HomeMy WebLinkAbout2007.04.16 RESO 2007-0017v
RESOLUTION 2007-17
RESOLUTION ESTABLISHING TAX INCREMENT FINANCING
(REDEVELOPMENT) DISTRICT NO. 1-2 WITHIN DEVELOPMENT DISTRICT NO.1
AND APPROVING THE TAX INCREMENT FINANCING PLAN THEREFOR
A. WHEREAS, there is a proposal to establish Tax Increment Financing
(Redevelopment) District No. 1-2 ("TIF District No. 1-2") and approve and accept the proposed
Tax Increment Financing Plan for TIF District No. 1-2 under the provisions of Minnesota
Statutes, Sections 469.174 to 469.1799 (the "Act"); and
B. WHEREAS, the proposed Tax Increment Financing Plan for TIF District No. 1-2
(the "TIF Plan") has been prepared; and
C. WHEREAS, the City of Hugo, Minnesota (the "City") has performed all actions
required by law to be performed prior to the approval of the Plan, and including, but not limited
to, notification of Washington County and Independent School District No. 624, and the holding
of a public hearing upon published and mailed notice as required by law; and
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Hugo, Minnesota as follows:
1. TIF District No. 1-2. TIF District No. 1-2 is hereby established in the City within
Development District No. 1 as a tax increment financing district, the initial boundaries of which
are fixed and determined as described in the TIF Plan.
2. Tax Increment Financing Plan. The TIF Plan is adopted as the tax increment
financing plan for TIF District No. 1-2, and the City Council makes the following findings:
(a) TIF District No. 1-2 is a redevelopment district as defined in Minnesota
Statutes, Section 469.174, Subd. 10, the specific basis for such determination is that at least 70%
of the area in TIF District No. 1-2 is occupied by buildings, streets, utilities, paved or gravel
parking lots or other similar structures and more than 50% of the buildings in TIF District No. 1-
2 are structurally substandard to a degree requiring substantial renovation or clearance as set
forth in the inspection and coverage reports of the City Building Inspectors (the "Reports"). The
City Council has had an opportunity to review the findings in the Reports regarding the condition
of buildings, streets, utilities, parking lots, etc. and hereby ratifies the findings made therein.
(b) The proposed redevelopment in the opinion of the City Council, would not
occur solely through private investment within the reasonably foreseeable future. The reasons
supporting this finding are that:
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(i) Based in part upon discussions with potential developers, as well as the
particular challenges and costs of redeveloping the subject site, private
investment will not finance these development activities because of
prohibitive costs. It is necessary to finance these development activities
through the use of tax increment financing so that other development by
private enterprise will occur within Development District No. 1.
(ii) A comparative analysis of estimated market values both with and without
establishment of TIF District No. 1-2 and the use of tax increments has
been performed as described above. Such analysis is found in Exhibit VI
of the TIF Plan, and indicates that the increase in estimated market value
of the proposed development (less the indicated subtractions) exceeds the
estimated market value of the site absent the establishment of TIF District
No. 1-2 and the use of tax increments.
(c) In the opinion of the City Council, the increased market value of the site
that could reasonably be expected to occur without the use of tax increment financing would be
less than the increase in the market value estimated to result from the proposed development
after subtracting the present value of the projected tax increments for the maximum duration of
TIF District No. 1-2 permitted by the TIF Plan. The reasons supporting this finding are that:
(i) The estimated amount by which the market value of the site will increase
without the use of tax increment financing is $0, and a small amount
attributable to appreciation in land value;
(ii) The estimated increase in the market value that will result from the
redevelopment to be assisted with tax increment financing is $260,390,671
(from $27,740,300 to $232,650,371, assuming compounded 2% annual
inflation); and
(iii) The present value of the projected tax increments for the maximum
duration of the TIF District permitted by the TIF Plan is $18,466,937.
(d) The TIF Plan for TIF District No. 1-2 conforms to the general plan for
development or redevelopment of the City of Hugo as a whole. The reasons for supporting this
finding are that:
(i) TIF District No. 1-2 is properly zoned;
(ii) The Planning Commission of the City of Hugo has determined that the
proposed TIF Plan conforms to the general plan for the development or
redevelopment of the City as a whole; and
(iii) The TIF Plan will generally complement and serve to implement policies
adopted by the City.
(e) The TIF Plan will afford maximum opportunity, consistent with the sound
needs of the City of Hugo as a whole, for the development or redevelopment of Development
District No. 1 by private enterprise. The reasons supporting this finding are that the development
activities are necessary so that development and redevelopment by private enterprise can occur
within Development District No. 1.
3. Public Purpose. The adoption of the Tax Increment Financing Plan for Tax
Increment Financing (Redevelopment) District No. 1-2 within Development District No. 1
conforms in all respects to the requirements of the Act and the development of up to 592
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residential housing units, 145,500 square feet of retail and 37,700 square feet of office space will
provide safe, decent, sanitary housing for the residents of the City, increase employment in the
State, help prevent the emergency of blight and blighting influences and result in the
preservation and enhancement of the tax base of the State and improve the general economic of
the State and thereby serves a public purpose.
4. Certification. The Auditor of Washington County is requested to certify the
original net tax capacity of TIF District No. 1-2 as described in TIF Plan, and to certify in each
year thereafter the amount by which the original net tax capacity has increased or decreased in
accordance with the Act; and the City Clerk is authorized and directed to forthwith transmit this
request to the County Auditor in such form and content as the Auditor may specify, together with
a list of all properties within TIF District No. 1-2 for which building permits have been issued
during the 18 months immediately preceding the adoption of this Resolution.
5. Film¢. The City Clerk is further authorized and directed to file a copy of the
Development Program for Development District No. 1 and the TIF Plan for TIF District No. 1-2
with the Commissioner of Revenue.
6. Administration. The administration of Development District No. 1 is assigned to
the City Community Development Director who shall from time to time be granted such powers
and duties pursuant to Minnesota Statutes, Sections 469.130 and 469.131 as the City Council
may deem appropriate.
Adopted on April 16, 2007, by the Hugo City Council.
Attest:
Mary Creager, City C
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Fr iron, Mayor