HomeMy WebLinkAboutResolution No. 2004-55CITY OF COLUMBIA HEIGHTS
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO. 2004-55
RESOLUTION ADOPTING A MODIFICATION TO THE DOWNTOWN
CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE
CBD REDEVELOPMENT PROJECT AND ESTABLISHING THE HUSET PARK
AREA TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING
A TAX INCREMENT FINANCING PLAN THEREFOR.
BE IT RESOLVED by the City Council (the "Council") of the City of Columbia Heights,
Mim~esota (the "City"), as follows:
Section 1. Recitals.
1.01. The Board of Commissioners (the "Board") of the Columbia Heights Economic
Development Authority (the "EDA") has heretofore established the CBD Redevelopment Project (the
"Project Area") and adopted the Downtown CBD Revitalization Plan therefor. It has been proposed by
the EDA and the City that the City adopt a Modification to the Downtown CBD Revitalization Plan for
the Project (the "Project Plan Modification") and establish the Huset Park Area Tax Increment Financing
District (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the
Project Plan Modification and the TIF Plm~ are referred to collectively herein as the "Plans"), all pursuant
to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047,
Sections 469.090 to 469.1082, and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act")
all as reflected in the Plans, and presented for the Council's consideration.
1.02. The City has investigated the facts relating to the Plans and has caused the Plans 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 Plans, including, but not
limited to, notification of Anoka County and Independent School District No. 13 having taxing
jurisdiction over the property to be included in the District, a review of and written comment on the Plans
by the City Planning Commission, and the holding of a public hearing upon published notice as required
by law.
1.04. Certain written reports (the "Reports") relating to the Plans and to the activities
contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council
and/or made a part of the City files and proceedings on the Plans. The Reports include data, information
and/or 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.
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1.05 The City is not modifying the boundaries of the Project, but makes specific findings as
further described in this resolution regarding the conditions of the area within the Project that are the
boundaries of the proposed TIF District.
Section 2. Findings for the Adoption of the Project Plan Modification.
2.01. The Council finds that the portion of the Project Area encompassed by the boundaries of
the TIF District constitute a "blighted area" within the meaning of Minnesota Statues, Section 469.002,
Subd. 11.
2.02. The Council further finds that acquisition, clearance, and related activities to redevelop
the TIF District portion of the Project Area, all in accordance with the Project Plan and the TIF Plan,
constitute a "redevelopment project" within the meaning of Minnesota Statues, Section 469.002, Subd.
14.
2.03. The Council further finds, declares and determines that the City made the above findings
stated in this Section based on the supporting facts described in Exhibit B.
Section 3. Findings for the Establishment of the Huset Park Area Tax Increment Financing District.
3.01. The Council hereby finds that the District is in the public interest and is a "redevelopment
district" under Minnesota Statutes, Section 469.174, Subd 10(a)(1).
3.02. The Council further finds that the proposed redevelopment would not occur solely
through private investment within the reasonably foreseeable future and that 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 projected tax increments for the maximum duration of the District
permitted by the TIF Plan, that the Plans conform to the general plan for the development or
redevelopment of the City as a whole; and that the Plans 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 finds, declares and determines that the City 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 Exhibit A.
3.04. The City elects to calculate fiscal disparities for the District in accordance with
Minnesota Statutes, Section 469.177, Subd. 3, clause a, which means the fiscal disparities contribution
would be taken from outside the District.
Section 4. Public Purpose
4.01. The Council finds that adoption of the Plans conforms in all respects to the requirements
of the Act and will help fulfill a need to redevelop a portion of the Project Area that is characterized by
blight, occupied by substandard buildings, and contaminated with pollutants; and that the financial
assistance described in the TIF Plan will revitalize this area, significantly expand the amount and variety
of housing stock in the City, and expand the tax base; and that, because these benefits would not accrue
without the assistance provided, any benefits received by private redevelopers are incidental to the
broader benefits achieved by the overall redevelopment of the TIF District.
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Section 5. Approval and Adoption of the Plans.
5.01. The Plans, 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 Executive Director of the EDA.
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 Plans 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 Anoka County (the "Auditor") is requested to certify the original net tax
capacity of the District, as described in the TIF 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
£orthwith transmit this request to the 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 Executive Director of the EDA is further authorized and directed to file a copy of the
Plans with the Commissioner of the Minnesota Department of Revenue pursuant to Minnesota Statutes
469.175, Subd. 4a.
OFFERED BY:
SECOND BY:
ROLL CALL:
Ericson
Kelzenberg
Ayes: Wyckoff, Williams, Ericson, Kelzenberg, Nay: Nawrocki
Dated: October 25, 2004
(Patricia Muscovitz, CMC ~
Deputy City Clerk/Council Secretary
Julienn' Wyck°ff U
(Seal)
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EXHIBIT A
RESOLUTION NO. 2004-55
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for
the Huset Park Area Tax Increment Financing District, as required pursuant to Minnesota Statutes,
Section 469.175, Subdivision 3 are as follows:
1. Finding that the Huset Park Area Tax Increment Financing District is a redevelopment district as
defined in M.S., Section 469.174, Subd. lO(a)(1).
The District consists of 12 parcels, with plans to redevelop the area for a mixed-use development
consisting of housing and a neighborhood retail office development. At least 70 percent of the area
in the parcels in 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 in the District, not including
outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance
(See Appendix F of the TIF Plan)
Finding that the proposed development, in the opinion of the City Council, wouM not reasonably be
expected to occur solely through private investment within the reasonably foreseeable future and
that the increased market value of the site that couM reasonably be expected to occur without the use
of tax increment financing wouM be less than the increase in the 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 Huset Park Area Tax Increment Financing District permitted by the
TIF Plan:
The proposed development consists of a mixed-use development consisting of up to 559 units of
owner-occupied housing and a neighborhood retail office development in the City of Columbia
Heights. This area is occupied by 15 parcels, which requires acquisition, environmental
remediation, and demolition and relocation to permit the proposed development. Current estimates
for environmental clean-up of the area are over $4,650,000. It is not likely that any new
development on this site is feasible without significant environmental remediation. A grant of
$1,300,000 of State and Metropolitan funds has been secured for the project, but it is not known if
future grants will be awarded. The grant was awarded only because of a comprehensive
redevelopment plan, which is feasible only with further assistance of tax increment. In addition to
the costs of remediation, the land acquisition costs and site preparation is expected to be over
$13,000,000. Without any public assistance, the cost of raw land (prior to internal streets,
utilities, SAC/WAC, landscaping, etc) per unit of housing is estimated to be over $31,000. The
proposed sales prices of the units are expected to be $200,000 to $275,000, which is too low to
support significant raw land prices.
The increased market value of the site that couM 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:
It is not likely that any new development on this site is feasible without significant environmental
remediation. Only small portions of the site are not affected by soil contamination and the new
development on the site would be sporadic and less than $10,000,000. For taxes payable in 2005,
the County assessors has decreased the estimated market value on the parcels in the District by
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approximately $2,300,000 due to the environmental conditions. The site had previously been in a
T!F district since !989 and has seen only one piece of property develop, even with public
assistance. Therefore, the City concludes as follows:
ao
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 less than $10,000,000.
If all development which is proposed to be assisted with tax increment were to occur in
the District, the total increase in market value would be up to $121,351,950. (See
Appendix G in the TIF Plan.)
The present value of tax increments from the District for the maximum duration of the
district permitted by the TIF Plan is estimated to be $13,937,075. (See Appendix G in
the TIF Plan.)
Even if some development other than the proposed development were to occur, the Council finds
that no alternative would occur that would produce a market value increase greater than
$107,414,875 (the amount in clause b less the amount in clause c) without tax increment
assistance.
Finding that the Tax Increment Financing Plan for the Huset Park Area Tax Increment Financing
District conforms to the general plan for the development or redevelopment 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, as amended by the City Council on August 9, 2004, of the City.
Finding that the Tax Increment Financing Plan for Huset Park Area Tax Increment Financing
District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for
the develOPment or redevelopment of the CBD Redevelopment Project by private enterprise.
The project to be assisted by the District will result in the preservation and enhancement of the tax
base, the redevelopment of substandard areas, and provide employment opportunities in the City.
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EXHIBIT B
RESOLUTION NO. 2004-55
The findings described in Section 2 of the Resolution regarding blighted conditions are supported by the
following analysis and studies:
1. City of Columbia Heights Industrial Area Redevelopment Plan, November 2003. See especially
Chapter 8, describing blighted conditions.
2. Letter from Rusty Fiefield, Hoisington Koegler Group, Inc. to City of Columbia Heights dated
September 21, 2004, summarizing blight findings.
Redevelopment Eligibility Assessments prepared by Short Elliot Hendrickson, summarized in
Appendix F of the TIF Plan. These reports conclude that 10 of 12 buildings in the entire TIF
District are structurally substandard to a degree requiring substantial renovation or clearance, for the
purposes of qualification of the area as a redevelopment tax increment financing district. The
analysis in the SEH reports also supports the conclusion that most of the buildings in this portion of
the Project Area are dilapidated and obsolete, which are elements of blight.
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