BY COUNCILOR GILBERT:
Section 1. Recitals; findings.
1.01 The council has been informed that the Housing and Redevelopment Authority of Duluth (the authority) desires to promote development of property located in the city.
1.02 In order to promote such development, the authority has established Project Area No. 1 (the project) in the city and adopted a redevelopment plan/housing development plan (the plan) therefor pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended (the act).
1.03 The authority has established the Lake Superior View Tax Increment Financing District (the district) within the project and adopted a tax increment financing plan (the TIF plan) therefor pursuant to Minnesota Statutes, Sections 469.174 through 469.1799, as amended, (the TIF act) for the purpose of financing public improvements and encouraging investment in the project. The authority has prepared the TIF plan in accordance with the TIF act.
1.04 Pursuant to Section 469.175, Subdivision 3 of the TIF act, the authority has requested the city to hold a public hearing on the TIF plan and approve the TIF plan, which hearing was held this day, at which the views of all interested parties were heard.
1.05 The authority has transmitted a copy of the TIF plan to the city in a document entitled: Tax Increment Financing Plan for the Establishment of the Lake Superior View Tax Increment Financing District, which is now on file in the office of the city clerk.
1.06 The council has been provided with a copy of the TIF plan.
Section 2. Statutory findings.
2.01 The district is a housing district as defined in Section 469.174, Subdivision 11 of the TIF act because: it consists of a portion of a 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; it satisfies the requirements of Section 469.1761 of the TIF act; and tax increment generated from the district will be used solely in accordance with Section 469.176, Subdivision 4d of the TIF act.
2.02 The land in the project would not be made available for redevelopment without the financial aid to be sought by establishing the district.
2.03 It is the opinion of the council, based on discussions with representatives of the authority regarding projects proposed to be constructed in the district and information contained in the plan and the TIF plan: that development and redevelopment within the district would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; that the increased market value of the site to be included in the 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 district after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF plan; and that the use of tax increment financing is necessary.
(a) The viability of the district is infeasible without tax increment assistance because of the high costs of site preparation, construction and rehabilitation, which will not be recouped through anticipated sales prices for this mixed-income housing development, because of the intent to include residents of low and moderate income;
(b) The city and the authority have created a policy to redevelop the city’s hillside neighborhoods to remove vacant and blighted buildings and reconstruct a mixture of affordable and market-rate housing units. Therefore, any redevelopment option, such as the district, must contain an affordable housing component and a pure market-rate housing development is not a viable option.
2.04 In further support of the council’s statutory findings, Appendix F to the TIF plan sets out the following:
(a) An estimate of the amount by which the market value of the district will increase without the use of tax increment financing ($0);
(b) An estimate of the increase in the market value that will result from the development or redevelopment to be assisted with the tax increment financing described herein ($2,800,000); and
(c) The present value of the projected tax increments for the maximum duration of the district permitted by the TIF plan ($331,939).
2.05 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.
2.06 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 is approved and the district is established.
3.02 The geographic boundaries of the project and the district are as described in the plan and 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 district is designated a housing district as defined in Section 469.174, Subdivision 11 of the TIF act.
STATEMENT OF PURPOSE: This resolution approves the Lake Superior View Tax Increment Financing District, as required by the TIF act. The TIF district is a housing district and will provide housing, in part, for low and moderate income persons.