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2006-29 . . . CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA Council member Lundquist introduced the following resolution and moved its adoption: RESOLUTION NO. 2006-29 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO.9 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Chanhassen, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Board of Commissioners (the "Board") of the Chanhassen Economic Development Authority (the "EDA") has heretofore estabIlshed the Downtown Chanhassen Redevelopment Project Area and adopted a Redevelopment Plan therefor. It has been proposed by the EDA and City that the City adopt a Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area (the "Redevelopment Plan Modification") and establish Tax Increment Financing District No.9 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIP Plan") therefor (the Redevelopment Plan Modification and the TIP Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes ("M.S. "), Sections 469.090 to 469.1082 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The City has investigated the facts relating to the Plans and has caused the Plans to be prepared. 1.03. The City has performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Carver County and Independent School District No. 112 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, approval of the Plans by the EDA on April 10, 2006, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the actIVItIes contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05. The City is not modifying the boundaries of the Downtown Chanhassen Redevelopment Project Area but is, however, modifying the Redevelopment Plan therefor. . Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The Council hereby finds that the Plans, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public interest and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of Tax Increment Financing District No.9. 3.01. The Council hereby finds that Tax Increment Financing District No.9 is in the public interest and is a "housing district" under M.S., Section 469.174, Subd. 11 and M.S. Section 469.1761, and a "qualified housing district" under M.S., Section 469.174, Subd. 29. 3.02. The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future, that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3.04. The City elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause a, which means the fiscal disparities contribution would be taken from outside the District. It is not anticipated that the District will contain commercial/industrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. . 3.04. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. Section 4. Public Purpose 4.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to provide housing opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 5. Approval and Adoption of the Plans. 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Manager. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. . 5.03 The Auditor of Carver County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the City is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. . 5.04. The City Manager or EDA Director is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. The motion for the adoption of the foregoing resolution was duly seconded by Council member Labatt and upon a vote being taken thereon, the following voted in favor thereof: Furlong, Lundquist, Labatt and Tjomhom. and the following voted against the same: None Dated: April 10, 2006 ~ . (Seal) . . EXHffiIT A. RESOLUTION NO. 2006-29 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIP Plan) for Tax Increment Financing District No.9 (District), as required pursuant to Minnesota Statutes (M.S.), Section 469.175, Subd. 3 are as follows: 1. Finding that the District is a housing district, as defined in M.S., Section 469.174, Subd. 11 and M.S. Section 469.1761, and a qualified housing district as defined in M.S., Section 469.174, Subd. 29. The District consists of a portion of one existing parcel. The City is currently working with the land owner to plat this portion of the property into several parcels, one of which will remain in the District. The development will consist of 48 units of rental housing. At least 40% of the rental units must be occupied with persons at 60% of median income and rents will be restricted to Section 42 (g) of the Internal Revenue Code of 1986. No more than 20% of the square footage of buildings that receive assistance from tax increments may consist of commercial, retail, or other nonresidential uses. Appendix E of the TIP Plan contains background for the above finding. . 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the development proposed in this plan is a housing district that meets the City's objectives for development and redevelopment. The cost of land acquisition, site and public improvements and utilities makes this affordable housing development infeasible without City assistance. Due to the high cost of building affordable new housing in the City and the cost of financing the proposed public improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward with an affordable rental housing project without tax increment assistance (see attachment in Appendix F of the TIP Plan). The tax increment and other project funding provided by the Minnesota Housing Finance Agency will reduce the rents on the Chanhassen Gateway Place rental housing project. Without tax increment, the project developer has stated that he will construct a market -rate residential rental housing project. The assessed market value of rental housing is the same, whether or not the rents are reduced through federal, state, and local assistance. To summarize this finding: a. The amount by which the market value of the site will increase without the use of tax increment financing is estimated to be $4,348,880. b. The increase in the market value that will result from the proposed development to be assisted with tax increment financing is estimated to be $4,348,880. (See Appendix F of TIP Plan). c. The present value of the projected tax increments for the maximum duration of the district permitted by the tax increment financing plan is estimated to be $656,034. (See Appendix F of TIP Plan) 3. Finding that the TIF Plan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. . The Planning Commission reviewed the TIP Plan and found that the TIP Plan conforms to the general development plan of the City. . . . 4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Downtown Chanhassen Redevelopment Project Area by private enterprise. Through the implementation of the TIP Plan, the City will provide an impetus for affordable residential development, which is desirable or necessary to serve the City's increasing population and an increasing need for life-cycle housing within the City.