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Home My WebLink AboutEDA October 7, 1997 '. Call toOrcIer - 7:00 PM CITY of ANDOVER 1685 CROSSTOWN BOULEVARD NW. . ANDOVER. MINNESOTA 55304 . (612) 755-5100 EDA Meeting -Tuesday, October 7,1997 . agenda .1. Approve ModificationlDevelopment Program/DistrictNo, 1 & TIF Plan/District 1-3 2, Heidelberger Relocation Expenses 3. Commercial Auto Parts Relocation Expenses 4. Discuss PurchaselMom's Auto . 5. Consider Lot Sale/Aridover ColIUllercial Park, Lot 3, Block 3 6.Adjourn. .I Bookmark ~ tif . relocate . commercial purchase lots' ale CITY OF ANDOVER REQUEST FOR ECONOMIC DEVELOPMENT AUTHORITY ACTION DATE October 7.1997 AGENDA ITEM ORIGINATING DEPARTMENT Community Development Approve Modification to Development Program/ I TIF District No, 1 & TIF , PlanlDistrict 1-3 David L. Carlberg Community Development Director '. ) The Economic Development Authority (EDA) is requested to approve the modification to the development program for Development District No.1 and approve the establishment of Tax Increment Financing District No. 1-3 and TIF Plan therefor. Said request is related to the senior housing project to be known as "The Farmstead" being developed by Presbyterian Homes Housing and Assisted Living, Inc. The project calls for the construction of 140 independent and assisted living units on the site of the "Round Barn" located on Bunker Lake Boulevard NW. The City Council will officially hold a public hearing and approve said modification, establishment and plan later on the Council agenda. Attached is a resolution for EDA adoption, .' EXTRACT OV MINUTES OF A MEETING OF TH~ BOARD OF COMMISSIONERS OF THB ANDOVER ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA HELD: October 7, 1997 Pursuant to due call and notice thereof, a regular or special meeting of the Board of Commissioners of the Andover Bconomic Development Authority, Anoka County, Minnesota, was duly ca11Qd and hQ1d on the 7th day of Octobsr, 1997, o'clock p.m. The following members of the Board were present: and che fOllowing were absent: Member and movQd its adoption: introduced the following resolution RESOLUTION ADOPTING THE MODIFICATION TO TaE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. .1, .AND ADOPTING THE TAX INCREMEN'l' FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-3 THEREIN / WHEREAS: A. The City of Andover, Minnesota (the "City"), has heretofore on July 29, 1986, established Development District No. 1 and on April 5, 1994 transferred concrol, authority and operation of Developmsnt District No. 1 and ite tax increment financing districts to the Andover Economic Develo~ment Authority, Minnesota pursuant to Minnesota Statutes, Section 469.094, Subdivision 2 and it has been proposed that the City adopt a Modification to the Development Program therefor, and establish Tax Increment Financing District No. 1-3 therein and adopt a tax increment financing plan therefor under the provisions of Minnesota Statutes, Sections 469.090 to 469.1081, 469.124 to 469.134 and 46~.174 to 46~.179 (collectively, the "Act"); and / B. The City CounCil has investigated the facts and has caused to be prepared a proposed Moditication to the Development Program for Development District No.1, and has caused to be prepared a pro~osed tax increment financing plan for Tax Increment Financing District No. 1-3; and C. The City has performed all a~tion5 required by law to be performed prior to the egtablishment of Tax Increment Financing District No. 1-3, and adoption of the proposed modification to the development program and tax increment !1nanc1ng plan there!or, 1ncluding, nut noc limited to, 364953.1 G d 6~EG8L1SS8W;IGI;CI "lS/81:0l L6.c8'6013fil) NYDHO~ ~ SDD:HH NOHd notification of Anoka County and Independent School Dist~ict No. 11 having taxing jurisdiction over the property to be includQd in Tax Increment Financing District No. 1-3 and the holding of a public hearing upon published and mailed notice as required by lawj and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Andover Economic Development Authority as !ollows: 1. MOdification to th2 Dp.velo"Qment Program. The modification to the development program for Development District No. ~, a copy of which is on file in the office of ~he City Clerk, ie adopted as the MOdification to the Development Pro9~am for Development District NO.1. 2 . Tax Increment Financina Plan. The Tax Increment Financing Plan is adopted as the tax increment financing plan for Tax Increment Pinancing Di~trice No. 1-3. / 3. Public Pu~o~e. The adoption of the Modification to the Development program for Development District No.1, and the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-3 conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State which is already built up to provide employment opportunities to improve the tax base and to improve the general economy of the State and thereby Serves a public purpose. The motion for the was duly seconded by member taken thereon, the following adoption ot the foregoing resolution and upon vote being voted in favor thereof: and the following voted ~gain6t the same: adopted. Whereupon said resolution was declared duly passed and ; 361.953.1 2 E d OVEGELI~~E "OKIGt:Cl 1S/EI:01 Lo,CE "00 (3ill) NV~HOW ~ S~~:Ha NOH~ STATE OP MINNESOTA COUNTY OF ANOKA CITY OF ANDOVER I, the undersigned, being the duly qualified and acting Secretary or the Andover Economic Development Authority, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the Board of Commiggionerg o~ said Authority, duly callGO ~na hald on the date therein indicated, insofar as such minutes relate to the establishment o~ Tax Inorement Financing District No. 1-3 in the City. \ / WITN~SS my hand thi6 7th day of October, 1997. Secreta:ry 364953.1 3 7 d otEC:SLlSSS"OKlGI:CI 18/SI:OI Lo.CS"oO(3nl) NVDBOW ~ SDD:Bff NOBj ;' f , I \ / ~ MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1 AND TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-3 CITY OF ANDOVER, MINNESOTA ADOPTED: October 7, 1997 This document was drafted by: BRIGGS AND MORGAN, Professional Association 2200 First National Bank Building 332 Minnesota Street St. Paul, Minnesota 55101 Financia~ Information provided by: Juran & Moody 1100 Minnesota World Trade Center 30 East Seventh Street St. Paul, Minnesota 55101-2091 361669.1 TABLE OF CONTENTS ARTICLE I - DEFINITIONS AND EXHIBITS Section 1.01. Definitions Section 1.02. Exhibits . . . . ARTICLE II - THE MODIFICATION TO THE DEVELOPMENT PROGRAM 3 Section 2.01. Statement of Need and Public Purpose 3 Section 2.02. Statutory Authority. . . . . . . . 3 Section 2.03. Increase Estimates for Public Costs and Budget . . . . . . . . . 4 ARTICLE III - THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-3 Section 3.01. Statement of Objectives. . . . . . Section 3.02. Statement of Development Program Section 3.03. Parcel(s) to be Included in Tax Increment Financing District No. 1-3 Property to be Acquired . . . . . . . Development Activity in the Development District for which Contracts Have Been Signed . . . . . . . . . . . . . . . . Other Specific Development Expected to Occur Within The Development District . Estimated Public Costs . . . . . . . . Estimated Amount of Bonded Indebtedness Sources of Revenue . . . . . . . . Estimated Recent Net Tax Capacity . Estimated Captured Net Tax Capacity and Computation of Tax Increment . Type of Tax Increment Financing District . . . . . . . . . . . . Duration of Tax Increment Financing District No. 1-3 . . . . . Estimated Impact of Tax Increment Financing . . . . . . . . . . Cash Flow and Other Financial Analysis Use of Tax Increment . . . . . . . . . Prior Planned Improvements ..... Modifications of Tax Increment Financing Districts . . . . . . . . . . . . . . . Limitation on Administrative Expenses . Limitation on Duration of Tax Increment Financing Districts . . . . . . . . . . Limitation on Qualification of Property in Tax Increment Financing Districts Not Subject to Improvement . . . . Excess Tax Increments . . . . . Administration of Tax Increment Financing District No. 1-3 Annual Disclosure Requirements \, Section 3.04. Section 3.05. Section 3.06. Section 3.07. Section 3.08. Section 3.09. Section 3.10. Section 3.11. Section 3.12. Section 3.13. Section 3.14. Section 3.15. Section 3.16. Section 3.17. Section 3.18. Section 3.19. Section 3.20. Section 3.2l. Section 3.22. Section 3.23. Section 3.24. / , , 361669.1 Page 1 1 2 5 5 5 5 5 5 5 5 5 6 6 6 7 7 7 8 8 8 9 9 10 10 10 11 11 361669.1 Section 3.25. Reasonable Expectations . . . . . . . 13 Section 3.26. Restriction on Pooling; Five Year Limit 13 Section 3.27. Other Limitations on the Use of Tax Increment . . . . . . . . . . . 13 Section 3.28. Use of Tax Increment from Housing Districts . . . . . . 14 Section 3.29. Income Requirements . . 14 Section 3.30. Qualified Housing District 14 Section 3.3l. Wage and Job Goals . . . . 14 ARTICLE I DEFINITIONS AND EXHIBITS Section l.Ol. Definitions. The terms defined below have, for purposes of this Development Program and Tax Increment Financing Plan, the meanings herein specified, unless the context specifically requires otherwise: "City" -means the City of Andover, a municipal corporation and political subdivision of the State of Minnesota. "City Council" means the City Council of the City. "County" means Anoka County, Minnesota. "Development District Act" means Minnesota Statutes, Sections 469.124 through 469.134, as amended and supplemented from time to time. "Development District" means Development District No. 1 of the City, the boundaries of which are described on the attached Exhibit A. "Development Program" means the Development Program for the Development District, initially adopted by the City Council on / July 29, 1986, as the same may, from time to time, be further amended or supplemented. "Governinq Body" means the duly elected City Council. "Land Use Recrulations" means all federal, state and local laws, rules, regulations, ordinances and plans relating to or governing the use or development of land in the City, including but not limited to environmental, zoning and building code laws and regulations. "Municipality" means any city, however organized. "Public Costs" means the repayment of debt service on any Tax Increment Bonds and the costs set forth in Sections 3.07 and 3.l6 of the Tax Increment Financing Plan, and any other costs eligible to be financed by Tax Increments under Minnesota Statutes, Section 469.176, subdivision 4. "State" means the State of Minnesota. "Tax Increment Bonds" means any tax increment bonds issued by the City to finance the Public Costs of the Development District as stated in the Development Program and in the Tax Increment Financing Plan, and any obligations issued to refund such bonds. 361669.1 "Tax Increment Financinq District" means any tax increment financing district presently established or to be established in the future in the Development District. "Tax Increment Financinq Act" means Minnesota Statutes, Sections 469.174 through 469.179, both inclusive, as amended and supplemented from time to time. "Tax Increment Financinq Plan" means the respective Tax Increment Financing Plan for each Tax Increment Financing District located within the Development District. "Tax Increments" means the tax increments derived from the Tax Increment Financing District. Section 1.02. attached to and by Program: Exhibits. The following exhibits are reference made a part of this Development Exhibit A: Map of Development District No.1; Description of Tax Increment Financing District No. 1-3; Estimated Project Costs; Impact of Tax Increment Financing District No. 1-3 on Other Taxing Jurisdictions; and Cash Flow Projections and Other Financial Data relating to Tax Increment Financing District No. 1-3. Exhibit B: Exhibit C: Exhibit D: / Exhibit E: 361669.1 2 ARTICLE II THE MODIFICATION TO THE DEVELOPMENT PROGRAM Section 2.01. Statement of Need and Public Purpose. The City Council of the City has determined that there is a need for the City to take certain actions designed to encourage, ensure and facilitate development and redevelopment by the private sector of under utilized and unused land located within the corporate limits of the City in order to provide additional employment opportunities for residents of the City and the surrounding area, to improve the tax base of the City, the County and Independent School District No. 11 (the "School District") thereby enabling them to better utilize existing public facili- ties and provide needed public services, and to improve the general economy of the City, the County, and the State. Specifically, the City Council has determined that the property within the Development District is either under utilized or unused due to a variety of factors, including inadequate public improvements to serve the property; which has resulted in a lack of private investment; that, as a result, the property is not providing adequate employment opportunities, and is not contribu- ting to the tax base and general economy of the City, the School District, the County and the State to its full potential; and, therefore, that it is necessary for the City to exercise its authority under the Development District Act and the Tax . / Increment Financing Act to develop, implement and finance a program designed to encourage, ensure and facilitate the commercial development and redevelopment of the property located in the Development District, to further and accomplish the public purposes specified in this paragraph. The development proposed for the Development District would not occur solely through private investment in the foreseeable future; the Tax Increment Financing Plan proposed herein is consistent with the Development Program; and the Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the property located in the Development District by private enterprise. The'welfare of the City, the County and the State of Minnesota requires active promotion, attraction, encouragement and development of economically sound industry and commerce by the City. Section 2.02. Statutory Authority. The Development District Act authorizes the City, upon certain public purpose findings by the City Council, to establish and designate development districts within the City and to establish, develop and administer development programs therefor to meet the needs and accomplish the public purposes specified in Section 2.01. In 361669.1 3 accordance with the purposes set forth in Section 469.124 of the Development District Act, the City Council has established the Development District comprising the area described on the attached Exhibit A and has adopted this Development Program therefor. The Tax Increment Financing Act authorizes the City, upon certain findings by the City Council, to establish and designate tax increment financing districts within the Development District and to adopt and implement a tax increment financing plan to accomplish the Development Program established for the Development District. In accordance with the Tax Increment Financing Act, the City has established Tax Increment Financing District No. 1-3 in the Development District as a housing district described in Section 469.174 subdivision 11, and has adopted therefor the Tax Increment Financing Plan set forth in Article III hereof, which provides for the use of tax increment financing to finance the cost of qualified public activities and improvements in the Development District, as specified in the Development Program and the Tax Increment Financing Plan. Section 2.03. Increase Estimates for Public Costs and Budqet. The additional costs estimated to be incurred by the City, directly or indirectly, in carrying out the Development Program, as modified are amended to include the Public Costs set forth in the Tax Increment Financing Plan. / j 361669.1 4 ARTICLE III THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-3 Section 3.01. Statement of Obiectives. See Section 2.01 of the Development Program entitled Statement of Need and Public Purpose and Section 3.01 entitled Statement of Objectives for the Development District. Section 3.02. Statement of Development Proqram. The Statement of the Development Program for the Development District is set forth in Articles II and III hereof. Section 3.03. Parcel(s) to be Included in Tax Increment Financing District No. 1-3. Tax Increment Financing District No. 1-3 is described on the attached Exhibit B and includes the parcel identification number(s) or legal description set forth on the attached Exhibit B. Section 3.04. Propertv to be Acauired. The City does not intend to acquire any property within Tax Increment Financing District No. 1-3 as the developer currently owns the land within Tax Increment Financing District No. 1-3. The City may reimburse the Developer for land acquisition. / Section 3.05. Development Activitv in the Development District for which Contracts Have Been Siqned. The City intends to enter into a Development Agreement with Presbyterian Homes Housing and Assisted Living, Inc. with respect to the construction of an approximately one hundred forty (140) unit multifamily elderly rental housing facility. Section 3.06. Other S~ecific Development Expected to Occur Within The Development District. It is anticipated that develop- ment will occur within the Development District. Additional development may occur in the Development District in the future; however, no contracts have been entered into at this time with respect to such development. The nature and timing of further development cannot accurately be predicted at this time. Section 3.07. Estimated Public Costs. The estimated total Public Costs to be paid from Tax Increments is described in Exhibit C. Section 3.08. Estimated Amount of Bonded Indebtedness. It is anticipated that Tax Increment Bonds will not be issued to finance the estimated Public Costs of the Development Program. The City intends to utilize 100% of the available Tax Increments to finance said Public Costs. The City, however, reserves the right to issue bonds estimated not to exceed $6,138,194 to / 361669.1 5 / finance said Public Costs. Such Public Costs will be paid from sources described in Section 3.09 hereof. Section 3.09. Sources of Revenue. The revenues to pay the Public Costs of the Development District are the proceeds of the Tax Increments and any other available sources of revenue which the City may apply to pay Public Costs. Section 3.10. Estimated Recent Net Tax Capacitv. The estimated net tax capacity of all taxable property in Tax Increment Financing District No. 1-3 as most recently certified by the Commissioner of Revenue of the State of Minnesota, being the certification made in 1997 with respect to the net tax capacity of such property as of January 2, 1997, for taxes payable in 1998 is estimated to be $29,000. Section 3.11. Estimated Captured Net Tax Capacitv and Computation of Tax Increment. Each year the County Auditor will measure the amount of increase or decrease in the total net tax capacity value of Tax Increment Financing District No. 1-3 to calculate the Tax Increments payable to the City. In any year in which there is an increase in total net tax capacity in Tax Increment Financing District No. 1-3 above the original net tax capacity, Tax Increments will be payable to the City. In any year in which the total net tax capacity in Tax Increment Financing District No. 1-3 declines below the net tax capacity, no net tax capacity will be captured and no tax increment will be payable. The County Auditor shall certify in each year after the date the original net tax capacity was certified, the amount the net tax capacity has increased or decreased as a result of: 1. change in tax exempt status of property; 2. reduction or enlargement of the geographic boundaries of the district; 3. change due to stipulations, adjustments, negotiated or court-ordered abatements. Upon completion of the development expected to occur in Tax Increment Financing District No. 1-3 the City estimates the net tax capacity of taxable property in Tax Increment Financing District No. 1-3 will be approximately $258,832. The captured net tax capacity upon completion of development is expected to be approximately $229,832. The Tax Increments will be captured for up to 25 years from receipt of the first Tax Increments or until the Public Costs described in the Tax Increment Financing Plan have been paid. The City elects to retain no Tax Increment that is payable 1998. The City determines that 100~ of the available increase in net tax / 361669.1 6 / capacity from Tax Increment Financing District No. 1-3 shall be used for the repayment of the Tax Increment Bonds, and payment of Public Costs of the Development District in accordance with the Development Program and Tax Increment Financing Plan. Section 3.12. Type of Tax Increment Financinq District. Pursuant to Section 469.174, Subdivision 11 of the Act, the City has determined that Tax Increment Financing District No. 1-3 qualifies as a "housing district". "Housing district" means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in Chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of these acts. A project does not qualify under this subdivision if the fair market value of the improvements which are constructed for commercial uses or for uses other than low and moderate income housing consists of more than 20 percent of the total fair market value of the planned improvements in the development plan or agreement. The fair market value of the improvements may be determined using the cost of construction, capitalized income, or other appropriate method of estimating market value. The City Council has found that all of these facts exist. Section 3.13. Duration of Tax Increment Financinq District No. 1-3. The Act allows "housing districts" to remain in existence for a period of 25 years from the receipt of the first Tax Increments. Therefore, Tax Increment Financing District No. 1-3 may remain in effect until 25 years from the receipt of the first Tax Increments or until the Public Costs described in the Tax Increment Financing Plan have been paid. The first Tax Increments are expected to be received in 1999. Section 3.14. Estimated Impact of Tax Increment Financinq. The estimated impact of Tax Increment Financing District No. 1-3 on the other taxing jurisdictions is set forth on Exhibit D. In accordance with Minnesota Statutes, Section 469.175, Subdivision l, clause (b), alternative estimates of the impact have been made, assuming in one case that the captured net tax capacity would be available without creation of the district and in the other case that none of the captured net tax capacity would be available without creating the district. 361669.1 7 / Section 3.15. Cash Flow and Other Financial Analvsis. See Exhibit E attached hereto. , Section 3.16. Use of Tax Increment. The City hereby determines that it will use 100% of the captured net tax capacity of taxable property located in Tax Increment Financing District No. 1-3 for the following activities: 1. To pay principal and interest on the Tax Increment Bonds. 2. To pay principal and interest on any loans, advances or other payments made to the City or for the benefit of the Development District by the Developer. 3. To finance or otherwise pay Public Costs of the Development District. 4. To finance or otherwise pay premiums and other costs for insurance, credit enhancement, or other security guaranteeing the payment when due of principal and interest on the Tax Increment Bonds or bonds issued pursuant to the Tax Increment Financing Plan or pursuant to Minnesota Statutes, Chapter 462C and Minnesota Statutes, Sections 469.152 to 469.165, or both. 5. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the Tax Increment Bonds or bonds issued pursuant to Minnesota Statutes, Chapter 462C and Minnesota Statutes, Sections 469.152 to 469.165, or both. 6. To payor finance Public Costs described in the Development Program and Tax Increment Financing Plan. 7. To finance other Public Costs as may be allowed by the Tax Increment Financing Act. These revenues shall not be used to circumvent levy limitations applicable to the City nor for other purposes prohibited by Section 469.176, Subdivision 4 of the Tax Increment Financing Act. Section 3.17. Prior Planned Improvements. The City shall, after due and diligent search, accompany its request for certification to the County Auditor or its notice of district enlargement with a listing of all properties within Tax Increment Financing District No. 1-3 for which building permits have been issued during the eighteen (18) months immediately preceding approval of the Tax Increment Financing Plan by the City. The County Auditor shall increase the original net tax capacity of Tax Increment Financing District No. 1-3 by the net tax capacity ) of the improvements for which the building permit was issued. 361669.1 8 , / , / Section 3.18. Modifications of Tax Increment Financinq Districts. In accordance with Minnesota Statutes, Section 469.175, Subdivision 4, any reduction or enlargement of the geographic area of the Development District or Tax Increment Financing District No. 1-3, increase in amount of bonded indebtedness to be incurred, including a determination to increase the amount of capitalized interest on debt to be paid on the Tax Increment Bonds over the amount shown in this Tax Increment Financing Plan, or to increase or decrease the amount of interest on the debt to be capitalized, increase the portion of the captured net tax capacity to be retained by the City, increase in total estimated Public Costs or designation of additional property to be acquired by the City shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the Tax Increment Financing Plan. The geographic area of a Tax Increment Financing District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of section 469.174, subdivision 11 must be documented. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcels from the project or district and (2) (A) the current tax capacity of the parcels eliminated from the district equals or exceeds the tax capacity of those parcels in the district's original tax capacity or (B) the authority agrees that, notwithstanding Section 469.177, subdivision 1, the original tax capacity will be reduced by no more than the current tax capacity of the parcels eliminated from the district. The authority must notify the county auditor of any modification that reduces or enlarges the geographic area of a district or a project area. Section 3.19. Limitation on Administrative Expenses. In accordance with Minnesota Statutes, Section 469.174, Subdivision 14 and Minnesota Statutes, Section 469.176, Subdivision 3, administrative expenses means all expenditures of an authority other than amounts paid for the purchase of land or amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the district, relocation benefits paid to or services provided for persons residing or businesses located in the district or amounts used to pay interest on, fund a reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administra- tive expenses includes amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. No Tax Increments shall be used to pay any administrative expenses for a project which exceed ten percent of the total expenditures authorized by the Tax Increment Financing Plan or the total Project Costs, whichever is less. 361669.1 9 , I / , / Section 3.20. Limitation on Duration of Tax Increment Financinq Districts. Pursuant to Minnesota Statutes, Section 469.176, Subdivision l(d), . ."no tax increment shall be paid to an authority for a tax increment district after three years from the date of certification of the original net tax capacity of the taxable real property in the district by the county auditor. . unless within the three-year period (1) bonds have been issued pursuant to section 469.178, or in aid of a project pursuant to any other law, except revenue bonds issued pursuant to sections 469.152 to 469.165, or (2) the authority has acquired property within the district,. or (3) the authority has constructed or caused to be constructed public improvements within the district." Section 3.21. Limitation on Oualification of Propertv in Tax Increment Financinq Districts Not Subiect to Improvement. Pursuant to Minnesota Statutes, Section 469.176, Subdivision 6, "if, after four years from the date of certification of the original net tax capacity of the tax increment financing district..., no demolition, rehabilitation or renovation of property or other site preparation, including qualified improve- ment of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certify to the county auditor that the activity has commenced, and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district." The City must submit to the county auditor evidence that the required activity has taken place for each parcel in the tax increment financing district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which,the parcel was certified as included in the district. Section 3.22. Excess Tax Increments. Pursuant to Minnesota Statutes, Section 469.176, Subdivision 2, in any year in which the Tax Increments exceeds the amount necessary to pay the Public Costs authorized by the Development Program and Tax Increment Financing Plan, including the amount necessary to cancel any tax levy as provided in Minnesota Statutes, Section 475.61, Subdivision 3, the City shall use the excess amount to: 1. prepay the outstanding Tax Increment Bonds; 361669.1 10 2. discharge the pledge of Tax Increments thereto; 3. pay into an escrow account dedicated to the payment of the Tax Increment Bonds; or 4. return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their respective tax capacity rates. In addition, the City may, subject to the limitations set forth herein (in particular in Section 4.26), choose to modify the Tax Increment Financing Plan as described in Article III, in order to finance additional Public Costs of the Development District. Section 3.23. Administration of Tax Increment Financinq District No. 1-3. Administration of Tax Increment Financing District will be handled by the Administrator. The Tax Increments received as a result of increases in the net tax capacity of Tax Increment Financing District No. 1-3 will be maintained in a special account separate from all other municipal accounts and expended only upon municipal activities identified in the Development Program and Tax Increment Financing Plan. '. Section 3.24. Annual Disclosure Reauirements. Pursuant to Minnesota Statutes, Section 469.175, subdivision 5, the City must file with the County Board, the County Auditor, the School Board, and the State Auditor on or before July 1 of each year a report of the status of Tax Increment Financing District No. 1-3. The report shall include the following information: (1) The amount and source of revenue in the account established for Tax Increment Financing District No. 1-3. / (2) The amount and purpose of expenditures from each account. (3) The amount of any pledge of revenues, including principal and interest on any outstanding bonded indebtedness. (4) The original net tax capacity of Tax Increment Financing District No" 1-3. (5) The captured net tax capacity retained by the City in Tax Increment Financing District No. 1-3, and the captured net tax capacity, if any, shared with other taxing districts. (6) The tax increment received from the Tax Increment / Financing District No. 1-3. 361669.1 11 (7) Any additional information necessary to demonstrate compliance with this Tax Increment Financing Plan. In addition, the City shall publish an annual statement as required under Minnesota Statutes, Section 469.175, subdivision 5 . Pursuant to Minnesota Statutes, Section 469.175, Subdivision 6, the City must file with the State Auditor on or before July 1, an annual financial report for Tax Increment Financing District No. 1-3. The report shall also be filed by the City with the school board and county board. The report shall: (1) make full disclosure of the sources and uses of public funds in Tax Increment Financing District No. 1-3; (2) permit comparison and reconciliation with the City's accounts and financial reports; (3) permit auditing of the funds expended on behalf of Tax Increment Financing District No. 1-3, or that is funded in part or whole through the use of a development account funded with tax increments from other Tax Increment Financing Districts or with other public money; and , , ) (4) be consistent with generally accepted accounting principles. In addition, the report shall contain the following infor- mation: (l) the original net tax capacity of Tax Increment Financing District No. 1-3; (2) the captured net tax capacity of Tax Increment Financing District No. 1-3, including the amount of any captured tax capacity shared with other tax districts; (3) for the reporting period and for the duration of Tax Increment Financing District No. 1-3, the amount budgeted under the Tax Increment Financing Plan, and the actual amount expended for, at least, the following categories: (a) acquisition of land and buildings through condemnation or purchase; (b) site improvements or preparation costs; / (c) installation of public utilities, parking facilities, streets, roads, sidewalks or other similar public improvements; 361669.1 12 \ (d) administrative costs, including the allocated cost of the City; (e) public park facilities, facilities for social, recreational, or conference purposes, or other similar public improvements; and , / (4) For properties sold to developers, the total cost of the property to the City and the price paid by developers; (5) the amount of increments rebated or paid to developers or property owners for privately financed improvements or other qualifying costs, other than those reported under clause (3), that were issued on behalf of private entities for facilities located in Tax Increment Financing District No. 1-3. In addition, pursuant to Minnesota Statutes, Section 469.175, subdivision 6a, the City shall submit to the State Auditor the annual report required thereunder. ; Section 3.25. Reasonable Expectations. As required by the Tax Increment Financing Act, in establishing Tax Increment Financing District No. 1-3, the determination has been made that the anticipated development would not 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. In making said determination, reliance has been placed upon written representatives made by the developer to such effects and upon City staff awareness of the feasibility of developing the project site. Section 3.26. Restriction on Poolinq; Five Year Limit. Pursuant to Minnesota Statutes, Section 469.1763, (1) at least 80% of the Tax Increments derived from Tax Increment Financing District No. 1-3 will be expended on Public Costs incurred within said district, and up to 20% of said Tax Increments may be spent on Public Costs incurred outside of said district but within the Development District; provided that in the case of a housing district, a housing project, as defined in Minnesota Statutes, Section 469.174, Subdivision 11 is deemed to be an activity in the Tax Increment Financing District, and (2) Public Costs within said district shall be limited to reimbursement of Public Costs paid before or within five years after certification of said district by the County Auditor and interest on all such unreimbursed expenditures. Section 3.27. Other Limitations on the Use of Tax Increment; General Limitations. All revenue derived from tax increment shall be used in accordance with the tax increment financing plan. The revenues shall be used to finance or J otherwise pay public capital and administration costs pursuant to 361669.1 13 , , / Minnesota Statutes, Section 469.124 through 469.134. These revenues shall not be used to circumvent existing levy limit law. No revenues derived from tax increment shall be used for the construction, renovation, operation or maintenance of a building to be used primarily arid regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government; this provision shall not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure, a commons area used as a public park or a facility used for social, recreational or.conference purposes and not primarily for conducting the business of the municipality. Section 3.28. Use of Tax Increment from Housinq Districts. Revenue derived from Tax Increments from Tax Increment Financing District No. 1-3 must be used solely to finance the cost of housing projects as defined in Minnesota Statutes, Section 469.174, Subdivision 11. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the City may be included in the cost of a housing project. Section 3.29. Income Reauirements. The housing project must satisfy the income requirements for a "qualified residential rental project" as defined in Section 142(d) of the Internal Revenue Code. Section 3.30. Financing District within the meaning Subdivision 1. Oualified Housinq District. Tax Increment No. 1-3 is a "qualified housing district" of Minnesota Statutes, Section 273.1399, Section 3.31. Waqe and Job Goals. The City is not providing tax increment financing for the purpose of economic development or job growth purposes and therefore the provisions of Minnesota Statutes, Section 116J.991 are not applicable and the City is not establishing wage and job goals in connection with Tax Increment Financing District No. 1-3. 361669.1 14 , I \ EXHIBIT A Map of Development District No. 1 (See attached) , , / J 361669.1 A-l \ ---- / ~~= :l . -'.- .. ---- .. _._~ --- .. -....- ... -'~-~ -'._- ---...- _ ...n_' --- -'.- - IQ -'.- .. -'.- -. --.:=; .. ---- --- -'........ -'.- -........... "\. -'-- .. -..-- , -'-- ,l1li ___ - III -.-- a ___ --- .. --- II, -;;:: --- _a._. , , , , I , , , I , I I I I I I , I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I , ~ 1 1 . , , 1 , ; 6 1 1 1 1 1 1 a 1 1 .. 1 1 1 1 , 1 , 1 , a , ~ , ii, ~ :: :: i i a '5 1 , s \ 1 C I I ! I I Ii' I I I I ! I I ii' I i I I ! ! Ii' ! I I I ! i ! Ii! i i I i I ! I Iii I I I IJ 'F:t: t-"; ).1 -IT r-..T hJ II I:--\. 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CU a.. < I '- II II I ~ ~ !! ~ ';;:if 8 It:';'; ~ ~5 ! ~ i~ ~ 'it.! lI'I 0 AI.it': if !! l~ ~ >= . ~ g I! ~ I: .. ~ II I u Ii i ~ i r i .. z ~ .. ;!! c II II ~ u Ii J ~ i J L I ~ J EXHIBIT B '1 Description of Tax Increment Financing District No. ~-3 . / The West 715.00 feet of the South 487.38 feet, liS meuured at right lIIlgles to the South md Wesllinea thereof, Dfthe East Half of the Nortbeast Quarter of Section 32, Township 32, Range 24, Anoh County, Minnesota, except that part thereof lying within the following described pucel: Commencing at the East Qwutcr comer of Section 32; thence West along the South liDe of the Nonheast Qu~r of said Section 32 a distance of 593.07 feot to the actual point of beginning: thence continuing West along the said South line of said Northeast Quarter of Section 32, a distmce of225.29 feeti thence deflection to the North with an Interior angle of 88 degrees 20 minutes, S4 seconds II diSWIci: of 163.07 feet; thence deflecting to the East with an Interior angle of 91 degrees 39 minutes 06 seconds a distance of 220.61 feet, thence deflecting to the South with an Interior angle of 89 degrees S3 minutes SO seconds a distance of 163.00 feet to the poiat of beginning and there terminating. Subject to Co. Rd. 16 over the South 33 feet and V.lth rights of ingress and egress over 16 foot wide parcel adjacent to the South 83.03 feet of the west 1iae. AND / 'That part ofthc West 715.00 feet of the South 487.38 feet, as measured at right angles to the South and West lines thereof, oithe East Half of the Northeast Quarter of Section 32, Township 32, Range l4, Anoka County, Minnesota, lying within the following described parcel; COllll:O.encing at the East Quarter comer of Section 32; thence West II1on8 the South line of the Northeast Quarter of said Section 32 a distance of 593.07 feet to the actual point of beginning; theoce continuing West along the said South line of said Northean Qwu1er of Sectioo 32, a distance of225.29 feet; thCD~e deOection to the North with an interior angle of 88 degrees 20 minute!, 54 seconds a distance of 163.07 feet, thence dcfleGting to the East with an interior angle of91 degrees 39 minutes 06 se:oods:l distan;::c of 220.61 feet; thence deflecting to the South with an interior angle of 89 degrees S3 minutes SO seconds II distance of 163.00 feet to tho point ofbeginning and thete terminating. Subject to Co. Rd. 16 over the South 33 feet and with righll; ofiDgress and egress over 16 foot wide parcel adjacent to the south 83.03 feet' of the west line. J 361669.1 B-1 EXHIBIT C \ Estimated Public Costs and Bonded Indebtedness ESTIMATED PUBLIC COSTS TO BE FINANCED It is the intention of the City of Andover to reimburse the developer of this parcel for costs associated with site improvements, acquistion and construction, road improvements, utility extensions to the extent authorized by this plan. It is the expectation that this district will generate increment annually, and thus will over a period of 25 years generate approximately $245,528 annually, or $6,138,194 over 25 years. As stated earlier, these monies will be utilized for eligibl.e c.osts... incurred by the developer including, but not limited to, site preparation and acquisition, parking, structural construction, signage, footings and foundation, and utility and road improvements. ESTIMATED BONDED INDEBTEDNESS It is not the intention of the City to general obligation issue bonds for the project, including administrative expenses. The developer will be required to provide evidence of the eligible costs incurred prior to the distribution of increment receipts or bond proceeds. The application of the increment distributions are as follows: , / Utilities, Road and Infra- Structure Improvements, and Site Development. Capitalized interest Administrative expenses $5,524,375 $0 $613,819 TOTAL $6,138,194 / 361669.1 C-l EXHIBIT D " Impact of Tax Increment Financing District No. 1-3 on Other Taxing Jurisdictions Estimated Average Captured Tax Capacity Payable 1997 Local Tax Rate $25,774 106.829 % Estimated Annual Tax Increment $27,534 PAYABLE 1997 TAX CAPACITIES OF AFFECTED TAXING JURISDICTIONS TAX CAPTURED CAPACITY TAX PERCENT VALUE CAPACITY CAPTURED Anoka County 183,317,918 $25,774 0.01 % Anoka-Hennepin ISD #11 118,358,038 $25,774 0.02 % City of Andover 14,112,304 $25,774 0.18 % Met Council 2.161,233.611 $25,774 0.00 % DOLLAR IMPACT ON AFFECTED TAXING JURISDICTIONS PAY 1997 TAX ADDED LOCAL %OF INCREMENT LOCAL TAX RATE TOTAL SHARE TAX RATE Anoka County 30.091 0/0 28.17% 7,756 0.004 % \ Anoka-Hennepin ISD #11 55.588 % 52.03% 14,327 0.012 % / City of Andover 19.804 % 18.54% 5,104 0.036 % Other 1.346 % 1.26% 347 106.829 0/0 100.00% 27,534 STATEMENT #1: Assuming that ALL of the captured tax capacity would be available to all taxing jurisdictions even if the City does not create Tax Increment Financing District No. 1-3, then the creation of the District will reduce the tax capacities and increase the tax capacity rates as illustrated in the above-referenced tables. STATEMENT #2: Assuming that NONE of the captured tax capacity would be available to all taxing jurisdictions if the City did not provide tax increment assistance through Tax Increment Financing District No. 1-3, then the plan has virtually no initial impact on the tax capacities of the taxing jurisdictions. However, once the District is established, allowable costs are paid from increments, and the District is terminated, all taxing jurisdiction will enjoy an improvement in their tax base. J 361669.1 D-l EXHIBIT E Cash Flow Projections and Other Financial Data Relating to Tax Increment Financing District No. 1-3 CAPTlJRED TAX CAPACITY ASSUMPTIONS: Ois!rict Established October 7. 1997 Project ConstruCled During 1997 and 1998 First Tax Incremenl Received In 1999 (A) (B) (C) (D) (E) (F) (0) (H) (I) CAPIUlED 100,00". 90.00% ASSESSOA'S NEVI !lASE TAX ESTIMATED ESTIMATED VALUE PAY IMAXET ClASS TAX TAX CAPACITY TAX TAX \'FAA \'FAA VALUE RATE CAPACITY CAPACITY VALUE KREMENT t.CRe.lENT 1996 1997 0 O.OO~~ 0 0 0 0 0 1997 199B 0 0.00% 0 0 0 0 0 1998 1999 8.925,258 2.90"1. 258.832 29.000 229.832 245.528 220,975 1999 2000 8,925,258 2.90% 256,832 29,000 229,832 245,528 220,975 2000 2001 8.925,258 2.90". 258,832 29,000 229,832 245.528 220,975 2001 2002 8.925.258 2.90". 258.832 29.000 229.832 245,528 220,975 2002 2003 8.925.258 2.90% 258.832 29.000 229,832 245.528 220,975 2003 2004 8.925,258 2.90% 258.832 29.000 229.832 245,526 220.975 2004 2005 B.925,258 2.90~. 258.832 29,000 229,832 245.528 220.975 2005 2006 8.925,258 2.90~~ 258.832 29,000 229,832 245.528 220,975 2006 2007 8.925,258 2.90"/. 258.832 29,000 229.832 245.528 220,975 2007 2008 8,925.258 2.90~~ 258.832 29.000 229.832 245.528 220,975 2008 2009 8,925,258 2.900/. 258.832 29,000 229,832 245,528 220,975 \ 2009 2010 8,925,258 2.90". 258.832 29.000 229,832 245,528 220,975 / 2010 2011 8.925,258 2.90% 258.832 29,000 229,832 245.526 220,975 2011 2012 8.925,258 2.90% 258.832 29.000 229,832 245.528 220,975 2012 2013 8.925.258 2.90,.. 258.632 29,000 229.832 245.528 220.975 2013 2014 8.925,258 2.90% 258.832 29.000 229,832 245.528 220,975 2014 2015 8.925,258 2.90% 258,832 29.000 229,832 245,528 220,975 2015 2016 8.925,258 2.90"/. 258.832 29.000 229.832 245,528 220,975 2016 2017 8.925,258 2.90% 258,832 29,000 229,832 245.528 220,975 2017 2018 8,925.258 2.90~. 258.832 29.000 229.832 245,528 220,975 20t6 2019 8.925.258 2.90% 258,832 29,000 229,832 245,528 220,975 2019 2020 8.925,258 2.901> 258,832 29,000 229,832 245,526 220,975 2020 2021 8.925.258 2.90~~ 258.832 29.000 229.832 245.528 220.975 2021 2022 8.925.258 2.90", 258,632 29,000 229,632 245,528 220,975 2022 2023 8.925.258 2.900/. 258.832 29,000 229,832 245,526 220,975 2023 2024 0 O.OO~. 0 0 0 0 0 2024 2025 0 O.OO~~ 0 0 0 0 0 56,138,194 55,524,374 NPV. 52,994,917 $2,ISllS,425 AVG.. $245,528 5220,975 (8) This Plan Idenlifies a 25 year Housing Oisllicl wilh pay 2023 as being the 1asI year to collecllncrement IC) Assumes a .new. market value 01 $9,925,256. Assumes $1,000,000 lor land and $8,925,258. (0) As per current state law lor residential non.homestead lour or more unils. IE) Est'd assessors market value upon completion of the proposed structure multiplied by the class rala. IF) Based on developers estimate 01 $1,000,000 for land. (0) The difl'erence between Ihe new tax capacity and the base tax capacity. (H) The estimated tax Increment based on an assumed lax rate or 106.829~~. (Pay 1997) Please nola thai, Minnesola Slalules 469 stales thai the tax capacity rate used for this calculation shall be the current rate or the base year rate, whichever is less. I 361669.1 E-l CITY OF ANDOVER REQUEST FOR COUNCIL ACTION , -' DATE: October 7. t 997 AGENDA SECTION ORIGINATING DEPARTMENT EDA Meeting ITEM NO. A. Heidelberger Relocation Expenses Background: The City of Andover is currently in the process of purchasing a house from Richard Heidelberger and .6 acres ofland surrounding the house. Conworth, Inc., the city's relocation expert, has recommended that Mr. Heidelberger be paid an advance for the purposes of moving. Staff is recommending that an amount of $22,450, which is half of the total relocation cost, be directed to Mr. Heidelberger immediately to expedite his move. \. / , / I 800 I 1200 '- N FEET .'00.. BUt - -------- .. - -.- - - ---- _. ,....- ,~ " I " ~', , z " ~ '... " , fRONTAGE , " ~ ti ..-, ," l I I I I I I \ , ,-........ \ / . rr I~~ C). ztn CITY OF ANDOVER REQUEST FOR COUNCIL ACTION / DATE: October 7.1997 AGENDA SECTION ORIGINATING DEPARTMENT EDA Meeting ITEM NO. .3 Commercial Auto Parts Relocation Expenses Background: The City has been notified that Mr. Mistelske lacks the funds necessary to begin the moving process. The AEDA has indicated that it is willing to make an initial payment or payments for this purpose. The AEDA has insisted that such payments be made directly to movers for actual expenses. At this time, the City is waiting for Mr. Mistelske to submit a plan detailing the move. \, / CITY OF ANDOVER REQUEST FOR COUNCIL ACTION " DATE: October 7.1997 AGENDA SECTION ORIGINATING DEPARTMENT EDA Meeting ITEM NO. j Administration Richard Fursman Discuss PurchasefMOM's Auto Salvage - REOUEST: The Economic Development Authority (EDA) is requested to consider the purchase of property known as MOM's Auto Salvage. The details of the site are listed below: Size Location Contamination " I , Surface Clean-up 7.8 Acres. MOM's, fronting Bunker Lake Boulevard. 12 test sites were established on the salvage yard. From the 12 different test sites, two showed some oil based contamination. The City's environmental consultant has estimated a cost range of$30, 000 to $40,000 to clean the sub surface area. The seller has agreed to clear all cars, tires and other debris from the surface. $225,000 $165,000 Land Price Moving Expense Q: Wasn't the original asking price from the new owners of MOM's $225,000? A : Yes. Pannack Inc., won the property in a law suit against MOM's. The property was put into bankruptcy court, and was under the control of a bankruptcy trustee. In April the City had discussions with Pannack regarding the purchase of the site. A net return to the owner of $225,000 was expressed as an acceptable number. Considering the history of costs associated with the purchase of other salvage yards, it seemed like a good price. (Please see cost history of other salvage yards) Q: Now Parmack Inc., wants $165,000 more; for what? A: The principals of Pannack relate that the number used in the spring of $225,000 did not take into consideration the problems and costs of getting the property into acceptable condition for sale. Also, in order to be able to dissolve the MOM's corporation, Pannack has to undertake sizable costs associated with the business which Mr. Heidelberger apparently did not pay. These items include: Property Taxes; Employee Withholding; Workers Comp; Income Taxes; and related bankruptcy fees. Q: What about the City's liability for contamination abatement? A: Once the property is the City's, the responsibility for clean-up will also be the City's. I am recommending the City structure the purchase of the yard as such: Cost.....................................$390,OOO Escrow Soil Clean-up..........$50,OOO / If the City spends less than $50,000 on the Clean-up, then the rest of the money will be returned to Pannack. If the City spends more on the clean-up, then the City will be responsible for costs over $50,000. Page 2 Discuss PurchaseIMOM's Auto Salvage , Q: What are the chances of finding another major area of contamination. A: The City has paid and is paying experts to study that very question. We have been informed that no hazardous levels of compounds have been identified on MOM's auto salvage. The site was practically covered with test holes. Far more research was done on this site than on any other. So, the chances of having missed something are quite small. Q: What if the City refuses to buy the site? A: Hard to say. Parmack has indicated that Mr. Heidleberger is interested in purchasing the site. It has also been indicated that several other parties have expressed an interest in purchasing the site. The City also has the option of going through condemnation, however, this has not been a popular alternative. Q: What other things are there to consider? A: TIF. There are 14 taxable years left on the property. If developed anytime soon, the TIF pool could easy grow by 10 million dollars. That money could be used for additional economic development and on road and park improvements. Also, without all the salvage yards eliminated from the site, sales of the property will be hurt. Q: Does the City have the TIF funds available to complete the project? A: The City received $500,000 recently from the legislature for clean-up. Also, costs of clean-up were lower than expected on the hazardous waste site. The project is still fundable, as increased costs have been matched with increased revenues. Bill Hawkins (City Attorney) and I will be meeting with representatives ofParmack on Monday, September 6, to further negotiate. I will report any substantial developments at the meeting. CITY OF ANDOVER COMMERCIAL PARK DEVELOPMENT PURCHASE OF SALVAGE YARDS The flfst phase ofthe redevelopment included the purchase of salvage yards and related industries. City officials attempted to negotiate with land and business owners in an effort to expedite the process and to keep costs down. At this initial period, the large amounts of Hazardous waste were not discovered. PROPERTY Best Auto Parts Sandeen (guns) M.R. Olson D. Heidelberger ATV Andover Auto Liesinger Wilbers C. Heidelberger R. Heidelberger TOTAL BUDGET $410,000.00 $470,000.00 $300,000.00 $40,000.00 $285,000.00 $370,000.00 $ $750,000.00 $30,000.00 $120,000.00 $2,775,000.00 ACTUAL $410,000.00 $470,000.00 $390,000.00 $48,000.00 $315,000.00 $400,000.00 $153,850.00 $850,000.00 $13,504.00 $140,000.00 $3,190,354.00 Running Total $3,190,354.00 Site Preparation To Date Before s Before site work began for the installation of utilities, soil tests were done and meetings held wit held with the MPCA. A remedial action plan was approved through the Voluntary Investig Investigation and Clean-up program ( VIe) in the event contamination was encountered. During t During the site preparation process, unexpected amounts of Hazardous waste were discovered. Money Money earmarked for roads, sewer, water, lighting, ponding and other development costs were be were being spent on costly Hazardous waste removal, testing and storage. It should be noted that had the City not purchased this property, this contamination would have continued to foul groundwater indefinitely. Additional Salvage Yard PurchaseslIn Progress The City has two salvage operations left to purchase before the site can be completely cleaned. One additional salvage yard was to be purchased also, however, the high cost of clearing the area, and of the hazardous waste removal has left the City without adequate funds. Not yet Acquired $750,000.00 $450,000.00 $1,500,000.00 $2,700,000.00 Grading/Clean-up Contamination County Land Commercial Blvd. Subtotal $300,000.00 $50,000.00 $1.00 $900,000.00 $1,250,001.00 Commercial , / MOM'S Anoka Auto Subtotal Page 1 $884,250.00 $320,000.00 $1.00 $904,500.00 $2,108,751.00 $5,299,105.00 $1,000,000.00 $350,000.00 $1,700,000.00 $3,050,000.00 $8,349,105.00 " Remaining Project Cost Estimates In addition to the task of acquiring salvage yards, the City will also be finishing hazardous clean-up, site grading, utility installation, road construction and related industrial site development work. Contamination Site Grading/Soil Correc Frontage Roads TOTALS $ o $ $110,000.00 $1,200,000.00 1,310,000.00 $ Funding For Project Tax Increments Land Sales Interest Income Andover EDA Andover Street Funding TOTAL Item PostponedooPurchase of Anok...Auto {Seperate Site) 661,000.00 $110,000.00 $1,200,000.00 1,971,000.00 $ $ $ $ $ $ 7,300,000.00 150,000.00 150,000.00 50,000.00 464,000.00 8,114,000.00 $ Shortfall $ $10,320,105.00 8,114,000.00 (2,206,105.00) 1,700,000.00 (506,105.00) $500,000 -6105 Special Note: The City is presently researching the layout of the new industrial park. Several changes to the original plan seem to indicate the work to be done will cost less than originally thought. Page 2 $ 1,700,000.00 $ Adjusted Shortfall $ State Grant New Shortfall CITY OF ANDOVER REQUEST FOR ECONOMIC DEVELOPMENT AUTHORITY ACTION \ > DATE: October 7. 1997 AGENDA SECTION ORIGINATING DEPARTMENT Discussion Community Development ITEM NO. Discuss Lot Sale ~ Lot 3, Block 3, Andover Commercial Park y,Bob Peterson David L. Carlberg Community Development Director The Economic Development Authority (EDA) is requested to discuss the sale of Lot 3, Block 3, Andover Commercial Park to Bob Peterson, owner of a stucco construction business. Staff requested a letter from Mr. Peterson explaining his operation and the intended use of the property for EDA review. Attached is the letter for EDA review. Mr. Peterson will be present at the meeting to address the EDA. The sale price for the 1.83 (79,700 s.f.) acre lot is $43,835. The sale price is based on a cost of $0.55 a square foot. If the EDA elects to sell the lot to Mr. Peterson, a $1,000 nonrefundable escrow is required to hold the lot. The City Attorney will also be preparing the necessary I documents for the sale. .: I ! STUCCO 1, INC. OF MINNESOTA 16529 Argon Street Northwest Andover, MN 55304 (612) 493-4430. 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