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HomeMy WebLinkAboutResolution - 2015-41 - Modified TIF District 16 and Amendment No. 4 to Project Management Agreement - 03/31/2015 CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA RESOLUTION NO. 2015-41 RESOLUTION APPROVING MODIFIED TAX INCREMENT FINANCING PLAN, DISTRICT NO. 16, AMENDMENT NO. 4 TO PROJECT MANAGEMENT AGREEMENT, AND SECOND AMENDMENT TO COMMUNITY DEVELOPMENT BLOCK GRANT LOAN DOCUMENTS 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. The Board of Commissioners (the "Board") of the Eden Prairie Housing and Redevelopment Authority (the "HRA") has heretofore established Redevelopment Project No. 5 (the "Project Area") and adopted the Redevelopment Plan therefor. It has been proposed by the HRA that the City adopt a Modification to the Tax Increment Financing Plan (the "TIF Plan Modification") for the Tax Increment Financing District No. 16 (the "TIF District"), which is located the Project Area, all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, and Sections 469.174 to 469.1794, inclusive, as amended (the "Act"), all as reflected in the TIF Plan Modification and presented for the Council's consideration. 1.02. Tax increment from the TIF District has been used to pay for certain development costs and to provide affordable housing units at Lincoln Parc Apartments. The TIF Plan Modification will allow the City and HRA to extend the term of the affordability of 140 units from 15 to 25 years. 1.03. The City and the HRA have investigated the facts relating to the TIF Plan Modification and have caused the TIF Plan Modification to be prepared. 1.04. The City and HRA have performed all actions required by law to be performed prior to the adoption and approval of the TIF Plan Modification, including, but not limited to, notification of Hennepin County and Independent School District No. 272, having taxing jurisdiction over the property to be included in the TIF District, and the holding of a public hearing upon published notice as required by law. 1.05. The City and HRA are not modifying the boundaries of the Project Area or the TIF District. Section 2. Findings for the TIF Plan Modification 2.01 The Council hereby reaffirms the original findings for the TIF District, namely that when the TIF District was established, Tax Increment Financing District No. 16 was established as a housing district. However, the City originally designated the TIF District as a "qualified housing district" under Section 469.174, subd. 29 of the Act. Legislation in 2008 repealed provisions related to qualified housing districts, effective retroactively to cover any district given that designation. Accordingly, the TIF District is no longer a "qualified housing district," but remains subject to all laws that govern housing districts as defined in the Act. In accordance with the applicable state requirements for housing districts, at the time of TIF District creation, a minimum of 37 units in Lincoln Pare are required to be occupied by individuals at or below 50% of the area median income. 2.02 It is found and determined, and it is the reasoned opinion of the City, that: (i) The proposed redevelopment described in the TIF Plan Modification would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. The major purpose of the TIF Plan Modification is to extend the term of affordable housing units within Lincoln Parc. Historically, affordable housing has not occurred in the City without significant public assistance because of high land and construction costs and lower revenues produced by affordable rents or sale prices. The use of tax increment resources from the TIF District will offer opportunities for the private developer to continue to incorporate affordable housing in Lincoln Parc. By reimbursing the developer for the eligible costs of Lincoln Parc, the City will be able to extend the term of affordability on 140 units by 10 years. The Developer has represented to the City the extension of the affordable units would not occur without the TIF Plan Modification. (ii) The TIF Plan Modification conforms to the general plan for the redevelopment of the City as a whole. The City's Comprehensive Guide Plan ("Guide Plan") guides the property as Town Center. Town Center calls for a pedestrian-oriented mixed-use downtown area that includes offices, shops, and restaurants, with nearby housing having higher density than is typically found in other parts of the City. Lincoln Parc is a high density residential development that complies with the City's Guide Plan and general goals for providing safe and sustainable housing for its citizens. The Community Development Director advises and the Council finds that the development is compatible with the City's zoning ordinances and other related regulations and encourages efficient use of existing infrastructure as set forth in the City's Guide Plan. (iii) The Tax Increment Plan Modification will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the redevelopment of the Project by private enterprise. The City has promoted affordable rental and owner-occupied housing for several years. The tax increment from the TIF District will be used to encourage the private market to offer affordable housing choices and ensure that affordability is maintained over an extended period of time, and promote development that links housing with transportation corridors and services. Through the implementation of the TIF Plan, the City will increase the availability of low and moderate income housing opportunities in the City. 2.03 As required by Section 469.176, Subdivision 4d, it is expected that all of the tax increment to be derived from the District will be used to finance eligible costs of the low and moderate income housing project, including the cost of public improvements directly related thereto and allowable administration expenses of the Redevelopment Project. 2 Section 3. Public Purpose 3.01. The adoption of the TIF Plan Modification conforms in all respects to the requirements of the Act and will help fulfill a need to provide housing opportunities affordable to persons of low and moderate income and improve the tax base. These public purposes and benefits exceed any benefits expected to be received by private developers, who will receive assistance only in the amount needed to make the provision of affordable housing financially feasible. Section 4. Approval and Adoption of the TIF Plan Modification 4.01. The TIF Plan Modification is hereby approved, and shall be placed on file in the office of the City Clerk. 4.02. City staff is authorized to file the TIF Plan Modification with the Commissioner of Revenue, the Office of the State Auditor and the Hennepin County Auditor. 4.03. City staff, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the TIF Plan Modification and for this purpose to negotiate, draft, prepare and present to this Council for its consideration all further modifications, resolutions, documents and contracts necessary for this purpose. Section 5. Approval of Amendment No. 4 to Project Management Agreement 5.01. The City and Lincoln Parc Apartments, LLC (the "Developer") are parties to that certain Project Management Agreement dated June 20, 2000, as amended (the "Project Management Agreement") which requires the Developer to provide affordable housing units for 15 years from the date of receipt of the first tax increment. The City and the Developer have caused to be prepared Amendment No. 4 to the Project Management Agreement, which reflects the TIF Plan Modification and extends the terms of the affordability of 140 units from 15 to 25 years, or until December 31, 2027. 5.02. Amendment No. 4 to the Project Management Agreement is hereby approved. The Mayor and City Manager are hereby authorized to execute Amendment No. 4 to the Project Management Agreement and such other documents and certificates as may be necessary to give effect to the transaction herein contemplated. Section 6. Approval of Second Amendment to Community Development Block Grant Loan Documents 6.01. Prior to the date hereof, the City made a loan to Developer of Community Development Block Grant ("CDBG") funds in the original principal amount of two hundred thousand dollars ($200,000.00) at an interest rate of five percent (5.0%) per annum (the "CDBG Loan"). The CDBG Loan is evidenced by a Promissory Note and secured by a Mortgage executed by Developer in favor of the City on November 15, 2000, as amended. 3 6.02. The City and Developer have agreed to reduce the interest rate on the CDBG Loan to two percent (2.0%) per annum. The City and the Developer have caused to be prepared the Second Amendment to Community Development Block Grant Loan Documents, which reflects the reduced interest rate. 6.03. The Second Amendment to Community Development Block Grant Loan Documents is hereby approved. The Mayor and City Manager are hereby authorized to execute the Second Amendment to Community Development Block Grant Loan Documents and such other documents and certificates as may be necessary to give effect to the transaction herein contemplated. Section 7. Additional Approvals 7.01 The Approval hereby given to the TIF Plan Modification, Amendment No. 4 to Project Management Agreement, and Second Amendment to Community Development Block Grant Loan Documents includes approval and the execution by the appropriate officers of the City of such additional documents necessary to fulfill the objectives contemplated hereby. ADOPTED by the Eden Prairie City Council this 3 1"day of March, 2015. an ra- e �ao ATTEST: th een orta, City Clerk 4