HomeMy WebLinkAboutResolution No. 2008-168RESOLUTION N0.2008-168
CITY OF COLUMBIA HEIGHTS, MINNESOTA
RESOLUTION APPROVING PROPERTY TAX ABATEMENT
RELATED TO SENIOR HOUSING IMPROVEMENTS
AND APPROVING FIRST AMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT
BE IT RESOLVED by the City Council (the "Council") of the City of Columbia Heights,
Minnesota (the "City") as follows:
Section 1. Recitals.
1.01. The Columbia Heights Economic Development Authority (the "Authority") and
Pratt Ordway, LLC, dba Pratt Ordway Properties (the "Original Redeveloper") entered into that
certain Contract for Private Redevelopment, dated as of November 28, 2006 (the "Original
Contract") providing for redevelopment of certain property in the City (as defined in the Original
Contract, the "Redevelopment Property").
1.02. The Original Redeveloper assigned all of its rights and interests in the Original
Contract to Columbia Heights COH, LLC ("COH"} under an assignment and assumption
agreement, dated as of January 26, 2007.
I.03. Lighthouse Acquisition Group, LLC will purchase the Redevelopment Property and
assign all of its rights and interests in the Redevelopment Property and the Original Contract to New
Perspective Fund III, LLC (the "Redeveloper"}.
1.04. The Original Redeveloper failed to complete construction of a senior rental housing
facility (as defined in the Original Contract, the "Minimum Improvements") on the Redevelopment
Property and the Redeveloper has requested certain assistance in order to complete such
improvements.
1.05. The Original Cantract is being amended (the "First Amendment"} to, among other
items, include the City as a party to the Original Contract, as well as to provide for a property tax
abatement to the Redeveloper.
1.06. Pursuant to Minnesota Statues, Sections 469.1812 through 469.1815, as amended
(the "Act"), the City is authorized to abate a portion of its real property taxes on the Redevelopment
Property (the "Abatement") to facilitate development of the Minimum Improvements.
1.07. On July 14, 2008, and continued to July 28, 200$, the Council conducted a duly
noticed public hearing on the Abatement pursuant to the Act at which the views of all interested
persons were heard.
Section 2. Findings; Benefits of the Abatement.
2.01. Benefits Equal Costs. It is hereby found and determined that the benefits to the City
from the Abatement will be at least equal to the costs to the City of the Abatement for the following
reasons:
(a) The Abatement will help finance the construction of the Minimum Improvements,
which will redevelop real property that is presently zmderutilized and will prevent the emergence of
blight at a critical location. in the City.
(b) Construction of the Minimum Improvements will complete the redevelopment of the
area surrounding 37th Avenue and Stinson Boulevard, which was otherwise a vacant and
undeveloped area of the City.
(c) Construction of the Minimum Improvements will increase the value of the
Redevelopment Property, thereby generating additional City tax revenues after expiration of the
Abatement.
2.02. Public Interest. It is further found and determined that the Abatement is in the
public interest, as set forth in Section 469.1813, Subdivision 1 of the Act, for the following
reasons:
(a) Increase or preserve tax base, by stimulating development on the Redevelopment
Property, as described in Section 2.01.
(b) Help to redevelop and renew blighted areas in the City, or areas that may become
blighted, as described in Section 2.01.
(c} Help provide access to services for residents of the City, because construction of the
Minimum Improvements will offer residents a service that is not presently utilized to its fullest
extent within the City.
Section 3. Terms of the Abatement.
3.01. Generally. According to the First Amendment, the Redeveloper is eligible to receive
the Abatement each. tax.-payable year from 201.1. through 201. S (the "Abatement Period"). The
Redeveloper will receive the Abatement in a specific tax-payable year during the Abatement Period
only if the amount of aggregate taxes from the Redevelopment Property, payable to the City, Anoka
County, Independent School District No. 13, and any special taxing districts (collectively, the
"Aggregate Taxes"), equals or exceeds the following numbers, as shown on the following chart:
Taws Pa able Year A r ate Taws
2011 $80,000
2012 82,400
2013 84,872
2014 87,418
2015 90,041
3.02. City Contribution. If the Aggregate Taxes exceed the amounts listed in Section 3.01
for any tax-payable year during the Abatement Period, the City agrees to pay to the Redeveloper a
portion of the City's share of the Aggregate Taxes for that specific tax-payable year (the ``City
Contribution"), as an abatement under the Act. The City Contribution will be the City's share of
property taxes from the Redevelopment Property in each specific tax-payable year during the
Abatement Period in which the Redeveloper's Aggregate Taxes exceed the amounts in Section 3.01,
minus the City's share of the property taxes from the Redevelopment Property in tax-payable year
2009. The City will levy the City Contribution, if any, using its best estimates and projections of
the Redevelopment Property's tax capacity and the City's tax rates thereon for each tax-payable
year within the Abatement Period.
3.03. Excess Cites Contribution. 1f the City levies for the City Contribution during the
Abatement Period based on its best estimates and projections of the Redevelopment Property's tax
capacity and the City's tax rates thereon, and the Redeveloper is not eligible for the Abatement
because the Aggregate Taxes do not exceed the amount for a specific tax-payable year pursuant to
L
Section 3.01, the City will irrevocably credit that specific City Contribution into a subaccount of the
City. If the Redeveloper later qualifies for the City Contribution in a given tax-payable year during
the Abatement Period, the City will disburse the funds already irrevocably credited to the
Redeveloper. If, at the end of the Abatement Period, the balance of the City Contribution has not
been credited to the Redeveloper, and the Redeveloper has not become otherwise eligible for the
City Contribution, the City will use the remainder of the City Contribution to reduce its general levy
for the tax-payable year following the expiration of the Abatement Period.
3.04. Shortage of City Contribution. If the City levies for the City Contribution during the
Abatement Period based on its best estimates and projections of the Redevelopment Property's tax
capacity and the City's tax rates thereon, and the Redeveloper is bath eligible for the Abatement and
an increased City Contribution because the Aggregate Taxes are higher than projected by the City,
the City will levy the excess amount of the City Contribution for the following tax-payable year,
whether or not the Abatement Period has expired. During the Abatement Period, the excess City
Contribution will be in addition to the regular City Contribution estimated to be due to the
Redeveloper for the following tax-payable year, if any.
Section 4. Actions Ratified; Abatement Ap rp Dyed.
4.01. Ratification. The Council hereby ratifies all actions of the City's staff and
consultants in arranging for approval of this Resolution in accordance with the Act.
4.02. Additional Terms. Subject to the provisions of the Act, the Abatement is hereby
approved and adopted subject to the following additional terms and conditions:
(a} The aggregate Abatement paid to the Redeveloper during the Abatement Period will
not exceed $150,000,
(b) In accordance with Section 469.1813, Subdivision 8 of the Act, in no year shall the
Abatement, together with all other abatements approved by the City under the Act and paid in that
year, exceed the greater of 10 percent of the net tax capacity of the City for the taxes payable year to
which the Abatement applies or $200,000 (the "Abatement Cap"). The City may grant any other
abatements permitted under the Act after the date of this Resolution, provided that to the extent
the total abatements in any year exceed the Abatement Cap, the allocation of the Abatement Cap
to such other abatements is subordinate to the Abatement granted under this Resolution.
(c} If the City determines that a City Contribution is due to the Redeveloper in a specific
tax-payable year during the Abatement Period, the City will disburse the City Contribution to the
Redeveloper on August 1 of that tax-payable year and the next following February 1. For example,
if a City Contribution is due to the Redeveloper in 2011, half of the City Contribution will be
payable on August 1, 2011, and the second half will be payable on February 1, 2012. Such
payments will continue by the City until the end of the Abatement Period or until the total
Abatement payments reach $150,000, whichever occurs first.
(d} This Resolution may be modified only with the prior written approval of the City.
All determinations of the City regarding the Redeveloper's eligibility for the Abatement and the
amount of the City Contribution are controlling.
(e) In accordance with Section 469.1815 of the Act and according to the First
Amendment, the City will add to its levy in each year during the Abatement Period the total
estimated amount of current year Abatement granted under this Resolution.
4.03. Approval of First Amendment. The First Amendment, as presented and on file
with the City Council, is hereby approved, subject to modifications that do not alter the substance
of the transaction and that are approved by the Mayor and the City Manager, provided that
execution. of the document by such officials shall be conclusive evidence of approval. The Mayor
and the City Manager are authorized and directed to execute and deliver the First Amendment in
order to implement the agreements and certifications agreed to by the Authority, the City and the
Redeveloper and contained in this Resolution. The Mayor and the City Manager are further
authorized to execute and deliver any additional agreements, certificates, or other documents that
the City determines are necessary to implement this Resolution.
4.04. Effective Date. This Resolution is effective only upon the execution of the First
Amendment and the closing date of the transfer of the Redevelopment Property to the
Redeveloper.
Approved by the City Council of the City of Columbia Heights, Minnesota this 28th day of
July, 2008.
Motion by: Kelzenberg
Second by: Williams
Passed: Ayes: Peterson, Williams, Nawrocki, Diehm, Kelzenberg
Attest:
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Patricia Muscovitz C -
ity Clerk
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