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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 t 1 1, C ITYOF - - I i 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 , . .3 /? /i& 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. 1 1 1 1 1 1 1 1 1 r 1 1 k ----- AR_B • R o „ l ` $OULEV ARO ■.■.. pi 1 ce r 0, 1 1 McGLYNN ilf 1 1 p TIM¢ERWOOO �� 40. No. 2 -1 rr cP all L NAL ' ill 10, fti jb ergillir CO It 111111 , 1 / 4 1 ilk RENAISSANCE / Ill IkUl J °/ _ 1 \ ' f PARK Z , az SITE .� 1 :s / GP GO, / I No. 2 -2 I/ 1 � ►�: ��IMI 1 1 "-VW / . cr No.2 0 i I ill A a vc V 41/111 L_ 1 1 FIGURE 2 LIFT STATION 1 ACQUISITION SITE a 1 Development District No. 2 "m""mi T.I.F. District No. 2 -1 1 ...c..... T.I.F. District No. 2 -2 0 1000' 2000 3000' 1 I 1 1 1 1 MODIFIED DEVELOPMENT PROGRAM 1 DEVELOPMENT DISTRICT NO. 2 and 1 MODIFIED TAX INCREMENT FINANCING PLAN, I TAX INCREMENT FINANCING DISTRICT NO. 2 -1 1 CITY OF CHANHASSEN, MINNESOTA 1 March 9, 1992 1 • I Prepared By: I . HOLMES & GRAVEN, CHARTERED 470 Pillsbury Center Minneapolis, MN 55402 1 - and - HOISINGTON GROUP, INC. • I 7401 Metro Blvd, #340 Edina, MN 55439 1 1 1 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 1 r 1 1 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; RHB26639 CH130 -11 1 "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 • facilities, which are necessary for the orderly and beneficial development of the Development District; and 1 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. CH1-11 CH13O 30 -11 2 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. RH826639 CH130 -11 3 5 - 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 111 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. 1 1 1 1 1 1 1 1 RHB26639 CH130 -11 4 1 1 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. • • 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 1113226639 CH130 -11 5 1 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 -1 111 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 H13-11 C H130 -11 6 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 • 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 R1026639 CH130 -11 7 r 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 111 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 . 1 1 RH826639 • CH130 -11 8 1 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; ' RHB26639 CH130 -11 9 • 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 • 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; RHB26639 CH130 -11 10 , 1 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, • 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 ' RHB26639 CH130 -11 11 1 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 1 1 • 1 1 1 1 1 1 1 1 RHH26639 CH130 -11 12 1 1 1 1 TAX INCREMENT FINANCING PLAN, TAX INCREMENT FINANCING DISTRICT NO. 2 -2 CITY OF CHANHASSEN, MINNESOTA • 1 March 9, 1992 1 1 Prepared By: HOLMES & GRAVEN, CHARTERED' 470 Pillsbury Center Minneapolis, MN 55402 - and - 1 HOISINGTON GROUP, INC. 7401 Metro Blvd, #340 Edina, MN 55439 1 1 1 TABLE OF CONTENTS Page 1 • 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 1 1 1 1 (1) • 1 1 1 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; 1 RHH28376 CH130 -11 1 1 "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; 1 "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 -2 which is hereby adopted. B . Statutory Authority. 111 Pursuant to Section 469.175, Subd. 4 of the TIF Act, the City is hereby I 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 111 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. • 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. RH1328376 CH130 -11 2 1 1 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. • 1 RS828376 CH130 -11 3 1 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. , • 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 11E0328376 C13130 -11 4 1 • 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. 1 88828376 CH130 -11 5 1 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: 1110328376 CH130 -11 6 1 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 $1,400,000 reveals the annual "loss" of tax dollars by each jurisdiction upon completion of all projects if the development would have occurred without TIF. The City believes the actual impact on other taxing jurisdictions is zero because development would not have occurred within the reasonably foreseeable future without public intervention. However, for the purposes of Section 469.175, subd. 1(6), the assumed amount of tax dollars foregone by each jurisdiction is listed in below: RR828376 - CB130 -11 7 1 1 Percent of Tax Increment Attributable to Various Taxing Jurisdictions 1 Estimated Tax Capacity Percent of Total Ultimate Tax Taxing Jurisdictions Rate Tax Capacity Rate Loss ($) City of Chanhassen 24.1 21.1 $ 295,400 1 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 Il 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 Y to the City and the price paid by the developer; and I RHB28376 CH130 -11 8 . 1 I 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 • 1 (iii) to otherwise finance activities located outside of the tax increment district; and 6. any additional information that the commissioner of revenue may • 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 1 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 • 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 RHB30613 y+` 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. RHB30613 CH130 -11 2 1 I 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 1 1 1 . 1 1 1 1 1 1 RHB30613 CH130 -11 3 1 • 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 RHB30606 CH130 -11 1 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 RBB30606 01130 -11 2 1 • 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: • 1 Donald Ashworth, City Clerk /Manager 1 1 1 REB30606 CE130 -11 3 1 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 11 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 1 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. 88829498 CH130 -11 I 1 1 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 • 1 1 • 1 1 1 1 1 1 RHS29498 CR130 -11 1