Title
Approving (i) the establishment of the Fairview/St. Joe’s Tax Increment Financing District (a redevelopment district) in the Downtown St. Paul Industrial Development District and adopting a Tax Increment Financing Plan therefor, and (ii) a modification to the Redevelopment Plan for the Downtown St. Paul Industrial Development District (District 17, Ward 2).
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WHEREAS, the Port Authority of the City of Saint Paul (the “Port Authority”) with the powers enumerated under Minnesota Statutes, Sections 469.048 through 469.068 and 469.084, inclusive (the “Port Authority Act”) has proposed to establish the Fairview/St. Joe’s Tax Increment Financing District (a redevelopment district) (the “TIF District”) pursuant to a Tax Increment Financing Plan (the “TIF Plan”) within the existing boundaries of the Downtown Industrial Development District (the “Downtown IDD”) previously established by the Port Authority and the City of Saint Paul, Minnesota (the “City”) which also contains a previously established project area (the “Project Area”); and
WHEREAS, the Port Authority has represented that the TIF Plan also represents a modification and continuation of the previously established redevelopment plan (the “Redevelopment Plan”) for the Downtown IDD and a continuation of the goals and objectives set forth in the Redevelopment Plan; and
WHEREAS, Minnesota Statutes Section 469.175 requires that before a county auditor may certify a tax increment financing district, such as the TIF District, created under Minnesota Statutes Section 469.174 to 469.1794, as amended (the “TIF Act”), the governing body of the municipality must approve the TIF Plan after a public hearing thereon; and
WHEREAS, the Port Authority has entered into an acquisition and Demolition Agreement (St. Joseph’s Hospital) (the “Redevelopment Agreement”) with Fairview Health Services (“Fairview”) which provides for the acquisition, demolition, decoupling and the preparation for redevelopment of a portion of the existing St. Joseph’s hospital site to facilitate the construction of up to 170-units of market rate apartments and approximately 100,000 square feet of office/commercial space and the rehabilitation or removal of an existing parking structure, including related improvements in the City (the “Project”) located in downtown Saint Paul at or about 69 West Exchange Street (the “Redevelopment Property”) setting forth the duties and responsibilities of each party; and
WHEREAS, the Port Authority has asked the City Council to approve the creation of the TIF District within the Downtown IDD as a redevelopment tax increment financing district under Section 469.174, Subdivision 10 of the TIF Act and adopt a TIF Plan, all pursuant to and in accordance with the TIF Act; and
WHEREAS, the Port Authority proposes to undertake the Project on the Redevelopment Property which is within the previously established Project Area and Downtown IDD, the boundaries of which are not proposed to be amended; and
WHEREAS, the creation of the TIF District will assist the Port Authority with certain public costs to redevelop the Redevelopment Property and the TIF District is being established to facilitate the Project; and
WHEREAS, the Port Authority has investigated the facts and caused the TIF Plan to be prepared for the TIF District; and
WHEREAS, the Port Authority has performed all actions required by law to be performed prior to the creation of the TIF District and adoption of the TIF Plan therefor, including, but not limited to, notification of the Ramsey County Commissioner representing the area of the County in which the TIF District is located and transmitting a copy of the TIF Plan to Ramsey County and Independent School District Number 625, which have taxing jurisdiction over the property to be included in the TIF District; and
WHEREAS, on this date, the City Council conducted a public hearing on the TIF Plan and the establishment of the TIF District, after published notice thereof; and
WHEREAS, at the public hearing the City Council heard testimony from all interested parties on the TIF Plan and the establishment of the TIF District; and
WHEREAS, the City Council has considered the findings and determinations of the Port Authority respecting the Project, Redevelopment Property, the TIF District and TIF Plan, together with the documentation submitted in support of the same and has taken into account the information and knowledge gained in the hearing upon and during consideration of the matters relating to the Project for the Redevelopment Property.
NOW, THEREFORE, BE IT RESOLVED by the City Council, as follows:
Section 1. Findings and Approval of Redevelopment Property.
1.01 It is hereby found and determined that, based upon information provided by the Port Authority, (i) the site of the Redevelopment Property is within the boundaries of the Downtown IDD and that the actions of the Port Authority to be taken on such property are consistent with the requirements of Section 469.058 of the Port Authority Act.; (ii) the land within the Redevelopment Property would not be made available for, nor would redevelopment be financially feasible without the public financial assistance proposed for the development; (iii) the Redevelopment Agreement will afford maximum opportunity, consistent with the sound needs of the locality as a whole, for the redevelopment of the Redevelopment Property by private enterprise; and the modification of the Redevelopment Plan by the TIF Plan conforms to the 2040 Saint Paul Comprehensive Plan, and the general plan for the development in the Downtown IDD.
1.02 The Redevelopment Project activities proposed for the Project are hereby adopted and approved as necessities and in the public interest by removing conditions of blight and deterioration by preventing the spread of deteriorating conditions through redevelopment of cleared or renovated property, by preserving and enhancing the municipal tax base, by providing housing opportunities, including housing facilities for all income levels, and by providing necessary public improvements, serving the public safety, health, morals and general welfare of the residents of this City and State, by promoting the sound growth and development of neighborhoods and communities.
1.03 The Project Area was previously established and is not being amended and the Redevelopment Plan is modified by the TIF Plan previously approved by the Port Authority.
Section 2. Findings for Creation of TIF District and Adoption of the TIF Plan therefor.
2.01 The City Council hereby finds that the creation of the TIF District and the adoption of the TIF Plan therefor are intended and, in the judgment of the City Council, the effect will be, to carry out the objectives of the Downtown IDD and the Redevelopment Plan therefor by facilitating the demolition of a portion of the existing building that is a blighted structure and the construction of up to 170-units of market rate apartments and approximately 100,000 square feet of office/commercial space and the rehabilitation or removal of an existing parking structure, including related improvements in the City, and otherwise promote certain public purposes and accomplish certain objectives as specified in the Downtown IDD, the Redevelopment Plan and TIF Plan.
2.02 The City Council hereby finds that the TIF District qualifies as a “redevelopment district” within the meaning of the TIF Act for the following reasons:
(a) The TIF District is a redevelopment district established pursuant to Minnesota Statutes Section 469.174, Subdivision 10(a)(1). The reasons and supporting facts for these determinations are set forth in that certain Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District, prepared for the Port Authority of the City of Saint Paul by LHB, Inc. (the “Redevelopment Assessment Report”), copies of which are on file with the Chief Financial Officer of the Port Authority. These findings are based in part upon on-site examination and written reports substantiating the structurally substandard nature of the buildings on the Redevelopment Property.
(b) The TIF District currently contains one parcel or a portion thereof. The parcel is occupied and meets the requirements of Minnesota Statutes Section 469.174, Subdivision 10(e) in that at least 15% of the area of each parcel is occupied by buildings, streets, utilities, paved or gravel parking lots or similar structures. The occupied parcel consists of 100% of the area of the TIF District, which is greater than 70%. As set forth in the Redevelopment Assessment Report, the building (i.e. 100%) is “structurally substandard” to a degree requiring substantial renovation or clearance. The “structurally substandard” building is not in compliance with the building code applicable to new buildings, and the costs of modifying the building to satisfy the building code would be more than 15% of the cost of constructing structures of the same square footage and type on the site.
2.03 The City Council hereby makes the following additional findings:
(a) The City Council further finds that the proposed development, in the opinion of the City Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding is:
Port Authority staff has experience with respect to the redevelopment of property such as the Redevelopment Property and Port Authority staff also obtained feedback from the development community relating to the site and the feasibility of redevelopment thereof as outlined more fully in Appendix C to the TIF Plan. The property on which the proposed development will occur would not be redeveloped in the reasonably foreseeable future because it currently contains a structurally substandard building that has been underutilized for many years. The anticipated costs to redevelop the property that achieves many City goals and objectives is unlikely to occur without public financial assistance.
(b) The City Council further finds that the TIF Plan conforms to the general plan for the development or redevelopment of the City and the Downtown IDD. The specific basis for such finding being:
The TIF Plan will generally compliment and serve to implement policies adopted in the 2040 Saint Paul Comprehensive Plan. The contemplated Project is a continuation of the Redevelopment Plan and the Downtown IDD; and the contemplated Project is permitted in the existing zoning and is consistent with the 2040 Saint Paul Comprehensive Plan.
(c) The City Council further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of the TIF District by private enterprise. The specific basis for such finding being:
The proposed development to occur within the TIF District is mixed-use housing and commercial/office space and related improvements. The development will increase the taxable market valuation of the City, expand commercial space and access to local jobs and increase the housing supply in the City with the completion of the development contemplated by the TIF Plan.
(d) For purposes of compliance with Minnesota Statutes Section 469.175, Subdivision 3(2), the City Council hereby finds that the increased market value of the property to be developed within the TIF District that could reasonably be expected to occur without the use of tax increment financing is $0, which is less than $34,740,308, which is the estimated increase in market value to result from the proposed development (i.e., approximately $56,956,900) after subtracting the present value of the projected tax increment for the maximum duration of the TIF District (i.e., approximately $22,216,592). In making these findings, the City Council has noted that the property has not been redeveloped for many years and would likely remain so if tax increment financing is not available. Thus, the use of tax increment financing will be a positive net gain to the City, the School District, and the County, and the tax increment assistance does not exceed the benefit which will be derived therefrom.
(e) The City elects to retain all of the captured tax capacity to finance the costs of the TIF District. The City Council elects the method of tax increment computation set forth in Section 469.177, Subdivision 3(b) of the TIF Act.
(f) The City elects to delay the first year to receive increment until tax payable year 2030.
(g) The provisions of this Section 2 are hereby incorporated by reference into and made a part of the TIF Plan.
Section 3. Approval of the Creation of TIF District and Approval of the TIF Plan therefore.
3.01 The creation of the TIF District and the adoption of the TIF Plan therefore are hereby approved.
3.02 The Port Authority’s President and staff of the Port Authority and the City and the Port Authority’s advisors and legal counsel are authorized and directed to proceed with the establishment and implementation of the TIF District, the TIF Plan and this Resolution and for this purpose to negotiate, draft, prepare and present to the Board of Commissioners of the Port Authority for its consideration all further plans, resolutions, documents and contracts necessary for this purpose.
3.03 Upon approval of the Port Authority, the staff of the Port Authority is directed to file a copy of the TIF Plan with the County Auditor of Ramsey County (the “County Auditor”) and to request the County Auditor to certify the original tax capacity of the TIF District.
3.04 The staff of the Port Authority is also directed to file a copy of the TIF Plan with the Commissioner of Revenue and the Office of the State Auditor within 60 days after the latest of: (a) the filing of the request with the County Auditor to certify the TIF District and (b) the date of approval of the TIF Plan by the City and the Port Authority.
Section 4. Acknowledgment Regarding Tax Increments.
4.01 The Council acknowledges that the County Auditor will forward all tax increments from the TIF District to the Port Authority or at the direction of the Port Authority.