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EDA AGN 12-17-01 Special
CITY OF COLUMBIA HEIGHTS 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website at: www. ci. columbia-heights.mn.us EDA COMMISSIONMERS Robert W. Ruettimann Patricia Jindra Marlaine Szurek Julienne Wyckoff Gary L. Peterson Bruce Nawrocki Bobby Williams ECONOMIC DEVELOPMENT AUTHORITY December 17, 2001 The following is the Agenda for the Special meeting of the Columbia Heights Economic Development Authority (EDA) to be held at 6:00 p.m. on Monday, December 17, 2001, before the City Council Meeting in Conference Room 1, City_ Hall, 590 40 Avenue N.E., Columbia Heights, Minnesota. The EDA does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its accommodation will be provided to allow individuals with disabilities to participate in all EDA services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call the EDA Secretary at 706-3669 to make arrangements (TDD 706-2806) for deaf or hearing impaired only. CALL TO ORDER/ROLL CALL. PLEDGE OF ALLEGIANCE. 1TEMS FOR CONSIDERATION. A. Other Resolutions. 1) Approve Resolution 2001-20, Modifying the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and the Modification of Housing Redevelopment TIF District #1 (P3)- Shelly Eldridge, Ehler & Associates. MOTION: Move to adopt Resolution 2001-20, a Resolution Modifying the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and the Modification of Housing Redevelopment Tax Increment Financing District No. 1 (P3). Other Business. 1) Approve CDBG Program Application for 2002- Randy Schumacher. MOTION: Move to authorize staff to pursue preparation of the 2002 CDBG Program Application for the Industrial Park Redevelopment Planning Study; and furthermore, to submit said application to the City Council for consideration at its regularly scheduled meeting on December 17, 2001. ADJOURNMENT. Walter R. Fehst, Executive Director H:\edaAgenda\ 12-17-2001 mission of the Columbia 21eights Bconomic ~)evelopment Authority is to provide financialand technicalassistance and resources to residentia6 commercia6 and industrial interests to promote health, safety, welfare, economic development and redevelopment. THE CiTY Of COLUMBIA HEIGHTS DOeS NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting off December 17, 2001 AGENDA SECTION: Items for Consideration, ORIGINATING EXECUTIVE Other Business DEPARTMENT: EDA DIRECTOR NO: 3-A-1 APPROVAL ITEM: Adopt Resolution 2001-20, Modification to BY: Mark Nagel BY: the Downtown Central Business District (CBD) DATE: December 13,2001 Revitalization Plan for the CBD Redevelopment Project and the Modification of Housing Redevelopment TIF District #1 (P3) BACKGROUND: On May 27, 1997, the Columbia Heights City Council approved a scattered site redevelopment TIF District to facilitate redevelopment of substandard single-family homes throughout the City in order to improve the City's housing stock, increase property values, and prevent the spread of blight. Tax increments from the 56 properties listed in the District were to be used to finance land acquisition, demolition, relocation, and related development costs. During a meeting August 7~ with Shelly Eldridge, Ehlers and Associates, reviewing progress in TIF District 1 and 2, it was determined that the City needs to show activity and any modifications need to be completed on each of the 56 parcels in the District by September 8, 2002, or they will be dropped from the District. This would reduce the potential TIF revenue generated for the above purposes. Finally, all projected funds generated by the District need to be obligated by that date. Based on discussions with the Consultant and further analysis of Housing Redevelopment TIF District No. 1, the following steps have been taken: 1) add 10 parcels to the District to increase the revenue stream; 2) Ehlers and Associates complete a projection of funds that could be expended, then recovered over the remaining 21 years of the District based on the new TIF laws; 3) expend the projected funds for the purposes listed above within the District prior to the September 8, 2002 deadline; 4) any City funds that have been spent in the past 4 years on the 56 parcels, such as 4401 Quincy Street NE, will be reimbursed by the District and spent on other housing activities within the District. All of the necessary documentation was prepared after the EDA gave the "go ahead" at their September meeting and City Council set the Public Hearing at their meeting of October 8th. On December 4t~, Planning Commission passed a Resolution finding the Modified Plans were in compliance with the Comprehensive Plan. Fiscal Consultant, Shelly Eldridge, Ehlers and Associates will be at the meeting to assist staff in answering any questions from the City Council and/or public. RECOMMENDATION: Recommendation to adopt Resolution 2001-20, a resolution for the proposed modification of Housing Redevelopment of TIF District No. 1. RECOMMENDED MOTION: Move to waive the reading of Resolution 2001-20, there being ample copies available to the public. RECOMMENDED MOTION: Move to Adopt Resolution 2001-20, a Resolution Modifying the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and the proposed Modification of Housing Redevelopment Tax Increment Financing District No. 1. Attachments EDA ACTION: h:\consent Form2001L~pprove Modif. of TIF #1(P3) COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY CITY OF COLUMBIA HEIGHTS ANOKA COUNTY STATE OF MINNESOTA RESOLUTION NO. 2001-20 RESOLUTION ADOPTING A MODIFICATION TO TI-IE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT AND ADOPTING A MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 THEREIN. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Economic Development Authority (the "EDA") and the City of Columbia Heights (the "City") that the EDA adopt a Modification to the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and adopt a Modification to the Tax Increment Financing Plan (the "Modifications") for Housing Redevelopment Tax Increment Financing District No. 1 therein (the "District"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 through 469.1081, and Sections 469.174 to 469.179, inclusive, as amended (the "Act"), all as reflected in the Modifications and presented for the Board's consideration; and WHEREAS, the EDA has investigated the facts relating to the Modifications and has caused the Modifications to be prepared; and WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption of the Modifications. The EDA has also requested the City Planning Commission to provide for review of and written comment on the Modifications and that the Council schedule a public hearing on the Modifications upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: 1. The EDA hereby reaffirms that the District as modified herein is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, Subd. 10 (afro and finds that the Modifications conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the Sate of Minnesota which is already built up and that the adoption of the propose Modifications will help provide redevelopment to the housing stock and thereby serves a public proposed. 2. The EDA further finds that the Modifications 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. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Modifications, as presented to the EDA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Deputy Clerk. 4. Upon approval of the Modifications by the City Council, the staff, the EDA advisors and legal counsel are authorized and directed to proceed with the implementation of the Modifications 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 Modifications does not constitute approval of any project or a Development Agreement with any developer. 5. Upon approval of the Modifications by the City Council, the Deputy Clerk is authorized and directed to forward a copy of the Modifications to the Minnesota Department of Revenue. 6. The Deputy Clerk is authorized and directed to forward a copy of the Modifications to the Anoka County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Modifications, all in accordance with Minnesota Statutes 469.177. Approved by the Board of Commissioners of the Economic Development Authority this 17th day of December, 2001. ATTEST: Robert Ruettimann, President Cheryl Bakken, Secretary SCHEDULE OF EVENTS COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF COLUMBIA HEIGHTS FOR THE MODIFICATION OF THE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT AND THE MODIFICATION OF THE TAX INCREMENT FINANCING PLAN FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 (a redevelopment district) As of October 31~ 2001 October $, 2001 City Council calls for public hearing on the modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and the modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. 1. October 30, 2001 Project information, property, identification numbers, and maps sent to Ehlers and Associates for drafting documentation. November 2, 2001 November 6, 2001 Project information submitted to the County Board for review of county, road impacts (at least 45 days prior to public hearing). Letter received by County Commissioner giving notice of potential redevelopment tax increment financing district (at least 30 days prior to publication of public hearing notice). November 16, 2001 Fiscal/economic implications received by School District and County Board (at least 30 days prior to public hearing). November 20, 2001 EDA approves the Modified Plans. November 20, 2001 Ehlers confirms with the City whether building permits have been issued on the property, to be included in the TIF District. December 4, 2001 Planning Commission finds Modified Plans to be in compliance with Ci .ty's comprehensive plan. December 6, 2001 Date of publication of hearing notice and map (at least 10 days but not more than 30 days prior to hearing). [Focus News publication deadline Friday, November so, 2oou December 17, 2001 City Council holds public hearing on the modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and the modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. 1, and passes resolution approving the Modified Plans. [Council packet information sent by December 3, 2001.] Janua~ 31, 2002 Ehlers certifies Modified Plans with county and state. *The TIF Plan was forwarded to the County 45 days prior to the public hearing. The County Board, by law, has 45 days to review the plan to determine if any county roads will be impacted by the development. Please be aware that the County Board could claim that tax increment should be used for county roads, even after the public hearing. OEHLERS & '~SSOClAT[$ EHLERS & ASSOCIATES INC November 7, 2001 BY FAX AaND BY REGULAR MAIL Commissioner Jim Kordiak, Board Vice-Chair Anoka County Board of Commissioners 2100 3~ Avenue Anoka, MN 55303-2265 City of Columbia Heights/Columbia Heights EDA and the Proposed Modification of Housing Redevelopment Tax Increment Financing District No. 1 Dear Corm-nissioner Kordiak: The City of Columbia Heights and the Columbia Heights Economic Development Authority CEDA") are considering a proposal to modify Housing Redevelopment Tax Increment Financing Dis~ct No. 1 (the "District"). The District is a scattered-site redevelopment tax increment financing district. Tax increments collected from the District are proposed to be used to facilitate demolition of blighted property and the construction of single fatally homes. The location of the District is w/thin the Downtown Central Business District and is indicated on the attached maps. The City Council has scheduled a public hearing on this matter, pursuant to the Minnesota Tax Increment Financing Act, on December 17, 2001, at approximately 7:00 P.M. The Act requires the City notify the County Board member representing the affected area at least 30 days prior to publishing the notice of public hearing on the establishment or modification of a housing or a redevelopment tax increment district. To meet this requirement, the notice was due in your office ora November 6, 2001. The notification was inadvertently not transmitted to your office. Subsequently, we are transmitting the notice to your office today, which is 29 days prior to the publication date of public hearing notice. M~. 469.175, Subdivision 2a, provides for the waiving of the 30-day requirement if the county commissioner of the affected district submits written comments on the proposal and any modification of the proposal to the authority after receipt of the information. The City of Columbia Heights is requesting that Anoka County Commissioner Kordiak waive the 30-day notification requirement for holding a public hearing on the modification of the tax increment financing district. LEADERS IN PUBLIC FINAr~C E Eclual Opoorlunily Emoloyer Charier Member ot t,~e rlational A$$ocialion of Inlelenden! PuDhc Finance A(1~'150,$ 3060 Centr~ Po~nte Drive. Roseville. MN 55113.1105 651.697.8500 fax 651.697.8555 a'ww.ehlers.~nc.com Commissioner Jim Kordiak, Anoka County Board of Commissioners Page 2 November 7, 2001 We have attached a statement which would suffice for this purpose or, if you would prefer, a letter indicating your willingness to waive the 30-day notification would also be sufficient. We apologize for any inconvenience this may have caused, l~lease address your written comment to the Columbia Heights Economic Development Authority and the City of Columbia Heights. We have enclosed a self-addressed, postage-paid envelope for your convenience. A complete draft of the tax increment financing plan w/Il be sent to the County no later than November 16, 2001. We would like to solicit your comments and offer to meet with you at your convenience, if you so desire. In addition, we invite you to attend the public hearing on the modification of Housing Redevelopment Tax Increment Financing District No. 1. Again, we re~et any inconvenience the request for the 30-day notification wavier may have caused. Please direct any comments or questions that you may have to Mark Nagel (City of Columbia Heights) at 76~.-706'- 3600 or to me at 651-697-8504. Sincerely, EHLERS & ASSOCIATES, INC. Shelly Eldr/dge Financial Advisor Acting for m~d on behalf of the City of Columbia Heights, Minnesota Enclosure cc: Mark Nagel, City of Columbia Heights Dan Greensweig, Kennedy & Graven, Chartered STATEMENT I, Jim Kordiak, County Commissioner of Anoka County, received the letter notifying me of the proposed Modification to the Tax Increment Financing Plan for Homing Redevelopment Tax Increment Financing District No. 1, a redevelopment district that will facilitate demolition of blighted property and the construction ofsin~e family homes. The Plan is to be considered by the City Council of the City of Columbia Heights on December 17, 2001. As County. Commissioner of District 4, please consider this statement my personal waiver of the required 30-day notification prior to the publication of the public heating notice. Dated: November ,2001 Jim Kordiak, Anoka County Commissioner Arrest: i I ! IllllJllllllllll IlltlllllllllllJ-- Illl Ill Ill"'llll I I'1.1 I I [11 1~ J I I [1 __ __ Illllllll II I i[ilt1Iill t itjJ [ II Il I~1 Iflllllll i Draft as of December 12, 2001 MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DEVELOPMENT (CBD) REVITALIZATION PLAN for the CBD REDEVELOPMENT PROJECT and the MODIFICATION TO THE TAX INCREMENT FINANCING PLAN for HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 (a redevelopment district) COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY CITY OF COLUMBIA HEIGHTS ANOKA COUNTY STATE OF MINNESOTA Established: May 27, 1997 Public Hearing Expansion Modification: December 17, 2001 Expansion Modification Adopted: Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www. ehiers-inc.com TABLE OF CONTENTS (for reference purposes only) MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT ................. 1-I Subsection C Description of the Project ....................................... 1-1 MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 .......... 2-1 Subsection 2-1. Subsection 2-2. Subsection 2-3. Subsection 2-4. Subsection 2-5. Subsection 2-6. Subsection 2-7. Subsection 2-8. Subsection 2-9. Subsection 2-10. Subsection 2-11. Subsection 2-12. Subsection 2-13. Subsection 2-14. Subsection 2-15. Subsection 2-16. Subsection 2-17. Subsection 2-18. Subsection 2-19. Subsection 2-20. Subsection 2-21. Subsection 2-22. Subsection 2-23. Subsection 2-24. Subsection 2-25. Subsection 2-26. Subsection 2-27. Subsection 2-28. Subsection 2-29. Subsection 2-30. Forward ....................................................... 2-I Statutory Authority ............................................... 2-1 Statement of Objectives ........................................... 2-1 Central Business District Revitalization Plan Overview .................. 2-2 Legal Description of Property in Housing Redevelopment Tax Increment Financing District No. 1 ........................................... 2-2 Classification of Housing Redevelopment Tax Increment Financing District No. 1 ........................................... 2-2 Original Tax Capacity and Tax Rate ................................. 2-3 Estimated Captured Net Tax Capacity Value/Increment .................. 2-4 Property To Be Acquired .......................................... 2-5 Uses of Funds ................................................... 2-5 Sources of Revenue/Bonded Indebtedness ............................. 2-7 Duration of Housing Redevelopment Tax Increment Financing District No. 1 ........................................... 2-8 Estimated Impact on Other Taxing Jurisdictions ........................ 2-8 Modifications to Housing Redevelopment Tax Increment Financing District No. 1 ........................................... 2-9 Administrative Expenses ......................................... 2-10 Limitation of Increment .......................................... 2-11 Use of Tax Increment ............................................ 2-12 Notification of Prior Planned Improvements ......................... 2-12 Excess Tax Increments ........................................... 2-13 Requirements for Agreements with the Developer ..................... 2-13 Assessment Agreements .......................................... 2-14 Administration of Housing Redevelopment Tax Increment Financing District No. 1 .......................................... 2-14 Financial Reporting Requirements .................................. 2-14 Municipal Approval and Public Purpose ............................. 2-16 Fiscal Disparities Election ........................................ 2-17 Other Limitations on the Use of Tax Increment ........................ 2-18 State Tax Increment Financing Aid ................................. 2-19 County Road Costs .............................................. 2-20 Supporting Documentation ........................................ 2-20 Summary ...................................................... 2-20 APPENDIX A BOUNDARY MAPS OF CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT AND HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 .. Aol APPENDIX B LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT AND HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 ....... B-1 APPENDIX C ESTIMATED CASH FLOW FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 APPENDIX D REDEVELOPMENT QUALIFICATIONS FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 ....... D-1 MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT Introduction The Central Business District ("CDB") Redevelopment Project is administered by the Columbia Heights Economic Development Authority (the "EDA"). Previously, the CBD Redevelopment Project was established and administered by the City of Columbia Heights (the "City") and the Columbia Heights Housing and Redevelopment Authority (the "HRA"). The CBD Redevelopment Project previously included property ~ the downtown area. On July 18, 1994, the Sheffield Neighborhood Redevelopment and Housing Development Project was consolidated with the CBD Redevelopment Project by the HRA. On January 8, 1996, the HRA transferred its authority to the EDA, which currently administers the CDB Redevelopment Project. (As Modi. fied December 17, 2001) On May 27, 1997, the CBD Redevelopment Project was modified to expand the project area to include the entire City. Concurrently, Housing Redevelopment Tax Increment Financing District No. 1 ("District No. 1") within the CBD Redevelopment Project was established. As District No. 1 is a scattered site redevelopment tax increment financing district, the property to be included in District No. 1 is found throughout the City, thus necessitating the expansion of the boundaries of the CBD Redevelopment Project. Subsection C Description of the Project The City of Columbia Heights and the Columbia Heights Economic Development Authority are hereby modifying the boundaries of the Central Business District Redevelopment Project to be coterminous with the corporate limits of the City. A map of the new boundaries of the Central Business District Redevelopment Project can be found in Appendix A. Columbia Heights EDA Modification to the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project !-1 MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 Subsection 2-1. Forward The City of Columbia Heights ("City"), the Columbia Heights Economic Development Authority (the "EDA"), staffand consultants have prepared the following information for the expedition and establishment of Housing Redevelopment Tax Increment Financing District No. 1 ("District No. 1 "), a redevelopment tax increment financing district, located in Central Business District Redevelopment Project. Subsection 2-2. Statutor3, Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the City and EDA have certain statutory powers pursuant to Minnesota Statutes ("M. S. "), Sections 469. 001 through 469. 04 7 and 469. 090 through 469.1081, inclusive, as amended, and M.S., Sections 469.174 through 469.179, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This Section contains the Tax Increment Financing Plan (the "Plan") for District No. 1. Other relevant information is contained in the Modified Revitalization Plan for Central Business District Redevelopment Project. Subsection 2-3. Statement of Obiectives District No. 1 currently consists of 55 parcels of land and adjacent and internal rights-of-way. District No. 1 is created to facilitate construction of a scattered site housing project in the City of Columbia Heights. For plan purposes, the values of new homes are assumed to be $147,000. It is expected that the value of many homes will be less. This plan is expected to achieve many of the objectives outlined in the Modified Revitalization Plan for Central Business District Redevelopment Project. The activities contemplated in the present Modified Revitalization Plan and the Tax Increment Financing Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of District No. 1 and Central Business District Redevelopment Project. (As Modified December 17, 2001) The modification to District No. 1 proposes to add 10 parcels to the district. However, a number of the original parcel will be "knocked down", according to M.S., Section 469.176, Subd. 6, due to lack of qualifying activity for taxes payable in 2003. It is proposed that a number of the parcels will be purchased by the E.D.A. and/or City, the existing structures demolished, the land cleared for resale and reconstruction of a single family, owner occupied homes. It is anticipated that the new market value of the newly constructed units will range from $130,000 to $135,00 each. Other renovation and rehabilitation of some the properties within the district is also anticipated. Subsection 2-4. Central Business District Revitalization Plan Overview Property to be Acquired - All property located within District No. 1 may be acquired by the City or EDA and is further described in this Plan. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-1 Relocation - Complete relocation services are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the City or EDA may sell to a developer selected properties that they may acquire within District No. 1 or may lease land or facilities to a developer. The City or EDA may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public streets work within District No. 1. Subsection 2-5. Legal Description of Property in Housing Redevelopment Tax Increment Financine District No. 1 District No. 1 encompasses all property and adjacent rights-of-way identified by the parcels listed in Appendix B. Please see the map in Appendix A for further information on the location of District No. 1. (,'Is Modified December 17, 2001) 10 properties and adjacent rights-of-ways are being added through this modification to District No.1 and are listed in Appendix B. Please see the map in Appendix A for further information on the location of District No. 1. Subsection 2-6. Classification of Housing Redevelopment Tax Increment Financing District No. 1 The City and EDA, in determining the need to create a tax increment financing district in accordance with MS., Sections 469.174 to 469.179, as amended, inclusive, find that Housing Redevelopment Tax Increment Financing District No. 1, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. lO(afrO as defined below: "Redevelopment district" means a type of tax increment financing district consisting ora project, orportions ofa project, within which the authorityfinds by resolution that one of the following conditions, reasonably distributed throughout the district, exists: parcels consisting of 70 percent of the area in the district are occupied by buildings, streets, utilities, or other improvements and more than 50percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; or The property consists of vacant, unused, underused, inappropriately used, or infrequently used railyards, rail storage facilities or excessive or vacated railroad rights-of-way. For purposes of this subdivision, "structurally substandard" shah mean containing defects in structural elements or a combination of deficiencies.in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-2 to justify substantial renovation or clearance. A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or couM be modified to satisfy the building code at a cost of less than 15percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost ofplumbing, electrical, or structural repairs or other similar reliable evidence. If the evidence supports a reasonable conclusion that the building is not disqualified as structurally substandard, the municipality may make such a determination without an interior inspection or an independent, expert appraisal of the cost of repair and rehabilitation of the building... Forpurposes of this subdivision, aparcel is not occupied by buildings, streets, utilities or other improvements until 15 percent of the area of the parcel contains improvements. In meeting the statutory criteria described above, the City and EDA rely on the following facts and findings: District No. 1 is a redevelopment district consisting of 55 parcels. The parcels are noncontiguous scattered sites as shown in Appendix A and listed in Appendix.B. All parcels in District No. 1 are occupied as defined in the TIF Act. An inspection of the buildings located within District No. 1 finds that each nonContiguous parcel is occupied by a single-family home or two-family home that is structurally substandard as defined in the TIF Act. (See Appendix D) Subsection 2-7. Original Tax Capacity and Tax Rate Pursuant to M.S., Section 469.174, Subd 7 and M. S., Section 469.177, Subd 1, the Original Net Tax Capacity (ONTC) as certified for District No. I is based on the market values placed on the property by the assessor in 1998 for taxes payable 1999. Pursuant to M.S., Section 469.177, Sub&. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 1999) the amount by which the original value has increased or decreased as a result off 2. 3. 4. 5. 6. change in tax exempt status of property; reduction or enlargement of the geographic boundaries of the district; change due to adjustments, negotiated or court-ordered abatements; change in the use of the property and classification; change in state law governing class rates; or change in connection with previously issued building permits. In any year in which the current Net Tax Capacity value of District No. 1 declines below the ONTC, no value will be captured and no tax increment will be payable to the Cit~ or EDA. The original local tax rate for District No. I will be the local tax rate for taxes payable 1997. The Original Tax Capacity and the Original Local Tax Rate for District No. 1 appear in the table on the next page. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-3 Original Tax Capacity Value Percent Retained by EDA Original Local Tax Rate $13,750 100% 1.47752 (,ds Modified December 17, 2.001) The original local tax rate for the proposed expansion parcels in District No. 1 will be the local tax rate for taxes payable 2002, assuming the request for certification is made before June 30, 2002. The Original Tax Capacity and the Original Local Tax Rate for the parcels in proposed expansion of District No. 1 appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M. S., Section 469.177, Suba~ 1, 2, and4, the estimated Captured Net Tax Capacity ofthe proposed expansion parcels in District No. 1. The City requests 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2003. The tax rate and values are based on the most current information available at the time the plan was prepared, which were for taxes payable in 2001. Original Tax Capacity Value Percent Retained by EDA Original Local Tax Rate $6,628 100% 111.935% Subsection 2-8. Estimated Captured Net Tax Capacity Value/Increment Pursuant to M.S., Section 469.174 Subcl. 4 and M. S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of District No. 1, within Central Business District Redevelopment Project, upon completion of the project, will annually approximate tax increment revenues as shown in the table below. The City and EDA request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 1999. The project tax capacity listed is an estimate of values when the project is'completed. Project Estimated Tax Capacity upon Completion of Project (PTC) Original Estimated Net Tax Capacity (ONTC) Estimated Captured Tax Capacity (CTC) Estimated Annual Tax Increment (CTC x Local Tax Rate) 108,150 13,750 94,400 $139,478 (/is Modified December 17, 2001) The project tax capacity listed is an estimate ofvalues of the proposed expansion parcels if and when Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-4 all of the projects are completed. The tax rate and values are based on the most current information available at the time the plan was prepared, which were for taxes payable in 2001. Upon completion of the project, the proposed expansion parcels will annually generate approximate tax increment revenues as shown in the table below. Project Estimated Tax Capacity upon Completion of Project (PTC) 20,808 Original Estimated Net Tax Capacity (ONTC) 6,628 Estimated Captured Tax Capacity (CTC) 15,872 Estimated Annual Tax Increment (CTC x Local Tax Rate) $23,291 Subsection 2-9. Property_ To Be Acquired The City or EDA may acquire any parcel within District No. 1 including interior and adjacent sUeet rights of way. Any properties identified for acquisition will be acquired by the City or EDA only in order to accomplish one or more of the following: provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish development of new or renovate housing and other objectives set forth in this plan. (As Modi~ed December 17, 2001) The District encompasses all property and adjacent rights-of-way identified in Appendix B as amended See the map in Appendix A for further information on the location of District No. 1 and the Central Business District Redevelopment Project. The City may acquire any parcel within District No. 1, or any property located within the Central Business District Redevelopment Project area, including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the E.D.A. and/or City only in order to accomplish one or more of the following: carry out land acquisition, site improvements, clearance and/or redevelopment to accomplish the uses and objectives set forth in this plan. The City may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. The EDA plans to acquire some of the parcels that are being added to the District. Subsection 2-10. Uses of Funds Currently under consideration for District No. 1 is a proposal to facilitate construction' of a scattered site housing project. The City and EDA have determined that it will be necessary to provide assistance to the project for certain costs. The EDA has conducted a feasibility study for the development or redevelopment of property in and around District No. 1. To facilitate the establishment and development or redevelopment of District No. 1, this Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with District No. 1 is outlined in the table on the following page. These figures have been prepared based on high estimates, for purposes of this Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-5 Plan only. Uses of Funds Per Unit Total Acquisition $72,000 $3,960,000 Demolition 10,000 550,000 Soil Correction 2,000 110,000 Relocation 2,000 110,000 Interest 6,215 341,825 Administrative Costs (up to 10%) ! 0,240 563,200 TOTAL $102,455 5,635,025 The costs above are estimates only, and may be increased or decreased within the listed categories, so long as the total amount does not exceed the total amount listed above. Estimated costs associated with Housing Redevelopment Tax Increment Financing District No. 1 are subject to change. The cost &all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within District No. 1 will be spent on activities related to development or redevelopment outside of District No. 1 but within the boundaries of Central Business District Redevelopment Project, (including administrative costs, which are considered to be spent outside of District No. 1) subject to the limitations as described in this Plan. (As Modified December 17, 2001) The costs associated with the addition of the proposed expansion parcels does not anticipate an increase in costs beyond the already authorized budget. Due to the lack of activity in the original district, the existing budget is substantially higher than the expected costs. The estimated sources of funds for the District are contained in the table below. The costs have NOT increased but have been restated according the current reporting requirements of the Office of the State Auditor. USES OF FUNDS TOTAL Land/Building Acquisition Demolition Soil Correction Relocation Site Improvements (renovation & renewal) Interest Administrative Costs (up to 10%) $3,000,000 $550,000 $110,000 $110,000 $960,000 $341,825 $563~00 PROJECT COSTS TOTAl, Interfund Loans Transfers Bond Principal Columbia Heights EDA $5.635.025 $4,800,000 $4,800,000 $4,800,000 M~ifi~tion to ~e Tm Increment Fin~cing Plan ~r Housing R~evelopment Tm lnc~ment Fin~cing District No. I 2-6 Subsection 2-11. Sources of Revenue/Bonded Indebtedness Public improvements costs, acquisition, relocation, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The City or EDA reserves the right to use other sources of revenue legally applicable to the Modified Revitalization Plan and the Plan, including, but not limited to, ~pecial assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contributions from the developer and investment income, to pay for the Estimated Public Costs. The City or EDA reserves the right to incur bonded indebtedness as a result of the Plan. Additional indebtedness may be required to finance other authorized activities. The total amount of bonded indebtedness and other obligations related to the use of tax increment financing will not exceed $4,800,000 without an amendment to the Plan pursuant to applicable statutory requirements. This provision does not obligate the City or EDA to incur debt. The City or EDA will issue bonds or incur obligations only upon the determination that such action is in the best interest of the City. The City or EDA reserve the right to finance the activities to be undertaken pursuant to the Plan through loans from funds of the City or EDA, through an interfund loan, with general obligation tax increment financing notes, or to reimburse the developer on a "pay-as-you-go" basis for eligible activities paid for by the developer. The estimated sources of funds for District No. 1 are contained in the table below. These figures have been prepared based on high estimates, for purposes of this Plan only. Sources of Funds Per Unit Total Tax Increment $63,750 3,506,250 Land Sales 35,500 1,952,500 Local Contribution 3,205 176,275 TOTAL $102,455 $5,635,025 (As Modified December 17, 2001) The estimated sources of funds for the District are contained in the table below. They have NOT increased but have been restated according the current reporting requirements of the Office of the State Auditor. SOURCES OF FUNDS Tax Increment Interest Revenue (replaces Local Contribution) Land Sale Proceeds PROJECT REVENUES Interfund Loans Transfers Bond Proceeds TOTAL $3,5o6,~5o $176,275 $1,952,5oo $5?635?025 $4,800,000 $4,800,000 $4,800,000 Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. ! 2-7 Subsection 2-12. Duration of Housing Redevelopment Tax Increment Financing District No. I Pursuant to MS., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of District No. 1 must be indicated within the Plan. Pursuant to M.S., Section 469.176, Subd. l(b), the duration of District No. 1 will be 25 years from the date of receipt of the first increment by the City or EDA. The date of receipt by the City of Columbia Heights of the first tax increment will be approximately 1999. Thus, it is estimated that District No. 1, including any modifications of the Plan for subsequent phases or other changes, would terminate after 2023, or when the Plan is satisfied. The City or EDA does reserve the right to decertify District No. I prior to the legally required date. (As Modified December 17, 2001) Pursuant toM. S, Section 469.176, Subd l(b), the duration of District No. 1 will be 25 years from the date of receipt of the first increment by the City or E.D.A. The date of receipt by the City of the first tax increment was 1998. Thus, it is estimated that District No. 1, including any modifications of the Plan for subsequent phases or other changes, would terminate after December 31, 2023 or when the Plan is satisfied. The City or E.D.A. reserves the right to decertify District No. 1 prior to the legal expiration date. Subsection 2-13. Estimated Impact on other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes construction which would have occurred without the creation of District No. 1. If the construction is a result of tax increment financing, the impact is $0 to other entities. Notwithstanding, the fact that the fiscal impact on the other taxing jurisdictions is $0 due to the fact that the construction would not have occurred without the assistance of the City or EDA, the following estimated impact of District No. 1 would be as follows if the "but for" test was not met: IMPACT ON TAX BASE Anoka County I.S.D. No. 13 City of Columbia Heights 1996/t997 Estimated Captured Total Net Tax Capacity (CTC) Percent of CTC Tax Capacity Upon Project Completion to Entity Total 147,999,763 94,400 0.0638% 12,947,050 94,400 0.7291%o 7,960,658 94,400 1.1858% IMPACT ON TAX RATES 1996/1997 Percent Potential Extension Rates of Total CTC Taxes Anoka County 0.2800'0' 18.95% 94,400 26,432 I.S.D. No. 13 0.84748 57.36% 94,400 80,002 City of Columbia Heights. 0.29018 19.64% 94,400 27,393 Other 0.05986 4.05% 94,400 5,651 Total 1.477520 100.00% 139,478 Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-8 The tax rate used for the calculations on the previous page is the 1996/Pay 1997 rate. The total net capacity for the entities listed above are based on Pay 1997 figures. The tax rate at which District No. 1 will be certified will be the same Pay 1997 tax rates. (As Modified December 17, 2001) The estimated impact for the proposed expansion parcels in District No. 1 on other taxing jurisdictions assumes that the redevelopment contemplated by the proposed Plan would occur without the expansion of District No. 1. However, the City and E.D.A. has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact ofpropsed expansion parcels within District no. 1 would be as follows if the "but for" test was not met: IMPACT ON TAX BASE Anoka County City of Columbia Heights Columbia Heights ISD No. 13 2000/2001 Estimated Captured Total Net Tax Capacity (CTC) Percent of CTC Tax Capacity Upon Completion to Entity Total 189,341,459 14,180 0.0075% 8,818,621 14,180 0.1608% 13,857,623 14,180 0.1023% IMPACT ON TAX RATES 2000/2001 Percent Potential Extension Rates of Total CTC Taxes Anoka County 26.432% 23.61% 14,180 3,748 City of Columbia Heights 30.564% 27.31% 14,180 4,334 Columbia Heights ISD No. 13 47.452% 42.39% 14,180 6,729 Other 7.487% 6.69% 14,180 1,062 Total 111.935% 100.00% 15,872 The above impacts are based on the most current data available at the time the Plan was prepared, which is for taxes payable in 2001. Subsection 2-14. Modifications to Housing Redevelopment Tax Increment Financing District No. In accordance with M.S., Section 469.175, Subd 4, any: 1. reduction or enlargement of the geographic area of Central Business District Redevelopment Project or District No. 1; 2. increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on debt if that determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized; Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. 1 2-9 increase in the portion of the captured net tax capacity to be retained by the City or EDA; increase in total estimated tax increment expenditures; or designation of additional property to be acquired by the City or EDA, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original plan. The geographic area of District No. 1 may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. Ifa redevelopment district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of MS., Section 469.174, Subd. 10, paragraph (a), clauses (1) to (5), must be documented. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from Central Business District Redevelopment Project or District No. 1 and (2) (A) the current net tax capacity of the parcel(s) eliminated from District No. 1 equals or exceeds the net tax capacity of those parcel(s) in District No. l's original net tax capacity or (B) the EDA agrees that, notwithstanding MS., Section 469.177, Subd. I, the original net tax capacity will be reduced by no more than the current net tax capacity of the parceI(s) eliminated from District No. 1. The City or EDA must notify the County Auditor of any modification that reduces or enlarges the geographic area of District No. 1 or Central Business District Redevelopment Project. Modifications to Housing Redevelopment Tax Increment Financing District No. 1 in the form of a budget modification or an expansion of the boundaries will be recorded in the Plan. Subsection 2-15. Administrative Expenses In accordance with M.S., Section 469.174, Subd 14, and M. S., Section 469.176, Subd 3, administrative expenses means all expenditures of the City or EDA, other than: amounts paid for the purchase of land or amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the district; relocation benefits paid to or services provided for persons residing or businesses located in the district; or amounts used to pay interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178. Administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Tax increment may be used to pay any authorized and doenmented administrative expenses for District No. 1 up to but not to exceed 10 percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for Central Business District Redevelopment Project, whichever is less. Pursuant to M.S., Section 469.176, Subd 4h, tax increments may be used to pay for the county's actual administrative expenses incurred in connection with District No. 1. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the county treasurer shall deduct an amount equal to 0.1 percent of any increment distributed to the City or EDA and the county treasurer shall pay the amount deducted to Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-10 the state treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. Subsection 2-16. Limitation of Increment Pursuant to M.S., Section 469.176, Subd 1 (a), no tax increment shall be paid to the City or EDA for District No. 1 after three (3) years from the date of certification of the Original Net Tax Capacity value of the taxable property in District No. 1 by the County Auditor unless within the three (3) year period: (a) bonds have been issued pursuant to M.S., Section 469.178, or in aid of a project pursuant to any other law, except revenue bonds issued pursuant to M.S., Sections 469.152 to 469.165, or (b) the City or EDA has acquired property within District No. 1, or (c) the City or EDA has constructed or caused to be constructed public improvements within District No. 1. The bonds must be issued, or the City or EDA must acquire property or construct or cause public improvements to be constructed by approximately May, 2000. The tax increment pledged to the payment of bonds and interest thereon may be discharged and may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd 6: if, after four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement ora street adjacent to aparcel butnot installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision... For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening ora new street, (2) relocation ora street, and (3) substantial reconstruction or rebuilding of an existing street. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing Disn'ict No. I 2-11 The City or EDA or a property owner must improve parcels within District No. 1 by approximately May, 2001. Subsection 2-17. Use of Tax Increment The City or EDA hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in District No. 1 for the following purposes: to pay the principal of and interest on bonds used to finance a project; to finance, or otherwise pay public redevelopment costs of the Central Business District Redevelopment Project pursuant to the M.S., Sections 469.001 to 469.047; to pay for project costs as identified in the budget; to finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; to pay principal and interest on any loans, advances or other payments made to the City or EDA or for the benefit of Central Business District Redevelopment Project by the developer; to finance or otherwise pay premiums and other costs for insurance, credit enhancement, or other security guaranteeing the payment when due of principal and interest on tax increment bonds or bonds issued pursuant to the Plan or pursuant to M.S., Chapter 462C and M.S., Sections 469.152 to 469.165, or both; and to accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C and M.S., Sections 469.152 to 469.165, or both. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, subd. 4. Subsection 2-18. Notification of Prior Planned Improvements The City or EDA shall, after due and diligent search, accompany its request for certification to the County Auditor or its notice of District No. 1 enlargement with a listing of all properties within District No. 1 or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original value of District No. 1 by the value of improvements for which a building permit was issued. Pursuant to M.S., Section 469.177, Subd. 4, the EDA has reviewed the parcels to be included in the expansion of the Housing Redevelopment Tax Increment Financing District No. 1 and found four parcels for which building permits have been issued during the 18 months immediately preceding approval of the Plan by the City and EDA, as follows: 4038 Madison Street- $13,000 garage 4542 Heights Drive - $3,000 egress window and siding 2201 45th Ave. o $9,000 siding 4825 5th St. - $5,700 TOTAL - $30~700 Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. ! 2-12 (As Modified December 17, 2001) Pursuant to M.S., Section 469.177, Subd. 4, the City has reviewed the parcels to be included in the expansion of Housing Redevelopment Tax Increment Financing District No. 1 and found three parcels for which building permits have been issued during the 18 months immediately preceding approval of the Modified Plan by the City and EDA, as follows: Parcel Number R36-30-24-22-0043 R35-30-24-21-0099 R35-30-24-21-0155 Improvement Address Amount Purpose Amount* 4435 Central Ave $3,320 New Roof $0 330 44* Ave $2,313 New Roof $0 4328 6' St $35,400 Room Addition $35,400 Value Increase $35,400 Subsection 2-19. Excess Tax Increments Pursuant to MS., Section 469.176, Subd. 2, in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the Plan, including the amount necessary to cancel any tax levy as provided in MS., Section 475.61, Subd. 3, the City or EDA shall use the excess amount to do any of the following: 2. 3. 4. prepay any outstanding bonds; discharge the pledge of tax increment therefor; pay into an escrow account dedicated to the payment of such bond; or return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. In addition, the City or EDA may, subject to the limitations set forth herein, choose to modify the Plan in order to finance additional public costs in District No. 1 or Central Business District Redevelopment Project. Subsection 2-20. Requirements for Agreements with the Developer The City or EDA will review any proposal for private development to determine its conformance with the Modified Revitalization Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the City or EDA to demonstrate the conformance of the development with city plans and ordinances. The City or EDA may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd 5, no more than 25 percent, by acreage, of the property to be acquired in District No. 1 as set forth in the Plan shall at any time be owned by the City or EDA as a result of acquisition with the proceeds of bonds issued pursuant to MS., Section 469.178, without the City or EDA having, prior to acquisition in excess of 25 percent of the acreage, concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the City or EDA should the development or redevelopment not be completed. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-13 Subsection 2-21. Assessment A~reements Pursuant to M.S., Section 469.177, Subd. 8, the City or EDA may enter into an agreement in recordable form with the developer of property within District No. 1 which establishes a minimum market value of the land and completed improvements for the duration of District No. 1. The assessment agreement shall be presented to the assessor who shall review the plans and specifications for the improvements constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appear, in thejudgrnent of the assessor, to be a reasonable estimate, the assessor may certify the minimum market value agreement. Subsection 2-22. Administration of Housing Redevelopment Tax Increment Financing Dist. No. 1 Administration of District No. 1 will be handled by the Executive Director of the EDA of the City of Columbia Heights. Subsection 2-23. Financial Reporting Requirements A. Filing with State Auditor, County Auditor, County Board and School Board: Pursuant to M.S., Section 469.175, Subd. 5, the City or EDA must file an annual disclosure report for all tax increment financing districts, including District No. 1. The report shall be filed with the County Board, County Auditor, School Board, and the State Auditor on or before July I of each year. The report to be filed by the City or EDA shall include the following information: o 5. 6. 7. 8. the amount and source of revenue in the tax increment account; the amount and purpose of expenditures from the account; the amount of any pledge of revenues, including principal and interest, on any outstanding bond indebtedness; the original net tax capacity of District No. 1; the captured net tax capacity retained by the City or EDA; the captured net tax capacity shared with other taxing districts; the tax increment received; and any additional information necessary to demonstrate compliance with the tax increment financing plan. B. Newspaper Statement: M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City showing: 2. 3. 4. 5. 6. 7. the tax increment received and expended in that year, the original net tax capacity, captured net tax capacity, amount of outstanding bonded indebtedness, the amount of District No. l's increment paid to other governmental bodies, the amount paid for administrative costs, the sum of increments paid, directly or indirectly, for activities and improvements located outside of District No. 1, and any additional information the City or EDA deems necessary. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-i 4 C. State Auditor filing for District No. 1: Pursuant to M.$., Section 469.175, Subd. 6, the City or EDA must annually submit to the State Auditor, on or before July 1, a financial report which shall: o provide for full disclosure of the sources and uses of the public funds in District No. 1; permit comparison and reconciliation with the City and EDA's accounts and financial reports; permit auditing of the funds expended on behalf of District No. 1 or that is funded in part or whole through the use ora development account funded with tax increments from other tax increment districts or with public money; and be consistent with generally accepted accounting principles. The financial report must also include the following: the original net tax capacity of District No. 1; the captured net tax capacity of District No. 1, including the amount of any captured net tax capacity shared with other taxing districts; the amount budgeted under the Plan, and the actual amount expended for, at least, the following categories (for the reporting period and for the duration of District No. 1): a. acquisition of land and buildings through condemnation or purchase; b. site improvements or preparation costs; c. installation of public utilities, parking facilities, streets, roads, sidewalks, or other similar public improvements; d. administrative costs, including the allocated cost of the city; e. public park facilities, facilities for social, recreational, or conference purposes, or other similar public improvements; and the total costs of the property to the City or EDA and the price paid the developers (for properties sold to developers); the amount of increments rebated or paid to developers or property owners for privately financed improvements or other qualifying costs, other than those reported under clause (3), that were issued on behalf of private entities for facilities located in District No. 1. D. State Auditor filing for all Tax Increment Financing Districts: Pursuant to M.S., Section 469.175, Subd. 6a, the City or EDA must also annually report to the State Auditor before or on July 1 of each year the following amounts for the entire City: the total principal amount of nondefeased bonds that are outstanding at the end of the previous calendar year; and the total annual amount of principal and interest payments that are due for the current calendar year on: (i) general obligation tax increment financing bonds and (ii) other tax increment financing bonds; and for each tax increment financing district within the City: the type of tax increment financing district; the date on which the district is required to be decertified; the amount of any payments and the value of in-kind benefits, such as physical improvements and the uses of building space, that are financed with revenues derived Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-15 from increments and are provided to another governmental unit (other than the municipality) during the preceding calendar year; the tax increment revenues for taxes payable in the current calendar year; whether the tax increment financing plan or other governing document permits increment revenues to be expended Outside of each district; and any additional information that the State Auditor may require. Copies of this report must also be provided to the county and school district boards. Subsection 2-24. Municipal Approval and Public Purpose The masons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for District No. 1 as required pursuant to M.X, Section 469.175, Subd 3 are as follows: Finding that the District No. 1 is a redevelopment district as defined in M.S., Section 469.174, Subd lO(a)(1). District No. 1 is a redevelopment district consisting of 55 parcels, and qualifies because each noncontiguous parcel is occupied by improvements, and contains on substandard single-family or two-family home. Therefore each separate parcel independently meets all the tests for a redevelopment district under MS., Section 469.174, Subd. 10 (a) (1). 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 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 District No. 1 permitted by the Plan. Each parcel is occupied by a single family home in poor condition. Due to the high cost of renovation or clearance, such housing will continue to deteriorate. Due to the high cost of development or redevelopment on the parcels and the cost'of financing, the redevelopment for new housing will occur only through assistance, in part, from tax increment financing. In most cases, significant other public and private assistance will be required as well. A comparative analysis of estimated market values both with and without establishment of Housing Redevelopment Tax Increment Financing District No. 1 and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in District No. 1, the total increased market value would be up to $6,686,250. It is the Council's finding that no development with a market value of greater than $5,530,560 would occur without tax increment assistance in this district within 25 years. In fact, the Council is confident that no development of any kind would occur and market values would likely deteriorate. This finding is based upon evidence from general past experience with housing in the City (see Cashflow in Appendix C). Finding that the Tax Increment Financing Plan for District No. 1 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning and Zoning Commission on May 6, 1997. The Planning and Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-16 Zoning Commission found that the Plan conforms to the general development plan of the City. Finding that the Tax Increment Financing Plan for District No. 1 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Central Business District Redevelopment Project by private enterprise. The project to be assisted by Housing Redevelopment Tax Increment Financing District No. 1 will result in improved private housing stock in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City. Subsection 2-25. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the City or EDA may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause a, (outside District No. 1) are followed, the following method of computation shall apply: The original net tax capacity and the current net tax capacity shall be determined before the application of the-fiscal disparity provisions of Chapter 276A or 473F. Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured net tax capacity and no tax increment determination. Where the original net tax capacity is less than the current net tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment, financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. The county auditor shah exclude the retained captured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the lesser of(A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. If the calculations pursuant to MS., Section 469.177, Subd. 3, clause b, (within District No. 1) are followed, the following method of computation shall apply: The original net tax capacity shall be determined before the application of the -fiscal disparity provisions of Chapter 276A or 473F. The current net tax capacity shah exclude any-fiscal disparity commercial-industrial net tax capacity increase between the original year and the current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section 276A. 06, .subdivision 7 or M.S., Section 473F. 08, subdivision 6. Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. 1 2- I 7 the local taxing districts is the retained captured net tax capacity of the authority. The county auditor shah exclude the retained captured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the less of (~1) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. The City or EDA shall submit to the County Auditor at the time of the request for certification which method of computation of fiscal disparities the City or EDA elected. As the project to be assisted is not anticipated to include commercial / industrial development, the City of Columbia Heights will not incur any fiscal disparities because of this Tax Increment Financing District. According to M.S., Section 469.177, Subd. 3: The method of computation of tax increment applied to a district pursuant to paragraph (a) or (b) shah remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2-26. Other Limitations on the Use of Tax Increment General Limitations. All revenue derived from tax increment shall be used in accordance with the Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Central Business District Redevelopment Project pursuant to the M.S., Sections 469. 001 to 469. 047; These revenues shall not be used to circumvent existing levy limit law. No revenues derived from tax increment shall be used for the acquisition, construction, renovation, operation or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision shall not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure, a commons area used as a public park or a facility used for social, recreational or conference purposes and not primarily for conducting the business of the municipality. Pooling Limitations. At least 75 percent of tax increments from District No. 1 must be expended on activities in District No. 1 or to pay bonds, to the extent that the proceeds of the bonds were used to finance aciivities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of District No. 1 except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of appIying this restriction, all administrative expenses must be treated as if they were solely for activities outside of District No. 1. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from District No. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I 2-18 1 shall be deemed to have satisfied the 75 percent test set forth in paragraph (2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification of District No. 1, 75 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to f'mance the cost of correcting conditions that allow designation of redevelopment and renewal and renovation districts under M.S., Section 469.174. These costs include acquiring properties containing structurally substandard buildings or improvements, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition of structures, clearing of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the City or EDA may be included in the qualifying costs. Subsection 2-27. State Tax Increment Financing Aid Pursuant to M.S., Section 273.1399, for tax increment financing districts for which certification was requested after April 30, 1990, a municipality incurs a reduction in state tax increment financing aid (RISTIFA) applied to the municipality's Local Government Aids (LGA) fa'st and, Homestead and Agricultural Aid (HACA) second, in an amount equal to a formula based upon the equalized qualifying captured tax capacity (QCTC) of the tax increment financing district. Pursuant to M.S., Section 273.1399, Subd 6, the City or EDA may choose an option to the LGA-HACA penalty. District No. 1 is exempt from the LGA-HACA reduction if the City or EDA elects to make a qualifying local contribution at the time of approving the tax increment financing plan. To qualify for the exemption in each year, the City or EDA must make a qualifying local contribution to the project ora certain percentage. The local contribution for a redevelopment district is 5 percent. The maximum local contribution for all districts in the City in any year is limited to two percent of the City's net tax capacity, after which point the City or EDA must make an additional contribution equal to the lesser of(a) 0.25 percent of the City's net tax capacity or (b) 3 percent of tax increment revenues for that year. The amount of the local contribution must be made out of unrestricted money of the City or EDA, such as the general fund, a property tax levy, or a federal or state grant-in-aid which may be spent for general government purposes. The local contribution may not be made, directly or indirectly, with tax increments or developer payments. The local contribution must be used to pay project costs and cannot be used for general government purposes. The EDA elects to make the annual local contribution to the project to exempt itself from the LGA- HACA penalty. The City or EDA will pay for costs of the project described in this Plan, in an amount equal to 5 percent of annual tax increment for District No. 1, subject to the limitations described above, in any year in which such amount exceeds'2 percent of the City's net tax capacity. Such contribution may be in form of either lump sum or annual payments (in addition to tax increment payments) towards costs identified in this Plan or other costs related to that development or redevelopment. The contribution may also be made in the form of public improvements financed by the City or EDA or other unit of government with unrestricted funds. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. 1 2-19 (As Modified December 17, 2001) The 2001 Legislature eliminated the provisions for a reduction in state tax increment financing aid (RISTIFA) or the alternative qualifying local contribution. Subsection 2-28. County Road Costs Pursuant to M.S., Section 469.175, Subd. Ia, the county board may require the City or EDA to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or other county plan. In the opinion of the City and EDA and consultants, the proposed development outlined in this Plan will have little or no impact upon county roads. If the county elects to use increments to improve county roads, it must notify the City or EDA within thirty days of receipt of this Plan. (As Modified December 17, 2001) Subsection 2-29. Supportine Documentation Pursuant toM. S. Section 469.175 Subd l, clause 7the Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd3, clause (2). A list of reports and studies that support the authority's findings are on file at the E.D.A. Subsection 2-30. Summary The Columbia Heights EDA is establishing Housing Redevelopment Tax Increment Financing District No. 1 to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. 1 was prepared by Ehlers and Associates, Inc., 2950 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota 55402-4100, telephone (612) 339-8291. Modified December 17, 2001) The Columbia Heights EDA is expanding Housing Redevelopment Tax Increment Financing District No. 1 to continue to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. I was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone (651) 697-8500. Columbia Heights EDA Modification to the Tax Increment Financing Plan for Housing Redevelopment Tax Increment Financing District No. 1 2-20 APPENDIX A BOUNDARY MAPS OF CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT AND HOUSING REDEVELOPMENT TAX INCREMENT FI]qANCING DISTRICT NO. 1 APPENDIX A-I ~/COLUMBIA HEIGHTS Housing Redevelopment /Tax Increment Financing (TIF) District #t Expansion Map ID Key Additions: 1 3805 2ND ST 2 4358 3RD ST 3 4356 5TH ST 4 4328 6TH ST 5 320 44TH AVE 6 330 44TH AVE 7 3701 BUCHANAN ST 8 4435 CENTRAL AVE 9 4441 CENTRALAVE 10 3919 MAIN ST LEGEND ~ TIF District 1 Additions ~ Parcels ~-~ Right-of-Way ~ City of Hilltop ~ Park ...... Water ~ Mlnneapohts ~ Water Works N City Limits N LayoutN ame: TIF_DISTRICTI_ADD1TIONS 0.25 0 0.25 Miles Project LocaUon: W:\DATABASE\GI~G/SDATA\PtANNING\PROJECTSkTIF.APR Date Printed: 11/30/2001 - 10:42:35 AM 0 IIIIIIIIItlllllllll~ IIIllllllllllllllll~lJ ! ! I IIIlli Illl I nlllTnp:l~ IIIIIIIit llllll IIIIIIll __ lilllllllllllllll I~111 ii Ilil II Itlllllll II II! IIIHIIIIIIII ir[illllll ilil iiiiiiiiiiii i I_1 iiiii i~1 il ii1111111111111 iici. 1111 i I IllllI II 1 IIIlllllll I I IIIItlltllll ii I nmllt I Illlllllltlll II ! II I I111 Ill IIIIII Il lllllllilllll|lllllillllUIIIIIIIIlillllllitllli I iii I1~ I ltlllll Iltfl III IIIIIIlIJJl'l Bill II Iii I ill II~ -- tiilllllililllillliltllllllla'l I I lift illTlll APPENDIX B LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT AND HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 The legal description of the Central Business District Redevelopment Project is being modified to include all property located within the corporate limits of the City of Columbia Heights. The legal description of property to be included in Housing Redevelopment Tax Increment Financing District No. 1 includes the following properties: Address Land Value Bldg Value Total Value 3831 Main St. 23,900 33,600 57,500 4045 Main St. 22,500 30,400 52,900 4309 Main St. 19,100 33,800 52,900 4341 Main St. 19,100 32,700 51,800 3855 Main St. 19,100 26,100 45,200 3802 2nd St. 19,100 33,400 52,500 4021 2nd St. 23,900 36,000 59,900 4404 2 ½ St. 23,900 49,200 73,100 4323 3rd St. 26,700 29,700 56,400 3700 2 ½ St. 19,100 26,800 45,900 3950 Lookout Pl. 23,900 30,300 54,200 546 Summit St. 18,100 18,800 36,900 544 Summit St. 13,800 11,400 25,200 3818 Quincy St. 20,800 42,900 63,700 3913 Polk St. 20,900 37,500 58,400 3823 Polk St. 20,900 22,500 43,400 1513 37th St. 27,500 31,400 58,900 5057 University Ave. 58,500 4,400 62,900 4417 University Ave. 32,500 5,300 37,800 315 44th Ave. 22,000 5,700 27,700 4516 4th St. 23,100 38,600 61,700 4538 4th St. 23,100 28,700 51,800 4421 5th St. 19,100 36,500 55,600 4533 7th St. 21,000 32,900 53,900 APPENDIX B-I 4401 Quincy St. 22,000 46,000 68,000 4321 5th St. 32,500 37,200 69,700 4033 6th St. 18,100 35,700 53,800 4038 7th St. 19,100 29,700 48,800 4131 7th St. 21,000 29,400 50,400 4153 7th St. 19,100 38,100 57,200 4240 Jefferson St. 22,000 37,000 59,000 4038 Madison St. 19,100 37,600 56,700 4032 Madison St. 23,900 36,400 60,300 4048 Quincy St. 22,000 16,900 38,900 4145 Quincy St. 19,100 33,000 52,100 965 43rd Ave. 23d 100 37,800 60,900 1032 44th Ave. 22,000 30,100 52,100 1124 44th Ave. 22,000 32,500 54,500 4044 Tyler St. 25,300 37,200 62,500 4246 Polk St. 25,300 53,400 78,700 1827 41st Ave. 20,900 40,200 61,100 4400 Stinson St. 41,800 8,800 50,600 4542 Heights Dr. 24,900 29,500 54,400 2201 45th Ave. 27,300 53,000 80,300 1331 45th Ave. 26,000 61,100 87,100 1124-26 45th Ave. 22,000 50,500 72,500 1118-16 45th Ave. 22,000 50,300 72,300 4525-27 Taylor St. 22,000 53,100 75,100 4529 -31 Taylor St. 22,000 47,000 69,000 4539 Filmore St. 22,000 43,900 65,900 4825 5th St. 23,100 30,300 53,400 4806 6th St. 21,000 42,600 63,600 4916 6th St. 21,000 47,200 68,200 4929 6th St. 21,000 35,000 56,000 5101 7th St. 21,000 20,3 O0 41,300 APPENDIX B-2 (.ds Modified December 17, 2001) The property to be included in ltonsing Redevelopment Tax Increment Financing District No. 1 is being modified to add the following properties: Parcel Number Key Address Land Bldg Total Limited Number Value Value Value Mkt Val R35-30-24-33-0025 00264065 3805 NE 2"d St 48,800 31,400 80,200 63,300 R35-30-24-21-0122 00280939 4356 NE 5th St 39,000 41,300 80,300 67,600 R35-30-24-21-0155 00281251 4328 NE 6~ St 39,000 20,600 59,600 45,300 R35 30 24 21 0104 00268007 320 NE 44th Ave 44,900 8,600 53~00 37,900 R35-30-24-21-0099 00267954 330 NE 44a Ave 39,000 35,600 74,600 61,500 R36-30-24-34-0030 00247487 3701 NE 43,800 52,800 96,600 86,100 Buchanan St R36-30-24-22-0043 00283446 4435 NE 48,400 17,000 65,400 65,400 Central Ave R36-30-24-22-0042 00283437 4441 NE 48,400 27.~00 75,900 75,900 Central NE R35-30-24-32-0060 00264387 3919 NE Main 46,300 39,400 85,700 71,800 St R35-30-24-22-0126 00281974 4358 NE 3~ St 46,800 18,800 65,600 51,600 APPENDIX B-3 APPENDIX C ESTIMATED CASH FLOW FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. I APPENDIX C-I CITY OF COLUMBIA HEIGHTS, MINNESOTA HOUSING TAX INCREMENT FINANCING DISTRICT #1 T.I.F. CASH FLOW ASSUMPTIONS - LOCAL MATCH Pay-As-You-Go Interest Rate: Tax Extension Rate: Inflation Rate: BASE VALUE INFORMATION 9.000% 111.935% 0.0000% Pay 2001 Total MV* Classification Tax Capacity** 12 Parcels 656,200 Res Hst Total * All but 2 parcels are calculated using the P2002 limited market value. ** Tax capacity has been calculated using P2001 classification percentages. PROJECT VALUE INFORMATION 6,628 Type of Tax Increment District: Number of Units: Class Rates: Single Family < Single Family > Estimated Market Value On all Projects: Estimated Total Market Value per Unit Estimated Tax Capacity per Unit Estimated Total Tax Capacity: Estimated Taxes: Estimated Taxes Per Unit: $76,000 $76,000 Redevelopment 12 3.40% 1.00% 1.65% 1,620,000 135,000 1,734 20,808 23,291 1,941 Pay 2002 Pay 2001 Pay 2001 BUT / FOR ANALYSIS Current Market Value - Est. New Market Value - Est. Difference Present Value of Tax Increment Difference Value Likely to Occur Without TIF is Less Than: 656,200 1,620,000 963,800 144,674 819,126 819,126 Appendix C Estimated Cashflow for Expansion Parcel List As Modifted December 17, 2001 Ehlers and Associates, Inc. 11/12/01 CITY OF COLUMBIA HEIGHTS, MINNESOTA HOUSING TAX INCREMENT FINANCING DISTRICT #1 Base Project Caplured Semi-Annual *Estimated Admin Semi-Annual Yearn PERIOD BEGINNING Tax Tax Tax Gross Tax OSA Fee @ At Net Tax Of PERIOD ENDING Yrs. Filth. Yr. Capacity Capacity Capacity Increment 0.5(Y'/~ 10.00% Increment Increment Yrs. Mth. Yr. 0.0 08-01 1996 0 0.0 0.0 02-01 1997 0.0 02-O1 1997 0 0.0 0.0 08-01 1997 0.0 08-01 1997 6,628 6,628 0 0 0 0 0 0.0 0.0 02-01 1998 0.5 02-01 1998 6,628 6,628 0 0 0 0 0 0.0 0.5 08-01 1998 1.0 08-01 1998 6,628 6,628 0 0 0 0 0 0.0 1.0 02-01 1999 1.5 02-01 1999 6,628 6,628 0 0 0 0 0 0.0 1.5 08-01 1999 2.0 08-01 1999 6,628 6,628 0 0 0 0 0 0.0 2.0 02-01 2000 2.5 02-O1 2000 6,628 6,628 0 0 0 0 0 0.0 2.5 08-01 2000 3.0 08-01 2000 6,628 6,628 0 0 0 0 0 0.0 3.0 02-01 2001 3.5 02-01 2001 6,628 6,628 0 0 0 0 0 0.0 3.5 08-01 2001 4.0 08-O1 2001 6,628 6,628 0 0 0 0 0 0.0 4.0 02-01 2002 4.5 02-O1 2002 6,628 6,628 0 0 0 0 0 0.0 4.5 08-01 2002 5.0 08-01 2002 6,628 6,628 0 0 0 0 0 0.0 5.0 02-01 2003 5.5 02-01 2003 6,628 6,628 0 0 0 0 0 0.0 6.0 08-01 2003 6.0 08-01 2003 6,628 6,628 0 0 0 0 0 0.0 6.5 02-01 2004 6.5 02-01 2004 6,628 20,808 14,180 7,936 (40) (790 7,107 0.5 7.0 08-01 2004 7.0 08-01 2004 6,628 20,808 14,180 7,936 (40) (7901 7,107 1.0 7.5 02-01 2005 7.5 02-01 2005 6,628 20,808 14,180 7,936 (40) (790} 7,107 1.5 8.0 08-01 2005 8.0 08-01 2005 6,628 20,808 14,180 7,936 (40) (790} 7,107 2.0 8.5 02-01 2006 8.5 02-01 2006 6,628 20,808 14,180 7,936 (40) (790} 7,107 2.5 9.0 08-01 2006 9.0 08-01 2006 6,628 20,808 14,180 7,936 (40) (790} 7,107 3.0 9.5 02-01 2007 9.5 02-01 2007 6,628 20,808 14,180 7,936 (40) (790 7,107 3.5 10.0 08-01 2007 10.0 08-01 2007 6,628 20,808 14,180 7,936 (40) (790) 7,107 4.0 10.5 02-01 2008 10.5 02-01 2008 6,628 20,808 14,180 7,936 (40) (790) 7,107 4.5 11.0 08-01 2008 11.0 08-01 2008 6,628 20,808 14,180 7,936 (40) (790 7,107 5.0 11.5 02-01 2009 11.5 02-01 2009 6,628 20,808 14,180 7,936 (40) (7901 7,107 5.5 12.0 08-01 2009 12.0 08-01 2009 6,628 20,808 14,180 7,936 (40) (790 7,107 6.0 12.5 02-01 2010 12.5 02-01 2010 6,628 20,808 14,180 7,936 (40) (790 7,107 6.5 13.O 08-01 2010 13.0 08-01 2010 6,628 20,808 14,180 7,936 (40) (79( 7,107 7.0 13.5 02-01 2011 13.5 02-O1 2011 6,628 20,808 14,180 7,936 (40) (790'. 7,107 7.5 14.0 08-01 2011 i14.0 08-O1 2011 6,628 20,808 14,180 7,936 (40) (7901 7,107 8.0 14.5 02-O1 2012 14.5 02-01 2012 6,628 20,808 14,180 7,936 (40) (79( 7,107 8.5 15.0 08-01 2012 15.0 08-O1 2012 6,628 20,808 14,180 7,936 (40) (7901 7,107 9.0 15.5 02-01 2013 15.5 02-01 2013 6,628 20,808 14,180 7,936 (40) (79(; 7,107 9.5 16.0 08-01 2013 16.0 08-01 2013 6,628 20,808 14,180 7,936 (40) (790~ 7,107 10.0 16.5 02-01 2014 16.5 02-01 2014 6,628 20,808 14,180 7,936 (40) (7901 7,107 10.5 17.0 08-01 2014 17.0 08-01 2014 6,628 20,808 14,180 7,936 (40) (790 7,107 11.0 17.5 02-01 2015 17.5 02-01 2015 6,628 20,808 14,180 7,936 (40) (790) 7,107 11.5 18.0 08-01 2015 18.0 08-01 2015 6,628 20,808 14,180 7,936 (40) (7901 7,107 12.0 18.5 02-01 2016 18.5 02-01 2016 6,628 20,808 14,180 7,936 (40) (790} 7,107 12.5 19.0 08-01 2016 19.0 08-01 2016 6,628 20,808 14,180 7,936 (40) (790) 7,107 13.0 19.5 02-01 2017 19.5 02-01 2017 6,628 20,808 14,180 7,936 (40) (790) 7,107 13.5 20.0 08-01 2017 20.0 08-01 2017 6,628 20,808 14,180 7,936 (40) (790) 7,107 14.0 20.5 02-01 2018 20.5 02-01 2018 6,628 20,808 14,180 7,936 (40) (790 7,107 14.5 21.0 08-01 2018 21.0 08-01 2018 6,628 20,808 14,180 7,936 (40) (790 7,107 15.0 21.5 02-01 2019 21.5 02-01 2019 6,628 20,808 14,180 7,936 (40) (790 7,107 15.5 22.0 08-01 2019 22.0 08-01 2019 6,628 20,808 14,180 7,936 (40) (790 7,107 16.0 22.5 02-01 2020 22.5 02-01 2020 6,628 20,808 14,180 7,936 (40) (790' 7,107 16.5 23.0 08-01 2020 23.0 08-01 2020 6,628 20,808 14,180 7,936 (40) (790 7,107 17.0 23.5 02-01 2021 23.5 02-01 2021 6,628 20,808 14,180 7,936 (40) (790', 7,107 17.5 24.0 08-01 2021 24.0 08-01 2021 6,628 20,808 14,180 7,936 (40) (7~ 7,107 18.0 24.5 02-01 2022 24.5 02-01 2022 6,628 20,808 14,180 7,936 (40) (790', 7,107 18.5 25.0 08-01 2022 25.0 08-01 2022 6,628 20,808 14,180 7,936 (40) (790', 7,107 19.0 25.5 02-O1 2023 25.5 02-01 2023 6,628 20,808 14,180 7,936 (40) (790'~ 7,107 19.5 26.0 08-01 2023 Totals 309,511 (1,548) (30,810 277,154 Present Values 144,674 (723) (14,401 129,549 ' OSA Fee is subject to change annualy Appendix C Estimated Cash_flow for Expansion Parcel List /is Modified December 17, 2001 Ehlers and Associates, Inc. 11/12/01 CITY OF COLUMBIA HEIGHTS, MINNESOTA HOUSING TAX INCREMENT FINANCING DISTRICT #1 T.I.F. CASH FLOW ASSUMPTIONS - LOCAL MATCH Pay-As-You-Go Interest Rate: 9.000% Tax Extension Rale: 1.47752 Inflation Rate: 0.0000% BASE VALUE INFORMATION Pay 1996 Various Total Tax MY Per Unit # Units Market Value Capacity 25,000 55 1,375,000 13,750 PROJECT VALUE INFORMATION 13,750 Type of Tax Increment District: Number of Units: Class Rates: Apt. >4 units Market Single Family <$72k Single Family >$72k Estimaled Market Value On all Projects: 'assumes each new house worth al least $72,000 Estimated Total Market Value per Unit Estimated Additonal Market Value Per Unit: Estimated Tax Capacity: Estimated Taxes: Estimated Taxes Per Unit: 3.4000% 1.0000% 2.0000% I, BUT / FOR ANALYSIS Current Mad(el Value - Esl. New Market VaJue - Est. Difference Present Value of Tax Inc~ement Differertce alue Likely to Occur Without 'I'IF is Less Than: Housing 55 6,700,000 Pay 99 147,000 122,000 94,400 Pay 99 139,478 2,536 13,7soJ 6,700,000 6, 686,250 5,530,560 IMPACT ANALYSIS TAX CAPACITIES ~'K:d(a County 147,999,763 g4,400 0.064% ~.S.D. No. 13 12,947,050 94,400 0.729% City of Columbia Hei~Ns 7,960,658 94,400 1.186% Anoka County 0.280000 94.400 26,432 I.S.D. No. 13 0.847480 94,400 80,002 City of Columbia Heig~ls 0~90180 94,400 27,393 Other 0.059860 94,400 5,651 1.477520 139,478 Appendix C Estimated Cashflow for Original Parcels Ehlers and Assodates, Inc. 05/27/97 Page 1 CITY OF COLUMBIA HEIGHTS, MINNESOTA HOUSING TAX INCREMENT FINANCING DISTRICT #1 TAX INCREMENT CASH FLOW Base Project Captured Semi-Annual Admin. Semi-Annual Local Match Years PERIOD BEGINNING Tax Tax Tax Gross Tax at Net Tax at Of PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Capacity Increment 10.10% Increment 5.00% Increment Yrs. Mth. Yr. 0.0 08-01 1996 0 0.0 0.5 02-01 1997 0.0 02-01 1997 0 0.0 0.5 08-01 1997 0.0 08-01 1997 13,750 13,750 0 0 0 0 0 0.0 0.5 02-01 1998 0.5 02-01 1998 13,750 13,750 0 0 0 0 0 0.0 1.0 08-01 1998 1.0 08-01 1998 13,750 13,750 0 0 0 0 0 0.0 1.5 02-01 1999 1.5 02-01 1999 13,750 13,750 0 0 0 0 0 0.0 2.0 08-01 1999 2.0 08-01 1999 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 0.5 2.5 02-01 2000 2.5 02-01 2000 13,750 108,150 94,400 69,739 (7,044} 62,695 3,487 1.0 3.0 08-01 2000 3.0 08-01 2000 13,750 108,150 94,400 69,739 (7,044) 62,695~ 3,487 1.5 3.5 02-01 2001 3.5 02-O1 2001 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 2.0 4.0 08-01 2001 4.0 08-01 2001 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 2.5 4.5 02-01 2002 4.5 02-01 2002 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 3.0 5.0 08-01 2002 5.0 08-01 2002 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 3.5 5.5 02-01 2003 5.5 02-01 2003 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 4.0 6.0 08-01 2003 6.0 08-01 2003 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 4.5 6.5 02-01 2004 6.5 02-01 2004 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 5.0 7.0 08-01 2004 7.0 08-01 2004 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 5.5 7.5 02-01 2005 7.5 02-01 2005 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 6.0 8.0 08-01 2005 8.0 08-01 2005 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 6.5 8.5 02-01 2006 8.5 02-01 2006 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 7.0 9.0 08-01 2006 9.0 08-O1 2006 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 7.5 9.5 02-01 2007 9.5 02-01 2007 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 8.0 10.0 08-01 2007 10.0 08-01 2007 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 8.5 10.5 02-01 2008 10.5 02-01 2008 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 9.0 11.0 08-01 2008 11.0 08-01 2008 13,750 108,150 94,400 69,739 (7,944) 62,695 3,487 9.5 11.5 02-01 2009 11.5 02-01 2009 13,750 108,150 94,400 69,739 (7,044) 62,695: 3,487 10.0 12.0 08-01 2009 12.0 08-01 2009 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487i 10.5 12.5 02-01 2010 12.5 02-01 2010 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 11.0 13.0 08-01 2010 13.0 08-01 2010 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 11.5 13.5 02-01 2011 13.5 02-01 2011 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 12.0 14.0 08-01 2011 14.0 08-01 2011 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 12.5 14.5 02-01 2012 14.5 02-01 2012 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 13.0 15.0 08-01 2012 15.0 08-01 2012 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 13.5 15.5 02-01 2013 15.5 02-01 2013 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 14.0 16.0 08-01 2013 16.0 08-01 2013 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 14.5 16.5 02-01 2014 18.5 02-01 2014 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 15.0 17.0 08-01 2014 17.0 08-01 2014 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 15.5 17.5 02-01 2015 17.5 02-01 2015 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 16.0 18.0 08-01 2015 18.0 08-01 2015 13,750 108,150 94,400 69,739 (7,044) . 62,695 3,487 16.5 18.5 02-01 2016 18.5 02-01 2016 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 17.0 19.0 08-01 2016 19.0 08-01 2016 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 17.5 19.5 02-01 2017 19.5 02-01 2017 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487' 18.0 20.0 08-01 2017 20.0 08-01 2017 13,750 108,150 94,400 69,739 (7,044) 62,695~ 3,487 18.5 20.5 02-01 2018 20.5 02-01 2018 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 19.0 21.0 08-01 2018 21.0 08-01 2018 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 19.5 21.5 02-01 2019 21.5 02-01 2019 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 20.0 22.0 08-01 2019 22.0 08-01 2019 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 20.5 22.5 02-01 2020 22.5 02-01 2020 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 21.0 23.0 08-01 2020 23.0 08-01 2020 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 21.5 23.5 02-01 2021 23.5 02-01 2021 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 22.0 24.0 08-01 2021 24.0 08-01 2021 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 22.5 24.5 02-01 2022 24.5 02-01 2022 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 23.0 25.0 08-01 2022 25.0 08-01 2022 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 23.5 25.5 02-01 2023 25.5 02-01 2023 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 24.0 26.0 08-01 2023 26.0 08-01 2023 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 24.5 26.5 02-01 2024 26.5 02-01 2024 13,750 108,150 94,400 69,739 (7,044) 62,695 3,487 25.0 27.0 08-01 2024 Totals 3,486,947 (352,182) 3,134,766 174,347 Present Values 1,155,690 (116,725) 1,038,965 57,784 Appendix C Estimated Cashflow for Original Parcels Ehlers and Associates, Inc. 05/27/97 Page 2 APPENDIX D REDEVELOPMENT QUALIFICATIONS FOR HOUSING REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1 EXPANSION PARCELS City of Columbia Heights, Minnesota - Expansion Parcles Qualifications Pcxcel Pcrcel Lot Size Occupied Type Percent Greater Thcn~ Ncme Number Sct. Ft. Scl. Ft. (Approx.) Occupied Occupied 15% ~ 3805 NE 2ndSt R35-30-24-33-0025 10,368 1,600 Bldg. ImFrmts 15.43% Yes 4356 NE 5th St R35-30-24-21-0122 5,184 978 BId~, Im~mts 18.87% Yes 4328 NE 6th S t R35-30-24-21-0155 5,184 320 NE 44th Ave R35-30-24-21-0104 9,322 330 NE 44th Ave R 35-30-24-21-0099 5, 229 1,076 BId~ ImFrmts 20.76% Yes 1,420 BId~ Im~-mts 15.23% Yes 912 BId~ Im~mts 17.44% Yes 3701 NE Buchcncn St R36-30-24-34-0030 14,571 2,32,9 BId~ Imprmts 15.98% Yes 4441 NE Cental A~e R36-30-24-22-0043 10,240 2,373 BId~ Im~mts 23.17% Yes 4435 NE Central A~e R36-30-24-22-[]042 10,240 1,920 BId~ Im~rmts 18.75% Yes 3919 NE Main St R35-30-24-32-0060 10,128 2,876 BId~, Im~mts 28.40% Yes 4358 NE 3rdSt R35-30-24-22-0126 9,860 2,120 BId~ Imprrnts 21.50% Yes Occupied ~ Include bullrings, pa'ldng lots, ~nd utilities. Parcel P cxcel Number of g uildngs Percent Ncrne Number B uildngs S ubs tondcrd B lighted ~805 NE 2nd $ t R 35-30-24-33-0025 1 1 100.00% 4356 NE 5th S t R 35-30-24-21-0122 1 1 100.00% 4328 NE 6th S t R35-30-24-21-0155 1 1 100.00% 320 NE 44th Ave R35-30-24-21-0104 1 1 100.00% 330 NE 44th Ave R35-30-24-21-0099 t 1 100.00% 3701 NE Buchcr~cn St R36-30-24-34-0030 2 2 100.00% 4441 NE Centd A~e R36-30-24-22-0043 2 2 100.00% 4435 NE Central A~e R36-30-24-22-0042 2 2 100.00% 3919 NE Main S t R35-30-24-32-0060 2 2 100.00% 4358 NE 3rd S t R35-30-24-22-0126 2 1 50.00% Documentation verifying the interior inspections and substandard determination for the expansion parcels are on file at Offices of the City of Columbia Heights and the Columbia Heights Economic Development Authority. APPENDIX D- 1 · 5-26-1997 12: 27PM FROM C~ I TY DEV. - CH 61278228.57 P. 2 CITY OF COLUMBIA HEIGHTS 30 40¥H AVENUE I~1.1~,, COLUMBIA HEIGHTS, MN 55421-3878 (6 ~ 2) 782-2800 TDD 782-2806 BUZLI)ZN(~ IN~PECTZOtl DL'~'~I~II~ J~ei~. Come i D~td G. JotLy ~ J~fles G~ry L. city flatter ii. Felt~ Kenneth R. Anderson Community Development Director City of Columbia Heights 590 40th Avenue N.E. Columbia Heights, MN 55421 RE: HOUSING REDEVELOPHENT TAX ZNCREN~iT ~L~,,i~TCING DISTRICT NO. 1 (]I~DEVELOPML'NT DISTRICT) .Dear Mr. Anderson: In April of 1997 Z' conducted a visual windshield survey of residential properties in the City of Columbia Heights, Minnesota. I have identified fifty-five .(55) properties in the City with residential structures which are deemed to be structurally substandard in accordance with requirements of Minnesota Statutes, Section 469.174, Subdivision 10. I hereby certify that each of the fifty-five parcels are occupied by buildings which are substandard based ~pon their size, age, building 'type, and/or condition. Furthermore, based upon my general knowledge oft he area and similar types of housin~in order to bring the building(s) into compliance with current codes the average cost of plumbing, electrical, or structural repairs for each structure will exceed fifteen (15) percent of the cost of .'construCting a new structure of the same square footage and type on the site. This certification applies to each property listed in Appendix B and included in the Housing Redevelopment Tax Increment Financing District No. i Plan. If you have other questions, please do not hesitate to contact me. Mel Collova Building Official #1727 Enclosures c: File Appendix D Redevelopment Qualifications for Original Parcels THE CI'fV OI~ COLUI,4BI^ H£1GI-I'f~ ~£~1 NOT Ol~.~l~'l 1~41NA¥1~ ON TH~: B3,~;15 OF ~3[~tAIlILfTY IN ]~'Iv~/pLO¥'~4C.%iT OR THE; PROVIBION OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: December 17, 2001 AGENDA SECTION: Items for Consideration, Other ORIGINATING EXECUTIVE Business DEPARTMENT: EDA DIRECTOR NO: 3-B-1 APPROVAL ITEM: 2002 CDBG Program Application. BY: Tim Johnson DATE: BY: December 12, 2001 ISSUE STATEMENT: The EDA is requested to considered potential projects to incorporate in the 2002 CDBG Program application to be submitted to Anoka County on or before January 11, 2002. BACKGROUND/ANALYSIS: The 2002 competitive CDBG Program Application is due to Anoka County by January 11, 2002. The Council must approve the projects incorporated in the 2002 application before submission. The City Council will give consideration to the project(s) at its regular session on December 17, 2001. The total grant allocation for Anoka County in 2002 is approximately $1,864,000. Of this amount, $1,114,500 is available for cities and townships, which is 55% of the total grant allocation. Each project submitted is limited to a maximum amount of $300,000. Anoka County staffheld a meeting on December 4, 2001 to discuss the 2002 CDBG program and to provide information related to this program. We have attached a copy of the information summarizing the CDBG program. You will note that one of three federal objectives must be met with CDBG funds including: 1) benefit to low and moderate income persons, 2) prevention or elimination of slums and blight, and 3) urgent need. Please also review the eligible activities. Anoka County will likely only fund high priority activities as listed in their Consolidated Plan Goals and Priorities (see attached). Finally, the CDBG program is governed by a number of Federal regulations including Davis-Bacon labor standards, environmental, fair housing, relocation, lead-based paint, equal oppommity, record keeping, and auditing. City staff offers the following Community Development Block Grant proposals for consideration by the EDA: 1) Staff would recommend a planning study for the entire industrial park which would provide us with an inventory of existing businesses, a market analysis of these properties, and a planning study to determine the highest and best use of the land and buildings. The Project application for the Industrial Park Redevelopment Planning Study would be for approximately $65,000 - $75,000, based on planning consultant Hoisington Koegler estimate (see attached), which would not include any environmental studies. A Phase I and a Phase II could be added to the study focus. The Elimination of slums and blight would be the federal objective used in the Planning Study application. Planning grants are limited to 20% of the total grant amount. 2) Staffwould ask the EDA to consider the acquisition of deteriorated/non-conforming property(s), of which the project maximum would be $300,000. The elimination of slums and blight would also be used if the EDA were supportive of this type of application. However, Anoka County will be looking for projects that are based on a plan and those that have a developer in hand or have determined a future use of the land. 3) Staffwould ask the EDA to consider additional funds to support housing fix-up for a maximum of $300,000. There are currently about 10 Columbia Heights resident grant applications in process, with an additional 5-6 on the waiting list. The City Council should keep in mind that Columbia Heights was awarded funding of $175,000 out of $300,000 for the acquisition of the Conoco Station last year, but should not necessarily expect a similar funding amount for 2002. Benefit to low and moderate-income persons would be used to meet the federal objective. RECOMMENDATION: Staffrecommends submitting a proposed planning study of the industrial park for the 2002 CDBG Program Application. RECOMMENDED MOTION: Move to authorize staffto pursue preparation of the 2002 CDBG Program Application for the Industrial Park Redevelopment Planning Study; and furthermore, to submit said application to the City Council for consideration at its regularly scheduled meeting on December 17, 2001. Attachments: CDBG Program information; Anoka County Goals and Priorities Chart; Industrial Park Map Study Area; Koel~ler Study info EDA ACTION: Community Development Goals and Priorities 2000-2005 PRIORITY COMMUNITY DEVELOPMENT NEEDS PUBLIC FACILITY NEEDS Neighborhood Facilities Parks and/or Recreation Facilities Health Facilities Parking Facilities Solid Waste Disposal Improvements Asbestos Removal Non-Residential Historic Preservation Other Public Facility Needs INFRASTRUCTURE Water/Sewer Improvements Street Improvements Sidewalks Sewer Improvements Flood Drain Improvements Other infrastracture Needs PUBLIC SERVICE NEEDS Handicapped Services Transportation Services Substance Abuse Services Employment Training Health Services Other Public Service Needs ANTI-CRIME PROGRAMS Crime Awareness Other Anti-Crime Programs YOUTH PROGRAMS Youth Centers Child Care Centers Youth Services Child Care Services * Other Youth Programs SENIOR PROGRAMS Senior Centers Senior Services **Other Senior Programs Priority Need Level High, Medium, Low H L L L L M M M M M L M L L H H H H L L H H H H H H H H Community Development Goals and Priorities Page 1 ECONOMIC DEVELOPMENT Rehab; Publicly- or Privately- Owned CI Infrastructure Development Other Commercial/Industrial Improvements Micro-Enterprise Assistance ED Technical Assistance Other Economic Development PLAN-NING Planning H M H H M L H Community Development Goals and Priorities Page 2 Creative Solutions for Land Planning and Design December 11, 2001 Mr. Tim Johnson City of Columbia Heights 590 40th Street NE Columbia Heights, MN 55421-3835 Hoisington Koegler Group Inc. Re: Industrial Area Study Dear Tim: This letter outlines a preliminary scope of services for the analysis and planning of the industrial area in Columbia Heights. The purpose of the project is to examine the existing industrial area to determine redevelopment potential based on market .expectations and physical planning issues. ']?his proposed scope of services has been assembled to: Help the City more clearly understand the steps required to create an achievable redevelopment plan. Estimate the cost and timetable for completing a plan. Provide a framework for preparing a final work program that fits the needs of the City. Methodolog~ and Scope This industrial area analysis and planning project would be conducted by Hoisington Koegler Group Inc (HKGi) with assistance from Bonz/REA. Bonz/REA will be responsible for the market analysis tasks in the project. The firm will also assist with the financial feasibility analysis. HKGi will perform all other tasks. The following outline of tasks indicates our methodology and scope of work for the Columbia Heights Industrial Area Redevelopment Study. 1. Organize the Effort At the outset of the planning process, it will be vital for all parties to have a firm understanding of the anticipated planning activities, and to recognize how and when various project interests wiii be asked to participate in preparing the study. ].1. Organize and conduct a "Kick-Off Meeting" with City representatives to introduce the HKGi team, to review the process for the work, and to confirm project goals. The "Kick- Off Meeting" will also provide an opportunity to gain initial insights into the issues and concerns with the project. 1.2. Determine approach(s) to maintain ongoing project communications and define presentation of findings at key times during completion of the work. 1.3. Create a project schedule containing meeting, dates and milestones. 123 North Third Street, Suite 100, Minneapolis, MN 55401-1659 Ph (612) 338-0800 Fx (612) 338-6838 Preliminary' Scope of Work December 11, 2001 Page 2 2. Understand the Existing Environment Redevelopment does not occur on an empty field. Redevelopment modifies an existing built environment. The foundation of redevelopment planning is a clear understanding of the existing setting. To create this understanding, HKGi will: 2.1. Review and evaluate previous plans, land controls and other municipal information related to the project area. 2.2. Use existing data to build Geographic Information System (GIS) database and related mapping for the area. At a minimum, parcel level data will include lot configuration, rights-of-way, building size, property valuation, existing land use, comprehensive planning designation, and zoning classifications. 2.3. Determine and collect additional data needed to update and supplement existing information. 2.4. Prepare photo inventory of parcels in project area. 2.5. Review land use and development plans for adjacent areas. 3. Understand the Market Planning cannot take a "Field of Dreams" approach. "If you build it, they will come" rarely works for redevelopment. Successful redevelopment occurs within the context of economic reality. What types and quantities of development can be supported in the project area? What market forces influence the redevelopment of the project area? To create this understanding, HKGi will: 3.1. Provide an understanding of the regional economic context focusing on the economic factors that attract business and investment to this sector of the metropolitan area and the project area. This analysis will examine existing and emerging market dynamics affecting these investment flows. Specific areas of examination will include: · Regional demographic trends, profiles, and projections, focusing on local as well as regional data relating to labor, employment, and growth; · Regional and local employment trends, focusing on industry sectors and their short- term and long-term growth prospects; · Commercial development and absorption patterns, focusing on current performance indices (price/lease rates, vacancy rates, etc.), comparative performances among competing subregions, emerging development locations, likely areas for future development, tenant profiles, and other such factors. 3.2. Conduct interviews of public officials, developers, real estate brokers, property managers, landowners, and other persons possessing technical data as well as insight into current and future development conditions in the project area and nearby competitive market locations. 3.3. Investigate relevant competitive trade areas and the existing and emerging factors shaping local and regional development patterns. These analyses will focus on such Preliminary Scope of Work December 11, 2001 Page 3 influences in the project area, as well as in the nearby locations and regions that would compete with the project area. Our analyses will examine: · Availability and quality of existing and planned public infrastructure; · Land prices in the subject area and in potentially competitive areas; Relative proximity to various business and residential amenities; · Labor force availability, characteristics, and growth potential; and · Other relevant influences that may emerge during the course of our research. 3.4. Identify the project area's sustainable competitive advantages as well as its potential vulnerabilities. 3.5. Assess the long-term (20-year) development potential in the project area. This assessment will offer insight into each of the major development sectors (residential, office, retail, industrial). For each sector, this assessment will describe the approximate volume, likely ~-~" ~ ,u,~adon~, and likely character (scale, types of tenant operations) of future development, while identifying alternative development opportunities that might be feasible under potential conditions that could be encouraged in the planning process. 4. Explore the Possibilities There is no single "right" approach to redevelopment. Typically, several redevelopment scenarios are possible. Each scenario possesses different strengths and weaknesses. In creating and exploring these possibilities, the HKGi team will: 4.1. 4.2. 4.3. 4.4. 4.5. Develop a list of criteria to be used for selecting redevelopment sites. The criteria will focus on factors such as community needs, market projections, economic projections, shifts in regional market dynamics and opportunities that may be enhanced by the removal of development constraints. Apply the criteria as part of a parcel-by-parcel review of the project area. For example, the review will focus on undeveloped and underdeveloped parcels as evidenced by building valuations, building condition, current users, etc. Identify sites that are expected to redevelop over the next twenty years and calculate the combined land area. Identify a list of potential long-term (2020) uses appropriate for the project area based on market data compiled and the other development goals of the City. Prepare two future land use concepts that depict the goals and probable market realities of the study in varying ways. The alternative scenarios will feature varying patterns of development and land use. The development scenarios will be framed in the realities of their potential for implementation. The feasibility of each concept will be addressed, so that the implications for implementation are considered as the desirability of the development patterns are subsequently evaluated. Preliminary Scope of Work December 11, 2001 Page 4 5. Analyze the Feasibility A plan will not lead to redevelopment unless it is financially feasible. Financial feasibility has both public and private elements. Redevelopment often requires public investments to remove physical and economic barriers to development. The public investments must seek to create an environment that attracts and sustains private investment in a manner desired by the City. 5.1. Identify the public actions needed to facilitate the redevelopment scenarios proposed in Task 4. These actions will include infrastructure, site assembly and site preparation. 5.2. Determine if all or part of the project area can qualify as a tax increment financing district and, if so, calculate the funding capacity of the district. 5.3. Analyze the potential applications of tax abatement and the related tax impacts. 5.4. Determine if other public finance tools, such as special assessments and special service districts, play a role in implementation and, if so, how. 5.5. Estimate and project the net new property valuation created by the redevelopment scenarios. 5.6. Conduct a prototype feasibility analysis. This analysis will analyze the financial feasibility of an example redevelopment project. The purpose of this analysis is to evaluate (1) the public assistance needed to induce development in the early years and (2) the potential reduce or eliminate public assistance for future redevelopment. 5.7. Identify the public finance tools available to the City to undertake necessary public actions and evaluate the implications of using the tools. 5.8. Compare the financial feasibility of the proposed redevelopment scenarios. 6. Recommend a Land Use Scenario Building upon the two alternate redevelopment scenarios, and the constructive comments of the City, the HKGi team will recommend a Preferred Land Use Scenario for consideration. The recommended scenario will clearly reflect the goals and objectives of the City. 6.1. Define screening criteria to be used in the assessment of the two redevelopment scenarios developed in Task 4. Screening criteria might include traffic generation, land use compatibility, environmental impacts, fiscal impacts, and infrastructure needs. APply screening criteria to each of the concepts. 6.2. Select and refine a preferred future land use scenario. The selected alternative will include refinements so that it depicts specific patterns of land use and development, connections to transit, links to existing and new neighborhoods, connections to the community-at-large, circulation patterns, and traffic flow. Preliminary Scope of Work December 11, 2001 Page 5 7. Recommend Implementation Strategies Implementation strategies will be prepared that recommend specific steps required to realize the desired future land use scenario. The following tasks will help define appropriate implementation strategies: 7.1. Identify key public actions required for implementation and provide guidance on the preferred sequencing of actions. 7.2. Prepare an implementation strategy documenting the steps required to implement the recommended land use scenario from Task 6. The strategy will include a specific framework for achieving the strategy. 8. Prepare the Plan HKGi will compile all pertinent text, graphics and tables into a final study report. The report serves two purposes. First, and foremost, the report serves as a tool for encouraging and guiding the redevelopment of the project area. The report also records the information and findings generated through the planning process. 8.1. Assemble a draft study report for review by the City. The draft report will include progress reports, diagrams, maps, photographs, text, etc., along with an executive summary of key study recommendations regarding both "process" and "product". 8.2. Assemble the final study report incorporating changes identified in the review of the draft report. Budget £stimates Four factors play important roles in shaping the cost of completing a redevelopment planning study: 1. Specific tasks to be performed. 2. Level of detailed information required by the City. 3. Number of meetings to attend and conduct. 4. Overall timetable for completing the plan. Based on our experience with similar projects, the City can expect a budget of $65,000 to $75,000 to complete the tasks described in this letter. A final budget amount can be set once we have additional guidance on the factors listed above. Preliminary Scope of Work December I I, 2001 Page 6 I trust that this letter provides you with the necessary information for consideration of the industrial area analysis. HKGi looks forward to our continued discussions about this exciting and important planning project. Please call me if you have any questions or need additional information. Sincerely, HOISINGTON KOEGLER GROUP INC R. Mark Koegler President RMK:dbm © 2001 Hoisington Koegler Group Inc. This document is the intellectual property of Hoisington Koegler Group Inc. It shall not be copied, reproduced, distributed or used in any way, except for evaluating credentials, without permission from Hoisington Koegler Group lnc.