1. Sand Companies TIF Plan
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax 952.227.1110
Web Site
WIfN.ci .chanhassen. mn. us
IT]
MEMORANDUM
TO:
Kate Aanenson, Community Development Director
FROM:
Justin Miller, Assistant City Manager
~~
DATE:
March 10, 2006
RE:
Sand Companies TIP Plan
BACKGROUND
The City of Chanhassen is considering a request from the Sand Companies to
provide Tax Increment Financing (TIP) for their 48 unit Gateway Place apartment
building to be located at the intersection of new Highway 212 and relocated
Highway 101. The TIP assistance will be used to help offset costs incurred by the
developer in making these units affordable according to federal and state guidelines.
One requirement of the TIP process is to have the planning commission review the
TIP plans to ensure conformance with the city's comprehensive plan. The planning
commission reviewed this project on February 7, 2006, and approved the preliminary
plat and site plan by a 6-0 vote. In approving the findings of fact, the planning
commission found:
1. The property is currently zoned PUD, Planned Unit Development-
Mixed Use.
2. The property is guided in the Land Use Plan Mixed Use development.
3. The proposed subdivision is consistent with 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 TIP plans are consistent with the City's
comprehensive plan. According to past actions taken by the planning commission,
staff believes that this project does meet this requirement.
I will be at the March 21 st planning commission meeting to provide a verbal report
and answer any questions that may arise.
RECOMMENDATION
Staff recommends that the Chanhassen Planning Commission adopt the
attached resolution finding that a modification to the redevelopment plan for
the downtown Chanhassen redevelopment project area and a tax increment
financing plan for Tax Increment Financing District No. 9 conform to the
general plans for the development and redevelopment of the city.
The City of Chanhassen · A growing community with clean lakes, Quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
G:\admin\jm\sand company\Planning Commission Staff Report.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
THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA AND
A TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO.9 CONFORM TO THE GENERAL PLANS FOR THE
DEVELOPMENT AND REDEVELOPMENT OF THE CITY.
WHEREAS, the City Council for the City of Chanhassen, Minnesota, (the "City") has proposed to
adopt a Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project
Area (the "Redevelopment Plan Modification") and a Tax Increment Financing Plan for Tax Increment
Financing District No.9 (the "TIP Plan") therefore (the Redevelopment Plan Modification and the TIP
Plan are referred to collectively herein at the "Plans") and has 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 Plans to determine their 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: March 21,2006
Chair
ATTEST:
Secretary
As of March 10, 2006
Planning Commission Review
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.9
(a housing district)
within
THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA
.
CITY OF
CHANIIASSEN
CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY
CITY OF CHANHASSEN
CARVER COUNTY
STATE OF MINNESOTA
Public Hearing: April 10, 2006
Adopted:
This document is in draftformfor distribution to the County and the School District. The TIF
Plan contains the estimated fiscal and economic implications of the proposed TIF District. The
City and the EDA may make minor changes to this draft document prior to the public hearing.
.
& ASSOCIATES INC
Prepared by: EHLERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
EHLERS
TABLE OF CONTENTS
(for reference purposes only)
SECTION 1- MODIFICA TION TO THE REDEVELOPMENT PLAN
FOR THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA 1-1
Foreword ............................................................. 1-1
SECTION 11- TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO. 9.......................... 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 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/Bonded Indebtedness .................... 2-5
Subsection 2-10. Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-6
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. . . ... . .. . .. . . . . .. . . . . . . ... . . . .. 2-11
Subsection 2-18. Administrative Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-12
Subsection 2-19. Limitation of Increment ................................... 2-13
Subsection 2-20. Use of Tax Increment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-13
Subsection 2-21. Excess Increments ...................................... 2-14
Subsection 2-22. Requirements for Agreements with the Developer. . . . . . . . . . . . .. 2-14
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-15
Subsection 2-27. Other Limitations on the Use of Tax Increment. .. . . . .. . . . . . .. .. 2-16
Subsection 2-28. Summary.............................................. 2-16
APPENDIX A
PROJECT DESCRIPTION. . . . . . . . . . . . .. . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . ... A-1
APPENDIX B
MAPS OF THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA
AND TAX INCREMENT FINANCING DISTRICT NO.9. . . . . . . . . . . . . . . . . . . . . . . . .. B-1
APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT. . . . . . . . . . . .. C-1
APPENDIX 0
ESTIMATED CASH FLOW FOR THE DISTRICT .............................. 0-1
APPENDIX E
HOUSING QUALIFICATIONS FOR THE DiSTRiCT............................ E-1
APPENDIX F
BUT/FOR QUALIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. F-1
SECTION 1- MODIFICA TION 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 modificationrepresents 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.9.
F or 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 11- TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO.9
Subsection 2-1. Foreword
The Chanhassen Economic Development Authority (the "EDA"), the City ofChanhassen (the "City"), staff
and consultants have prepared the following information to expedite the establishment of Tax Increment
Financing District No.9 (the "District"), a housing tax increment financing district, located in the Downtown
Chanhassen Redevelopment Project Area.
Subsection 2-2. Statutory Authority
Within the City, there exists areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the City has certain statutory powers pursuant to Minnesota Statutes
("MS. "), Sections 469.124 to 469.134, inclusive, as amended, and MS., Sections 469.174 to 469.1799,
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 a portion of one existing parcel ofland and adjacent and internal rights-of-
way. The District is being created to facilitate construction of 48 units of affordable rental housing near the
intersection of the new Highway 212 and relocated Highway 10 1 in the City of Chanhassen. Please see
Appendix A for further project information. Contracts for this project have not been entered into at the time
of preparation of this TIF Plan, but development is likely to occur in the summer of2006. 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 City and is further described in this TIF Plan.
2. Relocation - Relocation services, to the extent required by law, are available pursuant to
MS., 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 City may sell to a developer selected properties that it may acquire
within the District or may lease land or facilities to a developer.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-1
4. The City may perform or provide for some or all necessary acquisition, construction,
relocation, demolition, and required utilities and public street work within the District.
Subsection 2-5. Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcel listed below. The subject property is currently being platted into several parcels. Only the parcel
containing the rental housing will be included in the District. See the map in Appendix B for further
information on the location of the District.
Parcel Number
a portion of25-024241O
The 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 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 City may acquire property by gift, dedication, condemnation or direct purchase
from willing sellers in order to achieve the objectives ofthis 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 City, in determining the need to create a tax increment financing district in accordance with MS.,
Sections 469.174 to 469.1799, as amended, inclusive, finds that the District, to be established, is a housing
district pursuant to MS., Section 469.174, Subd. 11 and MS., Section 469.1761 as defined below:
MS., Section 469.174, Subd.ll:
"Housing district" means a type of tax increment financing district which consists of a project, or a
portion of a project, intended for occupancy, in part, by persons or families of low and moderate
income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National
Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act
of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or
the regulations promulgated under any of those acts, and that satisfies the requirements of MS.,
Section 469.1761. Housing project means a project, or portion of a project, that meets all the
qualifications of a housing district under this subdivision, whether or not actually established as a
housing district.
MS., Section 469.1761:
Subd. 1. Requirement imposed.
(a) In order for a tax increment financing district to qualify as a housing district:
(1) the income limitations provided in this section must be satisfied; and
(2) no more than 20 percent of the square footage of buildings that receive assistance from tax
increments may consist of commercial, retail, or other nonresidential uses.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-2
(b) The requirements imposed by this section apply to property receiving assistance financed with
tax increments, including interest reduction, land transfers at less than the Authority's cost of
acquisition, utility service or connections, roads, parking facilities, or other subsidies. The
provisions of this section do not apply to districts located within a targeted area as defined in
Section 462C.02 Subd 9, clause (e).
Subd. 2. Owner occupied housing.
For owner occupied residential property, 95 percent of the housing units must be initially purchased
and occupied by individuals whose family income is less than or equal to the income requirements
for qualified mortgage bond projects under section 143(j) of the Internal Revenue Code.
Subd. 3. Rental property.
For residential rental property, the property must satisfy the income requirements for a qualified
residential rental project as defined in section 142(d) of the Internal Revenue Code. The
requirements of this subdivision apply for the duration of the tax increment financing district.
Pursuant to MS. 469.176 Subd. 7(a), the City may request inclusion in the District and the County Auditor
may certify the original tax capacity of a parcel or a part of a parcel that qualified under the provisions of MS
273.111 or 273.112 or Chapter 473Hfor taxes payable in any of the five calendar years before filing of the
request for certification only for:
(I) a district in which 85 percent or more of the planned buildings and facilities (determined on the basis
of square footage) are a qualified manufacturing facility or a qualified distribution facility or a
combination of both; or
(2) a qualified housing district.
Pursuant to MS. 469.174, Subd. 29, a "qualified housing district" means:
(1) a housing district for a residential rental project or projects in which the only properties
receiving assistance from revenues derived from tax increments from the district meet the
rent restriction requirements and the low-income occupancy test for a qualified low-income
housing project under section 42 (g) of the Internal Revenue Code of 1986, as amended
through December 31, 2002, regardless of whether the project actually receives a low-
income housing credit; or
(2) a housing district for a single-family homeownership project or projects, if 95 percent or
more of the homes receiving assistance from tax increments from the district are purchased
by qualified purchasers. A qualified purchaser means the first purchaser of a home after the
tax increment assistance is provided whose income is at or below 85 percent of the median
gross income for a family of the same size as the purchaser. Median gross income is the
greater of (i) area median gross income, or (ii) the statewide median gross income, as
determined by the secretary of Housing and Urban Development.
The District does contain a portion of a parcel that qualified under the provisions of S 273.111 or 273.112
or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for
certification ofthe District. The development assisted by the District is a residential rental project that meets
the requirements of a qualified housing district.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-3
In meeting the statutory criteria the City relies on the following facts and findings:
· The District is a housing district consisting of a portion of one existing parcel. The City is currently
working with the land owner to plat this portion ofthe property into several parcels, one of which will
remain in the District.
The development will consist of 48 units of rental housing.
· At least 40% of the rental units must be occupied with persons at 60% of median income and rents will
be restricted to Section 42 (g) of the Internal Revenue Code of 1986.
· No more than 20% of the square footage of buildings that receive assistance from tax increments may
consist of commercial, retail, or other nonresidential uses.
Subsection 2-7. Duration of the District
Pursuant to MS., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must
be indicated within the TIF Plan. Pursuant to MS., Section 469.176, Subd. 1b, the duration of the District
will be 25 years after receipt of the first increment by the City (a total of26 years of tax increment). The date
of receipt by the City of the first tax increment is expected to be 2008. Thus, it is estimated that the District,
including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after
2033, or when the TIP Plan is satisfied. Ifincrement is received in 2007, the term of the District will be 2032.
The 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/lncrement and Notification of Prior Planned Improvements
Pursuant to MS., Section 469.174, Subd. 7 and MS., 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 2005 for taxes payable 2006.
Pursuant to MS., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2008) 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 ofthe District declines below the ONTC, no
value will be captured and no tax increment will be payable to the City.
The original local tax rate for the District will be the local tax rate for taxes payable 2006, assuming the
request for certification is made before June 30, 2006. The ONTC and the Original Local Tax Rate for the
District appear in the table on the following page.
Pursuant to MS., Section 469.174 Subd. 4 and MS., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) ofthe District, within the Downtown Chanhassen Redevelopment Project
Area, upon completion of the project, will annually approximate tax increment revenues as shown in the table
on the following page. The City requests 100 percent of the available increase in tax capacity for repayment
of its obligations and current expenditures, beginning in the tax year payable 2008. The Project Tax Capacity
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-4
(pTC) listed is an estimate of values when the project is completed.
Project Estimated Tax Capacity upon Completion (PTC)
$55,625
Original Local Tax Rate
Estimated Annual Tax Increment (CTC x Local Tax Rate)
Percent Retained by the City
$1,264
$54,361
1.05641
Pay 2006
Original Estimated Net Tax Capacity (ONTC)
Estimated Captured Tax Capacity (CTC)
$57,428
100%
*
The calculation above estimates the captured tax capacity using tax capacity rate of 1.25% for rental
housing. It is anticip.ated that the Chanbassen Gateway housing project will De eligible for the reduced
tax capacity rate of .75%, which would reduce the estimated annual tax increment.
Pursuant to MS., Section 469.177, Subd. 4, the City 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 MS.,
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 MS., 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 determined that no building permits
have been issued during the 18 months immediately preceding approval ofthe TIF Plan by the City.
Subsection 2-9. Sources of Revenue/Bonded Indebtedness
Public improvement costs, acquisition, relocation, utilities, housing improvements, streets and sidewalks, and
site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the
annual collection of tax increments. The City reserves the right to use other sources of revenue legally ap-
plicable to the City and the TIF Plan, including, but not limited to, special assessments, general property
taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contributions
from the developer and investment income, to pay for the estimated public costs.
The City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF Plan.
As presently proposed, the project will be financed by a pay-as-you-go note. Additional indebtedness may
be required to finance other authorized activities. The total principal amount of bonded indebtedness,
including a general obligation (GO) TIF bond, or other indebtedness related to the use of tax increment
financing will not exceed $950,000 without a modification to the TIF Plan pursuant to applicable statutory
requirements. Of the $950,000 in bonded indebtedness, it is estimated that $200,000 in interfund loans and
$750,000 in bond principal or TIF note principal will be financed with tax increment revenues.
This provision does not obligate the City to incur debt. The City will issue bonds or incur other debt only
upon the determination that such action is in the best interest of the City. The City may also finance the ac-
tivities to be undertaken pursuant to the TIF Plan through loans from funds of the City or to reimburse the
developer on a "pay-as-you-go" basis for eligible costs paid for by a developer.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-5
The estimated sources of funds for the District are contained in the table below.
SOURCES OF FUNDS TOTAL
Tax Increment $1,465,000
Revenue $0
PROJECT REVENUES $1,465,000
Interfund Loans $200,000
Transfers $0
Bond Principal $750,000
TIF Note Principal $750,000
The other financing sources list above is included for purposes of OSA reporting for the TIF District. It is
not intended to be cumulative. Transfers are included in case money is moved from one fund to another
before an expenditure.
Subsection 2-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate construction of 48 units of affordable
rental housing near the intersection of the new Highway 212 and relocated Highway 101. The City has
determined that it will be necessary to provide assistance to the project for certain costs. The City has studied
the feasibility ofthe 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 FUNDS TOTAL
Land/Building Acquisition $770,000
Site ImprovementslPreparation $350,000
Public Utilities $35,000
Housing Improvements $128,500
Streets and Sidewalks $35,000
Interest $0
Administrative Costs (up to 10%) $146,500
PROJECT COSTS TOTAL $1,465,000
Interfund Loans $200,000
Transfers $0
Bond Principal $750,000
TIF Note Principal $750,000
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-6
The other financing uses list on the previous page is included for purposes of OSA reporting for the TIF
District. It is not intended to be cumulative. Transfers are included in case money is moved from one fund
to another before an expenditure. TIF is expected to be used for the project costs listed on the previous page,
which is a not-to-exceed budget rather than an expected budget of costs.
It is estimated that the cost ofimprovements, including administrative expenses and financing which will be
paid or financed with tax increments, will equal $3,165,000, which includes all authorized obligations, as is
presented in the budget on the previous page.
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. The City
may expend funds for qualified housing activities outside of the District boundaries.
Subsection 2-11.
Fiscal Disparities Election
Pursuant to MS., Section 469.177, Subd. 3, the City may elect one of two methods to calculate fiscal
disparities. Ifthe calculations pursuant to MS., Section 469.177, Subd. 3, clause a, (outside the District) are
followed, the following method of computation shall apply:
(1) The original net tax capacity and the current net tax capacity shall be determined before the
application of the fiscal disparity provisions of Chapter 276A or 473F. Where the original net
tax capacity is equal to or greater than the current net tax capacity, there is no captured net tax
capacity and no tax increment determination. Where the original net tax capacity is less than
the current net 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 lesser 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 City will choose to calculate fiscal disparities by clause a. It is not anticipated that the District will
contain commercial/industrial property. As a result, there should be no impact due to the fiscal
disparities provision on the District.
According to MS., 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).
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-7
Subsection 2-12.
Business Subsidies
Pursuant to MS. Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy ofless than $25,000;
(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 MS., 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 ifthe 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 MS., 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
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 MS., 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 $75,000 or less; and
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration.
The City will comply with MS., Section 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions. The project is expected to be exempt
under clause (7).
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-8
Subsection 2-13. County Road Costs
Pursuant to MS., Section 469.175, Subd 1 a, the county board may require the 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 judgement of the county, substantially increase the use of county roads requiring construction of road
improvements or other road costs and ifthe road improvements are not scheduled within the next five years
under a capital improvement plan or within five years under another county plan.
The County roads that serve the housing development were scheduled for reconstruction as part of the
County's five year capital improvement plan prior to the proposed development ofthe rental housing. The
reconstruction and realignment of Highway 101 was planned as part of the construction of the new state
Highway 212/312.
Ifthe county elects to use increments to improve county roads, it must notify the City within forty-five days
of receipt of this TIF Plan. In the opinion of the City and consultants, the proposed development outlined
in this TIF Plan will have little or no impact upon county roads; therefore the TIP Plan was not forwarded
to the county 45 days prior to the public hearing. The City is 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 TIP
Plan would occur without the creation of the District. However, the 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 if the "but for" test was not met:
IMP ACT ON TAX BASE
Carver County
City of Chanhassen
Chaska ISD No. 112
2005/2006
Total Net
Tax Capacity
83,829,963
28,439,930
45,893,874
Estimated Captured
Tax Capacity (CTC)
Upon Completion
54,361
54,361
54,361
Percent of CTC
to Entity Total
0.0648%
0.1911 %
0.1184%
IMP ACT ON TAX RATES
Carver County
City of Chanhassen
Chaska ISD No. 112
Other
Total
2005/2006 Percent Potential
Extension Rates of Total CTC Taxes
0.408360 38.66% 54,361 22,199
0.266380 25.22% 54,361 14,481
0.328080 31.06% 54,361 17,835
0.053590 5.07% 54,361 2.913
1.056410 100.00% 57,428
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-9
The estimates listed on the previous page display the captured tax capacity when all construction is
completed. The tax rate used for calculations is the actual2005/Pay 2006 rate. The total net capacity for the
entities listed on the previous page are based on actual Pay 2006 figures. The calculation above estimates
the captured tax capacity using tax capacity rate of 1.25%for rental housing. It is anticipated that the
Chanhassen Gateway housing project will be eligible for the reduced tax capacity rate of. 75%, which would
reduce the estimated fiscal impacts of the District.
Pursuant to MS. Section 469.175 Subd. 2(b):
(1) It is estimated that the total amount of tax increment that will be generated over the life of the
District is $1,465,000;
(2) An impact of the District on police protection is expected. The development of vacant land into
residential rental housing is expected to generate an estimated two additional police calls per week
(104 calls annually). This estimate is based upon comparable property types and cannot be
considered a scientifically valid crime analysis. The City currently contracts with the Carver
County Sheriffs Department for police services. The City does not expect that the proposed
development, in and of itself, will necessitate new capital investment in vehicles or facilities, or
require that the City expand its contract with Carver County. However, there may be an increase
in calls for service to the general area due to the increased traffic at the intersection of the new
Highway 212 and relocated Highway 101 and nearby development planned for the adjacent sites
that are not in the tax increment district.
The probable impact of the proposed project on fire protection and emergency medical services
would be approximately 1 call per week (52 annually) including medical, false alarms, and traffic
accidents. New construction requires the building to be sprinkled, so fire risk is minimized. Most
calls will be medical emergencies or vehicle accidents. The City has already planned to construct
a new fire station in 2007-2008.
The impact ofthe District on Public Works is expected to be minimal. The road and infrastructure
improvements around the site are being completed as part ofthe construction of the new Highway
212/312, and were planned regardless of this housing development being constructed. Other
infrastructure costs related to this specific land use, including sanitary and storm sewer
improvements, will be assessed to the property. The project is expected to pay sewer and water
connection fees totaling $349,344, which will be used, in part, to pay for the new water treatment
plant under construction.
The probable impact of borrowing costs 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) It is estimated that the amount of tax increments over the 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 $463,710;
(4) It is estimated that the amount of tax increments over the 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 $577,174;
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
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(5) No requests for additional information from the county or school district regarding the proposed
development for the District were received.
Subsection 2-15. Supporting Documentation
Pursuant to MS. Section 469.175 Subd 1, clause 7 the TIF Plan must contain identification and description
of studies and analyses used to make the determination set forth in MS. Section 469.175 Subd 3, clause (b)(2)
and the findings are required in the resolution approving the TIF district. Following is a list of reports and
studies on file at the City that support the Authority's findings:
Planning Commission Staff Report, February 2006
· City letter of support regarding Sand's application for tax credits, June 2005
· Development Plans, Sand Companies
· City of Chanhassen Affordable Housing Goals and Related Documents
· Tax Increment Financing Analysis, Sand Companies
Subsection 2-16. Definition of Tax Increment Revenues
Pursuant to MS., 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 MS.,
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;
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 MS., 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 Downtown Chanhassen Redevelopment
Project Area or the District, ifthe reduction does not meet the requirements of MS., 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 ofthe original TIF
Plan, or to increase or decrease the amount of interest on the debt to be capitalized;
4. Increase in the portion ofthe captured net tax capacity to be retained by the City;
5. Increase in the estimate ofthe cost ofthe project, 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 City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIF Plan.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
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Pursuant to MS. Section 469.175 Subd. 4(1), 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 housing district is enlarged, the reasons and supporting facts for the determination that the
addition to the district meets the criteria of MS., Section 469.174, Subd. 11 must be documented. The
requirements of this paragraph do not apply if(I) the only modification is elimination ofparcel(s) from the
Downtown Chanhassen Redevelopment Project Area or 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 City agrees that, notwithstanding MS., 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 City must notify the County Auditor of any modification that reduces or enlarges the geographic area
of the Downtown Chanhassen Redevelopment Project Area or 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 MS., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
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
project;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
project; or
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to MS., Section 469.178; or
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,
administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants,
and planning or economic development consultants. Pursuant to MS., 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 MS., Section 469.174, Subd. 25, clause (1), from the District,
whichever is less.
Pursuant to MS., 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. The county may require payment of those
expenses by February 15 ofthe year following the year the expenses were incurred.
Pursuant to MS., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the City and the County Treasurer shall pay the amount deducted to
the State Treasurer 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.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
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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 MS., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax increment
financing district pursuant to MS., 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 incrementfinancing district by the authority or by the owner of the parcel
in accordance with the tax incrementfinancingplan, no additional tax increment may be takenfrom
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 increment financing 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 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 City or a property owner must improve parcels within the District by approximately April, 2010 and
report such actions to the County Auditor.
Subsection 2-20. Use of Tax Increment
The 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 capital and administration costs of the Downtown Chanhassen
Redevelopment Project Area pursuant to the MS., Sections 469.124 to 469.134;
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 MS., Section 469.176, Subd. 4;
5. To pay principal and interest on any loans, advances or other payments made to or on behalf ofthe
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
MS., Chapter 462C. MS., Sections 469.152 through 469.165, and/or MS., Sections 469.178; and
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
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7. To accumulate or maintain a reserve securing the payment when due ofthe principal and interest on
the tax increment bonds or bonds issued pursuant to MS., Chapter 462C, MS., Sections 469.152
through 469.165, and/or MS., Sections 469.178.
Revenues derived from tax increment from a housing district must be used solely to finance the cost
of housing projects as defined in M.S., Sections 469.174, Subd. 11 and 469.1761. The cost of public
improvements directly related to the housing projects and the allocated administrative expenses ofthe
EDA may be included in the cost of a housing project.
Notwithstanding the definition of a project under section 469.174, increments may be spent to assist housing
that meets the requirements under MS. Section 469.1763, Subd. 2,paragraph (d) and MS. Section 469.174,
Subd. 29, regardless of whether the housing is located within the boundaries of the project area.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by MS., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Carver County to the City for the Tax Increment
Fund of said District. The 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
City administration (up to 10 percent) and the costs of public improvement activities outside the District.
Subsection 2-21. Excess Increments
Excess increments, as defined inMS., 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
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The City must spend or return the excess increments under paragraph (c) within nine months after the end
of the year. In addition, the 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 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 City to demonstrate the conformance of the development
with City plans and ordinances. The City may also use the Agreements to address other issues related to the
development.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-14
Pursuant to MS., Section 469.176, Subd. 5, no more than 10 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 City as a result of
acquisition with the proceeds ofbonds issued pursuant to MS., Section 469.178 to which tax increments from
property acquired is pledged, unless prior to acquisition in excess of 10 percent of the acreage, the City
concluded an agreement for the development of the property acquired and which provides recourse for the
City should the development not be completed.
Subsection 2-23. Assessment Agreements
Pursuant to MS., Section 469.177, Subd. 8, the 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
ofthe land and completed improvements for the duration ofthe 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 MS., Section 469.175, Subd. 5, 6, and 6b the City must undertake financial reporting for all tax
increment financing districts to the Office of the State Auditor, County Board, County Auditor and School
Board on or before August 1 of each year. MS., 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 MS., Section
469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax
increment from the District.
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 of the 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 of the 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 City staff awareness of the feasibility of developing the project site. 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 ofthe site absent the establishment of the District and the
use of tax increments.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-15
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 TIP
Plan. The revenues shall be used To finance, or otherwise pay the capital and administration costs ofthe
Downtown Chanhassen Redevelopment Project Area pursuant to the MS., Sections 469.124 to 469.134.
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. Housing District Exceptions to Restriction on Pooling; Five Year Limit. Pursuant to MS., Section
469.1763, (1) At least 80% of the tax increment derived from the District must be expended on Public
Costs incurred within said district, and up to 20% of said tax increments may be spent on Public Costs
incurred outside of the District but within the Downtown Chanhassen Redevelopment Project Area;
provided that in the case of a housing district, a housing project, as defined in MS., Section 469.174,
Subd. 11 is deemed to be an activity in the District, and (2) public costs within the District shall be
limited to reimbursement of public costs paid before or within five years after certification of said district
by the County Auditor and interest on all such unreimbursed expenditures; or expenditures are made for
housing purposes as permitted by MS., Section 469.1763, Subd. 2, paragraph (b).
Subsection 2-28.
Summary
The EDA is establishing the District to provide an impetus for residential development and provide safe and
decent life cycle housing in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc.,
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone (651) 697-8500.
Chanhassen Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No.9
2-16
APPENDIX A
PROJECT DESCRIPTION
The project will consist of 48 units of rental housing near the intersection of the new Highway 212 and
relocated Highway 101. Forty-seven (47) of the units will be restricted for rental to persons with incomes at
or below 60% of the area median income, adjusted for family size.
The Sand Companies has acquired the property at the northwest corner of new Highway 212 and the relocated
Highway 101. When completed, the entire development will include 150 housing units and six acres of
commercial development. Only the site on which the Sand Companies intends to construct the 48 unit
apartment complex is included in the Tax Increment District.
The apartment project has received an award of federal housing tax credits and favorable financing from the
Minnesota Housing Finance Agency. These funding sources, together with the proposed tax increment
assistance, will make 47 of the rental units initially affordable to families with incomes at or below 50% of
the median income.
It is anticipated that the project will be assisted with a "Pay-As-You-Go" Tax Increment Revenue Note issued
by the EDA. Under the terms of the Note, the EDA is expected to pay 90% of the increment generated by
the project in Years 2009 through 2013, and 65% of the increment generated by the project in 2014 and 2015.
APPENDIX
A-I
APPENDIX B
MAPS OF THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA
AND TAX INCREMENT FINANCING DISTRICT NO.9
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I} / 1 Redevelopment Project Area
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rt f I- Carver County, Minnesota
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Legend
D Downtown Redevelopment Project Area
.. Tax Increment Financing District No 9
APPENDIX
B-1
Location Map
Gateway North/Gateway Place
NW Corner Realigned Highway 101 & Future Highway 212
Planning Case No. 06-05
City of Chanhassen
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APPENDIX
B-2
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
parcel* listed below.
Original Parcel Number*
25-0242410
* The parcel is being replatted and new parcel numbers will be assigned by Carver County.
The portion ofPID 25-0242410 that is to be included in the District is:
This information will be completed prior to the request for certification of the District.
APPENDIX
C-I
APPENDIX D
ESTIMATED CASH FLOW FOR THE DISTRICT
APPENDIX
D-l
311012006
o ~J!}&~.~
Pagelof2
1.25% Tax Capacity Rate
Sand Companies. Gateway Place Apartments
CITY OF CHANHASSEN, MINNESOTA - Housing TIF District
48 Multifamily Apartments
TaXln~IStrlct #2506
1f1!%%1llt_~IW%llkfff&4?i!P?i@t;f%!J!lIll'ltlFiLCASHtc,gWJ1tSSlillilR3:irONSYYfPJikmY2illPk!i!Li0WYkW"iillilli
District New Housing District
County District #
Inflation Rate - Every 1 Year
Pay-As-You-Go Interest Rate:
Note Issued Date (Present Value Date):
local Tax Rate - Estimate
Fiscal Disparities Election (A - outside or B inside)
Year District certified
Assumes First Tax Increment For District
Assumes First Tax Increment For Dev
Years of Tax Increment
Assumes last Year of Tax Increment
Fiscal Disparities Ratio
Fiscal Disparities Metro Wide Tax Rate
local Tax Rate - Current
Slate Wide Property Tax Rate (for tolaltaxes)
Market Value Tax Rate (used for tolaltaxes)
Commercial Industrial Class Rate
First 150,000
Over 150,000
Rental Class Rate
Residenlal Class Rate
Under $500,000
0.0000%
5.1500%
o l-Aug-06
105.6410% Pay 2006 proposed
N/A
2006
2008
2008
26
2033
N/A
N/A
105.6410% Pay 2006 proposed
N/A Pay 2006
0.18997% Pay 2006 proposed
1.5%-2.0% Pay 2004
1.50%
2.00%
1.25% Pay 2004
1.0%-1.25%
1.00%
AfHF;J
Property land Building Total Class Base Date
PID Owner Market Value Market Value Market Value Rate Tax Capacitv Pavable
Sands Companies 101,120 0 101,120 1.25% 1,264 2006
Totals 101,120 1,264
Note:
1. The parcel is currently being subdivided from PID# 250-24-410 which has a Pay 2006 market value of $1.06 per sq. ft.
The Gateway Place site will be 95,396 sq. ft., resulting In an estimated base value of $101,120
UECTlINF ,;.I:PPSTYDEVELOPIilEtm :UMI1WuW@r$WWd3fJff06'
Total Market Value Taxes Per Total Market Class New Date
Use SF/Units SF/Units SF/Units Taxes Value Rate Tax Canacitv Pavable
Housing 24 92,708.33 $1,400.34 33,608 2,225,000 1.25% 27,813 2008
Housing 24 92,708.33 $1,400.34 33,608 2,225,000 1.25% 27,813 2009
TOTAL 48 67,216 4,450,000 55,625
Note:
1. Tax estimates are based upon market value, construction costs and taxes per sq/ft.
2. TIF run assumes 50% of the building is constructed by January 1, 2007 for payable 2008 and 100% completed by January 1, 2008 for payable 2009.
3. Completed market value is based on developer estimates and comparable projects.
:. " '. c' 'ci . . '. . '. '., .: . ....
Total Local Fiscal Local Fiscal State-wide Local Fiscal State-wide Market
Use Tax Tax Disparities Tax Disparities Property Taxes Disparities Property Value Total
Caoacitv Caoacitv Tax Caoacitv Rate Tax Rate Tax Rate Taxes Taxes Taxes Taxes
Hsg. 55,625 55,625 0 1.05641 0.00000 0.00000 58,763 0 0 8,454 67,216
TOTAL 55,625 55,625 0 1.05641 58,763 0 0 8,454 67,216
Note:
1. Housing developments do not pay Fiscal Disparities or State-wide property taxes.
Prepared by Ehl."
Cashftow T1F Mar '.xIs
3/10/2006
. ~.~.~~.~,~
Pago 2 012
CITY OF CHANHASSEN, MINNESOTA - Housing TIF District
Sand Companies. Gateway Place Apartments
Base Project Captured Semi-Annual State Admin. Semi-Annual Semi-Annual PAYMENT DATE
PERIOD BEGINNIN Tax Tax Tax Gross Tax Auditor & Pooling Net Tax Present PERIOD ENDING
Yrs. Mth. Yr. Caoacltv Caoacltv Caoacltv Increment 0.36% 10.00% Increment Value Yrs. Mth. Yr.
0.0 02-01 2005 0 0 0 0 0 0 0 0 0.0 08-01 2005
0.0 08-01 2005 0 0 0 0 0 0 0 0 0.0 02-01 2006
0.0 02-01 2006 1,264 1,264 0 0 0 0 0 0 0.0 08-01 2006
0.0 08-01 2006 1,264 1,264 0 0 0 0 0 0 0.0 02-01 2007
0.0 02-01 2007 1,264 1,264 0 0 0 0 0 0 0.0 08-01 2007
0.0 08-01 2007 1,264 1,264 0 0 0 0 0 0 0.0 02-01 2008
0.0 02-01 2008 1,264 27,813 26,549 14,023 (50) (1,397) 12,575 11,359
0.5 08-01 2008 1,264 27,813 26,549 14,023 (50) (1,397) 12,575 22,433 1.0 02-01 2009
1.0 02-01 2009 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 44,540 1.5 08-01 2009
1.5 08-01 2009 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 66,091 2.0 02-01 2010
2.0 02-01 2010 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 87,102 2.5 08-01 2010
2.5 08-01 2010 1,264 55,625 54,361 28,714 (103) (2,861 ) 25,749 107,585 3.0 02-01 2011
3.0 02-01 2011 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 127,553 3.5 08-01 2011
3.5 08-01 2011 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 147,021 4.0 02-01 2012
4.0 02-01 2012 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 166,000 4.5 08-01 2012
4.5 08-01 2012 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 184,502 5.0 02-01 2013
5.0 02-01 2013 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 202,540 5.5 08-01 2013
5.5 08-01 2013 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 220,125 6.0 02-01 2014
6.0 02-01 2014 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 237,268 6.5 08-01 2014
6.5 08-01 2014 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 253,982 7.0 02-01 2015
7.0 02-01 2015 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 270,275 7.5 08-01 2015
7.5 08-01 2015 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 286,160 8.0 02-01 2016
8.0 02-01 2016 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 301,646 8.5 08-01 2016
8.5 08-01 2016 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 316,743 9.0 02-01 2017
9.0 02-01 2017 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 331,461 9.5 08-01 2017
9.5 08-01 2017 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 345,810 10.0 02-01 2018
10.0 02-01 2018 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 359,798 10.5 08-01 2018
10.5 08-01 2018 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 373,435 11.0 02-01 2019
11.0 02-01 2019 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 386,730 11.5 08-01 2019
11.5 08-01 2019 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 399,692 12.0 02-01 2020
12.0 02-01 2020 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 412,327 12.5 08-01 2020
12.5 08-01 2020 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 424,646 13.0 02-01 2021
13.0 02-01 2021 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 436,655 13.5 08-01 2021
13.5 08-01 2021 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 448,363 14.0 02-01 2022
14.0 02-01 2022 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 459,777 14.5 08-01 2022
14.5 08-01 2022 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 470,905 15.0 02-01 2023
15.0 02-01 2023 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 481,753 15.5 08-01 2023
15.5 08-01 2023 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 492,329 16.0 02-01 2024
16.0 02-01 2024 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 502,639 16.5 08-01 2024
16.5 08-01 2024 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 512,690 17.0 02-01 2025
17.0 02-01 2025 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 522,489 17.5 08-01 2025
17.5 08-01 2025 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 532,043 18.0 02-01 2026
18.0 02-01 2026 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 541,356 18.5 08-01 2026
18.5 08-01 2026 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 550,436 19.0 02-01 2027
19.0 02-01 2027 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 559,287 19.5 08-01 2027
19.5 08-01 2027 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 567,917 20.0 02-01 2028
20.0 02-01 2028 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 576,329 20.5 08-01 2028
20.5 08-01 2028 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 584,531 21.0 02-01 2029
21.0 02-01 2029 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 592,527 21.5 08-01 2029
21.5 08-01 2029 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 600,322 22.0 02-01 2030
22.0 02-01 2030 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 607,921 22.5 08-01 2030
22.5 08-01 2030 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 615,329 23.0 02-01 2031
23.0 02-01 2031 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 622,552 23.5 08-01 2031
23.5 08-01 2031 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 629,593 24.0 02-01 2032
24.0 02-01 2032 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 636,458 24.5 08-01 2032
24.5 08-01 2032 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 643,150 25.0 02-01 2033
25.0 02-01 2033 1,264 55,625 54,361 28,714 (103) (2,861) 25,749 649,674 25.5 08-01 2033
25.5 08-01 2033 1,264 55 625 54361 28714 1103\ i2,861\ 25 749 656 034 26.0 02-01 2034
Totals 1,463,734 15,269\ 1145,846\ 1,312,618
656,034
NOTES:
1. State Auditor payment is based upon 2005 actuals and may increase over term of district
2. Assumes 50% of the building is completed on January 1, 2007 for first increment collected In 2008 which starts the district,
and there is no partial Increment payment prior to 2008.
3. Amount of Increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value.
4. Inflation on tax rates cannol be captured.
5. TIF does not capture stale wide property taxes or market value property taxes.
Prepared by Ehl.rs
Cuhtlow T1F Mar '.xIs
APPENDIX E
HOUSING QUALIFICATIONS FOR THE DISTRICT
No. of Bedrooms
50% of Median Income 60% of Median Income
I-bedroom
$721 $866
$866 $1,039
$1,001 $1,201
2-bedroom
3-bedroom
4-bedroom $1,116
Source: Minnesota Housing Finance Agency
$1,339
*Rent restrictions include all utility costs
No. of Persons 50% of Median Income 60% of Median Income
I-person $26,950 $32,340
2-person $30,800 $36,960
3-person $34,650 $41,580
4- erson $38,500 $46,200
Source: Department of Housing and Urban Development and Minnesota
Housing Finance Agency
The two options for income limits on a qualified housing district are 20% of the units at 50% of median
income or 40% of the units at 60% of median income. At the time a district is established, the project needs
to choose one ofthe options and meet those requirements for the life of the district. The City elects that 40%
of the units will be at 60% of the median income.
***PLEASE NOTE: THESE NUMBERS ARE ADJUSTED ANNUALLY. ALL INCOME FIGURES
REPORTED ON THIS PAGE ARE FOR 2005. UPDATED NUMBERS FOR THE YEAR 2006 ARE NOT
AVAILABLE YET, BUT ARE EXPECTED SOON.
APPENDIX
E-I
APPENDIX F
BUT/FOR QUALIFICA TraNS
Current Market Value - Est.
New Market Value - Est.
Increase in Market Value, Regardless of Use of Tax Increment
$101,120
$4,450,000
$4,348,880
Present Value of Tax Increment
$656,034
The tax increment and other proj ect funding provided by the Minnesota Housing Finance Agency will reduce
the rents on the Chanhassen Gateway Place rental housing project. Without tax increment, the project
developer has stated that he will construct a market-rate residential rental housing project. The assessed
market value of rental housing is the same, whether or not the rents are reduced through federal, state, and
local assistance.
11. The amount by which the market value of the site will increase without the use of tax increment
financing is estimated to be $4,348,880.
12. The increase in the market value that will result from the proposed development to be assisted with
tax increment financing is estimated to be $4,348,880.
13. The present value of the projected tax increments for the maximum duration of the district permitted
by the tax increment financing plan is estimated to be $656,034.
APPENDIX
F-I