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A /' HINSHAW & CULBERTSON PIPER JAFFRAY TOWER SUITE 3100 APPLETON,WISCONSIN ^�- MILWAUKEE,WISCONSIN BELLEVILLE,ILLINOIS 222 SOUTH NINTH STREET i '�!+�� MINNEAPOLIS,MINNESOTA 55402 "•�aJCL� MUNSTER,INDIANA BROOKFIELD,WISCONSIN PEORIA,ILLINOIS CHAMPAIGN,ILLINOIS 612.333.3434 I PHOENIX,ARIZONA CHICAGO,ILLINOIS 4 2rr.� ROCKFORD,ILLINOIS CRYSTAL LAKE,ILLINOIS TELEFAX 612.334.8888 ST.LOUIS,MISSOURI FT.LAUDERDALE,FLORIDA Y V ',r .SAN FRANCISCO,CALIFORNIA JACKSONVILLE,FLORIDA I Uric O SPRINGFIELD,ILLINOIS JOLIET,ILLINOIS Thomas J.Barrett TAMPA,FLORIDA LISLE,ILLINOIS Direct:612.334.2676 WAUKEGAN,ILLINOIS MIAMI,FLORIDA TBarrett@hinshawlaw.com January 8, 2002 Mike Gaffron City of Orono 2750 Kelley Parkway (0 Crystal Bay, MN 55323 Re: City of Orono ° 7- "'"1 "-----j Dear Mike: Enclosed please find the original executed Mortgage Note for the Orono Senior Housing transaction. Please keep this in the City's files. Thank you. Very truly yours.,^ Thomas : : ett TJB/cmh Enclosure(s) • HC26DS4/4707/26553252.v1 1/8'2002 A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS MORTGAGE NOTE Note Amounts: $35,510.00 Orono, Minnesota Maturity Date: December 31, 2003 December 3, 2001 In the amount and manner hereinafter specified, for value received, the undersigned Orono Ambar, LLC, a Minnesota limited liability company(the "Borrower") promise to pay to City of Orono (the "City") at 2750 Kelly Parkway, Orono, MN 55323 or at such other location as the City may direct, the principal sum of Thirty Five Thousand Five Hundred Ten and no/100 Dollars, ($35,510.00) without interest, on the Maturity Date stated herein. This Note is secured by a Mortgage on real property located in Hennepin County, Minnesota legally described as follows: Lot 1, Block 1, Orono Ambar, together with the easements granted pursuant to that certain Easement Agreement dated March 16, 1998 and recorded May 22, 1998 as Document No. 3017952 over that part of Outlot F, Sugar Woods as described therein. The Maturity Date of this Note and the Mortgage which secures it shall be two years (2) from the date hereof, unless prior to that date the Borrower: a) sells, transfers, mortgages or pledges all or any part of the Borrower's interest in the Property without prior written consent of the Holder; or b) defaults (beyond any applicable cure period) on any terms, covenants or conditions of this Note or the Mortgage which secures it; or c) defaults (beyond any applicable cure period) on any terms of any mortgage secured by the Property, including by way of illustration and not limitation, the failure to make payment pursuant to any mortgage, in which case the Note Amount shall immediately be due and payable. Should the Borrower fail to meet any of the above terms and conditions of the Note or the Mortgage, the Holders, at its option may declare the original Note Amount immediately payable. Upon such default interest shall commence to accrue at eight percent (8%)per annum. In the event that the Borrower is notified directly or indirectly that foreclosure proceedings (by advertisement, action or otherwise) have been commenced or will be commenced, foreclosing any liens against the Property or any part thereof, including by way of illustration and not limitation, the HC26DS4/1403/26552234.v1 11/30/2001 1 • foreclosure of any other mortgage encumbering the Property, then the Borrower shall immediately notify, in writing, the Holders of such proceedings. Upon payment of this Note as provided herein,the Holder will within thirty (30) days, upon written demand by the Borrower, execute a release and satisfaction. Presentiment,protest and notice of dishonor are hereby waived by the Borrower. The Borrower shall pay all costs incurred by the Holders hereof in the collection of this Note, including reasonable attorney's fees. To secure payment of this Note, the Borrower will execute a Mortgage, a copy of which is attached hereto as Exhibit A. If there is more than one Borrower under this Note, each person shall be considered a Borrower within the meaning of this Note, and each shall be jointly and severally responsible for payment under this Note. This Note is made with reference to and is to be construed in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, this Note has been duly executed by the undersigned as of its date. Orono : • ..or LLC By: .�_, F :nk . Dunbar Its: hief Manager Borrower HC26DS4/1403/26552234.vl 11/30/2001 2 NOV. 30. 2001 4: 08PV EHLERS & ASSOCIATES N0. 3468 P. 1/8 EHLERS & ASSOCIATES INC TO: Mike Gaffron, City of Orono FAX: 952-249-4616 Ron Moorse, City of Orono 952-249-4616 Steve Rosholt, Faegre &Benson FLLP 612-776-1600 FROM; Susan Landrum/Mark Ruff FAX: 651-697-8555 DATE: November 30, 2001 TOTAL NUMBER OF PAGES: 8 (Including this cover sheet) Original to follow by mail_ Yes X No Message: RE: Certification request for Orono Woods (TIF District No. 1-1) FY1...Letters and forms that are going out today (certified mail) If you have any questions,please call me. Susan If you do not receive all the pages, please call Susan, at 651-697-8531, as soon as possible_ Ehlers and Associates, Inc. 3060 Centre Pointe Drive Roseville, MN 55113 Phone: (651) 697-8500; FAX: (651) 697-8555 NOV. 30. 2001 4: 08PM EHLERS & ASSOCIATES NO. 3468 P. 2/8 November 30,2001 EHLERS& ASSOCIATES INC Jerry Silkey Minnesota Department of Revenue Property Tax Division Mail Station 3340 St. Paul, MN 55146-3340 Dear Mr. Silkey: Pursuant to the requirements of Minnesota Statutes,Section 469.175,Subd.2 and 4,I am forwarding to you the copies of the following documents detailing the City of Orono's establishment of Tax Increment Financing District No. 1-1: (1) The City Council resolution adopting the Tax Increment Financing Plan for Tax Increment Financing District No. 1-1; (2) The minutes of the Orono City Council meetings on May 14 and May 29, 2001, which include the public hearing on the establishment of Tax Increment Financing District No_1-1; (3) The Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 and the Development Plan for Development District No_ 1; (4) The Tax Increment Financing Certification Request Supplement Form. If you have any questions regarding this matter, please feel free to contact me at 651-697-8505. Sincerely, EHLERS & ASSOCIATES,INC. Mark Ruff Financial Advisor Enclosures cc: Ron Moorse, City of Orono Mike Gaffron, City of Orono Steve Rosholt, Faegre&Benson P.L.L.P. Equal Opportunity Employer LEADERS IN PUBLIC FINANCE Charter Member of the National Aseoaation or Independent Public Finance Advisors NOV. 30. 2001 4: 08PM EHLERS & ASSOCIATES NO. 3468 P. 3/8 EHLERS November 30,2001 & ASSOCIATES INC Jean Beirbaum Taxpayer Services Department A-600 Hennepin County Government Center 300 South 6th St. Minneapolis,MN 55487 Dear Ms. Bierbaum: On May 14, 2001, the Orono City Council held a public hearing on the establishment of Tax Increment Financing District No. 1-1 and, on May 29, 2001, the City of Orono City Council approved the Tax Increment Financing Plan for Tax Increment Financing District No. 1-1.Enclosed please find a copy of each of the following: (1) The City Council resolution adopting the Tax Increment Financing Plan for Tax Increment Financing District No. 1-1; (2) The minutes of the Orono City Council meeting on May 14 and May 29, 2001, which includes the public hearing on the establishment of Tax Increment Financing District No. 1-1; (3) The Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 and the Development Plan for Development District No. 1; (4) The County Certificate as to Original Net Tax Capacity and Original Local Tax Rate. Please complete the Certificate pursuant to Minnesota Statutes, Section 469.177 (1) and 469.177(1a)and return the original signed/sealed copy to me; (5) The parcel to be included in Tax Increment Financing District No. 1-1 (The current parcel number is 34-118-23-24-0058. This parcel is being split. The recording of the plat will be on Monday, December 3, 2001. The new legal description for the parcel to be included in Tax Increment Financing District No. 1-1 will be: Lot 2,Block 1, Orono Ambar); (6) The Tax Increment Financing Certification Request Supplement Form. Pursuant to the requirements of Minnesota Statutes,Section 469.177(4),the Original Net Tax Capacity shall be increased by the value of building permits issued in 18 months preceding May 29, 2001. The City advises that no building permits have been issued in said Tax Increment Financing District No.1-1 in the 18 months preceding May 29,2001. Equal Opportunity Employer LEADERS IN PUBLIC FINANCE Chartor Mornbcr of the Nacional Association of Independent Public finance Advisors nncn n__._.. n..:..., n.;,,., QQ177 zinc Fcl AO-7 aeon f=Y F;1 1Q7 RcQS www phlnrc-inr nnm NOV. 30. 2001 4: 08PV EHLERS & ASSOCIATES NO. 3468 P. 4/8 Ms.Jean Beirbaum, Taxpayer Services Department Hennepin County Page 2 November 30, 2001 Pursuant to the requirements of Minnesota Statutes, Section 469.175,the City of Orono City Council has, after public hearing,made the necessary findings and approved the establishment of Tax Increment Financing District No. 1-1. The City requests that the duration of the district be 25 years from the date of receipt by the City of the first increment. Please note that the district does not anticipate to contain commercial/industrial property,therefore the fiscal disparities provision does not apply to Tax Increment Financing District No. 1-1, Please return a copy of the County Certificate to me as soon as possible. If you have any questions regarding this matter, please feel free to call me at 651-697-8505. Sincerely, EHLERS &ASSOCIATES,INC. Mark Ruff Financial Advisor Enclosures cc: Ron Moorse, City of Orono Mike Gaffron,City of Orono Steve Rosholt, Faegre & Benson P.L.L.P. NOV. 30. 2001 4: 08PM EHLERS & ASSOCIATES NO, 3468 P. 5/8 STATE OF MINNESOTA ) ) ss. HENNEPIN COUNTY ) COUNTY AUDITOR'S CERTIFICATION AS TO ORIGINAL NET TAX CAPACITY AND ORIGINAL LOCAL TAX RATE FOR PROPERTIES WITHIN TAX INCREMENT FINANCING DISTRICT NO. 1-1 IN THE CITY OF ORONO,MINNESOTA 1, the undersigned, being the duly qualified and acting County Auditor of Hennepin County, Minnesota (the "County"), DO HEREBY CERTIFY to the City of Orono in said County (the "City"), pursuant to the provisions of Minnesota Statutes, Section 469.177, Subdivision 1 that the "original net tax capacity" of all taxable property within the tax increment district designated as Tax Increment Financing District No. 1-1 (the "District")of said City, as described in the Tax Increment Financing Plan for the area approved by resolution of the City Council dated May 29, 2001, is I also certify that such original net tax capacity is composed of the tax capacity of each parcel of taxable property within the District as determined by the assessment thereof in 2001 for taxes payable in 2002,this being the tax capacity most recently certified by the State of Minnesota as of the date when this certification was requested. I also certify pursuant to the provisions of Minnesota Statutes,Section 469.177,Subdivision la that the "original local tax rate" that applies to the District is ,this being the local tax rate for taxes payable in 2002. WITNESS my hand and the seal of the County this _ day of Hennepin County Auditor (SEAL) Please indicate the identification Please indicate the "Certification Request number assigned by the County: Date"you placed on the County's systems: NOV. 30. 2001 4: 08PM EHLERS & ASSOCIATES N0. 3468 P. 6/8 PARCELS TO BE INCLUDED IN TAX INCREMENT FINANCING DISTRICT NO, 1-1 CITY OF ORONO HENNEPIN COUNTY Current Parcel Current Legal Market Value Class Rate Tax Capacity No."' Description* 34-118-23-24-0058 Addition Sugar Woods *This parcel is being split. The recording of the plat will be on Monday,December 3,2001, The new legal description for the parcel to be included in Tax Increment Financing District No. 1-1 will be; Lot 2,Block 1,Orono Ambar NOV. 30. 2001 4: 08PM EHLERS & ASSOCIATES NO. 3468 P. 7/8 Tax Increment Financing District Certification Request Supplement 1. TIF District Location(Municipality/County)- City of Orono Ilennepin,County....,,:._._..__.—_ 2. TIF District Name &Number: Tax Increment Fiiiancing.D.istrict No 1-1 3. [TZ I New District El District Expansion Hazardous Substance Subdistrict 4. District Type: a. Redevelopment (M.S. 469. o 174, Subd. 10). Maximum Duration: 25 years tax increments. b. I "I Housing(M.S. 469.174, Subd. 11). Maximum Duration: 25 years of tax increments. c. Mined Underground Space (M.S. 469.174, Subd_ 13). Maximum Duration: 25 years of tax increments. d. nRenewal and Renovation(M.S. 469.174, Subd. l0a). Maximum Duration: 15 years of tax increments. e. Housing Repplacement 1995 Laws, Chapter 264, Article 5, Sections 44-47). Maximum Duration: 15 years of tax increments from each parcel. f. Soils Condition (M.S. 469.174, Subd. 19. Maximum Duration: Tax increment may be received for 12 years from the approval of the tax increment plan by the municipality. g. nEconomic Development(M.S. 469.174, Subd. 12). Maximum Duration: In the 11 year period following the approval of the tax increment plan by the municipality, 9 years of tax increment may be received 5. If the district is a Redevelopment, Housing or a Hazardous Substance Subdistrict, is the minimum market value tax increment delay option elected(M.S. 469.175, Subd. 1, Paragraph(b))? n Yes Li No 6. Does the district have extended duration limits provided by a special law? Yes X No If yes, law citation_ _— (Over) NOV, 30. 2001 4: 08PM EHLERS & ASSOCIATES NO. 3468 P. 8/8 7. Does the district's plan provide for any sharing of captured net tax capacity with the local taxing districts (M.S. 469.177, Subd. 2, Paragraph(a))? E Yes © No 8. Does the district's plan provide for its captured net tax capacity to be reduced by the fiscal disparity contribution(M.S. 469.177, Subd. 3)? (Seven Metropolitan Counties and Taconite Tax Relief Area Counties Only) ® Yes (Clause B Option) _ No (Clause A Option) 9. Does the aid reduction provision apply to this district (M.S. 273.1399)? El Yes LJ No If no, what is the basis for the exemption? a. n Qualified Housing District(M .S. 273.1399, Subd. 1, Paragraph(c) and Subd.6, aragraph(c)). b. n Housing Replacement District (1995 Laws, Chapter 264, Article 5, Section 47). c. ri Ethanol Production Facility(M.S. 273.1399, Subd. 6,Paragraph (b)). d. Agricultural Processing Facility(M.S. 273.1399, Subd. 7). e. Municipal Local Contribution Election (M.S. 273.1399, Subd. 6, Paragraph (d)). £ Special Law. Law Citation: 10. Date the district plan was approved by the municipality: May 29,2001 _..... 11. District contact person: Name: Ron Worse __„__ Phnne• 942-249-4601 A.ddress:_ED B,ox66, ___-- Crystal Bayy,MN_5_532'1 Signature: _____ ..-.-.__ Date,_,Navemhrr 10, 2001 Note: All statute references are as amended by Laws 1995,Chapter 264,Article 5, and Laws 1996, Chapter 471,Article 7. County Auditor Use Only 12. Certification Request Date. 13. Certification Date: 14. Original Value and Tax Rate Year: Taxes Payable August 6, 1996 REQUEST FOR COUNCIL ACTION Date: May 8, 2001 Item No.: - 3 Department Approval: Administrator Approval: Agenda Section: R � City Administrator's Report Name: Ron Moorse 4?r Title: City Administrator Item Description: Public Hearing Regarding Elements of the Financial Package for the Orono Woods Senior Housing Project Attachments: 1. Schedule of Events (Revised May 8, 2001) Orono Woods Senior Housing Project 2. Program for the Financing of a Multifamily Rental Housing Development for Seniors (Housing Program) 3. Tax Increment Financing Plan 4. Development Plan for Housing Project No. 1 5. Council Resolution approving the Development Plan, Establishing the TIF District, and approving the TIF Plan 6. HRA Resolution approving the Development Plan, Establishing the TIF District, and approving the TIF Plan 7. Council resolution approving Housing Program and stating intent to issue Housing Revenue Bonds 8. TIF District Overview The financial package for the Orono Woods senior housing project, which includes tax increment financing and housing revenue bonds, requires a number of actions by the City Council. These actions are listed in the attached"Schedule of Events". At the May 14 Council meeting, the Council will hold a public hearing regarding three elements of the financial package: 1. Establishment of Tax Increment Financing District No. 1-1 2. Adoption of a Housing Program 3. A TEFRA hearing on the issuance of housing revenue bonds. Because Mayor Peterson and Councilmember Flint will not be able to attend the May 14 Council meeting, it is recommended that the Council hold the hearing but continue action on the resolutions to the May 29 Council meeting. COUNCIL ACTION REQUESTED Motion to continue action on the resolutions related to the elements of the financial package for the Orono Woods Senior Housing Project to the May 29, 2001 Council meeting. 4 Tac)\'I i SCHEDULE OF EVENTS CITY OF ORONO ORONO HOUSING AND REDEVELOPMENT AUTHORITY ORONO WOODS HOUSING PROJECT Revised-May 8,2001 March 12, 2001 City Council calls for public hearing on the establishment Project Area No. 1 and Tax Increment Financing District No. 1-1 (a qualified housing district). March 23, 2001 Project information,property identification numbers, and maps sent to Ehlers and Associates for drafting documentation. March 29, 2001 Letter received by County Commissioner giving notice of potential housing tax increment financing district(at least 30 days prior to publication of public hearing notice). [Sent by March 28, 20011 March 30, 2001 Project information submitted to the County Board for review of county road impacts(at least 45 days prior to public hearing). April 10,2001 Ehlers confirms with the City whether building permits have been issued on the property to be included in the TIF District. April 13, 2001 Draft of TIF Plan including fiscal and economic implications received by School Board Clerk and County Auditor(at least 30 days prior to public hearing). [Sent by April 12, 2001] April 23, 2001 HRA approves draft housing program and adopts resolution calling for public hearing on housing program and requesting corresponding action by City Council on TIF Plan and housing program. April 23, 2001 City Council adopts resolution calling for public hearing on housing program and 1 TEFRA hearing on issuance of 501(c)(3)bonds. April 27, 2001 Housing Program submitted to Metropolitan Council for review. April 28, 2001 Date of publication for the following: (1) Notice of hearing (with map) on establishment of Project t Area No. 1 and Tax Increment Financing District No. 1- 1;(2) Notice of hearing on Housing Program;and(3)Notice of TEFRA on bonds. [The Laker/Pioneer Newpapers publication deadline April 23, 2001] 11011 EHLERS A A;A?'IAT"S he Orono Woods Schedule May 8, 2001 Page Two May 14,2001 City Council holds public hearings on 1. Establishment of Tax Increment Financing District No. 1-1. 2. Adoption of Housing Program. 3. TEFRA hearing on issuance of housing revenue bonds. The City Council will conduct the hearings for each of the above, but will not take any approving actions on this date. May 29, 2001 City Council(1)adopts resolution approving the Development Plan and TIF Plan, (2) adopts resolution approving Housing Program, and (3) adopts resolution approving issuance of the housing revenue bonds. HRA(1)adopts resolution approving the Development Plan and TIF Plan, and(2) adopts resolution approving Housing Program This date assumes that the regular meeting is moved due to Memorial Day. These action may also be taken at a later meeting. The City has 60 days from the date of submission of the Plan by the HRA to approve or disapprove. June 9, 2001 HRA development agreement. City Council approves development agreement and 501(c)(3)bond documents. By June 30, 2001 Ehlers certifies District with county and state. *Because the City staff believes that the proposed tax increment district will not require unplanned county road improvements,the TIF Plan wasforwarded to the County Board 45 days prior to the public hearing. The County Board, by law, has 45 days to review the plan to determine if any county roads will be impacted by the development. Please be aware that the County Board could claim that tax increment should be used for county roads,even after the public hearing. 0 EHLERS 1 A;S:.'IAT'S 1\e Ron Moorse- Housing Program Orono.doc ` Page 1M kT7 C41 tet+ J1 Z RA F ■T PROGRAM FOR THE FINANCING OF A MULTIFAMILY RENTAL HOUSING DEVELOPMENT FOR SENIORS Pursuant to Minnesota Statutes, Chapter 462C (the "Act"), the City of Orono (the "City") has been authorized to develop and administer programs of multifamily housing developments under the circumstances and within the limitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the City. The City has determined that it is in the best interests of the residents of the City to create a program of financing to encourage and facilitate the development of multifamily rental housing for seniors in the City(the "Program"). The City has received a proposal from representatives of Wedum Foundation, a Minnesota nonprofit corporation, and Orono Senior Housing, LLC (the "Owner"), requesting that, pursuant to the Act, the City approve a program providing for the acquisition of the Land and construction of 62 units of multifamily housing for seniors (the "Project") to be located at in the City and intended, by location and design, to provide safe and affordable housing for, and to be occupied by, persons age 62 and older. The acquisition and construction of the Project is to be funded through the issuance of up to $9,000,000 in revenue bonds issued by the City (the "Bonds") pursuant to the Act. At least twenty percent (20%) of the units financed will be specifically reserved for tenants whose incomes are not greater than fifty percent (50%) of the area median income. It is estimated that rents for the Project will range from $ per month to $ per month, depending on unit size and amenities. The City, in establishing this Program, has considered, among other things (i) the availability and affordability of other government housing programs; (ii) the availability and affordability of private marketing financing for the construction of multifamily housing units; (iii)an analysis of population, employment trends and projections of future population trends and future employment needs; (iv) the recent housing trends and future housing needs of the City; and (v) an analysis of how the Program will meet the needs of persons and families residing and expected to reside in the City. The City, in adopting the Program, has further considered(i)the amount, timing and sale of Bonds to finance the estimated costs of the housing units, to fund the appropriate reserves and to pay the cost of issuance; (ii) the method of monitoring and implementation of the Program to insure compliance with the City's housing plan and its objectives; (iii) the method of administering, servicing and supervising the Program; (iv)the costs of the City, including future administrative expenses;(v)the restrictions on the multifamily development to be financed under the Program; and(vi)certain other limitations. The City, in adopting the Program, considered the potential financing impact of a bond issuance on affected public agencies. In addition,the City reviewed the method of marketing the Program. Such review examined the equal opportunity for participation by (i) minorities; (ii) households with incomes at the lower end of the range that can be served by the Program; (iii) households displaced by public or private actions; and(iv) accessibility to the handicapped. HOUSING PROGRAM 1 Ron Moorse �. Housing Program-Orono.doc Pa a 2-, The Project will be constructed and financed pursuant to Subdivision 1(a) of Section 462C.05 of the Act. Subsection A. Definitions. The following terms used in this Program shall have the following meanings,respectively: (1) "Act" shall mean Minnesota Statutes, Chapter 462C, as currently in effect and as the same may be from time to time amended. (2) "Authority" shall mean the Orono Housing and Development Authority. (3) "Bonds" shall mean the revenue bonds to be issued by the City or at the discretion of the City,the Agency,to finance the Program. (4) "City" shall mean the City of Orono, State of Minnesota. (5) "Housing Unit" shall mean any one of the apartment units located in the Project,occupied by one person or family,and containing complete living facilities. (6) "Land" shall mean the parcel of real property upon which the Project is to be constructed. (7) "Owner" shall mean Wedum Foundation, a Minnesota nonprofit corporation or Orono Senior Housing,LLC, a Minnesota limited liability company. (8) "Program" shall mean the program for the financing of the Project pursuant to the Act. (9) "Project" shall mean the 62 unit senior housing facility to be located at Subsection B. Program For Financing the Project. It is proposed that the City establish this Program to provide financing for acquisition of the Land and construction of the Project thereon by the Owner at a cost and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the City,the initial purchaser of the Bonds and the respective Owner. To do this, the City or, upon authorization by the City, the Authority, expects to issue Bonds the proceeds of which will be loaned to the Owner for financing the acquisition of the Project. If determined to be necessary, a trustee will be appointed by the City to monitor the disbursement of proceeds of the Bonds and payments of principal and interest on the Bonds. The cost of any additional security devices for the Bonds will be borne by the Owner and payable in addition to the principal and interest on the Bonds except as otherwise provided by resolution of the City. It is contemplated that the Bonds shall have a maturity of up to forty (40) years and will be priced to the market at the time of issuance. The Bonds may be issued in two series, one of �—' which has a claim on revenues i n o the other The City will hire no additional staff for the administration of the Program. The City intends to select and contract with a financial institution or trustee experienced in trust matters to HOUSING PROGRAM 2 Ron-Moorse- HousingProgram-Orono.doc `` Page 3 administer the Bonds. Insofar as the City will be contracting with underwriters, legal counsel, bond counsel,the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Program, no administrative costs will be paid from the City's budget with respect to this Program except as otherwise provided by resolution of the City. The Bonds will not be general obligation bonds of the City, but are to be paid only from properties pledged to the payment thereof, which may include additional security such as additional collateral, insurance or a letter of credit. Subsection C. Local Contributions To The Program. It is presently contemplated that there will be a local contribution of funds to the Project consisting of tax increment financing by the Authority or the City for Land acquisition and certain public costs, together with an appropriation of funds for a local contribution. Subsection D. Standards and Requirements Relating to the Financing of the Projects Pursuant to the Program. The following standards and requirements shall apply with respect to the operation of the Project by the Owner pursuant to this Program: (1) Substantially all of the proceeds of the sale of the Bonds will be used to provide funds for the acquisition and construction of the Project. The funds will be made available to the Owner pursuant to the terms of the Bond offering, which may include certain covenants to be entered into between the City and the Owner. (2) The Owner will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, sex, marital status, or status with regard to public assistance or disability. (3) No Housing Unit may be in violation of applicable zoning ordinances or other applicable land use regulations, including any urban renewal plan or development district plan, and including the state building code as set forth under Minnesota Statutes, Section 16.83, et seq. Subsection E. Evidence of Compliance. The City may require from the Owner or such other person deemed necessary at or before the issuance of the Bonds, evidence satisfactory to the City of the ability and intention of the Owner to complete the Project, and evidence satisfactory to the City of compliance with the standards and requirements for the making of the financing established by the City, as set forth herein; and in connection therewith, the City or its representatives may inspect the relevant books and records of the Owner in order to confirm such ability, intention and compliance. In addition, the City may periodically require certification from either the Owner or such other person deemed necessary concerning compliance with various aspects of the Program. Subsection F. Issuance of Bonds. To finance the Program authorized by this Section,the City may by resolution authorize, issue and sell its Revenue Bonds in one or more series, and using any additional credit enhancement devices determined by the City to be necessary or desirable for each such series, in an aggregate principal amount estimated to be up to$9,000,000. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be HOUSING PROGRAM 3 Ron Moorse- Housing Program-Orono.doc �` �� Page 4• '` payable primarily from the revenues of the Program authorized by this Section. The City anticipates the issuance of such amount prior to the end of 2001. Subsection G. Severability. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or otherwise illegal or inoperative by any court of competent jurisdiction,the decision of such court shall not affect or impair any of the remaining provisions. Subsection H. Amendment. The City shall not amend this Program while Bonds authorized hereby are outstanding,to the detriment of the holders of such Bonds. Subsection I. Issuance of Tax Increment Notes. At the discretion of the City and Authority, obligation to finance the Land and certain public costs of the Program may be issued by the Authority or City pursuant to authority granted by Minnesota Statues, Section 469.178. M1:740376.01 • • HOUSING PROGRAM 4 As of May 9, 2001 Draft for Public Hearing TAX INCREMENT FINANCING PLAN for the establishment of TAX INCREMENT FINANCING DISTRICT NO. 1 -1 (a housing district) within HOUSING PROJECT AREA NO. 1 • CITY OF ORONO ORONO HOUSING AND REDEVELOPMENT AUTHORITY HENNEPIN COUNTY STATE OF MINNESOTA Public Hearing: May 14, 2001 Adopted: EHLERS 0 Prepared by: EHLERS &ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 (651) 697-8500 fax: (651)697-8555 www.ehlers-inc.com 1 TABLE OF CONTENTS (for reference purposes only) SECTION II TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-1 2-1 Subsection 2-1. Foreword 2-1 Subsection 2-2. Statutory Authority 2-1 Subsection 2-3. Statement of Objectives 2-1 Subsection 2-4. Development Plan Overview 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired 2-2 Subsection 2-6. Classification of the District 2-2 Subsection 2-7. Duration of the District 2-3 Subsection 2-8. Original Net Tax Capacity 2-3 Subsection 2-9. Prior Planned Improvements 2-4 • Subsection 2-10. Original Tax Rate 2-4 Subsection 2-11. Estimated Tax Increment 2-4 Subsection 2-12. Use of Tax Increment 2-5 Subsection 2-13. Sources of Revenue 2-6 Subsection 2-14. Bonded Indebtedness 2-6 Subsection 2-15. Uses of Funds 2-6 Subsection 2-16. Local Contribution (State Tax Increment Financing Aid) 2-7 Subsection 2-17. Fiscal Disparities Election 2-8 Subsection 2-18. Business Subsidies 2-8 Subsection 2-19. County Road Costs 2-8 Subsection 2-20. Estimated Impact on Other Taxing Jurisdictions 2-8 Subsection 2-21. Supporting Documentation 2-9 Subsection 2-22. Modifications 2-9 Subsection 2-23. Time Factors 2-9 Subsection 2-24. Administration of the District 2-11 Subsection 2-25. Administrative Expenses 2-11 Subsection 2-26. Excess Tax Increments 2-12 Subsection 2-27. Requirements for Agreements with the Developer 2-12 Subsection 2-28. Assessment Agreements 2-12 Subsection 2-29. Annual Disclosure Requirements 2-12 Subsection 2-30. Reasonable Expectations 2-13 Subsection 2-31. Other Limitations on the Use of Tax Increment 2-13 APPENDIX A PROJECT DESCRIPTION A-1 APPENDIX B ESTIMATED CASH FLOW FOR THE DISTRICT B-1 APPENDIX C BUT/FOR QUALIFICATIONS C-1 SECTION II TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-1 Subsection 2-1. Foreword The Orono Housing and Redevelopment Authority,(the"Authority"),the City of Orono(the"City"),staff, and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 1-1 ("the District"), a housing tax increment financing district, located in Housing Project Area No. 1 (the"Project Area"). This Section contains the Tax Increment Financing Plan(the"TIF Plan") for Tax Increment Financing District No. 1-1. Other relevant information is contained in the Development Plan for Housing Project Area No. 1. The Tax Increment Financing Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone 651-697-8500. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the Authority has certain statutory powers pursuant to Minnesota Statutes ("M.S.'), 469.001 through 469.047, inclusive, as amended (the "HRA Act"), and M.S., Sections 469.174 through 469.179, inclusive, as amended(the"Tax Increment Financing Act"or"TIF Act"). This Plan is based on statutory authority at the time of adoption. Subsequent legislation action may alter the ability of the Authority to use tax increment collected from the District. Subsection 2-3. Statement of Objectives The District currently consists of one parcel of land and adjacent and internal rights-of-way. The District is being created to facilitate construction of senior housing in the City of Orono consisting of approximately 62 units of housing for senior citizens(the"Project"). The Project will provide safe,decent,and affordable housing for persons of low and moderate income. Contracts for this have not been entered into at the time of preparation of this TIF Plan, but the proposed development will begin in the summer of 2001. This TIF Plan is expected to achieve many of the objectives outlined in the Development Plan for Housing Project Area No. 1. The activities contemplated in the Development Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Housing Project Area No. 1 and the District. Subsection 2-4. Development Plan Overview Activities to be undertaken by the Authority and the City pursuant to the Development Plan for Housing Project No. 1 include, but are not limited to, the following: 1. Property to be Acquired - Property located within the District may be acquired by the Authority and is further described in this TIF Plan. 2. Upon approval of a developer's plan relating to the Project and completion of the necessary legal requirements, the Authority may sell or lease to a developer selected properties that they may acquire within the District. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-1 3. The City and the Authority may perform or provide for some or all necessary acquisition, construction,relocation,demolition,and required utilities and public streets work within the District. Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all the parcel and adjacent rights-of-way identified below. The map below shows the parcel included in the District and the boundaries of Housing Project No. 1. 1, C\ cn E m r 4, as t A il un r , a ria---- R y� `mit ''./..rias... s �T ''' m` . - $ ;• MI —Th..—.__. Ola > ° 44i ' YISA® g v'J •i' Q tE. * S�'11 ,y` a s Mk P I' . Ways / :; ta±,iF ur jj� GTr V s•w•± th `C7 8!WU CiY,.i r LM1kF __�-__ a`. %+ r 2�.5j ur` " �_:'O• ar«c ., e"+s�ir- ._ - ate. m• sa u j�. 431 ':s _ '414cor - �___ ___ 1 tr:±, ' rti iia r WA A BLVD W 4 ' ' z*. L via: w� esitA x Ks ' R/7r S /k T p. . • j • ,..10 -7L,,,i 17 M ®, ' i s 1+r 11 `•yy `4',..w �„x •! a -_i---tr--r +p R 21.17 1. -n XE cCOIMSRcoA ; {4 a ® 4 r 9,R. a Housing {c ura J ••1,., fJ61 160 ��` +F 5 f�,�? �a'y ISJ ry'al Q -.um Project No. 1 .�»+,K w:T ;•.-m i x s Y 'tn _I 110"-- '2.--,74,21, ,i.F,.., . v„F1,,,,,'' .qtr '� DANraS ° sT R,;by 4 ~ ± s Z°' 441 R <5,±7r sn)\ �, ; S », 4 4rx .MI n3. (A .,.,. ,, I, '7 3 ,.,Px> � TIF District 1-1 N'O11t�TROAL (PARK • 't .a.;,. p t. ,�. ea.•sm.. ys)r y. y� 43/ MO �'^�.i A , oje ' X, ,4V, 4 .551 Tar . ' . c \• i S • Si `!Fi . � `. ...?"-‘.-c., -4°.:71.'2?;*”, r.,:n .j, Parcel Numbers 34-118-23-24-0058* *The above parcel number represents current identification. The parcel will be subdivided and a new parcel number will be assigned to the property included within the District. Any property within the Project Area may be acquired by the Authority. Subsection 2-6. Classification of the District The Authority, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.179, as amended, inclusive, finds that the District, to be established, is a housing district pursuant to M.S., Section 469.174, Subd 11 as defined below: Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. I-1 2-2 "Housing district"means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts.A district does not qualify as a housing district under this subdivision if the fair market value of the improvements which are constructed in the district for commercial uses or for uses other than low and moderate income housing consists of more than 20 percent of the total fair market value of the planned improvements in the development plan or agreement. The fair market value of the improvements may be determined using the cost of construction,capitalized income, or other appropriate method of estimating market value. Housing project means a project, or portion of a project, that meets all the qualifications of a housing district tinder this subdivision, whether or not actually established as a housing district. In meeting the statutory criteria the Authority relies on the following facts and findings: • The District consists of one parcel. • The development will consist of 62 units of rental housing for senior citizens. • 20% of the units will be occupied by persons with incomes less than 50% of the area median income Pursuant to 469.176 Subd. 7,the District does not contain any parcel or part of a parcel that qualified under the provisions of Section 273.111 or 273.112 of Chapter 473H(Green Acres)for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1,the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. Ib,the duration of the District will be 25 years after receipt of the first increment by the Authority(a total of 26 years). The date of receipt by the Authority of the first tax increment is expected to be 2003. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes,would terminate after 2028, or when the TIF Plan is satisfied. If increment is received in 2002, the term of the District will be 2027. The Authority reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Net Tax Capacity The Original Net Tax Capacity (ONTC) value of the District is the base value of the parcels. The ONTC certified for the district pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1,will be based on the Assessor's Estimated Market Value in 2000 for taxes payable 2001. The value will be prorated after the parcel is split for development. Based on the current market value, the ONTC of the District is estimated to be $1,570. Changes in the following factors may alter the amount of the ONTC in future years: 1. change in tax exempt status of property; 2. reduction or enlargement of the geographic boundaries of the district; 3. change due to adjustments, negotiated or court-ordered abatements; 4. change in the use and tax classification of the property; 5. change in statutory rates used to determine Tax Capacity. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-3 In any year in which the current Net Tax Capacity value of the District declines below the ONTC,no value will be captured and no tax increment will be payable to the Authority. Subsection 2-9. Prior Planned Improvements The Authority has determined that no building permits have been issued for property within the District during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. Subsection 2-10. Original Tax Rate The amount of tax increment is calculated by multiplying the total local tax rate (excluding market value rates) by the Captured Tax Capacity value of the District. If the current total local tax rate exceeds the Original Tax Rate(OTR),the amount of tax increment produced by the tax rate above the OTR is distributed to the taxing jurisdictions as excess tax increment. The OTR for the District will be the local tax rate for taxes payable 2001, assuming the request for certification is made before June 30, 2001. The local tax rate for taxes payable 2001 is 104.005% Subsection 2-11. Estimated Tax Increment The Authority estimates that the total tax capacity value of property within the District upon completion of the proposed development will be $73,935. The amount of annual tax increment revenue is shown in the table below. Project Estimated Tax Capacity upon Completion (PTC) $73,935 Original Estimated Net Tax Capacity(ONTC) (1,570) Estimated Captured Tax Capacity (CTC) $72,365 Original Local Tax Rate (OTR) 104.0050% Pay 2001 Estimated Annual Tax Increment (CTC x Local Tax Rate) $75,263 Percent Retained by the Authority 100% The Authority requests 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2003 The following factors will determine the actual amount of tax increment received by the Authority: • Actual market value of property within the District as determined by the Assessor. • Statutory rates for setting tax capacity values. • Actual total local tax rate. The cash flow projections in Appendix B show the potential tax increment revenues collected by the Authority. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. I-1 2-4 Subsection 2-12. Use of Tax Increment Revenues derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in M.S., Section 469.174, subd. 11. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the Authority may be included in the cost of a housing project. Within this limitation,the Authority hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. to pay the principal of and interest on bonds issued to finance a project; 2. to finance, or otherwise pay the public development costs of the Housing Project Area No. I pursuant to the M.S. Sections 469.001 to 469.047; 3. to pay for project costs as identified in the budget set forth in the TIF Plan; 4. to finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. to pay principal and interest on any loans, advances or other payments made to or on behalf the Authority or for the benefit of Housing Project Area No. 1 by a developer; 6. to finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and 7. to accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, subd. 4. Tax increments generated in the District will be paid by Hennepin County to the Authority for the Tax Increment Fund of said District. The Authority will pay to the developer(s)annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements,demolition and relocation,site preparation,and administration. Remaining increment funds will be used for Authority administration(up to 10 percent)and the costs of public improvement activities. Pursuant to M.S., Section 469.1763, (1)At least 80%of the tax increment derived from the District must be expended on Public Costs incurred within said district, and up to 20%of said tax increments may be spent on Public Costs incurred outside of the District but within Housing Project Area No. 1;provided that in the case of a housing district,a housing project, as defined in M.S., Section 469.174, Subd. 11 is deemed to be an activity in the District,and(2)pubic costs within the District shall be limited to reimbursement of public costs paid before or within five years after certification of said district by the County Auditor and interest on all such unreimbursed expenditures. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-5 Subsection 2-13.Sources of Revenue The estimated sources of revenue for the District are contained in the table below. SOURCES OF FUNDS TOTAL Tax Increment $2,030,000 Other City Funds $0 PROJECT REVENUES $2,030,000 Interfund Loans/Transfers $1,393,000 Bond Proceeds $0 TOTAL PROJECT AND FINANCING REVENUES $3,423,000 The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The Authority and the City reserve the right to use other sources of revenue legally applicable to the Authority, the City and the TIF Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contributions from the developer and investment income,to pay for the estimated public costs. In addition to the actual tax increment collected by the Authority,the TIF Act(M.S. Section 469.174, Subd. 25) places restrictions on the use of revenues derived from the following sources: • the proceeds from the sale or lease of property,tangible or intangible, purchased by the authority with tax increments; • repayments of loans or other advances made by the authority with tax increments; and • interest or other investment earnings on or from tax increments. Subsection 2-14. Bonded Indebtedness It is anticipated that the Authority will use a pay-as-you-go note to reimburse the Developer for eligible expenses and interest on the unpaid balance. The City may use an interfund loan or a transfer of funds to pay for public costs. Tax increment revenues may be used to repay an interfund loan or transfer. The City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF Plan. Any bonded indebtedness will be incurred by the City or the Authority v.ithout a modification to the TIF Plan pursuant to applicable statutory requirements. This provision does not obligate the City to incur debt. The City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. It is expected that the Authority or the City will issue not more than $9,000,000 of housing revenue bonds under M.S.Chapter 462C to provide for the costs of the Project that are not paid by tax increment or a local contribution. Subsection 2-15. Uses of Funds Currently under consideration for the District is a proposal to facilitate construction of senior housing. The Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-6 Authority has determined that it will be necessary to provide financial assistance to the project. To facilitate the proposed development,this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF FUNDS TOTAL Land/Building Acquisition $775,000 Site Improvements/Preparation 100,000 Public Utilities 77,000 Parking Facilities 0 Streets and Sidewalks 562,000 Other Public Improvements 31,000 Interest on Pay-as-you-go Note $1,159,000 Administrative Costs(up to 10%) 70,000 PROJECT COSTS TOTAL S2.774.000 Interfund Loans/Transfers $649,000 Loan Interest 0 Bond Interest 0 Bond Principal 0 TOTAL FINANCING AND PROJECT COSTS $3,423,000 The above budget is organized according to the current State reporting forms. The information in Appendix A contains additional information about the project. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed the Total Project Costs in the table above without formal modification of this Plan pursuant to the applicable statutory requirements. The Authority may expend funds for qualified housing activities outside of the District boundaries. Subsection 2-16. Local Contribution (State Tax Increment Financing Aid) The City elects to make the annual local contribution to the project(pursuant to M.S.,Section 273.1399, Subd. 6) to exempt itself from the LGA-HACA penalty set forth in M.S. Section 273.1399. The District is exempt from the LGA-HACA reduction if the elects to make a qualifying local contribution at the time of approving the tax increment financing plan. To qualify for the exemption in each year, the must make a qualifying local contribution to the project in an amount equal to five percent(5%)of the annual tax increment for the District. The maximum local contribution for all districts in the City in any year is limited to two percent of the City's net tax capacity, after which point the City must make an additional contribution equal to the lesser of(a) 0.25 percent of the City's net tax capacity or (b) 3 percent of tax increment revenues for that year. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-7 The amount of the local contribution must be made out of unrestricted money of the City,such as the general fund, a property tax levy, or a federal or state grant-in-aid which may be spent for general government purposes. The local contribution may not be made, directly or indirectly,with tax increments or developer payments. The local contribution must be used to pay project costs and cannot be used for general government purposes. Such contribution may be in form of either lump sum or annual payments(in addition to tax increment payments)towards costs identified in this Plan or other costs related to that development or redevelopment. The contribution may also be made in the form of public improvements financed by the City or other unit of government with unrestricted funds. Subsection 2-17. Fiscal Disparities Election It is not anticipated that the District will contain commercial/industrial property. Therefore, the fiscal disparities provision does not apply to the District. Subsection 2-18. Business Subsidies Pursuant to M.S. Statutes 116J.993, Subdivision 3, assistance for housing is not considered a business subsidy. Subsection 2-19. County Road Costs Pursuant to M.S., Section 469.175,Subd. la,the county board may require the Authority to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county,substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. In the opinion of the Authority and consultants,the proposed development outlined in this TIF Plan will have little or no impact upon county roads. If the county elects to use increments to improve county roads,it must notify the Authority within forty-five days of receipt of this TIF Plan. Subsection 2-20. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the Authority has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: IMPACT ON TAX BASE 2000/2001 Estimated Captured Total Net Tax Capacity (CTC) Percent of CTC Tax Capacity Upon Completion to Entity Total Hennepin County 1,385,934,076 72,365 0.0052% City of Orono 17,779,001 72,365 0.4070% Orono ISD No. 278 23,991,541 72,365 0.3016% Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-8 IMPACT ON TAX RATES 2000/2001 Percent Potential Extension Rates of Total CTC Taxes Hennepin County 0.376240 36.18% 72,365 27,227 City of Orono 0.137080 13.18% 72,365 9,920 Orono ISD No. 278 0.431840 41.52% 72,365 31,250 Other 0.094890 9.12% 72,365 6,867 Total 1.040050 100.00% 75,263 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate and total net tax capacities used for calculations is for taxes payable in 2001. Subsection 2-21.Supporting Documentation Pursuant to M.S.Section 469.175 Subd la, clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause(2). Following is a list of reports and studies on file at the Authority that support the authority's findings: A list of applicable studies, if any, will be listed here prior to the public hearing. Subsection 2-22. Modifications The Authority reserves the right to make future modifications to the TIF Plan and District. In accordance with the TIF Act(MS. Section 469.175, Subd. 4) the following modifications may be made only upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan: 1. reduction or enlargement of the geographic area of Housing Project Area No. 1 or the District; 2. increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on debt if that determination was not a part of the original plan,or to increase or decrease the amount of interest on the debt to be capitalized; 3. increase in the portion of the captured net tax capacity to be retained by the Authority; 4. increase in total estimated tax increment expenditures; or 5. designation of additional property to be acquired by the Authority, Subsection 2-23.Time Factors 1. District Enlargement Pursuant to M.S. Section 469.175 Subd. 4(b),the geographic area of the District may be reduced,but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 11 must be documented. The requirements of this paragraph do not apply if(1)the only modification is elimination of parcel(s) from Housing Project Area No. 1 or the District and (2)(A)the current net tax capacity of the parcel(s)eliminated from the District equals or exceeds the net tax capacity Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-9 of those parcel(s) in the District's original net tax capacity or (B) the Authority agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of Housing Project Area No. 1 or the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. 2. Activity Within 3 Years No tax increment shall be paid to the Authority for the District after three(3)years from the date of certification of the Original Net Tax Capacity value of the taxable property in the District by the County Auditor(MS. Section 469.176, Subd la) unless: (a)bonds have been issued in aid of the project containing the district pursuant to M.S. Section 469.178, or any other law, except revenue bonds issued pursuant to M.S., Sections 469.152 to 469.165, or (b)the Authority has acquired property within the District, or (c)the Authority has constructed or caused to be constructed public improvements within the District. The bonds must be issued, or the Authority must acquire property or construct or cause public improvements to be constructed by approximately June,2004 and report such actions to the County Auditor. 3. 4-Year Knockdown Parcels without"qualifying activity"will be knocked out of the District after four years from the date of certification of the original net tax capacity. M.S. Section 469.176, Subd. 6 defines qualifying activities as"demolition,rehabilitation or renovation of property or other site preparation,including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems" in accordance with the TIF Plan. For purposes of the knock down requirements,qualified improvements of a street are limited to(1)construction or opening of a new street,(2)relocation of a street,and(3)substantial reconstruction or rebuilding of an existing street. Knock down means that the original net tax capacity of that parcel is excluded from the original net tax capacity of the District and no tax increment may be collected from that parcel. If the Authority or the owner of the parcel subsequently commences a qualifying activity in accordance with the TIF Plan,the Authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The Authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district.The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district. The Authority, the City or a property owner must improve parcels within the District by approximately June, 2005 and report such actions to the County Auditor. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-10 4. 5-Year Limit After five years from the date of certification of the TIF District,tax increment may only be used to (1) repay existing bonds the proceeds of which must be used to finance the activity, are issued and sold to a third party before or within five years after certification,the revenues are spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, reasonably expected to be spent before the end of the later of(a) the five-year period, or (b) a reasonable temporary period within the meaning of the use of that term under § 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund; (2) reimburse a developer or other third party for eligible expenses paid before or within five year period, including interest on unreimbursed costs;(3)eligible administrative expense;and(4)eligible expenses under M.S.Section 469.1763, Subd. 2 (Pooling). Subsection 2-24.Administration of the District Administration of the District will be handled by the City Administrator. Subsection 2-25.Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, and M.S., Section 469.176, Subd. 3, administrative expenses means all expenditures of the Authority, other than: 1. amounts paid for the purchase of land; 2. amounts paid to contractors or others providing 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; or 4. amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in sections 1 to 3. For districts for which the request for certification were made before August 1, 1979,or after June 30, 1982, administrative expenses also include amounts paid for services provided by bond counsel,fiscal consultants, and planning or economic development consultants. Tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total tax increment expenditures authorized by the TIF Plan or the total tax increment expenditures for Housing Project Area No. 1,whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the county's actual administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the county treasurer shall deduct an amount equal to 0.25 percent of any increment distributed to the Authority and the county treasurer shall pay the amount deducted to the state treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-11 Subsection 2-26. Excess Tax Increments Pursuant to M.S., Section 469.176, Subd. 2, in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the TIF Plan, including the amount necessary to cancel any tax levy as provided in M.S., Section 475.61, Subd. 3, the Authority shall use the excess amount to do any of the following: 1. prepay any outstanding bonds; 2. discharge the pledge of tax increment therefor; 3. pay into an escrow account dedicated to the payment of such bonds; or 4. return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. In addition,the Authority may, subject to the limitations set forth herein,choose to modify the TIF Plan in order to finance additional public costs in Housing Project Area No. 1 or the District. Subsection 2-27. Requirements for Agreements with the Developer The Authority will review any proposal for private development to determine its conformance with the Development Program and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings,landscaping plan,grading and storm drainage plan,signage system plan,and any other drawings or narrative deemed necessary by the Authority to demonstrate the conformance of the development with Authority plans and ordinances. The Authority may also use the Agreements to address other issues related to the development. Pursuant to MS., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the Authority as a result of acquisition with the proceeds of bonds issued pursuant to M.S.,Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the acreage, the Authority concluded an agreement for the development of the property acquired and which provides recourse for the Authority should the development not be completed. Subsection 2-28.Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8,the Authority may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the assessor shall also certify the minimum market value agreement. Subsection 2-29.Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subd. 5, 6 and 6a the Authority must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board, County Auditor and School Board on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-12 annual statement shall be published in a newspaper of general circulation in the Authority on or before August 15. If the Authority fails to make a disclosure or submit a report containing the information required by M.S. Section 469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-30. Reasonable Expectations As required by the Tax Increment Financing Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that 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 the 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 District permitted by the TIF Plan. In making said determination, reliance has been placed upon written representatives made by the developer to such effects and upon City staff awareness of the feasibility of developing the project site. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix C, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions)exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-31. Other Limitations on the Use of Tax Increment All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay the public development costs of the Housing Project Area No. 1 pursuant to the M.S., Sections 469.001 to 469.047 and the costs of a housing development project described in M.S. Section 469.017. These revenues shall not be used to circumvent existing levy limit law. No revenues derived from tax increment shall be used for 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 provision shall not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure or of a privately owned facility for conference purposes. Orono HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 2-13 APPENDIX A PROJECT DESCRIPTION The Authority and the Developer will enter into a development agreement containing a pay-as-you-go note. Through the Note, the Authority will reimburse the Developer for eligible expenses with interest on the unpaid balance. The anticipated reimbursable expenses include: Land acquisition $775,000 Site improvements 100,000 Sewer connection fees 41,000 Park dedication fees 161,200 The actual costs to be reimbursed will be determined through the negotiation ofthe development agreement. In'undertaking the TIF Plan,the City and the Authority expect to incur certain expenses. These expenses include, but are not limited to, the following: Sidewalk $12,000 Street lighting 32,000 Bury power lines 45,000 Traffic control (Brown Road/Highway 12) 150,000 Intersection improvements(Brown Road/Highway 12) 100,000 Access to Brimhall/Highway 12 intersection 100,000 Traffic control (Brimhall Avenue) 150,000 Access to Highway 12 50,000 To the degree permissible by the TIF Act,this Plan and the available funds,the Authority and the City will finance these activities with interfund loans and repayment from future tax increment revenues. APPENDIX A-I APPENDIX B ESTIMATED CASH FLOW FOR THE DISTRICT Project Value Information EMV Tax Per Capacity Units Built Per Year Project Unit Per Unit 2001 2002 2003 2004 Senior Housing (Class rate-1.20./1.65%) 93,000 1,193 62 0 0 0 Tax Increment Projections Tax Gross Local Net Local Tax Capacity Values Extension Tax Retained Semi-Annual Contribution Year Base Total Captured Rate Increment 10.00% Increment 5% 2001 1,570 0 0 1.04005 0 0 0 0 8/1/2001 0 2/1/2002 2002 1,570 0 0 1.04005 0 0 0 0 8/1/2002 0 2/1/2003 2003 1,570 73,935 72,365 1.04005 75,263 (7,526) 33,868 3,763 8/1/2003 33,868 2/1/2004 2004 1,570 76,892 75,322 1.04005 78,339 (7,834) 35,253 3,917 8/1/2004 35,253 2/1/2005 2005 1,570 76,892 75,322 1.04005 78,339 (7,834) 35,253 3,917 8/1/2005 35,253 2/1/2006 2006 1,570 76,892 75,322 1.04005 78,339 (7,834) 35,253 3,917 8/1/2006 35,253 2/1/2007 2007 1,570 76,892 75,322 1.04005 78,339 (7,834) 35,253 3,917 8/1/2007 35,253 2/1/2008 2008 1,570 79,968 78,398 1.04005 81,538 (8,154) 36,692 4,077 8/1/2008 36,692 2/1/2009 2009 1,570 83,167 81,597 1.04005 84,865 (8,486) 38,189 4,243 8/1/2009 38,189 2/1/2010 2010 1,570 86,493 84,923 1.04005 88,325 (8,832) 39,746 4,416 8/1/2010 39,746 2/1/2011 2011 1,570 89,953 88,383 1.04005 91,923 (9,192) 41,365 4,596 8/1/2011 41,365 2/1/2012 2012 1,570 93,551 91,981 1.04005 95,665 (9,567) 43,049 4,783 8/1/2012 43,049 2/1/2013 2013 1,570 97,293 95,723 1.04005 99,557 (9,956) 44,801 4,978 8/1/2013 44,801 2/1/2014 2014 1,570 101,185 99,615 1.04005 103,605 (10,360) 46,622 5,180 8/1/2014 46,622 2/1/2015 2015 1,570 105,233 103,663 1.04005 107,814 (10,781) 48,516 5,391 8/1/2015 48,516 2/1/2016 2016 1,570 109,442 107,872 1.04005 112,192 (11,219) 50,486 5,610 8/1/2016 50,486 2/1/2017 2017 1,570 113,820 112,250 1.04005 116,745 (11,675) 52,535 5,837 8/1/2017 52,535 2/1/2018 2018 1,570 118,372 116,802 1.04005 121,480 (12,148) 54,666 6,074 8/1/2018 54,666 2/1/2019 2019 1,570 123,107 121,537 1.04005 126,405 (12,640) 56,882 6,320 8/1/2019 56,882 2/1/2020 2020 1,570 128,031 126,461 1.04005 131,526 (13,153) 59,187 6,576 8/1/2020 59,187 2/1/2021 2021 1,570 133,153 131,583 1.04005 136,853 (13,685) 61,584 6,843 8/1/2021 61,584 2/1/2022 2022 1,570 138,479 136,909 1.04005 142,392 ,(14,239) 64,076 7,120 8/1/2022 64,076 2/1/2023 Total 2,029,504 (202,950) 1,826,554 101,475 The figures above are estimates of future tax increment revenues based on assumptions about property values in the District and the operation of the property tax systems. Changes in these assumptions will alter the projected revenues. These projections intended solely to illustrate the revenues that could be created if these assumptions become reality. APPENDIX B-1 If collected over the maximum statutory duration,present value of the projected tax increments is estimated to be$848,000. Based on experience with other development in Orono and in comparable communities and based on the analysis of the proposed development,it is reasonable to expect that the increased market value of the site without the use of tax increment financing would be less than$4,918,000. This amount represents the estimated increase in market value from the proposed development minus the estimated present value of the tax increments. This finding is based on the assumption that other development of the site would meet similar public purposes and objectives and would comply with City plans and land use regulations. APPENDIX B_2 APPENDIX C BUT/FOR QUALIFICATIONS The Developer has submitted proforma analysis and other supporting information related to the need for the use of tax increment financing. This information shows that without the use of tax increment financing,the proposed development is not financially feasible. The rents required with the assistance cannot be supported and do not make the housing available for persons of low and moderate income. The projected income from the development do not produce sufficient return on investment to make a feasible project without tax increment assistance. The Authority will enter into a development agreement in conjunction with granting the tax increment assistance. This agreement will provide additional representations by the Developer concerning the need for the use of tax increment financing. APPENDIX C-1 A—TrA—e Frau 1.3-r- 1-/ Draft as of May 9, 2001 iii For Public Hearing II DEVELOPMENT PLAN for HOUSING PROJECT NO. 1 ORONO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF ORONO HENNEPIN COUNTY STATE OF MINNESOTA Public Hearing: May 14, 2001 Adopted: 0E H L E R S Prepared by: EHLERS &ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 & ASSOCIATES INC (651) 697-8500 fax: (651)697-8555 www.ehlers-inc.com TABLE OF CONTENTS (for reference purposes only) MUNICIPAL ACTION TAKEN iii SECTION I Development Plan for Housing Project No. 1 1-1 Subsection 1-1. Definitions 1-1 Subsection 1-2. Statutory Authority 1-2 Subsection 1-3. Statement of and Finding of Public Purpose 1-2 Subsection 1-4. Statement of Objectives 1-2 Subsection 1-5. Statement of Public Facilities and Costs to Be Financed 1-3 Subsection 1-6. Funding of Developments and Redevelopments 1-4 Subsection 1-7. Environmental Controls 1-4 Subsection 1-8. Proposed Reuse of Property 1-4 Subsection 1-9. Open Space to Be Created 1-4 Subsection 1-10. Administration and Maintenance of Housing Project No. 1 1-4 Subsection 1-11. Rehabilitation 1-5 Subsection 1-12. Relocation 1-5 Subsection 1-13. Property Acquisition' 1-5 Subsection 1-14. Modification of the Development Plan and/or Housing Project No. 1 1-5 Subsection 1-15. Boundaries of Housing Project No. 1 A-1 ii MUNICIPAL ACTION TAKEN (This Municipal Action is only for convenience of reference.) Based upon the statutory authority described in the Development Plan attached hereto,the public purpose findings by the Board of Commissioners and for the purpose of fulfilling the Authority's development objectives as set forth in the Development Plan,the Board of Commissioners has created, established and designated Housing Project No. 1 pursuant to and in accordance with the requirements of the HRA Act and the TIF Act as defined in the definitions of this document. Tax Increment Financing District No. 1-1,a housing tax increment financing district,was established at the same time that the Housing Project No. 1 was established. The following municipal action was taken in connection therewith: Housing Project No. 1: May 14, 2001: The Housing Project No. 1 was established by the Authority and the Development Plan adopted. Tax Increment Financing District No. 1-1: May 14,2001: The Tax Increment Financing District No. 1-1 was established by the Authority and the Tax Increment Financing Plan adopted. iii SECTION I Development Plan for Housing Project No. 1 Subsection 1-1. Definitions The terms defined below shall,for purposes of this Development Plan,have the meanings herein specified, unless the context otherwise specifically requires. 1. "Authority" means the Orono Housing and Redevelopment Authority. 2. "Board of Commissioners" means the Board of Commissioners of the Authority. 3. "City" means the City of Orono. 4. "Comprehensive Plan" means the documents which contain the objectives, policies, standards and programs to guide public and private land use, development, redevelopment and preservation for all lands and water within the City. 5. "County" means the County of Hennepin, Minnesota. 6. "Development Plan"means this Development Plan for Housing Project No. 1,as initially proposed,and as it shall be modified. 7. "HRA Act" means Minnesota Statutes, Sedtion 469.001 through 469.047. 8. "Land Use Regulations"means all federal,state and local laws,rules,regulations,ordinances,and plans relating to or governing the use of development of land in the City, including but not limited to environmental, zoning and building code laws and regulations. 9. "Project Area" means the real property within the City constituting the Housing Project No. 1. 10. "Public Costs"means the costs set forth in the Tax Increment Financing Plan,and any other costs eligible to be financed by Tax Increments under the TIF Act and the HRA Act. 11. "Public Improvements" means the public improvements described in the Development Plan and Tax Increment Financing Plan. 12. "State" means the State of Minnesota. 13. "Tax Increment Bonds" means any tax increment bonds or notes issued by the Authority to finance the Public Costs as stated in the Development Plan for Housing Project No. 1 and in the Tax Increment Financing Plans, and any obligations issued to refund such bonds. 14. "TIF Act" means Minnesota Statutes, Sections 479.174 through 479.179, inclusive, as amended. 15. "Tax Increment Financing District"means any tax increment financing district presently established or to be established in the future in Housing Project No. 1. 16. "Tax Increment Financing Plan" or "Plan" means the Plans adopted by the Authority for any Tax Increment Financing District. Orono HRA Development Plan for Housing Project No. 1 1-1 Subsection 1-2. Statutory Authority The HRA Act authorizes the Authority, upon certain public purpose findings by the Authority and City,to establish and designate housing,development and redevelopment projects within the City and to establish, develop and administer redevelopment plans therefore to meet the needs and accomplish the public purposes specified in Statement of and Finding of Public Purpose. In accordance with the purposes set forth in the HRA Act, the Authority has established Project Area. The Project Area shall be designated as Housing Project No. 1 contain the area described in Subsection 1.15. The Tax Increment Financing Act authorizes the Authority, upon certain findings, establish and designate tax increment financing districts within the Project Area and to adopt and implement a tax increment financing plan to accomplish the Development Plan established for the Housing Project No. 1. Subsection 1-3. Statement of and Finding of Public Purpose The Authority has determined that there is a need for the Authority to take certain actions designed to encourage,ensure,and facilitate development and redevelopment by the private sector of underutilized and unused land located within the corporate limits of the City, in order to provide adequate and affordable housing for residents of the City and the surrounding area,to improve the tax base of the City,the County and the School District,to better utilize existing public facilities and provide needed public services,and to improve the general economy of the City, the County, and the State. Specifically, the Authority has determined that the property within the Project Area is either underutilized or unused due to a variety of factors,which has resulted in a lack of private investment. The Authority further finds that the private sector has not provided the variety of housing opportunities necessary to meet the needs of the community. It is necessary for the Authority to exercise its authority under the HRA Act and the TIF Act to develop, implement and finance a program designed to encourage, ensure and facilitate the development of the property located in the Project Area, to further and accomplish the public purposes specified in this Development Plan. The development currently proposed in the Project Area consists of approximately 62 units of rental housing for senior citizens. The Authority finds that this development will alleviate a shortage of decent, safe and affordable housing for persons of low and moderate income. In adopting this Development Plan, the Authority also finds: 1. The development proposed for the Project Area would not occur solely through private investment in the foreseeable future. 2. The proposed development is consistent with the overall plans for the development of the City. 3. The proposed use of tax increment financing will afford maximum opportunity,consistent with the sound needs of the City as a whole, for the development or redevelopment of the property located in Housing Project No. 1 by private enterprise. 4. The welfare of the City, County, and the State of Minnesota requires active promotion, attraction, encouragement and development of a variety of housing opportunities. Subsection 1-4. Statement of Objectives The establishment of the Project Area in the City, pursuant to the HRA Act, is necessary and in the best interests of the City and its residents and is necessary to give the Authority the ability to meet certain public purpose objectives that would not be obtainable in the foreseeable future without intervention by the Authority in the normal development process. Orono HRA Development Plan for Housing Project No. 1 1-2 The Authority intends, to the extent permitted by law, to accomplish the following objectives through the implementation of the Development Plan: 1. Promoting and securing the prompt development of property in the Project Area in a manner consistent with the City's planning and with a minimal adverse impact on the environment,which property is less productive because of the lack of proper utilization and lack of investment,and thereby promoting and securing the development of other land in the City. 2. Promoting and securing additional housing opportunities within the Project Area and the City for residents of the City and the surrounding area,thereby improving living standards and preventing the loss of residents. 3. Securing the increase in value of property subject to taxation by the City, School District, County and any other taxing jurisdictions in order to better enable such entities to pay for public improvements and governmental services and programs required to be provided by them. 4. 'Securing the construction and providing moneys for the payment of the cost of public improvements in the Project Area, which are necessary for the orderly and beneficial development of the Project Area. 5. Creating a desirable and unique character within the Project Area through quality land use alternatives and design quality in new buildings. 6. Providing and securing the development of increased opportunities for senior citizens to choose from housing options which offer a wide array of services without regard to income. Subsection 1-5. Statement of Public Facilities and Costs to Be Financed The Authority will perform or cause to be performed, to the extent permitted by law, all project activities pursuant to the HRA Act, the TIF Act and other applicable state laws, and in doing so anticipates that the following may, but are not required,to be undertaking by the Authority: 1. The making of studies, planning,and other formal and informal activities relating to the Development Plan. 2. The implementation and administration of the Development Plan. 3. The re-zoning of land within the City. 4. The acquisition of property,or interests in property,by purchase or condemnation,which acquisition is consistent with the objectives of the Development Plan. 5. The resale or lease of property to private parties. 6. The establishment of covenants or other restrictions to protect public interests. 7. The preparation of property for use and development in accordance with applicable Land Use Regulations and any development agreements, including demolition of structures, clearance of sites, placement of fill and grading. 8. The construction of public improvements and facilities needed to serve the Project Area. Orono HRA Development Plan for Housing Project No. 1 1-3 9. The construction, expansion, or relocation of private utilities. 10. The construction or reconstruction of facilities to own and lease as described in the Tax Increment Financing Plans. 11. The issuance of Tax Increment Bonds to finance the Public Costs of the Redevelopment Plan, and the use of Tax Increments or other funds available to the Authority to pay or finance the Public Costs of the Development Plan incurred or to be incurred by it pursuant to the Development Agreement. 12. The use of Tax Increments to pay debt service on the Tax Increment Bonds or otherwise pay or reimburse with interest the Public Costs of the Development Plan. 13. The issuance of housing revenue bonds by the Authority or the City to finance the costs of the Project. Subsection 1-6. Funding of Developments and Redevelopments It is anticipated that the Public Costs of the Development Plan will be paid from proceeds of Tax Increment revenues. The Authority reserves the right to utilize other available sources of revenue, including but not limited to special assessments and user charges,which the Authority may apply to pay a portion of the Public Costs. Subsection 1-7. Environmental Controls All municipal actions, public improvements and private development shall be carried out in a manner consistent with existing environmental controls and all applicable Land Use regulations. Subsection 1-8. Proposed Reuse of Property The Development Plan contemplates that the Authority may acquire property and reconvey or lease the same to another entity. Prior to formal consideration of the acquisition of any property,the Authority will require the execution of a binding development agreement with respect thereto and evidence that Tax Increments or other funds will be available to repay the Public Costs associated with the proposed acquisition. It is the intent of the Authority to negotiate the acquisition of property whenever possible. Appropriate restrictions regarding the reuse and redevelopment of property shall be incorporated into any development agreement to which the Authority is a party. Subsection 1-9. Open Space to Be Created Any open space within the Project Area will be created in accordance with the zoning and ordinances of the Authority. Subsection 1-10. Administration and Maintenance of Housing Project No. 1 Maintenance and operation of the Project Area will be the responsibility of the City Administrator. Each year,the Administrator of the Project Area will submit to the Board of Commissioners the maintenance and operation budget for the following year. The Administrator of the Project Area will administer the Project Area pursuant to the provision of the HRA Act;provided,however,that such powers may only be exercised at the direction of the Authority. No action taken by the administrator of the Project Area pursuant to the above-mentioned powers shall be effective without authorization by the Authority. Orono HRA Development Plan for Housing Project No. 1 1-4 Subsection 1-11. Rehabilitation Owners of properties within the Project Area may be encouraged to rehabilitate their properties to conform with the applicable state and local codes and ordinances, as well as any design standards. Persons who purchase property within the Project Area from the Authority may be required to rehabilitate their properties as a condition of sale of land.The Authority may provide such rehabilitation assistance as may be available from federal, state or local sources. Subsection 1-12. Relocation Any person or business that is displaced as a result of the Development Plan will be relocated in accordance with Minnesota Statutes, Section 117.50 to 117.56. The Authority accepts its responsibility for providing for relocation assistance pursuant to the HRA Act. Subsection 1-13. Property Acquisition The Authority intends to acquire such property, or appropriate interest therein, within the Project Area as the Authority may deem to be necessary or desirable to assist in the implementation ofthe Development Plan. Subsection 1-14. Modification of the Development Plan and/or Housing Project No. 1 The Authority reserves the right to alter and amend the Development Plan and the Tax Increment Financing Plans, subject to the provisions of state law regulating such action. The Authority specifically reserves the right to enlarge or reduce the size of the Project Area and the Tax Increment Financing District, the Development Plan,the Public Costs and the amount of Tax Increment Bonds(if any)to be issued to finance such cost by following the procedures specified in Minnesota Statutes, Section 469.175, subdivision 4. Orono HRA Development Plan for Housing Project No. 1 1-5 Subsection 1-15. Boundaries of Housing Project No. 1 The boundaries of the Project Area shall be as shown in the map below. .. ,,,,, n ,t, : 4' 1 .a, ' L r —.,-;-,4t' i .__,,,o/ Y., .. ...;;,...,1 - — . MI 11 4 0 - Alms [ ii, — Ag pip/ pqq e �: a 5 w e ? iaw L_ .F.tss a'zata B1Vd ? g I n + _ _eii 2 Ott\ C" , 4 n 6 C , . v`.' ;rtf h ,.n 2 .I°,. 'Att +._.r ;x. - r an rr/x a ata .Ga' ' w44 40. „e.;,•,, f. dd• a ' s •^$ RN & n., ,— � XX 'tCgd511.VICOA14_... , 't Housing - 5 *` �,, 1 - 41.4.4a k Project No. 1 a.., mai v.. Q DANras St x+nr a . .: I coo- -), x. �.oso, n E¢ -. } 4 j t TIF District 1-1 R�lD�IIYP3Ob. PAni� I *w " mow 3 an i .x ;1 ..0 s- ' p.,.."6" '' .,r L r'f. Vijay - ct H n ly w : ) i14n PO f1A t !!! These boundaries include the following parcels and all adjacent street right-of way: [to be added] Orono HRA Development Plan for Housing Project No. 1 A-1 CITY OF ORONO HENNEPIN COUNTY STATE OF MINNESOTA Council member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING THE REDEVELOPMENT PLAN FOR HOUSING PROJECT AREA NO. 1,ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-1 THEREIN, AND ADOPTING THE TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council(the"Council")of the City of Orono,Minnesota(the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed by the Orono Housing and Redevelopment Authority (the "HRA") and the City that the City adopt the Development Plan for Housing Project Area No. 1, establish Tax Increment Financing District No. 1-1 (the "District") therein and adopt the Tax Increment Financing Plan therefor(collectively,the"Plans"); all pursuant to and in conformity with applicable law,including Minnesota Statutes,469.001 through 469.047 and 469.174 through 469.179, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The City has investigated the facts relating to the Plans and has caused the Plans to be prepared. 1.03. The City has performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Hennepin County and Independent School District No. 278 having taxing jurisdiction over the property to be included in the District,and the holding of a public hearing upon published notice as required by law. 1.04. Other written reports and analysis (the"Supporting Data") relating to the Plans and to the activities contemplated therein have heretofore been prepared and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Supporting Data include data, information and/or substantiation constituting or relating to the bases for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Supporting Data,which are hereby incorporated into and made as fully a part of this resolution to the -1- same extent as if set forth in full herein. Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The Council hereby finds that the Plans, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public purpose and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of Tax Increment Financing District No. 1-1. 3.01. The Council hereby finds that Tax Increment Financing District No. 1-1 is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, subd. 11. 3.02. The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future and that 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 the 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 District permitted by the Tax Increment Financing Plan,that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3.03. The City elects to make a qualifying local contribution in accordance with Minnesota Statutes, Section 273.1399, subd. 6(d), in order to qualify the District for exemption from state aid losses set forth in Section 273.1399. 3.04. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. Section 4. Public Purpose 4.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide housing opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 5. Approval and Adoption of the Plans. 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein,are hereby approved,ratified,established,and adopted and shall be placed on file in the office of the City Administrator. -2- 5.02. The HRA,the staff of the City,the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the City of Orono is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City Administrator is further authorized and directed to file a copy of the Plans as required by the Act. The motion for the adoption of the foregoing resolution was duly seconded by Council member , and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Dated: , 2001 ATTEST: Mayor City Administrator (Seal) -3- EXHIBIT A RESOLUTION# As required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3, the reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-1, set forth below. Additional supporting information for each finding appears in the Plans and in the files of the City. 1. Finding that Tax Increment Financing District No. 1-1 is a housing district as defined in M.S., Section 469.174, Subd. 11. The District consists of one parcel. The proposed development will consist of approximately 62 units of rental housing for senior citizens. Twenty percent (20%) of the units will be occupied by persons with incomes less than 50% of the area median income. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that 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 the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of Tax Increment Financing District No. 1-1 permitted by the Plan. 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:This finding is supported by the fact that the development proposed in this plan is a housing that meets the City's objectives for development and redevelopment. The cost of land acquisition, site and public improvements and utilities makes this housing development infeasible without City assistance. Due to the high cost of building affordable new housing in the City and the cost of financing the proposed public improvements,this project is feasible only through assistance, in part, from tax increment financing. The developer has provided information demonstrating that the proposed development would not have gone forward without tax increment assistance. The increased market value of the site that could reasonable 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 Plan: The City supported this finding on the grounds that the cost of land acquisition,site and public improvements and utilities add to the total development cost. With the tax increment assistance the proposed housing development could not offer rents afford able to persons of low or moderate income. Therefore, land and site development costs in this area have made the proposed development infeasible without tax increment assistance. The City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided to the development. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the District,the total increase in market value would be up to $5,766,000. The present value of tax increments from the District is estimated to be $848,000. It is the Council's finding that no development with a market value of greater than$4,918.000 would occur -4- without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the development of the area,existing land use regulations and development objectives of the City. 3. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission and the City Council have conducted reviews of the proposed development for compliance with City land use regulations and the Comprehensive Plan. Based on the results of the reviews,the City Council determines that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 will afford maximum opportunity, consistent with the sound needs of the City as a whole,for the development or redevelopment of Housing Project Area No. 1 by private enterprise. Through the implementation of the Plan,the City will provide provide safe,decent,and affordable housing ' for persons of low and moderate income. • -5- ti-iTixtmmosT ORONO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF ORONO HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION ADOPTING THE REDEVELOPMENT PLAN FOR HOUSING PROJECT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-1 WITHIN HOUSING PROJECT NO. 1 AND ADOPTING THE TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Orono Housing and Redevelopment Authority(the "HRA")and the City of Orono(the"City")that the HRA adopt the Development Plan for Housing Project No. 1 and establish Tax Increment Financing District No. 1-1 and adopt the Tax Increment Financing Plan therefor,(collectively,the"Plans"),all pursuant to and in conformity with applicable law,including Minnesota Statutes,Sections 469.001 through 469.047,and Sections 469.174 to 469.179, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS,the City has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS,the City has performed all actions required by law to be performed prior to the adoption of the Plans. The City has also requested the Council schedule a public hearing on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: 1. The HRA hereby finds that Tax Increment Financing District No. 1-1 is in the public interest and is a"housing district"under Minnesota Statutes,Section 469.174,subd. 11 and Minnesota Statutes,and finds that the adoption of the proposed Plans conforms in all respects to the requirements of the Act and will facilitate the development of a parcel of land in the City that due to a variety of conditions and reasons has remained undeveloped and will result in the construction of needed decent, safe and sanitary housing for persons of low and moderate income and thereby serves a public purpose. 2. The HRA further finds that the Plans will afford maximum opportunity,consistent with the sound needs for the City as a whole, for the development or redevelopment of the project area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. Conditioned upon the approval thereof by the City Council following its public hearing thereon,the Plans, as presented to the HRA on this date, are hereby approved,established and adopted and shall be placed on file in the office of the City Administrator. 4. Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to -1- negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. 5. Upon approval of the Plans by the City Council,the City Administrator is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue pursuant to Minnesota Statutes 469.175, subdivision 2. 6. The City Administrator is authorized and directed to forward a copy of the Plans to the Hennepin County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. Approved by the HRA of the City of Orono on this day of , 2001. Chair ATTEST: • Secretary -2- CITY OF ORONO HENNEPIN COUNTY STATE OF MINNESOTA Council member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION APPROVING HOUSING PROGRAM AND STATING INTENT TO ISSUE HOUSING REVENUE BONDS BE IT RESOLVED by the City Council (the "Council") of the City of Orono, Minnesota(the "City"), as follows: 1. On May 14, 2001 this Council held public hearings on a Program for the Financing of a Multifamily Rental Housing Development for Seniors (the "Housing Program") and on the issuance of up to $9 million of housing revenue bonds (the "Housing Bonds") pursuant to Minnesota Statutes, Chapter 462C to finance the Program. The Program provides for acquisition of land and construction of 62 units of multifamily housing for seniors to be located at Brown Road and Wayzata Boulevard and to be owned by Wedum Foundation or Orono Senior Housing, LLC. 2. The Program is hereby approved. 3. The issuance of the Bonds given preliminary approval. The City intends to issue the Bonds subject to negotiation and consideration of the terms thereof and related documents. City staff, the City Attorney and bond counsel are authorized to negotiate and prepare appropriate documents relating to the Bonds for consideration by this Council. The motion for the adoption of the foregoing resolution was seconded by Council member , and upon a vote being taken thereon the following voted in favor thereof: and the following voted against the same: Dated: ATTEST: Mayor City Administrator MI 750269 01 4.7-7-Pre-e4 '— 5 /Ehlers 8Z Associateset I' -' Tax Increment Financing District Overview <, City of Orono/Orono HRA Tax Increment Financing District No. 1 -1 Proposed action: Establishment of Housing Project Area No. and the adoption of a Development Plan. Establishment of Tax Increment Financing District No. 1-1 and the adoption of the Tax Increment Financing Plan. It is anticipated that the City Council will conduct the public hearing on May 14, 2001, but not take any formal action. The adoption of the resolutions approving the above actions will be considered at a subsequent meeting. Type of TIF District: A Housing District. Twenty percent(20%)of the units will be occupied by persons with incomes less than 50% of the area median income. Parcel Numbers: 34-118-23-24-0058* (*The parcel will be subdivided and a new parcel number will be assigned to the property included within the district.) Location: • i2 ,. u it E .F ? A i' f '..4I gay B♦ 4, !----j'''.1-....,;1,._., h1, ,191 a: i' 0°- 1 : -. _ waYL7t� a l r ti! - �...... Blvd _ L - ""^*;:',4'4, • F7. 4.2." � tg �Y 4.-4.- Pi 5 "P '"` l E.. ,�2-. / '� R, N}ir A�'N 1 s `' 2 _.. 1 I ��ti -` :::: i > .o ''- eowr. ... 4'1 , • / �•Od' ." ,r.v :'G ikø Housin , o' , ' Project o..v:a s sr �* T a �Y .:, - �J TIF District 1-1 ', 19lTHIAt PAfrc r'It ;�. .- 2 SO .. i ' i sa `` Proposed development: Orono Woods. Approximately 62 units of housing for occupancy by senior citizens. Estimated annual tax $75,263. This amount is based on assumptions value of the proposed increment: development after the completion of construction. The estimate is also based on the current parameters of the property tax system. Changes in these assumptions will alter the actual tax increment revenues. TIPDistrict No. 1-1 -Overview Proposed uses: Tax increment collected from the District will be used to reimburse the Developer for costs of land acquisition and site development. The actual terms of assistance will be set forth in a development agreement between the City,the HRA and the developer. The City anticipates retaining 10% of the tax increment to pay for administration and other eligible public costs. The table below contains the authorized expenditures in the TIF Plan. These amounts set the maximum expenditures that can be made without a formal modification of the TIF Plan. The TIF Plan does not compel the City or the HRA to make these expenditures. Land/Building Acquisition $775,000 Site Improvements/Preparation $100,000 Public Utilities $77,000 Streets and Sidewalks $562,000 Other Public Housing Improvements $31,000 Interest on Pay-as-you-go Note $1,159,000 Administrative Costs(up to 10%) $70,000 PROJECT COSTS TOTAL S2,774,000 Interfund Loan/Transfers $649,000 Loan Interest $0 Bond Interest $0 Bond Principal ,$1) TOTAL FINANCING & PROJECT COSTS S3,423,000 Form of financing: It is anticipated that the Authority will use a pay-as-you-go note to reimburse the Developer for eligible expenses and interest on the unpaid balance. The City may use an interfund loan or a transfer of funds to pay for public costs. Tax increment revenues may be used to repay an interfund loan or transfer. Maximum duration: The maximum duration of the District will be 25 years after receipt of the first increment by the HRA or City. The date of receipt by the City of the first tax increment is expected to be 2003. Thus, it is estimated that the District, including any modifications of the Plan for subsequent phases or other changes, would terminate after 2028, or when the Plan is satisfied. If increment is received in 2002,the term of the District will be 2027. Administrative fee: Up to 10% of annual increment, if costs are justified. LGA/HACA penalty: The City elects to make the annual local contribution to the project to exempt itself from the LGA-HACA penalty. Contribution for a housing district is 5% of annual tax increment. The contribution can be made annually or in larger contribution throughout the life of the district. 3 Year Activity Rule At least one of the following activities must take place in the District ( 469.176 Subd. 1 a) within 3 years from the date of certification: • bonds have been issued • the authority has acquired property within the district • the authority has constructed or caused to be constructed public improvements within the district The estimated date whereby this activity must take place is June, 2004. Page 2 TIP District No. 1-1 - Overview 4 Year Activity Rule After four years from the date of certification of the District one of the ((469.176 Subd 6) following activities must have been commenced on each parcel in the District: • demolition • rehabilitation • renovation • other site preparation(not including utility services such as sewer and water) If the activity has not been started by the approximately June, 2005, no additional tax increment may be taken from that parcel until the commencement of a qualifying activity. 5 Year Rule • Within 5 years of certification revenues derived from tax increments ((469.1763 Subd 3) must be expended or obligated to be expended. Tax increments are considered to have been expended on an activity within the District if one of the following occurs: • the revenues are actually paid to a third party with respect to the activity • bonds,the proceeds of which must be used to finance the activity,are issued and sold to a third party, the revenues are spent to repay the bonds,and the proceeds of the bonds either are reasonably expected to be spent before the end of the later of(i)the five year period, or(ii)a reasonable temporary period within the meaning of the use ofthat term under§. 148(c)(1)of the Internal Revenue Code,or are deposited in a reasonably required reserve or replacement fund • binding contracts with a third party are entered into for performance of the activity and the revenues are spent under the contractual obligation • costs with respect to the activity are paid and the revenues are spent to reimburse a pay for payment of the costs, including interest on unreimbursed costs. Any obligations in the Tax Increment District made after approximately June, 2006, will not be eligible for repayment from tax increments. The previous summary contains an overview of the basic elements of the proposed Tax Increment Financing Plan for Tax Increment Financing District No. 1-1. More detailed information on each of these topics can be found in the complete TIF Plan. Page 3 REQU ST FOR COUNCIL ACTION /peed CZE ( gr- �,1� "' f� S Date: March 6, 2001 C11111 1111 / Item No.: Department Approval: Administrator Approval: Agenda Section: Zoning Name: Michael P. Gaffron Title: Planning Director Item Description: Dunbar Project: I. Sewer and Water Connection Charges Analysis 264 y`W 1 ,Mer Z II. Park Fee Analysis Since my February 7 memo (attached), the Council has considered the option of deferring certain up-front charges and development fees for the Dunbar senior housing project. Such deferral would be in exchange for guarantees that the use of the site and building would remain as senior housing for as long a term as possible. The deferred amounts plus interest would have to be paid back to the City if the use becomes other than senior housing. A brief summary of this plan is as follows: 1) The developer buys the land, conveys it to the City for$1; 2) City approves TIF funding plan with controls on rental price of 20%of units for 20 years; 3) City leases land back to the developer for 40 years(the life of the HUD bond guarantee)with a covenant in effect that requires that it remain in use as senior housing for that period; 4) City defers the up-front costs of park fees and sewer and water connection charges. City proceeds with street lighting, sidewalk and power line burial projects,paying itself back via TIF dollars over the 20-year TIF period; 5) At the end of 20-year TIF period, City loses its control over the low-income requirement; 6) At end of 40 year bond life, City sells the land back to the developer/owner for $1; at that time, the deferred amount plus 40 years interest becomes due unless the owner agrees to maintain the senior housing status for a specified renewable contractual period. In the February 7 memo, an option for revising the park fee ordinance is discussed, as are options for interpretation of the original S&W agreements with Rebers.With the proposed incentive program in place,the City has no strong motivation to revise its Park Dedication ordinance nor to reduce the sewer and water connection charges below the amounts established by ordinance and per the original S&W agreement with Rebers. Deferral of the entire S&W connection charge and perhaps a portion of the park dedication fees would be appropriate. Since Orono's per-unit park fee is relatively high compared to that charged in some other cities for similar types of multi-family housing, staff would recommend that a park fee equivalent to $500 per unit ($31,000 for 62 units) be collected up front, with the remainder ($2600 per unit) deferred. Dunbar Project Fees March 6, 2001 Page 2 Based on information contained in the February 7 memo and taking into account the deferral/incentive program under consideration,I would suggest the following fee structures for the Dunbar project: Proposed Park Fees Total Amount Payment Deferred Up-front-7,-,\ Amount Office Property $33,125 $33,125 r -- Senior Housing Property 2,200 $31,000 $161,200 Totals $225,325 $64, 125 $161,200 Proposed Sewer and Water Connection Charge Payment Up-front Deferred Office Property $0 $0 Senior Housing Property $0 $40,838 Total deferred amount would be approximately $202,000. COUNCIL ACTION REQUESTED Motion to approve the Park Fee and Sewer& Water Connection Charges for the Dunbar project per the above proposal. I 1- 1 ) 0 PD dr, F- )1-1,7P2 ,ur4K erl1 f)vfo To: Ron Moorse, City Administrator From: Mike Gaffron, Planning Director Date: February 7, 2001 Subject: Dunbar Project: I. Sewer and Water Connection Charges Analysis II. Park Fee Analysis SUMMARY I. Sewer and Water Connection Charge. There are two alternatives for determining the Sewer and Water Connection Charge based on two interpretations of the original agreement for construction of the Highway 12 sewer and water system, yielding a total S/W connection charge of either$40,838 based on developer purchase of additional units at current rates; or$0 based on a conclusion that Rebers' original assessments for the project (totaling $277,100 for the 44 units) were not tied to a limitation on number of units. II. Park Fees. The commercial park fee for the office site under the standard formula is $33,125. The residential park fee under the current ordinance is $192,200 although this is 25% of the land value. Council may wish to consider amending the existing Park Dedication ordinance by: 1. Adopting language that will allow a reduction/waiver of park dedication fees or requirements for projects receiving City assistance or meeting certain public purposes; and/or 2. Adopting language that would cap park fees at.a given percent of land value for higher-density residential projects, or eliminate the minimum/maximum per-unit fees for such projects. Dunbar Fees Analysis February 7, 2001 Page 2 I. SEWER& WATER CONNECTION CHARGES ANALYSIS The Dunbar project involves developing within Outlot F, Sugar Woods, a 62-unit senior housing building and a 27,000 s.f.office building. The senior housing building is expected to equal 62 SAC units. The office building is expected to net out at approximately 10 SAC units,although this could increase tog erha s 12-14 units depending on the extent of medical office fixtures installed. p p p For discussion purposes,the two buildings will be considered as requiring a total of 75 SAC units. One SAC unit is the equivalent of 1 City sewer unit or 274 gpd. Outlot F 1989 Assessed Unit Allocation The document controlling the use and assessment of sewer and water units for Outlot F is the 1989 Petition for Local Improvements submitted by Otten, Wear and Rebers. In 1989 Otten, Wear and Rebers were each assessed for the costs of the SugarWoods/North Highway 12 sewer and water trunk(Phase I)and each were assessed for the Phase II improvements which included a)well,pump station, and connections for the assessed parcels; b) sewer upgrade to connect Phase I trunk to MWCC interceptor;and c)water tower construction and connections.Each were allocated a specific number of sewer and water units. The project was assessed on the basis of a total of 329 units,with 40 units allocated to Otten, 10 units to Wear and 69 units to Rebers. The remaining 210 units were expected to be used and paid for by future development in the Highway 12 area. Of Rebers' 69 units, 25 were attributed to the Sugar Woods residential development. Rebers paid off the assessment for the 25 Sugar Woods residential units in 1989; the remaining 44 units were specially assessed at a rate totaling approximately $6,300 per unit, and final payments for Phase II will occur in 2002. Of these 44, 3 were sold to Service 800 in 1999 for use in Sugar Woods Outlot E, and the remaining 41 are available for development within Outlot F. Because Rebers' remaining allocation of 41 units is less than the 75 units that will be required to serve Outlot F, a total of 34 units are technically lacking. While the 1989 Petition clearly specifies that the petitioners will be reimbursedfor unused units at the full assessment rate plus interest upon full development, it says nothing about purchase of additional units should the development exceed the number of allocated units. It might be assumed that the extra required units should be purchased by the developer at the current connection charge rate for the 1989 Highway 12 sewer/water project. One might argue, however, that Rebers simply paid for a share of the sewer and water system at a rate that was determined by a unit allocation but which didn't limit him to that allocation. Dunbar Fees Analysis February 7, 2001 Page 3 Highway 12 Current S/W Connection Charge Prior to March 2000 the 1989 Highway 12 Sewer and Water Connection Charge unit rate totaled $9,695 per unit.In March 2000 Council adopted Ordinance 195,Second series which converted this to an acreage charge in order to assure repayment of remaining project bonds regardless of the ultimate number of units developed,and to keep the connection charge somewhat reasonable for the types of development anticipated and wanted in the Highway 12 area. The acreage charge under the 2001 fee schedule is$5,105/acre for sewer and$8,440/acre for water,for a total of$13,545 per acre. This applies to both residential and non-residential properties. Connection Charge Options for Dunbar Project The question remaining,then,is what to charge for the additional 34 units required for Outlot F.Two options appear to exist: Option 1. A case can be made that the site has 41 of 75 units paid, or 55% of the required units, and should pay 45% of the current connection charge for the remaining 34 units. The total site is 6.7 acres. The connection charge would be calculated as follows: 6.7 acres x $13,545/acre x 0.45 = $40,838 (this figure would change slightly depending on the final number of required units) Option 2. It could be argued that Rebers initially paid this property's fair share of the costs of sewer/water installation, having been assessed approximately $277,100 for the 44 units for Phases I and II, and should incur no additional costs regardless of the number of units ultimately developed. Note that SAC charges for the project will be at the current Met Council rate of$1150 per unit or totaling approximately $86,000. Note also that the excess units needed for Outlot F are directly a result of the senior housing project, and would likely not be needed if all of Outlot F were to develop commercially as currently zoned. Therefore, the cost of the excess units should be attributed to the senior housing, not the office building. Dunbar Fees Analysis February 7, 2001 Page 4 II. PARK FEE ANALYSIS Residential. The standard Park Dedication fee for residential property is 8%of the land value,with a minimum fee of$3100 per dwelling unit and a maximum of$5300 per dwelling unit. The residential portion of the Dunbar site is valued at approximately $775,000. The standard park fee of 8% is $62,000. However, using the minimum per-unit fee, $3100 x 62 dwelling units is $192,200 or approximately 25% of the land cost. Although an argument can be made that higher density residential development has similar park needs and impacts as lower density housing, the relationship of park impact fees to land value becomes very disproportionate under higher density development. It can generally be assumed that in Orono,development of single family 2-acre and 5-acre lots will have land costs high enough that the maximum park fee of$5300 per unit almost always kicks in and developers will almost always be paying less than 8% in park fees. However, at densities of 4-6 units per acre or higher, even the $3100 per-unit minimum fee will far exceed 8%of the typical land cost per unit as can be seen on the attached table of Density vs Land Cost. This factor can become critical when attempting to meet City housing goals. In a situation where the City is providing incentives for a development that meets specified City goals, it may be appropriate to reduce or waive the park fees as a further incentive to such development. Minnetonka has recognized this via the following ordinance language: "400.030.7 The city council,at its discretion, may waive or reduce the requirements of this section when the subdivision includes a city-assisted development or redevelopment area or achieves some other public purpose and the requirements would create a financial hardship for the project." For projects not serving a specified public purpose, a further amendment of the park dedication requirements would be needed in order to lower park fees for higher density residential projects, if the Council were to conclude the current fees are inappropriate. Regarding the RPUD ordinance, Planning Commission has concluded that the required private recreation areas for RPUD developments should not be credited toward the Park Dedication requirements, as they serve different purposes. The "Private Recreation Area" language in the RPUD is from the Minnetonka Zoning Code,and is in addition to their Park Dedication requirement of 10%of the land area or(at Council option) a park fee. For comparison purposes, Minnetonka's park fees appear to be unrelated to the value of the land, and are significantly lower than Orono's park fees: Orono Minnetonka Single Dwelling $3100-$5300 $550 Townhome, duplex or multi-unit building $3100-$5300/unit $500/unit Office/Industrial $7750-13,250/acre $3000/acre Commercial $7750-13,250/acre $2400/acre Dunbar Fees Analysis February 7, 2001 Page 5 Commercial. The Park dedication fee for commercial property is 8% of the land value, with a minimum fee of$7,750 per acre, and a maximum of$13,250 per acre. The commercial (office) portion of Outlot F will be approximately 2.5 acres with a value estimated at $550,000 (assuming selling price of approximately $5 per square foot). 8% of $550,000 is $44,000. Using the maximum per acre fee, 2.5 acres x$13,250 is $33,125. The park fee for the office portion should be established at this figure. .� 00 Ln 00 U N rP M N cn O 0 O CJ O O o O O o 00 O p c� ; M O O O N O_ Oo O_ _ 00 O O N .-, M '-,,;4) vl M 00 r- M — 00 en 0 N 63 69' z,...3.' a 69 69 69 69 69 69 69 69 69 69 69 0 C U M AC -• 4n M N N as as cA O O'-" O O O O O N 'n 0 O O 0 O O o O O O O O (N Oat O` m oo �O o d N s. Lr) N N M V) M 00 1:-.,,,-. � M �--, O M M 6. --� 69 6R 69 69 69 6R 69 69 69 69 69 69 69 69 69 a) O 0 ..i. 7 00 7r -1E,1M N .-a ,--1 it cn A-- O O O O c O O O co 00 O O O O O O O O O O O O O V) O O O ,z) O O O M en 00 NO M ,M-. 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C V h 6 L t--- E c=• U ; E s. r 8 r? w • v C.0 CS O L, *, E•y 01 6 v2 �. 65 � � h •a L _ to c 7,, c• � .� U � L = R N R w +r �', R •� ec A t- _ p , z 4.4 Z 3 O C, E" 45 cJ =\ � . „^ r-, F c swu* m c L tn,atic.8 "3 r, rt rs TAK tiAtr3 n9►u41/U/,U ‹y.��30 - 9v PETITION FOR LOCAL IMPROVEMENT 6-•2- -4I v 17 (2y , 1989 TO THE CITY COUNCIL OF ORONO, MINNESOTA: The undersigned Petitioners, being all the owners of real property abutting the North side of Wayzata Boulevard (U.S. Highway 12) from the Northwest quadrant of Brown Road and Wayzata Boulevard and to and including the Northeast quadrant of Willow Road and Wayzata Boulevard sketched on Exhibit A annexed hereto (the "Assessed Parcels") hereby petition that construction of sanitary sewer and water facilities (the "Improvements") be undertaken by the City of Orono pursuant to Minnesota Statutes Chapter 429 as follows: Phase I : a) Sewer and water trunk to serve the Assessed Parcels. Phase II: a) Well, pump station, connections for Assessed Parcels and related improvements. b) Sewer upgrade to connect Phase I (a) trunk to Metropolitan Waste Commission interceptor. c) Water tower construction and connections. subject to the following conditions: 1. Final Plans and Specifications. The City has engaged the City Engineers to prepare detailed plans and specifications for completion of the Phase I Improvements, including preparation of estimates, special contract provisions, preparation of proposal forms and designation of the description of all necessary and permanent temporary easements. The City will engage the City Engineer to prepare detailed plans and specifications for completion of the Phase II Improvements at such time as the City is prepared to undertake the Phase II Improvements. Plans and specifications for Phases I and II shall be coordinated with Petitioners for proper placement of the driveway curb cuts, individual building utility services, and water service stubs. 2 . Easements . Petitioners shall make available to the City, at no cost to the City, all permanent and temporary easements necessary for the installation of the Improvements within the Assessed Parcels, as determined by the City Engineer. Each such easement requested by the City shall be in writing, in recordable form, and on terms reasonably satisfactory to the City and the affected Petitioner. • C:\DOCS\TTW\PETITION.7/21/89 ,;.< 'j kl: F :, .? ..._ / /7 1, - ' • ' t �. 2b - .,---- 3 . Total Costs of Project. In consideration of the action of the City Council authorizing the construction of the Improvements, Petitioners hereby agree to be assessed their fair share of the cost of the Improvements, including reasonable engineering, legal and administrative costs incurred by the City, according to the n1771—ler of units allocated to each Petitioner (as f,. set out opposite their signatures hereto) . The City Engineer hasJ estimated that the a sessmant fnr each unit wia _total S1 810,_00 ' , for P ase I Improvements and $3 , 240.00 for Phase II Improvements. --- The mprovements.The City may, at its election, may determine to perform certain - c` — Phase II Improvements as a part of Phase I and increase assessment for Phase I Improvements by up to $1, 000. 00, provided that the Phase II Improvements are ratably reduced such that the total assessment for Phase I and Phase II Improvements, regardless of when constructed or assessed, does not exceed $ O,4,pg ,,,(plus„ cal t lize4 nterest, if any) . Nevertheless, Petitioners agree to Ie, sed for um to 10% more than su�c�hamount. The final assessment roll snalleasie upon the final cost of the Improvements and the units allocated to each assessed Petitioner. 4 . Special Assessment Installments; Interest. Each Petitioner' s share of the cost of the Phase I Improvements shall f ,-/ 'R / be paid by the Petitioner to the City as a special assessment levied against such Petitioner' s benefitted parcel or parcels in ( i' .:- five (5) equal annual installments of principal and capitalized / 7 interest (if any) , and with interest on unpaid installments at an '; ; annual percentage rate to be established by the City at the time '1 of the sale of the Improvements bond issue. Each Petitioner' s (' Allo share of the cost of Phase II Improvements shall be levied against/ - such Petitioner ' s benefited parcel or parcels, in seven (7) egual (/)- 4 .,installments of principal and capitalized— ni terest (if _anv) 1' -- beg nning in the fourth year following the payment of the initial pr anntidi-ThstalTment for Phase I ImprovemenEs. (9— =' e-;' , G 5. Reimbursement of Assessments. The City will reimburse ' any Petitioner who fails to be able to utilize the number of units (cj_ reserved herein, only if the City refuses to approve a development // \� � 6 ' plan allowing use of the total number of units reserved herein, in J an amount equal to the total assessment paid for each unit the ) -? ." Petitioner is unable to use, together with interest thereon. ' ( I Reimbursement by the City shall be paid in lump sum if accruing after all installments of special assessments have been paid. If final City action denying development utilizing the reserved number of units is taken prior to payment in full of a Petitioner' s installment obligations, then the City shall reimburse such Petitioner in lump sum for the portion of the assessment already paid (including interest paid thereon) with respect to unused units, and in equal yearly payments over the remaining term of the special assessment period for that portion of the remaining installments (and interest thereon) allocated to the unused units. Notwithstanding any right to reimbursement that has accrued or may C:\DOCS\TTW\PETITION.7/21/89 2 accrue, any installment payments of special assessments due hereunder shall be fully paid when due. 6 . Acceleration of Payment. Petitioners herein agree that prior to the granting of a building permit for a Petitioner's parcel, the special assessment petitioned for herein for such parcel, including all remaining installments and any interest due thereon, shall be fully paid; provided that if fewer than the total number of units allocated to a Petitioner herein are allocated to a portion of such Petitioner' s parcel, pursuant to a development plan approved by the City, then this special assessment shall only be fully paid with respect to the units allocated to such portion. 7 . Exclusion from Initial Assessment. Petitioners William J. and Mable J. Wear (PIN 34-118-23-24-0001 and PIN 34-118-12-21- 0002) (the "Wears") enter into this petition on behalf of themselves and their successors or assigns. It is understood that the Wears currently receive sewer and water service from the City of Long Lake. The Wears will be assessed for ten (10) units hereunder. An additional thirty-two (32) units will be reserved ,/'1,b(/y( tor the Wear property for five (5) years following the date of Wear' s execution hereof. At such time as the Wears, or their successors or assigns, petition to utilize the reserved units and be connected to the Improvements, they shall be assessed based upon then current unit values as determined by the City. 8 . Payment Dates . If the special assessments levied by the resolution of the City Council pursuant to this Petition for Phase I (and subsequently levied for Phase II) are adopted by and between October 10th of any year and April 10th of the following year, it is understood and agreed that the Petitioners will pay the City Clerk one-half (1/2) of the first annual installment with interest on or before May 31st next following the levy, and will pay the remaining one-half (1/2) of such first installment with interest to the City Clerk on or before the following September 30th. All remaining installments shall be paid as assessments to the Treasurer of Hennepin County as and when the general property taxes become due upon Petitioner' s respective properties. If the special assessments levied by the City Council pursuant to this Petition are adopted between April 11th and October 9th of any year, then all installments due hereunder shall be paid as assessments to the Treasurer of Hennepin County as and when the general property taxes become due upon such property. 9. Waiver by Petitioners. Petitioners agree to waive, and hereby do waive, any and all rights to appeal the special assessments, including any supplemental assessments, with regard to any procedural or substantive rights, rights to a public hearing, rights to any notices under Minnesota Chapter 429 or any other ordinances of the City, and the constitutions or laws of the State of Minnesota or of the United States. C:\DOCS\TTW\PETITION.7/21/89 3 10. Successors and Assigns. The terms and provisions of the Petition shall be binding on and inure to the benefit of the heirs, representatives, successors and assigns of the parties hereto, and shall be binding on all future owners of all or any part of the Petitioners ' respective properties and shall be deemed covenants running with the land and shall be enforceable by the City against the Petitioners, their heirs and assigns. NO. OF UNITS ALLOCATED TO 'TITIONERS: ADDRESS EACH PETITIONER • rners of PIN 34-118-23-21-0001: i69 Rebers Construction Co. ✓` /o- 9_, '. . ,' g 63y /j 7�<«�}' `�=_ 'rt4-- 7 -:-' - 1.-W---. /l 4�� . , c o Rebers Construction Co. ''= /S{idney/B.-Rebe>rsr3524 Webster Avenue St. Louis Park, MN 55416 74 '�C /-_,Y4 - c/o! Rebers Construction Co. Barbara Rebers / 3524 Webster Avenue St. Louis Park, MN 55416 niers of PIN 34-118-23-24-0001 and ,, m �R�, /19D 10 34-118-12-21-0002 ` ) 36 Hackberry Hill William W. Wear Orono, MN 55356 7144./1-6, )- 2 f-iV 36 Hackberry Hill Mable J.,/Wear Orono, MN 55356 - t/, ,// I V/ Arners of PIN 34-118-23-22-0013: , 71/g,- 4 0 o`�� ei / /�'j/,. ( 405 Willow Drive South 3 � C arles Rin ,, r Long Lake, MN 55356 �'4��b �'r*' �� s_:_a b ",� G/�-- - ti 405 Willow Drive South ( ` /r` • Mary I?. Ringer Long Lake, MN 55356 V C:\DOCS\TTW\PETITION.7/21/89 4 -r I yi,//7/7/ , / 047// ' / h On. , ,.',6 //7 _ . l fJ :c : -'- Clifford Otten and / Louise W. Otten, husband and wife, as Optionees under Option Agreement dated Ss h l ) Ic7 Examined, checked and found to be in proper form and to be signed by the required number of owners •f property affected by the making of the improvements petitioned dr. Ci y Clef C:\DOCS\TTu\PETITION.7/21/89 5 ?3. ' 'i° R Z3 . ;c•riI ic. 'n, •., .y 1448../ - f ~ —WbIow.- r L— —pl —�l�q— Cr-T —N— —f ef/ 1 a:: Z iii 1'''' -L \ �• 1 ; o ,iZ N4. Y1 '�� s z s up . 3s7: i , ...,.. „._.. 1 ... . „. 2, - 4.c' Gj . t . :) :r.� i N cor). -- 1 -',%,' S. I 1.-t':.11 SI P , .. l't• • 0 — 4'-• 2 ----- y [BRiYH•LL E n W 4C. .14. • YE r t a: 6 ? � , a ..:c_- ,:..... a � k . s N ,..i---,, ,$)..: r. . ..m. _ se. # Nw CD N ) 1 E ',,' -- 'z.:*C__,...._,__..__J;is i- ��...c Y fT F at T - • - C �'C14, ` Er: le Fig-:-r . :,ti /••`` 7 I �. — y :T _ ,' / -%- •. - ♦ .7 ~''alt -. ? • • y • . ).Q��—j: .•-err .•J \? y - 'Q ------F2 a ze .2 . a C.) ,i r,Y, ,� . �J� .\. •\ � '- L Y r �I 7,), ., l ' ,s ` '.'. . .,'tis 1• �` - \i �C • '., , . � ilirCi ter. J ' 0.=* / 1 �., / ::per . tt!: "Fs w • t 1'� v CD EXHIBIT A \, i.-1 �� 90 J a I 7. a 811! . n� n .. .- 6iS 56-... • so9.79 • -a 6r�—_6b.� ._ ._ • a I _ S {� $;S 279.96 '--4 5 a -T— g r 25 0 --) ' i''' ' b� ! • v i L $ 115 . M g o vT8 v Ific ^'� Y +s�rs 700.169. 115 i - 765.6.owk u u : - 353 V� r VI K AVE p , \ 1144,_, —' m I.• 52 7 y .!........:1/4.' .v ^ '<'w.\ ^I I^'> 318.6] 'J 6p'dt •-•- •,-1)(:-....„ � J I., oC,1 ' I_ v nr i - L • - - sc) sz �� J v u t. ,,,,, I 200 c 46 Z N � �' �� P ,fay �.♦ .} : 7+S 74 r-. •. 46 to • A.��t b . 2 y u a a.02 I 1 % ,, 3_,,,6 • co Qt'>9Lz v, o .. I b� ;���p .• C CJ.';') rr I h .. .. 6106.15 1 `r7. : - r°• )m rn lu.e I v, i i0 6.. 710 »r ?'>• y br ,� k9 SJull. 1062.11 ?75 �.'` 0 Z.;F F9 L" 5 rt;/_ ,,, ,gin - Y 2A.69 1 �, / p� /4 ,,4!'......... 361.01 10 170 U >o a� c, 1. N ' U O ..-.. N 1 •-• m O- • 6 P U N o v 86'66 a,oa \os, • 1m.abJ$. C166 e7 �'I 1...9 : ° :: 0 C • 11.06..... 'a�*mo , g �1 ., _ _ \oJS. F S N o u \J _ 1---4 177.,. t S u1.67 • I F - • zn 6:..:::::!..' 10.01..., 1 10 MI'i9'E 457.,. 10 ..:: •I •/3 7 cy, 21.76.,: • �.T ,� `.J XI, CO... :2- .i ^\N.:. - ,Y I ' V u a F . g _• y S0 106.77 P �+ 4 • .-►1 IJ Y 276 7 o m 6. .:.. , . 1 yff� ., y� \� V gm LO • �i - .10 0, y oy r� F' ,.. ss 8 N ,, w ...... n.i Q i.t I Y .1ww o 1 43 ..., .... :. p .ss n � „ ., 90.e2 Gb _�`� ^ �r'„ re: V • ri = � .. iGS 17 b - q` -W it.a $. h ;- n a1-1.• 9 a3-<Yi7to klx� � a 3.-i2 . • rtt/ Y z�' :sEi IIsi L 7 _ naln- 0 . . v ti Ci' :Z.:: To: File #2425 - Rebers Subdivision From: Michael P. Gaffron, Senior Planning Coordinator Date: October 1, 1998 Subject: SAC & Sewer/Water Units, 2190 Wayzata Boulevard (Proposed 10,000 s.f. Office Building) The proposed office building will be located on Lot 1, Block 1, Sugarwoods Second Addition (fomerly known as Outlot E, Sugarwoods). The SAC criteria established by Metropolitan Council Environmental Services (MCES) are found in the Service Availability Charge(SAC)Procedures Manual dated January 1998. SAC criteria for an "Office" use establishes 1 SAC unit per 2,400 s.f. of floor area, excluding mechanical rooms, elevator shafts, stairwells,restrooms,and storage areas. Absent a floor plan as of this writing, it is assumed that 15% of the floor area of the proposd building will be excludable, leaving a net floor area of 8,500 s.f. / 2,400 s.f. = 3.54 = 4 SAC units. Absent more detailed information, the City would be responsible for collecting 4 SAC unit charges at the time a building permit is issued. For 1998,the SAC charge is $1,000 per unit,which is passed on to MCES. For sewer and water unit allocation and assessment purposes,the City uses the SAC equivalent(274 gpd/unit), and 1 SAC unit= 1 sewer unit. Rebers' original Sugarwoods subdivision was allocated and assessed for 69 sewer and water units, of which 25 were attributed to the residential portion of the plat, and the remaining 44 for use within commercial Outlot F. Rebers is proposing to transfer (sell) 4 of these 44 units to the purchaser of 2190 Sugarwoods, which is acceptable to the City, leaving Rebers with 40 units for use within Outlot F. The 44 sewer and water units have been fully assessed, and no new or additional unit charges would be added. SUMMARY At the time a building permit is issued, the City would collect 4 SAC charges at the current rate. Sewer and water connection permits would be obtained by the plumber prior to making such connections. To: Ron Moorse, City Administrator Greg Gappa, Public Services Director Paul Weinberger, Assistant Zoning Administrator Tom Kuehn, Finance Director From: Mike Gaffron, Senior Planning Coordinator Date: April 19, 1999 Subject: Calculation of Sewer& Water Unit Charges, Hwy 12 Area(Re: Orono Schools) There are four specific incremental fees that combine to become the'Sewer and Water Connection Fee' for new development in the Highway 12 area. The Orono Middle School project is subject to these fees, as will be new development in the area north of Highway 12 between Willow and Old Crystal Bay Road. The fee structure is as follows (1998 and 1999 fees shown): z,cvy Unit Connection Fee: 1998 1999 Fee Fee Sewer 1989 Highway 12 - Phase I -North Side Trunk $ 1,185 $1,235 3 Z'7 1989 Highway 12 - Phase II -Future Trunk Expansion 2,175 2,265 Water 1989 Highway 12 - Phase I -North Side Trunk 670 700 3 y4,, 1989 Highway 12 - Phase II - Water Tower, Well, Pumphouse 4,910 5,110 $ 8,940/unit S 9,310/unit The number of units to be collected for the Middle School project would be equivalent to the number of SAC units(to be determined by Met Council Environmental Services). The unit SAC charge for 1999 is $1,050. tL,S \NO` < /1 A 2 c 2 2 & Cl) 2 \ § E \ E 2 - « / \ ' § E % -0 F. k v § 2 \ ) © N . § X 'd 2 CI ■ Cl) 0 n a et S © B 1:3 L. . ..0 ■ 3 /.U .i . .. . 2 ° � � C6) d k k 0 • o — el / § ©el 0 k . / L. _ ©L. § o : u i § L. 7 O CI $ u f o . [ .� 7 ] U § 2 �_ k k 3 3 2 W 2 - a tat).= � q 2 � r 2 t u 2 k C. d 2 . _ o _ � : 2 § Cl) 2 » 22 Cl) OAm 3 A '= % 2 _ b Cl) L. n, E. k / \ 2 o \ . . - = 2 t Cl)r c ■ _ ■ 2 Q £ Cl) © el '§ o Q — g o C ® ( 217) VI 7 k / a = ] U 2 k / n _ 6 g n 1" « g U k 3 k W g la ce 2 z u k 7 ) g 0 § U U el U U 2 4 0 s. TO: Mayor and City Council FROM: Ron Moorse, City Administrator DATE: January 27, 2000 SUBJECT: Connection Charges Related to the 1989 Highway 12 Water and Sewer Improvement Project When the 1989 Highway 12 water and sewer improvement project was constructed,the funding was to come from two sources. 1. Special assessments on the properties that were ready to develop. 2. Connection charges for the properties that would develop later. The assessment amount was set at approximately$5,500 per unit for the combined water and sewer costs. The connection charge amount was set at the same level. Each year, the connection charge has been increased by a cost-of-living factor. For the year 2000, the combined water and sewer connection charge is$9650 per unit. The Council may want to review the connection charge for two reasons. 1. The connection charge amount is substantially higher than similar connection charges in other cities. This is due to the high cost of the improvement project being spread over a relatively small area. The high connection charge amount could make it difficult for the City to obtain the type of development it wants, particularly on the 40-acre medium density residential parcel,but also on the 17-acre commercial parcel. For example, if the 40-acre residential parcel was to be developed at 3 units per acre on the approximately 30 acres of dry buildable land, the development would be 90 units. The connection charge for 90 units @ $9,650 per unit would be $868,500. This is a very large cost for water and sewer service,and it does not include the cost of installing water and sewer lines throughout the development. 2. If the City were to collect the$9,650 per unit connection charge on all development, the City would collect approximately $700,000 of revenues beyond the amount required to pay all expenses related to the 1989 water and sewer project. Based on the above two factors,staff has developed a proposed revised connection charge schedule. The proposed schedule changes the connection charge for the school property,the ice arena property, the medium density residential property, and the commercial property from a per-unit charge to a per-acre charge. The advantage of the per-acre charge is that the per-acre charge can be set at an amount sufficient to cover project expenses,and the City will receive the planned amount regardless of the number of units developed. The attached spreadsheet shows the total expenses and the total estimated revenues using the revised connection charge amount. Connection Charges Related to the 1989 Highway 12 Water and Sewer Improvement Project January 27, 2000 Page 2 The comparison of the revenues generated from the various properties under each connection charge option is shown below. Property Per Unit Charge Per Acre Charge Medium Density Residential $869,000 $520,000 Commercial $290,000 $221,000 Orono Ice Arena $120,000 S58,500 Orono Schools $595,840 S390,000 Total $1,874,840 $1,189,500 As the above table shows,while the Orono Schools and Orono Ice Arena connection charges would be reduced significantly,the most substantial reduction is related to the medium density residential property; which is the property on which the City is most interested in facilitating a quality development. Potential Connection Charge Credits In 1967, the City installed sewer and water lines along Highway 12 to serve the Orono Schools and the City's industrial district. The project also provided water and sewer facilities to serve the area north of Highway 12 between Willow Drive and Old Crystal Bay Road in the event the MUSA was expanded to include that property. This property was assessed for the water and sewer project in the total amount of$44,146 based on both a cost-per-lineal-foot and a cost-per-unit. Although the 1989 water and sewer project provided additional facilities to enable water and sewer service to the property between Willow Drive and Old Crystal Bay Road, the property owners may claim a credit against the 1989 connection charges based on the assessment paid for the 1967 project. The amount of credit they could claim could be as high as 30 units since that is the number of units allowed by the zoning in 1967. If they received a credit for 30 units, it would result in a loss of $290,850 in connection charge revenue. The City would argue that the 1989 project provided increased capacity without which the 1967 water and sewer facilities could not have been used by the property. Therefore, the property owners should not receive any credit. The Council may want to take into account the potential credit against the connection charges in determining any changes to be made in the current connection charge amounts. Staff will try to further clarify the potential for credits if the Council determines the connection charge amounts should be changed. 1989 Water& Sewer Project Expenses: Principal and Interest Payments 1989 Revenue Bond $1,618,031 1995 Refunding Bond 1,783,729 Total Principal and Interest Payments $3,401,760 Fiscal Agent/City Service Charges 27,740 Total Debt Service&Related Costs $3,429,500 2000 Interim Sewer Capacity Lift Station Project 200,000 TOTAL EXPENSES $3,629,500 Revenues: Developer Deposits $176,570 Developer Assessments Phase I-Principal and Interest 261,239 Phase II-Principal and Interest 419,535 Total Developers'Revenue $857,344 Sewer Fees(from non-Hwy 12 Lift Station Project) 398,424 Sewer Op Constr acct(unused bonds from 89 project) 877,265 1980 Debt Fund-closed to water portion 1994/1995 97,809 Total Confirmed Funding $2,230,842 Estimated Additional Funding Two acre residential development(25 units @$9,695) $242,375 Medium density residential development(40acres @ $13,000) 520,000 Commercial development(17 acres @$13,000) 221,000 Orono Ice Arena(4.5 acres @$13,000) 58,500 Orono Schools (30 acres @ $13,000) 390,000 Total Estimated Additional Funding 1,431,875 Total Revenues (Confirmed and Estimated Additional) $3,662,717 Excess of Revenues Over Expenses $33,217 updated 01/26/00 TOM\DEBTSERV\89-DEBT.123 1--- 2 /y 3(5' C9,0 , -14- A-84 0476'k- tp. 0r- it-,,, C: /Dblor 140v-ii" 0 4-sk-(2.4e,,telL p,) 0-0,4 LAtti 1 1- SkC.- , 1 ?(<1 -7 As--•p ,L, 2 ,0 / t l -----7---,--_-7—A..c. –....7„.____.,_,... ._.,.....,__.....__ le-e' / - t i , 0 v,r-P -1 A-1osAil4,....c. - C C-'I')1 C- I _____ rail) c:) )41 s 0 /1-11-faC) viPts-t-- '?0 / I f- ' /2_ 1 Lf 00 "2,6,, (7...,'", '-'-' t> • 1 ."°.- 2-i'l, WC' -2---, 2 Var5 7: /0 ,.'• City of Orono 2750 Kelley Parkway P.O. Box 66 Orono, MN 55323 Phone: (612) 294-4600 Fax: (612) 249-4616 MEMORANDUM DATE: March 30, 2000 TO: File FROM: Paul Weinberger, Zoning Administrator SUBJECT: Application#2522 To be completed prior to Final Plat approval ❑ Subdivider shall install a gravity sanitary sewer system to serve each of the lots. The sewer service shall be from the south and installed along Willow Drive North. Detailed sewer plans shall be submitted to the City Engineer for approval prior to final plat approval. ❑ Subdivider shall install municipal water service. The developer shall work with the City to determine the most appropriate service to the site. Water shall be extended to the north property line, at County Road 6 to allow future connection when water service is required to the north and to the east. Detailed plans shall be submitted to the City Engineer for approval prior to final plat approval. ❑ The private road in Outlot A shall be constructed to City private road requirements, subject to a Developers Agreement to be executed between the City and the developer. Private road construction can begin as soon as the engineering plans for the road as well as stormwater management plans have been approved by the City, the Developers Agreement has been executed, and the final plat has been recorded with Hennepin County. ❑ The PRD approval requires Staff approve the restrictive covenants that will apply to the development. (A few changes to the language) ❑ Trail easements shall be granted over the conservation outlots,the private road and between lots 7 and 8, Block 1. Final trail plans shall be submitted for approval by Staff prior to final plat approval. (We need legal descriptions for the trails) ❑ Subdivider shall plant boulevard trees along the private road per the requirements of Section 11.60, Subd. 2. ❑ Subdivider shall construct stormwater management improvements generally as shown on the Preliminary Grading, Drainage and Erosion Control Plan dated December 3, 1999 subject to any revisions of said plan as may be required by the City Engineer. A final Grading, Drainage& Erosion Control Plan must be approved by the City Engineer prior to final plat approval. Subdivider shall grant drainage easements over all drainageways and stormwater ponds within the plat. ❑ MCWD permit is required for grading, drainage and erosion control. ❑ Submission of two mylar copies of the plat at a 1":200 scale. ❑ Signed and executed Developer's Agreement and letter of credit for approved site improvements, landscaping and construction of private road, stormwater and drainage facilities, etc. ❑ Signed and executed easement for the outlot to protect the land from future development. ❑ Signed and executed Drainage Easements to be taken over drainageway and detention areas within plat. ❑ Signed and executed Flowage and Conservation Easement over the conservation areas and wetlands within the development. ❑ Signed and executed Road and Utilities Easement over Outlot A. ❑ Signed and executed"Declaration of Private Road Easement and Declaration of Maintenance for Same". ❑ Completed "Application for Private Road Name". ❑ Park Dedication Fee = $72,500 ❑ Sewer/Water Connection Fee = $243,375 ❑ Applicants' architect shall submit final development plans to the Metro Council Environmental Services to determine the exact number of SAC units to be charged at the time of the issuance of building permits. ❑ Appropriate traffic and parking signage shall be installed subject to the Orono staff and City Engineer's review, including required stop signs within the parking lots and service drive to ensure safe parking areas and pedestrian crossing within the development(ero,/ A,‘'( ')A,(19-- Ct1l�► -• •• _ --; ; . - aridard ° 70 — lerdinaneeHhe-RPU--and B-6-disstric s-- ❑ Monument signs e re • led by the developer at eaach•entran e to the. The signage shall be limited to a company or development name `" and/or logo and street address on the monument signs. Final design/materials of monument signage shall be subject to approval by the City Council. r ❑ - inalaighting plan shall be subject to City staff approval to t lights f_--- ti _�: lighting so as to 1rP�_�e---e., ------- ---- � acent-resifleiiti'Tl'"- -1 ighborhaod. _.; _ . '. i . . . _•- - - • - - • ". _ , 1 - -; - ent-Practiz sor ro ec 1nC._..a --Water-Quality in Urban Areas O - --All-erasion-controls as icquiied by-the City shall be in place prior ---to-corn irig_excava ion e The ee struction limits shall be elearly-murkcdwith adequate fencing-to prevent any construction damage or disturbance of anyred'es and vegetation outside of-the--eonstruction limits area. - Developer mus�.strive to maintain perimeter vegetation to the greatest extent possible-during construction to minimize visual impaets. -� Additional improvements including burying of power lines, installation of street lighting compatible with the City of Long Lakes-streetlighting program, and improvement of sidewalks outside the project boundaries •e address-ed in the Development Agreement noted herein—,, ❑ A road easement shall be granted to the City to permit public ingress/egress over the driveways on the site to guarantee future access for a public road should the City choose to develop a service road connection to the west in the future.