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HomeMy WebLinkAboutResolution No. 2009-58CITY OF COLUMBIA HEIGHTS RESOLUTION NO. 2009-58 RESOLUTION ADOPTING A MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT; AND A MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE K-MART/CENTRAL AVENUE TAX INCREMENT FINANCING DISTRICT. RECITALS Section 1. 1.01. The Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("EDA") has heretofore established the CBD Redevelopment Project and adopted the Downtown CBD Revitalization Plan, therefore it has been proposed by the EDA and the City that the City adopt a Modification to the Downtown CBD Revitalization Plan (the "Revitalization Plan Modification"} for the CBD Redevelopment Project and a Modification to the Tax Increment Financing Plan (the "TIF Plan Modification") for the K-Mart/Central Avenue Tax Increment Financing District (the Revitalization Plan Modification and the TIF Plan Modification are referred to collectively herein as the "Modifications"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as reflected in the Modifications, and presented far the Council's consideration. 1.02. The EDA and City have investigated the facts relating to the Modifications and have caused. the Modifications to be prepared. 1.03. The EDA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Modifications, including, lift not IiZniterl tn~ nntifratlon of Annka rnupty anal Independent Srhnnl Dictri~t No, 13 Baying taxing jurisdiction over the property to be included in the K-Mart/Central Avenue Tax Increment Financing District, a review of and written comment on the Modifications by the City Planning Commission, approval of the Modifications by the EDA on April 28, 2009, and the holding of a public hearing upon published notice as required by law. 1..04. Certain written reports (the "Reports") relating to the Modifications and to the activities contemplated therein have heretofore been prepared by staff and. consultants and submitted to the Council and/or made a part of the City files and proceedings on the Modifications. The Reports include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution, The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05 The City is not modifying the boundaries of the CBD Redevelopment Project. Section 2. Fn~dings for the Adoption and Approval of the Modifications 2.Oi. The Council hereby finds that the Modi ications, arc intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public interest and. accomplish certain objectives as specified in the Modifications, which are hereby incorporated herein. 2.02. The Council hereby finds that parcels listed in Appendix C of the TIF Plan Modification should be included in the K-Mart/Central Avenue Tax Increment Financing District, and adjacent streets and right-of way property; thereby changing the geographic shape of the K-Mart/Central Avenue Tax Increment Financing District. 2.03. The addition of the above-referenced parcels constitute the TIF Plan Modification for the K-Mart/Central Avenue Tax Increment Financing District, and staff is directed to maintain a copy of this resolution with the records for the K-Mart/Central Avenue Tax Increment Financing District. Section 3. Findings for the Modification of the K-Mart/Central Avenue Tax Increment Financing District 3.01. The Council hereby reaffirms the original findings for the K-Mart/Central Avenue Tax Increment Financing District, established as a "renewal and renovation district". 3.02. The Council hereby finds that the area added to the K-Mart/Central Avenue Tax Increment Financing District meets the requirements fora "renewal and renovation district" under Minnesota Statutes, Section 469.174, Subd. 10a. 3.03. The Council reaffirms the original findings that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed. development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan, that the Modifications conform to the general plan for the development or redevelopment of the City as a whole; and that the Modifications will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3,f14, T12e f~,'a~,~nril fiirtl~ar finds, derlarec and determines that thc~ City rnadP the ah~ve findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 3.05. The City reaffirms to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. Section 4. Public Purpose 4.01. The adoption of the Modifications conforms in all respects to the requirements of the Act and will help fulfill a need. to develop an area of the City which is already built up, and will revitalize an area characterized by blight and occupied by substandard buildings, and expand the tax base of the City, and thereby serves a public purpose. Section S. Approval. and Adoption of the Modifications 5,01. T11e~ Modifications, as presented to the Council on this date, including without limitation the findings and stateme-tts of a%jeetives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Community Development Director. 5.02, The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Modifications and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Anoka County is requested to certify the original net tax capacity of the parcels being added to the K-Mart/Central Avenue Tax Increment Financing District, as described in the Modifications, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the EDA is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The Community Development Director is further authorized and directed to file a copy of the Modifications with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.1.75, Subd. 4a. Passed this 11 `~' day of May 2009 Offered by: Williams Second by: Kelzenberg Roll call: Ayes Peterson, Williams, Diehm ,Kelzenberg Nay: Nawrocki or Gary L. ATTEST: -- _ . ~_ <..~ 6.~„ ~ ~ - ~~ %~ Patricia Muscovitz, CMC ` City Clerk EXHIBIT A RESOLUTION N0.2009-58 The reasons and facts supporting the findings for the adoption of a Modification to the Tax Increment Financing (TIF) Plan far the K-Mart/Central Avenue Tax Increment Financing District (District), as required pursuant to Minnesota Statutes, Section 469.175, Subd. 3, are as follows: Finding that the area added to the District meets the requirements for a redevelopment district, as defined in M.S, Section 469.171, Subd. IOa. The Modification adds 55 parcels to the existing District, with plans to redevelop the area for housing and commercial purposes. Parcels consisting of more than 70 percent of the area in the modified portion of the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 20 percent of the buildings in the District are structurally substandard, and more than 30 percent are requiring substantial renovation or clearance. (See Appendix F of the TIF Plan) 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment tivithin 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 resadt fi^om the proposed development after subtracting the present val~~e of the projected tax increments for the maximum dzn^ation of the District permitted by the TIF Plan. The proposed development, in the opinion of the Ciry, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in this TIF Plan meets the City's objectives for redevelopment. The expansion area being added to the District is occupied by a number of residential units that are vacant due to foreclosure. The private marl~et does not have the ability to purchase these units to provide for a comprehensive redevelopment. Many of the homes are in such disrepair that demolition will need to occur and others require extensive rehabilitation, above w11at the market can bear for the value and/or purchase of the homes. The economic downturn in the overall housing market adds stress to this declining neighborhood and without public intervention, the homes will remain vacant and dilapidated. The increased market value of the site that could reasonably be expected to occur withoz,~t the use of tax increment,financing would be less than the increase in market valate estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan: The values of the housing units in this area only continue to decline due to the high number of foreclosures and dilapidated housing units. The City has no reason to believe that the market value will increase anytime in the near future without public intervention. Even with redevelopment, the City can only hope that market values can be preserved. Therefore, the City reasonably determines that na other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. Therefore, t11e City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $61,240,900 (see Cashflow in Appendix D of the TIF Plan). c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $5,725,538 (see Cashflow in Appendix D of the TIF Plan). Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $55,515,362 (the amount in clause b less the amount in clause c} without tax increment assistance. Finding that the TIF Plan Modification for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan Modification and found that the TIF Plan Modification conforms to the general development plan of the City. ~. Finding that the TIF Plan Modification for the District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the CBD Redevelopment Project by private enterprise. The project to be assisted by the District will result in the creation of quality housing, the preservation and enhancement of the tax base and the redevelopment of substandard properties.