City of Blaine Anoka County, Minnesota

Date	Ver.	Action By	Action	Result	Action Details	Meeting Details	Video
7/11/2013	1	City Council	Adopted	Pass	Action details	Meeting details	Video

ITEM: 9.2 PUBLIC HEARING - Bryan K. Schafer, Planning and Community Development Director

Title

APPROVING AN AMENDMENT TO THE BLAINE ECONOMIC DEVELOPMENT PROJECT PLAN, ESTABLISHING A HOUSING TAX INCREMENT FINANCING DISTRICT AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR (CREST VIEW SENIOR HOUSING PROJECT)

Schedule of Actions

City Council and EDA

07/11/13 (Public Hearing)

Background

A hearing is being held for the purpose of establishing Tax Increment Financing District 1-18. The proposed resolution will create a project area for the purpose of underwriting the costs of development, public improvements and property improvements which will also be a tax increment district.

The location of the new district is the 7.5 acre lot located at the southwest corner of Ulysses Street and Paul Parkway. This location is proposed as Tax Increment Financing District 1-18 meaning that new tax increment will be captured to fund construction cost of a new 155-unit senior residence. The building is currently envisioned to contain 69 independent living units, 51 assisted living units and 24 units for memory care and 11 care suites.

The proposed TIF plan would have the following basic elements:

· TIF would be structured as a pay-as-you-go note

TIF would be a 25-year Housing TIF

90% project benefit/10% EDA Administrative

Benefit to 20% of the units for low/moderate income residents

Annualized TIF benefit estimated at $190,866 when fully taxed (2017)

Recommendation

By motion, approve the Resolution.

Attachments

Location Map

Proposed TIF District

TIF Plan

Body

BE IT RESOLVED by the City Council (the Council) of the City of Blaine, Minnesota (the City), as follows:

Recitals.

The Blaine Economic Development Authority (the EDA) has proposed to amend the Project Plan (the Project Plan) for the Blaine Economic Development Project (the Project Area) to reflect increased public development and redevelopment costs and activities, and to establish Tax Increment Financing District No. 1-18 (the TIF District) within the Project Area and to adopt the Tax Increment Financing Plan relating thereto (the TIF Plan), all pursuant to Minnesota Statutes, Sections 469.001 through 469.047, 469.090 through 469.1082, 469.124 through 469.134, and 469.174 through 469.1794 (the TIF Act), respectively, all as reflected in that certain document, dated July 11, 2013, entitled Amendments Relating to Blaine Economic Development Project of the Blaine Economic Development Authority Including Establishment and Approval of an Amended and Restated Tax Increment Financing District and Plan No. 1-18 dated July 11, 2013, and presented for the Council's consideration.

The Council has investigated the facts relating to the amendment of the Project Plan, the establishment of the TIF District and the adoption of the TIF Plan.

The City has performed all actions required by law to be performed prior to the adoption and approval of the TIF Plan, including, but not limited to, 30 days' prior notification of the County Auditor and School District Clerk and of the individual affected County Commissioner, a review of the Amendment to the Project Plan by the City Planning Commission, and the holding of a public hearing thereon following notice thereof published in the City's official newspaper at least 10 but not more than 30 days prior to the public hearing.

Certain information and material (collectively, the Materials) relating to the TIF Plan and to the activities contemplated therein have heretofore been prepared and submitted to the Council and/or made a part of the City or EDA files and proceedings on the TIF Plan. The Materials include information and/or substantiation constituting or relating to (1) why the new Tax Increment District meets the so-called but for test; and (2) the bases for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Materials, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein.

Crest View Senior Community of Blaine, LLC, a Colorado limited liability company (the Developer) has proposed to construct a 155 unit senior housing development in the City, consisting of 69 senior housing units, 51 assisted living units, 11 enhanced assisted living units and 24 memory care units and related parking and public improvements (collectively, the Project) and has requested that the EDA provide tax increment assistance to pay a portion of the public redevelopment costs of the Project.

Findings for the Creation of the TIF District and Adoption of a TIF Plan Therefor.

The City Council hereby finds that the creation of the TIF District and adoption of the TIF Plan therefor, are intended and, in the judgment of the City Council, its effect will be, to carry out the objectives of the Project Plan and to create an impetus for the construction of low and moderate income housing, and will otherwise promote certain public purposes and accomplish certain objectives as specified in the Project Plan and TIF Plan.

The City Council hereby finds that the creation of the TIF District and the adoption of the TIF Plan are intended, its effect will be, to carry out the objectives of the Project Plan by creating an impetus for the development of housing facilities in the City and otherwise promote public purposes and accomplish certain objectives as specified in the Project Plan and TIF Plan.

The City Council hereby finds that the TIF District qualifies as a housing district within the meaning of the TIF Act for the following reasons:

The District is, pursuant to Minnesota Statutes, Section 469.174, Subdivision 11, a housing district because it consists of a project or portions of a project or a portion of a project intended for occupancy, in part, by persons or families of low and moderate income as defined in Chapter 462A, Title II of the National Housing Act of 1934; the National Housing Act of 1959; the United States Housing Act of 1937, as amended; Title V of the Housing Act of 1949, as amended; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses.

The project to be constructed in the TIF District will consist of approximately 155 units of rental housing and related parking facilities which at least 20% of the units will be initially rented and occupied by individuals whose family income is less than or equal to 50% of median income.

The City Council hereby makes the following findings:

The City Council further finds that the proposed development, in the opinion of the City Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being:

The housing development will result in the construction of low and moderate income senior housing units which would not be constructed in the reasonably foreseeable future. The Developer has represented that it could not proceed with the development without tax increment assistance and the Project has experienced several delays.

The City Council further finds that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole. The specific basis for such finding being:

The TIF Plan will generally complement and serve to implement policies adopted in the City's comprehensive plan. The housing development contemplated is in accordance with the existing zoning for the property.

The City Council further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of the TIF District by private enterprise. The specific basis for such finding being:

The proposed development to occur within the TIF District is primarily low and moderate income senior housing. The development will increase the taxable market valuation of the City. The available senior housing in the City will expand by approximately 155 rental units with the completion of the development contemplated by the TIF Plan.

For purposes of compliance with Minnesota Statutes, Section 469.175, Subdivision 3(2), the City Council hereby finds that the increased market value of the property to be developed within the TIF District that could reasonably be expected to occur without the use of tax increment financing is $0, which is less than the market value increase estimated to result from the proposed development (i.e., $20,662,602) after subtracting the present value of the projected tax increments for the maximum duration of the TIF District (i.e., approximately $3,406,503). In making these findings, the City Council has noted that the property has been under utilized for many years and would likely remain so if tax increment financing is not available. Thus, the use of tax increment financing will be a positive net gain to the City, the School District, and the County, and the tax increment assistance does not exceed the benefit which will be derived therefrom.

The City elects to delay the receipt of the first increment until tax payable year 2017.

Creation of the TIF District and Approval and Adoption of the Plans; Interfund Loans.

The creation of the TIF District and the Amendment to the Project Plan and the TIF Plan, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted.

The Council hereby approves a policy on interfund loans or advances (Loans) for this TIF District, as follows:

The authorized tax increment eligible costs (including without limitation out-of-pocket administrative expenses) payable from the District, as its TIF Plan is originally adopted or may be amended, may need to be financed on a short-term and/or long-term basis via one or more Loans, as may be determined by the City Finance Director from time to time.

The Loans may be advanced if and as needed from available monies in the City's or the EDA's general fund or other City or EDA fund designated by the City Finance Director.

Neither the maximum principal amount of any one Loan nor the aggregate principal amount of all Loans may exceed the adopted and, if applicable, amended TIF Plan budget for the TIF District.

The maximum term of any Loan shall not exceed the lesser of the statutory duration limit of the TIF District or such earlier date as the City Finance Director may specify in writing. All Loans may be prepaid, in whole or in part, whether from tax increment revenue, TIF bond proceeds or other eligible sources.

The outstanding and unpaid principal amount of each Loan shall bear interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Section 270.75 or 549.09 of the Statutes at the time a Loan, or any part of it, is first made, subject to the right of the City Finance Director to specify a lower rate (but not less than the City's or the EDA's then-current average investment return for similar amount and term).

PASSED by the City Council of the City of Blaine this 11^th day of July 2013.