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Home My WebLink About[04g] Call for Public Hearing, CMCU TIFMEETING DATE: AGENDA ITEM: SUBMITTED BY: Council Agenda Item 4 February 2, 2015 TIF Hearing: Requested Action: Accept the Preliminary TIF Application for the Central MN Credit Union and set the public hearing for March 16, 2015. Cynthia Smith-Strack, Municipal Development Group BOARD/COMMISSION/COMMITTEE RECOMMENDATION: The EDA reviewed the preliminary application at a regular meeting on January 28, 2015. The EDA finds: 1. The preliminary application and proposed use of TIF meets economic development goals of creation of quality j obs, retaining of quality j obs, and tax base diversification. 2. The proposed use of TIF meets the `but -for' test in that development will not occur in the City of St. Joseph unless TIF is used to bring project costs down to the level it would be in another community. 3. The project appears to be consistent with the Comprehensive Plan and applicable zoning district. 4. The taxes paid following project completion are estimated by the Stearns County Assessor's Office to be 7:1 over what they are currently. 5. The project is proposed for an infill site wherein a full complement of municipal services are pre-existing. Existing utilities are adequately sized to serve the proposed development. PREVIOUS COUNCIL ACTION: BACKGROUND INFORMATION: Central Minnesota Credit Union has submitted a pre - application for tax increment financing assistance in conjunction with a $4.2M office building at 1140 Elm Street East. The Stearns County Assessor's Office projects an estimated market value of $2.07M for the project, including S1.58M for the proposed structure. Current taxes paid are approximately $9,000, total real estate taxed paid after project completion is estimated at $64,600 Economic development TIF is available for the project. Maximum term of the applicable district is nine years, an actual term of four or five years is proposed. A pay-as-you-go arrangement is contemplated meaning the Applicant is reimbursed after taxes are paid. The Applicant reports a financing gap of $125,257.01; the gap is indicative of building costs for the exact structure on a similar sized lot in a different community. The Applicant is not seeking interest on the proposed principal amount The project involves the construction of a one story professional office building which will house a call center, information technology support/equipment, and other administrative and support staff. The office is expected to house a minimum of 30 workers initially but is designed to accommodate up to 80 employees. A total of I I to 16 jobs will be retained in St. Joseph and 40 to 68 new full-time equivalent positions will be added over five years following project completion. CMCU will provide FTE employees a full complement of benefits including, but not limited to, medical insurance, dental insurance, term life insurance, short term disability, long term disability, 401K, flexible spending accounts, paid time office and holiday leave. Wage and benefit packages range from 519.35 to $43.30 per hour for jobs created/retained. The proposed structure will complement and harmonize with the existing CMCU financial facility across CR 133 creating quality buildings which will `book end' expanding developments at a key intersection. The development is proposed for an infill site and, as such, will maximize the public's previous investment in infrastructure including municipal water, sanitary sewer, and storm water facilities/services The Applicant is a financial entity and, as such, will self -finance the project making a requirement fora lead lender non -applicable. ATTACHMENTS: Request for Council Action Resolution calling for a public hearing Preliminary TIF projections Project Map Preliminary site plan REQUESTED COUNCIL ACTION: Based on the aforementioned findings, the EDA recommends the City Council authorize the Mayor and Administrator to execute Resolution 2015-002 calling for a public hearing to create a TIF District for the Central Minnesota Credit Union project. NOTE: Previously you should have received the EDA packet through Dropbox, additional information on this matter can be found. This has been placed on the consent agenda as this item is only calling for a public hearing. Statutory requirements require the Council formally call for the hearing, for other matters hearings are just scheduled. It is typical for this type of item to be placed on a consent agenda. EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF ST. JOSEPH, MINNESOTA HELD: February 2, 2015 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of St. Joseph, Minnesota, was duly held at the City offices on Monday, the 2nd day of February, 2015, at 6 o'clock p.m. for the purpose, in part, of calling a public hearing on the proposed establishment of Municipal Development District No. 3 and the related Development Program and the establishment of Tax Increment Financing District No. 3-1, and the Tax Increment Financing Plan relating thereto. The following Commissioners were present: and the following were absent: Councilor _________________ introduced the following resolution and moved its adoption; RESOLUTION NO. ____ CALLING PUBLIC HEARING ON THE PROPOSED ESTABLISHMENT OF MUNICIPAL DEVELOPMENT DISTRICT NO. 3 AND THE RELATED DEVELOPMENT PROGRAM AND THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 3-1 AND THE ADOPTION OF A TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLVED by the County Board (the "Board") of ST. JOSEPH, Minnesota (the "County"), as follows: 1. Public Hearing. The City Council of the City of St. Joseph shall meet on Monday, March 16, 2015, at approximately 6:00 p.m. at City Offices in St. Joseph, Minnesota, to hold a public hearing on the following matters; (a) the proposed establishment of Municipal Development District No. 3, (b) adoption of a Development Program relating thereto, (c) the proposed establishment of Tax Increment Financing District No. 3-1, and (d) the adoption of the Tax Increment Financing Plan relating thereto, pursuant to and in accordance with Minnesota Statutes, Sections 469.124 through 469.134 and 469.174 to 469.1799, both inclusive, as amended (collectively, the "Act"). 2. Notice of Hearing. Filing of Plans. The City Administrator is hereby authorized to cause a notice of the hearing, substantially in the form attached hereto as Exhibit A, to be published as required by the Act and to place a copy of the proposed Development Plan and Tax Increment Financing Plan on file in City Administrator’s Office at the St. Joseph City offices and to make such copies available for inspection by the public. The motion for the adoption of the foregoing resolution was duly seconded by Councilor _________________ and upon vote being taken thereon, the following voted in favor: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. STATE OF MINNESOTA ) CITY OF ST. JOSEPH ) SS. COUNTY OF STEARNS ) I, the undersigned, being the duly qualified and acting Administrator of the City of St. Joseph, Minnesota, DO HEREBY CERTIFY that the attached resolution is a true and correct copy of an extract of minutes of a meeting of the City Council of St. Joseph, Minnesota duly called and held, as such minutes relate to the calling of a public hearing on the establishment of Development District No. 3 & Tax Increment Financing District No. 3-1. _________________________________________ Administrator EXHIBIT A ST. JOSEPH COUNTY OF STEARNS STATE OF MINNESOTA NOTICE OF PUBLIC HEARING ON THE PROPOSED ESTABLISHMENT OF MUNICIPAL DEVELOPMENT DISTRICT NO. 3, THE RELATED DEVELOPMENT PROGRAM, THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 3-1 AND THE ADOPTION OF A TAX INCREMENT FINANCING PLAN RELATING THERETO NOTICE IS HEREBY GIVEN that The City Council of the City of St. Joseph shall meet on Monday, March 16, 2015, at approximately 6:00 p.m. at City Offices in St. Joseph, Minnesota, to hold a public hearing on the following matters; (a) the proposed establishment of Municipal Development District No. 3, (b) adoption of a Development Program relating thereto, (c) the proposed establishment of Tax Increment Financing District No. 3-1, and (d) the adoption of the Tax Increment Financing Plan relating thereto, pursuant to and in accordance with Minnesota Statutes, Sections 469.124 through 469.134 and 469.174 to 469.1799, both inclusive, as amended (collectively, the "Act"). Copies of the respective plans, as proposed to be adopted, are on file and available for inspection at the office of the City Administrator of the City of St. Joseph at City Hall. A map of proposed Municipal Development District No. 3 and Tax Increment Financing District No. 3- 1 are as follows: (INSERT MAP of Tax Increment Financing District) All interested persons may appear at the hearing and present their view orally or in writing. BY ORDER OF THE CITY COUNCIL /s/ Judy Weyrens, City Administrator PRELIMINARY CMCU Projections ONLY Valuations & Estimated Taxes City of Saint Joseph, Minnesota Economic Development Tax Increment Financing District No. 3-1 St. Joseph Professional Plat Development Projects Proposed Plan Adoption Date: 1/___/2015 Base Tax Rate Assumptions Share of Increment Estimated Annual EXHIBIT 3 Life of District City Market Tax Total TIF County 42.65% Value Capacity Tax Portion 2013/2014 Rates Original Values $ 496,200 $ 4,962 $ 8,962 na City52.0569% Value lost to Demolition $ - $ - $ - $ County 54.7913% 128.4618% CMCU $ 1,578,300 30,816 $ 55,660 $ 39,587 School 20.0983% Net $ - - $ - $ - Other 1.5153% Base Tax Rate $ - - $ - $ - State C/I 52.160% Total $ 2,074,500 $ 35,778 $ 64,623 $ 39,587 Total 180.622% Share of Increment Estimated Annual EXHIBIT 3 Life of District City 40.52% $ 16,042 $ 144,377 County 42.65% $ 16,884 $ 151,960 School 15.65% $ 6,193 $ 55,741 Other 1.18% $ 467 $ 4,203 State C/I Projected $ - $ - Available 100.00% $ 39,587 $ 356,281 356,281 $ - $ 1,283 $ 354,998 $ 35,500 $ 319,499 $ 253,801 Inflation Rate 0% The Authority intends to retain 100% of the net Captured Tax Capacity This TIF District does not fall within a Fiscal Disparity Area The Authority elects to receive the first increment in Share of Total Annual Tax - If Abatement were used City $ 18,624.92 29% County $ 19,603.23 30% School $ 7,190.77 11% Other $ 542.14 1% State C/I $ 18,661.80 4.00% 4.00% 64,622.87 Payable Base Projected Captured Projected Gross Tax State Auditor Available 10% Authority Net lnrement Cummulative Net Cumm Net District Year Tax Capacity Tax Capacity Tax Capacity Base Tax Rate Increment Deduction (.36%) Tax Increment Admin Max Increment Present Val. Present Val. Duration 2015 $ 4,962 $ 4,962 $ - 128.462% $ - 2016 $ 4,962 $ 4,962 $ - 128.462% $ - 2017 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 35,500 $ 32,822 $ 32,822 1 2018 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 71,000 $ 31,559 $ 64,381 2 2019 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 106,500 $ 30,345 $ 94,726 3 2020 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 141,999 $ 29,178 $ 123,905 4 2021 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 177,499 $ 28,056 $ 151,961 5 2022 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 212,999 $ 26,977 $ 178,938 6 2023 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 248,499 $ 25,939 $ 204,877 7 2024 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 283,999 $ 24,942 $ 229,819 8 2025 $ 4,962 $ 35,778 $ 30,816 128.462% $ 39,587 $ 143 $ 39,444 $ 3,944 $ 35,500 $ 319,499 $ 23,982 $ 253,801 9 356,281 $ - $ 1,283 $ 354,998 $ 35,500 $ 319,499 $ 253,801 Inflation Rate 0% The Authority intends to retain 100% of the net Captured Tax Capacity This TIF District does not fall within a Fiscal Disparity Area The Authority elects to receive the first increment in Share of Total Annual Tax - If Abatement were used City $ 18,624.92 29% County $ 19,603.23 30% School $ 7,190.77 11% Other $ 542.14 1% State C/I $ 18,661.80 29% $ 64,622.87 N Data is as represented in Stearns County Auditor/Treasurer Databases, Itis NOT Intended for 0 80 160 320 480 640 Division of Land Mana ennent I_ocational Use and Stearns County Feet 9 naives all liability from this product. 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