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Untitled (:"l��1 C��J Housing and Redevelopment Authority 763-593-8002/763-593-8109(fax) Executive Summary for Action Golden Valley Housing and Redevelopment Authority Meeting November 12, 2014 Agenda Item 2. Public Hearing - Modification No. 2 to the Tax Increment Financing Plan for Tax Increment Financing (Renewal and Renovation) District Within Highway 55 West Redevelopment Project Area (Highway 55 TIF Renewal and Redevelopment Project) Prepared By Jason Zimmerman, Planning Manager Sue Virnig, Finance Director Summary On Octaber 14, 2014, the Housing and Redevelopment Authority (HRA) passed a resolution expressing intent to modify the existing Tax Increment Financing (TIF) plan within the Highway 55 West TIF District No. 1 in order to support the.project proposed by Golden Villas, LLC. The existing plan for Highway 55 West TIF District No. 1 (Renewal and Renovation) identifies the statutory authority, highlights current conditions in the project area, outlines anticipated improvements, and identifies goals, objectives, policies, and administration for the proposed project area. The modified TIF plan outlines the anticipated income created by the new project within the district and planned expenditures. Following the public hearing, the HRA will consider the adoption of the modified Financing Plan and forward it to the City Council for consideration. Prior to consideration by the City Council,the Planning Commission must review the plan to determine if it is in accord with the City's Comprehensive Plan. If forwarded by the HRA, the Council would hold another public hearing to consider its adoption. If the modified Financing Plan is approved, State Statutes allow the district to continue for 15 years. However, the City could choose to close the district when increment covering the expenditures has been received. The Financing Plan creates an overall budget, but the City Council is required to authorize each project to be financed by the TIF. At#achments � Modification No. 2 to the Tax Increment Financing Plan for Tax Increment Financing (Renewal and Renovation) District Within Highway 55 West Redevelopment Project Area (Highway 55 TIF Renewal and Redevelopment Project) (22 pages) • Resolution Approving Modification No. 2 to the Tax Increment Financing Plan for Tax Increment Financing (Renewal and Renovation) District No. 1 (3 pages) Recommended Action Motion to adopt Resolution Approving Modification No. 2 to the Tax Increment Financing Plan for Tax Increment Financing (Renewal and Renovation) District No. 1. City of Golden Valley, Minnesota Golden Valley Housing and Redevelopment Authority Modification No. 2 to the Tax Increment Financing Plan for Tax Increment Financing (Renewal and Renovation)District Within Highway 55 West Redevelopment Project Area (Highway 55 TIF Renewal and Redevelopment Project) Adopted by Housing and Redevelopment Authority: October 9, 2012 Planning Commission Review: November 26, 2012 Adopted by City Council: December 18, 2012 Administrative Amendment Adopted: January 15, 2013 Modification No. 2 Dated: October 31, 2014 (Draft) Prepared by: SPRINGSTEDINCORPORATED 380 Jackson Street, Suite 300 St. Paul, MN 55101-2887 (651)223-3000 WWW.SPRINGSTED.COM INTRODUCTION The purpose of Motlification No. 2 to the Tax Increment Financing Plan for the Tax Increment Financing(Renewal and Renovation) District Highway 55 TIF Renewal and Retlevelopment Project is to account for a delay in scope and timing of the proposed private development. The original TIF Plan anticipated the tlevelopment of a 142 unit apartment building,with construction commencing in 2013. This TIF Plan modification is prepared to update the development scenario to account for the development of a 162 unit apartment building with construction commencing in 2015. The modification also accounts for an increase in the project budget to account for the revised size and scope of the proposetl development. The proposed modifications to the TIF plan are highlighted by untlerlined text. The proposed modification does not increase the overall size of the District, but does increase the overall size of the budget. The sections being modified are: F, I,J, K, L, M, N, 0, P,V,X,and Y. TABLE OFCONTENTS Section Pa e s A. Definitions..............................................................................................................................................................1 B. Statutory Authorization..........................................................................................................................................1 C. Statement of Need and Public Purpose.................................................................................................................1 D. Statement of Objectives........................................................................................................................................1 E. Designation of Tax Increment Financing District as a Renewal and Renovation District.......................................1 F. Duration of the TIF District.....................................................................................................................................3 G. Property to be Included in the TIF District..............................................................................................................3 H. Property to be Acquiretl in the TIF District.............................................................................................................3 I. Specific Development Expected to Occur Within the TIF District..........................................................................4 J. Findings and Need for Tax Increment Financing...................................................................................................4 K. Estimated Public Costs..........................................................................................................................................5 L. Estimated Sources of Revenue.............................................................................................................................6 M. Estimated Amount of Bonded Indebtedness..........................................................................................................6 N. Original Net Tax Capacity......................................................................................................................................6 0. Original Local Tax Rate.........................................................................................................................................7 P. Projected Retained Captured Net Tax Capacity and Projected Tax Increment.....................................................7 Q. Use of Tax Increment............................................................................................................................................8 R. Excess Tax Increment...........................................................................................................................................8 S. Tax Increment Pooling and the Five Year Rule.....................................................................................................9 T. Limitation on Administrative Expenses..................................................................................................................9 U. Limitation on Property Not Subject to Improvements-Four Year Rule...............................................................10 V. Estimatetl Impact on Other Taxing Jurisdictions..................................................................................................10 W. Prior Planned Improvements...............................................................................................................................10 X. DevelopmentAgreements...................................................................................................................................11 Y. Assessment Agreements.....................................................................................................................................11 Z. Modifications of the Tax Increment Financing Plan.............................................................................................11 AA. Administration of the Tax Increment Financing Plan............................................................................................12 AB. Filing TIF Plan, Financial Reporting and Disclosure Requirements......................................................................12 Map of the Tax Increment Financing District and Renewal and Redevelopment Project Area................EXHIBIT I AssumptionsReport...............................................................................................................................EXHIBIT II Projected Tax Increment Report............................................................................................................EXHIBIT III Estimated Impact on Other Taxing Jurisdictions Report........................................................................EXHIBIT IV Market Value Analysis Report................................................................................................................EXHIBIT V Redevelopment District Findings...........................................................................................................EXHIBIT VI Housing and Redevelopment Authority of the City of Go/den Valley, Minnesota Section A Definitions The terms defined in this section have the meanings given herein, unless the context in which they are usetl indicates a different meaning: "Authoritv" means the Housing and Redevelopment Authority of the City of Golden Valley. "Citv„means the City of Golden Valley, Minnesota;also referretl to as a"Municipalitv". "Citv Council"means the City Council of the Golden Valley;also referred to as the'Governina Botiv". "Countv„means Hennepin County, Minnesota, "Redevelopment Project Area" means the Highway 55 West Redevelopment Project Area in the City, which is described in the corresponding Redevelopment Plan. "Redeveloqment Plan" means the Redevelopment Plan for the Highway 55 West Project Area. "Project Area"means the geographic area of the Redevelopment Project Area. "School District" means Independent School District No. 270, Minnesota. "State" means the State of Minnesota. "TIF Act"means Minnesota Statutes, Sections 469.174 through 469,1799, both inclusive. "TIF DistricY'means Tax Increment Financing (Renewal and Redevelopment) District No. . "TIF Plan"means the tax increment financing plan for the TIF District(this document). Section B Statutory Authorization See"Statutory Authorization"on page 4 of the Redevelopment Plan for the Project Area. Section C Statement of Need and Public Purpose See"Statement of Need and Public Purpose"on page 4 of the Redevelopment Plan for the Project Area. Section D Statement of Objectives See "Statement of Objectives"on pages 4-5 of the of the Retlevelopment Plan for the Project Area. Section E Designation of Tax Increment Financing District as a Renewal and Renovation District Renewal and Renovation districts are a type of tax increment financing district in which the following conditions exists: 1) i) parcels comprising at least 70% of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots,or other similar structures; ii) 20 percent of the builtlings are structurally substandard; and iii) 30 percent of the other buildings require substantial renovation or clearance to remove existing conditions such as: inatlequate street layout, incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings not SPRINGSTED Page 1 Housing and Redevelopment Authority of the City of Go/den Valley, Minnesota suitable for improvement or conversion, or other identified hazards to the health, safety, and general well-being of the community. 2) the conditions described in clause(1)are reasonably distributed throughout the geographic area of the district. For purposes of determining whether a building is structurally substandard, whether parcels are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures, or whether noncontiguous areas qualify,the provisions of Minnesota Statutes 469.174,subdivision 10, paragraphs(b)through(fl, apply. For districts consisting of two more noncontiguous areas, each area must indivitlually qualify under the provisions listed above,as well as the entire area must also qualify as a whole. The TIF District qualifies as a renewal and renovation district in that it meets all of the criteria listed in (1) and (2) above. An executive summary of a report prepared by LHB Corporation that details the qualifications is included in Exhibit VI.A copy of the entire report with supporting facts and documentation for this determination is on file with the Authority and is available to the public upon request. The full report will be retained by the Authority for the life of the TIF District. "Structurally substandard" is defined as buildings containing defects or deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection (including egress), layout antl condition of interior partitions, or similar factors. Generally, a building is not structurally substandard if it is in compliance with the building code applicable to a new building, or could be modified to satisfy the existing code at a cost of less than 15%of the cost of constructing a new structure of the same size and type. A city may not find that a building is structurally substandard without an interior inspection, unless it can not gain access to the property and there exists evidence which supports the structurally substandard finding. Such evidence inclutles recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence. Written documentation of the fintlings and reasons why an interior inspection was not conducted must be made and retained. A parcel is deemed to be occupied by a structurally substandard building if the following conditions are met: (1) the parcel was occupied by a substandard building within three years of the filing of the request for certification of the parcel as part of the district; (2) the demolition or removal of the substandard building was performed or financetl by the City, or was performed by a developer under a development agreement with the City, (3) the City found by resolution before such demolition or removal occurred that the building was structurally substandard and that the City intended to include the parcel in the TIF tlistrict, and (4) the City notifies the county auditor that the original tax capacity of the parcel must be adjusted upon filing the request for certification of the tax capacity of the parcel as part of a district. In the case of(4)above,the County Auditor shall certify the original net tax capacity of the parcel to be the greater of (a)the current tax capacity of the parcel, or (b)a computed tax capacity of the parcel using the estimated market value of the parcel for the year in which the demolition or removal occurred, and the appropriate classification rate(s) for the current year. A parcel is deemed "occupied" if at least 15%of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots;or other similar structures. At least 90 percent of the tax increment from a renewal and renovation district must be used to finance the cost of correcting conditions that allow designation as a redevelopment tlistrict. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, tlemolition and rehabilitation of structures, clearing of land, removal of hazardous substances or SPRINGSTED Page 2 Housing and Redevelopment Authority of the City of Golden Valley, Minnesota remediation necessary to develop the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the Authority may be included in the qualifying costs. Section F Duration of the TIF District Renewal and Renovation districts may remain in existence 15 years from the date of receipt of the first tax increment. The Authority anticipates that the TIF District will remain in existence the maximum duration allowed by law(projected to be through the year 2030). Modifications of this plan (see Section Z) shall not exl�nd these Vimitations. Ali fax increments from taxes payable in the year the TIF District is decertified shall be paid to the A�t�ority. The Authority has elected to delay receipt of increment for a periotl of four vears; therefore, the anticipatsd first potential collection vear would not occur until 2016, in the event that inflationarv is aenerated. The Authoritv anticipates that inflationarv increment will not be generated and therefore the first collection vear will be in 2017. The Authority reserves the right to allow the TIF District to remain in existence the maximum duration allowed by law (projected to be through the year 2032), and anticipates that the TIF District may be active for the maximum duration allowed(see Section P). However the Authority will decertify the TIF District as early as possible should the projectetl increment be received in a shorter time period than originally projected. All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the Authority. Section G Property to be Included in the TIF District The TIF District is an approximate 4.46-acre area of land located within the Project Area. A map showing the location of the TIF District is shown in Exhibit I. The boundaries and area encompassed by the TIF District are described below: Parcel Number Le al Descri tion 31-118-21-32-0009 THAT PART OF NW 1/4 OF SW 1/4 LYING E OF W 749 8/10 FT THOF AND W OF E 291.14 FT THOF N OF STATE HWY NO 55 AND S OF WATERTOWN ROAD 31-118-21-32-0008 W 211 14/100 FT OF E 291 14/100 FT OF THAT PART OF NW 1/4 OF SW 1/4 LYING S OF MPLS WATERTOWN ROAD AND N OF STATE HWY NO 55 31-118-21-32-0007 E 80 FT OF THAT PART OF NW 1/4 OF SW 1/4 LYING S OF MPLS WATERTOWN ROAD AND N OF STATE HWY NO 55 31-118-21-31-0001 THE W 115 FT OF THAT PART OF NE 1/4 OF SW 1/4 LYING NLY OF STATE HWY NO 55 AND SLY OF 6TH AVE N 31-118-21-31-0002 THE E 115 FT OF W 230 FT OF THAT PART OF NE 1/4 OF SW 1/4 LYING NLY OF STATE HWY NO 55 AND SLY OF 6TH AVE N 31-118-21-31-0040 REGISTERED LAND SURVEY N0. 0030 HENNEPIN COUNTY, MINNESOTA TRACTS S&W The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent to the property described above. Section H Property to be Acquired in the TIF District The Authority may acquire and sell any or all of the property located within the TIF District; however, the Authority does not anticipate acquiring any such property at this time. SPRINGSTED Page 3 Housing and Redeve/opment Authority of the City of Golden Val/ey, Minnesota Section I Specific Development Expected to Occur Within the TIF District The proposed project includes the redevelopment of a currently blighted site by the construction of a 162-unit market rate apartment project. The proposed apartment proiect will be a six-storv 162-unit Class A market rate apartment buildina, anticiqated to contain a mix of 113 one-bedroom and 49 two-bedroom units. The average unit size of the apartments is 846 spuare feet. The apartment aroiect will require site work improvements. Proposed to be constructed as a result of the apartment project are public improvements proposetl for the area to include improvements to the Highway 55 access/exit to Decatur Avenue North, sidewalks and lighting to improve pedestrian safety, burial of overheatl electrical lines, regional storm water facilities and sanitary sewer lining. These improvements are necessary to facilitate the redevelopment of the blighted site, by facilitating a safer pedestrian neighborhood antl removing costs prohibitive to the redevelopment of the project area. The Authority anticipates using tax increment revenues to finance a portion of the eligible public costs related to redevelopment of the project area antl the development of the apartment proiect throuqh the reimbursement of TIF eliqible expenses includinq land acauisition,as well as related administrative expenses. The Authority anticipates development commencing in 2015 for the apartment portion of the project. The public improvements are slated to be undertaken in conjunction with the apartment project. It is likely that multiple projects will occur within the District, although it is assumed that all project costs eligible for TIF assistance will have been initiated by 2018. Section J Findings and Need for Tax Increment Financing In establishing the TIF District,the Authority makes the following findings: (1) The TIF District qualifies as a renewal and renovation district; The City of Golden Valley retained the services of LHB to inspect and evaluate property within the proposed Tax Increment Financing District to be established by the Authority, The purpose of the evaluation was to determine if the proposed district met the statutory requirements for coverage and if the buildings met the qualifications required for a Renewal and Renovation District. These findings are described more completely in Section E and Exhibit VI. (2) The proposed development, in the opinion of the Authority, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future antl the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum tluration of the tlistrict permitted by the TIF Plan. Factual basis: Proposed deve%pment not expected to occur.• The proposed redevelopment consists of the acquisition and demolition/renovation of substandartl buildings,and the undertaking of necessary public improvements within the proposed TIF District boundaries in the City of Golden Valley for development of new market rate apartments. The cost of acquisition and demolition/renovation of the existing buildings coupled with the cost of the public improvements, make the total cost of this effort significantly higher than reasonably incurred for similar developments on a clean site. The Authonty anticipates undertaking the public improvements necessary to provide for an area safe for both petlestrian and vehicle traffic, and to remove costs prohibitive to the redevelopment of the project area. No highermarket value expected.• SPRINGSTED Page 4 Housing and Redevelopment Authority of the City of Golden Val/ey, Minnesota If the proposed redevelopment did not go forward, for the same reasons described above, no large scale alternative redevelopment of the project site would likely occur. The currently blighted building is now closed and vacated,and it is highly unlikely that significant improvements would be made. It is conceivable that the existing buildings could be rehabilitatetl antl reopened, but even if that occurred, the result would be only a modest increase in market value compared to the significant value growth created by the proposed redevelopment. In short,there is no basis for expectation that the area would redevelop or be renovated in any significant way purely by private action without public subsidy given the improvements necessary for the development of the project area. To summarize the basis for the Authority's findings regartling altemative market value, in accordance with Minnesota Statutes,Section 469.175,Subd.3(d),the Authority makes the following determinations: a. The Authonty's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is anywhere from$0 to some modest amount based on small scale renovation or redevelopment that could be possible without assistance; any estimated values would be too speculative to ascertain. b. If the proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately 37 240 007, including the value of the building (See Exhibit II). c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be 5 069 240(See Exhibit� d. Even if some development other than the proposed development were to occur,the Authority finds that no alternative would occur that would protluce a market value increase greater than 32170 767(the amount in clause b less the amount in clause c)without tax increment assistance. (3) The TIF Plan will afford maximum opportunity, consistent with the sound needs of the Authority as a whole,for development of the Project Area by private enterprise. Factual basis: The anticipated redevelopment of the project site may include the construction of a new 162-unit market rate apartment building,and the redevelopment of project area consistent with the City's design goals. (4) The TIF Plan conforms to general plans for development of the Authority as a whole. Factual basis: The City Planning Commission has determined that the development proposed in the TIF Plan conforms to the City comprehensive plan. Section K Estimated Public Costs The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax increments of the TIF District. Land/Building Acquisition, Demolition,Special Assessments, Public Utilities, Site 4 545 891 Improvements/Preparation Costs, and other Eli ible Im rovement Costs Bond/Note Interest Pa ments 3 387 437 Administrative ex enses 881 480 Other Ex enditures Total $8 814 808 SPRINGSTED Page 5 Housing and Redeve/opment Authority of the City of Golden Valley, Minnesota The Authority reserves the right to administratively adjust the amount of any of the items listed above or to incorporate additional eligible items,so long as the total estimatetl public cost is not increased. The estimated cost of capitalized interest is included in the loan interest payment amount. The Authority reserves the right to spend available tax increment outside of the TIF District boundaries and within the project area. Section L Estimated Sources of Revenue Tax Increment revenue 8 814 808 Interest on invested funds Bond roceeds Loan roceeds Grants Other Total 8 814 808 The Authority anticipates using future tax increments for reimbursement of public costs incurretl from Section K. As increments are collected from the TIF District in future years, these taxes will be reserved by the Authority as reimbursement for public costs incurred, either through internal funding or general obligation or revenue debt. The Authority reserves the right to finance any or all public costs of the TIF District using pay-as-you-go assistance, internal funding, general obligation or revenue debt, or any other financing mechanism authorized by law. The Authority also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. Section M Estimated Amount of Bonded Indebtedness The Authority anticipates issuing tax increment bontls to finance a portion of the estimated public costs of the TIF District, to internally loan funds to the TIF District from allowable Authority and/or City in an amount not to exceed 5 455 069(eligible costs+20%allowance for cost of issuance). Section N Original Nei Tax Capacity The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 antl December 31, inclusive,this value is based on the current assessment year. The Certifietl Estimated Market Value of all the land within the TIF District as of January 2, 2012,for taxes payable in 2013,was$3,457,000 and the original net tax capacity of the TIF District is 65 390, For the purposes of this TIF plan the oriqinal net tax capacitv is anticipated to be adiusted to$53 000 at the time of qroiect initiation based on a qortion of the propertv beinq reclassified to rental to coincide with the develooment and the remaininq area continuinp to be classified commercial/industrial. Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of: (1) changes in the tax-exempt status of property; (2) reductions or enlargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements;or (4) changes in property classification rates. SPRINGSTED Page 6 Housing and Redevelopment Authority of the City of Golden Val/ey, Minnesota Section 0 Original Local Tax Rate The County Auditor shall also certify the original local tax rate of the TIF District. This rate shall be the sum of all local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the original net tax capacity. In future years,the amount of tax increment generated by the TIF District will be calculated using the lesser of(a)the sum of the current local tax rates at that time or(b)the original local tax rate of the TIF District. The Certified Oriqinal Local Tax Rate for the TIF District is the sum of the local tax rates for taxes levied in 2012 and pavable in 2013,is 148.328%as shown below. 2012/2013 Taxing Jurisdiction Local Tax Rate City of Golden Valley 58.204% Hennepin County 49.461% ISD#270 29.730% Other 10.933% Total 148.328% Section P Projected Retained Captured Net Tax Capacity and Projected Tax Increment The Authority anticipates that the apartment project will be 80%completed bv December 31, 2015, creating an initial tax capacity for the TIF District of �294,420 as of Januarv 2, 2016. The captured tax capacity as of that date is estimated to be 240 430 and the first-year of tax increment is estimatetl to be $356,625 pavable in 2017. The first full year of increment is projected to be in $456,480 in taxes aavable 2018, A complete schedule of estimated tax increment from the TIF District is shown in Exhibit IV. The estimates shown in this TIF Plan assume that commercial class rates remain at 1.5%for the first $150,000 of estimated market value and 2.0%of the market value above $150,000; and that rental class rates remain at 1.25%. The projections also assume a 3%annual increase in market values. Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. For communities affected by the fiscal disparity provisions of Minnesota Statutes, Chapter 473F and Chapter 276A, the original net tax capacity of the TIF District shall be determinetl before the application of fiscal disparity. In subsequent years, the current net tax capacity shall either(a)be determined before the application of fiscal disparity or(b)exclude the product of any fiscal disparity increase in the TIF District (since the original net tax capacity was certified)times the appropriate fiscal disparity ratio, The method the Authority elects shall remain the same for the life of the TIF District, except that a single change may be matle at any time from method(a)to method(b)above. »The Authority elects method (a),or M.S. Section 469.177, Subtlivision 3(a). The County Auditor shall certify to the Authority the amount of captured net tax capacity each year. The Authority may choose to retain any or all of this amount. It is the Authority's intention to retain 100%of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the anticipated life of the TIF District. SPRINGSTED Page 7 Housing and Redeve/opment Authority of the City of Golden Val/ey, Minnesota Section Q Use of Tax Increment Each year the County Treasurer shall deduct 0.36%of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of financial reporting and autlit�ng of tax increment financing information throughout the state. Exhibit III shows the projected deduction for this purpose over the anticipated life of the TIF District. The Authority has determined that it will use 100% of the remaining tax increment generatetl by the TIF District for any of the following purposes: (1) pay for the estimated public costs of the TIF District (see Section K) and County administrative costs associated with the TIF District(see Section T); (2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175, Subdivision 1a;or (5) return excess tax increments to the County Auditor for redistribution to the City, County and School District. Tax increments from property located in one county must be expended for the tlirect and primary benefit of a project located within that county, unless both county boards involvetl waive this requirement. Tax increments shall not be usetl to circumvent levy limitations applicable to the Authority. Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county,school district,or any other local unit of government or the State or federal government, or for a commons area used as a public park, or a facility usetl for social, recreational, or conference purposes. This prohibition does not apply to the construction or renovation of a parking structure or of a privately owned facility for conference purposes. If there exists any type of agreement or arrangement providing for the developer,or other beneficiary of assistance,to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section R Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan,the Authority shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereof; (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds;or SPRINGSTED Page 8 Housing and Redeve/opment Authority of the City of Golden Val/ey, Minnesota (4) return excess tax increments to the County Auditor for redistribution to the City, County antl School District. The County Auditor must report to the Commissioner of Etlucation the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. Section S Tax Increment Pooling and the Five Year Rule At least 75°/a of the tax increments from the TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No more than 25%of the tax increments may be spent on costs outsitle of the TIF District but within the boundaries of the Project Area,except to pay debt service on credit enhanced bonds. All administrative expenses are consideretl to have been spent outside of the TIF District. Tax increments are consideretl to have been spent within the TIF District if such amounts are: (1) actually paid to a third party for activities performed within the TIF District within five years after certification of the district; (2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. (3) used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district;or (4) used to reimburse a party for payment of eligible costs(including interest)incurred within five years from certification of the district. Beginning with the sixth year following certification of the TIF District,at least 75%of the tax increments must be used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District must be decertified. The Authority tloes currently anticipate that an eligible portion of tax increments will be spent outside the TIF District (including allowable administrative expenses),and such expenditures are expressly authorized in this TIF Plan. Section T Limitation on Administrative Expenses Administrative expenses are defined as all costs of the Authority other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the physical development of the real property in the project; (3) relocation benefits paid to, or services provided for, persons residing or businesses located in the project; (4) amounts used to pay principal or interest on, fund a reserve for, or sell at a tliscount bonds issued pursuant to section 469.178;or (5) amounts usetl to pay other financial obligations to the extent those obligations were used to finance costs described in clause(1)to(3). Administrative expenses include amounts paid for services provided by bond counsel,fiscal consultants, planning or economic development consultants, and actual costs incurred by the County in atlministering the TIF District. Tax SPRINGSTED Page 9 Housing and Redevelopment Authority of the City of Go/den Val/ey, Minnesota increments may be usetl to pay administrative expenses of the TIF District up to the lesser of(a) 10%of the total tax increment expentlitures authorized by the TIF Plan or(b) 10%of the total tax increments received by the TIF District. Section U Limitation on Property Not Subject to Improvements- Four Year Rule If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified improvement of an adjacent street has commenced on a parcel locatetl within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year,evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the Authority or owner of the parcel subsequently commences any of the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. Section V Estimated Impact on Other Taxing Jurisdictions Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The Authority believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development woultl not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the tlevelopment therein becomes part of the general tax base. The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota Statutes, Section 469.175,Subtlivision 2,are listed below. 1. The total amount of tax increment that will be generated over the life of the district is estimated to be 8 846 656, 2. To the extent the project in the TIF District generates any public cost impacts on city-provided services such as police and fire protection, public infrastructure, antl the impact of any general obligation tax increment bonds attributable to the district upon the ability to issue other debt for general fund purposes,such costs will be levied upon the taxable net tax capacity of the Authority,excluding that portion capturetl by the District, 3. The amount of tax increments over the life of the district that would be attributable to school district levies, assuming the school districYs share of the total local tax rate for all taxing jurisdictions remainetl the same, is estimated to be 1 773172. 4. The amount of tax increments over the life of the district that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be 2 949 979. 5. No additional information has been requested by the county or school district that would enable it to determine additional costs that will accrue to it due to the development proposed for the district. Section W Prior Planned Improvements The City shall accompany its request for certification to the County Auditor(or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the SPRINGSTED Page 10 Housing and Redevelopment Authority of the City of Golden Va/ley, Minnesota TIF District by the net tax capacity of each improvement for which a building permit was issued. The City does not believe the issuance of the permits will have a significant impact on the original net tax capacity for the District. Various permits have been issued for property within the TIF District within the last 18 months are a listed below:� Permit Value of Pro ert Address Pro ert ID Number Permit Date Work Performed Im rovement 9100 Olson Memorial Hi hwa 31-118-21-32-0007 11-1-2012 Move Interior Wall $25,000 9100 Olson Memorial Hi hwa 31-118-21-32-0007 12-4-2012 Electrical-Office Remodel $0 9100 Olson Memorial Hi hwa 31-118-21-32-0007 12-12-2012 Duct Work $1,700 9010 Olson Memorial Hi hwa 31-118-21-32-0001 03-29-2012 Install 4 S rinkler Heads $1,000 9010 Olson Memorial Hi hwa 31-118-21-32-0001 07-23-2012 Si n Removal $0 8950 Olson Memorial Highway 31-118-21-31-0040 09-07-2011 Replace Furnace and Gas $1,921 Pi in Section X Development Agreements If within a project containing a renewal and renovation district, more than 25% of the acreage of the property to be acquired by the Authority is purchased with tax increment bonds proceeds (to which tax increment from the property is pledged), then prior to such acquisition, the Authority must enter into an agreement for the development of the property. Such agreement must provide recourse for the Authority should the development not be completed. The Authoritv does not anticipate acquirinp anv proqertv located within the TIF District however the Authoritv does reserve the riqht to acquire propertv and enter into an aqreement if deemed necessarv The Authoritv does anticipate enterinq into a development aqreement but not for qurposes related to the acauisition of propertv with tax increment bonds. Section Y Assessment Agreements The Authority may, upon entering into a development agreement, also enter into an assessment agreement with the developer, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recortler of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and School District. The Authoritv does anticipate enterinp into an assessment apreement Section Z Modifications of the Tax Increment Financing Plan Any reduction or enlargement in the geographic area of the Project Area or the TIF District; a determination to capitalize interest on the debt if that determination was not part of the original TIF Plan, increase in the portion of the captured net tax capacity to be retainetl by the Authority; increase in the total estimated public costs;or designation of property to be acquired by the Authority shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if: (1) the only motlification is elimination of parcels from the TIF District;and (2) the current net tax capacity of the parcels eliminated equals or exceetls the net tax capacity of those parcels in the TIF DistricYs original net tax capacity, or the Authority agrees that the TIF SPRINGSTED Page 11 Housing and Redevelopment Authority of the City of Go/den Valley, Minnesota District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The Authority must notify the County Autlitor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reducetl but not enlarged after five years following the tlate of certification. Section AA Administration of the Tax Increment Financing Plan Upon adoption of the TIF Plan, the Authority shall submit a copy of such plan to the Minnesota Department of Revenue and the Office of the State Auditor. The Authority shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process,the Authority shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The Authority shall also send the County Assessor any assessment agreement establishing the minimum market value of land and improvements in the TIF District, and shall request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the Authority the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retainetl captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values,or changes in property classification rates or formulas. In administering and implementing the TIF Plan,the following actions should occur on an annual basis: (1) prior to July 1, the Authority shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to insure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District,or for modification of an existing TIF District, before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests receivetl on or after July 1 shall be used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: (a) the value of property that changes from tax-exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; (b) the original net tax capacity may be motlified by any approvetl enlargement or reduction of the TIF District; (c) if laws governing the classification of real property cause changes to the percentage of estimated market value to be applied for property tax purposes,then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the Authority of all changes made to the original net tax capacity of the TIF District. Section AB Filing TIF Plan, Financial Reporting and Disclosure Requirements The Authority will file the TIF Plan,and any subsequent amendments thereto,with the Commissioner of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes, Section 469.175,subdivision 4A. The Authority will comply with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175,subdivisions 5 and 6, SPRINGSTED Page 12 Exhibit I MAP OF TAX INCREMENT FINANCING(Renewal and Renovation) DISTRICT Within Highway 55 West Redevelopment Project Area LOGISMap Out�ut Page Page 1 of 1 . �YP q� ��+ �N p� W �� +� '�f► • ;+�, ' ,�p e�s ' �� ` x • �� W � �� rw � � � � �4iqFIM yt sp �� ; �. � � �i0 y�g— a �`� � � �� 4> �� i;Tl��' war1�� ;�""'",�t'�+3= �wA'�,��' �� : =e i � � •.7p�AW M - _ . �� TMO � � � � ♦ U �0 K 'i� �� 7� �M1 dM ' yy - . . � � , . � . y��'iy � '� i � f , 4lwYK°,55 .. . ' t..:..,+""'.—� � ��,ya � ... . " ��Mo.� - � . 1S � �p,y ai � �� ow+^d'� a�� y�� • � ��b ��t �f � �. � �M � '� t�{ j �Q,� } � z . � �� . `,'' f�� is7 = YO 72 !f ' � . p YOS;a , $�. .;+iP�to1 � M�� w+M it � � - tMim ` _ ' � ' ;� �,p . �...___... . . .. 3. . �1^�' ' r�''��•�-.V^� � 1�t - _ fOt� � �7P1 Genual M111f Nature PrC�rvs f� IOJ irrd�MNArIpN � J ,^;�.1. � �....��,....w:. r,.�.�: .��~�. f _. , ,_�: �` 1 s BotrWery oi Mwy 55 YVes[ RsdewlopmMt Proj�d Arw =e«.,amr a R.m�r.�a rt«wvatia, TIF Disvicl http:/lgis.logis.org/I.OGIS_A.rcIMS/ims?ServiceMame�v_LOGISmap OVSDEc�ClientV... 9/18/2012 SPRINGSTED Page 13 Exhibit ll Assum tions Re ort City of Golden Valley, Minnesota Tax Increment Financing(Renewal 8�Renovation)District $23.4 Million Highway 55 TIF District-Amendment No.2 Type of Tax Increment Financing District Renewal& Renovation Maximum Duration of TIF District 15 years from 1st increment Projected Certification Request Date � 12/04/12 Decertification Date � 12/31/32 (16 Years of Increment) 2014/2015 Base Estimated Market Value � $3,457,000 Original Net Tax Capacity $53,990 AssessmenUCollection Year 2014/2015 2015/2016 2016/2017 2017/2018 Base Estimated Market Value $3,457,000 $3,457,000 $3,457,000 $3,457,000 Increase in Estimated Market Value � 0 � 0 � 19,234,400 � 24,620,032 Total Estimated Market Value � 3,457,000 � 3,457,000 � 22,691,400 � 28,077,032 Total Net Tax Capacity $53,990 $53,990 $294,420 $361,740 City of Golden Valley 58.204% Hennepin County 49.461% ISD#270 29.730% Other � 10.933% Local Tax Capacity Rate 148.328% 2012/2013 Fiscal Disparities Contribution From TIF District 0.0000% Administrative Retainage Percent(maximum = 10%) 10.00% Pooling Percent 0.00% Bonds Note(Pay-As-You-Go) Bonds Dated � 12/31/14 Note Dated 12/31/14 Bond Issue @ 0.00%(NIC) $0 Note Rate 5.50% Eligible Project Costs � $0 Note Amount $3,790,600 Present Value Date&Rate � 12/31/14 5.50% Notes Projections assume no future changes to tax and classification rates. Assumptions are based on a 3%market value inflator. Projections assumed development 80%constructed in 2015. Projections are based on a post development estimated market value for the project of$24M SPRINGSTED Exhibit lll Projected Tax Increment Report City of Golden Valley,Minnesota Tax Increment Financing(Renewal 8�Renovation)District $23.4 Million Highway 55 TIF District-Amendment No.2 Less: Less: Retained Times: Less: Annual Less: Annual Total Original Fiscal Captured Tax Annual State Aud. Revenue Admin. Annual Period Net Tax Net Tax Disp.@ Net Tax Capacity Gross Tax Deduction Net of Retainage Net Ending Capacity Capacity 0.0000% Capacity Rate Increment 0.360% OSA Deduction 10.00°/a Revenue 7 2 3 4 5 6 7 8 9 10 11 12/31/17 294,420 53,990 0 240,430 148.328% 356,625 1,284 355,341 35,534 319,807 12/31/18 361,740 53,990 0 307,750 148.328°/a 456,480 1,643 454,837 45,484 409,353 12/31/19 370,973 53,990 0 316,983 148.328% 470,174 1,693 468,481 46,848 421,633 12/31/20 380,482 53,990 0 326,492 148.328% 484,280 1,743 482,537 48,254 434,283 12/31/21 390,277 53,990 0 336,287 148.328% 498,808 1,796 497,012 49,701 447,311 12/31/22 400,366 53,990 0 346,376 148.328% 513,772 1,850 511,922 51,192 460,730 12/31/23 410,757 53,990 0 356,767 148.328% 529,185 1,905 527,280 52,728 474,552 12/31/24 421,460 53,990 0 367,470 148.328% 545,061 1,962 543,099 54,310 488,789 12J31/25 432,484 53,990 0 378,494 148.328% 561,413 2,021 559,392 55,939 503,453 12/31/26 443,839 53,990 0 389,&49 148.328% 578,255 2,082 576,173 57,617 518,556 12/31/27 455,534 53,990 0 401,544 148.328% 595,603 2,144 593,459 59,346 534,113 12/31/28 467,581 53,990 0 413,591 148.328% 613,471 2,208 611,263 61,126 550,137 12/31/29 479,989 53,990 0 425,999 148.328% 631,875 2,275 629,600 62,960 566,640 12/31/30 492,768 53,990 0 438,778 148.328% 650,831 2,343 648,488 64,849 583,639 12/31/31 505,932 53,990 0 451,942 148.328% 670,356 2,413 667,943 66,794 601,149 12/31/32 519,490 53,990 0 465,500 148.328% 690,467 2,486 687,981 68,798 619,183 $8,846,656 $31,848 $8,814,808 $881,480 $7,933,328 SPRINGSTED Page 15 Exhibit IV Estimated Im act on Other Taxin Jurisdictions Re ort � City of Golden Valley,Minnesota � Tax Increment Financing(Renewal S Renovation)District � $23.4 Million Highway 55 TIF District-Amendment No.2 W ithout Project or TIF District With Project and TIF District Projected Hypothetical 2013/2014 � 2013/2014 Retained New Hypothetical Hypothetical Tax Generated Taxable � 2013/2014 Taxabie Captured Taxable Adjusted Decrease In by Retained Taxing Net Tax Local Net Tax Net Tax Net Tax Local Local Captured Jurisdiction Capaciry(1) Tax Rate Capacity(1) + Capacity = Capacity Tax Rate(*) Tax Rate(*) N T C (*) �City of Golden Valley 26,707,577 � 58.204% 26,707,577 � $465,500 27,173,077 57.207% 0.997% 266,298 �iennepin County 1,233,679,768 � 49.461% 1,233,679,768 465,500 1,234,145,268 49.442% 0.019% 230,154 �SD#270 87,531,458 � 29.730% 87,531,458 465,500 87,996,958 29.573% 0.157% 137,661 Other(2) --- ' 10.933% --- 465,500 -- 10.933% —_ __ Totals 148.328% 147.155% 1.173% * Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypotheticaliy available to each of the taxing jurisdictions above,the result would be a lower local tax rate(see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case,the total local tax rate would decrease by 1.173%(see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity=total net tax capaciry-captured TIF-fiscal disparity contribution, if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 7.37%of the total tax rate. SPRINGSTED Page 16 Exhibit V Market Value Anal sis Report � Cityof Golden Valley, Minnesota r Tax Increment Financing (Renewal & Renovation) District � $23.4 Million Highway 55 TIF District -Amendment No. 2 Assumptions Present Value Date � 12/31/14 P.V. Rate -Gross T.I. � 5.50% Increase in EMV With TIF District � $37,240,007 Less: P.V of Gross Tax Increment 5,069,240 Subtotal $32,170,767 Less: Increase in EMV Without TIF 0 Difference $32,170,767 Annual Present Gross Tax Value @ Year Increment 5.50% ` 2016 � 0 0 1 2017 � 356,625 307,799 2 2018 � 456,480 373,444 3 2019 � 470,174 364,594 4 2020 � 484,280 355,955 5 2021 � 498,808 347,520 6 2022 � 513,772 339,284 7 2023 � 529,185 331,244 8 2024 � 545,061 323,395 9 2025 � 561,413 315,732 10 2026 ` 578,255 308,250 11 2027 � 595,603 300,946 12 2028 � 613,471 293,814 13 2029 � 631,875 286,852 14 2030 � 650,831 280,054 15 2031 � 670,356 273,418 16 2032 � 690,467 266,939 $8,846,656 $5,069,240 SPRINGSTED Exhibit VI RENEWAL AND RENOVATION QUALIFICATIONS FOR THE DISTRICT EXECUTIVE SUMMARY PURPOSE OF EVALUATION LHB was hired by the City of Golden Valley to inspect and evaluate the properties within a Tax Increment Financing Renewal and Renovation District ("TIF DistricY') proposed to be established by the City. The proposed TIF District is located in the City of Golden Valley, bounded by Golden Valley Road on the North, Highway 55 on the South, and Decatur Avenue North on the West (Diagram 1). The purpose of LHB's work is to determine whether the proposed TIF District meets the statutory requirements for coverage, and whether five buildings on seven parcels, located within the proposed TIF District, meet the qualifications required for a Renewal and Renovation District. � .... (k` . �: ��`f w+ ,�"�.r�. � . - �"-;rM^-:�I ,.l�,ri��+� *�>a _E. � �; 't'� � � .� $ � �� d "S�§. � �{.._.�� a:� � T}�: ..sWIV.2� � �' .�,�4 � � 8. . ,�+i:� � � . } 4 �_ .,* . y . ' , �,..,tt � -- � ... <� M n. �F� . � � ''� �� _ � � . s$� a k,�u z,h.. � . •"� �.. z.�-�. .� � � _ . 7 .. �� . � ..6 �� .��aY..+"°rv��fYt. / �$ \ ;� �.,_ � .#. �� . ' � '�► �� y� J'IS�� Y�� 1lryt�f�i��;� �i;1V • !00 �� ".�� # ' �,� �:5,. -�4 s ' ;� ,�M� ,� �, 4� 'a�c �� . •.��'`.. �_ 's:' _.� . Diagram 1 —Proposed TIF District SCOPE OF WORK The proposed TIF District consists of six (6) parcels and a section of public road, with five (5) commercial buildings. All five of the buildings received a curbside visual inspection. Three buildings in the proposed TIF District received an on-site interior and exterior inspection. Building code and Condition Deficiency reports for each building inspected by LHB are located in Appendix B. SPRINGSTED Exhibit VI CONCLUSION After inspecting and evaluating the properties within the proposed TIF District and applying current statutory criteria for a Renewal and Renovation District under Minnesota Statutes, Section 469.174, Subdivision 10a, it is our professional opinion that the proposed TIF District qualifies as a Renewal and Renovation District because: • The proposed TIF District has a coverage calculation of 100 percent which is above the 70 percent requirement. • 20 percent of the buildings are structurally substandard which meets the 20 percent requirement. • 50 percent of the other buildings require substantial renovation or clearance which is above the 30 percent requirement. • The substandard buildings are reasonably distributed throughout the geographic area of the proposed TIF District. SPRINGSTED Resolution 14-6 November 12, 2014 Gommissioner introduced the following resolution and moved its adoption: RESOLUTION APPROVING MODIFICATION NO. 2 TO THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING (RENEWAL AND RENOVATION) DISTRICT NO. 1 BE IT RESOLVED by the Housing and Redevelopment Authority of the City of Golden Valley, Minnesota (the "Authority"), as follows: WHEREAS, the Authority has previously adopted a redevelopment plan (the "Project Plan") and redevelopment project under Minnesota Statutes, Sections 469.001 to 469.047, designated as the Highway 55 West Renewal and Renovation Project Area (the "Redevelopment Project") and a tax increment financing plan of the Authority under Minnesota Statutes, Sections 469.174 to 469.1799, designated as the Tax Increment Financing Plan for Tax Increment Financing (Renewal and Renovation) District No. 1, as amended by an administrative modification adopted January 15, 2013 (as so modified, the "Financing Plan"). The Financing Plan established Tax Increment Financing (Renewal and Renovation) District No, 1 (the "TIF District"). WHEREAS, it has been proposed that the Authority approve Modification No. 2 to the Financing Plan (the "Amended Financing Plan") to account for a delay in scope and timing of the proposed private development and to increase the budget of the TIF District, all as reflected in the Amended Financing Plan and presented for the Authority's consideration; WHEREAS, the Authority has investigated the facts relating to the Amended Financing Plan and has caused the Amended Financing Plan to be prepared; WHEREAS, the City Council of the City of Golden Valley, Minnesota (the "City Council"), has scheduled a public hearing on the Amended Financing Plan to be held on December 2, 2014, in accordance with Minnesota Statutes, Chapter 469 (the "Public Hearing"); NOW, THEREFORE, BE IT RESOLVED by the Board as follows: Section 1, Ado�tion. The Amended Financing Plan is hereby adopted based on the findings herein, subject to approval by the City Council following the Public Hearing. Section 2. Findinqs. The Authority hereby makes the following findings: (a) The District consists of a contiguous geographic area within a "project" as defined in Minnesota Statutes, Section 469.174, subdivision 8, and is a proper "tax increment financing district" within the meaning of Section 469.174, subdivision 9. Based on the information in Amended Financing Plan and representations of the developer, the District contains the following conditions: Parcels consisting of 70% of the area of the District are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures; 20% of the buildings are structurally Resolution 14-6 - Continued November 12, 2014 substandard; and 30% of the other buildings require substantial renovation or clearance to remove existing conditions, such as inadequate street layout, incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for improvement or conversion, or other identified hazards to the health, safety, and general well-being of the City. The foregoing conditions are reasonably distributed throughout the geographic area of the District. Therefore, the Distriet qualifies as a "renewal and renovation district" within the meaning of Minnesota Statutes, Section 469.174, subdivision 10a. (b) The private redevelopment proposed to be encouraged in the Redevelopment Project pursuant to the proposed Project Plan would not, in the opinion of the Authority, reasonably be expected to occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. Furthermore, in the opinion of the Authority, the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the Amended Financing Plan. The studies and analyses supporting these findings are identified in the Amended Financing Plan. (c) The Amended Financing Plan conforms to the general plan for the development or redevelopment of the City as a whole. The redevelopment activities are compatible with the City's zoning ordinances and other related regulations and encourage efficient use of existing infrastructure as set forth in the City's Land Use Plan. (d) The Amended Financing Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. The redevelopment activities contemplated in the Project Plan would help to retard blight in the Redevelopment Project and provide an increase in employment and housing opportunities in the City and enhance the tax base of the City and overlapping taxing jurisdictions. Section 3. Transmittal. The Authority does hereby transmit fhe Amended Financing Plan to the City Council for approval after the same have been considered by the City Council subsequent to the Public Hearing. Section 4. Filin . Following approval by the City Council, the Secretary is hereby authorized and directed to file the Amended Financing Plan with the Commissioner of Revenue and the Office of the State Auditor as required by Minnesota Statutes, Section 469.175, subdivision 4a. Resolution 14-6 - Continued November 12, 2014 Steven T Schmidgall, Chair ATTEST: Thomas D. Burt, Executive Director The motion for the adoption of the foregoing resolution was seconded by Commissioner upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same whereupon said resolution was declared duly passed and adopted, signed by the Chair and his signature attested by the Executive Director. Exhibit I MAP OF TAX INCREMENT FINANCING (Renewal and Renovation)DISTRICT Within Highway 55 West Redevelopment Project Area LOGISMap Output Page Page 1 of 1 1 y� � �� o�; � °� +iA � '� , • � • � e�` siy ��p _ � �� {� ��° , � � ��,- _ � x �. �� sib � '� rw� +� � £ '41wYa W WP '�e '� 't � $ ------- �i� IY �ip .��_ z �� '',�'. °`� ,i ____.--- P , �� !�� iih�l�� }Z e��ii� �� z i �:�' T� �� + u ,s '3a'J7� �m ave n�Z � ._,_ � � ; � �wo sp+A � . � � �0 ��t �� 9 p '�� t fA 1�t Y�0 � . ....r—^"' 7�/D �611 }� . 0 _. IIeY d +��y,� ' �' 4I 0 0 . ��r ! . {�$�, � � MA.55 . !"'. � �7 � LU�N+�Y i Q - po.55 '�_,v � DNd� .. S�'Nvn1 ,r-7 1 S � n,axt�"'1 �7/ � -- � - Ox�M�i l957 S �— ��o� � � �n eV� F � _ ��a� �� : 'u � � oo ' z ,� • ��. '�a N� � �o i: �a a z `� Y05 = �N $ bb�lROt i TB]��' � WaMy.6� � q1 .' ! 2M70I � 1 1�0 �00 .F a . �{^�� . /�r^.�� 1iS�� . . � �ffi � J01201 Gen4tal Mllk lieture Vr�erve '� ? t016e�dMUFslbera i � � r �3 � . � ; � I / ` u.. �. - ,.�.�.. �^,� ( ,,. t� u..�._�.:_,,..,.�,�,� .�' � :sounaary ot Hwy ss wes[ RsdevelopmeM Projaet Area � =Boundary of Rernral and Rsravatbn TIF Districl http:/lgis.logis.org/LOGI S_Arcl MS/ims?ServiceName=gv_LOGISmap_OV SDE&CI ientV,.. 9/18/2012 SPRINGSTED Page 13