HomeMy WebLinkAboutCity Council Packet 07-26-1993 SpecialCITY COUNCIL STUDY SESSION
MONDAY, JULY 269 1993
4:30 P.M.
I. REVIEW OF TAX INCREMENT FINANCING
APPLICATIONS
II. FURTHER CONSIDERATION OF ASSESSMENT POLICY
FOR COUNTY ROAD 9 & DUNKIRK LANE PROJECTS
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: July 21, 1993
TO: Mayor and City Council
FROM: Dwight D. Johnson, City Manager
SUBJECT: Tax Increment Financing Applications
Background. The City invited applications for tax increment financing applications in
its existing districts on April 19, 1993 to help fill up those districts prior to their
expiration. Applications for basic manufacturing, high tech research/development and
distribution were especially invited. Five applications have been received in response
to this invitation and an additional request for a new district has also been received.
The Council and the staff held a study session on criteria for evaluation of these
applications on July 12, 1993. Since that time, a staff team consisting of Assistant City
Manager Kathy Lueckert, Finance Director Dale Hahn, Acting Community
Development Director Joe Ryan, Public Works Director Fred Moore, and myself have
met several times to evaluate the applications per our discussion with the Council.
Discussion of five applications in existing districts. The attached chart shows the
general information that has been received for all of the applications. The first five
applications are for assistance in existing districts while the Hoyt application would
require a new district. The Hoyt application will be discussed separately in this memo.
All of the five applications in existing districts are consistent with the Comprehensive
Plan and are located in districts with at least two years of remaining life in them (it
takes up to two years for increments to actually start flowing in our tax system).
Two of the applicants, Opus and Ameridata, appear to have asked for more increment
than the City can verify will be created. All of the applicants except H.I. Enterprises
have requested up -front assistance rather than pay-as-you-go assistance. The Opus and
Caliber projects appear to be speculative buildings while the other buildings would be
occupied by the owner or by known lessee. All of the applicants have a business
history in or near the Plymouth area. All of the applicants appear to items eligible for
TIF assistance in their project budgets.
Staff has also provided information on the amount of developer equity being provided
and the proposed design standards for the project, as well as basic information about
the project size, type, and location. We have also provided information on the number
of jobs to be retained or created except for the spec buildings, where the occupant is
obviously not known.
The greatest item of concern for staff is the meeting of the "But for" test. The Council
must find that the project would not occur but for the providing of TIF assistance. This
is a requirement of State law, and the varied interpretations of this requirement by
different cities has been a subject of substantial controversy among local officials as
well as the State Legislature.
While the evidence is not as clear for any of the applications as we would like, staff
believes that the "but for" test is credibly met by Rotation Engineering and might
possibly be met by the Ameridata application. We do not reasonably believe from the
evidence provided to date that the test is met by the Opus, Caliber, and H.I.
Enterprises applications. In fact, all of these latter three applications have proceeded
through to the final stages of City development review without any promise of TIF
assistance.
In the case of the application of H.I. Enterprises for a Goodyear Tire store, staff has
the additional concern that the Council's criteria of approving TIF for retail is not met
since staff does not believe that the stated need for soil correction is extraordinary or
unusual compared to other retail sites. A competing tire store does business in the
immediate area which did not receive TIF assistance, raising the issue of unwarranted
City interference in private economic competition.
With these three applications, staff believes that the City would have difficulty
justifying to our public or to the Legislature that public tax funds are needed to directly
assist these projects.
Discussion of Hoyt application. Hoyt enterprises proposes to move its window
treatment manufacturing business to Plymouth with over 300 jobs on a site northwest of
I-494 and Schmidt Lake Road. Staff believes that this application might meet all
necessary criteria for assistance, including the 'but for" test. However, considerably
more research needs to be done to determine the type of district that could be created,
the amount of increment that is likely to be generated, and the amount of HACA aid
the City would lose. The site does appear to have unusual environmental and
topographical conditions. It also had old, substandard structures which contribute to
costs of development. The Hoyt application requests an amount of assistance equal to
about one-half of the City's estimate of the amount of increment to be created. Hoyt
also proposes a pay-as-you-go method of assistance which eliminates City risk in the
project.
Discussion of type and amounts of assistance. The staff team believes that if TIF
assistance is to be granted to Ameridata and Rotation Engineering, that it should be
offered on a pay-as-you-go basis and that the City should share the available increment
with the applicant on a 50-50 basis during the remaining life of the district, or until the
amount requested is reached, whichever occurs first. We believe that any up front loan
from the City greatly increases the City's risk with no justification. We know of no
reason why the project financing for each project could not be adjusted for a pay-as-
you- go approach.
Recommendations. Staff recommends that these applications be placed on the August
2, 1993 agenda for preliminary action. For those applicants preliminarily approved for
TIF assistance on that date, staff recommends that the City require a $5,000 deposit
from those applicants to pay for the costs of negotiating and preparing a legal TIF
development agreement and to pay for costs of additional review by the City's financial
advisors. Final approval of the agreements for TIF could hopefully then occur at the
August 30th Council meeting. The developers would receive a refund of any portion
of the $5,000 deposit not actually needed by the City for its review. .
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MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MINNESOTA 55447
DATE: July 22, 1993
TO: Dwight Johnson, City Manager
FROM: Fred G. Moore, Director of Public Works
SUBJECT: ASSESSMENT POLICY FOR
NEW COUNTY ROAD 9 AND DUNKIRK LANE IMPROVEMENT PROJECT
At the last City Council Study meeting on determining a method for the proposed final
assessments for the Dunkirk Lane and County Road 9 improvement projects, the City Council
received the attached memorandum. This memorandum indicated the proposed assessments to
each parcel of land based upon the current adopted City Council Assessment Policy. The
assessments were indicated separately for County Road 9 and for Dunkirk Lane.
At the conclusion of the study meeting the property owners were to get together and make
a proposal back to the City on a method of assessment. Also, I was requested to provide
information if assessments on County Road 9 were based on a dwelling unit basis. The
following is a table indicating assessments against each parcel for Dunkirk Lane and for
County Road 9 based on a front footage basis. Also indicated in the table are the
assessments on County Road 9 if a dwelling unit basis is used.
Map No.
1
Property Description
Plymouth Creek Heights
3,10,11 Sugar Hills
4 Private Parcels
5 Holly Creek
6 Scherber Parcel
12 Jordan Homestead
7 Church Main Parcel
2 Church North of Dunkirk
13 Church South of C. R. 9
14 Dunkirk Investment
8 Dundee
Dunkirk Lane
199,010
7,000
60,550
53,900
46,130
58,800
39,200
C. R. 9
312,480
51,100
50,625
34,875
52.160
516,750 $449,080
965,830
At "Business" rate based on front footage
Area
Based on Dwelline
Units (S651.60/Unit)
C.R. 9
168,758
91,221
5,213
31,927
24,108
1,955
40,398
50,625 *
34,875 *
449,080
SUBJECT: ASSESSMENT POLICY FOR
NEW COUNTY ROAD 9 AND DUNKIRK LANE IMPROVEMENT PROJECT
July 22, 1993
Using the current City Assessment Policy, 58% of the project costs will be assessed for
the Dunkirk Lane improvements and 26% of the project costs would be assessed for the
County Road 9 improvements. The balance would be the City's share which would be
funded from our Municipal State Aid Account.
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MONS
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MINNESOTA 55447
DATE: July 8, 1993
TO: Dwight Johnson, City Manager
FROM: Fred G. Moore,- ITDirector of Public Works
SUBJECT: ASSESSMENT POLICY FOR NEW COUNTY ROAD 9 IMPROVEMENTS AND
DUNKIRK LANE IMPROVEMENT PROJECT
After the public improvement hearing the City Council ordered
construction of New County Road 9 and Dunkirk Lane Improvement Projects.
At this same time the City Council set a study session for July 12 to
discuss possible assessment methods.
Previous to the hearing held by the City Council the Engineering staff
had presented two methods of assessments. It was recognized that there
are many alternates which could be used. The two major developers in
the area, U.S. Homes and Forbragd-Harstad stated that they might suggest
other methods of assessments.
Attached to this memo are estimated assessments for the project based
only on the existing adopted City Council Assessment Policy. The
assessments are divided separately for Dunkirk Lane and New County Road
9. We also indicate the assessments for sanitary sewer and watermain
improvements.
After the City Council study meeting the Engineering staff will prepare
a proposed method of final assessments in accordance with direction
given by the City Council.
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attachment
OLD ROCKFORD ROAD
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1 -36 -?TON S -MEET 9
ON STR.EFT(' T f.
A
ft
Street and Storm Sewer
County Road 9
Dunkirk Lane
Dunkirk Court
Sanitary Sewer
County Road 9
Dunkirk Lane
Watermain
County Road 9
Dunkirk Lane
Trail Improvements
County Road 9
Dunkirk Lane
Street & Storm Sewer
Sanitary Sewer
Watermain
Trail
TOTAL
CITY PROJECT NO'S 308 AND 310
PROJECT COSTS
TOTAL
1,705,410
889,090
111,980
31,400
17,710
156,630
210,820
30,450
38.580
3,192,070
FUNDING - COMBINED PROJECT
M.S.A.
1,628,670
0-
0-
54.537
1,683,207
Frontage Basis
Assessments
1,077,810
49,110
37,418
0-
1,164,338
July 8, 1993
Utility or
Park Dedication
0-
0-
330,032
14.493
344,525