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3. TIF District 5 and 5.1: Program for Development.1 1 I MEMORANDUM ' TO: FROM: DATE: SUBJ: CITY OF 3 CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 0 CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 Don Ashworth, City Manager Todd Gerhardt, Assistant City Manager ' June 19, 1996 Action by City Administrates Indors V/' D yi i - Modifie Rejecte Dat Date Submitted to Commission Date Submitted to Council Consider Approval of Creating a New Tax Increment Financing Plan No.5 -1 and Development District No. 5 The City Council at their May 6, 1996 meeting authorized staff to hold a public hearing for June 24, 1996 to consider establishing a new tax increment financing district. The purpose of this district is to assist North Bay, a residential development in reducing the price of owner- occupied homes so as to be affordable under the Metropolitan Livable Communities Act (LCA). In order to accomplish this objective, the City of Chanhassen would have to incur some of the costs and expense to reduce the capital and administrative costs of the proposed development in order to meet the LCA. The Met Council's definition of affordable are those occupied units under $115,000. Under this plan the city would be providing assistance to 35 of the 76 units within the Rottlund development. Staff is proposing 18 units to be designated for first time home buyers with a price range of $88,000 to $95,000 and combined net income of not more than $43,000. The remaining 17 units would have a price range of $105,000 to $115,000 and a combined income of not more than $54,600. All of the units would also have a recapture policy where the home owner will only receive the annual Consumer Price Index, 10 year limitation, plus realtor costs on the resale of the property. The proposed development currently pays $7,166 per year in taxes which will be the "base original tax capacity" (this amount will continue to go to the school, city, and county) and the "capture tax capacity" is estimated to be $60,481. The total estimated amount of taxes captured through the life of the district (25 years) totals $1,512,025. The total obligation to Rottlund is as follows: The city proposes to assume $350,000 in sewer, water and roadway improvement costs against the site. Land write down to further reduce their housing project costs of $400,000. Total Incentives: $750,000 Mr. Don Ashworth June 19, 1996 Page 2 Staff also estimated 10% of the project costs for administrative expenses in creating the district and administering the annual reports. The project is also designed as a "pay as you go program" and the annual payment to Rottlund would only occur from available increment from the district. If the city council should approve this district, staff would prepare a contract with Rottlund outlining a repayment schedule for city council's approval. Staff has also sent notice to the school district and Carver County (see Attachment #3). RECOMMENDATION Staff recommends that the city council approve the Resolution Creating Tax Increment Financing District No. 5 -1 and Development District No. 5 (see Attachment #4) and direct staff to prepare a private redevelopment agreement with Rottlund Homes. ATTACHMENTS 1. TIF Plan 2. Maps 3. Letter to School District/Carver County 4. Resolution Approving TIF District No. 5 u 1 1 1 J ' DEVELOPMENT DISTRICT PROGRAM, DEVELOPMENT DISTRICT NO. 5 AND I TAX INCREMENT FINANCING PLAN, TAX INCREMENT FINANCING DISTRICT NO. 5 -1 CITY OF CHANHASSEN June 24, 1996 This document drafted by: ' KENNEDY & GRAVEN, CHARTERED 470 Pillsbury Center ' Minneapolis, MN 55402 (612) 337 -9300 ' RHB105171 CH130 -59 Subsection TABLE OF CONTENTS Statutory Authority ... ............................... 5 Page i SECTION I. DEVELOPMENT DISTRICT PROGRAM FOR DEVELOPMENT DISTRICT NO. 5 5 Subsection C. Statement of Public Purpose ........................... Subsection A. Definitions ......... ............................... 1 i Subsection B. Statutory Authority ... ............................... 2 Subsection Subsection C. Subsection D. Statement of Public Purpose ........................... Statement of Objectives ............................... 2 2 ' Subsection E. Environmental Controls ............................... 3 6 Subsection F. Open Space to be Created ............................. 3 Classification of TIF District .......................... 1 Subsection G. Subsection H. Public Facilities to be Constructed ....................... Proposed Reuse of Property ... I ........................ 3 3 ' Subsection I. Development District Financing ......................... 3 Subsection Subsection J. Subsection K. Relocation Administration of Development District ................... 3 3 ' Subsection L. Map of Development District ........................... 4 6 SECTION II. TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING , DISTRICT NO. 5 -1 Limitation on Increment .............................. 7 Subsection A. Statutory Authority ... ............................... 5 Subsection B. Statement of Objectives ............................... 5 Subsection C. Statement of Public Purpose ........................... 5 Subsection D. Development District Program .......................... 6 Subsection E. Description of TIF District ............................. 6 Subsection F. Development District Contracts ......................... 6 , Subsection G. Classification of TIF District .......................... 1 6 Subsection H. Modification of TIF Plan .............................. 6 Subsection I. Use of Tax Increment . ............................... 6 ' Subsection J. Excess Tax Increment ............................... 6 Subsection K. Limitation on Increment .............................. 7 Subsection L. Limitation on Administrative Expenses .................... 7 Subsection M. Limitation on Boundary Changes ........................ 7 , Subsection N. Relocation 7 Subsection O. ........ IF Parcels to be Acquired within T District .................. 8 Subsection P. TIF Account ....... ............................... 8 Subsection Q. Estimate of Project Costs ............................. 8 Subsection R. Estimate of Bonded Indebtedness ........................ 8 Subsection S. Original Tax Capacity and Tax Increment .................. 8 Subsection T. Duration of the TIF District ............................ 8 ' Subsection U. Estimate of Captured Tax Capacity ...................... 8 Subsection V. Estimated of Impact on Other Taxing Jurisdiction ............ 9 Subsection W. Annual Reports ..... ............................... 9 ' RHB105171 CH130 -59 �1� SECTION I. DEVELOPMENT DISTRICT PROGRAM FOR DEVELOPMENT DISTRICT NO. 5 ' A. Definitions For the purposes of the Development District Program for Development District No. 5 and the Tax Increment Financing Plan for Tax Increment Financing District No. 5 -1, the following ' terms shall have the meanings specified below, unless the context otherwise requires: "Administrative expenses" means all expenditures of the City other than amounts paid for ' the purchase of land or amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of real property in the District, relocation benefits paid to or services provided for persons residing or businesses located in the District, or amounts used to pay interest on, fund a reserve ' for, or sell at a discount bonds issued pursuant to section 469.178 of the TIF Act. Administrative expenses includes amounts paid for services provided by bond counsel, fiscal consultants and planning or economic development consultants; ' "City" means the City of Chanhassen, a municipal corporation under the laws of Minnesota; "City Council" or "Council" means the Chanhassen City Council; "City Development District Act" or "Act" means Minnesota Statutes sections 469.124 through 469.134, as amended; "Comprehensive Plan" means the City's objectives, policies, standards and programs to guide public and private land use, development, redevelopment and preservation for all lands and water within the City; "County" means Carver County, Minnesota; "Development District" or "District" means Development District No. 5 in which Tax Increment Financing District No. 5 -1 will be located; "Development District Program" or "Program" means the Program for Development District No. 5, which will be adopted by the Authority on June 24, 1996; "Metropolitan Livable Communities Act" or "MLC Act" means Minnesota Statutes sections 473.25 et seq. "State" means the State of Minnesota; "Tax Increment Bonds" means any general obligation or revenue tax increment bonds issued by the City to finance the public costs associated with Development District No. 5 as stated in the Program or in the Plan for TIF District No. 5 -1 or any obligations issued to refund any Tax Increment Bonds; "Tax Increment Financing Act" or "TIF Act" means Minnesota Statutes sections 469.174 through 469.179, as amended; "Tax Increment Financing District" or "TIF District" means Tax Increment Financing District No. 5 -1, which is being created and established within Development District No. 5 pursuant to the TIF Act; and RHB105171 CH130 -59 1 1 "Tax Increment Financing Plan" or "Plan" means the Plan for TIF District No. 5 -1, which will be adopted by the City on June 24, 1996. B. Statutory Authority The City has determined that it is necessary, desirable and in the public interest to establish Development District No. 5, pursuant to the provisions of the Act. The City has also determined that the funding of the necessary activities and improvements in Development District No. 5 shall be accomplished in part or in whole through tax increment financing in accordance with the TIF Act. C. Statement of Public Purpose It is found that there is a need for the City to offer assistance to a residential development proposed to be constructed within the City. If the project is built pursuant to City assistance, the effect will be to increase employment opportunities, improve the tax base and improve the general economy of Chanhassen and the State. The specific public purpose of Development District No. 5 is to foster development of the residential project for low and moderate income housing. In order to accomplish this purpose, the City intends to incur those costs and expenses specified in the Plan for TIF District No. 5 -1. In choosing to support the project, the City is attempting to meet its obligations towards affordable housing, as articulated in the MLC Act. D. Statement of Obiectives The Authority seeks to achieve the following objectives through the Development District Program: 1. promote and secure the prompt development of property in Development District No. 5 in a manner consistent with the Comprehensive Plan and with minimal adverse impact on the environment, which property is currently less productive because of the lack of proper utilization and lack of investment, thus promoting and securing the development of other land in Chanhassen; 2. encourage additional employment opportunities within Development District No. 5 and Chanhassen for residents of the community and the surrounding area, thereby improving living standards and preventing unemployment and the loss of skilled labor and other human resources in the area; 3. secure the increase of property subject to taxation by the City, County, the school district and other taxing jurisdictions in order to better enable such entities to pay for public improvements and governmental services and programs required to be provided by them; 4. secure housing within the City which is affordable to persons of low and moderate income, which housing is unlikely to be available without public assistance on the private market; 5. promote the concentration of appropriate residential uses and related development within Development District No. 5 in order to maintain the area in a manner compatible with its highest and best use; and 6. encourage development within the District which is aesthetically pleasing and which creates a positive visual image of the community. RHB105171 CH130 -59 2 1 u t I I I 1 E. Environmental Controls It is not anticipated that any development within the Development District will present major environmental concerns. Lands within Development District No. 5 contain wetlands and some are within the shoreland zone of Lake Riley. The City will require that the developer comply with all statutes, regulations and ordinances when developing any land within the District. All public improvements and private development will be constructed and carried out in ' compliance with applicable environmental standards. F. Open Space to be Created ' Any open space within the Development District will be created in accordance with the development controls of the City and will be adequate for the needs of the residents of the community as well as those who work in or visit the Development District. ' G. Public Facilities to be Constructed All public facilities constructed within the Development District will be financially ' feasible and compatible with the City's Comprehensive Plan. H. Proposed Reuse of Property ' The City may acquire property within Development District No. 5 in order to resell the land to a developer at a reduced price. Property within the Development District will be reused in accordance with the City's ordinances and Comprehensive Plan as well as with this Program ' and the Plan for TIF District No. 5 -1. No property will be acquired or sold by the City without entering into an agreement with the developer regarding the specific reuse of the land. ' I. Development District Financing Within Development District No. 5, the Authority will establish TIF District No. 5 -1 to finance the cost of development activities. Project costs for TIF District No. 5 -1 will be met at ' least in part through pledged increment. Details of project cost are contained in the TIF Plan which follows this Program. ' J. Relocation Although no relocation is anticipated in connection with any project within Development District No. 5, the City accepts its responsibility for providing for relocation pursuant to section ' 469.133 of the Act. If relocation is necessary, provision will be made in accordance with Minnesota Statutes sections 117.50 through 117.56, as amended. ' K. Administration of Development District Maintenance and operation of the public improvements is the responsibility of the administrator of Development District No. 5. The administrator will be appointed by the city ' council. Each year the administrator will submit to the City the maintenance and operation budget for the following year. The administrator will administer the Development District pursuant to the provisions of section 469.131 of the Act; provided, however, that such powers may only be exercised at the direction of the City. No action taken by the administrator shall be effective without authorization by the City. The City has not and does not anticipate the need to create an advisory board to advise it on the planning, construction or implementation of the activities and improvements outlined in the Development Program. ' RHB105171 CH130 -59 3 L. Map of Development District I A map of Chanhassen which shows the area to be included within Development District Noe 5 is attached hereto as Exhibit A. A map of the boundaries of Development District No. 5 ' and of TIF District No. 5 -1 is attached hereto as Exhibit B and is incorporated herein by reference. RHB105171 cH130 -59 n 1 J V SECTION II. TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 5 -1. ' A. Statutory Authority Pursuant to section 469.175, subd. 4 of the TIF Act, the City is authorized to establish tax increment financing districts to facilitate and provide financing for the development objectives articulated in the Development District Program. The Authority ' intends to establish and operate TIF District No. 5 -1 pursuant to the Act and TIF Act. The Plan for TIF District No. 5 -1 is consistent with the City's plans and objectives as outlined in the Program for Development District No. 5. ' B. Statement of Obiectives The Authority seeks to achieve the following objectives through the establishment of TIF District No. 5 -1; ' 1. encourage affordable residential development in an area of the community which has not been utilized to its full potential; 2. improve the tax base of Chanhassen and the general economy of the City ' and State; 3. provide employment opportunities within the community; and ' 4. implement relevant portions of the Comprehensive Plan. The City's specific purpose in establishing TIF District No. 5 -1 is to promote the ' development of a residential project proposed to contain 76 owner - occupied townhomes near Lake Riley. Thirty -five of the units will be priced at a level to make them affordable under the MLC Act's guidelines. Housing which meets this definition cannot be provided by the private ' market in cities like Chanhassen without public assistance. The City wishes to provide the assistance necessary to allow the units to be sold to income - qualified buyers. The City intends to utilize tax increment to write down the cost of land and pay for certain public improvements in order to achieve the necessary price level. Without public assistance, the development could ' not be built with affordable housing and the goals and objectives of the MLC Act could not be accomplished. ' C. Statement of Public Purpose In adopting the Plan for TIF District No. 5 -1, the Authority will make the following findings: 1. Anticipated affordable residential housing would not reasonably be ' expected to occur within Development District No. 5 solely through private investment within the reasonably foreseeable future and, therefore, the use of TIF is deemed necessary; ' 2. The TIF Plan will afford maximum opportunity, consistent with the sound needs of the community as a whole, for development of the District by private enterprise; 3. The TIF Plan conforms to general plans for development of Chanhassen as a whole as articulated in the Comprehensive Plan; 4. The increased market value of the property that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increment for 25 years; and t 5. The area included within TIF District No. 5 -1 qualifies as a housing TIF district within the meaning of the TIF Act. RHB105171 CH130 -59 5 1 The conclusions to be reached by the City regarding the above are based upon the recommendations of city staff and consultants after analysis of the financial feasibility of the project, the conclusions of the planning and zoning board after review of the Comprehensive Plan as well as the familiarity of members of the City Council with the property involved and the likelihood that the property will develop within the reasonably foreseeable future solely through private efforts. With specific reference to finding no. 4 above, the City will conclude that no affordable housing could reasonably be expected to be developed within the reasonably foreseeable future within the District. In that event, no increase in market value could be expected to occur and any increase in market value associated with the assisted project, even discounted by the present value of the stream of increment used to assist the developer, is greater than zero. This analysis is based on comparisons of similar projects, i.e., affordable housing. The analysis fails if it is assumed that market rate housing or another use would have been built instead. In that case, affordable housing could never be justified under these terms. The City believes this is not the intent of the TIF Act and, instead, has conducted its analysis according to the above assumptions. D. Development District Program The City intends to adopt a Program for Development District No. 5 on June 24, 1996, at the same time as the establishment of TIF District No. 5 -1. The plan for development of Chanhassen outlined in the Program will continue to provide the basis of the City's efforts to develop portions of the community which have not and remain unlikely to be developed solely through private efforts. The Plan for TIF District No. 5 -1 is consistent with the Program for Development District No. 5. E. Description of TIF District The legal descriptions of the parcels within TIF District No. 5 -1 are included as Exhibit C. A map of the boundaries of TIF District No. 5 -1 is attached hereto as Exhibit B. Exhibits B and C are incorporated herein by reference. F. Development District Contracts The City has not yet entered into a development contract with regard to the development of any property within TIF District No. 5 -1. The City anticipates entering into such an agreement with Rottlund Homes during the third quarter of 1996 for the affordable housing project. Contracts regarding additional property with TIF District No. 5 -1 will be entered into in accordance with section 469.176, subd. 5 of the TIF Act. All contracts will be approved by the City prior to becoming effective. G. Classification of TIF District TIF District No. 5 -1 qualifies as a housing TIF district, pursuant to section 469.174, subd. 11 of the TIF Act. H. Modification of TIF Plan The Plan for TIF District No. 5 -1 may be modified by the City, provided that any enlargement of the geographic area of the TIF District, increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on the debt if that determination was not a part of the original Plan, or to increase or decrease the amount of interest on the debt to be capitalized, increase in the portion of the captured tax capacity to be retained by the City, increase in total estimated tax increment expenditures or designation of additional property to be acquired by the City shall be approved upon the notice and after such discussion, public hearing and findings as required for approval of the original Plan. I. Use of Tax Increment Pursuant to section 469.176, subd. 4 of the TIF Act, all revenues derived from TIF District No. 5 -1 shall be used in accordance with the TIF Plan. The revenues shall be used to finance or otherwise pay the capital and administrative costs of development activities within the District as identified in the Program and Plan. J. Excess Tax Increment Pursuant to section 469.176, subd. 2 of the TIF Act, in any year in which increment exceeds the amount necessary to pay the costs authorized by the TIF RHB105171 CH130 -59 6 u 1 Plan, the City shall use the excess amount to do any of the following, in the order determined by the City: 1. prepay the outstanding bonds or other obligations; 2. discharge the pledge of tax increment therefor; 3. pay into an escrow account dedicated to the payment of bonds or other obligations; or 4. return the excess amount to the Carver County auditor who shall distribute the excess amount to the City, the County and the school district in direct proportion to their respective tax capacity rates. The City may also choose to modify the TIF Plan in order to provide for other public improvements within the District. K. Limitation on Increment 1. No increment shall be paid to the City from TIF District No. 5 -1 after three years from the date of certification of the original tax capacity of the property in the TIF district by the county auditor unless within the three year period (a) bonds have been issued pursuant to section 469.178 of the TIF Act, or (b) the City has acquired property within TIF District No. 5 -1, or (c) the City has constructed or caused to be constructed public improvements within TIF District No. 5 -1. 2. If, after four years from the date of certification of the original tax capacity of TIF District No. 5 -1, no demolition, rehabilitation, or renovation of property or other site preparation, including qualified improvement of a street or right -of -way adjacent to a parcel but not installation of underground utility service, including sewer or water systems, have been commenced on a parcel located within TIF District No. 5 -1 by the City, or by the owner of the parcel in accordance with the TIF Plan, no additional increment may be taken from that parcel, and the original tax capacity of that parcel shall be excluded from the original tax capacity of the TIF District. If one of these activities subsequently commences, the City shall so certify to the county auditor, and the tax capacity of the property as most recently certified by the commissioner of revenue may be added to the TIF District. ' 3. No tax increment shall in any event be paid to the City from TIF District No. 5 -1 after 25 years from the date of receipt by the City of the first increment. L. Limitation on Administrative Expenses Pursuant to section 469.176, subd. 3 of the TIF Act, administrative expenses are limited to 10 percent of the total tax increment expenditures budgeted or actually incurred, whichever is less. Each time the City increases the budget of TIF District No. 5 -1, the amount of increment allocated to administrative costs may be increased as long as the total of administrative expenditures does not exceed 10 percent of the total budget of the TIF District. M. Limitation on Boundary Changes The geographic area of TIF District No. 5 -1 may be reduced, but cannot be enlarged after five years following the date of certification of the original tax capacity by the Carver county auditor. ' N. Relocation Although no relocation is anticipated, the City accepts as binding its obligations under state law regarding relocation benefits and, if necessary, will administer relocation services for families, individuals and businesses displaced by public action. RHB105171 CH130 -59 7 O. Parcels to Be Acquired Within the TIF District It is anticipated that a majority of the property within the TIF District may be acquired by the City. If property is acquired by the City, the City will resell it to Rottlund Homes at a reduced cost. No property will be acquired by the City or resold to a developer until a development agreement has been signed by the parties. , P. TIF Account The tax increment received with respect to the TIF District No. 5 -1 shall be segregated by the City in a special account on its official books and records. ' Q. Estimate of Project Costs The following costs are authorized for expenditure within TIF District No. 5 -1: , Housing Project Costs, including land acquisition and site ' preparation reimbursement $ 400,000 Special Assessment Assumption for roadway and public utilities 350,000 , Administrative Costs 75,000 TOTAL $ 825,000 , R. Estimate of Bonded Indebtedness The City does not intend to sell its general obligation bonds to pay for the items budgeted in this Plan. The City will finance the costs of , public improvements through special assessments which will be assumed by the City. Pay -as- you-go financing will be utilized to reimburse the developer for site preparation and land costs. The City may use a revenue note in financing with the developer. ' S. Original Tax Capacity and Tax Increment Pursuant to section 469.177, subd. 1 of the TIF Act, the original tax capacity for TIF District No. 5 -1 is $7,166. Each year the Carver county auditor will measure the increase or decrease in the total tax capacity of property in the ' TIF district. Any year in which the tax capacity of TIF District No. 5 -1 exceeds $7,166, an increment will be payable to the Authority. Any year in which the tax capacity is below $7,166, no value will be captured and no increment will be payable to the Authority. ' Each year after the certification of the original tax capacity, the county auditor will increase or decrease the original tax capacity of property within TIF District No. 5 -1 as a result of: ' 1. change in the tax exempt status of the property; 2. reduction or enlargement of the geographic boundaries of the TIF District; ' or 3. reduction of valuation by means of a court - ordered abatement, stipulation ' agreement, voluntary abatement made by the assessor or auditor or by order of the Minnesota commissioner of revenue. T. Duration of the TIF District In accordance with section 469.176, subd. 1 of the ' TIF Act, the Authority wishes to retain its right to receive TIF payments until 25 years from the date of the receipt of the first increment. , U. Estimate of Captured Tax Capacity Pursuant to sections 469.175, subd. 1 and 469.177, subd. 2 of the TIF Act, the estimated net captured tax capacity of TIF District No. 5 -1 ' RHB105171 8 CH130 -59 J will be $60,481 after January 2, 1998 for taxes payable in 1999, when the housing project has been completed. A smaller increment may be paid in the prior year. The captured tax capacity was estimated in the following manner: ' Tax Capacity on January 2, 1998 $67,647 Original Tax Capacity -7,166 ' Captured Tax Capacity $60,481 ' Pursuant to section 469.177, subd. 2 of the TIF Act, it is found and declared that all of the captured tax capacity generated by TIF District No. 5 -1 is necessary to finance or otherwise make permissible expenditures authorized by section 469.176, subd. 4 of the TIF Act. ' V. Estimated of Impact on Other Taxing Jurisdiction In is anticipated that up to $90,300 in increment will be captured annually within TIF District No. 5 -1. This increment amount is based on the value of the development on January 2, 1998 for taxes payable in 1999. ' For the purposes of estimating increment during the life of TIF District No. 5 -1, no inflation has been assumed in the value of the new development. The composite tax capacity rate for the affected property is currently 149.1763 percent. Applying the percentage of the total tax capacity rate attributable to each taxing jurisdiction to the annual increment of $90,300 reveals the annual ' "loss" of tax dollars by each jurisdiction if the projects would have occurred without TIF. Although the City believes the actual impact on other taxing jurisdictions is zero because development would not have occurred within the reasonably foreseeable future without public ' intervention, the assumed amount of tax dollars foregone by each jurisdiction is listed below: Tax Increment Attributable to Various Taxing Jurisdictions Tax % of Total ' Capacity Tax Est. Tax Taxing Jurisdiction Rate Capacity Loss ($) City of Chanhassen 25.018 16.7 15,106 ' Carver County 47.321 31.6 28,572 Independent School District No. 112 71.201 47.6 42,991 Other 6.011 4.1 3,631 TOTAL 149.551 100.0 $ 90,300 ' W. Annual Reports Pursuant to section 469.175, subd. 6 of the TIF Act, the City must file a financial report by July 1 each year regarding TIF District No. 5 -1. The report shall be filed with the school board, the county board and the state auditor. The report to be filed by ' the City shall be in accordance with the form specified by the state auditor and shall include the following information: ' 1. the original tax capacity of TIF District No. 5 -1; 2. the captured tax capacity of TIF District No. 5 -1, including the amount of any captured tax capacity shared with other taxing districts; ' 3. for the reporting period and for the duration of TIF District No. 5 -1, the amount budgeted under the modified TIF Plan and the actual amount expended for, at least, the following categories: (a) acquisition of land and buildings through condemnation or purchase; RHB105171 CH130 -59 9 1 (b) site improvement or preparation costs; (c) installation of public utilities, parking facilities, streets, roads, sidewalks or other similar public improvements; t (d) administrative costs, including the allocated cost of the City; (e) public park facilities, facilities for social, recreational, or conference , purposes, or other similar public improvements; 4. for properties sold to developers, the total cost of the property to the City and the price paid by the developer; and , 5. the amount of increment rebated or paid to developers or property owners for privately financed improvements or other qualifying costs. Pursuant to section 469.175, subd. 6a of the TIF Act, by July 1 each year the City must report annually to the state auditor the following amounts for the entire municipality: , 1. the total principal amount of nondefeased tax increment financing bonds that are outstanding at the end of the previous calendar year; and due for ' 2. the total annual amount of principal and interest payment that are the current calendar year on (i) general obligation tax increment financing bonds, and (ii) other tax increment financing bonds. The City must also annually report to the state auditor the following amounts for each tax increment financing district, including TIF District No. 5 -1: development, ' 1. the type of district, whether economic redevelopment, housing, soils condition, mined underground space, or hazardous substance site; 2. the date on which the district is required to be decertified; , 3. the amount of any payments and the value of in -kind benefits, such as physical improvements and the use of building space, that are financed with revenues ' received from increments and are provided to another governmental unit (other than the municipality) during the preceding calendar year; 4. the tax increment revenues for taxes payable in the current calendar year; ' 5. whether the tax increment financing plan or other governing document permits increment revenues to be expended (i) to pay bonds, the proceeds of which were ' or may be expended on activities located outside of the district, (ii) for deposit into a common fund from which money may be expended on activities located outside of the district, or (iii) to otherwise finance activities located outside of the tax increment ' financing district; and 6. any additional information that the state auditor may require. The City must file a report regarding the status of TIF District No. 5 -1 by July 1 each ' year. The report must be sent to the county board, county auditor, school board and state auditor. The report must include the information required by section 469.175, subd. 5 of the TIF Act in ' the form prescribed by the Minnesota commission of revenue. The report must also be published in a newspaper of general circulation in the community. RHB105171 CH130 -59 10 r EXHIBIT C The Property to be included within TIF District No. 5 -1 is legally described as Outlots B, C, D, ' E and F, North Bay, according to the plat on file in Carver County, Minnesota. I RHB105171 CH130 -59 0 A T� kL I 0 W 4L Development District Nr Ll I LAstrict Ne I Attorneys at Law I r t 1 KENNEDY & GRAVEN CHARTERED 470 Pillsbury Center, Minneapolis, Minnesota 55402 (612)..337.9300 . RECEIVED Facsimile (612) 337.9310 MAY 15 RECD WRITER'S DIRECT DIAL (612) 337.9262 May 14, 1996 Commissioner Ursula Din Carver County Courthouse 600 East 4th Street P. 0. Box 12 Chaska, MN 55318 -2188 RE: Chanhassen TIF Project Dear Ms. Dimler: CITY OF CHANHASSEN JAMES J. THOMSON LARRY M. WERTHEIM BONNIE L WILKINS JOE Y. YANG DAVID L. GRAVEN (1929.1991) OF COUNSEL ROBERT C. CARLSON ROBERT L. DAVIDSON WELLINGTON H. LAW FLOYD B. OISON CURTIS A. PEARSON T. JAY SALMEN ' Pursuant to Minnesota Statutes section 469.175, subd. 2a, please note that the city of Chanhassen proposes to create a housing tax increment financing project within your district. The project is being proposed by Rottlund Homes and will be know as North Bay. It is located on the north ' shore of Lake Riley off of Lyman Boulevard. The project will include 75 owner occupied townhomes with approximately one -half of them priced at or below $115,000 to meet the Metropolitan Council's Livable Communities Program for affordable housing. Chanhassen ' proposes to create a tax increment financing district in order to write -down the cost of land and other infrastructure improvements in order to keep the price of these units affordable. ' A public hearing on the proposed tax increment district is scheduled before the Chanhassen city council on June 24, 1996. A copy of the TIF plan will be sent to the county and school district 30 days in advance of the hearing. In the meantime, we would be happy to meet with you to ' discuss the proposed district and would welcome any comments that you may have regarding the matter. Please feel free to give Mr. Todd Gerhardt or me a call. Mr. Gerhardt's number is 937- 1900, ext. 119. My number is 337 -9262. ' Sincerely, 1 ' ; G) jWd ' Ronald H. Batty Special Counsel for the City of Chanhassen ' RHB:ckr cc: Todd Gerhardt RHB104522 CH130 -59 ROBERT A. ALSOP BRUCE M.BATTERSON RONALD H. BATTY STEPHEN J. BUBUL JOHN B. DEAN DANIEL J. GREENSWEIG DAVID J. KENNEDY CHARLES L. LEFEVERE JOHN M. LEFEVRE, JR. ROBERT J. LINDALL ROBERT C. LONG JAMES M. STROMMEN CORRINE H. THOMSON 1 :CITY OF CHANHASSEN I Date CARVER AND I4ENNEPIN COUNTIES, MEVNESOTA RESOLUTION Resolution No. Seconded By I Motion By RESOLUTION ADOPTING A DEVELOPMENT DISTRICT PROGRAM FOR I DEVELOPMENT DISTRICT NO. 5 AND A TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 5 -1 u BE IT RESOLVED By the City Council (the "Council ") of the City of Chanhassen, Minnesota (the "City as followts: Section L Recitalw 1.01. It has been proposed that the City establish Development District No. 5 Pmsuant to Minnesota Statutes fi§ 469.14 through 469.134 and create Tax Incrennent Financing District No. 5 -1 pursuant to Minnesota Siatate s. §§ 469.174 through 469.179 within Development District No. 5. 1.02, The Council has iri 'vestigated the facts and has caused to be prepared a development district program {the "Prograrn ") describing the public assistance needed within Development District No. 5 and a tax increment financing plan (the "Plan") describing the specific acts to be taken to assist development within the boundaries of Tart Increment Financing Distri ct No_ 5 -1. 1.03. The City has performed all actions required by law to be performed prior to the establishment of Development District No. 5 and Tax Increment Financing District No. 5 -1 and the adoption of a Program and Plan relating thereto, including. but not limited to, notification of Carver county and Independent School District No. 112; a review of the Program and Plan by the planning commission for their consistency with the general plans for development of the City; and holding a public hearing re.,� the Program and Plan upon such notice as is required by law'_ 1.04. The Program and: Plan are contained in a document entitled "Development District Program, Development District No. 5 and Tax Increment Financing Plan, Tax Increment Financing District No. 5 -1, City of Chanhassen, Minnesota," dated rune 24, 1996, and on file in the office of the City Manager. RHB10 321 cel °.0-59 S/O ROHd u 0I CSLSC319' Q I NaAV60 '8 AQRNNaM : W0aH C L = E L 96- 0Z -Nnr' LJ 1.05. `The Council has fully reviewed the contents of the pkogram and the Plan and has on this date conducted a public hearing thereon at which the views of all interested persons were heard. Section 2. Findings Related to Establishment of Development District No. 5 2.01. The Council hereby; finds that the establishment of Development District No. 5 is intended, and in the judgment of the Council, its effect will be to provide an impetus for ' affordable zesidenti.al development in the city, increase employment, and otherwise promote the public purposes and objectives specified in the Program_ 2.02. It is further found and determined that: a) The land in the Development District No. 5 would not be made available for 1 affordable residential development consistent with the goals of the Metropolitan Livable Communities ,Act without the public intervention and financial assistance described in the Pro gram. and Plan; ' b max The Program will' afford imum opportunity, consistent with the sound needs of the city as a whole, for the development of the District by private enterprise; and C) In accordance with the findings made by the planning commission on June 19, 1996, the Program conforms to the general plan for development of the community as set,: forth in the city's comprehensive plan. Section 3. Findings Related to Establishment of Tax Increment Financin District No. 5 -l.. 3.01. It is the opinion of the. Council, that development of the properties included within Tax Increment Financing District No. 5 -1 in 'a manner consistent with the goal of providing affordable housing under the Metropolitan Livable Communities Act would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future due to the lack of an adequate public investment and that the use of tax increment financing is therefore necessary. 3.02. The Council finds that the Plan for Tax increment Financing District No. 5 -1 conforms to the general plan for development of the City, based upon the June 19, 1996 recommendations of the planning commission. 3.03. The Council finds that the Plan for Tax Increment Fiun.ancing District No. 5 - 1 will afford maximum opportunity, ;consistent with the sound needs of the City as a whole, for development of the District byyprivate enterprise. HBlf�b9z1 cw 1 . - S? 2I0dd 0IE6GEEZI9'QI 2 NEAV2I0 T AGENNEM : NONA i7I ' E I 96- 0c', -Nnr 3.04. The Council further finds that the establishment of Tax Increment Financing District No. 5 -1 is intended, and in the . judgment of the Council, its effect will be to promote the public purposes and accomplish tl�e objectives specified in the Program and Flan. 3.05. The Council has relied upon the opinions and recommendations of its staff and ' pla3nnin commission and the personal knowledge of the members of the Council W reaching its conclusions regarding the creation of Tax Increment Financing District No. 5 -l. ' 3.06. The Council hereby funds that Tax Increment Financing District No. 5 -1 is a housing tax increment financing district within the meaning of Minnesota Statutes S 469.174, ' Subd. 11. Section 4. Approval of Develo ment District NoMm and Tax Increment Financing Plan• ' Establishrnent of Tax Increment Financ Dxamct No. 5 -1, in 4.01. The Program for Development District No. 5 and the Plan for Tax Increment ' Financing District No. 5 -1 are hereby approved and adopted. Tax increment Financing District No. 5 -1 is hereby established. 4.02. The boundaries of D District No. 5 and Tax Increment Financing i Distzi.ct No. 5 -1 are described in! the Program and Plan therefor and acre incozporated herein by reference. ' 4.03. The City elects to make a qualifying local contribution each year with respect to Tax Increment Financing District No. 5 -1 in an amount necessary to satisfy the requirements of ' Minnesota Statutes § 273.1399,; subd. 6. 4.04. The City Manager is authorized and directed to transmit a certified copy of this t resolution together with a certified copy of the Plan to the auditor of Carver county With a request that the original tax capacity of the property within Tax Increment Financing District No- 5-1 be certified to the City pursuant to Section 469.177, Subd. 1 of the Tai: Increment Financing ' Act and to file a copy of the program and the Plan with the, Minnesota state auditor. 4.05. The City may, at the appropriate time, take action to issue and sell its geed a o bli4atiQn bonds pursuant to the Ta x increment Financing Act to finance the costs identified the Plan for Tax Increment Financing District No. 5 -1. ' DATED: June 24, 1995. Donald e , ayor ATTEST: ' I� Donald s Iv�orth, City ciericimanager =.iiF,106?27. 3 S/S 30'dd 0I E6L.EEZ I9' 0I N31 VED '8 A03NN3M: W0NH S L ' E L 96- 03-Nnf '