HomeMy WebLinkAbout20100719 - VII-1 & VIII-B-1Memo
To: Mayor Hicks and City Council
From: John Hinzman, Community Development Director
Date: July 19, 2010
SubjectPublic Hearing:
:Modify Redevelopment Plan\Establish TIF District
No. 5 - Napa
REQUEST
The City Council is asked to hold a public hearing and adopt the attached resolution
modifying the Redevelopment Plan for the Vermillion Street Redevelopment Area, and
to establish Tax Increment Finance (TIF) District No. 5. The district would consist of
0.69 acres owned by Linn Investment Properties, LLC, located at the southeast corner
th
of the 15and Vermillion Streets. The site formerly contained Jiffy Gas Station (1501
Vermillion) and a home (1511 Vermillion). Both structures have been demolished per
the 2008 Demolition Agreement betweenthe HRA and Linn.
The City Council adopted a resolution ordering the public hearing at the May 17, 2010
meeting.
HEDRA REVIEW
The Hastings Economic Development and Redevelopment Authority (HEDRA) reviewed
the request at the July 15, 2010meeting. A summary of HEDRA actions will be
presented at the City Council Meeting.
PLANNING COMMISSION REVIEW
The Planning Commission voted 5-0 to adopt a resolution finding that the proposed
redevelopment plan modifications and TIF District are in conformance with the “general
plans” of the City.
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 1 of 86
TIF –TAX INCREMENT FINANCING
Tax Increment Financing (TIF) allows for the use of increased tax revenue achieved
through improving a propertyto finance improvements. The increment between the
present value of the property and the value of the property with improvements would be
captured for use in project development.
PROPOSED PROJECT
On June 21, 2010, Linn Investment Propertiesreceived Site Plan approval to construct
an 8,500 s.f. Napa auto partsstore within the proposed district. Linn has submitted
preliminary plans and project cost information showing a need for TIF in order to move
forward with construction. Ehlers and Associates has reviewed the preliminary cost
information and concurs that project could not occur, but for TIF.Linn plans to submit
for Site Plan review in near future.
ATTACHMENTS
Resolution – Amend Redevelopment Plan\Establish TIF District.
Planning Commission Resolution
Vermillion Street Redevelopment Area Plan
TIF District Plan
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 2 of 86
CITY OF HASTINGS
DAKOTA AND WASHINGTON COUNTIES
STATE OF MINNESOTA
Council member ______________________ introduced the following resolution and moved its adoption:
RESOLUTION NO. _____________
RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT
PLAN FOR THE VERMILLION STREET REDEVELOPMENT AREA; AND
ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 5 THEREIN
AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR.
BE IT RESOLVED by the City Council (the "Council") of the City of Hastings, Minnesota (the
"City"), as follows:
Section 1. Recitals
1.01. The Board of Commissioners of the Hastings Economic Development and
Redevelopment Authority (the "HEDRA") has heretofore established the Vermillion Street
Redevelopment Area (the "Project Area") and adopted the Redevelopment Plan therefor. It has been
proposed by the HEDRA and the City that the City adopt a Modification to the Redevelopment Plan (the
"Redevelopment Plan Modification") for the Project Area and establish Tax Increment Financing District
No. 5 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the
Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all
pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to
469.047, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1799, all inclusive, as amended, (the
"Act") all as reflected in the Plans, and presented for the Council's consideration.
1.02. The HEDRA and City have investigated the facts relating to the Plans and have caused
the Plans to be prepared.
1.03. The HEDRA and City have performed all actions required by law to be performed prior
to the establishment of the District and the adoption and approval of the proposed Plans, including, but
not limited to, notification of Dakota County and Independent School District No. 200 that have taxing
jurisdiction over the property to be included in the District, a review of and written comment on the Plans
by the City Planning Commission, approval of the Plans by the HEDRA on July 15, 2010, and the
holding of a public hearing upon published notice as required by law.
1.04. Certain written reports (the ''Reports") relating to the Plans and to the activities
contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council
and/or made a part of the City files and proceedings on the Plans. The Reports, including the
environmental and renewal and renovation qualifications reports, and planning documents, include data,
information and/or substantiation constituting or relating to the basis for the other findings and
determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports,
which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set
forth in full herein.
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 3 of 86
1.05 The City is not modifying the boundaries of the Project Area, but is however, modifying
the Redevelopment Plan therefor.
Section 2. Findings for the Adoption and Approval of the Redevelopment Plan Modification.
2.01. The Council approves the Redevelopment Plan Modification, and specifically finds that: (a)
the land within the Project area would not be available for redevelopment without the financial aid to be
sought under this Redevelopment Plan; (b) the Redevelopment Plan, as modified, will afford maximum
opportunity, consistent with the needs of the City as a whole, for the development of the Project by
private enterprise; and (c) that the Redevelopment Plan, as modified, conforms to the general plan for the
development of the City as a whole.
Section 3. Findings for the Establishment of the District
3.01. The Council hereby finds that the District is in the public interest and is a "renewal and
renovation district" under Minnesota Statutes, Section 469.174, Subd. 10a. of the Act.
3.02. The Council further finds that the proposed redevelopment would not occur solely
through private investment within the reasonably foreseeable future and that the increased market value of
the site that could reasonably be expected to occur without the use of tax increment financing would be
less than the increase in the market value estimated to result from the proposed development after
subtracting the present value of the projected tax increments for the maximum duration of the District
permitted by the Tax Increment Financing Plan, that the Plans conform to the general plan for the
development or redevelopment of the City as a whole; and that the Plans will afford maximum
opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment
of the District by private enterprise.
3.03. The Council further finds, declares and determines that the City made the above findings
stated in this Section and has set forth the reasons and supporting facts for each determination in writing,
attached hereto as Exhibit A.
3.04. The City and the HEDRA elect to calculate fiscal disparities for the District in
accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause a, which means the fiscal
disparities contribution would be taken from outside the District.
Section 4. Public Purpose
4.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will
help fulfill a need to develop an area of the City which is already built up, to provide employment
opportunities, to improve the tax base and to improve the general economy of the State and thereby serves
a public purpose. Forthe reasons described in Exhibit A, the City believes these benefits directly derive
from the tax increment assistance provided under the TIF Plan. A private developer will receive only the
assistance needed to make this development financially feasible.As such, any private benefits received
by a developer are incidental and do not outweigh the primary public benefits.
Section 5. Approval and Adoption of the Plans
5.01. The Plans, as presented to the Council on this date, including without limitation the
findings and statements of objectives contained therein, are hereby approved, ratified, established, and
adopted and shall be placed on file in the office of the Community Development Director.
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 4 of 86
5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to
proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council
for its consideration all further plans, resolutions, documents and contracts necessary for this purpose.
5.03 The Auditor of Dakota County is requested to certify the original net tax capacity of the
District, as described in the Plans, and to certify in each year thereafter the amount by which the original
net tax capacity has increased or decreased; and the HEDRA is authorized and directed to forthwith
transmit this request to the County Auditor in such form and content as the Auditor may specify, together
with a list of all properties within the District, for which building permits have been issued duringthe 18
months immediately preceding the adoption of this resolution.
5.04. The Community Development Director is further authorized and directed to file a copy of
the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State
Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a.
Council member _____________________ moved a second to this resolution, and upon being put to a
vote it was unanimously adopted by all Council members present.
Adopted by the Hastings City Council on July 19, 2010, by the following vote:
Ayes:
Nays:
Absent:
ATTEST: ______________________________
Paul J. Hicks, Mayor
_____________________________________
Melanie Mesko Lee, City Clerk
(City Seal)
I HEREBY CERTIFY that the above is a true and correct copy of resolution presented to and adopted by
th
the City of Hastings, County of Dakota, Minnesota, on the 19
day of July, 2010, as disclosed by the
records of the City of Hastings on file and of record in the office.
______________________________
Melanie Mesko Lee, City Clerk
(SEAL)
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 5 of 86
EXHIBIT A
RESOLUTION NO. ___________
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing
Plan (TIF Plan) for Tax Increment Financing District No. 5 (District), as required pursuant to
Minnesota Statutes, Section 469.175, Subdivision 3 are as follows:
1.Finding that the District is a renewal and renovation district as defined in M.S., Section
469.174, Subd. 10a.
The District consists of one parcel, with plans to redevelop the area for commercial
purposes. The HEDRA obtained a "Proposed Renewal and Renovation TIF Eligibility
Assessment" dated June 23, 2008, prepared by SEH. Based on that report, it has been
determined that parcels consisting of 70% of the area of the District are occupied by
buildings, streets, utilities, paved or gravel parking lots, or other similar structures and at
least 20% of the buildings located in the District were structurally substandard and at least
30% of the other buildings require substantial renovation or clearance to remove existing
conditions such as inadequate street lay-out, incompatible uses or land-use relationships,
obsolete buildings not suitable for improvement or conversion, or other identified hazards to
the health, safety, and general well-being of the community. Specifically, the parcel in the
District was previously three separate parcels that have been assembled for redevelopment.
The original parcels contained an abandoned gas station with underground tanks that
required removal, an obsolete gas station building not suitable for renovation and containing
asbestos, an old house containing asbestos that was the only residential structure on the
commercial block, and a portion of the adjacent bank property that was underutilized. The
structures have been demolished and the underground tanks have been removed under a
development agreement between the HEDRA and the property owner and HEDRA
Resolution 7-2008, and in accordance with M.S., Section 469.174, Subd. 10(d) that provides
that a parcel of property on which a structurally substandard building or other buildings and
improvement have been demolished by a tax increment authority or by a developer under a
development agreement with the authority may still be treated as occupied by such building
or improvements for purposes of creating a renewal and renovation tax increment financing
district if prior to the demolition the authority finds by resolution that the parcel was
occupied by a structurally substandard building or other buildings and improvements and
that the authority intends to include the parcel in a tax increment district. (See Appendix F of
the TIF Plan.)
The District is in the public interest because it will it redevelop substandard areas where
extensive soil corrections, tank removal and asbestos abatement have been needed, provide
an impetus for commercial development, and preserve and enhance the tax base of the state.
2.Finding that the proposed development, in the opinion of the City Council, would not
reasonably be expected to occur solely through private investment within the reasonably
foreseeable future and that the increased market value of the site that could reasonably be
expected to occur without the use of tax increment financing would be less than the increase
in the market value estimated to result from the proposed development after subtracting the
present value of the projected tax increments for the maximum duration of the District
permitted by the TIF Plan.
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 6 of 86
The proposed development, in the opinion of the City, would not reasonably be expected to
occur solely through private investment within the reasonably foreseeable future: This
finding is supported by the fact that the redevelopment proposed in the TIF Planmeets the
City's objectives for redevelopment. The site is located within the Vermillion Street
Redevelopment area - a key commercial corridor in the City. The old gas station was
constructed in 1971 and has been closed and vacant for over 10 years without any
redevelopment occurring. The gas station site by itself was not large enough to support new
retail until the current developer, Linn Properties, acquired the old house and underutilized
bank property to the south to assemble a parcel big enough toprovide retail, off-street
parking, and improved site access through the alley. Due to the high cost of assembling the
land, removing the existing structures and improvements, and replacing four feet of
unbuildable soils and improving vehicle access, this project is feasible only through
assistance, in part, from tax increment financing. The developer was asked for and provided
a letter and a proforma as justification that the developer would not have gone forward
without tax increment assistance. (See attachment in Appendix G of the TIF Plan.)
The increased market value of the site that could reasonably be expected to occur without
the use of tax increment financing would be less than the increase in market value estimated
to result from the proposed development after subtracting the present value of the projected
tax increments for the maximum duration of the District permitted by the TIF Plan: This
finding is justified on the grounds that the cost of land assembly, demolition, and site
improvements add to the total redevelopment cost. Without tax increment financing
assistance, the current owner could not afford to assemble the site from the three parcels.
Redevelopment of the vacant gas station alone is not viable, and the site is too small to
attract a retail or commercial tenant that can pay a high enough rent to support new
construction and redevelopment costs. Redevelopment of the vacant gas station was not
financially feasible, as evidenced by the decade it remained vacant without a buyer. TheCity
reasonably determines that no other redevelopment of similar scope is anticipated on this
site without substantially similar assistance being provided to the development.
Therefore, the City concludes as follows:
a.The City's estimate of the amount by which the market value of the entire District will
increase without the use of tax increment financing is $0.
b.If the proposed development occurs, the total increase in market value will be $1,048,000
(see Appendix D and G of the TIF Plan)
c.The present value of tax increments from the District for the maximum duration of the
district permitted by the TIF Plan is estimated to be $246,457 (see Appendix D and
G of the TIF Plan).
d.Even if some development other than the proposed development wereto occur, the
Council finds that no alternative would occur that would produce a market value
increase greater than $801,543 (the amount in clause b less the amount in clause c)
without tax increment assistance.
3.Finding that the TIF Plan for the District conforms to the general plan for the development
or redevelopment of the municipality as a whole.
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 7 of 86
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to
the general development plan of the City.
4.Finding that the TIF Plan for the District will afford maximum opportunity, consistent with
the sound needs of the City as a whole, for the development or redevelopment of the Project
Area by private enterprise.
The project to be assisted by the District will result in preservation and enhancement of the
tax base, and an impetus for commercial by the renovation of substandard properties along
Vermillion Street.
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 8 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 9 of 86
As of July 13, 2010
Draft for City Council Review/Public Hearing
Redevelopment Plan
for the
Vermillion Street Redevelopment Area
Hastings Economic Development and Redevelopment Authority
City of Hastings
Dakota and Washington Counties
State of Minnesota
Establishment Public Hearing:October 6, 2008
Adopted:October 6, 2008
Modification Public Hearing:July 19, 2010
Modification Adopted:
Prepared by: EHLERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
(651) 697-8500 fax: (651) 697-8555 www.ehlers-inc.com
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 10 of 86
TABLE OF CONTENTS
(for reference purposes only)
Municipal Action Taken.......................................................i
Section 1 - Redevelopment Plan for the
Vermillion Street Redevelopment Area....................................1-1
Subsection 1-1.Definitions..............................................1-1
Subsection 1-2.Statutory Authority........................................1-2
Subsection 1-3.Statement of and Finding of Public Purpose....................1-2
Subsection 1-4.Statement of Objectives...................................1-3
Subsection 1-5.Statement of ............................................1-4
Subsection 1-6.Funding of Developments and Redevelopments................1-5
Subsection 1-7.Environmental Controls....................................1-5
Subsection 1-8.Proposed Reuse of Property................................1-5
Subsection 1-9.Open Space to Be Created.................................1-5
Subsection 1-10.Administration and Maintenance of the Vermillion Street
Redevelopment Area.....................................1-6
Subsection 1-11.Rehabilitation...........................................1-6
Subsection 1-12.Relocation..............................................1-6
Subsection 1-13.Property Acquisition......................................1-6
Subsection 1-14.Modification of the Redevelopment Plan and/or Vermillion
Street Redevelopment Area................................1-6
Subsection 1-15.Description of Boundaries of the Vermillion Street
Redevelopment Area.....................................1-7
APPENDIX A
BOUNDARY MAPS OF THE VERMILLION STREET REDEVELOPMENT AREA.....A-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 11 of 86
Municipal Action Taken
(This Municipal Action is only for convenience of reference.)
Based upon the statutory authority described in the Redevelopment Plan attached hereto, the public purpose
findings by the City Council and for the purpose of fulfilling the City's development objectives as set forth
in the Redevelopment Plan, the City Council has created, established and designated the Vermillion Street
Redevelopment Area pursuant to and in accordance with the requirements of the Enabling Act and the TIF
Act as defined in the definitions of this document.
The following municipal action was taken in connection therewith:
Vermillion Street Redevelopment Area:
January 22, 2008: The Vermillion Street Corridor Development Guidelines were adopted by City of Hastings.
September 11, 2008: The Redevelopment Plan for the Vermillion Street Redevelopment Area was adopted
by the Housing and Redevelopment Authority in and for the City of Hastings.
September 22, 2008: The Redevelopment Plan for the Vermillion Street Redevelopment Area was reviewed
by the Hastings Planning Commission.
October 6, 2008: The Redevelopment Plan for the Vermillion Street Redevelopment Area was adopted by
the City of Hastings.
January 1, 2009: The Hastings Economic Development and Redevelopment Authority (HEDRA)
replaced the Housing and Redevelopment Authority and the Economic Development Commission. The
HEDRA operates with the powers of both a Housing and Redevelopment Authority and an Economic
Development Authority.
July 12, 2010: The modified Redevelopment Plan for the Vermillion Street Redevelopment Area was
reviewed by the Planning Commission.
July 15, 2010: The modified Redevelopment Plan for the Vermillion Street Redevelopment Area was
adopted by the HEDRA. The HEDRA approved the Tax Increment Financing Plan for TIF District
No. 5, a renewal and renovation district located within the Vermillion Street Redevelopment Area and
established to facilitate the redevelopment of an abandoned gas station on the corner of Vermillion
th
Street and East 15 Street.
The modified Redevelopment Plan for the Vermillion Street Redevelopment Area was
July 19, 2010:
adopted by the City. The City Council approved the Tax Increment Financing Plan for TIF District
No. 5, a renewal and renovation district located within the Vermillion Street Redevelopment Area and
established to facilitate the redevelopment of an abandoned gas station on the corner of Vermillion
th
Street.
Street and East 15
i
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 12 of 86
Section 1 - Redevelopment Plan for the
Vermillion Street Redevelopment Area
Subsection 1-1.Definitions
The terms defined below shall, for purposes of this Redevelopment Plan, have the meanings herein specified,
unless the context otherwise specifically requires.
"City" means the City of Hastings.
"City Council" means the City Council of the City of Hastings.
"County" means the County of Dakota County, Minnesota.
"Enabling Act" means Minnesota Statues, 469.001 to 469.047, as amended and supplemented from time
to time.
"HEDRA" means the Hastings Economic Development and Redevelopment Authority of the City
of Hastings.
"EDA Act" means Minnesota Statutes, Section 469.090 through 469.1082.
"Land Use Regulations" means all federal, state and local laws, rules, regulations, ordinances, and plans
relating to or governing the use of development of land in the City, including but not limited to
environmental, zoning and building code laws and regulations.
"Municipal Development District Act" means Minnesota Statutes, 469.124 to 469.134, inclusive, as
amended.
"Project Area" means the real property within the City constituting the Redevelopment Project.
"Public Costs" means the costs of the Redevelopment Project funded under the TIF Act, EDA Act,
Enabling Act or the Municipal Development District Act.
"Public Improvements" means the public improvements described in the Redevelopment Plan and any
future Tax Increment Financing Plan.
"Redevelopment Plan" means this Redevelopment Plan for the Vermillion Street Redevelopment Area,
as initially proposed, and as it shall be modified.
"Redevelopment Project" means the Vermillion Street Redevelopment Area,
"State" means the State of Minnesota.
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment Area1-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 13 of 86
"Tax Increment Bonds" means any tax increment bonds or notes issued by the City to finance the Public
Costs as stated in the Redevelopment Plan for the Vermillion Street Redevelopment Area and in the Tax
Increment Financing Plans, and any obligations issued to refund such bonds.
"TIF Act" means Minnesota Statutes, Sections 479.174 through 479.179, inclusive, as amended.
"Tax Increment Financing District" means any tax increment financing district to be established in the
future in the Vermillion Street Redevelopment Area.
"Tax Increment Financing Plan" or "Plan" means the plans adopted by the HEDRA or City for any Tax
Increment Financing District.
"Vermillion Street Development Guidelines" means the report and recommendations adopted by the City
in January, 2008 to assist with economic development, land use, and transportation decisions along
Vermillion Street in the Redevelopment Area.
Subsection 1-2.Statutory Authority
The Enabling Act authorizes the HEDRA, upon certain public purpose findings by the HEDRA and City,
to establish and designate redevelopment projects within the City and to establish, develop and the administer
redevelopment plans therefor to meet the needs and accomplish the public purposes specified in Statement
of and Finding of Public Purpose. In accordance with the purposes set forth in the Enabling Act, the HEDRA
and City have established the Redevelopment Project comprising the parcels described on the attached
Exhibit A and have adopted this Redevelopment Plan therefor.
The Enabling Act and the approval of this Redevelopment Plan by the City of Hastings authorizes the
HEDRA to undertake redevelopment activities within the Project Area and, at a date subsequent to the
adoption of this Redevelopment Plan and with future City Council approval, to establish and designate tax
increment financing districts within the Project Area and to adopt and implement tax increment financing
plans to accomplish the objective of this Redevelopment Plan.
Subsection 1-3.Statement of and Finding of Public Purpose
The HEDRA has determined that there is a need to take certain actions designed to encourage, ensure and
facilitate development and redevelopment of underutilized and unused land located within the corporate limits
of the City. These actions will provide additional employment opportunities for residents of the City and the
surrounding area, and improve the tax base, thereby enabling better utilization of existing public facilities and
provide needed public services, and improve the general economy of the City, the County, and the State.
Specifically, the HEDRA has determined that the property within the Project Area is either underutilized or
unused due to a variety of factors, including inadequate public parking to serve the property, small parcels,
non-conforming uses, vacant or underutilized property, possible environmental conditions, obsolete building
design and site layout, poor access and parking, and lack of streetscaping and visual appeal that is needed to
make this a viable business district. These factors have resulted in a lack of private investment. As a result,
the property is not providing adequate employment opportunities, and is not contributing, to its full potential,
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment Area1-2
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 14 of 86
to the tax base and general economy of the City, the School District, the County and the State. Therefore,
it is necessary for the City to exercise its authority under the Enabling Act to develop and implement a
program designed to encourage, ensure and facilitate the commercial and mixed use development and
redevelopment of the property located in the Project Area, to further and accomplish the public purposes
specified in this paragraph.
The land in the Project Area would not be developed or redeveloped solely through private investment in the
foreseeable future.
The welfare of the City, County and the State of Minnesota requires active promotion, attraction,
encouragement and development of economically sound commerce by the HEDRA.
Subsection 1-4.Statement of Objectives
The establishment of the Project Area in the City pursuant to the Enabling Act is necessary and in the best
interests of the City and its residents and is necessary to give the HEDRA the ability to meet certain public
purpose objectives that would not be obtainable in the foreseeable future without intervention by the City in
the normal development process.
The HEDRA intends, to the extent permitted by law, to accomplish the following objectives through the
implementation of the Redevelopment Plan:
1.Promoting and securing the development and redevelopment of property in the Project Area in a manner
consistent with the City's planning, the Vermillion Street Development Guidelines, and with a minimal
adverse impact on the environment, which property is less productive because of the lack of proper
utilization and lack of investment, and thereby promoting and securing the development of other land in
the City;
2.Promoting and securing additional employment opportunities within the Project Area and the City for
residents of the City and the surrounding area, thereby improving living standards and preventing
unemployment and the loss of skilled and unskilled labor and other human resources in the City;
3.Securing the increase in value of property subject to taxation by the City, School District, County and
any other taxing jurisdictions in order to better enable such entities to pay for public improvements and
governmental services and programs required to be provided by them;
4.Securing the construction and providing moneys for the payment of the cost of public improvements in
the Project Area, which are necessary for the completion of the Redevelopment Project and the orderly
and beneficial development of the Project Area.
5.Promoting a compatible mix of commercial, institutional, and residential land uses.
6.Encouraging the expansion and improvement of local business, and enhancing the economic vitality of
existing and new businesses.
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment Area1-3
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 15 of 86
7. Eliminating blighting influences that impede development in the area.
8.The provision of adequate streets, utilities, and other public improvements and facilities to enhance the
area for both new and existing development.
9.Creating a desirable and unique character within the Project Area through quality land use alternatives
and design quality in new buildings that create a safe environment for pedestrians, can be maintained
for
the long run, and celebrates the historic role of Vermillion Street as the main artery within the City of
Hastings.
10.Supporting the physical connection to local trails, open space, and other community institutions.
11.Enhancing the integrity of residential neighborhoods adjacent to the Project Area. Providing and securing
the development of increased opportunities for families to reside in quality owner-occupied housing , for
senior citizens to choose from housing options which offer a wide array of services without regard to
income, and for residents looking for a wide range of multi-family units.
12.Enhancing the long term viability of the Project Area by facilitating:
/DQGXVHVWKDWFRPSOHPHQWDQGVXSSRUWH[LVWLQJEXVLQHVVHV
1HZEXVLQHVVHVWKDWHQKDQFHWKHFRPPHUFLDOPDUNHW
9LVXDOTXDOLW\RIWKHVWUHHWVFDSHODQGVFDSHVLWH plan and building types of new developments;
0L[HGXVHKRXVLQJGHYHORSPHQWZKHUHDSSURSULDWH DQG
6DIHDFFHVVDQGFRQYHQLHQWSDUNLQJ
Subsection 1-5.Statement of Redevelopment Project Activities
The HEDRA will perform or cause to be performed, to the extent permitted by law, all project activities
pursuant to the Enabling Act, the Tax Increment Financing Act and other applicable state laws, and in doing
so anticipates that the following may, but are not required, to be undertaking by the HEDRA:
(a)The making of studies, planning, and other formal and informal activities relating to the
Redevelopment Plan.
(b)The implementation and administration of the Redevelopment Plan.
(c)The re-zoning of land within the City.
(d)The acquisition of property, or interests in property, when acquisition is consistent with the
objectives of the Redevelopment Plan.
(e)The assembly of redevelopment sites of such size and character to assure development and
redevelopment that meets the objectives of this Redevelopment Plan.
(f)The preparation of property for use and development in accordance with applicable Land Use
Regulations and any development agreements, including demolition of structures, clearance of
sites, placement of fill and grading.
(g)The resale or lease of property to private parties.
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment Area1-4
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 16 of 86
(h)The construction, reconstruction ,or rehabilitation of facilities to own and lease as described in the
Tax Increment Financing Plans.
(i)The installation, construction, or reconstruction of streets, utilities, sidewalks, lighting, retaining
walls, or other site improvements.
(j)The implementation of a rehabilitation loan or grant program for properties within the Project Area.
Subsection 1-6.Funding of Developments and Redevelopments
It is anticipated that the Public Costs of the Redevelopment Plan will be paid from available sources of
revenue, including but not limited to:
VSHFLDODVVHVVPHQWVDQGXVHUFKDUJHV
SURSHUW\WD[OHY\FROOHFWHGE\WKHHEDRA
ODQGVDOHSURFHHGV
OHDVHRUUHQWDOUHYHQXHV
JUDQWDQGORDQSURFHHGV
WD[LQFUHPHQWRUSURFHHGVIURPWD[LQFUHPHQWERQGV
FRQWULEXWLRQVIURPWKH&LW\
RWKHUIXQGLQJVRXUFHVGHVLJQDWHGE\WKH&LW\RUHEDRA
which the HEDRA may apply to pay a portion of the Public Costs.
Subsection 1-7.Environmental Controls
All municipal actions, public improvements and private development shall be carried out in a manner
consistent with existing environmental controls and all applicable Land Use regulations.
Subsection 1-8.Proposed Reuse of Property
The Redevelopment Plan contemplates that the HEDRA or City may acquire property and reconvey the same
to another entity. Prior to formal consideration of the acquisition of any property, the HEDRA or City will
require the execution of a binding development agreement with respect thereto and evidence that funds will
be available to repay the Public Costs associated with the proposed acquisition. It is the intent of the HEDRA
and City to negotiate the acquisition of property whenever possible. Appropriate restrictions regarding the
reuse and redevelopment of property shall be incorporated into any development agreement to which the
HEDRA is a party.
Subsection 1-9.Open Space to Be Created
Any open space within the Redevelopment Project will be created in accordance with the zoning and planning
ordinances of the City and the Vermillion Street Development Guidelines.
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment Area1-5
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 17 of 86
Subsection 1-10.Administration and Maintenance of the Vermillion Street Redevelopment
Area
Maintenance and operation of the Redevelopment Project will be the responsibility of the HEDRA Director.
Each year, the administrator of the Redevelopment Project will submit to the HEDRA Board of
Commissioners the maintenance and operation budget for the following year.
The administrator of the Redevelopment Project will administer the Redevelopment Project pursuant to the
provision of the Enabling Act; provided, however, that such powers may only be exercised at the direction
of the HEDRA. No action taken by the administrator of the Redevelopment Project pursuant to the above-
mentioned powers shall be effective without authorization by the HEDRA.
Subsection 1-11.Rehabilitation
Owners of properties within the Project Area may be encouraged to rehabilitate their properties to conform
with the applicable state and local codes and ordinances, as well as any design standards. Persons who
purchase property within the Project Area from the HEDRA or City may be required to rehabilitate their
properties as a condition of sale of land. The HEDRA or City may provide such rehabilitation assistance as
may be available from federal, state or local sources.
Subsection 1-12.Relocation
Any person or business that is displaced as a result of the Redevelopment Plan will be relocated in accordance
with Minnesota Statutes, Section 117.50 to 117.56. The HEDRA accepts its responsibility for providing for
relocation assistance pursuant to the Enabling Act.
Subsection 1-13.Property Acquisition
The HEDRA or City intends to acquire such property, or appropriate interest therein, within the Project Area
as the Authority may deem to be necessary or desirable to assist in the implementation of the Redevelopment
Plan.
Subsection 1-14.Modification of the Redevelopment Plan and/or Vermillion Street
Redevelopment Area
The HEDRA reserves the right to alter and amend the Redevelopment Plan, subject to the provisions of state
law regulating such action. The HEDRA specifically reserves the right to enlarge or reduce the size of the
Project Area.
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment Area1-6
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 18 of 86
Subsection 1-15.Description of Boundaries of the Vermillion Street Redevelopment Area
The Redevelopment Project shall include the following parcels
193215004080197730008005194470017007192775001202191630002001
193215001080197730021204195845001001190380001020198170001004
193215006079197730009005190370001105190380001021198170012201
193215008080197730010205194470019007190370001008198170003004
193215004088197730019104194470020007190370001009198170019004
193215006088197730010105194470021007190370001510198170018004
193215006188197730011005190370008105190370001510198170014001
193215003089197730012005194470022007190340001050198170017104
193215004089197730013005194470023007198170001101198170004004
193215006089197730016004190370008205197755001004198170005004
193215005089197730014005194470024007197755001104190340001055
193215006198197730010007194470002018197755001005191955101001
191320003006197730005106194470002218197755003005191955102001
191320014006197730009007194470002318198170002101198170025105
191320005106197730008007194470003018198170001001191955103001
191320007006197730005107194470004018198170003002198170023001
191320010006197730005007194470007118198170005302198170004005
191320006206197730007107194470008018197755006004198170005005
191320009106197730007007194470010018198170004001198170002006
193215006079194470002306194470011018198170002001198170030006
191320007006194470002406194470012018197755005004198170010106
191320009106194470016106194470015018198170002103197730004005
197730002004194470003107194470016018198170006001197730026004
197730028004194470012206194470001018198170013003197730003004
197730003005194470005207190370001407198170003003193215002189
197730027004194470008207190380008101191630001001193215002089
197730026104194470010207190380013101198170008101193215007089
197730025204194470013007190380001007198170005003
197730025004190380001007198815001002191630004001
197730006005198815004001198815004002198170009001
197730022004194470015107192775001101191630003001
197730007005194470016007192775001001198170012101
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment Area1-7
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 19 of 86
APPENDIX A
BOUNDARY MAPS OF THE VERMILLION STREET REDEVELOPMENT AREA
City of Hastings Redevelopment Plan for the Vermillion Street Redevelopment AreaA-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 20 of 86
As of July 6, 2010
Draft for City Council Review/Public Hearing
Tax Increment Financing Plan
for the establishment of
Tax Increment Financing District No. 5
(a renewal and renovation district located within Dakota County)
within the
Vermillion Street Redevelopment Area
Hastings Economic Development and Redevelopment Authority
City of Hastings
Dakota and Washington Counties
State of Minnesota
Public Hearing: July 19, 2010
Adopted:
Prepared by: EHLERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 21 of 86
Table of Contents
(for reference purposes only)
Section 1 - Tax Increment Financing Plan
for Tax Increment Financing District No. 5....................................1-1
Subsection 1-1.Foreword...............................................1-1
Subsection 1-2.Statutory Authority........................................1-1
Subsection 1-3.Statement of Objectives...................................1-1
Subsection 1-4.Redevelopment Plan Overview..............................1-1
Subsection 1-5.Description of Property in the District and Property To Be Acquired .1-2
Subsection 1-6.Classification of the District.................................1-2
Subsection 1-7.Duration and First Year of Tax Increment of the District...........1-3
Subsection 1-8.Original Tax Capacity, Tax Rate and Estimated Captured Net
Tax Capacity Value/Increment and Notification of Prior
Planned Improvements....................................1-3
Subsection 1-9.Sources of Revenue/Bonds to be Issued......................1-4
Subsection 1-10.Uses of Funds...........................................1-5
Subsection 1-11.Fiscal Disparities Election..................................1-6
Subsection 1-12.Business Subsidies.......................................1-6
Subsection 1-13.County Road Costs.......................................1-7
Subsection 1-14.Estimated Impact on Other Taxing Jurisdictions.................1-8
Subsection 1-15.Supporting Documentation.................................1-9
Subsection 1-16.Definition of Tax Increment Revenues.......................1-10
Subsection 1-17.Modifications to the District................................1-10
Subsection 1-18.Administrative Expenses..................................1-11
Subsection 1-19.Limitation of Increment...................................1-11
Subsection 1-20.Use of Tax Increment....................................1-12
Subsection 1-21.Excess Increments......................................1-13
Subsection 1-22.Requirements for Agreements with the Developer..............1-13
Subsection 1-23.Assessment Agreements.................................1-13
Subsection 1-24.Administration of the District...............................1-14
Subsection 1-25.Annual Disclosure Requirements...........................1-14
Subsection 1-26.Reasonable Expectations.................................1-14
Subsection 1-27.Other Limitations on the Use of Tax Increment.................1-14
Subsection 1-28.Summary..............................................1-15
Appendix A
Project Description......................................................A-1
Appendix B
Map of the Vermillion Street Redevelopment Area and the District.................B-1
Appendix C
Description of Property to be Included in the District............................C-1
Appendix D
Estimated Cash Flow for the District........................................D-1
Appendix E
Minnesota Business Assistance Form.......................................E-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 22 of 86
Appendix F
Redevelopment Qualifications for the District..................................F-1
Appendix G
Findings Including But/For Qualifications.....................................G-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 23 of 86
Section 1 - Tax Increment Financing Plan
for Tax Increment Financing District No. 5
Subsection 1-1.Foreword
The Hastings Economic Development and Redevelopment Authority (the "HEDRA"), the City of Hastings
(the "City"), staff and consultants have prepared the following information to expedite the establishment of
Tax Increment Financing District No. 5 (the "District"), a renewal and renovation tax increment financing
district, located in the Vermillion Street Redevelopment Area.
Subsection 1-2.Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the HEDRA and City have certain statutory powers pursuant to
Minnesota Statutes ("M.S."), Sections 469.001 to 469.047 and Sections 469.090 to 469.1082, inclusive, as
amended, and M.S., Sections 469.174 to 469.1799, inclusive, as amended (the "Tax Increment Financing Act"
or "TIF Act"), to assist in financing public costs related to this project.
Section 1 contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant
information is contained in the Modification to the Redevelopment Plan for the Vermillion Street
Redevelopment Area.
Subsection 1-3.Statement of Objectives
The District currently consists of one parcel of land and adjacent and internal rights-of-way. (Three parcels
were recently replatted into a single parcel and assigned a new property identification number, which is listed
in Appendix C.) The District is being created to facilitate the redevelopment of an old gas station and two
adjacent properties in the City. Please see Appendix A for further District information. The HEDRA has not
entered into an agreement, but it has designated the Linn Investment Properties as the developer at the time
of preparation of this TIF Plan. Construction is likely to begin in August, 2010. This TIF Plan is expected
to achieve many of the objectives outlined in the Redevelopment Plan for the Vermillion Street
Redevelopment Area.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude
the undertaking of other qualified development or redevelopment activities. These activities are anticipated
to occur over the life of the Vermillion Street Redevelopment Area and the District.
Subsection 1-4.Redevelopment Plan Overview
1.Property to be Acquired - Selected property located within the District may be acquired by
the HEDRA or City and is further described in this TIF Plan.
2.Relocation - Relocation services, to the extent required by law, are available pursuant to
M.S., Chapter 117 and other relevant state and federal laws.
3.Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the HEDRA or City may sell to a developer selected properties that it
may acquire within the District or may lease land or facilities to a developer.
4.The HEDRA or City may perform or provide for some or all necessary acquisition,
construction, relocation, demolition, and required utilities and public street work within the
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 24 of 86
District.
Subsection 1-5.Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcel listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information
on the location of the District.
The HEDRA or City may acquire any parcel within the District including interior and adjacent street rights
of way. Any properties identified for acquisition will be acquired by the HEDRA or City only in order to
accomplish one or more of the following: storm sewer improvements; provide land for needed public streets,
utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to
accomplish the uses and objectives set forth in this plan. The HEDRA or City may acquire property by gift,
dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF
Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition
and related costs.
Subsection 1-6.Classification of the District
The City, in determining the need to create a tax increment financing district in accordance with M.S.,
Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a renewal and
renovation district pursuant to M.S., Section 469.174, Subd. 10a. as defined below:
(a)"Renewal and renovation district" means a type of tax increment financing district consisting of a
project, or portions of a project, within which the City finds by resolution that:
(1)(i) parcels consisting of 70 percent of the area of the district are occupied by buildings,
streets, utilities, paved or gravel parking lots, or other similar structures;
(ii) 20 percent of the buildings are structurally substandard; and
(iii) 30 percent of the other buildings require substantial renovation or clearance to
remove existing conditions such as: inadequate street layout, incompatible uses or
land use relationships, overcrowding of buildings on the land, excessive dwelling unit
density, obsolete buildings not suitable for improvement or conversion, or other
identified hazards to the health, safety, and general well-being of the community; and
(2)the conditions described in clause (1) are reasonable distributed throughout the geographic
area of the district.
(b)For purposes of determining whether a building is structurally substandard, whether parcels are
occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures,
or whether noncontiguous areas qualify, the provisions of subdivision 10, paragraphs (b)
through (f) apply.
In meeting the statutory criteria the City relies on the following facts and findings:
7KH'LVWULFWLVDUHQHZDODQGUHQRYDWLon district consisting of one parcel.
$QLQYHQWRU\VKRZVWKDWSDUFHOVFRQVLVWLQJRIPRUHWKDQSHUFHQWRIWKHDUHDLQWKH'LVWULFWDUH
occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures.
$QLQVSHFWLRQRIWKHEXLOGLQJVORFDWHGZLWKLQWKH'LVWrict finds that more than 20 percent of the buildings
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-2
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 25 of 86
are structurally substandard as defined in the TIF Act. (See Appendix F).
$QLQVSHFWLRQRIWKHEXLOGLQJVORFDWHGZLWKLQWKH'LVWrict finds that more than 30 percent of the buildings
require substantial renovation or clearance to remove existing conditions such as defined in the TIF Act.
(See Appendix F).
Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that
qualified under the provisions of M.S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in
any of the five calendar years before the filing of the request for certification of the District.
Subsection 1-7.Duration and First Year of Tax Increment of the District
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first year of tax
increment of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b.,
the duration of the District will be 15 years after receipt of the first increment by the HEDRA or City (a total
of 16 years of tax increment). The HEDRA or City elects to receive the first tax increment in 2013, which
is no later than four years following the year of approval of the District. Thus, it is estimated that the District,
including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after
2028, or when the TIF Plan is satisfied. The HEDRA or City reserves the right to decertify the District prior
to the legally required date.
Subsection 1-8.Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements
Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity
(ONTC) as certified for the District will be based on the market values placed on the property by the assessor
in 2010 for taxes payable 2011.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2013) the amount by which the original value has increased or decreased as a result of:
1.Change in tax exempt status of property;
2.Reduction or enlargement of the geographic boundaries of the district;
3.Change due to adjustments, negotiated or court-ordered abatements;
4.Change in the use of the property and classification;
5.Change in state law governing class rates; or
6.Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no
value will be captured and no tax increment will be payable to the HEDRA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2011, assuming the
request for certification is made before June 30, 2011. The ONTC and the Original Local Tax Rate for the
District appear in the table on the following page.
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within the Vermillion Street Redevelopment Area, upon
completion of the projects within the District, will annually approximate tax increment revenues as shown
in the table on the following page. The HEDRA and City request 100 percent of the available increase in tax
capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2013.
The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are
completed.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-3
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 26 of 86
Project Estimated Tax Capacity upon Completion (PTC)$31,266
Original Estimated Net Tax Capacity (ONTC)$4,048
Estimated Captured Tax Capacity (CTC)$27,218
Pay 2010
Original Local Tax Rate1.05483
Estimated Annual Tax Increment (CTC x Local Tax Rate)$28,710
Percent Retained by the HEDRA100%
Tax capacity includes a 1.50% inflation factor for the duration of the District. The tax capacity included in
this chart is the estimated tax capacity of the District in year 15. The tax capacity of the District in year one
is estimated to be $25,008.
Pursuant to M.S., Section 469.177, Subd. 4, the HEDRA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval of the
TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City has reviewed the area to be included in the District and determined that no building permits
have been issued during the 18 months immediately preceding approval of the TIF Plan by the City.
Subsection 1-9.Sources of Revenue/Bonds to be Issued
The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax
increments. The HEDRA or City reserves the right to incur bonds or other indebtedness as a result of the TIF
Plan. As presently proposed, the projects within the District will be financed by a pay-as-you-go note.
Additional indebtedness may be required to finance other authorized activities. The total principal amount
of notes to be issued, or other indebtedness related to the use of tax increment financing, will not exceed
$245,569 without a modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated
that up to $40,327 in interfund loans will be financed with tax increment revenues. It is estimated that up to
$205,242 in loan proceeds will be financed with tax increment revenues. Any refunding amounts will be
deemed a budgeted cost without a formal TIF Plan Modification.
This provision does not obligate the HEDRA or City to incur debt. The HEDRA or City will issue bonds or
incur other debt only upon the determination that such action is in the best interest of the City. The HEDRA
or City may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds
of the HEDRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for
by a developer.
The total estimated tax increment revenues for the District are expected to be approximately $403,265, as
shown in the table below:
TOTAL
SOURCES OF FUNDS
Tax Increment$403,265
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-4
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 27 of 86
The HEDRA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax
increments from the District in a maximum principal amount of up to $245,569. Such bonds may be in the
form of pay-as-you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This
estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date
of approval.
Subsection 1-10.Uses of Funds
Currently under consideration for the District is a proposal to facilitate the redevelopment of an old gas station
and adjacent properties. The HEDRA and City have determined that it will be necessary to provide assistance
to the project(s) for certain District costs, as described. The HEDRA has studied the feasibility of the
development or redevelopment of property in and around the District. To facilitate the establishment and
development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to
pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with
the District is outlined in the following table.
TOTAL
USES OF TAX INCREMENT FUNDS
Land/Building Acquisition$100,242
Site Improvements/Preparation$70,000
Public Utilities$15,000
Public Parking Facilities$0
Streets and Sidewalks$20,000
$40,327
Administrative Costs (up to 10%)
PROJECT COST TOTAL$245,569
Interest$157,696
PROJECT AND INTEREST COSTS TOTAL$403,265
For purposes of OSA reporting forms, uses of funds include interfund loans, bond principal, TIF Note
principal, and transfers, all in the principal amount of $245,569. These amounts are not cumulative, but
represent the various forms of "bonds" included within the concept of bonded indebtedness under the TIF Act.
The total project cost, including financing costs (interest) listed in the table above does not exceed the total
projected tax increments for the District as shown in Appendix D.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant
to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the
District will be spent on activities related to development or redevelopment outside of the District but within
the boundaries of the Vermillion Street Redevelopment Area, (including administrative costs, which are
considered to be spent outside of the District) subject to the limitations as described in this TIF Plan.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-5
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 28 of 86
Subsection 1-11.Fiscal Disparities Election
Pursuant to M.S., Section 469.177, Subd. 3, the HEDRA or City may elect one of two methods to calculate
fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause a, (outside the
District) are followed, the following method of computation shall apply:
(1)The original net tax capacity and the current net tax capacity shall be determined before the
application of the fiscal disparity provisions of Chapter 276A or 473F. Where the original net
tax capacity is equal to or greater than the current net tax capacity, there is no captured net tax
capacity and no tax increment determination. Where the original net tax capacity is less than
the current net tax capacity, the difference between the original net tax capacity and the current
net tax capacity is the captured net tax capacity. This amount less any portion thereof which the
authority has designated, in its tax increment financing plan, to share with the local taxing
districts is the retained captured net tax capacity of the authority.
(2)The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the lesser of (A) the local taxing district tax rates or (B) the original local tax
rate to the retained captured net tax capacity of the authority is the tax increment of the
authority.
The City and HEDRA choose to calculate fiscal disparities by clause a.
According to M.S., Section 469.177, Subd. 3:
(c)The method of computation of tax increment applied to a district pursuant to paragraph (a) or
(b) shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Subsection 1-12.Business Subsidies
Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy of less than $150,000;
(2)Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
(3) Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3;
(5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that
the assistance is equal to or less than 50% of the total cost;
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-6
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 29 of 86
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers' compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
(16) Assistance for a tax increment financing soils condition district as defined under M.S., Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes of a principally
technical nature.
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of $150,000 or less; and
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration.
The HEDRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
Subsection 1-13.County Road Costs
Pursuant to M.S., Section 469.175, Subd. 1a, the county board may require the HEDRA or City to pay for all
or part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgment of the county, substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the HEDRA or City within
forty-five days of receipt of this TIF Plan. In the opinion of the HEDRA and City and consultants, the
proposed development outlined in this TIF Plan will have little or no impact upon county roads, however the
TIF Plan was not forwarded to the county 45 days prior to the public hearing. The HEDRA and City are
aware that the county could claim that tax increment should be used for county roads, even after the public
hearing.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-7
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 30 of 86
Subsection 1-14.Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation of the District. However, the HEDRA or City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows if the "but for" test was not met:
IMPACT ON TAX BASE
2009/Pay 2010Estimated Captured
Total NetTax Capacity (CTC)Percent of CTC
Tax CapacityUpon Completionto Entity Total
Dakota County 410,126,74527,218
0.0066%
City of Hastings18,005,39127,218
0.1512%
Hastings ISD No. 20028,050,33227,218
0.0970%
IMPACT ON TAX RATES
PercentPotential
Pay 2010
Extension Ratesof TotalCTCTaxes
Dakota County 0.27269025.85%27,218
7,422
City of Hastings0.52677049.94%27,218
14,338
Hastings ISD No. 2000.20206019.16%27,218
5,500
Other0.0533105.05%27,218
1,451
1.054830100.00%
Total28,710
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual Pay 2010 rate. The total net capacity for the entities listed above are based
on actual Pay 2010 figures. The District will be certified under the actual Pay 2011 rates, which were
unavailable at the time this TIF Plan was prepared.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be
generated over the life of the District is $403,265;
(2) Probable impact of the District on city provided services and ability to issue debt. Any impact of the
District on police protection is expected to be minimal. The property that is being redeveloped has
been vacant for several years, and vacant property can create public safety challenges. A new
business on the site will increase public perceptions of security and safety, and will not, in and of
itself, necessitate new capital investment in vehicles or facilities or increase staffing requirements.
The probable impact of the District on fire protection is expected to be negligible. The City currently
has the equipment necessary to provide fire protection to the proposed project. Prior to demolition,
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-8
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 31 of 86
the site contained a wood-frame house and an old gas station with a small unsprinklered building and
underground storage tanks. The new development will eliminate those specific risks, and the new
building will be fully sprinklered. The financial impact to the fire department will be limited, if any.
The impact of the District on public infrastructure is expected to be minimal. The development is
not expected to significantly impact any traffic movements in the area. The infrastructure for sanitary
sewer, storm sewer and water are in place and will be able to handle the slightly increased volume
generated from the proposed development. Based on the development plans, there are no additional
costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. The
development in the District is expected to contribute an estimated $11,430 in sanitary sewer (SAC)
and water (WAC) connection fees.
The probable impact of any District general obligation tax increment bonds on the ability to issue
debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any
general obligation debt issued in relation to this project, therefore there will be no impact on the
City's ability to issue future debt or on the City's debt limit.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated that the
amount of tax increments over the life of the District that would be attributable to school district
levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions
remained the same, is $88,000;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of
tax increments over the life of the District that would be attributable to county levies, assuming the
county's share of the total local tax rate for all taxing jurisdictions remained the same, is $118,752;
(5) Additional information requested by the county or school district. The City is not aware of any
standard questions in a county or school district written policy regarding tax increment districts and
impact on county or school district services. The county or school district must request additional
information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax
increment financing plan.
No requests for additional information from the county or school district regarding the proposed
development for the District have been received.
Subsection 1-15.Supporting Documentation
Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and
description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd.
3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of
reports and studies on file at the City that support the HEDRA and City's findings:
9HUPLOOLRQ6WUHHW&RUULGRU'HYHORSPHQW*XLGHOLQHV-DQXDU\
3URSRVDOWR&RPSOHWH3KDVH,,(QYLURQPHQWDO6ite Assessment Report for Former Jiffy Station
Property Located at 1501 Vermillion Street, Hastings, MN 55033, Thatcher Engineering, Inc., April
11, 2008
/LPLWHG3KDVH,,(6$5HSRUWIRU)RUPHU-LII\6WDWLRQ9HUPLOOLRQ6WUHHW+DVWLQJV01
Thatcher Engineering, Inc., May 2008
$VEHVWRV'HPROLWLRQ6XUYH\5HSRUW7KDWFKHU(QJLQHHULQJ,QF0D\
$GGHQGXPWR0D\$VEHVWRV'HPROLWLRQ6XUYH\5HSRUW7KDWFKHU(QJLQHHULQJ,QF-XO\
2008
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-9
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 32 of 86
3URSRVHG5HQHZDODQGRenovation TIF Eligibility Assessment, Hastings, MN, SEH No, HASTI-
103412, Short Elliott Hendrickson (SEH) Inc., August 25, 2008
$VEHVWRV5HSRUW$SSOLHG(QYLURQPHQtal Sciences, Inc., September 19, 2008
7DQN5HPRYDO$VVHVVPHQWIRU)RUPHU-LII\*DV6WDWLRQ/RFDWHGDW9HUPLOOLRQ6WUHHW +LJKZD\
61), Hastings, MN 55033Thatcher Engineering, Inc., November 2008
,
5HSRUWRI6XEVXUIDFH([SORUDWLRQDQG*HRWHFKQLFDO Review, American Engineering Testing, Inc.,
May 27, 2010
Subsection 1-16.Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
1.Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed
under M.S., Section 469.177;
2.The proceeds from the sale or lease of property, tangible or intangible, to the extent the
property was purchased by the Authority with tax increments;
3.Principal and interest received on loans or other advances made by the Authority with tax
increments;
4.Interest or other investment earnings on or from tax increments;
5.Repayments or return of tax increments made to the Authority under agreements for districts
for which the request for certification was made after August 1, 1993; and
6.The market value homestead credit paid to the Authority under M.S., Section 273.1384.
Subsection 1-17.Modifications to the District
In accordance with M.S., Section 469.175, Subd. 4, any:
1.Reduction or enlargement of the geographic area of the District, if the reduction does not
meet the requirements of M.S., Section 469.175, Subd. 4(e);
2.Increase in amount of bonded indebtedness to be incurred;
3.A determination to capitalize interest on debt if that determination was not a part of the
original TIF Plan;
4.Increase in the portion of the captured net tax capacity to be retained by the HEDRA or City;
5.Increase in the estimate of the cost of the District, including administrative expenses, that
will be paid or financed with tax increment from the District; or
6.Designation of additional property to be acquired by the HEDRA or City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIF Plan.
Pursuant to M.S. Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not
be enlarged after five years following the date of certification of the original net tax capacity by the county
auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that
the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, paragraph (a), clauses (1) to
(5), must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the
only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the
parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's
original net tax capacity or (B) the HEDRA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the
original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s)
eliminated from the District.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-10
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 33 of 86
The HEDRA or City must notify the County Auditor of any modification to the District. Modifications to
the District in the form of a budget modification or an expansion of the boundaries will be recorded in the
TIF Plan.
Subsection 1-18.Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
HEDRA or City, other than:
1.Amounts paid for the purchase of land;
2.Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
District;
3.Relocation benefits paid to or services provided for persons residing or businesses located in the
District; or
4.Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to M.S., Section 469.178; or
5.Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses (1) to (3).
For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982,
and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond
counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section
469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative
expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures
authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause
(1), from the District, whichever is less.
For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay
any administrative expenses for District costs which exceed ten percent of total estimated tax increment
expenditures authorized by the TIF Plan or the total tax increments, as defined in M.S., Section 469.174, Subd.
25, clause (1), from the District, whichever is less.
Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District and are not subject to the percentage limits
of M.S., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the
year following the year the expenses were incurred.
Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the HEDRA or City and the County Treasurer shall pay the amount
deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor
for the cost of financial reporting of tax increment financing information and the cost of examining and
auditing authorities' use of tax increment financing. This amount may be adjusted annually by the
Commissioner of Revenue.
Subsection 1-19.Limitation of Increment
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-11
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 34 of 86
Pursuant to M.S., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax
increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation
or renovation of property or other site preparation, including qualified improvement of a
street adjacent to a parcel but not installation of utility service including sewer or water
systems, has been commenced on a parcel located within a tax increment financing district
by the authority or by the owner of the parcel in accordance with the tax increment financing
plan, no additional tax increment may be taken from that parcel and the original net tax
capacity of that parcel shall be excluded from the original net tax capacity of the tax
increment financing district. If the authority or the owner of the parcel subsequently
commences demolition, rehabilitation or renovation or other site preparation on that parcel
including qualified improvement of a street adjacent to that parcel, in accordance with the
tax increment financing plan, the authority shall certify to the county auditor that the activity
has commenced and the county auditor shall certify the net tax capacity thereof as most
recently certified by the commissioner of revenue and add it to the original net tax capacity
of the tax increment financing district. The county auditor must enforce the provisions of this
subdivision. The authority must submit to the county auditor evidence that the required
activity has taken place for each parcel in the district. The evidence for a parcel must be
submitted by February 1 of the fifth year following the year in which the parcel was certified
as included in the district. For purposes of this subdivision, qualified improvements of a
street are limited to (1) construction or opening of a new street, (2) relocation of a street,
and (3) substantial reconstruction or rebuilding of an existing street.
The HEDRA or City or a property owner must improve parcels within the District by approximately July
2014 and report such actions to the County Auditor.
Subsection 1-20.Use of Tax Increment
The HEDRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable
property located in the District for the following purposes:
1.To pay the principal of and interest on bonds issued to finance a project;
2.To finance, or otherwise pay public redevelopment costs of the Vermillion Street Redevelopment
Area pursuant to M.S., Sections 469.001 to 469.047 and Sections 469.090 to 469.1082;
3.To pay for project costs as identified in the budget set forth in the TIF Plan;
4.To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4;
5.To pay principal and interest on any loans, advances or other payments made to or on behalf of the
HEDRA or City or for the benefit of the Vermillion Street Redevelopment Area by a developer;
6.To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and
7.To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152
through 469.165, and/or M.S., Sections 469.178.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Dakota County to the HEDRA for the Tax Increment
Fund of said District. The HEDRA or City will pay to the developer(s) annually an amount not to exceed
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-12
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 35 of 86
an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public
improvements, demolition and relocation, site preparation, and administration. Remaining increment funds
will be used for HEDRA or City administration (up to 10 percent) and the costs of public improvement
activities outside the District.
Subsection 1-21.Excess Increments
Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the
following:
1.Prepay any outstanding bonds;
2.Discharge the pledge of tax increment for any outstanding bonds;
3.Pay into an escrow account dedicated to the payment of any outstanding bonds; or
4.Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The HEDRA or City must spend or return the excess increments under paragraph (c) within nine months after
the end of the year. In addition, the HEDRA or City may, subject to the limitations set forth herein, choose
to modify the TIF Plan in order to finance additional public costs in the Vermillion Street Redevelopment
Area or the District.
Subsection 1-22.Requirements for Agreements with the Developer
The HEDRA or City will review any proposal for private development to determine its conformance with the
Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
other drawings or narrative deemed necessary by the HEDRA or City to demonstrate the conformance of the
development with City plans and ordinances. The HEDRA or City may also use the Agreements to address
other issues related to the development.
Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be
acquired in the District as set forth in the TIF Plan shall at any time be owned by the HEDRA or City as a
result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax
increments from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the
acreage, the HEDRA or City concluded an agreement for the development or redevelopment of the property
acquired and which provides recourse for the HEDRA or City should the development or redevelopment not
be completed.
Subsection 1-23.Assessment Agreements
Pursuant to M.S., Section 469.177, Subd. 8, the HEDRA or City may enter into a written assessment
agreement in recordable form with the developer of property within the District which establishes a minimum
market value of the land and completed improvements for the duration of the District. The assessment
agreement shall be presented to the County Assessor who shall review the plans and specifications for the
improvements to be constructed, review the market value previously assigned to the land upon which the
improvements are to be constructed and, so long as the minimum market value contained in the assessment
agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall
also certify the minimum market value agreement.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-13
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 36 of 86
Subsection 1-24.Administration of the District
Administration of the District will be handled by the HEDRA Director.
Subsection 1-25.Annual Disclosure Requirements
Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the HEDRA or City must undertake financial reporting
for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor
on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement
shall be published in a newspaper of general circulation in the City on or before August 15.
If the City fails to make a disclosure or submit a report containing the information required by M.S., Section
469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax
increment from the District.
Subsection 1-26.Reasonable Expectations
As required by the TIF Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value of the site that could reasonably be expected
to occur without the use of tax increment financing would be less than the increase in the market value
estimated to result from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration of the District permitted by the TIF Plan. In making said
determination, reliance has been placed upon written representation made by the developer to such effects
and upon HEDRA and City staff awareness of the feasibility of developing the project site(s) within the
District. A comparative analysis of estimated market values both with and without establishment of the
District and the use of tax increments has been performed as described above. Such analysis is included with
the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed
development (less the indicated subtractions) exceeds the estimated market value of the site absent the
establishment of the District and the use of tax increments.
Subsection 1-27.Other Limitations on the Use of Tax Increment
1.General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used To finance, or otherwise pay the capital and administration costs of
the Vermillion Street Redevelopment Area pursuant to the M.S., Sections 469.001 to 469.047 and
Sections 469.090 to 469.1082. Tax increments may not be used to circumvent existing levy limit law.
No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance
of a building to be used primarily and regularly for conducting the business of a municipality, county,
school district, or any other local unit of government or the state or federal government. This provision
does not prohibit the use of revenues derived from tax increments for the construction or renovation of
a parking structure.
2.Pooling Limitations. At least 80 percent of tax increments from the District must be expended on
activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance
activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not
more than 20 percent of said tax increments may be expended, through a development fund or otherwise,
on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced
bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they
were solely for activities outside of the District.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-14
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 37 of 86
3.Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall
be deemed to have satisfied the 80 percent test set forth in paragraph (2) above only if the five year rule
set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year
following certification of the District, 80 percent of said tax increments that remain after expenditures
permitted under said five year rule must be used only to pay previously committed expenditures or credit
enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5.
4.Renewal and Renovation District. At least 90 percent of the revenues derived from tax increment from
a renewal and renovation district must be used to finance the cost of correcting conditions that allow
designation of renewal and renovation districts under M.S., Section 469.176 Subd. 4j. These costs
include, but are not limited to, acquiring properties containing structurally substandard buildings or
improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary
to provide a site of sufficient size to permit development, demolition and rehabilitation of structures,
clearing of the land, the removal of hazardous substances or remediation necessary for development of
the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated
administrative expenses of the City, including the cost of preparation of the development action response
plan, may be included in the qualifying costs.
Subsection 1-28.Summary
The Hastings Economic Development and Redevelopment Authority is establishing the District to preserve
and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City.
The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville,
Minnesota 55113, telephone (651) 697-8500.
Hastings Economic Development and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 51-15
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 38 of 86
Appendix A
Project Description
Prior to the proposed redevelopment, the project site contained an abandoned gas station and an old
residential structure. The structures were demolished pursuant to a resolution and adopted by the HEDRA
(see Appendix F). Special steps were taken to dispose of the asbestos. The gas tanks have been removed.
Remaining on the site is four feet of old fill and unstable soils that must be excavated. After completing the
soil work, the developer intends to construct an 8,600 sq. ft. retail facility that will contain a NAPA Auto
Parts store.
AppendixA-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 39 of 86
Appendix B
Map of the Vermillion Street Redevelopment Area and the District
AppendixB-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 40 of 86
Appendix C
Description of Property to be Included in the District
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcel listed below.
Parcel Number
19-44700-161-06
Address
1501 Vermillion Street
Owner
Linn Investment Properties, LLC.
AppendixC-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 41 of 86
Appendix D
Estimated Cash Flow for the District
AppendixD-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 42 of 86
Appendix E
Minnesota Business Assistance Form
(Minnesota Department of Employment and Economic Development)
A Minnesota Business Assistance Form (MBAF) should be used to report and/or update each calendar year's
activity by April 1 of the following year.
Please see the Minnesota Department of Employment and Economic Development (DEED) website at
http://www.deed.state.mn.us/Community/subsidies/MBAFForm.htm for information and forms.
AppendixE-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 46 of 86
Appendix F
Redevelopment Qualifications for the District
AppendixF-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 47 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 48 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 49 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 50 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 51 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 52 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 53 of 86
Proposed Renewal and Renovation
TIF Eligibility Assessment
Hastings, MN
SEH No. HASTI-103412
August 25, 2008
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 54 of 86
Table of Contents
Title Page
Table of Contents
Page
1.0 Purpose......................................................................................................................2
2.0 Scope of Work............................................................................................................2
3.0 Evaluations.................................................................................................................2
4.0 Findings......................................................................................................................2
5.0 Conclusion.................................................................................................................2
6.0 Supporting Documents Attached.............................................................................2
7.0 Procedural Requirements.........................................................................................2
8.0 Procedures to Follow to Meet Requirements..........................................................2
9.0 Qualification Requirements......................................................................................2
10.0 Measurements Against Technical Test Requirements..........................................2
List of Figures
Figure 1 Buildings
Figure 2 Occupied Surfaces
Figure 3 Percentage Occupied
List of Tables
Table 1 Site Occupied/Building Substandard Determination
List of Appendices
Appendix A Asset Detail Report on Building Condition (one per page)
Appendix B Reports on Substantial Renovation or Clearance to Remove Existing
Conditions for One Building
SEH is a registered trademark of Short Elliott Hendrickson Inc.
Proposed Renewal and Renovation 103412
Hastings, MN Page i
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 55 of 86
Proposed Renewal and Renovation
TIF Eligibility Assessment
Prepared for City of Hastings, MN
1.0 Purpose
Short Elliott Hendrickson, Inc. (SEH) was hired by the City of Hastings,
Minnesota, to survey and evaluate the properties within the proposed
Renewal and Renovation Tax Increment Financing (TIF) District. The
proposed district is generally located east of the intersection of Vermillion
th
Street and 15 Street. The purpose of our work was to independently
ascertain whether the qualification tests for tax increment eligibility, as
required under Minnesota Statute, could be met.
The findings and conclusions drawn herein are solely for the purpose of tax
increment eligibility and are not intended to be used outside the scope of this
assessment.
2.0 Scope of Work
The proposed district consists of 3 parcels comprised of the following types
of improvements: 1 commercial structure, 1 single family structure and 1
vacant parcel with parking improvements.
3.0 Evaluations
Interior and exterior inspections were completed for all buildings.
4.0 Findings
Coverage Test –
3 of the 3 properties met the coverage test with a 100%
area coverage. This exceeds the 70% area coverage requirement.
Condition of Buildings Test – 50 percent
of the buildings – 1 of the 2
buildings - were found to be “structurally substandard” when considering
code deficiencies and other deficiencies of sufficient total significance to
justify substantial renovation or clearance (see definition of “structurally
substandard” as follows). This exceeds the Condition of Buildings Test
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 56 of 86
whereby 20% of buildings, not including outbuildings, must be found
“structurally substandard.”
Existing Conditions Test – 50 percent
of the buildings – 1 of the 2
buildings - were found to have “existing conditions” requiring substantial
renovation or clearance to correct (see definition of “existing conditions” as
follows). This exceeds the Existing Conditions Test whereby 20% of
buildings must be found “structurally substandard” (see above) and 30% of
the other buildings must be found to have “existing conditions.”
5.0 Conclusion
Our surveying and evaluating of the properties within this proposed Renewal
and Renovation District render results that in our professional opinion
qualify the district eligible
under the statutory criteria and formulas for a
Renewal and Renovation Tax Increment Financing District (State Statute
469.174 Subd. 10a).
6.0 Supporting Documents Attached
Site Occupied/Building Substandard Determination table
TIF Assessment Figures: Buildings Under Study, Occupied
Surfaces, Percent Occupied
Asset Detail Report on Building Condition (one per
building)
Reports on Substantial Renovation or Clearance to Remove
Existing Conditions for One building
7.0 Procedural Requirements
The properties were surveyed and evaluated in accordance with the following
requirements under Minnesota Statute Section 469.174, Subdivision 10,
clause (c) which states:
Interior Inspection
– “The municipality may not make such determination
[that the building is structurally substandard] without an interior inspection
of the property…”
Exterior Inspection and Other Means
– “An interior inspection of the
property is not required, if the municipality finds that (1) the municipality or
authority is unable to gain access to the property; and after using its best
efforts to obtain permission from the party that owns or controls the property;
and (2) the evidence otherwise supports a reasonable conclusion that the
building is structurally substandard.”
Documentation
– “Written documentation of the building findings and
reasons why an interior inspection was not conducted must be made and
retained under section 469.175, subdivision 3, clause (1).” The City of
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 3
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 57 of 86
Hastings has maintained and has on file, Documentation of
Contacts/Evaluations for documentation for these purposes.
8.0 Procedures to Follow to Meet Requirements
The City of Hastings sent letters to all property owners located in the district
requesting that an inspection and evaluation be made of their property. SEH
conducted assessments on June 13, 2008.
Requests for evaluation appointments were made with the building owner or
building tenants. An interior inspection and evaluation was completed if
consented to by the owner. An exterior inspection and evaluation was made
where the owner refused interior access to their property. In all cases, an
exterior evaluation was completed.
For all subject buildings, the City of Hastings provided copies of available
building permit information on record for review by SEH. These permits
provide a basic description of type of work completed for each permit
(Building, Electrical, or Plumbing, scope of work) and, in some cases,
approximate value of work to be completed. Some buildings had no permit
records. Additionally, copies of police reports and building inspection
reports were also provided for the buildings if available. In some cases,
completed and approved corrections are noted on the reports. Building data
from these public records was combined with and reviewed against
information gathered in the field Qualification Requirements
The properties were surveyed and evaluated to ascertain whether the
qualification tests for tax increment eligibility for a renewal and renovation
district, required under the following Minnesota Statutes, could be met.
Minnesota Statute Section 469.174, Subdivision 10a, clause (a) (1) requires
three tests for occupied parcels:
Coverage Test
1. – “parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, paved or gravel parking
lots or similar structures . . .”
Note: The coverage required by the parcel to be considered occupied
is defined under Minnesota Statute Section 469.174, Subdivision 10, clause
(e) which states: “For purposes of this subdivision, a parcel is not occupied
by buildings, streets, utilities, paved or gravel parking lots or other similar
structures unless 15% of the area of the parcel contains buildings, streets,
utilities, paved or gravel parking lots or other similar structures.”
Condition of Buildings Test
2. – “20 percent of the buildings are
structurally substandard;”
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 4
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 58 of 86
The term ‘structurally substandard’, as used in the preceding
paragraph, is defined by a two-step test:
Conditions Test:
Under the tax increment law, specifically,
Minnesota Statutes, Section 469.174, Subdivision 10, clause (b), a building is
structurally substandard
if it contains “defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light and
ventilation, fire protection including adequate egress, layout and condition of
interior partitions, or similar factors, which defects or deficiencies are of
sufficient total significance to justify substantial renovation or clearance.”
Code Test:
Notwithstanding the foregoing, the tax increment law,
specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause (c)
also provides that a building may not be considered structurally substandard
if it: “. . . is in compliance with building code applicable to new buildings or
could be modified to satisfy the building code at a cost of less than 15
percent of the cost of constructing a new structure of the same square footage
and type on the site.”
Based on the above requirements, the substandard determination of a
particular building is a two-step process; therefore, the findings of each step
steps must be satisfied in order for a
are independent of each other and both
building to be found structurally substandard. It is not sufficient to conclude
that a building is structurally substandard solely because the Code Test is
satisfied. It is theoretically possible for a building to require extensive
renovation in order to meet current building codes but still not meet the main
test of the Conditions Test.
Furthermore, deficiencies included in the Conditions Test may or may not
include specific code deficiencies as listed in the Code Test. In many cases,
specific building code deficiencies may well contribute to the data which
supports satisfying the Conditions Test; conversely, it is certainly possible
that identified hazards or other deficiencies which could be included in the
Conditions Test do not necessarily constitute current building code
deficiencies. By definition, the nature of the two steps is slightly different.
The Conditions Test is more subjective, whereas the Code Test is an
objective test. Conditions Test deficiencies are less technical and not
necessarily measurable to the same extent of the code deficiencies in the
Code Test. To the end that technical, measurable building code deficiencies
support the satisfaction of the less technical Conditions Test, the following
code requirements are defined in terms that go beyond the technical
requirements of the code and demonstrate their relevance in terms of “ . . .
deficiencies in essential utilities and facilities, light and ventilation, etc. . .”
The purpose of the IBC is to provide
International Building Code (IBC):
minimum standards to safeguard public health, safety and general welfare
through structural strength, means of egress facilities, stability, sanitation,
adequate light and ventilation, energy conservation, and safety to life and
property from fire and other hazards attributed to the built environment (IBC
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 5
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 59 of 86
101.3). A deficiency in the building code (insufficient number of building
exits, insufficient door landing area, etc.) adversely affects one or more of the
above standards to safeguard ‘public health . . .and safety to life’; therefore, a
deficiency in the building code is considered a deficiency in one or more
“essential utilities and facilities, light and ventilation, etc.”.
This chapter sets the
Minnesota Accessibility Code, Chapter 1341:
requirements for accessibility all building occupancies. The Minnesota
Accessibility Code closely follows the Americans with Disabilities Act
Accessibility Guidelines (ADAAG), which sets the guidelines for
accessibility to places of public accommodations and commercial facilities as
required by the Americans with Disabilities Act (ADA) of 1990. The ADA
is a federal anti-discrimination statute designed to remove barriers that
prevent qualified individuals with disabilities from enjoying the same
opportunities that are available to persons without disabilities (ADA
Handbook). Essentially, a deficiency in the accessibility code (lack of
handrail extension at stairs or ramp, lack of clearance at a toilet fixture, etc.)
results in a discrimination against disabled individuals; therefore, a
deficiency in the accessibility code is considered a deficiency in “essential
utilities and facilities”.
Minnesota Rules/Manufactured Homes, Chapter 1350: This chapter sets the
requirements for manufactured homes and closely follows the Federal
Manufactured Home Construction and Safety Standards. The standards
provide additional safety requirements for residents in these structures. A
deficiency in this code would consist of improper installation or lack of seals.
Minnesota Food Code, Chapter 4626: This chapter is enforced by the
Minnesota Department of Health and is similar to the IBC in that it provides
minimum standards to safeguard public health in areas of public/commercial
food preparation. A deficiency in the food code (lack of non-absorbent wall
or ceiling finishes, lack of hand sink, etc.) causes a condition for potential
contamination of food; therefore, a deficiency in the food code is considered
a deficiency in “essential utilities and facilities”.
National Electric Code (NEC): The purpose of the NEC is the practical
safeguarding of persons and property from hazards arising from the use of
electricity. The NEC contains provisions that are considered necessary for
safety (NEC 90-1 (a) and (b)). A deficiency in the electric code (insufficient
electrical service capacity, improper wiring, etc.) causes a hazard from the
use of electricity; therefore, a deficiency in the electric code is considered a
deficiency in “essential utilities and facilities”.
International Mechanical Code (IMC): The purpose of the IMC is to provide
minimum standards to safeguard life or limb, health, property and public
welfare by regulating and controlling the design, construction, installation,
quality of materials, location, operation, and maintenance or use of
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 6
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 60 of 86
mechanical systems (IMC 101.3). The IMC sets specific requirements for
building ventilation, exhaust, intake and relief. These requirements translate
into a specified number of complete clean air exchanges for a building based
on its occupancy type and occupant load. A deficiency in the mechanical
code adversely affects the ‘health . . . and public welfare’ of a building’s
occupants; therefore, a deficiency in the mechanical code is considered a
deficiency in “light and ventilation”.
Note: The above list represents some of the more common potential code
deficiencies considered in the assessment of the buildings in the proposed
district. This list does not necessarily include every factor included in the
data used to satisfy Step 1 for a particular building. Refer to individual
building reports for specific findings.
Finally, the tax increment law provides that the municipality may find that a
building is not disqualified as structurally substandard under the Code Test
on the basis of “reasonably available evidence, such as the size, type, and age
of the building, the average cost of plumbing, electrical, or structural repairs,
or other similar reliable evidence. Items of evidence that support such a
conclusion [that the building is structurally substandard] include recent fire
or police inspections, on-site property appraisals or housing inspections,
exterior evidence of deterioration, or other similar reliable evidence.”
3. Existing Conditions Test
– “. . . and 30 percent of the other buildings
require substantial renovation or clearance to remove existing conditions
such as: inadequate street layout, incompatible uses or land use relationships,
overcrowding of buildings on the land, excessive dwelling unit density,
obsolete buildings not suitable for improvement or conversions, or other
identified hazards to the health, safety, and general well-being of the
community;”
9.0 Measurements Against Technical Test Requirements
Coverage Test
SEH utilized a GIS (Geographic Information Systems) system database,
available through Dakota County and the City of Hastings, to obtain
individual parcel information. The GIS system contains graphic information
(parcel shapes) and numerical data based on county tax records. This
information was used by SEH for the purposes of this assessment.
The total square foot area of each property parcel was obtained from county
records (GIS) and general site verification.
The total extent of site improvements on each property parcel was digitized
from recent aerial photography. The total square footage of site
improvements was then digitally measured and confirmed by general site
verification.
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 7
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 61 of 86
The total percentage of coverage of each property parcel was computed to
determine if the 15% requirement was met. Refer to attached maps:
Occupied Surfaces map and Percent Occupied map.
The total area of all qualifying property parcels was compared to the total
area of all parcels to determine if the 70% requirement was met. The area
occupied by public rights-of-way has not been considered in the coverage
test calculations. All of the public rights-of-way are improved. If all of the
public rights-of-way were treated as a parcel for the purpose of coverage test
calculations, the 70% requirement of the coverage test would still be met.
Condition of Building Test
Replacement Cost – the cost of constructing a new structure of the same size
and type on site:
R. S. Means Square Foot Costs (2007) was used as the industry standard for
base cost calculations. R. S. Means is a nationally published reference tool
for construction cost data. Costs are updated yearly and establish a “national
average” for materials and labor prices for all types of building construction.
The base costs derived from R. S. Means were reviewed, and modified if
applicable, against our professional judgment and experience.
A base cost was calculated by first establishing building type, building
construction type, and construction quality level (residential construction) to
obtain the appropriate Means cost per square foot. This cost was multiplied
times the building square footage to obtain the total replacement cost for an
individual building. Additionally, to account for regional/local pricing, a
cost factor was added to the total cost according to R.S. Means tables. Using
R. S. Means, consideration is made for building occupancy, building size,
and construction type; therefore, the cost per square foot used to construct a
new structure will vary accordingly.
Building Deficiencies: Conditions Test (Condition Deficiencies) –
determining the combination of defects or deficiencies of sufficient total
significance to justify substantial renovation or clearance.
On-Site evaluations - Evaluation of each building was made by reviewing
available information from city records and making interior and/or exterior
evaluations, as noted, sometimes limited to public spaces. Deficiencies in
structural elements, essential utilities and facilities, light and ventilation, fire
protection including adequate egress, layout and condition of interior
partitions, or similar factors, were noted by the evaluator. Condition
Deficiencies may or may not include Code Deficiencies as defined below.
Energy code compliance was not considered for the purposes of determining
Condition Deficiencies. Deficiencies were combined and summarized for
each building in order to determine their total significance.
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 8
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 62 of 86
Building Deficiencies: Code Test (Code Deficiencies) – determining
technical conditions that are not in compliance with current building code
applicable to new buildings and the cost to correct the deficiencies:
On-Site evaluations - Evaluation of each building was made by reviewing
available information from city records and making interior and/or exterior
evaluations, as noted, sometimes limited to public spaces. On-site
evaluations were completed using a standard checklist format. The standard
checklist was derived from several standard building code plan review
checklists and was intended to address the most common, easily identifiable
code deficiencies. Mechanical Engineers, Electrical Engineers, and Building
Code Officials were also consulted in the development of the checklist.
Deficiencies are generally grouped into the following categories (category
names are followed by its applicable building code):
Building accessibility – Minnesota Accessibility Code
Building egress, building construction – International Building Code
Fire protection systems – International Building Code
Food service – Minnesota Food Code
HVAC (heating, ventilating, and air conditioning) – International
Mechanical Code
Electrical systems – National Electric Code and Minnesota Energy
Code
Energy code compliance – Minnesota Energy Code
For the purposes of determining the Code Test (Code Deficiencies), Energy
code compliance is relevant because its criteria affect the design of integral
parts of a majority of a building’s systems. The intent of these criteria is to
provide a means for assuring building durability, and permitting energy
efficient operation (7676.0100). The energy code addresses general building
construction (all forms of energy transmission in an exterior building
envelope – walls, roofs, doors and windows, etc.) and energy usage by
lighting and mechanical systems. A deficiency in the energy code
(inadequate insulation, non-insulated window systems, improper air
infiltration protection, etc.) reduces energy efficient operation and adversely
affects building system durability; therefore, a deficiency in the energy code
is considered to contribute to a condition requiring substantial renovation or
clearance.
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 9
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 63 of 86
Office evaluations – Following the on-site evaluation, each building was then
reviewed, based on on-site data, age of construction, building usage and
occupancy, square footage, and known improvements (from building permit
data), and an assessment was made regarding compliance with current
mechanical, electrical, and energy codes. A basic code review was also
completed regarding the potential need for additional egress (basement
stairways, for example), sprinkler systems, or elevators.
Deficiency Cost – Costs to correct identified deficiencies were determined by
usingR. S. Means Cost Data and our professional judgment and experience.
Our VFA partner Internet website has a real-time link to the R. S. Means
Cost Data. In general, where several items of varying quality were available
for selection to correct a deficiency, an item of average cost was used, as
appropriate for typical commercial or residential applications. Actual
construction costs are affected by many factors (bidding climate, size of
project, etc.). Due to the nature of this assessment, we were only able to
generalize the scope of work for each correction; that is to say that detailed
plans, quantities, and qualities of materials were not possible to be known.
Our approach to this matter was to determine a preliminary cost projection
suitable to the level of detail that is known. This process was similar to our
typical approach for a cost projection that may be given to an owner during a
schematic design stage of a project.
Costs to correct deficiencies were computed for each building and compared
to the building replacement cost to determine if the 15% requirement was
met. Each individual Asset Summary Report contains the Requirements
Index. The Requirements Index is the ratio of Requirements (Code
Deficiencies) divided by current replacement value.
The total number of buildings determined to be “structurally substandard” by
satisfying both the Conditions Test and the Code Test in this manner was
compared to the total number of buildings in the proposed district to
determine if the 20% requirement was met.
Technical Conditions Resources – the following list represents the current
building codes applicable to new buildings used in the Building Deficiency
review:
2007 Minnesota State Building Code
2006 International Building Code
2006 International Residential Code
MN 1341 – Minnesota Accessibility Code, Chapter 1341
(2007)
MN 1350 – Minnesota Rules/ Manufactured Homes, Chapter
1350 (2007)
2007 Minnesota Energy Code, Chapters 7672, 7674, or 7676
2005 National Electric Code
2000 International Mechanical Code
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 10
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 64 of 86
Existing Conditions Test – Determining buildings that require renovation or
clearance to remove existing conditions:
Existing Conditions – Conditions such as inadequate street layout,
incompatible uses or land use relationships, overcrowding of buildings on the
land, excessive dwelling unit density, obsolete buildings not suitable for
improvement or conversion, or other identified hazards to the health, safety,
and general well-being of the community, were noted by the evaluator. Data
on conditions was collected by the evaluator based on actual site review,
discussion with city staff, and building code review.
The total number of buildings determined to have existing conditions in this
manner was compared to the total number of buildings in the district. If 20%
of the buildings were determined to be structurally substandard (see above)
and 30% of the other buildings were determined to have existing conditions
(combination of the two findings must be equal to or greater than 50%), then
the requirement is satisfied.
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 11
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 65 of 86
List of Figures
Figure 1 – Buildings
Figure 2 – Occupied Surfaces
Figure 3 – Percent Occupied
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 12
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 66 of 86
1-1
2-1
Coordinate System (ft)
CITY OF
Dakota County, NAD 83
Legend
Source: City of Hastings,
Dakota County, and SEH.
HASTINGS
Buildings Under Study
Project Area
Parcel
Redevelopment Eligibility
05250
Assessment
Feet
BUILDINGS UNDER STUDY
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 67 of 86
1
2
3
Coordinate System (ft)
Dakota County, NAD 83
CITY OF
Legend
Source: City of Hastings,
Dakota County, and SEH.
Occupied Surfaces
HASTINGS
Yes
No
Buildings Under Study
Redevelopment Eligibility
05250
Assessment
Project Area
Feet
Parcel
OCCUPIED SURFACES
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 68 of 86
1
2
3
Coordinate System (ft)
Legend
Dakota County, NAD 83
CITY OF
Source: City of Hastings,
Percent Improved
Dakota County, and SEH.
HASTINGS
0 % Developed
1 - 15 % Developed
> 15 % Developed
Redevelopment Eligibility
Buildings Under Study
05250
Assessment
Project Area
Feet
Parcel
PERCENT OCCUPIED
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 69 of 86
List of Tables
Site Occupied/Building Substandard Determination
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 13
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 70 of 86
Appendix A
Asset Detail Report on Building Condition (one per building)
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 14
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 72 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
'PMIRX ,EWXMRKW'MX]SJ%WWIX2EQI 0MRR-RZIWXQIRX4VSTIVXMIW00'
4VSNIGXC2YQFIV ,%78-8-*%WWIWWQIRX%WWIX2YQFIV
78%8-78-'7
*'-'SWX *'-
8SXEP6IUYMVIQIRXW'SWX 6-
'YVVIRX6ITPEGIQIRX:EPYI %HHVIWW0MRR-RZIWXQIRX4VSTIVXMIW00'
7M^I7*%HHVIWW:IVQMPPMSR7X
=IEV'SRWXVYGXIH 'MX],EWXMRKW
=IEV6IRSZEXIH7XEXI4VSZMRGI6IKMSR12
'SQQMWWMSR(EXI>MT4SWXEP'SHI
(IGSQQMWWMSR(EXI%VGLMXIGX
3[RIVWLMT,MWXSVMGEP'EXIKSV]2SRI
*PSSVW'SRWXVYGXMSR8]TI-&'8]TI&
8]TI&YMPHMRK9WI,SYWMRK7MRKPI*EQMP]
4,383
3ZIVZMI[
%77)8()7'6-48-32
1%4-(
4-(
4EVGIP2EQI0-22-2:)781)284634)68-)700'
-RWTIGXSV'/
-RWTIGXMSR(EXI
7YVZI]1IXLSH)<8)6-36-28)6-36
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKISJ
Page 73 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
&PHK3GGYTERG]6IWMHIRXMEP
&PHK8]TI6
;EPP'SRWXVYGXMSR;SSH
6SSJ'SRWXVYGXMSR%WTLEPX7LMRKPI
7XSVMIW
&EWIQIRX
=2
=
7XSV],IMKLX
*PSSV%VIE
&YMPHMRK%VIE
=IEV&YMPX
7TVMROPIVIH2
)PIZEXSV2
6ITSVXSR&YMPHMRK'SRHMXMSR
&YMPHMRK-(&YWMRIWW2EQI%HHVIWW
0MRR-RZIWXQIRX4VSTIVXMIW
:IVQMPPMSR7X
7EXMWJMIW'SRHMXMSRW8IWXJSV7XVYGXYVEPP]7YFWXERHEVH&YMPHMRK 2
7EXMWJMIW'SHI8IWXJSV7XVYGXYVEPP]7YFWXERHEVH&YMPHMRK 2
7XVYGXYVEPP]7YFWXERHEVH&YMPHMRK
=2
2
'SRHMXMSRW8IWX
2SX%TTPMGEFPI&YMPHMRKJEMPIHGSHIXIWX
'SHI8IWX
2SX[MXLWXERHMRKXLIJSVIKSMRKXLIXE\MRGVIQIRXPE[EPWSTVSZMHIWXLEXEFYMPHMRKQE]RSXFIGSRWMHIVIHWXVYGXYVEPP]WYFWXERHEVHMJMXMWMRGSQTPMERGI
[MXLXLIFYMPHMRKGSHIETTPMGEFPIXSRI[FYMPHMRKWSVGSYPHFIQSHMJMIHXSWEXMWJ]XLIGYVVIRXFYMPHMRKGSHIEXEGSWXSJPIWWXLER SJXLIGSWXSJ
GSRWXVYGXMRKERI[FYMPHMRKSJXLIWEQIWUYEVIJSSXEKIERHX]TISRXLIWEQIWMXI
)WXMQEXIHGSWXSJRI[FYMPHMRKSJWEQIWM^IERHX]TI
8SXEP6ITPEGIQIRX'SWX
)WXMQEXIHGSWXSJGSVVIGXMSRSJGSHIHIJMGMIRGMIW
8SXEP(IJMGMIRG]'SWX
4IVGIRXEKISJ'SHI(IJMGMIRG]XS6ITPEGIQIRX'SWX
6IJIVXSXLIJSPPS[MRKVIUYMVIQIRXWJSVHSGYQIRXEXMSRSJWTIGMJMGGSHIHIJMGMIRGMIW
6)59-6)1)287
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKISJ
Page 74 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
%GXMSR
6IUYMVIQIRX2EQI4VMQI7]WXIQ'EXIKSV]4VMSVMX](EXI'SWX
)KVIWW)\XIVMSVHSSV
PERHMRKPIWWXLERQMR
MRHMVIGXMSRSJXVEZIP
VIWMHIRXMEPI\GITXMSR!
SVKVIEXIVXLERVMWI
JSVRSREGGIWWMFPII\XIVMSV
HSSVWMRKVSYTW*,67
ERH9-&'
-&'0MJI7EJIX]8-*6IUYMVIQIRX
)KVIWW*PMKLXSJWXEMVW
[MXLRSRGSQTPMERXVMWIVYR
QE\VMWIQMRVYR
VIWMHIRXMEPI\GITXMSR
QE\VMWIQMR
VYR
-&'0MJI7EJIX]8-*6IUYMVIQIRX
)KVIWW7XEMVJPMKLXSV
PERHMRK[MXLRSRGSQTPMERX
KYEVHVEMP
MRQMR
LIMKLXMRSVMRQMR
WTEGMRKFIX[IIR
MRXIVQIHMEXIVEMPW
VIWMHIRXMEPI\GITXMSR!
MR MRLIMKLX
-&'
0MJI7EJIX]8-*6IUYMVIQIRX
)KVIWW7XEMVLERHVEMPW
VIUYMVIHSRSRWMHI-&'
0MJI7EJIX]8-*6IUYMVIQIRX
)PIG6IW*SVVIWMHIRXMEP
GSRWXVYGXMSRTVMSVXS
VIGITXEGPIPSGEXMSRWERH
X]TIWEVIRSRGSQTPMERX
[MXLGYVVIRXFYMPHMRKGSHIW
FEXLVSSQOMXGLIRKEVEKI
SYXPIXVIGITXEGPIWEVIXSFI
+*'-TVSXIGXIH
VIJVMKIVEXSVGMVGYMXMWXSFI
HIHMGEXIHSYXPIXWTEGM&YMPHMRK'SHI8-*6IUYMVIQIRX
)RIVK]*SVFYMPHMRK
GSRWXVYGXMSRTVMSVXS
EXXMGVSSJEVIE[MXLPIWW
XLER6 MRWYPEXMSR
VIWMHIRXMEP
SV6
MRWYPEXMSR
GSQQIVGMEP
12 12
)RIVK]8-*6IUYMVIQIRX
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKISJ
Page 75 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
%GXMSR
6IUYMVIQIRX2EQI4VMQI7]WXIQ'EXIKSV]4VMSVMX](EXI'SWX
)RIVK]*SVFYMPHMRK
GSRWXVYGXMSRTVMSVXS
I\XIVMSV[EPPEVIE[MXLPIWW
XLER6MRWYPEXMSR12
12)RIVK]8-*6IUYMVIQIRX
)RIVK]*SVFYMPHMRK
GSRWXVYGXMSRTVMSVXS
JSYRHEXMSR[EPP[MXLPIWW
XLER6MRWYPEXMSR12
12)RIVK]8-*6IUYMVIQIRX
8SXEP
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKISJ
Page 76 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
'PMIRX ,EWXMRKW'MX]SJ%WWIX2EQI 0MRR-RZIWXQIRX4VSTIVXMIW00'
4VSNIGXC2YQFIV ,%78-8-*%WWIWWQIRX%WWIX2YQFIV
78%8-78-'7
*'-'SWX *'-
8SXEP6IUYMVIQIRXW'SWX 6-
'YVVIRX6ITPEGIQIRX:EPYI %HHVIWW0MRR-RZIWXQIRX4VSTIVXMIW00'
7M^I 7*%HHVIWW:IVQMPPMSR%ZI
=IEV'SRWXVYGXIH 'MX],EWXMRKW
=IEV6IRSZEXIH7XEXI4VSZMRGI6IKMSR12
'SQQMWWMSR(EXI>MT4SWXEP'SHI
(IGSQQMWWMSR(EXI%VGLMXIGX
3[RIVWLMT,MWXSVMGEP'EXIKSV]2SRI
*PSSVW'SRWXVYGXMSR8]TI-&'8]TI&
8]TI&YMPHMRK9WI%FERHSRIH
4,383
3ZIVZMI[
%77)8()7'6-48-32
1%4-(
4-(
4EVGIP2EQI0-22-2:)781)284634)68-)7
-RWTIGXSV'/
-RWTIGXMSR(EXI
7YVZI]1IXLSH)<8)6-36-28)6-36
&PHK3GGYTERG]1IVGLERXMPI
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKISJ
Page 77 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
&PHK8]TI1
;EPP'SRWXVYGXMSR&03'/
6SSJ'SRWXVYGXMSR)4(11IQFVERI
7XSVMIW
&EWIQIRX
=2
2
7XSV],IMKLX
*PSSV%VIE
&YMPHMRK%VIE
=IEV&YMPX
7TVMROPIVIH2
)PIZEXSV2
6ITSVXSR&YMPHMRK'SRHMXMSR
&YMPHMRK-(&YWMRIWW2EQI%HHVIWW
0MRR-RZIWXQIRX4VSTIVXMIW
:IVQMPPMSR7X
7EXMWJMIW'SRHMXMSRW8IWXJSV7XVYGXYVEPP]7YFWXERHEVH&YMPHMRK =
7EXMWJMIW'SHI8IWXJSV7XVYGXYVEPP]7YFWXERHEVH&YMPHMRK =
7XVYGXYVEPP]7YFWXERHEVH&YMPHMRK
=2
=
'SRHMXMSRW8IWX
'SRHMXMSRW8IWX
9RHIVXLIXE\MRGVIQIRXPE[WTIGMJMGEPP]1MRRIWSXE7XEXYXIW7IGXMSR 7YFHMZMWMSREFYMPHMRKMWWXVYGXYVEPP]WYFWXERHEVHMJMXGSRXEMRWHIJIGXW
MRWXVYGXYVEPIPIQIRXWSVEGSQFMREXMSRSJHIJMGMIRGMIWMRIWWIRXMEPYXMPMXMIWERHJEGMPMXMIWPMKLXERHZIRXMPEXMSRJMVITVSXIGXMSRMRGPYHMRKEHIUYEXIIKVIWW
PE]SYXERHGSRHMXMSRSJMRXIVMSVTEVXMXMSRWSVWMQMPEVJEGXSVW[LMGLHIJIGXWSVHIJMGMIRGMIWEVISJWYJJMGMIRXXSXEPWMKRMJMGERGIXSNYWXMJ]WYFWXERXMEP
VIRSZEXMSRSVGPIEVERGI
8LIEFSZIFYMPHMRKFEWIHYTSREGXYEPMRXIVMSVERHI\XIVMSVMRWTIGXMSRERHVIZMI[SJFYMPHMRKTIVQMXVIGSVHWI\LMFMXWXLIJSPPS[MRKHIJMGMIRGMIWXLEX
GSRXVMFYXIXSNYWXMJ]MRKWYFWXERXMEPVIRSZEXMSRSVGPIEVERGI
7XVYGXYVEP)PIQIRXW
(IJIGXWMRI\XIVMSVFYMPHMRKWLIPP QEWSRV]JSYRHEXMSR[EPPWLS[WIZMHIRGISJWIXXPIQIRXGVEGOWWXVYGXYVEPERHWXITGVEGOMRKMRXLIFPSGOSRXLIWSYXLERH
GVEGOWWIXXPMRKMRGSRGVIXIEXZEVMSYWPSGEXMSRWEW[IPPEWQSMWXYVIHEQEKI
)WWIRXMEP9XMPMXMIW
*EGMPMXMIW
(IJMGMIRXMRJEGMPMXMIWJSVHMWEFPIH PEGOSJEGGIWWMFPILEVH[EVISRI\XIVMSVHSSVW7XSVIJVSRX[MRHS[WEVIRSXXIQTIVIHERHEVIRSXIRIVK]IJJMIGIRX
0MKLX
:IRXMPEXMSR
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKISJ
Page 78 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
(IJMGMIRXMRQIIXMRK1IGLERMGEPGSHI JSVFYMPHMRKGSRWXVYGXMSRTVMSVXS QIGLERMGEPW]WXIQWHSRSXTVSZMHIWYJJMGMIRXRYQFIVSJEMVI\GLERKIW
(IJMGMIRXMRQIIXMRK)PIGXVMGEPGSHI VIGITXEGPIPSGEXMSRWVIGITXEGPIX]TIWERH[MVMRKEVIRSRGSQTPMERX[MXLGYVVIRXFYMPHMRKGSHI
7MQMPEV*EGXSVW
(IJIGXWMRI\XIVMSVFYMPHMRKWLIPP VSSJPIEOEKITVSFPIQI\MWXW HEQEKIHI\XIVMSVHSSVW ERHHEQEKIHTEVETIX
'SHI8IWX
2SX[MXLWXERHMRKXLIJSVIKSMRKXLIXE\MRGVIQIRXPE[EPWSTVSZMHIWXLEXEFYMPHMRKQE]RSXFIGSRWMHIVIHWXVYGXYVEPP]WYFWXERHEVHMJMXMWMRGSQTPMERGI
[MXLXLIFYMPHMRKGSHIETTPMGEFPIXSRI[FYMPHMRKWSVGSYPHFIQSHMJMIHXSWEXMWJ]XLIGYVVIRXFYMPHMRKGSHIEXEGSWXSJPIWWXLER SJXLIGSWXSJ
GSRWXVYGXMRKERI[FYMPHMRKSJXLIWEQIWUYEVIJSSXEKIERHX]TISRXLIWEQIWMXI
)WXMQEXIHGSWXSJRI[FYMPHMRKSJWEQIWM^IERHX]TI
8SXEP6ITPEGIQIRX'SWX
)WXMQEXIHGSWXSJGSVVIGXMSRSJGSHIHIJMGMIRGMIW
8SXEP(IJMGMIRG]'SWX
4IVGIRXEKISJ'SHI(IJMGMIRG]XS6ITPEGIQIRX'SWX
6IJIVXSXLIJSPPS[MRKVIUYMVIQIRXWJSVHSGYQIRXEXMSRSJWTIGMJMGGSHIHIJMGMIRGMIW
6)59-6)1)287
%GXMSR
6IUYMVIQIRX2EQI4VMQI7]WXIQ'EXIKSV]4VMSVMX](EXI'SWX
%GGIWW)\X2SZER
EGGIWWMFPITEVOMRK
EZEMPEFPI12%GGIWWMFMPMX]8-*6IUYMVIQIRX
%GGIWW)\X
2SRGSQTPMERXSVRSGYVF
GYXTVSZMHIHJSVI\XIVMSV
EGGIWWMFPIVSYXI12
%GGIWWMFMPMX]8-*6IUYMVIQIRX
%GGIWW-RX(SSVSRER
MRXIVMSVEGGIWWMFPIVSYXI
[MXLSYXPIZIVLERHPISV
PSSTWX]PILEVH[EVI12
%GGIWWMFMPMX]8-*6IUYMVIQIRX
%GGIWW-RX8SMPIXVSSQ
EGGIWWMFMPMX]MQTVSZQIRXW
HYIXSRSRGSQTPMERX
GPIEVERGIWEXJM\XYVIWSV
HSSVWERHLIMKLXWSJ
JM\XYVIW12%GGIWWMFMPMX]8-*6IUYMVIQIRX
&PHK'SRWX*EYGIX
PEGOMRKTVSTIVZEGYYQ
FVIEOIV124PYQFMRK
'SHI &YMPHMRK'SHI8-*6IUYMVIQIRX
&PHK'SRWX+PE^MRKRSX
XIQTIVIHEPSRK[EPO[E]
-&')RIVK]8-*6IUYMVIQIRX
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKISJ
Page 79 of 86
%WWIX(IXEMP6ITSVX
F]%WWIX2EQI
%GXMSR
6IUYMVIQIRX2EQI4VMQI7]WXIQ'EXIKSV]4VMSVMX](EXI'SWX
)KVIWW)\XIVMSVHSSV
PERHMRKPIWWXLERQMR
MRHMVIGXMSRSJXVEZIP
VIWMHIRXMEPI\GITXMSR!
SVKVIEXIVXLERVMWI
JSVRSREGGIWWMFPII\XIVMSV
HSSVWMRKVSYTW*,67
ERH9-&'
-&'0MJI7EJIX]8-*6IUYMVIQIRX
)PIG'SQ*SVFYMPHMRK
GSRWXVYGXMSRTVMSVXS
I\MWXMRKPMKLXMRKW]WXIQW
HSRSXGSRJSVQXS
QE\MQYQEPPS[EFPI
IRIVK]YWI
PMKLXWGSRWYQI
XSSQYGLIRIVK]MRXIVQW
SJ[EXXWWJ
12)RIVK]8-*6IUYMVIQIRX
)PIG6IW+EVEKISYXPIX
VIGITXEGPI[MXLSYX+*'-
TVSXIGXMSR2)' &YMPHMRK'SHI8-*6IUYMVIQIRX
)RIVK]*SVFYMPHMRK
GSRWXVYGXMSRTVMSVXS
I\XIVMSV[EPPEVIE[MXLPIWW
XLER6MRWYPEXMSR12
12)RIVK]8-*6IUYMVIQIRX
,:%''SQ*SVFYMPHMRK
GSRWXVYGXMSRTVMSVXS
FYMPHMRKIPIGXVMGEPW]WXIQW
EVIRSXWYJJMGMIRXXSLERHPI
EHHMXMSREPQIGLERMGEPYRMXW
EWWSGMEXIH[MXLMRGVIEWIH
EMVI\GLERKIW)RIVK]8-*6IUYMVIQIRX
,:%''SQ*SVFYMPHMRK
GSRWXVYGXMSRTVMSVXS
QIGLERMGEPW]WXIQWHSRSX
TVSZMHIWYJJMGMIRXRYQFIV
SJEMVI\GLERKIW)RIVK]8-*6IUYMVIQIRX
8SXEP
%PPGSWXWMR97(
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
'ST]VMKLX :*%-RG%PPVMKLXWVIWIVZIH%YK 4EKI SJ
Page 80 of 86
Appendix B
Reports on Substantial Renovation or Clearance to Remove Existing Conditions for One Building
Proposed Renewal and Renovation 103412
Hastings, MN
Page - 15
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 81 of 86
Report on Substantial Renovation or Clearance to Remove
Existing
Conditions
Linn Investment Properties, LLC–
1-2
Business Name/Address/ Building ID:
1511 Vermillion St. Hastings, MN
Building requires substantial renovation or clearance to remove existing conditions (Y/N): Y
Under the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10a, paragraph
a.1.iii, requires that at least 30 percent of the buildings in a Renewal and Renovation Tax Increment District
“require substantial renovation or clearance to remove existing conditions such as: inadequate street layout,
incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit
density, obsolete buildings not suitable for improvement or conversion, or other identified hazards to the
health, safety, and general well-being of the community.”
The above building, based upon interior inspection, review of building permit records, site observation,
discussion with City staff and review of current planning documents, requires substantial renovation or
clearance to remove the following existing conditions:
Incompatible Uses or Land Use Relationships
Property exhibits faulty arrangement and is a non-conforming land use.
Obsolete Building not suitable for Improvement or Conversion
Building is functionally obsolete and not suitable to be modified or converted from current
use to a conforming land use.
Other Identified Hazards to Health, Safety, and General Well-Being of the Community
Poor linkage/transition between the residential, commercial and the conditions within the
public rights-of way. The physical and economic difficulties associated with a lot-by-lot or
building-by-building renewal of all properties in the project area lead to the conclusion that
this type of reinvestment/renewal is unlikely to occur. A more likely and feasible scenario is
total redevelopment, which would contribute to the near term and future health and well being
of the Hastings community.
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 82 of 86
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 83 of 86
Appendix G
Findings Including But/For Qualifications
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF
Plan) for Tax Increment Financing District No. 5 (District), as required pursuant to Minnesota Statutes,
Section 469.175, Subdivision 3 are as follows:
1.Finding that the District is a renewal and renovation district as defined in M.S., Section 469.174,
Subd. 10a.
The District consists of one parcel, with plans to redevelop the area for commercial purposes. The
HEDRA obtained a "Proposed Renewal and Renovation TIF Eligibility Assessment" dated June 23,
2008, prepared by SEH. Based on that report, it has been determined that parcels consisting of 70%
of the area of the District are occupied by buildings, streets, utilities, paved or gravel parking lots,
or other similar structures and at least 20% of the buildings located in the District were structurally
substandard and at least 30% of the other buildings require substantial renovation or clearance to
remove existing conditions such as inadequate street lay-out, incompatible uses or land-use
relationships, obsolete buildings not suitable for improvement or conversion, or other identified
hazards to the health, safety, and general well-being of the community. Specifically, the parcel in
the District was previously three separate parcels that have been assembled for redevelopment. The
original parcels contained an abandoned gas station with underground tanks that required removal,
an obsolete gas station building not suitable for renovation and containing asbestos, an old house
containing asbestos that was the only residential structure on the commercial block, and a portion of
the adjacent bank property that was underutilized. The structures have been demolished and the
underground tanks have been removed under a development agreement between the HEDRA and the
property owner and HEDRA Resolution 7-2008, and in accordance with M.S., Section 469.174,
Subd. 10(d) that provides that a parcel of property on which a structurally substandard building or
other buildings and improvement have been demolished by a tax increment authority or by a
developer under a development agreement with the authority may still be treated as occupied by such
building or improvements for purposes of creating a renewal and renovation tax increment financing
district if prior to the demolition the authority finds by resolution that the parcel was occupied by a
structurally substandard building or other buildings and improvements and that the authority intends
to include the parcel in a tax increment district. (See Appendix F of the TIF Plan.)
The District is in the public interest because it will it redevelop substandard areas where extensive
soil corrections, tank removal and asbestos abatement have been needed, provide an impetus for
commercial development, and preserve and enhance the tax base of the state.
2.Finding that the proposed development, in the opinion of the City Council, would not reasonably be
expected to occur solely through private investment within the reasonably foreseeable future and that
the increased market value of the site that could reasonably be expected to occur without the use of
tax increment financing would be less than the increase in the market value estimated to result from
the proposed development after subtracting the present value of the projected tax increments for the
maximum duration of the District permitted by the TIF Plan.
The proposed development, in the opinion of the City, would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future: This finding is supported
by the fact that the redevelopment proposed in the TIF Plan meets the City's objectives for
redevelopment. The site is located within the Vermillion Street Redevelopment area - a key
commercial corridor in the City. The old gas station was constructed in 1971 and has been closed
and vacant for over 10 years without any redevelopment occurring. The gas station site by itself was
AppendixG-1
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 84 of 86
not large enough to support new retail until the current developer, Lynn Properties, acquired the old
house and underutilized bank property to the south to assemble a parcel big enough to provide retail,
off-street parking, and improved site access through the alley. Due to the high cost of assembling the
land, removing the existing structures and improvements, and replacing four feet of unbuildable soils
and improving vehicle access, this project is feasible only through assistance, in part, from tax
increment financing. The developer was asked for and provided a letter and a proforma as
justification that the developer would not have gone forward without tax increment assistance. (See
attachment in Appendix G of the TIF Plan.)
The increased market value of the site that could reasonably be expected to occur without the use of
tax increment financing would be less than the increase in market value estimated to result from the
proposed development after subtracting the present value of the projected tax increments for the
maximum duration of the District permitted by the TIF Plan: This finding is justified on the grounds
that the cost of land assembly, demolition, and site improvements add to the total redevelopment cost.
Without tax increment financing assistance, the current owner could not afford to assemble the site
from the three parcels. Redevelopment of the vacant gas station alone is not viable, and the site is
too small to attract a retail or commercial tenant that can pay a high enough rent to support new
construction and redevelopment costs. Redevelopment of the vacant gas station was not financially
feasible, as evidenced by the decade it remained vacant without a buyer. The City reasonably
determines that no other redevelopment of similar scope is anticipated on this site without
substantially similar assistance being provided to the development.
Therefore, the City concludes as follows:
a.The City's estimate of the amount by which the market value of the entire District will
increase without the use of tax increment financing is $0.
b.If the proposed development occurs, the total increase in market value will be $1,048,000
(see Appendix D and G of the TIF Plan)
c.The present value of tax increments from the District for the maximum duration of the
district permitted by the TIF Plan is estimated to be $246,457 (see Appendix D and G of the
TIF Plan).
d.Even if some development other than the proposed development were to occur, the Council
finds that no alternative would occur that would produce a market value increase greater than
$801,543 (the amount in clause b less the amount in clause c) without tax increment
assistance.
MARKET VALUE BUT / FOR ANALYSIS
Current Market Value - Est.239,900
New Market Value - Est.1,287,900
Difference1,048,000
Present Value of Tax Increment246,457
Difference801,543
Value likely to occur without Tax Increment is less than:801,543
AppendixG-2
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 85 of 86
3.Finding that the TIF Plan for the District conforms to the general plan for the development or
redevelopment of the municipality as a whole.
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the
general development plan of the City.
4.Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound
needs of the City as a whole, for the development or redevelopment of the Project Area by private
enterprise.
The project to be assisted by the District will result in preservation and enhancement of the tax base,
and an impetus for commercial by the renovation of substandard properties along Vermillion Street.
AppendixG-3
Modification of Redev Plan - Establish TIF Dist No. 5
City Council Report - July 19, 2010
Page 86 of 86