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HomeMy WebLinkAboutResolution - 89-40 - Approve Amendment to IF Plan for Prairie Center Village Apartments - 02/21/1989 RESOLUTION NO. 89- t c A RESOLUTION TO AMEND THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 10 ESTABLISHED PURSUANT TO THE PROVISIONS OF SECTIONS 469 . 1.74 TO 469 . 1.79 , INCLUSIVE , FORMERLY SECTIONS 273 . 71 TO 273 . 78 , INCLUSIVE, OF MINNESOTA STATUTES , AND TO APPROVE THE HOUSING AND REDEVELOPMENT AUTHORITY ' S INTEREST REDUCTION PROGRAM FOR THE DISTRICT . WHEREAS , the City Council of the City of Eden Prairie, Minnesota , ( "City" ) , has determined that it is necessary and desirable in the public interest to designate, establish, develop and administer a Housing District in the City of Eden Prairie, Minnesota, as defined in Minnesota Statutes , Section 469 . 174 , subd . 11 , formerly Section 273 . 72 , subd . 11 ; and WHEREAS , the Housing and Redevelopment Authority in and for the City of Eden Prairie , ( "HRA" ) , has adopted a Redevelopment Plan dated October, 1985 ( the "Plan " ) , part of which plan contains a method of financing for a Project as defined in Minnesota Statutes , Section 462 . 421 , subd . 14 ; and WHEREAS , the City Council adopted the Plan on November 5 , 1985 ; and WHEREAS , the HRA, by resolution duly adopted at a meeting held on February 1.8 , 1986 , did approve a Tax Increment Financing Plan ( "TIF Plan " ) and Interest Reduction Program; and WHEREAS , the City Council , by resolution duly adopted at a meeting held February 18 , 1986 , did approve the TIF Plan and the Interest Reduction Program and designate Tax Increment Financing District No . 10 ( "TIF District No . 10 " ) ; and WHEREAS , the City Council of the City has determined that tax increment financing will be necessary to finance the public costs associated with the Housing District and Project within the TIF District pursuant to Minnesota Statutes , Sections 469 . 174 to 469 . 179 , inclusive, formerly Sections 273 . 71 to 273 . 78 , inclusive; and WHEREAS , the HRA has fully informed the members of the Board of. Hennepin County Independent School District 272 and Vocational School District 287 and Hennepin County Board of Commissioners of the fiscal_ and economic implications of the proposed TIF District; and r WHEREAS, the HRA has been requested to amend the TIF Plan to increase the amount of tax increment to be used for the Interest. Reduction Program in exchange for obtaining additional low income housing for elderly persons in the TIF District; and WHEREAS , the HRA , by resolution duly adopted at a meeting held on February 21 , 1989 , did approve the amended TIF Plan ( the "Amended TIF Plan" ) and the amended Interest Reduction Program ( the "Amended Program" ) ; and WHEREAS , at a public hearing duly held and noticed, all persons and parties were given full opportunity to present written or oral testimony, comments , objections , suggestions , and other matters , all of which were duly considered by the City Council ; and WHEREAS , the Amended TIF Plan will afford maximum opportunity consistent with the sound needs of the municipality as a whole for the redevelopment of the area encompassed within the TIF District No . 10 by private enterprise; and WHEREAS , the Amended TIF Plan conforms to the general plan for the redevelopment of the area and development of the municipality as a whole; and WHEREAS , the City Council of the City finds the Amended TIF Plan is intended to provide financing that will enable the Project to provide lower income housing for elderly persons , meeting, at a minimum, the requirements of Minnesota Statutes , Section 469 . 012, subd . 7 ; NOW, THEREFORE , BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE, dces hereby adopt the Emended TIF Plan and Amended Program for the Project and finds : 1 . That the proposed development, in the opinion of the City Council , would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment• financing is deemed necessary; 2 . That the Amended TIF Plan conforms to the general plan for the development or redevelopment of the municipality as a whole; 3 . That the Amended TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of the district by private enterprise; 4 . That the Amended Program is necessar•,r to accomplish the goals of the City and carry out the Amended TIF Plan . 2 . ;a ;s 5 . That the City makes the above findings and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit "A. " .M,arcin ADOPTED BY THE CITY COUNCIL this 7M day of , 1989 . Mayor ATTFST: f City -Clerk r 3 . EXHIBIT "A" TO RESOLUTION 89-! REASONS AND FACTS SUPPORTING FINDINGS FOR THE ADOPTION OF THE AMENDED TAX INCREMENT FINANCING PLAN AND AMENDED INTEREST RATE REDUCTION PROGRAM RELATING TO TAX INCREMENT FINANCING DISTRICT NO . 10 . BACKGROUND AND SUMMARY OF EVIDENCE In late 1984 , the Planning Commission for the City of Eden Prairie first reviewed the site plan for the proposed Prairie Village Apartments . The proposal originally involved one 56-unit apartment building for lower income elderly persons and one 56-unit multifamily apartment building in which at least 20% of the units would be reserved for tenants whose adjusted gross income did not exceed 80% of the Minneapolis/St . Paul metropolitan statistical area median income . The project was proposed for the parcel legally described as all of Outlot B and that part of Outlot C , Gonyea 4th Addition, Hennepin County, Minnesota , lying northwesterly of a line drawn from a point on the westerly line of said Outlot C distant 96 . 68 feet southeasterly along said western line from the most westerly corner of said Outlot C to a point on the northerly line of said Outlot C distant 159 . 24 feet southwesterly along said northerly line from the most northerly corner of said Outlot C ( hereinafter referred to as t'Ze "Parcel " ) . It was determined that the Parcel was vacant , unused and underused within the meaning of Minnesota Statutes , Section 426 . 421 , subd . 13 ( 3 ) and the Planning Commission recommended approval of the site plan A-1 to the City Council . At the direction of the Eden Prairie Housing and Redevelopment Authority ( hereinafter referred to as the "HPA" ) , a redevelopment plan. for Prairie Village Apartments was prepared with the cooperation and assistance of the appropriate City department . The redevelopment plan was completed in October, 1985 . The plan included the following analysis as to why the proposed Prairie Village Apartments would be consistent with the City ' s housing policies , RELATIONSHIP TO LOCAL OBJECTIVES The Prairie village Apartments Project is consistent with the following policies set forth in the City 's Housing Plan which was adopted pursuant to I4innesota Statutes , Chapter 462 (C ) . 1 . The city ' s desire to encourage low income housing projects and to work with the Metropolitan Council to develop such projects . 2 . The City ' s desire to encourage development of 'a variety of living and working environments for all kinds of people by holding development costs down . 3. The City ' s desire to encourage a variety of housing types and prices through innovative land use mixes . 4 . The City ' s desire to encourage development of a variety of living and working environments for people of all ages , races and income groups . 5. In creating its multifamily housing finance program, the City Council of the City has found and determined that the preservation and enhancement of the high quality of life in the City is dependent upon the maintenance and provision of adequate , decent, safe and sanitary housing stock; that accomplishing the provision of such housing stock is a public purpose and will benefit the citizens of the City; that a need exists within the City to provide in a timely fashion additional and affordable housing to persons residing and expected to reside in the City; that a need exists for - mortgage credit to be made available for the new construction of additional multifamily housing;• that a need exists to encourage elderly and low income housing projects ; that a need exists to encourage development of a variety of Living and working A-2 environments for all kinds of people by holding development costs down; that a need exists to encourage a variety of housing types and prices through innovative architecture and land use mixes ; and that a need exists to encourage development of a variety of living and working environments for all people of all ages , races , and income groups . 6 . The City, in considering the multifamily housing program, has considered generally available information regarding conditions in the housing industry and the information contained in the City ' s Minnesota Statutes , Chapter 462 (C) Housing Plan, adopted on Cctober 30 , 1978, as amended February 2 , 1982 (the "'Housing Plan " ) , including particularly i . The availability and affordability of other government housing programs; ii . The availability and affordability of private market financing for the acquisition of land for and construction of multifamily housing units; iii . An analysis of population and employment trends and future employments needs ; iv . The recent housing trends and future housing { needs of the City; and v . An analysis of how the program will meet the needs of persons and families residing and expected to reside in the City . 7 . The City, in considering this program, has further considered i . The amount , timing, and sale of bonds to finance the estimated amount of construction and mortgage loans to be made under the program, to fund the appropriate reserves and to pay the cost of .issuance; ii . The method of monitoring and implementation of the program to assure compliance with the City ' s Housing Plan and its objectives; iii . The method of administering, servicing, and supervising the program; iv . The cost to the City, including future administrative expenses ; A--3 v . The .restrictions on the multifamily development to be financed under this program; and vi . Certain other limitations . The Plan along with the preliminary draft of the Tax Increment Financing Plan for `Pax Increment Financing District No . 10 proposed to be located entirely within the Redevelopment Plan area was duly transmitted by the HRA to the Planning Commission for the City of Eden Prairie for its study and opinion thereon . At its meeting of October 28 , 1985 , the Planning Commission recommended adoption of the Plan and the preliminary draft of the Tax Increment Financing Plan for Tax increment Financing District No . 10 . On November 5 , 1985 , in Resolution 85-2 the HRA adopted the October , 1985 , Redevelopment Plan which included thE; preliminary draft of the r Tax Increment Financing Plan for Tax Increment Financing District No . 10 . On November 5 , 1985 , in Resolution 85-243 , the City Council , City of Eden Prairie, also approved the Redevelopment Plan and preliminary draft of the Tax Increment Financing Plan for Tax Increment Financing District No . 10 . On November 5 , 1985 , in Resolution No . 85-1 the HRA authorized the chairman and administrator of the HRA to execute on behalf of the HRA the Purchase Agreement for the Parcel and the Property Management Agreement. Resolution No . 85-1 authorized the HRA to purchase the Parcel for $150 , 000 . 00 payable in cash , $128 , 819 . 00 to be paid by the HPA and $21 , 181 . 00 to be paid by Prairie Village Limited Partnership . on November 19 , 1985, the chairman and administrator of the HRA executed said Purchase Agreement and Property Management A-4 Agreement . On November 23 , 1985 , the Parcel was conveyed by the HRA to Prairie Village Limited Partnership for $21 , 181 . 00 . The $ 128 , 819 . 00 originally paid by the HRA was subsequently reimbursed to the HRA in a Community Development Block Grant . On February 18 , 1986 , the HRA and the City Council designated and established the Housing District for Tax Increment Financing District No. 10 , approved Tax Increment Financing District No . 101 and adopted the Tax Increment_ Financing Plan and Interest Reduction Program therefor . Since that date, the Tax Increment Financing Plan for Tax Increment Financing District No . 10 has undergone several changes . The original proposal for the Project included one 56-unit apartment building for lower income elderly persons and one { 56-unit apartment building in which at least 20% of the units would be reserved for tenants whose adjusted •gross income did not exceed 80% of the Minneapolis/St . Paul Standard Metropolitan Statistical Area median income . The Project now includes one 56-unit apartment building for lower income elderly persons and one 56-unit apartment building to be rented at market rates . The Project Management Agreement to be executed by the developer of the Project will require that eighty percent ( 80% ) of the elderly units of the Project be rented to individuals or families whose incomes do not exceed sixty percent ( 60% ) of the median income for the Minneapolis- St . Paul Standard Metropolitan Statistical Area , as adjusted for family size and other factors , by HUD . Twenty percent ( 20% ) of the elderly units of the Project must be rented to A-5 individuals or families whose incomes do noz exceed seventy percent ( 70% ) of the median income for the Mi nneapolis-St . Paul Standard Metropolitan Statistical Area , as adjusted for family size and other factors , by HUD . The rent charged by the developer for each unit rented to a lower income person or family may not exceed thirty percent of sixty percent or thirty percent of seventy percent of median income, as applicable , annually . Such rents may not be .increased by more than seven and five-tenths percent ( 7 . 5% ) a year , or the amount calculated as described above and based on median income as determined by HUD from time to time , whichever is less . It is contemplated that the project will be partially financed through the sale of tax-exempt housing revenue bonds ( in the approximate amount of $5 , 750 , 000 . The proposed Interest Reduction Program will cover the entire Project , but be applied to assist in financing the 55-unit apartment building for elderly lower income tenants . Rased upon the evidence and the record the Council sets forth its further specific reasons and facts supporting its Findings as follows : I . Tax Increment Financing District No . 10, described in the Amended Tax Increment Financing Plan for Tax Increment Financing District No . 10, consists of one parcel legally described as all of Outlot B and that part of Outlot C, Gonyea 4th Addition , Hennepin County, Minnesota, lying northwesterly A-b of a line drawn from a point on the westerly line of said Outlot C distant 92 . 68 feet southeasterly along said westerly line from the most westerly corner of said Out-lot C to a point on the northerly line of said outlot C distant 159 . 24 feet southwesterly along said northerly lire from the most northerly corner of said Outlot C . ( Tax Increment Financing District No . 10 is hereinafter referred to as " TIF District No . 10 " ; the Amended Tax Increment Financing Plan for TIF District. No . 10 is hereinafter referred to as the "Amended TIF Plan" ; and the property located within the TIF District No. 10 and identified above is hereinafter referred to as the "Parcel " ) . II . The Project consists of development of a residential i complex containing two 56-unit apartment buildings and their accessory land uses . Fifty-six ( 56 ) units ate intended for elderly lower income households and ,:he other 56 units will. be. made available at market-rate rentals . The Project has an estimated development cost of $6 , 505 , 000 and will be partially financed through the sale of tax-exempt housing revenue bonds . The Parcel has been purchased by the Eden Prairie Housing and Redevelopment Authority and has been sold to Prairie Village Limited Partnership , the developer . j T T The Project will result in increased housing and lower income elderly housing in the City and it will preserve and enhance the quality of life of the City by providing a range of housing opportunities . A-7 IV. The Project is intended for occupancy, in part , by elderly persons of lower income . Eighty percent ( 80% ) of the elderly units of the Project will be rented to individuals or families whose incomes do not exceed sixty percent ( 60% ) of the median income: for the Minneapolis-St . Paul Standard Metropolitan Statistical Area, as adjusted for family size and other factors , by HUD . Twenty percent ( 2O% ) of the elderly units of the Project will be rented to individuals or families whose incomes do not exceed seventy percent ( 70% ) of the median income for the Minneapolis-St . Paul Standard Metropolitan Statistical Area , as adjusted for family size and other factors , by HUD . The rent charged by the developer for each unit rented to a lower income person or family will not exceed thirty percent of sixty percent or thirty percent of seventy percent of median income, as applicable , annually. Such rents may not be increased by more than seven and five-tenths percent ( 7 . 5% ) a year, or the amount calculated as described above and based on median income as determined by HUD from time to time, whichever is less . V. If the Project were financed with a conventional mortgage, the rents which would be needed to meet the mortgage payments would be so high that they would not be affordable to lower income tenants . The Interest Reduction Program, together with housing revenue bond financing, will allow rents to be set at A-8 such levels as to qualify it as a lower income development and will make the Project economically feasible . For these reasons the use of tax increment financing for the Project is deemed necessary . i ,I i f l A� 1 SOK : EY1 A-9