HomeMy WebLinkAboutItem 07September 18, 2015 Item No.
RESOLUTION APPROVING THE MODIFICATION OF THE REDEVELOPMENT PLAN FOR
AIRLAKE REDEVELOPMENT PROJECT AREA NO.1 AND ESTABLISHING TAX INCREMENT
FINANCING DISTRICT NO. 21 AND APPROVING A TAX INCREMENT FINANCING PLAN
September 21, 2015 City Council Meeting
Proposed Action
Staff recommends adoption of the following motion: Move to adopt a resolution approving the
modification of the Redevelopment Plan for Airlake Redevelopment Project Area No.1 and the
establishment of Tax Increment Financing District No. 21 and approving the Tax Increment Financing
Plan.
Passage of this motion will result in the creation of a new Tax Increment Financing (TIF) District No. 21
to facilitate a new manufacturing and warehouse facility for SSB Manufacturing Company.
Overview
SSB Manufacturing Company has submitted an application for Tax Increment Financing. The
proposed project is a 240,000 square foot manufacturing and warehouse facility. SSB Manufacturing
manufactures Serta and Simmons mattresses and is the number one mattress manufacturer in the US.
The estimated development cost of the project is $15.7 million and it is proposed to be located on a
23 acre site in the new Interstate South Logistics Park located in the southwest corner of Co. Rd. 70
and Dodd Blvd (see attached site plan.) The project would be a build -to -suit -to -lease project with
Scannell Properties constructing the building and leasing it back to SSB Manufacturing.
The project will result in the creation of 200 new jobs in Lakeville and the State of Minnesota. The
average starting wage is $36,100 ($17.35 per hour) excluding benefits. The lowest wage proposed is
$15.20. The total investment in machinery and equipment for this project is $10 Million in addition to
the $15.7 million project construction cost for a total project cost of $25.7 million.
The City Council/HRA reviewed this request for TIF assistance at the September 8, 2015 HRA Meeting.
The EDC reviewed this project August 25' and recommended approval. Staff recommends approval
of the proposed creation of TIF District No. 21. A copy of the proposed TIF Plan were submitted to
Dakota County and ISD 194 for review and comment. Copies of their comments are attached.
Primary Issues to Consider
• Is this request for TIF assistance consistent with the City's policies? The request is consistent
with the City's TIF and Business Subsidy Policies.
Supporting Information
• City Council Resolution, Proposed TIF Plan as prepared by Springsted Inc.
David L. Olson, Community and Economic Development Director
c: Ronald Richmond- SSB Manutacturing, Dan Salzer- Scannell Properties, Chris Schastock - CBRE
Financial Impact: $ $1,607,350 Budgeted:Y/N N Source: Captured Tax Increments
Envision Lakeville Community Value: Diversified Economic Development
CITY OF LAKEVILLE
COUNTY OF DAKOTA
RESOLUTION NO. 15 -
RESOLUTION APPROVING THE MODIFICATION OF THE REDEVELOPMENT PLAN
FOR AIRLAKE REDEVELOPMENT PROJECT NO. 1 AND
ESTABLISHING A TAX INCREMENT FINANCING DISTRICT AND
APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR
BE IT RESOLVED by the City Council (the "Council") of the City of Lakeville,
Minnesota (the "City"), as follows:
Section 1. Recitals.
1.1. It has been proposed that the City modify the Redevelopment Plan (the "Plan
Modification") for Airlake Redevelopment Project No. 1 (the "Redevelopment Project"),
establish Tax Increment Financing District No. 21 within the Redevelopment Project (the 'TIF
District") and adopt the related Tax Increment Financing Plan therefor (the 'TIF Plan") all
pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections
469.124 through 469.133 and Sections 469.174 through 469.1794, as amended (the 'TIF Act"),
all as reflected in that certain document entitled 'Tax Increment Financing Plan for Tax
Increment Financing (Economic Development) District No. 21 within Airlake Redevelopment
Project No. 1(SBB Manufacturing/Scannell Properties Project)", and presented for the Council's
consideration.
1.2. The City has perfonned all actions required by law to be performed prior to the
modification and approval of the Plan Modification and the TIF Plan, delivery of the Plan
Modification and the TIF Plan to the Board of Dakota County (the "County") and the Board of
Independent School District No. 194 (the "School District"), and the holding of a public hearing
by the City thereon following notice thereof published in the City's official newspaper at least 10
but not more than 30 days prior to the public hearing.
1.3 The Council has investigated the facts relating to the Plan Modification and the
TIF Plan; at the public hearing the City Council heard testimony from all interested parties on the
TIF Plan; the City Council has considered the documentation submitted in support of the TIF
District and TIF Plan, including data, information and/or substantiation constituting or relating to
why the TIF District meets the requirements to be an economic development tax increment
financing district and why the assistance satisfies the 'but for" test; and the City Council has
taken into account the information and knowledge gained in hearings upon and during
consideration ofothermatters relating to theproposed Development.
Section 2. Findings for the Adoption and Approval of the Plan Modification and
TIF Plan.
2.1. The City Council hereby finds that the TIF District is in the public interest and is
an "economic development district" within the meaning of Minnesota Statutes, Section 469.174,
Subd. 12, because it will result in increased employment in the state and it will result in
preservation and enhancement of the tax base of the state. In addition, the TIF District will
facilitate the increase in production in the City by the construction of an approximately 240,000
square foot industrial manufacturing and warehouse facility for the Company (the
"Development"), and at least 85% of the facility will be used for manufacturing, warehousing,
distribution, or research, with less than 15% available for office or other space not related to such
functions. Based on representations by the Developer, the City finds that the Development is
expected to commence construction in late 2015 and be fully constructed by December 31, 2016.
The City finds that jobs will be created and maintained in this state, including construction jobs.
2.2. The City Council hereby makes the following additional findings in connection
with the Tax Increment District:
(a) The City Council further finds that the proposed Development, in the
opinion of the City Council, would not occur solely through private investment within the
reasonably foreseeable future and, therefore, the use of tax increment financing is deemed
necessary. The specific basis for such finding being:
The property on which the Development is proposed to occur would not
be developed with the 240,000 square foot manufacturing and warehouse
facility in the reasonably foreseeable future due to the high costs related to
construction of the facility, development of the site, including extraordinary
site improvement costs. The Developer has represented that it could not
proceed with the development without tax increment assistance.
(b) The City Council further finds that the TIF Plan conforms to the general
plan for the development or redevelopment of the City as a whole. The specific basis for
such finding being:
The TIF Plan will generally complement and serve to implement policies
adopted in the City's comprehensive plan. Following subdivision and
platting, the Development contemplated will be in accordance with the
existing zoning for the property and the City's Planning Commission has
determined that the Development is consistent with the comprehensive plan.
(c) The City Council further finds that the TIF Plan will afford maximum
opportunity consistent with the sound needs of the City as a whole for the development of
the TIF District by private enterprise. The specific basis for such finding being:
The proposed assistance will help finance public costs related to the
Development. The Development will increase the taxable market valuation
of the City and increase industrial facilities in the City.
(d) For purposes of compliance with Minnesota Statutes, Section 469.175,
Subdivision 3(d), the City Council hereby finds that the increased market value of the
property to be developed within the TIF District that could reasonably be expected to
occur without the use of tax increment financing is $0, which is less than $15,700,000
which is the increased market value estimated to result fi-om the proposed development
less the present value of the projected tax increments for the maximum duration of the
TIF District. Thus, the use of tax increment financing will be a positive net gain to the
City, the School District, and the County, and the tax increment assistance does not
exceed the benefit which will be derived therefrom.
2
The provisions of this Section 2.02 are hereby incorporated by reference into and made a
part of the TIF Plan.
2.3. The Council further finds that the Plan Modification and the TIF Plan are
intended and in the judgment of the Council their effect will be to promote the public purposes
and accomplish the objectives specified in the TIF Plan for the TIF District and the Plan
Modification for the Redevelopment Project.
Adopted this 21s` day of September, 2015.
AITEST:
City Clerk
3
Mayor
9.2 - RBA.docx
DAKOTA COUNTY BOARD OF COMMISSIONERS
Review Of Proposed Tax Increment Financing District No. 21 Within Airlake Redevelopment Project No. 1 In
City Of Lakeville
Meeting Date:
9/8/2015
Item Type:
Consent -Action
Division:
Public Services and Revenue
Department:
Property Taxation and Records
Contact:
Koethe, Amy
Contact Phone: -(651) 438-4370
Prepared by:
Koethe, Amy
Fiscal/FTE Impact:
❑ None ® Other
❑ Current budget ❑ Amendment requested
❑ New FTE(s) requested
Board Goal: Good for Business
PURPOSE/ACTION REQUESTED
Review of Proposed Tax Increment Financing (TIF) District No. 21 and Modification to Airlake Redevelopment
Project No. 1 in the City of Lakeville (City).
SUMMARY
The Property Taxation and Records Department received the Proposed Tax Increment Plan for TIF District No. 21
and Modification to the Airlake Redevelopment Project on August 21, 2015. The City has scheduled a public
hearing for September 21, 2015, to consider the proposed TIF District Plan and Project Modification.
TIF District No. 21 (SSB Manufacturing Company/Scannell Properties) will be within Airlake Redevelopment Project
No. 1 (Attachment A). The boundaries of the redevelopment project will be expanded to include the parcels in the
proposed TIF district as well as other project improvements. The proposed district is an Economic Development TIF
District consisting of two parcels of land totaling approximately 23 acres in the project area, and is located west of
County State Aid Highway (CSAH) 9 (Dodd Blvd) and south of CSAH 70 (215'' St W) in the City of Lakeville
(Attachment B). The District is being created to prepare the site for an approximate 240,000 square foot
manufacturing facility.
The Transportation Department has reviewed the TIF Plan (Attachment C). The proposed TIF parcels are adjacent
to CSAH 9 with access to and from CSAH 9 via a new access. The new access will meet the County's current
access spacing guidelines for a full access. Additional requirements regarding right of way dedication and turn lane
requirements were identified in Transportation's comments regarding the Interstate South Logistics Park Alternative
Urban Areawide Review (AUAR) (this site) last April. Staff is evaluating whether the proposed TIF district
development will generate traffic that will necessitate the need for road improvements that would not otherwise be
needed if the TIF development were not implemented. The County has legal right to cause the reservation of TIF
funds for capital improvements (not included in the County's Capital Improvement Program (CIP)) where such
impacts are caused by the TIF development. The County has 45 days from the receipt of the proposed TIF plan to
notify the TIF authority of the election to use increments to finance road costs. If warranted, staff will present
recommendations to the County Board on September 22, 2015.
Environmental Resources staff performed an environmental audit of the parcels included in the proposed district
(Attachment C), identifying a sealed well, and the likelihood of an unused unsealed well on one of the parcels. The
owner is required to follow State Rule regarding unused wells. No hazardous materials or waste sites were
identified.
The Dakota County Community Development Agency has reviewed the TIF Plan. Since there is no redevelopment
or housing component, no comment was provided.
Dakota County has adopted Policy No. 8002 (Attachment D) regarding TIF, which supports the use of TIF for
bonafrde redevelopment efforts and affordable housing opportunities. This proposed TIF district, an economic
development district, is not consistent with the TIF Policy.
RECOMMENDATION
Staff recommends that the Board find that proposed TIF District No. 21 in the City of Lakeville is not consistent with
County Policy No. 8002.
EXPLANATION OF FISCAL/FTE IMPACTS
Lakeville TIF District No. 21 expects to receive approximately $1.7 million in tax increment revenue from 2018
through 2026. The result will cause Dakota County to shift nearly $479,000 in property tax revenue to taxpayers
outside of the district to finance the project.
-65-
9.2 - RBA.docx
Supporting Documents: Previous Board Action(s):
Attachment A: Various pages of TIF Plan
Attachment B: TIF No. 21 Site Map
Attachment C: Physical Development Memo
Attachment D: TIF Policy No. 8002
RESOLUTION
WHEREAS, the City of Lakeville submitted the Proposed Tax Increment Financing (TIF) Plan for TIF District No. 21
in the Airlake Redevelopment District No. 1 to Dakota County Property Taxation and Records on August 21, 2015;
and
WHEREAS, the City of Lakeville established a public hearing date of September 21, 2015; and
WHEREAS, Minn. Stat. § 469.175, subd.1a, provides that the Board of Commissioners may require the TIF
authority to pay all or a portion of the cost of County road improvements out of tax increment revenue, under certain
conditions; and
WHEREAS, the County has 45 days from the receipt of the proposed TIF plan to notify the TIF authority of the
election to use increments to finance road costs; and
WHEREAS, the County Transportation Department has reviewed the TIF Plan and will continue to evaluate
whether the proposed TIF district development will generate traffic that will necessitate the need for road
improvements that would not otherwise be needed if the TIF development were not; and
WHEREAS, Environmental Resources staff has reviewed the property and found record of one sealed well and the
likelihood of an unused unsealed well. No hazardous materials or County -identified waste sites were found; and
WHEREAS, should other unsealed wells be discovered, those wells are required to be sealed in accordance with
applicable regulations; and
WHEREAS, the Proposed TIF District No. 21 does not meet the criteria for support under Dakota County's TIF
Policy No. 8002.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby acknowledges
receipt of Proposed Tax Increment Plan for TIF District No. 21 in the City of Lakeville; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby finds that the Lakeville
Economic Development TIF District No. 21 is not consistent with Dakota County's TIF Policy.
County Manager's Comments:
® Recommend Action
❑ Do Not Recommend Action
❑ Reviewed ---No Recommendation
❑ Reviewed ---Information Only
❑ Submitted at Commissioner Request
13W40LA 22�
County Manager
9/4/2015 11:34 AM Page 2
Reviewed by (if required):
®
County Attorney's Office
®
Financial Services
®
Risk Management
❑
Employee Relations
❑
Information Technology
❑
Facilities Management
Sept. 18, 2015
Mr. David Olson
Community and Economic Development Director
City of Lakeville
20195 Holyoke Ave.
Lakeville, MN 55044
Dear Mr. Olson:
On behalf of the Board of Education of Lakeville Area Public Schools, we are writing to express support
with reservations for the proposal to create a Tax Increment Finance Economic Development District
including the SSB Manufacturing Company/Scannell Properties Project.
Lakeville Area Public Schools appreciates the development would not occur but for the $1.7 million in
incentives provided by the TIF plan. We have these concerns.
Lakeville Area Public Schools would encourage the City of Lakeville and Dakota County to take the
following factors into consideration:
Dakota County Road 70 is a two-lane road -10 -ton design. The Average Daily Trips already are
high, with FedEx expecting to add 444 trips per day initially. Several new business enterprises are
in development including Menasha, BTD, Mendell Machine and SSB Manufacturing. This traffic
likely will increase as business increases. Lakeville Area Public Schools' Board of Education
members have significant concerns for the safety of our students, families and staff traveling to
and from Lakeville South High School, McGuire Middle School and John F. Kennedy
Elementary School. People traveling to these schools primarily use County Road 70 to access the
schools.
Currently, Dakota County has not included upgrading CR 70_ to a four -lane road in its five-year
CIP. Lakeville Area Public Schools strongly requests the city to pursue a corridor study with
Dakota County to examine the increase in truck and motor vehicle traffic along the corridor.
Lakeville Area Public Schools also strongly requests the county and city consider upgrading CR
70 in two phases, with the first phase from Interstate 35 to Dodd Boulevard,
Lakeville Area Public Schools will approach voters Nov. 3 for consideration of capital and
operating levy referendum questions. If approved, SSB would fund their portion of the operating
levy based on an estimated value of $15 million market value. It would not, however, be eligible
to fund its portion of the capital levy the district considers vital to improve the quality of
education our students receive and to prepare them for 21St century career pathways.
• Lakeville Area Public Schools strives to provide a world-class education for its students, and
would encourage the City of Lakeville and Lakeville Area Chamber of Commerce to pursue
business campus and office park sites to create more pathways for our students. Among the
district's efforts is its Science -Technology -Engineering -Math (STEM) Academy at Lakeville
South High School to prepare students for jobs in these growing fields. Other efforts include
Lakeville North High School's Business Academy and the newly forming Innovation Zone
partnership with Prior Lake -Savage Area Schools to provide career- and profession -based
learning opportunities for our students. Jobs with wages of $14.56 per hour will not enable our
students with advanced academic programs to find jobs that would enable them to reside in their
"Hometown."
We respectfully ask the City of Lakeville and Dakota County to take these factors into consideration
going forward as Airlake Industrial Park and Scannell Properties expand.
We want to thank you and the City of Lakeville for the opportunity to review and comment on this
proposed TIF District plan.
Respectfully,
Michelle Volk
Chairwoman, Lakeville Area Public Schools Board of Education
CC: Mayor Matt Little
Lakeville City Council
City Administrator Justin Miller
Dakota County Commissioners
Lakeville Area Public Schools Board of Education
Dr. Lisa Snyder
City of Lakeville, Minnesota
Housing and Redevelopment Authority for the City of Lakeville
Tax Increment Financing Plan
for
Tax Increment Financing (Economic Development)
District No. 21
ithin
Airlake Redevelopment Project No.1
(SSB Manufacturing Company/Scannell Properties)
Draft Dated: September 21, 2015
Public Hearing Scheduled: September 21, 2015
Anticipated Approval Date: September 21, 2015
Prepared by:
SPRINGSTED INCORPORATED
380 Jackson Street, Suite 300
St. Paul, MN 55101-2887
(651) 223-3000
WWW.SPRINGSTED.COM
TABLE OF CONTENTS
PART
LAKEVILLE
AIRLAKE REDEVELOPMENT PLAN
MODIFICATION NO. 10
I. INTRODUCTION AND LEGAL BASIS
A, Statement of Intent of Modification..................................................................................... 1
B. Statement of Public Purpose............................................................................................1
C. Project Area Boundary ...................................................................................................1
D. Statement of Authority....................................................................................................1
II. REDEVELOPMENT PROJECT
A. Redevelopment Plan Objectives.......................................................................................1
B. Land Use.................................................................................................................... 2
C. Development Standards................................................................................................. 2
D. Environmental Controls.................................................................................................. 2
E. Redevelopment Activities................................................................................................ 2
1. City Activities -Original Plan
2. City Activities - Plan Modification
3. Private Activities - Original Plan
F. Project Cost Estimates................................................................................................... 3
G. Relocation................................................................................................................... 3
H. Development Contracts.................................................................................................. 3
I. Operation of Public Improvements.................................................................................... 3
J. Administriation of Project................................................................................................ 4
K. Modification Plan.......................................................................................................... 4
PARTI............................................................................................................................................................... EXHIBIT
TABLE OF CONTENTS
(Continued)
PART II
TAX INCREMENT FINANCING PLAN NO. 21
Section
A.
Definitions................................................................................................................... 5
B.
Statutory Authorization..................................................................................................
5
C.
Statement of Need and Public Purpose..............................................................................
5
D.
Statement of Objectives..................................................................................................
5
E.
Designation of Tax Increment Financing District as an Economic Development District ..................
6
F.
Duration of the TIF District...............................................................................................
6
G,
Property to be Included in the TIF District............................................................................
6
H.
Property to be Acquired in the TIF District...........................................................................
7
I.
Specific Development Expected to Occur Within the TIF District ...............................................
7
J.
Findings and Need for Tax Increment Financing...................................................................
7
K.
Estimated Public Costs...................................................................................................
9
L.
Estimated Sources of Revenue........................................................................................
9
M.
Estimated Amount of Bonded Indebtedness......................................................................10
N.
Original Net Tax Capacity.............................................................................................
10
0.
Original Tax Capacity Rate............................................................................................10
P.
Projected Retained Captured Net Tax Capacity and Projected Tax Increment ............................11
Q.
Use of Tax Increment...................................................................................................11
R.
Excess Tax Increment..................................................................................................12
S.
Tax Increment Pooling and the Five Year Rule...................................................................12
T.
Limitation on Administrative Expenses.............................................................................13
U.
Limitation on Property Not Subject to improvements - Four Year Rule......................................13
V.
Estimated Impact on Other Taxing Jurisdictions..................................................................14
W.
Prior Planned Improvements..........................................................................................
14
X.
Development Agreements.............................................................................................14
Y.
Assessment Agreements..............................................................................................15
Z.
Modifications of the Tax Increment Financing Plan..............................................................
15
AA.
Administration of the Tax Increment Financing Plan.............................................................
15
AB.
Financial Reporting and Disclosure Requirements................................................................16
Page(s)
Map of the Tax Increment Financing District within Redevelopment Project Area ............................. EXHIBIT
AssumptionsReport........................................................................................................................... EXHIBIT II
Projected Tax Increment Report......................................................................................................... EXHIBIT III
Estimated Impact on Other Taxing Jurisdictions Report..................................................................... EXHIBIT IV
MarketValue Analysis Report............................................................................................................. EXHIBIT V
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
PART
MODIFICATION NO. 10
TO AIRLAKE REDEVELOPMENT PROJECT
INTRODUCTION AND LEGAL BASIS
Section A Statement of Intent of Modification
The City proposes to implement the plan objective listed in Section II.A.3 of the Original Redevelopment Plan
approved by the Authority and Council in 1984. The activity objective primarily includes the expansion of the project
boundary to include the proposed SSB Manufacturing Company/Scannell Properties Project TIF 21 as well as
certain Airlake public Improvements.
Section B Statement of Public Purpose
No Change
The Authority and Council find that there is a need to provide impetus for private development, maintain and
increase employment, and to increase tax base for the taxing jurisdiction within the City's corporate limits. These
public purpose goals are not attainable in the foreseeable future without the intervention of the Authority and City in
the normal development process.
Section C Project Area Boundary
The modification dated September 21, 2015 includes the addition of properties within the current Project Area
boundaries to further meet the City's Redevelopment Plan objectives. The expanded boundaries of the Project area
(including those added with the modification) are shown in Exhibit "I" "Project Area Boundary Map". All land included
in the Project Area is within the legal boundaries of the City
Section D Statement of Authority
No Change
The Authority is authorized to modify a project pursuant to Minnesota Statutes Sections 469.001 to 469.047 (the
HRA Act) within boundaries of municipalities. The project as contemplated by this Plan consists of a Redevelopment
Project in the HRA Act, pursuant to Section 469.002, Subdivision 14 and Minnesota Statutes, Section 469.028,
Subdivision 3.
II. REDEVELOPMENT PROJECT
Section A Redevelopment Plan Objectives
No Change
The Authority and City, through the implementation of this Plan, seek to achieve the following objectives:
1. To provide logical and organized land use for the Project Area consistent with the Comprehensive Land
Use Plan and the zoning ordinance of the City.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
2. To promote the prompt development of property in the Project Area with a minimal adverse impact on the
environment
3. To provided adequate streets, utilities, and other public improvements and facilities to enhance the Project
Area and the City for new and existing development.
4. To enhance the project Area and the City and surrounding area by retaining current, and providing
additional employment opportunities for the residents of the City and surrounding community.
5. To increase the City's tax base.
6. To afford existing business in the City the opportunity to expand or relocate within the Project Area.
7. To stimulate development and investment within the project Area by private interest by providing land of
suitable size and configuration to permit it's economic and appropriate development.
Section B Land Use
No Change
1. Current use:
a. The project is partially vacant and undeveloped and used for both industrial and farming purposes.
The Area is principally Zoned 1-1 and 1-2, which provides for the establishment of warehousing,
light and heavy industrial and manufacturing development.
2. Future Land Use:
a. It is anticipated that the Project Area will develop consistent with existing zoning districts. The uses
of the Project Area proposed are consistent with the Plan, the Lakeville Comprehensive Plan, and,
to the knowledge of the City and Authority at this time, all other federal state and local laws and
regulation.
Section C Development Standards
The Authority and City will consider, among other things, the following factors when evaluating development
proposals in all phases:
1. Degree to which development objectives are provided for or enhanced.
2. Consistency with this Plan and the Lakeville Comprehensive Plan.
3. Ability of proposed tax increment projects to generate enough annual tax increment to retire the debt
created by the project.
4. Developer's ability to perform both from a standpoint of financial ability to perform and the necessary
experience and expertise to complete the proposed development.
5. Displaced Project Area property owners and tenants will be given priority over competing projects of similar
scale and magnitude.
Section D Environmental Controls
It is presently anticipated that the proposed development in the Project Area will not present major environment
problems. All municipal actions, public improvements, and private development will be carried out in a manner that
will comply with applicable environmental standards. Then environmental controls to be applied within the Area are
contained within the codes an ordinance of the City of Lakeville.
The Minnesota Code of Agency Rules (6 MCAR 3.021-3.056) defines Minnesota's environmental policy. The
threshold factor for the industrial/commercial projects on second class cities is 1,000,000 square feet (gross floor
area). Projects above this threshold would require an Environmental Impact Statement. There are no properties on
the National Historic Register of Historic Places within the Project Area.
Section E Redevelopment Activities
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
The Authority and the City proposes to implement this plan in phases. The activities of this Plan are described as
follows:
1. City Activities — Original Plan
a. To acquire the land from the current owners and dedicate the land to an acceptable developer for
the purposes of constructing a 150,000 square foot office, warehouse and manufacturing facility.
2. City Activities — Plan Modification
a. A full discussion of the proposed City Activities can be found in Tax Increment District No. 4, 13,
14, 15, 16, 17, 18 and 19 Plans prepared by the City's consultant(s) and is hereby adopted by
reference.
3. Private Activities — Original plan
a. Phase One (TIF# 4) included a major private development project — Please see TIF #4 Plan.
b. Phase Two (TIF #13) included a major private development project - Please see TIF #13 Plan.
c. Phase Three (TIF #14) included a major private development project — Please see TIF #14 Plan.
d. Phase Four (TIF #15) included a major private development project — Please see TIF #15 Plan.
e. Phase Five (TIF #16) included a major private development project. — Please see TIF #16 Plan.
f. Phase Six (TIF #17) — Please see TIF #17 Plan
g. Phase Seven (TIF #18) — Please see TIF # 18 Plan
h. Phase Eight (TIF #19) — Please see TIF # 19 Plan
i. Phase Nine (TIF #20) — Please see TIF #20 Plan
j. Phase Ten (TIF #21) — Please see TIF #21 Plan
Section F Project Cost Estimates
A full description of project costs is provided in Tax Increment Financing District No.21 project budget
Section G Relocation
No Change
Phase One of the Plan requires no relocation. In subsequent phases where development proposals require the
acquisition of either commercial, industrial or residentially occupied parcels of land, the displaced party or parties
shall be eligible for and receive those relocation benefits in conformance with the Minnesota Uniform Relocation Act.
Minnesota Statutes, Section 117.50-56.
The relocation plan will be part of any tax increment financing plan that provides for acquisition and subsequent
displacement.
Section H Development Contracts
No Change
The City and Authority will not authorize any public improvement or facilities projects nor acquire any property for
development which will be wholly or partially funded by the use of tax increment financing without first having
secured development contracts.
The Development Contracts shall require the developer to among other things, cause to be constructed an industrial
facility of at least a specified minimum cost, and having a specified minimum Assessor's Market Value; to complete
the work by a specified date pursuant to plans and specifications submitted to and building permits issued by or on
behalf of the City, and pursuant to an and in accordance with all other applicable governmental regulations; and to
demonstrate its financial capability for doing so.
Section I Operation of Public Improvements
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
No Change
All public improvements constructed under the provisions of this program shall be operated by the City of Lakeville in
the same manner as all publicly owned streets and utilities.
Section J Administration of Project
No Change
The Lakeville Housing Authority shall be responsible for seeing that contents of this plan are promoted, implemented
and enforced. The Executive Director shall be delegated day by day responsibilities while the Board of Directors
shall make all policy regarding the Project Area. Administrative maintenance activities will be funded out of tax
increment revenue and other HRA funds.
Section K Modification of Plan
No Change
Modifications or revisions of this Plan which change the permitted uses; modify the Project Area Boundary; set forth,
revise, or modify and Developers Contract with respect to any part of the Project or terminate all or any part of the
Project require approval of such modifications by the Authority and the City, upon notice and other public hearing as
required for the adoption of this Plan and in accordance with Section 462.525, Subdivision 6 of the Act.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
PART II
TAX INCREMENT FINANCING PLAN NO. 21
Section A Definitions
The terms defined in this section have the meanings given herein, unless the context in which they are used
indicates a different meaning;
"Authority" means the Housing and Redevelopment Authority for the City of Lakeville.
"City" means the City of Lakeville, Minnesota; also referred to as a "Municipality".
"City Council" means the City Council of the City; also referred to as the "Governing Body".
"County„ means Dakota County, Minnesota
"Redevelopment Project Area" means Airlake Redevelopment Project No. 1 in the City, which is described in the
corresponding Redevelopment Plan.
"Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project Area.
"Project Area" means the geographic area of the Redevelopment Project Area.
"School District" means Independent School District No. 194, Minnesota.
"State" means the State of Minnesota.
"TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, both inclusive.
"TIF District" means Tax Increment Financing (Economic Development) District No. 21.
"TIF Plan" means the tax increment financing plan for the TIF District (this document).
Section B Statutory Authorization
See Section I.D. of the Redevelopment Plan for the Redevelopment Project Area.
Section C Statement of Need and Public Purpose
See Section LA and I.B of the Redevelopment Plan for the Redevelopment Project Area.
Section D Statement of Objectives
See Section I I.A of the Redevelopment Plan for the Redevelopment Project Area.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Section E Designation of Tax Increment Financing District as an
Economic Development District
Economic development districts are a type of tax increment financing district which consist of any project, or portions
of a project, which the City finds to be in the public interest because:
(1) it will discourage commerce, industry, or manufacturing from moving their operations to
another state or municipality;
(2) it will result in increased employment in the state; or
(3) it will result in preservation and enhancement of the tax base of the state.
The TIF District qualifies as an economic development district in that the proposed development described in this
TIF Plan (see Section 1) meets the criteria listed above in (2) and (3). Without establishment of the TIF District, the
proposed development would not occur within the City. The proposed development will also result in increased
employment and enhancement of the tax base in both the City and the State.
Tax increments from an economic development district must be used to provide improvements, loans, subsidies,
grants, interest rate subsidies, or other assistance in which at least 85% of the square footage of the facilities to be
constructed are used for any of the following purposes:
(1) manufacturing or production of tangible personal property, including processing, resulting in the
change of the condition of the property;
(2) warehousing, storage and distribution of tangible personal property, excluding retail sales;
(3) research and development related to the activities listed in (1) or (2) above;
(4) telemarketing if that activity is the exclusive use of the property;
(5) tourism facilities (see M.S. Section 469.174, Subd. 22);
(6) qualified border retail facilities (see M.S. Section 469.176, Subd. 4c); or
(7) space necessary for and related to the activities listed in (1) through (6) above.
Section F Duration of the TIF District
Economic development districts may remain in existence 8 years from the date of receipt by the City of the first tax
increment. The City anticipates that the TIF District will remain in existence the maximum duration allowed by law
(projected to be through the year 2025, assuming first increment is received in 2017). The district will remain open
through the year 2026 if the first collection of increment is in taxes payable 2018. The City may decertify the TIF
District earlier if fulfillment of all District obligations occurs prior to the statutory maximum duration of 9 total years.
Section G Property to be Included in the TIF District
The TIF District is an approximate 23 -acre area of land located within the Project Area. A map showing the location
of the TIF District is shown in Exhibit I. The boundaries and area encompassed by the TIF District are described
below:
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Parcel ID Number Legal Description
The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent
to the property described above.
Section H Property to be Acquired in the TIF District
The City may acquire and sell any or all of the property located within the TIF District; however, the City does not
anticipate acquiring any such property at this time.
Section I Specific Development Expected to Occur Within the TIF District
The proposed development is expected to consist of an approximate 240,000 square foot build -to -suit manufacturing
facility. The development will result in increased employment (200 net new jobs with average wages of $36,100)
within the City in compliance with statutory requirements. It is anticipated tax increment will be used to finance a
portion of the site development costs deemed necessary for the project to proceed. In addition, the City anticipates
using available tax increment for related administrative expenses and any other eligible expenditures associated
with the development of the site.
Construction of the facility is projected to start in 2015. The project is expected to be fully constructed by December
31, 2016, and be 100% assessed and on the tax rolls as of January 2, 2017 for taxes payable in 2018.
At the time this document was prepared there were no signed construction contracts with regards to the above
described development.
Section J Findings and Need for Tax Increment Financing
In establishing the TIF District, the City makes the following findings:
(1) The TIF District qualifies as an economic development district;
See Section E of this document for the reasons and facts supporting this finding.
(2) The proposed development, in the opinion of the City, would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future, and the increased market
value of the site that could reasonably be expected to occur without the use of tax increment would be
less than the increase in market value estimated to result from the proposed development after
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All that part of the Southeast Quarter (SE 1/4)
of Section Thirty-one (31), Township One
22 03100 75 010
Hundred Fourteen (114) North, Range Twenty
(20) West of the Fifth Principal Meridian,
Dakota County, Minnesota lying westerly of
the highway known as Dodd Boulevard
All that part of the Southwest Quarter (SW
1/4) of Section Thirty-two (32), Township One
22 03200 50 010
Hundred Fourteen (114) North, Range Twenty
(20) West, Dakota County, Minnesota, lying
westerly of the highway known as Dodd
Boulevard
The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent
to the property described above.
Section H Property to be Acquired in the TIF District
The City may acquire and sell any or all of the property located within the TIF District; however, the City does not
anticipate acquiring any such property at this time.
Section I Specific Development Expected to Occur Within the TIF District
The proposed development is expected to consist of an approximate 240,000 square foot build -to -suit manufacturing
facility. The development will result in increased employment (200 net new jobs with average wages of $36,100)
within the City in compliance with statutory requirements. It is anticipated tax increment will be used to finance a
portion of the site development costs deemed necessary for the project to proceed. In addition, the City anticipates
using available tax increment for related administrative expenses and any other eligible expenditures associated
with the development of the site.
Construction of the facility is projected to start in 2015. The project is expected to be fully constructed by December
31, 2016, and be 100% assessed and on the tax rolls as of January 2, 2017 for taxes payable in 2018.
At the time this document was prepared there were no signed construction contracts with regards to the above
described development.
Section J Findings and Need for Tax Increment Financing
In establishing the TIF District, the City makes the following findings:
(1) The TIF District qualifies as an economic development district;
See Section E of this document for the reasons and facts supporting this finding.
(2) The proposed development, in the opinion of the City, would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future, and the increased market
value of the site that could reasonably be expected to occur without the use of tax increment would be
less than the increase in market value estimated to result from the proposed development after
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
subtracting the present value of the projected tax increments for the maximum duration of the TIF
District permitted by the TIF Plan.
Factual basis:
Proposed development not expected to occur:
The project includes the development of an approximate 240,000 square foot build -to -suit manufacturing
facility. The proposed developer of the site has submitted information to the city demonstrating that the
development of this site is not financially feasible without the assistance provided in this TIF Plan.
The City has determined that the proposed development would not occur but for the financial assistance
provided in this TIF Plan because of the increased costs related to site development and subsequent
construction. Due to the high costs of investment for the proposed project, including site improvements,
infrastructure, machinery & equipment and development costs incurred by the developer in conjunction with
development of the project, the developer has stated that the project as proposed would not occur without
the financial assistance provided by the City, as it would not be economically feasible without financial
assistance. The City finds the use of tax increment necessary to finance a portion of the site improvements
costs to facilitate development of the project and developer investment. The City anticipates providing
financial assistance on a pay-as-you-go basis.
No higher market value expected:
The increased market value of the site that could reasonably be expected to occur without the use of tax
increment financing would be less than the increase in market value estimated to result from the proposed
development after subtracting the present value of the projected tax increments for the maximum duration
of the TIF District permitted by the TIF Plan. Without improvements the City has no reason to expect that
significant development would occur without assistance similar to that provided in this plan. For the same
reasons that the desired development described above is not feasible without tax increment assistance, the
City believes that no alternative development is likely to occur without similar assistance.
To summarize the basis for the City's findings regarding alternative market value, in accordance with
Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations:
a. The City's estimate of the amount by which the market value of the site will increase
without the use of tax increment financing is $0 (for the reasons described above), except some
unknown amount of appreciation.
b. If the proposed development to be assisted with tax increment occurs in the District, the
total increase in market value would be approximately $18,197,937, including the value of the
building (See Exhibit V).
C. The present value of tax increments from the District for the maximum duration of the
district permitted by the TIF Plan is estimated to be $1,317,785 (See Exhibit V).
d. Even if some development other than the proposed development were to occur, the City
finds that no alternative would occur that would produce a market value increase greater than
$16,880,152 (the amount in clause b less the amount in clause c) without tax increment
assistance.
(3) The TIF Plan would afford maximum opportunity, consistent with the sound needs of the City as a
whole, for development of the Project Area by private enterprise.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Factual basis: The proposed development is the construction of an expansion to an existing business
facility in the Project Area that is proposed to create new jobs in the City, while creating these jobs in the
State, plus create new tax base for the City and the State. The development clearly meets the City's
economic development goals in terms of tax base expansion, job retention and creation, and wage levels.
(4) The TIF Plan conforms to general plans for development of the City as a whole,
Factual basis: The City Planning Commission has determined that the development proposed in the TIF
Plan conforms to the City comprehensive plan.
Section K Estimated Public Costs
The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax
increments of the TIF District.
Land/building acquisition 0
Utilities 0
Other qualifying Improvements 1,607,350
Loan Interest payments 0
Administrative expenses 84,596
Total $1,691,946
The City anticipates using tax increment to the extent available to assist with financing a portion of the site
improvement costs, related administrative expenses, and other TIF -eligible expenditures as necessary and related
to development of the project.
The City reserves the right to administratively adjust the amount of any of the items listed above or to incorporate
additional eligible items, so long as the total estimated public cost is not increased.
Section L Estimated Sources of Revenue
Tax increment revenue
1,691,946
Interest on invested funds
0
Loan proceeds
0
Special assessments
0
Rent/lease revenue
0
Grants
0
Total $1,691,946
The City anticipates providing financial assistance on a pay-as-you-go basis for site improvement costs, as well as
other TIF -eligible expenses related to the proposed development. As tax increments are collected from the TIF
District in future years, a portion of these taxes will be used by the City to reimburse the developer/owner for public
costs incurred (see Section K).
The City reserves the right to finance any or all public costs of the TIF District using pay-as-you-go assistance,
internal funding, general obligation or revenue debt (referred to together as "TIF Bonds"), or any other financing
mechanism authorized by law. The City also reserves the right to use other sources of revenue legally applicable to
the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or
state funds, and investment income.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Section M Estimated Amount of Bonded Indebtedness
The maximum principal amount of bonds (as defined in the TIF Act) secured in whole or part with tax increment from
the TIF District is $1,691,946. The City currently plans to finance the improvement costs in the form of a pay -as -you
go revenue note, but reserves the right to issue bonds in any form, including without limitation any interfund loan with
interest not to exceed the maximum permitted under Section 469.178, subd. 7 of the TIF Act.
Section N Original Net Tax Capacity
The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total
net tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts
certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For
districts certified between July 1 and December 31, inclusive, this value is based on the current assessment year.
The Estimated Market Value of all property within the TIF District as of January 2, 2015, for taxes payable in 2016, is
$1,255,900 and the estimated tax capacity is $24,368, which is estimated to be the original net tax capacity of the
TIF District upon establishment, reclassification and subsequent certification.
Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased
as a result of:
(1) changes in the tax-exempt status of property;
(2) reductions or enlargements of the geographic area of the TIF District;
(3) changes due to stipulation agreements or abatements; or
(4) changes in property classification rates.
Section 0 Original Tax Capacity Rate
The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all
local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the
original net tax capacity.
In future years, the amount of tax increment generated by the TIF District will be calculated using the lesser of
(a) the sum of the current local tax rates at that time or (b) the original tax capacity rate of the TIF District.
It is anticipated the request for certification of the District will occur prior to June 30, 2016 and the local tax rates for
taxes levied in 2015 and payable in 2016 will apply. At the time of the drafting of this document, the local tax rate is
not available. For purposes of estimating the tax increment generated by the TIF District, the sum of the local tax
rates for taxes levied in 2014 and payable in 2015, is 105.073% as shown below.
2014/2015
Taxing Jurisdiction Local Tax Rate
City of Lakeville 38.948%
Dakota County 29.633%
ISD #194 31.459%
Other 5.033%
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Total 105.073%
Section P Projected Retained Captured Net Tax Capacity and
Projected Tax Increment
The City anticipates that the project will begin construction in 2015 and be partially completed by December 31,
2015 and 100% completed by December 31, 2016, creating a total tax capacity for TIF District No. 21 $315,605 as
of January 2, 2017. The captured tax capacity as of that date is estimated to be $176,570. The first year of tax
increment is estimated to be $185,527 payable in 2018. A complete schedule of estimated tax increment from the
TIF District is shown in Exhibit III.
The estimates shown in this TIF plan assume that commercial class rates remain at 1.5% of the estimated market
value up to $150,000 and 2.0% of the estimated market value over $150,000, and assume 3% annual increases in
market values.
Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the
extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax
capacity of the TIF District.
The County Auditor shall certify to the City the amount of captured net tax capacity each year. The City may choose
to retain any or all of this amount. It is the City's intention to retain 100% of the captured net tax capacity of the TIF
District. Such amount shall be known as the retained captured net tax capacity of the TIF District.
Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits
contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the
anticipated life of the TIF District.
Section Q Use of Tax Increment
Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and
pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of
financial reporting and auditing of tax increment financing information throughout the state. Exhibit III shows the
projected deduction for this purpose over the anticipated life of the TIF District.
The City has determined that it will use 100% of the remaining tax increment generated by the TIF District for any of
the following purposes:
(1) pay for the estimated public costs of the TIF District (see Section K) and County administrative
costs associated with the TIF District (see Section T);
(2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated
public costs of the TIF District;
(3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to
finance the estimated public costs of the TIF District;
(4) pay all or a portion of the county road costs as may be required by the County Board under M.S.
Section 469.175, Subdivision 1a; or
(5) return excess tax increments to the County Auditor for redistribution to the City, County and
School District.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Tax increments from property located in one county must be expended for the direct and primary benefit of a project
located within that county, unless both county boards involved waive this requirement. Tax increments shall not be
used to circumvent levy limitations applicable to the City.
Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a
building to be used primarily and regularly for conducting the business of a municipality, county, school district, or
any other local unit of government or the State or federal government, or for a commons area used as a public park,
or a facility used for social, recreational, or conference purposes. This prohibition does not apply to the construction
or renovation of a parking structure or of a privately owned facility for conference purposes.
If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance,
to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be
subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less
than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest
rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the
developer or beneficiary.
Section R Excess Tax Increment
In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated
public costs authorized by the TIF Plan, the City shall use the excess tax increments to:
(1) prepay any outstanding tax increment bonds;
(2) discharge the pledge of tax increments thereof;
(3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or
(4) return excess tax increments to the County Auditor for redistribution to the City, County and
School District. The County Auditor must report to the Commissioner of Education the amount of
any excess tax increment redistributed to the School District within 30 days of such redistribution.
Section S Tax Increment Pooling and the Five Year Rule
At least 80% of the tax increments from the TIF District must be expended on activities within the district or to pay for
bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No
more than 20% of the tax increments may be spent on costs outside of the TIF District but within the boundaries of
the Project Area, except to pay debt service on credit enhanced bonds. All administrative expenses are considered
to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF
District if such amounts are:
(1) actually paid to a third party for activities performed within the TIF District within five years after
certification of the district;
(2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably
expected on the date of issuance to be spent within the later of the five-year period or a
reasonable temporary period or are deposited in a reasonably required reserve or replacement
fund.
(3) used to make payments or reimbursements to a third party under binding contracts for activities
performed within the TIF District, which were entered into within five years after certification of the
district; or
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
(4) used to reimburse a party for payment of eligible costs (including interest) incurred within five
years from certification of the district.
Beginning with the sixth year following certification of the TIF District, at least 80% of the tax increments must be
used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding
bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF
District must be decertified.
The City does not expect that allowable pooling expenditures will be made outside of the TIF District but within the
Project Area (along with allowable administrative expenses), but such expenditures are expressly authorized in this
TIF Plan.
Section T Limitation on Administrative Expenses
Administrative expenses are defined as all costs of the City other than:
(1) amounts paid for the purchase of land;
(2) amounts paid for materials and services, including architectural and engineering services directly
connected with the physical development of the real property in the project;
(3) relocation benefits paid to, or services provided for, persons residing or businesses located in the
project;
(4) amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to section 469.178; or
(5) amounts used to pay other financial obligations to the extent those obligations were used to
finance costs described in clause (1) to (3).
Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or
economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax
increments may be used to pay administrative expenses of the TIF District up to the lesser of (a) 10% of the total tax
increment expenditures authorized by the TIF Plan or (b) 10% of the total tax increments received by the TIF District.
Section U Limitation on Property Not Subject to Improvements - Four Year Rule
If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified
improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall
be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified
improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial
reconstruction or rebuilding of an existing street. The City must submit to the County Auditor, by February 1 of the
fifth year, evidence that the required activity has taken place for each parcel in the TIF District.
If a parcel is excluded from the TIF District and the City or owner of the parcel subsequently commences any of the
above activities, the City shall certify to the County Auditor that such activity has commenced and the parcel shall
once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most
recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF
District.
Section V Estimated Impact on Other Taxing Jurisdictions
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net
tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The City believes that
there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed
development would not have occurred without the establishment of the TIF District and the provision of public
assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the
development therein becomes part of the general tax base.
The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota
Statutes, Section 469.175, Subdivision 2, are listed below.
The total amount of tax increment that will be generated over the life of the district is estimated to be
$1,698,059.
2. To the extent the facility in the proposed TIF District generates any public cost impacts on city -provided
services such as police and fire protection, public infrastructure, and borrowing costs attributable to the
district, such costs will be levied upon the taxable net tax capacity of the City, excluding that portion
captured by the District. The City does not anticipate issuing bonds in conjunction with this project,
3. The amount of tax increments over the life of the district that would be attributable to school district levies,
assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same,
is estimated to be $508,401.
4. The amount of tax increments over the life of the district that would be attributable to county levies,
assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is
estimated to be $478,892.
5. No additional information has been requested by the county or school district that would enable it to
determine additional costs that will accrue to it due to the development proposed for the district.
Section W Prior Planned Improvements
The City shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a
listing of all properties within the TIF District for which building permits have been issued during the 18 months
immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of
the TIF District by the net tax capacity of each improvement for which a building permit was issued.
There have been no building permits issued in the last 18 months in conjunction with any of the properties within the
TIF District.
Section X Development Agreements
If within a project containing an economic development district, more than 10% of the acreage of the property to be
acquired by the City is purchased with tax increment bonds proceeds (to which tax increment from the property is
pledged), then prior to such acquisition, the City must enter into an agreement for the development of the property.
Such agreement must provide recourse for the City should the development not be completed.
The City anticipates entering into an agreement for development, but does not anticipate acquiring any property
located within the TIF District.
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Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
Section Y Assessment Agreements
The City may, upon entering into a development agreement, also enter into an assessment agreement with the
developer, which establishes a minimum market value of the land and improvements for each year during the life of
the TIF District.
The assessment agreement shall be presented to the County or City Assessor who shall review the plans and
specifications for the improvements to be constructed, review the market value previously assigned to the land, and
so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate,
shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the
office of the County Recorder of each county where the property is located. Any modification or premature
termination of this agreement must first be approved by the City, County and School District.
The City does not anticipate entering into an assessment agreement
Section Z Modifications of the Tax Increment Financing Plan
Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount
of bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the
captured net tax capacity to be retained by the City; increase in the total estimated public costs; or designation of
additional property to be acquired by the City shall be approved only after satisfying all the necessary requirements
for approval of the original TIF Plan. This paragraph does not apply if:
(1) the only modification is elimination of parcels from the TIF District; and
(2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of
those parcels in the TIF District's original net tax capacity, or the City agrees that the TIF District's
original net tax capacity will be reduced by no more than the current net tax capacity of the parcels
eliminated.
The City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF
District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date
of certification.
Section AA Administration of the Tax Increment Financing Plan
Upon adoption of the TIF Plan, the City shall submit a copy of such plan to the Minnesota Department of Revenue.
The City shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the
TIF District. To assist the County Auditor in this process, the City shall submit copies of the TIF Plan, the resolution
establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The City
shall also send the County Assessor any assessment agreement establishing the minimum market value of land and
improvements in the TIF District, and shall request that the County Assessor review and certify this assessment
agreement as reasonable.
The County shall distribute to the City the amount of tax increment as it becomes available. The amount of tax
increment in any year represents the applicable property taxes generated by the retained captured net tax capacity
of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other
development, inflation of property values, or changes in property classification rates or formulas. In administering
and implementing the TIF Plan, the following actions should occur on an annual basis:
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Lakeville, Minnesota
(1) prior to July 1, the City shall notify the County Assessor of any new development that has occurred
in the TIF District during the past year to insure that the new value will be recorded in a timely
manner.
(2) if the County Auditor receives the request for certification of a new TIF District, or for modification
of an existing TIF District, before July 1, the request shall be recognized in determining local tax
rates for the current and subsequent levy years. Requests received on or after July 1 shall be
used to determine local tax rates in subsequent years.
(3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF
District. The amount certified shall reflect any changes that occur as a result of the following:
(a) the value of property that changes from tax-exempt to taxable shall be added to the
original net tax capacity of the TIF District. The reverse shall also apply;
(b) the original net tax capacity may be modified by any approved enlargement or reduction
of the TIF District;
(c) if laws governing the classification of real property cause changes to the percentage of
estimated market value to be applied for property tax purposes, then the resulting
increase or decrease in net tax capacity shall be applied proportionately to the original
net tax capacity and the retained captured net tax capacity of the TIF District.
The County Auditor shall notify the City of all changes made to the original net tax capacity of the TIF District.
Section AB Filing TIF Plan, Financial Reporting and Disclosure Requirements
The City will file the TIF Plan, and any subsequent amendments thereto, with the Commissioner of Revenue and the
Office of the State Auditor pursuant to Minnesota Statutes, Section 469.175, subdivision 4A. The City will comply
with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175, subdivisions 5 and 6.
SPRINGSTED Page 16
Assumptions Report
City of Lakeville, Minnesota
Tax Increment Financing (Economic Development) District No. 21
Proposed Project Shore within ISD 194
Draft TIF Plan Exhibits: $15.7M EMV with 3% MV Inflator
Type of Tax Increment Financing District Economic Development
Maximum Duration of TIF District 8 years from 1st increment
Projected Certification Request Date
Decertification Date
Base Estimated Market Value
Original Net Tax Capacity
10/01/15
12/31/25 (9 Years of Increment)
2015/2016
$1,255,900
$24,368
Exhibit !1
Final 2015 Tax Rates were used.
Total EMV upon completion based on company estimate of $15.7M of investment, to be updated as info is available
Base EMV of 2 properties as provided by Dakota County
SPRINGSTED Page 18
Assessment/Collection Year
2015/2016
2016/2017 2017/2018
2018/2019
Base Estimated Market Value
$1,255,900
$1,255,900 $1,255,900
$1,255,900
Increase in Estimated Market Value
0
2,669,100 14,561,850
15,036,383
Total Estimated Market Value
1,255,900
3,925,000 15,817,750
16,292,283
Total Net Tax Capacity
$24,368
$77,750 $315,605
$325,096
City of Lakeville
38.948%
Dakota County
29.633%
ISD #194
31.459%
Other
5.033%
Local Tax Capacity Rate
105.073% 2014/2015
Fiscal Disparities Contribution From TIF District
39.3723%
Administrative Retainage Percent (maximum = 10%)
5.00%
Pooling Percent
0.00%
Bonds
Note (Pay -As -You -Go)
Bonds Dated NA
Note Dated
10/01/15
Bond Issue @ 0.00% (NIC) NA
Note Rate
0.00%
Eligible Project Costs NA
Note Amount
$1,607,350
Present Value Date & Rate 10/01/15
4.00%
Present Value Amount
$1,247,391
Notes
Assumptions assume no change to future tax rates, class rates,
and a 3% annual MV inflator is assumed
Final 2015 Tax Rates were used.
Total EMV upon completion based on company estimate of $15.7M of investment, to be updated as info is available
Base EMV of 2 properties as provided by Dakota County
SPRINGSTED Page 18
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Exhibit V
Market Value Analysis Report
City of Lakeville, Minnesota
Tax Increment Financing (Economic Development) District No. 21
Proposed Project Shore within ISD 194
Draft TIF Plan Exhibits: $15.7M EMV with 3% MV Inflator
Assumptions
Present Value Date
P.V. Rate - Gross T. I.
10/01/15
4.00%
Increase in ENV With TIF District
Less: P.V of Gross Tax Increment
Subtotal
Less: Increase in EMV Without TIF
Difference
$18,197,937
1,317,785
$16,880,152
0
$16,880,152
Annual
Present
Gross Tax
Value @
Year
Increment
4.00%
1 2017
34,006
31,440
2 2018
185,527
164,933
3 2019
191,574
163,758
4 2020
197,801
162,578
5 2021
204,215
161,394
6 2022
210,821
160,207
7 2023
217,626
159,017
8 2024
224,635
157,826
9 2025
231,854
156,632
$1,698,059
$1,317,785
SPRINGSTED Page 21