HomeMy WebLinkAbout9.a. Local Effort Funding for Rosemount Village Square _.,
� ► CITY OF ROSEMOUNT
EXECUTIVE SIIi�lARY FOR ACTION
CITY COUNCIL MEETING DATE: APRIL 19, 1994
AGENDA ITEM: LOCAL EFFORT FUNDING FOR AGENDA SECTION:
ROSEMOUNT VILLAGE SQUARE OLD BUSINESS
PREPARED BY: THOMAS D. BURT, AGENDA N��C� �
CITY ADMINISTRATOR C �
ATTACF�NTS: WORK SHEET' APPROVED BY:
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The concept of Local Effort Funding (LEF) is extremely attractive due to
the Legislature eliminating Tax Increment Financing as an economic
development tool for commercial development. Staff has reviewed the concept
and agrees this may be a very viable means of funding public improvements .
One primary concern with the use of LEF on this proposal is that the value
of the shopping center has not been clearly established. The figures that
are attached are based on the information presented by the Carlson' s. The
actual value has not been set by the assessor and will not be until after
the project is built and it is questionable if we can tie the Carlsons to a
minimum assessed value for the lot .
Another concern is fiscal disparities, the State is unclear of exactly how
much we will lose on this project but it is definite we will lose some of
the new taxes generated. Based on the information provided by the State we
are anticipating losing from $5, 000 to $12, 000 of the $42, 061 of new taxes
generated.
And finally, the County has not approved our request for financing a
portion of the improvements . Without the commitment af the County we are
not able to know how long the taxes would be diverted to pay for the
improvements.
The LEF concept is a good idea, however, the timing of this project leaves '
too many uncertainties to recommend this type of financing at this time. '
Once a County decision is made, tax values established and fiscaT disparity
loss determined I recommend that this proposal be looked at again. If at a '
later date the Council considers this method of financing it does not take '
the consent of the Carlsons. �
Recommendation: I�'i
No action at this time. Staff will monitor the issues and bring the topic I
back to a future Council meeting.
RECObIl�iENDED ACTION: None at this time.
COUNCIL ACTION:
1
CITY OF ROSEMOUNT
WORKSHEEf FOR ROSEMOUNT VILLAGE SQUARE TURN LANE PROJECT
Tax Capacity Rates: Carison's Estimated Tax Dollars(1994) $175,000 (Phase� EsUmated Costs for Tum Lane Constructlon on CSAH 42:
City 32.29796 25.70% City 44,975
Couniy 27.474% 21.86% Couniy 38,259 1) Right Tum Lane&Signal Revisions at Chippendale $107,000
School District 60.933% 48.4996 School District 84,853 2) Right&Left Turn Lanes into Rosemount�Ilage Sq $85,000
Miscelianeous 4.964% 3.95% Miscellaneous 6,913 3) Right Turn Lane at Canada $36,000
Adjustment AdJustment
— $228,000
Total 125.66896 100.000% Tota) $175,000 .
'* Thesa are preliminary�igures and need to be revlsed with a feasibiliiy
study. Numbers inciude engineering&adminisVation at 30%. **
Current Tax Coliections(1993)-Carlson Property '�* If the County picks up the projects at Chippendale and Canada,
the Ciiy would be respo�ible for 45%of the project c�sts. This
' City Taxes New City Tax Totals: $44,975 equates to 45%of$143,000 or$64,350. **
Current Collections: 2,914
34-71175-030-01 $848.69 --
34-71175-041-01 110.59 Add'I Gty Tax Dollars $42,061 x 5 Yrs of Debt Pymts= $210,305
34-71150-013-01 1,954.34
$2,913.62
NOTES: Besed on conversa�ons I have had with the State,a portion of the$175,000 of new tax dollars wili be'Fiscal DisparNy"dollars •
(probably anywhere from$20,000 to$50,000). With this In mind,the amount of$44,975 that calculates out to City taxes
could be reduced by anywhere from$5,000 to$12,000 a year. This would greatly reduce the$210,305 availabe for the turn lanes.
Also,it is my understanding that although the City recelves Fiscal Disparity dollars,because of the State's formulas
for distribudon,we would probabty be a"loser"on this project because it is new construction,meaning that although the project
would be paying those additional taxes(for Fiscsl Disparities),the City would probably not receive any of the dollars.
Also,the Phase A tax dollars were not included in the catculations,because of the short-term nature of
the funding and the uncertainty of when that phase would be completed and added on to the tax rotls.