Res 2017- 48 Modification to Dvlp Program Devlp Dist 1, Establish TIF Dist 2CITY OF MENDOTA HEIGHTS
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2017 - 48
RESOLUTION ADOPTING A MODIFICATION TO THE DEVELOPMENT
PROGRAM FOR MUNICIPAL DEVELOPMENT DISTRICT NO. l;
ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 2 THEREIN;
AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR
BE IT RESOLVED by the City Council (the "Council") of the City of Mendota Heights,
Minnesota (the "City"), as follows:
Section 1. Recitals
1.01. The Council has heretofore established Municipal Development District No. 1
and adopted the Development Program therefor. It has been proposed by the City that the City
adopt a Modification to the Development Program for Municipal Development District No. 1
(the "Development Program Modification") and establish Tax Increment Financing District No.
2(the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the
Development Program Modification and the TIF Plan are referred to collectively herein as the
"Program and Plan"); all pursuant to and in conformity with applicable law, including Minnesota
Statutes, Sections 469.124 to 469.133 and Sections 469.174 to 469.1794, all inclusive, as
amended, (the "Act") all as reflected in the Program and Plan, and presented for the Council's
consideration.
1.02. The City has investigated the facts relating to the Program and Plan and has
caused the Program and Plan to be prepared.
1.03. The City has performed all actions required by law to be performed prior to the
establishment of the District and the adoption and approval of the proposed Program and Plan,
including, but not limited to, notification of the Dakota County Commissioner who represents
the property underlying the District, notification of Dakota County and Independent School
District No. 197, each having taxing jurisdiction over the property to be included in the District,
a review of and written comment on the Program and Plan by the City Planning Commission,
and the holding of a public hearing by the Council upon published notice as required by law.
1.04. Certain written reports (the "Reports") relating to the Program and Plan and to the
activities contemplated therein have heretofore been prepared by City staff and consultants and
submitted to the Council and made a part of the City files and proceedings on the Program and
Plan. The Reports, including the redevelopment qualifications reports and planning documents,
include data, information and substantiation constituting or relating to the basis for the other
findings and determinations made in this Resolution. The Council hereby confirms, ratifies and
adopts the Reports, which are hereby incorporated into and made as fully a part of this
Resolution to the same extent as if set forth in full herein.
1.05 The City is not modifying the boundaries of Municipal Development District No.
1, which are coterminous with the corporate boundaries of the City, but is modifying the
Development Program therefor.
Section 2. Findin�s for the Adoption and A�proval of the Development Program
Modification.
2.01. The Council approves the Development Program Modification, and specifically
finds that: (a) the land within the Project area would not be available for redevelopment without
the financial aid to be sought under the Development Program; (b) the Development Program, as
modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for
the development of the Project by private enterprise; and (c) the Development Program, as
modified, conforms to the general plan for the development of the City as a whole.
Section 3. Findin�s for the Establishment of Tax Increment Financin� District No. 2.
3.01. The Council hereby finds that the District is in the public interest and is a
"redevelopment district" under Section 469.174, Subd. 10 of the Act.
3.02. The Council further finds that
(i) the proposed redevelopment described in the TIF Plan would not reasonably be
expected to occur solely through private investment within the reasonably
foreseeable future;
(ii) 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 proj ected tax increments for the
maximum duration of the District permitted by the TIF Plan;
(iii) the TIF Plan conforms to the general plan for the development or
redevelopment of the City as a whole; and
(iv) the TIF Plan will afford maximum opportunity, consistent with the sound
needs of the City as a whole, for the development or redevelopment of the
District by private enterprise.
3.03. The Council further iinds, declares and determines that it made the above findings
stated in this Section and has set forth the reasons and supporting facts for each determination in
writing, attached hereto as E�iibit A.
3.04. The City elects to calculate fiscal disparities for the District in accordance with
Section 469.177, Subd. 3, clause b of the Act, which means the fiscal disparities contribution
would be taken from inside the District.
Resolution 2017-48 page 2
Section 4. Public Pur�ose
4.0 L The adoption of the Program and Plan conforms in all respects to the
requirements of the Act and will help fuliill a need to develop an area of the City which is
already built up, to provide employment opportunities, to improve the tax base and to improve
the general economy of the State and thereby serves a public purpose. For the reasons described
in Exhibit A, the City believes these benefits directly derive from the tax increment assistance
provided under the TIF Plan. A private developer will receive only the assistance needed to
make this development financially feasible. As such, any private benefits received by a
developer are incidental and do not outweigh the primary public benefits.
Section 5. Approval and Adoption of the Program and Plan
5.01. The Program and Plan, as presented to the Council on this date, including without
limitation the findings and statements of objectives contained therein, are hereby approved,
ratified, established, and adopted and shall be placed on file in the office of the City
Administrator.
5.02. The staff of the City, the City's advisors and legal counsel are authorized and
directed to proceed with the implementation of the Program and Plan and to negotiate, draft,
prepare and present to this Council for its consideration all further plans, resolutions, documents
and contracts necessary for this purpose.
5.03 The Auditor of Dakota County is requested to certify the original net tax capacity
of the District, as described in the Program and Plan, and to certify in each year thereafter the
amount by which the original net tax capacity has increased or decreased; and the City is
authorized and directed to forthwith transmit this request to the County Auditor in such form and
content as the Auditor may specify, together with a list of all properties within the District for
which building permits have been issued during the 18 months immediately preceding the
adoption of this Resolution.
5.04. The City is further authorized and directed to file a copy of the Program and Plan
with the Commissioner of the Minnesota Department of Revenue and the Office of the State
Auditor pursuant to Section 469.175, Subd. 4a of the Act.
Adopted by the City Council of the City of Mendota Heights this 20th day of June, 2017.
A TE
�
Lorri Smith, City Clerk
CITY COUNCIL
CITY OF MENDOTA HEIGHTS
�
Neil Garlock, Mayor P
Resolutio�2 2017-48 page 3
EXHIBIT A
RESOLUTION NO. 2017-48
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing
Plan (the "TIF Plan") for Tax Increment Financing District No. 2(the "District"), as required
pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows:
1. Finding that Tax IncNement Financing DistNict No. 2 is a �^edevelopnzent distNict as
defined in M.S., Section 469.174, Subd. 10.
The District consists of nine parcels, with plans to redevelop the area for residential rental
housing purposes. Parcels consisting of at least 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. These
conditions are reasonably distributed throughout the District. (See Appendix F of the TIF
Plan.)
2. Finding that the p�oposed development, in the opinion of the City Council, would not
�easonably be expected to occur solely thNough private investment within the reasonably
foreseeable futu�e and that the incNeased market value of the site that could reasonably
be expected to occur without the use of tax incNement financing would be less than the
increase in the ma�ket value estimated to �esult fNom the p�oposed development after
subt�°acting the present value of the projected tax inc�ements for the maximum duration
of the District peNmitted by the TIF Plan.
The pf�oposed development, in the opinion of the City, would not r�easonably be expected
to occur solely through private investment within the Neasonably foreseeable futuNe: This
finding is supported by the fact that the redevelopment proposed in the TIF Plan meets
the City's objectives for redevelopment. Due to the high cost of redevelopment on the
parcels currently occupied by substandard buildings and poor soils, the limited amount of
property available for new development, and the cost of financing the proposed
improvements, this project is feasible only through assistance, in part, from tax increment
financing. The developer was asked for and provided a letter and a proforma as
justification that the developer would not have gone forward without tax increment
assistance. (See attachment in Appendix G of the TIF Plan.)
The inc�°eased 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 market value
estimated to result from the p�oposed development after subt��acting the present value of
the p�ojected tax inc�ements for the maximum du�ation of the Dist��ict pe�mitted by the
TIF Plan: This finding is justified on the grounds that the cost of acquisition, soils
corrections, site and public improvements and utilities significantly add to the total
redevelopment cost. Historically, site and public improvement costs in this area have
made redevelopment infeasible without tax increment assistance. The City reasonably
Resolution 2017-48 page 4
determines that no other redevelopment of similar scope is anticipated on this site without
substantially similar assistance being provided to the development.
Therefore, the City concludes as follows:
a. The City's estimate of the amount by which the market value of the entire District
will increase without the use of tax increment financing is $0, or a nominal
amount equivalent to inflation over time.
b. If the proposed development occurs, the total increase in market value will be
approximately $18,481,300.
c. The present value of tax increments derived from the District for the maximum
duration of the District permitted by the TIF Plan is estimated to be $4,314,609.
d. Even if some development other than the proposed development, as proposed in
the TIF Plan, were to occur, the Council finds that no alternative would occur that
would produce a market value increase greater than $14,166,691 (the amount in
clause b less the amount in clause c) without tax increment assistance.
3. Finding that the TIF Plan fo� the District confo�ms to the gene�al plan for the
develop�nent or Nedevelopment of the municipality as a whole.
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms
to the general development plan of the City.
4. Finding that the TIF Plan fo� the District will afford maximum opportunity, consistent
with the sound needs of the City as a whole, fo� the development or �edevelopment of
Municipal Development Dist�ict No. 1 by private enteNprise.
The project to be assisted by the District will result in increased employment in the City
and the State of Minnesota, the renovation of substandard properties, increased tax base
of the State and will add a high quality development to the City.
Through the implementation of the TIF Plan, the City will increase the availability of safe
and decent life-cycle housing in the City.
Resolution 2017-48 page 5