B-1. DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA; TAX INCREMENT FINANCING DISTRICT NO. 11: Review Plans to determine if they comply with the city’s comprehensive plan Y
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CITY OF CHANHASSEN
S Chanhassen is a Community for Life-Providing for Today and Planning for Tomorrow
NH A '
TO: Planning Commission
FROM: Kate Aanenson AICP, Community Development Director
DATE: September 5, 2017
SUBJ: Review Modification to the Redevelopment Plan for Downtown Chanhassen
Redevelopment Project Area and Tax Increment Financing Plan No. 11 for
Compliance with the 2030 Comprehensive Plan
PROPOSED MOTION:
The Chanhassen Planning Commission adopts the attached Resolution.
BACKGROUND
The Chanhassen Economic Development Authority is creating a new Tax Increment Financing
(TIF) District to establish Tax Increment Financing District No. 11, a redevelopment district,
within the Downtown Chanhassen Redevelopment Project Area and adopting a tax increment
financing plan. The EDA is also adopting a modification to the Redevelopment Plan for the
Chanhassen Downtown Redevelopment Project Area. The modification of the Redevelopment
Plan and the new TIF Plan are collectively called the"Plans".
One requirement of the TIF process is for the Planning Commission to review The Plans to
ensure conformance with the City's Comprehensive Plan. The Planning Commission reviewed
this project on June 20, 2017 and approved the preliminary plat and site plan. In the approved
Findings of Fact, the Planning Commission found:
1. The property is zoned Central Business District(CBD).
2. The property is guided in the Land Use Plan for commercial.
3. The proposed subdivision is consistent of the zoning ordinance.
4. The proposed subdivision is consistent with all applicable city, county, and regional plans
including but not limited to the city's comprehensive plan.
The Planning Commission's role in this process is to advise the City Council and Economic
Development Authority if The Plans are consistent with the City's Comprehensive Plan. Based
on past actions taken by the Planning Commission, staff believes that this project does meet this
requirement.
PH 952.227.1100• www.cl.chanhassen.mn.us• FX 952.227.1110
7700 MARKET BOULEVARD • PO BOX 147 • CHANHASSEN • MINNESOTA 55317
Planning Commission
Review Tax Increment Financing Plan No. 11
September 5, 2017
Page 2 of 2
RECOMMENDATION
Staff recommends that the Chanhassen Planning Commission adopt the attached resolution.
ATTACHMENTS
1. Resolution.
2. Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment
project Area and Tax Increment Financing Plan prepared by Ehlers &Assoc.
g:\admin\cp\tif\tif#1 I frontier redevelopment\pc review plan for compliance with comp plan.doc
PLANNING COMMISSION
CITY OF CHANHASSEN,MINNESOTA
RESOLUTION NO.
RESOLUTION OF THE CITY OF CHANHASSEN PLANNING COMMISSION
FINDING THAT A MODIFICATION TO THE REDEVELOPMENT PLAN FOR
DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA AND A
TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 11 CONFORM TO THE GENERAL PLANS FOR THE
DEVELOPMENT AND REDEVELOPMENT OF THE CITY.
WHEREAS,the project being developed by Chanhassen Frontier LLC consists of a six-story, 134-unit
apartment building with underground parking and single-story, 19,000 square feet commercial retail
building(the"Project"); and
WHEREAS,upon recommendation from the Planning Commission the City Council approved the Site
Plan and Registered Land Survey in July 2017; and
WHEREAS, the Chanhassen Economic Development Authority (the "EDA") and the City of
Chanhassen (the "City") have proposed to adopt a Modification to the Redevelopment Plan for the
Downtown Chanhassen Redevelopment Project Area (the "Redevelopment Plan Modification") and the
establishment of Tax Increment Financing District No. 11 (the "TIF Plan")therefore (the Redevelopment
Plan Modification and the TIF Plan are referred to collectively herein as the "The Plans") and have
submitted "The Plans" to the City Planning Commission (the "Commission") pursuant to Minnesota
Statutes, Section 469.175, Subd. 3, and
WHEREAS, the "Commission" has reviewed the "The Plans" to determine the Project's conformity
with the general plans for the development and redevelopment of the City as described in the comprehensive
plan for the City.
NOW, THEREFORE, BE IT RESOLVED by the "Commission" that "The Plans" conform to the
general plans for the development and redevelopment of the City as a whole.
Dated: September 5,2017
Chair
ATTEST:
Secretary
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10
As of August 18, 2017
Draft for Public Hearing
Modification to the Redevelopment Plan
for the Downtown Chanhassen Redevelopment Project Area
and the
Tax Increment Financing Plan
for the establishment of
Tax Increment Financing District No. 11
(a redevelopment district)
within
the Downtown Chanhassen Redevelopment Project Area
Chanhassen Economic Development Authority
City of Chanhassen
Carver County
State of Minnesota
Public Hearing: September 11,2017
Adopted:
Prepared by: EHLERS&ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
G 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
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Table of Contents
(for reference purposes only)
Section 1 - Modification to the Redevelopment Plan
for the Downtown Chanhassen Redevelopment Project Area 1-1
Foreword 1-1
Section 2 -Tax Increment Financing Plan
for Tax Increment Financing District No. 11 2-1
Subsection 2-1. Foreword 2-1
Subsection 2-2. Statutory Authority 2-1
Subsection 2-3. Statement of Objectives 2-1
Subsection 2-4. Redevelopment Plan Overview 2-1
Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2
Subsection 2-6. Classification of the District 2-2
Subsection 2-7. Duration and First Year of Tax Increment of the District 2-4
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements 2-4
Subsection 2-9. Sources of Revenue/Bonds to be Issued 2-5
Subsection 2-10. Uses of Funds 2-7
Subsection 2-11. Fiscal Disparities Election 2-7
Subsection 2-12. Business Subsidies 2-8
Subsection 2-13. County Road Costs 2-9
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions 2-9
Subsection 2-15. Supporting Documentation 2-11
Subsection 2-16. Definition of Tax Increment Revenues 2-11
Subsection 2-17. Modifications to the District 2-12
Subsection 2-18. Administrative Expenses 2-12
Subsection 2-19. Limitation of Increment 2-13
Subsection 2-20. Use of Tax Increment 2-14
Subsection 2-21. Excess Increments 2-14
Subsection 2-22. Requirements for Agreements with the Developer 2-15
Subsection 2-23. Assessment Agreements 2-15
Subsection 2-24. Administration of the District 2-15
Subsection 2-25. Annual Disclosure Requirements 2-15
Subsection 2-26. Reasonable Expectations 2-16
Subsection 2-27. Other Limitations on the Use of Tax Increment 2-16
Subsection 2-28. Summary 2-17
Appendix A
Project Description A-1
Appendix B
Maps of the Downtown Chanhassen Redevelopment Project Area and the District B-1
Appendix C
Description of Property to be Included in the District C-1
Appendix D
Estimated Cash Flow for the District D-1
Appendix E
Minnesota Business Assistance Form E-1
Appendix F
Redevelopment Qualifications for the District F-1
Appendix G
Findings Including But/For Qualifications G-1
Section 1 -Modification to the Redevelopment Plan
for the Downtown Chanhassen Redevelopment Project Area
Foreword
The following text represents a Modification to the Redevelopment Plan for the Downtown Chanhassen
Redevelopment Project Area. This modification represents a continuation of the goals and objectives set forth
in the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area. Generally, the
substantive changes include the establishment of Tax Increment Financing District No. 11.
For further information,a review of the Redevelopment Plan for the Downtown Chanhassen Redevelopment
Project Area is recommended. It is available from the City Manager at the City of Chanhassen. Other
relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing
Districts located within the Downtown Chanhassen Redevelopment Project Area.
Chanhassen Economic Development Authority
Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area 1-1
Section 2- Tax Increment Financing Plan
for Tax Increment Financing District No. 11
Subsection 2-1. Foreword
The Chanhassen Economic Development Authority(the"EDA"),the City of Chanhassen(the"City"),staff
and consultants have prepared the following information to expedite the establishment of Tax Increment
Financing District No. 11 (the "District"), a redevelopment tax increment financing district, located in the
Downtown Chanhassen Redevelopment Project Area.
Subsection 2-2. Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development or
redevelopment to occur. To this end,the EDA and City have certain statutory powers pursuant to Minnesota
Statutes ("M.S.'), Sections 469.090 to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to
469.1794, inclusive, as amended(the "Tax Increment Financing Act" or "TIF Act"),to assist in financing
public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant
information is contained in the Modification to the Redevelopment Plan for the Downtown Chanhassen
Redevelopment Project Area.
Subsection 2-3. Statement of Objectives
The District currently consists of three parcels of land and adjacent and internal rights-of-way. The District
is being created to facilitate the redevelopment of the former Frontier property into 134 market rate
apartments and 19,000 square feet of retail,as well as the construction of public improvements adjacent to
the site.Please see Appendix A for further District information. The EDA plans to enter into an agreement
with Chanhassen Frontier LLC as the developer. This TIF Plan is expected to achieve many of the objectives
outlined in the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude
the undertaking of other qualified development or redevelopment activities. These activities are anticipated
to occur over the life of the Downtown Chanhassen Redevelopment Project Area and the District.
Subsection 2-4. Redevelopment Plan Overview
1. Property to be Acquired-Selected property located within the District may be acquired by
the EDA or City and is further described in this TIF Plan.
2. Relocation - Relocation services, to the extent required by law, are available pursuant to
M.S., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements,the EDA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. The EDA or City may perform or provide for some or all necessary acquisition,construction,
relocation,demolition,and required utilities and public street work within the District.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-1
Subsection 2-5. Description of Property in the District and Property To =e Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information
on the location of the District.
The EDA or City may acquire any parcel within the District including interior and adjacent street rights of
way. Any properties identified for acquisition will be acquired by the EDA or City only in order to
accomplish one or more of the following:storm sewer improvements;provide land for needed public streets,
utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to
accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift,
dedication,condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF
Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition
and related costs.
Subsection 2-6. Classification of the District
The EDA and City,in determining the need to create a tax increment financing district in accordance with
M.S., Sections 469.174 to 469.1794, as amended, inclusive, fmd that the District, to be established, is a
redevelopment district pursuant to M.S., Section 469.174, Subd. 10(a)(1)as defined below:
(a) "Redevelopment district"means a type of tax increment financing district consisting of a project,
or portions of a project, within which the authority finds by resolution that one or more of the
following conditions, reasonably distributed throughout the district, exists:
(1) parcels consisting of 70 percent of the area in the district are occupied by buildings,streets,
utilities,paved or gravel parking lots or other similar structures and more than 50 percent
of the buildings, not including outbuildings, are structurally substandard to a degree
requiring substantial renovation or clearance;
(2) The property consists of vacant, unused, underused, inappropriately used, or infrequently
used rail yards, rail storage facilities or excessive or vacated railroad rights-of-way;
(3) tankfacilities,or property whose immediately previous use was for tankfacilities,as defined
in Section 115C, Subd. 15, if the tank facility:
(i) have or had a capacity of more than one million gallons;
(ii) are located adjacent to rail facilities;or
(iii)have been removed, or are unused, underused, inappropriately used or infrequently
used; or
(4) a qualifying disaster area, as defined in Subd. 10b.
(b) For purposes of this subdivision, "structurally substandard"shall mean containing defects in
structural elements or a combination of deficiencies in essential utilities and facilities,light and
ventilation,fire protection including adequate egress,layout and condition ofinterior partitions,
or similar factors, which defects or deficiencies are of sufficient total significance to just
substantial renovation or clearance.
(c) A building is not structurally substandard fit is in compliance with the building code applicable
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-2
to new buildings or could be modified to satisfy the building code at a cost of less than 15
percent of the cost of constructing a new structure of the same square footage and type on the
site. The municipality may find that a building is not disqualified as structurally substandard
under the preceding sentence on the basis of reasonably available evidence, such as the size,
type, and age of the building, the average cost of plumbing, electrical, or structural repairs or
other similar reliable evidence. The municipality may not make such a determination without
an interior inspection of the property, but need not have an independent, expert appraisal
prepared of the cost of repair and rehabilitation of the building. An interior inspection of the
property is not required,if the municipality finds that(1)the municipality or authority is unable
to gain access to the property after using its best efforts to obtain permission from the party that
owns or controls the property;and(2)the evidence otherwise supports a reasonable conclusion
that the building is structurally substandard.
(d) A parcel is deemed to be occupied by a structurally substandard building for purposes of the
finding under paragraph (a) or by the improvement described in paragraph (e) if all of the
following conditions are met:
(1) the parcel was occupied by a substandard building or met the requirements of paragraph
(e), as the case may be, within three years of the filing of the request for certification of the
parcel as part of the district with the county auditor;
(2) the substandard building or the improvements described in paragraph(e)were demolished
or removed by the authority or the demolition or removal was financed by the authority or
was done by a developer under a development agreement with the authority;
(3) the authority found by resolution before the demolition or removal that the parcel was
occupied by a structurally substandard building or met the requirement of paragraph(e)and
that after demolition and clearance the authority intended to include the parcel within a
district;and
(4) upon filing the request for certification of the tax capacity of the parcel as part of a district,
the authority notifies the county auditor that the original tax capacity of the parcel must be
adjusted as provided by§469.177,subdivision 1,paragraph f.
(e) For purposes of this subdivision, a parcel is not occupied by buildings,streets, utilities,paved
or gravel parking lots or other similar structures unless 15 percent of the area of the parcel
contains buildings,streets, utilities,paved or gravel parking lots or other similar structures.
f For districts consisting of two or more noncontiguous areas, each area must qualf as a
redevelopment district under paragraph(a)to be included in the district,and the entire area of
the district must satisfy paragraph(a).
In meeting the statutory criteria the EDA and City rely on the following facts and findings:
• The District is a redevelopment district consisting of three parcels.
• An inventory shows that parcels consisting of more than 70 percent of the area in the District are
occupied by buildings,streets,utilities,paved or gravel parking lots or other similar structures.
• An inspection of the buildings located within the District finds that more than 50 percent of the buildings
are structurally substandard as defined in the TIF Act.(See Appendix F).
Pursuant to M.S., Section 469.176, Subd. 7,the District does not contain any parcel or part of a parcel that
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-3
qualified under the provisions of M.S., Sections 273.111,273.112, or 273.114 or Chapter 473H for taxes
payable in any of the five calendar years before the filing of the request for certification of the District.
Subsection 2-7. Duration and First Year of Tax Increment of the District
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1,the duration and first year of tax
increment of the District must be indicated within the TIF Plan. Pursuant to M.S.,Section 469.176,Subd. lb.,
the duration of the District will be 25 years after receipt of the first increment by the EDA or City(a total of
26 years of tax increment). The EDA or City elects to receive the first tax increment in 2020,which is no
later than four years following the year of approval of the District. Thus, it is estimated that the District,
including any modifications of the TIF Plan for subsequent phases or other changes,would terminate after
2045,or when the TIF Plan is satisfied. The EDA or City reserves the right to decertify the District prior to
the legally required date.
Subsection 2-8. Original Tax Capacity,Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements
Pursuant to M.S.,Section 469.174,Subd. 7 and M.S.,Section 469.177,Subd.1,the Original Net Tax Capacity
(ONTC)as certified for the District will be based on the market values placed on the property by the assessor
in 2017 for taxes payable 2018.
Pursuant to M.S., Section 469.177, Subds. 1 and 2,the County Auditor shall certify in each year(beginning
in the payment year 2020)the amount by which the original value has increased or decreased as a result of:
1. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries of the district;
3. Change due to adjustments,negotiated or court-ordered abatements;
4. Change in the use of the property and classification;
5. Change in state law governing class rates;or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity(NTC)value of the District declines below the ONTC,no
value will be captured and no tax increment will be payable to the EDA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2018, assuming the
request for certification is made before June 30,2018.The ONTC and the Original Local Tax Rate for the
District appear in the table below.
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity(CTC)of the District,within the Downtown Chanhassen Redevelopment Project
Area,upon completion of the projects within the District,will annually approximate tax increment revenues
as shown in the table below. The EDA and City request 100 percent of the available increase in tax capacity
for repayment of its obligations and current expenditures,beginning in the tax year payable 2020.The Project
Tax Capacity(PTC)listed is an estimate of values when the projects within the District are completed.
Chanhassen Economic Development Authority 2-4
Tax Increment Financing Plan for Tax Increment Financing District No.11
Project Estimated Tax Capacity upon Completion(PTC) $320,580
Original Estimated Net Tax Capacity(ONTC) $30,024
Fiscal Disparities Contribution $13,751
Estimated Captured Tax Capacity(CTC) $276,805
Original Local Tax Rate 1.06381 Pay 2017
Estimated Annual Tax Increment(CTC x Local Tax Rate) $294,468
Percent Retained by the EDA 100%
Pursuant to M.S., Section 469.177, Subd. 4,the EDA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4,with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen(18)months immediately preceding approval of the
TIF Plan by the municipality pursuant to M.S.,Section 469.175,Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City has reviewed the area to be included in the District and found no parcels for which building
permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the
City.
Subsection 2-9. Sources of Revenue/Bonds to be Issued
The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax
increments. The EDA or City reserves the right to incur bonds or other indebtedness as a result of the TIF
Plan. As presently proposed,the projects within the District will be financed by pay-as-you-go notes and
interfund loan. Additional indebtedness may be required to finance other authorized activities.
The total estimated tax increment revenues for the District are shown in the table below:
SOURCES OF FUNDS TOTAL
Tax Increment $7,628,595
Interest $762,859
TOTAL $8,391,454
The EDA or City may issue bonds(as defined in the TIF Act)secured in whole or in part with tax increments
from the District in a maximum principal amount of$4,887,444. Such bonds may be in the form of pay-as-
you-go notes, revenue bonds or notes,general obligation bonds, or interfund loans. This estimate of total
bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval.
Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This
provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur other
debt only upon the determination that such action is in the best interest of the City.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-5
Subsection 2-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate the redevelopment of the former
Frontier property into a six-story building consisting of 134 market rate apartments with underground parking
and a single-story building with 19,000 square feet of commercial retail and surface parking, as well as
facilitate the construction of public improvements adjacent to the site. The EDA and City have determined
that it will be necessary to provide assistance to the project for certain District costs,as described. The EDA
has studied the feasibility of the development or redevelopment of property in and around the District. To
facilitate the establishment and development or redevelopment of the District,this TIF Plan authorizes the
use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs
and uses of funds associated with the District is outlined in the following table.
USES OF TAX INCREMENT FUNDS TOTAL
Land/Building Acquisition $1,250,000
Site Improvements/Preparation $780,000
Utilities $500,000
Other Qualifying Improvements $1,976,014
Administrative Costs(up to 10%) $381,430
PROJECT COST TOTAL $4,887,444
Interest $3,504,010
PROJECT AND INTEREST COSTS TOTAL $8,391,454
The total project cost,including financing costs(interest)listed in the table above does not exceed the total
projected tax increments for the District as shown in Subsection 2-9.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without formal modification,the budget above pursuant to the applicable statutory requirements. Pursuant
to M.S.,Section 469.1763,Subd.2,no more than 25 percent of the tax increment paid by property within the
District will be spent on activities related to development or redevelopment outside of the District but within
the boundaries of the Downtown Chanhassen Redevelopment Project Area,(including administrative costs,
which are considered to be spent outside of the District) subject to the limitations as described in this TIF
Plan.
Subsection 2-11. Fiscal Disparities Election
Pursuant to M.S.,Section 469.177,Subd. 3,the EDA or City may elect one of two methods to calculate fiscal
disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b,(within the District)are
followed,the following method of computation shall apply:
(1) The original net tax capacity shall be determined before the application of the fiscal disparity
provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal
disparity commercial-industrial net tax capacity increase between the original year and the
current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section
Chanhassen Economic Development Authority 2-6
Tax Increment Financing Plan for Tax Increment Financing District No.11
276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax
capacity is equal to or greater than the current net tax capacity,there is no captured tax capacity
and no tax increment determination. Where the original tax capacity is less than the current tax
capacity, the difference between the original net tax capacity and the current net tax capacity
is the captured net tax capacity. This amount less any portion thereof which the authority has
designated, in its tax increment financing plan, to share with the local taxing districts is the
retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the less of(A)the local taxing district tax rates or(B)the original local tax rate
to the retained captured net tax capacity of the authority is the tax increment of the authority.
The EDA will choose to calculate fiscal disparities by clause b.
According to M.S., Section 469.177, Subd. 3:
(c) The method of computation of tax increment applied to a district pursuant to paragraph (a)or
(b)shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Subsection 2-12.Business Subsidies
Pursuant to M.S., Section 116J.993, Subd. 3,the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy of less than$150,000;
(2) Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location,or similar general criteria;
(3) Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in M.S.,Section 116J.552,Subd. 3;
(5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts,provided that
the assistance is equal to or less than 50%of the total cost;
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement,including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers'compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A,bonds issued to refund outstanding bonds,and
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-7
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986,as amended through December 31, 1999;
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
(16) Assistance for a tax increment financing soils condition district as defined under M.S., Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes of a principally
technical nature;
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of$150,000 or less;
(22) Federal loan funds provided through the United States Department of Commerce,Economic
Development Administration;and
(23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to
valuation under Minnesota Rules, chapter 8100.
The EDA will comply with M.S., Sections 116.1.993 to 116.1995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
Subsection 2-13.County Road Costs
Pursuant to M.S., Section 469.175, Subd. la,the county board may require the EDA or City to pay for all or
part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgment of the county,substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads,it must notify the EDA or City within forty-
five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed
development outlined in this TIF Plan will have little or no impact upon county roads,therefore the TIF Plan
was not forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the
county could claim that tax increment should be used for county roads, even after the public hearing.
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation of the District. However,the EDA or City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows on the next page if the "but for"test was not met:
Chanhassen Economic Development Authority 2-8
Tax Increment Financing Plan for Tax Increment Financing District No.11
IMPACT ON TAX BASE
2016/Pay 2017 Estimated Captured
Total Net Tax Capacity(CTC) Percent of CTC
Tax Capacity Upon Completion to Entity Total
Carver County 121,806,073 276,805 0.2273%
City of Chanhassen 40,553,943 276,805 0.6826%
East Carver County ISD 112 70,429,593 276,805 0.3930%
IMPACT ON TAX RATES
Pay 2017 Percent Potential
Extension Rates of Total CTC Taxes
Carver County 0.388510 36.52% 276,805 107,542
City of Chanhassen 0.238550 22.42% 276,805 66,032
East Carver County ISD 112 0.370050 34.79% 276,805 102,432
Other 0.066700 6.27% 276.805 18,463
Total 1.063810 100.00% 294,468
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual Pay 2017 rate. The total net capacity for the entities listed above are based
on actual Pay 2017 figures. The District will be certified under the actual Pay 2018 rates, which were
unavailable at the time this TIF Plan was prepared.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be
generated over the life of the District is$7,628,595;
(2) Probable impact of the District on city provided services and ability to issue debt. An impact of the
District on police protection is expected.The City police department does track all calls for service
including property-type calls and crimes. With any addition of new residents or businesses,police
calls for service will be increased. New developments add an increase in traffic, and additional
overall demands to the call load.The City does not expect that the proposed development,in and of
itself, will necessitate new capital investment at this time. The City is preparing to add additional
officers some time in the future with or without the completion of this project.
The probable impact of the District on fire protection is not expected to be significant. Typically new
buildings generate few calls,if any,and are of superior construction.
The impact of the District on public infrastructure is expected to be minimal. The development is
not expected to significantly impact any traffic movements in the surrounding area and no new public
streets are required to be constructed in conjunction with this development.The City is planning to
upgrade Market Boulevard due to this development and will assess the developer. The current
infrastructure for sanitary sewer,storm sewer and water will be able to handle the additional volume
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-9
generated from the proposed development. Based on the development plans,there are no additional
costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. The
development in the District is expected to contribute an estimated $7,157 per unit in City water
(WAC) connection fees, $2,302 per unit in City sewer (SAC) connection fees, and an additional
$2,560 per unit in Met Council SAC.A sewer capacity analysis is currently being completed for the
project, and any necessary sanitary sewer system improvements will be paid by the developer.
The probable impact of any District general obligation tax increment bonds on the ability to issue
debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any
general obligation debt issued in relation to this project, therefore there will be no impact on the
City's ability to issue future debt or on the City's debt limit.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated that the
amount of tax increments over the maximum life of the District that would be attributable to school
district levies,assuming the school district's share of the total local tax rate for all taxing jurisdictions
remained the same,is$2,653,988;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of
tax increments over the maximum life of the District that would be attributable to county levies,
assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same,
is $2,785,963;
(5) Additional information requested by the county or school district. The City is not aware of any
standard questions in a county or school district written policy regarding tax increment districts and
impact on county or school district services. The county or school district must request additional
information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax
increment financing plan.
No requests for additional information from the county or school district regarding the proposed
development for the District have been received.
Subsection 2-15.Supporting Documentation
Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and
description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd.
3, clause(b)(2)and the findings are required in the resolution approving the District. Following is a list of
reports and studies on file at the City that support the EDA and City's findings:
• A list of applicable studies will be listed here prior to the public hearing.
Subsection 2-16. Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd.25,tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
1. Taxes paid by the captured net tax capacity,but excluding any excess taxes,as computed under M.S.,
Section 469.177;
2. The proceeds from the sale or lease of property,tangible or intangible,to the extent the property was
purchased by the authority with tax increments;
3. Principal and interest received on loans or other advances made by the authority with tax increments;
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-10
4. Interest or other investment earnings on or from tax increments;
5. Repayments or return of tax increments made to the Authority under agreements for districts for
which the request for certification was made after August 1, 1993; and
6. The market value homestead credit paid to the Authority under M.S., Section 273.1384.
Subsection 2-17.Modifications to the District
In accordance with MS., Section 469.175, Subd. 4,any:
1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the
requirements of M.S., Section 469.175, Subd. 4(e);
2. Increase in amount of bonded indebtedness to be incurred;
3. A determination to capitalize interest on debt if that determination was not a part of the original TIF
Plan;
4. Increase in the portion of the captured net tax capacity to be retained by the EDA or City;
5. Increase in the estimate of the cost of the District,including administrative expenses,that will be paid
or financed with tax increment from the District; or
6. Designation of additional property to be acquired by the EDA or City,
shall be approved upon the notice and after the discussion,public hearing and findings required for approval
of the original TIF Plan.
Pursuant to M.S.Section 469.175 Subd.4(f),the geographic area of the District may be reduced,but shall not
be enlarged after five years following the date of certification of the original net tax capacity by the county
auditor. If a redevelopment district is enlarged,the reasons and supporting facts for the determination that
the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, must be documented in
writing and retained. The requirements of this paragraph do not apply if(1) the only modification is
elimination of parcel(s)from the District and(2)(A)the current net tax capacity of the parcel(s)eliminated
from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax
capacity or(B)the EDA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax
capacity will be reduced by no more than the current net tax capacity of the parcel(s)eliminated from the
District.
The EDA or City must notify the County Auditor of any modification to the District. Modifications to the
District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF
Plan.
Subsection 2-18.Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
EDA or City,other than:
1. Amounts paid for the purchase of land;
2. Amounts paid to contractors or others providing materials and services,including architectural and
engineering services,directly connected with the physical development of the real property in the
District;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
District;
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to M.S., Section 469.178;or
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-11
5. Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses(1)to(3).
For districts for which the request for certification were made before August 1, 1979,or after June 30, 1982,
and before August 1,2001,administrative expenses also include amounts paid for services provided by bond
counsel, fiscal consultants,and planning or economic development consultants. Pursuant to M.S., Section
469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative
expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures
authorized by the TIF Plan or the total tax increments,as defined by M.S.,Section 469.174,Subd.25,clause
(1),from the District,whichever is less.
For districts for which certification was requested after July 31,2001,no tax increment may be used to pay
any administrative expenses for District costs which exceed ten percent of total estimated tax increment
expenditures authorized by the TIF Plan or the total tax increments,as defined in M.S.,Section 469.174,Subd.
25, clause(1),from the District,whichever is less.
Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District and are not subject to the percentage limits
ofM.S.,Section 469.176,Subd.3. The county may require payment of those expenses by February 15 of the
year following the year the expenses were incurred.
Pursuant to M.S., Section 469. 177, Subd. 11,the County Treasurer shall deduct an amount(currently .36
percent) of any increment distributed to the EDA or City and the County Treasurer shall pay the amount
deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be
appropriated to the State Auditor for the cost of financial reporting of tax increment financing information
and the cost of examining and auditing authorities' use of tax increment financing. This amount may be
adjusted annually by the Commissioner of Revenue.
Subsection 2-19. Limitation of Increment
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Pursuant to M.S., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax
incrementfinancing district pursuant to M.S.,Section 469.177,no demolition,rehabilitation
or renovation of property or other site preparation, including qualified improvement of a
street adjacent 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 from that parcel, and the original net tax
capacity of that parcel shall be excluded from 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 incrementfinancing plan,the authority shall certify to the county auditor that the activity
has commenced and the county auditor shall certify the net tax capacity thereof as most
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-12
recently certified by the commissioner of revenue and add it to the original net tax capacity
of the tax increment financing 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 1 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.
The EDA or City or a property owner must improve parcels within the District by approximately September
2021 and report such actions to the County Auditor.
Subsection 2-20. Use of Tax Increment
The EDA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable
property located in the District for the following purposes:
1. To pay the principal of and interest on bonds issued to finance a project;
2. To finance, or otherwise pay the cost of redevelopment of the Downtown Chanhassen
Redevelopment Project Area pursuant to M.S., Sections 469.090 to 469.1082;
3. To pay for project costs as identified in the budget set forth in the TIF Plan;
4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176,Subd. 4;
5. To pay principal and interest on any loans,advances or other payments made to or on behalf of the
EDA or City or for the benefit of the Downtown Chanhassen Redevelopment Project Area by a
developer;
6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
M.S., Chapter 462C.M.S., Sections 469.152 through 469.165,and/or M.S., Sections 469.178;and
7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152
through 469.165,and/or M.S., Sections 469.178.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Carver County to the EDA for the Tax Increment
Fund of said District. The EDA or City will pay to the developer(s) annually an amount not to exceed an
amount as specified in a developer's agreement to reimburse the costs of land acquisition, public
improvements,demolition and relocation,site preparation,and administration. Remaining increment funds
will be used for EDA or City administration (up to 10 percent) and for the costs of public improvement
activities outside the District.
Subsection 2-21. Excess Increments
Excess increments,as defined in M.S.,Section 469.176, Subd. 2,shall be used only to do one or more of the
following:
1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment for any outstanding bonds;
3. Pay into an escrow account dedicated to the payment of any outstanding bonds;or
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-13
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The EDA or City must spend or return the excess increments under paragraph(c)within nine months after
the end of the year. In addition,the EDA or City may, subject to the limitations set forth herein, choose to
modify the TIF Plan in order to finance additional public costs in the Downtown Chanhassen Redevelopment
Project Area or the District.
Subsection 2-22. Requirements for Agreements with the Developer
The EDA or City will review any proposal for private development to determine its conformance with the
Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings,landscaping plan,grading and storm drainage plan,signage system plan,and any
other drawings or narrative deemed necessary by the EDA or City to demonstrate the conformance of the
development with City plans and ordinances. The EDA or City may also use the Agreements to address other
issues related to the development.
Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be
acquired in the District as set forth in the TIF Plan shall at any time be owned by the EDA or City as a result
of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments
from property acquired is pledged,unless prior to acquisition in excess of 25 percent of the acreage,the EDA
or City concluded an agreement for the development or redevelopment of the property acquired and which
provides recourse for the EDA or City should the development or redevelopment not be completed.
Subsection 2-23.Assessment Agreements
Pursuant to M.S., Section 469.1 77, Subd. 8,the EDA or City may enter into a written assessment agreement
in recordable form with the developer of property within the District which establishes a minimum market
value of the land and completed improvements for the duration of the District. The assessment agreement
shall be presented to the 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 assessment agreement appears,
in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the
minimum market value agreement.
Subsection 2-24.Administration of the District
Administration of the District will be handled by the City Manager.
Subsection 2-25.Annual Disclosure Requirements
Pursuant to M.S., Section 469.1 75, Subds. 5, 6, and 6b the EDA or City must undertake financial reporting
for all tax increment financing districts to the Office of the State Auditor,County Board and County Auditor
on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement
shall be published in a newspaper of general circulation in the City on or before August 15.
If the City fails to make a disclosure or submit a report containing the information required by M.S., Section
469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the
distribution of tax increment from the District.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-14
Subsection 2-26. Reasonable Expectations
As required by the TIF Act,in establishing the District,the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value ofthe site that could reasonably be expected
to occur without the use of tax increment financing would be less than the increase in the market value
estimated to result from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration ofthe District permitted by the TIF Plan.In making said determination,
reliance has been placed upon written representation made by the developer to such effects and upon EDA
and City staff awareness of the feasibility of developing the project site(s)within the District. A comparative
analysis of estimated market values both with and without establishment of the District and the use of tax
increments has been performed as described above. Such analysis is included with the cashflow in Appendix
D,and indicates that the increase in estimated market value of the proposed development(less the indicated
subtractions)exceeds the estimated market value of the site absent the establishment of the District and the
use of tax increments.
Subsection 2-27. Other Limitations on the Use of Tax Increment
1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the the
Downtown Chanhassen Redevelopment Project Area pursuant to M.S., Sections 469.090 to 469.1082.
Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used
for the acquisition,construction,renovation,operation,or maintenance of a building to be used primarily
and regularly for conducting the business of a municipality,county,school district,or any other local unit
of government or the state or federal government. This provision does not prohibit the use of revenues
derived from tax increments for the construction or renovation of a parking structure.
2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on
activities in the District or to pay bonds,to the extent that the proceeds of the bonds were used to finance
activities within said district or to pay,or secure payment of,debt service on credit enhanced bonds. Not
more than 25 percent of said tax increments may be expended,through a development fund or otherwise,
on activities outside of the District except to pay,or secure payment of,debt service on credit enhanced
bonds. For purposes of applying this restriction,all administrative expenses must be treated as if they
were solely for activities outside of the District.
3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall
be deemed to have satisfied the 75 percent test set forth in paragraph(2)above only if the five year rule
set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year
following certification of the District, 75 percent of said tax increments that remain after expenditures
permitted under said five year rule must be used only to pay previously committed expenditures or credit
enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5.
4. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a
redevelopment district must be used to finance the cost of correcting conditions that allow designation
of redevelopment and renewal and renovation districts under M.S.,Section 469.176 Subd.4j. These costs
include, but are not limited 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 for development of
the land, and installation of utilities,roads,sidewalks,and parking facilities for the site. The allocated
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.11 2-15
administrative expenses of the EDA or City,including the cost of preparation of the development action
response plan,may be included in the qualifying costs.
Subsection 2-28. Summary
The Chanhassen Economic Development Authority is establishing the District to preserve and enhance the
tax base,redevelop substandard areas,and provide employment opportunities in the City. The TIF Plan for
the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota
55113,telephone(651)697-8500.
Chanhassen Economic Development Authority 2-16
Tax Increment Financing Plan for Tax Increment Financing District No.11
Appendix A
Project Description
Chanhassen Frontier LLC is proposing to redevelop vacant and underutilized commercial site formerly known
as the Frontier Lumber site. On the four-acre site,the developer is proposing a six-story, 134 unit market rate
multifamily housing building with underground parking and a single-story commercial retail building
adjoined by surface parking. Additional public street infrastructure is expected to be constructed to facilitate
the new density within the downtown area,a portion of which will be assessed to the redevelopment project.
The multifamily building is to be comprised of a mix of studio,one-bedroom den,as well as two and three-
bedroom units. The redevelopment cost is estimated to be in excess of$33 million. Construction is expected
to start as early as the Fall of 2017 and occur over the next 18-month period reaching initial occupancy in
early 2019.
Tax Increment from the District will be utilized with potential funding from Carver County's Community
Growth Partnership Grant to provide financing for the project. The EDA proposes to issue one or more pay-
as-you-go TIF Notes to the developer to reimburse additional qualifying costs necessary to facilitate the
redevelopment. Qualifying activities include:demolition,utilities,earthwork,grading and site preparation,
surface and structured parking,project street infrastructure costs,and various other site improvement costs.
Appendix A-1
I
Appendix B
Maps of the Downtown Chanhassen Redevelopment Project Area and the District
Appendix� �J�� B'1
Tax Increment Financing District No. 11
Downtown Chanhassen Redevelopment Project Area
City of Chanhassen, Minnesota
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City of Chanhassen N
Proposed Tax Increment
Financing District No. 11
Appendix C
Description of Property to be Included in the District
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below.
Parcel Numbers Address Owner
25.2830020 Unassigned Chanhassen Frontier LLC
25.1680031 0 78th St.W Chanhassen Frontier LLC
25.2830031 0 Market St Chanhassen Frontier LLC
The property within the TIF District will be undergoing a registered land survey to facilitate the new use of
the property and subdivision. An updated description will amend this section upon completion of that
process.
Appendix C-1
Appendix D
Estimated Cash Flow for the District
Appendix D-1
I
8/10/2017 Base Value Assumptions-Page 1
EHLERS
ttAnF Ra ix MOM MARC.
Frontier 2 Redevelopment TIF District
City of Chanhassen,MN
134 Market Rate Apartments and 19,000 eq ft retail
ASSUMPTIONS AND RATES
DlstrlctType: Redevelopment Tax Rates
District Name/Number: TIF No.11
County District#: Exempt Class Rate(Exempt) 0.00%
First Year Construction or Inflation on Value 2018 Commercial Industrial Preferred Class Rate(C/I Pref.)
Existing District-Specify No.Years Remaining First $150,000 1.50%
Inflation Rete-Every Yea r. 0.00% Over $150,000 2.00%
Interest Rate: 5.00% Commercial Industrial Class Rate(CA) 2.00%
Present Value Date: 1-Aug-18 Rental Housing Class Rate(Rental) 1.25%
First Period Ending 1-Feb-19 Affordable Rental Housing Class Rate(AH.Rental)
Tax Year District was Certified: Pay 2018 First 5115,000 0.75%
Cashflow Assumes First Tax Increment For Development: 2020 Over $115,000 0.25%
Years of Tax Increment 26 Non-Homestead Residential(Non-H Res.1 Unit)
Assumes Last Year of Tex Increment 2045 First $500,000 1.00%
Fiscal Disparities Election[Outside(A),Inside(B),or NA) Inside(B) Over $500,000 1.25%
Incremental or Total Fiscal Disparities Incremental Homestead Residential Class Rate(Hmstd.Res.)
Fiscal Disparities Contribution Ratio 37.5067% Pay 2017 First $500,000 1.00%
Fiscal Disparities Metro-Wide Tax Rate 150.0490% Pay 2017 Over $500,000 1.25%
Maximum/Frozen Local Tex Rate: 106.381% Pay 2017 Agricultural Non-Homestead 1.00%
Current Local Tax Rate:(Use lesser of Current or Max.) 106.381% Pay 2017
State-wide Tax Rate(Comm.And.only used for total taxes) 45.8020% Pay 2017
Market Value Tax Rate(Used for total taxes) 0.24963% Pay 2017
BASE VALUE INFORMATION (Original Tax Capacity)
Building Total Percentage Tax Year Property Current Class After
Land Market Market Of Value Used Original Original Tax Original After Conversion Area/
Map# PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig.Tax Cap. Phase
1 25.2830020 Bloomberg Co 391,900 1,067,400 1,459,300 100% 1,459,300 Pay2018 C/I Pref. 28,436 Rental 18,241
2 25.1680031 Bloomberg Co 408,000 38,900 446,900 100% 446,900 Pay 2018 C/I 8,938 C/I Pref. 8,188
3 25.2830031 Bloomberg Co 287,600 0 287,600 100% 287,600 Pay2018 C/I 5,752 Rental 3,595
1,087,500 1,106,300 2,193,800 2,193,800 43,126 30,024
Note:
1.Base values are for pay 2018 based upon review of County website on July 10,2017.
Prepared by Ehlers 8 Associates.Inc.-Estimates Only N:1Minnsola\ChantasaenNbuei g-Economic-Redauolopeanv1IF\TIF VisticbtTIF 11 FroMier\Chanhmwn_Frontier 2 TIF Run(8.6.201r)xls
8/10/2017 Base Value Assumptions-Page 2
EHLERS
!rel ac aPPM IC fIN Ahri
Frontier 2 Redevelopment TIF District
City of Chanhassen,MN
134 Market Rate Apartments and 19,000 sq ft retail
PROJECT INFORMATION(Project Tax Capacity)
Estimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First Year
Market Value Market Value Total Market Tax Project Project ax Completed ComOpleeted Completed Completed Full Taxes
Area/Phase New Use Per Sq.FtJUnh Per Sq.Ft/Unit Sq.FtJUnits Wee Class Tax Capacity Capacity/Unit
100%201100%19 100%2 102/ 202b
0
Apartments 164,615 164,615 134 22,058,410 Rental 275,730 2,058100% 100% 2020
Retail 120 120 19,000 2280000 C/I Pref. 44,850 2 100% 10045
TOTAL 24,338,410 320,580
Subtotal Residential 134 22,058,410 275,730
Subtotal Commercial/Ind. 19,000 2,280,000 44,850
Note:
1.Market values are based upon the proposed minimum assessed value agreement for the apartment redevelopment,and retail estimates provide by the County Assessor.
TAX CALCULATIONS
ota s oca is . tate-w•- 'er et
Tax Disparities Tax Property Disparities Property Value Total Taxes Per
Nov Use Capacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq.Ft./Unit
Apartments 275,730 0 275,730 293,324 0 0 55,064 348,388 2,599.91
Retail 44,850 16,822 28,028 29,817 25,241 20,542 5,692 81 291679 4.28
TOTAL 320,580 18,822 303,758 323,141 25,241 20,542 80.798 424
Note:
1.Taxes and tax Increment will very significantly from year to year depending upon values,rates,state taw,fiscal disparities and other factors
which cannot be predicted.
WHAT IS EXCLUDED FROM TIF? MARKET VALUE BUT I FOR ANALYSIS
Total Property429,679 Current Market Value-Est. 2,193,800
less State-wideTaxes Taxes (20,542) New Market Value-Est. 24,338,41'
less Fiscal Disp.Adj. (25,241) Difference -- --- n,
less Market Value Taxes (60,756) Present Value of Tax Increment r,
less Base Value Taxes (28,673 Difference - -•0 -
Annual Gross TIF , • Value like! to occur without Tax Increment is less than:
N:V.ennsola\Cbantoss en1Housi,g-Economic-RedevelopmennTiE\TIF District\TIF 11 FroMie4Ctenhassen Fronlier 1 TIF Run(6.8.2017)xls
Prepared by Ehlers fl Associates.Mc.-Estimates Only
8/10/2017 Tax Increment Cashflow-Page 3
4) EHLERS
[Wf14 Of MIK exalt[
Frontier 2 Redevelopment TIF District
City of Chanhassen,MN
134 Market Rate Apartments and 19,000 sq ft retail
TAX INCREMENT CASH FLOW
Project Original Fiscal Captured Local Annual Semi-Annual State Admin. Semi-Annual Semi-Annual PERIOD
%of Tax Tax Disparities Tax Tax Gross Tax Groes Tax Auditor at Net Tax Present ENDING Tax Payment
OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36% 6% Increment Value Yrs. Year Date
-
-
02/01/19
-
-
-
-
08/01/19
-
•
02/01/20
100% 320,580 (30,024) (13.751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 126,261 0.6 2020 08/01/20
147,234 (530) (7,335) 139,369 249,443 1 2020 02/01/21
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,368 389,620 1.5 2021 08/01/21
147,234 (630) (7,335) 139,369 486,866 2 2021 02/01/22
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 601,252 2.5 2022 08/01/22
147,234 (530) (7,995) 139,389 712,848 3 2022 02/01/23
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 821,723 3.5 2029 08/01/23
147,234 (530) (7,335) 139,369 927,942 4 2023 02/01/24
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,389 1,031,570 4.5 2024 08/01/24
147,234 (530) (7,335) 139,369 1,132,671 5 2024 02/01/25
100% 920,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 1,231,306 5,5 2025 08/01/25
147,234 (530) (7,335) 139,369 1,327,535 6 2025 02/01/26
100% 320,560 (30,024) (13,751) 278,805 106,381% 294,468 147,234 (530) (7,335) 139,369 1,421,417 6.6 2026 08/01/26
147,234 (630) (7,335) 139,369 1,513,009 7 2028 02/01/27
100% 320,680 (30,024) (13,761) 276,805 106.381% 284,468 147,234 (530) (7,335) 139,369 1,602,368 7.5 2027 08/01/27
147,234 (530) (7,335) 139,369 1,689,647 8 2027 02/01/28
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 1,774,599 8.5 2028 08/01/28
147,234 (530) (7,335) 139,388 1,857,577 9 2028 02/01/29
100% 320,580 (30,024) (13,751) 278,805 106.381% 294,468 147,234 (530) (7,335) 139,369 1,938,532 9.6 2029 08/01/29
147,234 (530) (7,335) 139,369 2,017,511 10 2029 02/01/30
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 2,094,665 10.5 2030 08/01/30
147,234 (530) (7,335) 139,369 2,169,739 11 2030 02/01/31
100% 320,580 (30,024) (13,761) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 2,243,080 11.6 2031 08/01/31
147,234 (530) (7,335) 139,369 2,314,631 12 2031 02/01/32
100% 320,580 (30,024) (13,751) 276,80.5 106.381% 294,468 147,234 (530) (7,335) 139,369 2,384,438 12.5 2032 08/01/32
147,234 (530) (7,335) 139,369 2,452,542 13 2032 02/01/33
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 2,518,985 13.5 2033 08/01/33
147,234 (630) (7,335) 139,369 2,583,807 14 2033 02/01/34
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,336) 139,369 2,647,049 14.5 2034 08/01/34
147.234 (530) (7,336) 139,389 2,708,748 15 2034 02/01/35
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 2,768,942 15.5 2035 08/01/35
147,234 (530) (7,335) 139,369 2,827,887 18 2035 02/01/36
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 2,884,961 16.5 2036 08/01/36
147,234 (530) (7,395) 139,369 2,940,857 17 2036 02/01/37
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 2,995,390 17.6 2037 08/01/37
147,234 (530) (7,935) 139,369 3,048,593 18 2037 02/01/38
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,389 3,100,498 18.5 2038 08/01/38
147,234 (530) (7,335) 139,389 3,151,137 19 2038 02/01/39
100% 320,580 (30,024) (13,761) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,368 3,200,541 19.5 2038 08/01/39
147,234 (530) (7,335) 139,369 3,248,740 20 2039 02/01/40
100% 320,580 (30,024) (13,751) 278,805 106.381% 294,468 147,234 (530) (7,335) 139,369 3,295,764 20.5 2040 08/01/40
147,234 (530) (7,335) 139,369 3,341,640 21 2040 02/01/41
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 3,386,398 21.5 2041 08/01/41
147,234 (530) (7,335) 139,369 3.430,064 22 2041 02/01/42
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (630) (7,335) 139,369 8472,665 22.5 2042 08/01/42
147,234 (530) (7,335) 139,369 3,514,227 23 2042 02/01/43
100% 320,680 (30,024) (13,751) 276,805 106.381% 294,488 147,234 (530) (7,335) 139,369 3,554,775 23.5 2043 08/01/43
147,234 (530) (7,335) 139,369 3,594,334 24 2043 02/01/44
100% 320,580 (30,024) (13,751) 276,805 106.981% 294,488 147,234 (530) (7,335) 139,369 3,632,928 24.5 2044 08/01/44
147,234 (530) (7,335) 139,369 3,870,581 25 2044 02/01/45
100% 320,580 (30,024) (13,751) 276,805 106.381% 294,468 147,234 (530) (7,335) 139,369 3,707,316 25.5 2045 08/01/45
147,234 (530) (7,335) 139389 3.743,155 26 2045 02/01/46
Total 7,666,157 (27,562) (381,430) 7,247,165
Present Value From 08/01/2018 Present Value Rata 5.00% 3,954,399 (14,236) (197,008) 3,743,155
Prepared by Ehe,s F.Asmceles.Inc.-Estimates Only N:ui n s elC)aro eaenW ou,ig-Economic-Re481elopmexSTFOTF Oeatb0TF 11 Frontiel005m600en_Fronlier 2 TIF 000)8.82017W¢
Appendix E
Minnesota Business Assistance Form
(Minnesota Department of Employment and Economic Development)
A Minnesota Business Assistance Form(MBAF)should be used to report and/or update each calendar year's
activity by April 1 of the following year.
Please see the Minnesota Department of Employment and Economic Development (DEED) website at
http://www.deed.state.mn.us/Community/subsidies/MBAFForm.htm for information and forms.
E 1
Appendix
Appendix F
Redevelopment Qualifications for the District
Appendix F_1
Report of Inspection Procedures and Results for
Determining Qualifications of a
Tax Increment Financing District as a Redevelopment District
Chanhassen West 78th Street
Redevelopment TIF District
Chanhassen, Minnesota
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December 15,2015
Prepared For the
City of Chanhassen
Prepared by:
LHB,Inc.
tlj jE.{J 701 Washington Avenue North,Suite 200
Minneapolis,Minnesota 55401
LI-TB Project No.150703
TABLE OF CONTENTS
PART 1 — EXECUTIVE SUMMARY 2
Purpose of Evaluation 2
Scope of Work 3
Conclusion 3
PART 2 — MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS 3
A. Coverage Test 4
B. Condition of Buildings Test 4
C. Distribution of Substandard Buildings 5
PART 3 — PROCEDURES FOLLOWED 6
PART 4 — FINDINGS 6
A. Coverage Test 6
B. Condition of Building Test 7
1. Building Inspection 7
2. Replacement Cost 8
3. Code Deficiencies 8
4. System Condition Deficiencies 9
C. Distribution of Substandard Structures 9
PART 5 -TEAM CREDENTIALS 11
APPENDIX A Property Condition Assessment Summary Sheet
APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports
APPENDIX C Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
Chanhassen West 78' Street Redevelopment TIE District
LHB Project No. 150703 Page 1 of 11 Final Report
PART 1 - EXECUTIVE SUMMARY
PURPOSE OF EVALUATION
LHB was hired by the City of Chanhassen to inspect and evaluate the properties within a Tax
Increment Financing Redevelopment District("TIF District")proposed to be established by the City.
The proposed TIF District is located between 78th Street West and Market Street, east of Market
Boulevard (Diagram 1). The purpose of LHB's work is to determine whether the proposed TIF
District meets the statutory requirements for coverage, and whether two (2) buildings on three (3)
parcels, located within the proposed TIF District, meet the qualifications required for a
Redevelopment District.
7.8th Street. jWest
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Diagram 1—Proposed TIF District
Chanhassen West 78 Street Redevelopment TIF District Page 2 0111 Final Report
LHB Project No.150703
III
SCOPE OF WORK
The proposed TIF District consists of three(3)parcels with two (2)buildings. Two(2)buildings were
inspected on November 20,2015. Building Code and Condition Deficiency reports for the buildings
that were inspected are located in Appendix B.
CONCLUSION
After inspecting and evaluating the properties within the proposed TIF District and applying current
statutory criteria for a Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10,
it is our professional opinion that the proposed TIF District qualifies as a Redevelopment District
because:
• The proposed TIF District has a coverage calculation of 100 percent which is above the 70
percent requirement.
• 100 percent of the buildings are structurally substandard which is above the 50 percent
requirement.
• The substandard buildings are reasonably distributed.
The remainder of this report describes our process and findings in detail.
PART 2 - MINNESOTA STATUTE 469.174, SUBDIVISION 10
REQUIREMENTS
The properties were inspected in accordance with the following requirements under Minnesota Statutes,
Section 469.174, Subdivision 10(c),which states:
INTERIOR INSPECTION
"The municipality may not make such determination [that the building is structurally substandard]
without an interior inspection of the property..."
EXTERIOR INSPECTION AND OTHER MEANS
"An interior inspection of the property is not required,if the municipality finds that
(1) the municipality or authority is unable to gain access to the property after using its best efforts
to obtain permission from the party that owns or controls the property;and
(2) the evidence otherwise supports a reasonable conclusion that the building is structurally
substandard."
DOCUMENTATION
"Written documentation of the findings and reasons why an interior inspection was not conducted
must be made and retained under section 469.175,subdivision 3(1)."
QUALIFICATION REQUIREMENTS
Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires three tests for occupied parcels:
Chanhassen West 78''Street Redevelopment TIF District
LHB Project No.150703 Page 3 of 11 Final Report
A. COVERAGE TEST
..."parcels consisting of 70 percent of the area of the district are occupied by buildings,streets,
utilities,or paved or gravel parking lots..."
The coverage required by the parcel to be considered occupied is defined under Minnesota
Statutes,Section 469.174,Subdivision 10(e),which states:"For purposes of this subdivision,a parcel
is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar
structures unless 15 percent of the area of the parcel contains buildings,streets,utilities,paved
or gravel parking lots,or other similar structures."
B. CONDITION OF BUILDINGS TEST
Minnesota Statutes, Section 469.174, Subdivision 10(a) states, "...and more than 50 percent of the
buildings, not including outbuildings, are structurally substandard to a degree requiring
substantial renovation or clearance;"
1. Structurally substandard is defined under Minnesota Statutes,Section 469.174,Subdivision 10(b),
which states: "For purposes of this subdivision, `structurally substandard' shall mean
containing defects in structural elements or a combination of deficiencies in essential
utilities and facilities,light and ventilation, fire protection including adequate egress,layout
and condition of interior partitions,or similar factors,which defects or deficiencies are of
sufficient total significance to justify substantial renovation or clearance."
a. We do not count energy code deficiencies toward the thresholds required by Minnesota
Statutes, Section 469.174, Subdivision 10(b)defined as "structurally substandard", due to
concerns expressed by the State of Minnesota Court of Appeals in the Walser Auto
Sales,Inc. vs. City of Richfield case filed November 13,2001.
2. Buildings are not eligible to be considered structurally substandard unless they meet certain
additional criteria,as set forth in Subdivision 10(c)which states:
"A building is not structurally substandard if it is in compliance with the building code
applicable to new buildings or could be modified to satisfy the building code at a cost of
less than 15 percent of the cost of constructing a new structure of the same square footage
and type on the site. The municipality may find that a building is not disqualified as
structurally substandard under the preceding sentence on the basis of reasonably available
evidence, such as the size, type, and age of the building, the average cost of plumbing,
electrical,or structural repairs,or other similar reliable evidence."
"Items of evidence that support such a conclusion [that the building is not disqualified]
include recent fire or police inspections, on-site property tax appraisals or housing
inspections,exterior evidence of deterioration,or other similar reliable evidence."
LHB counts energy code deficiencies toward the 15 percent code threshold required by
Minnesota Statutes, Section 469.174,Subdivision 10(c)) for the following reasons:
• The Minnesota energy code is one of ten building code areas highlighted by the
Minnesota Department of Labor and Industry website where minimum
construction standards are required by law.
Chanhassen West 78 Street Redevelopment TIF District
LHB Project No. 150703 Page 4 of 11 Final Report
• Chapter 13 of the 2015 Minnesota Building Code states, `Buildings shall be designed
and constructed in accordance with the International Energy Conservation Code."
Furthermore,Minnesota Rules, Chapter 1305.0021 Subpart 9 states, "References
to the International Energy Conservation Code in this code mean the Minnesota Energy
Code..."
• The Senior Building Code Representative for the Construction Codes and
Licensing Division of the Minnesota Department of Labor and Industry
confirmed that the Minnesota Energy Code is being enforced throughout the State
of Minnesota.
• In a January 2002 report to the Minnesota Legislature, the Management Analysis
Division of the Minnesota Department of Administration confirmed that the
construction cost of new buildings complying with the Minnesota Energy Code is
higher than buildings built prior to the enactment of the code.
• Proper TIF analysis requires a comparison between the replacement value of a
new building built under current code standards with the repairs that would be
necessary to bring the existing building up to current code standards. In order for
an equal comparison to be made,all applicable code chapters should be applied to
both scenarios. Since current construction estimating software automatically
applies the construction cost of complying with the Minnesota Energy Code,
energy code deficiencies should also be identified in the existing structures.
C. DISTRIBUTION OF SUBSTANDARD BUILDINGS
Minnesota Statutes,Section 469.174,Subdivision 10,defines a Redevelopment District and requires
one or more of the following conditions, "reasonably distributed throughout the district."
(1) "Parcels consisting of 70 percent of the area of the district are occupied by buildings,
streets,utilities,paved or gravel parking lots,or other similar structures and more than
50 percent of the buildings,not including outbuildings,are structurally substandard to a
degree requiring substantial renovation or clearance;
(2) the property consists of vacant,unused,underused,inappropriately used,or infrequently
used rail yards,rail storage facilities,or excessive or vacated railroad rights-of-way;
(3) tank facilities,or property whose immediately previous use was for tank facilities..."
Our interpretation of the distribution requirement is that the substandard buildings must be
reasonably distributed throughout the district as compared to the location of all buildings in
the district. For example,if all of the buildings in a district are located on one half of the
area of the district,with the other half occupied by parking lots (meeting the required 70
percent coverage for the district),we would evaluate the distribution of the substandard
buildings compared with only the half of the district where the buildings are located. If all of
the buildings in a district are located evenly throughout the entire area of the district,the
substandard buildings must be reasonably distributed throughout the entire area of the
district. We believe this is consistent with the opinion expressed by the State of Minnesota
Court of Appeals in the Walser Auto Sales,Inc. vs. City of Richfield case filed November 13,
2001.
Chanhassen West 78' Street Redevelopment TIF District
LHB Project No. 150703 Page 5 of 11 Final Report
PART 3 - PROCEDURES FOLLOWED
LHB inspected two (2) of the two (2) buildings during the day of November 20,2015.
PART 4 - FINDINGS
A. COVERAGE TEST
1. The total square foot area of the parcel in the proposed TIF District was obtained from City
records,GIS mapping and site verification.
2. The total square foot area of buildings and site improvements on the parcels in the
proposed TIF District was obtained from City records,GIS mapping and site verification.
3. The percentage of coverage for each parcel in the proposed TIF District was computed to
determine if the 15 percent minimum requirement was met. The total square footage of
parcels meeting the 15 percent requirement was divided into the total square footage of the
entire district to determine if the 70 percent requirement was met.
FINDING:
The proposed TIF District met the coverage test under Minnesota Statutes, Section 469.174, Subdivision
10(e), which resulted in parcels consisting of 100 percent of the area of the proposed TIF District
being occupied by buildings, streets,utilities,paved or gravel parking lots,or other similar structures
(Diagram 2). This exceeds the 70 percent area coverage requirement for the proposed TIF District
under Minnesota Statutes, Section 469.174, Subdivision (a) (1).
Chanhassen West 78 Street Redevelopment TIF District Fin= Report
LHB Project No. 150703 Page 6 of 11
78tb:Street JW-eSt
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Diagram 2—Coverage Diagram
Shaded area depicts a parcel more than 15 percent occupied by buildings,streets,utilities,
Paved or gravel parking lots or other similar structures
B. CONDITION OF BUILDING TEST
1. BUILDING INSPECTION
The first step in the evaluation process is the building inspection. After an initial walk-
thru,the inspector makes a judgment whether or not a building"appears"to have enough
defects or deficiencies of sufficient total significance to justify substantial renovation or
clearance. If it does,the inspector documents with notes and photographs code and non-
code deficiencies in the building.
Chanhassen West 78'' Street Redevelopment TIE District
LHB Project No.150703 Page 7 of 11 Final Report
2. REPLACEMENT COST
The second step in evaluating a building to determine if it is substandard to a degree
requiring substantial renovation or clearance is to determine its replacement cost. This is
the cost of constructing a new structure of the same square footage and type on site.
Replacement costs were researched using R.S. Means Cost Works square foot models for
2015.
A replacement cost was calculated by first establishing building use(office,retail,residential,
etc.),building construction type(wood,concrete,masonry,etc.),and building size to obtain
the appropriate median replacement cost, which factors in the costs of construction in
Chanhassen,Minnesota.
Replacement cost includes labor, materials, and the contractor's overhead and profit.
Replacement costs do not include architectural fees, legal fees or other "soft" costs not
directly related to construction activities. Replacement cost for each building is tabulated
in Appendix A.
3. CODE DEFICIENCIES
The next step in evaluating a building is to determine what code deficiencies exist with
respect to such building. Code deficiencies are those conditions for a building which are
not in compliance with current building codes applicable to new buildings in the State of
Minnesota.
Minnesota Statutes, Section 469.174, Subdivision 10(c), specifically provides that a building
cannot be considered structurally substandard if its code deficiencies are not at least 15
percent of the replacement cost of the building. As a result,it was necessary to determine
the extent of code deficiencies for each building in the proposed TIF District.
The evaluation was made by reviewing all available information with respect to such
buildings contained in City Building Inspection records and making interior and exterior
inspections of the buildings. LHB utilizes the current Minnesota State Building Code as
the official code for our evaluations. The Minnesota State Building Code is actually a series
of provisional codes written specifically for Minnesota only requirements, adoption of
several international codes,and amendments to the adopted international codes.
After identifying the code deficiencies in each building,we used R.S. Means Cost Works
2015: Unit and Assembly Costs to determine the cost of correcting the identified
deficiencies. We were then able to compare the correction costs with the replacement cost
of each building to determine if the costs for correcting code deficiencies meet the required
15 percent threshold.
FINDING:
Two(2)out of two(2)buildings (100 percent)in the proposed TIF District contained code
deficiencies exceeding the 15 percent threshold required by Minnesota Statutes, Section
469.174, Subdivision 10(c). Building Code, Condition Deficiency and Context Analysis
reports for the buildings in the proposed TIF District can be found in Appendix B of this
report.
Chanhassen West 78 Street Redevelopment TIF District Final Report
LHB Project No. 150703 Page 8 of 11
4. SYSTEM CONDITION DEFICIENCIES
If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section
469.174, Subdivision 10(c), then in order for such building to be "structurally substandard"
under Minnesota Statutes, Section 469.174, Subdivision 10(b), the building's defects or
deficiencies should be of sufficient total significance to justify "substantial renovation or
clearance." Based on this definition,LHB re-evaluated each of the buildings that met the
code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), to
determine if the total deficiencies warranted"substantial renovation or clearance"based on
the criteria we outlined above.
System condition deficiencies are a measurement of defects or substantial deterioration in
site elements, structure, exterior envelope, mechanical and electrical components, fire
protection and emergency systems,interior partitions, ceilings, floors and doors.
The evaluation of system condition deficiencies was made by reviewing all available
information contained in City records, and making interior and exterior inspections of the
buildings. LHB only identified system condition deficiencies that were visible upon our
inspection of the building or contained in City records. We did not consider the amount
of"service life" used up for a particular component unless it was an obvious part of that
component's deficiencies.
After identifying the system condition deficiencies in each building, we used our
professional judgment to determine if the list of defects or deficiencies is of sufficient total
significance to justify"substantial renovation or clearance."
FINDING:
In our professional opinion,two (2) out of two (2)buildings (100 percent)in the proposed
TIF District are structurally substandard to a degree requiring substantial renovation or
clearance, because of defects in structural elements or a combination of deficiencies in
essential utilities and facilities, light and ventilation, fire protection including adequate
egress, layout and condition of interior partitions, or similar factors which defects or
deficiencies are of sufficient total significance to justify substantial renovation or clearance.
This exceeds the 50 percent requirement of Subdivision 10a(1).
C. DISTRIBUTION OF SUBSTANDARD STRUCTURES
Much of this report has focused on the condition of individual buildings as they relate to
requirements identified by Minnesota Statutes, Section 469.174, Subdivision 10. It is also
important to look at the distribution of substandard buildings throughout the geographic
area of the proposed TIF District (Diagram 3).
FINDING:
The parcels with substandard buildings are reasonably distributed compared to all parcels
that contain buildings.
Chanhassen West 78th Street Redevelopment TIF District Final Report
LHB Project No.150703 Page 9 of 11
4.---- 44
r r..., rd" ,
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Ma
rket Street
Diagram 3—Substandard Buildings
Shaded green area depicts parcels with substandard buildings.
Shaded orange area depicts substandard buildings.
Chanhassen West 78 Street Redevelopment TIF District Final Report
LHB Project No. 150703 Page 10 of 11
PART 5 - TEAM CREDENTIALS ,
Michael A. Fischer, AIA, LEED AP- Project Principal/TIF Analyst
Michael has 28 years of experience as project principal,project manager,project designer and project
architect on planning, urban design, educational, commercial and governmental projects. He has
become an expert on Tax Increment Finance District analysis assisting over 100 cities with strategic
planning for TIF Districts. He is a Senior Vice President at LHB and currently leads the Minneapolis
office.
Michael completed a two-year Bush Fellowship,studying at MIT and Harvard in 1999,earning Masters
degrees in City Planning and Real Estate Development from MIT. He has served on more than 50
committees, boards and community task forces, including a term as a City Council President and as
Chair of a Metropolitan Planning Organization. Most recently, he served as Chair of the Edina,
Minnesota planning commission. Michael has also managed and designed several award-winning
architectural projects, and was one of four architects in the Country to receive the AIA Young
Architects Citation in 1997.
Philip Waugh —Project Manager/TIF Analyst
Philip is a project manager with 13 years of experience in historic preservation,building investigations,
material research, and construction methods. He previously worked as a historic preservationist and
also served as the preservation specialist at the St.Paul Heritage Preservation Commission. Currently,
Phil sits on the Board of Directors for the Preservation Affiance of Minnesota. His current
responsibilities include project management of historic preservation projects, performing building
condition surveys and analysis, TIF analysis, writing preservation specifications, historic design
reviews, writing Historic Preservation Tax Credit applications, preservation planning, and grant
writing.
Phil Fisher—Inspector
For 35 years,Phil Fisher worked in the field of Building Operations in Minnesota including White Bear
Lake Area Schools. At the University of Minnesota he earned his Bachelor of Science in Industrial
Technology. He is a Certified Playground Safety Inspector, Certified Plant Engineer,and is trained in
Minnesota Enterprise Real Properties (MERP)Facility Condition Assessment(FCA). His FCA training
was recently applied to the Minnesota Department of Natural Resources Facilities Condition
Assessment project involving over 2,000 buildings.
M:\15Proj\150703\400 Design\406 Reports\Final Report\150703 20151215 Chanhassen\Vest 78th Redevelopment 111,Report.docx
APPENDICES
APPENDIX A Property Condition Assessment Summary Sheet
APPENDIX B Building Code and Condition Deficiencies Reports
APPENDIX C Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
GhanhassenWest78":treetRedevelopment TlF istrict iinalReport
-.1-1Bf'rpject to 150703 Page 11 of 11
APPENDIX A
Property Condition Assessment Summary Sheet
Chanhassen West 78th Street Redevelopment TIF District Chanhassen,Minnesota
Property Condition Assessment Summary Sheet
No_ r
TIF No.of
Coverage Area of Coverage Coverage Building 15`k of ' No. f b
Building Code Buildings
PID M Property Address Imp:ovements Percent of Quantity Replacement Replacement det i
I;nproved or Survey Method Site Area
Map No. Vacant Used (S.F.) (S.F.) Improvements (S.F.) Buildings Cost Cost Deficiencies Exceeding 156 substa da
Cntena _
A 252830020 N/A Improved Interior/Exterior 104,108 103,001 98.9% 104,108 1 $2,264,147 $339,622 $515,382 1 1
B 251680031 78TH ST W Improved Interior/Exterior 35,284 35,284 100.0% 35,284 1 $428,067 564,360 $96,075 1 1
C 252830031 MARKET ST Improved Exterior 30,492 29,813 97.8% 30,492 0
TOTALS 169,884 169,884 2 2 2
Total Coverage Percent: 100.0%
Percent of buildings exceeding 15 percent code deficiency threshold: 100.0%
M\15Proj4150703\400 Design\406 ReportslFixel Reportu150703 20151215 Chanhassen West 78th Street Redevelopment TIF Summary Spreadsheet.xtsx]Property Info Percent of buildings determined substandard: 100.0%
Chanhassen West 78th Street Redevelopment TIF District
LHB Project No.150703 Page 1 of 1 Property Condition Assessment Summary Sheet
APPENDIX B
Building Code, Condition Deficiency and Context Analysis Reports
Chanhassen West 78th Street Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
December 1,2015
Map No.&Address: Parcel A-78Th Street West,Chanhassen,MN 55317
Inspection Date(s) &Time(s): November 20,2015 10:00 am
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard
because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15%of
replacement cost,NOT including energy code deficiencies.
Estimated Replacement Cost: $2,264,147
Estimated Cost to Correct Building Code Deficiencies: $515,382
Percentage of Replacement Cost for Building Code Deficiencies: 22.76%
Defects in Structural Elements
1. There is a bowed wooden support column on the south side of the building that supports a roof.
2. There are brick parapet columns that are out of plumb.
3. Steel arches are rusting.
Combination of Deficiencies
1. Essential Utilities and Facilities
a. Thresholds are not ADA compliant.
b. There is not an accessible route to two out of the three levels in this building.
c. There are no accessible restrooms on the second floor.
d. Door hardware are not all ADA compliant.
e. Stair railings are missing and not in compliance with building code.
f. Faucets in one ground floor restroom are non-compliant.
g. Stair risers on two sets of stairs are not compliant.
h. Sidewalks do not meet accessibility standards.
i. There is a non-compliant threshold leading into the restaurant cooler.
j. The staff break room sinks in two areas are non-compliant.
k. The transaction counter in one of the retail spaces is not ADA compliant.
1. There are showers that are not ADA compliant.
Chanhassen West 78th Street Redevelopment TIE District Building Report
,LHB:Project No.150703 - - Page 1 of 3 Parcel A
2. Light and Ventilation
a. The HVAC system in several areas is of an age that it would not meet current ASHRAE
standards.
b. Tight diffusers are stained and damaged from cooking grease and water.
c. Wall return grills are covered in dust indicative of a compromised HVAC system.
d. Water stains are evident on the OSB flooring in the mechanical room.
e. Exterior exhaust diffusers are hail damaged.
3. Fire Protection/Adequate Egress
a. There is a smoke detector that has been disabled on the lower level.
b. Carpeting is missing and/or torn preventing adequate egress in the event of an emergency.
c. Vinyl flooring is loosen and damaged preventing adequate egress in the event of an
emergency.
d. The stoop is too high for safe egress from the building.
4. Layout and Condition of Interior Partitions/Materials
a. Interior corridors are in need of repair and painting.
b. Walls have been removed and are exposing structural members.
c. Glass wall mirrors are broken and should be replaced.
d. The interior block walls in the lower service areas show signs of water intrusion and mold.
e. There are stained ceiling tiles indicative of water intrusion from the roof.
f. Wooden stairs are in need of paint.
g. Interior sheetrock ceiling in lower area is damaged from a pipe leak and in need of repair.
h. Interior wall sections are missing and need repair or replacement.
i. Transitions are missing between dissimilar surfaces.
j. Window sills need to be refinished.
k. Window hardware is missing.
1. Ceiling sheetrock is damaged at tape joints in several areas.
m. Wallpaper is peeling and needs repair.
n. Ceramic tile is cracked and in need of replacement.
o. Wooden dance floor needs refinishing.
5. Exterior Construction
a. The EPDM roof is failing,showing water leakage on ceiling members below.
b. Block work is in need of pointing and replacement.
c. Windows are rotting and allowing for water intrusion.
d. Exposed wood ceiling members are stained from water intrusion and need painting.
e. Sidewalks and parking lots are crumbling and in need of repair.
f. Brick is missing from column wrap.
g. Roof drains are spilling over walkway and may cause icy conditions in the winter.
h. Exterior openings on the upper floor have a temporary plastic covering over them.
i. Gas pipe is rusting and in need of painting.
j. Exterior block is in need of painting.
k. Door trim should be painted.
1. Miscellaneous debris including an AC unit is abandoned on the roof.
m. Roof tie downs are rusting and should be replaced.
n. Exterior windows should be repainted.
o. Metal flashing is in need of painting.
Chanhassen West 78 Street Redevelopment TIF District Building Report
LHB Project No. 150703 Page 2 of 3 Parcel A
Description of Code Deficiencies
1. Replace thresholds that are not ADA compliant.
2. Create an accessible route between all building levels per building code.
3. Create ADA compliant restrooms on upper level per code.
4. Install code compliant door hardware where necessary.
5. Install code compliant hand railings on all stairs.
6. Install code compliant ADA accessible lavatory faucet on main level.
7. Correct stair risers to be building code compliant on two stairways.
8. Sidewalks need to be replaced to meet building code.
9. Correct the threshold on the walk-in cooler to be building code compliant.
10. Create a transaction counter in the lower retail space to meet ADA compliance.
11. Modify the two staff break room sinks to be ADA compliant.
12. Create at least one accessible shower facility for ADA compliance.
13. Replace HVAC system to meet building code compliance.
14. Replace/repair the nonfunctioning smoke detector for code compliance.
15. Replace the damaged carpet to allow for unimpeded egress in an emergency per life safety code.
16. Replace the tom vinyl flooring to allow for unimpeded egress in an emergency per life safety code.
17. Correct the elevation on the stoop to allow for safe egress per building code.
18. Repair damaged block to prevent water intrusion per building code.
19. Replace EPDM roofing to prevent water intrusion per building code.
20. Replace failed window systems to prevent water intrusion per building code.
Overview of Deficiencies
This building was originally constructed as a lumber yard and hardware store. Over the years it has been
remodeled into its current retail businesses on the lower levels and professional services on the upper level.
There is no accessible route between levels. Restrooms on the second floor are non-compliant for
accessibility. The individual HVAC systems are of an age that they would not meet ASHRAE standards for
the current usage. The exposed block wall on the east side is in need of repair as it is allowing for water
intrusion.
Chanhassen West 78' Street Redevelopment TIF District Building Report
LHB Project No. 150703 Page 3 of 3 Parcel A
Chanhassen West 78th Street Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
December 1,2015
Map No.&Address: Parcel B- 78th Street West,Chanhassen,MN 55317
Inspection Date(s)&Time(s): November 20,2015 9:00 am
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard
because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15%of
replacement cost,NOT including energy code deficiencies.
Estimated Replacement Cost: $429,067
Estimated Cost to Correct Building Code Deficiencies: $96,075
Percentage of Replacement Cost for Building Code Deficiencies: 22.39%
Defects in Structural Elements
1. Not Applicable.
Combination of Deficiencies
1. Essential Utilities and Facilities
a. Drinking fountain is inoperable.
b. Thresholds are non-compliant.
c. Sidewalks do not provide for an unobstructed route to building.
d. Install code-compliant door hardware
2. Tight and Ventilation
a. HVAC system is older and functioning below ASHRAE standards.
b. Smoke stack needs to be replaced/repaired.
3. Fire Protection/Adequate Egress
a. There are no GFCI receptacles present in building.
4. Layout and Condition of Interior Partitions/Materials
a. Interior walls should be painted.
b. Scuff marks on exit corridor walls.
c. VCT flooring showing signs of age.
d. Exit door stained and dented.
Chanhassen West 78 Street Redevelopment TIF District Building Report
LHB Project No. 150703 Page 1 of 2 Parcel B
5. Exterior Construction
a. Siding needs repair and painting.
b. Roof needs replacement.
c. Ceiling in walkway needs painting.
d. Exterior block walls cracked,damaged and in need of painting.
e. Gutters need to be repaired/replaced.
Description of Code Deficiencies
1. Replace roof to prevent water intrusion per building code
2. Repair/replace drinking fountain per plumbing and building code.
3. Correct threshold height to meet ADA compliance code.
4. Replace sidewalks to provide an unobstructed route to building per ADA code.
5. Replace existing HVAC system to meet building code requirements.
6. Install GFCI receptacles near all water sources per electrical code.
7. Repair/replace siding to prevent water intrusion per building code.
8. Install ADA compliant door hardware.
Overview of Deficiencies
This building is part of a commercial mixed use assemblage of both retail and professional services connected
by an enclosed walkway and an exposed sidewalk. In this building there is a hair salon and an educational
training service. The roof is showing signs of weathering with curling of the asphalt shingles. The wood
siding is damaged and in need of repair. Accessibility concerns are apparent by the uneven sidewalk and the
elevated thresholds. The HVAC system is older and appears not to meet current ASHRAE criteria.
Chanhassen West 78 Street Redevelopment TIF District Building Report
LHB Project No. 150703 Page 2 of 2 Parcel B
APPENDIX C
Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
Chanhassen West 78th Street Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date: 11/25/2015
Estimate Name: Parcel A
City of Chanhassen
78th StreetWest, Chanhassen, Minnesota,
55317
Store, Retail with Painted Concrete Block
Building Type: /Steel Joists
Location: MINNEAPOLIS, MN
Story Count:
Story Height(L.F.): 12
Floor Area(S.F.): 33357 9 --• ----•
Labor Type: OPN N f � _ � ,��l; �rf�ft`tq�
Basement Included: Yes : d#
4
Data Release: Year 2016 Costs are derived from a building model with basic components.
Cost Per Square Foot: $126.82 Scope differences and market conditions can cause costs to vary significantly.
Building Cost: $2,264,146.89
%of Total Cost Per S.F. Cost
A Substructure 19.10% 22.02 367,323.46
A1010 Standard Foundations 3.68 61,430.46
Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing
capacity 6 KSF, 12"deep x 24"wide 1.32 22,046.53
Spread footings, 3000 PSI concrete, load 100K, soil bearing capacity
6 KSF,4'-6"square x 15"deep 2.36 39,383.93
A1030 Slab on Grade 5.63 93,972.36
Slab on grade,4"thick, non industrial, reinforced 5.63 93,972.36
A2010 Basement Excavation 4.42 73,711.42
Excavate and fill, 10,000 SF, 8'deep, sand, gravel, or common
earth, on site storage 4.42 73,711.42
A2020 Basement Walls 8.29 138,209.22
Foundation wall, CIP, 12'wall height, pumped, .444 CY/LF,21.59
PLF, 12"thick 8.29 138,209.22
B Shell 39.74% 45.82 764,260.61
81010 Floor Construction 19.83 330,705.74
Cast-in-place concrete column, 12"square, tied, 200K load, 12'story
height, 142 lbs/LF,4000PSI 5.66 94,456.20
Flat slab, concrete,with drop panels, 6"slab/2.5"panel, 12"column,
15'x15'bay, 75 PSF superimposed load, 153 PSF total load 14.17 236,249.54
B1020 Roof Construction 10.16 169,385.11
Roof,steel joists, beams, 1.5"22 ga metal deck, on columns,25'x25'
bay,20"deep,40 PSF superimposed load,60 PSF total load 8.41 140,269.32
Roof,steel joists, beams, 1.5"22 ga metal deck, on columns, 25'x25'
bay,20"deep,40 PSF superimposed load, 60 PSF total load, add
for column 1.75 29,115.79
82010 Exterior Walls 6.67 111,179.53
E.I.F.S.,cement board sheathing, 1x8 fascia, R8 insulation, 6"metal
studs, 16"O.C., 2"EPS 6.67 111,179.53
B2020 Exterior Windows 1.48 24,805.65
Aluminum flush tube frame,for 1/4"glass,1-3/4"x4", 5'x6'opening, no
intermediate horizontals 0.11 1,875.35
Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report
LHB Project No.150703 Page 1 of 3 Parcel A
%of Total Cost Per S.F. Cost
Glazing panel, insulating, 1/2"thick, 2 lites 1/8"float glass, clear 1.37 22,930.30
B2030 Exterior Doors 1.67 27,904.64
Door, aluminum&glass,with transom, black finish, hardware, 3'-0"x
10'-0"opening 1.42 23,654.95
Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0"
x 7'-0"opening 0.25 4,249.69
B3010 Roof Coverings 5.95 99,312.93
Roofing, single ply membrane, EPDM, 60 mils, loosely laid, stone
ballast 1.69 28,200.83
Insulation, rigid, roof deck, extruded polystyrene,40 PSI
compressive strength,4"thick, R20 2.94 49,056.34
Roof edges,aluminum, duranodic, .050"thick, 6"face 0.92 15,398.53
Gravel stop, aluminum,extruded,4", mill finish, .050"thick 0.4 6,657.23
B3020 Roof Openings 0.06 967.01
Roof hatch,with curb, 1"fiberglass insulation,2'-6"x 3'-0",
galvanized steel, 165 lbs 0.06 967.01
C Interiors 13.25% 15.27 254,743.60
C1010 Partitions 1.38 23,049.23
Metal partition, 5/8"fire rated gypsum board face, no base,3-5/8"@
24"OC framing, same opposite face, no insulation 0.79 13,231.55
Gypsum board, 1 face only,exterior sheathing,fire resistant, 5/8" 0.35 5,884.53
Add for the following: taping and finishing 0.24 3,933.15
C1020 Interior Doors 2.05 34,225.32
Door, single leaf, kd steel frame, hollow metal, commercial quality,
flush,3'-0"x 7'-0"x 1-3/8" 2.05 34,225.32
C1030 Fittings 0.20 3,345.70
Toilet partitions,cubicles, ceiling hung, stainless steel 0.2 3,345.70
C3010 Wall Finishes 0.87 14,436.58
Painting, interior on plaster and drywall,walls&ceilings, roller work,
primer&2 coats 0.28 4,666.77
Painting, interior on plaster and drywall,walls&ceilings, roller work,
primer&2 coats 0.31 5,137.42
Ceramic tile, thin set,4-1/4"x 4-1/4" 0.28 4,632.39
C3020 Floor Finishes 2.95 49,200.43
Vinyl, composition tile, maximum 2.95 49,200.43
C3030 Ceiling Finishes 7.82 130,486.34
Acoustic ceilings,3/4"mineral fiber, 12"x 12"tile, concealed 2"bar& 7 82 130,486.34
channel grid,suspended support
D Services 27.92% 32.18 671,987.68
D2010 Plumbing Fixtures 1.79 29,826.08
Water closet,vitreous china, tank type,2 piece close coupled 0.34 5,674.02
Urinal,vitreous china,wall hung 0.08 1,288.21
Lavatory w/trim, vanity top, PE on CI, 20"x 18" 0.31 5,183.15
Service sink w/trim, PE on Cl,wall hung w/rim guard, 24"x 20" 0.82 13,624.26
Water cooler,electric,wall hung, dual height, 14.3 GPH 0.24 4,056.44
D2020 Domestic Water Distribution 1.49 24,826.40
Gas fired water heater, commercial, 100< F rise, 500 MBH input, 480
GPH 1.49 24,826.40
D2040 Rain Water Drainage 1.26 21,043.16
Replacement Cost Report
Chanhassen West 78th Street Redevelopment TIF District Page 2 of 3 Parcel A
LHB Project No. 150703
%of Total Cost Per S.F. Cost
Roof drain, CI, soil,single hub, 4"diam, 10'high 1.16 19,303.74
Roof drain, CI, soil,single hub, 4"diam,for each additional foot add 0.1 1,739.42
D3050 Terminal& Package Units 8.10 270,191.70
Rooftop, single zone, air conditioner, department stores, 10,000 SF,
29.17 ton 8.1 270,191.70
D4010 Sprinklers 4.37 72,893.87
Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 10,000
SF 4.37 72,893.87
D4020 Standpipes 1.09 18,176.62
Wet standpipe risers, class III, steel, black, sch 40, 4"diam pipe, 1
floor 1.09 18,176.62
D5010 Electrical Service/Distribution 1.36 22,848.70
Overhead service installation, includes breakers, metering, 20'
conduit&wire, 3 phase,4 wire, 120/208 V,400 A 0.36 6,081.30
Feeder installation 600 V, including RGS conduit and XHHW wire,
400 A 0.27 4,529.15
Switchgear installation, incl switchboard, panels&circuit breaker,
120/208 V, 1 phase,400 A 0.73 12,238.25
D5020 Lighting and Branch Wiring 10.99 183,240.25
Receptacles incl plate, box,conduit,wire, 8 per 1000 SF, .9 watts
per SF 2.88 47,955.25
Miscellaneous power, 1.5 watts 0.42 6,979.74
Central air conditioning power,4 watts 0.84 14,020.93
Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF,40
FC, 10 fixtures @32watt per 1000 SF 6.85 114,284.33
D5030 Communications and Security 1.73 28,940.90
Communication and alarm systems, fire detection, addressable, 25
detectors, includes outlets, boxes, conduit and wire 0.96 16,046.62
Fire alarm command center, addressable without voice, excl.wire&
conduit 0.77 12,894.28
E Equipment&Furnishings 0% 0 0
E1090 Other Equipment 0 0
F Special Construction 0% 0 0
G Building Sitework 0% 0 0
SubTotal 100% $115.29 $2,058,315.35
Contractor Fees(General Conditions,Overhead,Profit) 10.00% $11.53 $205,831.54
Architectural Fees 0.00% $0.00 $0.00
User Fees 0.00% $0.00 $0.00
Total Building Cost $126.82 $2,264,146.89
Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report
LHB Project No.150703 Page 3 of 3 Parcel A
Chanhassen West 78th Street Redevelopment TIF District
Code Deficiency Cost Report
Parcel A- 78th Street West, Chanhassen, MN 55317 - Parcel No. 252830020
Unit Total
Code Related Cost Items Unit Cost Units Quantity
Accessibility Items
Thresholds 250.00 Ea 10 $ 2,500.00
Replace all thresholds for ADA compliance $
Door Hardware 250.00 Ea 40 $ 10,000.00
Replace door hardware for ADA compliance $
Sidewalks10,000.00
Remove and Replace sidewalks for ADA compliance $ 10.00 SF 1,000 $
Accessible route 1 $ 100,000.00
Install an elevator between all levels $ 100,000.00 Lump
Restrooms20,000.00
Create ADA compliant restrooms on upper level $ 10,000.00 Ea 00.00 Ea 2 $ 150.00
Install compliant lavatory faucet on lower level $
Restaurant walk in cooler 2,500.00
Modify threshold for ADA compliance $ 2,500.00 Ea 1 $
Transaction counter
Modify counter to comply with ADA $ 500.00 Ea 1 $ 500.00
Staff break room sinks $ 500.00 Ea 2 $ 1,000.00
Modify sink for ADA compliance
Shower facility 1 $ 1,500.00
Install ADA compliant shower stall $ 1,500.00 Ea
Structural Elements
Exiting
Stairways1,000.00
Install compliant hand railings $ 250.00 Ea 4 $
Correct stair riser height to meet compliance $
250.00 Ea 15 $ 3,750.00
Flooring
Replace damaged carpeting $ 2.95 $ 2,350.00.95 SF 12,000 $ 35,400.00
Replace damaged vinyl flooring 2.35 SF 1,000
Exterior stoop500.00
Correct excessive elevation per code $ 500.00 Ea 1 $
Fire Protection
Smoke detector 100.00
Replace non functioning detector $ 100.00 Ea 1 $
Code Deficiency Cost Report
Chanhassen West 78th Street Redevelopment TIF District Page 1 of 2 Parepl A
LHB Project No.150703
Code Related Cost Items Unit Cost Units Unit Total
Quantity
Exterior Construction
Block walls
Repair/replace damaged block to prevent water intrusion $ 8.00 Ea 4,000 $ 32,000.00
Windows
Replace failed window systems $ 1.48 Ea 10,000 $ 14,800.00
Roof Construction
Provide code compliant exterior roof covering
Remove and replace EPDM roof $ 5.95 SF 1,200 $ 7,140.00
Mechanical- Electrical
Mechanical
Replace HVAC system for code compliance $ 8.10 SF 33,357 $ 270,191.70
Total Code Improvements $ 515,381.70
Chanhassen West 78th Street Redevelopment TIF District Code Deficiency Cost Report
LHB Project No.150703 Page 2 of 2 Parcel A
Chanhassen West 78th Street Redevelopment TIF District
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LHB Project No.150703
Chanhassen West 78th Street Redevelopment TIF District
Replacement Cost Report
RSMeans Square Foot Cost Estimate Report Date: 11/25/2015
FROM ThC SOPUIPN GROUP'
Estimate Name: Chanhassen Parcel B
City of Chanhassen
78th St W, Chanhassen, Minnesota, 55317
Building Type: Retail,Wood Siding/Wood Truss
Location: MINNEAPOLIS, MN
Story Count: 1
Story Height(L.F.): 12
Floor Area (S.F.): 3494l' ^• e'
Labor Type: OPN ...� it ,� 611,4 I a IVO
Basement Included: No
Data Release: Year 2016 Costs are derived from a building model with basic components.
Cost Per Square Foot: $122.82 Scope differences and market conditions can cause costs to vary significantly.
Building Cost: $429,067.46
ice. y y FFF % of Total Cost Per S.F. Cost
A1010 Standard Foundations 3.27 11,431.53
Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6
KSF, 12"deep x 24"wide 3.27 11,431.53
A1030 Slab on Grade 5.63 19,686.98
Slab on grade,4"thick, non industrial, reinforced 5.63 19,686.98
A2010 Basement Excavation 0.35 1,216.93
Excavate and fill, 10,000 SF,4'deep, sand gravel, or common earth, on
site storage 0.35 1,216.93
A2020 Basement Walls 6.19 21,644.14
Foundation wall, CIP, 4'wall height, direct chute, .123 CY/LF, 6.0 PLF,
10"thick 6.19 21,644.14
29.52% 32.97 115,144.19
B1020 Roof Construction 7.48 26,149.24
Wood roof,truss,4/12 slope, 24"O.C.,30'to 43'span 7.48 26,149.24
B2010 Exterior Walls 8.37 29,244.78
Wood siding systems, 1/2"x 6" beveled cedar siding, "A"grade 8.37 29,244.78
B2020 Exterior Windows 7.73 26,994.24
Windows,wood, double hung, insulated glass,2'-8"x 4'-6" 7.73 26,994.24
B2030 Exterior Doors 4.29 14,973.77
Door, birch, solid core, single door, hinged, 3'-0"x 7'-0"opening 4.29 14,973.77
B3010 Roof Coverings 5.10 17,782.16
Asphalt roofing, strip shingles, inorganic, Class A, 4"slope, 210-235
lbs/SQ 2.41 8,406.81
Insulation, rigid, roof deck,fiberglass,3'x4'or 4'x8°sheets, 15/16"thick,
R3.70 1.79 6,269.17
Flashing, aluminum, no backing sides, .019" 0.46 1,595.11
Gutters, box, aluminum, .027"thick, 5",enameled finish 0.38 1,310.93
Downspout, aluminum, rectangular, 2"x 3", embossed mill finish, .020"
thick 0.06 200.14
CInter'.r_ ,; 26.37% 29.43 102,848.35
C1010 Partitions 12.06 42,121.36
Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report
LHB Project No.150703 Page 1 of 3 Parcel B
Wood partition, 5/8"fire rated gypsum board face, 1/4"sound deadening
gypsum board, 2x4 @ 16" OC framing, same opposite face, 1.5" 7.86 27,450.42
1/2"fire rated gypsum board,taped&finished, painted on metal furring 4.2 14,670.94
C1020 Interior Doors 1.92 6,725.95
Door, single leaf,wood frame, 3'-0"x 7'-0"x 1-3/8", birch, hollow core 1.92 6,725.95
C3010 Wall Finishes 2.97 10,390.15
Painting, interior on plaster and drywall,walls&ceilings, roller work,
primer&2 coats 1.49 5,214.28
Ceramic tile, thin set, 4-1/4"x 4-1/4" 1.48 5,175.87
C3020 Floor Finishes 7.38 25,775.56
Carpet, tufted, nylon, roll goods, 12'wide, 36 oz 4.52 15,796.90
Carpet, padding, add to above, 2.7 density 1.01 3,531.21
Tile,ceramic natural clay 1.85 6,447.45
C3030 Ceiling Finishes 5.10 17,835.33
Gypsum board ceilings, 1/2"fire rated gypsum board, painted and
textured finish,1"x 3"wood, 16"OC furring,wood support 5.1 17,835.33
30:27% 33 1 118,089.21
La‘ ,91-is(* -' 111111111111111111111111111111.111D2010 Plumbing Fixtures 2.08 7,267.52
Water closet,vitreous china, tank type, 2 piece close coupled 1.33 4,647.02
Lavatory w/trim,vanity top,cultured marble, 19"x 17" 0.75 2,620.50
D2020 Domestic Water Distribution 4.33 15,116.41
Gas fired water heater, commercial, 100< F rise, 155 MBH input, 150
GPH 4.33 15,116.41
D3050 Terminal &Package Units 8.43 29,454.42
3/4 ton,cooling units 3.74 13,067.56
Furnace, gas heating only, 100 MBH, area to 1200 SF 0.72 2,515.68
Intermittent pilot, 100 MBH furnace 0.12 419.28
Supply duct, rectangular, area to 1200 SF, rigid fiberglass 0.82 2,865.08
Return duct, sheet metal galvanized,to 1500 SF 1.02 3,563.88
Lateral ducts,flexible round 6"insulated,to 1200 SF 0.87 3,039.78
Register elbows, to 1500 SF 0.56 1,956.64
Floor registers, enameled steel w/damper,to 1500 SF 0.28 978.32
Return air grille,area to 1500 SF 12"x 12" 0.09 314.46
Thermostat, manual, 1 set back 0.09 314.46
Plenum, heating only, 100 MBH 0.12 419.28
D4010 Sprinklers 4.70 16,434.66
Wet pipe sprinkler systems, steel, light hazard, 1 floor, 5000 SF 4.7 16,434.66
D4020 Standpipes 1.09 3,807.96
Wet standpipe risers, class III, steel, black, sch 40, 4"diam pipe, 1 floor 1.09 3,807.96
D5010 Electrical Service/Distribution 3.05 10,646.16
Overhead service installation, includes breakers, metering,20'conduit&
wire, 3 phase, 4 wire, 120/208 V, 200 A 0.87 3,054.80
Feeder installation 600 V, including RGS conduit and XHHW wire,200
A 1.3 4,531.80
Switchgear installation, incl switchboard, panels&circuit breaker,
120/208 V, 1 phase,400 A 0.88 3,059.56
D5020 Lighting and Branch Wiring 7.33 25,563.78
Receptacles incl plate, box, conduit,wire, 10 per 1000 SF, 1.2 watts per
SF 3.07 10,715.19
Wall switches, 5.0 per 1000 SF 1.35 4,710.54
Miscellaneous power,to .5 watts 0.17 578.47
Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report
LHB Project No. 150703 Page 2 of 3 Parcel B
Fluorescent fixtures recess mounted in ceiling, 1 watt per SF, 20 FC, 5
fixtures @40 watts per 1000 SF 2.74 9,559.58
D5030 Communications and Security 2.80 9,798.30
Communication and alarm systems,fire detection, addressable,25
detectors, includes outlets, boxes, conduit and wire 2.03 7,096.98
Fire alarm command center,addressable without voice, excl.wire&
conduit 0.77 2,701.32
Equipment&Furnishings 0.00% 0.00 0.00
E1090 Other Equipment 0 0
F Special Construction 0% 0 0
G Building Sitework 0% 0 0
SubTotal 100% $111.65 $390,061.33
Contractor Fees(General Conditions,Overhead,Profit) 10.00% $11.17 $39,006.13
Architectural Fees 0.00% $0.00 $0.00
User Fees 0.00% $0.00 $0.00
Total Building Cost $122.82 $429.067.46
Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report
LHB Project No. 150703 Page 3 of 3 Parcel B
Chanhassen West 78th Street Redevelopment TIF District
Code Deficiency Cost Report
Parcel B -78th Street West, Chanhassen, MN 55317 - Parcel No. 25168003
Unit Total
Code Related Cost Items Unit Cost Units Quantity
Accessibility Items
Thresholds
Replace all thresholds for ADA compliance $ 250.00 Ea 2 $ 500.00
Door Hardware
Replace door hardware for ADA compliance $ 250.00 Ea 4 $ 1,000.00
Sidewalks
Remove and Replace sidewalks for ADA compliance $ 10.00 SF 450 $ 4,500.00
Structural Elements
$
Exiting
$
Fire Protection
$
Exterior Construction
Provide code compliant exterior wall covering
Replace siding to prevent water intrusion $ 8.37 SF 3,494 $ 29,244.78
Roof Construction
Provide code compliant exterior roof covering
Remove and replace ashphalt shingles $ 8.48 SF 3,494 $ 29,629.12
Mechanical- Electrical
Electrical
Provide GFCI protected receptacles at sink locations $ 0.50 SF 3,494 $ 1,747.00
Mechanical
Replace HVAC system for code compliance $ 8.43 SF 3,494 $ 29,454.42
Total Code Improvements $ 96,075.32
Chanhassen West 78th Street Redevelopment TIF District Code Deficiency Cost Report
LHB Project No. 150703 Page 1 of 1 Parcel B
Chanhassen West 78th Street Redevelopment TIF District
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LHB Project No.150703 Parcel B
Appendix G
Findings Including But/For Qualifications
To be added to prior to the public hearing
But-For Analysis
Current Market Value 2,193,800
New Market Value-Estimate 24,338,410
Difference 22,144,610
Present Value of Tax Increment 3,954,399
Difference 18,190,211
Value Likely to Occur Without TIF is Less Than: 18,190,211
Appendix G-1