HomeMy WebLinkAbout2. Workshop Session - TIF4
SCHEDULE OF EVENTS
ROSEMOUNT PORT AUTHORITY
AND THE CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
FOR A MODIFICATION TO THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1
AND THE ESTABLISHMENT OF A TAX INCREMENT FINANCING DISTRICT
(a redevelopment district)
As of January 7, 2004
November 3, 2003 Port Authority approves preliminary development agreement with CPDC.
February 3, 2004 Port Authority requests that the City Council call for a public hearing on a
Modification to the Redevelopment Plan for Redevelopment Project No. 1
and the establishment of a Tax Increment Financing District.
February 10, 2004 Project information (property identification numbers and legal descriptions,
detailed project description, maps, but/for statement, and list of sources and
uses of funds) sent to Ehlers & Associates for drafting documentation.
February 17, 2004 City Council calls for a public hearing on a Modification to the
Redevelopment Plan for Redevelopment Project No. 1 and the establishment
of a Tax Increment Financing District.
March 3, 2004 Ehlers & Associates confirms with the City whether building permits have
been issued on the property to be included in the TIF District.
March 5, 2004 Project information submitted to the County Board for review of county road
impacts (at least 45 days prior to public hearing). The County Board, by law,
has 45 days to review the TIF Plan to determine if any county roads will be
impacted by the development.
March 10, 2004 Letter received by County Commissioner giving notice of potential
redevelopment tax increment financing district (at least 30 days prior to
publication of public hearing notice). [Ehlers & Associates to fax and mail
on March 9, 2004]
March 19, 2004 Fiscal /economic implications received by School Board Clerk and County
Auditor (at least 30 days prior to public hearing). [Ehlers & Associates to
fax and mail on March 19]
March 23, 2004 Planning Commission reviews Plans to determine if they are in compliance
with City's comprehensive plan and adopts a resolution approving the
Modifications.
FREERS
6 ASSOCIATES INC
SCHEDULE OF EVENTS - PAGE 2
ROSEMOUNT PORT AUTHORITY
AND THE CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
FOR A MODIFICATION TO THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1
AND THE ESTABLISHMENT OF A TAX INCREMENT FINANCING DISTRICT
(a redevelopment district)
March 31, 2004 Ehlers & Associates conducts internal review of the Plans.
April 6, 2004 Port Authority adopts a resolution approving a Modification to the
Redevelopment Plan for Redevelopment Project No. 1 and the establishment
of a Tax Increment Financing District.
April 9, 2004 Date of publication of hearing notice and map (at least 10 days but not more
than 30 days prior to hearing). [Rosemount Town Pages publication deadline
April 2, 2004]
April 20, 2004 City Council holds public hearing at 7:30 p.m. on a Modification to the
Redevelopment Plan for Redevelopment Project No. 1 and the establishment
of the Tax Increment Financing District and passes resolution approving the
Plans. [Ehlers & Associates will mail Council packet information to the City
by April 9, 2004]
May 4, 2004 Port Authority adopts development agreement with CPDC.
By Ehlers & Associates files Plans with the MN Department of Revenue and
requests cert ification of the TIF District from Dakota County.
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FREERS
6 ASSOCIATES INC
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DISTRIBUTION LIST
ROSEMOUNT PORT AUTHORITY
AND THE CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
FOR A MODIFICATION TO THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1
AND THE ESTABLISHMENT OF A TAX INCREMENT FINANCING DISTRICT
(a redevelopment district)
CITY: Jamie Verbrugge, City Administrator 651- 322 -2006 Phone
j amie .verbruggegci.rosemount.mn.us
Kim Lindquist, Community Development Director 651- 322 -2020 Phone
kim.lindquist a(ici.rosemount.mn.us
Jeff May, Finance Director 651- 322 -2031 Phone
j ef£mayA,ci.ro semount. mn.us
City of Rosemount
2875 - 145th Street West
Rosemount, MN 55068 -4997
651- 423 -4411 Phone
651 -423 -5203 Fax
(Word format)
TIF COUNSEL Ron Batty
rbatty_@,kennedy- graven.com
Kennedy & Graven, Chartered
612 - 337 -9262
Phone
470 Pillsbury Center
612- 337 -9310
Fax
200 South Sixth Street
Minneapolis, MN 55402
TIF ADVISOR: Mark Ruff
651- 697 -8505
Phone
mark(a)ehlers- inc.com
Susan Landrum
651- 697 -8531
Phone
salCcD ehlers -inc. com
Ehlers & Associates, Inc.
3060 Centre Pointe Drive
Roseville, MN 55113 -1105
651- 697 -8555 Fax
0 EHLE,RS
Downtown Redevelopment Study Area
TIF District
2003
I_1
'tre
E2
1
Redevelopment District Boundary : ' " Right -Of -Way = Water
V - TIF District Boundary A/ Buildings
0.5 0 0.5 Miles
moli
Redevelopment in Downtown
Rosemount: Implement the
"Vision and Plan"
Mark Ruff &Sid Inman
Ehlers
Janus
Associates
2012004
Step 1.0 Find $ to Work With
City
will continue to pursue
grant
funds.
*TIF
remains viable
tool
with
local
control.
Port and City Council are scheduled to
consider a new Tax Increment Financing
(TIF) District in early 2004 to include former
Brockway site and most of downtown.
. See TIF schedule as handout
• See proposed map of District as handout
Additional property can be added within five
years
Step 1: Find $ to Work With
Other taxing districts have no veto power over TIF.
* TIF does not capture school district operating levy
nor future tax increases in tax rate.
* Dakota County does review and comment on all TIF
proposals.
TIF does not increase or decrease the amount of
taxes paid by a business or homeowner in a district.
Citizens and business owners do retain right to
challenge TIF district within six months after district
is established.
.a Office of State Auditor can always challenge TIF
districts but has no enforcement power.
Enforcement lies with the county attorney.
Residential Taxes
Breakdown of Residential Taxes
❑ Other
❑ School 4% ❑ County
31% 24%
City
41%
Commercial Taxes
Breakdown of Commercial Taxes
2% 11% ❑ County
29% 19 /o o ■ City
❑ School
❑ Fiscal Disparities
■ State
13%
26% ❑ Other
Calculate TIF
Taxes Before and After TIF: Where Do They Go?
2,500 -,' z
2,000- ■ TIF
1,500 ❑ Other
1,000 ❑ School
500 ■ City
0 ❑ County
$50,000 House $200,000 House as
Prior to TIF Redevelopment
Step 1.m Find $ to Work With
A decision on fiscal disparities election for C/I
property in the district is needed at approval
but can be modified.
Pooling is limited by law to 15% to 20 %.
State requires that various actions take place
to keep the district viable.
• Three year rule = one 'deal" or acquire land
• Four year rule = any land not improved is
removed from the district
• Five year rule = Must finalize majority of contracts
or the project is considered pooled $
Step 1.m Find $ to Work With
• Redevelopment plan
underway lends credibility
to need for redevelopment
and the need for public
intervention.
The redevelopment planning process does
not need to be complete, but an interim
report establishing the need and basic plan
reduces chances of a legal or OSA challenge.
Step 1: Find $ to Work With
* rules
• TIF cannot be used for recreational or park
purposes or municipal buildings (like city hall or
library).
• TIF can be used for streetscape costs within the
boundaries of the district.
• TIF can be used for some speculative purchases of
land, but with restrictions.
• Typical costs of demolition, site improvements,
renovation of buildings, and infrastructure are
allowable.
• Where TIF can be spent in a district depends.....
Step 1: Find $ to Work With
* >Two types of districts utilized for downtowns:
• Redevelopment
• 26 year term, requires 50% of buildings substandard,
and TIF only used in a development which
removes /renovates a substandard building.
• Renewal and Renovation
• 16 year term, requires 20% of buildings substandard and
30% "obsolete" or poorly planned.
• Professional architects have conducted the
substandard tests as a minimum requirement.
• Where TIF can be spent is biggest difference
between the two as well as risk mitigation from
outside challenges.
Step 1: Find $ to Work With
�►> Former Brockway site is
expected to be the
"TIF generator ".
Negotiations will commence
with CPDC when plat is finalized.
+ Expect that only a portion of the TIF created
on Brockway property will be utilized on -site
with remainder available for downtown
With one unified TIF district, no restrictions
on using funds throughout district. Otherwise
limited to 15% of TIF outside of the district.
Step 2.s Be a Frugal Negotiator
*-TIF negotiations have evolved in recent
years.
• Illinois example
• Full disclosure required from developer
• Rate of return analysis is key.
• Single family developers usually focus on a fee equal to
12% to 15% of sales.
• Lookback provisions require developer, upon
completion, to prove all costs incurred and
account for profit.
• Recommended as a policy for all development
deals.
Step 3n. Purchase Land Wisely
+Vost cities with successful
redevelopments have invested
in land ahead of development
. Land banking reduces costs
Can purchase when seller is willing at a
reasonable cost
o , Can better acquire property without a
development timeframe and allow
reconstruction at another site.
Port has already started in downtown
Step 3n. Purchase Land Wisely
Most cities have utilized threat of
condemnation in redevelopment.
• Prevents unreasonable profit of existing land
owners.
• Results in quality developers interested in
projects.
• Can benefit landowner with extended timeframe
on new acquisition ( "like kind exchange" rules for
capital gains).
• Requiring a private developer to assemble land
w i l l result in higher development fees and
potentially higher public investment.
Step 3m. Purchase Land Wisely
r Examples of cities with a history of
good land acquisition strategy include:
• St. Louis Park
• Burnsville
• Richfield
• Brooklyn Park
. Maple Grove
Step 4n. Recruit Quality
Only a few developers are good at
mixed -use development.
. Rosemounts market is relatively untested
*Port and City must encourage local
efforts from existing property
owners /retailers.
Dakota County CDA is an important
resource for affordable housing.
Step 5: Be Patient
+ Smaller projects will build confidence in
community.
Public improvements are an important signal
of city's commitment to downtown.
City should determine its level of willingness
for up -front funding of redevelopment for
both land acquisition and public
improvements.