5.1. HRSR 10-04-2004 - Laserfiche WebLink

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TIF District Overview The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No. 22, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Downtown Phase I Tax Increment Financing District No. 22 is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a). The District consists of 10 parcel(s), with plans to redevelop the area for commercial/residential purposes. At least 70 percent of the area in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance(See Appendix D 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 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 Downtown Phase I Tax Increment Financing District No. 22 permitted by the Plan. The proposed development, in the opinion ofthe City,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 plan meets the CityEs objectives for redevelopment. Due • to the high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount of commercial/industrial property for expansion adjacent to the existing project,the incompatible land uses at close proximity,and the cost of financing the proposed improvements,this project is feasible only through assistance,in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance(see attachment in Appendix H). 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 District permitted by the Plan: This finding is justified on the grounds that the cost of site acquisition, site and public improvements and utilities add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance.Therefore,the City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the District,the total increase in market value would be up to$15,310,000. The present value of tax increments from the District is estimated to be$3,089,062. It is the Council's finding that no development with a market value of greater than $12,220,938 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition and public improvements in the general area of the District(see Cashflow in Appendix G of the TIF Plan). • Page 3