6.1. SR 11-01-2004 - Laserfiche WebLink

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TIF District Overview The reasons aod facts supporting the findings for the adoption of the Tax Increment Financing Plao 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 redeveiopment district as defined in MS., Section 469.174, Subd. lO(a). The District consists of 10 parcel(s), with plaos 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 ofthe buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (See Appendix 0 of the TIF plao). 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 afier 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 of the City, would not reasonably be expected to occur solely through private investtnent within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in this plan meets the CityDs objectives for redevelopment. Due to the high cost of redevelopment on th'e 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 offinaocing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for aod provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistaoce (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 aod public improvements aod utilities add to the total redevelopment cost. Historically, site aod 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 substaotially similar assistaoce being provided to the development. A comparative analysis of estimated market values both with aod without establishment ofthe 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 ofthe District (see Cashflow in Appendix G of the TIF Plao). Page 3