CC PACKET 03241992 - Laserfiche WebLink

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• L INTRODUCTION. The Commissioners of the Housing and Redevelopment Authority of St. Anthony, Minnesota (the "HRA") and the City Council of the City of St. Anthony, Minnesota (the "City"), have previously approved the Kenzie Terrace Redevelopment Plan (the "Redevelopment Plan") and the Kenzie Terrace Redevelopment Project (the "Redevelopment Project") to be undertaken pursuant thereto in an area located in the City (the "Project Area"), and in order to finance the public redevelopment costs to be incurred by the City and the HRA in connection with the.Redevelopment Plan and the Redevelopment Project, the HRA and the City have approved the Kenzie Terrace Tax Increment Financing Plan (the "Financing Plan"), which establishes the Kenzie Terrace Tax Increment Financing District (the "District"). The major objectives of the Redevelopment Plan were to: acquire for redevelopment economically or functionally obsolete or underutilized buildings and land; provide a redevelopment site of a character which would encourage future development of the area and improve sources of public revenue; eliminate blighting influences which impeded potential development; provide maximum opportunity for redevelopment by private enterprise consistent with the needs of the City as a whole; and encourage private rehabilitation of structures within the Project Area. In furtherance of these objectives, the HRA entered into a • Redevelopment Contract (the "Redevelopment Contract") dated as of July 6, 1988 with St. Anthony LaNel, a Minnesota general partnership ("LaNel") for development of a 201-unit multi-family residential rental housing project (the "Development") .intended for occupancy by individuals of low and moderate income on the land located in the Project Area. The HRA determined that redevelopment of the Project Area and construction of the Development pursuant to the Redevelopment Contract were in the best interests of the City and benefited the health, safety, morals and welfare of its residents. Prior to execution of the Redevelopment Contract, the HRA and the HRA's financial consultant calculated projections of the necessary tax increment to be generated in the Development to ensure that the bonds to be paid with the tax increment would be retired as anticipated. The amount of tax increment projected by the HRA was based upon real estate taxes estimated to be $1,200 per apartment unit in the Development. Throughout the discussions leading up to the preparation and the execution of the Redevelopment Contract (and in prior discussions with other potential developers of the Development), the parties assumed that the property tax per apartment unit in the Development would be approximately $1,200.. These projections were made based upon the 1988 state property tax rate classifications. Since 1988, the Minnesota legislature has modified the system in a way which has resulted in an increase in the per unit property tax expenses. Construction of the Development has been completed by LaNel. The • projection for the 1991 tax increment derived from the Development was $211,000, and the projection of the 1992 tax increment derived from the Development was