03/03/2020 - City Council Finance Committee
FINANCE COMMITTEE MEETING
TUESDAY, MARCH 3, 2020
10:30 A.M.
FIRE SAFETY CENTER
UPPER LEVEL CONFERENCE ROOM
AGENDA
I. AGENDA ADOPTION
II. CONSIDER RESOLUTION OF SUPPORT FOR TAX INCREMENT FINANCING
III. REVIEW VALUATION OF INTANGIBLE ASSETS ACCOUNTS PAYABLE
IV. OTHER BUSINESS
V. ADJOURNMENT
Agenda Information Memo
Finance Committee Meeting
March 3, 2020
II. RESOLUTION OF SUPPORT FOR TAX INCREMENT FINANCING
Direction To Be Considered:
To provide direction on a resolution of support for tax increment financing for Nicols
Apartments.
Facts:
In 2019, Real Estate Equities submitted a pre-application for business assistance
financing for a 202-unit affordable housing development south of the
intersection of Nicols and Diffley Roads.
At the May 28, 2019 meeting, the Finance Committee was in agreement that the
developer should work with the Dakota County Community Development
Agency (CDA) on tax increment financing and other public financing assistance.
The Nicols Apartments development project will need a comprehensive guide
plan amendment (CPA), rezoning, and planned development approvals.
On August 5, 2019, the City Council voted to submit the CPA for Metropolitan
Council review which has been delayed until final approval of the 2040
Comprehensive Plan. Staff expects to submit the CPA to the Metropolitan
Council in early March. Consideration of land use applications is tentatively
scheduled for the May 5, 2020 City Council meeting.
Pending final land use and financing approvals, the developer would like to close
on the property in June 2020 to meet a summer construction schedule.
The Dakota County CDA has requested that the City approve a resolution of
support for the creation of a tax increment financing district for Nicols
Apartments. Approval of the resolution of support prior to land use approvals
would allow the CDA to draft a TIF report, begin the 45-day County review
process, and schedule public hearings at the County and CDA Boards. Public
hearings will not be held until following land use approvals. The resolution of
support is not an indication of City support for land use approvals. The
resolution does not obligate the City to grant approvals, nor does it release the
developer from its obligation to receive City land use and other related
approvals.
The developer’s tax increment request and the CDA’s tax increment policy are
summarized as follows:
o The developer has requested $1,850,000 in tax increment over 20 years.
o The CDA’s TIF policy provides tax increment through an Interest Rate
Reduction Program in which the CDA provides up to 70% of available
increment over 15 years.
o The CDA retains 30% of increment for the first 15 years and 100% of
increment for the remaining 10 years of the district for other affordable
housing developments in the city.
o The developer must agree to participate in the Housing Choice Voucher
program for the 26-year term of the agreement.
o The CDA’s TIF consultant will review project financials to determine if the
requested amount is necessary for development.
o The CDA provides only the amount of increment necessary to ensure the
development can meet the affordable housing requirements stipulated in
state statute.
o The developer also intends to apply for tax credits which will be included
in the CDA’s review of financial need.
Action on the tax increment resolution of support is scheduled for the March 17,
2020 City Council meeting. The staff report will include the outcome from the
Finance Committee meeting.
Attachments: (2)
FCII-1 Location Map
FCII-2 Draft Resolution of Support
JADE PTNICOLS ROADZIRCON LANE
DIFFLEY SERVICE RD N
SAPPHIRE LN
DIAMONDDRI
VEMOONSTONEDRBLUESTONE LANE
MEDARYAVEGARNETLANE
C.S.A.H. NO. 30
CEDAR RDG CIR
CORAL LANEBLUESTONE DRCLARK ST ONYXDRFLINT DRTOPAZ DRIVELIMESTONE DROLD SIBLEY MEMORIAL HIGHWAYSHALE LANESTATEHWY.NO.77(CEDARAVE.)SIBL E Y CTSTATE HWY. NO. 77 (CEDAR AVE.)GARNET PTSANDSTONE DREMERALDLANE
COPPERPTNICOLS SERVICE ROADMARBLELANE
CARNELIAN LANE
C.S.A.H. NO. 30 (DIFFLEY ROAD)GARNETDRIVE
C
O
P
P
ERLANE
GLORY DRIVE
METCALFDRF L I NTLANE
JASPERDRDIAMOND DRIVEQUARTZLANE
METCALF DR
OPALDRIVE
A M B E R CTDIAMONDDRNICOLS ROADDIAMOND PT CLARK CTOLDSIBLEYHIGHWAYOPAL PL.
JADELANE
AMBERDRMETCAFDRIVERiverHills Park
CedarPondPark
Rahn ParkRahn Athletic Park
Location Map
0 1,000500Feet
´
§¨¦35E
§¨¦494
Cliff Rd
Diffley Rd
Yankee Doodle Rd
Lone Oak Rd
Map Area Extent
Liefschultz Property (Ramada Co.)PID: 10-03000-27-011
Subject SitePID: 10-03000-27-011
RESOLUTION NO. _____
CITY OF EAGAN
AUTHORIZATION TO ESTABLISH A TAX INCREMENT FINANCING DISTRICT
FOR AFFORDABLE HOUSING IN CITY OF EAGAN BY THE DAKOTA COUNTY
COMMUNITY DEVELOPMENT AGENCY
WHEREAS, pursuant to Minnesota Statues, Section 383D.41, the Dakota County
Community Development Agency (the “Agency”) is authorized to exercise the powers and
duties of a housing and redevelopment authority under the provisions of the Municipal Housing
and Redevelopment Act, including the establishment of a tax increment financing plan and a tax
increment financing district to provide monies to finance such a program, and
WHEREAS, a proposal has been made to the Agency by Real Estate Equities (the
“Developer”) that the Agency (a) undertake a tax increment financing program for Nicols
Apartments (the “Project”) located in the City of Eagan on the real property legally described on
Exhibit A attached hereto (the “Site”) and (b) create a tax increment financing district and plan
including such real property in order to finance the costs of said tax increment financing
program, and
WHEREAS, the Developer has applied to the City of Eagan for a comprehensive plan
amendment, rezoning, and preliminary planned development which are tentatively scheduled to
be considered by the City Council in May 2020, and
WHEREAS, in order to meet schedules for financing and construction, the Agency has
requested that the City Council indicate its support for the creation of a tax increment financing
district for affordable housing prior to consideration of land use approvals, and
WHEREAS, public hearings on the creation of the tax increment financing district will
be held following City land use approvals.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Eagan,
Dakota County, Minnesota, as follows:
1. Based on information as previously submitted by the Developer and contingent on the
Developer’s pro forma demonstrating to the Agency the Project’s financial feasibility, the
amount of financial assistance for the Project is approved in concept only.
2. The actual tax increment committed to the Project and number of years the Project
receives tax increment financing will be determined by the Agency through a final
financial analysis demonstrating the Project’s financial need, and shall be subject to the
Agency’s policies.
3. All increment captured by the tax increment financing district will be used solely to
support affordable housing within the City of Eagan and related administrative costs as
authorized by Minnesota Statutes 469.174 through 469.179.
4. The Agency is encouraged to work collaboratively with the City on housing programs in
Eagan that may occur from Agency tax increment resources received by the Agency as a
result of the Project.
5. The Agency is hereby authorized to take all actions necessary to create such tax
increment financing district and related tax increment financing plan on the property
legally described on Exhibit A, subject to and not before the Developer complies with all
the following terms and conditions:
a. The Developer must submit documentation outlining proof of a firm financing
commitment of the Project that is submitted for review and approval by the
Dakota County Community Development Agency and its financial consultants.
The form of tax increment financing assistance for the Project shall be determined
based on a financial analysis of the Project’s need.
b. The Developer agrees to enter into a Development Agreement with the Agency
outlining all terms and conditions associated with the Project, including those
outlined in this Resolution, as well as those otherwise deemed appropriate by the
Agency.
c. The Developer must secure all comprehensive plan amendments, rezoning,
planned development, site plan, public utilities, and building code approvals from
the City of Eagan and all other associated and related governmental approvals.
Nothing in this Resolution is deemed to obligate the City of Eagan to approve any
portion of the comprehensive plan amendment, rezoning, planned development,
site plan, public utilities, and building code review process, nor is adoption of this
Resolution considered approval of the foregoing.
d. All terms, conditions, and obligations as outlined in this Resolution shall expire
on December 31, 2021, unless all conditions herein have been satisfied.
ADOPTED, this 17th day of March, 2020
CITY OF EAGAN
CITY COUNCIL
By: _________________________
Its Mayor
Attest: _______________________
Its Clerk
Motion by:
Seconded by:
Those in favor:
Those against:
Date:
CERTIFICATION
I, Christina M. Scipioni, Clerk of the City of Eagan, Dakota County, Minnesota, do
hereby certify that the foregoing resolution was duly passed and adopted by the City Council of
the City of Eagan, Dakota County, Minnesota, in a regular meeting thereof assembled this 17th
day of March, 2020.
____________________________
City Clerk
EXHIBIT A
To Resolution No. ____________________________________
(Legal description of Property)