Title
RESOLUTION ADOPTING AN AMENDMENT TO THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 7 (COUNTY NO. 32).
Body
CITY PROPOSAL:
BE IT RESOLVED by the city council ("council") of the city of Duluth, Minnesota ("city"), as follows:
Section 1. Recitals
1.01. The board of commissioners ("board") of the Duluth Economic Development Authority ("DEDA") has heretofore established a housing development project/municipal development district ("District 1") and adopted a development program therefor. Tax increment financing district No. 7 (the “TIF district”) was created within the physical boundary of District 1, and District 1 was the designated “project” for the TIF District within the meaning of Minnesota Statutes, Section 469.174, Subd 8. It has been proposed by DEDA that the city adopt an amendment to the tax increment financing plan (the "TIF plan") for the TIF district which is referred to herein as the "amendment", pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "act") all as reflected in the amendment, and presented for the council's consideration.
1.02. DEDA and city have investigated the facts relating to the amendment and have caused the amendment to be prepared.
1.03. DEDA and city have performed all actions required by law to be performed prior to the adoption and approval of the amendment, including, but not limited to, notification of St. Louis County and Independent School District No. 709 having taxing jurisdiction over the property in the TIF district, notification of each county commissioner who represents part of the area included in the TIF district, approval of the amendment by DEDA on July 22, 2015, and the holding of a public hearing upon published notice as required by law.
Section 2. Findings for the amendment to the TIF plan.
2.01 The council hereby reaffirms the original findings for the TIF district, namely that when it was established, it was established as a "redevelopment district."
2.02 The TIF district is being amended to designate Development District No. 17, an economic development project area (“District 17”), as well as District 1 in which the original TIF District was created as the “project” for the TIF District within the meaning of Minnesota Statutes, Section 469.174, Subd. 8, and to incorporate by reference the objectives set forth in the Development Program for District 17. The TIF District is located within the existing physical boundaries of both District 17 and District 1. DEDA is not modifying the boundaries of the TIF District or extending the term of the TIF District.
2.03 The amendment conforms to the general plan for development or redevelopment of the city as a whole. The fact supporting this finding is that the amendment will generally complement and serve to implement policies adopted in the city's comprehensive plan.
2.04 The amendment will afford maximum opportunity, consistent with the sound needs of the city as a whole, for the development or redevelopment of the project area by private enterprise. The facts supporting this finding are that the amendment will continue the redevelopment that has been stimulated under the TIF plan for the TIF district.
2.05 The council further finds that future development or redevelopment, in the opinion of the city, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and therefore the use of tax increment financing is deemed necessary.
2.06 Based on information available from property owners in District 17, DEDA has determined that further development cannot occur without additional investment in infrastructure with respect to those properties, and therefore the increased market value of the sites to be benefited by tax increment financing 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 the proposed developments after subtracting the present value of the projected tax increments for the remaining duration of the TIF District.
Section 3. Public purpose.
3.01. The adoption of the amendment conforms in all respects to the requirements of the act and will help fulfill a need to redevelop an area of the state which is already built up, to provide employment opportunities, to provide housing and economic development opportunities, to improve the tax base and to improve the general economy of the state and thereby serves a public purpose.
Section 4. Approval and adoption of the modifications.
4.01. The amendment, as presented to the council on this date, is hereby approved, ratified, adopted and shall be placed on file in the office of the executive director of DEDA (“director”), 402 city hall, 411 west first street, Duluth, MN 55802.
4.02. The staff, the city's advisors and legal counsel are authorized and directed to proceed with the implementation of the amendment and for this purpose to negotiate, draft, prepare and present to this council for its consideration all further amendments, resolutions, documents and contracts necessary for this purpose. Approval of the amendment does not constitute approval of any project or a development agreement with any developer.
4.03. The director is authorized and directed to forward a copy of the amendment to the commissioner of the Minnesota department of revenue and the office of the state auditor pursuant to M.S., Section 469.175, Subd. 4a.
4.04. The director is further authorized and directed to file a copy of the amendment with St. Louis county auditor.
Statement of Purpose
STATEMENT OF PURPOSE: TIF District 7 was created as a scattered site redevelopment district for the purpose of removing blight and redeveloping housing; the district is known as the West Duluth Housing District. The TIF District was established in the housing project area (District 1) which encompasses the entire city. The current activities for which TIF District 7 monies can be spent are primarily housing.
Project Area No. 17 (District 17) is an economic development project area and is shown on the attached map. TIF District 7 is located within the physical boundaries of both District 1 and District 17. The purpose of this amendment is to designate District 17 as well as District 1 (in which the original TIF District was created) as the “project” for TIF District 7. This amendment will allow TIF District 7 monies to be used for economic development activities as well as housing purposes, giving DEDA greater flexibility in the use of TIF District 7 monies.