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Home My WebLink About10.a. TIF District No. 1-2 dor Carlson Site CITY OF ROSEMOUNT EXECUTIVE SIJMMARY FOR ACTION CITY COUNCIL 1V�EZ'ING DATE: DECEbiBER 19, 1995 AGENDA ITEM: T� DISTRICT FOR CARLSON SITE AGF�TDA SECTION: NEW BUSINFSS PREPARED BY: DAN ROGNESS, COb�]V1:UIVITY !��,� AGENDA�A� � DEVEI.OPMINT DIRECTOR �� 1 C� A ATTACffiV�NTS: SPRINGSTED L,ETTER; RESOLUTION APPROVED BY: (See attached memo dated 12/OS/95) Note: The question of whether future LGA/HACA statewide changes may impact this decision was raised by Kevin Canoll. I will discuss this issue further at the meeting, but in a general sense the decision to change will be based on a best guess since tax laws and formulas do change by the legislature from time to time. RECOMIVV�NDED ACTION: Motion to approve a RESOLUTION PLIDGING A CONTRIBUTION OF UNRESTRICTED FUNDS IN SUPPORT OF A TAX INCREM�N'r FINANCING PROJECT that will amend the penalty in T� District No. 1-2 from LGA/HACA to a local contribution from unrestricted funds. COUNCIL ACTION: C1TY HAL� ` r �� 2875—145th StreetW�t RO��O� P.O.Box510 C'�� O C Rosemount,MN f 55068-d510 p ROSem�Unt�� Phone:61Z-423-�411 E v e r y t hin g`s Coming u FaX;61Z-423-5203 lv�� Rosemount Port Authority TO: MaYor and City Council tor �}`� ess, Commu�ty Develop�ent D� FROM: Dan RO� D�ember 5, 1995 DAZ'E: pPM'ENT DI5TRICT N�' 12 T.I.F• �E� gE: CARLSpN SI'1� , , ��ia1 advisor on the pr�P°S� sted, the crty s �� 42 �d�I 3• Due t° some �°�0`ation from SP�g er of CSAI3 �on of chang�g �e I received velopme1't Project at th es�i995StR�s mOunt has the of 7 5 percent of the actual Carlson rede e effect��na1tY to a "1��- contribution legisla.tive 1aw u�LGAIHACA Pe previously r�l act of the local contnbu- �u��increment. e ultimate imP ative unPact of arison table that shows ��ates that the neg�e of the �S��t of springsted provided�a�ap�tion 2). My review � must pay ate imPact over the �at�e city t i o n (S� a� 1 5, but the ultim ,�e�w S�tes th tion o P CA S�S �oun d y�T tion 2• levy a lloc a t i o n t o t he Port LGA�'� 1 $140,00� less under � �a,1 increments �wenty years is near Y S��ted funds such as � �venue other than� its local contribut�°n from u� or from some other source of ong°�g Authority's budget ember of from the TIF District. District i�D��t�s or tion af the'� xowever, not pro�� S�Ce �e n w tax base is added• I��eV�that this ro ect�S be created until ��crements s�Ce the p J within th� next five y�s� 1994, no ta��rements °'�� to be� �ontributions � �S� the Authority ment projeCt were �reduced lvcal n� �ture, another redevelop overall � ro osecl��1e over ag��the change would benefit the C��other proJ?�t ls�SPtrl�t and start �e used beyond 15 years. �e e�sting �m�to� more advan�ge°us• and Council could el�ta°d�� at the City aPProve a LGAIKACA Penalty o`' end th I wonrestncte.md fmunds e�lu�to 7•5% of the m initia1 review of the situation, istrict No• 1'2• plea.se don't hesitate to Based uPon y �uai contribuf om°nu �g t�s pr�sa1• resolution that pl�ges an enerated uestions reg �u� �increment ro�yes g _ 02 ou should have further q contact me at 322 2 �%��'°^^ containing- ��_�pnsur 85 E.SEVENTy p�qCE SUfTE I00 SAINT PA UL,MN SS 101-2143 �� 612-223-3000 FAX:612-223-3002 � SPRjNGSTED Pu6lic F'inana Advisors December 1, 1995 Mr. Thomas gu� Administrator P� Box 510 Rosemount, MN 5506g_05�� Re: TIF Carison p oelopment) District No. �_2 �ect Adopted: December 2p, 1994 Dear Tom: This legislative referenced TIF Session, amend to make d�strict and ments to the a locai p►'oject. The ne�y�a 71F ►aW were LGq/HqCA aid �ontribution w now passed which amount o f due to estabiisht� the project a�10WS munici affect the � the contribution that menf of the 7-�F�annuaily or �n a �u a6ties the o above approved district. The attached Shee m�� ption of electing covered b after June 30, 1994 must be made � �n �ieu of losing y this ne but before �u� and other related restrictions. w law if the Y 1, 1995 9 es details on the We have reviewed the e1ection is made by resolution�ur case n ►a er� the City ay e1e a�stricts TIF Plan� and have p�ojected tax incre than Dec to be C�tY�s financiai interestached a co ment and loss o f LG m r 3� �99 • Please find enclosed tO make mparative report for �HACA aid a sam the local Your review. �aS deterrr�ined in the Upon adoption p1e co �ontribution �t appears that it is in the . please send py °f a resolution for e1ection before the an executed co action b end o f py to both our o ffCe the City Council on th she year. Mr. Jerorr�e Si�kev and to: matter. M►nnesota Department of Local Government S Revenue �a��Station 3340 ery�ces Division �� River Park Plaza Please call if St. Pau�, MN �5146-3340 Y�u have any questions regarding thrs rn Sincerely, atter. ,c.�.��,G�C<�C�� Dav�d P. Drown '��`�� Vice President �� p�m ,� � 195� Enclosures � � � � � �'�' r `�� u�,vi�r��l�- SAIN1'PRUL,MN ` MINNEqpOLIS,MN ' BROOK}.7ELD,Wi , ��'ERLAND PARK KS . �tsASHIN�70N -- � ,DC • [OWq Ci7-y lq Loss of LGA/HACA vs. Local Contribution Report City of Rosemount, Minnesota Tax Increment Financing (Redevelopment) District No. 1-2 Carison Project O tion 1 O tion 2 Less Annual Annual Adm./Pooling Annual Projected Local (a) Period Gross Tax Retainage Net Tax Loss of Contribution Ending Increment 17.50% Increment LGA/HACA 7.50% Difference �1) �2) �3) �4) f5) �6) ��) 12/31/95 0 0 0 0 0 0 12/31/96 0 0 0 0 0 0 12/31/97 90,913 15,910 75,003 0 6,818 (6,818) 12/31/98 119,817 20,968 98,849 0 8,986 (8,986) 12/31/99 203,637 35,636 168,001 0 15,273 (15,273) 12/31/2000 203,637 35,636 168,001 0 15,273 (15,273) 12/31/2001 203,637 35,636 168,001 0 15,273 (15,273) 12/31/2002 203,637 35,636 168,001 4,223 15,273 (11,050) 12/31/2003 203,637 35,636 168,001 8,446 15,273 (6,827) 12/31/2004 203,637 35,636 168,001 12,669 15,273 (2,604) 12/31/2005 203,637 35,636 168,001 16,892 15,273 1,619 12/31/2006 203,637 35,636 168,001 21,116 15,273 5,843 12/31/2007 203,637 35,636 168,001 25,339 15,273 10,066 12/31/2008 203,637 35,636 168,001 29,562 15,273 14,289 12/31/2009 203,637 35,636 168,001 33,785 15,273 18,512 12/31/2010 203,637 35,636 168,001 38,008 15,273 22,735 12/31/2011 203,637 35,636 168,001 42,231 15,273 26,958 12/31/2012 203,637 35,636 168,001 46,454 15,273 31,181 12/31/2013 203,637 35,636 168,001 50,677 15,273 35,404 12J31/2014 0 0 0 54,901 0 54,901 $3,265,285 $571,418 $2,693,867 $384,303 $244,899 $139,404 P.V. @5.00% $36,688 (a) Must be paid out of unrestricted money of the City's and can not be made, directly or indirectly, with tax increments (including administrative retainage) or developer payments. Prepared by: SPRINGSTED Incorporated (20-Nov-95) Ti�x �rla�+��+T' A�v ��c7aN sec'non� <�s � ) Sec. 6. Minnesota Statutes 1994, section 273.1399 subdivision 6 is amended to read: Subd. 6. ��''��A�i• EXEMPT DISTRICTS. (a) The prnvisions of this section do not apply ta exempt tax increment finanan¢ ' tricts as specified by this subdivision. - -� � (b) A tax increment financing district for an ethanol production facility that satisfies all of th�ollowing requirements is exempt �� - - ' • � � - • (1) The district is an economic development district, that qualifies under section 469.176, subdivision 4c, paragraph (a), clause (1). -� . �: . _ (2) The facility is certified by the commissioner of�e a�riculture to qualify for state payments for ethanol development under section 41A.09 to the extent funds are available. (3) Increments from the district are used only to finance the qualifying ethanol develop- ment project located in the district or to pay for administrative costs of the distric� (4) The district is located outside of the seven-county metropolitan azea, as defined in section 473.12L . . . - (5) The tax increment financing plan was approved by a res�lution of the county board. (6) The exem tion rovided b this ara h a lies until the first ear after tne total amount of increment for the district exceeds 1,500,000. The countv auditor shall notifv the commissioner of revenue of the expiration of the exemption by June 1 of the year in which the auditor proiects the revenues from increments will exceed 15$ , 00,000. . Sc) A qualified housing district is exemp� --� - (d) A district is exempt if the municipalitv elects at the time of approving the tax increment financing plan for the district to make a qualif�ring local contribution. To Qualify for the exemption in each vear, the authoritv or the municipalitv must make a qualifying local contribution equal to the listed percenta�es of increment from the district or subdistric� 1 for an economic dev o ment a ousin distri or a renewal and renovation distri ten en • • --•-—-- ... _: .. ------ �------•--_-__ 2) for eve o ment distri a mine und und s �ace distri a hazardous substarice subdistrict, or a so� con 'tion distri 7.5 n�. ' The maximum local contribution for all districts in the municipality is limited to two percent �`of city net tax ca acity as defined in section 4??A.011, subdivision 20, The amount of the local contribution must be made out of unrestricted money of the authoritv or municipalitv, such as the �eneral fund, a propertv tax lew,or a federal or a state Aran�in-aid which mav be spent for general �overnment purposes. The local contnbution mav not be made, directiv or indirectiv, with tax increments or developer payments as defined under section 469.1?66. The local contribution must be used to paY project costs and cannot be used for �eneral �overnment purposes or for improvements or costs that the anthoritv or municipalitv planned to incur absent the proiect. The authority or municipality mav request contributions from other local gavernment entities that will benefit from the district's activities. These contributions reduce the local contribution required of the munici- palitv or authoritv bv this para�raph. Cities, counties, towns, and schools may contribute to paving these costs, notwithstanding anv other law to the contrary. - �- ��•-- - If the state contributes to the proiect costs throu�h a direct grant or similar incentive, the r�quired local contribution is reduced bv one-half of the dollar amount of the state grant or other similar incentive. . . , � 7�F [�i��rs ��vt� � Jv� .�'.��4 �' �� ULY �. /99s . 7t� r�N1/�16 �Y G� ?l}L� 1'►`1t�cJHAE.l� �'� � �Y �v��, ?a �E cr�V9�� y 77�s --�7cN ��.•6) i� l�x� so No tA�7�- ��iu ��, /995. CTTY OF ROSEMOUNT DAKOTA COUNTY, II�IINNESOTA RESOLUTION 1995- RESOLUTION PLEDGING A CONTRIBUTION OF UNRESTRICTED FUNDS IN SUPPORT OF A TAX INCREMENT FINANCING PROJECT WHEREAS, in 1995 the Minnesota Legislature passed, and on June l, 1995, the Governor signed into law, Laws of M'innesota for 1995, Chapter 264 ("Chapter 264"); and WHEREAS, Article 5, Section 6, of Chapter 264 provided that certain tax increment financing districts would be exempt from the LGA/HACA reductions otherwise applicable provided that a certain"qualifying local contribution" were to be made; and WHEREAS, pursuance to Article 5, Section 49, of Chapter 264 providing for effective dates of said Article 5, the provisions of the aforesaid Section 6 were specified to "apply to tax increment_ financing districts for which the request for certification was made after June 30, 1994, and to all hazardous substance subdistricts, regardless of when the request for certification was made. For� districts for which the tax increment financing plan was approved before 7uly l, 1995, the governing body of the municipality must elect, by resolution, to be covered by the section by no later than December 31, 1995"; and WHEREAS, the City Council(the"Council") of the City of Rosemount, Minnesota(the"City") on December 20, 1994, has previously established Tax Increment Financing District No. 1-2 (the "Tax Increment Financing District") as a redevelopment district; and WHEREAS, pursuant to the 1995 Omnibus Tax Bill, Article 5, Section 6, the Tax Increment Financing District is exempt from a LGA/HACA penalty if a contribution of unrestricted funds of the City equal to 7.5% of the tax increment revenues is pledged to an economic development district, a housing district, or a renewal and renovation district. NOW THEREFORE,BE IT RESQLVED,that the Council hereby pledges to make a contribution of unrestricted funds to pay project costs equal to or in excess of 1.5%0 of the tax increment revenues generated from Tax Increment Financing District No. 1-2. By this action the City will be exempt from any regular Local Government Aid/Homestead and Agricultural Credit Aid penalty provisions otherwise applicable pursuant to Minnesota Statutes, Section 273.1399, Subdivision 6(d) in relation to the Tax Increment Financing District. The maximum local contribution for all tax increment districts in the City is limited to 2% of city net tax capacity as defined in Minnesota Statutes, Section 477A.011, Subdivision 20. RESOLUTION 1995- FURTHERMORE,BE IT RESOLVED, that the City Clerk is hereby directed to file a copy of this resolution with the 1Vrnnesota Department of Revenue and his or her office. ADOP1'ED this 19th day of December, 1995, by the Rosemount City Council. Mayor City Clerk Motion by. Second by: Voted in favor: Voted against: 2