RESOLUTION BY THE CITY OF DULUTH, MINNESOTA, AUTHORIZING THE ABATEMENT OF TAXES PURSUANT TO MINNESOTA STATUTES, SECTION 469.1812 THROUGH 469.1815.
BY COUNCILOR STAUBER:
BE IT RESOLVED, by the city council (the council) of the city of Duluth, Minnesota (the city), as follows:
Section 1. Recitals.
1.01 The city entered into a property acquisition and sales agreement, Lakewalk Town Homes Development, Lakewalk Townhomes L.L.C. (the development agreement) dated December 7, 2004, with the Duluth economic development authority (DEDA) and Lakewalk Townhomes, L.L.C. (the developer). Among the terms provided in the development agreement, the developer agreed to grant the city an option to purchase land to extend the Lakewalk near 23rd Avenue East to 25th Avenue East adjacent to Lake Superior. The land subject to such option is referred to as the developer Lakewalk property in the development agreement (the developer Lakewalk property). The developer has granted the city an option to purchase the developer Lakewalk property pursuant to a Lakewalk property option agreement, Lakewalk Town Homes Development, Lakewalk Townhomes L.L.C. (the option agreement), dated December 21, 2004, between the developer and the city.
1.02 The city desires to acquire the developer Lakewalk property for the extension of the city’s Lakewalk (the project).
1.03 Pursuant to Minnesota Statutes, Section 469.1812 through 469.1815 (the act), the council may grant an abatement of the taxes imposed by the city on parcels of property, subject to certain conditions set forth in the act.
1.04 The city desires to utilize tax abatement under the act to pay the debt service on the city’s general obligation tax abatement bonds in the approximate amount of $310,000 to be issued pursuant to Minnesota Statutes, Section 469.1814 and Minnesota Statutes, Chapter 475, to pay for the acquisition
of the developer Lakewalk property, capitalized interest and costs of issuance of the bonds (the bonds).
1.05 The parcels on which abatement of taxes imposed by the city (the abatement) will occur are located between 23rd Avenue East and 25th Avenue East and between Interstate Highway 35 and the shoreline of Lake Superior and are more fully described in the following tax parcels:010-1440-00350
(Such above-listed parcels and any modification of such parcels as a result of platting the property described in such parcels are herein referred to as the “Parcels”).
1.06 The council has on August 8, 2005, held a public hearing on the abatement, at which all those wishing to speak were heard. Notice of the hearing was published in the Duluth News Tribune on July 27, 2005, a date more than ten days, but less than thirty days before the hearing.
Section 2. Findings.
2.01 Based on the city efforts to encourage development of the project, the council expects and hereby finds that the benefits to the city of the proposed abatement for the acquisition of the developer Lakewalk property will be at least equal to the costs to the city of the proposed abatement for the Lakewalk property.
2.02 The council finds that the abatement is in the public interest because it will provide for the acquisition of public facilities for the extension of the Lakewalk.
2.03 The council finds that the project is a public benefit as it will provide the public with access to Lake Superior through the Lakewalk in an area previously not accessible.
Section 3. Terms of the abatement. The terms by which the city will grant the abatement are as follows:
3.01 The term of the abatement for the parcels shall be 13 years commencing with the tax payments in 2007 and ending with the tax payments in 2019.
3.02 The amount of the abatement shall be all of the city’s portion of the taxes on the parcels in 2007 and thereafter through 2019 to provide for the payment or prepayment of the principal of and interest on the bonds (or any bonds issued to refund the bonds).
3.03 The abatement shall be retained by the city and shall be used and is hereby pledged to pay the principal of and interest on the bonds (or any bonds issued to refund the bonds).
Section 4. Administration. The city will add to its levy amount for the applicable current year (2007-2019) the total amount of the current year abatement authorized hereunder.
Approved: Approved for presentation to council:
Department Director Administrative Assistant
Approved as to form: Approved:
FIN GAS:RET:trg 07/28/2005
STATEMENT OF PURPOSE: This resolution authorizes the “tax abatement” on property described in the resolution for the payment of the principal and interest on bonds to be issued to finance the acquisition of land to extend the Lakewalk near 23rd Avenue East to 25th Avenue East adjacent to Lake Superior. Under the tax abatement statute, property owners pay their property taxes under the general tax procedures, and the city is authorized to use its portion of the property taxes for the authorized public purpose, in this case payment of debt service on bonds issued to finance land acquisition for the Lakewalk extension.