Loading...
HomeMy WebLinkAboutResolution - 83-176 - Providing for Establishment of Tax Increment District No. 6 - 07/19/1983 CITY OF EDEN PRAIRIE COUNTY OF HENNEPIN S"PATE OF MINNESOTA RESOLUTION NO. 83-176 RESOLUTION PROVIDING FOR ESTABLISHMENT OF PROPOSED TAX INCREMENT DISTRICT NO. 6 AND THE ADOPTION OF A TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLVED by the City Council (the "Council") of the City of Eden Prairie, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed that the City establish an additional tax increment district within Development District No. I and adopt a tax increment financing plan relating thereto, all pursuant to Minnesota Statutes, Section 273.71 to 273.78, inclusive, as amended. 1.02. This Council has caused to be prepared, and has investigated the facts with respect thereto, a proposed Tax Increment Financing Plan for a proposed Tax Increment District No. 6. 1.03. The City has performed all actions required by law to be performed prior to the establishment of Tax Increment District No. 6 and the adoption of the Tax Increment Financing Plan for Tax Increment District No. 6, including, but not limited to, consultations or the opportunity for consultations with Hennepin County and the School Districts having taxing jurisdiction over the property proposed to be included in Tax Increment District No. 6, and the holding of a public hearing upon published and mailed notice as required by law. 1.04. The Council hereby determines that it is necessary and in the best interests of the City at this time to establish Tax Increment District No. 6 and to adopt the Tax Increment Financing Plan relating thereto. Section 2. Findings Concerning Establishment of Tax Increment District No. 6. 2.01, The Council hereby finds, determines and declares that Tax Increment District No. 6 constitutes a "tax increment financing district," as defined in Minnesota Statutes, Section 273.73, Subdivision 9, and further constitutes an "economic development district," as defined in Minnesota Statutes, Section 273.73, Subdivision 12. 2.02. The Council further finds, declares and determines that Tax Increment District No. 6 does not meet the requirements found in the definition of redevelopment district or housing district, as defined in Minnesota Statutes, Section 273.73, Subdivisions 10 and 11, respectively, but is in the public interest, thereby qualifying it as an economic development district. Page -2- 2.03. The Council further finds, declares and determines that the develop- ment presently occurring for which tax increments from Tax Increment District No. 6 will be used, in the opinion of the Council would not have occurred solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is dee►ned necessary; that the Tax Increment Financing Plan for Tax Increment District No. 6 conforms to the general plan for the development of the City as a whole; and will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of the Development District by private enterprise. 2.04. The Council further finds, declares and determines that the City ►Wade the above findings stated in Section 2 and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit "A". 2.05. Under and pursuant to Minnesota Statutes, Sections 273.71 to 273.78, inclusive, as amended, Tax Increment District No. 6 is hereby established in and for the City. The property included in Tax Increment District No. 6 shall be the property described in the Tax Increment Financing Plan for Tax Increment District No. 6, adopted in Section 3 hereof. Section 3. Adoption of Tax increment Financing Plan for Tax Increment District No. 6. 3.01. The Tax Increment Financing Plan for Tax Increment District No. 6 is hereby approved and adopted in the form on file and of record in the Office of the Finance Director-Clerk. Section 4. Implementation of Tax Increment Financing Plan for Tax Increment District No. 6. 4.01. The officers of the City, the City's financial advisor and the City's legal counsel and bond counsel are authorized and directed to proceed with implementa- tion of the Tax Increment Financing Plan for Tax Increment District No. 6 and for this purpose to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Section 5. Certificate of Assessed Value. 5.01. The County Auditor of Hennepin County (the "Auditor") is hereby requested to certify the original assessed value of all real property as described in the Tax Increment Financing Plan for Tax Increment Financing District No. 6, as of January 2, 1982, and each year hereafter to certify the amount by which the assessed value has increased or decreased from the assessed value of January 2, 1982. Each year the Auditor shall also add to the original assessed value of Tax Increment District No. 6 an amount equal to the original assessed value for the preceding year multiplied by the average percentage increase in the assessed valuation of all property included in Tax Increment District No. 6 during the five years prior to certification of Tax Increment District No. 6, and also to certify the proportion which any such increase or decrease bears to the total assessed value for �f Page -3- the real property in Tax Increment District No. 6 for that year and to remit to the___A City of Eden Prairie each year, commencing in 19W and ending in 199OV"tFiat proportion of all taxes paid that year on real property in Tax Increment District No. 6 which the captured assessed value bears to the total current assessed value, all pursuant to Minnesota Statutes, Section 273.76, Subd. 1, as amended. Alayor 1 ance" 'rector-Clerk i i :i EXHIBIT "A" TO RESOLUTIONS 83-176 Reasons and Facts Supporting Findings for Establishment of Proposed Tax Increment District No. 6 and the Adoption of a Tax Increment Financing Plan Relating Thereto. BACKGROUND AND SUMMARY OF EVIDENCE The City Council adopted Development District No. 1 and Tax Increment Financing Plan for an Economic Development District on September 22, 1981. Thereafter, on March 30, 1982, the City Council adopted Amended Development District No. 1 Prograrn and Tax Increment Financing Plans for the City of Eden Prairie, Minnesota. The latter included Tax Increment District No. I and Tax Increment District No. 2. On November 16, 1982 the City Council adopted Tax Increment Financing Plan For Tax Increment District No. 3. On March 14, 1983 the City Council adopted Tax Increment Financing Plan For Tax Increment District No. 4. On May 17, 1983 the City Council adopted Modified Development District No. 1. The latter included Tax increment District Nos. .1, 2, 3 and 4. The Tax Increment Financing Plan for Tax Increment District No. 5 was also adopted on May 17, 1983. Adoption of the Development District No. 1 and Tax Increment Financing Plan for an Economic Development District on September 22, 1981, was preceded by a hearing thereon held on September 15, 1981. At the hearing extensive evidence in the form of documents, memoranda, reports and oral testimony was introduced, all of which is set for-ch in minutes of the meeting of the City Council held on September 15, 1981. The evidence introduced and as described in the minutes of September 15, 1981, is made a part of the record in these proceedings. Also made a part of the record in these proceedings are: a) the notice of the August 16, 1983 public hearing; b) minutes of meetings of the City Council held on Page -2- September 22, 1981, March 30, 1982, November 16, 1992, March 15, 1983 and May 17, 1983; c) letter from Eden Prairie Chamber of Commerce dated September 18, 1981; d) minutes of meetings of the City's Planning Commission on March 29, 1982 and May 9, 1983; e) ;memorandum dated August 15, 1983 by Eugene A. Dietz, Director of Public Works, addressed to the Mayor and City Council; f) a letter dated July 14, 1983, addressed to Mr. John Lobben, Chairman of the Board, Eden Prairie School District No. 272; g) a letter dated July 14, 1983 addressed to Mr. Norm Friederichs, Chairman of the Board, Joint Independent School District No. 287; h) a letter dated July 14, 1983 addressed to Mr. John Derus, Chairman of the Hennepin County Board of Commissioners; i) and a memorandum dated August 15, 1983 by Carl J. Jullie, City Manager; and j) a memorandum dated August 15, 1983 by Bob Martz. Summary of portions of the evidence contained in the record relevant to the findings contained in Section 2 of Resolution No. 83-176 follows. The project for Tax Increment Financing Plan for Tax Increment District No. 6 is described as the "Development Program" in the Modified Development Program for Development District No. 1 including Tax Increment Financing Plans for Tax Increment Districts Within Development District No. 1 dated May 17, 1983 (hereinafter referred to as "Modified Development Program"). The geographic area of the Project is described in the Development Program. Tax Increment District No. 6 consists of one parcel legally described as Lot 1, Block 1, Menard 3rd Addition. Eugene A. Dietz, Director of Public Works for the City has provided a memorandum demonstrating that the parcel in Tax Increment District No. 6 is situated within the geographical area of the Project. In his memorandum dated July 7, 1981, Chris Enger, Director of Planning of the City, stated that the concept of a Ring Road in the major center area was adopted in the City's first Comprehensive Guide Plan in 1968 which was further refined in 1973 as part of the major center area planned unit development. Mr. Page -3- Enger noted that regional office and commercial development has been stifled by the lack of good regional access. He also stated that if congestion can be reduced and access improved in the major center area, rapid growth will result in the traditionally established pattern of development following roads. If access cannot be improved, growth will stagnate as more accessible commercial areas retain a competitive advantage over the City. In a letter dated September 18, 1981, Eden Prairie Chamber of Commerce stated that it views the project as necessary to the growth and development of the City in general and of the major center area in particular. In a letter dated September 14, 1991, Ron Wesley, Center Manager for Homart Development Co., stated that since the opening of highway improvements in November, 1979, consisting of Highway 169/212 south exit ramp from I-494 westward, traffic movements have steadily increased. Also during this period of time the Eden Prairie Center's occupancy levels, that is the number of merchants, have also increased. At the public hearing conducted by the City Council on September 15, 1981, on the matter of Development District No. 1 and Economic Development District and Tax Increment Financing Plan, Robert Boblett, a real estate expert, testified that he does not believe Eden Prairie is experiencing the degree of development which should be expected and that can be ascribed to troublesome egress and ingress. He believes the Project ought to be of relief to the bottlenecking of access to the major center area and that it will open up the area to development. He believes it will result in substantial construction velocity, all of which will amount to appreciation of the value of the land which will increase taxes. He stated that the Project will result in the preservation and enhancement of the tax base in Eden Prairie; that in connection with jobs the Plan would be to the City's benefit; and that the Plan would discourage cornmerce, industry or manufacturing from moving their operations to another state. He stated the plan is an economic good for the City. Eugene A. Dietz, Director of Public Works, in a Page -4- memorandum dated August 15, 1983, stated that the parcel of property located within Tax Increment District No. 6 is partially occupied by a building now under construction. The partially constructed building is not structurally substandard and does not require substantial renovation or clearance. The parcel is not in a condition having unusual terrain or soil deficiencies requiring substantial filling, grading or other physical preparation for use and at least 80 percent of the total acreage of the parcel does not have a fair market value which when added to the estimated cost of preparing that .land for development, excluding costs relating to roads and local improvements, exceeds its anticipated fair market value after completion of the preparation. He also states that the parcel does not consist of air rights over a public street or highway or of rail yards, rail storage facilities or railroad right-of--ways. Carl Jullie, City Manager, in a memorandum dated August 15, 198.3, stated that while improvements in the Project have been contemplated at least since the early 1970s and efforts have been made to conduct the improvements through the local improvement special assessment to benefited lands procedure or through other private investment alternatives, accomplishing this objective has met with only limited success with respect to a small part of the project. The building of roads, bridges, underpasses and other major highway improvements has not historically been within the capability of private investment and there is no indication in the light of present economic conditions that private investment could in the reasonably foreseeable future cause the improvements in the Project to be made. At its meeting on August 24, 1981, the Planning Commission found that the Tax Increment Financing Plan conforms to the general plan for the development of the municipality as a whole; at its meeting on March 29, 1982, the Planning Commission in reviewing the Amended Development District No. 1. Program and Page -5- Tax Increment Financing Plans dated March 30, 1982, found that the Plan conforms to the general plan for the development of the municipality as a whole; and at its meeting on May 9, 1983 the Planning Commission in reviewing the proposed "Modified Development Program" found that it conforms to the general plan for the development of the municipality as a whole. A memorandum by City Assessor, Bob Martz, dated July 7, 1981, reflects the valuation for general ad valorem taxes of real property within the major center area has been reduced in the following amounts for the following owners during the following periods: Sears Roebuck & Co. 197'7-1980 $4,471,000.00 Hornart Shopping Center 1978-1980 $7,979,400.00 +, Powers Department Store 1977 and 1978 $4,720,000.00 By memorandum dated August 15, 1993 Martz updated the July 7, 1981 memorandum. The Sears Roebuck & Co. valuation was not reduced any further .for -the period 1978-1983. The Homart Shopping Center valuation experienced an increase of. $301,300.00 applicable to years 1981 and 1982 but was reduced $627,050.00 for 1983, resulting in a net reduction for the period 1981-1983 of $24,450.00. Powers Department Stores experienced a net reduction of $1,300,000.00 for the period 1979-1983. A report from Jack Hacking dated September 8, 1981, to Carl Jullie setting forth accident information in the major center area indicates that during the period 1975-1981 a total of 680 accidents occurred in the area resulting in 274 injuries and 7 fatalities. Based upon the evidence and the record the Council sets forth its further specific reasons and facts supporting its findings as follows: Page -6- The Tax Increment Financing District No. 6 contained in the Tax Increment Financing Plan for Tax Increment District No. 6 consists of one parcel legally described as Lot 1, Block 1, Menard 3rd Addition. ("tax Increment District No. 6 hereinafter referred to as the "District"; Tax Increment Financing Plan for Tax Increment District No. 6 hereinafter referred to as the "Plan"; and the property located within the District and identified above hereinafter referred to as the "Parcel".) II. The Project described in the Plan is that set forth in Section I, Development Program, in the [Modified Development Program, dated May 17, 1983 referred to in the Plans. The project consists of public improvements including roads, grading, curb and gutter, storm drainage, utilities, sidewalks, bituminous surfacing, traffic { signals, underpass and ramps, all as more fully described in the Development Program (tire "Project"). The geographic area of the Project is described in the Modified Development Program at pages I-A-1 through I-A-4, the boundaries of which are further delineated on a map at page I-B-I. The Parcel is wholly contained within the geographic area of the Project. III. Construction of the Project will reduce traffic congestion and provide better access to lands within the Project geographic area which will result in the development of such lands, the construction of buildings thereon, the increase of business and commerce and the increase in jobs as a result thereof, all of which will contribute to economic growth and development in the City. IV. The District is, therefore, a tax increment financing district as defined by Minnesota Statutes, Section 273.73, Subd. 9. Page -7-- { V. The Project, being one for the improvement of roads within its geographic area, is not intended for occupancy by persons or families of low and moderate income as defined in those acts and laws referred to in Minnesota Statutes Section 273.73, Subd. 11, and is not a housing district as defined therein. VI. In the District there is one partially constructed building. The partially constructed building is not structurally substandard and does not require renovation or clearance. VII. The Parcel is not in a condition having unusual terrain or soil deficiencies requiring substantial filling, grading or other physical preparation for use and least 80 percent of the Parcel does not have a fair market value which, when added to the estimated cost of preparing the Parcel for development excluding costs related to roads and local improvements, if any, exceed their anticipated fair market value after completion of such preparation. Vill. The Parcel does not consist of air rights over a public street, highway or right-of-way. IX. The Parcel does not consist of used rail yards, rail storage facilities or excessive or vacated railroad right-of-ways. X. The District is not a redevelopment district as defined in Minnesota Statutes Section 273.73, Subd. 10. Page -8- XI. The Project, which will be financed in part from the tax increments from the District, will (a) discourage commerce, industry or manufacturing from moving their operations to another state; (b) result in increased employment in the City; and (c) result in preservation and enhancement of the tax base of the City and is therefore in the public interest. XII. The District is an economic development district within the meaning of Minnesota Statutes Section 273.73, Subd. 12. XIII. The irnprovernents in the Project have been contemplated since the early 1970s. While efforts were made to construct 'the improvements through the local improvements special assessment to benefited lands procedure or through other 9 private investment alternatives, doing so has met with only limited success as to a small part of the Project. Furthermore, the building of roads, bridges, underpasses and other major highway improvements has not historically been within the capability of private investment. There is no indication in the light of present economic conditions that private investment could in the reasonably foreseeable future cause the improvements in the Project to be made. For these reasons the use of tax increment financing for construction of the Project is deemed necessary. XIV. The Project and the improvements within its geographic area have been reviewed by the City's Planning Commission prior to the adoption of the Modified Development Program and were found to conform to the City's general plan for its development as a whole. Page -9- XV. The construction of the Project will reduce congestion and enhance access to private lands within the Project's geographic area and will thereby encourage and afford development of the lands within the Project's geographic area by private enterprise. 'i i ,z f M E M O R A N D U M TO: City Manager , Carl J. Jull7) "1 FROM: City Assessor, Bob Martz SUBJECT : Valuation for Homart Shopping Center, Sears Roebuck & Company , Powers Department Store DATE : August 15 , 1983 The following updates my memorandum of July 7 , 1981 regarding valuation reductions for the above-referenced properties . Sears Roebuck & Company experienced no further reduction in valuation for years 1981 , 1982 and 1983 . The Homar_t Shopping Center experienced an increase in valuation of $301 , 300 applica- ble to tax years 1981 and 1982 but experienced a reduction of $627 , 050 for 1983 . This resulted in a net reduction for the period 1981 through 1983 of $24 , 450 . Powers Department Store experienced an overall reduction for the period 1979 through 1983 of $1 , 300 , 000 . MEMORANDUM TO: Mayor and City Council THROUGH: Carl Jullie, City Manager FROM: Eugene A. Dietz, Director of Public Works DATE: August 15, 1.983 RE: Tax Increment District No. 6 I, or persons on my staff, have inspected the parcels of property located within Tax Increment District No. 6, legally described as Lot 1, Block 1, Menard 3rd Addition (hereinafter "the parcel"). The inspections disclose the following: 1. In the District there is one partially constructed building. The partially constructed building is not structurally substandard and does not require substantial renovation or clearance. 2. The parcel is not in a condition having unusual terrain or soil deficiencies requiring substantial filling, grading or other physical preparation for use. At least 80 percent of the total acreage of the parcel does not have a fair market value which, when added to the estimated cost of preparing that land for development excluding costs related to roads and local improvements, if any, exceeds its anticipated fair market value after completion of such preparation. 3. The parcel does not consist of air rights over a public street, highway or right-of-way. 4. The parcel does not consist of used rail yards, rail storage facilities or excessive or vacated railroad right-of-ways. lr Page -2- 5. The parcels of property located within Tax Increment District No. 6 i legally described as Lot 1, Block 1, Menard 3rd Addition is by definition a continguous geographic area. The Parcel is situated within the project described in Tax Increment Financing Plans for Tax Increments Districts Within Development District No. I which is by reference the Development Prograrn described in Modified Development Program for Development District No. 1. Attached hereto as Exhibit 1 is a copy of the boundary map of Modified Development Program for Development District No. 1 on which is shown the location of the parcel. / Eugene ietz Director of Public Works MEMORANDUM TO: Mayor and City Council FROM: Carl Jullie, City Manager DATE: August 15, 1983 P,E: Tax Increment District No. 6 Improvements in the Project area have been contemplated at least since the early 1970s and efforts have been made to construct the improvements through local improvement special assessments to benefited lands procedure or through other private investment alternatives. Accomplishing this objective has met with only limited success with respect to a small part of the project. The building of roads, bridges, underpasses and other major highway improvements has not historically been within the capability of private investment and there is no indication in the light of present economic conditions that private investment could, in the reasonably foreseeable future, cause the improvements in the Project to be made. i YI J. Ju lie y Manager I `I '/ I • ' t.. t / `� '•.�)= � \ y i au..v..c _a a- n I�ava�o, y i i ®r rr �-i. � `- � �♦• -_` __- � ___ __ �r�'/Tj --- - - --- '.. _ .._._._t.. _ �j-,: it `' fi'- l L 1 J �\ 1 I _ r' + •�� r.�r' '"'" '. I lam./.• . . im ui !3 1� ' - .---- __-_.--' —•1` \_.ram—� .y_� � e. i iv.�cisN�+�}rs.-.t+ruw.r�..±�...-._..-_ �-.a._ r ._'a� ..___._-.W....� ,�'f. _S.