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2001-78.RTFCITY OF CHANHASSEN CARVER COUNTY STATE OF MINNESOTA Council member Ayotte introduced the following resolution and moved its adoption: RESOLUTION NO. 2001-78 RESOLUTION ADOPTING THE MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA; AND THE MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE DOWNTOWN CHANHASSEN TAX INCREMENT FINANCING DISTRICT; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 8 (WITHIN DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA) AND ADOPTING THE TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Chanhassen, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Board of Commissioners (the "Board") of the Chanhassen Economic Development Authority (the "EDA") has heretofore established the Downtown Chanhassen Redevelopment Project Area and adopted a Redevelopment Plan therefor. It has been proposed by the EDA and the Council that the City adopt Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area, and a Modification to the Tax Increment Financing Plan for the Downtown Chanhassen Tax Increment Financing District, and establish Tax Increment Financing District No. 8 (the "District") and adopt the Tax Increment Financing Plan therefor, (collectively, the "Modifications and Plan"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, 469.090 through 469.1081 and 469.174 through 469.179, all inclusive, as amended, (the "Act") all as reflected in the Modifications and Plan, and presented for the Council's consideration. 1.02. The EDA and City have investigated the facts relating to the Modifications and Plan and have caused the Modifications and Plan to be prepared. 1.03. The EDA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Modifications and Plan, including, but not limited to, notification of Carver County and Independent School District No. 112 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Modifications and Plan by the City Planning Commission, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Modifications and Plan and to the activities contemplated therein have heretofore been prepared by staff and submitted to the Council and/or made a part of the City files and proceedings on the Modifications and Plan. The Reports include data, information and/or substantiation constituting or relating to the bases for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05. The City is not modifying the boundaries of the Downtown Chanhassen Redevelopment Project Area. Section 2. Findings for the Adoption and Approval of the Modifications and Plan. 2.01. The Council hereby finds that the Modifications and Plan, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public purpose and accomplish certain objectives as specified in the Modifications and Plan, which are hereby incorporated herein. Section 3. Findings for the Establishment of Tax Increment Financing District No. 8. 3.01. The Council hereby finds that Tax Increment Financing District No. 8 is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 11. 3.02. The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future and that 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 the District permitted by the Tax Increment Financing Plan, that the Modifications and Plan conform to the general plan for the development or redevelopment of the City as a whole; and that the Modifications and Plan will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 3.04. The City elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause a, which means the fiscal disparities contribution would be taken from outside the District. Section 4. Public Purpose 4.01. The adoption of the Modifications and Plan conforms in all respects to the requirements of the Act and will help fulfill a need to provide housing opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 5. Approval and Adoption of the Modifications and Plan. 5.01. The Modifications and Plan, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Manager. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Modifications and Plan and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Carver County is requested to certify the original net tax capacity of the District, as described in the Modifications and Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the City Manager 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 the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City Manager is further authorized and directed to file a copy of the Modifications and Plan with the Commissioner of Revenue. The motion for the adoption of the foregoing resolution was duly seconded by Council member Boyle, and upon a vote being taken thereon, the following voted in favor thereof: Jansen Labatt Peterson Boyle Ayotte and the following voted against the same: None Dated: November 13, 2001 ATTEST: Mayor City Manager (Seal) EXHIBIT A RESOLUTION # The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 8, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: i. Finding that Tax Increment Financing District No. 8 is a housing district as defined in M.S., Section 469.174, Subd. 11. The District will consist of one parcel. The development will consist of multi-family senior rental housing and a small amount of retail. At least 20 percent of the units/homes receiving assistance will have incomes at or below 50 percent of statewide median income. The market value of non-assisted housing or commercial property will be less than 20 percent of the total fair market value of the planned improvements. Appendix E of the TIF plan contains detailed analysis for the above finding. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that 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 Tax Increment Financing District No. 8 permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the development proposed in this plan is a housing development that meets the City's objectives for development and redevelopment. The cost of land acquisition, site and public improvements and utilities makes this housing development with the expected affordability infeasible without City assistance. The developer was asked for and provided a proforma as justification that the developer would not have gone forward without tax increment assistance (see attachment in Appendix F of the TIF plan). The increased market value of the site that could reasonable 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 increments for the maximum duration of the TIF District permitted by the Plan: The City supported this finding on the grounds that the cost of land acquisition, site and public improvements and utilities add to the total development cost. Historically, site development costs in this area have made development infeasible without tax increment assistance. Therefore, the City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided to the development. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the District, the total increase in market value would be up to $12,084,800. The present value of tax increments from the District is estimated to be $2,098,808. It is the Council's finding that no development with a market value of greater than $9,985,992 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition and public improvements in the general area of the District (see Cashflow in Appendix D of the TIF plan). 3. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 8 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the Plan and found that the Plan conforms to the general development plan of the City. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 8 will afford maximum opportunity, consistent with the sound needs' of the City as a whole, for the development or redevelopment of Downtown Chanhassen Redevelopment Project Area by private enterprise. Through the implementation of the Plan, the EDA or City will provide an impetus for residential development, desirable or necessary for increased population and increased life-cycle housing with the City.