CC PACKET 05152000 - Laserfiche WebLink

Home Browse Search

05/08/00 MON 14:55 FAX 16123402644 DORSEY VMIMY 19 2. Establishment of New TIF District and Termination of Assessment Aareemen on Apache Plaza: For the proposed new TEF district to qualify as a redevelopment district(i)parcels consisting of at least 70% of the area of the new TIF district must be occupied by buildings, streets, utilities or other improvements (a parcel is not considered occupied by such improvements unless 15% of the area of the parcel contains improvements), and(ii) more than 50% of the buildings located in the district must be"structurally substandard"to a degree requiring substantial renovation or clearance. The HRA must make this finding in the resolution approving the financing plan for the district and the establishment of the TIF district. It is my understanding that there are two buildings in the proposed new district, the shopping center building and a building containing Taco Bell. Since the requirement is that more than 50% of the buildings must be structurally substandard, both of the buildings will need to be found structurally substandard. Minnesota Statutes, Section 469.174, subdivision 10 contains a definition of structurally substandard and provides that the HRA may not make a determination that a building is structurally substantial without undertaking an interior inspection of the building unless it is unable to gain access to such building. The HRA should obtain a report of an independent engineer to evidence that the buildings are "structurally substandard" and use this report as the basis for its determinations. The duration limit of the new redevelopment district is 25 years from the date of first receipt of tax increment. This district will result in a reduction of LGA/HACA for the City pursuant to Minnesota Statutes, Section 273.1399. This reduction is phased in beginning 6 years after the assessment year for the original tax capacity of the district. The developer may not reimburse the City for any such reduction since any developer payments will be treated as tax increment revenue under Minnesota Statutes, Section 469.1766. Hillcrest Development has requested that the HRA terminate the existing Assessment Agreement entered into with St. Marie Company for Apache Plaza shopping center. The Agreement establishes a minimum market value for the shopping center and provides that it terminates when_ general obligation bonds issued by the City for the CUB Store are paid in full: The Assessment Agreement was required by the City to preserve the City's tax base and to protect against a reduction in market value for the shopping center which would have a negative impact on the tax increment revenue to pay the general obligation bonds. Minnesota Statutes, Section 469.177, subdivision 8 provides that an assessment agreement may be terminated by mutual consent of the current parties to the agreement. Such termination must be approved by the City. If the estimated market value for the property for the most recent available assessment is less than the minimum market value established by the assessment agreement for that year or an later year it must also be approved by the governing body of the county Y Y and school district in which such property is located. It is my understanding that the estimatedmarket value of the shopping center is not less than the minimum market value contained in the Assessment -2-