HomeMy WebLinkAboutIV.B - Redevelopment Findings - 11 & Vermillion
HEDRA Memorandum
To: HEDRA Commissioners
From: Rusty Fifield, Economic Development Coordinator
Date: May 7, 2020
Subject: Redevelopment Findings – 11th and Vermillion
Requested Action
Authorize staff to take steps necessary to bring the Board a proposal to allow for the demolition
of buildings prior to the potential creation of a TIF district on the parcels identified in this
memorandum (simple motion).
The TIF District may include four parcels generally located southeast of 11th and Vermillion. E
& R Investments (Ebert Construction) owns three of the parcels and a has preliminary
agreement to buy the remaining parcel (#4280). Please see the map below for further detail.
Background
Staff has been working with Ebert
Construction for the past four years on
plans for a commercial and mixed use
concept to redevelop the property south of
Walgreens on Vermillion Street. Our focus
has been on resolving issues related to
access & site constraints. Part of our
discussions has been on the potential of
creating a tax increment financing district
(consisting of the parcels shown here) to
assist with this development. The
preliminary evaluation of the site is that it
would meet the statutory criteria for the establishment of a redevelopment TIF district.
There are two basic criteria for a redevelopment TIF district:
1. 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.
2. More than 50% of the buildings, not including outbuildings, are structurally substandard to
a degree requiring substantial renovation or clearance.
Redevelopment Findings
May 7, 2020
Page 2
State law contains criteria for determining if a building is structurally substandard. The required
finding is that the building is not in compliance with the building code and could be modified to
satisfy the building code at a cost of more than 15% of constructing a new structure of the same
size and type on that site. Physical inspection of the building is required.
The developer is not requesting the creation of a TIF district at this time. The requested action is
to exercise the statutory authority to demolish structures prior to the establishment of an TIF
district. The developer has determined that the house in the 4020 parcel needs substantial
improvements (Potential lead paint, roof, mechanical, plumbing, electrical, flooring, exterior
doors, and windows) and should be demolished.
There are three key elements to this authority:
1. HEDRA must conduct the investigations and make the findings necessary to determine that
the building to be demolished meets the statutory criteria for "structurally substandard".
2. The building is demolished under one of three options: (a) HEDRA demolishes the building;
(b) The developer demolishes the building with financing from HEDRA; or (c) The developer
demolishes the building pursuant to a development agreement with HEDRA.
3. HEDRA has three years from the time the building is demolished to complete the
establishment of the TIF district and request certification by the County.
This action does not obligate HEDRA to establish a TIF district nor does it relieve the developer
from the need to demonstrate that tax increment is needed to make the project financially
feasible.
Financial Impact
We will retain Northland Securities (our Financial and Economic Development Advisor) to
manage the project and provide technical assistance. The developer will be required to place
$5,000 escrow sufficient to pay for these services and potential legal expense.