7.0.-8.0. EDSR 06-10-1996 ITEM 7 . & 8.
• ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
MEMORANDUM
TO: Economic Development Authority
FROM: Executive Director, Pat Klaers
DATE: June 10, 1996
SUBJECT: TIF No. 15 Public Hearing and
Developer Contract
I made a mistake in the public hearing notice for this District. The public
hearing notice should have been published on May 29, 1996, but did not get
published until June 5, 1996. Prior to this public hearing notice getting in
the paper, the error was noticed and the public hearing date was changed to
June 17 in order to meet the ten day notice requirement. Accordingly, the
EDA public hearing cannot be held on June 10 and must be held on June 17,
1996.
• The attached background material on TIF No.15, the TIF application, and
the TIF Plan should be brought to the special June 17, 1996, EDA meeting.
The Contract between the EDA/city and McChesney Cabinets will be sent out
prior to the June 17, 1996, meeting. The public hearing and review of the
private developer contract is not expected to take a great deal of time and
four of the seven EDA members are anticipated to be at the June 17, 1996,
City Council meeting, so it is hoped that this special meeting will not be an
inconvenience for EDA members.
Recommendation
It is recommended that the EDA call a special meeting for 5:45 p.m. on
Monday, June 17, 1996,at the Elk River City Hall Council Chambers. The
purpose of this special meeting is to hold a public hearing to receive input on
TIF Plan No. 15, to consider TIF Plan No. 15 after receiving input, and to
consider the developer agreement between the city/EDA and McChesney
Cabinets associated with TIF No. 15.
eda\meetings\tif 15hrg
•
P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425
Equal Opportunity Housing and Equal Opportunity Employment
ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
MEMORANDUM
TO: Economic Development Authority
FROM: Pat Klaers, Executive Director
DATE: June 10, 1996
SUBJECT: Public Hearing on Tax Increment
Financing Plan for Tax Increment
Financing District No. 15 (McChesney
Cabinets)
Introduction
At its May 13, 1996, meeting, the Elk River EDA authorized a public hearing
for June 10, 1996, to consider a Tax Increment Financing Plan for Tax
Increment Financing District No. 15 for McChesney Cabinets. On May 13,
1996, the EDA also authorized the preparation of the TIF Plan.
10 Background
Attached for your review is the TIF application from McChesney Cabinets
and the TIF Plan for TIF District No. 15. This request for TIF assistance
comes from Jerry McChesney who is the owner of McChesney Cabinets.
McChesney Cabinets needs additional space to enable the company to grow
in order to meet increasing demands for its product and service. McChesney
Cabinets is a manufacturer and installer of custom cabinets and countertops
and specialty wood items. Without city assistance for this project, the
expansion could not reasonably be expected to occur solely through private
investment within the foreseeable future. City assistance is needed in order
to preserve capital so that the company can provide the additional machinery
that is necessary to meet increasing demands for its products.
McChesney Cabinets is proposing to construct an approximately 10,000
square foot facility. The company seeks $35,000 in TIF assistance to support
this project. The company seeks to construct this facility on Lot 9 of the
McChesney Industrial Park. Tax increment funds will be used to write down
the value of this lot on a pay-as-you-go basis. With this project, McChesney
Cabinets would go from a 3,000 square foot facility to a 5,000 square foot
facility. The balance of the facility will be leased out to another local
• company, Winlectric, for its expansion. With this project, McChesney
13065 Orono Parkway • P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax (612).441-7425.
Equal Opportunity Housing and Equal Opportunity Employment
• Cabinets will add two new employees over the next three years. McChesney
Cabinets currently has two employees. Additionally, it is anticipated that
Winlectric will be adding another employee with their expansion. Overall,
this project adds 10,000 square feet of industrial space to the community and
adds another few employees. Additionally there is a spin-off benefit with this
project whereby other companies can expand into the existing space that
McChesney Cabinets and Winlectric currently occupy.
The Sherburne County Board of Commissioners and the 728 School Board
have both reviewed this TIF Plan and have accepted the Plan without
comment. Both the School Board and County Board waived the 30 day
review and comment time requirement in order to allow this public hearing
to take place on June 10. The Planning Commission reviewed this TIF Plan
on May 28, 1996, and found the proposal and land use activity to be
consistent with the Comprehensive Plan.
State law requires that when city assistance is provided,job creation goals
must be met. The job creation goals must be reported to the Department of
Trade and Economic Development. This project has very modest job creation
goals, but the company is very small. You can look at the job creation goals
in two ways; one way is that there is only two new jobs being created, the
•
other is that the jobs in the company are being doubled. The two additional
jobs do meet the job creation requirement for providing financial assistance.
This is an economic development TIF District. Accordingly, there is a
penalty for the local unit of government that creates the TIF District. This
penalty can either be a loss of local government aid or the city can opt out of
the local government aid penalty by providing a qualified local contribution
to the District. The local government aid penalty equals 35 percent of the
increment while the local option out provision calls for 10 percent of the TIF
assistance to be contributed by the city or EDA to the District. The 10
percent option out provision is more economical for the city or EDA. It is
recommended that the city select the qualifying local contribution option as
this has a smaller impact on city funds. Additionally, it is recommended that
the city/EDA uses funds generated from the selling of the Industrial Park lot
to the School District for financing this contribution. This land transaction
was recently completed and the School District public works facility is under
construction. Questions regarding the TIF penalty should be directed to Lori
Johnson.
As required by law, this EDA public hearing notice has been published in the
Elk River Star News. The City Council public hearing on this District and
proposal will follow the EDA meeting. The TIF Plan is consistent with state
• law, meets the but for requirement in state law (but for city assistance, this
project could not happen within the reasonable future...city assistance is
necessary in order for the company to preserve its limited capital for
additional machinery), and has been reviewed by the County Board, School
Board, and Planning Commission.
Action Requested
After conducting the public hearing on the TIF Plan for TIF District No. 15,
the EDA is asked to adopt the attached resolution. Approval of the Plan is
subject to the execution of the Contract for Private Development which the
EDA should review and approve.
It is recommended that the EDA formally recommend to the City Council
that is select the option out provision for making a qualified local
contribution of 10 percent of the TIF assistance to the District. The funds for
this contribution will come from the monies generated from land transaction
between the EDA and the School District for the Industrial Park lot.
eda\meetings\tif15
• EDA RESOLUTION 96 -
A RESOLUTION FOR THE ECONOMIC DEVELOPMENT AUTHORITY
FOR THE CITY OF ELK RIVER, MINNESOTA, RELATING TO THE
ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 15
AND THE ADOPTION AND APPROVAL OF THE TAX INCREMENT
FINANCING PLAN RELATING THERETO, LOCATED WITHIN
DEVELOPMENT DISTRICT NO. 1
BE IT RESOLVED by the Economic Development Authority for the City of
Elk River, Minnesota (EDA), as follows:
Section 1. - Recitals.
1.01. It has been proposed that the EDA establish Tax Increment
Financing District No. 15 within Development District No. 1.
1.02 The EDA has caused to be prepared a proposed Tax Increment
Financing Plan (the Plan) for Tax Increment Financing District No. 15.
1.03 The EDA has performed all actions by Minnesota Statutes to be
• performed prior to the establishment of Tax Increment Financing District No.
15 and the adoption of the Plan relating thereto.
1.04 The EDA hereby determines that it is necessary and in the best
interest of the City at this time to establish Tax Increment Financing District
No. 15 and to approve the Plan relating thereto.
Section 2. - Findings for the Establishment of Tax Increment
Financing District No. 15.
2.01 The EDA hereby finds, determines, and declares that the
establishment of Tax Increment Financing District No. 15 within
Development District No. 1 is intended and, in the judgment of this EDA, its
effects will be, to provide an impetus for commercial and industrial
development, increase employment and otherwise promote certain public
purposes and accomplish certain objectives as specified in the Plan for Tax
Increment Financing District No. 15.
2.02 The EDA further finds, determines, and declares that Tax
Increment Financing District No. 15 qualifies as an Economic Development
District pursuant to Minnesota Statutes, Section 469.174, Subdivision 12.
• 2.03 The EDA further finds, determines, and declares that the
proposed development, in the opinion of the EDA, would not occur solely
through private investment within the reasonably foreseeable future and,
therefore, the use of Tax Increment Financing is deemed necessary.
2.04 The EDA further finds, determines, and declares that the
proposed Plan for Tax Increment Financing District No. 15 conforms to the
Comprehensive Plan of the City.
2.05 The EDA further finds, determines, and declares that the
proposed Plan for Tax Increment Financing District No. 15 will afford
maximum opportunity, consistent with the sound needs of the City as a
whole, for the development or redevelopment of Development District No. 1
by private enterprise.
2.06 The EDA determines and declares that Tax Increment
Financing District No. 15 located within Development District No. 1 is
hereby established.
Section 3. - Adoption of the Plan.
3.01 The Plan for Tax Increment Financing District No. 15 presented
to the EDA on this date, is hereby approved and adopted and shall be placed
on file in the office of the City Clerk.
Section 4. - Implementation of the Plan.
4.01 The Executive Director of the EDA, the City Administrator, and
the Assistant City Administrator are authorized and directed to proceed with
implementation of the Plan, and for this purpose, to negotiate, draft, and
prepare and present to the EDA for its consideration all future plans,
resolutions, documents, and contracts necessary for this purpose.
Adopted this 17th day of June, 1996.
Jeffrey A. Gongoll, President
Elk River EDA
ATTEST:
• Patrick D. Klaers, Executive Director
Elk River EDA
•
TAX INCREMENT FINANCING PLAN
TAX INCREMENT FINANCING DISTRICT NO. 15
• DEVELOPMENT PROGRAM
DEVELOPMENT DISTRICT NO. 1
CITY OF ELK RIVER, MINNESOTA
JUNE 10, 1996
•
• TAX INCREMENT FINANCING PLAN
TAX INCREMENT FINANCING DISTRICT NO. 15
SUMMARY
McChesney Cabinets, 18983 York Street, Elk River, Minnesota seeks $35,000
in Tax Increment Financing assistance to support its proposed construction of
a 10,000 square foot facility in the McChesney Industrial Park. McChesney
Cabinets is a manufacturer and installer of custom cabinets and countertops
and specialty wood items. McChesney Cabinets currently occupies 3,000
square feet at 18983 York Street in Elk River, Minnesota, and currently has
two (2) full time employees at this facility. As a result of the expansion,
approximately two new full-time jobs will be created in 1997.
The Economic Development Authority for the City of Elk River, Minnesota is
proposing the creation of an Economic Development District pursuant to the
Tax Increment Financing Act. Tax increment funds will be used to "write-
down" the price or value of the development site. The Economic Development
Authority for the City of Elk River proposes to reimburse McChesney
Cabinets for the value associated with Lot 9 under a pay-as-you-go Tax
Increment Financing District.
• The 10,000 square foot facility will have a finished market value estimated at
$300,000 which produces property taxes of approximately $12,600 per year.
Of this total, $11,400 will be new additional taxes. These new funds will be
"captured" by the Economic Development Authority so that the City of Elk
River can recover the $35,000 in tax increment assistance. After these funds
have been repaid, Tax Increment Financing District No. 15 will be
decertified, thereby enabling all local taxing jurisdictions (county, school,
city, etc.) to share in the project's property taxes.
The Economic Development Authority for the City of Elk River, Minnesota
anticipates that Tax Increment Financing District No. 15 will exist for
approximately six (6) years; during which time tax increment funds will be
collected for four (4) years.
•
• TAX INCREMENT FINANCING PLAN
TAX INCREMENT FINANCING DISTRICT NO. 15
A. STATEMENT OF OBJECTIVES
Tax Increment Financing District No. 15 is located entirely within
the City's Development District No. 1, a Municipal Development
District created and established pursuant to the Development
District Act. The Development Program for Development District No.
1, was adopted by the City Council on April 1, 1985, and was
amended on January 27, 1986, and November 30, 1987. The
objectives of the Development District, as amended, and as set forth
in the Development Program, are herey incorporated into this Tax
Increment Financing Plan. Attached as Exhibit A is a map of
Development District No. 1.
The specific objectives of the Tax Increment Financing Plan for Tax
Increment Financing District No. 15 are:
1. To provide pay-as-you-go reimbursement for the value of Lot 9,
Block 1, McChesney Industrial Park; (the development site);
2. To encourage a manufacturing company to expand in the
• McChesney Industrial Park; said expansion includes the
construction of a new facility estimated at approximately
10,000 square feet;
3. To increase employment opportunities in the community and in
the State of Minnesota; said expansion will create
approximately two (2) full time positions over the next three (3)
years and approximately two (2) positions will be retained; and,
4. To preserve and enhance the local tax base and the tax base
in the State of Minnesota; said expansion will generate total
property taxes of approximately $12,600 including new
additional property taxes of approximately $11,400.
B. CLASSIFICATION OF THE DISTRICT
The City Council of the City of Elk River, Minnesota determines
that it is necessary, desirable, and in the public interest to
designate, establish, develop, and administer an Economic
Development Tax Increment Financing District in the City of Elk
River pursuant to the provisions of the Tax Increment Financing
Act, Minnesota Statutes 469.174, Subdivision 12. The purpose of the
Tax Increment Financing Plan and Tax Increment Financing District
•
No. 15 is to encourage the expansion of a manufacturing company in
the McChesney Industrial Park, thereby increasing local employment
opportunities and preserving and enhancing the local tax base of the
• State of Minnesota.
C. DEVELOPMENT PROGRAM
1. Overview
McChesney Cabinets, 18983 York Street NW, Elk River,
Minnesota, seeks Tax Increment Financing assistance to
support its proposed construction of a 10,000 square foot
facility in the McChesney Industrial Park.
The Tax Increment funds will be used to reimburse McChesney
Cabinets for the value of the development site.
2. Property Included in Tax Increment Financing District No. 15
The legal description of the property included in TIF District No.
15 are is follows:
Lot 9, Block 1, McChesney Industrial Park (PID No. 75-
433-0180)
Attached as Exhibits B-1 and B-2 are maps showing the exact
location of the property included in Tax Increment Financing
District No. 15.
•
3. Property to be Acquired by the Authority
No property will be acquired by the Authority.
D. DEVELOPMENT ACTIVITIES
1. Development Overview
McChesney Cabinets, proposes to construct a new facility
containing approximately 10,000 square feet on Lot 9. The new
facility will have a finished market value estimated at $300,000.
Construction may begin during the summer of 1996 and will be
completed by December 31, 1996.
McChesney Cabinets currently employs two (2) individuals at its
3,000 square foot space in Elk River. As a result of the
expansion, two (2) new full-time jobs will be created by
McChesney Cabinets in the next three (3) years.
•
• 2. Contracts
No contracts have been entered into at the time of the
preparation of this Tax Increment Financing Plan.
Proposed contracts for services associated with Tax Increment
Financing District No. 15 include:
• Contract for Construction of a 10,000 Square Foot
Facility (by McChesney Cabinets)
• Soil Borings and Analysis
• Site Preparation and Development
E. FINANCIAL ANALYSIS OF TAX INCREMENT FINANCING
DISTRICT NO. 15
1. Tax Increment Financing District No. 15 Cost Estimates
Budget Amount
Land Write Down $35,000
Administration & Legal $ 1,000
Miscellaneous $ 1.000
Total $37,000
• 2. Bonded Indebtedness
The City of Elk River anticipates a pay-as-you-go Tax Increment
Financing District No. 15 and no bonds will be issued.
3. Sources of Revenue to Pay Public Costs
Tax Increments collected from the McChesney Cabinets
expansion will be used to pay the public costs associated
with Tax Increment Financing District No. 15.
4. Original Tax Capacity
The original net tax capacity, based on the 1995 valuation, for
the real property in Tax Increment District No. 15 is estimated
to be $1,150. The County Auditor Certification attributable to
this value is attached as Exhibit C.
5. Estimated Captured Tax Capacity
The finished market value upon completion of the
improvements in Tax Increment Financing District No. 15 is
estimated at $300,000. This value translates into a completed
•
• net tax capacity estimated at $12,200. The captured net tax
capacity is estimated as follows:
Completed Net Tax Capacity $12,200
Less Original Net Tax Capacity 1.150
Equals Captured Net Tax Capacity $11,050
One hundred percent of the captured net tax capacity of Tax
Increment Financing District No. 15 will be required to finance
the public costs associated with District No. 15. As a result, the
City of Elk River elects, pursuant to Minnesota Statute 469.177
Subdivision 2 (a)(1), to retain the full captured net tax capacity
of Tax Increment Financing District No. 15.
6. Duration of the Tax Increment Financing District No. 15
The City of Elk River expects that the first increment it will
receive from Tax Increment Financing District No. 15 will be for
taxes payable in 1998, and will be based on a completed value as
of January 2, 1997. The City expects to continue to receive tax
increment from Tax Increment District No. 15 up to and
including the year 2001, or until approximately $37,000 in tax
increment has been received. Thereafter, no further increments
may be received and Tax Increment Financing District No. 15
will terminate.
• F. CASH FLOW ANALYSIS
Attached as Exhibit D is the Cash Flow Analysis for Tax Increment
Financing District No. 15.
G. IMPACT ON OTHER LOCAL TAXING JURISDICTIONS
1. Estimated Impact of District No. 15 on the Taxing Jurisdictions
Assuming the Captured Net Tax Capacity is Available to the
Taxing Jurisdictions Without Creation of District No. 15:
Pursuant to Minnesota law, tax increment generated by
development within the Tax Increment Financing District may
be captured by the City for a period of up to eight years. During
this period other taxing jurisdictions will continue to receive
taxes from the property within the Tax Increment Financing
District based on the current net tax capacity.
2. Estimated Impact of District No. 15 on the Taxing Jurisdictions
Assuming None of the Captured Net Tax Capacity is Available
to Taxing Jurisdictions Without Creation of District No. 15:
The Economic Development Authority of the City of Elk River
has determined that the McChesney Cabinets project would not
reasonably be expected to occur without the creation of TIF
• District No. 15 and the use of tax increment financing is
necessary. Therefore, none of the net tax capacity captured
during the term of this TIF District would be available to other
• taxing jurisdictions without the creation of this district.
3. Additional information on the impact of Tax Increment
Financing District No. 15 on the other local taxing jurisdictions
can be found in Exhibit E.
H. STUDIES AND ANALYSIS USED TO DETERMINE THE NEED FOR
TAX INCREMENT FINANCING
The Elk River EDA and City Council have determined that the
McChesney Cabinets expansion project cannot reasonably be expected
to occur solely through private investment within the reasonably
foreseeable future. Therefore, the use of Tax Increment Financing
assistance is deemed necessary.
This determination has been made based on the following:
• The company currently occupies 3,000 square feet in Elk
River and is planning this expansion into a larger 5,000
square foot facility. The balance of the facility, 5,000 square
feet, will be leased to another local company - Winlectric
Company - for its expansion. Tax increment assistance is
needed to reduce the overall project costs - thereby
preserving scarce capital to ensure that McChesney Cabinets
remains financially stable after the expansion.
1111 • In addition, tax increment assistance is necessary because
the project will result in increased employment in the State,
and, it will result in the preservation and enhancement of
the tax base of the State.
PARCEL INCLUDED IN TAX INCREMENT FINANCING DISTRICT
NO. 15
Tax Increment Financing District No. 15 is comprised of one parcel of
land. It is listed below:
1995 Original
Parcel 1995 EMV Payable 1996 Net Tax Capacity
75-433-0180 $25,000 $1,150
Please refer to Exhibit C for the County Auditor Certification of this
parcel in Tax Increment Financing District No. 15.
•
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EXHIBIT B-2
TAR INCREMENT FINANCING DISTRICT NO. 15
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• EXHIBIT C
COUNTY AUDITOR CERTIFICATION
TAX INCREMENT FINANCING DISTRICT NO. 15
The original net tax capacity of the following listed parcel as of January 2, 1995,
is certified to be $1,150.
The parcel contained in Tax Increment District No. 15 is listed below.
1995 EMV 1995 Original
Parcel Number Payable 1996 Net Tax Capacity
75-433-0180 $25,000 $1,150
The Base Tax Rate will be the rate calculated for taxes payable in 1996. In accordance
with Minnesota Statutes, Section 469.177, Subdivision 1, the average percentage increase
in the original Net Tax Capacity shall be three percent(3%).
•
Ramona Doebler
Sherburne County Auditor
SHERBURNE
COUNTY
SEAL June , 1996
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EXHIBIT A
DEVELOPMENT PROGRAM FOR DEVELOPMENT
DISTRICT NO. 1
FORWARD
This document constitutes the City of Elk River's Development Program for
Development District No. 1. The Development Program for Development District
No. 1 was originally adopted by the City Council of the City of Elk River on April 1,
1985. The City Council transferred jurisdiction over Development District No. 1 to
the Economic Development Authority for the City of Elk River pursuant to City
• Council Resolution 87-63. This document incorporates amendments to the
Development Program adopted by the City Council pursuant to Minn. Stat.
469.124, et seq., through February 12, 1990.
•
• TABLE OF CONTENTS
DEVELOPMENT PROGRAM
DEVELOPMENT DISTRICT NO. 1
Page
A. STATUTORY AUTHORITY 1
B. STATEMENT OF PUBLIC PURPOSE 1
C. BOUNDARIES OF THE DEVELOPMENT DISTRICT 2
D. LAND USE IN THE DEVELOPMENT DISTRICT 3
1. Present Land Use 3
2. Future Land Use 3
E. STATEMENT OF OBJECTIVES 4
F. PUBLIC FACILITIES 5
• 1. Sanitary Sewer 5
2. Storm Drainage 6
3. Water System 6
4. Proposed System Improvements 7
5. Additional Public Improvement Projects 8
6. Unscheduled Public Improvements 8
7. Parks and Open Spaces 8
G. PUBLIC LAND 9
1. Current Status 9
2. Proposed Park Plan 9
a. Neighborhood Parks 10
b. Community Parks 10
c. Area Wide Parks 10
d. Trails System 11
H. ENVIRONMENTAL CONTROLS 12
I. DEVELOPMENT OF PRIVATE PROPERTY 13
1. Downtown Commercial Redevelopment 13
2. Hotel 13
3. Other Development 13
•
4. New Industrial Space 13
J. ADMINISTRATION OF THE DEVELOPMENT DISTRICT 14
EXHIBIT A: Development District No. 1
DEVELOPMENT PROGRAM
DEVELOPMENT DISTRICT NO. 1
A. STATUTORY AUTHORITY
The statutory authority empowering the City to establish the Development
District in April 1985 was Minn. Stat. Chapter 472A, the Minnesota Municipal
Development Districts Act. In 1987, the Development Districts Act was recodified
as Minn. Stat. 469.124, et seq. This Development Program has been prepared and
amended in accordance with the applicable provisions of the Development Districts
Act.
i B. STATEMENT OF PUBLIC PURPOSE
The City Council and the Economic Development Authority of the City of Elk
River, Minnesota determine that it is necessary, desirable, and in the public
interest to designate, establish, develop, and administer a Development District in
the City of Elk River pursuant to the Development Districts Act. The purpose of the
Development District is to provide a means for financing public improvements and
facilities necessary if the city is to attract additional commercial and industrial
development and increase employment opportunities in those areas of the city
designated for these uses.
The City Council and the Economic Development Authority find that there is
a demand within the city for increased commercial, industrial, and residential
1
development and, that the Development District, as amended, includes all of the
areas in the city designated for business, industrial, and residential development.
However, extensive commercial, residential, and industrial development in many of
these areas is not possible absent the installation of certain public facilities,
including improved water and sanitary sewer service, additional streets and roads,
and others. The high cost of constructing such facilities cannot be met, and
additional commercial, residential, and industrial development is therefore not
possible without public intervention. Therefore, the Development District is
created by the city to make public intervention and assistance possible, construction
of the required public facilities possible, and to encourage development of
designated commercial, residential, and industrial areas of the city.
•
C. BOUNDARIES OF THE DEVELOPMENT DISTRICT
The geographic boundaries of Development District No. 1 are set forth on the
map attached as Exhibit A to this Development Program.
These boundaries have been selected to include those areas of the city which:
1) are zoned and planned for commercial, residential, and industrial
development but require that certain public improvements be installed to make
such development possible;
2) may have water and sanitary sewer service made available by the
proposed water and sanitary sewer improvements, therefore, making development
possible;
•
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• 3) have existing water and sanitary sewer service which may be improved
by the proposed water and sanitary sewer improvements.
D. LAND USE IN THE DEVELOPMENT DISTRICT
1. Present Land Use
The Development District includes all of the developed areas of the city.
Present land uses include the central business area of the city; urban and semi-
urban residential uses; free-standing highway and general business uses;
industrial uses; recreational uses; and educational uses. The Development
District also includes the undeveloped areas of the city designated for business and
industrial uses, and undeveloped areas planned for residential uses. Present land
. use of these areas is primarily interim agricultural and under-utilized open space.
2. Future Land Use
The purpose of the Development District is to encourage increased business,
residential, and industrial development in those areas of the city designated for
these uses. Creation of Development District No. 1 in 1985 and establishment of
Tax Increment Financing Districts 1 and 3 made possible the installation of certain
water system improvements which resulted in extensive commercial development
at the intersection of Highway 169 and School Street; and made possible the
enlargement of the city industrial park located at County Road 1 and Industrial
Boulevard. It is anticipated that installation of the public improvements
3
• contemplated in and made possible by the amended Development Program will
make possible future land uses and development within the expanded Development
District including increased business and industrial uses in the industrial park, in
the development districts of the city, and in several other areas of the city
designated for these uses. It is also anticipated that these public improvements will
make residential development possible in those areas of the Development District
planned for residential uses.
E. STATEMENT OF OBJECTIVES
The City Council of the City of Elk River seeks to achieve the following
objectives through the creation of the Development District and the implementation
• of this Development Program:
1) Provide impetus for commercial, residential, and industrial
development by constructing the public facilities necessary to make such
development possible;
2) Increase employment opportunities in the city by encouraging
additional commercial and industrial development;
3) Provide adequately serviced commercial and industrial areas of the
city to accommodate desirable users;
4) Remedy deficiencies in the existing water and sanitary sewer systems,
which deficiencies have restricted development in areas of the city planned and
designated for commercial, residential, and industrial uses;
•
4
i5) Preserve and enhance the tax base of the city;
6) Preserve and enhance the quality of life of the city; and,
7) Provide maximum opportunity, consistent with the needs of the city for
development by private enterprise.
F. PUBLIC FACILITIES
The city is concerned with providing cost effective water and sanitary sewer
and storm sewer services to areas of the city designated for urban density
development. Extension of such services is intended for use as a tool to direct urban
expansion in an orderly manner. The city currently provides sanitary sewer, storm
sewer, and water to a portion of its residents. The status of each system is as
• follows:
1. Sanitary Sewer
The city has a relatively new wastewater treatment plant, construction of
which was completed in 1978. This facility is located between U.S. Highway 169
and the Burlington Northern Railroad tracks near the United Power plant. The
hydraulic design capacity is 710,000 gallons per day. It is currently treating
approximately 480,000 gallons per day or about 67 percent of capacity. The system
serves approximately 900 residents, commercial, and industrial users within its
service area. The system is comprised of 17 miles of sewer lines along which there
are seven lift stations.
•
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•
2. Storm Drainage
The city has a storm drainage system constructed in 1981 comprised of a
detention pond located in the Lions Park and a pipe network which discharges to
the Mississippi River. This system provides drainage for an area generally bounded
by Highway 169 on the east, Main Street on the south, the railroad and Proctor
Avenue on the west and the School District property on the north.
Storm drainage in other areas of the City consists of old small diameter pipe
systems, county and local unmaintained ditch systems, and isolated wetland areas.
3. Water System
The city has three wells from which it draws water. They are located at
Jackson Avenue and 4th Street, the old city hall, and at the Cretex property near
the Burlington Northern Railway. This system also has three towers all at the
same elevation. They are located at Jackson Avenue, Cretex, and near the school
administration building along Highway 169.
Prior to 1981, the pipe network had no pipe over 10 inches in diameter with
most pipes of 4 inch, 6 inch, or 8 inch diameter. However, since 1981, there have
been 8,300 linear feet of pipe constructed ranging in sizes of 12 inches, 16 inches
and 24 inches.
The Comprehensive Water Plan - 1982, serves as a guide for decisions with
respect to the water system of the city.
•
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•
4. Proposed System Improvements
The Utilities Plan includes an expanded urban service area and a phasing
component for a systematic extension of water and sewer services. Expansion of the
existing facilities in an orderly manner will serve two purposes: 1) it will allow for
urban density expansion in additional parts of the city at a cost effective rate, and
2) it will increase the utilization of the sanitary sewer and water facilities, thus
spreading costs over a larger population.
Phase I expansion is targeted to occur before 1993. This five year expansion
is to be west of the existing urban service area between the Mississippi River and
the Elk River (the western area), and east of Highway 169 between Elk Hills Drive
• and 197th Avenue. The western area should be serviced as soon a economically
feasible. Phase II expansion is targeted to occur after the completion of Phase I.
Any expansion is contingent upon the city's determination that there is readily
available a cost effective method by way of which to extend those services to the
serviced properties without undue burden to the taxpayers.
All future development within the boundaries of the planned urban service
district will require hookup to the water and sanitary sewer systems except the
area between the Elk River, County Road 35, Meadowvale Road and the western
boundary of the city which will require overlay plats for future development.
•
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• Based on the land use categories evaluated in the Land Use Plan, the
Planned Urban Service Area can contain 17,400 additional people of the total
accommodated growth of 23,900 people.
5. Additional Public Improvement Projects
Additional Public Improvement Projects scheduled in the Development
District are identified in the city's Capital Improvements Plan Schedule, as
amended from time to time. It is not anticipated that any of the currently planned
Public Improvement Projects will require the acquisition of any property or the
displacement or relocation of any persons or businesses.
6. Unscheduled Public Improvements
Upon a demonstration of need and public financial feasibility, the city will
extend streets and utilities and construct or install such other public facilities and
improvements within the Development District as the City Council deems
necessary or appropriate to meet the purposes of this Development Program.
7. Parks and Open Spaces
The anticipated growth of the city during the next 20 years will dictate a
need for additional park and recreation areas. The city recognizes this need
and also recognizes many existing opportunities to create an appropriate park and
recreation system of which a trail system would be a part.
•
8
Large parcels of undeveloped land exist in areas surrounding the urbanized
core. The intent of this plan is to identify land which should be preserved for
recreational purposes as development takes place within the city.
G. PUBLIC LAND
1. Current Status
The city is endowed with significant recreational assets in the form of rivers
and lakes. The Mississippi River has long stretches of undeveloped land along its
shores. This land is conducive to development into parkland and trails for active
and passive recreational use. Also, Elk River north of Highway 10 and Lake Orono
south of Highway 10, provide opportunities for active and passive water related
• recreation.
2. Proposed Park Plan
It is the city's desire to provide a variety of passive and active recreational
activities and opportunities for its citizens. Therefore, the city desires to improve
the existing parks and develop new parks consistent with future overall growth
patterns. Priority items identified by the city include: 1) Neighborhood parks and
community parks located to effectively serve the recreational needs of the
population; 2) An integrated trail system for pedestrians and bicycles which
effectively ties together existing and proposed human activity centers.
•
9
• Features considered favorable for park land include: forested areas,
wetlands, shoreland of lakes, streams and rivers, abandoned railroad beds, and
areas of poor soil quality.
a. Neighborhood Parks
There are areas of intense recreational activities such as field games, court
games, playground equipment, skating rinks, and neighborhood centers. Typically,
these recreation areas have a service radius of a half mile to a mile and serve a
population of 2,000 to 5,000 in an urbanized area. Typical size ranges from 10-25
acres.
The location of neighborhood parks is coordinated with the location of
community parks to provide appropriate geographic distribution of recreational
411 opportunities to the city's residents.
b. Community Parks
These are areas of intense recreational facilities such as athletic fields and
swimming pools. These parks should also include many of the same types of
facilities as neighborhood parks because the geographic distribution of all parks
requires a community park to serve a neighborhood function as well. Community
parks are designated for Lions Park and Orono Park.
c. Area Wide Parks
These are areas of natural or ornamental quality for nature-oriented
recreation such as picnicking, boating, fishing, swimming, biking, camping, and
trail use. These parks are intended to serve the recreational needs of Elk River and
•
10
• surrounding area. There are four such areas of varying size designated for area
wide parks. They include:
1. The river front area immediately south of the central business district.
This land lies within the floodplain and is currently undeveloped.
2. A 160 acre parcel adjacent to and north of the Elk River Golf Course.
The land is currently undeveloped and has substantial tree stands.
3. The former city dump which is 80 acres in size.
4. An area of 80 to 160 acres surrounding Eagle Lake in the northeastern
quadrant of the city.
d. Trails System
An important feature of the Park Plan is the integration of existing and
• proposed recreation areas through the use of a trail system. The trail system
provides a series of loops through the city. This loop arrangement is designed to
provide access from residential neighborhoods to the park system with a minimum
of traffic conflict with motorized vehicles. Portions of the trail system will be
developed in conjunction with the expansion and development of various
transportation corridors.
The backbone of the trails system is the abandoned Burlington Northern
Railroad bed which runs in a north-south direction from the Central Business
District. Acquisition of the railroad bed is a goal of the city since it is an important
link to the integrated trail system.
•
11
• An important link in the trail system is the trail parallel to the Mississippi
River. The Mississippi River trail will provide an east-west access along the city's
southern boundary.
Acquisition of lands for the parks and trails system is to be through land
dedications and purchase when funds are available.
H. ENVIRONMENTAL CONTROLS
All development within the Development District will be subject to existing
environmental controls established by state and federal law and the Elk River code
of Ordinances, including:
1) the National Environmental Protection Act, and related regulations;
2) the Minnesota Environmental Policy Act, and related regulations;
3) the Minnesota Environmental Rights Act;
4) the Minnesota Critical Areas Act, and related regulations;
5) the Elk River Flood Plain Management Ordinance;
6) the Elk River Shoreland and Wild and Scenic River Management
Ordinance;
7) the Elk River Subdivision Ordinance;
8) the Elk River Zoning Ordinance;
9) sections 1300 and 1302 of the Elk River Code of Ordinances regulating
sanitary sewage disposal.
No additional environmental controls are proposed.
•
12
S
I. DEVELOPMENT OF PRIVATE PROPERTY
1. Downtown Commercial Redevelopment
An entire new block of commercial buildings is being proposed for the old
downtown. The block which runs along the Mississippi River and Main Street will
be renovated or completely raised. The redevelopment will focus on the river and
the theme created by the new cast iron lighting and streetscape.
2. Hotel
A new 42 unit Hotel will serve as a catalyst to attract new higher scale
development to the east end of Highway 10. The possibility of city services to the
• area will serve to create new economic opportunities to the area. The Hotel site is
another redevelopment project, replacing economically obsolete structures.
3. Other Redevelopment
The city anticipates additional redevelopment opportunities in the older
parts of downtown. Included are a new medical clinic and the relocation or
renovation of obsolete service stations and residential units.
4. New Industrial Space
Once city services are extended to the west end of the city, a new industrial
park will be built to make room for additional industrial growth.
•
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410
J. ADMINISTRATION OF THE DEVELOPMENT DISTRICT
Administration of the Development District is the responsibility of the City
Administrator, under the supervision of the City Council. Public streets, parklands,
and other public property are the responsibility of the City Public Works
Department and shall be maintained in the same manner as all other public
property in the city. The water tower, water mains, and other water facilities will
be operated and maintained by the Elk River Municipal Utilities Commission in the
same manner as existing water facilities and systems.
Private property owners will be responsible for the maintenance of their
parcels following development.
s:\document\devprogl.doc
•
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BOIINDARY OF ( --- >, "' —&•--_ \•
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DEVELOF.* ENT DISTRICT NO, 1 =-` --`-`- _ ' ._ _\ —
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F.2EIBIT A I I rI1 ( ,‘Iliil
DEVELOPMENT D T STR T I T Nn 1 ii ,; , , , ,l! , , , , A
APPLICATION FOR TAX INCREMENT FINANCING
CITY OF ELK RIVER, MINNESOTA
•
APPLICANT
Business Name: _McChesney Cabinets
Address: 18983 York St NW
Elk River, MN b5330
Telephone: 441 -3374
Officers: Jerry Mr-rhfcnPy
Contact Person: .r rry McChesney
Title: Owner
Business Form (Corporation, Partnership, Etc.):
rartncr3hip
Years In Operation: 7 4
• Sales/Revenues: $ 31 1 , 000_
aD
Brief Description of Business, Principal Products, etc:
Custom Cabinets and Counter Tops
Has applicant ever filed for bankruptcy? Yes No x
If yes, provide details on separate page(s).
Has applicant ever defaulted on any bond or mortgage
commitment? Yes No x
If yes, provide details on separate page(s).
Does applicant have commitments for conventional financing for
the project? Yes x No
Please list three financing references:
(Name/Address/Contact/Phone)
First National Bank contact Tom McNair 441 -27O
729 Main SL Elk RiveL , MN 55330
• Edward D Joncc Contact Cene Wipf 441 -6824
Name and 213dress o ap icant'sWalt6ERred a a c5o r ant:
Accountant is John Enstad 786-6606
Coon Rapids, Mn 55433
PROPOSED PROJECT
Describe Project: NPW ,S`tPP_1 Building
S
Location: McChesney Industrial Park
Block 1 Lot 9
Site Plan Attached: Yes x No
Type of Project:
Commercial x Industrial Residential
New Construction Expansion Rehab
JOB CREATION
Current Number of Employees: 2
Current Payroll: $110 ,000 .00
Number of Jobs Created: 2
Number of Jobs Retained: 2
Revised Payroll: $1A5 ,000 _00
• PROJECT COSTS
Land Acquisition: $ 45,00n nn
Site Development: $ 4 0 0 n _n n
Construction: $ 320,000 .00
Machinery & Equipment: $ 49 ,400.00
Architectural and
2,000 .00
Engineering Fees $
Legal Fees $ 1 ,000 .00
Interest During Const. $ 3,400 .00
Debt Service Reserve $
Contingencies $
TOTAL $ 424 , 800 _nn
SOURCE OF FINANCING
Conventional Loan $ 290 ,000 .00
Equity $
SBA Loan $
Revenue Bond $
• Tax Increment Financing $ 35,000 .00
Grant(s) $
Other $
TOTAL $ 17q ,n00 _00
CONSTRUCTION AND DESIGN
Name and address of architect, engineer and contractor for project:
•
—maids not in to be derided later
Target Dates:
Start of Construction: Jun= 15, 1 A Q 6
Construction Completed: Oct_ 1 , 1996
Finished Market Value of Project: $_3.6141112.0_011________
STATEMENT OF PUBLIC PURPOSE
Describe why the proposed development or redevelopment would not
reasonably be expected to occur solely through private investment
within the foreseeable future and therefore the use of Tax Increment
Financing is deemed necessary:
Expanding a bu3inc33 i3 a very cxpcn3ivc
project. Additional machinery and working space is badly
• needed to satisfy our existing customers. Without some
help in the cxpan3ion projcct P1cChcancy Cabinet, cannot
afford all of the expenses involved.
The undersigned, (a) (the)
of applicant, hereby represents and warrants to the City that (he) (she) has
carefully reviewed us application, and that the statements and information
contained herein and submitted herewith are accurate and complete to the
best of the undersigned's knowledge and belief.
LCC
LCC T
Dated: May 10, 1996 Jer ="R' Chccncy
pplicant
By
Its
The City reserves the right to require additional information and supporting
data from the applicant after the filing of this Application.
•
ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
MEMORANDUM
TO: Economic Development Authority
FROM: Executive Director Pat Klaers
DATE: June 10, 1996
SUBJECT: Contract for Private Development
between City/EDA and McChesney
Cabinets
Associated with TIF projects is a Contract for Private Development and the
Note that is entered into between the City/EDA and the company receiving
city assistance. This Developer's Agreement further outlines the
commitments being made by both parties. The commitment by the city is to
repay tax revenue as it is received up to $35,000. The commitment on the
company's part is to construct a 10,000 square foot facility of approximately
• $300,000 in value and to create two new jobs within the next three years.
This Contract is still being drafted and is not attached. This Contract will be
sent out to the EDA prior to the special meeting on June 17, so that it can be
reviewed, and hopefully approved, by the EDA at that meeting.
eda\meetings\cfpd
13065 Orono Parkway • P. O. Box 490• Elk River, MN 55330-1743 • (612) 441-7420• Fax (612) 441-7425
Equal Opportunity Housing and Equal Opportunity Employment