1m Remove 2 parcels TIF Dis 3-1
CITY OF
CHANHASSEN
I City Cmltr Drillt, PO Box 147
,'hanh"",", Minntsota 55317
Phon,6/2,937J900
General Fax 6/2,937.5739
,gineering Fax 612937.9152
,bfic Safety Fax 612.934.2524
(leb www.ci.chanhfliSen.mn.us
.LM\
MEMORANDUM
TO:
Scott Botcher, City Manager
Todd Gerhardt, Assistant City Manager O~
FROM:
DATE:
Febmary 9,2000
SUB1:
Removal of Two Parcels from TIF District No. 3-1
(Hennepin County)
Under MÏ1mesota State Statutes 1996, Sections 469.176 Subdivision 6, Cities
must report to the county auditor, the removal of any parcels due to "non-
qualifying activity" trom a TlF District celti1ìed by the couniy auditor between
January i, 1995 a.'1d December 31,1995. The Hennepin County TIF District was
certified by the Hennepin County Auditor on April 4, 1995. The definition of a
"non-qualifying activity is . . . demolition, rehabilitation or renovation of property
or other site prepwation, including qualified improvements of a street adjacent to
a parcel" (see Attachment #1). Staffhas reviewed the activity of all the parcels
located in this district and recommend the removal of the following parcels based
on the "non-qualifYing activity" that has not taken place on these parcels as of
Jmmary I, 1999;
I.
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33-0027
22-0006
(Lotus Laval and Garden Center)
(CSM - vacant lot)
(See Attachment #2 for iocation map)
Y Oll should wlderstand that these parcels are considered in "knock down" mode,
meaning if anyone of these parcels has any building activity taking place in the
next 4 years, they can be put back into the TIF district. However, the base value
for the TIF District would need to be adjusted to take into account the increased
land values trom the beginning of the district and when the new improvements are
made.
A 1'1' ACHMEN1'S
I. State Statute Section 469.176, Subdivision 6.
2. Location map.
g:\admin\tg\tif3-1 remove p3rcels.doc
City of Gal/hassen. A f'Owinr community with cleal/lakts, quality schools, a chacminr downtown, thriviny busints"', and b,autilûl parks. A ",at vlace to lillt, work, and via.
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Through § 469.t76, Subd. 6
Page -25-
(b) Tax increments may be used to pay county road costs as provided in § 469.175, subdivision la.
Subd. 4i. Multicounty use prohibited. If a tax increment district is located in a
municipality, parts of which are situated in more than one county, the revenue derived ûom tax
increments from parcels located in one county must be expended for the direct and primary benefit
ofa project located or conducted within that county, unless the county boards of each of the counties.
involved agree to waive this requirement.
Subd. 4j. Redevelopment districts. At least 90 percent of the revenues derived from
tax increments ûom a redevelopment district or renewal and renovation district must be used to
finance the cost of correcting conditions that allow designation of redevelopment and renewal and
renovation districts under § 469.174. These costs include, but are not litnited to, acquiring'
properties containing structurally substandard buildings or improvements, or hazardous substances,
pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size
to permit development, demolition and rehabilitation of structures, clearing of the land, the removal
of hazardous substances or remediation necessary to development of the land, and installation of
utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses
of the authority, including the cost of preparation of the development action response plan, may be
included in the qualifying costs.
Subd. 5. Requirement for agreements. No more than 25 percent, by acreage, of the
property to be acquired within a project which contains a redevelopment district, or ten percent, by
acreage, of the property to be acquired within a project which contains a housing or economic
development district, as set forth in the tax increment financing plan, shall at any time be owned by
an authority as a result of acquisition with the proceeds of bonds issued pursuant to § 469.178 to
which tax increment from the property acquired is pledged unless prior to acquisition in excess of
the percentages, the authority has concluded an agreement for the development or redevelopment
of the property acquired and which provides recourse for the authoritý should ffie development or
redevelopment not be completed. This subdivision does not apply to a parcel of a district that is a
designated hazardous substance site established under § 469.174, subdivision ]6, or part of a
hazardous substance subdistrict established under § 469.175, subdivision 7.
Subd. 6. Action required. If, after four years from the date of certification of the
original net tax capacity of the tax increment fmancing district pursuant to § 469.] 77, no demolition,
rehabilitation, or renovation of property or other site preparation, including qualified improvement
of a street adjactnt to a parcel but not installation of utility service including sewer or water systems,'
has been commenced on a parcel located within a tax increment financing district by the authority
or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax
increment may be taken ûom that parcel, and the original net tax capacity of that parcel shall be
excluded ûom the original net tax capacity of the tax increment financing district. If the authority
or the owner of the parcel subsequently commences demolition, rehabilitation, or renovation or
other site preparation on that parcel including qualified improvement of a street adjacent to that
parcel, in accordance with the tax increment financing plan, the authority shall certifÿ to the county
auditor that the .activity has commenced, and the county auditor shall certifÿ the net tax capacity .
The Minnesota Tax Increment Act for the 2000 Publicorp Tax Increment Financing Seminar
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Through § 469.t76t, Subd. t Page ~26-
thereof as most recently certified by the commissioner of revenue and add it to the original net tax
capacity of the tax increment fmancing district. The county auditor must enforce the provisions of
this subdivision. The authority must submit to the county auditor evidence that the required activity
has taken place for each parcel in the district. The evidence for a parcel must be submitted by
February I of the fifth year following the year in which the parcel was certified as included in the
district. For purposes of this subdivision, qualified improvements of a street are limited to (1)
construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction
or rebuilding of an existing street.
Subd. 7. Parcels not includable in districts.
(a) The authority may request inclusion in a tax increment financing district and the county auditor
!naY certify the original tax capacity of a parcel or a part of a parcel that qualified under the
provisions of § 273.111 or 273.112 or chapter 473H for taxes payable in any of the five calendar
years before the filing of the request for certification only for
(I) a district in which 85 percent or more of the planned buildings and facilities (determined
on the basis of square footage) are a qualified manufacturing facility or a qualified
distribution facility or a combination of both; or
(2) a qualified housing district as defined in § 273.1399, sUbdivision I.
(b) (I) A distribution facility means buildings and other improvements to real property that are
used to conduct activities in at least each of the following categories:
(i) to store or warehouse tangible personal property;
(ii) to take orders for shipments, mailing, or delivery;
(iii) to prepare personal property for shipment, mailing, or delivery; and
(iv) to ship, mail, or deliver property.
(2) A manufacturing facility includes space used for manufacturing or producing tangible
personal property, including processing resulting in the change of condition of the property,
and space necessary for and related to the manufacturing activities.
(3) To be a qualified facility, the owner or operator of a manufacturing faciliiy must agree
to pay and pay 90 percent or more of the employees of the facility at a rate equal to or
greater than 160 percent of the federal minimum wage for individuals over the age of20.
§ 469.1761 - INCOME REQUIREMENTS; HOUSING PROJECTS.
Subd. 1. Requirement imposed. In order for a tax increment financing district to
qualify as a housing district, the income limitations provided in this section must be satisfied. The
requirements imposed by this section apply to residential property receiving assistance financed with
tax increments, including interest reduction, land transfers at less than the authority's cost of
acquisition, utility service or connections, roads, or other subsidies. The provisions of this section
do not apply to districts located in a targeted area as defined in § 462C.02, subdivision 9, clause (e).
The Minnesota Tax Increment Act for the 2000 PUblicorp Tax Increment Financing Seminar
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