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HomeMy WebLinkAboutResolution - HRA 2017-03 - Modification to Redevelopment Project Area No. 5, Establishing TIF District 22, Elevate Apartments, TIF Agreement - 10/03/2017EDEN PRAIRIE HOUSING AND REDEVELOPMENT AUTHORITY CITY OF EDEN PRAIRIE HENNEPIN COUNTY STATE OF MINNESOTA H.R.A. RESOLUTION NO. 2017-03 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT AREA NO. 5, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 22 (ELEVATE APARTMENTS) THEREIN, ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR AND APPROVING AND AUTHORIZING EXECUTION OF THE TAX INCREMENT DEVELOPMENT AGREEMENT. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Eden Prairie Housing and Redevelopment Authority (the "HRA") and the City of Eden Prairie (the "City") that the HRA adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for Redevelopment Project Area No. 5 (the "Project Area") and establish Tax Increment Financing District No. 22 (Elevate Apartments) (the "District") and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469 .04 7, and Sections 469 .17 4 to 469 .1794, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans and a Tax Increment Development Agreementto be prepared; and WHEREAS, the HRA has performed all actions required by law to be performed prior to the adoption of the Plans. The City Council has also held a public hearing on September 19, 2017 on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: I. The HRA hereby finds that the District is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 11, and finds that the adoption of the proposed Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota for affordable and high quality housing. 2. The HRA further finds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. The boundaries of the Project Area are not being expanded. 4. The reasons and facts supporting the findings in this resolution are described in the Plans and are attached here to as Exhibit A. 5. The HRA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. 6. Conditioned upon the approval thereof by the City Council following the September 19, 2017 public hearing thereon, the Plans, as presented to the HRA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Executive Director of the HRA. 7. Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. 8. Upon approval of the Plans by the City Council, the Executive Director of the HRA is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. 9. The Executive Director of the HRA is authorized and directed to forward a copy of the Plans to the Hennepin County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. 10. The Tax Increment Development Agreement is hereby approved. The Chair and the Executive Director of the HRA are authorized to execute said Agreement, including execution by the Chair, Executive Director, or other HRA or City officials whose execution is required, of all other documents attached thereto or necessary to accomplish the purposes of said Agreement. Approved by the Eden Prairie Housing and Redevelopment Authority on October 3, 2017. ~ SEAL ATTEST: L~~ Rick Getschow, Executive Director EXHIBIT A H.R.A. RESOLUTION NO. 2017-03 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 22 (Elevate Apartments), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Tax Increment Financing District No. 22 (Elevate Apartments) is a housing district as defined in MS., Section 469.174, Subd. II. TIF District No. 22 (Elevate Apartments) consists of two parcels. The development will consist of approximately 222 apartment units and 13,266 square feet of commercial space. A portion of the housing units will receive tax increment assistance and will meet income restrictions described in MS. 469.1761. At least 20 percent of the units (45 apartments) receiving assistance will have incomes at or below 50 percent of statewide median income. Appendix E of the TIF Plan contains background for the above finding. 2. Finding that the proposed development, in the opinion of the HRA, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. The proposed development, in the opinion of the HRA, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the development proposed in this plan contains affordable, workforce housing units that meet the City's objectives for development. The cost of land acquisition, site and public improvements and construction makes this housing development infeasible without City assistance. The cost of land acquisition and construction are the same for workforce housing units as they are for market rate projects. The decreased rental income from the affordable units, means there is less cash flow available to service the operating and debt expenses for the project. The leaves a gap in funding for the project. The need to offset this reduction in rents for the workforce housing units makes this housing development feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a pro forma as justification that the project would not have gone forward without tax increment assistance. 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 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 TIF District permitted by the TIF Plan: This finding is justified on the grounds that the costs of acquisition, building demolition, site improvements, utility improvements and construction of affordable housing add to the total redevelopment cost. Historically, the costs of site and public improvements, as well as high market rate rents in the City have made development of affordable housing infeasible without tax increment assistance. Although other projects could potentially be proposed, the HRA reasonably determines that no other redevelopment of similar scope providing the desired affordability can be anticipated on this site without substantially similar assistance being provided to the development. 3. Finding that the TIF Plan for Tax Increment Financing District No. 22 (Elevate Apartments) conforms to the general plan for the development or redevelopment of the municipality as a whole. The HRA finds that the TIF Plan conforms to the general development plan of the City. The TIF Plan is consistent with amendments approved by the City Council to the Comprehensive Guide Plan and zoning. 4. Finding that the TIF Plan for Tax Increment Financing District No. 22 (Elevate Apartments) will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Redevelopment Project Area No. 5 by private enterprise. The project to be assisted by the District will result in diversified housing opportunities and increased employment and increased tax base in the City and the State of Minnesota, and the addition of a high-quality development to the City.