C. Consider TIF #4 and #5 Budget ModificationsTO: City Council
FROM: Laurie Hokkanen, Assistant City Managero(4
CITY OF DATE: September 8, 2010 0 V
CHMNSEN SUBJ: Consider TIF #4 and #5 Budget Modifications
7700 Market Boulevard
PO Box 147 BACKGROUND
Chanhassen, MN 55317
TIF #4:
Administration This district was established in 1995 to facilitate redevelopment in the downtown
Phone: 952.227.1100
Fax: 952.227.1110 area, especially the property around the Chanhassen Dinner Theatre. Last year,
the Council established Tax Increment District 10 to facilitate the construction of
Building Inspections the Park and Ride facility and potential development in and around the
Phone: 952.227,1180
Fax: 952.227.1190 Chanhassen Dinner Theatre complex.
Engineering At this point, TIF #4 has generated more increment than was anticipated in the
Phone: 952.227.1160 TIF Plan. Staff is proposing to modify the TIF #4 Plan to reflect the true revenues
Fax: 952.227.1170 and expenditures in the The difference in plan versus actual is due to the
Finance fact the Office of the State Auditor (OSA) did not require reporting on tax
Phone: 952.227.1140 increment revenues or interest earnings or payments in 1995, so the plan did not
Fax: 952.227.1110 account for those expenses.
Park & Recreation
Phone: 952227.1120
The proposed modification to TIF #4 would also allow some of the increment
Fax: 952.227.1110
from TIF #4 to be used, as needed, to pay for some of the City's Park and Ride
Fax: 952.227.1110
costs and other project costs in TIF #10. Staff is working to complete the
Recreation Center
2310 Coulter Boulevard
calculations, but at this point estimates that approximately $156,000 of TIF #10
Phone: 952.227.1400
expenses are eligible to be paid through these "pooling" dollars from TIF #4.
Fax: 952227.1404
itself and Rottlund for public improvements and other certain development costs
TIF #4 has outstanding bond obligations. The current schedule calls for the bonds
Planning&
to be paid off in 2021, with annual payments ranging from $107,725 to $113,300.
Natural Resources
Phone: 952.227.1130
The bonds are callable on 2/1/2013. The amount needed to defease the bonds is
Fax: 952.227.1110
approximately $1.17 million. The account currently has a balance of
approximately $500,000. Therefore, we need to modify the TIF budget to allow
Public Works
1591 Park Road
the District to remain open and generate increment /revenue sufficient to pay the
Phone: 952.227.1300
bonds. Current projections show that the account will have sufficient funds to call
Fax: 952.2271310
the bonds in 2013. We may then be able to decertify the District in 2014.
Senior Center
TIF #5:
Phone: 952.227.1125
Fax: 952.227.1110
This is a housing district, established in 1997, that encompasses the Rottlund
Web Site
Housing Development known as North Bay. The City uses increment to repay
wwadchanhassen.mn.us
itself and Rottlund for public improvements and other certain development costs
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
associated with the project. The budget is being modified to reflect actual tax
increment collections and to keep the district in compliance with the Office of
State Auditor's requirements.
As in TIF #4, the OSA reporting regulations in 1997 did not require the inclusion
of tax increment revenues or interest expense, so the plan did not account for
those items. The modification of TIF #5 is completely driven by the GSA's
increased reporting requirements. We need to increase the total budget authority
to include interest expense.
TIF #5 obligations include payments to Rottlund Homes on a $400,000 + interest
note. This is a pay -as- you -go note with the final payment due in 2014. This
District may then be eligible for decertification in 2015.
Update on Other Active TIF Districts 8, 9 (No action requested)
TIF #8 was created in 2002 to facilitate the building of the Summerwood Senior
Apartment Complex by Presbyterian Homes. This is a pay -as- you -go obligation.
Presbyterian Homes receives 90% of the increment generated from July 2006 to
December 2011. Beginning in July 2012, they receive 50% of the increment
generated, through December 2013, up to a maximum of $1,060,000. Payments
to date total $668,675.50. The current fund balance in TIF #8 is $75,182.39. The
District could potentially be decertified in 2014.
TIF #9 was created in 2006 to facilitate the development of the Gateway
Apartments by the Sand Companies. This is a pay -as- you -go obligation. The
Sand Companies receives 90% of the increment generated from August 2009 to
February 2014. From August 2014 to February 2016, they receive 65% of the
increment generated, up to a maxiumum of $300,000. Payments to date total
$11,072.23. The current fund balance in TIF #9 is $1,033.83. The District could
potentially be decertified in December, 2016.
RECOMMENDATION
The City Council will hold a Public Hearing on October 11` to consider the
budget modifications to Districts #4 and #5. No action is required at this time.
ATTACHMENTS
Map of TIF Districts #5,8,9
2. Map of TIF Districts #9, 10
Tax Increment Financing District
Tax Increment Financing District Nos. 4 and 10
Downtown Chanhassen Redevelopment Project Area
City of Chanhassen, Minnesota
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