RES 24-30City of Elk River
ver City Council
Resolution 24-30
A Resolution of the City Council of the City of Elk River Approving a
Modification of the Development Program for Municipal Development
District No. I, the Establishment of Tax Increment Financing District
29, and a Tax Increment Financing Plan Therefor
BE IT RESOLVED by the City Council (the "City Council") of the City of Elk River,
Minnesota (the "City") as follows:
Section 1. Background.
1.01. The City has previously established Development District No. 1 (the
"Development District") within the City and has approved a Development Program therefor
(the "Development Program") in accordance with Minnesota Statutes, Sections 469.124
through 469.133, as amended (the "City Development District Act").
1.02. The City has proposed to establish Tax Increment Financing District No. 29
(the "TIF District"), an economic development district within the Development District,
and adopt a Tax Increment Financing Plan therefor (the "TIF Plan"), all pursuant to the City
Development District Act and Minnesota Statutes, Sections 469.174 through 469.1794, as
amended (the "TIF Act"). To that end, the City has caused to be prepared a Modification to
the Development Program (the "Development Program Modification") and the TIF Plan.
Copies of the Development Program Modification and the TIF Plan are on file with the
City.
1.03. The City and its consultants have performed all actions required by law to be
performed prior to the adoption and approval of the Development Program Modification
and the TIF Plan, including without limitation notification of the commissioner of
Sherburne County, Minnesota (the "County") representing the area included in the TIF
District, notification of the County Auditor of the County and Clerk of the Board of
Education of Independent School District No. 728 (the "School District"). In addition, on
the date hereof, the City Council conducted a public hearing, following notice thereof
published in the City's official newspaper at least 10 but not more than 30 days prior to the
date hereof.
1.04. The TIF Plan and certain information and material (collectively, the
"Materials") relating to the TIF Plan and to the activities contemplated therein have
heretofore been prepared and submitted to the Council and/or made a part of the City's files
and proceedings on the TIF Plan. The Materials include the tax increment application,
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project financial information, project sources and uses and other information supplied by
PLM Properties LLC, a Minnesota limited liability company, Heritage Millwork Inc.,
Minesota corporation, or an entity affiliated therewith or related thereto (collectively, the
"Developer"), as to the activities contemplated therein, and information constituting or
relating to (1) why the assistance satisfies the so-called "but for" test and (2) the bases for the
other findings and determinations made in this resolution. The Council hereby confirms,
ratifies and adopts the Materials, which are hereby incorporated into and made as fully a part
of this resolution to the same extent as if set forth in full herein.
1.05. The TIF District is being established to facilitate the development by the
Developer of certain property in the TIF District currently owned by the City (the
"Property") including the construction and equipping thereon of an approximately 110,000
square foot industrial warehouse facility (the "Project"). At least 85% of the Project will be
used for manufacturing, warehousing, distribution, or research, with less than 15% of the
Project available for office or other space not related to such functions.
Section 2. Findings, Develo ment District.
2.01. The boundaries of the Development District are not being expanded and the
Development Program is not being modified other than to incorporate the establishment of
the TIF District therein; therefore, the City Council reaffirms the findings and
determinations originally made in connection with the establishment of the Development
District and the adoption of the Development Program therefor. The purposes and
development activities set forth in the proposed Development District Modification are
hereby expanded to include all development and redevelopment activities occurring within
the TIF District.
2.02. It is further specifically found and determined that (i) the land within the
Development District would not be made available for redevelopment or development
without the public intervention and financial assistance described in the Development
Program Modification; (ii) the Development Program Modification will afford maximum
opportunity, consistent with the sound needs of the City as a whole, for the development
and redevelopment of the Development Program by private enterprise; and (iii) the
Development Program Modification conforms to the general plan for the development of
the City as a whole and otherwise promotes certain public purposes and accomplish certain
objectives as specified in the Development Program Modification and the TIF Plan.
Section 3. Findings; TIF District.
3.01. The City Council hereby finds that the Project within the TIF District is in
the public interest and the TIF District is an economic development district, as defined in
Section 469.174, subdivision 12 of the TIF Act, because the Project will (i) discourage the
Developer from moving their operations out of the State, effectively discouraging commerce
and industry from relocating out of the State; (ii) result in increased employment in the City
and the State, including construction jobs; and (iii) result in capital investment in the City,
which will preserve and enhance the City and the State's tax base.
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3.02. The City Council hereby makes the following additional findings:
(a) The City Council further fords that the proposed Project, in the
opinion of the City Council, would not occur solely through private investment
within the reasonably foreseeable future and, therefore, the use of tax increment
financing is deemed necessary. The specific basis for such finding being:
The Developer has represented that it could not proceed with the Project
without tax increment assistance to offset the high cost of the land
acquisition and site improvements necessary for the Project. The Developer
has further represented that the Project is necessary for the Developer to
retain its current operations in the State, as well as to expand its business and
increase jobs and the tax base in the State. The Developer has provided
supplemental financial information demonstrating that the development of
this site would not occur without the assistance provided in the TIF Plan. No
private entity has undertaken efforts for similar land development in this area
of the City with an emphasis on job creation. The cost of construction of
the project and availability of revenues to support repayment of debt has
created a financial gap that requires a level of public assistance.
(b) The City Council further finds that the TIF Plan conforms to the
general plan for the development or redevelopment of the City as a whole. The
specific basis for such finding being:
The TIF Plan conforms with the general development plan of the City and
will generally complement and serve to implement policies adopted in the
City's comprehensive plan. The construction of the Project contemplated on
the Property is in accordance with the existing zoning or approved zoning
variances for the property.
(c) The City Council further finds that the TIF Plan will afford
maximum opportunity consistent with the sound needs of the City as a whole for the
development of the Development District by private enterprise. The specific basis
for such finding being:
The proposed Project will be used by the Developer as an industrial
warehouse facility and will afford maximum opportunity for the development
of the Property to serve the needs of the City. The new facility is expected
to create and retain up to 70 new jobs in the City and State plus create new
tax base for the City and the State. The development meets the City's
community development goals in terms of land use, tax base growth and
diversification and employment opportunities. The Project will maximize the
potential of an underutilized site and will increase the taxable market
valuation of the City and the State, will retain and increase jobs in the City
and State, and add a high -quality development to the City.
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(d) For purposes of compliance with Section 469.175, subdivision 3(b)(2)
of the TIF Act, the City Council hereby finds that the increased market value of the
property to be developed within the TIF District that could reasonably be expected
to occur without the use of tax increment financing is likely $0, which is less than the
increase in market value estimated to result from the Project (approximately
$13,770,718), after subtracting the present value of the projected tax increments for
the maximum duration of the TIF District (approximately $1,613,824), which is
approximately $12,156,894. Thus, the use of tax increment financing will be a
positive net gain to the City, the School District, and the County, and the tax
increment assistance does not exceed the benefit which will be derived therefrom.
3.03. The City elects to retain all of the captured tax capacity to finance the costs
of the TIF District and the Development District.
3.04. The provisions of Sections 3.02 and 3.03 hereof are hereby incorporated by
reference into and made a part of the TIF Plan. The findings of the TIF Plan are
incorporated herein by reference and made a part hereof.
3.05. The City Council further finds that TIF Plan is intended and in the judgment
of the City Council its effect will be to promote the public purposes and accomplish the
objectives specified therein. The TIF Plan will increase employment, facilitate the
development of a new industrial warehouse facility and improve the tax base in the City and
State. The City Council expressly finds that any private benefit to be received by a private
developer is incidental, as the tax increment assistance is provided solely to make the Project
financially feasible and thus produce the public benefits described. Therefore, the City
Council finds that the public benefits of the TIF Plan exceed any private benefits.
Section 4. Creation of the TIF District and Approval and Adoption of the TIF
Plan.
4.01. The TIF District is hereby established and the TIF Plan, as presented to the
City Council on this date, including without limitation the findings and statements of
objectives contained therein, is hereby approved, ratified, established, and adopted and shall
be placed on file in the office of the in the office of the Community Development Director.
Approval of the TIF Plan does not constitute approval of any project or a development
agreement with any developer. City staff and consultants are authorized and directed to
proceed with implementation of the TIF Plan and to transmit the request for certification of
the TIF District to the County Auditor in such form and content as the County Auditor may
specify and to file a copy of TIF Plan with the Minnesota Commissioner of Revenue and the
Office of the State Auditor as required by the TIF Act. The County Auditor is requested to
certify the original net tax capacity of the TIF District as described in the TIF Plan, and to
certify in each year thereafter the amount by which the original net tax capacity has increased
or decreased in accordance with the Act.
4.02. City staff, advisors, and legal counsel are authorized and directed to proceed
with the implementation of the TIF Plan and to negotiate, draft, prepare, and present to the
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City Council for its consideration all further plans, resolutions, documents, and contracts
necessary for this purpose.
Passed and adopted this 3`d day of June 2024.
ATTEST:
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Tina Allard, City Clerk
4jnjj.ietz, Nyor
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