Loading...
HomeMy WebLinkAbout02-25-16 RA* Sty Ithe4 V •4M0O AGENDA REGULAR ECONOMIC DEVELOPMENT AUTHORITY MEETING February 25, 2016 6:30 PM Room 170 Todd Larson, Chair; Geraldine Jolley, Vice-Chair Douglas Bonar, Steve Wilson, Kirk Zeaman Jake Cordes, Steve Corraro 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA 5. CITIZENS COMMENTS 6. CONSENT AGENDA (a) Meeting Minutes (1/28/16 Regular Meeting) (b) Monthly Statements 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) Annual Organizational Items (b) Downtown Redevelopment Plan Update (c) TIF/TaxAbatement Policy Discussion (d) Trident Affordable Senior Housing TIF Request 9. DIRECTOR'S REPORT (a) February Directors Report 10. ADJOURN � City of Farmington 430 Third Street Farmington, Minnesota X. 651.280.6800 -Fax 651.280.6899 44/%4 1.1100www ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Meeting Minutes (1/28/16 Regular Meeting) DATE: February 25, 2016 INTRODUCTION/DISCUSSION Please find attached the minutes from the January 28, 2016 Regular EDA Meeting. ACTION REQUESTED ATTACHMENTS: Type Description ❑ Backup Material Meeting Minutes (1/28/16 Regular Meeting) MINUTE S ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting January 28, 2016 1. CALL TO ORDER The meeting was called to order by Chair Larson at 6:30p.m. Members Present: Jolley, Larson,Bonar, Wilson, Zeaman, Members Absent: None Also Present: Adam Kienberger, Community Development Director, Jake Cordes, ISD#192, Steve Corraro, ISD#192 2. PLEDGE OFALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Jolley second by Bonar to approve the Agenda. APIF,Motion Carried. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Wilson second by Jolley to approve the Consent Agenda as follows: a) Meeting Minutes—January 7, 2016 Special Meeting b) Monthly Statements APIF,Motion Carried. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) Community Development Block Grant Reallocation Request—Based on discussion with the Parks and Recreation Director in conjunction with the Recreation Supervisor for the Rambling River Center, they would like to respectfully request that the EDA reprogram $2,500 from the 2015 Commercial Rehabilitation Grant Program to the Senior Services—Financial Support Program. If the EDA is in favor of this transfer, it will take approximately 45 days for the funds to be available. Motion by Wilson second by Bonar to recommend approval of the reallocation of$2,500 from the city of Farmington's PY2015 Commercial Rehabilitation Grant Program to a PY2015 Senior Services—Financial Support Program activity. APIF,Motion Carried. b) Open to Business Joint Powers Agreement- The Open to Business Program was started in Dakota County in 2013 as a county-wide effort to offer expert technical assistance and additional financial resources to small businesses and entrepreneurs. Now in its third year, the program continues to gain recognition and have an impact on our small business economy. The total program fee for services offered throughout Dakota County is $140,000. The CDA continues to cover over 50% of this fee with the remainder distributed amongst the participating cities in Dakota County according to population. Farmington's fee for 2016 is unchanged and remains at$5,000. Motion by Wilson second by Bonar to authorize the execution of the Open to Business Joint Powers Agreement between the Farmington Economic Development Authority and the Dakota County Community Development Agency. APIF, Motion Carried. EDA Minutes(Regular) January 28,2016 Page 2 c) 2016-2018 Strategic Plan for Economic Development Implementation—The EDA's main priorities are identified as: 1.Develop tools for promoting growth and development in Farmington. 2. Develop strong incentive policies to ensure proper use of tools. 3. Explore plans for acquiring land for new industrial development. 4. Complete the development of Vermillion River Crossings. 5. Define and utilize the existing or future resources of the EDA. Implementation of this plan begins with discussing economic development tools and how we can form policies to utilize them. Information on TIF and tax abatement was discussed. Some examples of tools are: a. TIF/Abatement(Tax deferral/refunding) b. Programs to encourage new investment(Main Street programs/CDBG) c. Targeted types of businesses (statewide datacenter program) d. Grants/loans(local/state/partners) e. Training assistance City policies need to be established regarding the use of these tools. We need more affordable housing in Farmington. It's not always the incentives but about the personal touches that will make an impact. 9. DIRECTOR'S REPORT January Director's Report a) EDA Structure—City Council approved the addition of two ISD 192 school board members, Steve Corraro and Jake Cordes, beginning at the February meeting. b) Planning Commission/Comp Plan Invite- The EDA has been invited to the February 9th Planning Commission meeting to listen to a presentation by our Metropolitan Council Sector Representative Patrick Boylan on Comp Planning. Farmington's Comp Plan update will take place over the next two and a half years and is the main document that outlines Farmington's growth and vision. c) State of the City—State of the City has been scheduled for March 7th at 1:00PM at the Ground Round. d) Downtown Redevelopment Plan—There have been three meetings and one open house. Meeting notes and details are on the city's website. e) Next meeting will be on Thursday, February 25th at 6:30PM. 10. ADJOURN MOTION by Jolley, second by Bonar to adjourn at 7:41 p.m.APIF,Motion Carried. Respectfully submitted, Sue Miller Administrative Assistant -o�il► , City of Farmington �� 430 Third Street Farmington, Minnesota 'rs 651.280.6800 -Fax 651.280.6899 � �' www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Monthly Statements DATE: February 25, 2016 INTRODUCTION/DISCUSSION Please find attached the monthly statements for the EDA. ACTION REQUESTED ATTACHMENTS: Type Description ❑ Backup Material January-February Revenue and Expenditures ❑ Backup Material February Financial Statement Snapshot EDA Actual vs Budgeted 2016 Object January February March April May June July August September October November December Dec YTD Dec YTD Dec YTD Account Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Budget Actual Budget Variance 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 Intergovernmental 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Investment Income 0 0 0 0 0 0 0 0 0 0 0 0 0 1,572 (1,572) Misc Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Revenues 0 0 0 0 0 0 0 0 0 0 0 0 0 1,572 (1,572) 6401-PROFESSIONAL SERVICES 0 0 0 0 0 0 0 0 0 0 0 0 0 10,000 (10,000) 6403-LEGAL 0 0 0 0 0 0 0 0 0 0 0 0 0 3,000 (3,000) 6404-IT SERVICES 557 0 0 0 0 0 0 0 0 0 0 0 557 6,680 (6,123) 6422-ELECTRIC 15 0 0 0 0 0 0 0 0 0 0 0 15 300 (285) 6426-INSURANCE 11 0 0 0 0 0 0 0 0 0 0 0 11 450 (439) 6450-OUTSIDE PRINTING 0 0 0 0 0 0 0 0 0 0 0 0 0 2,000 (2,000) 6460-SUBSCRIPTIONS&DUES 890 0 0 0 0 0 0 0 0 0 0 0 890 2,500 (1,610) 6470-TRAINING&SUBSISTANCE 0 280 0 0 0 0 0 0 0 0 0 0 280 3,000 (2,720) 6485-MILEAGE REIMBURSEMENT 0 0 0 0 0 0 0 0 0 0 0 0 0 1,000 (1,000) 6570-PROGRAMMING EXPENSE 0 0 0 0 0 0 0 0 0 0 0 0 0 13,500 (13,500) Services and Charges 1,473 280 0 0 0 0 0 0 0 0 0 0 1,753 42,430 (40,677) Total Exp 1,473 280 0 0 0 0 0 0 0 0 0 0 1,753 42,430 (40,677) Transfers In 3,333 0 0 0 0 0 0 0 0 0 0 0 3,333 40,000 (36,667) Transfers Out 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Financing Sources 3,333 0 0 0 0 0 0 0 0 0 0 0 3,333 40,000 (36,667) Net Change in Fund Balance 1,860 (280) 0 0 0 0 0 0 0 0 0 0 1,580 (858) 2,438 Page 1 of 1 Department Actual vs Budget-Generic Time Period Business Object Account Cumulative 12 Cumulative 12 Actual Budget Unit Account Description 2016 2016 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH 275,923.03 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH-LGA ASSMNT RELIEF 50,000.00 2000-HRA/ECONOMIC DEVELOPMENT 2010 ACCOUNTS PAYABLE -336.52 2000-HRA/ECONOMIC DEVELOPMENT 3510 UNRESERVED FUND BALANCE -324,378.26 2000-HRA/ECONOMIC DEVELOPMENT 4955 INTEREST ON INVESTMENTS 0.00 -1,572.00 2000-HRA/ECONOMIC DEVELOPMENT 5205 OPERATING TRANSFERS -3,333.33 -40,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6401 PROFESSIONAL SERVICES 0.00 10,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6403 LEGAL 321.30 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6404 IT SERVICES 556.67 6,680.00 2000-HRA/ECONOMIC DEVELOPMENT 6422 ELECTRIC 15.22 300.00 2000-HRA/ECONOMIC DEVELOPMENT 6426 INSURANCE 11.01 450.00 2000-HRA/ECONOMIC DEVELOPMENT 6450 OUTSIDE PRINTING 0.00 2,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6460 SUBSCRIPTIONS&DUES 890.00 2,500.00 2000-HRA/ECONOMIC DEVELOPMENT 6470 TRAINING&SUBSISTANCE 290.70 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6485 MILEAGE REIMBURSEMENT 40.18 1,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6570 PROGRAMMING EXPENSE 0.00 13,500.00 Total 2000-HRA/ECONOMIC DEVELOPM 0.00 858.00 0.00 858.00 0.00 858.00 2/19/2016 4:21:42 PM Page 1 of 1 „ilk <% City of Farmington 4 430 Third Street Farmington, Minnesota 14W46. 651.280.6800 -Fax 651.280.6899 •A PRO, www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Annual Organizational Items DATE: February 25, 2016 INTRODUCTION/DISCUSSION Attached are the proposed 2016 Economic Development Authority(EDA)By-Laws. Section 1, subdivision 3 of the by-laws requires direction from the EDA regarding the following: a. Election of Officers The EDA By-Laws provides that each year,the EDA shall choose a Chairperson and Vice- Chairperson. A Secretary and Treasurer must also be appointed which typically is assigned to the Executive Director, as neither needs to be a commissioner. In 2015 Mayor Larson served as Chair and Commissioner Jolley served as Vice-Chair. b. Meeting Schedule The EDA shall establish a meeting schedule for the year.Attached is the City's Board and Commission meeting calendar which identifies the date of each EDA meeting. EDA meetings are held the fourth Thursday of each month at 6:30 p.m. If that Thursday is a holiday, the EDA meeting would be held the prior day(November). EDA members should confirm that this meeting schedule works for all members. c. Acknowledge Official Newspaper The EDA shall acknowledge City Council's designation of the official newspaper. For 2016 the official newspaper remains the Farmington Independent. Please provide action for the above listed items. A copy of the revised by-laws is enclosed. ACTION REQUESTED Approve the 2016 Economic Development Authority By-laws, elect officers, approve the 2016 EDA meeting schedule, and acknowledge the City Council's designation of the official newspaper. ATTACHMENTS: Type Description D Backup Material 2016 Meeting Calendar D Backup Material 2016 EDA By-Laws JANUARY 2016 JULY 2016 SM T W T 1 2 SMTWTj S FARM 3 5 6 7 8 9 3 tit• 6 7 8 9 L\7 /y�� 10 11 14 15 16 104+414 15 16 v Z17 18 20 21 2223 119 20 21 2223 �� 24 2f 26 27 29 30 24®26 27 a.29 30 �°`o °~ 31 31 A's''•A PROM�sv FEBRUARY 2016 AUGUST 2016 S T W T F 3 3 T W T F 3 2 3 4 5 6 2 3 4 5 6 www.ci.farmington.mn.us 7 *:0 11 1213 7 8 9 . 11 1213 14 1*, 17 18 1920 14 . 1617 18 1920 2016 21 ® 23 24A 26 27 21 VI 23 24à26 27 28 29 28 29 30 31 PHONE NUMBERS MARCH 2016 SEPTEMBER 2016 SMTWTFS SMTWTF S 1 2 3 4 5 1 2 3 6 .♦O9 10 11 12 4 57 8 9 10 13 1 15 16 17 18 19 11 14 415 18 17 20 22 23 A25 26 18 •20 21 /a23 24 27 ®2930 31 25® 27282930 APRIL 2016 OCTOBER 2016 3 M TWTF 3 SMTWTF 3 1 2 1 35 6 7 8 9 2 4 5 6 7 8 10 11 14 15 16 9 10 13 14 15 17 •�® 21 22 23 16 ••®20 21 22 CITY HOLIDAYS 240 26 2729 30 23 R 25 26h28 29 ♦ PLANNING COMMISSION 30 31 • COUNCIL MEETINGS MAY 2016 NOVEMBER 2016 8 T W 1-5 F 3 SMTWTF 8 PAYDAYS 1 4 3 4 5 6 7 1 2 3 4 5 8 4+0, 12 13 14 6 • 8 ♦ 10 A12 ElWATER BOARD 1517 18 19 20 21 13 S 15 16 17 18 190 PARK & REC. COMMISSION 22 0 24 25A 27 28 20.22,5'.2410 26 29 80 31 27 2® 29 30 0 RRC ADVISORY BOARD HPC MEETINGS JUNE 2016 DECEMBER 2016 A EDA MEETINGS 3 M TWTF 8 SMTWTF 3 1 2 3 4 1 2 3 5 . 7 ® 9 10 11 4 . 6 7 8 9 10 123 * 15 16 17 18 11 1• ♦�t► 15 16 17 00 Stantec 19 21 22124 25 18 S 20 21 .41:23 24 651-636-4600 26© 28 29 30 25 00 Q 28 29 30 31 FAX 651-636-1311 www.atantec.com R=\clan\municipal\farmington_clJnn\141OEN\Cad\141ca1_2015 2016 ECONOMIC DEVELOPMENT AUTHORITY BY-LAWS These By-Laws, when adopted, are intended to deal with matters not otherwise covered by State Law, City Ordinance or elsewhere. Section I—Meetings SUBD. 1 —Regular meetings of the Economic Development Authority shall be held on the fourth (4th) Thursday of each month at 6:30 p.m. Any regular meeting falling upon a holiday shall be held on the prior business day at the same time and place. All meetings, including special and adjourned meetings, shall be held in the City Hall unless otherwise designated. SUBD. 2—Special meetings of the Authority may be called by the Chairperson or in written form by any other two (2) members of the Authority, filed with the Executive Director. The Executive Director may also call a special meeting.At least three(3) days before the meeting, the Executive Director shall notify each member of the time, place and purpose of the meeting by causing written notice thereof to be delivered to him/her by e-mail. At least three(3)days prior to the meeting, the Executive Director shall also post notice of the meeting and if applicable, notify each person who has filed an applicable written request for notice, or may, if necessary, provide such other more restricted notice, including but not limited to (as allowed by Statute, such as)M.S. 471.705, subd. 1C, paragraph g, "if a person receives actual notice of a meeting of a public body at least 24 hours before the meeting, all notice requirements of this subdivision are satisfied with respect to that person, regardless of the method of receipt of notice." Emergency meetings may be held because of circumstances that, in the judgment of the Authority require immediate attention. The notice of special meeting shall state the item(s)to be discussed and acted upon. Items not stated in the notice may be discussed, but no action may be taken if any member objects. Any special meeting attended by a majority of the Authority members shall be a valid meeting for the transaction of business that may come before the meeting. SUBD. 3 —At the regular Authority meeting in February of each year,the Authority shall (1) acknowledge City Council's designation of the official newspaper; (2) establish meeting schedule for the year; (3) choose a Chairperson and a Vice-Chairperson, who shall perform the duties of the Chairperson during the Chairpersons disability or absence, and in case of a vacancy in the office of Chairperson, and until a successor has been appointed and qualifies to fulfill the duties of Chairperson, and; (4) appoint a Secretary and Treasurer, which need not be a commissioner. SUBD. 4—All Authority meetings, as defined by State Law, including special and adjourned meetings shall be open to the public. The Authority Attorney shall advise the Authority in writing as to their interpretation of the state"Open Meeting Law" and all new members shall be provided such written interpretation. 1 Section II Presiding Officer; Rules of Order SUBD. 1 —The Chairperson shall preside at all meetings of the Authority. In the absence of the Chairperson, the Vice-Chairperson shall preside. In the absence of both, the Executive Director shall call the meeting to order and shall preside until the Authority members present at the meeting choose one of their members to act temporarily as presiding officer. SUBD. 2—The presiding officer shall preserve order, enforce the rule of procedure herein prescribed, and determine all questions of procedure and order. Except as otherwise provided by statute or by these rules, the proceedings of the Authority shall be conducted in accordance with the following rules of order: A. A motion must be seconded before being considered by the Authority and the presiding officer must recognize mover, as well as the seconder. B. Any motion may be withdrawn by its mover with the consent of his/her second. But a motion, once debated, cannot be withdrawn except by a majority vote of the Authority. C. A motion will not be subject to debate until it has been stated by the presiding officer and he/she has opened it to debate. D. Each member,while speaking, shall confine himself/herself to the question at hand and avoid all personal, indecorous or sarcastic language. E. Whenever any member of the Authority desires to speak on any question, which affects him/her personally, he/she shall first vacate his/her chair and shall not resume his/her seat until the matter under consideration has been acted upon. He/she shall be allowed to make comments on the question as a private citizen only and while a member of the audience. F. Whenever public hearings are held,the presiding officer shall allow any member of the public,the privilege of speaking. A reasonable time shall be allowed to anyone as long as they are not repeating points already made. The presiding officer shall maintain order and may rule anyone out of order. G. At any meeting,the presiding officer will allow the public to participate as long as there is reason to believe the input is beneficial. SUBD. 3 —Any member may appeal to the Authority from a ruling of the presiding officer. If the appeal is seconded, the appealing member may speak first on the reason for his/her appeal. General discussion can then take place on the appeal before a vote. The appeal shall be sustained if it is approved by a majority of the members present. 2 Section III—Agendas SUBD. 1 —The agenda shall be prepared by the EDA Executive Director and shall be closed at noon on the Friday preceding the meeting for publication purposes. SUBD. 2—Any member may place an item on the agenda by so instructing the Executive Director. SUBD. 3 — No item shall be placed on the agenda unless the item is expressed in such a way as to clearly show the subject matter involved. SUBD. 4—The agenda add-ons are subject to approval by a majority vote of the members present and further such add-on items may be discussed, but no action may be taken if any member objects. Section IV—Order of Business SUBD. 1 —Each meeting of the Authority shall convene at the time and place appointed therefore. Authority business shall be conducted in the following order: 1) Call to Order 2) Pledge of Allegiance 3) Roll Call 4) Approve Agenda 5) Citizen Comments 6) Approve Consent Agenda a. Minutes b. Monthly Statements c. Additional Consent Agenda items 7) Public Hearings 8) Discussion Items 9) Director's Report 10)Adjourn SUBD. 2—The order of business may be varied by the presiding officer, except that all public hearings shall be held at the time specified in the notice of hearing. Section V—Minutes SUBD. 1 —Minutes of each Authority meeting shall be kept by the Executive Director or, in his/her absence, his/her designee. In the absence of both, the presiding officer shall appoint a secretary pro tem. Resolutions need not be recorded in full in the minutes if they appear in other permanent records of the Executive Director and can be accurately identified from the description given in the minutes. SUBD. 2—Minutes of each meeting shall be reduced to typewritten form. At the next regular Authority meeting, approval of the minutes shall be considered by the Authority. The minutes need not be read aloud, but the presiding officer shall call for any additions or corrections. If there is an objection,the Authority shall vote upon the addition or correction. If there are no additions or 3 corrections, the minutes shall stand approved by motion. If there is an objection,the Authority shall vote upon the addition or correction and approve the minutes by motion as amended. Section VI—Quorum and Voting SUBD. 1 —At all meetings a majority of all members shall constitute a quorum for the transaction of business. SUBD. 2—The votes of members on any question pending before the EDA shall be by voice votes. Roll call vote can be requested by any member, except for the following agenda items; approval of the agenda; approval of the consent agenda; and the adjournment. The names of those voting for and against the question shall be recorded in the minutes. If any member present does not vote, the minutes shall state: "Abstain: Name". SUBD. 3 —Except as otherwise provided by statute, a majority vote of the quorum shall prevail. Section VII—Executive Director The Authority may appoint and provide for annual performance reviews of an Executive Director. Section VIII—Suspension or Amendment of the By-Laws SUBD. 1 —These by-laws may be temporarily suspended by a unanimous vote of the members present. SUBD. 2—These by-laws shall not be repealed or amended except by a majority vote of the whole Authority after notice has been given at some preceding meeting. Section IX—Effective Date SUBD. 1 —These by-laws have been adopted by the Economic Development Authority on the 25th day of February, 2016 and become effective immediately. Attest: EDA Executive Director EDA Chairperson Date: Date: 4 6iiiiititkRifitCity of Farmington Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 '�.,,., + www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Downtown Redevelopment Plan Update DATE: February 25, 2016 INTRODUCTION/DISCUSSION On September 21, 2015, the City Council appointed a Task Force to oversee the creation of a Downtown Redevelopment Plan. Steve Wilson serves as the EDA representative on the Task Force. The Task Force has held three meetings, two open houses, and a joint Council work session to date. Meeting notes along with project details are available on the City's website http://www.ci.farmington.mn.us/Departments/EconomicDevelop/DRP.html. The latest preferred development concept along with the February 8th City Council presentation is attached. The final meeting of the Task Force and public open house will take place in mid-March, with a final draft plan being presented to City Council at the end of March or early April. The EDA will likely have a pivotal role in the implementation of this plan. This plan will also play a role in our discussions regarding economic development tools and the policies that accompany them. ACTION REQUESTED Review the attached information and provide input for the Downtown Redevelopment Task Force. ATTACHMENTS: Type Description D Exhibit Preferred Concept DRAFT January 2016 D Exhibit Joint Council Work Session Presentation 2-8-16 r '- •' `-.. I ro.., ---w r 11 PREFERRED REDEVELOPMENT CONCEPT (JANUARY2016 DRAFT) ' 1_•_ i1 //,,,>\\. ,\__,) _ i �� 4" Fr wIi�OW. P,edestrlan �' -: I Apa�rtment5- Bridge L\\ ' /1` �, Un ries ,U deryFr—P king� f M edNre ERM j 1•4010L - +.1 I 111Oiougt • iii I 1 EOM me�a_iu,ioo, �'� = l s' e'e H g=r-ait -t '',i: .1 Rowhouses- aosou its F♦ .,T\i �'- 's uet:+/- Upgrade,Commercial •, go-. 201 •411) 1 E ing - \, 1II 0* 1 Ao 4 i IR 1 , tAO I ii A � � ! l I I !� l_ . ;�' t ae t'. , ! 1 {`----• _.._._- .tpa. est 3 srori Potential Retail ExpansionI. *'r ..L J -Parking tF,r,t lour S o*oii/t _ Mixetl Use. il N commereal_ Y. Ggrt 1 Ho nsu q= 50 Urii� 50 P,otentiahQpR:n or —_ 3t_ �,1 —_._-77- ._. -- II atien (T } -010 f Co�me`rciall Refurtiis LF.ill , 1 I�tj. Sit�D o Hstoric Bu,�_Ildings "`!k. t1LL�- k� ' Improv• e e•„m_en�t�. ` r Farme5slMarket _•�''� • l i-1•i{k._-._ Ja _ _.- _ I .. Mlxed.USH 1 I _ �Ly�`_ 4 0--- - _ j C.. rc 9000 se fi, Pavilion V Y1 + _� Flow 5 ng-40 Units'+- New4Commerdy i -. ,. mo V , f.-.�.f•^s.» t Singl Storyss / t I i. or 417—N WI i, tensa j•, x Space yNsr�la as MI ifI. II t I:t Hill i` t Apartments ':'r �. - I �It, "MI toll 1 ! j 35tmks- _ I , r . s Undeigrdtin'd Parking 1 1'+ i 1� f 7 Atipettirents+ i ,;4, p• R...,.es. - eit/&I, P6ten[ial Tawri Rowlwuses 3-+/units; -- ` U ( S,quare L--L__1- Potenti'-'ill: l Open I —! J L-1 I i I SpL � I ,_. I I Townhomei DETACHED HOUSING iI S L .) + Single Levelt tz�U_, ATTACHED HOUSING E • L--1 }} Z. L-- -�--_ T=.--Y.-- -,.- - 1 - — 'tE . APARTMENTS r +1 I .I I ! T `� . • �� ????ilii 1 ! II MI%ED USF i 1 t I----- l !- taLI101t.1151001,1111 L" II J. COMMERCIAL �rl�• •+r••+.►�o r . - _-..--_.__.._._. __ . CIVIC -.,a.r..•-• F _ - .-� 'J t .-... PARK OR OPEN SPACE --�--- 1 1 HISTORIC BUILDINGS 1i { � 1 I MIMING 11IGn1D { ` f ' i I 1 I 1 16 PROPOSED RIVERWALK !Ij ""* t I ' i i IEXISTING TRAIL — N t.,; 1• PROPOSED TRAIL i I i . I 1 L-- -I J --j er'-"'••� `- - ' — �� D 1OO 200 I i E L , E , E I , a 11 a L a . , \:�' [EA FARMINGTON, MINNESOTA .. , .,•-•. ... Y " , • , , \ LI 4 . .,‘ ••. I •. ••• I 4 •...-1; , • .p. C (I) LD P Ca 11Ne •r"q •4 • I ::4‘.4'.• i. 1 0 rms"I 1 4., ., ,k • SI . 0 Z ti) . • '' ' ,' S.,1' • '1. ' • . ., .1.,,, )• ,..•0,..•...?1,..' • ,,.1 ,r . ,, ' NI . %, , , 'CA.:144 4‘•1v,.-,, 11.... ,,O*1 . , • ,4: . , i 1m z _ 44,. I 1 . • • ' I ‘4 .112N . .".- - ‘t :7 CU ms.m 00 , .,. _ :,. .t,.• i , ?.. ) %. ,.,i„ , .., ,, 4',' V•4'`4:,,''''' 'i,1 i'' ,a.:461 i .. oiliti),, 1 • ell=0 Lin , 1 Uri ,La >,• 44:•• n OA k II CD l 'n" S•••••• • 4 \ 0, •. '' • ! co . ,‘, , . , --, ;. .,.,., ,y.' ' AL,is• • 5.,,.' „...... . ., , • • — , tr-.:.,. ,, , s.... .., . ,.. .-.) •A, ; 11- +l mIll .4' •1 mi0 C • / . . (....) cu - c u_ . 'ow E 16.41/16.4.• .-- 1*, ai 0 • \ ,•..,00000;00 If' _ / I U ....? i . ( ....... /...e ' Allir au (-4-i-------- 1. , 4,..........._.,„ ._ > •.... ( aii u . _ \ .:. . ( : . „pi._ Iv _c e _ „„, , . it all) 4141 . , .... ,1 a il Ce draw - :.1 41111V , •ti iii , . ....-•c---,„--. __,_. 0 bso .._ 4-• ._ v t :„. ...... . , _ .. ....„... __, mmo, . . • ••• ‘4' I iltk , „ c •mi. 4-1 a) cu .,,.. .i. , 41<) 2 • ... . . ,... ". ra 4....) 1 r. LL ....„1.,/°°':00,1 , , c 0,,, . . ,,,.,... . •_ f(1 1 r, 1 .2( .. , Meeting Expectations • Provide project update • Present preferred downtown redevelopment concepts and strategies • Summary of market analysis • Answer questions and seek input 111K g i ' Project Purpose (from City's RFP) Craft a shared vision for Downtown Farmington that illustrates unique redevelopment opportunities • Land use plan changes • Zoning requirement changes • Potential sites and types of redevelopment • Market feasibility • Transportation/pedestrian connection improvements • Financing tools and programs pK g Project Process Task 1 : Understand current conditions Task 2: Explore potential redevelopment opportunities Task 3: Make redevelopment recommendations Task 4: Identify redevelopment tools Task 5: Prepare redevelopment plan WK . Si Issues Identified Working with Task Force and Staff • Vacant commercial buildings/storefronts • Vacant sites - Hwy 50, Oak St • Current mix of restaurants & bars doesn't attract families • Casual gathering places are limited, e.g. bakery seating, no coffee shop, outdoor seating, etc. • Street, trail, and sidewalk connections into downtown limited by river and rail line • Lack of public gathering space in downtown core 111K ; 3i Issues Identified Working with Task Force and Staff ■ Buildings on Highway 50 don't reflect character of historic downtown ■ Downtown is off the beaten path for residents north of downtown and not convenient ■ Not enough destinations to attract residents on a regular basis ■ Not enough unique shops to be a destination for boutique shoppers ■ Downtown identity and awareness is low within the community K 3i Opportunities Identified Working with Task Force and Staff ■ Attract businesses to historic buildings and other commercial buildings in downtown core ■ Redevelop vacant and underutilized sites ■ Add park or plaza in downtown core ■ Add connections from downtown to trail system and river ■ Add a riverwalk on south side of river 111 K 3 i ' Opportunities Identified Working with Task Force and Staff ■ Create a stronger downtown entry from Hwy 50 ■ Improve character of streets, e.g. 2nd St, Hwy 50 ■ Add new housing options ■ Create a stronger downtown identity LIK 3i October 22nd Downtown Design Session • All-day working design session with City Staff at City Hall • Generated redevelopment concepts for identified sites in downtown core, downtown edges, and along river EIIK g DOWNTOWN DISTRICTS CONCEPT Downtown• • b�r. -._y__.w_, � r t Districts t - Concept ,, ., ) , r ,Ii 911 ii , . ,, i rI v+i Ire r 4 o . . t -..4. 1` . i s lirOrt"-, r F nye ._ J(ji LJ , . . ��— ., , ro�'rr--71M i 0 1 D Ir- 1 ti'.4:7-- 1---/-$ 1 1 D 9 Tyl 10'A 1`.1 ...god!. - _ 4 _ E1I1 . . „ . , , : . . . 41 1 . i 'L FARMINGTON, MINNESOTA ii fi L 9 REDEVELOPMENT CONCEPT Downtown : ,.,... .. . .,./. ..\\ Preferred _..,, ;- ...f fR,, , __ .. __.... .4., ., 4 , ... r- i i,•\? .., ....,,, ,, ___,____. ,...,..,,..., .. ,.,,. . :l . . Redevelopment „. .. , .__ _ ,,,,...f . .,....eit . rd. i . „......„, ..,, , . Concept 1:— .........11k.%.-.4 h '41" .405.1 t * I ofth 1 , • iriiiiiii` , • • =X.= , ti r , i ry•:-----' ;•- r ,„ ..).- ._...• tioeirw.0.6 ,-, ' . 7 . , - • ..1— '.-:.2. -. I ---- $ , 1 ._ . .. , 1.11114:ir-.47 eilhivitio , Et „ ............ .i.....r.....u.+ 0 I -9------41 1 . , , ., , ._„.,....., .....„ ,.. , .. ...., ,:=,,,,,,, a I •t,,- 7 [ i ... ...._ •, _ ,ir • ; 1 I -''' ; ' I .• '; i 1.1 Afalankti 1 Pe 3,_ , , . ..1.2.0:1,.....,.. 111...., ... . 1111 cow ''' -' PIM 1.11111.3 1 - -- 1410.1111111/11,4 WWI E UK •••• WM,Int V ...' 1 fitsiryctror#11>e, =WPM? . 1; r ' 1 i---------7 i C i I . . 1 i I . ! '1 FARMINGTON, MINNESOTA I . I — I , • 1. Downtown Core ,II •iokf S- - .1'.., 'ars,.1•.r Ne r I v.): -. ii'• . , — , 1 Redevelopment _. _ _.. ,.. __.. . t Concepts 1 i __ ___.,,,,,L. , . •111..- 44.. L...._ ( 1. Pliii4V-r4* : . if i (7 ' -:. Imi ell , : _ ... • ; . 441mq 1 . . t___ milliftisit 11_ ' , i t.......„ ... id .._ _ .— -1 1 , , 4 1 .4_, 1 i I ' i ..e I ti'i—t 4.0 0 ii ie II , . , — (---% f: i 111 I 1 1 Lii _ \iii. Downtown Core Redevelopment Strategies 1 . Refurbish vacant historic and .. 4 _ �w, ,�., ..,.,----. , r) iiihri) - other commercial buildings, 1 ti exteriors and interiors i ti aft III. spa.,%-..,� ... 2. Retain and su ort : :' l� _ ,, ...... _......* -cp,.....„ is , , , improvements to civic/municipal destinations „.1! i n downtown, e.g. library, ostp „ pi office, liquor store, farmer's market, etc. .��. �� '� .� _: � ., iii, , i i ivy. 1 -.L.-..„-- ___,„. „ - .., 7211,10-- , - . _ i;ii:i 1n Downtown Core Redevelopment Strategies 3. Redevelop vacant and underutilized sites in ..... .. , - downtown core for °�! �1 - P a a WON f : �. P new businesses and _ I` ' .•••,...14 ' ® � �ta} ... 1 _ r` ISI"_ ��-:: -� . possibly housing __. _.. r i-- . A. Highway5O , j;- .; -,,,,, . B. Oak Street : : -,,-,: ' -- �,; a ow � ' :: t '_1;: , i- ___. r If IA! I t If. . LtMommift. �:.r �� , .. ill►' I Si Downtown Core +� . Downtown *r .r« Redevelopment Strategies - . '- i 71 4. Add outdoor public space in �� �;� ,g the downtown core for events ,\, y • �' . i and informal gathering, such . .A. .,. 4 ., „ - .----- Nov Y' � :: . Z as: / .: ,4,-,4;4, r ,, ...., A. Rambling River Center plaza 4.. X41iro op, ,,, ......, ,, .. --,4.. - i pc . -4: - .,. ‘, - B. Cornerplaza at librar ; ,A, y 110; rIii "•. r C. 2nd Street linear open space • .., ,...., , ,,,,,;r_, .., .. 5. Improve 2Street to make it , _:ui . ....... .. ..... , .„ ,.., A - - ,0't more visually attractive and _ . .:J .: "sr pedestrian-friendly _ K• H .z g 1 6 . Build downtown identityand awareness tit . I • 4 ,a1: Street, Looking VICC7 ' ward Milwaukee Depot, armirc#Un, Mir . *- • . • • • M!? io 1 41111111114r t •"*.* yd 1 • A x ' .'vi• , \ I , *, ,.'. ) idi w• . $ I 4111111111.11 11111 I 11.11," 40000111g111. Orr 4.` I 1 . ....14....E.. . . ,.. . .......... 1 „, , , . 1 . , , it li ' ' -.... 1H . -. A , ,-.„7: )k',r, d+ a ,. _ • 1 I 1. , s{,.1 . t,` Ash i f r 1 1 ��• ��� # - i '�' - ' , • - - i t : 0 * 1 , .. ' "� Ana • R t ' 1, y _x in � � H kb K oirimIL„.... ....�. . .wl.� .t' ....,.rt; �',�` '. -,.:4:-.7.!,.:.',---.. �'t - • •�w•�. '•� .r. • 1 Downtown Core Redevelopment Strategies 7. Add outdoor places for /.,,/,,, ,,/ :,..-,, ..:.,, ', : - i seating and gathering :a. r: .r , rS ,.,. . . .r along 3rd StreetandOak -, : _______\ 0 Street: ' Im ��,�,, j - _ i - I. _ , k t A. Outdoor seating in --, ------ .:,.,,,,,, .._ . ........ ,....._._,....„ . .. „,, .., . ..,,.„,..„.„,, , , corner plazas4. 5 :, . ,� i - B. Temporary outdoor l :. C ; ;': 1 � O -1t . �i seating areas for --. . , . -• ,,,. _ _ _., fy., - , _-___ __,-..„ . _:.__.;.:,:•'WIi- , ` ` restaurants, etc. �. � � Downtown Core Redevelopment Strategies 8. Improve H50 ),,Dp�VNTOWNIDL�_ ovu --.4 4. , crossings for pedestrians . , . : : a k ,,.and bicyclists: , � .4 . , _ -' — _ A. Visible pavement 4„...... ...,--------- markings - B. Pedestrian-activated ___ __ ;ms,_,_,___________„_-__ _s ==„,,=si signals = ===_ = C. Add or enhance r , T-4-- .-- -. downtown gateway _ ... and identity features , E;II1 gin Downtown Edges Redevelopment Concepts . .. _, -_-.%.±,--074.: _1 , . Mored Use I cfmmet al; -•p rn qC- N 0,/ i h n�. i.. L I_ • 50 P,otentialtOpn _r ---.7 I I �S�ce, Y — '. '�I , Come ual f I 9 Refurblsht+aFill yp�" 1� I Site pestgn Hnlo7�Building�. ! !. improvements, i rI. ' -7 H 1 F,ari>mrisuVlarket< I `�Y _� V tMixed'Use Pavilion-- i] ' _ co"n ,____tr. r if .,anmq+. IJnr N,ev+,Comm eh ! i I Smq e-Siaiy - - t,t�t,rt-te-h � ■r�J j •arFfotentelppenn1 /( s:. "r aim" rxr - I?... ,_,�.._. rn r ... Apartments I I I j Rt oun VOL _ ! �� .3..! r� , ir UnArrg•aurni Park 7 1\ I ( —-_--L___- I T I�1 Apartments+ J f _r 1 114 1 Howhousesw • ATtaiiin m_,72^�,+i I ; Potent altTow� III I Square I lid iti I_ JIM I 1 5 e( �f , [ITT?r _t16Wnh011 I 1tf � S••4.1 I DETACHED HOUSING ( J ! i�t1---` } I a! f - i_. --{ ATTACHED HOUSING Ijf —.. t �" ■ APARTMENTS i 1--- „,... s+' Yfir! .4... 1 w ■ MIXED USE / 1.160 ar'I[` I ii © I(D1111(1(UL.r[SIDCxtIAI; � -,,. # R ■ COMMERCIAL i C yw...l`. .� T"� --rte+ -0 . CIVIC r�U l iiill Downtown Edges Redevelopment Strategies • w•• 1 . Redevelop sites to provide new housingoptions in Farmungton: _ . S I L Rowhouses, townhouses, 0 - apartments Ilk 2. Improve design of existing .74420 Ys commercial sites on Hwy 50 -op 4„. A 3. Improve biking and walking �._. .'j3u :'i m P. L.connections and facilities gi Riverside Redevelopment Concepts , 1 1 H ,... , Will OW 4 i' 1 I..-iA . 4 I- , , • cc : ii. - , ! West rianj ' I -''''' -'' # ,... - - # ` I Ap4tments, . .0., _ .. • ......., . ' .' „0,. di ...., IL,.. z. ..arriti . ,..6...........— E R MI0' l' I .....04 OF— 4 ipridergiouncl_qatiting, M,...iir e_clp_se) 1 #Alk ..• KF.-t-i,- • i6o-7,o,ur its, i i ... Commercialt --------- I mil Rowhouses---- . 80;,Q..nit s.,, • I ' 1.2tUnity.-/,-.. -- - _ ypg rade ontrnercial ilitifiiiitigalh ._.......,. ,iik'bh. I _mg m%., , ,- -mom .. Mom 1=MIN INJI . ..„ I - a miii m•ma:.... gomo.:. 4•••••• 0 1/4. Rowhouses -......- --""--- Of lYeiilaYSI) II , ...........-e• if.04111171 .—..... .........---t .,- ' i 1 I 1 I rr ,- *, , n - —r- - 1 • , 11 . 111111rd I M ' } r W 11 '' 1 Riverwal k i --, I. - 74 ' 111 ' ' ; ...' v .. ra, . .4.J i i . „. It I • • a • . 11 1 7 - ., 'T •T;;;:4.. 4-- '.: 'di II --- ` -----, I 1 I ell. , . 1 , iii , II , 1 -1: 1, i , i 1 li i 1 D eta c ti4117, 4-4` . .... . . _.... [ , I i ' , I I 1 iilli RAMBLIN 4. Ift 1! 1.1 ' - ? RIVER PAR ; 1 i II ) -- - i' I I i 1 1 \1 1 • 1 0 0 t.!! Pr'''. ' 11 I I 1 Apartments, Istories .Potential Retail ptpar4,...4pA flIr , _i i ! .4 L - Floor L----li 5;000.sq _lfor - . Pariongat.FI'st [ 4 (------- n firliM . rI TII I - —42 Units 1 i 1 I 1 i il MixedUp , .si, , i I - 1 I I ! Commercial=ti-/-10 000 sq,rt4,---, I I ---.—.....,.-4,1 •1444.4,of , , I Housing=40--‘5,9 Unnsi ! I Riverside Districts Redevelopment Strategies - . r . r k 1 . Ex and Rambling Park . 0,,,, y east of rail line and south of -,.. ,.. .1, • .... . ... _. ,.. river with park entryat 3rd & • • .., ,.l Pine . _____� � -.�:. , . 2. Create a riverwalk on south „i„... .,,,: . .„, ... . ln, side of river Fl I 3. Add a pedestrian bridge over a .v���K, :�a„ \, , ... ._,.. 0, rail line `gm& 44 pnad< K -, lu 4r u. - r f4:17.=, 4:1. �aJ ..9- e - r. .....-Rolord tmJ�aJ .m r i,¢ y� funs heal taut 1 1.,, ._� lY Mary t.l 4 ii 4. Add trails to connect Cd1n a LIf:IT LL: • rV ;73 f331 . FL a. downtown to river and -- IIiK regional trails Riverside Districts Redevelopment Strategies 5. Riverside West - - r--. ---1- 1 ----- A. Redevelopcommercial ' i F ® t Li site furthest from Hwy :t - , 50 with residential _ _ •. 7 A r�� building ��. ► � ., , ca,��fi, _...., • . W.' 4"- ' st B. Redesign commercial 1 rl _-.J \ lotdrivesto parking ll have street character TO "" 1' `(_��yw5s.�r.>FF t,.•:.: 'C !!y ' !A 1 .. it j .if 1 . H r '1 K Riverside Districts Redevelopment Strategies 6. Riverside North ue. , .. , ,, . . ., .,. , . , .. . , A. Redevelopsites along � . . Pine Street with :, , ii 1..i-i. n -, residential ` .. - 1.. .. , i„„,:. uu+i! � � rt•It} . B. Realign Pine Street _ . ____:__. where it connects with 3rd Street iiikl-,__ !!!! I I TV/ 1 tr, Eir:-, ill:_. ii , mi-,- ,:r.,i.., i C. Preserve truck route for � . ili ici Hi.i , _ „ ,i -- . . , the Kemps facility ,. . • �M ' in ,w --4 R ' l 4.0 H K Market Feasibility Considerations • Retail gaps analysis - Retail sales leakage occurring in many categories • Economically viable retail lease rates - DT core mixed use lease rates could be $ 18 -$20 per sq. ft. - Retail building may broaden potential interested businesses • Refurbishing existing vacant commercial buildings - Provides lower costs for attracting small/medium size businesses • Riverside West residential or mixed use - Site has poor visibility and access for retail � K g i ' Market Feasibility Considerations ■ Housing - Variety of housing types could help attract multiple market segments to downtown ■ Economically viable apartment rents - Current rental rates range from $ 1 .50 - $ 1 .70 per sq. ft. - New rental housing may require grants or low-interest loans ■ Ownership vs. rental housing - Townhouses targeted for ownership, apts for rental ■ Rail adjacent housing - Potentially higher construction costs 0 K Si Recommended Short-Term Strategies ■ Build relationships with key downtown property owners - public and private ■ Refurbish existing vacant commercial buildings, interiors & exteriors, particularly historic buildings ■ Support civic/municipal destinations downtown, e.g. library, post office, municipal liquor store • Improve biking & walking facilities, e.g. trail connections, highway crossings, bike racks, signage • Add outdoor seating and gathering places, permanent and temporary • Build downtown's identity DK Si Recommended Implementation ■ Downtown Core - Fill existing buildings and redevelop strategic sites - Add outdoor public space in the downtown core for events and informal gathering - Add trails to connect downtown to river and regional trails ■ Downtown Edges - Redevelop new housing options ■ Riverside Districts - Add park and trail amenities on south side of river - Add housing next to river � K Si in..---,,,-....- ii . ' ' ii f• .. �. r t r ,,4 s. • Mina V) Z 0 iiii C Imi +a ((II 13 C amr Q (111) bn CD 4) E U) v4.3 Q C C CO O O O L („,r) (3..)4 a) = 73 O a...) DC ,„r ✓j ti p /"er( .. '1i ?Oil ._ / „_..,. Next Steps • Revise draft redevelopment concept if needed • Recommend potential changes to current plans and regulations • Recommended redevelopment tools • Prepare draft redevelopment plan • Final task force meeting • Final community meeting • Prepare final document • Presentation to PC, EDA, and CC 111K Si . , •ri ; r — ., ' . _ 1 . -I, # _ , ,,''• ' .,_. e, '• it 1:, k i.., . ..k •• 1 1 A JO" '. • .101.t Hit 4 . or•q".. ' . .. k • i 41 '•• ,, .. , . - . 41r =MN• op 00000monsomm"owso, - — — C) iii _ 110. 1•= C CD -C ;151 Cy if,‘-/) , , 4) 1 e IgS . .cioi°1/ ' /9(.„, i11 <,....,,.. -. . .. frOl City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 '4".►•. ,0www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: TIF/Tax Abatement Policy Discussion DATE: February 25, 2016 INTRODUCTION/DISCUSSION In conjunction with a recently received application for the TIF assistance,we are beginning the process of developing more comprehensive policies for existing financial assistance tools. These policies will help guide future EDA decisions and allow for additional taxpayer dollar accountability. Currently the EDA makes business assistance decisions solely on the city's Business Subsidy Policy which we revised in April of 2015. A copy of this document is attached. TIF and Tax Abatement are two of the most powerful economic development incentive tools available to cities in Minnesota. These tools are also very closely regulated and strictly defined in Minnesota State Statute. Attached is an updated TIF vs. Tax Abatement presentation I received at the Ehlers Public Finance Conference in February for you to review. When considering how to formulate these policies some discussion questions include: • For economic development TIF assistance—number of jobs to be created per dollar of subsidy(see Lakeville's policy for one example). Wages of jobs being created with public assistance(refer to our current Business Subsidy Policy) Completed valuation of project to receive TIF or Abatement(see Apple Valley's policy). For a housing TIF district—maximum length of the district and affordability requirements (see Dakota County CDA's housing finance policy) Should all costs associated with application and administration be borne by the applicant? Based on our discussions, I will work with the City Administrator, Finance Director, and municipal financial advisor to create a draft TIF and Tax Abatement policy to bring back for further discussion and/or approval. ACTION REQUESTED Review the attached information and prepare any questions for discussion. ATTACHMENTS: Type Description CI Backup Material Ehlers TIF vs.Abatement Presentation D Backup Material Farmington Business Subsidy Policy a Backup Material Lakeville TIF Policy D Backup Material Apple Valley TIF Policy D Backup Material CDA Housing Finance Policy I � i 1 `�.eron�ea . \win 017 I _ ii. iii) ,, ',-,,,,,I..,.-,:. ill':.:7,1-isqi--,,,,.,,ii•: ''''''r- ' -- ---**.'Ss i oliiii , .. ,--i.--•,--ig.,4-1' , r-i- _ _ 1-----r-, --V. - I { q rirr-47.40 .... / I , EHLERS LEADERS IN PUBLIC FINANCE #Tiftastic : TIF and Abatement 101 Jason Aarsvold — Ehlers Christopher Virta — Fryberger, Buchanan, Smith & Frederick, P.A. February 4, 2016 1 -* Session Outline • Basics of Tax Increment • Framework of a District • Types of Districts • Uses of TIF • But-For / Gap Analysis • Basics of Tax Abatement • Comparison of TIF to Abatement EHLERS LEADERS IN PUBLIC FINANCE Basics of Tax Increment Minnesota Statutes 469 . 174 — 469 . 1794 3 EHLERS LEADERS IN PUBLIC FINANCE What is TIF? Tax Increment Financing (TIF ) : The ability to capture and use most of the increased local property tax revenues from new development within a defined geographic area for a defined period of time without approval of the other taxing jurisdictions . 4 FREERS 7 LEADERS in PUBLIC virvnrvcr TIF Example (26 year housing dist. ) •Original Tax Capacity • Project Tax Capacity $180,000 $160,000 $140,000 N CU $120,000 C W $100,000 Captured Tax Capacity R5 $80,000 0 $60,000 District Ends `^ X $40,000 H $20,000 Base Taxes ,i LD I` oo Ql o e--I N m Ill lD N 00 01 0 e--1 N m V1 CD N 00 01 0 r-1 N m 'zf kr, o o 0 0 0 0 0 0 0 0 0 0 0 01 0 o o o 0 0 0 0 0 0 8 8 8 8 8 8 N N N N N N N N N N N N r4 N N N N N N N N N N N N N N N N N L_ Year GEHLERS I FADERS IN PUBLIC FINANCE Why use TIF? • Encourage certain types of development or redevelopment that would not normally occur without assistance (" but for" test) •Create or retain jobs •Redevelop blighted areas •Remediate polluted sites •Construct affordable housing FREERS 6 IAI1f R5 IN PUBI IC FINANCE Project Area : Where Increment may be Spent • TIF Districts must be located in a Project Area or Development District • Multiple TIF Districts can be in a Project Area • Increment can be spent outside a TIF District in Project Area (aka "pooling") 7 voillik EHLERS LEADERS IN PUBLIC FINANCE TIF District : Where Increment is Collected • Defines parcels whose increased value will be captured • Parcels do not have to be contiguous , but usually are • Must meet criteria in State law for type of District being established 8 + EHLERS LEADERS IN PUBLIC FINANCE ,r� ".�"�s���'�t;�.`+,'�?�.,.u• rt'k� .r�,�„�.a''��Nva ”' .' ��� Project Area and TIF District Example Project Area 45) TIF Districts S Diamond 'd o gar S °tee 0 129th Ave (9). • TIF Districts TIF 12 TIF 13 -119-1 EHLERS TIF 14 0 5.200 Iv TIF 15 Feet LEADERS IN PUBLIC FINANCE TIF District Approval • Can be established by City, County, HRA or EDA • TIF Plan and Project Area Plan • Set forth policy objectives • Provide maximum budget authority for TIF revenues and expenditures • Must have approval of elected officials following public hearing ,o millw EHLERS 0 LEADERS IN PUBLIC FINANCE mmaimiliammisson-- _ - Types of Districts • Redo substandard / obsolete buildings • Redevelopment TIF District • Renovation and Renewal TIF District • Affordable housing • Housing TIF District • Job and tax base creation • Economic Development TIF District „ „cr ia, FREERS LEADERS IN PUBLIC fINArvCE Redevelopment District Qualifications • Parcels consisting of 70% of area must be improved • "Improved" means - buildings, streets, utilities, paved or gravel parking lots • Improved area equals 15% area of parcel • More than 50% of buildings must be substandard • 90% of TIF used to correct redevelopment issues • Reasonable distribution of conditions 12 _ EHLERS LEADERS IN PUBLIC FINANCE ��•t:.i x F �.-•:tea.as*- .��; -,�, ..;, _.. � ... - _ .....,�,... ^�.^^^'�.€a_„r",,.'e _ Reasonable Distribution L. M v- „A 1---7 if If % 80% Substandard buildings 60% Substandard buildings 80% Coverage 80% Coverage 134 EHLERS LEADERS IN PUBLIC FINANCF Renewal and Renovation District Qualifications • Parcels consisting of 70% of area is improved • 20% of buildings are structurally substandard • 30% of other buildings require substantial renovation or clearance • To remove inadequate street layout, incompatible uses or land use relationships, overcrowding of buildings, excessive dwelling unit density, obsolete buildings not suitable for improvement or conversion, etc. 14 � _ _ FREERS LEADERS IN PUBLIC fINANI:F Housing District • Affordable Housing - Income test is main qualification • TIF law references federal rules on income limitations • More liberal rules on pooling • 100 % tax increment used for affordable housing ; 20 % of project's value can include commercial/ industrial development ,5 6: FREERS LEADERS IN PUB!IC FINANCE Housing District: Owner Occupied Income of 95 % of first buyers is limited to 100% or 115 % of the greater of state or local median income • Metro area : Family of 2 = $83 , 800 ; Family of 3+ = $96 , 370 • State-wide : Family of 2 = $77 ,400 ; Family of 3+ = $89 , 010 • First buyet test for income compliance 16 4p-- --- __ -- FREERS LEADERS IN PUBLIC FINANCE Housing District: Rental • Income adjusted by number of occupants from 1 to 6 • 40 % of units restricted to 60% of median income • 20 % of units restricted at 50% of median income • Annual test for income compliance for life of district Rio 17 FREERS LEPDERS IN PII9LIC FINNNC, - --- Economic Development • At least 85 % of new building space must be : • Manufacturing • Warehousing , storage , distribution • Research and development • Telemarketing • Space necessary and related to the above uses FREERS LEADERS IN PUBLIC iINANff How Can Increment Be Spent? • Must meet policy objectives in TIF Plan • Must be in TIF Plan Budget 19 EHLERS IFADFRSIN PUBLIC FINANCE How Can Increment be Spent? • Must Be Costs Associated with New Development • Land Acquisition • Demolition and Relocation • Site improvements • Utilities , Streets , Sidewalks • Environmental Clean-up • Parking • Buildings (only for housing districts) EHLERS 20 LEADERS IN PUBLIC FINANCE TIF Financing Options • Pay-as-you-go TIF Note • Developer funds TIF-eligible expenses • Authority repays developer with interest, over time, from available tax increment • No risk to TIF authority if term expires before note is retired EHLERS 21 LEADERS IN PUBLIC FINANCE TIF Financing Options • General Obligation TIF Bonds • Authority issues bonds to fund TIF-eligible expenses • Pays debt service with available tax increment • IF TIF < debt service, authority is required to cover the gap • Can mitigate (but not eliminate) risk with developer guarantees • TIF Revenue Bonds • Bonds secured solely with TIF • Investor takes full risk of non-payment, wants higher interest rate in exchange 22 _ _ EHLERS LEADERS IN PUBLIC FINANCE " But For" Test • The development is only possible but for the use of tax increment • Elected body has to make this finding 23 411 � FREERS LEADERS IN PUBLIC FINANCE Gap Analysis How much assistance is needed ? • Pro forma Analysis • Cost comparison of raw land vs . developed land 2 4 44' 0 EHLERS I F ADFRS IN PUBLIC FINANCE TIF Financing — Case Study: 167 Unit Affordable Housing Project Project Gap Amount: • Review of Gap Calculation developer pro Total Project Costs 30,017,203 forma to confirm Less - First Mortgage (17,357,000) Total Gap 12,660,203 actual gap Gap Funding Tax Credit Equity 8,729,410 • Evaluate Grants/Deferred Note 300,000 funding options Deferred Developer Fee 2, 187,793 to close thea Total Gap Funding 11 ,217,203 g p Remaining Gap 1 ,443,000 25 EHLERS LEADERS IN PUBLIC FINANCE Tax Increment Calculation — 167 afford . units New Net Tax Capacity ( 167 Units) $125,250 (Less) base tax capacity ($7,622) Captured Tax Capacity $117,628 Times Local Tax Rate 1 . 12222 Gross Tax Increment $132,004 (Less) State Auditor Fee (0.36%) ($475.22) (Less) City Administration ( 10%) ($13, 153) Annual Net Tax Increment $118,376 Total Present Value (26 years @ 4%) $1 ,774, 110 26 EHLERS s'; LEADERS IN PUBLIC FINANCE Project Funding — 167 Affordable Units SOURCES Amount Pct. Developer Financing - First Mortgage 17,357,000 57.82% Developer Financing - TIF Note/Mortgage 1,443,000 4.81% Tax Credit Equity 8,729,410 29.08% Subtotal 27,529,410 91.71% Grants 300,000 1.00% Deferred Developer Fee (78%) 2,187,793 7.29% Subtotal 2,487,793 8.29% TOTAL SOURCES 30,017,203 100.00% USES Amount Per Unit Acquisition Costs 900,000 5,389 Construction Costs 22,623,736 135,471 Professional Services 1,268,300 7,595 Financing Costs 1,778,848 10,652 Real Estate Taxes 88,032 527 Developer Fee 2,752,584 16,483 Cash Accounts 605,703 3,627 TOTAL USES 30,017,203 179,744 27 IRICt EHLERS LEADERS IN PUBLIC FINANCE MINEMINEMEMENS- LEADERS IN PUBLIC FINANCE Tax Abatement Basics Christopher Virta, Fryberger, Buchanan, Smith & Frederick, P.A. (218) 725-6846 cvirta@fryberger.com 28 • a 1111 ...__ Basics of Abatement Minnesota Statutes 469 . 1812 — 469 . 1815 29 -- - EHLERS JrLEADERS IN PUBLIC FINANCE What is Abatement? The ability to capture and use all or a portion of the local property tax revenues within a defined geographic area to assist with commercial or housing development 30 � EHLERS LEADERS IN PUBLIC FINANCE How Abatement Works • Allows eacr , major taxing jurisdiction to choose to contribute its share of the taxes and limit abatement in any manner it determines appropriate • Can use to retain business by abating existing taxes 31 ØEHLERS LEADERS IN PUBLIC FINANCE Who May Grant Abatements? • Cities , Counties , Schools , Towns • Need approval by each governing board • Cannot abate the State property tax or Market Value tax EHLERS OFLEADERS IN PUBLIC FINANCF How to Establish an Abatement • Each entity holds a public hearing and adopts a resolution , which must contain the following : • Term of abatement • Statement of public benefit expected to result from the abatement • Required findings • Schedule of repayment of deferred taxes 33 (11 FREERS LEADERS iN PUBLIC FINANCE Requisite Findings • Benefits to the political subdivision at least equal the costs of the proposed agreement; AND • Abatement is in the public interest • Increase or preserve tax base • Provide employment opportunities • Provide or help acquire or construct public facilities • Redevelop or renew blighted areas • Provide access to services for residents • Provide public infrastructure • Phase in a property tax increase, in specific circumstances • Stabilize the tax base with respect to certain utility proper ies 34 EHLERS LEADERS IN PURI IC FINANCE immimminimmam-- — Restrictions for Abatement • In any one year, the TOTAL an lour r a political subdivision may abate may not exceed the greater of: • Ten percent of its net tax capacity • $200 , 000 35 _ FREERS LEADERS IN PUBLIC FINANCE Abatement and Tax Levies • Abatements are special tax levies outside of levy limits • Amount of abatement must be added to total levy for the current year 36 41" FREERS LEADER IN PUBLIC FINANCE 0 FREERS LEADERS IN PUBLIC FINANCE TIF/Abatement Comparison 37 al TIF / Abatement Comparison The following information is provided as a reference tool . The information may be helpful as a starting point to assist in the determination of whether tax increment or tax abatement may be more appropriate for your project. As always , contact your municipal advisor and/or TIF attorney to assist in making the final determination . ØEHLERS LENDERS IN PUBLIC fiNANCE Definitions Tax Increment Tax Abatement • Captures and uses • Provides the ability for most of the increase in one or more taxing local property tax jurisdictions to capture revenues without and use all or a portion approval of the other of their share of the taxing jurisdictions local property tax revenues 39 EHLERS LEADERS IN PUBLIC FINANCE Who Can Grant Assistance Tax Increment Tax Abatement • City • City • HRAs • County • EDAs • School • Towns 404It ElI ES LEADERS IN PUBLIC FINANCE Types of Projects Assisted • Redo substandard / obsolete buildings • Redevelopment TIF District • Renovation and Renewal TIF District • Tax Abatement • Affordable housing • Housing TIF District • Tax Abatement • Job and tax base creation • Economic Development TIF District • Tax Abatement 41 FREERS LEADERS IN PUBLIC FINANC! Redevelopment Tax Increment Tax Abatement • Coverage requirements • No coverage or • Substandard building inspection requirements requirements • Reasonable distribution of conditions 42 EHLERS IPLEADERS IN PUBLIC FINANCE Housing Tax Increment Tax Abatement • Income test is main • No income qualification requirements • More liberal rules on pooling • Can include market rate housing to contribute TIF to affordable housing 43 EHLERS LEADERS IN PUBLIC FINANCE Economic Development Tax Increment Tax Abatement • Goal is job creation • No use requirements • Majority of new space must be manufacturing , warehousing , distribution , telemarketing , and / or research and development or fall within exceptions 441161k _ __ EHLERS IFLEADERS IN PUBLIC FINANCE Geographic Areas Tax Increment Tax Abatement • District must be in a • Parcels with taxes project area , which sets abated must be boundaries for identified expenditures • No restrictions on area • District defines parcels of expenditure for capture of value Iii& ØEHLERS 45 .01 LEADERS IN PUBLIC FINANCI Maximum Terms Tax Increment Tax Abatement • Redevelopment — 26 • Participation by all 3 years entities — 15 years • Renovation & Renewal • Participation by 1 or 2 — 16 years entities — 20 years • Housing — 26 years • Resolution is silent as • Economic to the term — 8 years Development — 9 years 46 __ EHLERS LEADERS IN PURIICFINANCF Approval Process Tax Increment Tax Abatement • Notification to County • Requires public and School District, but hearing by each does not require participating jurisdiction approval from other • Each jurisdiction jurisdictions adopts a resolution with • City holds public statement of public hearing and adopts benefit and term of resolution with findings abatement „ 0EHLERS LEADERS IN PUBLIC FINANCE Amount of Assistance Tax Increment Tax Abatement • Captures only increase • Flexible structure — in value May capture existing values 48 EHLERS LEADERS IN PUBLIC FINANCE Reporting Requirements Tax Increment Tax Abatement • Annual reports are filed • No annual reporting with Office of the State requirements Auditor by August 1 • Annual Business • Annual Business Subsidy reports may Subsidy reports may need to be filed with need to be filed with the Dept. of Revenue the Dept. of Revenue by April 1 by April 1 49Ito 11, EHLERS LEADERS IN PUBLIC FINANCE Maximum Use Tax Increment Tax Abatement • No maximum on • Maximum cannot annual increment exceed greater of generated or number of $200 , 000 or 10% of net Districts tax capacity 50 ØEHLERS LEADERS IN PUBLIC FINANCE Restrictions on Use Tax Increment Tax Abatement • Restrictions on use • Few restrictions on use depending on type of • Cannot abate taxes on District ap arcel in a TIF district • General governmental use is prohibited • Recreational use is prohibited 51 EHLERS LEADERS IN PUBLIC FINANCE . _ ,,, , „,„ , ..„._, , .. Other Items to Consider Tax Increment Tax Abatement • Geographic restrictions • Abatements are special on pooling levies and outside levy limits • Amount of abatement must be added to total levy for current year • Proposed and certified levy must include current levy abatement amounts 52 we* EHLERS LEADERS IN PUBLIC FINANCE EHLERS LEADERS IN PUBLIC FINANCE Jason Aarsvold Christopher Virta Ehlers Fryberger, Buchanan, Smith & Frederick, P.A. (651 ) 697-8512 (218) 725-6846 Jaarsvold@ehlers-inc.com cvirta©fryberger.com 534 FARMINGTON BUSINESS SUBSIDY POLICY 1.0 PURPOSE 1.01 This Policy is adopted for purposes of the Business Subsidies Act (the"Act"), Minnesota Statues, Sections 116J.993 through 116J.995. Terms used in this Policy are intended to have the same meanings as if used in the Act, and this Policy shall apply only with respect to "subsidies"as defined by the Act if and to the extend required thereby. 2.00 POLICY 2.01 The City of Farmington and the Farmington Economic Development Authority maintain several policy documents which speak to the general goals and objectives for the provision of public assistance for private development or redevelopment activities. These documents include, but are not limited to the current Strategic Plan for Economic Development and the Comprehensive Land Use Plan. 2.02 The City of Farmington has determined that in order for any project to be considered for fmancial assistance, a finding is needed that determines that, "but for"the City's assistance, this project will not occur or will not occur within a reasonable amount of time. The City will also need to demonstrate a return on its investment based on one or more of the public benefit categories listed in this Policy. 2.03 Because projects vary greatly in structure and public benefit derived, each project will be considered on its own merits. Consideration will be given to projects providing public benefits in one or more of the following categories: a. The creation of new jobs/increase in total payroll. In the case of new job creation, new jobs must pay an average wage equal to the minimum wage level for business assistance programs administered by the Minnesota Department of Employment and Economic Development for cities located in the seven county metropolitan area in place at the time of an application by any business seeking a subsidy. Preference will be given to higher paying jobs that also provide benefits such as health care coverage. b. Projects that provide value in the forms of needed transportation and other utility infrastructure improvements including regional infrastructure in the community that would be completed in conjunction with the project. c. Redevelopment projects that result in the stabilization of business districts or neighborhoods by elimination of blighting conditions. d. Projects that enhance or increase the economic diversity of the community by attracting businesses or industries not currently located in the City. New job wage requirements will apply to any new jobs created. Farmington Business Subsidy Policy rev.4.20.15 e. Projects that result in the development of affordable senior or workforce housing. f. Quality of Life based on business/projects. Those business/entities that provide a desirable good or service and address an unmet demand in the community will be considered. New job wage requirements will apply to any new jobs created. g. Retention of existing jobs. To be considered under this category, it must be demonstrated—to the satisfaction of the City-that the loss of jobs is specific and can be demonstrated. 2.04 If a particular project does not involve the creation of jobs, but is nonetheless found to meet another public purpose of the City it may be considered without any specific job wage goals, as permitted by Minnesota Statutes. This public purpose has to be something other than an increase to the City's tax base. Other measurable, specific and tangible goals must be established. Examples of tangible goals may include redevelopment or clean-up of a contaminated site or increased tourism. 2.05 Each project shall not only be evaluated against the Business Subsidy Policy but also against other applicable City of Farmington or Economic Development Authority policies, including the Comprehensive Land Use Plan, current Strategic Plan for Economic Development. The level of assistance to be provided for any project is at the discretion of City of Farmington. 2.06 Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, the governing body must retain the right in its discretion to approve projects and subsidies which may vary from the principles and criteria of this Policy. The burden will be on the applicant to demonstrate,to the satisfaction of the City of Farmington,that the public benefit justifies the requested subsidy. 2.07 In all cases of business subsidy, where the subsidy is equal to or greater than the threshold prescribed in Minnesota Statutes, a subsidy agreement will be entered into between the City and the recipient. This agreement will delineate the subsidy structure and amount, as well as the expected public benefit. The agreement will include provisions for repayment and other resolution options if the expected public benefit is not achieved. Upon completion of the project,the actual costs of the elements of the project eligible for the business subsidy will be verified. All business subsidies will be subject to the criteria outlined in Minnesota Statutes, Section 116J.933 through Section 116J.955 except those subsidies as exempted by same. Farmington Business Subsidy Policy rev.4.20.15 TAX INCREMENT FINANCING POLICY Policy 2.06 1) PURPOSE For the purposes of this document, the term "City"shall include the Lakeville City Council. a) The purpose of this policy is to establish the City of Lakeville's position relating to the use of Tax Increment Financing(TIF)for private development above and beyond the requirements and limitations set forth by State Law. This policy shall be used as a guide in the processing and review of applications requesting tax increment assistance. b) The City of Lakeville(City) is granted the power to utilize TIF by the Minnesota Tax Increment Financing Act, as amended. The fundamental purpose of tax increment financing in the City of Lakeville is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided through TIF. c) The City reserves the right to approve or reject projects on a case by case basis,taking into consideration established policies, project criteria,and demand on City services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of business assistance to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. d) The City Council can deviate from this policy for projects that supersede the objectives identified herein. 2) OBJECTIVES OF TAX INCREMENT FINANCING a) Tax Increment Financing(TIF) uses the increased property taxes generated by new real estate development within a tax increment district to pay for certain eligible costs associated with the development. As a matter of adopted policy,the City will consider using TIF to assist private development projects that will achieve one or more of the following objectives: i) To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. Preference will be given to higher paying jobs that also provide benefits such as health care coverage. ii) Projects that provide value in the forms of needed transportation and other utility infrastructure improvement that would be completed in conjunction with the project. iii) To encourage additional unsubsidized private development in the area,either directly or indirectly through"spin off" development. iv) To facilitate the development process and to achieve development on sites which would not otherwise be developed but-for the use of TIF. v) To remove blight and/or encourage redevelopment of commercial and industrial areas in the City that result in high quality redevelopment and private reinvestment. vi) To offset increased costs of redevelopment(i.e.contaminated site clean-up)over and above the costs normally incurred in development. vii) To create opportunities for affordable housing. viii) Projects that improve the quality of life in the City by providing a desirable good or service and address an unmet demand in the community. 1 ix) To contribute to the implementation of other public policies,as adopted by the city from time to time,such as the promotion of quality urban or architectural design,energy conservation, and decreasing capital and/or operating costs of local government. 3) POLICIES FOR THE USE OF TIF a) When possible,TIF shall be used to finance public improvements associated with the project. The priority for the use of TIF funds is: a) Public improvements, legal,administrative, and engineering costs. ii) Site preparation,site improvement, land purchase, demolition,and environmental remediation. iii) Capitalized interest, bonding costs. b) The following types of TIF districts may be established: i) Economic Development Districts(maximum term 9 years) ii) Redevelopment Districts(maximum term 26 years) iii) Housing Districts(maximum term 26 years) iv) Renewal and Renovation Districts(maximum term 16 years) v) Other types of TIF districts, along with specific criteria, may be considered on a case by case basis. c) TIF assistance shall not be provided for reimbursement of land and/or property price that is in excess of fair market value. An appraisal by a third party,agreed upon by the City and Developer,will determine the fair market value of the land. d) The City shall retain a fee to reimburse administrative costs up to but not to exceed ten percent (10%)of any tax increment received. e) Only for a project which significantly supersedes the objectives identified herein,will the term of the TIF assistance exceed 15 years. f) Any developer receiving TIF assistance shall provide a minimum of twenty percent(20%)cash equity investment in the project. The assistance shall not be used to supplant cash equity. The City may consider exceptions for"pay-as-you-go"TIF projects. g) Developer shall be able to demonstrate a market demand for a proposed project.TIF shall not be used to support purely speculative projects. h) TIF shall not be utilized in cases where it would create an unfair and significant competitive financial advantage over other projects in the City. i) TIF shall not be provided for projects that would place extraordinary demands on city services or for projects that would generate significant environmental impacts. j) The developer must provide adequate financial guarantees to ensure completion of the project, including, but not limited to: assessment agreements, letters of credit, personal guarantees, etc. k) The developer shall adequately demonstrate,to the City's sole satisfaction, an ability to complete the proposed project based on past development experience,general reputation,and credit history, among other factors, including the size and scope of the proposed project. I) For the purposes of underwriting the proposal,the developer shall provide any requested market,financial,environmental,or other data requested by the City or its consultants. 2 4) PROJECT QUALIFICATIONS All TIF projects considered by the City of Lakeville must meet all of the following requirements: a) To be eligible for TIF,a project shall result in: i. For Economic Development TIF Districts, new construction of a minimum of 5,000 square feet. ii. For Economic Development TIF Districts,the minimum creation of one new or retained full time job per$25,000 of TIF provided. iii. For Redevelopment TIF Districts, a minimum value increase of$200,000 or not less than 2 times the current year assessed value,whichever is greater. b) The project shall meet at least one of the objectives set forth in Section 2. c) The developer shall demonstrate that the project is not financially feasible but-for the use of TIF. d) The project must be consistent with the City's Comprehensive Plan, Land Use Plan,and Zoning Ordinances. e) The project shall serve at least two of the following public purposes: i. Creation of jobs with livable wages and benefits, per City's Business Subsidy Policy. ii. Increase of tax base. iii. Enhancement or diversification of the City's economic base. iv. Industrial development that will spur additional private investment in the area. v. The project contributes to the fulfillment of the City's development or redevelopment objectives. vi. Removal of blight or the rehabilitation of a high profile or priority downtown site. 5) SUBSIDY AGREEMENT&REPORTING REQUIREMENTS a) All developers/businesses receiving tax increment financing assistance from the City of Lakeville shall be subject to the provisions and requirements set forth by State Statute 1161.993 and summarized below. b) All developers/businesses receiving TIF assistance shall enter into a Subsidy Agreement with the City of Lakeville that identifies:the reason for the subsidy,the public purpose served by the subsidy, and the goals for the subsidy, as well as other criteria set forth by State Statute 1161.993. c) The developer/business shall file a report annually for two years after the date the benefit is received or until all goals set forth in the application and performance agreement have been met,whichever is later. Reports shall be completed using the format drafted by the State of Minnesota and shall be filed with the City of Lakeville no later than March 1 of each year for the previous calendar year. Businesses fulfilling job creation requirements must file a report to that effect with the City within 30 days of meeting the requirements. d) The developer/business owner shall maintain and operate its facility at the site where TIF assistance is used for a period of five years after the benefit is received. e) The developer/business will be required to attain or exceed the jobs and wages goals set forth in the Subsidy Agreement. f) Developer/Businesses failing to comply with the above provisions will be subject to fines, repayment requirements,and be deemed ineligible by the State of Minnesota to receive any loans or grants from public entities for a period of five years. 3 6) APPLICATION PROCESS a) Applicant submits the completed application along with a nonrefundable initial application fee of$500, i. City staff reviews the application and completes the Application Review Worksheet. ii. Results of the Worksheet are submitted to the appropriate governing authorities for preliminary approval of the proposal. b) If preliminary approval is granted,the applicant submits the final application fee of$5,500 and the Tax Increment Financing Plan, along with all necessary notices, resolutions and certificates are prepared by City staff and/or consultants. i. Notices are published and sent to the county and school board. ii. Public hearing(s)on the proposed project are held. iii. The City Council grants final approval or denial of the proposal. 4 CITY OF APPLE VALLEY TAX INCREMENT FINANCING POLICY Adopted: February 11, 1988 Amended January 1, 1990 Amended: May 7, 2012 SECTION 1. PURPOSE To broaden the tax base, encourage quality construction, develop an enhanced employment base, promote the highest and best use of the land, and provide more and better services to the citizens of the community, it is the policy of the City of Apple Valley("City")to encourage strong, viable growth and development for the mixed-use, commercial and industrial areas of the community. Tax Increment Financing("TIF") can be an important and useful tool benefitting the community by attracting private development, creating employment opportunities, providing housing opportunities and encouraging the redevelopment of property. The Apple Valley Economic Development Authority (the"EDA"), pursuant to Minnesota State Statutes Chapter 469, as may be amended from time to time, has the authority to use TIF within the City. When appropriate,the EDA will use TIF to aid or accomplish the development goals of the City. The Apple Valley City Council has transferred authority for TIF issuance and administration to the EDA. The provisions of the TIF program are designed to provide potentially significant savings in costs, which may be an incentive for industrial, commercial, and multi-family and mixed housing enterprises to locate or expand within the City. Though the EDA has expressed support for the use of TIF as needed,the EDA may approve or reject any TIF application. Meeting policy criteria does not guarantee the use of TIF for any project. Approval or denial of one project is not precedent for approval or denial of another project. The EDA shall have the option to deviate from this policy for projects when determined necessary or appropriate. SECTION 2. TIF PROGRAM GOALS AND OBJECTIVES It is the City's intent to advance the following goals and objectives in granting TIF assistance. 1. To promote the development or redevelopment that would not occur"but for"the assistance provided through TIF. 2. To promote development or redevelopment that will build a strong tax base. 3. To improve the City's economic vitality through the creation and expansion of employment opportunities. 1 4. To assure that development projects are constructed and maintained with quality consistent with the goals of the City. 5. To enhance the competitive position of the City regarding new and expanding business. 6. To increase the local job base, retain local jobs, and provide economic diversity in that job base. SECTION 3. POLICIES FOR THE USE OF TIF 1. At all times, procedures and policies related to the proposed or actual approval of TIF usage will comply with the State laws. 2. The project must be in accord with the City's Comprehensive Plan and Zoning ordinances to secure assistance. 3. The use of TIF may be a"business subsidy" as defined by State law. In these cases,the use will comply with the requirements of applicable statutes and the EDA's Business Assistance Policy. 4. The following general types of TIF districts may be established: a. Redevelopment District b. Renewal and Renovation District c. Economic Development District d. Housing District e. Soils Condition District f. Compact Development District In addition to these districts,the EDA may also consider the creation of TIF Districts as authorized by applicable legislation. 5. When possible,TIF shall be used to pay for the costs of public improvements associated with a project, including but not limited to streets, sewers, storm water control, water,public parking lots and structures, lights, fiber optic infrastructure,transit and transportation, energy technologies, and publicly owned infrastructure. 6. TIF shall generally be used to reimburse the developer for eligible costs on a"Pay as You Go"basis. The EDA shall have the option to issue a TIF note with or without interest. The principal amount of the TIF note will not exceed the amount of eligible project costs incurred and documented by the developer. The developer shall be required to provide written receipts that show costs eligible for reimbursement have been paid. In all cases, TIF payments shall be based on available increment generated from the project. TIF payments shall be made after collection of property taxes. Requests for up front financing may be considered by the EDA on a case-by-case basis. 2 7. The applicant is required to retain and be assisted by qualified professionals, e.g. accountants, legal counsel, etc., separate and independent from the EDA. 8. TIF shall not be used for projects that would place extraordinary demands on city services or for projects that would generate significant environmental impacts. 9. Construction of an eligible project shall not commence until the EDA has given final approval to the application for financing and the TIF district has been established, if required. 10. The EDA reserves the right to deny any application for financing at any time prior to final execution of a business subsidy agreement or development agreement, which ever applies. 11. The EDA shall be reimbursed by the applicant for all its costs related to the request for TIF. At the time of application, the applicant will deposit with the EDA an amount as determined by the EDA as necessary to cover all costs incurred by the EDA in connection with the proposed project. a. The amount of the initial deposit shall be determined by the Executive Director of the EDA. b. The fact that the applicant's deposit is accepted by the EDA is not be construed as a guarantee that the EDA will authorize the project. c. The EDA may request and the applicant shall be responsible to pay any additional amounts as determined from time to time by the EDA, should associated costs exceed the initial deposit. 12. All applications and supporting materials and documents shall become the property of the EDA, and, as such, are subject to the Minnesota Data Practice Act. 13. The EDA reserves the right to select a third party to assist in the management of the TIF process. 14. All TIF proposals must take into account the direct costs to the City and County and how those costs will be addressed. The applicant shall pay all permits and fees normally charged by the City as part of the subdivision or building permit approval. 15. The EDA will reserve up to 10% of all TIF funds to pay the EDA's administrative costs. SECTION 4. TIF PROGRAM CRITERIA In addition to satisfying the provisions in Section 3, qualified projects should meet or exceed the following criteria to be eligible for TIF assistance. Meeting the threshold of eligibility does not mean automatic approval for the project. 3 1. The developer must demonstrate that the project is not financially feasible"but for"the use of TIF. The level of TIF financing shall be reduced to the lowest possible level to achieve the development or redevelopment goals of the City. 2. The developer must be willing to enter into a development agreement or business subsidy agreement that satisfies the EDA. • 3. The project must comply with the City of Apple Valley Business Assistance Policy, including job and wage goals. 4. To be eligible for TIF, a project shall result in the following minimum values: a. All industrial projects must have a minimum estimated market value of$1,500,000 upon completion. b. All fee-standing commercial or office projects must have a minimum estimated market value of$1,500,000 upon completion. c. All retail shopping center projects must have a minimum estimated market value of $10,000,000. d. All multi-family projects must have a minimum estimated market value of$5,000,000 upon completion. SECTION 5. ASSISTANCE AGREEMENT AND REPORTING REQUIREMENTS 1. All recipients of TIF assistance from the EDA shall be subject to the provisions and requirements set forth by state statute. 2. All recipients of TIF assistance shall enter into an assistance agreement with the EDA that identifies the reason for the assistance,the public purpose served by the assistance,the goals of the assistance, as well as other criteria set forth by state statute. 3. The TIF assistance agreement may be amended from time to time as the parties may agree. Any such amendment must be in writing and signed by both parties. The TIF assistance agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The TIF assistance agreement shall be recorded in the Office of the Dakota County Recorder or Registrar of Titles. 4. All recipients of TIF assistance shall file a report annually for two years after the date the benefit is received or until all goals set forth in the application and the assistance agreement have been met. Reports shall be completed using the format drafted by the State of Minnesota and shall be filed with the City no later than March 1 of each year for the previous calendar year. Businesses fulfilling job creation requirements must file a report to that effect with the City within 30 days of meeting the requirement. 4 Er.....,... Dakota County n. Community Development Agency CDA HOUSING FINANCE POLICY Amended 10-28-14 I. OVERVIEW The Dakota County Community Development Agency(the CDA) is committed to assisting in the financing of affordable rental housing for low to moderate income households. The CDA will consider assisting in the development, acquisition and substantial rehabilitation or acquisition and preservation of multifamily rental housing facilities using qualified residential rental bonds, qualified 501(c)(3) bonds, refunding bonds, low income housing tax credits, tax increment financing, and Housing Opportunities Enhancement(HOPE) funds. Before the CDA will take any action in connection with the issuance of bonds or the establishment of a tax increment district, it must receive a completed Application for Revenue Bonds and/or Application for Tax Increment Financing Assistance, as applicable. The issuance of the various types of bonds, and the establishment of a tax increment financing district, will require compliance with the respective procedural requirements, including public approvals. Meeting these requirements generally takes between two to three months. The applicant will be required to pay all of the CDA's costs associated with processing an application for bonds or tax increment financing assistance, whether or not the application is ultimately approved, bonds are ultimately issued, or the tax increment financing district is ultimately established. It is the CDA's policy to encourage the distribution of affordable housing throughout the county in order to avoid the concentration of such housing in any one city or section of a city. As a result, the CDA may limit the number of units and the units per acre of affordable housing that it will assist. In order to address the CDA's concern that each development will be well maintained throughout its useful life,the CDA will review the building plans and may require specific building materials, such as fiber cement board siding, to be used. To expand affordable housing opportunities for a range of household sizes, the CDA may require that the units designated as "affordable" within a mixed- income development be closely proportional to the number of units of each bedroom size within the development. The CDA considers the cities in Dakota County to be its clients, thus the city in which the development is proposed will be consulted. Please Note—The requirements specified herein are not inclusive of all of the requirements to be met in order to receive CDA financing. This information is to be used only as a general guide to the different CDA financing programs available. 1 II. QUALIFIED RESIDENTIAL RENTAL BONDS The use of private activity bonds will be considered for either new construction or acquisition coupled with rehabilitation. The CDA receives an annual entitlement allocation of private activity bonding authority from the State of Minnesota. The CDA within its sole discretion will determine (a) whether it will use any of its entitlement allocation for multifamily bonds, and if so, (b) which multifamily project or projects it will finance. If the CDA has used its entire entitlement allocation for the previous year, the CDA may apply to the State for an allocation of bonding authority to finance a multifamily project to be owned by a for-profit developer. An application to the State for additional bonding authority requires a non-refundable application fee of .02% of the requested allocation and, depending on when the application is submitted, a deposit of either one or two percent of the requested allocation. The developer will be responsible for providing such fee and deposit. In the event the CDA issues bonds that do not meet the definition of"permanently issued" within Minnesota Statutes 474A.02, Subd. 20a, then the CDA may hold some or all of the application deposit received from the Department of Finance (in lieu of returning it to the developer) until and unless the bonds are "permanently issued"within such definition. In connection with the issuance of private activity bonds that receive an allocation of volume cap, the developer may be eligible for the 4% tax credit allocation. Please refer to the section on HOUSING TAX CREDITS. If the 4% tax credit is sought, the development will be subject to both income and rent restrictions imposed by federal and state law and will be subject to the separate application and other procedural requirements of the CDA's tax credit program. A. Under state law, projects financed with bond allocation must meet the following requirements: (a) Income and rent restrictions: (i) the proposed residential rental project meets the requirements of section 142(d) of the Internal Revenue Code regarding the incomes of the occupants of the housing (that is, 40% of the units are held for persons at 60%of median income, or 20%of the units are held for persons at 50%of median income); and; (ii) the maximum rent for at least 20 percent of the units in the proposed residential rental project do not exceed the area fair market rent or exception fair market rents for existing housing, if applicable, as established by the federal Department of Housing and Urban Development. (b) The proceeds from qualified residential rental bonds may be used for a project for which project-based federal rental assistance payments are made only if: 2 (i) the owner of the project enters into a binding agreement with the Minnesota Housing Finance Agency under which the owner is obligated to extend any existing low-income affordability restrictions and any contract or agreement for rental assistance payments for the maximum term permitted, including renewals thereof; and (ii) the Minnesota Housing Finance Agency certifies that project reserves will be maintained at closing of the bond issue and budgeted in future years at the lesser of: (I) the level described in Minnesota Rules. Part 49000.0010, subpart 7, item A, subitem (2), effective May 1, 1997; or (II) the level of project reserves available prior to the bond issue, provided that additional money is available to accomplish repairs and replacements needed at the time of bond issue B. 15 Year Agreement and Monitoring: State law requires that prior to the issuance of tax-exempt residential rental bonds, the developer of the project must enter into a 15-year agreement with the CDA that specifies the maximum unit rental rates of the rent-restricted units and the income levels of the families occupying the rent-restricted units. The developer must annually certify to the CDA, during the 15-year term, that the rental rates are within the applicable limitations. The CDA may request individual certifications of income for all families. State law requires that the CDA monitor compliance with the rent and income restrictions listed above. The CDA may issue an order of noncompliance if a project is determined to be out of compliance with the rental or income limitations set forth above. The owner of the project will be required to pay a penalty to the CDA equal to one-half of one percent of the total amount of bonds issued for the project if the CDA issues an order of noncompliance. For each additional year a project is out of compliance, the annual penalty must be increased by one-half of one percent of the total amount of bonds issued for the project. C. Participation in the Section 8 Program: The developer will be required to sign an agreement that while the bonds are outstanding, they will participate in the Section 8 Rental Assistance Program. Participation means that to the extent the developer has units that meet the requirements of this program, they will not exclude from consideration qualified families receiving assistance for the Section 8 program. D. Acquisition/Substantial Rehabilitation Requirements: 3 If the developer intends to utilize the proceeds of tax-exempt bonds for acquisition and rehabilitation,the following requirements must be met: (a) Rehabilitation expenditures must be made within a 2-year period and must be equal or exceed 15% of the acquiring the building finance with bond proceeds. (b) No substantial user of the facility prior to acquisition may be a substantial user of the facility following acquisition. E. Community Review: All applications will be sent to the city in which the development is located for review and comment. Cities will be given a minimum of 30 days to review and submit comments. The CDA will not consider approving a final bond sale resolution before this period of time has elapsed or comments are received,whichever comes first. The CDA will not approve any request for bonds where a community indicates that the development is not consistent with the community's plan, policies, or goals. F. Fees The following fees must be paid by the Applicant with respect to the Dakota County Community Development Agency(CDA) Multifamily Revenue Bond Programs: (a) An application fee in the amount of $1,000 must be submitted with the Multi- family Revenue Bond Application to the Dakota County CDA (b) An administrative fee in the amount of the greater of $10,000 or 1/8 of 1% (.125%) of the principal amount of the bonds shall be paid to the Dakota County CDA at the time of the bond sale closing. (c) An annual administrative fee in the amount of 1/8 of 1% (.125%) of the outstanding principal balance of the bonds shall be paid to the Dakota County CDA in semiannual payments. III. 501(c)(3)BONDS FOR RESIDENTIAL RENTAL HOUSING In order to qualify for 501(c)(3) bonds for residential rental projects, the developer must be a qualified 501(c)(3) organization, or a disregarded entity created by a 501(c)(3) organization, for purposes of federal tax law and all projects must be consistent with its 501(c)(3) charitable purposes. Proof of this status must be submitted with the application and an opinion of counsel acceptable to bond counsel will be required at closing. 501(c)(3) Bonds cannot be used in a partnership with for-profit ownership or be used for an activity that constitutes an unrelated trade or business of the 501(c)(3) organization. A. Type of Units and Income/Rental Limitations: 4 While the CDA may impose additional income or rental restrictions on a case-by- case basis, under federal law, housing projects which consist of the construction of new housing units need not include any units set aside for persons of low or moderate income, except as may be required in order to maintain the developer's status as a 501(c)(3) organization. Federal law also requires that existing housing projects which are to be acquired with the proceeds of 501(c)(3) bonds must comply with the rehabilitation requirements described in B. below, or must meet one of the following (elected at the date of the bond issue): (a) set-aside 20% of the units for families whose income is 50% or less than the county area median income, adjusted by family size; or (b) set-aside 40% of the units for families whose income is 60% or less than the county area median income, adjusted by family size; in each case in accordance with the requirements of Section 145(d) of the Internal Revenue Code. B. Rehabilitation Projects: Under federal law, an alternative to complying with the set-aside requirements described in A. above, a developer seeking to finance the acquisition of an existing housing project with 501(c)(3) bonds may substantially rehabilitate the project, as required by Section 145(d) of the Internal Revenue Code. "Substantial rehabilitation" requires, in essence, the expenditure for rehabilitation of an amount at least equal to the acquisition price of the project. C. Participation in the Section 8 Program: The developer will be required to sign an agreement that while the bonds are outstanding, it will participate in the Section 8 Rental Assistance Program. Participation means that to the extent the developer has units that meet the requirements of this program, they will not exclude from consideration qualified families receiving assistance for the Section 8 Program. D. Community Review: All applications will be sent to the city in which the development is located for review and comment. Cities will be given a minimum of 30 days to review and submit comments. The CDA will not consider approving a final bond sale resolution before this period of time has elapsed or comments are received whichever comes first. The CDA will not approve requests for bonds where a community indicates that the development is not consistent with the community's plans, policies, or goals. E. Fees 5 The following fees must be paid by the Applicant with respect to the Dakota County Community Development Agency(CDA) Multifamily Revenue Bond Programs: (a) An application fee in the amount of$1,000 must be submitted with the Multi- family Revenue Bond Application to the Dakota County CDA (b) An administrative fee in the amount of the greater of$10,000 or 1/8 of 1% (.125%) of the principal amount of the bonds shall be paid to the Dakota County CDA at the time of the bond sale closing. (c) An annual administrative fee in the amount of 1/8 of 1% (.125%) of the outstanding principal balance of the bonds shall be paid to the Dakota County CDA in semiannual payments. IV. REFUNDING BONDS The CDA will consider a developer's request that the CDA issue bonds to refund a developer's existing bond issue, or make amendments which constitutes a reissuance for purposes of federal tax law based on the following CDA policies and objectives. A. Requirements for Agreements and Terms of the Restrictions: Prior to issuance of refunding bonds, the developer of the project must enter into an agreement with the CDA that specifies the maximum unit rental rates and the income levels of tenants. (These limits will be based on the type of bonds being issued.) The CDA may request individual certifications of income for all tenants. B. Participation in the Section 8 Program: The developer will be required to sign a new agreement that while the bonds are outstanding, they will participate in the Section 8 Rental Assistance Program. Participation means that to the extent the developer has units that meet the requirements of this program, they will not exclude from consideration qualified families receiving assistance for the Section 8 program. C. Community Review: All applications will be sent to the city in which the development is located for review and comment. Cities will be given a minimum of 30 days to review and submit comments. The CDA will not consider approving a final bond sale resolution before this period of time has elapsed or comments are received,whichever comes first. The CDA will not approve requests for refunding or reissuing bonds where a community indicates that the development is not consistent with the community's plan, policies, or goals. All 501(c)(3) bond requests require CDA Board and County Board of Commissioners' approval. The CDA will not commit to any 501(c)(3) Bond assistance until approvals have been granted. D. Fees 6 The following fees must be paid by the Applicant with respect to the Dakota County Community Development Agency(CDA) Multifamily Revenue Bond Programs: (a) An application fee in the amount of$1,000 must be submitted with the Multi- family Revenue Bond Application to the Dakota County CDA. (b) An administrative fee in the amount of the greater of$10,000 or 1/8 of 1% (.125%) of the principal amount of the bonds shall be paid to the Dakota County CDA at the time of the bond sale closing. (c) An annual administrative fee in the amount of 1/8 of 1% (.125%) of the outstanding principal balance of the bonds shall be paid to the Dakota County CDA in semiannual payments. V. GENERAL REQUIREMENTS. The following requirements apply in connection with the issuance by the Dakota County CDA of Qualified Residential Rental Bonds, Qualified 501(c)(3) Bonds and Refunding Bonds. (a) The Applicant shall submit to the Dakota County CDA its written proposal for selection of one or more investment bankers or underwriters to assist the Applicant and Dakota County CDA in the structuring, implementation and sale of the bonds. Such proposed selection shall not become effective, nor shall the Applicant enter into any binding agreement or commitment with respect thereto, until and unless the Dakota County CDA approves such selection; and the Dakota County CDA may disapprove such selection in its sole discretion. If the Applicant proposes that the bonds shall be privately placed with a financial institution, the Applicant may propose that no investment bankers or underwriters will be selected. (b) The Applicant acknowledges that the Dakota County CDA will appoint the trustee in connection with the issuance of the bonds. (c) The Applicant acknowledges that the Dakota County CDA will appoint bond counsel in connection with the issuance of the Bonds. (d) The Applicant, and if the applicant is a single asset entity, other parties required by the Dakota County CDA, will be required to enter into a memorandum of understanding on terms acceptable to the Dakota County CDA prior to the adoption of approving resolutions by the Dakota County CDA. VI. LOW-INCOME HOUSING TAX CREDITS (HTC) The CDA has been designated as an allocating agency for HTC by the state legislature. Federal law requires the CDA to adopt a Qualified Allocation Plan, which explains the guidelines and methods for allocating tax credits. Allocations of HTC will be 7 made in accordance with the Qualified Allocation Plan's threshold requirements and then ranked based on selection criteria. The CDA will consider allocating HTC for new construction, acquisition, or rehabilitation, in accordance with its Qualified Allocation Plan. HTC Applications are due annually on a date selected by the Minnesota Housing Finance Agency as the closing date for its first round allocation for the subsequent year's tax credit allocation. VII. TAX INCREMENT FINANCING(TIF) FOR RENTAL HOUSING The use of TIF will be considered for either new construction or rehabilitation of rental housing. The TIF provided will primarily be in the form of an Interest Rate Reduction Program (IRR). The CDA may consider other forms of TIF financing depending upon the specific needs of the development. A. Consistent with the Dakota County Tax Increment Financing Policy, the CDA policy requires that the proposed housing district meet all of the requirements for a low-income housing credit under section 42 of the Internal Revenue Code of 1986, as amended through December 31, 1992, regardless of whether the project actually receives a low-income housing credit. (a) (i) 20-50 test-The project meets the requirements if 20 percent or more of the residential units in the project have rents that are at or below the published Sec. 42 maximum gross rent, adjusted by bedroom size, for 50 percent of the area median income, and these units are occupied by households whose income is 50 percent or less of area median gross income, or (ii) 40-60 test-The project meets the requirements if 40 percent or more of the residential units in the project have rents that are at or below the published Sec. 42 maximum gross rent, adjusted by bedroom size, for 60 percent of the area median income, and these units are occupied by households whose income is 60 percent or less of area median gross income. (b) Annual rent increases will be limited to the lesser of published Sec. 42 rents or the average rent increase in the proposed City as demonstrated in the Dakota County CDA Annual Market Study. B. Generally, TIF Assistance provided will be in the form of an Interest Rate Reduction Program (Minnesota Statutes 1998, 469.012 subd. 8)with the following additional restrictions: (a) Maximum of 15 years of increment payments (c) Generally, TIF Assistance will not exceed 70%of increment available (subject to underwriting) 8 (d) Interest rate reduction payments must only be utilized to pay interest on project financing C. Repayment Terms: (Per loan agreement) D. Participation in the Section 8 Program: The developer will be required to sign an agreement that states that while the agreement is outstanding,they will participate in the Section 8 Rental Assistance Program. Participation means that to the extent the developer has units that meet the requirements of this program, they will not exclude from consideration qualified families receiving assistance for the Section 8 Program. E. Community Review: All applications will be sent to the city in which the development is located for review and consideration of support. Cities will be given a minimum of 30 days to review and submit comment. The CDA will not consider private TIF requests unless a resolution is passed by the respective city council authorizing the use of TIF and requesting the CDA to proceed with the development of a TIF District. The CDA will not approve TIF requests where the community indicates that the development is not consistent with the community's plan, policies, or goals. TIF requests initiated by the CDA require review and approval by the Dakota County Board of Commissioners. All TIF requests require CDA Board and County Board of Commissioners' approval. The CDA will not commit to any TIF assistance until approvals have been granted. F. "But For"Determination: The developer requesting assistance must provide financial information on the development that clearly demonstrates that "but for" the use of TIF the development would not occur. The CDA will also conduct its own independent analysis to verify whether the "but for" determination has been met, which will include comparing cash flow proformas with and without rent-restricted units. In most cases, the amount of TIF available will not exceed the amount of funding necessary to write down rents from market rate to affordable levels. G. Fees The following fees must be paid by the Applicant with respect to the Dakota County Community Development Agency(CDA)tax increment program: (a) An application fee in the amount of $1,000 must be submitted with the Application for Tax Increment Financing Assistance to the Dakota County CDA 9 (b) The CDA will require a deposit in the amount of$15,000 from the applicant to cover legal and consultant costs incurred by the CDA in investigating the feasibility of providing assistance to the applicant and other costs associated with establishing the district. If the CDA incurs additional expenses beyond the $15,000, the CDA shall notify the applicant in writing and the applicant will be required to deposit additional funds in $5,000 increments. Any excess funds in escrow will be returned to the developer once the TIF district is certified by the County. VIII. TAX INCREMENT FINANCING (TIF) FOR OWNER-OCCUPIED HOUSING The CDA will consider the use of TIF for either new construction, acquisition, or acquisition/rehabilitation of owner occupied housing. A. Income and Sale Price Limitations: (a) For owner occupied residential property to qualify for tax increment financing assistance, the proposed project must meet the following requirements: (i) The statutory requirement that at least 95 percent of the housing units assisted with tax increment must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code: 115 percent of the area median income for household sizes of 3 or more, and 100 percent of the area median gross income for household sizes of 1 or 2. (ii) In addition to (i) above, the project must meet the CDA policy requirement that at least 50 percent of the housing units in the project must be initially purchased and occupied by individuals or families with an annual adjusted gross income which is equal to or less than 80 percent of the area median gross income, as determined annually by the U.S. Department of Housing&Urban Development(HUD). I. Income is determined based on Section 8 standards, whereby annual income includes the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD. II. The maximum sale price for the units referenced in (ii) above must not exceed the limit established by the CDA, on an annual basis, for its mortgage revenue bond program. The CDA 10 may adjust this sale price limit to ensure that these housing units are affordable to homebuyers that meet the income requirement. B. Community Review: All applications will be sent to the city in which the development is located for review and consideration of support. Cities will be given a minimum of 30 days to review and submit comment. The CDA will not consider private TIF requests unless a resolution is passed by the respective city council authorizing the use of TIF and requesting the CDA to proceed with the development of a TIF District. The CDA will not approve TIF requests where the community indicates that the development is not consistent with the community's plan, policies, or goals. TIF requests initiated by the CDA require review and approval by the Dakota County Board of Commissioners. All TIF requests require CDA Board and County Board of Commissioners' approval. The CDA will not commit to any TIF assistance until approvals have been granted. C. "But For"Determination: The developer requesting assistance must provide financial information on the development that clearly demonstrates that "but for" the use of TIF the development would not occur. The CDA will also conduct its own independent analysis to verify whether the"but for"determination has been met. D. Fees The following fees must be paid by the Applicant with respect to the Dakota County Community Development Agency(CDA)tax increment program: (a) An application fee in the amount of $1,000 must be submitted with the Application for Tax Increment Financing Assistance to the Dakota County CDA (b) The CDA will require a deposit in the amount of$15,000 from the applicant to cover legal and consultant costs incurred by the CDA in investigating the feasibility of providing assistance to the applicant and other costs associated with establishing the district. If the CDA incurs additional expenses beyond the $15,000, the CDA shall notify the applicant in writing and the applicant will be required to deposit additional funds in $5,000 increments. Any excess funds in escrow will be returned to the developer once the TIF district is certified by the County. IX. HOUSING OPPORTUNITIES ENHANCEMENT (HOPE) FUND The Dakota County Board of Commissioners has designated the CDA as the administrator of HOPE funds. The CDA will consider allocating HOPE loans for new 11 construction/land acquisition, homeownership opportunities (indirect or direct assistance), and housing rehabilitation/acquisition/preservation. The CDA will accept applications on an open pipeline basis, depending on availability. A. Types of Units, Incomes, and Rent Limitations: The maximum loan amount available to projects serving the eligible population may not exceed $30,000 per unit or a maximum of$750,000 per project. Assisted rental units must serve persons at or below 50 percent of the county's median income as determined by HUD. Rental developments must have rents based upon the most current HUD AMI rent schedule for 50 percent, less applicable utility allowance. Assisted owner-occupied units must serve persons at or below 80 percent of the county's median income as determined by HUD. Owner-occupied development will be considered affordable based on the current purchase price limit for the Dakota County First Time Homebuyer program. B. Monitoring Requirements: The developer of a project must provide the CDA with a list of actual tenant rents and incomes and certify that the tenant rents and incomes are accurate and in compliance with the rent and income requirements at initial lease up and annually thereafter. Copies of reports submitted for the Tax Credit program, bond programs, or other approved financing program are acceptable. The project units must remain affordable pursuant to an established affordable housing program or if not funded by such other program, the units shall remain affordable for a period of not less than 15 years. C. Participation in the Section 8 Program: Developers of multifamily rental units will be required to sign an agreement that while the loan is outstanding,the development will participate in the Section 8 Rental Assistance Program. Participation means that to the extent the developer has units that meet the requirements of the HOPE program, they will not exclude from consideration qualified families receiving assistance for the Section 8 program. D. Community Review: All applications will be sent to the city in which the development is located for review and comment. Cities will be given a minimum of 30 days to review and submit comments. The CDA will not consider approving a loan agreement before this period of time has elapsed or comments are received whichever comes first. The CDA will not approve requests for loans where a city indicates that the development is not consistent with the city's plans, policies, or goals. X. APPLICATIONS &DOCUMENTS The following documents are available on the CDA website: www.dakotacda.org: 12 1. Application for Housing Opportunities Enhancement(HOPE) Program Funds 2. Application for Tax Increment Financing Assistance 3. Application for Multifamily Housing Revenue Bonds 4. Low-Income Housing Tax Credit Documents - CDA Qualified Allocation Plan(QAP) for Tax Credits - CDA Procedural Manual for Tax Credits - Tax Credit Application: Application submission requirements are found in the CDA Procedural Manual. The "Minnesota Multifamily Rental Housing Common Application" can be found at the Minnesota Housing's website: http://www.mnhousing.gov. Please note that the CDA's submission requirements and self-scoring sheet are different from Minnesota Housing's. X. CONTACT INFORMATION Kathy Kugel, Housing Finance Program Coordinator 651-675-4478 kkugel@dakotacda.state.mn.us Karly Schoeman, Housing Finance Program Coordinator 651-675-4488 kschoeman@dakotacda.state.mn.us Submit Applications to: Dakota County CDA 1228 Town Centre Drive Eagan, MN 55123 13 o�F City of Farmington P 430 Third Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 �'-.A pear05 www.ci.famiington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Trident Affordable Senior Housing TIF Request DATE: February 25, 2016 INTRODUCTION/DISCUSSION The EDA has received an application for tax increment financing assistance for a new senior assisted living rental housing development. Trident Development has authorized a deposit agreement and submitted an escrow amount to cover the cost of the city's financial consultant to review the application and establish a new TIF Housing District in Farmington. The proposed project will be located at 22120 Denmark Avenue just south of St. Michael's Church. A project narrative is attached. They have applied for and the city approved a rezoning and comprehensive plan amendment in preparation of this development. We will be working with Ehlers to conduct a review of the application as well as service the reporting requirements of this new district if approved. I would like to request that the EDA allow the city time to review and provide a recommendation to be acted on at the March meeting so all public hearing requirements are met and due diligence is completed. Ehlers will review the market feasibility, financials, and determine if the application meets the requirements of the city's business assistance policy. A summary of the application materials are attached for your review and discussion. ACTION REQUESTED Review the attached information and prepare any questions that can be forwarded on to the developer. ATTACHMENTS: Type Description a Exhibit Project Rendering o Exhibit Trident Application Summary �'ap �. M._� , N3QI2I� 'J\1 52i:t,1.\:i.) .121N.-2 C} ..m.. o�•wi.�.c=',.-... ) , , „, „„,k), ,..„, fAAn ll0.unanactctw >ni.i.���.i.�cs� 1 s >IDaitHDavCSISISSV dnon 3103 NOIVNIW IVei* _ _ —� 1 , , j •,n .-:111-121- 1I` 0 i� , 7 i ' fi j -,; i MN a i ', , ..—.. .... _ ,.,. ., :.. • _ _, �, 1 cu © iii +F ® ,„ --'-'---- iii,7- -------- -----------r-----_------- - 0 "� i�.,., 4 _ _. .. f Ft �' ..�_- 1;�- fir` I'.°pY�iiI I111 f ;1. ilii ■ a if _.or._ TRNTI LE . Development, LG 3001 18th Street South •Suice#103 •St. Cloud,MN 56301 Rout' 321.258.4438 • Ely 320 252 3003 February 9,2016 Mr. Adam Kienberger Community Development Director Members of the Farmington Economic Development Authority Farmington City Hall 430 Third Street Farmington,MN 55024 VLA E-mail and U.S.Mail Re:BUSINESS ASSISTANCE REQUEST SENIOR ASSISTED LIVING RENTAL HOUSING DEVELOPMENT Dear Mr.Kienberger and the Members of the FarmingtonEDA: Trident Development,LLC is pleased to submit this request for business assistance for your consideration. The following narrative is intended to generally describe the proposed project,as well as the operations and experience of the development team. It is also intended to serve as a basis for supporting business assistance for a senior rental housing development in the City of Farmington. PUBLIC BENEFIT—As further explained below,tax increment financing for assisted living senior housing will bring an added public benefit to the community of Farmington,including but not limited to: Increase in taxable property values: The development site is currently classified as "tax exempt"and is paying no taxes at this time. The proposed new housing development will immediately increase the tax value of the site by an estimated$10,000,000. New permanent job creation: Approximately twenty(20)new full-time jobs will be created by this new business,generating personal income for Farmington residents to purchase goods and services. Satisfies market demand: The new rental units created by this development help to meet a pent-up demand for assisted living housing for elderly residents of Farmington,both market rate and subsidized housing. This allows them to remain safely in their community near family,friends and medical services. Sanitary Sewer Utility Improvement: Subject to final design of sanitary sewer and municipal water,the proposed development offers the opportunity to improve certain sewer line connections in the immediate vicinity. LOCATION—The proposed development site is located at 22120 Denmark Avenue. The subject property is currently vacant and consists of approximately 4.42+1-acres,parcel number 14-65250-00-050. During 2015,Trident worked with City to obtain a Comprehensive Plan Amendment and a Zoning Amendment to allow for the proposed project. The subject property is currently zoned R-5 High Density with a Land Use designation of High Density Residential. The subject development plan calls for 70 dwelling units on 4.42 acres,resulting in 16 units per acre density. The proposed use will conform with the zoning and land use designation. MARKET DEMAND- Trident Development authorized a market demand assessment for senior housing to identify the unmet need for senior independent,assisted living and memory care rental housing in the Farmington market area. This report was prepared by Viewpoint Consulting Group,Inc.on March 25,2015. A copy of this report is available upon request. The report identifies an unmet need in the Farmington market for 113 senior housing units projected to be captured at the subject site.The afore-mentioned demand is"income-qualified",meaning these residents have sufficient financial resources to pay"market-rate"rent. It also takes into account the demand from those seniors who require reduced rent or rental subsidies. This subsidized demand is estimated to be 26 of the 113 units of demand. DESCRIPTION OF PROPOSED USE—The proposed use is a 70-unit,senior assisted living/memory care rental housing community. The current proposal contemplates a mix of 21 studio units(memory/enhanced care),forty-four(44)one-bedroom apartments,and five(5)two- bedroom apartment units for a total of 70 dwelling units. The apartment units offer a variety of floor plans which include a complete kitchen with appliances,window treatments and washer/dryer in each unit. Apartment units range in size from 360+/-square foot studios,to 600 +/-square feet 1-BR plans to 900+/-SF 2-BR plans. The community will be professionally managed by Tealwood Senior Living of Bloomington,MN. DESCRIPTION OF IMPROVEMENTS—The current concept is designed as an"X"shaped, 3-story structure with pitched roof and prominent front entry feature. The building is wood-frame construction,slab-on-grade foundation and hydraulic elevator service. An automatic fire suppression system is provided throughout the building,which is monitored 24 hours a day. The current parking plan provides for a total of seven(7)"tuck-under"parking stalls and 51 surface parking spaces.Traffic circulation is designed to provide convenient pick-up and drop-off at the front entry.Deliveries are made at the rear of the building and emergency vehicles have access to front and rear of the building. Other site improvements include generous landscaping, fenced garden,gazebo and raised planter boxes. FEATURES AND AMENITIES—The assisted living facility will include the following features and amenities: • Meal plan and scheduled activities. • Transport van for schedules trips and transportation needs. • Library and high-speed Internet access.. • Beauty Salon • Spa with pedicure,massage and hydrotherapy tub. • Community room for resident parties and family gatherings. • Private dining room for special occasions. • Patient monitoring system • Controlled access entry system •._._Wellness.center._with..gym-quality equipment PROFESSIONAL MANAGEMENT—The facility will be professionally managed by a licensed care provider,Tealwood Management. Tealwood brings over 25 years of experience in operating and managing over 50 nursing homes,senior housing and assisted living facilities. Tealwood arranges for all administrative,dietary,nursing,activities and maintenance staffing. All site improvements and building design features are coordinated with Tealwood to meet the needs of the residents and the operation of the staff. Tealwood also oversees marketing,leasing and licensing of the property. (www.twdcc.com) DEVELOPMENT TEAM—Trident Development,LLC is based in St. Cloud,MN.and has considerable experience in development and construction of assisted living communities and multi-story apartment housing. Trident is currently under construction with a 139-unit independent and assisted living facility in Chaska,MN and has successfully completed numerous apartment and townhouse developments around the state. Over the course of the last 9 years, Trident has successfully negotiated business assistance(TIF and/or tax abatement)in the communities of North St.Paul,MN, Shakopee,MN,Marshall,MN,Little Falls,MN;Princeton, MN;Delano,MN; and Sauk Centre,MN. Trident's team of real estate professionals have over 30 years of real estate experience. Trident and Tealwood work closely together in the design and detail of the assisted living facilities-to assure quality,functionality and to provide the highest level of resident care. UTILIZATION OF BUSINESS ASSISTANCE-Trident Development is requesting business assistance in the formof tax increment financing for a 70-unit a senior assisted living rental community. Specifically,a MN Section 469 Housing TIF district of 25 years,applying 90%of the increment for the business assistance. Pursuant to the requirements of such a housing TIF,the project will dedicate no less than 20%of the dwelling units(14 units)to seniors whose incomes are at or below 50%of the area median income. The 2013 AMI for Dakota County was$73,475. This development will make affordable rental housing units available to seniors with household incomes of$36,737 or less. The commitment to reserve the 20%affordable units will continue as long as the TIF district exists. In order to create and maintain the affordable units now,and long into the future,it is important to extend the term of the TIF district for 25 years. EMPLOYMENT—An added benefit of supporting an assisted living housing development is the additional jobs created by this facility. As indicated in#5 of the Project Information section,this development is projected to create approximately 20 new permanent FTE jobs. The base wages for these new jobs range from$11/hour to$36/hour. Traditionally,a Housing TIF district is created to develop and maintain affordable housing units,not to create permanent jobs. With an assisted living facility however,the affordable units are created along with the added bonus of new job creation. PROJECT TIMING—We are eager to complete the municipal approval process by the end of March 2016 and proceed with construction commencement before May of this year. This will allow the facility to open in the spring of 2017. Enclosed,please find the following enclosures: • a check payable to the City of Farmington representing the initial application deposit of $15,000.00. • A completed Application for.Business Assistance. • Schematic site plan,floor plans and elevations. • Background material of the applicant • Pro Forma analysis • Pro Forma financial statement • Evidence of site control(copy of signed purchase agreement) We thank you in advance for considering this business assistance application and look forward to your comments and recommendations as we finalize our plans. Please feel free to contact me at (320)258-4438 or(612)242-6097 if there are any questions. Regards, T ' t Development,LL Roger D. k Sr.Vice President Enclosures C: Scott O'Brien,Trident Development,LLC CITY OF FARMINGTON Application for Business Assistance GENERAL INFORMATION: Business Name: Trident Development,LLC Date: February 9,2016 Address: 3601—18th Street South,St.Cloud,MN 56301 Type(Partnership,etc.): Limited Liability Company Authorized Representative: Roger D.Fink Phone: 320-258-4438 Description of Business: To-be-built,70-unit senior,assisted living apartment community Legal Counsel: Siegel Brill,PA—Tony Gleekel Address: 100 Washington Ave.So.Minneapolis,MN Phone: 612-337-6127 FINANCIAL BACKGROUND: 1. Have you ever filed for bankruptcy? No 2. Have you ever defaulted on any loan commitment? No 3. Have you applied for conventional financing for the project? Yes—preliminary only 4. List financial references: a. Bell State Bank,Alexandria,MN b. Home Federal Savings,Sartell,MN c. Tradition Capital Bank,Edina,MN 5. Have you ever used any business subsidy before? Yes If yes,where and when? Andover,MN in 2012; Shakopee,MN in 2014;Chaska,MN in 2015 Rev. 1.12.16 AK PROJECT INFORMATION: 1. Location of Proposed Project: 22120 Denmark Avenue. South of St Michaels Church. 2. Amount of Business Subsidy Assistance $2,000,000.00-based on 90%pay-as-you-go TIF requested? District over 25 years 3. Why the need for Business Subsidy To support creation of affordable rental units to seniors Assistance: 4. Present ownership of site: The Church of St Michael 5. Number of permanent full-time jobs created as a result of 20(estimate) Ranging from$11/hour to project. Please include projected wage levels/ranges. $36/hour. 6. Estimated annual sales: Present: Future: 7. Market value of project following completion: $10,000,000 8. Name and address of architect: Cole Group Architects,240 Park Ave.South,St.Cloud,MN 9. Anticipated start date: June 2016 Completion Date: May 2017 FINANCIAL INFORMATION: 1. Estimated project related costs: a. land acquisition $ 750,000 b.site development 1,400,000 c.building cost 8,580,000 d.equipment 1,060,000 e.architectural/engineering fee 152,300 f.legal fees 60,000 g.off-site development costs 300,000 h. financing,permits,wkg cap,conting 1,347,700 Rev. 1.12.16 AK TOTAL ESTIMATED COSTS 13,650,000 2. Source of financing: a.private financing institution $ 10,237,500 b.tax increment/abatement funds 2,000,000 c.other public funds 0 d.developer equity 1,412,500 TOTAL ESTIMATED SOURCES 13,650,000 (Should equal Total Estimated Costs) What type of business assistance requested? Tax Increment Financing X Economic Development Tax Abatement Other: Rev. 1.12.16 AK t 1 k I I. 1.,j I ALTA/AGSM LAND TITLE SURVEY I _� s I 1•.(2..iiiiCr4fkre e, . 1 OI1TLOT E.2{ I I' i f n�a ST. 6IICHAEI•:S ADDITION,f,\ 1 1 1 t i rt I uuv r h 1 ` �j LL , ! • J `('—.�4 - :D 41 DAKOTA COUNT\:. MINNESOTA Y 88 '"I -.1:::i.,,, .4.-:,.:.-........:,1 , z J ` 4 TRIDENT DEVEI.OPMFNT, LLC1. �� �: II 1 .( , t, 5 Yr r. N115.53E rw �� -. 0000... ._ �t ____ . ._ 0000. 0000..." .... 0000..e-.e.�yl i p0 0 C0000.. _ .. I, ' I 1 - Jr CS.a.+5N4M a6 .-_ mf �l 1. ,I �+1 I ,- 1 n 0000 00..00 ...0r,ny WORM wu h-..,..•r•wn,r.. m t. I' Y0I ... n�r�r-....air-1_..._.�✓h.�..,h.w»..r.>m-0...�n>u n.Wn > li I . I 1 ✓ J ern ..•✓•......`:.. :�w r~. . :�R w E 2 11 I. 1 t r .":., a ^- -._.r _._ ._- .✓..,. -_.w✓- .w , aw<-.. I w I I N r _ . .. ✓ -00_00 �+ tti�S 1 I z- } E 1� I Q _ ^ `e. a u>.... ""0000... ,- rMi Z 7<0 �` I I i t,- t` ^ n.,O• 0.....wvmw.n.._ , f OSE } I. z. t y3y .._ 11 I o< j I I Fa 1: m+.-�,,....•6..r;.'y: TEALWOOD SENIOR LIVING COMPANY PROFILE In January 1989,Tealwood Senior Living(TW) began business by leasing five skilled nursing centers from Leonard Louis Healthcare Properties(LLHCP).TW set out on a growth strategy to acquire smaller nursing facilities in the Midwest.This strategy was prompted by the belief that the overall provision of care was better in markets where friends and relatives frequently care for friends and relatives. In 1992,TW got its first experience in the senior housing market when the principals of LLHCP acquired a 72 unit senior community in Waite Park, MN.As part of the transaction,the principals of TW were able to participate in the ownership of the property for the first time in addition to holding the management agreement. In 1998,TW formed a joint venture,TWSL, and began by managing a 256 bed nursing facility in Minneapolis,MN.TWSL's next opportunity was the design and development of an independent and assisted living community located in Eden Prairie, MN in 2002.A year later,TWSL further enhanced this community's uniqueness by opening the Transitional Care Unit(TCU).A first of its kind,the TCU is a 25 bed nursing facility focusing solely on rehabilitation services while being attached to an independent and assisted living community. Beginning in 1999,TW sought to expand its operations into a new market.TW identified a strategy for developing and constructing independent and assisted living communities adjacent to its nursing center operations. In these locations,the skilled nursing centers focused on the rehabilitation market,while the independent and assisted living facilities focused on the senior housing market. In 2001,TW partnered with LLHCP in the acquisition of an assisted living community located in Sauk Rapids, MN. Five years later,TW_was able to use its knowledge gained to develop a freestanding 50unit_ independent and assisted living project in Fergus Falls, MN.The community featured many of TW's design priorities:a high percentage of common spaces,full size apartments,exercise area,etc. In addition,these communities would deliver care services by TW directed staff in the resident's unit, thereby not requiring another move. Tealwood Management(TM)was formed in 2003.The principals of Tealwood Senior Living established an organization that focuses on managing its own projects and obtaining management agreements with other businesses,all while affording ownership opportunities for key staff.TW manages ten locations of its own and has management agreements with six others including freestanding assisted living communities,skilled nursing centers and larger campuses. The principals of TW partnered with Trident Development to jointly develop a project in Sauk Center,MN which opened in late 2008.This joint venture has successfully co-developed fifteen additional senior housing projects.Three new projects are currently under construction in Chaska, Edina and Andover, MN and are slated to open in the Fall 2016. Throughout their experiences,TW's focus grew from building design and clinical services to the needs and desires of an individual. In 2008,TW began a company wide focus on wellness. Utilizing the 7 Dimensions of Wellness,it has developed and implemented programs in all the communities it operates. In an effort to continually expand their knowledge of the long term care and post acute care profession, the principals of TW have made a concerted effort to become involved by serving on the board of directors both in Minnesota and South Dakota associations and nationally for AHCA and NCAL,as well as being intimately involved in strategic committees at all levels. Howie is a past Chair of the National Center for Assisted Living and presently serves as the Co-Chair of the Quality Cabinet,and Gail is a past Chair of Care Providers of Minnesota. 4iAi , City of Farmington 430 Third Street Farmington, Minnesota 14 651.280.6800 -Fax 651.280.6899 -,A►11006`° www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: February Director's Report DATE: February 25, 2016 INTRODUCTION/DISCUSSION State of the City State of the City has been scheduled for March 7th at 1:00 p.m. at the Ground Round (lunch on your own at noon). Please join Mayor Larson as he presents this annual update on the City of Farmington. EDA Board Fundamentals In keeping with our theme of February being the annual Organizational Meeting, I have included a few resources for you to review:Board Essentials—a two-page board member refresher document used with permission from Ewald Consulting, and Bringing business to a community—an article by the city of Shakopee. Planning Commission/Comp Plan Meeting On February 9th members of the Planning Commission and EDA listened to a presentation by our Metropolitan Council Sector Representative Patrick Boylan on Comp Planning. Farmington's Comp Plan update will take place over the next two and a half years and is the main document that outlines Farmington's growth and vision. As noted in our Strategic Plan, the EDA will be provided updates and given the opportunity to participate multiple times throughout Farmington's Comp Plan update process. 2016-2018 Strategic Plan for Economic Development This will be a standing item of note each month in the Director's Report. The EDA's 2016-2018 Strategic Plan for Economic Development is included for your reference. Miscellaneous Articles Please find attached several miscellaneous articles of interest:the CDA's January notice of pendency and foreclosure reports. NEXT MEETING Our next meeting is scheduled for Thursday,March 24th at 6:30 p.m. ACTION REQUESTED None, this report is intended to be a monthly update on various development and industry related topics. ATTACHMENTS: Type Description D Backup Material Bringing Business to a Community ❑ Backup Material EDA Board Essentials- Ewald Consulting ❑ Backup Material CDA January Notice of Pendency ❑ Backup Material CDA January Foreclosure Report ❑ Backup Material 2016-2018 Strategic Plan for Economic Development Bringing business to: a community Cities are limited when it comes to enticing retailers, restaurants "Shakopee needs more restaurants and the business needs. high-end retailers"is a common refrainRetail businesses and POLL:What stores and retailers would you like to see around the city.As more people move to restaurants tend to work a locate in Shakopee? Shalcopee for its.affordable housing and little differently,DiMaggio Share your thoughts at www.ShakopeeMN.gov suburban lifestyle;they want their favorite said.Larger chains typically restaurants and stores to come with them. have brokers that perform 4 So how can residents encourage their • •But,bringing.business into a community site searches based on the company's favorite coffee shop or grocery store to isrit as easy as sending an open invitation. growth strategy,such as demographics, locate in their community?Grassroots Cities are limited as to how they can volumes and proximity to an existing efforts are often the most effective way for entice retail and food service businesses, store.They tend to approach the City after showing a business that people in your especially when chains have preset growth they've already decided on a location. community are interested in having them strategies. nearby,DiMaggio said.Write an email, Another difference between send a letter,make a phone call and let the "People assume that city governments manufacturing.and retail/food service• business know you'd like to see them locate can pick and choose which businesses businesses is the lack of economic in your city. locate within city limits,but that's definitely incentives.Unlike manufacturing, not the case;"said Shakopee's Economic which can produce hundreds of head- Investing in infrastructure is also Development Coordinator Samantha of-household jobs,retail and service extremely important,Dombrovski noted. DiMaggio. � industries tend to have smaller wages. The new Highway 101 bridge will be a big Cities are less likely to invest in jobs that do benefit to Shakopee by ensuring the area While cities zone for different types of is no longer isolated by flooding.He also businesses and building sizes,they cannot not provide a living wage. points to the teamwork happeningi dictate which private businesspurchases Commercial Relator Stephen among P the RiverSouth partners and in the Valley land from private landowners.City Dombrowski said retailers and restaurants •Green Business Park as,evidence that the zoning is meant to regulate land use and like to establish themselves where they community's leaders are encouraging new development in order to keep a community feel most comfortable and oftentimes opportunities. attractive,functional and safe.As long as that means around"synergistic partners," the intended business meets the zoning Many businesses have been reluctant to be "It's my belief that there are the right Code,a city has no legalpioneers south of the 'ingredients in Shakopee for a lot of things If we look at the average river;however,he to happen,provided there are leaders on right to block its location. median income and the new said the marketplace board to make them happen;'Dombrovski "Shakopee has always businesses coming into the is changing. said. • had an open-to-business mentality;said DiMaggio. industrial park, I think that's "I think Shakopee "Any business that wants changing. There are a lot of has always been to do business here is . ' things happening[that are viewed as a little By the Numbers... welcome." attractive to the type of] blue collar;'said The City receives businesses'that people want Dombrovski,who $78,02 Q business leads in a [in Shakopee:" markets Shakopee's 6� variety of ways,including River City Centre. Median annual household the First StopShop, Stephen Dombrovski "But if we look at income in Shakopee • Commercial Relator the average median GreaterMSP and the . _ Minnesota Department.of Employment income and the new 7 ,400 and Economic Development.DiMaggio businesses-coming into the industrial park,— - — Estimated Shakopee responds to these leads-the majorityof I think that's changing.There are a lot of P population in 2040 which are manufacturing or warehouse things happening[that are attractive to the interests-by identifying potential lots or type of]businesses that people want[in • sites in the city that would accommodate Shakopee];' �`� .� Winter/Spring 2015 5 1 '+it �y .ts.� � � Tv A'; sk4 �' ' s ' i• `'• "a-s`tC �. � �. rg a� k t `t y 'a^r.-,�L,.. �'� a�r'x,�,yha''�';a`}s� • • • '6�vf' 'i.t Iz • i • • 7 'v}eF 5i,9a" n�..., zpt.-'a".kt.r mss•" .r1;4 cI,�.;.�i r A� ,,.-�' tp 7Af U1Ft A0r/ctr�h tlp;(t(4 .>�isfr iR r6 (te(- C • SSt] •F •R€ k''mi.k-K-r' ,""�„ 14`'"5H2/3r 41 �eArzJk2 t ei�'�4../6dp RAd)k IfJ!22C FBI fY-157 mak. ; '>4` "The board governs.., Board Responsibilities Legal Principles .., the staff manages." 1. Define the mission,vision,and goals Duty of Care requires leaders to use Leadership:Volunteer leaders are respon- of the organization, reasonable care and good judgement in sible for the direction of the organization. 2. Hire,fire,determine compensa making their decisions on behalf of the tion and performance targets for the interest of the organization. The board governs,develops policy and sets a course for the future.The Board Executive Director. maintains focus on the mission and 3. Oversee the performance of the orga- Duty of Loyalty requires leaders to be strategic goals—and should avoid micro- nization's programs and services. faithful to the organization, avoiding con- - managing the organization and staff. 4. Secure funding toward the accom- flicts of interest. Function(s): plishment of organizational objec- tives. Duty of Obedience requires leaders to corn- • Governance 5. Serve as a lead ambassador of the ply with governing documents(i.e.bylaws, • Policy&Position Development organization to the community. articles of incorporation,policies,etc.) • Visionary—Future Focus • Fiduciary Insurance and Volunteer Governance Tool Kit Management:Paid staff and contractors Immunity are responsible for the administration Documents leaders need to be familiar with: of the organization.Staff act as partners State and federal governments afford cer- to the board,advancing the goals and tain protection to volunteer leaders.While ▪ Statement of Purpose(Mission) strategies,while taking care of the daily the volunteer may have some protection, • Articles of Incorporation administrative needs unique to nonprofit the organization is still open for legal Bylaws organizations. suits.Insurance coverages add further pro- • Budget tection for volunteers and organization. • Policy Manual • Strategic Plan Unique Terminology Directors and Officers(D&O)Liability • Financial Statements may cover legal defense for employ- • Meeting Minutes Not-for-Profit refers to the legal corporate ment,copyright,and antitrust claims,for • Organizational Charts status of the organization.(It does not inn- instance. • IRS Forms ply an exemption from paying or collect- ing state sales tax.) Nonprofit is the casual General Liability insurance covers prop- Treat all governing documents with reference to Not-for-Profit erty damage and injuries relating to the confidentiality. organization. Exempt Organization is a reference to the IRS designation exempting the organiza- Fidelity Bond covers losses resulting from The Role of Committees tion from paying most federal income tax fradulent or dishonest acts committed by (with exception of UBIT-Unrelated Busi- an employee. "Committees recommend-►board ness Income Tax.) approves-►staff and volunteers imple- Meeting Cancellation covers the loss of ment." IRS 501 (c)(3)designation most often revenue due to a cancellation,curtail- refers to organizations with a religious, ment,postponement because of weather, Standing–identified in the bylaws,ap- charitable,scientific or educational pur- strikes,etc. pointed annually,ongoing committee pose. work. (Contact legal and insurance counselors for assistance.) IRS 501 (c)(6)designation refers to tradeAd Hoc–formed for specific or immedi- associations,business leagues and profes- ate needs and disbanded upon completion sioal societies. of work(a.k.a.Task Force) Ewald ! Consulting 1 Robert's Rules of Order Common Sense Risk Management Essentials 1. Prepare for meetings;read, read,read! Protect the organization.Be aware of fidu- Agenda ensures that important business is 2. Respect the chairperson,agenda and ciary responsibility,contracts,audit results, rules of order. insurance,IRS requirements,values and covered and discussions are on topic. 3. Bring a calendar,start and end on time. ethics,apparent authority,antitrust,etc. Motions are proposals for action,begin- 4. Know the mission and goals. Hing with,"I move we...:" 5. Listen more than you speak. Public Records requests for the organiza- 6. Check personal and political agendas tion's annual federal tax return(Form 990, A Second is required for the motion to be at the door. 990-EZ)must be made available for the discussed. 7. Respect confidentiality. last 3 years.Significant fines occur for 8. You don't speak for the organization noncompliance. Discussion comes after a motion is intro- without authority. duced and seconded. 9. Support the board;don't bad-mouth Antitrust Violations occur when two or any action or person. (Dissenting more persons from the same industry or Amendments may be made to most mo- votes may be noted in the minutes— profession discuss suppliers,processes, tions if they improve the intent or clarify not outside the meeting.) prices or operations.Remove yourself the original motion. from any conversation that would change how business is conducted because of an Tabling lays the motion aside until a sped- Strategic Planning agreement among competitors. fied later time. A strategic plan focuses the board on mis- Apparent Authority arises when a board Calling the Question ends discussion and sion goals for 3 to 5 years.It serves as a chair,though not granting actual authority, demands a vote on the motion. roadmap.Creat board members can think permits a committee or chapter to behave beyond their term of office and outside as if it had authority.Authority rests with Voting is the official action after discussion their area of expertise. the chairman and may not be assumed by to adopt,amend,kill or table the motion. others. Data Gathering—survey members, review Minutes protect the organization by industry and organizational trends,assess fi- Financial Audits annually to protect board recording the time and location of the nancial performance of ongoing initiatives, and staff;relying on an audit committee to meeting,participants,and the outcome Environmental Scan—review of external select,oversee and report on the process. of the motions.They are not a place to re- and internal influences on the organiza- - tion,as well as strengths,weaknesses, Conflicts,of Interest disclosed at the start cord conversations,assignments,reports, � ' ear.e th out h etc.(Including reports and discussions can opportunities and threats(SWOT). of the term and throughout y incriminate.) Mission—statement about what the orga- nization is who it serves and the services it Quorum is number of directors required provides;short,with PR value. to conduct business. Vision—inspiring, long-term desired out- come;image of success. — — Values—guiding principles for board and High Performing Boards staff. Ewald rai Consulting Goals—broad targets to advance the mis- "Mission Driven—Member Focused" sion. Objectives—S.M.A.R.T.Usually just 3 to 7 1000 Westgate Drive,Ste 252 • Accountable and follow through for to remain focused. St. Paul,MN 55114 your commitments. (S)Specific Phone:651-290-6260 • Uphold governing douments and (M)Measurable www.ewald.com expectation. (A)Attainable • Determine to be successful—ENVI- (R)Realistic Services SION success. (T)Time-bound • Association Management • Work as a team-no individual has Strategies—advance the objectives and • Government Relations/Public goals;creative efforts to achieve the mis- Relations an agenda more important than the • whole. sion and serve stakeholders/members. • Strategic Planning • Value and build relationships and Action Steps—fit within the strategies • Board Development respect diversity. (the actions,assignments,deadlines,'etc.) Operations a.k.a.annual "operating plan"or"busi- • Consulting • Focus on outcomes and the impact Finance the organization can have. Hess plan." Plan Champion—the per •son(staff and/orPublications&Seminars volunteer)who keeps focus on the plan. • Communication&Technology rfr / County diCommunity Development Agency CDA Notice of Pendency Filings January 2016 City Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2016 2015 Apple Valley 7 7 136 Burnsville 14 14 142 Eagan 7 7 130 Farmington 5 5 76 Hastings 1 1 67 Inver Grove Heights 3 3 77 Lakeville 6 6 120 Mendota Heights 0 0 11 Rosemount 1 1 39 South St.Paul 4 4 66 West St.Paul 0 0 49 Small Cities 0 0 27 TOTAL 48 0 0 0 0 0 0 0 0 0 0 0 48 940 NOTE:Notices of Pendency are filed by a mortgage company's attorney as official notification that the foreclosure process has begun.Not all of these result in sheriff sales.Numbers are based on Notice of Pendency filings with Dakota County Property Records.City numbers are based on municipality address. For more information about the CDA's homeowner or homebuyer services, visit www.dakotacda.org or call(651)675-4473. nv-----... Dakota County Ei., Community Development Agency CDA Foreclosure Summary for Dakota County Sheriff Sales January 2016 City Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2016 2015 Apple Valley 8 8 74 Burnsville 14 14 87 Eagan 5 5 78 Farmington 3 3 44 Hastings 1 1 37 Inver Grove Heights 2 2 50 Lakeville 5 5 68 1— Mendota Heights 0 0 3 Rosemount 2 2 21 South St.Paul 0 0 43 West St.Paul 1 1 21 Small Cities 0 0 29 TOTAL 2016 41 0 0 0 0 0 0 0 0 0 0 0 41 555 TOTAL 2015 65 36 63 41 39 43 51 38 46 59 41 33 555 TOTAL 2014 72 57 50 49 74 56 62 47 52 55 41 65 680 TOTAL 2013 142 73 84 86 90 58 107 69 60 51 45 60 925 SOURCE:Dakota County Sheriff Sales.City numbers are based on municipality address. For more information about the CDA's homeowner or homebuyer services, visit www.dakotacda.org or call(651)675-4473. Farmington Economic Development Authority AR F � o ti y � o � w .4 J� iO Q OAgsr `�`w ' A PROM 2016-2018 Strategic Plan for Economic Development January 2016 Introduction "The key to successful communities is their heart and soul—the unique cultures, landscapes, traditions and values that people cherish—and with people themselves taking action to enhance and sustain the places they love. Many communities are ready to protect their unique character, deeply engage their citizens, and meet the challenges of the 21st Century. Economic Development is one of those challenges, and citizens can assist with it by shopping locally and creating awareness to other citizens about the businesses within the City."(Farmington 2030 Comprehensive Plan—Chapter 10:Economic Development Element) Strategic planning is a key component of economic development.A three-year strategic plan is a valuable tool for both elected and appointed officials, as well as staff to provide work direction and prioritization of new initiatives. The following document outlines the EDA's areas of focus for 2016-2018. Participation EDA Members: Todd Larson, Chair Jeri Jolley,Vice Chair Doug Bonar Steve Wilson Kirk Zeaman Adam Kienberger, Executive Director Dr. Craig Waldron, Facilitator 2 Mission The Economic Development Authority's mission is to improve the economic vitality of the city of Farmington and to enhance the overall quality of life by creating partnerships,fostering employment opportunities, promoting workforce housing, and expanding the tax base through development and redevelopment. Role of the EDA The role of the Farmington EDA is to serve as an advisory board to the City Council on matters related to economic development.Through policy development and implementation of new and existing tools,the EDA serves as the voice of economic development. 3 Strategic Priorities The following five priorities were ranked by the EDA at their strategic planning session and are defined below.These priorities will serve as the focus and primary guidance of the EDA from 2016-2018. Because new opportunities and ideas will arise during this timeframe,these priorities are meant to serve as the focus areas of the EDA while allowing flexibility to thoughtfully explore other topics deemed important. 1. Develop tools for promoting growth and development in Farmington. 2. Develop strong incentive policies to ensure proper use of tools. 3. Explore plans for acquiring land for new industrial development. 4. Complete the development of Vermillion River Crossings. 5. Define and utilize the existing or future resources of the EDA. 4 Implementation Strategies i. Develop tools for promoting growth and development in Farmington. • Identify traditional economic development tools • Identify tools that can be unique to Farmington • Identify existing resources • Identify potential resource partners • Recommend tools to City Council 2. Develop strong incentive policies to ensure proper use of tools. • Discuss criteria and thresholds desired for individual tools(i.e.job creation, wages, etc.) • Recommend policies to City Council • Allocate necessary resources • Promote available tools o Website etc. 3. Explore plans for acquiring land for new industrial development. • Provide input on the 2134o Comprehensive Plan and land use designations o Encourage additional collaboration between advisory bodies o Joint meeting(s)with Planning Commission • Maintain relationships with local landowners • Explore additional ways to facilitate land development 4. Complete the development of Vermillion River Crossings. • Maintain relationship with broker/landowners • Consider alternate land use options • Discuss existing assessments 5. Define and utilize the existing or future resources of the EDA. • Do current resources align with desired tools/initiatives? • Explore economic development revenue opportunities • Joint meeting(s)of the EDA and City Council 5 2016 Work Plan —TBD Check in on strategic priorities at each EDA meeting to demonstrate progress or discussion needed. 6