1999-05-03 TIF 11
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Development Pp approved by
City Council 5'". , 1999
TIF Plan, TIF Diet No. 11 approved by
City Council -6 (3 , 1999
MODIFIED DEVELOPMENT PROGRAM
DEVELOPMENT DISTRICT NO.1
and
TAX INCREMENT FINANCING PLAN
TAX INCREMENT FINANCING DISTRICT NO. 11
CITY OF ALBERTVILLE, MINNESOTA
May,-3 , 1999
This Instrument Drafted by:
KENNEDY & ORA VEN, CHARTERED (SJB)
470 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
Telephone: (612) 337-9300
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SECTION I.
Subsection 1.1.
Subsection 1.2.
Subsection 1.3.
Subsection 1.4.
Subsection 1.5.
Subsection 1.6.
Subsection 1.7.
Subsection 1.8
Subsection 1.9.
Subsection 1.10.
Subsection 1.11.
Subsection 1.12.
Subsection 1.13.
Subsection 1.14.
SECTION II.
Subsection 2.1.
Subsection 2.2.
Subsection 2.3.
Subsection 2.4.
Subsection 2.5.
Subsection 2.6.
Subsection 2.7.
Subsection 2.8.
Subsection 2.9.
Subsection 2.10.
Subsection 2.11.
Subsection 2.12.
Subsection 2.13.
Subsection 2.14.
Subsection 2.15.
Subsection 2.16.
Subsection 2.17.
Subsection 2.18.
Subsection 2.19.
Subsection 2.20.
Subsection 2.21.
Subsection 2.22.
Subsection 2.23.
Subsection 2.24.
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MODIFIED DEVELOPMENT PROGRAM FOR DEVELOPMENT
DISTRICT NO. 11 .......................................................................... 1
Definitions....... ...................... .................................................... .... ............ .......... 1
Statement and Finding of Public Purpose ........................................................... 2
Statutory Authority...................................... ................................................ ........ 2
Statement of Objectives ............ .............................. ........ ........ ........................ .... 3
Estimated Public Costs and Supportive Data...................................................... 4
Environmental Controls.... ........................................ ........ ........ ........ .............. .... 4
Proposed Reuse of Property ...................................................... .......................... 4
Public Improvements and Facilities to be Constructed Within
Development District No.1.............. ................ ................ ...... ...................... ...... 4
Administration and Maintenance of the Development District........................... 4
Rehabilitation................ .................. .................. .................... ...... ........ ................ 5
Relocation.......................................... ......... .............. .................. ........................ 5
Open Space to be Created .................................................................................... 5
Boundaries of the Development District............................................................. 5
Parcels to be Acquired or May be Acquired In Whole or in Part
Within the Development District ........................................................................5
TAX INCREMENT FINANCING PLAN FOR TAX
INCREMENT FINANCING DISTRICT NO. 11...........................................6
Statutory Authority............ ...... .......... ...................... .............. ............ ............ ...... 6
Statement of Objectives............ ...... .................... .......... .... .......... ...... .... .............. 6
Statement of Public Purpose ............................. ........ .......... ................................ 6
Development District Program.. ............................ .... .................. ........................ 7
Description of TIP District........ ........ .................... ...... ...... ............................ ...... 7
Development Contracts. ............ ........ ........................ .... .................... .................. 7
Classification of TIP District..... .......... .................. ...... ................................ ........ 8
Modification of TIP Plan. ........ .......... ............ ...... ...................... .... ...... ................ 8
Use of Tax Increment...... ............ ...... ...... ............ .......... ............ ........ .... .......... .... 8
Limitation on Collection of Increment ................................................................ 9
Limitation on Administrative Expenses .............................................................. 9
Limitation on Boundary Changes...... .............. .......... ...................... .... ................ 10
Relocation... .... .................... ...... .......... ................ ...... .......... .......... ........ .............. 10
Parcels to be Acquired Within the TIP District................................................... 10
TIF Account .... .................... ............ ............ ...................... ........ .... ...................... 10
Estimate of Project Costs .... .... ...... .................... ........ ...... .................... ................ .10
Estimate of Bonded Indebtedness ....................................................................... 10
Original Tax Capacity and Original Tax Capacity Rate...................................... 11
Estimate of Captured Tax Capacity and Tax Increment ..................................... 11
Duration of the TIF District................................................................................. 121
Estimate of Impact on Other Taxing Jurisdictions .............................................. 12
Annual Financial Report ....... .......... .......... ........ ........................ .......................... 12
Notification of Prior Planned Improvements ...................................................... 12
Assessment Agreements...... .... ...... .................... .......... .... .... .............. .... ...... ........ 12
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Subsection 2.25. Local Government Aid/Homestead and
Agricultural Credit Aid (LGNHACA) ............................................................... 12
Subsection 2.26. TIP Account .................................. .............. .................................................. ...... 12
EXHIDIT A
MAP OF DEVELOPMENT DISTRICT NO.1 AND
TAX INCREMENT FINANCING DISTRICT NO.1
EXHIDIT B
EXHIDIT C
EXHIDIT D
DESCRIPTION OF TAX INCREMENT FINANCING DISTRICT NO. 11
TAX INCREMENT SCHEDULE
IMPACT TABLE
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SECTION I MODIFIED DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT
NO.1
Subsection 1.1. Definitions. For the purposes of the Development District Program, the
following terms shall have the meanings specified below, unless the context otherwise requires:
"City" means the City of Albertville, a municipal corporation under the laws of the State
of Minnesota.
"Comprehensive Plan" means the City's Comprehensive Plan, including the objectives,
policies, standards and programs to guide public and private land use, development,
redevelopment and preservation for all lands and water within the City.
"City Council" or "Council" means the Albertville City Council;
"City Development District Act" or "Act" means Minnesota Statutes, Sections 469.124
through 469.134, as amended.
"County" means Wright County, Minnesota.
"Development District" means Development District NO.1 which was initially approved
by the Council in April, 1981 pursuant to and in accordance with the City Development District
Act, and as it has been or may be modified.
"Development District Program" or "Program" means the program for development of
the District adopted by the City pursuant to the Development District Act.
"Project Area" or ''Project'' means the property within Development District No.1, as
described in the Development Program.
"State" means the State of Minnesota.
''Tax Increment Financing Act" or "TIF Act" means Minnesota Statutes, Sections
469.174 through 469.179, inclusive, as amended.
''Tax Increment Bonds" means any general obligation or revenue tax increment bonds or
notes issued by the City to [mance the public costs associated with Development District No. 1 as
stated in the Program and in the Tax Increment Financing Plan for the Tax Increment Financing
Districts within Development District No.1, or any obligations issued to refund the Tax
Increment Bonds.
''Tax Increment Financing District" or ''TIF District" means any Tax Increment Financing
District created and established pursuant to the TIF Act within Development District No. 1.
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''Tax Increment Financing Plan" or "Plan" means the TIP Plan adopted by the Council for
any TIP District within Development District NO.1.
Subsection 1.2. Statement and Finding of Public Pumose. The Council of the City
determines that there is a need for development and redevelopment within the corporate limits of
the City and within the Development District to provide employment and housing opportunities,
to improve the tax base, and to improve the general economy of the State. It is found that the
area within the District is potentially more useful and valuable than is being realized under
existing development, is less productive than is possible under this Program and, therefore, is not
contributing to the tax base to its full potential.
Therefore, the City has determined to exercise its authority to develop a program for
improving the Development District of the City to provide an impetus for private development,
to maintain and increase employment, to utilize existing potential and to provide other facilities
as are outlined in the Development Program adopted by the City.
The Council finds that the welfare of the City as well as the State of Minnesota requires
active promotion, attraction, encouragement and development of economically sound industry,
housing, and commerce to carry out its stated public purpose objectives.
Subsection 1.3. StatutOry Authoritv. The Council reaffirms its determination that it is
desirable and in the public interest to establish, develop and administer a Development Program
for the Development District in the City, pursuant to the provisions of the Act.
Funding of the necessary activities and improvements in the Development District may be .
accomplished in whole or in part through tax increment financing in accordance with the TIP
Act.
The City has designated a specific area within the corporate limits of the City as
Development District No.1 as authorized by Section 469.126 of the Act, as outlined in this
document. Within the Development District, the City has previously created TIP District Nos. 1,
2,3,4,5,6, 7, 8, 9 and 10.
The original Development Program for Development District No. 1 was approved in
April, 1981 and has been modified subsequently. On July 17, 1989, the Development Program
was modified to expand the area of the Development District. On July 15, 1996 and May 20,
1997, the Development Program was again modified to expand the area of the Development
District.
The City has now determined that, in order to address changing development needs
throughout the City, it is in the public interest to provide for additional expenditures and
development within Development District No.1. This modified Development Program is
intended to restate and expand on the original program and all prior amendments hereto, which
are incorporated herein by reference. Nothing in this modification is intended to supersede or
alter the activities described in the original Development Program.
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Subsection 1.4. Statement of Obiectives. The Council determines that the Development
District will provide the City with the ability to achieve certain public purpose goals not
otherwise obtainable in the foreseeable future without City intervention in the normal
development process. The public purpose goals include: restore and improve the tax base and
tax revenue generating capacity of the Development District; increase employment and housing
opportunities; realize comprehensive planning goals; remove blighted conditions; revitalize the
property within the Development District to create an attractive, comfortable, convenient, and
efficient area for industrial, commercial and related use.
The City and Council seek to achieve the following Development District program
objectives:
1. Promote and secure the prompt development of certain property in the
Development District, which property is not now in productive use or in its highest and best use,
in a manner consistent with the City's Comprehensive Plan and with the minimum adverse
impact on the environment, and thereby promote and secure the development of other land in the
City.
2. Promote and secure additional employment and housing opportunities within the
Development District and the City for residents of the City and the surrounding area, thereby
improving living standards, reducing unemployment and the loss of skilled and unskilled labor
and other human resources in the City.
3. Secure the increase of commercial/industrial property subject to taxation by the
City, Independent School District No. 885, Wright County, and other taxing jurisdictions in order
to better enable such entities to pay for governmental services and programs required to be
provided by them.
4. Provide for the financing and construction of public improvements in the
Development District necessary for the orderly and beneficial development of the Development
District and adjacent areas of the City.
5. Promote the concentration of commercial, office, and other appropriate
development in the Development District so as to maintain the area in a manner compatible with
its accessibility and prominence in the City.
6.
possible.
Encourage local business expansion, improvement, and development, whenever
7. Create a desirable and unique character within the Development District thorough
quality land use alternatives and design quality in new and remodeled buildings.
8. Encourage and provide maximum opportunity for private redevelopment of
existing areas and structures that are compatible with the Development Program.
9. Encourage redevelopment of substandard buildings, to improve employment
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opportunities in the Development District and the City, where compatible with other planning
and development goals.
Subsection 1.5. Estimated Public Costs and Supportive Data. The public costs and
development plans for the Development District have been described in detail in each TIP Plan,
which are incorporated herein by reference.
The City now anticipates additional public costs to be financed in part with tax
increments from TIP District No. 11. Estimated costs and related data for such efforts are set
forth in the TIP Plan for TIP District No. 11. The TIP Plan for TIP District No. 11 is attached to
this modified Development Program.
Subsection 1.6. Environmental Controls. The proposed development activities in the
Development District do not present significant environmental concerns. All municipal actions,
public improvements and private development shall be carried out in a manner consistent with
existing environmental standards.
Subsection 1.7. Prooosed Reuse of Prooertv. The proposals for reuse of property within
the Development District are described in the documents referenced in Section 1.5 herein. The
City may acquire additional parcels for development, as identified in Subsection 1.14 herein.
Unless otherwise specified, the Development Program does not contemplate the
acquisition of private property until such time as a private developer presents an economically
feasible program for the reuse of that property. Proposals, in order to be considered, must be
within the framework of the above cited goals and objectives, and must clearly demonstrate
feasibility as a public program. Prior to formal consideration of the acquisition of any property,
the City Council will require a binding contract, performance bond and/or other evidence or
guarantees that a supporting tax increment or other funds will be available to repay the public
cost associated with the proposed acquisition. It is the intent of the City to negotiate the
acquisition of property whenever necessary. Appropriate restrictions regarding the reuse and
redevelopment of property shall be incorporated into any land sale contract to which the City is a
part.
Subsection 1.8. Public Improvements and Facilities to be Constructed Within
Development District No.1. The public improvements and facilities to be constructed within
Development District No.1 include streets, water, sanitary sewer and storm sewer, utilities, soils
correction, parking and landscaping. All public improvements are more particularly described in
the documents referenced in Subsection 1.5 herein.
Subsection 1.9. Administration and Maintenance of the Development District.
Maintenance and operation of the public improvements will be the responsibility of the
Administrator of the City who shall serve as Administrator of the Development District. The
Administrator will administer the Development District pursuant to the provisions of Section
469.131 of the Act; provided, however, that such powers may only be exercised at the direction
of the Council. No action taken by the Administrator pursuant to the above-mentioned powers
shall be effective without authorization by the Council.
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Subsection 1.10. Rehabilitation Owners of properties within the Development District
will be encouraged to rehabilitate their property to conform with the applicable state and local
codes and ordinances, as well as any design standards. Owners of the properties who purchase
property within the Development District from the City may be required to rehabilitate their
properties as a condition of sale of land. The City will provide such rehabilitation assistance as
may be available from federal, state or local sources.
Subsection 1.11. Relocation. The City does not anticipate the need to relocate any
residents or businesses, but if such need arises, provisions for relocation will be made in
accordance with Minnesota Statutes, Section 117.50 through 117.56 and any rules adopted by the
City Council.
Subsection 1.12. Open Space to be Created. The City, in carrying out the objectives of
the Development Program, proposes to encourage the beautification of open spaces through the
development of criteria which shall be incorporated into any land sale or development
agreements entered into by the City of Albertville.
Subsection 1.13. Boundaries of the Development District. Boundaries of Development
District No. 1 are unchanged by this modification. A map of the Development District is
attached at Exhibit A.
Subsection 1.14. Parcels To Be Acquired or Mav be Acquired In Whole or In Part Within
the Development District. The City may acquire any parcels in any TIP District or in the
Development District as a whole if necessary to carry out the goals and objectives of the
Development Program.
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SECTION ll. TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 11
Subsection 2.1. StatutOry Authoritv Pursuant to the TIP Act, the Authority seeks to
create TIP District No. 11 and adopt a TIP Plan for that TIP District.
Subsection 2.2 Statement of Obiectives The objectives for the Development
District set forth in Subsection 1.4 of the Development Program are incorporated herein by
reference.
Subsection 2.3 Statement of Public Purpose In adopting the TIP Plan for TIP
District No. 11, the City Council will make the following findings:
1. Anticipated development would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future and 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
TIP Plan;
Factual Basis:
Anticipated development would not reasonably be expected to occur solely
through private investment within the reasonably foreseeable future
The proposed development is a large manufacturing facility, located at a site that
requires street, curb and water improvements. The project financing requires an
SBA loan, and the developer has also submitted a letter from its primary mortgage
lender indicating that financing would not proceed without the assistance provided
by the City under this plan. Tax increment is necessary to help defray land costs
and the cost of public improvements that will be assessed against the property.
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
This site has failed to develop despite a good location near Interstate 94. It has
changed ownership several times, and no development proposals have come to
fruition. Any significant development would require extension of water and street
improvements. The site has been zoned commercial, but the City has determined
that such use is unlikely given historical patterns. The site is therefore being
rezoned for industrial use as proposed by Land of Lakes Stone Company.
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As noted in the tax increment cash flow in Exhibit C, the proposed development
will create an increase in market value of $1,250,000. The present value of the
tax increments for the maximum duration of the plan is $264,677. For the
reasons cited above, the City does not anticipate any increase in market value on
this site that would exceed $985,323 (the proposed increases less the present value
of the tax. increment). In fact, the proposed development is the largest industrial
facility built in the City in over ten years. Any other development under current
commercial zoning would create far less market value. The City believes that any
other industrial development would also require assistance, and would almost
certainly create less value than the substantial project proposed by Land of Lake
Stone Company.
2. The TIP Plan will afford maximum opportunity, consistent with the sound
needs of the Authority as a whole, for development of the District by private enterprise;
and
Factual Basis:
The tax increment assistance provided in the TIP Plan will permit development of
a long underutilized site in the City and will substantially increase jobs and tax.
base in the City.
3.
whole.
The TIP Plan conforms to general plans for development of the City as a
Factual Basis:
The City Planning Commission at its meeting on April 13, 1999 found that the
development proposed in the plan is consistent with the general plans for the City
as a whole.
Subsection 2.4 Development District Program. Actions taken with regards to TIP
District No. 11 will be fully consistent with the Plan for Development District No.1, as
modified.
Subsection 2.5 Description of TIP District. TIP District No. 11 consists of the property
described in Exhibit B. A map of the approximate boundaries of TIP District No. 11 is included
in Exhibit A.
Subsection 2.6. Development Contracts The Authority has not yet entered any
development contracts regarding property within the TIP District. The Authority expects to enter
a development contract with Land of Lakes Stone Company or a related entity providing for the
development described in more detail in Section 2.17 of this TIP Plan.
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Subsection 2.7. Classification of TIP District The City finds that TIP District No. 11 is
an economic development district pursuant to Section 469.174, subdivision 12 of the TIP Act
because the proposed tax increment assistance will discourage commerce, industry, and
manufacturing from moving their operations from the City, will result in increased employment
within the State, and will result in the preservation and enhancement of the tax base of the State.
Further, revenue derived from tax increment from the TIP District will not be used for to provide
assistance in any form to developments consisting of buildings or ancillary facilities if more than
15 percent of the buildings and facilities (determined on a square footage basis) are used for a
purpose other than:
1. the manufacturing, storage and distribution of tangible personal property,
including processing resulting in the change in condition of the property;
2. warehousing, storage and distribution of tangible personal property,
excluding retail sales;
3. research and development related to the activities listed in clause 1 or 2;
4. telemarketing, if that activity is the exclusive use of the property;
5. tourism facilities (if the conditions specified in Section 469.174, subd. 22
are met); and
6. space necessary for and related to the activities listed in clauses 1 to 5.
Subsection 2.8. Modification of TIP Plan The TIP Plan for TIP District No. 11 may be
modified by the City, provided that any reduction or enlargement of geographic area of TIP
District No. 11, increase in amount of bonded indebtedness to be incurred, including a
determination to capitalize interest on the debt if that determination was not a part of the original
plan, or to increase or decrease the amount of interest on the debt to be capitalized, increase in
the portion of the captured assessed value to be retained by the City, increase in total estimated
tax increment expenditures, or designation of additional property to be acquired by the City, shall
be approved upon the notice and after the discussion, public hearing and [mdings required for
approval of the original plan.
Subsection 2.9. Use of Tax Increment
1. Pursuant to Section 469.176, Subd. 4 of the TIP Act, all revenues derived
from the tax increment from TIP District No. 11 shall be used in accordance with the TIP
Plan. The revenues shall be used to [mance or otherwise pay the capital and
administrative costs of development activities within the Development District as
identified in the TIP Plan.
2. Pursuant to Section 469.1763, Subd. 2 of the TIP Act, at least 80 percent
of the revenue derived from tax increments paid by properties in TIP District No. 11 will
be expended on activities ("Activities") in the TIP District or to pay bonds, to the extent
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that the proceeds of the bonds were used to finance Activities in the TIP District or to
pay, or secure payment of, debt service on credit enhanced bonds (as defined in the TIP
Act). No more than 20 percent of the revenue derived from tax increments paid by
properties in TIP District No. 11 will be expended, through a development fund or
otherwise, on Activities outside of the TIF District but within Development District No. 1
except to pay, or secure payment of, debt service on credit enhanced bonds.
3. Revenues derived from tax increment will be expended in accordance with
the five-year rule as set forth in Section 469.1763 of the Tax Increment Act.
Subsection 2.10. Excess Tax Increment Pursuant to Sections 469.176, Subd. 20f the TIP
Act, in any year in which the increment exceeds the amount necessary to pay the costs authorized
by the TIP Plan, the City will use the excess amount to do any of the following, in the order
determined by the City:
1. Prepay the outstanding bonds;
2. Discharge the pledge of tax increment therefor;
3. Pay into an escrow account dedicated to the payment of bonds;
4. Retained by the City for future development purposes; or
5. Return the excess amount to the Wright County auditor, who shall distribute the
excess amount to the City, the County and Independent School District No. 885 in direct
proportion to their respective tax capacity rates.
In addition, and subject to the limitations set forth in Subsections 2.7 and 2.9 herein, the
City may choose to modify the TIF Plan in order to provide for other economic development
activities within the TIF District.
Subsection 2.11. Limitation on Collection of Increment
1. No increment shall be paid to the City from TIP District No. 11 after three
years from the date of certification of the original tax capacity of the taxable real property
in the TIF District by the county auditor unless within the three year period (a) bonds
have been issued in aid of Development District No. 1 pursuant to Section 469.178 of the
TIF Act or any other law except revenue bonds issued pursuant to Minnesota Statutes,
Sections 469.152 to 469.165, or (b) the City has acquired property within TIP District No.
11 or (c) the City has constructed or caused to be constructed public improvements within
TIF District No. 11.
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2. If, after four years from the date of certification of the original tax capacity
of TIP District No. 11, no demolition, rehabilitation, or renovation of property or other
site preparation, including qualified improvement of a street or right-of-way adjacent to a
parcel but not installation of underground utility service, including sewer or water
systems, have been commenced on a parcel located within TIP District No. 11 by the
City, or by the owner of the parcel in accordance with the TIP Plan, no additional
increment may be taken from that parcel, and the original tax capacity of that parcel shall
be excluded from the original tax capacity of the TIP District. If these activities
subsequently commences, the City will so certify to the county auditor, and the tax
capacity of the property as most recently certified by the commissioner of revenue will be
added to the TIP District's original tax capacity.
3. No tax increment will in any event be paid to the City from TIP District
No. 11 after 9 years from the date of receipt of the first increment, or 11 years from the
date of approval of this TIP Plan, whichever occurs first.
Subsection 2.12. Limitation on Administrative EXDenses Pursuant to Section 469.176,
Subd. 3 of the TIP Act, administrative expenses are limited to 10 percent of the total tax
increment expenditures for Development District No. 1. Each time the City increases the budget
of TIP District No. 11, the amount of tax increment money allocated to administrative costs may
be increased as long as the total of administrative expenditures does not exceed 10 percent of the
total budget of the TIP District.
Subsection 2.13. Limitation on Boundarv Changes The geographic area of TIP District
No. 11 may be reduced, but it may not be enlarged after five years following the date of
certification of the original tax capacity by the Wright County auditor. Thus, the TIP District
may not be enlarged after approximately September 2003.
Subsection 2.14. Relocation While no relocation is currently anticipated, the City
accepts as binding its obligations under state law for relocation and will administer relocation
services for families, individuals and businesses displaced by public action.
Subsection 2.15. Parcels to be Acquired Within the TIP District The City may acquire
any property within the TIP District in order to carry out the objectives of this TIP Plan.
Subsection 2.16. TIP Account The tax increment received with respect to TIP District
No. 11 shall be segregated by the City in a special account on its official books and records or
held by a trustee for the benefit of holders of bonds issued to finance development activities.
Subsection 2.17. Estimate of Project Costs The City intends to facilitate development of
the Land of Lakes Stone Company manufacturing facility. The total estimated costs to be
financed in part with tax increment, exclusive of interest, are as follows:
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Land acquisition
Street, curb, and water improvements
Administration
TOTAL
$300,000
50,000
35.000
$385,000
The above are estimates, which may shift among categories without modification of this
TIP Plan, provided that the total costs will not exceed the total listed, and that the City will
comply with Section 469.1763, Subd. 2. Costs within each category are deemed to include
capitalized interest which will vary depending on when or if bonds are issued, but in any event
will not exceed three years as required by Minn. Stat. Ch. 475.
Subsection 2.18. Estimate of Bonded Iridebtedness The City may finance the project
costs identified in this TIP Plan through issuance of revenue notes, pay as you go obligations in
any form, or general obligation bonds in a principal amount not to exceed the budget provided
for in this TIP Plan.
Subsection 2.19. Original Tax Capacity and Original Tax Capacity Rate As of the time
of the request for certification, the original tax capacity of TIP District No. 11 is expected to be
$2,795, representing the valuation for taxes payable in 1999. The original tax capacity rate of
TIP District No. 11 is estimated to be 136.404%. This rate is an estimate of the aggregate tax
capacity rate applicable to property within the TIP District for taxes payable in 1999, though the
actual rate may vary from that figure.
The original tax capacity will be increased each year by a factor estimated to be 27.34%,
representing the average percent increase in market value of property within the TIP District in
the five years prior to establishment of the TIP District.
The County auditor will also increase or decrease the original tax capacity of TIP District
No. 11 as a result of:
1. Change in the tax exempt status of property within the TIP District;
2. Reduction or enlargement of the geographic boundaries of the TIP District;
3. Reduction of valuation by means of a court-ordered abatement, stipulation
agreement, voluntary abatement made by the assessor or auditor or by order of the Minnesota
commissioner of revenue; or
4. Change in the classification of property within the TIP District to a classification
that has a different class rate.
Subsection 2.20. Estimate of Captured Tax Capacity and Tax Increment The City
expects the improvements in the TIP District to be completed by December 31, 1999. As of that
date, the captured capacity is estimated to be $41,637. The first full tax increment is estimated to
be $56,795 payable in 2001. The tax increment is expected to decline annually due to the annual
adjustment in the original tax capacity, unless the completed project increases in market value as
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well. A complete schedule of estimated tax increment from the TIP District is shown in Exhibit
C.
Pursuant to Section 469.177, Subd. 2 of the TIP Act, it is found and declared that all of
the captured tax capacity generated within TIP District No. 11 is necessary to finance or
otherwise make permissible expenditures authorized by Section 469.176, Subd. 4 of the TIP Act.
Subsection 2.21. Duration of the TIP District In accordance with Section 469.176, Subd.
1 (b) of the TIP Act, the City may continue to receive TIP payments until the earlier of 9 years
after the date of receipt of the first increment, or 11 years after the date of approval of this TIP
Plan. The City expects the first receipt in 2001 and the last receipt in 2009, but may collect
increments through May, 2010 at the latest.
Subsection 2.22. Estimate of Imoact on Other Taxing Jurisdictions The City believes
that, because the development would not have occurred without tax increment assistance, the TIP
District has no impact on other taxing jurisdictions. However, assuming the development would
have occurred without tax increment assistance, making the anticipated captured tax capacity
available to other jurisdictions, the hypothetical impacts on other jurisdictions are presented in
Exhibit D.
Subsection 2.23. Annual Financial Reoort The City will file the annual reports with the
State Auditor regarding all TIP Districts in the City, as required in Sections 469.175, subds. 5, 6,
and 6a of the TIP Act.
S:ubsection 2.24. Notification of Prior Planned Imorovements Pursuant to Section
469.177, Subdivision 4 of the TIP Act, the City reviewed its records with regard to the property
within TIP District No. 11 and found that no building permits were issued during the 18 months
immediately preceding approval of the TIP Plan by the City.
Subsection 2.25. Assessment Agreements Pursuant to Section 469.177, Subdivision 8 of
the TIP Act, the City may execute an assessment agreement in recordable form with the
developer which establishes a minimum Market value of land and improvements for the duration
of TIP District No. 11. The Assessment agreement, if any, shall be presented to the Wright
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
assessor may certify the minimum market value agreement. The assessment agreement shall be
filed of record in the office of the county recorder or the registrar of titles of Wright County.
Recording or filing of an assessment agreement complying with the terms of Section 469.177,
Subd. 8 of the TIP Act shall constitute notice of the agreement to any subsequent purchaser or
encumbrance of the land or any part thereof, whether voluntary or involuntary, and shall be
binding upon them.
Subsection 2.26. Local Government Aid/Homestead and Agricultural Credit Aid
CLGNHACA) Pursuant to Minnesota Statutes, Section 273.1399, subd. 6(d), the City elects to
SJB-160674
AL141-29
It
e
make a local contribution to pay costs of the project financed under this TIP Plan, in the amount
equal to 10 percent of the annual tax increment. Therefore, the City anticipates that the TIP
District will be exempt from LGNHACA loss.
The local contributions will be made from unrestricted funds of the City, and not from tax
increments or developer payments. The local contribution will not be used for general
government purposes or for improvements or costs that the City or the City planned absent the
project.
The City currently anticipates that the contribution will be made through City payment of
consultant fees in connection with the development (to the extent paid with funds other than tax
increment or developer payments), along with additional payments to the Developer for
development costs similar to those financed by tax increments under this plan. However, the
City reserves the right to satisfy its local match requirement through any means permitted under
Section 273.1399, subd 6(d).
SJB-160674
AL141-29
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EXHIBIT A
MAP OF DEVELOPMENT DISTRICT NO.1
and
TAX INCREMENT FINANCING DISTRICT NO. 11
SJB-I60674
AL141-27
A-I
Waste Water Treatment ,
.. :'. e & PU~~.Cc~~ Facility .
. .... ..Tif u~~tr(~..t":'No. \, ..;
::Cy . ...... .', ..." ....."'.....:. ........J..............:......~y.:..f,....:).~.;2a.::cit4Jer!'.. ~ .1.ejtn:.~u~.~e~.~.;t:.
>)' >)~{iVi~.r;~~~}~, .. I'm .......,,,
!cc.n ... '-40; .",,~~~~,\ !~
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......... 5933
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. ",. ~ .. 5592 5589 5596:: 5:: ::.. 5.~5~! 5556" 555:JfE ~ ~ ~~ _ .5. _. ____n_. o'
, 5519 5574 5581 ~ ~~~y ~ 0 5549 fS.l 5550 55471g, 55s2 fj> ~.
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----- 55th Street ~E
--.....;.. ~ '" M ~ ~ C '" M ;r}f. lil"~ iii
-, "1 ~51 11447 5498 J 1156 1157 CD CD .... :: I.... .... ,..,..:::;
'- . ",5491' 54' 94 - 5494 L'~ :l'l:l~ ~!! ~ Sl~~ C,..~ ~~11~ S! 8n~::
....... -- .s;.S09 <-Y. 5455 <hc< - ;::: ................:.::;..: ,;!I~:DC ~.~
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EXHIBIT B
DESCRIPTION OF TAX INCREMENT FINANCING DISTRICT NO. 11
PID No. 101-500-361401
PID No. 101-500-364304
PID No. 101-500-364401
Legal Description
(See attached)
--~
SJB-I60674
AL141-27
B-1
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EXHIBIT C
TAX INCREMENT SCHEDULE
TAX INCREMENT FINANCING DISTRICT NO. 11
SJB-I60674
AL141-27
C-l
e
--
Assumptions Report
City of Albertville, Minnesota
Tax Increment Financing (Economic Development) District
land of lakes Stone Project
Scenario A
Type of Tax Increment Financing District
Maximum Duration of TIF District
Economic Development
Lesser of 11 yrs. from TIF plan approval
-or- 9 years from 1st increment
Certification Request Date
Decertification Date
06/30/99
12/01/09 (9 Years of Increment)
Times: First
Excess
$150,000
2.45%
3.50%
1998/1999
$114,100
2,795
o
$2,795
Base Estimated Market Value
Original Net Tax Capacity
Assessment/Collection Year
1999/2000 2000/2001 2001/2002 2002/2003
Base Estimated Market Value $114,100 $114,100 $114,100 $114,100
Increase in Estimated Market Value 0 1,250,000 1,250,000 1,250,000
Total Estimated Market Value $114,100 $1,364,100 $1,364,100 $1,364,100
Times: First $150,000 2.45% 2,795 3,675 3,675 3,675
Excess 3.50% 0 42,494 42,494 42,494
Total Net Tax Capacity $2,795 $46,169 $46,169 $46,169
Base Inflation Factor
Local Tax Capacity Rate
Fiscal Disparities Contribution From TIF District
Administrative Retainage Percent (maximum = 10%)
Pooling Percent
City Tax Rate (Only if Local-Effort TIF)
27.34%
136.404% (Pay 1999)
0.0000%
0.00%
0.00%
NA
B.on.d..s.
Bonds Dated
First Interest Date
Underwriters Discount
06/30/99
02/01/00
1.50%
Note (Pay-As-You-Go)
Note Dated
Note Rate
06/30/99
7.50%
LGAlHACA Loss'
Will Annual Local Contribution Be Made (Yes or No)?
I.S.D #728 Equalized Tax Capacity Rate
I.S.D #728 Sales Ratio
City Sales Ratio & Taxable Net Tax Capacity
Present Value Date & Rate
Yes
NA
NA
NA
06/30/99
NA
5.00%
Prepared by: Springsted Incorporated (printed on 4/9/99 at 8:02 AM)
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Projected Pay-As-You-Go Note Report
City of Albertville, Minnesota
Tax Increment Financing (Ecolnomic Development) District
Land of Lakes Stone Project
Scenario A
Note Date: 06/30/99
Note Rate: 7.50%
Amount: $286,700
Semi-Annual Loan
Net Capitalized Balance
Date Principal Interest P& I Revenue Interest Outstanding
(1 ) (2) (3) (4) (5) (6) (7)
286,700.00
02101/00 0.00 0.00 0.00 0.00 12,602.85 299,302.85
08/01/00 0.00 0.00 0.00 0.00 11,223.86 310,526.71
02101/01 0.00 0.00 0.00 0.00 11,644.75 322,171.46
08/01/01 19,077.57 12,081.43 31,159.00 31,159.00 0.00 303,093.89
02101/02 19,792.98 11,366.02 31,159.00 31,159.00 0.00 283,300.91
08/01/02 19,607.72 10,623.78 30,231.50 30,231.50 0.00 263,693.19
02101/03 20,343.01 9,888.49 30,231.50 30,231.50 0.00 243,350.18
08/01/03 19,925.37 9,125.63 29,051.00 29,051.00 0.00 223,424.81
02101/04 20,672.57 8,378.43 29,051.00 29,051.00 0.00 202,752.24
08/01/04 19,942.79 7,603.21 27,546.00 27,546.00 0.00 182,809.45
02101/05 20,690.65 6,855.35 27,546.00 27,546.00 0.00 162,118.80
08/01/05 19,552.04 6,079.46 25,631.50 25,631.50 0.00 142,566.76
02101/06 20,285.25 5,346.25 25,631.50 25,631.50 0.00 122,281.51
08101/06 18,606.94 4,585.56 23,192.50 23,192.50 0.00 103,674.57
02/01/07 19,304.70 3,887.80 23,192.50 23,192.50 0.00 84,369.87
08/01/07 16,923.13 3,163.87 20,087.00 20,087.00 0.00 67,446.74
02101/08 17,557.75 2,529.25 20,087.00 20,087.00 0.00 49,888.99
08/01/08 14,261.16 1,870.84 16,132.00 16,132.00 0.00 35,627.83
02101/09 14,795.96 1,336.04 16,132.00 16,132.00 0.00 20,831.87
08/01/09 10,314.30 781.20 11,095.50 11,095.50 0.00 10,517.57
02/01110 10,517.57 394.41 10,911.98 10,911.98 0.00 0.00
08/01/10 0.00 0.00 0.00 0.00 0.00 0.00
02101/11 0.00 0.00 0.00 0.00 0.00 0.00
08/01/11 0.00 0.00 0.00 0.00 0.00 0.00
$322,171 $105,897.02 $428,068.48 $428,068.48 $35,471.46
Excess Tax Increment 183.52
Total Net Revenue $428,252.00
Prepared by: Springsted Incorporated (printed on 4/9/99 at 8:03 AM)
Tifa.xls
.
e e
I Market Value Analysis Report ,
City of Albertville, Minnesota
Tax Increment Financing (Economic Development) District
land of lakes Stone Project
Scenario A
Assumptions
Present Value Date 06/30/99
P.V. Rate - Gross T.1. 7.50%
Increase in EMV With TIF District $1,250,000
less: p.v of Gross Tax Increment 264,677
Subtotal $985,323
Less: Increase in EMV Without TIF 0
Difference '$985,323
Annual Present
Gross Tax Value @
Year Increment 7.50%
1 2000 0 0
2 2001 56,795 48,256
3 2002 55,104 43,553
4 2003 52,952 38,932
5 2004 50,210 34,341
6 2005 46,720 29,724
7 2006 42,274 25,019
8 2007 36,614 20,158
9 2008 29,405 15,059
10 2009 20,225 9,635
11 2010 0 0
12 2011 0 0
13 2012 0 0
14 2013 0 0
15 2014 0 0
16 2015 0 0
17 2016 0 0
18 2017 0 0
19 2018 0 0
20 2019 0 0
21 2020 0 0
22 2021 0 0
23 2022 0 0
24 2023 0 0
25 2024 0 0
$390,299 $264,677
Prepared by: Springsted Incorporated (4/9/99)
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EXHIBIT D
IMPACT TABLE
TAX INCREMENT FINANCING DISTRICT NO. 11
518-160674
ALl41-27
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EXHffiIT D
IMPACT TABLE
TAX INCREMENT FINANCING DISTRICT NO. 11
Sffi-160674
AL141-27
D-l
e
e
NOTICE OF PUBLIC HEARING
NOTICE is hereby given that the City Council of the City of Albertville will meet in the
Albertville City Hall, 5975 Main Avenue NE, Albertville Minnesota 55301 at 7:15 p.m.. on
Monday, May 3, 1999, to conduct a public hearing on the creation of Tax Increment Financing
("TIF") District No. 11 and a Tax Increment Financing Plan ("TIP Plan") for the TIP District, and
modification of the Development Program for existing Development District No.1.
\
The boundaries 'of the Development District are the same as the City as a whole: The
boundaries of the TIP District are shown in the map below. The proposed TIP District is an
economic development district, whose purpose is to facilitate development of a manufacturing
facility in the City. Details on the proposal are contained in the Development Program and the TIP
Plan, a draft copy of which will be available for public inspection at the Albertville City Hall during
regular business hours.
Any person wishing to express an opinion on the matters to be considered at the public
hearing will be heard orally or in writing.
BY ORDER OF THE CITY COUNCIL.
Dated: [Date of Publication]
LI//q/97
~~
. 'dGoeb /
City Administrator .
City of Albertville, Minnesota
.... .f
Sffi-161047
AL141-29
.
e
CITY OF ALBERTVILLE PLANNING COMMISSION
RESOLUTION NO.
1
RESOLUTION FINDING THE TAX INCREMENT FINANCING
PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 11
AND THE MODIFICATION TO THE DEVELOPMENT
PROGRAM FOR DEVELOPMENT DISTRICT NO. 1
CONSISTENT WITH THE PLANS FOR DEVELOPMENT OF
THE CITY OF ALBERTVILLE
~HEREAS, the City of Albertville has authorized preparation of a Tax Increment
Financing Plan (TIF Plan) for Tax Increment Financing District No. 11 (an economic development
district) within Development District No.1, and a modification to the Development Program for
Development District No.1, and the TIF Plan and the modified Development Program have been
submitted to the Planning Commission for comment; and
WHEREAS, the Planning Commission has reviewed the TIF Plan and the modified
Development Program and has compared them with the plans for development of the City as a
whole.
NOW, THEREFORE, BE IT RESOLVED By the Planning Commission of the City of
Albertville, Minnesota as follows:
1. The modified TIF Plan for TIF District No. 1 L and modified. Development Program
for Development District No. 1 are found to be consistent with the plan for
development of the City of Albertville as a whole.
2. It is recommended that the City Council of the City of Albertville hold the public.
hearing required by law and adopt the modified TIF Plan and Development
Program.
Approved this 13th day of April, 1999 by the Planning Commission of the City of
Albertville, Minnesota.
~r-
ATTEST:
~4
Secretary
S18-16 1048
. AL141-29