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91-059 - 05-07 Approve Redevelopment Valley SquareResolution 91-59 May 7, 1991 Member Thompson introduced the following resolution and moved its adoption: RESOLUTION APPROVING REVISED REDEVELOPMENT PLAN FOR VALLEY SQUARE REDEVELOPMENT PROJECT AND MAKING FINDINGS WITH RESPECT THERETO BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota as follows: 1. The Commissioners of the Housing and Redevelopment Authority in and for the City of Golden Valley, Minnesota (the "HRA") and the City of Golden Valley, Minnesota (the "City"), have previously approved a Redevelopment Plan (as amended through August 10, 1982, the "Redevelopment Plan") for the Valley Square Redevelopment Project (the "Redevelopment Project") to be undertaken pursuant thereto. The Board of Commissioners of the HRA has now prepared and approved a revised Redevelopment Plan (the "1991 Revised Plan"). Among other modifica- tions, the 1991 Revised Plan updates redevelopment activities completed and work remaining to be done in the project area, and updates the finance plan and budget for the project. 2. This Council, on May 7, 1991, held a public hearing on the 1991 Revised Plan after notice of the public hearing was published in the official newspaper of the City not less than ten (10) days prior to the date of the hearing. Copies of the 1991 Revised Plan were provided to Hennepin County and to the school districts in which the project area is located at least 30 days prior to the hearing date. At such public hearing all persons desiring to be heard with respect to the 1991 Revised Plan were given an opportunity to express their views with respect thereto. 3. Pursuant to Minnesota Statutes, Sections 469.028, Subdivision 2, 469.029, Subdivision 6, 469.175, Subdivision 3, and 469.179, Subdivision 2, it is hereby found and determined that: (A) The land in the Redevelopment Project would not be made available for redevelopment and the proposed redevelopment to be undertaken in accordance with the 1991 Revised Plan, in the opinion of this Council, would not occur solely through private investment within the reasonably foreseeable future and therefor financial aid, including the use of tax increment financing, is deemed necessary. The findings of Resolution #96, adopted July 17, 1978, at the time of approval of the original Redevelopment Plan, are incorporated herein by reference and affirmed. (B) The 1991 Revised Plan conforms to the general plan for the devel- opment of the City as a whole, and has been reviewed and approved by the Planning Commission. (C) The 1991 Revised Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the redevelopment of the Redevelopment Project by private enterprise since the 1991 Revised Plan con- templates (and redevelopment activity to date evidences) that private developers will successfully develop the property in the project area, with public assistance being provided primarily in the form of land acquisition, site pre- paration and infrastructure improvements. 4. The 1991 Revised Plan is approved. The City Clerk shall file a copy of the 1991 Revised Plan with the Commissioner of Revenue. Resolution 91-59 - Continued Passed by the Council this 7th day of May, 1991. • ATTEST: Shir ey e son, City er May 7, 1991 The motion for the adoption of the foregoing resolution was seconded by Member Johnson and upon a vote being taken thereon, the following voted in favor thereof: Bakken, Johnson, Russell, Stockman and Thompson; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted, signed by the Mayor and his signature attested by the City Clerk. C7 • Resolution 91-59 - Continued • VALLEY SQUARE REDEVELOPMENT PLAN GOLDEN VALLEY, MINNESOTA ADOPTED JULY 10, 1978 REVISED MAY 14, 1979 REVISED APRIL 6, 1982 REVISED AUGUST 10, 1982 REVISED May 7, 1991 • • May 7, 1991 Resolution 91-59 - Continued • POLICY ON PLAN REVISION • L� May 7, 1991 This Redevelopment Plan will require many years to implement completely and will have a major impact on the community during that period. In order to assure that this plan remains consistent with changing community needs and objectives, further review must be provided. The Redevelopment Plan may be modified at any time before or after the lease or sale of the project area or any parts contained therein, provided that modifica- tion shall be accomplished in accordance with the requirements of applicable 1 aw . r: Resolution 91-59 - Continued PART I: OVERVIEW Introduction "lay 7, 1991 Located in West Central Golden Valley (Exhibit 1), the Valley Square area was the site of some of the earliest business development in the City. A primary impetus in the creation of the Valley Square Redevelopment Area and TIF District was the desire to revitalize this aging business area, centering on Winnetka Avenue north of highway 55. With the main City offices also located in the area, the intent has been to establish a full-service, mixed-use district that will provide a renewed sense of focus for a community divided by two school districts, three major highways, three railroads, and three metropolitan districts. The Valley Square Commission was appointed in 1976, after a decade of periodic studies and recommendations had failed to result in any significant upgrading of the area. The Commission was charged with producing a coordinated study of land use, traffic, and physical appearance issues within the Valley Square area, including recommendations for improvements. A draft report was completed and submitted to the City Council in January of 1978. Following an approval process that incorporated formal and informal reviews by local residents and business owners, various local interest groups, the Planning Commission, the HRA, and the City Council, the Valley Square Redevelopment Plan was adopted in July of 1978. It has been revised several times. Redevelopment Area Boundaries Historically, the limits of the Valley Square area tended to depend on who was looking at it, and for what reason. With the adoption of the Redevelopment Plan in 1978, an official Tax Increment District was created for financing purposes, and was certified by the State Auditor's Office. The boundaries of the Tax Increment District then became the permanent boundaries of the Valley Square Redevelopment Area (Exhibit 2). A set of subareas identifies locations within the Redevelopment Area where specific projects are planned or have now been completed. The various subareas will be discussed in Part II of this Plan. Justification for Redevelopment Area State law requires that certain findings be made regarding blight and deteriorating conditions in areas to be certified as Tax Increment Districts. The findings for Valley Square were established by resolution of the City Council in 1978 (Resolution #96; July 17, 1978). Initially formulated during the redevelopment planning process, the findings cover seven bases as follows: is 1. BLIGHTING CONDITIONS - the Valley Square area exhibits clear symptoms of blight in the form of -2- n U • Resolution 91-59 - Continued EXHIBIT 1: VALLEY SQUARE LOCATION MAP May 7, 1991 -3- Resolution 91-59 - Continued EXHIBIT 2: VALLEY SQUARE AND ACTIVITY AREAS jj ,CD / ;J \ Z A�iM=771 ■ Dai ;i IML r1F N I, 0 Z !�--SON t! 0 W -4- Q C� 1 NNIM May 7, 1991 goo O► -+N NO Z NCO 3m>-� WWWJ f•CQ ==►-J WJ3 ►QO == 1 0 LL LL p W i- W U. O F- OOJN ?1=-Oi 3 Vf Q Od•1--Z W D .wv J 3Z JG •-ZC9J SQ =G W LO ►r0 F- F- m to W n' W NI N Z N cj h - WWWWW =m CD =C7=cmO C7 J2 WH-ZF-Z O�COKCUj S •crop ¢ C w Q Z �-+ F- N S 1- W 2= 21- W= Z m 0= Q = V7=NZ I--WZF-Z►-• H•.�� =3� 3 OSOTJ• ��-C3�� - NF-ZN w Z "=4w w�.. WZZW> Z Q = r r Z S Q d r O ch F- m F-- W oC �F-000OW 07 Qm>- CD Ln •Z �C�F-J O Q N J W= W S W W p W V W ]C N O C = Z = O WW O - ZOtNO= mmHHQ -- OUVATino • Resolution 91-59 - Continued lay 7, 1991 A. undeveloped or underdeveloped parcels that fail to contribute to the local tax base to their full potential; B, obsolete, unattractive, and/or worn out structures, site lay- outs, and amenities; C. unnecessary clutter such as above -ground utilities, a profusion of signs, poorly screened outdoor service or delivery areas, and poorly maintained or nonexistent green areas; D. a multitude of vehicular and pedestrian circulation hazards; and E. an adverse image in the eyes of local residents, the business community, and realtors. 2. NEED FOR IMMEDIATE INTERVENTION - without prompt action as recommended by the Redevelopment Plan, the area may deteriorate beyond any hope of saving. 3. NEED FOR GOVERNMENT INTERVENTION - the area has already deteriorated beyond the point where the private sector can be relied upon to turn it around without government assistance. 4. SUPPORT FOR PRIVATE REDEVELOPMENT EFFORTS - the Redevelopment Plan is designed to foster optimum conditions for private participation in the redevelopment effort. 5. ADEQUACY OF THE REDEVELOPMENT PLAN - the Redevelopment Plan adequately defines development goals and standards for the area, and provides suf- ficient guidance as to appropriate land uses. 6. AVAILABILITY OF RELOCATION OPTIONS - the City has reviewed available resources and guarantees to follow all applicable federal or state guide- lines and requirements regarding the relocation of displaced residents and businesses. 7. CONSISTENCY WITH COMPREHENSIVE PLAN - the goals, objectives, and general intent of the Redevelopment Plan are in conformance with the City's currently adopted Comprehensive Plan. These findings show that the Valley Square area is in need of a government - assisted redevelopment program, and that the City of Golden Valley has laid the groundwork to properly direct such a program. Redevelopment Goals and Objectives To direct the course of redevelopment in the Valley Square area, the City has established a set of broad, philosophical goals for the area as a whole, and three sets of more narrowly focused goals and objectives relating to certain development aspects of the area. am Resolution 91-59 - Continued ?lay 7, 1991 OVERALL GOALS 1. Stimulate and coordinate an aggressive revitalization effort that no single business, developer, or governmental agency has the capacity to undertake. 2. Establish a unified commercial and civic center that is a distinctive source of identity for Golden Valley. 3. Strengthen and increase the tax base of the area. 4. Reverse deteriorating conditions by providing opportunities for private investment and reinvestment. 5. Provide for the orderly physical and economic growth of the area through controlled development and redevelopment. 6. Work toward a land use pattern within the project area which results in more functional and complementary relationships. INFRASTRUCTURE GOALS AND OBJECTIVES 1. Maximize trade area accessibility and circulation safety by creating a more organized traffic pattern. A. Identify, and augment as necessary, an arterial and collector is street system serving the area. B. Identify and correct traffic safety hazards. C. Provide for safe and convenient pedestrian movement. 2. Upgrade the appearance and amenity -level of public rights-of-way. A. Provide pedestrian -oriented benches, litter containers, attrac- tive lighting, and plantings. B. Relocate utilities through underground construction. LAND USE GOALS AND OBJECTIVES I. Create an atmosphere conducive to increased levels of economic activity. A. Replace old deteriorating structures with new development, or rehabilitate structurally sound buildings. B. Remove and relocate conflicting or non -complementary uses. C. Encourage participation by owners and tenants in private renova- tion of existing commercial buildings. -6- • Resolution 91-59 - Continued 'lay 7, 1991 2. Promote redevelopment that is diversified, but coordinated. A. Increase the amount of office space. B. Provide the commercial core with support from high density housing. C. Encourage new development to be organized in a planned environ- ment. SOCIAL GOALS AND OBJECTIVES 1. Create a community focus and sense of area identity. A. Improve the physical appearance of the government center and its environs. B. Improve the physical appearance of the commercial core. 2. Minimize potential hardships in the acquisition and relocation of conflicting or non -complementary uses. 3. Achieve a balance in the variety of commercial businesses and services to satisfy the needs of the neighboring residents and larger market area. Specific action plan components, whether already completed or still in the plan- ning stages, will be discussed in part II of this Plan. PART II: REDEVELOPMENT PLAN COMPONENTS Initially, the Valley Square Redevelopment Plan was organized into phases of development that bore a general relation to geographic location within the Valley Square area, but were not specifically location -based. Over time, it has been discovered that redevelopment activities are easier to stage and to track based on geographic subareas within the overall district. Therefore, this revi- sion of the plan, which summarizes activities completed to -date as well as outlining future redevelopment components, will deal with development staging within each subarea identified back in Part I of the plan (Exhibit 2, page 4). At this time, the most critical element of the plan is considered to be the Winnetka Avenue Improvement Project, and the coordination of Area C redevelop- ment with that project. Previously, Area C redevelopment was expected to pre- cede and act as a trigger for the street improvements. However, a reanalysis of the situation, including such elements as the local and regional redevelopment climate, traffic congestion occurring in the area, and the financial prospects for the City and the County, has caused the City to reorder its priorities. In the following pages, the "Winnetka Avenue Overlay Area" has its own summary of activities, and cross-references are made within the summaries for other areas as appropriate. • Area "A" Location: Bounded on the north and west by curve of Bassett Creek; on the south by Highway 55; on the east by Wisconsin Avenue -- Overall size - 17 acres -7- Resolution 91-59 - Continued May 7, 1991 1978 Characteristics: Large portion of area occupied by Reiss Greenhouse, a commercial grower; also included two single-family homes occupied by Reiss • family; no other uses. Plan Characteristics: Improved traffic circulation; high density residential development along creek, large office site fronting on Highway 55. Redevelopment Activities Completed to -Date: Acquisition and clearance of all property in area ° Extension of Wisconsin Avenue northward to intersect 10th Avenue Opening of Wisconsin Avenue access onto Highway 55 ° Realignment of Golden Valley Road from location adjacent to highway to a more northerly, curving route across area, subdividing the site in to two parcels identified as "A-1" and "A-2" ° Construction of 3 -story, 122 unit apartment complex, mostly market rate but including low-income set-aside, on A-2 site adjacent to Bassett Creek ° Bassett Creek walking path Current Action Plan Components: Preparation for and attraction of large-scale development, preferably office, to the A-1 site Area "B" Location: North of Highway 55, extending up to Bassett Creek; West of Winnetka Avenue, extending to Wisconsin Avenue -- Overall size - 29 acres 1978 Characteristics: Mid-size commercial strip center with three outlying buildings along Highway 55; two small -size commercial strip centers along Winnetka Avenue; a super -market and miscellaneous other small commercial operations; two single-family homes along Creek. Plan Characteristics: Improved traffic circulation; generally mixed uses with emphasis on commercial; no residential uses. Redevelopment Activities Completed to -Date: Acquisition and removal of one of the two houses Acquisition and removal of Hennepin Co-op building (business relocated within Valley Square, on Lewis Road) for street realignment purposes Vacation of Vermont Avenue adjacent to street realignment ° Realignment of Golden Valley Road to a more northerly location, beginning • just west of supermarket and continuing through Area A ° Former Golden Valley Road alignment west of the Vermont Street alignment closed to thru traffic but retained for local access and to protect underlying utilities Resolution 91-59 - Continued May 7, 1991 Current Action Plan Components: ° Commercial redevelopment of sites cleared for Winnetka Avenue improvement (see Winnetka Avenue Overlay Area) ° Acquisition and removal of remaining single family residence ° Bassett Creek amenities Area "C" Location: North of Highway 55, extending up to Golden Valley Road, East of Winnetka Avenue, extending to Rhode Island Avenue -- Overall size - 11 acres. 1978 Characteristics: Mid-size commercial strip center along Highway 55, Dahlberg, Inc. (hearing aid manufacturer), small office building, and miscellaneous small commercial operations located behind strip center to the north; two single-family residences along Rhode Island; triangle of vacant publicly owned land between Golden Valley Road and Country Club Drive. Plan Characteristics: Improved traffic circulation; unified mixed-use develop- ment over entire site; high-density residential component desirable but not mandatory. Redevelopment Activities Completed to -Date: Both Residences acquired and removed Is Gas station at Winnetka and Golden Valley Road acquired and leased out pending future removal Small office building acquired and temporarily being used by the Golden Valley Public Safety Department Drug Force Task pending completion of improvements to the Public Safety Building, located in the Government Center Block ° Dahlberg, Inc. acquired (business relocated to North Wirth Redevelopment District) ° All other miscellaneous small properties acquired, with leases to be con- tinued pending future removal Current Action Plan Components: ° Acquisition of commercial strip center (Krelitz property); HRA plans to acquire property in 1991 even without a development agreement ° Coordination of redevelopment site with Winnetka Avenue improvement (see Winnetka Avenue Overlay Area) Vacation of Country Club Drive to improve configuration of redevelopment site (underground utilities must be preserved) • Establishment of large-scale, mixed use development to fill area Widening of Rhode Island Avenue at approach to Highway 55 10 Resolution 91-59 - Continued Area "D" May 7, 1991 Location: West half of block bounded by Highway 55, Rhode Island Avenue, Country Club Drive, Glenwood Avenue, and Kelly Drive -- Overall size - 7 acres. 1978 Characteristics: Trevilla Nursing Home, largest land use; gas station at Rhode Island and Highway 55 with adjacent wet area to east; five single family residences along Rhode Island. Plan Characteristics: Area to be shared by Trevilla Nursing Home and mid-size office development. Redevelopment Activities Completed to -Date: ° Acquisition and removal of all five residences ° Acquisition and removal of gas station Drainage improved ° Construction of 81,000 sq.ft. Valley Square Corporate Center Current Action Plan Components: None; public sector redevelopment activity in Area D is considered substantially complete Is Area "E" Location: North of Golden Valley Road, between Winnetka and Rhode Island Avenues; also known as the Government Center Block -- Overall size - 16 acres 1978 Characteristics: Golden Valley library and City offices on most of block; public post office along commercial building also along Winnetka; Winnetka; McDonald's and original block another small row of single family residences along Rhode was wider, with Island, but street relocation marks current boundary with all residences counted in Area F (see). Plan Characteristics: City offices in to be a campus setting; Library and McDonald's only other uses. Redevelopment Activities Completed to -Date: ° Construction of new street segment along northern boundary, connecting Rhode Island to Winnetka ° Acquisition and removal of small commercial building Reconfiguration and redevelopment of McDonald's operation • Reconfiguration of City parking areas and access, and partial landscaping of campus area -10- Resolution 91-59 - Continued Current Action Plan Components: May 7, 1991 Completion of landscaping, including a walkway between City offices and • library ° Redevelopment of post office site after taking for Winnetka Avenue improvement (see Winnetka Avenue Overlay Area); relocation of post office within Valley Square preferred but not mandatory Area "F" Location: North of Country Club Drive, between Pennsylvania and Winnetka Avenues -- Overall size - 17 acres. 1978 Characteristics: Calvary Lutheran Church; 19 single-family residences along both sides of former Rhode Island Avenue alignment; small office building south of Golden Valley Road at Pennysivania. Plan Characteristics: Calvary Lutheran Church, including associated out- buildings, and high density residential north of Golden Valley Road; mixed office uses south of Golden Valley Road. Redevelopment Activities Completed to -Date: - 0 o -Date: ° Acquisition and removal of all residences along old Rhode Island ° Construction of realigned Rhode Island Avenue 0 ° Construction of high-rise senior housing complex including 80 subsidized rental units and 120 market -rate co-op units ° Construction of small, multi -tenant office building adjacent to existing office building Current Action Plan Components: None; public sector redevelopment activity in Area F is considered sub- stantially complete Winnetka Avenue Overlay Area Location: Winnetka Avenue right-of-way and abutting properties on east and west, extending from just north of Orkla Drive on the North to Harold Avenue on the South (Exhibit 3). Note. In order to provide the full improvements as necessary within the V- 77ey Square Area, this overlay area must extend slightly beyond the Valley Square boundaries on its north and south ends. 1978 Characteristics: Lack of capacity at peak periods, inadequate channeliza- tion, proliferation of driveways, and high accident rate. • Plan Characteristics: Added lanes for improved channelization, reduction and coordination of driveways, center median. -11- • • C Resolution 91-59 - Continued EXHIBIT 3: WINNETKA AVENUE OVERLAY AREA "lay 7, 1991 -12- Resolution 91-59 - Continued May 7, 1991 Redevelopment Activities Completed to -Date: ° Redevelopment activities in Area E (Government Center Block) have reduced • the number of driveways accessing onto Winnetka Avenue, have created better spacing between remaining driveways, and have reserved necessary right-of-way expansion area across all but the post office property ° Two of the affected properties in Area C have been purchased and are being leased out to businesses that will vacate as the actual construction period approaches Current Action Plan Components: Acquisition of additional right-of-way across 12 residential and 5 busi- ness properties Acquisition and potential removal of 2 residential and 7 business proper- ties that may no longer remain viable due to road widening needs (in some instances, simple right-of-way acquisition may still be possible) • • PART III: FINANCE PLAN The objective of the Finance Plan for the Valley Square Redevelopment Area and Tax Increment District is to indicate the ability of the City to finance public redevelopment activities as described in Part II of this report. Since the inception of the Valley Square Redevelopment Plan in 1978, much has been done and the City is well on its way to completing its planned activities before the tax increment finance funding source ends in 2001. The public improvements that have already been completed in Valley Square, including the rerouting of Golden Valley Road, Rhode Island Avenue, Wisconsin Avenue, and the clearing and sale of land in Areas A, D and E for private devel- opment, have all been financed by previous bond issues now being paid back by tax increment financing (Exhibit 4); projections clearly indicate that the City can continue to meet its obligation on these bond payments. Projects Remaining to be Financed There are two planned activities for which City must sell bonds before the Tax Increment Finance District ends in 2001. These two activities are key to the original intent of the Valley Square Redevelopment Plan. Since these two pro- jects are costly, the only way they can be financed is through the issuance of bonds. Unless these bonds are issued within the next two years, the projects may become financially infeasible. The projects are: A. Upgrading of Winnetka Avenue from Harold Avenue on the south to Orkla Avenue on the north - The upgrading of Winnetka Avenue(Co. —R -J—. -T-567 has been a key element of the Valley Square Redevelopment Plan since 1978. The road now has four narrow lanes without turn lanes. Inter- section improvements are needed at both Golden Valley Road and 10th Avenue. In addition, the road carries over 20,000 vehicles per day. This section of Winnetka Avenue has a very high accident rate in com- parison to other Hennepin County Roads. -13- • • C] U Resolution 91-59 - Continued O O o M o • CO w O O M lfw 01 O 01 of w40 p O N N 01 a 01 O - c N w O O _ O O1 O Q1 LA m w N 0 O O O O Y O O O O O O 01 ••-1 O -� 0 0 O LA N v 00 co 0 0 0 O O O N to O 00 N O 01 •7 N 00 m O O CD n O n O O O O O O OM N 1p O c • O c LO O O Lo c-Ij O N m O O tO Ln C C C C d cai N N N N M .a-1 m 10 L L•n L L• U 0, a U U 1 U O U N DZ U 0 O R) G L .•-1 -C lP) - d I,- w -.0 r0D xxvxalxal xal _ ,n 10 M N 10 = 10 L • 10 7 10 0 o n 0000m c7% -ac O1 0-01 o 01 Ol 01 O1 4.4 .�-1 n rn o I M O W LO O 01 O N O MN O 01 O 1� O M n p m .ct R Kr 07 v m N Lo O O LA O Qi O O tO Ll) O t` L' O O O1 O O -0 O m O O .r �c O N.... �... ... w to O O O O :21 O IA to O V O Lt1 O1 O M m 1— co O O LO 01 O '•r Ln N�. .... ... w O O O O u1 O O C O L17 O O M 4.0 O Q1 O O \ M O 0i •-• O O to co w O O o M o • CO w O O M lfw 01 O 01 of w40 p O N N 01 a 01 O - c N w O O _ O O1 O Q1 LA m w N 0 O O O O Y O O O O O O 01 ••-1 O -� 0 0 O LA N v 00 co 0 0 0 O O O N to O 00 N O 01 •7 N 00 m O O O O O O O O O O O O OM O O O c O O c LO O O O Ln O O Ln m O O M 00 Ln C C C C d cai N E E u N .r N .a-1 .may 10 L L•n L L• U 0, a U U 1 U O U N DZ U 0 O R) G L � 10 c •r al o_ 10 a1 U U Q M 00 w L� O QJ L 4J N Ol U E N •.7 •- G O 4.4 10 L •N L C N W I.- d U U L a/ 4.1 0 Y o u N L O1 O "71 •n.- O 1 O m L U L N L d L L v a) G 4..1 Q a1 N al ,Q Ia— v N •O. 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U U c V- 4- N O1 .- +7 Ola 00010 d 01 N V- 044 =� 4.4 •r N L N N LLQ, p M eo L a E H O et E OlU m L1) V 0.44 Ol Y 4.+ ,C d O d N X � 1O yl Q G N W W wM W N1I Q1 41O Z Resolution 91-59 - Continued 11 May 7, 1991 The City and County plan is to upgrade Winnetka Avenue in 1992. The upgrading will include wider lanes, turn lanes, a center median, sidewalks, streetscape features and new traffic signals and intersection • improvements at Golden Valley Road and 10th Avenue. The upgraded road will reduce accidents, carry the traffic more smoothly, and generally enhance the area. Recommended Financing - The upgrading of Winnetka Avenue is a joint project with Hennepin County. Since it is a County road, the County is the lead agency. Both the County and City Capital Improvement Plans call for its upgrading in 1992. In order to fund the project, the County has asked for significant City participation including 50% of the con- struction costs and 100% of the right-of-way acquisition needed to widen the roadway. The City plans to fund its share by the issuance in 1991 of $4,000,000 of tax exempt, general obligation tax increment bonds. These funds will be used to acquire the necessary right-of-way during late 1991 and early 1992. In 1992, the City anticipates the need to issue another $2,000,000 in tax exempt, general obligation tax increment bonds to pay for the City's share of the construction. Both bond issues would run until the year 2001 when the Tax Increment Financing District expires. B. Area C Land Acquisition - As described in Part II, the City plans to rede- ve op the entire Area C block. The City has yet to negotiate a private development agreement for its redevelopment. However, it is anticipated that a developer will soon come forward. The City, through the HRA, plans to complete the acquisition of all par- cels in Area C. Currently, the HRA owns five parcels on the block. The Valley Plaza Shopping Center and adjacent property owned by Phillip Krelitz are the only parcels left in the area for which the HRA has not negotiated a purchase agreement. The HRA is going ahead with the acquisitions in Area C without a developer in order to better influence and control the development of this Area, which is the key development area in the Valley Square Redevelopment Plan due to its prime location at the NE corner of Winnetka and TH 55. Since the Valley Square Tax Increment Fund has the funding available, the City believes it is in its best interest to go ahead with the acquisition of all parcels in Area C before the ability to finance the project ends in 2001. Recommended Financing The City has programmed the financing of the acquisition of the remaining parcels in Area C partly through available excess increment in the Valley Square Tax Increment Fund. The acquisitions of the M&I building at $230,000 and the Down in the Valley building at $185,000 in the Spring of 1991 were financed in this manner. The acquisition, including relocation and demolition, of the Valley Plaza Shopping Center is estimated to cost $4,500,000 for budgetary purposes. Fifty percent (50%) or $2,250,000 is to be paid from available excess increment in the Valley Square Tax Increment Fund and the remaining 50% by the issuance of a short term, (two-year), $2,250,000 general obligation • tax increment bond issue. This issue will be a tax exempt issue. -15- • • Resolution 91-59 - Continued N y 7, 1991 Financial Projections The financial projections for the Valley Square Tax Increment Fund are shown on Exhibit 4, including the funding of the two proposed projects described above. The projections indicate that the City is able to finance these new and past obligations. The projections shown are conservative in several ways. First, they do not include as revenue any interest earnings. Second, the interest rate used for future bond issues is higher than the City will probably pay due to the City's Aa -1 bond rating and market conditions. Third, the City has not indicated any proceeds from the sale of land that the HRA owns or will own in Area A-1, B or C. Fourth, the City has not indicated any tax increment proceeds from the future development that is sure to take place in these areas. The future projects outlined in this plan, upgrading of Winnetka Avenue and Area C Land Acquisition, are essentially the last major projects that will be needed in the Valley Square Redevelopment Area in order to provide for all of the future redevelopment anticipated for this area. -16-