05-17-11 HRA Special Agenda AGENDA
GOLDEN VALLEY HOUSING AND REDEVELOPMENT AUTHORITY
Special Meeting
Golden Valley City Hall
7800 Golden Valley Road
Tuesday — May 17, 2011
6:00 PM in Council Chambers
Pages
1. North Wirth Area Redevelopment 2-4
Tax Increment Financing District 3 —Termination of Note and
Decertification of District (Resolution 11-03)
2. Adjournment
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Executive Summary for Action
Housing and Redevelopment Authority Meeting
May 17, 2011
Agenda Item
Tax Increment Financing District No. 3 - Termination of Note and Decertification of District
(Resolution 11-03)
Prepared By
Jeanne Andre, Assistant Director
Summary
GVEC Properties has been in default of the GVEC Properties LLC Private Development
Agreement due to non-payment of taxes. A notice of the default was sent on February 23,
2010, and the default has not been cured. Based on the default, staff is recommending that
the outstanding Note be terminated. If there is no Note, there is no reason to collect
increment, so it would also be recommended that the TIF district be decertified. Hennepin
County has a June 30 deadline for changes to TIF districts effective January 1 2012.
A bank holds the TIF Note and a second bank holds a mortgage on the property. A bank
representative has reported that the 2009, 2010 and first half, 2010 taxes will be paid by May
16. Staff has requested that proof of payment be provided to the HRA by May 16.
Attachment
Resolution No 11-03, Terminating a Note Issued Pursuant to the GVEC Properties LLC
Private Development Agreement as Amended and Recommending the Amendment of the
North Wirth Tax Increment Financing District to Discontinue the Collection of Increment
Generated From Certain Parcels
Recommended Action
Motion to adopt Resolution No. 11-03, Terminating a Note Issued Pursuant to the GVEC
Properties LLC Private Development Agreement as Amended and Recommending the
Amendment of the North Wirth Tax Increment Financing District to Discontinue the Collection
of Increment Generated From Certain Parcels
Resolution 11-03 May 17, 2011
Commissioner introduced the following and moved its adoption:
RESOLUTION TERMINATING A NOTE ISSUED PURSUANT TO THE GVEC
PROPERTIES LLC PRIVATE DEVELOPMENT AGREEMENT AS AMENDED
AND RECOMMENDING THE AMENDMENT OF THE NORTH WIRTH TAX
INCREMENT FINANCING DISTRICT TO DISCONTINUE THE COLLECTION
OF INCREMENT GENERATED FROM CERTAIN PARCELS
WHEREAS, by adoption of a resolution on July 6, 2004, the City Council
of the City of Golden Valley Minnesota (the "City") has heretofore created the
North Wirth District#3 Tax Increment Financing District (the "District"), located
within North Wirth Development District No. 1505, and has approved a Tax
Increment Financing Plan (the "TIF Plan"), for the District to provide assistance to
the project area for soils correction; and
WHEREAS, the County Auditor of Hennepin County (the "County") has
certified the original net tax capacity and the original local tax rate of the District
pursuant to the provisions of Minnesota Statutes, Section 469.177; and
WHEREAS, the Housing and Redevelopment Authority (HRA) issued a
Note for the soils correction to GVEC Properties LLC ("Developer") on July 10,
2006 to refund the costs to correct soils within the North Wirth Redevelopment
Project; and
WHEREAS, in 2009 said Note was amended pursuant to an Amendment
to the GVEC Properties LLC Private Development Agreement, to provide that
interest payable on said Note is suspended if the Developer is in default; and
WHEREAS, the amended Note provided that interest payable on said
Note is suspended and the Note may be terminated if the Developer is in default
and said default is not cured within 60 days' notice of the Default; and
WHEREAS, notice of the default was sent on February 23, 2010, and said
default has not been cured, and property taxes from 2009, 2010 and the first half
payable 2011 are outstanding; and
WHEREAS, the City and the County have defined the North Wirth Area #3
parcels as County Project Number 1505 which has a preliminary frozen tax
capacity of$6,650 and a preliminary current tax capacity of $41,955 for taxes
payable year 2011; less fiscal disparities contribution from each parcel; and
WHEREAS, as of the date hereof, the HRA recommends that the Note be
cancelled and increment revenue received through the end of the 2011 be
forwarded to Hennepin Country for redistribution to taxing jurisdictions in the
2012 calendar year.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority that the Note issued pursuant to the GVEC Properties
LLC Private Development Agreement, as Amended, is hereby terminated and
the Tax Increment Financing District, County Project Number 1505, be
decertified; and
BE It FURTHER RESOLVED that the HRA request that the City Council
of the City of Golden Valley, Minnesota:
(i) direct the County to discontinue sending increment generated
from County Project Number 1505, in its entirety, to the City after
December 31, 2011;
(ii) the collected increment generated by County Project Number
1505, that has not been remitted to the developer due to non-
payment of property taxes, be submitted back to Hennepin
County for distribution to the taxing jurisdictions located in North
Wirth #3 Project Area; and
(iii) the City Clerk provide a certified copy of this resolution to the
County Auditor of Hennepin County as notification of the City's
compliance with the special legislation.
Adopted:
Paula Pentel, Chair
ATTEST:
Thomas D. Burt, Director
Motion for the adoption of the foregoing resolution was seconded by ; and
upon a vote taken thereon, the following voted in favor thereof
and and the following voted against the same: none, whereupon
said resolution was declared duly passed and adopted, signed by the Chair and
his signature attested by the Director.