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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. r FREERS 6 ASSOCIATES INC ,r T 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.