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HomeMy WebLinkAboutEDA AGN 09-27-04 SpecialCITY 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 COMMISSIONERS Don Murzyn Jr. Patricia Jindra Bruce Kelzenberg Julienne Wyckoff Bruce Nawrocki Bobby Williams Tammera Ericson ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING 7:00 P.M., WEDNESDAY, SEPTEMBER 27, 2004 CITY HALL, CONFERENCE ROOM 1 ,4 GENDA 1. CALL TO ORDER/ROLL CALL 2. PLEDGE OF ALLEGIANCE. 3. ITEMS FOR CONSIDERATION Ae ADOPT RESOLUTION 2004-13~ ADOPTING A MODIFICATION TO TltE DOWNTOWN REVITALIZATION PLAN FOR Tl:lE CBD REDEVELOPMENT PROJECT AND ESTABLISHMENT OF TIlE HUSET PARK AREA TIF PLAN. MOTION: Move to waive the reading of Resolution 2004-13, there being an ample amount of copies available to the public. MOTION: Move to Adopt Resolution 2004-13, a Resolution Adopting a Modification to the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and Establishing the Huset Park Area Tax Increment Financing District therein and Adopting a Tax Increment Financing Plan therefore. B. Adopt Resolution 2004-12~ Eliminating Parcels from K2 TIF DISTRICT MOTION: Move to waive the reading of Resolution 2004-12, there being an ample amount of copies available to the public. MOTION: Move to Adopt Resolution 2004-12, a Resolution Approving the Elimination of parcels from the TIF 4 Multi Use Redevelopment Project (MURP) K2 Tax Increment Financing District within the Central Business District Redevelopment Project in the City of Columbia Heights. C. Adopt Resolution 2004-11~ Approving Contract for Private Redevelopment MOTION: Move to waive the reading of Resolution 2004-11, there being an ample amount of copies for the public. MOTION: Move to Adopt Resolution 2004-11, a Resolution Approving a Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Schafer Richardson, Inc. or a related entity; and furthermore to authorize the President and Executive Director to enter into an agreement for the same. 4. ADJOURNMENT Walter R. Fehst, Executive Director H:~EdaAgenda2004\9-27-2004 Spec. Mtg 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 70.6-2806) for deaf or hearin~ in-mired only. HE r, JITY OF COLUMBIAHEIGI-~I'S DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES I~OUAL 0.~.~ .~. T'J.': :T:' COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: September 27, 2004 AGENDA SECTION: Items for Consideration ORIGINATING EXECUTIVE NO: 3-A DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2004-13, Adopting a BY: Randy Schumacher BY: Modification to the Downtown Revitalization DATE: September 20, 2004 Plan for the CBD Redevelopment Project and Establishment of the Huset Park Area TIF Plan BACKGROUND: The purpose of this resolution is for the proposed modification to the Downtown Revitalization Plan for the CBD Redevelopment project and establishment of the Huset Park Tax Increment Financing Plan. The increment created would be used for the purpose of encouraging the development and redevelopment of certain designated areas within the City. RECOMMENDATION: Staff recommends Adoption of Resolution 2004-13, Modifying the Downtown Revitalization Plan for the CBD Redevelopment Project and establishing the Huset Park Tax Increment Financing District. RECOMMENDED MOTION: Move to waive the reading of Resolution 2004-13, there being an ample amount of copies available to the public. RECOMMENDED MOTION: Move to Adopt Resolution 2004-13, a Resolution Adopting a Modification to the Downtown Revitalization Plan for the CBD Redevelopment Project and establishment of the Huset Park Area Tax Increment Financing District. Attachments EDA ACTION: ~ h:\consent Form2004\EDA Res.2004-13, Huset Pk TIF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY CITY OF COLUMBIA HEIGHTS COUNTY OF ANOKA STATE OF MINNESOTA RESOLUTION NO. 2004-13 RESOLUTION ADOPTING A MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR Tl~E CBD REDEVELOPMENT PROJECT AND ESTABLISHING THE HUSET PARK AREA TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority (the "EDA") and the City of Columbia Heights (the "City") that the EDA adopt a Modification (the "Project Plan Modification") to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project (the "Project Area") and establish the Huset Park Area Tax Increment Financing District and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Project Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1799, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS, the EDA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption of the Plans. The EDA has also requested the City Planning Commission to provide for review of and written comment on Plans and that the City Council schedule a public heating on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: 1. The EDA hereby finds that the Huset Park Area Tax Increment Financing District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, Subd 10(a)(1), and finds that the adoption of the proposed Plans conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is already built up and that the adoption of the proposed Plans will help provide life-cycle housing for citizens of the City, and to clean-up polluted soils, buildings, and groundwater, and thereby serves a public purpose. 2. The EDA further finds that the Plans 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. The EDA further finds that the TIF District portion of the Project Area is a "blighted area" within the meaning of Minnesota Statues, Section 469.002, subd. 11, and that acquisition, clearance and related activities to redevelop the TIF District portion of the Project Area in accordance with the Project Plan and the TIF Plan constitute a "redevelopment project" within the meaning of Minnesota Statutes, Section 469.002, subd. 14. 4. The reasons and facts supporting the findings in this resolution are described in the Plan and in the exhibits attached to the City resolution approving the Plans, on file in City Hall. SJB-253456vl CL205-23 5. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, 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 Executive Director of the EDA. 6. Upon approval of the Plans by the City Council, the staff, the EDA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans 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 Plans does not constitute approval of any project or a Development Agreement with any developer. 7. Upon approval of the Plans by the City Council, the Executive Director of the EDA is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue pursuant to Minnesota Statutes 469.175, Subd. 4a. 8. The Executive Director is authorized and directed to forward a copy of the Plans to the Anoka County Auditor and request that the Auditor certify the original tax capacity of the District as described in the TIF Plan, all in accordance with Minnesota Statutes 469.177. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 27t~ day of September, 2004. ATTEST: President- Don Murzyn, Jr. Executive Director- Walter R. Fehst SJB-253456vl CL205-23 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: September 27, 2004 AGENDA SECTION: Items for Consideration ORIGINATING EXECUTIVE NO: 3-B DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2004-12, Eliminating BY: Randy Schumacher BY: Parcels from K2 TIF District DATE: September 21, 2004 BACKGROUND: The purpose of this Resolution is to eliminate 12 parcels that are presently located in a previously established Tax Increment Financing District (MURP) K2, thereby, qualifying them to be designated in a new Tax Increment Financing District. The original net tax capacity of the Tax Increment Financing District will be reduced by no more than the current net tax capacity of the parcels. RECOMMENDATION: Staff recommends adoption of Resolution 2004-12, eliminating parcels from the K2 TIF District. RECOMMENDED MOTION: Move to waive the reading of Resolution 2004-12, there being an ample amount of copies available to the public. RECOMMENDED MOTION: Move to Adopt Resolution 2004-12, a Resolution Approving the Elimination of parcels from the TIF 4 Multi Use Redevelopment Project (MURP) K2 Tax Increment Financing District within the Central Business District Redevelopment Project in the City of Columbia Heights. Attachments EDA ACTION: h:\consent Form2004\EDA Res.2004-12 Elim. Parcel from K2 TIF COLUMBIA I-1EIGHTS ECONOMIC DEVELOPMENT AUTHORITY CITY OF COLUMBIA HEIGHTS COUNTY OF ANOKA STATE OF MINNESOTA RESOLUTION NO. 2004-12 RESOLUTION APPROVING TI-IE ELIMINATION OF PARCELS FROM TI-IE TIF 4 MULTI USE REDEVELOPMENT PROJECT (MURP) 1(2 TAX INCREMENT FINANCING DISTRICT WITHIN THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT IN TI-IE CITY OF COLUMBIA HEIGHTS. WHEREAS, on September 28, 1989, the City of Columbia Heights City Council (the "City) established TIF 4 Multi Use Redevelopment Project (MURP) K2 Tax Increment Financing District (the "TIF District") within its Central Business District Redevelopment Project; and WHEREAS, the Columbia Heights Economic Development Authority (the "EDA") is the administrative authority for the TIF District; and WHEREAS, the TIF District, in part, included the following parcel numbers, which were previously certified in the TIF District (the "Parcels"): 35-30-24-34-0013 35-30-24-34-0014 35-30-24-34-0040 35-30-24-43-0060 35-30-24-43-0047 35-30-24-34-0035 35-30-24-34-0039 35-30-24-34-0024 35-30-24-34-0041 35-30-24-34-0003 35-30-24-34-0004 35-30-24-34-0002 WHEREAS, the Parcels have been excluded from the original tax capacity of the TIF District pursuant to Minnesota Statues, Section 469.176, subd. 6 (the so-called "knock-down rule"); and WHEREAS, the EDA desires by this resolution to cause the elimination of the Parcels from the TIF District thereby reducing the size of the TIF District; and WHEREAS, the City and EDA are authorized to modify the TIF District by eliminating one or more parcels without the notice and hearing required for approval of an initial plan if they agree that, notwithstanding Minnesota Statutes, Section 469.177, subd. 1, the original net tax capacity of the TIF District will be reduced by no more than the current net tax capacity of the parcels eliminated from the TIF District; and WHEREAS, while the Parcels have been "knocked down," their current net tax capacity is less than the original net tax capacity of those Parcels when originally certified. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE EDA as follows: 1. The tax increment financing plan ("TIF Plan") for the TIF District is hereby modified to remove the Parcels from the TIF District, effective for taxes payable in 2005. 2. In accordance with Minnesota Statutes, Section 469.175, subd. 4(e)(2)(B), the EDA elects that the original net tax capacity of the TIF District will be reduced by no more than the current net capacity of the Parcels. SJB-253425vl CL205-23 Upon approval of a similar resolution by the City, staff are authorized and directed to attach a copy of this resolution to the TIF Plan for the TIF District in City files, file a copy of this resolution with the County Auditor of Anoka County along with instructions to adjust the records for the TIF District accordingly, and file a copy of the resolution with the Minnesota Commissioner of Revenue. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 27t~ day of September, 2004. ATTEST: President-Don Murzyn, Jr. Executive Director-Walter R. Fehst SJB-253425vl CL205-23 MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT REVITALIZATION PLAN FOR THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT and the TAX INCREMENT FINANCING PLAN for the establishment of THE HUSET PARK AREA TAX INCREMENT FINANCING DISTRICT (a redevelopment district) within THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY CITY OF COLUMBIA HEIGHTS COUNTY OF ANOKA STATE OF MINNESOTA Public Hearing: Public Hearing Continued: Public Hearing Continued: Adopted: August 9, 2004 September 13, 2004 September 27, 2004 EHLERS & ASSOCIATES INC Prepared by. EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 65.1-697-8500 fax: 651-697-8555 www. ehlers-inc, com TABLE OF CONTENTS (for reference purpoSes only) SECTION I MODIRCA TION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT REVITALIZA TION PLAN FOR THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT... 1-1 Foreword Ovewiew Findings ............................................................. 1-1 SECTION II TAX INCREMENT RNANCING PLAN FOR THE HUSET PARK AREA TAX INCREMENT FINANCING DISTRICT ................. 2-1 Subsection 2-1. Foreword ........................................... 2-1 Subsection 2-2. Statutory Authority ...: ............................... i. ii 2-1 Subsection 2-3. Statement of Objectives ................................... 2-1 Subsection 2-4. Downtown CBD Revitalization Plan Overview .................. 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2 Subsection 2-6. Classification of the District ................................ 2-2 Subsection 2-7. Duration of the District .................................... 2-4 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ............... 2-4 Subsection 2-9. Sources of Revenue/Bonded Indebtedness .................... 2-5 Subsection 2-10. Uses of Funds Subsection 2-11. Subsection 2-12. Subsection 2-13. Subsection 2-14. Subsection 2-15. Subsection 2-16. Subsection 2-17. Subsection 2-18. Subjection 2-19. Subsection 2-20. Subsection 2-21. Subsection 2-22. Subsection 2-23. Subsection 2-24. Subsection 2-25. Subsection 2-28. Subsection 2-27. Subsection 2-28. Fiscal Disparities Election ................................. 2-7 Business Subsidies ...................................... 2-7 County Road Costs ...................................... 2-8 Estimated Impact on Other Taxing Jurisdictions ................ 2-9 Supporting Documentation ................................. 2-9 Definition of Tax Increment Revenues ....................... 2-10 Modifications to the Distdct ............................... 2-10 Administrative Expenses ................................. 2-11 Limitation of Increment ................................... 2-11 Use of Tax Increment .................................... 2-12 Excess Increments ...................................... 2-13 Requirements for Agreements with the Developer .............. 2-13 Assessment Agreements ................................. 2-14 Administration of the District ............................... 2-14 Annual Disclosure Requirements ........................... 2-14 Reasonable Expectations ................................ 2-14 Other Limitations on the Use of Tax Increment ................ 2-14 Summary ....... , ..................................... 2-15 APPENDIX A PROJECT DESCRIPTION APPENDIX B MAPS OF THE CBD REDEVELOPMENT PROJECT AND THE HUSET PARK AREA TIF DISTRICT ............................... B-1 APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT ............. C-1 APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT .............................. D-1 APPENDIX E MINNESOTA BUSINESS ASSISTANCE FORM ............................... E-1 APPENDIX F REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT .................... F-1 APPENDIX G BUT/FOR QUALIFICATIONS ............................................. G-1 SECTION I MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT REVITALIZATION PLAN FOR THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT Foreword Thc following text represents a Modification to thc Downtown Central Bus/ness District (CBD) Rcvit~l~tion Plan for thc CBD Redcvcl~ Project. This mod;fication rcpresmts a cont~uation of thc goals and objectives set forth in thc Downtown CBD Revitalization Plan for thc CBD Redevelopment Project Generally, thc substarttivc changes include thc establistunent of Husct Park Area Tax Increment Financing District For further infusmation, a review of thc Downtown CBD Revitalization Plan for the CBD Redevelopment Project is recommendexL It is available from the Co~ty Development Director at the City of Columbia Heights. Other relevant info~vation is contained in thc Tax Increment Financing Plans for thc Tax Increment Financing Districts located within thc Central Business District (CBD) Redevelopment Project. Overview The Central Business District ("CDB") Redevelopment Project is a~fistered by thc Columbia Heights Economic Development Authority (thc "EDA"). Previously, thc CBD Redevelopment Project was established and administered by thc City of Columbia Heights (thc "City") and thc Columbia Heights Housing and Redevelopment Authority (thc "HRA'). The CBD Redevelopment Project previously included property in the downtown area. On July 18, 1994, the Sheffield Neighborhood Redevelopment and Housing Development Project was consolidated with the CBD Redevelopment Project by thc HRA. On January 8, 1996, thc HRA transferred its authority to thc EDA, which currently administers the CDB Redevelopment Project. on May 27, 1997, the CBD Redevelopment Project was modified to expand the project area to include thc entire City. Concm'rently, Housing Redevelopment Tax Increment Financing District No. 1 ('~)istrict 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. The boundaries of the CBD Redevelopment Project are coterminous with thc corporate limits of the City. A map of the boundaries of the CBD Redevelopment Project can be found in Appendix B. Findings, Upon approval of this Modification, the EDA and City will find that the portion of the Redevelopment Project to be designated as the Huset Park Area Tax Increment Financing District is characterized by blight. as defined by Minnesota Statutes, Sections 469.001 to 469.047. Columbia Heights ]~onomic Development Authority Modification to the Downtown CBD Rev/talizafion PI,,, for the CBD Redevelolm~mt Project 1-1 SECTION II TAX INCREMENT RNANCING PLAN FOR THE HUSET PARK AREA TAX INCREMENT RNANCING DISTRICT Subsection 2-1. Foreword The Col,m~hia Heights Econo~c Development Authority (the "EDA"), the City of Col~m~hia Heights (the "City"), staff and consultants have prepared the following.information to expedite the establishment of the Huset Park Area Tax Increment Financing District (the 'q)istrict"), a redevelopment tax increment financing district, located in the Central Business District Redevelopment Project. Subsection 2-2. Statutory Authority Withha the City, there exists areas where public involvermnt is necessary to cause development or redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota Statutes ('M.$.'9, Sections 469.001 to 469.047, inclusive, as amended, and M.$., Sections 469.174 to 469.1799, inclusive, as amended (the 'Fax 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 '~rlF Plan") for the Huset Park Area Tax Increment Financing District. Other relevant information is contained in the Modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project. Subsection 2-3. Statement of Objectives The District currently consists of 12 parcels of land and adjacent and internal rights-of-way and abutting roadways. The District is being created to facilitate the redevelopment of the Columbia Heights Industrial. Park into a mixed-use development consisting of up to 559 units of owner-occupied housing and a neighborhood retail office development in the City of Columbia Heights. In order to establish the District for thin project, certain parcels of land must be eliminated from Columbia Heights MURP TIF District County Identifier K2. Contracts for this have not been entered into at the time of preparation of this TIF Plan, but development is likely to occur in the spring of 2005. This TIF Plan is expected to achieve many of the objectives outlined in the Downtown CBD Revitalization Plan for the CBD Redevelopment Project. The activities conteni01ated in the Modification to the Downtown CBD Revitalization Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the CBD Redevelopment Project and the District. Subsection 2-4. Downtown CBD Revitalization Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the EDA or City and is further descn'bed in thi.q TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.$., 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 EDA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. Columbia Hvights Eeonomio D~velopmeat Authority Tax Increment Financing Plan for th~ Hu~t Park Area Tax heretmat F~nm-4ng District 2-1 Thc EDA or City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work with~ the District. Subsection 2-5. Description of Property in the District and Property To Be Acquired The Distric~ encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels* listed below. Sec the map in Appendix B for further information on the location of the District. Parcel N~ers* 35-30-24-34-0013 35-30-24-34-0014 35-30-24-34-0040 35-30-24-43-0060 35-30-24-43-0047 35-30-24-34-0035 35-30-24-34-0039 35-30-24-34-0024 35-30-24-34-004 1 35-30-24-34-0003 35-30-24-34-0004 35-30-24-34-0002 *All parcels are '~Knockcd Down" parcels being removed from Columbia Heights TIF 4 Multi Plan Cargill (MURP) TIF District County Identifier K2. The EDA or City may acquire any parcel within thc District including interior and adjacent street rights of way, or reimburse developers for the cost of such acquisition. Any properties identified for acquisition will be acquired by the EDA or City only in order to accomplish thc uses and objectives set forth in this plan. The EDA or City may acquire property by gift, dedication, con~tion or direct purchase from willing sellers in order to achieve thc objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District The EDA and City, in determining thc need to create a tax increment financing district in accordance with M.$., Sections 469.174 to 469.1799, as amended, inclusive, find that thc District, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. lO(a)(1) as defmedbelow: "Redevelopment district"means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more of the following conditions, reasonably distributed throughout the district, exists: (1,) parcels consisting of 70percent of the area in the district are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) The property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities or excessive or vacated railroad rights-of-way;. (3) tank facilities, or property whose immediately previous use was for tank facifities, as defined in Section 115C, Subd. 15, if the tank facility: Columbia Ht, ights Economic Developm~t Autl~ty Tax Inc~nent Finaacing Plaa for ih~ Hu~et Pa~k A~ Tax Incwmmt Finaaclag Disaict 2-2 (i) have or had a capacity of more than one million gallons; (ii) are located adjacent to rail facilities; or (iii) have been removed, or are unused, underused, inappropriately used or infrequently used; or (4) ct qualifying disaster area, as defined in Subd. 1 Ob. For purposes of this subdivision, "structurally substandard" shall 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 inten'or partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. .4 building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent 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 of plumbing, electrical, or structural repairs or other similar reliable evidence. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building..4n interior inspection of the property is not required, if the municipalityfinds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard. .4 parcel is deemed to be occupied by a structurally substandard building for purposes of the finding under paragraph (a) if all of the following conditions are met: (I) the parcel was occupied by a substandard building within three years of the filing of the request for cert~'fication of the parcel as part of the district with the county auditor,. the substandard building was demolished or removed by the authority or the demolition or removal was financed by the authority or was done by a developer under a development agreement with the authority; the authority found by resolution before the demolition or removal that the parcel was occupied by a structurally substandard building and that after demolition and clearance the authority intended to include the parcel within a district; and upon filing the request for certification of the tax capacity of the parcel as part of a district, the authority notifies the county auditor that the original tax capacity of the parcel must be adjusted as provided by 3~ 469.177, subdivision 1, paragraph (D. For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures. C°lumbia Hcight~ Economic Dev~lolnmmt Antlxnity Tax/nc~nmmt I~immcing Plan for the Huaet Pad~ Area Tax I~eu~n~t Financing Distric t 2-3 For districts consisting of two or more noncontiguous areas, each area must qualify as a redevelopment district under paragraph (a) to be included in the district, and the entire area of the district must satisfy paragraph (a). In meeting the statutory criteria the EDA and City rely on the following facts and findings: [] The District consists of 12 parcels. [] An inventory shows that parcels cousisfing of more tha~ 70 percent of the area in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structtlres. [] An inspection of the buildings located within the District finds that more than 50 percent of the buildings are structurally substandard as defined in the TIF Act. (See Appendix F). Pursuant to M.S. 469.176 Subd. 7, the District does not contain any parcel or part ora parcel that qualified under the provisions of M.S 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration of the District Pursuant toM. S, Section 469.175, Subd. 1, andSection 469.176, Subd. 1, the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. lb, the duration of the District will be 25 years after receipt of the first increment by the EDA or City (a total of 26 years of tax increment). Thc date of receipt by the City of thc first tax increment is expected to be 2007. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would te~-,,,~,,ate after 2032, or when the T[F Plan is satisfied. If increment is received in 2006, the texm of the District will be 2031. The EDA or City reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pm-suant to M.S., Section 469.175, Subd. 4(e) and M.S., Section 469.177, Subd. /, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor for taxes payable in 2005. Pursuant to M.S., Section 469.177, Subds. I and 2, the County Auditor shall certify in each year (beginning in the payment year 2005) the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to aajustments, negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the EDA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2005, assuming the request for certification is made before Julle 30, 2005. The estimated ONTC and the estimated Original Columbia H~.ights Economic Developmma Authtnlty Tax Incremeat Financing Plan for the Hmet pm:k Area Tax Incmmat Financing Dis~xlc t 2-4 Local Tax Rate for the District appear in the table below. (The Original Local Tax Rate shown is for Pay 2004, as the rate for Pay 2005 was unavailable at the time this TIF Plan was prepared.) Pursuant to M.$., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated CapturedNet Tax Capacity (CTC) of the District, withh~ the CBD Redevelopment Project, upon completion of the project, will annually approximate tax increment revenues as shown in the table below. The EDA and City request'100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, b ~eg/tminE in the tax year payable 2007. The Project Tax Capacity (PTC) listed is an estimate of values when the project is coi~pleted. Project Estimated Tax Capadty upon Completion (PTC) Original Estimated Net Tax Capadty (ONTC) Estimated Captured Tax Capadty (CTC) Original Local Tax Rate Estimated Annual Tax Increment(CTC x Local Tax Rate) Percent Retained by the EDA $1,570,073 $42,345 $1,527,728 1.09926 $1,679,370 100% Pay 2004 Pursuant to M.$., Section 469.177,'$ubd. 4, the EDA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District'or area of enlargement for which btu]ding permits have been issued during the eighteen (18) months ~tely preceding approval of the TIF Plan by the mtmicipality pursuant to M.$., Section 469.175, $ubd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of irt.ri, rovements for which a building permit was issued. The City has reviewed the area to be included in the District and determined that no building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. Subsection 2-9. Sources of Revenue/Bonded Indebtedness AH costs outlined in Subsection 2-10, the Uses of Funds, will be financed primarily through the annual collection of tax increments. The EDA or City reserves the right to use other sources of revenue legally ap- plicable to the EDA or City and the TIF Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contn~oufious from the developer and investment income, to pay for the estimated public costs. The EDA ~r City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF Plan. As presently proposed, the project will be financed by primarily by a pay-as-you-go note where the developer will up-front the costs and be reimbursed over time_. The City and EDA may issue general obligation (GO) TIF Bonds or inter-fund loans for public improveazats associated with the project. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness, including a GO TII~ bond, pay-as-you-go note, or other indebtedness related to the use of tax. increment financing will not exceed $15,000,000 without a modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated that $315,000 in interest income will be financed with tax increment revenues. Columbia Heighta Economic Development Amlaofity Tax Inczement Financing Plan for the Huset Pank Area Tax ~t Financing District 24 This provision does not obligate the EDA or City to incur debt The EDA or City will issue bonds or incur other debt only upon the det~,~h~ation ttmt such action is in the best interest of the City. The estimated sources of funds for the District are contained in the table below. ' SOURCES OF FUNDS TOTAL Tax Increment $36,185,000 Interest $315,000 PROJECT REVENUES $36~500~000 Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the redevelopment of the Columbia Heights Industrial Park into a mixed-use development consisting of up to 559 units of owner-oc~tpied housing and a ndghborhood retail office development. The EDA and City have dete,,,;ned that it will be necessary to provide assistance to the project for certain costs. The EDA has studied the feas~ility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF 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 fimds associated with the District, and expected to be paid with tax increments, is outlined in the following table. USES OF FUNDS Land/Building Acquisition Site Improvements/Preparation/Environmental Public Utilities Streets and Sidewalks Interest A,Imlni.~rafive Costs (up to 10%) TOTAL $5,400,000 $6,ooo, oo0 $1,000,000 $1,000,000 $19,500,000 $3,600,000 PROJECT COSTS TOTAL $36~5007000 The above budget is organized according to the Office of State Auditor (OSA) reporting forms. It is estimated that the cost of h:l, rovements, including a -dmixdstrative expenses which will be paid or financed ~rith tax increments, will equal $36,500,000 as is presented in the budget above. Estimated costs associated with the District are subject to change am:rag categories without a modification to this TIF Plan. The cost of all activities to be comidered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.$., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of the CBD Redevelopment Project, (incluaing a~trafive costs, which are considered to be spent outside of the District) subject to the limitations as descn'bed in this TIF Plan. Colmnbia Heights Economic Dev~.opment Auth°fity Tax Increment Financlng Plan £or tl~ Huset Park Area Tax Incmmmt F~.~eing District 2-6 Subsection 2-11. Fiscal Disparities Election Pursuant to M.$., Section 469.177, Subd. 3, the EDA or City may elect one oftwo methods to calculate fiscal disparities. If the calculations pursuant to M.$., Section 469.177, Subd. 3, clause a, (outside the District) 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 2 76A or 473F. g~here 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 shall 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(4) 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 EDA will choose to calculate fiscal disparities by clause a. According to M.$., Section 469.177, Subd. 3: (c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2-12. Business Subsidies Pursuant to M.$. Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $25,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, ~such as a line of business, size, location, or sim/lar general criteria; (3) Public ~rovements to buildings or lands owned by the state or local goverranent that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the/r?, rovements are made; (4) Redevelopment property polluted by eont~ as definedinM. S. Section 116J. 552, $ubd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those serv-ices; Columbia Heishis Bcouomic Developmeat AUthority Tax Inc.'mint Financiag Plau for the Huzet park .aaea Tax In~mmat Financing Di~ct 2-7 (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S. Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting fi.om confo~mity with federal tax law;, (11) Workers' compensation and unemployment compensation; (12) Benefits derived fi.om regulation; (13) Indirect benefits derived fi.omassistance to educational institutions; (14) Funds fi.ombonds allocated under chapter 474A, bonds issued to refund outstanding b'onds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S. Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's cuixent year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature. (19) Federal assistance until the assistance has been repaid to, and reinvested bY, the state or local government agency; (20) Funds fi.om dock and whaffbonds issued by a seaway port authority; (21) Business loans and loan guarantees of $75,000 or less; and (22) Federal loan funds provided through the United States Department of Co-~n~rce, Economic Development A~tration- The EDA will comply with M.S., Section 116J.993 to 116J. 994 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2-13. County Road Costs Pursuant to M.$., Section 469.175, Subd. la, the county board may require the EDA or City 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 ~rovements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. ff thc coumy elects to use increments to improve county roads, it mt notify the EDA or City within forty- five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed developme?t outlined in this TIF Plan will have little or no ira?act upon county roads, therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Columbia tt~ights Econmnie Develolnnmt Autbmity Tax Inc~mcnt F~n4ng Plma for the Huset pack .A~a Tax ln~ement Financing Distxict 2-8 Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated ir?act on oth~ taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the EDA or City has detc~.~,,ed that such devclopmmt or redevelopment would not occur '"out for" tax increment financing and that, therefore, the fiscal ir?a .ct on other taxing jurisdictions is $0. The es~i,,,~ted fiscal impact of the District would be as follows if the '"out for" test was not met: IMPACT ON TAX BASE Anoka County City of Columbia Heights Col,rnhia Heights 1SD No. 13 2003/2004 Estimated Captured Total Net Tax Capadty (CTC) Percent of CTC Tax Capacity UPon Completion to Entity Total 200,134,542 1,527,728 0.7634% 9,231,5~7 1,527,728 16.5490% 13,316,873 1,527,728 11.4721% IMPACT ON TAX RATES Anoka County City of Columbia. Heights Colmr~hia Heights 1SD No. 13 Other (Met, I-IRA, ~ Radio) Total 2003/2004 Percent Potential Extension Rates of Total CTC Taxes 0.327220 29.77% 1,527,728 499,903 0.478880 43.56% 1,527,728 731,598 0.229160 20.85% 1,527,728 350,094 0.064000 5.82% 1,527,728 97~775 1.099260 100.00% 1,679,370 The estimates listed above display the captured tax capacity when all Construction is completed. The tax rate used for calculations is the actual 2003/Pay 2004 rate. The total net capacity for the entities listed above are based on actual Pay 2004 figures. The District will be ccrffied under the actual 2004/Pay 2005 rates, which were unavailable at the time thi.~ TIF Plan was prepared. Subsection 2-15. Supporting Documentation Pursuant to M.$. Section 469.175 Subd 1, clause 7 the TIF Plan rrn~.qt contain identification and description of studies'and analyses used to make the detesmhaxtion set forth in M.S. Section 469.175 Subd 3, clause (2) and the findings are required in the resolution approving the TI1~ district. Following is a list of reports and studies on file at the City that support the Authority's findings: 1. City of Columbia Heights Industrial Area Redevelopn~mt Plan, Hoisington Koegler Group, Nov. 2003 2. Phase II Investigation ReporffFocus Feasibility Study/Response Action Plan prepared by ProSourcc and dated October 9, 2003 Columbia Hoights ~conomic De~mlopmemt ~ty Tax lucnammt F~ Pl~ for tho H~t pazk Para Tax Ia,nmmmt Fima~ing Dimic t 2-9 Subsection 2-16. Definition of Tax Increment Revenues Pursnant to M.$., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Tax,es paidby the captured net tax capacity, but excluding any excess taxes, as computed under M.$., Seen'on 469.177; 2. Thc proceeds from thc sale or lease of property, tangible or intangt~olc, purchased by the Authority 3. Principal and interest received on loans or other advances made by thc Authority with tax 4. Interest or other investment earn/ng.q on or from tax increments. Subsection 2-17. Modifications to the District In accordance with M.$., Section 469.175, Subd. 4; any: 1. Reduction or enlargenaent of the geographic area of the CBD Redevelop~t Project or the District, ffthe reduction does not meet the requirements ofM. S., Section 469.17.5, $ubd. 4(0; 2. Increase in amount of bonded indebtedness to be incurred; 3. A detra,,i.ation to capitalize interest on debt ff that determination was not a part of the original TIF Plan, or to increase or decrease the amount of interest on the debt to be capitalized; 4. Increase in the portion of the captured net tax capacity to be retained by the BDA or City; 5. Increase in the esfi,,~ate of the cost of the project, including administrative expenses, that will be paid 6. Designation of additional property to be acquired by the EDA or City, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the origflual TI1~ Plan. Pursuant to M.$. Section 469.175 Subd. 409, the geographic area of the District 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. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that the addition to thc district meets thc criteria of M.$., Section 469.174, Subd. 10, paragraph (a), clauses (1) to (5), mast be doonr~ted in writing and retained. Thc requirements of this paragraph do not apply if (1) thc only modification is elimination of parcel(s) from thc CBD Redevelopment Project or thc District and (2) (A) the cun'ent net tax capacity of thc parcel(s) clh,,i,tated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's ori~nal net tax capacity or (B) thc EDA agrees that, notwithst ,anding M.S., Section 469.177, $ubd. 1, the original net tax capacity will be reduced by no more than thc current net tax capacity of thc parcel(s) eliminated from the District. The EDA or City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the CBD Redevelopment Project or the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Columbla Heishts Bco~omlc Dcvelopm~t Autbodty Tax Inc~na~nt Fina~qng Plm for th~ Helot pad~ Area Tax I~mmmt F/nam/rig Di~tric t 2-10 Subsection 2-18. Administrative Expenses In accordance with M.$., Section 469.174, Subd. 14, a~trativc expenses means all expenditures of the EDA or City, other than: 1. Amgunts paid for the purchase of land; 2. 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 project, 3. Relocation benefits paid to or services provided for persons residing or businesses located in the project; or 4. Amounts used to pay principal or interest on, fired a reserve for, or sell at a discount bonds issued pursuant to M.$., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, admini.qtrative expenses also include amounts paid for services provided by bond counsel fiscal consultants, and planning or economo development consultants. Pursuant to M.$., Section 469.176, $ubd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.$., Section 469.174, $ubd. 25, clause (1), from the District, whichever is less. Pursuant to M.$., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual adi,,hdstrative expenses incurred in connection with the District. 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. I1, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the EDA or City and the County Treasurer shall pay the amount deducted to 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 finance. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-19. Limitation of Increment Pursuant to M.S., Section 469.176, Subd. Ia, no tax increment shall be paid to the EDA or City for the District after three (3) years from the date of certification of the Original Net Tax Capacity value of the taxable prbperty in the District by the County Auditor unless within the three (3) year period: 0) Bonds have been issued in aid of the project containing the District pursuant to M.S., Section 469.178, or any other law, except revenue bonds issued pursuant to M.$., Sections 469.152 to 469.165, or (2) The EDA or City has acquired property within the District, or (3) The EDA or City has constructed or caused to be constructed public improvements within the District. Columbia Hdgh~ Bconomio Dovelopm~t ~ty Tax lnot~-meat Financing Plan for the Hu~t park Area Tax Increment Fl,~a~eing Di~iet 2-11 The bonds must be issued, or the EDA or City must acquire property or construct or cause public irr~r, oven~mts to be constructed by approximately August, 2007 and report such actions to the County Auditor. The tax increment pledged to the paynx~ of bonds and interest thereon may be discharged and the District may be t~ i,i,,ated ff sufficient funds have been irrevocably deposited in the debt s~ice fund or other escrow account held in trust for all outstanding bonds to provide for the payment of th~ bonds at maturity or redemption date. Pursuant to M.$., 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.$., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a oarcel 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 fkom 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. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a newstreet, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The EDA or City or a property owner ~rn].~t improve parcels within the District by approximately August, 2008 and report such actions to the County Auditor. Subsection 2-20. Use of Tax Increment The EDA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for thc following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. To finance, or otherwise pay the cost of redevelopment of the CBD Redevelopment Project pursuant to theM. S, Sections 469.090 to 469.1082; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.$., Section 469.176, $ubd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the EDA or City or for the benefit of the CBD Redevelopment Project by a developer; 6. To finance or otherwise pay prernimm and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to Columbia Heights Ecoaomic D~wlopmmt Au~ority Tax ~t F~anHag Plan for th~ Huzet Park Ama Tax Incmamt Finandag Disaict 2-12 M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M. S., Sections 469.178; and To acctmmlate 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, M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178. 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. Tax increments generated in the District will be paid by Anoka County to the EDA for the Tax Increment Fund of said District. The EDA or City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreemmt to rch~urse the costs of land acquisition, public G,..,rovements, demolition and relocation, site preparation, and a~trafion. Rema/ning increment funds will be used for EDA or City ad.,h,i.~tration (up to 10 percent).and the costs of public improvement activities outside the District Subsection 2-21. Excess Increments Excess incretxtmts, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstand/ng bonds; 2. Dischaxge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to thc County Auditor for redistn'bution to the respective taxing jurisdictions in proportion to their local tax rates. In addition, the EDA or City may, subject to the limitations set forth herein, choose to modify the TII~ Plan in order to finance additional public costs in the CBD Redevelopment Project or the District. Subsection 2-22. Requirements for Agreements with the Developer The EDA or City will review any proposal for private development to determine its conformance with the Downtown CBD Revitalization Plan and with applicable rrnmicipal 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 EDA or City to demonstrate the conformance of the development with City plans and ordinance. The EDA or City may also use the Agreements to address other issues related to the development. Pursuant ~o M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the EDA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments fromproperty acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the EDA or City concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the EDA or City should the development or redevelopment not be completed. Colmnb/a Heighta Econom/c Dewlopment Authofit~ Tax Incmmat Financ/ng Plan for the Huset parle Area Tax/ncmnent Finaacing District 2-13 Subsection 2-23. Assessment Agreements Pursuant to M.$., Section 469.177, Subd. 8, the EDA or City may enter into a written assessment agreemeat in reoordable fo~m with the developer of property within the District which establishes a ill~H~'r~l '[T~'~k~t value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the h-,~rovem~nts are to be constructed and, so long as the ~;:h,h,,nn market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable es~te, the County Assessor shall also certify the i~h~hra~n market value agreement. Subsection 2-24. Administration of the District A~trafion of the District will be handled by the Executive Director of the EDA. Subsection 2-25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, $ubd. 5, 6, and 6b the EDA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board, County Auditor and School Board on or before August 1 of each year. M.$., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S. Section 469.175 $ubd. 5 and $ubd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26. Reasonable Expectations As required by the TIF Act, in establishing the District, the det¢i-,,h,ation has been made that the proposed development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed developnamt after subtracting the present value of the projected tax increments for the maxinatm duration of the District permittedby the TIF Plan. The factual basis for this finding is Summar/zed in Appendix G, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsect!on 2-27. Other Limitations on the Use of Tax Increment General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the CBD Redevelopment Project pursuant to the M.$., Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may 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 does not prola3it the use ofrevenues derived from tax increments for the construction or renovation of a parking structure. Columbia Hci~h~ Bcono~c Dov=loFmmt Ant~ofiey Tax Increment Financing Plan for th~ Hu~t pank Ar~ Tax heavmmt Financing Di~ziet 2-14 Pooling Limitations. At least 75 percent of tax increments bom the District nmst be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to ~ance activities within said d~trict 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 the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all ad~-h,i~trativc expenses mn~t be treated as if they were solely for activities outside of the District. Five Year Limitation on Co,:~,,imaeut of Tax Increments. Tax increments derived from thc District 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.$., Section 469.1763, Subd. 3, has been satisfied; and be~nning with the sixth year following certification of the District, 75 percent of said tax increments that remain af~cr expenditures p~,,-itted under said five year role mttqt be used only to pay previously coi ..... itted expenditures or credit enhanced bonds as more fully set forth in M. S., Section 469.1763, $ubd. $. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to finance the cost of correclh~g conditions that allow desi~ation ofredevelopment andrenewal andrenovation districts under M.S., Section 469.176 $ubd. 4j. These costs include, but are not limited to, acquiring properties containing structurally substandard buildin~ or ~rovem~ts or hazardous substances, pollution, or contanihiants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of hazardous substances or remediation necessary for development of the land, and installation of utilities, roads, sidewalks, ami parking facilities for the site. The allocated adi;~h,i~trative expenses of the EDA or City, ineludlng the cost of preparation of the development action response plan, may be included in the qualifying costs. Subsection 2-28. Summary The Columbia Heights Economic Development Authority is establishing the District to preserve and enhance the tax base, provide life-cycle housing, redevelop substandard areas, and provide ~,.~vloyment opportunities in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113, telephone (651) 697-8500. Columbia Heights B~onomic Do~lopment Authority T~x Incmnmt Financing Pl~u for tho Hu~et park .aaea Tax Iaenmsmt Fimacing District 2-15 APPENDIX A PROJECT DESCRIPTION The TI1~ District is being created to facilitate the redcwelopment of the Colm~hia Heights Industrial Park into a mixed-use.development consisting of up to 559 units of owner-occupied housing and a neighborhood retail office development in the City of Columbia Hc'ights. In order to establish the District for thi.~ project, certain parcels of land nmst be removed from Columbia Heights TIF District County Identifier K2. The City did conduct a public participation planning process in 2003, led by the plarming Cum Hoisington Koegler. The study dctei~;;;~;cd that there was more than adequate demand and public acceptance of higher density owner-occupied housing as a replacement for the foimer industrial park uses. The redevelopment would only be feas~le with public assistance for both the si~,~i. '~cant environmental costs and high costs of acquisition and demolition. The City also cuii,-,[~sioned PTo--Sotffc¢, an c-nvirbnnlental ell~pi11¢~.:~lg ~ to conduct an assessment of the cost of rcmcdiation of polluted soils, buildings, and groundwater. The csti-~,ate from Pro Source is $4,652,000. The City applied and did receive a grant of $1,300,000 in 2004 from the Mctropolitan Council and the State of Minncsota for the pollution clean-up associated with thc first phase of development. The es~ted cost of cnvir~tal remediation for the first phase is $1,900,000. Thc developer of thc project is cxpcctcd to be Schafer-Richardson, which currently owns one of thc large c~ .... ~rcial buildings on site. Schafer-Richardson is experienced in thc construction of condominium buildings in the Minneapolis area. Portion of the project may be sold to a townhomc developer and senior housing developer. The project is expected to be financed with a pay-as-you-go note to be financed by the developer. The City may cover a portion of adjacent public ;,,..,rovcments with tax increments, depending upon final cost estimates. APPENDIX APPENDIX B MAPS OF THE CBD REDEVELOPMENT PRO.~ECT AND THE HUSET PARK AREA TIF DISTRICT APPENDIX B-~ Huset Park Area City of Legend Central Business District Redevelopment Project Huset Park Area The boundaries of the Central Business District.Redevelopment Project are coterminous with the corp°rate limits of the CitY of' Columbia HeightS. APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels* listed below. Parcel N~m~hers* 35-30-24-34-0013 Address 519 38th Ave NE 35-30-24-34-0014 515 38th Ave NE 35-30-24-34-0040 550 39th Ave NE 35-30-24-43-0060 600 39th Ave NE 35-30-24-43-0047 35-30-24-34-0035 35-30-24-34-0039 35-30-24-34-0024 35-30-24-34-0041 35-30-24-34-0003 35-30-24-34-0004 35-30-24-34-0002 450 38th Ave NE 620 39th Ave NE 3901 5th St. 510 39th Ave NE 3801 5th Street NE 3800 5th St. NE 3700 5th St. NE 317 37th Ave NE *Ail parcels are "Knocked Down" parcels being removed from Columbia Heights TIF 4 Multi Plan Cargill (MURP) TIF District County Identifier K2. APPENDIX c-1 APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT D-I EHLERS Huset Park Area Redevelopment - Phase I + II + III Columbl~ HelghW EDA Every Year ~~v~): ~T~-~ t~.~ ~~-~B-~) A ~ ~T~{~F~ Y~~ ~Y~T~ ~~T~ t~.t~ ~ 1~,~ 1.~ Plge I of;; To~ Pmlk~ M VMuax ax ~ Odg~nM ~13 ,~M~ O 1~,7~ 75,1~ 1.~ 751 ~2~ 4 ;~ ~ M M ~ 42~ 1 .~ 4~ ~2~ ~M~ 1,~9,~ ~39 1.~ 0 ~2~ ~M~ ~ ~9 1.~ 0 ~2H~7 ~M~ IM,7~ 121,~ 1.~ I~10 ~ ~ ~ ~ ~.~ 241 ,~ 0.~ 0 ~2~ st=~M~ 153.~ 1,914,~ 1.~ 19,1~ ~ ~tm~w ~.~ 171,~ 1.~ 1,719 ~2~1 ~m~M 1.1~3,~ 975,~ 1.~ 9,755 ~2~ 3~w ~*~ ~ 1.~ 6,302 ~2~2 ~Mw 1~.~ ~ 1.~ 28.0O0 100 1.742,000 216.9O0 100 100 138.900 ~2,700 105,8O0 259,5O0 100 150.300 0 Stt~ff~OG 4~476tSOQ 42~34& Odglnld ¥11lJii ltl ~o~ ~ u~o~t plyiV4 ~ viltlt but in~ ~ upoll odgil~111 vall~ ax ~ lit tt~ TOTAL TMII ~.~.~..~ Vlkal TaxI~ ~ Te~d ~mk.~ Crawl S~ ~n~ ~. ~n~ Sq. ~ T~ V~ ~ T~ ~-~--- 88 ~,~.~ 2,097.~ ~,~ ~,~ 1 .~ ~,~ ~ ~0,~.~ 2,~7.~ ~,S~ ~,~ 1 .~ ~.~ ~ 1~.~.~ 1,177.14 ~.171 9.~,~ 1.~ ~,~ 11.~ 1~.~ 4.~ ~,~1 1,~7~ 2.~ 31.~5 7 ~,~.~ ~10.16 15,471 1,~,~ 1.~ 14,~ ~ 245,~.~ 2,791.24 237.255 ~,~5.~ 1.~ ~,2~ ~ ~,~.~ 2.8~.~ 2~74~ 21~,~ 1.~ 21~ M 2~.~ 2,8~.M 245~5~ 21~ 1.~ 215,~ ~ t~3~ t~7~ 1~74;~ Total Lo~I ~--,,~.~ Lmml ~ '- --,.,..,.~ ~ ~ FIICll StAtS-wide MV MIItmt Tax Tax DI~ Tu DIIpadtJe~ prope~y Taxes Ol.t~aadtlax prop~ty ~ Vllul To~d Uae Cap~lt~ ~ Tax ~,,,~ _~, RMe Tax Rate Tax Rite Tm. TIUml Credit Tamu~ TIxI~ T~.~,~: ~:~ ~OS 202,400 _~_ 9~ _ _~. 0 1 .O0928 222,400 O 0 .t 4,~4 20,64t ~,~ T~ ~ ~ ~ · 0 1.W 2~,~0 0 0 -14,~ ~ ~ ~,~ N,~ 0 I.~ 1~,6~ 0 0 -21,t62 ~,~ ~,17t ~ ~ ~.~ I~ 0 1.~ t01,132 0 0 4,ili 9~ 10~ ~ 31,405 ~,1~ 6,~ 1.~ 1.37107 0.~1~ ~,~ !,0~ t7,~ TOT~ t~4;~ 1~7~4~ ~ t.~ 1,~,~ 9T02S t710;;0 1. F~elidlM~ do nM ply SIMe-MCII pfOpMty rix Of ~ Dlspa~/tlaL COLUMBIA HEIGHTS EDA 0.0 0201 2005 ~ 0.0 0~01 2OO5 42.346 0.0 02-012;06 42,345 0.0 0&01 2006 42`345 0.O 02-012007 42,345 0.5 o&01 2o07 42,345 1.0 n~-012008 42,345 1.5 06-01200~ .42,345 2.0 02-0t2009 42,345 3.0 02-012010 42.346 3.5 08-012010 42`345 4.0 02-012011 42,345 4.5 0~O1 2011 42,345 5.O 02-O12012 42.345 5.5 0~01 2012 42.345 5.0 02-012013 42.345 6.5 0~01 20t3 42.345 7.0 02-012014 42.345 7.5 0&01 2014 42,345 0.0 02-012015 42,345 5.5 0~01 2015 42.345 9.0 02-012016 42`345 0.5 06-012016 42,345 10.002-012017 4?.345 10.50~1 2017 42.345 1t.00(2-01 2015 42,345 11.50~01 2018 42,345 12.002-012019 42,345 t2.50~-012019 42,345 12.002-012620 42,345 13.50601 2020 42.345 t4.002-012021 42.345 t4.30&01 2021 42,345 15.O02-012O22 42,345 15.50801 2O22 42.345 16.002-012023 42.345 16.504-012023 42.~45 17.002-012024 42`345 17.5~-01 2O24 42.345 18.002-012025 42.345 18.506-012~25 42,345 19.002-012026 42,345 20.0 02-012O27 42,345 2O.5 0~01 2027 42`345 21.5 0~01 2028 42,345 2?.5 06-012029 42`345 23.O ~2-012030 42,345 24.0 02-012031 42,345 25.0 02-012032 42,345 T~x Tax ~ Tax 42`345 0 42.345 0 0 42,345 0 0 42.345 0 0 421,855 379.510 O 2~.550 421,855 379,510 0 2(~,590 624,255 581.5t0 0 310.836 i824~55 5~1,510 0 315.835 846.505 804,160 0 441.600 846,505 804,1~0 0 441,990 1.050.006 1,016.660 0 55~,757 1,059,005 1,016.060 0 558,787 1,274,005 1,231 ,eSO 0 676,507 1,27'4,005 1,231.860 0 676,507 1.288,745 1.244.400 0 683,660 1~6.745 1,244,400 0 503,960 t~99,513 1~.57,26~ 0 501,032 1,29~,613 1,257~8 0 501,032 1,312,609 1,270.264 0 ~.175 1,312,609 1~70~64 0 ~.175 1,325.735 1,283,390 0 70~.350 1,325,735 1 ~83,3~0 0 7155,389 1,3.t8,992 1 ~96,647 0 712,675 1.33~.992 1 ~96.647 0 712,076 1.352.382 1,310,037 0 720.036 1,352.382 1,310,037 0 720.036 1,365,906 1,323.~1 0 727,469 1.365,906 1,323.~61 0 727.4~ 1,379,565 1,337,220 0 734,976 1,379,565 1.337~20 0 734,9'/6 1.393.361 1,351,016 0 742`659 1,39~.501 1.351,010 0 742.550 1,407~94 t,364,~45 0 750.217 1.407~94 1,364,949 0 750,217 1,421,367 1,379.022 0 757.952 t .421,367 1,375,022 0 757,652 1.435,581 1,393.236 0 765,764 1,435.581 1,393,236 0 765.764 1.449.037 1,407.592 0 773.655 1,445,637 1,407.592 0 T/3.655 1,464,436 t ,422`091 O 781,624 t ,479.080 1.436,733 0 759.673 1.493,571 1,451.526 0 797,802 1,508,510 1,466,465 0 ~456,013 1,~08.810 1,406,465 0 606,013 1,523.898 t.481,553 0 814,306 1,539,137 1.496.792 0 822.682 1,539,137 1,496.792 0 822,682 1,554.528 1,512.183 0 53t .141 1.554.520 1,512,183 0 ~31.141 1,570,073 1,527,725 0 835,605 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 ~s1) (~1.500) 165.579 1~ (t.161)~.671 ~.013 ~4 (~,1515~,571 ~,013 ~7.~ (1,~15 (t10,1~ ~ ~,312 (1,~) (110,1~ ~ 1,1~.1~ ~,01~ (t39, t~ 4t7,~1 1,418,~1 ~01~ (1~.1~ 417.~1 1.703.417 ~.~ (~.~ ~.~ ~7~e ~.~ (1~.~ ~,~ 2,~.~ ~,~ (~.374 51~.~ 2,e~,~3 ~.~ (t~.37, 5~1.1~ ~,~) (~ ste,~ p,61~ (1~.~ ~1,7~ 4,1~1 ~.~ (t75.71: ~.1~ 4.~119 ~,~ (175,713) ~,1~ 4.~ ~) (1~,~l ~,~ 4,9t8,161 ~) (1~,~ 532,~ 6.186,~ ~,S~ (179.~1 ~,~ 5,~1,491 ;,~) (I~,~ ~ ;,~ (1~,~3 ~ ~.~) (IM.971 ~,914 6,~ ~701) (1~,~9 ~.637 7.1~.~ ~7015 (1~,871 ~,M7 7,~,~ ~,~ (1~,~ ~,417 7,4~.~4 ~75~ (1~,7~ 572~ 7,~9,074 ~.75~ (1~,7~ S~,~ 8.015,~7 ~,~ (1~,71~ 578,152 ~7~ (1~.71~ 678,152 8,~5.740 ~.8145 (1~,7~) ~,107 8,~,147 (2.5145(194.7025 584,107 8,655,591 (2.843)(196,7075 590,122 8,804,757 (2.843)(196,7075 590.122 3,940,27.5 (2,87~ (150,7335 550,198 0,090,591 (2.57~ (108.733) 50e.loe 0.227.500 (2.0O2 (2oo.778) eo2.334 5.3el.474 (2.002 (2o0.778) eo2.334 0.401~25 (2.032 (202`844) 608,631 9,618,187 (2,932 (20~844) 608.531 9,741,t51 (2,~62 (204.930) 014,790 9,861,470 (2,~62 (204,630) 614,790 5,975,002 (2.992 (2O7,037) 621.112 (2,992 (207,0375 521,112 10.2O2.461 (3,02: (250.1505 627,457 10.310,519 PAY~F.,NT DATE O.O 0.0 O.O O.O 0.3 1.5 2.0 2.5 $.O 3.5 4.0 4.5 5.0 5.3 5.0 7.0 7,5 6.0 0.5 10.0 10.5 11.O 11.5 12.0 12.5 13.O 13.5 14.0 14.5 15.0 15.5 16.0 18.5 17.0 17.5 18.0 18.5 19.O 19.5 20.0 20.5 21.5 22.0 22.5 23.0 23.5 24.0 24.3 25.O 25.5 02-0t 2016 02-01 02-01 2027 (M-01 2026 02-01 2931 02-01 2032 06-01 2O32 25.5 ~ 2032 42 345 I 570 073 __~ Totais ;)re~mlt Value 2/1/06 NOTES: 1. Staw A~dHor payment is base~ upon 1 ~t half, pay 20~2 actual and nlay increaee over talTn o~ alL;trio1. 2. Ao~41me~ de~opment in confflFuctod in 2000, a$s~s~d In 2000 and first inc~nMflt is ~ in 2007. 5. TIF do~t not tip(urn 8tito wide prop~ty tax~ or market vadu~ property taxeL 0. If TIF is received tn 2006, the district wilt be ShOrisned by or4 yeir. 7. IdV Homestead credit 18 assumed to be paid by the 5tare ht futura yearn. 0 839885 105 527 407 10415176 0 3S850 150 7015 ~ 131 301 O 13 3 070 60173 347t7~ 10 15176 02-01 2033 APPENDIX E MINNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT) APPENDIX E-1 Please f'fll in date agreement signed (same as question 21) Minnesota Business Assistance Form · The Minnesota Business Assistance Form (MBAF) is used to report each business subsidy and £mancial assistance agreement signed fromAueust 1. 1999 through December 31, 2003 unless goals have been achieved and reported in a MBAF per Minn. Stat. §116J.993 to §116J.995. · The following government agencies must submit a MBAF: 1) any local govemmentJagency that signed a business subsidy agreement since January l, 1999, or represents a population of more than 2,500; 2) all state government agencies authorized to provide business subsidies. · If a local or state government agency that is required to report has not done so by April 1, DEED will mail a warning. If it fails to report by June 1, it may not award any business subsidies until a report has been filed. · Questions? Call (651) 296-0580. Information on where to mail or fax your completed MBAF(s) is on page 4. Section 1 Grantor Information 1. Name of grantor (funding entity) 2. Name of person completing this form 3. Stree~ address 4. City 5. ZIP code 6. County 7. Phone number 8. Fax number 9. E-mail address 10. Please indicate who in your organization should receive the MBAF if different from the person in Question 2. Name/Title Phone number Street address City ZIP code I I. Classification of grantor (Mark one. If grantor is entity 12. Has your organization held a public hearing on and created by gov 't agency, please indicate affiliation. For adopted criteria for awarding business subsidies in example, a city EDA wouM check "City government. ") compliance with Minn. Stat. § 116J.9947 (Mark one.) [3 City government ~1 Yes, in 2004 (attach criteria) [3 Yes, in 2004 but have not yet adopted criteria Cl County government [3 Yes, prior to 2004 [3 Regional government If Yes: Hearing Date: Year Criteria Submitted: Q State government Q No [~ Other (Please specify.) ~ Other (Please attach explanation.) 13. Has your organization signed any agreements to award a business subsidy or financial assistance from August 1, 1999 through December 31, 2003 unless goals have been achieved and reported in a previous filed MBAF? (Mark one.) ~1 Yes (Complete the remainder of the form unless goals have been achieved and [3 No (Stop here, go to section 5 on page 4.) reported in a previously filed MBAF per Minn. Stat. ~116~. 993 and 3~ 116~. 994.) Section 2 Recipient Information 14. Name of business or organization receiving subsidy or financial assistance 15. Address where business subsidy or financial assistance will be used Street address City State ZIP code 16. Does the recipient have a paint corporation? (Mark one.) O Yes (Indicate name and address ofparent corporation below. If more than one, indicate ultimate owner.) O No Name of parent corporation S~'eet address City State ZIP code Minnesota Business Assistance Form (1/14/04) Page 1 of 4 Dept. of Employment & Economic Development 17. Industry ofrecipi~nt's facility (Mark one.): ~ Manufacturing 51 Services lq Retail Trade ~ Wholesale Trade 51 Finance, Insurance, Real Estate lq Construction 51 Other (please specify) 18. Did the recipient relocate as a result of signing this agreement? (Mark one.) lq Yes (Indicate city and state of previous address and reason recipient did not complete this project at that address.) lq No (Go to Question 19.) City/State of previous address Reason project not completed at previous address 19. Would the recipient have remained in previous location or relocated elsewhere if not awarded this business subsidy or financial assistance? (Mark one.) 51 Remained at previous location lq Relocated to different Minnesota location lq Relocated outside Minnesota Section 3 Agreement Information 20. Total dollar value of business subsidy or financial assistance (Please separate value by t~e in Questions 24 an d 25.) 21. Date agreement signed (In addition to the agreement date, indicate any dates the agreement was amended.) 22. Benefit date (Indicate the date the recipient will benefit from the business subsidy or financial assistance. For example, indicate the date improvements were finished, equipment was placed into service, or the recipient occupied the property, whichever is earlier.) 23. Does the agreement provide a business subsidy or one of the four types of financial assistance (see Question 25) required to be reported? (Mark one.) lq business subsidy 51 financial assistance 24. If the agreement provided a business subsidy, please indicate the type(s) and total dollar value for each type. Iq not applicable, agreement provided financial assistance lq loan (only principal) $ lq grant 0.e., forgivable loan) $ lq tax abatement $ ~ TIF or other tax reduction or deferral $ lq guarantee of payment $~ lq contribution of property or infrastructure $ 51 preferential use of governmental facilities $~ 51 land contribution $ lq other (Specify subsidy type.) $.~ 25. lftha assistance was one of the four types of financial assistance, please indicate the type(s). not applicable, agreement provided a business subsidy lq assistance for property polluted $.~ by contaminants r3 assistance for renovating building stock or bringing it up to code, and assistance provided for designated historic preservation districts, when 50°,4 or less of total cost 51 assistance for pollution control or abatement lq assistance for a TIF soils condition district 26. If the assistance included tax increment financing, please indicate,the type ofTIF dislrict? (Mark one.) lq not applicable, assistance was not in the form of TIF 51 redevelopment lq renewal and renovation 51 soils condition ~1 economic development 51 m/ned undergxound space lq hazardous substance subdis~ct 27. Are any other grantors providing a business subsidy or financial assistance to the same project? (Mark one.) Yes (Specify each grantor and the value of their assistance below; attach an additional sheet if necessary.) lq No Grantor(s) and value of the agreement(s): Grantor Value ($) Grantor Value ($) Minnesota Business Assistance Form (I/14/04) Page 2 of 4 Dept. of Employment & Economic Development Section 4 Goals and Public Purpose Identified in the Agreement 28. Minn. Stat. § 116J.994 requires that business subsidy and financial assistance agreements state a public purpose. Which of the following public purposes were stated in the agreement? (Mark all that apply.) O Enhancing economic diversity O Increasing tax base (cannot be only purpose) O Creating high-quality job growth O Other (please specify), ~1 Job retention O Stabilizing the community 29. Indicate whether the agreement included thc following types of goals, and whether the recipient had attained those goals at the time of this report. (Fill in the boxes and attainment date(s) for each goal.) A) Specific wage and job goals to be attained within 2 years B) Other job-creation and/or retention goals C) Other wage goals D) Other goals other than wage and job goals Goals Target attainment All goals established? dates (month& year) attained? OYes [lNo OYes ONo OYes ~No nYes ONo ~ Yes D No I~ Yes O No OYes ONo ~Yes ~No (Please attach descriptions of goals and progress toward attainment if not documented in Questions 30 and 310 30. For each of the following wage categories, indicate the job creation and/or retention goals stated in the agreement and the average hourly value of any employer-provided health insurance goals for those jobs. (Only indicate job creation goals in full-time equivalents i/you are unable to separate goals by full- and part-time positions.) ' Full-time Part-time/ FTE (only ff goth not Hourly Wage Job Seasonal/Temp. stated as FT/lrl') Job Retention Hourly Value of (excluding benefits) Creation Job Creation ,/ob Creation Health Insurance no hourly wage-level goal less than $7.00 s $7.00 to $1.99 $9.00 to $10.99 $11.00 to $12.99 $13.00 to $14.99 $1 ~.00 a~d ~i~¢r 31. For each of the following wage categories, indicate the number of actual jobs created and/or retained since the benefit date and the actual hourly value of any employer-provided health insurance for those jobs. (Only indicate job creation in full-time equivalents i/you are unable to separate job creation into full- and part-time positions.) Full-time Part-time/ FTE (only if unable to Hourly Wage Job Seasonal/Temp. separate FT/PT) Job Retention Hourly Value of (excluding benefits) Creation Job Creation .lob Creation Health Insurance less than S7.00 $7.00 to $8.99 s.~ $9.00 to S10.99 s $11.00 to $12.99 $ S 13.00 to $14.99 s S15.00 and higher s~ 32. Has the recipient achieved all goals (sec Questions 29, 30 and 31) and fulfilled all obligations stipulated in the agreement? (Mark one.) ~ Yes O No Minnesota Business Assistance Form (1/14/04) Page 3 of 4 Dept. of Employment & Economic DevelOPment Section 5 Recipients Failing to Full'ti Obligations ~)o not complete this section i)e)~ou completed it on another MBAF submitted to DEED.~ 33. During the period January 1, 2003 through December 31, 2003, did your organization have any recipients who failed to report as required by Minn_ Stat. § 116J.993 and § 116J.9947 (Mark one.) 12 Yes (Indicate the name of each recipient failing to report and the value of subsidy or financial assistance awarded to that recipient. Anach additional pages if necessary.) 12 No Name of recipient Type of subsidy or assistance (See Questions 24 and 25.) Value of subsidy or assistance 34. Did your organization have any recipients who failed to ach/eve any goals or fulfill any other obligations under an agreement signed on or after August 1, 1999, that were required to be fulfilled by the time of this report? (Mark one.) Yes (Complete the remainder of this section.) 12 No ~Stop here and submit form to DEED .) 35. - 39. Provide the l~llowing information for each recipient failing to fulfill goals or any other terms of an agreement that were to be attained by the time of reporting. (Attach additionalpages if necessary.) 35. Information on recipient and agreement: Name of recipient in default Type of subsidy or assistance Initial value of subsidy or assistance Street address of recipient City/ZIP code of recipient Outstanding value of subsidy or assistance 36. Reason(s) for default '(Mark all that apply.): 12 recipient ceased operation 12 recipient relocated to a different community 12 recipient was unable to fill vacant positions cl other (Specify reason.) 37. To date, has the recipient fulfilled its repayment obligation? (Mark one~) 12 Yes 12 No, recipient has begun to repay the assistance. ..~ No, recipient has not begun to repay the assistance. 38. Has the agreement been amended to extend the recipient's deadline for fulfilling its obligations? (Mark one.) 12 Yes 12 No 39. Describe the steps being taken to bring recipient into compliance or recoup the subsidy: Return your completed MBAF(s) byApril 1, 2004, to: Minnesota Business Assistance Form Minnesota Department of Employment and Economic DeVelopment - AEO 500 Metro Square, 121 East 7m Place St. Paul, MN 55101-2146 Or fax to: (651) 215-3841 Minnesota Business Assistance Form (1/14/04) Page 4 of 4 Dept. of Employment & Economic Development APPENDIX F REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT APPENDIX ~_~ Redevelopment Eligibility Assessment Proposed Columbia Heights Industrial Park TIF District Columbia Heights, MN September 9, 2004 Prepared by: Short Elliott Hendrickson, Inc. (SEH) Butler Square Building, Suite 710C 100 North 6~ Street Minneapolis, M2q 55403 SEH No. A-COLHT0402.00 City of Columbia Heights Proposed TIF District September 9, 2004 PURPOSE Short Elliott Hendrickson, Inc. (SEH) was hired by the City of Columbia Heights, Minnesota, to survey and evaluate the properties within the proposed Columbia Heights Tax Increment Financing (TIF) District. The proposed district is generally located south of39t~ Avenue NE, north of 38"' Avenue NE, east of University Avenue NE and west of Jefferson Street. The purpose of our work was to independently ascertain whether the qualification tests for tax increment eligibility, as required under Minnesota Statute, could be met. The findings and conclusions drawn herein are solely for the purpose of tax increment eligibility and are not intended to be used outside the scope of this assessment. SCOPE OF WORK The proposed district consists of 12 parcels comprised of the following types of improvements: 9 commercial structures on 7 parcels, and 5 vacant parcels with only parking improvements. Within the district are also several accessory structures - for the purposes of this assessment, these are considered 'outbuildings' and are not included in the Condition of Buildings Test. EVALUATIONS Interior inspections were completed for all buildings except 2. An exterior inspection was completed for all buildings. FINDINGS Coverage Test- 12 of the 12 properties met the coverage test with a 100% area coverage. This exceeds the 70% area coverage requirement. Condition of Buildings Test - 100 percent of the buildings - 9 of the 9 buildings - were found to be "structurally substandard" when considering code deficiencies and other deficiencies of sufficient total significance to justify substantial renovation or clearance (see definition of"structurally substandard" as follows). This exceeds the Condition of BOildings Test whereby over 50% of buildings, not including outbuildings, must be found "structurally substandard." CONCLUSION Our surveying and evaluating of the properties within this proposed Redevelopment District render results that in our professional opinion qualify the district eligible under the statutory criteria and formulas for a Redevelopment Tax Increment Financing District (State Statute 469.174 Subd. 10). SUPPORTING DOCUMENTS ATTACHED Site Occupied/Building Substandard Determination table TIF Assessment maps: Buildings Under Study, Occupied Surfaces, Percent Occupied - Report on Building Condition (one per building) - Individual Building Sununary Report (one per building) PROCEDURAL REQUIREMENTS The properties were surveyed and evaluated in accordance with the following requirements under Minnesota Statute Section 469.174, Subdivision 10, clause (c) which states: Interior Inspection - "The municipality may not make such detemaination [that the building is structurally substandard] without an interior inspection of the property..." Exterior Inspection and Other Means - "An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property; and after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard." Documentation -"Written documentation of the building findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3, clause (1)." Refer to attached Exhibit A - Documentation of Contacts/Evaluations for documentation for these purposes. PROCEDURES FOLLOWED TO MEET REQUIREMENTS The City of Columbia Heights sent letters to all property owners located in the district requesting that an inspection and evaluation be made of their property. SEH conducted assessments between March and August 2004. Requests for evaluation appointments were made with the building owner or building tenants. An interior inspection and evaluation was completed if consented to by the owner. An exterior inspection and evaluation was made where the owner refused interior access to their property. In all cases, an exterior evaluation was completed. Fo¥ all subject buildings, SEH reviewed the information provided by the City of Columbia Heights. This information provided a basic description of type of work completed for each building (Building, Electrical, or Plumbing, scope of work) and, in some cases, approximate value of work to be completed. Some buildings had no available information. Additional building data was collected from public taxpayer information available fi:om Anoka County. Building data fi:om these public records was combined with and reviewed against information gathered in the field. QUALIFICATION REQUIREMENTS The properties were surveyed and evaluated to ascertain whether the qualification tests for tax increment eligibility for a redevelopment district, required under the following Minnesota Statutes, could be met. Minnesota Statute Section 469.174, Subdivision 10, clause (a) (1) requires two tests for occupied parcels: 1. Coverage Test - "parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots or similar structures..." Note: The coverage required by the parcel to be Considered occupied is defined under Minnesota Statute Section 469.174, Subdivision 10, clause (e) which states: "For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures unless 15% of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures." 2. Condition of Buildings Test -"... and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiting substantial renovation or clearance;" The term 'structurally substandard', as used in the preceding paragraph, is defined by a two-step test: Conditions Test: Under the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause Co), a building is structurally substandard if it contains "defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fn'e protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." Code Test: Notwithstanding the foregoing, the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause (c) also provides that a building may not be considered structurally substandard if it: "... is in compliance with building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site." Based on the above requirements, the substandard determination of a particular building is a two-step process; therefore, the findings of each step are independent of each other and both steps must be satisfied in order for a building to be found structurally substandard. It is not sufficient to conclude that a building is structurally substandard solely because the Code Test is satisfied. It is theoretically possible for a building to require extensive renovation in order to meet current building codes but still not meet the main test of the Conditions Test. 4 Furthermore, deficiencies included in the Conditions Test may or may not include specific code deficiencies as listed in the Code Test. In many cases, specific building code deficiencies may well contribute to the data which supports satisfying the Conditions Test; conversely, it is certainly possible that identified hazards or other deficiencies which could be included in the Conditions Test do not necessarily constitute current building code deficiencies. By definition, the nature of the two steps is slightly different. The Conditions Test is more subjective, whereas the Code Test is an objective test. Conditions Test deficiencies are less technical and not necessarily measurable to the same e/trent of the code deficiencies in the Code Test. To the end that technical, measurable building code deficiencies support the satisfaction of the less technical Conditions Test; the following code requirements are defined in terms that go beyond the technical requirements of the code and demonstrate their relevance in terms of".., deficiencies in essential utilities and facilities, light and ventilation, etc..." International Building Code (IBC): The purpose of the IBC is to provide minimum standards to safeguard public health, safety and general welfare through structural strength, means of egress facilities, stability, sanitation, adequate light and ventilation, energy conservation, and safety to life and property from fire and other hazards attributed to the built environment (IBC 101.3). A deficiency in the building code (insufficient number of building exits, insufficient door landing area, etc.) adversely affects one or more of the above standards to safeguard 'public health...and safety to life'; therefore, a deficiency in the building code is considered a deficiency in one or more "essential utilities and facilities, light and ventilation, etc.". Minnesota Accessibility Code, Chapter 1341: This chapter sets the requirements for accessibility all building occupancies. The Minnesota Accessibility Code closely follows the Americans with Disabilities Act Accessibility Guidelines (ADAAG), which sets the guidelines for accessibility to places of public accommodations and commercial facilities as required by the Americans with Disabilities Act (ADA) of 1990. The ADA is a federal anti-discrimination statute designed to remove barriers that prevent qualified individuals with disabilities from enjoying the same opporUmities that are available to persons without disabilities (ADA Handbook). Essentially, a deficiency in the accessibility code (lack of handrail extension at stairs or ramp, lack of clearance at a toilet £Lxture, etc.) results in a discrimination against disabled individuals; therefore, a deficiency in the accessibility code is considered a deficiency in "essential utilities and facilities". Minnesota Food Code, Chapter 4626: This chapter is enforced by the Minnesota Department of Health and is similar to the IBC in that it provides minimum standards to safeguard public health in areas ofpubliedcommercial food preparation. A deficiency in the food code (lack of non-absorbent wall or ceiling finishes, lack of hand sink, etc.) causes a condition for potential contamination of food; therefore, a deficiency in the food code is considered a deficiency in "essential utilities and facilities". National Electric Code (NEC): The purpose of the NEC is the practical safeguarding of persons and property from hazards arising from the use of electricity. The NEC contains provisions that are considered necessary for safety (NEC 90-1 (a) and (b)). A. deficiency in the electric code (insufficient electrical service capacity, improper wiring, etc.) causes a hazard from the use of electricity; therefore, a deficiency in the electric code is considered a deficiency in "essential utilities and facilities". International Mechanical Code OMC): The purpose of the IMC is to provide minimum standards to safeguard life or limb, health, property and public welfare by regulating and controlling the design, construction, installation, quality of materials, location, operation, and maintenance or use of mechanical systems (IMC 101 ·3). The IMC sets specific requirements for building ventilation, exhaust, intake and relief. These requirements translate into a specified number of complete clean air exchanges for a building based on its occupancy type and occupant load. A deficiency in the mechanical code adversely affects the 'health. ·. and public welfare' ofa building's occupants; therefore, a deficiency in the mechanical code is considered a deficiency in "light and ventilation". Note: The above list represents some of the more common potential code deficiencies considered in the assessment of the buildings in the proposed district. This list does not necessarily include every factor included in the data used to satisfy the conditions test for a particular building. Refer to individual building repons for specific findings. Finally, the tax increment law provides that the municipality may find that a building is not disqualified as structurally substandard under the Code Test on the basis of "reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. Items of evidence that support such a conclusion [that the building is stmcmrally substandard] include recent fire or police inspections, on-site property appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence." MEASUREMENTS AGAINST TECHNICAL TEST REQUIREMENTS Coverage Test SEH utilized a GIS (Geographic Information Systems) system database, available through Anoka County and the City of Columbia Heights, to obtain individual parcel information. The GIS system contains graphic information (parcel shapes) and numerical data based on county tax records. This information was used by SEH for the purposes of this assessment. The total square foot area of each property parcel was obtained from county records (GIS) and general site verification. 6 The total extent of site improvements on each property parcel was digitized from recent aerial photography (Spring, 2003). The total square footage of site improvements was then digitally measured and conf'u'med by general site verification. The total percentage of coverage of each property parcel was computed to determine if the 15% requirement was met. Refer to attached maps: Occupied Surfaces map and Percent Occupied map. The total area of all qualifying property parcels was compared to the total area of all parcels to determine if the 70% requirement was met. The area occupied by public fights-of-way has not been considered in the coverage test calculations. All of the public rights-of-way are improved. If all of the public rights-of-way were treated as a parcel for the purpose of coverage test calculations, the 70% requirement of the coverage test would still be met. Condition of Building Test Replacement Cost - the cost of constructing a new structure of the same size and type on site: R. S. Means Square Foot Costs (2004) was used as the industry standard for base cost calculations. R. S. Means is a nationally published reference tool for construction cost data. The book is updated yearly and establishes a "national average" for materials and labor prices for all types of building construction. The base costs derived from R. S. Means were reviewed, and modified if applicable, against our professional judgment and experience. A base cost was calculated by first establishing building type, building construction type, and construction quality level (residential construction) to obtain the appropriate Means cost per square foot. This cost was multiplied times the building square footage to obtain the total replacement cost for an individual building. Additionally, to account for regional/local pricing, a cost factor was added to the total cost according to R.S. Means tables. Using R. S. Means, consideration is made for building occupancy, building size, and construction type; therefore, the cost per square foot used to construct a new structure will vary accordingly. Building Deficiencies: Conditions Test (Condition Deficiencies) - detemaining the combination of defects or deficiencies of sufficient total significance to justify substantial renovation or clearance.. On-Site evaluations - Evaluation of each building was made by reviewing available information from city records and making interior and/or exterior evaluations, as noted, sometimes limited to public spaces. Deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, were noted by the evaluator. Condition Deficiencies may or may not include Code Deficiencies as def'med below. Energy code compliance was not considered for the purposes of determining Condition Deficiencies. Deficiencies were combined and summarized for each building in order to determine their total significance. Building Deficiencies: Code T~st (Code Deficiencies) - determining technical conditions that are not in compliance with current building code applicable to new buildings and the cost to correct the deficiencies: On-Site evaluations - Evaluation of each building was made by reviewing available information from city records and making interior and/or exterior evaluations, as noted, sometimes limited to public spaces. On-site evaluations were completed using a standard checklist format. The standard checklist was derived from several standard building code plan review checklists and was intended to address the most common, easily identifiable code deficiencies. Mechanical Engineers, Electrical Engineers, and Building Code Officials were also consulted in the development of the checklist. Deficiencies were generally grouped into the following categories (category names are followed by its applicable building code): · Building accessibility- Minnesota Accessibility Code · Building egress, building construction - International Building Code · Fire protection systems - International Building Code · Food service - Minnesota Food Code · HVAC (heating, ventilating, and air conditioning) - International Mechanical Code · Electrical systems - National Electric Code and Minnesota Energy Code · Energy code compliance - Minnesota Energy Code For the purposes of determining the Code Test (Code Deficiencies), Energy code compliance is relevant because its criteria affect the design of integral parts of a majority ofa building's systems. The intent of these criteria is to provide a means for assuring building durability, and permitting energy efficient operation (7676.0100). The energy code addresses general building construction (all forms of energy transmission in an exterior building envelope - walls, roofs, doors and windows, etc.) and energy usage by lighting and mechanical systems. A deficiency in the energy code (inadequate insulation, non-insulated window systems, improper air infiltration protection, etc.) reduces energy efficient operation and adversely affects building system durability; therefore, a deficiency in the energy code is considered to contribute to a condition requiring substantial renovation or clearance. Office evaluations - Following the on-site evaluation, each building was then reviewed, based on on-site data, age of construction, building usage and occupancy, square footage, and known improvements (from building permit data), and an assessment was made regarding compliance with current mechanical, electrical, and energy codes. A basic code review was also completed regarding the potential need for additional egress (basement stairways, for example), sprinkler systems, or elevators. Deficiency Cost- Costs to correct identified deficiencies were determined by using R. S. Means Cost Data and our professional judgment and experience. In general, where several items of varying quality were available for selection to correct a deficiency, an item of average cost was used, as appropriate for typical commercial or residential applications. Actual construction costs are affected by many factors (bidding climate, size of project, etc.). Due to the nature of this assessment, we were only able to generalize the scope of work for each correction; that is to say that detailed plans, quantities, and qualities of materials were not possible to be known. Our approach to this matter was to determine a preliminary cost projection suitable to the level of detail that is known. This process was similar to our typical approach for a cost projection that may be given to an owner during a schematic design stage of a project. Costs to correct deficiencies were computed for each building and compared to the building replacement cost to determine if the 15% requirement was met. The total number of buildings determined to be "structurally substandard" by satisfying both the Conditions Test and the Code Test in this manner was compared to the total number of buildings in the proposed district to determine if the 50% requirement was met. Reports on Building Conditions and Individual Building Summary Reports are available for review at the offices of SEH, the City of Columbia Heights. Technical Conditions Resources - the following list represents the current building codes applicable to new buildings used in the Building Deficiency review: 2003 Minnesota State Building Code 2000 International Building Code 2000 International Housing Code MN 1341 - Minnesota Accessibility Code, Chapter 1341 (1999) 2000 Minnesota Energy Code, Chapters 7672, 7674, or 7676 1999 National Electric Code 2000 International Mechanical Code PROJECT TEAM: Leon A. Grothe, AIA, Project Architect Jason P. Zemke, AIA, Project Architect Ron Seymour, Community Development Manager APPENDIX G BUT/FOR QUALIFICATIONS Current Market Value - Est. New Market Value - Est. Difference Present Value of Tax Increment Difference Value Ukely to Occur Without Tax Increment is Less Than: 4,475,800 125,827,750 121,351 ~950 13,937~075 107~414~875 107,414,875 The proposed development, in the opinion of the City Council, would 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 the Huset Park Area TIF Distn'ct permitted by the TIF Plan: The proposed development consists of a mixed-usc development consisting of up to 559 units of owner- occupied housing and a neighborhood retail office development in the City of Columbia Heights. This area is occupied by 15 parcels, which requires acquisition, environmental remediation, and demolition and relocation to peimit the proposed development. Current estimates for environmental dean-up of the area are over $4,650,000. It is not likely that any new development on this site is feasible without significant environmental remediation. A grant of $1,300,000 of State and Metropolitan funds has been secured for the project, but it is not known if future grants will be awarded. The grant was awarded only because of a coai0rehensive redevelopment plan, which is feasible only with further assistance of tax increment. In addition to the costs of remediation, the land acquisition costs and site preparation is expected to be over $13,000,000. Without any public assistance, the cost of raw land (prior to internal streets, utilities, SAC/WAC, landscaping, etc) per unit of housing is estimated to be over $31,000. The proposed sales prices of the units are expected to be $200,000 to $275,000, which is too low to support significant raw land prices. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF. Distn'ct permitted by the TIF Plan: It is not likely that any new development on this site is feasible without significant environmental remediafion. Only small portions of the site are not affected by soil contamination and the new development on the site would be sporadic and less than $10,000,000. For taxes payable in 2005, the County assessors has decreased the estimated market value on the parcels in the District by approximately $2,300,000 due to thc environmental conditions. The site had previously been in a TIF district since 1989 and has seen only one piece of property develop, even with public assistance. APPENDIX Therefore, the City concludes as follows: ao The City's estimate of the mount by which the rmrket value of the entire D/strict will increase without the use of tax increment financing is less than $10,000,000. If all development which is proposed to be assisted with tax increment were to occur in the District, the total increase in market value would be up to $121,351,950 (see table on previous page). The present value of tax increments fi:om the District for the maxima~m duration of the district permitted by the TIF Plan/s estimated to be $13,937,075. (see table on previous page). Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $107,414,875 (the amount in clause b less the amount in clause c) without tax increment assistance. APPENDIX G-2 :iN '~S uos~ajJ, ar 3N 'Icj uos!pelAI 3N '~S 3N 'CAy COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: September 27, 2004 AGENDA SECTION: Items for Consideration ORIGINATING EXECUTIVE NO: 3-C DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2004-11, Contract for BY: Randy Schumacher BY: Private Redevelopment DATE: September 20, 2004 BACKGROUND: The purpose for the Contract for Private Redevelopment between the Columbia Heights Economic Development Authority (EDA) and Schafer Richardson is to set forth the terms and conditions of redevelopment within the redevelopment project area. Due to the length of the contract, City staff will use the attached summary to review the general project, timing and proposed phases, financing, and related issues. RECOMMENDATION: Staff recommends adoption of Resolution 2004-11 for the Contract for Private Redevelopment between the Columbia Heights EDA and Schafer Richardson. RECOMMENDED MOTION: Move to waive the reading of Resolution 2004-11, there being an ample amount of copies available to the public. RECOMMENDED MOTION: Move to Adopt Resolution 2004-11, a Resolution Approving a Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Schafer Richardson, Inc. or a related entity; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments EDA ACTION: h:~consent Form2004\EDA Res.2004-11 Contract for Private Redev. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2004-11 RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF COLUMBIA HEIGHTS AND SCHAFER RICHARDSON, INC. OR A RELATED ENTITY BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently admirdstering the Downtown CBD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. The Authority, the City of Columbian Heights ("City") and Schafer Richardson, Inc. or a related entity (the "Redeveloper") have proposed to enter into a into a Contract for Private Redevelopment (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, generally located east of University Avenue and south and west of Huset Park. 1.03. The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authority Approval; Further Proceedings. 2.01. The Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Au~ority the Contract and any documents referenced therein requiting execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Dated this __ day of September, 2004. ATTEST: President- Don Murzyn, Jr. Executive Director- Walter R. Fehst SJB-253351 vi CL205-23 SUMMARY OF CONTRACT FOR PRIVATE REDEVEOPMENT BETWEEN COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, CITY OF COLUMBIA HEIGHTS, CH LAND, LLC (AN AFFILIATE OF SCHAFER RICHARDSON, INC.) ge General Project Description. A. The Columbia Heights Economic Development Authority (the "EDA") and the City of Columbia Heights (the "City") have proposed to undertake an area wide redevelopment of the approximately twenty-eight acre outdated and polluted industrial area located generally east of University Avenue, south and west of Huset Park to the City's southem boundary and north of 38th Avenue N.E., as depicted on Exhibit A. This area is referred to as the "Redevelopment Area" or "Redevelopment Property" and is proposed to be redeveloped into approximately 555 housing units (in a variety of types) and approximately 11,600 sq. ft. of convenience commercial space (collectively, the "Project"), generally in accordance with the site plan attached as Exhibit B. B. As part of the Project, the City has agreed to commit city funds to conslruct a new parkway connection through the Redevelopment Area from 37th Avenue NE to Jefferson Avenue ("Huset Parkway") and to construct or cause to be constructed certain necessary new infrastructure, including storm water holding ponds and public park facilities in the vicinity of the storm water ponds. C. The EDA has selected CH Land, LLC (an affiliate of Schafer Richardson, Inc.) to act as the overall master developer of the Project (the "Redeveloper"). In addition the EDA has obtained various grants for pollution abatement and overall Project planning, and anticipates successfully obtaining additional grant funds for additional pollution remediation and various other Project purposes, all in furtherance of the contemplated Project. The currently anticipated overall Redeveloper Project Development Budget is attached as Exhibit C (the "Development Budget"). D. In addition, the EDA has completed: (i) a "bhght analysis" of the Redevelopment Area; (ii) a tax increment "substandard building analysis" of all structures in the area; and (iii) a tax increment "but for analysis." Based on such analyses, the EDA and City will take all necessary and appropriate actions to create a Redevelopment Tax Increment Financing District (the "TIF District") encompassing the Redevelopment Area. The EDA will expend agreed upon amounts of resulting available tax increment to finance "TIF Eligible Costs" (as defined in Section IX below) in accordance with the terms set forth herein and in a detailed TIF budget (the "TIF Budget") that shall be incorporated into the Contract (as defined below). SJB-250856v7 CI P05-23 E. Further the EDA has determined it is necessary and in the public interest to assist in the assembly of the Redevelopment Property by utilization of its power of eminent domain, if necessary, in order to acquire the road right of way for Huset Parkway and eliminate blight, create a suitable redevelopment parcel, eliminate vacant, outdated and inappropriate land uses and otherwise generally make this area-wide redevelopment feasible. F. Upon the approval by the City and EDA of the terms set forth herein, the City, EDA and Redeveloper will promptly proceed to enter into a Redevelopment Contract (the "Contract") in all material regards in accordance with the terms set forth in this summary. Timing and Proposed Phases, Minimum Improvements. A. Phase I: Consisting of approximately 179 owner occupied townhomes and condominium or cooperative units and approximately 11,650 square feet of commercial space. Must commence improvements for Phase I within 1 year after date of entry into the Contract, and must complete all internal Phase I site improvements and 80% of the housing units in the Phase within 3 years. The Phases are shown on Exhibit B. B. Phase II: Consisting of approximately 120 owner occupied townhomes. Must commence site improvements for Phase II within 3 years after date of entry into the Contract, and must complete all internal Phase ri site improvements and 80% of the housing units in the Phase within 4.5 years. In addition, all land for Phase II must be acquired within 2 years after the date of agreement. C. Phase 1I[: Consisting of approximately 256 owner occupied condominium or cooperative units. Must commence site improvements for Phase 1II within 4 years after date of entry into the Contract, and must complete all internal Phase 1II site improvements and 80% of the housing units in the Phase within 5 years. In addition, all land for Phase 1II must be acquired within 2 years after the date of agreement. D. Unit sizes and types, the amount of commercial space and the Phase commencement and completion deadl/nes may be adjusted with approval of EDA. E. As its remedy for failure to meet any Phase schedule for commencement or completions of a Phase (or parcel within a Phase), the EDA may suspend payment of tax i~crement from defaulting parcels until the required Minimum Improvements are complete. Defaults as to one Phase, or parcel therein, will not be defaults as to other Phases or individual parcels. F. To meet DEED pollution grant unit price requirements, at least 20% of the units in Phase I (i.e. approximately 36 units) must be sold initially at a purchase price not to exceed 110% of the maximum affordable price under Metropolitan Council guidelines in effect in the year of sale (110% is approximately $215,000 in 2004). If the EDA receives DEED grants for Phases II and/or 1II, and the grant imposes a similar requirement, the same sale SJB-250856v7 CL205-23 price restrictions will apply for those phases. Means testing of prospective buyers is not required by the grant. G. All construction plans shall be subject to review and approval by EDA as to conformity with the overall Redevelopment Plan and Project design standards approved by EDA (the "Design Standards"): This review shall be in addition to all normal building permit reviews and inspections. H. Any condominium or common-interest-community elements of the Project shall be subject to appropriate owners' association documents, and such documents shall be subject to the initial review and approval of the EDA. IH. Land Use and Zoning Approvals. A. Redeveloper shall re-plat the entire Redevelopment Property in accordance with applicable City ordinances, which may be done as property is acquired and consistent with the l?hases or parcels proposed for redevelopment. The City and EDA will cooperate in all replatting. The Redeveloper will dedicate all land needed for Huset Parkway, the storm water ponding area and utility easements at no cost. In connection with each plat/replat, City and Redeveloper will enter into the usual and customary planning development agreement (a "Planning Contract"). B. The Redeveloper will receive all existing SAC/WAC credits and shall pay all additional SAC/WAC fees and park dedication fees in accordance with applicable City policies or ordinances. The City will give the Redeveloper credit against the park dedication fees for the portion of the storm water pond dedication area not used for the storm water pond in an amount equal to the fair market value of that portion of land. The details of SAC/WAC fees and park dedication fees will be specified in each Planning Contract. C. The City has commenced the process of Comprehensive Plan Amendment and rezoning of the Redevelopment Property to "Transit Oriented Residential," which is consistent with the City's previously approved Industrial Area Redevelopment Plan for the Redevelopment Area. The City shall complete the rezoning process promptly after approval of the Contract terms, however nothing herein shall limit the City's governmental fights. EDA will cooperate in the rezoning. IV. Land acquisition. A. As a condition to requesting condemnation, Redeveloper must utilize commemially reasonable efforts to acquire all parcels by voluntary purchase. Such efforts shall include written offers to all owners by September 30, 2004, and an offer to mediate if the negotiations are not successful (such mediation to occur by October 31, 2004). If Redeveloper provides written notice on or after November 1, 2004, that it has been unsuccessful in accomplishing any acquisition voluntarily, EDA (and City, 'for road right of way parcels) will use eminent domain to acquire any parcels for which Redeveloper hasn't obtained purchase agreements or options. Redeveloper shall pay (subject to reimbursement SJB-250856v7 CL205-23 as a TIF Eligible Cost, to the extent consistent with the TIF Budget) all costs to acquire parcels by voluntary purchase (exclusive of the SR Parcel hereafter defined), including all carrying costs on such parcels, and all condemnation costs, including legal, appraisal, court costs, quick take deposit and final payments, and relocation expenses. The City or EDA will utilize its power of "quick take" to the extent needed or desirable to allow the Project to proceed in accordance with the overall Project schedule. The Redeveloper and City and EDA will cooperate and consult on any condemnation actions and specifically on the final price to be paid in settlement of any condemnation action. The EDA shall be consulted on any price to be paid for a voluntary acquisition and no voluntary acquisition shall be undertaken except at a price approved'by the EDA as reasonable. B. Redeveloper has previously retained Evergreen Land Services as relocation consultant on behalf of Authority and City. Redeveloper will pay all relocation costs or secure waivers in form acceptable to EDA for all property acquired, whether voluntarily or by condemnation consistent with the Minnesota Uniform Relocation Act. Redeveloper will also indemnify EDA against relocation claims should it proceed with any terminations of tenancy prior to the entry into the Contract. Relocation costs are a TIF Eligible Cost in accordance with the TIF Budget. C. An independent affiliate of Schafer Richardson, Inc., owns one parcel in the Redevelopment Area (the "SR Parcel") and has agreed to transfer the SR Parcel to the Redeveloper for inclusion in the Redevelopment at its fair market value. If the EDA and Redeveloper cannot agree on the fair market value of the SR Parcel, the parties shall obtain an appraisal by the same appraiser conducting the appraisals for the EDA on other Redevelopment Property. Both the EDA and the Redeveloper shall meet with the appraiser and advise of their view of value. If, upon completion of the final appraisal, the EDA and Redeveloper still cannot agree on value, then the Redeveloper shall obtain a separate appraisal by an MAI appraiser of its choice. Following this appraisal, the two parties will further negotiate regarding value. If no agreement is then reached, the EDA and Redeveloper shall submit the matter to arbitration, which determination shall be final. Notwithstanding anyth/ng else to the contrary herein, no tax increment shall be paid to Redeveloper for the acquisition cost of the SR Parcel. V. Pollution Cleanup, Other Grant Funds. A,: EDA will promptly undertake clean-up for Phase I upon entry into the Contract, utilizing DEED and Met Council grant proceeds and local match for the DEED grant (the "DEED Local Match"). B. The budget for the anticipated DEED Local Match of $572,949 for Phase I will be paid as follows: $232,000 fi.om Met Council grant $340,949 by Redeveloper (with credit for any part of roadway costs paid by Redeveloper that include grant-eligible contamination cleanup costs). SJB-250856v7 4 CL205-23 Redeveloper w/Il be responsible for any clean-up costs in excess of grant proceeds and Redeveloper's share of DEED Local Match. EDA will apply for additional grant funds if additional contamination is found during demohtion and cleanup of Phase I, and if awarded will be used to offset the Redeveloper's obligations under this section. The Redeveloper's portion of the DEED Local Match will be a TIF Ehgible Cost, to extent permitted by law, with any excess funded by Redeveloper fi.om private sources. C. Redeveloper shall grant immediate access to all parcels owned by Redeveloper within the Redevelopment Property for clean up-work at no cost. D. Redeveloper and EDA will cooperate to obtain all necessary and desirable VIC and VPIC approvals from the Pollution Control Agency to assure no liability for Redeveloper and EDA from acquisition and clean-up. Costs of any VIC or VPIC approvals shall be a TIF Eligible Cost. E. Phases II and llI cleanup. 1. EDA will timely apply in fall 2004 for a cleanup grant for Phase II; if unsuccessful, EDA will re-apply in spring 2005 grant cycle. 2. EDA will timely apply in spring 2005 for a cleanup grant for Phase 117; if unsuccessful, EDA will re-apply in fall 2005 grant cycle. 3. Redeveloper will cooperate and assist with all grant applications. For any grants awarded, Redeveloper will pay the unfunded portion of any DEED Local Match, subject to reimbursement as a TIF Eligible Cost to the extent permitted by law. 4. To the extent grants are obtained for Phases 1I and 1II, the terms and conditions of subsections A to D above shall apply. 5. If, after two grant cycles, the EDA does not receive grants as requested in the amounts required for the Phases II and III cleanup, the EDA and Redeveloper will each be responsible for half of any unfunded cleanup costs, provided in no event shall the EDA's obligation hereunder exceed $1,000,000. This arrangement does not affect the Redeveloper's share of the DEED Local Match, which shall be funded by the Redeveloper. a. The EDA may finance its share with an intemal loan or TIF bonds (referred to an "EDA Subordinate Note"), secured on a subordinate basis by the tax increment from the TIF District, subordinate to the Initial TIF Notes and Bonds (described in Section IX, below). b. The Redeveloper must pay its share up-front, and shall receive as potential repayment for its share a subordinated additional pay as you go TIle SJB-250856v7 CL205-23 5 Vie VIII. Note (the "Redeveloper Subordinate Note") subordinate to the Initial Notes, the Bonds, and any EDA Subordinate Note. c. To the extent tax increment will support a greater mount of take-out financing (See Section IX below) than needed to prepay the Initial Notes, the excess proceeds will be used to prepay, first the EDA Subordinate Note, and second the Redeveloper Subordinate Note. F. The EDA, City and Redeveloper will cooperate to obtain other grants to fund costs of the Redevelopment, including Metropolitan Council Liveable Communities Funds. To the extent obtained such funds shall provide enhanced Project amenities or offset other public costs. Transfer/Parmers. There shall be no assignment or other transfer of the rights and obligations of Redeveloper under the Contract without the EDA's prior consent in writing. However, it is anticipated that the Redeveloper will sell portions of the Redevelopment Property to subdevelopers (each a "Subdeveloper") and transfer certain rights and obligations under the Contract to other parties to undertake certain portions of the Project. It is agreed that EDA must approve the Subdeveloper and the terms of the transfer in writing in each such case. EDA will review and approve any Subdevelopers identified by Redeveloper within thirty (30) days of the request for approval. No approval shall be required if the Subdeveloper is an affiliate of Schafer Richardson, Inc. Land Sales for Development. The Redeveloper shall not sell the land in the Redevelopment Area to any Subdeveloper or to itself (or any affiliated entity), for any portion of the Project retained by and developed by the Redeveloper, at a price less than the following: > $38,500 per townhome > $18,000 per condominium/cooperative > $300,000 for the commercial parcel The EDA has determined these land sale prices reflect "fair reuse value." In addition, each Subdeveloper shall pay to the Master Developer at the time of land sale the present value of the tax increment related to the Subdeveloper's portion of the overall Project, determined as provided in section IX, such amount to be approved by the EDA. P, ~ublic Improvements. A. The City will construct Huset Parkway (south and west of Jefferson only), and all sewer and water in the Huset Parkway right of way and the storm sewer improvements and the open space improvements in the vicinity of the storm water ponds, in a time fi:am, consistent with the Redeveloper's Project phasing. The Redeveloper will construct and pay for all interior roads and all associated inlkastmcture, subject to reimbursement as a T[F Eligible Cost as provided in the TIF Budget. Huset Parkway will be a public mad; City and Redeveloper will negotiate whether other interior roads are private or dedicated to public at the time of each plat approval, to be reflected in the Planning Contract. SJB-250856v7 6 CL205-23 B. Financing: 1. Sewer and water: City will pay for all, except connections from Huset Parkway. 2. Storm sewer and pondin~: Allocated between City and Redeveloper, based on SEH benefit analysis. 3. Huset Parkway: Redeveloper pays all costs of south end; City and Redeveloper equally share all costs of middle section. Landscaping and lighting shared by City and Redeveloper based on front footage. 4. Park Improvements: Park dedication fees and other city park funding (ponding area only). 5. Redeveloper's share for all costs will be assessed; Redeveloper signs waivers. 6. Amount of pubhc expenditures will be set in the project feasibility process for the parkway and utilities and park design process. The amount of special assessments is estimated at $1,677,460, see Exhibit C. TIF Assistance and Profit Look-Back. A. Initial Notes. EDA issues taxable pay as you go notes in one or more series at Redeveloper's request (the "Initial Notes"), secured by pledge of 90% of the increment fi'om specified portions of the Redevelopment Property (either an entire Phase or portion thereof). Tax increment will be calculated using an assumed original market value for the TIF District of $5,200,000 (reflecting the value before the recent environmental reduction). Notes will be issued under following terms: · The maximum aggregate principal amount of all Initial Notes will be determined through analysis of Redeveloper's pro forma, and will be the amount that is estimated to provide Redeveloper a 15% return as master developer of the Redevelopment Property (currently estimated to be $7,955,400). The maximum aggregate principal amount shall be subject to adjustment as described in part E below. In no event shall the principal amount of any Initial Note exceed the present value of 80% of the increment projected from the pledged property for the life of the TIF District, discounted at the interest rate of 6.5%. · Interest rote on Initial Notes shall be (a) the market rate, for Initial Notes transferred to a third party, subject to EDA approval of underwriting assumptions; and (b) 6% for Initial Notes held by the Redeveloper. Interest shall accrue from the date each Initial Note is issued (provided that all T~ Eligible Costs have been incurred as of that date). SJB-250856v7 ' 7 CL.205-23 B. TIF Eligible Costs are the following, in each case subject to final cost certification by EDA. The Site Improvements shall be the first priority for payment. · Site improvements for intemal streets, utilities, lighting, monumentation or other signage and decorative fencing and other structural improvements, but not landscaping (paid to Subdeveloper or Redeveloper as applicable); · Preparatory site work, demolition and soil correction; · Environmental remediation, including DEED Local Match, costs of VIC and VPIC approvals, costs of environmental consultants; · Costs of acquiring parcels specified in Exhibit C (excluding SR Property), and including the costs of condemnatibn or voluntary acquisition (legal, title, appraisal, court costs and similar); · Demolition; · Relocation; and · Costs of EDA and City Consultants with regard to the Project, but not including costs paid by any grants or dedicated highway or utility funds. C. TIF Accounting. The EDA and Redeveloper shall develop a suitable accounting system to track tax increment expenditures to assure that all tax increment funds are being properly utilized for TIF Eligible Costs in accordance with the Contract. D. Take-out Financing. When improvements providing the tax increment stream securing any one or several Initial Note(s) are complete, EDA will issue tax-exempt revenue bonds (the '°tax Exempt Revenue Bonds" or the "Bonds") in one or more series to refinance the Initial Note, at Redeveloper's request. Revenue bonds will be secured by all increment from relevant parcels, less $5,000 aggregate annual holdback for EDA administration. Issuance is subject to: · Market/legal constraints. · Pledged tax increment is estimated to provide not less than 120% coverage for the revenue bonds (subject to revision if the market requires less with the approval of EDA) and tax increment is projected to increase by 1% per annum. · EDA approval of underwriting assumptions and terms of issue, but consent cannot be unreasonably withheld. · If the net proceeds of the Bonds is less than the amount needed to prepay the Initial Notes, as a condition of the Bonds' issuance, the Redeveloper shall (a) pay the shortfall and (b) accept a subordinate pay-go note in the amount of the outstanding balance of the Initial Notes, payable fi.om excess tax increment over the amount needed to pay the Bonds and the EDA Administration costs. E. Lookback. There are two forms of "lookback" that adjust the amount of tax increment assistance to reflect the Redeveloper's actual return. When any Phase is SJB-250856v7 8 CL205-23 u~ Z Exhibit C Analysis of Schafer Richardson Land Development Budget Revenues Units Price Sales Proceeds - Townhome Pads 186 38,500 Sales Proceeds - Condos/Unit 376 18,000 TIF Sales Proceeds - Commercial Total Revenues Expenses Grading and Onsite Roads and Utilities Parkway Assessments Relocation Environmental Remediation Match Demolition Soft Costs Legal and Financing SR Land Acquisition Other Land Development Fee and Overhead Contingency Total Expenses 7.161.000 6.768.000 7.955.40O 300,000 22.184.400 3,480,000 1,680,000 840,000 600,000 1,100,000 726,000 1,815,000 2,090,000 6,425,000 3,328,400 100,000 22.184.400