04-0502R

RESOLUTION APPROVING A MODIFICATION TO HOUSING DEVELOPMENT PROJECT/ MUNICIPAL DEVELOPMENT DISTRICT AND A TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 24, AS PROPOSED BY THE DULUTH ECONOMIC DEVELOPMENT AUTHORITY.

BY COUNCILOR GILBERT:

BE IT RESOLVED, by the city council (the council) of the city of Duluth, Minnesota (the city), as follows:

Section 1.Recitals; findings.
1.01 The council established the Duluth economic development authority (DEDA) to promote development and redevelopment of property in the city.
1.02 In order to promote such development, DEDA has established a Housing Development Project/Municipal Development District within the city (the original project) and adopted a Housing Development Project/Municipal Development District program plan (the original plan) therefor pursuant to Minnesota Statutes, sections 469.001 through 469.047 (the act), and Minnesota Statutes, sections 469.124 through 469.134 (the Municipal Development Act).
1.03 In order to finance public improvements and encourage investment in the original project, DEDA has proposed modifying the original project (as modified, the project) and the original plan (as modified, the plan) and establishing Tax Increment District No. 24 (the district) within the project and has prepared a tax increment financing plan for Tax Increment Financing District No. 24 and modification to Housing Development Project/Municipal Development District program plan dated May 15, 1989 (the TIF plan) therefor, all pursuant to and in accordance with the act, the Municipal Development Act, and Minnesota Statutes, sections 469.174 through 469.179 (the TIF act).
1.04 The planning commission, by resolution dated June 8, 2004, determined that the TIF plan is consistent with and conforms to the general plan for development and redevelopment of the city as a whole and local objectives as to appropriate land uses and general standards of development and redevelopment.
1.05 Pursuant to Section 469.175, subdivision 3, of the TIF act, DEDA has requested that the city hold a public hearing on the TIF plan and approve the TIF plan; the hearing was held this day, and the views of all interested parties were heard.
1.06 DEDA has transmitted a copy of the TIF plan to the city, and the TIF plan is now on file in the office of the city clerk.
1.07 The council has been provided with a copy of the TIF plan.

Section 2. Statutory findings.
2.01 The land in the project would not be made available for redevelopment without the financial aid to be sought by establishing the district.
2.02 The modification to the original project and the original plan conforms with the goals and objectives of the original plan.
2.03 Based on discussions with representatives of DEDA regarding projects proposed to be constructed in the district and information contained in the plan and the TIF plan, it is the opinion of the council that development and redevelopment within the district would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the use of tax increment financing is necessary.
2.04 Based on information contained in the plan and the TIF plan, the TIF plan conforms to the general plan for the development and redevelopment of the city as a whole.
2.05 Based on information contained in the plan 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 project by private enterprise.

Section 3. Approval.
3.01 The TIF plan and the modification to the original project and the original plan are approved.
3.02 The geographic boundaries of the project and the district are described in the plan and the TIF plan, which documents are incorporated herein by reference and which, together with this resolution, contain the requirements set forth in Section 469.028, subdivision 2, of the act and Section 469.175, subdivision 3, of the TIF act.

Section 4. Designation of district.
4.01 The proposed district is a qualified housing district, as defined in Section 469.174, subdivisions 11 and 24, of the TIF act, because of the following:
(a) The district consists of a portion of the project intended for occupancy, in part, by persons or families of low and moderate income, as defined in Minnesota Statutes, 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 those acts;
(b) Not more than 20 percent of the total fair market value of the planned improvements in the district will be constructed for commercial uses or for uses other than low and moderate income housing;
(c) Tax increment generated from the district will be used solely in accordance with Section 469.176, subdivision 4d, of the TIF act;
(d) The income limitations set forth in Section 469.1761 of the TIF act will be satisfied;
(e) The renters of at least 40 percent of the rental housing units receiving tax increment assistance will have incomes at or below 60 percent of the area median income;
(f) The rental housing units receiving tax increment assistance will meet the rent restriction requirements of Section 42(g) of the Internal Revenue Code of 1986, as amended through December 31, 2002;
(g) At least 95 percent of the owner-occupied housing units receiving tax increment assistance will be purchased by qualified purchasers with incomes at or below 85 percent of the statewide median gross income.


STATEMENT OF PURPOSE: This resolution approves DEDA's tax increment financing plan for Tax Increment Financing District No. 24 (the district) and its modification to the Housing Development Project/Municipal Development District (the project) and program plan therefor, as required by the act, the Municipal Development Act and the TIF act. The modification involves adding the real property located within the district to the project. The district is a qualified housing district and will provide financing of public infrastructure improvements for housing for persons and families of low and moderate income.