BY COUNCILOR GILBERT:01-0022R
RESOLUTION APPROVING A TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 21 IN DEVELOPMENT DISTRICT NO. 17 AS PROPOSED BY THE DULUTH ECONOMIC DEVELOPMENT AUTHORITY.
RESOLVED, by the city council of the city of Duluth, as follows:
Section 1. Recitals.
1.01 The council has established the Duluth economic development authority (DEDA) to promote development and redevelopment of property located in the city of Duluth (the city).
1.02 In order to promote such development, DEDA has established Development District No. 17 (the development district) in the city and adopted a development program (the development program) therefor pursuant to Minnesota Statutes, Sections 469.090 through 469.1801 and Sections 469.124 through 469.134 (collectively, the act). DEDA has prepared the development program in accordance with Sections 469.125 and 469.126 of the act.
1.03 DEDA proposes to establish Tax Increment Financing District No. 21 (the TIF dstrict) within the development district and adopt a tax increment financing plan (the TIF plan) therefor pursuant to Minnesota Statutes, Sections 469.174 through 469.179 (the TIF act) for the purpose of financing public improvements and encouraging investment in the development district. DEDA has prepared the TIF plan in accordance with the TIF act (Public Document No. ____________).
1.04 Pursuant to Section 469.175, Subdivision 3 of the TIF act, the city held a public hearing on the TIF plan, which hearing was held this day, at which the views of all interested parties were heard.
1.05 DEDA has transmitted a copy of the TIF plan to the council in a document entitled "Fifth Amendment to Development Program for Development District No. 17 and Tax Increment Financing Plan for Tax Increment Financing District No. 21 (Garfield Industrial District)", which is now on file in the office of the city clerk.
1.06 Pursuant to Minnesota statutes, Section 273.1399 (the section), upon creation of the TIF district, the city will experience a reduction in state aids to be paid to the city (the reduction) unless an exemption provided in the section applies.
1.07 Pursuant to the section, the TIF district is exempt from the reduction if the city elects at the time of approving the tax increment financing plan for the TIF district to make a qualifying local contribution (the contribution).
1.08 After investigation of the facts, the council is of the opinion that:
(a) It is necessary for the sound and orderly development of the development district and of the city as a whole and for the protection and preservation of the public health, safety and general welfare, that the powers authorized by the act and the TIF act be exercised by the city to provide public financial assistance to the development district;
(b) Proper development of the development district and
implementation of the development program in accordance with the city's
long range plans is essential to:
(i) The economic viability of the development district;
(ii) The economic well being of the city and its residents;
(iii) The orderly development of the city; and
(iv) The orderly and beneficial development of the Development District to ensure the construction of and provide moneys for the payment of the cost of certain public improvements within the Development District, including site improvements, in order to provide and finance development of suitable and necessary sites for development;
(c) There is a need for new development within the development district (i) to enhance the quality of life of the city's residents by redeveloping blighted or polluted areas, (ii) to improve the general economy of the city and the state, (iii) to provide employment opportunities for residents of the city, (iv) to improve the tax base of the city and the state, and (v) to provide other facilities identified in the development program and TIF plan;
(d) Creation of the development district and TIF district is in the public interest and will result in increased employment in the city and in the preservation and enhancement of the tax base of the city; and
(e) The TIF district is intended and, in the judgment of city, its effect will be to promote the public purposes and accomplish the objectives specified in the development program, which are all consistent with the efforts already made for the development of the development district.
1.09 The council has fully reviewed the contents of the TIF plan.
Section 2. Statutory findings.
2.01 There is a need for new development in the development district in order to enhance the quality of life of the City's residents by redeveloping blighted or polluted areas, to improve the tax base, to provide employment opportunities, and to improve the general economy of the state.
2.02 Establishment of the TIF district will provide impetus for commercial development; increase employment; and provide off-street parking to serve employees of the development district and the TIF district.
2.03 The actions required to assist the implementation of the development program are a public purpose and the execution and financing of the development program are a public purpose.
2.04 It is the opinion of the council, based on discussions with developers of projects proposed to be constructed in the TIF district and information contained in the development program and the TIF plan that:
(a) Development and redevelopment within the TIF district would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future;
(b) The increased market value of the site to be included in the TIF district 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 development in the TIF district after subtracting the present value of the projected tax increments for the maximum duration of the TIF district permitted by the TIF plan; and
(c) The use of tax increment financing is necessary.
2.05 Based on information contained in the development program and the TIF plan, the TIF plan conforms to the general plan for the development and redevelopment of the city as a whole.
2.06 Based on information contained in the development program and the TIF plan, the TIF plan will afford maximum opportunity, consistent with the sound needs of the city as a whole, for the development and redevelopment of the development district by private enterprise.
Section 3. Approval.
3.01 The TIF plan is approved.
3.02 The geographic boundaries of the development district and TIF district are as described in the development program and TIF plan, which documents are incorporated herein by reference and which, together with this resolution contain the requirements set forth in Section 469.175 of the TIF act.
Section 4. Designation of TIF district.
4.01 The proposed TIF district is a redevelopment district as defined in Section 469.174, Subdivision 10(a)(2) of the TIF act because it consists of a portion of the development district within which the following conditions, reasonably distributed throughout the TIF district, exist: the property consists of vacant, unused, underused, inappropriately used, or infrequently used railyards, rail storage facilities, or excessive or vacated railroad rights-of-way.
4.02 The reasons and supporting facts for the determination that the TIF district meets the criteria set forth in Section 4.01 hereof will be retained and made available to the public by DEDA until the TIF district has been terminated.
4.03 At least 90 percent of the revenues derived from tax increments from the TIF district will be used to finance the cost of correcting conditions that allowed designation of the TIF district under Section 469.174 of the TIF act.
Section 5. Qualifying local contribution.
5.01 Since the TIF district is a redevelopment district, the city hereby elects to make a contribution equal to five percent of the increment from the TIF district.
5.02 The contribution for all tax increment financing districts in the city is limited to two percent of the city net tax capacity, except as otherwise provided by the Section.
5.03 The contribution will be paid out of unrestricted money of the city or DEDA, including but not limited to monies from the general fund, a property tax levy or a federal or state grant-in-aid which may be spent for general government purposes and will not be made directly or indirectly with tax increments or developer payments.
5.04 The contribution will be used solely to pay project
costs set forth in the TIF plan and will not be used for general governmental
purposes or for improvements or costs that the city or DEDA plans to incur
absent the project described in the TIF plan.