7. Modification of Program for Development District 2 Modification of the Plan for Tax Increment Financing District and Adopting a New Plan for Tax Increment Financing District 2-2 t
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1 CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
1 (612) 937 -1900 • FAX (612) 937 -5739
1 MEMORANDUM xa
TO: Planning Commission
FROM: Todd Gerhardt, Asst. City Manager , ,
I DATE: February 13, 1992 `y , .
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SUBS: Modification of Program for Development District No. 2; Modification of the
I Plan for Tax Increment Financing District No. 2 -1; and adopting a new Plan
for Tax Increment Financing District No. 2 -2
Attached for your consideration is a modification to the city's plan for Development District
No. 2; and TIF District No. 2 -1; and the creation of a new district which will be called TIF
1 District No. 2 -2. The area under consideration can be seen on Attachment #1.
1 - District No. 2 -1
On the attached, you will notice two areas described as No. 2 -1 and No. 2 -2. In District No.
-1 2 -1, the plan is being modified at this time to allow the expenditures for public
improvements, including streets, storm sewer, water, sanitary sewer, and street lighting that
1 have occurred along Audubon Road and the future development of the Chanhassen
Business Center.
' The plan is also being modified to allow the City Council to expend tax increment dollars
for acquisition of land for a new middle school site.
1 District No 2 -2
The second area highlighted on Attachment #1 is District No. 2 -2. You may remember at
I your December 4, 1991, meeting you discussed and approved the final stage of the
Chanhassen Business Center. In continuing to encourage growth of our industrial
development and enhancement both the city's employment and tax base, staff recommending
I in creating a new TIF District for the Chanhassen Business Center. Consistent with what
the city has done for the McGlynn District, Chanhassen Business Park, and downtown.
1
I tom' PRINTED ON RECYCLED PAPER
Planning Commission
1 February 13, 199L
Page 2
Based on this information, the Planning Commission must find that the modifications being
proposed are consistent with the city's overall development plans. In staff's review of the
1 proposed projects, the uses being considered and their locations are consistent with the city's
land use policies.
1 PLANNING COMMISSION UPDATE
' On February 19, 1992, the Planning Commission unanimously adopted staffs
recommendation.
RECOMMENDATION
Staff would recommend that.the City Council adopt the following motion:
1 "The City Council adopts the attached resolutions adopting the Modification of the program
for Development District No. 2, Modification of Plan for Tax Increment Financing District
1 A No. 2 -1; and the creation of a new plan for Tax Increment Financing District No. 2 -2."
ATTACHMENTS
1 1. Map.
2. Plan for District No. 2 -1.
3. Plan for District No. 2 -2.
4. Resolutions.
5. Planning Commission Minutes February 19, 1992.
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FIGURE 2 LIFT STATION 1
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Development District No. 2
"m""mi T.I.F. District No. 2 -1 1
...c..... T.I.F. District No. 2 -2
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MODIFIED DEVELOPMENT PROGRAM
1 DEVELOPMENT DISTRICT NO. 2
and
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MODIFIED TAX INCREMENT FINANCING PLAN,
I TAX INCREMENT FINANCING DISTRICT NO. 2 -1
1 CITY OF CHANHASSEN, MINNESOTA
1 March 9, 1992
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I Prepared By:
I . HOLMES & GRAVEN, CHARTERED
470 Pillsbury Center
Minneapolis, MN 55402
1 - and -
HOISINGTON GROUP, INC.
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I 7401 Metro Blvd, #340
Edina, MN 55439
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TABLE OF CONTENTS
page
I. MODIFIED DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT
NO.2 1
A. Definitions. 1
B. Statutory Authority . 2
C. Statement of Objectives . 2
D. Environmental Controls . 3
E. Open Space to be Created. 3
F. Public Facilities to be Constructed. 3
G. Proposed Reuse of Property 3
H. Development District Financing. 3
I. Relocation 4
J. Administration of Development District 4
K. Description of Development District . 4
II. MODIFIED TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT
FINANCING DISTRICT NO. 2 -1 5
A. Statutory Authority. 5
B. Statement of Objectives . 5
C. Statement of Public Purpose 5
D. Development District Program 6
E. Description of TIF District. 6
F. Development District Contracts . 6
G. Classification of TIF District. 6
H. Modification of TIF Plan. 6
• I. Use of Tax Increment . 6
J. Excess Tax Increment. 7
K. Limitation of Increment. 7
L. Limitation on Administrative Expenses. 8 111 M
M. Limitation on Boundary Changes . 8
N. Relocation 8
O. Parcels to be Acquired Within the TIF District. 8
P. • TIF Account. 8
Q. Estimate of Project Costs . 8
R. Estimate of Bonded Indebtedness . 9
S. Original Tax Capacity. 9
T. Estimate of Captured Tax Capacity. 10
U. Duration of the TIF District 10
V. Estimates of Impact on Other Taxing Jurisdiction. 10
W. Annual Financial Report . 10
X. Assessment Agreements. 12
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I. MODIFIED DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 2
A. Definitions.
For the purposes of the modified Development District Program and modified
Tax Increment Financing Plan, the following terms shall have the meanings specified
below, unless the context otherwise requires.
I "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. Adminis-
trative 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 the state of Minnesota;
"Comprehensive Plan" means the City's Comprehensive Plan, including the
' objectives, policies, standards and programs to guide public and private land use,
development, redevelopment and preservation for all lands and water within the
City;
"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;
"County" means Carver County, Minnesota;
"Development District" means Development District No. 2 which was
established on October 10, 1988, pursuant to and in accordance with the Act,
expanded on May 22, 1989, and which is hereby again being expanded;
"Development Program" or "Program" means the Development Program for
1 Development District No. 2, which adopted by the Council on October 10, 1988,
modified on May 22, 1989, and which is hereby again being modified;
"Project Area" or "Project" means the property within modified Development
District No. 2, as described in the modified Development Program;
"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. 2 as stated in the Program and in the Plans for all Tax Increment
Financing Districts within Development District No. 2 or any obligations issued to
refund the Tax Increment Bonds;
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"Tax Increment Financin District" means Tax Increment Financing Ta Financing ng District
No. 2 -1, established on October 10, 1988, pursuant to and in accordance with the
TIF Act and which was expanded on May 22, 1989;
"Tax Increment Financing Act" or "TIF Act" means Minnesota Statutes
Sections 469.174 through 469.179, inclusive, as amended; and 1
"Tax Increment Financing Plan" or "Plan" means the TIF Plan for TIF District
No. 2 which was adopted by the Council on October 10, 1988, and which was modified
on May 22, 1989, and October 22, 1990, and which is hereby being modified again.
B . Statutory Authority.
The City has determined that it is necessary, desirable and in the public
interest to establish, designate, develop and administer a Development Program for
Development District No. 2 in the City, 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. 2 shall be accomplished in part or in whole
through tax increment financing in accordance with the TIF Act.
C. Statement of Objectives .
The City seeks to achieve the following objectives through the Development
Program:
1. promote and secure the prompt development of property in
Development District No. 2 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 the
City;
2. promote and secure additional employment opportunities within '
Development District No. 2 and the City for residents of the City
and the surrounding area, thereby improving living standards
and preventing unemployment and the loss of skilled labor and
other human resources in the City;
3. secure the increase of property subject to taxation by the City,
county, 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 the construction and provide moneys for the payment of
the cost of public activities or improvements in Development
District No. 2, including the construction of public recreational
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facilities, which are necessary for the orderly and beneficial
development of the Development District; and
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5. promote the concentration of appropriate development within
Development District No. 2 in order to maintain the area in a
manner consistent with its significance to the City.
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D . Environmental Controls .
It is anticipated that no development within the Development District will
present major environmental concerns. All City actions, public improvements and
private development will be carried out in a manner which will comply with applicable
111 environmental standards .
E. Open Space to be Created.
The open space expected to be created within the Development District will be
in accordance with the development controls of the City.
F . Public Facilities to be Constructed.
All public facilities constructed within the Development District will be
' financially feasible and compatible with the City's long range development plans .
Public improvements proposed within Development District No. 2 include upgrading
of Audubon Road from State Highway No. 5 to Lyman Boulevard and the construction
' of Audubon Court westerly from Audubon Road. The City also proposes to construct
streets, storm sewer, water, sanitary sewer, and street lighting within the
Chanhassen Business Center area which is being added to the Development District
through this modification.
The City intends to develop a recreational facility for use by city residents in
conjunction with a new school proposed to be constructed by Independent School
I + District No. 112. The City also proposes to purchase land for a future park and
construction of a sanitary sewer lift station. These will occur in the area being
added to Development District No. 2 as a result of this modification.
' G. Proposed Reuse of Property.
Property may be acquired in the future for construction of the public
' improvements, park, sanitary sewer lift station and the recreational facilities
associated with a new school discussed in Section F above. The precise location of
the recreational facilities has not yet been chosen and the Program will be amended
I again when the City has determined the property which will be purchased for this
purpose.
Future proposals for the use of property to be acquired by the City must be
consistent with Development Program objectives and financially feasible. Prior to
acquisition of any property for reuse by a private developer, the City Council may
require a development contract and other guarantees to ensure that sufficient tax
increment or other funds will be available to repay the cost associated with the
property acquisition. Appropriate restrictions regarding the reuse and
redevelopment of property shall be incorporated into any development contract to
which the City is a party.
H. Development District Financing.
' Within Development District No. 2, the City previously created one TIF
District and is now considering creation of a second TIF district to finance
development activities . Public improvement costs incurred in Development District
No. 2 will be paid through the pledge of tax increment from TIF District No. 2 -1 and
the new TIF District No. 2 -2.
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I. Relocation.
The City anticipates that no relocation will be necessary but accepts its
responsibility for providing for relocation pursuant to Section 469.133 of the Act.
If relocation is necessary, provisions will. be made in accordance with Minnesota
Statutes Sections 117.50 through 117.56, inclusive. 1
J. Administration of Development District.
Maintenance and operation of the public improvements will be the 1
responsibility of the Administrator of Development District No. 2. Each year the
Administrator will submit to the City Council the maintenance and operation budget
for the following year. The Administrator will administer the Development District
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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 Council. No action
taken by the Administrator shall be effective without authorization by the City
Council.
The City does not anticipate the need to create an advisory board to advise the
City Council on the planning, construction and implementation of the activities and
improvements outlined in the Development District Program.
K. Description of Development District. 1
Attached to this modification as Exhibit A is a map of the new boundaries of
the Development District as they will appear after adoption of this modification.
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II. MODIFIED TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT
FINANCING DISTRICT NO. 2 -1
A. Statutory Authority.
Pursuant to Section 469.175, Subd. 4 of the TIF Act, the City has adopted the
Plan for TIF District No. 2 -1 and has established TIF District No. 2 -1 within
Development District No. 2. The City is hereby modifying the Plan for TIF District
1 No. 2 -1 to provide authorization for additional public improvements and costs. No
additional land is being included in TIF District NO. 2 -1 as a result of this
modification.
1 B . Statement of Objectives.
In addition to the objectives outlines in Section I, subdivision C of the
' modified Development Program, the City seeks to achieve the following objectives
through the modified Plan for TIF District No. 2 -1:
1. provide employment opportunities within the City;
2. improve the tax base of the City and the general economy of the
City and state;
3. encourage development in an area of the City which has not been
utilized to its full potential;
4. provide for additional street, storm sewer, water, sanitary sewer
and street lighting improvements;
5. provide for recreational facilities for residents of the community
in coordination with other public entities in order to prevent
unnecessary duplication of facilities; and
6. implement relevant portions of the Comprehensive Plan.
C. Statement of Public Purpose.
In adopting the modified Plan, the City Council intends to make the following
111 findings: .
1. Anticipated development would not reasonably be expected to
occur solely through private investment within the reasonably
' foreseeable future and, therefore, the use of TIF is deemed
necessary;
2. The modified TIF Plan will afford maximum opportunity, consis-
tent with the sound needs of the City as a whole, for development
of the District by private enterprise; and
3. The modified TIF Plan conforms to general plans for development
of the City as a whole. •
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The conclusion summarized in paragraph 1 of this subdivision will be adopted
by the City upon approval of this modification and is one which has been reached by
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the City Council following consultation with the planning commission and city staff .
The conclusion has also been reached based upon the personal knowledge of members
of the City Council regarding the property and development trends within the City. 1
D. Development District Program.
The City created Development District No. 2 at the same time as creation of 1
TIF District No. 2 -1. The first modification to the Program was adopted on May 22,
1989. This modification of the Plan for TIF District No. 2 -1 includes a modified
Development District Program as well.
E. Description of TIF District.
A description and a map of the boundaries of TIF District No. 2 -1 were
included with the modified Plan adopted on May 22, 1989. No additional property
is being added to TIF District No. 2 -1 by this modification. 1
F. Development District Contracts.
The City has not entered into any development contracts for properties within '
TIF District No. 2 -1. If necessary, contracts regarding property within the TIF
District will be entered into in accordance with Section 469.176, Subd. 5 of the TIF
Act and no more than 10 percent, by acreage, of the land within TIF District No. 2 -1
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will be acquired by the City with bond proceeds without having concluded an
agreement for development or redevelopment of the property.
G. Classification of TIF District. 1
TIF District No. 2 -1 is an economic development TIF district, pursuant to
Section 469.174, Subd. 12 of the TIF Act, for which certification was requested prior 1
to May 1, 1990.
H. Modification of TIF Plan.
The Plan for TIF District No. 2 -1 is being modified at this time to authorize
expenditures for public improvements, including streets, storm sewer, water, .
sanitary sewer and street lighting in the Chanhassen Business Center area. The
Plan for TIF District No. 2 -1 may be modified again in the future by the City,
provided that any reduction or enlargement of 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 assessed value 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. 2 -1 shall be used in accordance with this modified TIF Plan.
• The revenues shall be used to finance or otherwise pay the capital and administrative
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costs of development activities within the Development District as identified in the
modified Development Program and TIF Plan.
J. Excess Tax Increment.
Pursuant to Section 469.176, Subd. 2 of the TIF Act, in any year in which tax
increment exceeds the amount necessary to pay the costs authorized by the modified
• I TIF Plan, the City shall use the excess amount to do any of the following, in the
order determined by the City:
1. prepay any outstanding bonds;
2. discharge the pledge of tax increment therefor;
3. pay into an escrow account dedicated to the payment of bonds;
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 .
In addition, the City may choose to modify the TIF Plan again in order to
provide for other public improvements within the Development District.
K . Limitation of Increment.
1. No increment shall be paid to the City from TIF District No. 2 -1
' after three years from the date of certification of the original tax
capacity of the taxable real 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. 2 -1,
or (c) the City has constructed or caused to be constructed
' public improvements within TIF District No. 2 -1.
2. If, after four years from the date of certification of the original
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tax capacity of TIF District No. 2 -1, no demolition,
' • rehabilitation, or renovation of property or other site
preparation, including 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. 2 -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 these activities
subsequently commence, 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. The City shall submit to the county auditor
' evidence that the required activity has taken place for each
parcel in TIF District No. 2 -1. The evidence shall be submitted
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by February 1 of the fifth year following the year in which the
parcels were certified as included within TIF District No. 2 -1.
3. No tax increment shall in any event be paid to the City from TIF
District No. 2 -1 after eight years from the date of receipt by the
City of the first increment or 10 years from the date of approval
of the original TIF Plan, whichever occurs first.
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. Each time the City
increases the budget of TIF District No. 2 -1, the amount of tax increment money
allocated to Administrative Expenses may be increased as long as the total of
Administrative Expenses 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. 2 -1 may be reduced, but cannot be
enlarged after five years following the date of certification of original tax capacity
by the Carver county auditor. This modification does not include an expansion of
the boundaries of TIF District No. 2 -1. 1
N. Relocation. •
Although no relocation is anticipated, the City accepts as binding its
obligations under state law for relocation and will administer relocation services for
families, individuals and businesses displaced by public action.
0. Parcels to be Acquired Within the TIF District.
It is not anticipated that any property within TIF District No. 2 -1 will be
acquired in connection with the development proposals outlined in this modified TIF
Plan. Funds will be used to acquire property in connection with the public
improvements to be constructed in the Chanhassen Business Center area. In the
future the City may also acquire sites for a park, a sanitary sewer lift station and
for community recreational facilities to be constructed in connection with a new
school site. The site for the park will be located within proposed TIF District No.
2 -2. The sanitary sewer lift station and recreational facilities will be located within
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Development District No. 2.
P. TIF Account. '
The tax increment received with respect to TIF District No. 2 -1 shall be
segregated by the City in a special account on its official books and records and held 111 by a trustee for the benefit of holders of bonds issued to finance development
activities .
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The following are estimates of additional costs to be incurred as a result of this
third modification:
Public Improvements (streets, storm sewer, $1,500,000
water, sanitary sewer, street lighting
in Chanhassen Business Park)
Engineering /contingency for public improvements 300,000
Administration 90, 000
TOTAL $1,890,000
The City has also initiated a special assessment reduction program for
properties throughout the TIF District. Under the program, benefitted properties
are eligible for reductions in assessments if there has been an increase in the
assessed value of the properties due to new construction. Properties assessed at a
rate of less than $30, 000 per acre qualify for a reduction equal to seven percent of
the value added to the property through new construction. Properties assessed at
a rate of $30,000 per acre or more qualify for a reduction equal to 12 percent of the
' added value.
The amount of the reduction for which a property owner is eligible is equal to
the tax increment from the parcel (as determined by the auditor and adjusted for
fiscal disparities contributions) for a three year period following construction and
commencing with the year in which the City receives the first full year's increment,
or such other three year period as may be agreed upon by the City and owner.
However, the maximum reduction may not exceed the total special assessments levied
and outstanding against the parcel for qualifying public improvement projects.
Owners wishing to participate must enter into a special assessment reduction
agreement with the City.
' R . Estimate of Bonded Indebtedness.
The City has previously sold bonds to pay for the improvements to Audubon
Road. The City does not currently intend to sell additional tax increment bonds to
pay for the construction of the improvements authorized by this modification.
S. Original Tax Capacity.
Pursuant to Section 469.177, Subd. 1 of the TIF Act, each year the Carver
county auditor will measure the increase or decrease in the total tax capacity of the
property. Any year in which there is an increase in total tax capacity of property
within the TIF District, an increment will be payable to the City. Any year in which
the total tax capacity is below the original tax capacity of all property within TIF
District No. 2 -1, no increment will be payable to the City.
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. 2 -1 as a result of:
1. change in the tax exempt status of the property;
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2. reduction or enlargement of the geographic boundaries of the TIF
District;'
3. reduction of valuation by means of a court - ordered abatement, r
stipulation agreement, voluntary abatement made by the assessor
or auditor or by order of the Minnesota commissioner of revenue;
or
4 . any change in tax classification under Minnesota Statutes Section
273.13 of property after it has been added to the TIF District. 1
In addition, each year the auditor shall add to the original tax capacity of TIF
District No. 2 -1 an amount equal to the original tax capacity for the preceding year
multiplied by the average percentage increase in tax capacity of all property within
the TIF District during the preceding five years.
T. Estimate of Captured Tax Capacity. '
The City's estimate of captured tax capacity within TIF District No. 2 -1 was
contained in the modified Plan adopted on May 22, 1989. Since this third modification
does not involve the addition of property to the TIF District, the City has not
revised its estimate of captured tax capacity.
U. Duration of the TIF District. 1
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In accordance with Section 469.176, Subd. 1 of the TIF Act, the City may
continue to receive TIF payments until eight years from the date of the receipt of the
first increment or 10 years from the date of the approval of the original TIF Plan,
whichever occurs first .
V. Estimates of Impact on Other Taxing Jurisdiction. '
The City included its estimate of the impact of TIF District No. 2 -1 in the
original Plan adopted on October 10, 1988, and the modified Plan adopted on May 22,
1989. Since this third modification does not involve adding any property to TIF
District No. 2 -1, the City has not changed its estimate of the fiscal impact of the TIF
District No. 2 -1 on other taxing jurisdictions. '
W. . Annual Financial Report .
Pursuant to Section 469.175, Subd. 6 of the TIF Act, the City must file an ,
annual financial report regarding TIF District No. 2 -1. The report shall be filed by
July 1 of each year with the school board, the county board and the state auditor.
The report to be filed by the City shall include the following information:
1. the original tax capacity of TIF District No. 2 -1;
2. the captured tax capacity of TIF District No. 2 -1, including the 1
amount of any captured tax capacity shared with other taxing
districts;
3. the outstanding principal amount of bonds issued or other loans
incurred to finance project costs in TIF District No. 2 -1;
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4. for the reporting period and for the duration of TIF District No.
2 -1, the amount budgeted under the TIF Plan and the actual
amount expended for the following categories:
a. acquisition of land and buildings through condemnation or
purchase;
b. site improvement or preparation costs;
c. installation of public utilities or other public
improvements;
d. administrative costs, including the allocated cost of the
City;
5. for properties sold to developers, the total cost of the property
to the City and the price paid by the developer; and
' 6. the amount of tax exempt obligations, other than those reported
under clause (3), which were issued on behalf of private entities
for facilities located in TIF District No. 2 -1.
' In addition, the City must report annually by March 1 to the Minnesota
commissioner of revenue the following amounts for the entire City:
t 1. the total principal amount of nondefeased tax increment financing
bonds that are outstanding at the end of the previous calendar
year; and
' 2. the total annual amount of principal and interest payment that are
due for the current calendar year on (i) general obligation tax
' increment financing bonds, and (ii) other tax increment
financing bonds.
The City must annually report to the commissioner of revenue the following
' amounts for TIF District No. 2 -1:
1. the type of district, whether economic development,
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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 captured net tax capacity of the district, by property class
' as specified by the commissioner of revenue, for taxes payable
in the current calendar year;
4. the tax increment revenues for taxes payable in the current
calendar year;
5. whether the Plan or other governing document permits increment
I 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
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CH130 -11 11
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may be expended on activities located outside of the district, or
(iii) to otherwise finance activities located outside of the tax
increment district; and
6. any additional information that the commissioner of revenue may
require.
X. Assessment Agreements .
Pursuant to Section 469.177, Subdivision 8 of the TIF Act, the City may, upon
entering into a development agreement pursuant to Section 469.176, Subdivision 5
of the TIF Act, execute an agreement in recordable form with the developer which
establishes a minimum market value of the land and completed improvements for the
duration of TIF District No. 2 -1. The agreement shall be presented to the Carver
county assessor who shall review the plans and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon
which the improvements are to be constructed and so long as the minimum market
value contained in the agreement appears in the judgment of the assessor to be a
reasonable estimate, the assessor may certify the minimum market value agreement. 1
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CH130 -11 12
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TAX INCREMENT FINANCING PLAN,
TAX INCREMENT FINANCING DISTRICT NO. 2 -2
CITY OF CHANHASSEN, MINNESOTA •
1
March 9, 1992
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Prepared By:
HOLMES & GRAVEN, CHARTERED'
470 Pillsbury Center
Minneapolis, MN 55402
- and -
1 HOISINGTON GROUP, INC.
7401 Metro Blvd, #340
Edina, MN 55439
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TABLE OF CONTENTS
Page
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I. TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 2 -2
A. Definitions. 1 1
B. Statutory Authority . 2
C. Statement of Objectives . 2
D. Statement of Public Purpose 2
E. Development District Program 3
F. Description of TIF District. 3
G. Development District Contracts. 3
H. Classification of TIF District. 3
I. Modification of TIF Plan. 3
J. Use of Tax Increment. 4
K. Excess Tax Increment. 4
L. Limitation of Increment. 4
M. Limitation on Administrative Expenses . 5
N. Limitation on Boundary Changes. 5
O. Relocation 5
P. Parcels to be Acquired Within the TIF District. 5
Q. TIF Account. 5
R. Estimate of Project Costs. 6
S. Estimate of Bonded Indebtedness. 6
T. Original Tax Capacity. 6
U. Estimate of Captured Tax Capacity. 7
V. Duration of the TIF District 7
W. ,Estimates of Impact on Other Taxing Jurisdiction. 7
X. Annual Financial Report. 8
Y. Assessment Agreements . 9
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I. TAX INCREMENT FINAKING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 2 -2
A . Definitions.
For the purposes of the Tax Increment Financing Plan, 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. Adminis-
trative 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 the state of Minnesota;
"Comprehensive Plan" means the City's Comprehensive Plan, including the
objectives, policies, standards and programs to guide public and private land use,
development, redevelopment and preservation for all lands and water within the
City;
} "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;
' "County" means Carver County, Minnesota;
"Development District" means Development District No. 2 which was
established on October 10, 1988, pursuant to and in accordance with the Act,
expanded on May 22, 1989, and which is hereby again being expanded;
"Development Program" or "Program" means the Development Program for
Development District No. 2, which adopted by the Council on October 10, 1988,
modified on May 22, 1989, and which is hereby again being modified;
"Project Area" or "Project" means the property within modified Development
District No. 2, as described in the modified Development Program;
"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. 2 as stated in the Program and in the Plans for all Tax Increment
Financing Districts within Development District No. 2 or any obligations issued to
refund the Tax Increment Bonds;
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"Tax Increment Financing District" g tract means Tax Increment Financing District
No. 2 -2, which is hereby establishing pursuant to and in accordance with the TIF
Act;
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"Tax Increment Financing Act" or "TIF Act" means Minnesota Statutes
Sections 469.174 through 469.179, inclusive, as amended; and
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"Tax Increment Financing Plan" or "Plan" means the TIF Plan for TIF District
No. 2 -2 which is hereby adopted.
B . Statutory Authority. 111
Pursuant to Section 469.175, Subd. 4 of the TIF Act, the City is hereby
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adopting the Plan for TIF District No. 2 -2 and establishing TIF District No. 2 -2
within Development District No. 2.
C. Statement of Objectives. 1
The City seeks to achieve the following objectives through the Plan for TIF
District No. 2 -2: 1
1. provide employment opportunities within the City;
2. improve the tax base of the City and the general economy of the 1
City and state;
3. encourage development in an area of the City which has not been 1
utilized to its full potential;
4. provide for additional street, storm sewer, water, sanitary sewer 1
and street lighting improvements;
5. provide for recreational facilities for residents of the community
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in coordination with other public entities in order to prevent
unnecessary duplication of facilities; and
6. implement relevant portions of the Comprehensive Plan. 1
D. Statement of Public Purpose.
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In adopting the TIF Plan, the City Council intends to make the following
findings:
1. Anticipated development would not reasonably be expected to 1
occur solely through private investment within the reasonably
foreseeable future and, therefore, the use of TIF is deemed
necessary; 1
2. The TIF Plan will afford maximum opportunity, consistent with
the sound needs of the City as a whole, for development of the
District by private enterprise; and
3. The TIF Plan conforms to general plans for development of the
City as a whole.
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The conclusion summarized in paragraph 1 of this subdivision will be adopted
by the City upon approval of this TIF Plan and is one which has been reached by the
City Council following consultation with the planning commission and city staff. The
conclusion has also been reached based upon the personal knowledge of members of
the City Council regarding the property and development trends within the City.
E. Development District Program.
1 The City created Development District No. 2 on October 10, 1988, at the same
time as creation of TIF District No. 2 -1. The first modification to the Program was
adopted on May 22, 1989, and the Program is being modified again at this time. The
Plan for TIF District No . 2 -2 is consistent with the modified Program for Development
District No. 2.
F. Description of TIF District.
A map of the boundaries of TIF District No. 2 - 2 is included on Figure 1.
1 G. Development District Contracts .
The City has not entered into any development contracts for properties within
TIF District No. 2 -2. If necessary, contracts regarding property within the TIF
District will be entered into in accordance with Section 469.176, Subd. 5 of the TIF
Act and no more than 10 percent, by acreage, of the land within TIF District No. 2 -2
1 will be acquired by the City with bond proceeds without having concluded an
agreement for development or redevelopment of the property.
H. Classification of TIF District.
1 TIF District No. 2 -2 is an economic development TIF district, pursuant to
Section 469.174, Subd. 12 of the TIF Act.
1 I. Modification of TIF Plan.
The City proposes to purchase property to be used for construction of
1 community recreational facilities to be built in connection with a new school.. The
location of the new facility has not been determined precisely. When the specific
land to be utilized has been identified, the City will amend the Plan for TIF District
1 No. 2 -2 to identify the site and to detail the associated costs.
The Plan for TIF District No. 2 -2 may also be modified for other reasons in the
future by the City, provided that any reduction or enlargement of 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 assessed value 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
I • the notice and after such discussion, public hearing and findings as required for
approval of the original Plan.
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J. Use of Tax Increment.
Pursuant to Section 469.176, Subd. 4 of the TIF Act, all revenues derived 1
from TIF District No. 2 -2 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 Development District as identified in the
modified Development Program and TIF Plan.
K. Excess Tax Increment. 1
Pursuant to Section 469.176, Subd. 2 of the TIF Act, in any year in which tax
increment exceeds the amount necessary to pay the costs authorized by the TIF
Plan, the City shall use the excess amount to do any of the following, in the order
determined by the City:
1. prepay any outstanding bonds; '
2. discharge the pledge of tax increment therefor;
3., pay into an escrow account dedicated to the payment of bonds; j
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. ,
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In addition, the City may choose to modify the TIF Plan in order to provide for
other public improvements within the Development District. ,
L. Limitation of Increment.
1. No increment shall be paid to the City from TIF District No. 2 -2 ,
after three years from the date of certification of the original tax
capacity of the taxable real 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. 2 -2,
or (c) the City has constructed or caused to be constructed
public improvements within TIF District No. 2 -2.
2. If, after four years from the date of certification of the original
tax capacity of TIF District No. 2 -2, no demolition,
rehabilitation, or renovation of property or other site
preparation, including 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. 2 -2 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 these activities
subsequently commence, the City shall so certify to the county
auditor, and the tax capacity of the property as most recently
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certified by the commissioner of revenue may be added to the
TIF District. The City shall submit to the county auditor
evidence that the required activity has taken place for each
parcel in TIF District No. 2-2. The evidence shall be submitted
by February 1 of the fifth year following the year in which the
parcels were certified as included within TIF District No. 2 -2.
3. No tax increment shall in any event be paid to the City from TIF
' District No. 2 -2 after eight years from the date of receipt by the
City of the first increment or 10 years from the date of approval
of the TIF Plan, whichever occurs first.
M. Limitation on Administrative Expenses.
Pursuant to Section 469.1 76, Subd. 3 of the TIF Act, Administrative Expenses
are limited to 10 percent of the total tax increment expenditures . Each time the City
increases the budget of TIF District No. 2 -2, the amount of tax increment money
allocated to Administrative Expenses may be increased as long as the total of
Administrative Expenses does not exceed 10 percent of the total budget of the TIF
District.
N. Limitation on Boundary Changes.
The geographic area of TIF District No. 2 -2 may be reduced, but cannot be
enlarged after five years following the date of certification of original tax capacity
by the Carver county auditor.
O. Relocation.
Although no relocation is anticipated, the City accepts as binding its
obligations under state law for relocation and will administer relocation services for
families, individuals and businesses displaced by public action.
P. Parcels to be Acquired Within the TIF District.
' The City will acquire property within TIF District No. 2 -2 in connection with
the public improvements to be constructed in the Chanhassen Business Center area.
The City will also acquire a site for a future park within TIF District No. 2 -2 and for
a sanitary sewer lift station within Development District No. 2. These properties are
identified on Figure 2.
The City also intends to purchase a site for community recreational facilities
to be constructed in connection with a new school. The site for the recreational
facilities has not yet been identified.
Q. TIF Account.
The tax increment received with respect to TIF District No. 2 -2 shall be
segregated by the City in a special account on its official books and records and held
by a trustee for the benefit of holders of bonds issued to finance development
activities.
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R . Estimate of Project Costs.
The following are estimates of costs to be incurred in connection with TIF
District No. 2 -2:
Public Improvements (streets, storm sewer, • $1,500,000
water, sanitary sewer, street lighting
in Chanhassen Business Park)
Engineering /contingency for public improvements 300,000 ,
Administration 90, 000
TOTAL $1,890,000
The City has also initiated a special assessment reduction program for 1
properties throughout the TIF District. Under the program, benefitted properties
are eligible for reductions in assessments if there has been an increase in the
assessed value of the properties due to new construction. Properties assessed at a
rate of less than $30,000 per acre qualify for a reduction equal to seven percent of
the value added to the property through new construction. Properties assessed at
a rate of $30,000 per acre or more qualify for a reduction equal to 12 percent of the
added value.
The amount of the reduction for which a property owner is eligible is equal to
the tax increment from the parcel (as determined by the auditor and adjusted for
fiscal disparities contributions) for a three year period following construction and
commencing with the year in which the City receives the first full year's increment,
or such other three year period as may be agreed upon by the City and owner.
However, the maximum reduction may not exceed the total special assessments levied
and outstanding against the parcel for qualifying public improvement projects.
Owners wishing to participate must enter into a special assessment reduction
agreement with the City.
S. Estimate of Bonded Indebtedness.
The City does not currently intend to sell tax increment bonds to pay for the
construction of the improvements authorized by this TIF Plan.
T . Original Tax Capacity.
The original tax capacity of the land to be included within TIF District No. 2 -2
is $3,676. Pursuant to Section 469.177, Subd. 1 of the TIF Act, each year the
Carver county auditor will measure the increase or decrease in the total tax capacity
of the property. Any year in which there is an increase in total tax capacity of
property within the TIF District above $3,676, an increment will be payable to the
City. Any year in which the total tax capacity is below the original tax capacity of
all property within TIF District No. 2 -2, no increment will be payable to the City.
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. 2- as a result of:
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1. change in the tax exempt status of the property;
2. reduction or enlargement of the geographic boundaries of the TIF
District;
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;
' or
4. any change in tax classification under Minnesota Statutes Section
273.13 of property after it has been added to the TIF District.
In addition, each year the auditor shall add to the original tax capacity of TIF
District No. 2 -2 an amount equal to the original tax capacity for the preceding year
multiplied by the average percentage increase in tax capacity of all property within
the TIF District during the preceding five years.
1 U. Estimate of Captured Tax Capacity:
Pursuant to Sections 469.175, Subd. 1 and 469.177, Subd. 2 of the TIF Act,
1 the estimated captured tax capacity of the property within TIF District No. 2 -2 will
be $1,400,000 upon completion of all proposed construction within the next six to
eight years.
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. 2 -2 is necessary
to finance or otherwise make permissible expenditures authorized by Section
469.176, Subd. 4 of the TIF Act.
V. Duration of the TIF District.
In accordance with Section 469.176, Subd. 1 of the TIF Act, the City may
continue to receive TIF payments until eight years from the date of the receipt of the
first increment or 10 years from the date of the approval of the TIF Plan, whichever
1 occurs first.
W. Estimates of Impact on Other Taxing Jurisdiction.
1 It is anticipated that about $1,400,000 in increment will be captured annually
from within TIF District No. 2 -2. This represents the ultimate increment amount and
is based on completion of the proposed projects over the next six to eight years. A
cumulative tax capacity rate of 114.349 has been utilized throughout the cash flow
analysis employed in the TIF Plan. Applying the percentage of the total tax capacity
rate for taxes payable in 1993 by each taxing jurisdiction to the projected annual
increment of $1,400,000 reveals the annual "loss" of tax dollars by each jurisdiction
upon completion of all projects if the development would have occurred without TIF.
The City believes the actual impact on other taxing jurisdictions is zero because
development would not have occurred within the reasonably foreseeable future
without public intervention. However, for the purposes of Section 469.175, subd.
1(6), the assumed amount of tax dollars foregone by each jurisdiction is listed in
below:
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Percent of Tax Increment Attributable
to Various Taxing Jurisdictions 1
Estimated
Tax Capacity Percent of Total Ultimate Tax
Taxing Jurisdictions Rate Tax Capacity Rate Loss ($)
City of Chanhassen 24.1 21.1 $ 295,400
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Carver County 35.23 30.8 431,200
Independent School
District No. 112 51.604 45.1 631,400
Other 3.415 3 42,000
TOTAL 114.349 100.0% $ 1,400,000
X. Annual Financial Report. 1
Pursuant to Section 469.175, Subd. 6 of the TIF Act, the City must file an
annual financial report regarding TIF District No. 2 -2. The report shall be filed by
July 1 of each year with the school board, the county board and the state auditor.
The report to be filed by the City shall include the following information:
1. the original tax capacity of TIF District No. 2 -2; 1
2. the captured tax capacity of TIF District No. 2 -2, including the
amount of any captured tax capacity shared with other taxing
districts;
3. the outstanding principal amount of bonds issued or other loans 1
incurred to finance project costs in TIF District No. 2 -2;
4. for the reporting period and for the duration of TIF District No.
2 -2, the amount budgeted under the TIF Plan and the actual
amount expended for the following categories:
a. acquisition of land and buildings through condemnation or
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purchase;
b. site improvement or preparation costs; 1
c. installation of public utilities or other public
improvements; 1
d. administrative costs, including the allocated cost of the
City;
5. for properties sold to developers, the total cost of the property I
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to the City and the price paid by the developer; and
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6. the amount of tax exempt obligations, other than those reported
under clause (3) , which were issued on behalf of private entities
for facilities located in TIF District No. 2 -2.
In addition, the City must report annually by March 1 to the Minnesota
commissioner of revenue the following amounts for the entire City:
1. the total principal amount of nondefeased tax increment financing
bonds that are outstanding at the end of the previous calendar
year; and
2. the total annual amount of principal and interest payment that are
due for the current calendar year. on (i) general obligation tax
increment financing bonds, and (ii) other tax increment
financing bonds.
The City must annually report to the commissioner of revenue the following
amounts for TIF District No. 2 -2:
1. the type of district, whether economic development,
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 captured net tax capacity of the district, by property class
as specified by the commissioner of revenue, for taxes payable
in the current calendar year;
4. the tax increment revenues for taxes payable in the current
' calendar year;
5. whether the 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
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1 (iii) to otherwise finance activities located outside of the tax
increment district; and
6. any additional information that the commissioner of revenue may
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require.
Y. Assessment Agreements.
Pursuant to Section 469.177, Subdivision 8 of the TIF Act, the City may, upon
entering into a development agreement pursuant to Section 469.176, Subdivision 5
of the TIF Act, execute an agreement in recordable form with the developer which
establishes a minimum market value of the land and completed improvements for the
duration of TIF District No. 2 -2. The agreement shall be presented to the Carver
county assessor who shall review the plans •and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon
which the improvements are to be constructed and so long as the minimum market
value contained in the agreement appears in the judgment of the assessor to be a
reasonable estimate, the assessor may certify the minimum market value agreement.
CH130 -11 9
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CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA 1
RESOLUTION 1
Date Resolution No. '
Motion By Seconded By
* UTION ADOPTING A
RESOLUTION
INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING
DISTRICT NO. 2 -2
BE IT RESOLVED By the City Council (the Council) of the City of
Chanhassen, Minnesota (the City) as follows:
Section 1. Recitals . 1
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1.01. On October 10, 1988, the City adopted a Development Program for
Development District No. 2 and a Tax Increment Financing Plan for Tax Increment
Financing District No. 2 -1 therein, all pursuant to and in accordance with Minnesota
Statutes § 469.124 through 469.134 and Minnesota Statutes § 469.174 through
469.179.
1.02. On May 22, 1989, the boundaries of Development District No. 2 were
expanded and the Program accordingly modified.
1.03. It has been proposed that the City again expand the boundaries of
Development District No . 2 and create another tax increment financing district within
the expanded Development District No. 2, which tax increment district will be known
as Tax Increment Financing District No. 2 -2.
1.04. The Council has investigated the facts and has caused to be prepared
a Tax Increment Financing Plan describing the specific acts to be taken to assist
development within the boundaries of Tax Increment Financing District No. 2 -2 and
Development District No. 2.
1.05. The City has performed all actions required by law to be performed
prior to the establishment of Tax Increment Financing District No. 2 -2 and the
adoption of a Tax Increment Financing Plan relating thereto, including, but not
limited to, notification of Carver County and Independent School District No. 112;
a review by the City planning commission of the Tax Increment Financing Plan for
Tax Increment Financing District No. 2 -2 for its consistency with the general plans
for development of the City; and holding a public hearing regarding the Plan upon
such notice as is required by law.
1.06. The Tax Increment Financing Plan is contained in a document entitled
"Tax Increment Financing Plan, Tax Increment Financing District No. 2 -2, City of
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CH130 -11 1
Chanhassen, Minnesota," dated March 9, 1922, and on file in the office of the City
Manager.
1.07. The City Council has fully reviewed the contents of the Tax Increment
Financing Plan and has on this date conducted a public hearing thereon at which the
views of all interested persons were heard.
I Section 2. Findings Related to the Establishment of Tax Increment Financing
District No. 2 -2.
2.01. It is the opinion of the Council that development of the properties
included within the boundaries of Tax Increment Financing District No. 2 -2 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.
2.02. The Council finds that the Tax Increment Financing Plan for Tax
Increment Financing District No. 2 -2 conforms to the general plan for development
of the City, based upon the recommendations of the planning commission.
2.03. The Council finds that the Tax Increment Financing Plan for Tax
Increment Financing District No. 2 -2 will afford maximum opportunity, consistent
with the sound needs of the City as a whole, for development of the expanded
District by private enterprise.
2.04. The Council further finds that the establishment of Tax Increment
Financing District No. 2 -2 is intended, and in the judgment of the Council, its effect
will be to promote the public purposes and accomplish the objectives specified in the
Tax Increment Financing Plan.
2.05. The City Council has relied upon the opinions and recommendations of
j its staff and planning commission and the personal knowledge of the members of the
council in reaching its conclusions regarding the creation of Tax Increment
Financing District No. 2 -2.
2.06. The City Council hereby finds that Tax Increment Financing District
No. 2 -2 is an economic development tax increment financing district within the
meaning of Minnesota Statutes § 469.174, Subd. 12.
Section 3. Approval of Tax Increment Financing Plan; Establishment of Tax
Increment Financing District No. 2 -2.
1 3.01. The Tax Increment Financing Plan for Tax Increment Financing District
No. 2 -2 is hereby approved and adopted. Tax Increment Financing District No. 2 -2
is hereby established.
3.02. The boundaries of Tax Increment Financing District No. 2 -2 are
described in the Tax Increment Financing Plan therefor and are incorporated herein
by reference.
3.03. The City elects to be governed by Minnesota Statutes § 469.177, Subd.
3(a), with regard to fiscal disparities for Tax Increment Financing District No. 2 -2.
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3.04. The City Manager is authorized and directed to transmit a certified copy
of this resolution together with a certified copy of the Tax Increment Financing Plan
to the auditor of Carver County with a request that the original tax capacity of the
property within Tax Increment Financing District No. 2 -2 be certified to the City
pursuant to Section 469.177, Subd. 1 of the Tax Increment Financing Act and to file
a copy of the Tax Increment Financing Plan with the Minnesota commissioner of trade
and economic development .
3.05. The City may, at the appropriate time, take action to issue and sell its
general obligation bonds pursuant to the Tax Increment Financing Act to finance the
costs identified in the Plan for Tax Increment Financing District No. 2 -2.
DATED: March 9, 1992. 1
Donald Chmiel, Mayor 1
ATTEST:
1
Donald Ashworth, City Clerk /Manager
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CH130 -11 3
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CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
RESOLUTION
Date Resolution No.
Motion By Seconded By
RESOLUTION ADOPTING A MODIFIED
•
DEVELOPMENT PROGRAM FOR DEVELOPMENT
DISTRICT NO. 2 AND MODIFIED TAX INCREMENT
FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 2 -1
BE IT RESOLVED By the City Council (the Council) of the City of
Chanhassen, Minnesota (the City) as follows:
Section 1. Recitals. •
1.01. On October 10, 1988, the City adopted a Development Program for
Development District No. 2 and a Tax Increment Financing Plan for Tax Increment
Financing District No. 2 -1 therein, all pursuant to and in accordance with Minnesota
Statutes Section 469.124 through 469.134 and Minnesota Statutes Sections 469.174
through 469.179.
1.02. On May 22, 1989, the boundaries of Development District No. 2 were
expanded and the Program accordingly modified.
1.03. On May 22, 1989, the boundaries of Tax Increrilent Financing District
No. 2 -1 were expanded and the Plan modified and the Plan for Tax Increment
Financing District No. 2 -1 was again modified on October 22, 1990.
1.04. It has been proposed that the City again expand the boundaries of
Development District No. 2 and modify the Plan for Tax Increment Financing District
No. 2 -1 in order to authorize financing of additional public expenditures within
Development District No. 2.
1.05. The Council has investigated the facts and has caused to be prepared
a modified Development Program for Development District No. 2 and a modified Plan
for Tax Increment Financing District No. 2 -1, describing the additional actions to
be undertaken by the City to aid the development of property within Development
District No. 2.
1.06. The City has performed all actions required by law to be performed
prior to the enlargement of Development District No. 2 and the modification of the
Plan for Tax Increment Financing District No. 2 -1, including, but not limited to,
notification of Carver County and Independent School District No. 112; a review by
the City planning commission of the modified Development Program for Development
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District No. 2 and the modified Tax Increment Financing Plan for Tax Increment
Financing District No. 2 -1 for their consistency with the general plans for
development of the City; and holding a public hearing regarding the modified
Program and Plan upon such notice as is required by law.
1.07. The modified Development Program and Tax Increment Financing Plan
are contained in a document entitled "Modified Development Program, Development
District No. 2 and Modified Tax Increment Financing Plan, Tax Increment Financing
District No. 2 -1, City of Chanhassen, Minnesota," dated March 9, 1992, and on file
in the office of the City Manager.
1.08. The City Council has fully reviewed the contents of the modified
Development Program and Tax Increment Financing 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 the Expansion of Development District No. 2
2.01. The Council hereby finds that the expansion of Development District
No. 2 is intended, and in the judgment of the Council, its effect will be to provide
an impetus for additional industrial development in the City, increase employment,
and otherwise promote the public purposes and objectives specified in the modified
Development Program.
2.02. It is further found and determined that:
a) The land added to Development District No. 2 would not be made
available for development without the public intervention and financial
assistance described in the modified Development Program and Tax
Increment Financing Plan;
b) The modified Development Program will afford maximum 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 of the planning commission, the
modified Development Program conforms to the general plan for
development of the City as set forth in the City's comprehensive plan.
Section 3. Findings Related to the Modification of the Plan for Tax Increment ,
Financing District No. 2 -1.
3.01. It is the opinion of the Council that development of the properties 1
included within the boundaries of Tax Increment Financing District No. 2 -1 would
not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future due to the lack of an adequate access road and that the
use of tax increment financing is therefore necessary.
3.02. The Council finds that the modified Plan for Tax Increment Financing
District No. 2 -1 conforms to the general plan for development of the City, based
upon the recommendations of the planning commission.
3.03. The Council finds that the modified Plan for Tax Increment Financing 1
District No. 2 -1 will afford maximum opportunity, consistent with the sound needs
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of the City as a whole, for development of the expanded District by private
enterprise.
3.04. The Council further finds that the authorization for additional public
expenditures and other changes reflected in the modified Plan for Tax Increment
Financing District No. 2 -1 are intended, and in the judgment of the Council, their
effect will be to promote the public purposes and accomplish the objectives specified
in the modified Tax Increment Financing Plan and Development District Program.
Section 4. Approval of the Modified Development Program and Tax Increment
Financing Plan.
4.01. The modified Development Program for Development District No. 2 and
the modified Tax Increment Financing Plan for Tax Increment Financing District No.
2 -1 are hereby approved and adopted.
4.02. The expanded boundaries of Development District No. 2 and the
modification of the budget and other matters related to Tax Increment Financing
District No. 2 -1 are described in the modified Development Program and modified Tax
Increment Financing Plan therefor and are incorporated herein by reference. This
modification of the Plan for Tax Increment Financing District No. 2 -1 does not
involve the addition of any property to Tax Increment Financing District No. 2 -1.
4.03. The City Manager is authorized and directed t� file a copy of the
modified Development Program and modified Tax Increment Financing Plan with the
Minnesota commissioner of trade and economic development.
DATED: March 9, 1992.
Donald Chmiel, Mayor
ATTEST: •
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Donald Ashworth, City Clerk /Manager
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Planning Commission Meeting '1
February 19, 1992 - Page 21
II
Emmings: I will move the Planning Commission recommend the withdrawal of
approval of Site Plan #89 -6 for the Crossroads National Bank building. The
applicant should file the notice of withdrawal against the property at
II
Carver County. I'm not sure I understand that.
Batzli: Which applicant needs to file that? 1
Emmings: Yeah.
A1- .7aff: The Americana Bank would. 1
Batzli: Should we put that in our other motion? That probably should have
gone in our earlier motion that they need to file that notice but. 1
Emmings: Well we've got it here.
Batzli: Okay. Is there a second? 1
Conrad: I second.
Emmings moved, Conrad seconded that the Planning Commission recommend the 11
withdrawal of approval of Site Plan #89 -6 for the Crossroads National Bank
building. The applicant, Americana Community Bank, should file the notice"
of withdrawal against the property at Carver. County. All voted in favor
and the motion carried.
Krauss: Could I propose another agenda change? We have Todd Gerhardt 1
waiting for an item. I think it's an item you may find a little bit
inte- resting anyway. It will get Todd home at a reasonable time.
Erhart: Can we vote on that? r
Batzli: Okay, we can vote. All in favor of moving up to new business to II
previous to the PUD stuff signify by saying aye.
Ledvina voted in favor, the rest opposed.
Batzli: Why don't we do that first. So Todd, why don't you go ahead with!'
your modified tax increment financing district.
ADOPT RESOLUTION STATING THAT MODIFICATION PROGRAM FOR DEVELOPMENT DISTRICT"
2ir NO. 2, MODIFICATION OF PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 2 -1;
AND ADOPTION OF PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 2 -2, I5 .
CONSISTENT WITH THE CITY'S COMPREHENSIVE PLAN.
Gerhardt: The first item I have in front of.you is a modification to
development district No. 2 and modification to tax increment plan No. 2 -1 II
and creating a new district called 2 - 2. And you're saying, what is all
this? In the past the City' Council who is acting as the Economic
Development agency for the city of Chanhassen, created a district is what II
we call the McGlynn District which is 2 -1, highlighted in the blue.
Approximately 2 -3 months ago the Planning Commission approved an expansion
to the industrial park called Chanhassen Business Center, which is
highlighted in the red called 2 -2. To get businesses like McGlynn, 1
kTTR CO MCOT '°` C
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11 Planning Commission Meeting
February 19, 1992 - Page 22
Rosemount and those, cities have to be competitive with the Shakopee 's and
the Chaska's in creating economic development districts to assist
businesses in writing down public improvements. Roads, sanitary sewer,
water and special assessments. As a part of that, staff is recommending to
the City Council that you create a new district called 2 -2 and expanding
the boundary, the development boundary which is the heavy black line so
that increment dollars from district 2 -1 can be used to buy a middle school
site. In your guide plan you highlighted a piece of property located north
of the Timberwood as a future school site for the City of Chanhassen,
District 112. Paul's got some maps that lay out and we're going to
probably have come back a modification to your land use plan. That site no
longer can support a middle school for some of the facility needs that
Chaska or District 112 is looking at. Do you want to highlight?
Krauss: Yeah, maybe I should touch on this. First let me say that by your
approving the tax increment plan tonight in no way are you authorizing
changes to the Comp Plan. We just want you to know what is current and
what's happening out there. Some of you may be aware of the fact that the
City Manager and I and Tom Workman sit on a committee that the School
District established to get a handle on the future growth needs. We did
that to keep in mind you do have a middle school site located here which is
part of our comprehensive plan. And fit into what we were looking for in
terms of breaking up the TH 5 corridor area in terms of making sure we had
a residential feel. Initially the school district's architect told us that
a 40 acre site would be sufficient. We went out and visited a few of them,
that one included. They felt that that would meet their needs. We're now
getting down to more of the nitty gritty and we find a couple things.
First we find that the State has apparently established different
guidelines or more strenuous guidelines for school sites and they're really
looking like, if the State allows you to build a new school, they want the
school site to be able to accommodate growth until the next milieniun and
you basically have to provide an extensive amount of athletic fields. And
the site required to accommodate the school itself has to be pretty, 40 or
50 acres for the school still but it's got to be 40 or 50 acres. What we
found, in fact we found when Ryan Development had prepared a preliminary
program to develop an office /industrial park up there, we looked at the
land that was left for the school site. Gave that information to the
school district's architect and he came back to us and said the school
won't fit there anymore. Now what I've done here is kind of just sketched
up two alternative scenarios. The first one "is kind of, it's what's in the
comprehensive plan right now. Showing the school over to the northeast
corner of Timberwood. McGlynn sits right here. What you've already
improved is land up to the east bank or the east channel of Bluff Creek as
office industrial. The land beyond that was residential. I'm sure you...
extensive discussions with Timberwood and all that. Where is the road
going to go and all that. Well, the Council, I know I mentioned this to
you several times, when the Council adopted the Comp Plan they kept your
residential designation in front of Timberwood entact but provided an
alternate scenario that a very high quality office, industrial park
11 developer could achieve. They met I think it's 5 particularly strenuous
criteria. Well Ryan Development's been working with us to do that so
essentially this infill portion oJ3er here between the two branches of the
creek, up to the former school site, could and possibly would be developed
into a park and office park... We had been working with Ryan to do this...
11
Planning Commission Meeting 1
February 19, 1992 - Page 23
II school site but we found a couple things. First of all we found that the
road goes back even further but we originally had shown, by me meaning Mark
Koegler and myself, originally had shown the road down near Timberwood. I :II
believe we had one resident in Timberwood who objected to it and the road
was kicked up north. The road really wants to be further south. We're
looking at the stacking distances that you have over here but if the school
went here, you couldn't put the road up there because there's no place to
stack school buses come out and realistically the road wants to hang south.
Except for right in here where there's a wetland but there's a way to bring
the road through. We now have better information. So this is basically I
the status quo. This is what the comprehensive plan says now. This is
what Ryan has been working with us on to date. Again the problem is the
school district is telling us that it won't fit. And we've even looked at
massaging this around. Todd met with Zak Johnson, the school district's II
architect who's working with us on expanding the school site out" to this
area and wrapping it around Timberwood and the terrain just gets very
tough. You've got creek channels. You've got a wetland. It becomes too II
discontiguous for the school site to work effectively. So what we're doing
right now is looking to work for alternative scenarios to achieve a similar
goal but still allow for sufficient school to be developed. And I'm
showing this to you for informational purposes only. We're not requesting
that you change anything now. We're not even positive it works but what
this does is locate the school on the land, the 35 acres that McGlynn's has
open right now plus other land between the McGlynn site and the creek.
II
This map is a little bit out of scale over here. There's actually more
land here than it would appear but it's quite flat land. It's also very
prominent land as you're traveling down the corridor. Wrapping single
family residential around the 'Timberwood project which is consistent with
what we've been trying to do all along because the road coming in is a way
to bring this road through. In fact we've been working with a developer on
this property down here and if the plans go ahead, they'll include
provisions for this road connection to come around the corner so we can
service residential development there. Preserving a creek corridor which
is consistent with what we've always wanted to do. ...so we can generate 11
enough revenue to secure the school site because it's certainly not cheap.
And also be a sufficient amount of office /industrial development remaining.
We wind up shifting that component over to the former school site. Now the
premise here that this is better than normal quality stuff. That's what
the comprehensive plan says. It basically said that it'd have to walk like
an office, talk like an office...quaiify for tax increment but it's going
to be brick and glass construction most of it. It's going to be very, very ll
attractive stuff. Well in fact we've been working with Bill Morrish who
you met last time on some alternate designs. He hasn't seen this one yet
but the philosophy that we're trying to have here with the good setbacks, II
which is really one of the reasons as well for pushing the road back down
here. One of the things that Bill has hit on a lot, which we agree with
him a lot is you do not want a scenario where you have 4 lanes of TH 5 and II
then 2 lanes of collector on either side of it all paralleling each other
across the entire expanse of that property between Galpin and Audubon. In
fact we've had some preliminary meetings with MnDot and looking at a rural
road section now which is something...change their minds on but it means il
it's going to be a very wide corridor. So what you're really looking to do
is to kick that road down here where it's going to be masked by all those
trees and the wetland that separates it from Timberwood and focus that
11
! Planning Commission Meeting
February 19, 1992 - Page 24
• y
development a little bit back onto it away from TH 5. And we think it's
kind of a workable concept. We're going to be working with the school
i district's architect and make sure the school can fit on there before we go
. any further. But before we did that, you know I wanted to use this
opportunity with the TIF district to kind of bounce this off you and let
you know which way we're going because it is a change in direction. So if
you have any comments.
Batzli: Let's say we don't like this configuration. Does it make sense to
I go ahead with the TIF district to buy a school that's not large enough?
Gerhardt: What the plan lays out right now is'one that says that you can
use tax increment to buy a school site somewhere within the district. It
doesn't say a site specific spot.
Batzli: Correct.
I Gerhardt: And then if were to pick out a site specific spot, I'd have to
come back through with another modification and we would not acquire the
site until we had agreements where somebody wants this school site. But I
wouldn't enter into a purchase agreement until I came back to the Planning
Commission and City Council for their approval of thib modification.
r . Batzli: But my question is, if the school site doesn't fit on the area
where it was initially proposed by us in the comprehensive plan, if it
won't fit there and if what we're looking at right now doesn't really turn
us on, why do we want to do this tax increment financing district?
Gerhardt: The tax increment financing number, well we've got a couple of
things on tonight. We're making the modification to 2 -1 saying that
1 increments could be used to do a school site. If for some reason we decide
that there isn't any money or there isn't a site anywhere within that
boundary for a school site, we just don't do it. If you can't find a spot
anywhere within that area that's fit for a school, then you just don't do
i it. You don't follow through with the plan. I mean I can't go buy•a
school site and then come back to you and say we have a site. I've asked _
the Attorney that it almost seems illegal...now but we wanted to get it out
there and we talked about buying a middle school somewhere along...and
within the plan but that does not mean we have to follow through with it.
So in your land use plan laid out for that...middle school site somewhere
within this area so we are foliowing through with what we've got so if you
• do pass a resolution, you are...But right now in front of you that doesn't
work...so basically what we're doing is looking at alternatives. Finding
how alternative sites does work within that area and that would be
acceptable to Timberwood. That would be acceptable to the present
landowner and everybody. We wanted to stay along the TH 5 corridor... One
of the other things that the plan does is lay out, this increment dollars
could be used for the TH 5 corridor... So that's one part of it. The
other part is that you're creating a new economic development district
called 2 -2 which would approve special assessment reductions for any
building development that takes place on the business center. Ryan
Business Center that you approved,about 2 or 3 months ago. So you're not
locked in on buying the school site by approving the resolution tonight.
You're not approving where the school's going to be located. However you
Planning Commission Meeting
February 19, 1992 - Page 27
Bill Morrish has been pushing is one that you developed 2 years ago with ,1
wanting to bridge TH 5 and Bill built on that. I think it's a valid one.
The school site, it's a real handy element because it's so much open space I
and so much green area but basically is a residential appearing component.
...by the school district. We're fortunate in being able to piggyback this
onto a tax increment project but elsewhere in the corridor there's no
increment, there's no project and I'm not sure where that would put us at I
that point.
Gerhardt: You can look at the map and see certain areas that work. I mean
architects like to work with a flat piece of ground with no trees, no
hills, no wetlands and it's got perfect clay soils and all you need is to
put a little black on top so they don't have to truck any black dirt in.
That's a perfect scenario and you know when he started explaining that to
me, if you look at the McGlynn piece, you can't find a better flat piece of
ground that has nice clay soils to work off of. He got excited when he saw
33 acres of this flat ground and no wet -Lands on it. He's starting to say
he can set everything on the 33 acres and you had 60, yeah I think it was
60 acres that we were working with the other site and he couldn't fit
anything on it. So the topography plays a big factor in this. To answer
your questions, I always push for 2 -2 as being a future school site because dl
the land's a little cheaper than what McGlynn's wants'for theirs but again
we want to try and keep that corridor along TH 5 with the school and the
access. It just works a lot better in those areas. But to answer your
questions, a third scenario could be 2- 2...Business Center site and that'd
be a school site.
Batzli: What we're doing tonight doesn't enlarge in anyway the area 2 does tt
it? =District No. 2? Those boundaries were already previously drawn?
Gerhardt: District No. 2 is the dark black line.
Batzli: Right.
Gerhardt: The previous, that is being expanded. Where it used to fall,
it went like this. So this would be an expansion and the reason why we did
this is, what you can do is take the increment created off of the McGlynn
piece and spend those dollars anywhere within the dark black line. So it
gives enough play in those areas to use those increment dollars in finding
a piece of land. And it also, if Galpin ever needs to be upgraded, you can
use the increment from this district to assist in writing down costs of
upgrading Galpin and part of Lyman if you need to.
Batzli: Is there any impact on Timberwood by including them in the
district?
Gerhardt: No. The only place where tax dollars would be affected is in
those dashed areas so you did not create any increment outside the red and
blue area. So this, it's within the district boundary but the taxes
generated off these parcels would not go into the district. It's only in
those areas in the dashed areas.
Krauss: The reason for not excluding it is.
Planning Commission Meeting
February 19, 1992 - Page 28
1 Batzli: If you got the roadway back.
Krauss: Well, you've got the roadway and you've also got your lift station
that's going to be here or here and you've got a forcemain that's going to
come up this way and another one that's being split up that way and you've
really got to wrap that area to build those lines.
Batzli: Jeff, I cut you off earlier. Did you have another question?
' Farmakes: No. It didn't pertain exactly to this. I guess a lot of what
if questions.
Batzli: Does anybody else have any comments? Questions? Motions?
Conrad: I make a motion the Planning Commission adopt Resolution No. 92-2,
finding that modification of the program for Development District No. 2,
Modification of Plan for Tax Increment Financing District No. 2 -1 and the
creation of a new plan for the Tax Increment Financing District No. 2 -2.
Emmings: Second.
Resolution #92 -2: Conrad moved, Emmings seconded to itdopt Resolution No.
92 -2 finding that Modification of the program for Development District No.
2, Modification of Plan for Tax Increment Financing District No. 2 -1; end
the creation of a new plan for Tax Increment Financing District No. 2 -2.
All voted in favor and the motion carried.
11 ADOPT RESOLUTION STATING THAT MODIFICATION NO. 11 TO REDEVELOPMENT AND TAX
INCREMENT FINANCING PLAN I5 CONSISTENT WITH THE CITY'S COMPREHENSIVE PLAN.
Gerhardt: The second item in front of tonight is what we call the
Redevelopment Tax Increment District. On the back of your report you'll
notice that some of the newer members...but the district boundaries for the
redevelopment district follow the dark line, go up TH 101, follow TH 5, go
around the Taco Shoppe, come back down West 78th Street, go down along St.
Hubert's, goes around the new Heritage Square Apartments and then follows
11 along the parking lot behind the Riv and behind the Town Square Center and
then follows back up and go, divides the school property and the fire
station and then takes into account the West Village Apartments over here.
And then follows due west and then the boundary is being modified in this
location here. With the TH 5 upgrade, the City is going to have to build a
new service road to get to Lake Ann Park. We're proposing to use tax
increment dollars to build that service road because they're going to close
off our entrance off of TH 5. There will be a new service road that will
go along there.
Krauss: It's part of the collector, frontage road system that you have on
your Comp Plan.
Batzli: So this isn't just an access road. This is actually the road that
will be the.
Krauss: The first leg of that road.
1
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City of Chanhassen
Carver and Hennepin Counties, Minnesota 1
Plan Commission
1
DATE: February 19. 1992 RESOLUTION NO: 92 -1
MOTION BY: Ledvina SECONDED BY: Conrad
RESOLUTION FINDING MODIFIED PROGRAM FOR DEVELOPMENT
DISTRICT NO. 2, MODIFIED PLAN FOR TAX INCREMENT
FINANCING DISTRICT NO. 2 -1 AND PLAN FOR TAX
INCREMENT FINANCING DISTRICT NO. 2 -2 CONSISTENT WITH
THE PLANS FOR DEVELOPMENT OF THE •
CITY OF CHANHASSEN
•
WHEREAS, the City Council of the City of Chanhassen (City) has authorized
preparation of a modified Program (Program) for Development District No. 2 and a
modified plan for Tax Increment Financing District No. 2 -1 and a Plan for Tax
Increment Financing District No. 202 (collectively, the Plans) and
WHEREAS, the Plans have been submitted to the planning commission to review 1
regarding their consistency with the plans for development of the City as a whole;
and
WHEREAS, the Planning Commission has made a thorough review of the Plans
and has compared them with the plans for development of the City as a whole.
NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City 1
of Chanhassen, Minnesota as follows:
1. That Modified Program for Development District No. 2 and the Plans for TIF
District Nos. 2 -1 and 2 -2 are found to be consistent with the plans for
development of the City of Chanhassen as a whole.
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2. It is recommended that the 'City Council of the City of Chanhassen hold the
public hearing required by law and approve and adopt the Planss.
Passed this 19th day of February, 1992, by the Planning Commission of the
1 City of Chanhassen.
C A. I
Chairperson
A T: D
1 Secretary
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