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HomeMy WebLinkAbout16-032CITY OF LAKEVILLE, MINNESOTA RESOLUTION NO. 16-32 RESOLUTION GRANTING A PROPERTY TAX ABATEMENT AND APPROVING A TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT FOR CERTAIN PROPERTY IN THE CITY OF LAKEVILLE, MINNESOTA BE IT RESOLVED by the City Council (the "City Council") of the City of Lakeville, Minnesota (the "City") as follows: Section 1. Recitals. 1.01. MOM Brands Company, LLC, a Minnesota corporation, (the "Developer") proposes to remain located in an existing facility in the City of Lakeville (the "Project"), with the property identification numbers set forth in Exhibit A attached hereto (the "Property"). The Developer has requested that the City provide financial assistance to the Developer for the Project. The City proposes to use the abatement for the purposes provided for in Minnesota Statutes, Sections 469.1812 through 469.1815 (the "Act"), from the property taxes to be levied by the City on the Tax Abatement Property. 1.02. The proposed term of the abatement will be for up to 10 years in an estimated principal amount of $375,000, plus simple non -compounded interest at 3.5% for a total amount not to exceed $813,070, as described in the Tax Abatement and Business Subsidy Agreement, dated March 7, 2016 (the "Agreement"), among the City and Developer. The proposed abatement will apply to a portion of the City's share of real estate taxes which relate to the Project and the value of the land and building on the Tax Abatement Property by the Developer, as determined by the City (the "Abatement"). 1.03. This City Council has reviewed information concerning the above -referenced Project, including a Tax Abatement and Business Subsidy Agreement (the "Agreement") proposed to be entered into by the City and the Developer. The Agreement is incorporated herein by reference. 1.04. On the date hereof, the City Council conducted a duly noticed public hearing on the Abatement proposed to be granted by the City to the Developer pursuant to the Agreement. The views of all interested persons were heard at the public hearing. 1.05 The Abatement is authorized under the Abatement Law. Section 2. Findings for the Abatement. 2.01. The recitals set forth above are incorporated into this Resolution. 2.02. It is hereby found and determined that the benefits to the City from the Abatement will be at least equal to the costs to the City of the Abatement, because (a) the City believes that the development to be facilitated is not reasonably likely to occur absent the Abatement provided by the City, and (b) the long-term taxes collected from the Property after termination of the Abatement will exceed the amount of the Abatement returned to the Developer. 2.03. It is hereby found and determined that the Abatement is in the public interest because such action will increase the tax base and provide additional employment opportunities in the City. 2.04. It is hereby found that the Property will not be included within a tax increment financing district during the term of the Abatement. 2.05. It is further specifically found and determined that the Abatement is expected to result in the following public benefits: (a) Retention of a minimum of 250 existing jobs in the City, as set forth in the Agreement. (b) Retention of an estimated $10,443,600 increase in market value for property tax purposes, which will be available to all taxing jurisdictions after expiration of the Abatement. Section 3. Actions Ratified; Abatement Approved; Tax Abatement and Business Subsidy Agreement Approved. 3.01. The City Council hereby ratifies all actions of the City's staff and consultants in arranging for approval of this Resolution in accordance with the Act. 3.02. Subject to the provisions of the Act, the Abatement is hereby approved and adopted subject to the following terms and conditions: (a) The term "Abatement" means the real property taxes generated in any tax -payable year by extending the City's total tax rate for that year against the tax capacity of the Project on the Property in accordance with the Agreement, including the tax capacity of the land and building, as of January 2 in the prior year. (b) The Abatement will be collected by the City and used to reimburse itself for the upfront contribution to the project in accordance with all the terms and conditions of the Agreement. (c) In accordance with Section 469.1813, subdivision 8 of the Act, in no year shall the Abatement, together with all other abatements approved by the City under the Act and paid in that year exceed the greater of 10% of the net tax capacity of the City for that year or $200,000 (the "Abatement Cap"). The City may grant any other abatements permitted under the Act after the date of this Resolution, provided that to the extent the total abatements in any year exceed the Abatement Cap, the allocation of Abatement Cap to such other abatements is subordinate to the Abatement granted pursuant to this Resolution. (d) The Abatement shall commence in the first taxes payable year after the existing TIF District in which the property is currently located will be decertified. 2 (e) In no event shall the collection of abatement exceed $813,070 ($375,000 plus interest at the rate of 3.5% per annum on the unpaid principal balance) or continue to be paid for more than ten years. (f) The Abatement is subject to modification in accordance with the Act, subject to the terms of the Agreement. (g) In accordance with Section 469.1815 of the Act, the City will add to its levy in each year during the term of the Abatement the total estimated amount of current year Abatement granted under this Resolution. (h) The City makes no warranties or representations regarding the amount or availability of the Abatement. (i) The Abatement shall be provided to the Developer pursuant to the terms and conditions of the Agreement as approved by the City Council. 3.03. The Agreement are hereby in all respects authorized, approved and confirmed and the Mayor and City Clerk are hereby authorized and directed to execute and deliver the Tax Abatement and Subsidy Agreement for and on behalf of the City in substantially the form now on file with the City but with such modifications as shall be deemed necessary, desirable or appropriate, their execution thereof to constitute conclusive evidence of their approval of any and all modifications therein. Section 4. Implementation. The Mayor and City Clerk are authorized and directed to execute and deliver any additional agreements, certificates or other documents that the City determines are necessary to implement this Resolution. Section 5. Effective Date. This Resolution is effective upon full execution of the Agreement. Adopted this 7th day of March, 2016 BY: Y---- - ///,/ 11 Matt Li le, Mayor ATTEST: Izze -7 Charlene Friedges, City CI 3 EXHIBIT A TO ABATEMENT RESOLUTION THE PROPERTY That real property in the City of Lakeville, Dakota County, State of Minnesota, with the following property identification numbers: 22-24500-01-021 22-24500-01-022 A-1