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HomeMy WebLinkAbout2009-05-07 OPH Memo Re Nolde TIF ProposalCity sf Park keights 14168 Oak Park Blvd. N * Box 2007 0 Oak Park Heights, MN 55082 0 Phone (651) 439-4439 o Fax (651) 439-0574 Mu- 2009 MEMO TO: Planning Commission Me. FROM: Eiric itohn3on, Cit Ad. RE: Nolde TIF PropoaI - Renew .. ve Jpmi Mr. Tim Nolde (d.b.a. Anchobaypro) has sul?mitted an application to the City for consideration of the creation of ci & Renewal" Tax Incremental Financing District (#1) that would aid in ultimate development of the Carriage Homes Development which would consist of a 41-unit Senior Cooperative and 120-unit assisted living facility. The applicant is seeking lo recover $1,200,000 of fax increments to off-set his total land acquisition costs of $1„600,000 and would be approximately 6.3% of The total project costs. The application has been forwarded to the City's financial consultant kir. Nick Skarich of Northland Securities for a more in-depth analysis and discussion of process and has r a favorable opinion. (See Sec 2.) Ai this time, if the City does wish to consider the use of TIF to aid in this Developme-, it must take the first step and adopt the enclosed Resolution (See Sec 3.) prepared by Briggs & Morgan (Adopted by the City Council on April 14th, 2009) calling for a public hearing on the proposed establishment of the TIF district as proposed. If is vital to note that the Developer has indicated that without the proposed level of TIF assistance, the project would not be able to proceed, (the "but-for-test"). The Planning Commission is also required to review and approve a supporting resolution on the proposed district. In its current form as proposed, nor is it anticipated ihot the Applicant would seek any actual cash contribution or direct financial burden on the pawl of the City. This is to be a "pay-as-you-go" Ill= District, rneaning if the units are not constructed there would be no new tax increment generated cind thus there would be TV.= payments paid to the Applicant to off-set their cosis. The City is also not being asked to issue any redevelopment or conduit financing. BENEFITS TO THE MP/ When examining a Ili: proposal, 0 City does look at lhe long-term impacts and benefits that can be generated from implemeniing ihe TIF. Redevelopment of a long standing run-down area fax base enhancemenls, new jobs, affordable housing, environmental remediation are all typical examples of TIF use and these benefits are evident. Additional ENCLOSURE - 3 benefits can be new roads, new utility systems, etc, so long as these are related to the development. I will preface the three points below by saying that generating TIF increment with a housing development tends to be more difficult versus a new commercial / office area as new residents will require more local public services as opposed to a commercial/industrial area. • The Notde TIF proposal does target to remove 6 "substandard" homes and place 160 +1 - new residential units in the City. The use of the word `substandard', in terms of T1F, generally is understood to mean that the cost of bringing such structures into code compliance would exceed 15% the value of a new and similar home, not that it is dilapidated, inhabitable or in poor condition. Because this TIF District is anticipated to be a Renewal District, meeting these requirement standards will not be as rigorous. The City has contracted a consultant LHB to perform this analysis and the report is enclosed. • Additionally, the tax base that is proposed to be generated is being used by the developer to reimburse his costs related to the acquisition of the 6 properties to approximately $1 ,200,000. Accordingly, the City is not going to be realizing an immediate tax-roll benefit as a result of the TIF, but will in the long term. Also, the total net accrued TIF revenues, estimated to be $ 3,250,000 with only $1,200,000 needed for the Developer, will leaving an estimated balance of $2,000,000. The City may use a portion of these remaining funds fup to 20 percent of all total GROSS T1F proceeds generated), "TIF pooling ", for other TIF eligible expenses throughout the balance of the City. (NOTE: This does assume a full build-ouf of all units by the Developer and applying their property values) Developer does already own all these properties, the redevelopment opportunities can also be positive in terms of addressing certain poorly maintained homes, eliminating wells and septic fields {these homes are not on City sewer and water) and this development may ultimately aid the City in reaching a goal of 5,000 in population, which may trigger state road aids. • One additional benefit that may be generated as a result of the TIF is that the Developer (Mr. Nolde), once the properties are acquired could provide to the City the necessary easement/ROW for an Oakgreen Ave. expansion. However, this benefit however could be generated in other ways, such as from MnDOT or as a condition of the CUP that would be required in the proposed area. APPLYING CJTY TIF POLICY Applying the City's Tax Increment Policy, the proposal would likely meet many of the City's requirements: Y y base requirements: • The proposal does demonstrate long -tem benefits to the City, being the renewal of the area. • The proposal does provide some employment opportunities related to the assisted care facility and some management staff of the Cooperative homes. • The proposal will not SIONIFCANTLY add to the City's commercial of industrial tax base. (The nature of the development is purely residential) • The proposal does not immediately conform to the Comprehensive Plan - the area is Zoned 8-4 (commercial), but multi - family residential is permitted via Conditional Use Permit. O The City has been given indications via the LIMB Report that the properties to be acquired and involved in the District are generally known to be in need of redevelopment and will likely meet the required statutory test of a Renewal District. KEY QUESTIONS AND RECCOMENDATIONS 1. Regardless of the proposal made by the Developer for TIF assistance, does the City desire housing in this area? If that answer is NO, then the merits of the TIF should be disregarded and the proposal unilaterally rejected. Within the last year, the City has approved a concept plan for this area to permit multifamily housing. However, the current plan has substantially increased the number of units to 160 +1 -. 2. Should that answer be something besides no, 1 would recommend that the City proceed onward with the further analysis of this proposal with the following being accomplished: Adopt a resolution calling for a Public Hearing (Sec 3.) (COMPLETED BY THE CITY COUNCIL ON APRIL 14#h 2009) on the concept of the TIF district creation and In the interim, further engage third -party experts to make more specific determinations on the qualification of the proposal as a Renewal District, clarify the "but -for" tests and the issue of qualifying the properties as substandard. All of these costs are to be the Developer's. Preliminary reports in these areas appear to be supportive. • The City must weigh the other values of the current tax base at the site against the predicted outcomes; some which are not all purely a financial consideration. Again, the City will benefit from right -of -way acquisition, removal of substandard homes, job creation, removal of septic /wells and longer -term tax base expansion. • The City is not making any final commitment on the TIF proposal at this time. A final approval by the City would not be considered until May and a TIF Developer's Agreement would be required that would outline all final commitments and expectations. ® For the City to further continue with the consideration of this request, the City Planning Commission must adopt the enclosed approving resolution, see enclosed. Please review the enclosed information: Sec 1. Introduction Letter and TIF Application from Anchobaypo. Sec 2. TIF Plan Documents dated April 20th, 2009 and Memo from Nick Skarich of Northland Securities dated April 9th, 2009, providing a summary and process discussion. Sec 3. Required Resolution to Initiate TIF Process. This document does not create the TIF district nor provides any approvals, but initiates the public hearing process to allow the City to make a decision in May 2009. Sec 4. Inspection Report Document from City Consultant I.H.B. for the required "Blight" Inspection Reports for Properties within the District. Sec 5. Additional Information from Anchobaypo. This includes a letter from Anchobaypro that he is seeking this to be a "pay -as- you -go" project and that his ultimate project IS dependent on the receipt of TIF assistance. Sec 6. General TIF information & What is a Renovation and Renewal District? Sec 7. Plan Layout (no approvals have been granted) Sec 8. Requested Resolution to be approved by Planning Commission. BRADLEY&DEIKB,RA. nuwrnmuLaw SUITE 100,4018 WEST 65TH STREET EDINA, MINNESOTA 55435 Mr. Eric Johnson City Administrator City of Oak Park Heights 14168 Oak Park Blvd, Box 2007 Oak Park Heights, MN 55082 Dear Mr. Johnson: OFFICE: (952) 926 -5337 FAX: (952) 926 -5743 March 16, 2009 Re: Anchobaypro, Inc. Tax Increment Proposal PATRICK J. BRADLEY pjb@bradleydeike.com ROBERT J. MIKE rjd@bradleydeike.com STEPHEN J. WONTOR sjw@bradleydeike.com As you are aware, this firm has been retained by Anchobaypro, Inc., (the "Developer ") in connection with its proposal for tax increment financing from the City of Oak Park Heights to assist it in undertaking a proposed housing development. The tax increment application requires that it be accompanied by a letter from the Developer's legal counsel stating that the proposal has the general capacity to meet tax increment standards under Minnesota law, This letter is intended to satisfy that requirement. The creation of a renewal and renovation tax increment district requires compliance with the requirements of Minnesota Statutes, section 469.174, subd. 10a. Simply stated, those requirements are: 1. 70% of the area of the proposed district must be occupied by improvements. 2. In order to be considered "occupied ", at least 15% of the area of a parcel must be occupied by "buildings, streets, utilities, paved or gravel parking lots, or other similar structures." 3. 20 percent of the buildings, not including outbuildings, oust be structurally substandard, as defined in the statute, to a degree requiring substantial renovation or clearance and 30 percent of the other buildings must have other conditions that would require substantial renovation or clearance to eliminate. Typically, a municipality will retain an engineering or architectural firm to inspect the properties and buildings to be included in a district and prepare a report on whether the proposed district 1 of 21 NOLDE TIF DOCUMENTS meets the statutory requirements, The City has done that in this case and the preliminary report of the City's consultant indicates that the proposed tax increment district would qualify. Under the tax increment financing laws before a municipality can create a tax increment district the municipality must find that if it were not for the tax increment financing assistance, the proposed development would not occur. Again, a city proposing to create a tax increment district will typically retain a financial advisor to examine the developer's pro forma and to advise the city on whether the use of tax increment is _justified and what the level of assistance should be. The Developer has provided to the City a preliminary project pro forma and will provide such updated pro forrnas and supporting documentation as the City and its financial advisor will need to make this finding. . The proposed development involves the acquisition of six single family homes for demolition to allow construction of new townhouses. The cost of acquiring the single family homes exceeded $ 1,600,000. Such costs are extraordinary costs of redevelopment and normally can not be recovered through the proceeds received from the sales of housing units or from long term operations. In addition, the project is being designed with certain material upgrades that will add cost to the project. Finally, the Developer anticipates that certain property that it has acquired will have to be contributed to the City for adjacent right-of-way improvements, which also adds cost to the project. We believe that the project pro formas will demonstrate that without tax increment assistance the return that the Developer will likely achieve by doing the project will be below the level that a typical housing developer would expect to receive. I hope that this letter is sufficient for your purposes at this point. If you have any questions please let me know. Sincerely, Robert J. Deike cc: Tim Nolde 2 of 21 NOLDE TV DOCUMENTS CiTY OF OAK PARK HEIGHTS 14188 03k Park Blvd. N • aox 2007 • Oak Park Heights MN 55082 • Phone (851) 439 -4439 • Fax (651) 439 -0674 A. PROJECT: ' . Applicant Name Address Telephone # Fax # Contact Person 3 of 21 NOLDE TIF DOCUMENTS APPLICATION FOR TAX INCREMENT FINANCING ANCHOBAYPRO, INC. P.O. Box119, Stillwater, MN 55082 551 430-3891 651 430 -9197 Tim Noide 2. Brief description of Applicant. ANCHOBAYPRO, INC., Is a locally owned real estate development company. ti r {� 3. PID 's Legal description, address and size o y1roJect site. The project will consist of Lots 1 and 2, Block One, Grutiotild r y, :rtiage'fio rse µ{x4perative of St. Croix Valley. The site Is approximately 227,000 square feet In size. Project: Description of building(s) including square footage, �. Proposed � � p lain. materials, proposed use, etc. Attach site p There will be one 48 unit residential buildings {two - stories in height). The building will be approximately 80,000 square feet In size, A second building will be a 120 unit assisted living facility of Pp y approximately 1 07,000 square feet. The exterior of both buildings will be brick on masonry with "Nardi- plank ". 1 APPLICATION FOR TAX INCREMENT FINANCING 5, If ro erty is to be subdivided, describe division planned. p � See proposed /pending preliminary plat. 7. Source of Financing. 4 of 21 NOLDE TIF DOCUMENTS 6. Estimated Project Costs: (Please enclose construction proformas, if available) a. Land Acquisition b. Public Improvements c. Site Improvements d. Demolition e. Building(s) f4 Equipment g, Architectural & Engineering Fees h. Legal Fees /Other Consulting Fees 1. Financing Costs j. Contingencies k. Other Overhead 1. Other Marketing a. Equity b. Bank Financing c. Tax increment Assistance d. Other e. J Other 2 TOTAL 1,780,000 580,000 120,000 15,240,000 226,000 63,000 520,000 100,000 100,000 368,000 19,097,000 TOTAL $19,097,000 $ 3,888,858 14,000,000 1,208,142 8. Form of financing project costs: 5 of 21 NOLDE TIF DOCUMENTS APPLICATION FOR TAX Il1CRBM NT FINANCING living facility generate $130,000 per year in taxes, 3 Pay -as-- You -Go 9. Name and address of architect, engineer and general contractor Architect- Archnet, 333 North Main, Stillwater, MN 55082a Engineer -- Foiz Freeman Erickson, Inc, 12445 55th Street North, Lake Elmo, MN 55042 General Contractor- ANCHOBAYPRO, INC., P.O. Box 119, Stillwater, MN 55082 10, Project Construction Schedule, a Construction Start Date b. Construction Completion Date c. If phased project 2009 Year s oL ___ % Comp!ete 2010 Year 50% % Complete 11. Total estimated market value of project upon completion $ 19,000,000 Pay -as- You -Go or Bonds 5/1/09 5/1/11 I2. Estimated real estate taxes on project upon completion of project (PIease show calculations) it Is estimated that the cooperative building will generate 72,000 In taxes per year and that the assist - • + 13. Projected number of new jobscreate: 16 24 APPLICATION FOR TAX INCREMENT FINANCING Full-time Part -time Seasonal B. TAX INCREMENT FINANCING REQUEST • 1. Describe the amount and purpose for which tax increment financing is required (please include proforma), We are requesting that the City create a 15 year renewal and renovation district and that the City 6 of 21 NOLDE - IF DOCUMENTS provide assistance to offset costs of the project equal to 90% of the tax increment generated over the term of the district. We estimate that the tax increment that would be generated from the project would generate net proceeds of approximately $1,207,000. The purposes for the request are: 1. The assistance would write -down the cost of acquiring the land to allow units to be affordable to residents of the City. 2. The assistance would finance upgrades in materials used to construct the buildings. 3. The assistance would allow the City to acquire and for right - of-way on Oakgreen Avenue. 4. The assistance results in the removal of several existing substandard single family homes. 2. Statement of necessity for use of tax increment financing for project. Tax increment financing is necessary to construct the project as proposed. There are a number of factors that have caused the costs of the project to increase beyond what would normally be Incurred. First, is .the cost of acquiring developed properties as opposed to vacant land. Second, upgrades in exterior materials add substantial costs. Third, the developer will contribute a substantial parcel of property to the City for the realignment and Improvement of Oakgreen Avenue. Finally, current economic conditions require a substantially larger equity contribution for a project like this. 4 3. Municipal Reference (if applicable). Please name other municipalities wherein the applicant, or other corporations the applicant has been involved with, has completed development within the last five years. City of Stillwater, Minnesota- Curve Crest Villas 7 of 21 NOLDE T!F DOCUMENTS APPLICATION FOR TAX INCREMENT FINANCING Long Lake Villas 5 4. The following documents must accompany the Application • A Project Pro - Forma, O Parcel Maps depicting the proposed TIF area, O A written statement from your attorney that the TIF proposal has the general capacity to meet applicable TIF standards under Minnesota Law. O SIGNIFICANT ADDITIONAL INFORMATION MAY BE REQESTED AT ANY TIME BY THE CITY AND MAY BE IN ADDITION TO THE • MATERIALS OUTLINED IN THIS APPLICATION. THE APPLICANT' SHALL BE REQUIRED TO SUBMIT ANY AND ALL INFORMATION AS REQUESTED DY THE CITY. 5. Applicant acknowledges and agrees to pay the $3,000 TIF Application Fee and is non - refundable. Additionally the Applicant acknowledges and agrees to pay all fees and expenses incurred by the City in connection with this application or establishment of the `CIF District, whether or not approved. The city does require a minimum deposit of $10,000 to cover such fees, this amount may be adjusted upward on a project -by- project basis. The Applicant shall hold the City, its officers, consultants, attorneys and agents harmless from any and all claims arising from or in connection with the Projector TIF Application, including but not limited to, any legal or actual violations of any State or Federal securities laws. Applicant recognizes and agrees that the City reserves the right to deny any Application for Tax Increrhent Financing at any state of the proceedings prior to adopting the resolution approving the district, that the Applicant is not entitled to rely on any preliminary actions by the city prior to the final resolution, and that all expenditures, obligations, costs, fees or DATE: APPLICATION FOR TAX INCREMENT FINANCING IlabilItle§ incurred by the Applicant in connection with the Project are incurred by the Applicant at Its sole risk and expense and not In reliance on any actions of the City. The undersigned, a duly authorized representative of the Applicant, hereby certif es that the foregoing Information is true, correct and complete as of the date hereof and agrees that the Applicant shall be bound by the terms and provisions herein. 8 of 21 NCLDE T1F DOCUMENTS Applicant: ANCHOBAYPRO, INC, By: Its: City of Oak Park Heights, Minnesota Taxable Tax Increment Revenue Bonds (Senior Cooperative Project) SOURCES Bond Proceeds Total Sources USES Net Bond Proceeds Capitalized Interest Costs of Issuance Total Uses Closing Date Maturity Date Local Tax Rate Fiscal Dis parities Rate State Auditor Fee Administrative Fees Inflation Rate Minimum Debt Service Coverage Ratio Prelimina -- Sub change. 9 of 21 NOLDE TIF DOCUMENTS 4.00% Master Assumptions $ 539,000 539,000 $ 441,5O8 75,932 21,560 $ 539,000 3/1/2009 2/1/2025 0.83309 N/A 0.36% 10.00% L00% 1.25x S &U 1211812008 L fi oen2tsr L:OGp4'raI1Ye Date kro1eci - Original Estimated Tax Tax Capacity Capzcity (see assumptions) 1.00 'S In1111lan Captured Tax Capacity Estimated Tax lrsercrnrnt 0.83309 State Auditor Fees 11.36% City Available Admin increment Fee 10.00 Net of Fees Principal Coupon Interest Debt Capitslixed Service Interest Told Net Debt Service Excess Tax Increment ' Debt Scryiee Coverage Ratio 0.0 e.0 3/1/2409 OA 11/1/2009 6,662 6,662 - - - . - 7.000% 15,721 15,721 (16,507) (786) - 1.05 0.8 2/1 /2010 . - - - - 7.000% 18,865 18,865 (19,308) (94:1) - 1.05 0.5 8/1120 i 0 6,662 6,662 - - - .. - 7.000% 18,865 18,865 (19,808) (943) - 1.05 1,0 2/112011 - - - - - 7.000% 18,865 I8,865 (19,808) (943) - 1.05 1.5 8/112011 6,662 81,000 74,338 30,965 (111) (3,085) 27,768 3,000 7.000% 13,865 21,865 - 21,865 5,903 1.27 2.0 2/112012 30,965 (111) (3,085) 27,768 3,000 7.000% 13,760 21,760 - 21,760 6,008 1.28 2.5 811/2012 6,662 108,000 101,338 42,212 (152) (4,206) 37,854 11,000 7.060°'8 18,655 29,655 - 29,655 8, 199 1.21 3.0 2/1/2013 42,212 (152) (4,206) 37,854 12,000 7.000% 18,.270 30,270 • 30,270 7,584 1.25 3.3 8/1/2013 6,661 109,080 102,418 42,662 (154) (4,251) 32,257 12,000 7.000% 17,850 29,850 • 29,850 8,407 1.28 4.0 2/1/2014 42,662 (154) (4,251) 31,257 13,000 7.000% 17,430 30,430 30,430 7,327 1.26 4.5 8/1/2014 6,662 110,171 103,509 43,116 (155) (4,296) 38,665 13,000 7.0007% 16975 29,915 29,975 8,690 1.29 54 2/1/2015 43,116 (155) (4,296) 38,665 14,000 7,000% 16,520 30,520 . 30,520 8,145 1.27 5.8 8/1/2015 6,662 111,273 104611 43,575 (157) (4,342) 39,076 15,000 7.000% 16,030 31,030 - 31,030 8,046 1.26 4.0 2/1/2016 43,575 (157) (4,342) 39,076 15,000 7.000% 15,505 30,505 • 30,505 8,571 1.21 CS 8/1/2016 6,662 112.385 105,723 44,038 (159) (4,318) 39,492 16,000 7.000% 14,980 30,980 - 30,980 8,512 1.27 7A 2/1 /2017 44,038 (159) (4,388) 39,492 17,000 7.00035 14,420 31,420 31,420 8,072 1.26 7.5 8/1/2017 6,662 113,509 106,847 44,507 (160) (4,435) 39,912 18,000 7.000% 13,825 31,825 - 31,825 8,087 1.25 1.0 2/1/2018 44,507 (160) (4,435) 39,912 111,000 7.000% 13,195 31,195 • 31,193 8,717 1.28 L5 1/1/2018 6,662 114,644 107,982 44,979 (162) (4,482) 40,336 19,000 7.000% 12,563 31,565 - 31,565 8,771 1.28 9.0 2/1/2019 44,979 (162) (4,482) 40,336 20,000 7.00041 11,900 31,900 • 31,900 8,436 1.2.6 9.5 8/1/2019 6,662 115,79) 109, 129 45,437 (164) (4,529) 40,764 21,000 7.0004 11,200 32,200 • 32,200 8,564 1.27 16.0 2111'2020 45,457 (164) (4,529) 40,764 22,000 7.000% 10,465 32,465 • 32,465 8,299 126 1 0.5 8/1/2029 6,662 116,949 110,287 45,939 (165) (4,577) 4 1,197 23,000 7.0100% 9,695 32,695 - 32,695 8,502 1.26 11.0 2/1/2021 45,939 (165) (4,577) 41,197 24,000 7.000%. 8,890 32,890 - 32,890 8,307 1.25 11.5 811/2021 6,662 118,111 111,456 46,426 (167) (4,626) 41,633 25,000 7.000",4 8,050 33,050 - 33,050 8,583 1.26 130 2/112022 46,426 (167) (4,626) 41,633 26,4300 7.000% 7,175 33,175 - 33,175 1,458 1.25 135 8/112022 6,662 119,299 112,637 46,918 (169) (4,675) 42„075 27,000 1.000% 6,265 33,265 - 33,265 8,810 1.26 13.0 2/112023 46,918 (169) (4,673) 42,075 23,000 7.000% 5,320 33020 - 33,3213 8,755 126 115 8/112023 6,662 120,492 113,830 47,415 (171) (4,724) 42,520 29,000 7.000% 4,340 33,340 - 33,340 9,180 1.28 14.0 2/1/2024 47,415 (171) (4,724) 42,520 30,000 7.000% 3,325 33,325 - 33,325 9,195 1,28 14.1 8/1/2024 6,662 121,697 115,035 47,917 (173) (4,774) 412,970 32,000 7.000`x. 2,275 34,275 - 34,275 8,695 1.25 150 2/1/2025 47,917 (173) (4,774) 42,9703 31,000 7.000'% 1,155 34,135 - 34,155 8,815 1.26 106,592 1,585,731 1,479139 3,232,256 (4,436) _(122.782) 11 1 2 88 539,Doo 406,216 94� S,2ts 2 869,284 232,138 , ,_. ...... _ City of Oak Park Heights, Minnesota Taxable Tax Incremets! Revenue Bonds 10 of 21 NCLDE TIF DOCUMENTS Type of Tax Increment Financing (TIF) District Senior Co -Op Units Number of Units Average Value Per Unit Percent Complete Assessed Market Value @a Times: Property Classification Rate Net Tax Capacity Total Assessed Market Value Total Net Tax Capacity (NTC) Property ID 05.029.20.14.0003 05.029.20.11.0026 05.029.20.11.0063 05.029.20.11.0065 Original Net Tax Capacity (ONTO) - Total Total Tax Capacity Rate (Pay 2008) Fiscal Disparities Ratio (Pay 2008) Annual Valuation Growth Rate State Auditor Fee Administrative Fee 11 of 21 NOLDE TIF DOCUMENTS City of Oak Park Heights, Minnesota Taxable Tax Increment Revenue Bonds Assumptions Schedule Annual Valuation Growth Rate = 1.00% Construction Year = 2009 Assessment Year = 2010 Taxes Payable Year = 2011 48 225,000 100% 75.00% 8,100,000 1.00% $81,000 8,100,000 $81,000 83.309% N/A 1.00% 0.36% 10.00% Redevelopment 2010 2011 2012 (1) Information obtained from the Washington County Property and Tax Information web site. 2011 2012 2012 2013 2013 2014 100.00% 100.00% 100.00% 10, 800,000 10,908,000 1 1,017,080 1.00% 1.00% 1.00% $1 08,000 $109,080 $110,171 10,800,000 10,908,000 1 1,017,080 $109,080 $11 0,171 8108,000 Pay 2008 Taxes (1) $1,600 1,764 1,186 2,112 $6,662 City of Oak Park Heights, Minnesota Taxable Tax Increment Revenue Bonds (Senior Cooperative Project) SOURCES Bond Proceeds Total Sources USES Net Bond Proceeds Capitalized Interest Costs of Issuance Total Uses 12 of 21 NCLDE TIF DOCUMENTS 4.00% Building 2 $ 853,000 $ 853,000 $ 766,634 52,246 34,120 $ 853,000 Master Assumptions Closing Date Maturity Date Local Tax Rate Fiscal Disparities Rate State Auditor Fee Administrative Fees Inflation Rate Minimum Debt Service Coverage Ratio * Preliminary a Subject to change. 411/2009 2/1/2025 0.83309 N/A 0.36% 10.00% 0.00% 125 x S &ll 2/20/2009 City of Oak Park Heights, Minnesota Taxable Tax Increment Revenue Bonds Senior Coo erative Pro ect Original Estirnated Capturad Tax Tax Tax Date Capacity Capacity Capacity (set assumptions) (1) 0.00% Inllttliort 0.0 0.0 4/1/2009 0.0 8/1/2009 0.0 2/1/2010 0,5 8/1/2010 1,0 2/1/2011 1.5 811/2011 2.0 2/1/2012 25 8/112012 3.0 2/1/2013 35 8/1/2013 4.0 2/1/2014 44 8/1/2014 SA] 211/2015 04 • 8/1/2015 5,0 2/1/2016 6.5 8/1/2016 7.0 2/1/2017 7.5 8/1/2017 8.0 2/1/2018 8.5 8/1/2018 9.0 2/1/2019 95 8/1/2019 10.0 2/1/2020 10.5 8/1/2020 ILO 2/1/2021 11.5 8/1/2021 12,0 2/1 /2022 123 8/1/2022 13.0 2!1/2023 13.5 8/1/2023 140 2/1/2024 14.5 8/1/2024 15,0 2/1/2025 Estimated Tax Increrncan1 130,000 65,000 65,000 130,000 65,000 65,000 330,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,000 65,000 130,000 65,040 65,000 (1) This scenario assumes 8130,000 in annuli, 13 of 21 NOLDE TIF DOCUMENTS Building 2 State City Auditor Admin Fets Fee 0,36% 10.00% (234) ( (234) (234) (234) (234) (23 4) (234) (234) (234) (234) (234) (234) (234) ( (234) (234) (234) (234) (234) (234) (234) (234) (234) (231) (234) (234) (234) (234) (234) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) (6,471) (6,477) (6,477) (6,477) (6,477) (6,477) (6,477) Available Incarernernt Net or Fees 58,289 58,289 58,2.89 58,289 58,289 58,289 58,289 58,269 58,289 58,289 58,289 58,289 58,289 58,289 58,289 58,289 58,289 58,289 51,289 58,289 58,289 58,289 58,289 58,289 58,289 58,289 58,289 58,289 58,289 50,289 ;,- 1 L950,000 7,428 194,298 1,748,682 Principal Coupon Interest 7.000% 7.000% 16,000 7.000% 17,000 7.00014 18.000 7.000 % 18,000 7.000°/. 19,000 7.000% 20,000 7.000/. 20,000 7.000% 21,000 7.000% 22,000 7.00014 22,000 7.000% 23,000 7.000% 24,000 7.000° 25,000 7.000% 26,000 7.000% 27,000 7,000% 28,000 7.000% 29,000 7.000% 30,000 7 0001 /. 31,000 7,000% 32,000 7.000% 33,000 .7.006% 34,000 7.000% 35,000 7.000% 36,000 7.000% 38,000 7.000 %. 39,000 7.000% 40,000 7.000% 42,000 7.0000% 43,000 7.000% 45,000 7.0000% 853,000 7.00% 19,903 29,855 29,855 29,295 28,700 28,070 27,440 26,775 26,075 25,373 24,640 23,870 23,100 22,295 21,455 20,580 19,670 18,725 17,745 1 6,730 15,680 14,595 13,475 12,320 11,130 9,905 8,645 7,315 5,950 4,550 3,080 1,575 Debt Capitalized Service Interest 19,903 (20,899) 29,855 (31,348) 45,855 46,295 46,700 46,070 46,440 46,775 46,075 46,375 46,640 45,870 46,100 46,295 46,455 46,580 46,670 46,725 46,743 46,730 46,680 46,595 46,475 46,320 46,130 45,905 46,645 46,315 45,950 46,550 46,080 46,575 588,373 j411,222 (52,246) Total Net Debt Service (995) (1,493) 45,855 46,295 46,700 46,070 46,440 46,775 46,075 46,375 46,640 45,870 46,100 46,295 46,455 46,580 46,670 46,725 46,745 46,730 46,680 46,595 46,475 46,320 46,130 45,905 46,645 46,315 45,950 46,550 46,080 46,575 Excess Debt Tex Service Increment Coverage Ratio 12,434 11,994 11,589 12,219 11,849 11,514 12,214 11,914 1 1,649 12,419 12,189 11,994 11,834 11,709 11,619 11,564 1 1,544 11,559 11,609 1 1,694 11,814 11,969 12,159 12,384 11,644 11,974 1 2,339 11,739 12,209 11,714 1,389,127 357,067 1.05 1.05 1.27 1.26 1.25 1.27 1.26 1.25 1,27 1.26 1.25 1.27 1.26 1.26 1.25 125 1.25 1.25 1.25 1.25 1.25 125 1.25 1.24 1.26 1..27 1.25 1.26 1,27 1.25 - l.26 1.25 q pg Ag � n " L §0. ggd 'igwr ni �a R gR gr w Q 1 a§a r ci a � r oPO 0 Ri r § d t w r3 gaav YN 54WiaRra .W1,-9- A rY Y't• r W - i,ROggpqM P.00 o�p 82 mimuti airy w��'¢DYryC� nli,t6gqgi RMA4REI.4 gaViR gn 9 U FR IR R uu Ci �� �7 �� R4 W p y l�f § J N b H u1 ° 4 E i Inpag / 14 of 21 NOLDE TIF DOCUMENTS csr ri 2 L'r! a a , 000000 ti 00ri a no t � t7 r + tir r 00,10000 L,„ i '- r = tF .r4 r7 r" 000000❑ 2 M ....0.0 t 00 M 00/4000. 0000000 ci I : 3 . 1 w W .+. ❑ t_.: .i 1 a i gi cn a 1 ij i 8 g w mijhh 0 x a zapzz 1 F F > P o❑° -w❑❑ 7J g pp5q, . ° ' " e l EN P 8 z ❑❑iZu 0 ❑0000 0 9, ....... lr�i w v w 0000000 0000000 0000000 0000000 0000000 0000000 0000000 anoocoo 0000000 0 t4 { it" 0 ri G7 r• � 5 o � A t ° 0 r y! r • § w w o R 3 c c C7 ri f+] r c ] L ❑ rQ , 10 °§ °gam § § M cv t!7 M M tt7 M ri i`i c+r1 N r u7 N R0000 r-- 00000000 I-- a kg § CO r W c,- {'? to ' 0 oi . g ' ooa❑ N00000000 h 0 .0 $ off ❑ t M � m cr, 5 in ....- c*avr�n N00000000 n a g c�S m y ❑ vd t° N �► us 0000 r•o❑ovov❑❑ 4E. zzt co rvca c�a atacaoao a❑ g 5 r e- iA r` � Ln (q.) ;1 r to (,, fi T. 00000 000000000 Rti ❑ . 4 t.,, ,ici c0 00000 0300 0 00000 g G7 h 3 t 00 0 000000000 0 i ui r�► is 00033 d❑0d00000 {� ' a g � r § , 00000 0 0 0 0 0 0 0 0 0 g g ( §t? , t:i g i N 00000 ❑❑ 0.0.0 0❑ , 4 § i nt-_: tcl• •g 8 § §.. § &_ § § § § v. v. .. . 2.3 (i1 l m F iii V 1 - to Th tDOcOd[[} 0•- ^r❑ , .❑, --o g to .5 d i 0 fi.. 2 Lu .co c a. 0) g i. a n re � , � m oo .9 - 5i $ g- 2. 1 � � gcSig 2 � e ug 5 i 6 3 a 4)- . 0 2 10 .2 = ti ti g . . . -2 02 2 :2 3 < cc20 0 "Hrlithi411 g 2 (..1 2 15 of 21 NOLDE TIF DOCUMENTS Cost Summary Amount Percent .= Land Acquisition $ 890,000 8,42% Site Work $ 300,000 2.84% T Environmental $ 10,000 0.09% Demolition $ 60,000 0.57% f Broker Fees, Commissions $ 30,000 0.28% r Relocation is Total Acquisition $ 1,290,000 12.20% New Construction Private $ 7,650,000 72.34% City Fees $ 100,000 0.95% Private Streets $ 75,000 0.71% Excavation $ 75,000 0.71% Contingency $ 150,000 1.42% Total Now Construction $ 8,050,000 76.12% Architectural and Engineering $ 110,000 1,04% Architectural Inspections $ 3,000 0.03% Soli Testing $ 5,000 0.05% Surveys $ 5,000 0.05% Total Architectural and Engineering $ 123,000 1.16% Sales Fees and Marketing $ ,308,000 2.91% Signage Sales Commissions Advertising $ 30,000 0.28% Total Marketing $ 338,000 3.20% Construction Interest and Fees $ 300,000 2.84% Association Fees and Taxes $ 60,000 0.57% insurance $ 20,000 0.19% Total Carrying Costs $ 380,000 3.59% Lender Fees City T1F Fees TIF Note Costs of issuance Capitalized Interest Total Financing Fees $ 150,000 1.42% $ 40,000 0.38% $ 21,560 0.20% $ 75,932 0.72% $ 287,492 2.72% Environmental Consultants $ 7,000 0.07% Total Environmental Consultants $ 7,000 0.07% Condo Documents $ 20,000 0.19% Attorneys Fees $ 25,000 0.24% Title Costs $ 5,000 0.05% Total Condo, Attorneys, Title $ 50,000 0A7% Developer's Overhead Developer Fees 16 of 21 NOLDE TIF DOCUMENTS $ 50,000 0.47% Total Developer's Overhead Total Project Costs Income Summary Total Sales Prices of Units Tax Increment Total Proceeds $ 50,000 0,47% $ 10,575,492 100,00% $10,560,000 $ 539,000 $ 11,099,000 Proceeds $ 11,001,508 Project Costs $ 10,575,492 Profit $ 426,016 Percent of Cost 4.03% 17 of 21 NOLDE TIF DOCUMENTS 18 of 21 NOLDE TIF DOCUMENTS 1 x thi FACPWill ilISIW.CT BeaRCIARY t 6 ....„ _ _ ..,....- ,,,......1.- ,i... ...--- ......,.....4, r ____ — ..... ...... ' -- ..- ''''..— —17'' ‘ el ,. ' 7 — \ Xr... 4..........0 ‘ 42,1W d' V ..-4.2:6-4.....r. 16...........e.' 1 L..1._ rzi_____I L._ 1 LI I__ 1_11_1 _1 T 041 17 F171 L - j j L_LLI . Free.rmyri.. Erick.iriri, LAND FLOWING • SIJAVETIM ENCTSEMINC., 13.1)3 33111513*E7 X011111 LAIELMO,MilINESOTA !ars15ilf IMES EA (MI UM COnditiOnS With TH City of Oak Park Heights CARRIAGE HOUSE COOP AND ASSISTED 11 VING March 19, 2009 F1 17-1 11 17[1 LI 14 C11,7-7' „. • C.1,10.1 L 4.41 OF If stAtt , t - er 7 T IT f g 15' --..." . ., ,,......, ,/// :.••.'. ',...:-,,'..... , ._ —, V .7 / ... -- ---- ., , - z ' --- 7 / Vicinily 1 Map 5, 12.7, - 112.11 C-7, L 7" -*I • 1,e-61V if 01- kr0,...:Ar --- - 4— eet eele, , CARRIAGE HOUSE CO 0,P :11V7 If Lez.39./ Q Doan ae..• Not se., tic taaNCit sa.ati .aa• IA.d. C SC. &Iasi,/ • MAW 1.0 1/2 NCal rn =ANL, um. 2.14 A RA-VW Witt. 1..5 0340td. A EQ4Itt SIM Ka te. aLK u 111a 0001. re..11.10142...n. , V A' n o:T "r t... a ref, 1,44, ..e.aa.Lot; .34 tot. 4WD 33. CZ 111/4 u ANN 0,041fti rfa CIO = 4.44 1,fil .tiot A , Ara. - 1174 ACV.1. SAO kat! E. 1 1.72 Acras La 2 1_17 Acrei 0A.S41.1:./ •••,... .f.k0L-W14/.. - - - r ...... L , K.... ..., 044 :14 -- -- - DOI a _.,.. _uP'10 •',.... -- -- - . 7, 4 7;;Tr Z7Zi - 7 ,r• -,..j '' ' ' '''-- ,...--- ..,......., ,..-, --, \‘‘, a i , - 1.... - _:. - 7_:- 0 -d i ; if y.r ----t ' --- ' - -- , - , -,... 1 - ana-, C 'L 17 = 2 1 * F . T . I 1911te:OT 1 --- 1 1 th,,,f thrZ I 1 I .5 I • tht.q.r 241 _ I I r --- r -- F - 1 1 2. P 1 1 1 1 314x I —1 1— LLJ 1 r -I j Freernan, Erickion, Inc. LAND FLANRING • SUFtVETWG • wortratisc. 2.I-/i 5571f SIRIET NORTH LUKE 3ILVIIISCITA S5012 :fill 1;94113 ki I) 41.19131 1 11 • 1 1 1 , 1 1 1 1 1 1 1 81c ) 1 I 1 1 1 1. _.] t • r n - ,-37,D 1 - - :. - 1 r - ' /...w/....,/, ...-- -- \ b....-- ," I ( . 1 1 1 ; ---. - I is.; \ --; \ \ _ 1 oiteelgi 8 ' - 1- L _ 1 _ L ___J L —1 ' • `... - _ L \ I 1 ..-- --- '--- --I 7 . L. 1 ..// 7- ' 51 ./' .0 ..., ....,' ‚ 7 / , ---- ...,'' z ,, „ Sant r 4.4 FR/ 4 13. 1,73 vit .. • 1 c'jk-) 1` '17 , L • - • r • • , Vicinity Mop 5, rz.w C grj;,, SWAM, • - •- 19 of 21 NOME T1F DOCUMENTS Development Program fo MUNICIPAL DEVELOPMENT IMSTR NORTHLAN Carriage House Project Dated: April 20, 2009 PLAN DOCUMENTS PREPARED BY D Northland Securities, Inc. 45 South 7 Street - Suite 2500 Minneapolis, MN 55402 (800) 851-2920 Member FINRA and SIPC SECURITIES TABLE OF CONTENTS ARTICLE I -- DEFINITIONS AND EXHIBITS Section 1.01 Definitions 1 Section 1.02 Introduction 2 Section 1.03 Exhibit Reference /Description 2 ARTICLE II - STATEMENT OF PUBLIC PURPOSE AND AUTHORITY Section 2.01 Statement of Need and Public Purpose 3 Section 2.02 Statutory Authority 3 ARTICLE III - DEVELOPMENT PROGRAM Section 3.01 Statement of Objectives 4 Section 3.02 Boundaries of Development District 4 Section 3.03 Development Activities 4 -5 Section 3.04 Payment f Public Costs 5 Section 3.05 Environmental Controls; Land Use Regulations 5 Section 3.06 Park and Open Space to be Created 5 Section 3.07 Proposed Reuse of Property 6 Section 3.08 Administration and Maintenance of Development District 6 Section 3.09 Relocation 6 Section 3.10 Amendments 6 Section 3.11 Estimates of Public Costs and Budget 6 ARTICLE IV - TAX INCREMENT FINANCING PLAN Section 4.01 Statement of Need and Public Purpose 7 Section 4.02 Statutory Authority 7 Section 4.03 Statement Objectives 7 Section 4.04 Redevelopment District Designation 7 -8 Section 4.05 Duration of the Tax Increment Financing District 8 Section 4.06 Specific Development Expected to Occur Within the TIF District 8 Section 4.07 Parcels(s) to be Included in the TIF District 9 Section 4.08 Property to be Acquired in the l'IF District 9 Section 4.09 Findings and Need for Tax Increment Financing 9-10 Section 4.10 Estimated Sources of Revenue /Public Costs 10 Section 4.11 Estimated Amount of Bonded Indebtedness . 10 Section 4.12 Original Net Tax Capacity 11 Section 4.13 Original Local Tax Capacity Rate 11 Section 4.14 Projected Retained Captured Net Tax Capacity and Projected Tax Increment 11 Section 4.15 Use of Tax Increment 11 12 Section 4.16 Excess Tax Increment 13 Section 4.17 County Road Costs 13 Section 4.18 Four -Year Rule - Limitations on Property Not Subject to Improvements 13 -14 Section 4.19 Five -Year Rule - Tax Increment Pooling 14-15 Section 4.20 Limitations on Administrative Expenses 15 Section 4.21 Estimated Impact on Other Taxing Jurisdictions 15 Section 4.22 Prior Planned Improvements 15 -16 Section 4.23 Development Agreements 16 Section 4.24 Assessment Agreements 16 Section 4.25 Modifications of the Tax Increment Financing Plan 16 Section 4.26 Administration of the Tax Increment Financing Plan 17 Section 4.27 Financial Reporting and Disclosure Requirements 18 -21 Section 4.28 Business Subsidy Compliance 21 -22 Map of the Development District EXHIBIT I Map of the Tax Increment Financing District EXHIBIT IA Property Description EXHIBIT 1B Sources and Uses Statement EXHIBIT II TIF District Assumptions Report EXHIBIT III Projected Tax Increment Report EXHIBIT IV Estimated Impact on Other Taxing Jurisdictions Report EXHIBIT V Market Value Analysis Report EXHIBIT V Article 1 — Definitions, Introduction and Exhibits Section 1.01 Definitions NORTH LAN D ii0 SE CUR1 T1 ES The terms defined in this section have the meanings given herein, unless the context in which they are used indicates a different meaning: "City" means the City of Oak Park Heights, Minnesota; also referred to as a "Municipality". "City Council" means the City Council of the City; also referred to as the "Governing Body". "County" means Washington County, Minnesota. "Development District Act" means Minnesota Statutes, Sections 469.124 through 469.134, as amended and supplemented from time to time. "Development District" means Municipal Development District No. 1 in the City, created and established pursuant to and in accordance with the Development District Act as described in Section 3.02 of the Development Program. "Development Program" means the Development Program for the Development District, as amended and supplemented from time to time. "Land Use Regulations" means all federal, state and local laws, rules, regulations, ordinances and plans relating to or governing the use or development of land in the City, including but not limited to environmental, zoning and building code laws and regulations. "Project Area" means the geographic area of the Development District. "Public Costs" means the costs set forth in Sections 4.10 and 4.15 of the Tax Increment Financing Plan, repayment of debt service on any Tax Increment Bonds, and any other eligible costs set forth in the Tax Increment Financing Plan, Development Program, or Minnesota Statutes, Section 469.176, subdivision 4. "Public Improvements" means the public improvements, if any, described in Section 3.03 of the Development Program and Section 4.10 of the Tax Increment Financing Plan. "School District" means Independent School District No. 834, Washington County, Minnesota. "State" means the State of Minnesota. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1791, both inclusive. "TIF District" I eans Tax Increment Financing (Renewal and Renovation) District No. 1-1. "TIF Plan" means the tax increment financing plan for the Till' District. City of Oak Park Heights, Minnesota Article I — Definitions, Introduction and Exhibits Section L02 Introduction Section L03 Exhibit Reference /Description City of Oak Park Heights, Minnesota NOR' _F1 _AND .. R 1 . The City of Oak Park Heights has agreed to provide tax increment financing assistance to Anchobaypro, Inc. related to public costs for the development of a 48 -unit residential senior cooperative and a 120-unit assisted living facility within the City. It has been stated, in writing, by Anchobaypro, Inc. to the City that the project will not be viable without public participation. The City, through this document, will be establishing Tax Increment Financing District No. 1 -1 and also Municipal Development District No. 1. The Municipal Development District boundaries will be coterminous with the corporate boundaries of the City Oak Park Heights and are described in Exhibit I. Exhibit I This is a map that describes the boundaries of the Development District in which the Tax Increment Financing District will be established. Exhibit IA This is a map that describes the boundaries of the Tax Increment Financing District in which the project(s) generating the tax increment will be located. Exhibit 113 This is a property description that describes the property to be included within the boundaries of the TIF district. Exhibit 11 This is a sources and uses statement that line items the anticipated revenue sources for the project and the anticipated expenditures for those revenues. Exhibit III This report shows the various project and district assumptions for the tax increment financing district including applicable dates, original tax capacity information, projected project valuation, buildout, and various required elections. Exhibit IV This report shows the projected cash flow of the tax increment over a specified period of time. It reflects calculations used to determine G tax increment including various additions and deductions. Exhibit V This report shows the estimated impact on the respective taxing jurisdictions if the captured tax capacity was available immediately to the taxing jurisdictions (See Section 4.22). It also shows a comparative market value analysis of the property both with and without the establishment of the TIF district. (See Section 4.09(2)). 2 Article 11 — Statement of _Public Purpose and Authority NO RTH LA N D Section 2.01 Statement of Need and Public Purpose sEcuttrrtEs The City Council of the City has determined that there is a need for the City to take certain actions designed to encourage, ensure and facilitate development and redevelopment by the private sector of underutilized, and unused land located within the corporate limits of the City in order to provide additional employment opportunities for residents of the City and the surrounding area; to improve the tax base of the City, the County and Independent School District No. 834 (the "school district"), thereby enabling them to better utilize existing public facilities and provide needed public services; and to improve the general economy of the City, the County and the State. Specifically, the City Council has determined that the property within the Development District is either underutilized or unused due to a variety of factors, including inadequate public improvements to serve the property; which has resulted in a lack of private investment; that, as a result, the property is not providing adequate employment opportunities, and is not contributing to the tax base and general economy of the City, the School District, the County and the State to its full potential; and, therefore, that it is necessary for the City to exercise its Authority under the Development District Act and the Tax Increment Financing Act to develop, implement and finance a program designed to encourage, ensure and facilitate the commercial development and redevelopment of the property located in the Development District, to further and accomplish the public purposes specified in this paragraph. The development proposed for the Development District would not occur solely through private investment in the foreseeable future; the Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the property to be located in the Development District by private enterprise. The welfare of the City, the County and the State of Minnesota requires active promotion, attraction, encouragement and development of economically sound industry and commerce by the City. Section 2.02 Statutory Authorization The Development District Act authorizes the City, upon certain public purpose findings by the City Council, to establish and designate development districts within the City and to establish, develop and administer development programs therefor to meet the needs and accomplish the public purposes specified in Section 2.01. In accordance with the purposes set forth in Section 469.124 of the Development District Act, the City Council has established the Development District comprising the area described on the attached Exhibit 1, IA, and IB and has adopted this Development Program therefor. The TIF Act authorizes the City, upon certain findings by the City Council, to establish and designate tax increment financing districts within the Development District and to adopt and implement a tax increment financing plan to accomplish the Development Program established for the Development District. In accordance with the Tax Increment Financing Act, the City has established Tax Increment Financing District No. 1-1 in the Development District as a renewal and renovation district described in Section 469.174 subdivision 10a., and has adopted therefor the Tax Increment Financing Plan set forth in Article Iv hereof, which provides for the use of tax increment financing to finance the costs of qualified public activities and improvements in the Development District, as specified in the Development Program and the Tax Increment Financing Plan. City of Oak Park Heights, Minnesota 3 Article 111 — Development Program Section 3.01 Statement of Objectives ( (5) ( ( City of Oak Park Heights, Minnesota DEVELOPMENT PROGRA Section 102 Boundaries of the Development District The area within the Development District is described in the attached Exhibit I. NO RT H I AND F, C. R[ •F1 S The establishment of the Development District in the City pursuant to the Development District Act, is necessary and in the best interests of the City and its residents and is necessary to give the City 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 City intends, to the extent permitted by law, to accomplish the following objectives through the implementation of the Development Program: (1) Provide for the acquisition of land and construction and financing of the Site Improvements in the Development District which are necessary for the orderly and beneficial development of the Development District and adjacent areas of the City. (2) Promote and secure the prompt and unified development of certain property in the Development District, such property is not now in productive use or in its highest and best use, with a minimum adverse impact on the environment, and thereby promote and secure the desirable development of other land in the City. Promote and secure additional employment opportunities within the Development District and the City for residents of the City and the surrounding area, thereby improving living standards and reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. (4) Secure the increase of assessed values of property subject to taxation by the City, the County, the Independent School District No. 834, the County, and other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs that they are required to provide. Promote the concentration of new unified development consisting of desirable industrial 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) Encourage the expansion and improvement of local business, economic activity and development, whenever possible. Create a desirable and unique character within the Development District through quality land use alternatives and design quality in new buildings. Encourage and provide assistance for residential development, including single and multifamily housing accommodations for low and moderate income families. Article 11— Development Program Section 3403 Development Activities NORTHLAND SECURITIES The City will perform or cause to be performed, to the extent permitted by law, all project activities pursuant to the Development District Act, the Tax Increment Financing Act and other applicable state laws. In doing so the City anticipates that the following may, but are not required, to be undertaken by the City: The making of studies, planning and other formal and informal activities relating to the Development Program. (2) The implementation and administration of the Development Program. (3) The rezoning of land within the Development District. (1) (4) The acquisition of property, or interests in property, by purchase or condemnation, when such acquisition is consistent with the objectives of the Development Program. (5) The preparation of property for use and development in accordance with applicable Land Use Regulations and the development agreement, including demolition of structures, clearance of sites, placement of fill and grading. (6) The resale of property to private parties. (7) The construction or reconstruction of site improvements described in Section 4.07 hereof. (8) The issuance of tax increment bonds to finance the Public Costs of the Development Program, and the use of tax increments, or other funds available to the City, to pay or finance the Public Costs of the Development Program incurred or to be incurred by it pursuant to the Development Agreement. ( The use of tax increments to pay debt service on tax increment bonds or otherwise pay or reimburse with interest the Public Costs of the Development Program. Section 3.04 Payment of Public Costs It is anticipated that the Public Costs of the Development District will be paid primarily from proceeds of tax increment bonds or from tax increments. The City reserves the right to use other sources of revenue including, but not limited to, special assessments and user charges, which the City may apply to pay a portion of the Public Costs. Section 3.05 Environmental Controls; Land Use Regulations 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. Section 3.06 Park and Open Space to be Created Park and open space created within the Development District will be done so in accordance with the zoning and platting ordinances of the City. City of Oak Park Heights, Minnesota 5 Article III — Development Program Section 107 Proposed Reuse of Property The Development Program contemplates that the City may acquire property and reconvey the same to another entity. Prior to formal consideration of the acquisition of any property, the City Council will . require the execution of a binding development agreement with respect thereto and evidence that tax increments or other funds will be available to repay the Public Costs associated with the proposed acquisition. It is the intent of the 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 City is a party. Section 3.08 Administration and Maintenance Maintenance and operation of the Development District will be the responsibility of the City Administrator who shall serve as administrator of the Development District. Each year the administrator will submit to the City Council the maintenance and operating budget for the following year. The administrator will administer the Development District pursuant to the provisions of Section 469.131 of the Development District Act; provided, however, that such powers may only be exercised at the direction of the City Council. No action taken by the administrator pursuant to the above - mentioned powers shall be effective without authorization by the City Council. Section 3M9 Relocation Any person or business that is displaced as a result of the Development Program will be relocated in accordance with Minnesota Statutes, Sections 117.50 to 117.56. The City accepts its responsibility for providing such relocation assistance pursuant to Section 469.133 of the Development District Act. Section 110 Amendments The City reserves the right to alter and amend the Development Program, and the Tax Increment Financing Plans, subject to the provisions of state law regulating such action. The City specifically reserves the right to enlarge or reduce the size of the Development District and the Tax Increment Financing District, the Development Program and the Public Costs of the Development Program and the amount of Tax Increment Bonds to be issued to finance such costs by following the procedures specified in Minnesota Statutes, Section 4.69.175, Subdivision 4. Section 111 Estimates of Public Costs and Budget The eligible costs to be reimbursed by the City, in carrying out the Development Program, are described in Exhibit II of the Tax Increment Financing Plan. NO:OR . 1 - 11 \N E(;UR ` •t ES City of Oak Park Heights, Minnesota 6 Article IV — Tax Increment Financing Plan TAX INCREMENT FINANCING PLAN Section 4.01 Statement of Need and Public Purpose See Section 2.01 of the Statement of Public Purpose and Authority. Section 4.02 Statutory Authorization See Section 2.02 of the Statement of Public Purpose and Authority. Section 4.03 Statement of Objectives See Section 3.01 of the Development Program for the Development District. Section 4.04 Renewal and Renovation District Designation NORTHLAND SECURITIES Renewal and Renovation districts are a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that: (1) parcels comprising at least 70% of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots, or other improvements, and more than 20% of the buildings (not including outbuildings) are structurally substandard, 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 conversion, or other identified hazards to the health, safety, and general wellbeing of the community; A parcel is deemed "occupied" if at least 15% of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or other similar structures; and (2) the conditions described in clause (1) are reasonably distributed throughout the geographic area of the district. For districts consisting of two or more noncontiguous areas, each area must individually qualify under the provisions listed above, as well as the entire area must also qualify as a whole. The TIF District qualifies as a renewal and renovation district in that it meets all of the criteria listed in ( and (2) above. The supporting facts and documentation for this determination will be retained by the City for the life of the TIF District and are available to the public upon request. "Structurally substandard" is defined as buildings containing 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. A building is not structurally substandard if it is in compliance with the building code applicable to a new building, or could be modified to satisfy the existing code at a cost of less than 15% of the cost of constructing a new structure of the same square footage and type on the site. City of Oak Park Heights, Minnesota 7 Articic IV — Tax Increment Financing Plan NO RT J RT H LA N 1..) The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence 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. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. 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 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. Items of evidence that support such a conclusion include recent fire or police inspections, on -site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence. Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained by the City. Failure of a building to be disqualified under the provisions of this paragraph is a necessary, but not a sufficient, condition to determining that the building is substandard. A parcel is deemed to be occupied by a structurally substandard building if the following conditions are met: (1) the parcel was occupied by a substandard building within a three -year period prior to the parcel's inclusion in the district and request for certification from the County Auditor; and (2) if the substandard building was demolished or removed within the three year period, such demolition or removal was performed or financed by the City, or was performed by a developer under a development agreement with the City. In addition, the City must have found by resolution before such demolition or removal occurred that the building was structurally substandard and that the City intended to include the parcel in the TIF District. In the case of (2) above, the County Auditor shall certify the original net tax capacity of the parcel to be the greater of (a) the current tax capacity of the parcel, or (b) a computed tax capacity of the parcel using the estimated market value of the parcel for the year in which the demolition or removal occurred, and the appropriate classification rate(s) for the current year. At least 90 percent of the tax increment from a redevelopment district or renewal and renovation district must be used to finance the cost of correcting conditions that allow designation as a redevelopment district. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of land, removal of hazardous substances, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the City may be included in the qualifying costs. Section 4M5 Duration of the TIF District Renewal and renovation districts may remain in existence 15 years from the date of receipt of the first tax increment. Modifications of this plan shall not extend this limitation. The City reserves the right to allow the TIF District to remain in existence the maximum duration allowed by law (projected to be through the year 2026) but may decide to decertify the TIF District at an earlier date. All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the City. City of Oak Park Heights, Minnesota 8 Article IV — Tax Increment Financing Plan Section 4.06 Specific Development Expected to Occur within the TIF District See Exhibit IA & IB. The City intends to enter into a contract with Anchobaypro, Inc. regarding their proposal to develop two phases of housing within the City. The first is a 48 -unit residential senior cooperative building that will be two stories in height and approximately 80,000 square feet in size. The second will be a 120 -unit assisted living facility approximately 107,000 square feet in size. The construction is expected to be completed by late spring of 2011. This would result in the first tax increments being available in taxes payable 2011(partial based on 2009 completion). The benefits to the City include replacement of older housing stock, an addition of new housing units, including an assisted living facility and an increased future tax base. It has been stated, in writing, by Anchobaypro, Inc. to the City that the project will not be viable without public participation. The proposed development is within the TIF District boundaries described in Exhibit IA & 1B. No contracts have been entered into for the proposed development at this time. The entire project should be 100% assessed and on the tax rolls as of January 2, 2012 for taxes payable in 2013. Section 4.07 Parcel(s) to be Included in the TIF District The property to be included in the TIF District includes nine parcels within the City. The boundaries of the TIF District are reflected on a map attached as Exhibit IA. The following parcel identification number(s) (PID #'s) and corresponding legal description(s), along with adjacent rights-of-way, will be included in the TIF District: See Exhibit IB for the PID #'s and legal description of the parcels. Section 4.08 Property to be Acquired in the TIF District Anchobaypro, Inc. will be purchasing all of the parcels within the TIF district. None of the parcels are are owned by the City. The City reserves the right to reimburse the developer for TIF eligible costs as specified in Section 4.10 and Exhibit II. Section 4.09 Findings and Need for Tax Increment Financing Pursuant to Minnesota Statutes, the City makes the following findings in conjunction with the approval of this tax increment financing plan: ( Tax Increment Financing District No. l - 1 is a renewal and renovation district as defined in Minnesota Statutes, Section 469.174, Subd. 10a. The reasons and supporting facts for this determination will be documented in writing and retained and made available to the public by the City until the district has been terminated. The determination is described in Section 4.04 of this TIF' Plan. (2) The proposed development or redevelopment, in the opinion of the City, 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 TIF District permitted by the TIF Plan; The reasons supporting this finding are that: NORTHLAND SECURITIES City of Oak Park Heights, Minnesota 9 Article IV — Tax Increment Financing Plan 0) ( NOR' - LAN I) SE(::LRt r This finding is supported by the fact that the redevelopment proposed in this TIF Plan meets the City's objectives for redevelopment. The District is currently occupied by residential housing, of which 50% has been designated substandard. Redevelopment will require demolition and site clearance. The high cost of acquisition of the site represents a substantial financial risk to Anchobaypro, Inc., which has represented to the City in writing that it would not be feasible to undertake the proposed redevelopment without tax increment financing assistance. The TIF is intended to mitigate the risk by providing assistance for land acquisition costs related to the property. Therefore, the City reasonably concludes that the proposed redevelopment of the District (including both phases of housing) is not financially feasible or likely to occur in the foreseeable future without the assistance described in this Plan. (ii) This finding is based on the fact that the land in the District is now fully developed, with a substandard use. Any increase in market value without tax increment assistance would only occur if the existing owners made substantial improvements, or sold their property for redevelopment through large -scale improvements similar to those proposed in this Plan. The City has evidence to support the expectation that the existing owners will not make improvements on their own. Further, there has been little interest in comprehensive redevelopment in this area without public intervention. Therefore, 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. The above findings are stated in monetary terms in Exhibit V, which can be summarized as follows: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is SO (for the reasons described above). b. If all development which is proposed to be assisted with tax increment were to occur in the District, the total increase in market value would be up to $24,439,400. 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 $2,209,813. 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 $24,439,400 (the amount in clause b less the amount in clause c) without tax increment assistance. The Tax Increment Financing Plan for Tax Increment Financing District No. 1-1 conforms to the general plan for development or redevelopment of the City of Oak Park Heights as a whole. The reasons for supporting this finding are that: a. Tax Increment Financing District No. 1-1 is properly zoned; and b. The Tax Increment Financing Plan will generally compliment and serve to implement policies adopted in the City's comprehensive plan. The TIF Plan has been adopted by the City Planning Commission after review and making the determination that the TIF Plan complies with the City's comprehensive plan. City of Oak Park Heights, Minnesota 10 Article IV — Tax Increment Financing Plan (4) The Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City of Oak Park Heights as a whole, for the development or redevelopment of Municipal Development District No. 1, as modified, by private enterprise. The reasons supporting this finding are that: The project to be assisted by the District will result in the preservation and enhancement of the tax base and the redevelopment of a substandard area, and will provide employment opportunities in the City. Section 4.10 Estimated Sources of Revenue/Public Costs NORTHLAND SECURITIES The estimated sources of revenue, along with the estimated public costs of the TIF District, are itemized and attached as Exhibit II. Such costs are eligible for reimbursement from tax increments, and other listed sources of revenue from the TIF District. The City reserves the right to administratively adjust the amount of any of the items in Exhibit II or to incorporate additional eligible items, so long as the total estimated public cost (uses) is not increased. The City anticipates providing financial assistance to the proposed development through the use of a pay- as-you-go technique. As tax increments are collected from the TIF District in future years, a portion of these taxes will be reimbursed to the developer for TIF eligible costs. The City reserves the right to finance any or all public costs of the TIF District using pay -as- you -go assistance, internal funding, general obligation or revenue debt, or any other financing mechanism authorized by law. The City also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. Section 4.11 Estimated Amount of Bonded Indebtedness The City does not anticipate issuing tax increment bonds to finance the estimated public costs of the TIF District, but reserves the right to issue such bonds in an amount not to exceed $2,497,000. Section 4.12 Original Net Tax Capacity Upon or after adoption of the tax increment plan, the County Auditor, upon request of the City, shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the Commissioner of Revenue plus any amount determined under M.S. Section 469.177 subd. 4. For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July l and December 31, inclusive, this value is based on the current assessment year. For projection puroposes, this will be based on the Estimated Market Value of all property within the TIF District as of January 2, 2008, for taxes payable in 2009 which is estimated to be $1,360,600. Upon establishment of the TIF District it is estimated that the original net tax capacity of the TIF District will be approximately $16,248. Reclassification of property will be incorporated into this calculation. Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of: (1) changes in the tax- exempt status of property; City of Oak Park Heights, Minnesota 11 Article IV -- Tax Increment Financing Plan Total 87.312% City of Oak Park Heights, Minnesota (2) reductions or enlargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements; or (4) changes in property classification rates. NO LAND 2008/2009 Taxing Jurisdiction Local Tax Rate City of Oak Park Heights 39.657% Washington County 26.343% Independent School District No. 834 17.691% Other 3.621% J ti. T [ E S Section 4.13 Original Tax Capacity Rate At the time of the initial certification of the original net tax capacity for the tax increment financing district, the County Auditor shall certify the original local tax capacity rate that applies to the TIF District. This is the sum of all the local tax rates that apply to the property in the TIF District. This rate certified is the rate in effect for the same taxes payable year as the certified original net tax capacity. The tax generated by the extension of the lesser of (a) the local taxing district tax rates or (b) the original local tax capacity rate, to the retained captured net tax capacity of the TIF District is the tax increment. The sum of all local tax rates that apply to property in the TIF District, for taxes levied in 2008 and payable in 2009, is 87.312 %. The County Auditor shall certify this amount as the original tax capacity rate of the TIF District. For purposes of estimating the tax increment generated by the TIF District, the sum of the local tax rates for taxes levied in 2008 and payable in 2009, is 87.312% as shown below: Section 4A 4 Projected Retained Captured Net Tax Capacity and Projected Tax Increment Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. The County Auditor shall certify to the City the amount of captured net tax capacity each year. The City may choose to retain any or all of this amount. It is the City's intention to retain 100% of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. Exhibit III gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit IV, which shows the projected tax increment generated over the anticipated life of the TIF District. 12 Article IV -- Tax Increment Financing Plan Section 4A5 Use of Tax Increment Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of financial reporting and auditing of tax increment financing information throughout the state. Exhibit IV shows the projected deduction for this purpose over the anticipated life of the TIF District. The City has determined that it will use the remaining tax increment generated by the portion of the captured net tax capacity specified above (See Section 4.14) for any of the following purposes: ( (2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) (5) NO RiF1 LA N 1) SEC U R1T[ ES pay for the estimated public costs of the TIF District (see Section 4.10) and County administrative costs associated with the TIF District (see Section 4.20); accumulate a reserve securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175, Subdivision l a (see Section 4.17); or return excess tax increments to the County Auditor for redistribution to the City, County and School District. Tax increments from property located in one county must be expended for the direct and primary benefit of a project located within that county, unless both county boards involved waive this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment shall not be used to finance 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, or for a commons area used as a public park, or a facility used for social, recreational or conference purposes. This prohibition does not apply to the construction or renovation of a parking structure, or a privately owned facility for conference purposes. If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section 4.16 Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan, the City shall use the excess tax increments to: (I) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereof; City of Oak Park Heights, Minnesota 1 3 Article IV — Tax Increment Financing Plan ( (1) City of Oak Park Heights, Minnesota S E C U R I T I E S LAND (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or (4) return excess tax increments to the County Auditor for redistribution to the City, County and School District. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. Section 4017 County Road Costs The County Board may require the City to pay all, or a portion of, the cost of county road improvements out of increment revenues, if the following conditions occur: the proposed development will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs; and (2) the road improvement or other road costs are not scheduled for construction within five years under the county capital improvement plan, or another formally adopted county plan and in the opinion of the county, would not reasonably be expected to be needed within the reasonably foreseeable future if the TIF plan were not implemented. If the county elects to use tax increments to finance the road improvements, the county must notify the City and municipality within 45 days after receipt of the proposed TIF plan under subdivision 2 and the county and municipality must comply with the terms in M.S. Section 469.175, subd. 2 (b). Section 4.18 Four Rule - Limitation on Property Not Subject to Improvements If after four years from certification of the TIF District no demolition, rehabilitation, renovation or site improvement, including a qualified improvement of an adjacent street, has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The City must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the City or owner of the parcel subsequently commences any of the above activities, the City shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. Section 4.19 Five -Year Rule - Tax Increment Pooling 100% of the tax increments (net of administrative expenses) from the TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District (see Section 4.04 for additional restrictions). All administrative expenses are considered to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District if such amounts are: actually paid to a third party for activities performed within the TIF District within five years after certification of the district; ( used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year 14 Article IV Tax Increment Financing Plan (3) ( (1) (3) be used to: a) acquire and prepare the site of the housing; b) acquire, construct, or rehabilitate the housing; or c) make public improvements directly related to the housing. Section 4.20 Limitation on Administrative Expenses NORTHLAND SEC Li R1 Tl ES period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district; or (4) used to reimburse a party for payment of eligible costs (including interest) incurred within five years from certification of the district; or in the case of a housing district, used for a housing project, as defined in section 469.174, subdivision 11. Beginning with the sixth year following certification of the TIF District, at 100% of the tax increments must be used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District must be decertified. The City may also elect to increase by up to ten percentage points the permitted amount of expenditures for activities located outside of the geographic area of the district. As permitted by M.S. Section 469.176, subdivision 4k, the expenditures, including the prior permitted expenditures, need not be made within the geographic area of the project if the expenditures: are used exclusively to assist housing that meets the requirement for a qualified low - income building, as that tern is used in Section 42 of the Internal Revenue Code; (2) do not exceed the qualified basis of the housing, as defined under Section 42 (c) of the Internal Revenue Code, less the amount of any credit allowed under Section 42 of the Internal Revenue Code; and Administrative expenses are defined as all costs of the City other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the proposed development within the TIF District; (3) relocation benefits paid to, or services provided for, persons or businesses residing or located within the TIF District; or (4) amounts used to pay interest on, fund a reserve for, or sell at a discount, tax increment bonds. City of Oak Park Heights, Minnesota 15 Article IV — Tax Increment Financing Plan NORTHLAND SECURITIES Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax increments may be used to pay administrative expenses of the TIF District up to the lesser of (a) 10% of the total estimated tax increment expenditures authorized by the TIF Plan or (b) 10% of the total tax increments from the district. Section 4.21 Estimated Impact on Other Taxing Jurisdictions The City believes that, because the development would not have occurred without the tax increment assistance, TIF District No. 1-1 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 V. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. Additional fiscal and economic impacts of TIF District No. 1-1, pursuant to Section 469.175, subd. 2 of the TIF Act, are listed below. 1. The total amount of tax increment that will be generated over the life of the district is estimated to e $3,469,238. 2. The probable impact of the district on city-provided services such as police and fire protection, \ public infrastructure, and the impact of any general obligation tax increment bonds attributable to the district upo the ability to issue other debt for general fund purposes, is minimal. According to the Fire Chief of the Oak Park Fire Department, adequate resources currently exist to handle any fire-related incidents within the TIF District. Likewise, residential housing developed in recent years has not created a substantial increase in service calls from police. Public infrastructure costs, such as traffic impacts, water and sewer usage, and street maintenance, are estimated to - , as compared with the TIF District's previous residential use. p The City does not plan to issue general obligation tax increment bonds, and therefore there should be no effect on the ability of the City to issue other bonds. Therefore, there will be no impact of any general obligation tax increment bonds attributable to the district upon the ability to issue other debt for general fund purposes. 3. 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 estimated to be $702,930. 4. The amount of tax increment 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 estimated to be $ L046,707. 5. Neither the County nor the School District have requested additional information regarding size, timing, or type of development in the TIF District. If the City receives such a request, the City will provide the information requested. City of Oak Park Heights, Minnesota 16 Article IV — Tax Increment Financing Plan Section 4.22 Prior Planned Improvements The City shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. Section 4.23 Development Agreements No more than 10 %, by acreage, of the property to be acquired within a project containing a housing district may be purchased by the City with the proceeds of bonds issued pursuant to M.S. 469.178 to which tax increment from the property being acquired is pledged unless prior to acquisition the City has entered into an agreement for development which provides recourse for the property should the development or redevelopment not be completed. The City intends to enter into an agreement for development. Section 4.24 Assessment Agreements The City may, upon entering into a development agreement, also enter into an assessment agreement with the developer, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and School District. The City does not intend to enter into an assessment agreement. Section 4.25 Modifications of the Tax Increment Financing Plan (I) the only modification is elimination of parcels from the TIF District; and NORTHLAND SECURITI Es Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the captured net tax capacity to be retained by the City; increase in the total estimated public costs; or designation of additional property to be acquired by the City shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply i f: (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the City agrees that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. City of Oak Park Heights, Minnesota 17 Article IV -- Tax Increment Financing Plan Section 4.26 Administration of the Tax Increment Financing Plan (3) The City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. Upon adoption of the TIF Plan, the City shall submit a copy of such plan to the Minnesota Department of Revenue and the Office of the State Auditor. The City shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the City shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The City shall also send the County Assessor any assessment agreement establishing the minimum market value of land and improvements in the TIF District, and shall request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the City the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values, or changes in property classification rates or formulas. In administering and implementing the TIF Plan, the following actions should occur on an annual basis: (1) prior to July I, the City shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to insure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District, or for modification of an existing TIF District, before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests received on or after July I shall be used to determine local tax rates in subsequent years. each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: a) the value of property that changes from tax - exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; b) the original net tax capacity may be modified by any approved enlargement or reduction of the TIF District; c) if laws governing the classification of real property cause changes to the percentage of estimated market value to be applied for property tax purposes, then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the City of all changes made to the original net tax capacity of the TIF District. City of Oak Park Heights, Minnesota 18 Article IV - Tax Increment Financing Plan Section 4.27 Financial Reporting and Disclosure Requirements ( NORTH LAN SECURITIES The State Auditor shall enforce the provisions of the TIF Act and shall have full responsibility for financial and compliance auditing of the City's use of tax increment financing. On or before August 1 of each year, the City must annually submit to the State Auditor, County Auditor and to the governing body of the municipality a report which shall: (1) provide full disclosure of the sources and uses of public funds in the TIF District; (2) permit comparison and reconciliation of the accounts and financial reports; ( permit auditing of the funds expended on behalf of the TIF District; and (4) be consistent with generally accepted accounting principles. The report shall include, among other items, the following information: the original net tax capacity of the district and any subdistrict under 469.177, subdivision 1; (2) the net tax capacity for the reporting period of the district and any subdistrict; ( the captured net tax capacity of the district; (4) any fiscal disparity deduction from the captured net tax capacity under section 469.177, subdivision 3; ( the captured net tax capacity retained for tax increment financing under 469.177, subdivision 2, paragraph (a), clause (1); (6) any captured net tax capacity distributed among affected taxing districts under 469.177, subdivision 2, paragraph (a), clause (2); (7) the type of district; (8) the date the municipality approved the tax increment financing plan and the date of approval of any modification of the tax increment financing plan, the approval of which requires notice, discussion, a public hearing, and findings under subdivision 4, paragraph (a); (9) the date the City first requested certification of the original net tax capacity of the district and the date of request for certification regarding any parcel added to the district; (10) the date the county auditor first certified the original net tax capacity of the district and the date of certification of the original net tax capacity of any parcel added to the district; (11) the month and year in which the City has received or anticipates it will receive the first increment from the district; (12) the date the district must be decertified; (13) for the reporting period and prior years of the district, the actual amount received from, at least, the following categories: City of Oak Park Heights, Minnesota 19 Article IV - Tax Increment Financing Plan a) tax increments paid by the captured net tax capacity retained for tax increment financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding any excess taxes; b) tax increments that are interest or other investment earnings on or from tax increments; c) tax increments that are proceeds from the sale or lease of property, tangible or intangible, purchased by the City with tax increments; d) tax increments that are repayments of loans or other advances made by the City with tax increments; e) bond or loan proceeds; f� special assessments; g} grants; h) transfers from funds not exclusively associated with the district; and i) the market value homestead credit paid to the City under M.S. Section 273.1384; (14) for the reporting period and for the prior years of the district, the amount budgeted under the tax increment financing plan, and the actual amount expended for, at least, the following categories: a) acquisition of land and buildings through condemnation or purchase; b) site improvements or preparation costs; c) installation of public utilities, parking facilities, streets, roads, sidewalks, or other similar public improvements; d) administrative costs, including the allocated cost of the City; and e) public park facilities, facilities for social, recreational, or conference purposes, or other similar public improvements; and transfers to funds not exclusively associated with the district; (15) the amount of any payments for activities and improvements located outside of the district that are paid for or financed with tax increments; (16) the amount of payments of principal and interest that are made during the reporting period on any non - defeased: a) general obligation tax increment financing bonds; b) other tax increment financing bonds; and c) notes and pay -as- you -go contracts; (17) the principal amount, at the end of the reporting period, of any non- defeased: City of Oak Park Heights, Minnesota 20 Article IV — Tax Increment Financing Plan NORTHLAND SECU RITI ES a) general obligation tax increment financing bonds; b) other tax increment financing bonds; and c) notes and pay-as-you-go contracts; (18) the amount of principal and interest payments that are due for the current calendar year on any non-defeased: a) general obligation tax increment financing bonds; b) other tax increment financing bonds; and c) notes and pay-as-you-go contracts; (19) if the fiscal disparities contribution under chapter 276A or 473F for the district is computed under section 469.177, subdivision 3, paragraph (a). the amount of increased property taxes imposed on other properties in the municipality that approved the tax increment financing plan as a result of the fiscal disparities contribution; (20) the estimate, if any, contained in the tax increment financing plan of the amount of the cost of the project, including administrative expenses, that will be paid or financed with tax increment; (21) any additional information the state auditor may require. The City must also annually publish in a newspaper of general circulation in the City an annual statement for each tax increment financing district showing: the original net tax capacity of the district and any subdistrict under 469.177, subdivision 1; (2) the net tax capacity for the reporting period of the district and any subdistrict; (3) the captured net tax capacity of the district; (4) the month and year in which the City has received or anticipates it will receive the first increment from the district; ( the date the district must be decertified; (6) the amount of principal and interest payments that are due for the current calendar year on any non-defeased obligations; (7) if the fiscal disparities contribution under chapter 276A or 473F for the district is computed under section 469.177, subdivision 3, paragraph (a). the amount of increased property taxes imposed on other properties in the municipality that approved the tax increment financing plan as a result of the fiscal disparities contribution; (8) ( the amounts of tax increment received and expended in the reporting period; and any additional information the City deems necessary. City of Oak Park Heights, Minnesota 21 Article IV — Tax Increment Financing Plan NORTHLAND R C t ES The annual statement must inform readers that additional information regarding each district may be obtained from the City, and must explain how the additional information may be requested. The City must publish the annual statement for a year no later than August 15 of the next year. The City must identify the newspaper of general circulation in the municipality to which the annual statement has been or will be submitted for publication and provide a copy of the annual statement to the county board, county auditor, the school board, the state auditor, and the governing body of the municipality on or before August 1 of the year in which the statement must be published. The reporting and disclosure requirements outlined in this section shall begin with the year the district was certified, and shall end in the year in which both the district has been decertified and all tax increments have been spent or returned to the county for redistribution. Failure to meet these requirements, as determined by the State Auditors Office, may result in suspension of distribution of tax increment. Section 4.28 Business Subsidy Compliance The City, or other local government agency, must comply with the business subsidies law when providing business subsidies to private entities. The requirements are specified in Minnesota Statutes, Sections 116J.993 to 1 16J.995. The City must adopt business subsidy criteria prior to granting a business subsidy. The requirements include: the grantor must adopt the criteria following a public hearing; the criteria may not be adopted on a case -by -case basis; the criteria must set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies; ( the criteria must include a specific wage floor for the wages to be paid for the jobs created. The wage floor may be stated as a specific dollar amount or a formula that will generate a specific dollar amount (5) a grantor may deviate from its criteria by documenting in writing the reason for deviation and attaching a copy of the document to its next annual report to the Department of Employment and Economic Development; (6) a copy of the criteria must be submitted to the Department of Employment and Economic Development. In addition, the City must enter into a subsidy agreement with the recipient of the subsidy. For subsidies greater than $ 100,000 the grantor must provide public notice and a hearing on the subsidy. The subsidy agreement must include: (1) a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is tax increment financing; a statement of the public purpose for the subsidy; measurable, specific, and tangible goals for the subsidy; a description of the financial obligation of the recipient if the goals are not met; a statement of why the subsidy is needed; City of Oak Park Heights, Minnesota 22 Article IV Tax Increment Financing Plan (6) a commitment to continue operations in the jurisdiction where the subsidy is used for at least five years after the benefit date; the name and address of the parent corporation of the recipient, if any; and a list of all financial assistance by all grantors for the project. ( ( NORTHLAND NECURI rt Es The statute provides specific requirements in the event the subsidy agreement goals are not met by the recipient. Recipients are required to report to the grantor specific information as defined in statute. The grantor is also required, as specified in the statute, to report specific information annually to the Department of Employment and Economic Development. The City of Oak Park Heights has adopted a Business Subsidy Policy and intends to comply with the requirements of Minnesota Statutes 116J.993 to 116J.995. Because the intended subsidy for the project specified in this document is anticipated to be 100% for housing assistance it is exempt from the requirements of Minnesota Statutes 116J.993 to 116J.995. City of Oak Park Heights, Minnesota 23 EXHIBIT I - Munici, al Dev. District No 1 NO:OR'I'IfL_AND The boundaries of Municipal Development District No. 1 are coterminous with the Oak Park Heights City limits. EXIIIBIT IA ax Increment Financin ' District NORTHLAND Tax Irncrement Financing (Renewal and Renovation) District No. 1 -1 r77//:47717A r 58TH STREET SECURITIES EXHIBIT IB - Pro e rt Descri tion NORTH LAN D EC I.) `k. 1 - - • - . . . - • -• - The following parcel identification number(s) (PID# and corresponding legal description(s), along with adjacent rights-of-way, will be included in the TIF District: Parcel ID Number/Legal Descrin EXHIBIT 11 - Sources & Uses Statement Tax increment revenue Interest on invested funds Bond proceeds Loan Proceeds Real estate sales Special assessments Rent/lease revenue Grants Developer Equity Transfers in Total Sources of Funds Land/building acquisition Site improvements/preparation costs Installation of public utilities Parking facilities Streets and sidewalks Public park facilities Social, recreational, conference facilities Interest reduction payments Bond principal payments Bond interest payments Loan principal payments Loan/note interest payments Administrative expenses Capitalized Interest Other (OSA) Transfers out Total Uses of Funds Northland Securities, Inc. - 4/20/2009 at 3:42 PM Sources of Funds Uses of Funds NORTHLAND SECURITIES 2,509,500 0 0 0 0 0 0 0 0 0 2,509,500 1,200,000 0 0 0 345,000 0 0 0 0 0 0 457,000 345,000 150,000 12,500 0 2,509,500 T1F 042009Source&Use Certification Request Date Decertification Date Present Value Date Present Value Rate 06/01/09 12/31/26 06/01/09 6.00% (16 Years of Increment) Type of TIF District: Renewal and Renovation Type of Debt: Loan (Pay-as-you-go) Fiscal Disparities Election: NA Fiscal Disparities Rate: 0.0000% Local Tax Capacity Rate: 87.312% 2008/2009 Administration: 10.00% Pooling: 10.00% Market Value Inflator: 100.00% Base Value Information 2008/2009 2008/2009 2008/2009 CLASS RATE CLASS RATE 2008/2009 Class PID # EMV lst Tier 2nd Tier NTC RES 05-029-20-14-0003 175,100 1.00% 1.25% 1,999 RES 05-029-20-1 1-0063 119,400 1.00% 1.25% 1,303 REN 05-029-20-11-0062 100 1.25% 1.25% 1 REN 05-029-20-11-0059 219,200 1.25% 1.25% 2,740 REN 05-029-20-11-0136 1 00,000 1.25% L25% 1,250 RES 05-029-20-11-0026 182,300 1.00% 1.25% 2,089 RES 05-029-20-11-0065 177,300 1.00% 1.25% 2,026 REN 05-029-20-11-0028 168,000 1.25% 1.25% 2,100 REN 05-029-20-1 1-0059 219,200 1.25% 1.25% 2,740 Total 1,360,600 16,248 2010/2011 2011/2012 2012/2013 2013/2014 Base EIVIV Coop $654,100 $654,100 $654,100 $654,100 Base EMV Assisted $706,500 $706,500 $706,500 $706,500 Increase in EMV Coop 7,609,425 10,145,900 10,145,900 10,145,900 Increase in EMV Assisted 0 10,720,125 14,293,500 14,293,500 Total Estimated Market Value $8,970,025 $22,226,625 $25,800,000 $25,800,000 NTC Project 1 - lst Tier RES 0 0 0 0 NTC Project 1 - 2nd Tier RES 76,094 101,459 101,459 101,459 NTC Project 2. - lst Tier REN 0 0 0 0 NTC Project 2 - 2nd Tier REN 0 134,002 178,669 178,669 Total Net Tax Capacity $76,094 $235,461 $280,128 S280,128 EXHIBIT III TIF District Assumptions Northland Securities, Inc. - 4/20/2009 at 3:42 PM NORTHLAND :LIRITIES City of Oak Park Heights, MN Tax Increment Financing (Renewal and Renovation) District No. 1-1 Oakgreen Project TIF 042009 - Assumptions SchooJ City County District Other (7 @ @ @ 39.657% 26.343% 17,691% 3.621% c, c) C) d r 00 in .n in in in in VD en in in in in in in -4 Cr, In in Ls kr) In 4 .., r. ., , .s. r f• ( r- a, c c a cr, a, r - 4 rn rn fin rn cn rn 0 00 00 00 00 00 00 00 in r- , D \.0 \ID ' \C) \-0 C5 06 95 , ,07 95 95 ,, ,6 in r" Tr' 71 at d d .1 , ..0 ... ,.... ,--+ ,-, I. v. 1.1 , r , I+ r C i+ ah 1 4 .- ) r - c' CT\ (TN c Ch C., *--, lin , ,..0 , 0 \-0 \-0 \D \JD en en r - r - N r - r - r - c ( , T izi , 1 - , J . 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Cr, fin 00 \Ci 4 \47) .1 1.... . , a, ' N .1" izt d C> CM C) d cD cD 0 CM c) 0) cD c) 0 CD c) d C d cD d Cs C> Cs d C C> Cs d CD 9L8E.171 0E6`ZOL LOL:9 EZL`gLg‘1 Annual Gross Tax Increment 87.312% CD 0 In C-I N .r, Cr, C\ rn *-- Cr - CN Cr rn CD en NI C\ Cr, en C> en NI ON a cn CD 0": r ON Cr rr, d rn , t -- A Cr C. rn CD rn rq Cr, a rn d cs Nt ON ON rr. d ( c--.1 C\ Ct c d 0• r1 C c rn CD 01 r-1 ON Cr en d rn Ni ON Cr en d rn N Cr c en CD rn N Cr, rn CD rn N CN en CD rn irl d CD d d d cD d d CD d d d 1 8E7'6917'E rn. C/D - CI - 0 x (1) 6- C. H CI% czt - 0 71 c r :77 r,..) -. 00 vD \ID VD \O \ID \O \CD VD VD VD \JD VD VD CD CD CD CD CD CD CD CD CD CD CD CD 4 4 4 4 4 41 41 41 4 41 41 VD un VD , 4D VD o D VD VD VD ,,, C) VD VD VD VD VD r' c ( rn rn rn rq r rn m t n ..,t• in 00 oo 00 00 00 00 00 00 00 00 00 00 co oo .. . p•-■ r- N N r- N N r- C r- N N N N N. CD c) d C) (:=, C) C) Lc) , r) 4 , r) in 4 kn in kr) In NI Ca CP, CN ON ON a, a, a, Cr, Cr, a, ON C:rs Ch CA, Cl< N ("1 rT r4 rq rf cs1 rT rT rT c.is NNNNNNNNNNNNNN c) r - -- r r - N r - r - t - r - r - r - t 1 r - N N CD CD CD CD CD CD CD CD CD CD (:) CD Q) CD N 4 4 4 4 'II 4 4 4 WI 4"). VI 41 41 4 04) , ii .._, 03 0 r CD Cr, CN Ch Ch 0, Cr, CN 0, 0, Cr), Cr, CN Ch Ch . = ) i-, .R. CD -, N N N N N N N cl N ( ra ("4 (^4. N s...., C) 00 ON ON 01 Cr1 CI1 \ Cr, a ON ON c Cr, Cr, CD CD dddd CD d CD d 00 00 NNNNNNNNNNNN ("4 rs4 \D 00 00 oo 00 00 00 00 00 00 00 oo 00 00 00 V a) CD \-C. 01 CD ddd ddddddidddddd 00 cc cic 00 cc co 00 00 00 00 00 00 00 00 00 N 00 00 00 00 00 00 00 00 00 00 00 00 00 00 C..■ en en 0^, r.4 en en rn rn c en en en r.';' \ \LD \C ' \C \C NC r NN NN NI ( - I dddddd d d CD CD © CD CD CD CD CD CD C. C CD C, CD 00 00 00 OS 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 oo 00 - 1 - i •• NNNNNN NCNINNNN +4.-5 „c„, d %,.6‘ \ d o ' ,„6' 5 5 - 5 c: ;' 5 5 5 c= , - d 5 CO 00 00 00 00 00 00 00 00 00 OC NCANNNINN cs N r cI 00 oo oo 00 00 0: 00 C. 00 00 00 00 00 00 00 00 oo 00 00 00 00 00 00 Q0 oo 00 00 1 C, N CN ri C r r cN r N N N N r rI N N N N N N 1.■1 r e c• r r , C , r; r C C • --7) C ) CD d d d rn 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 rs1 N r - 4 NC Nc N cD CN1 r# . d . )r: , ,,C - N Q.:, C. d P- N rn ••=1 in VD t 00 ,- -- -- ,- ,- ,-- -, r N N N r N N N eN cp (7) d c d d d cD d cD CD (ID d d 0 d -- ,-- r - ,,) rn , cn rn rn rn rn rn Q r12 Q f , 2 ,-, in rq N C■I C..) -__ N ,.::4 ---. r'l N N N c N r N NI rCTI 7e f d d C CD c CD C•i CM (NI C • r- oo d -„_ rn rn 01 N k.0 cn rn rn OC N EXHIBIT IV - Projected Tax Increment Cash Flow Northland Securities. Inc. - 4/20/2009 at 3:42 PM TlF Oz1-2009 Tax1ncAnn 12/31/2032 12/31/2034 12/31/2036 12/31/2012 12/31/2035 12/31/2010 EXHIBIT V - Projected Tax Impact/Market Value Analysis City of Oak Park Heights, MN Tax Increment Financing (Renewal and Renovation) District No. 1-1 Oakgreen Project Total Taxable NTC Projected Retained NTC Hypothetical New NTC Existing Local Tax Rate Hypothetical Adj. Local Tax Rate Difference Hypothetical Taxes on Retained NTC 2008/2009 2008/2009 Annual Present Gross Tax Value @ Year Increment 6.00% 1 2011 52,253 45,610 2 2012 191,399 157,611 3 2013 230,399 178,987 4 2014 230,399 168,856 5 2015 230,399 159,298 6 2016 230,399 150,281 7 2017 230,399 141,775 8 2018 230,399 133,750 9 2019 230,399 126,179 10 2020 230,399 119,037 11 2021 230,399 1 12 2022 230,399 105,942 13 2023 230,399 99,945 14 2024 230,399 94,288 15 2025 230,399 88,951 16 2026 230,399 83.916 17 2027 0 0 18 2028 0 0 19 2029 0 0 20 2030 0 0 21 2031 0 0 22 2032 0 0 23 2033 0 0 24 2034 0 0 25 2035 0 0 26 2036 0 0 27 2037 0 0 28 2038 0 0 3,469,238 1,966,725 Northland Securities, Inc - 4/20/2009 at 142 PM Estimated Impact on Other Taxing Jurisdictions City of Washington Oak Park Heights County 8,921,360 263,880 9,185,240 39.657% 38.518% 1.139% 101,641 295,173,120 263,880 295,437,000 26.343% 26.319% 0.024% 69,452 87,614,826 263,880 87,878,706 17.691% 17.638% 0.053% 46,543 Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above, the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax rate would decrease by 1.216% (see Hypothetical Adj. Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity total net tax capacity - captured TIF. (2) The impact on these taxing jurisdictions is negligible since they represent only 4.15% of the total tax rate. NORIIMAND I.S.D. #834 Stillwater Other ri Total NA 391,709,306 263,880 NA 3.621% 87.312% 3.621% 86.096% NA 1.216% NA Present Value Date Present Value Rate (Gross TIF) Increase in EMV With TIF District Less: P.V of Gross Tax Increment Subtotal Less: Increase in EMV Without TIF Difference Market Value Analysis 06/01/09 6.00% $24,439,400 1,966,725 $22,472,675 0 $22,472,675 TIF 042009 - MVA-Impact CC: NORTHLAND FROM: Nick Skarich, Vice President Northland Public Finance RE: Oakgreen TIF Development Dear Mr. Johnson and Council Members, SECURITIES 45 South 7 Street Suite 2500 Minneapolis, .MN 55402 (800) 851 -2920 (612) 851 -5900 Fax (612) 851 -5917 E X T E R N A L M E M O R A N D U M DATE: April 9, 2009 TO: Mr. Eric Johnson, City Administrator Members of the City Council 1 have further reviewed the Anchobaypro, Inc. proposal and have provided the attached financial analysis in efforts to aid the City in understanding the components of the proposed TIF project. I will be in attendance at the April 14 City Council meeting to further discuss the City's role in the TIF process and the required steps moving forward. The most recent proposal includes two components. The first is 48 -unit residential senior cooperative building that will be two stories in height and approximately 80,000 square feet in size. The second will be a 120 -unit assisted living facility approximately 107,000 square feet in size. The construction is expected to be completed by late spring of 2011. This would result in the first tax increments being available in taxes payable 2011(partial based on 2009 completion). The benefits to the City include replacement of older housing stock, an addition of new housing units, including an assisted living facility and an increased future tax base. Procedurally, the City would start by first calling for a public hearing, which would typically be held approximately 45 days in the future. At that point Northland Securities and Briggs & Morgan will start the process of preparing the required documents and notices and forwarding those to the required parties. The developer would not be able to proceed, including the pulling of a building permit, until the City passes a resolution approving the establishment of the TIF district following the public hearing. The attached timeline describes the steps involved. The current request for financial assistance includes approximately $1,200,000 of tax increments to help offset $1,600,000 of acquisition related costs of the existing homes on the property and allow for a reasonable return on investment. This amounts to 5% of total project costs of approximately $24,000,000 which is a reasonable request. This would be accomplished based on the information provided. The assistance would be provided through a "pay -as- you -go" mechanism. This means that as taxes are paid on the property the tax increment portion would be returned to the City who would in turn reimburse the Developer on an annual basis. The payment amount would be determined by terms negotiated in the development agreement. The attached example reflects a 90% payout (10% admin to the City). The assumptions are based on 48 units assessed at an average of $225,000 and an assessed value of $15,000,000 on the assisted living as per the developer. Reimbursements are only made contingent on taxes being paid. No taxes = no TIF. This alleviates any financial risk to the City that would be assumed if the City were to issue bonds for instance. The statutory maximum duration for renewal and renovation districts is 16 years of collection. Dependent on final assumptions, the TIF district could fulfill its obligation in less than 15 years. Based on the attached analysis, and an assumed market value inflation of 0 %, it would take 9 years for the assistance to be paid in full (interest rate at 6.00 %). At that time the properties would go back on the City's tax rolls. The developer is paying out-of-pocket for an independent third party study that will determine whether property will qualify as a renewal and renovation TIF district as proposed. This report will be finalized shortly. The current draft demonstrates that the district will qualify. Overall, the project looks promising for the City of Oak Park Heights. The City will need to determine its comfort level with the nature of the project, duration of the district, etc. We look forward to working with you on this project. Feel free to contact me with any questions at (612) 851-5907. Thank you. DEADLINE ACTUAL DATE DATE 4/14/2009 City Council adopts Resolution calling for public hearing 4/26/2009 4/24/2009 Notification of County Auditor (30 days before hearing) 4/26/2009 4/24/2006 Notification of School Board Clerk (30 clays before hearing) - 111/2009 Forward Notice To Legal Paper (Stillwater Gazette) Deadline - one clay prior 5/16/2009 5/26/2009 N/A Timeline 040609 CITY OF OAK PARK HEIGHTS, MINNESOTA MUNICIPAL DEVELOPMENT DISTRICT ibk1(1 1 TAX INCREMENT FINANCING (RENEWAL & REMOVAll OkTiR0 7 ma 1-1 CARRIACA MOUSE PROJECT • 5/14/2009 Planning Commission Review and Approval Resolution B&M TIF Documents NS 5/1512009 Publish Notice of Hearinci (10 days before hearinG) 5/ Date of Public Hearing 5/26/2009 5/26/2009 City Council Adopts Resolution Creating Districts and Approving TIF Plan / Development Plan)? Development Acweement N/A Establishing Resolutions B&M TIF Plan NS - Development Plan NS Development Agreement B&M N 6/1/2009 File Documents With Commissioner of Revenue/State Auditor N/A 6/1/2009 Request District Certification From County Auditor NS SCHEDULE O [EVENTS TO ADOPT TAX inCREINIEMT DISTPOCT DOCUMENTS DESCVIIPTIM L 1 LJ IP Documents Pm:pred RIEEING by TYPE TRIE B&M NS NS NS Regular 7:00 Regular 7:00 Regular 7:00 T-Rec)ulai• 7:00 4/912009 EXHIBIT HI - TIF District Assumptions Base EMV Coop Base EMV Assisted Increase in EMV Coop Increase in EMV Assisted Total Estimated Market Value NTC Project 1 - 1 st Tier RES RES NTC Project 1 - 2nd Tier REN NTC Project 2 - 2nd Tier REN NTC Project 2. - I st Tier Total Net Tax Capacity 2010/2011 $654,100 706,50Q 7,609,425 10,720 125 S19,690,150 0 76,094 0 134,002 2011/2012 $654,100 $706,500 10,145,900 14,293,500 2012/2013 $654,1 7 A,500 10,145,900 14,293,500 13 $25,800,000 $25,800,000 0 0 101,459 101,459 0 0 178,669 178,669 2013/2014 $654,300 $706,500 10,145,900 14,293,500 $25,800,000 0 101,459 0 178,669 $210,096 $280,128 S280,128 $280,128 Certification Request Date Decertification Date Present Value Date Present Value Rate Type of TIF District: Type of Debt: Fiscal Disparities Election: Fiscal Disparities Rate: Local Tax Capacity Rate: Administration: Pooling: Market Value Inflator: ,,W1.01.•1■11■■..1111111111•1■■■ Base Value Information Class RES RES REN REN REN RES RES REN REN P1D # 05-029-20-14-0003 05-029-20-11-0063 05-029-20-11-0062 05-029-20-11-0059 05-029-20-11-0136 05-029-20-11-0026 05-029-20-11-0065 05-029-20-11-0028 05-029-20-11-0059 Total 2008/2009 EMV Northland Securities, Inc. - 4/9/2009 at 12:28 PM Renewal and Renovation Loan (Pay-as-you-go) NA 0.0000% 87.312% 2008/2009 10.00% 0.00% 100.00% • 175,100 119,400 100 219,200 100,000 182,300 177,300 168,000 219,200 1,360 600 06/01/09 12/31/26 (16 Years of Increment) 06/01/09 6.00% 2008/2009 2008/2009 CLASS RATE CLASS RATE 1st Tier 2nci Tier 1.00% 1.00% L25% L25% 1.25% 1.00% 1.00% 1.25°/ 1.25% NORTIEM A N L25% L25% 1.25% L25% 1.25% 1.25% 1.25% 1.25% L25% ET iR I I: 2008/2009 NTC T1F 0,41009 - As m tions 1,999 1,303 2,740 1,250 2,089 2,026 2,100 2,740 16,248, - 6 0. '8 0 . (s u — can C) . rn , 1■ L. 00 773 P, 0 v m L . 0,3 al cr$ u (--) tTi • L- r — -(/ r 4.) c ,Z j L c u cei 0 0 rin crs rn en cn Cr) P1 r r rn CD 0 0 0 (:=D 0 v. .1 ------ ‘ o 0 \ ‘4.. o '40 O , 0 \CI , C 1, 0 \0 0 V;) 0 0 6 1 / 4 .0 ‘,0 in 0 CD. 0 Q CD 0i 0 0 0 0 CD C 0 0 0 N N r4 NNNNNN r4 NNNNN CZ) C, c c c C, ••■•■■ 0 .tia N N N N N r r N r N r r c 0 0 0 C> 0 0 0 0 CD 0 0 \C kn kn tn kn kr) kn kr) , n aw a, C al, C a), Cr, C CN CI a, a, C C't r' 4 N r N N N r4 N N N r4 N N N r N r N r4 NNNNNN 0 o a a c a, a 0 Cl Cr, o c a CN CIN C, 0 0 0 0 0 0 0 0 0 0 0 N c4 N r4 NNNNNNNNNNN co co co co co co co c co 00 co co co co co cr) N r r r, C) CD CD 0 CD CD CD r4 N r4 N N ri% re) V v% en en en cn P1 CD a 41 in 41 VI V 4% 4% 4% 41 4% 4% 41 4n 'r 4% c; V% WI 4% 41 4% 4% 41 V% VI 4% 41 41 tin 41 CD VI 4% V% VI 41 VI VI VI 4% V% W) 4% N ON O CN7 o (77 0; a' c 0 0 CN rn rn rn m cfl c fl 1 rn 0 0 0 CD 0 0 0 0 0 CD 40 0 c CO CO o C CO 00 CO 00 00 CO 00 o c4 00 0-0 \CI \ \0 1, 0 O ¼Q ‘ 1 / 4 Z; \-0 \-0 \ID 1 / 4 0 \-0 \CD \C) \C+ \C 00 \6\0 \ID \C, 1 ,0 \O C .4. 4. .‘1. f 1 -r) ' "tr ei* CD 0 0 CD CD c= 0 c 0 0 0 CD 1/4,0 1•R 1^.1 r■. III In In In In i fl n in , 0 0,7 a: 4,3< c cr< Q 0 cr Cr: c 04' 04 1 ,0 \-0 \-0 \-0 \O \O \-0 \-.0 , 40 \t) r-- r N N N 0 0 0 c) 0 0 0 0 0 0 0 CD -1. P 0-0 \-0 1 / 4 .0 \C) b \ \C \0 r 4 .4 4 4 4 r 4 .9 ' 4 4 4 r - 0 0 0 0 0 CD 0 CD G. 0 CD G ..■•■ 0' C a, c a c a a a, a cr C 0 C a cr a, a a a a 0 c 0 a a. c rn r rn rj re', r r r '1 CD CD CD c CD CD C) C) CD rn rn r r rn rn rn NrANNN NI NINNNN N 0 Co C) 0 0 0 0 0 0 0 CD CD 0 CD 00 o 0 c c•C) iv: 00 04) 0C 00 vi CD Cs CD CD Cs 0 0 0 0 CD CO 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 , r • r, C'; rn pn c fin pn pn P1 c 01 rn CN ,0 \D \c.) \JD vD \0 NNNINN rANNNNNNN 0 0 0 0 0 0 CD 0 0 0 0 0 0 c 0 C. Cl 0 C 0 C G 0 0 c CD CD 0 0 0 0 0 0 CD 0 00 00 CO CC CO 00 C4 C0 CO 00 00 00 00 CO CO 00 CO 00 00 00 C0 00 CO 00 00 00 00 00 00 N N N N N N rA rA N CN N N rA r rJ rA N r N N " • • 0 \-0 \ \-C ‘.0 c C \C \-0 0 0 0 0 C-) 0 0 .1.. CO 00 00 00 00 GO 00 00 00 00 00 00 N N N rA NN NN 00 \C 00 00 00 CO OC CO CO 00 04 00 CO 00 00 00 GO 00 00 00 00 00 00 00 00 00 00 00 00 r4 N N CI CI rA rA PA cA cA rA N cl Ci C4 NI rA rA OW4 \ c5 C"... ( CD C G L G 0 0 0 0 0 0 0 c c 0 c 0 co 0 0 0 .4 00 00 co 00 04 00 00 00 00 00 00 00 00 00 00 00 00 00 04 00 04 04 00 00 00 04 N N cs NI NI NI N NNNNN N r N r N 4 N 00 0 c — NI rn NI N c cn rn r r rn rn Cs 0 CD 0 c Cs C) 0 CD CD 0 r r rni N r1 N N N N N rn en en rn ri 0'1 rn rn r r c N ■■■4 N cN \0 rn CD rn EXHIBIT V - Projected Tax Impact/Market Value Analysis Annual Present Gross Tax Value @ Year Increment 6.00% 1 2009 169,253 165,997 2 2010 230,399 213,177 3 2011 230,399 201,110 4 2012 230,399 189,726 5 2013 230,399 173,987 6 2014 230,399 168,856 7 2015 230,399 159,298 8 2016 230,399 150,281 9 2017 230,399 141,775 10 2018 230,399 133,750 11 2019 230,399 126,179 12 2020 230,399 119,037 13 2021 230,399 112,299 14 2022 230,399 105,942 15 2023 230,399 99,945 16 2024 230,399 94,288 17 2025 0 0 18 2026 0 0 19 2027 (1 0 20 2028 0 0 21 2029 0 0 22 2030 0 0 23 2031 0 0 24 2032 0 0 25 2033 0 0 26 2034 0 0 27 2035 0 0 28 2036 0 0 3,625,238 Northland Securities, Inc - 4/9/2009 at 12:28 PM Estimated Impact on Other Taxing Jurisdictions 2,360,647 L I City of Washington I.S.D. #834 Oak Park Heights County Stillwater Other Total Total Taxable NTC 2008/2009 8,921,360 295,173,120 87,614,826 NA 391,709,306 Projected Retained NTC 263,880 263,880 263,880 263,880 Hypothetical New NTC 9,185,240 295,437,000 87,878,706 NA Existing Local Tax Rate 2008/2009 39.657% 26.343% 17.691% 3.621% 87 312% Hypothetical Adj. Local Tax Rate 38.518% 26.319% 17.638% 3.621% 86.096% Difference 1.139% 0.024% 0.053% NA 1 216% Hypothetical Taxes on Retained NTC 101,641 69,452 46,543 NA Statement 1: lf the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above, the result would be a lower local (see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax rate would decrease by 1.216% (see Hypothetical Adj. Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity total net tax capacity - captured TIF. (2) The impact on these taxing jurisdictions is negligible since they represent only 4 15% of the total tax rate. Present Value Date Present Value Rate (Gross TIF) Increase in EMV With TIF District Less: P.V of Gross Tax Increment Subtotal Less. Increase in EMV Without TIF Difference Market Vakge AnallyMs 06/01/09 6.00% $24,439,400 2,360,647 $22,078,753 0 $22,078,753 TIF 041009 - MVA-lrnpact Pay-as-you- o Note Note Date: Note Rate: Proceeds: Cash Balance: Retained: Date 8/1/2010 0.00 2/1/2011 0.00 8/1/2011 36,398.80 2/1/2012 37,490.77 8/1/2012 66,032.50 2/1/2013 68,013.46 8/1/2013 70,053.85 2/1/2014 72,155.47 8/1/2014 74,320.12 2/1/2015 76,549.72 8/1/2015 78,846,22 2/1/2016 81,211.60 8/1/2016 83,647.96 2/1/2017 86,157.40 8/1/2017 88,742.11 2/1/2018 91,404.37 8/1/2018 94,146.49 2/1/2019 96,970.87 8/1/2019 99,880.00 2/1/2020 14,320.00 8/1/2020 0.00 2/1/2021 0.00 8/1/2021 0.00 2/1/2022 0.00 8/1/2022 0.00 2/1/2023 0.00 8/1/2023 0.00 2/1/2024 0.00 8/1/2024 0.00 2/1/2025 0.00 8/1/2025 0.00 2/1/2026 0.00 8/1/2026 0.00 2/1/2027 (1.00 07/01/09 6.00% $1,200,000 $1,741,452 100% Semi-Annual Net TIF Principle Interest P & I Revenue 1,316341.71 Northland Securities, Inc. - 4/9/2009 at 12:28 PM 0.00 0.00 39,490.20 38,398.23 37,273.50 35,292.54 33,252.15 31,150,53 28,985.88 26,756.28 24,459.78 22,094.40 19,658.04 17,148.60 14,563.89 11,901.63 9,159.51 6,335.13 3,426.00 429.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 399,775.89 0.00 0.00 75,889.00 75,889.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 14,749.60 0.00 0.00 0.00 0.00 0.00 0 00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 00 1,716,117 60 0.00 0.00 75,889.00 75,889.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 103,306.00 14,749.60 0.00 0.00 0.00 0.00 0 00 0.01) 0.00 0.00 0.00 0.00 0.00 0.00 0 00 0.00 1,716,117 60 Developer Contribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Capitalized Interest 78,000.00 38,340.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0,00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 116,340.00 Loan Balance Outstanding 1,200,000.00 1,278,000.00 1,316,340.00 1,279,941.00 1,242,450.00 1,176,418.00 1,108,405.00 1,038,351.00 966,196.00 891,876.00 815,326.00 736,480.00 655,268.00 571,620.00 485,463.00 396,721.00 305,317.00 211,171.00 114,200.00 14,320.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TIF 041009 - PayGoCity and the following were absent: 2325072v1 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF OAK PARK HEIGHTS, MINNESOTA The following members were present: HELD: April 14, 2009 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Oak Park Heights, Washington County, Minnesota, was duly held at the City Hall on Tuesday, the 14 day of April, 2009 at 7:00 p.m. for the purpose, in part, of calling a public hearing on the proposed establishment of Municipal Development District No. 1 and the adoption of a Development Program therefor, the proposed establishment of Tax Increment Financing (Renewal and Renovation) District No. 1 - l (Carriage House Project) within Development District No. 1 and the proposed adoption of the Tax Increment Financing Plan relating thereto. Member introduced the following resolution and moved its adoption: RESOLUTION RESOLUTION CALLING PUBLIC HEARING ON THE PROPOSED ESTABLISIIlvIENT OF MUNICIPAL DEVELOPMENT DISTRACT NO. 1 AND THE ADOPTION OF A DEVELOPMENT PROGRAM THEREFOR, THE PROPOSED ESTABLISHvIENT OF TAX INCREMENT FINANCING (RENEWAL AND RENOVATION) DISTRICT NO: 1 -1 WITHIN DEVELOPMENT DISTRICT NO. 1 (CARRIAGE HOUSE PROJECT) AND THE PROPOSED ADOPTION Off' A TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLVED by the City Council (the "Council ") of the City of Oak Park Heights, Minnesota (the "City "), as follows: 1. Public Hearing. This Council shall meet on May 26, 2009, at approximately 7: 00 p.m., to hold a public hearing on the following matters: (a) proposed establishment of Municipal Development District No. 1, (b) the adoption of a Development Program therefore, (c) the proposed establishment of Tax Increment Financing (Renewal and Renovation) District No. 1 -1 (Carriage House Project) (the "Tax Increment Financing District ") within Development District No. 1, and (d) the proposed adoption of a Tax Increment Financing Plan relating thereto, all pursuant to and in accordance with Minnesota Statutes, Sections 469.124 through 469.134, both inclusive, as amended and Minnesota Statutes, Sections 469.174 through 469.1799, both inclusive, as amended (collectively, the "Act "). 2. Notice of Hearing; Filing of Program and Plan. The City Administrator is hereby authorized to cause a notice of the hearing, substantially in the form attached hereto as Exhibit A, to be published as required by the Act and to place a copy of the proposed Tax Increment Financing Plan on file in the Administrator's Office at City Hall and to make such copies available for by inspection b the public. p The motion for the adoption of the foregoing resolution was duly seconded by Councihnember and upon vote being taken thereof., the following voted in favor: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 2325072v1 2 STATE OF MINNESOTA COUNTY OF WASHINGTON I, the undersigned, being the duly qualified and acting City Administrator of the City of Oak Park Heights, Minnesota, DO HEREBY CERTIFY that the attached resolution is a true and correct copy of an extract of minutes of a meeting of the City Council of the City of Oak Park Heights, Minnesota duly called and held, as such minutes relate to the calling of a public hearing on the City's Tax Increment Financing District. WITNESS my had this day of April, 2009 2325072v1 3 City Administrator NOTICE IS FIEREBY GIVEN that the City Council (the "Council") of the City of Oa Pak Heights, /ahngts County, Minnesota, will hold a public hearing on_ Tuesday, May 26, 2009, at 7:00 pat., a the City HF.41, in the City of Oak Park Heights, Minnesota, relating Lo the proposed establishmen of ikliunicipai Developmeni,', DistTict No 1 and the adoption of a Development Progiam therefore, the proposed establishm2nt of Tarz,. Inc,r6s Facrg (Renewal and Renovation) District No. 14 (Cordage I-louse Project) •thcf- "Ta:r. Lncre Fina2Ling within Municipal Development District No. 1 and the proposed adoption of a Tax Increment Filiancing Plan therefor, pursuant to Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as ame Copies of the Development Program and Tax Increment Financing Plan as propos(2,0 o b adopted wili b o Ole FAlci Evailable cor public inspection at the office of the City Administrator at City Hall. The property proposed lo be included in 'Development District No. 1 is dc-,scribed in the Developraeo/e Pc' :rill On file in the office of the City Administrator. The property proposed io b cluded in the Talif Iacai Fimuciog District is described in the TEIX Increment Financing Plan on file in ite office of thc Chy AdniTlisiTaor. A map of Municipal Development District No. 1 and the Tax Increment Finaichig DisiTict is sat 'CO - fib beietl: ge„tk 2325072v1 7.11 r , • ) i 1 F-; , ' :1 [7! ! . 1 --- , j — - 1 L -_, _LI - 1 i,..-.:27..._-:-' i ; I r ,- "---. 17. -- I — 1._ 1 '1 1 L.-1_ ITT T. I 1 1 _LLL LI i _.., _1. .1 1 1 ' 1 Exhibit A CITY OF OAK PARK FM1GH1 S COUNTY OF WASHINGTON STATE OF MINNESOTA NOTICE OF PUBLIC --Mi(-IniNG ■.■ All interested PerSOIIS aty appear at the 4 eErring a - :1. z. -11 :-..-.......„..... --1.-----„-,--- 1 • - 1 pesent 11.16 vie-Yrs vnitinP prig. o hearing. REPORT OF INSPECTION PROCEDURES AND RESULTS FOR DETERMINING QUALIFICATIONS OF A TAX INCREMENT FINANCING DISTRICT AS A RENEWAL AND RENOVATION DISTRICT Carriage House TIF District Oak Park Heights, Minnesota LHB Project No. 080629 April 1, 2009 Prepared For The City of Oak Park Heights Prepared by LHB, Inc. 250 Third Avenue North, Suite 450 Minneapolis, Minnesota 55401 APPENDIX A APPENDIX B APPENDIX C TABLE OF CONTENTS Property Condition Assessment Summary Sheet Building Code and Condition Deficiencies Reports Property Condition Assessment Building Replacement Cost Reports Code Deficiency Cost Reports Photographs Page 2 Page PART 1 Executive Summary 3 Purpose of Evaluation 3 Scope of work 4 Conclusion 4 PART 2 Minnesota Statute 469.174, Subdivision 10a Requirements 4 PART 3 Procedures Followed 7 PART 4 Findings 7 A. Coverage Test 7 B. Condition of Building Test 9 1. Replacement Cost 9 2. Code Deficiencies 9 3. System Condition Deficiencies 10 C. Distribution of Substandard Structures 11 PART 5 Team Credentials 12 PART 1 — EXECUTIVE SUMMARY PURPOSE OF EVALUATION LHB was hired by the City of Oak Park Heights to inspect and evaluate the properties within a Tax Increment Financing Renewal and Renovation District ("TIF District") proposed to be established by the City. The proposed TIF District is located in the City of Oak Park Heights, near the intersection of Oakgreen Avenue North and 58 Street North (Diagram 1). The purpose of LHB's work was to determine whether the proposed TIF District meets the statutory requirements for coverage, and whether buildings on ten different parcels, located within the proposed TIF District, meet the qualifications required for a Renewal and Renovation District. Page 3 Diagram 1 — Proposed TIF District SCOPE OF WORK The proposed TIF District consists of ten (10) parcels, with six (6) single family homes. All six buildings in the proposed TIF District received an on -site interior and exterior inspection. Building code and Condition Deficiency reports for each building inspected by LHB are located in Appendix B. CONCLUSION After inspecting and evaluating the properties within the proposed TIF District and applying current statutory criteria for a Renewal and Renovation District under Minnesota Statutes, Section 469.174, Subdivision 10a, it is our professional opinion that the proposed TIF District qualifies as a Renewal and Renovation District. The remainder of this report describes our process and findings in detail. PART 2 -- MINNESOTA STATUTE 469.174 SUBDIVISION 1 oa RE UIREMENTS The properties were inspected in accordance with the following requirements under Minnesota Statutes, Section 469.174, Subdivision 10(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 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 findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3(1)." Qualification Requirements Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires two tests for occupied parcels: A. Coverage Test ..."parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or paved or gravel parking lots" The coverage required by the parcel to be considered occupied is defined under Minnesota Statutes, Section 469.174, Subdivision 10(e), which states: "For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, or paved or gravel Page 4 parking lots unless 15 percent of the area of the parcel contains building, streets, utilities, or paved or gravel parking lots." R Condition of Buildings Test ..."and 20 percent of the buildings are structurally substandard; 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 conversion, or other identified hazards to the health, safety, and general well-being of the community." 1. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision 10(b), which states: "For purposes of this subdivision, `structurally substandard' shall mean containing 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." Definition of Substantial Renovation Because "Substantial renovation" can mean different things to different people, LHB has attempted to clarify exactly what we consider to be "substantial renovation" as it relates to Minnesota Statutes, Section 469.174, Subdivision 10(a) ( a. First we researched national standards as to how much building owners should budget for annual maintenance and repair on their buildings as a percentage of replacement cost of the building. 1. According to the University of California "Facilities Renewal Budget Model" report of 1999, building owners should budget between two and three percent of current replacement value of their buildings for maintenance and repair work. This does not include routine janitorial work and routine items such as changing light bulbs and filters. 2. According to the Building Research Board of the National Research Council, one and one -half to three percent of a building's replacement value should be budgeted for maintenance and repair. b. Based on this information, LHB utilized two and one-half percent as the desired amount of maintenance and repair that should be budgeted annually to keep a building in good working condition. We recognize through experience that only a small percentage of sophisticated building owners actually budget for and spend this amount of money every year on maintenance and repair. This is because most business owners are driven by other budgetary issues and tend to neglect the building maintenance and repair line items in their annual budgets. Page 5 c. By establishing how much a building owner should be budgeting per year for maintenance and repairs, LHB is of the opinion that we could more easily establish an amount that would be considered "substantial" in comparison. If an owner is budgeting 2.5 percent of the building's replacement cost annually, most business owners or home owners would have to take out a loan to cover the cost of a substantial building improvement. Assuming they had a fixed level of income to work with, they would have to keep the loan payment at a level very near the original 2.5 percent they should have been budgeting each year. In addition, they still would have to budget for the original. 2.5 percent on top of the loan. In most cases, the mortgage terms would have to extend out to a point beyond the life expectancy of the building they were trying to improve, as most buildings built in the past fifty years are not designed to last beyond 40 years. d. Based on the calculations described above, we have defined substantial renovation for purposes of Minnesota Statutes, Section 469.174, Subdivision 100)(4 as renovation: with costs exceeding 20% of the building's replacement value. e. We do not count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.1 74, Subdivision 1O(b) and 1O(c), due to concerns expressed by the State of Minnesota Court of Appeals in the Walser Auto Sales, Inc. vs. City of _Richfield case filed November 13, 2001. 2. Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Subdivision 10(c) which states: "A` building is not structurally substandard if it is in compliance with the 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. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence 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 not disqualified] include recent fire or police inspections, on -site property appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence." a. LHB counts energy code deficiencies toward the 15 percent code threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c)) for the following reasons: Page 6 PART 3 - PROCEDURES FOLLOWER A. LITB was able to schedule interior and exterior inspections for six buildings in the proposed TIF District. Inspections were conducted on February 2 and February 4, 2009. PART 4 — FINDINGS A. Coverage Test • The Minnesota energy code is one of ten building code areas highlighted by the Minnesota Department of Labor and Industry website where minimum construction standards are required by law. • The index page of the 2007 Minnesota Building Code lists the Minnesota Energy Code as a "Required Enforcement" area compared to an additional list of "Optional Enforcement" chapters. • The Senior Building Code Representative for the Construction Codes and Licensing Division of the Minnesota Department of Labor and Industry confirmed that the Minnesota Energy Code is being enforced throughout the State of Minnesota. • In a January 2002 report to the Minnesota Legislature, the Management Analysis Division of the Minnesota Department of Administration confirmed that the construction cost of new buildings complying with the Minnesota Energy Code is higher than buildings built prior to the enactment of the code. • Proper TIF analysis requires a comparison between the replacement value of a new building built under current code standards with the repairs that would be necessary to bring the existing building up to current code standards. In order for an equal comparison to be made, all applicable code chapters should be applied to both scenarios. Since current construction estimating software automatically applies the construction cost of complying with the Minnesota Energy Code, energy code deficiencies should also be identified in the existing structures. 1. The total square foot area of each parcel in the proposed TIF District was obtained from City records, GIS mapping and site verification. 2. The total square foot area of buildings and site improvements on the parcels in the proposed TIF District was obtained from City records, GIS mapping and site verification. 3. The percentage of coverage for each parcel in the proposed TIF District was computed to determine if the 15 percent minimum requirement was met. The total square footage of parcels meeting the 15 percent requirement was divided into the Page 7 total square footage of the entire district to determine if the 70 percent requirement was met. Finding: The proposed TIF District met the coverage test under Minnesota Statutes, Section 469. 1 74, Subdivision 10(e), which resulted in parcels consisting of 78.7 percent of the area of the proposed TIF District being occupied by buildings, streets, utilities or paved drives or parking lots (Diagram 2). This exceeds the 70 percent area coverage requirement for the proposed TIF District under Minnesota Statutes, Section 469.1 74, Subdivision 1 Oa (a) (1). Page 8 Diagram 2 Shaded area denotes parcels more than 15 percent occupied by buildings, streets, utilities or paved drives or parking lots Bo Condition of Building Test 1. Replacement Cost The first step in evaluating a building to determine if it is substandard to a degree requiring substantial renovation or clearance is to determine its replacement cost. This is the cost of constructing a new structure of the same square footage and type on site. Replacement costs were researched using R.S. Means Cost Works square foot models for 2009. A replacement cost was calculated by first establishing building use (office, retail, residential, etc.), building construction type (wood, concrete, masonry, etc.), and building size to obtain the appropriate median replacement cost, which factors in the costs of construction in Oak Park Heights, Minnesota. Replacement cost includes labor, materials, and the contractor's overhead and profit. Replacement costs do not include architectural fees, legal fees or other "soft" costs not directly related to construction activities. Replacement cost for each building is tabulated in Appendix A. 2. Code Deficiencies The next step in evaluating a building is to determine what code deficiencies exist with respect to such building. Code deficiencies are those conditions for a building which are not in compliance with current building codes applicable to new buildings in the State of Minnesota. Minnesota Statutes, Section 469.174, Subdivision 1O(c), specifically provides that a building cannot be considered structurally substandard if its code deficiencies are not at least 15 percent of the replacement cost of the building. As a result, it was necessary to determine the extent of code deficiencies for each building in the proposed TIC` District. The evaluation was made by reviewing all available information with respect to such buildings contained in City Building Inspection records and making interior and exterior inspections of the buildings. LHB utilizes the 2006 Minnesota State Building Code as the official code for our evaluations. The Minnesota State Building Code is actually a series of provisional codes written specifically for Minnesota only requirements, adoption of several international codes, and amendments to the adopted international codes. After identifying the code deficiencies in each building, we used R.S. Means Cost Works 20091 Unit and Assembly Costs to determine the cost of correcting the identified deficiencies. We were than able to compare the correction costs with the replacement cost of each building to determine if the costs for correcting code deficiencies meet the required 15 percent threshold. Page 9 Finding: Four (4) out of six (6) buildings (66.7 percent) in the proposed TIF District contained code deficiencies exceeding the 15 percent threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c). A complete Building Code and Condition Deficiency report for each building in the proposed TIF District can be found in Appendix B of this report. 3. System Condition Deficiencies If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 1O(c), then in order for such building to be "structurally substandard" under Minnesota Statutes, Section 469.174, Subdivision 1O(b), the building's defects or deficiencies should be of sufficient total significance to justify "substantial renovation or clearance." Based on this definition, LHB re- evaluated each of the buildings that met the code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 1O(c), to determine if the total deficiencies warranted "substantial renovation or clearance" based on the criteria we outlined above. System condition deficiencies are a measurement of defects or substantial deterioration in site elements, structure, exterior envelope, mechanical and electrical components, fire protection and emergency systems, interior partitions, ceilings, floors and doors. The evaluation of system condition deficiencies was made by reviewing all available information contained in City records, and making interior and exterior inspections of the buildings. LHB only identified system condition deficiencies that were visible upon our inspection of the building or contained in City records. We did not consider the amount of "service life" used up for a particular component unless it was an obvious part of that component's deficiencies. Aber identifying the system condition deficiencies in each building, we used our professional judgment to determine if the list of deficiencies would total more than 20 percent of the replacement value of the building added to the cost of total code deficiencies. For example, if a building with a replacement value of 100 thousand dollars had 17 percent code deficiencies, we would look at the list of system condition deficiencies and make a professional judgment that the cost of fixing the system condition deficiencies would be at least $3,000 (3 percent), in order for that building to be considered substandard. Finding: In our professional opinion, three (3) of the six (6) buildings (50 percent) in the proposed TIF District are structurally substandard to a degree requiring substantial renovation or clearance, because of 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 Page . 10 substantial renovation or clearance. This exceeds the 20 percent requirement of Subdivision 1Oa. (a) (1) (ii). Subdivision 10a. (a) (1) (iii) Subdivision 10a. (a) (1) (iii) requires that at least 30 percent of the other buildings (i.e., all buildings excluding the 20 percent minimum standard) meet the Subdivision 10a (1), clause (iii) test in which. 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. Finding: Six (6) out of the six (6) buildings (100 percent) in the proposed Renewal and Renovation District exhibit existing conditions warranting renovation or clearance as defined by Minnesota Statutes Subd. 1Oa. (1) (iii), described as follows: • As noted above, three buildings were found to be structurally substandard as defined by Minnesota Statutes, Section 469.1 74, Subdivsion 10 (b) and (c). The factors under Subdivision 10a (1), clause (iii) are broader, and include "obsolete buildings not suitable for conversion." Buildings with deficiencies significant enough to meet the structurally substandard test are, in effect, buildings that are obsolete and not suitable for improvement. Therefore, all three buildings found to be substandard in Appendix A and B also meet the lesser "obsolescence" test of Subdivsion 10a (1), clause (iii). • TIF Parcels 4, 6 and 9 -- Parcels 4, 6 and 9 exhibited signs of deterioration, including code deficiencies, but not at a level warranting a substandard finding. However, the City of Oak Park Heights Comprehensive plan written in 1998 and updated in 2008 is redirecting this area to a Commercial land use, which makes the single - family houses an obsolete land -use. The value of these properties is in the underlying land, not the house sitting on the land, which over time, will lead to further deterioration of the buildings. C. Distribution of substandard structures Much of this report has focused on the condition of individual buildings as they relate to requirements identified by Minnesota Statutes, Section 469.1 74, Subdivision 10 and 10a. It is also important to look at the distribution of substandard buildings throughout the geographic area of the proposed TIF District. Finding: Buildings meeting the requirements of Minnesota Statutes, Section 469.1 74, Subdivision 10 and 10a are reasonably distributed throughout the geographic area of the proposed TIF District (Diagram 3). Page 11 Diagram 3 — Distribution of Substandard Structures Yellow Shading— Structurally Substandard Building Orange Shading — Other Conditions warranting renovation or clearance (Subd. 100. (1) (iii) PART 5 - TEAM CREDENTIALS Michael A. Fischer, AL4 LEED AP - Project Principai/TIF Analyst Michael has nineteen years of architectural experience as project principal, project manager, project designer and project architect on municipal planning, educational, commercial and governmental projects. He is a Vice President at 11-113 and currently leads the Community Design Group in L}IB's Minneapolis office. Michael completed a two-year Bush Fellowship at the Massachusetts Institute of Technology in 1999, earning Masters Degrees in City Planning and Real Estate Development. Michael has served on over 35 committees, boards and community task forces, including a term as City Council President and Chair of the Duluth/Superior Metropolitan Planning organization. He is currently a Planning Commissioner in Edina, Minnesota. Ile was one of four architects in the country to receive the National "Young Architects Citation" from the American Institute of Architects in 1997. Page 12 Keow Chai (KC) Lim, AIA - Project Manager/Inspector K.C. has seven years of international experience prior to becoming an architect in the United States and has been with LHB since 1988. His experience includes multi-story speculative offices, commercial buildings, hospitality, manufacturing, residential, and cinema renovation and design. His close attention to the client's needs has contributed to a unique relationship with the owner and the designed space. K.C. is a creative designer who also has a special focus on architectural presentation and a unique rendering skill to bring forward the intricate design idea to clients. In addition to design, K.C. has several years experience in building inspections, preparation of construction documents and project management. M:\O8Proj10806291ADMN\TIF \Final Reportloak Park Heights TIF Final Report 04- 01- 09.doc APPENDICES Appendix A --- Property Condition Assessment Summary Sheet Appendix B — Building Code and Condition Deficiencies Reports Appendix C - Property Condition Assessment Building Replacement Cost Reports Code Deficiency Cost Reports Photographs Page 13 APPENDIX A Property Condition Assessment Summary Sheet APPENDIX B Building Code and Condition Deficiencies Reports APPENDIX C Property Condition Assessments Building Replacement Cost Reports Code Deficiency Cost Reports Photographs s;uauuasinbaH (!!) (1.) 'e0t. •pgns slaaN r ri r r [d Zr CD No. of buildings determined substandard %cOS w 4 cr, C Q} E Percent of buildings meeting Subd. 10a. (1) (iii) Requirements Meets 20% Substandard Criteria f sa) 1 9aA oN 1 °N SaA oN 'D C W - 2 C • - . . in Percent of buildings determined substandard ;sop ;uawaaef i a %QZ SS R'6£5 • 11.1.17ZS 969`017S Z11'91rS Z61.`g17S EpS'Sf'S 1 No. of Buildings Exceeding 15% Criteria %L9 salauarogea apoo 6u!pllrrg 68S'ZPS 59L'IES oZ6' t -kS i LZ`L 1. 656`oi'Z$ .... - 8I4''tl•$ ZZ6`9g£$ M.. 0 .4+ C Percent of buildings exceeding 16 percent code deficiency threshold; ;503 ;uausaseldaN Jo °IoSI L6£`6ZS L L zL 9 o£$ f 1790'9ES t�41`9>rS - [ . LS 1`gES OPS`1791S Building Replacement Cost LL6`S6f.S £95`OZ1$ 1 BLvt0Zg 6SS` i•ZS 6S6'01 F E1L'LZZS 69Z'OEZ' s0utpjjng to 'oN Coverage Quantity (S.F.) �zsa'S1 II 966•L l ear:z QZ9`6 0LS`£ [061 1098'SZ 961 Coverage Percent of Improvements [ %6'1Z %E'DZ %O0 %EZ %oE %SSt %LZ [ ■641• t'd - s) s}uawanoJduli 3u sauy a5eianvo SEW OZ9' f. acts G So6'Z 0Z9' I. - -- - - - - - oov£ O ZS'tr - - - -� O ('d - s) easy alig Z88'SI [966'L 1 009 1 8L0' EZ ZZO'ZZ OZ9'6 I OLS'E ........ 0617'11 �098'�xZ ss$'EZ1 Survey Method Used Interior & Exterior Interior & Exterior uogeadsui oN ioualxg 'g Jvualui uogoadsui oN Interior & Exterior uogoadsul oN [ JD!Jnlxi Interior & Exterior uogoadsut oN 1 � Improved or Vacant Improved 1 I mproved - Unimproved panoldwi panoJdwlvn panoldwj improved [Improved 1 irnproved Unirrmpraved Owner xassaomodsi [ OutiotJ- 1 Oudot I - Oakgreen Villa LLC � l Ouriot C - Oakgreen Villa LLC I l Out of G - Oakgreen Villa LLC 0_11 t3yMk uaaJv 1 Green Twig LLC F Oullot L - Green Twig LLC 1 Green Twig LLG 0 egzn uaajl3rO - 0 ;ogn01 # ❑ld 05 -029 -20 -14 -0003 I f 05-029-20-11-0063 05- 023 -20 -11 -0062 [ 6S00-1.1-00-6Z0-S0 05-029-20-14-0136 I 05-029-20-11-0026 I I I 05- 029 -20 -11 -0026 I [05-029-20-11-0065 1 05- 029 -20 -11 -0028 1 05- 029 -20 -11 -0059 'oN aPOO dI.L r N f'7 Lf7 ip 1� cp Q] 01� 15 .c. 4(r) A () a i cn p 15 3 c T I CU LX I 1 1 A. >I 7: 7 cf) CD Et m a R Q r'7 2 Updated 3/26/2009 Map No. & Building Name: Inspection Date(s) & Time(s): Inspection Type: Summary of Deficiencies: Oak Park Heights, Minnesota Carriage House TIF District CODE /CONDITION DEFICIENCY REPORT April 1, 2009 #1 1 5710 O a kgr een Avenue Feb. 4, 2009, 12:20 a.m. Interior /Exterior It is our professional opinion that this building is Substandard because: - Building Code deficiencies total more than 15% of replacement cost. - Substantial renovation (more than 20% of building replacement value) is required to correct Conditions found. Estimated Replacement Cost: Estimated Cost to Correct Building & Energy Code Deficiencies: Percentage of Replacement Cost: Estimated cost to correct all deficiencies exceeds (20 %): (Estimated Cost to Correct Building and Energy Code Deficiencies is the total of code - related items priced on the `unit' and `assembly' estimate lists. The two are combined for the Total Cost. Other costs identified as `Condition Related' are not priced on those sheets). DESCRIPTION OF CONDITION DEFICIENCIES Minnesota Statutes, Section 469.174, Subdivision 10, states that 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." A. Defects in Structural Elements 1. None observed. 1 $195,977 $42,589 21.73% $39,195 B. Combination of Deficiencies 1. Essential Utilities and Facilities a. House - Insulate exterior walls to meet present requirements (5275/5276/5278-5280). b. House - Refinish paint; peeling from masonry wall (5231/5307). c. House - Replace deteriorated roof shingle (5303). d. House - Provide hood over hot vent stack at chimney to meet requirements (5323). e. House - Provide missing light bulb (5228/5323). f. House - Provide exterior weather -proof power outlet. g. House - Replace single pane windows to meet present requirements (5231/5239/5263/5278/5307) h. Deck - Correct /replace guards to meet requirements (5300/5301/5304). i. Garage - Replace deteriorated garage door (5230/5233). j . Garage - Replace damaged siding (5232). k. Garage - Correct hot vent stack for heater to meet requirements (5320). 1. Basement - Provide fresh air - intake for furnace to meet requirements. m. Basement - Provide egress window and well in basement floor and (2) sleeping rooms IRC310.1 (5291-5293/5296/5297). n. Basement - Repair basement foundation walls to prevent water penetration (5275/5280/5298/5299). 0. Basement - Provide wallboard over exposed sprayed foam at window (5278). p. Basement - Provide missing ceiling light fixture (5277). q. Basement - Insulate basement rim joist at perimeter (5284). r. Basement .. Connect domestic water to city main (4996). s. Basement - Provide GFI in bathroom (5288-5290). t. Basement - Correct headroom at sleeping rooms; Existing 7" -3" (5291/5293). u. Basement - Extend exhaust to roof of building to meet requirements (5289). v. Basement - Provide gypsum board wall adjacent to windows to make air/water-tight (5278). w. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. x. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. y. Main - Provide missing grille cover at outlet (5270). z. Main - Provide rails on stair to meet requirements (5244/5371/5272). aa. Main - Provide exhaust fan to vent outside of building to meet requirements (5323). bb. Main - Provide missing water closet at bathroom (5256). cc. Main - Provide GFI in bathroom (525315254). dd. Main - Provide GFI in kitchen (5228-5266-5268). ee. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. ff. Main - Provide hard -wired CO2 detector 10" -0" of any sleeping room: MN299F.50. gg. Attic - Insulate attic to meet present requirements. 2. Light and Ventilation a. No combustion /make -up air for furnace. 3. Fire Protection/Adequate Egress a. Provide hard -wired smoke alarm in all floors: MN299F.362. b. Provide hard -wired smoke alarm in all (3) sleeping rooms & hall: MN299F.362. c. Provide hard -wired CO2 detector 10' --0" of any sleeping room: MN299F.50. d. Provide egress window and well in basement floor and all sleeping rooms IRC310.1. e. Basement -- Provide wallboard over exposed sprayed foam at window (5278). 4. Layout and Condition of Interior Partitions /Materials a. Interior condition of wall partitions is good. b. House - Replace single pane windows to meet present requirements (5231/5239/5263/5278/5307). 0. Basement - Provide fresh air - intake for furnace to meet requirements. d. Basement - Provide egress window and well in basement floor and (2) sleeping rooms IRC310.1 (5291-5293/5296/5297). e. Basement -- Repair basement foundation walls to prevent water penetration (5275/5280/5298/5299). f. Basement - Provide wallboard over exposed sprayed foam at window (5278). g. Basement - Provide missing ceiling light fixture (5277). h. Basement - Insulate basement rim joist at perimeter (5284). i. Basement - Connect domestic water to city main (4996). j. Basement - Provide GFI in bathroom (5288- 5290). k. Basement - Correct headroom at sleeping rooms; Existing 7e -3 " (529115293). 1. Basement - Extend exhaust to roof of building to meet requirements (5289). m. Basement - Provide gypsum board wall adjacent to windows to make air/water-tight (5278). n. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. 0. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. p. Main - Provide missing grille cover at outlet (5270). q. Main - Provide rails on stair to meet requirements (5244/5371/5272). r. Main - Provide exhaust fan to vent outside of building to meet requirements (5323). s. Main - Provide missing water closet at bathroom (5256). t. Main - Provide GFI in bathroom (5253/5254). u. Main - Provide GFI in kitchen (5228- 5266 - 5268). v. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. w. Main - Provide hard -wired CO2 detector 10' -0 " of any sleeping room: MN299F.50. x. Attic - Insulate attic to meet present requirements. 2 5. Exterior Construction a. House - insulate exterior walls to meet present requirements (52751527615278 - 5280). b. House - Refinish paint; peeling from masonry wall (5231/5307). c. House - Replace deteriorated roof shingle (5303). d. House - Provide hood over hot vent stack at chimney to meet requirements (5323). e. House - Provide missing light bulb (5228/5323). f. House - Provide exterior weather -proof power outlet. g. Deck - Correct/replace guards to meet requirements (5300/5301/5304). h. Garage - Replace deteriorated garage door (5230/5233). i. Garage -- Replace damaged siding (5232). j . Garage - Correct hot vent stack for heater to meet requirements (5320). k. Basement - Repair basement foundation walls to prevent water penetration (5275/5280/5298/5299). 1. Basement - Connect domestic water to city main (4996). DESCRIPTION OF CODE DEFICIENCIES 1. House - Provide hood over hot vent stack at chimney to meet requirements (5323). 2. House - Provide missing light bulb (5228/5323). 3. House - Provide exterior weather -proof power outlet. 4. Deck - Correct /replace guards to meet requirements (5300/5301/5304). 5. Garage - Correct hot vent stack for heater to meet requirements (5320). 6. Basement - Provide fresh air - intake for furnace to meet requirements. 7. Basement - Provide egress window and well in basement floor and (2) sleeping rooms IRC310.1 (5291- 52931529615297). 8. Basement - Repair basement foundation walls to prevent water penetration (5275/5280/5298/5299). 9. Basement - Provide wallboard over exposed sprayed foam at window (5278). 10. Basement - Provide missing ceiling light fixture (5277). 11. Basement - Insulate basement rim joist at perimeter (5284). 12. Basement - Connect domestic water to city main (4996). 13. Basement - Provide GFI in bathroom (5288- 5290). 14. Basement - Correct headroom at sleeping rooms; Existing 7' -3" (5291/5293). 15. Basement - Extend exhaust to roof of building to meet requirements (5289). 16. Basement - Provide gypsum board wall adjacent to windows to make air /water -tight (5278). 17. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. 18. Main - Provide hard -wired CO2 detector 10 -0" of any sleeping room: MN299F.50. 19. Main - Provide missing grille cover at outlet (5270). 20. Main - Provide rails on stair to meet requirements (5244/5371/5272). 21. Main - Provide exhaust fan to vent outside of building to meet requirements (5323). 22. Main - Provide missing water closet at bathroom (5256). 23. Main - Provide GFI in bathroom (5253/5254). 24. Main - Provide GFI in kitchen (5228- 5266 - 5268). 25. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. 26. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. ENERGY CODE In addition to the building code deficiencies listed above, the existing building does not comply with the current energy code. These deficiencies are not included in the estimated costs to correct code deficiencies and are not considered in determining whether or not the building is substandard: - House - Insulate exterior walls to meet present requirements (52751527615278 - 5280). - House - Replace single pane windows to meet present requirements (5231/5239/5263/5278/5307). - Attic - Insulate attic to meet present requirements. M: 10 $Proj\0806291ADMN1TIF\Building Reports1080629- Substandard Building Report -5710 Oakgreen Ave.doc 3 Map No. & Building Name: Inspection Date(s) & Time(s): Inspection Type: Summary of Deficiencies: Oak Park Heights, Minnesota Carriage House TIF District CODE /CONDITION DEFICIENCY REPORT April 1, 2009 #2 l 5754 O a kgreen Avenue Feb. 2, 2009, 10: 00 a.m. Interior /Exterior Estimated Replacement Cost: Estimated Cost to Correct Building Code Deficiencies: Percentage of Replacement Cost: Estimated cost to correct all deficiencies exceeds (20 %): It is our professional opinion that this building is Substandard because: - Building Code deficiencies total more than 15% of replacement cost. - Substantial renovation (more than 20% of building replacement value) is required to correct Conditions found. (Estimated Cost to Correct Building Code Deficiencies is the total of code - related items priced on the `unit' and `assembly' estimate lists. The two are combined for the Total Cost. Other costs identified as `Condition Related' are not priced on those sheets). DESCRIPTION OF CONDITION DEFICIENCIES Minnesota Statutes, Section 469.174, Subdivision 10, states that 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." A. Defects in Structural Elements 1. Several cracks in basement foundation walls (4914/4917/4951). B. Combination of Deficiencies 1. Essential Utilities and Facilities a. House - Insulate exterior walls to meet present requirements (4913/5017). b. House w Replace single pane windows to meet present requirements (4924). c. House - Replace deteriorated roof shingles (4910/4912). d. House - Replace /repair damage siding (4955). e. House - Replace /repair aluminum awning over side entrance; missing a support (4920). f. House - Replace metal flashing at masonry chimney (4913). House - Provide hood over hot vent stack at chimney (4957). h. House - Provide exterior weatherproof power outlet. i. House - Replace rotted fascia board (4910). j. House - Provide railing on steps at side entry (4918). k. House - Paint peeling from siding (4951). 1. House - Replace abandon HVAC system m. House - Replace hot and domestic water system n. House - Repair electrical system. 0. House - Repair cracks in basement foundation walls (4914/4917/4951). p. Basement - Provide egress window and well in basement floor IRC310.1. q. Basement - Provide fresh air - intake for furnace to meet requirements. g. 1 $120,583 $31,765 26.34% $24,117 r. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. s. Basement - Correct stair treads to meet requirements, existing 8" (4950). t. Basement - Install rails on stair to meet requirements (493714948). u. Main - Replace damaged glazing at side entry door (4921). v. Main - Provide landing on other side of door at basement stair to meet requirements (493614937). w. Main - Replace lavatory in bathroom (4925). x. Main - Repair damaged wall (4925). y. Main - Replace tub faucets (4925/4926). z. Main - Relocate existing power outlet away from tub (4926). aa. Main - Refinish basement door: paint peeling (4936). bb. Main - Refinish wall in closet and bedroom (4929/4930). cc. Main - Replace non - functioning storm door at side entry (4918). dd. Main - Provide exhaust fan to vent outside of building to meet requirements. ee. Main - Provide GFI in bathroom (4925/4926). ff. Main - Provide GFI in kitchen (4922/4932). gg. Main - Provide cover plate to power outlets (4921/4932/4934/4935). hh. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. ii. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. ji. Main -- Remove, clean, and sanitized wall and floor finish of "waste" (4928/4931). kk. Main - Provide code compliant (20 {'x30 ") attic access. 2. Light and Ventilation a. No combustion/make -up air for furnace. b. Abandoned HAVC system. c. Abandoned domestic and hot -water system. d. Abandoned electrical system. 3. Fire Protection/Adequate Egress a. House - Replace /repair aluminum awning over side entrance; missing a support (4920). a. House - Provide hood over hot vent stack at chimney (4957). b. House - Provide railing on steps at side entry (4918). c. House - Replace abandon HVAC system d. House - Replace hot and domestic water system e. House - Repair electrical system. f. Basement - Provide egress window and well in basement floor IRC310.1. g. Basement - Provide fresh air - intake for furnace to meet requirements. h. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. i. Basement - Correct stair treads to meet requirements, existing 8" (4950). j. Basement - Install rails on stair to meet requirements (4937/4948). k. Main - Replace damaged glazing at side entry door (4921). 1. Main - Provide landing on other side of door at basement stair to meet requirements (4936/4937). m. Main - Relocate existing power outlet away from tub (4926). n. Main - Replace non -- functioning storm door at side entry (4918). o. Main - Provide GFI in bathroom (4925/4926). p. Main - Provide GFI in kitchen (4922/4932). q. Main - Provide cover plate to power outlets (4921/4932/4934/4935). r. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. s. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. t. Main - Provide code compliant (20 "x30 ") attic access. 4. Layout and Condition of Interior Partitions/Materials a. Interior condition of wall partitions is fair. b. House - Insulate exterior walls to meet present requirements (4913/5017). c. House - Replace single pane windows to meet present requirements (4924). 2 d. House - Replace abandon HVAC system e. House - Replace hot and domestic water f. House - Repair electrical system. ge Basement - Provide egress window and well in basement floor IRC310.1. h. Basement - Provide fresh air- intake for furnace to meet requirements. i. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. j. Basement - Correct stair treads to meet requirements, existing 8" (4950). k. Basement -- Install rails on stair to meet requirements (4937/4948). 1. Main - Replace damaged glazing at side entry door (4921). m. Main - Provide landing on other side of door at basement stair to meet requirements (4936/4937). n. Main - Replace lavatory in bathroom (4925). 0. Main - Repair damaged wall (4925). p. Main - Replace tub faucets (4925/4926). q. Main - Relocate existing power outlet away from tub (4926). r. Main - Refinish basement door: paint peeling (4936). s. Main - Refinish wall in closet and bedroom (4929/4930). t. Main - Provide exhaust fan to vent outside of building to meet requirements. u. Main - Provide GFI in bathroom (4925/4926). v. Main - Provide GFI in kitchen (4922/4932). w. Main - Provide cover plate to power outlets (4921/4932/4934/4935). x. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. y. Main - Provide hard-wired CO2 detector 10' -0" of any sleeping room: MN299F.50. z. Main - Remove, clean, and sanitized wall and floor finish of "waste" (4928/4931). aa. Main - Provide code compliant (20 "x30 ") attic access. 5. Exterior Construction a. House - Insulate exterior walls to meet present requirements (4913/5017). b. House - Replace deteriorated roof shingles (4910/4912). c. House - Replace /repair damage siding (4955). d. House - Replace /repair aluminum awning over side entrance; missing a support (4920). e. House - Replace metal flashing at masonry chimney (4913). f. House - Provide hood over hot vent stack at chimney (4957). g. House - Provide exterior weather -proof power outlet. h. House - Replace rotted fascia board (4910). i. House - Provide railing on steps at side entry (4918). j. House - Paint peeling from siding (4951). k. House - Repair cracks in basement foundation walls (4914/4917/4951). 1. Main - Provide exhaust fan to vent outside of building to meet requirements. DESCRIPTION OF CODE DEFICIENCIES 1. House - Replace /repair damage siding (4955). 2. House - Replace /repair aluminum awning over side entrance; missing a support (4920). 3. House - Provide hood over hot vent stack at chimney (4957). 4. House - Provide exterior weather -proof power outlet. 5. House - Replace rotted fascia board (4910). 6. House - Provide railing on steps at side entry (4918). 7. House - Replace abandon HVAC system 8. House - Replace hot and domestic water system 9. House - Repair electrical system. 10. House - Repair cracks in basement foundation walls (4914/4917/4951). 11. Basement - Provide egress window and well in basement floor IRC310.1. 12. Basement - Provide fresh air- intake for furnace to meet requirements. 13. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. 14. Basement - Correct stair treads to meet requirements, existing 8" (4950). 3 15. Basement - Install rails on stair to meet requirements (4937/4948). 16. Main - Replace damaged glazing at side entry door (4921). 17. Main - Provide landing on other side of door at basement stair to meet requirements (4936/4937). 18. Main - Replace lavatory in bathroom (4925). 19. Main - Repair damaged wall (4925). 20. Main Replace tub faucets (4925/4926). 21. Main - Relocate existing power outlet away from tub (4926). 22. Main - Replace non-functioning storm door at side entry (4918). 23. Main - Provide exhaust fan to vent outside of building to meet requirements. 24. Main - Provide GFI in bathroom (4925/4926). 25. Main - Provide GFI in kitchen (4922/4932). 26. Main - Provide cover plate to power outlets (4921/4932/4934/4935). 27. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. 28. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. 29. Main - Remove, clean, and sanitized wall and floor finish of "waste" (4928/4931). 30. Main - Provide code compliant (20"x30") attic access. ENERGY CODE In addition to the building code deficiencies listed above, the existing building does not comply with the current energy code. These deficiencies are not included in the estimated costs to correct code deficiencies and are not considered in determining whether or not the building is substandard: - House - Insulate exterior walls to meet present requirements (4913/5017). -- House - Replace single pane windows to meet present requirements (4924). Ivy: 1OSProj \0806291ADMN\TIF\Building Reports1080629- substandard Building Report-5754 Oakgreen Ave.doc 4 Map No. & Building Name: Inspection Date(s) & Time(s): Inspection Type: Summary of Deficiencies: Oak Park Heights, Minnesota Carriage House TIF District CODE /CONDITION DEFICIENCY REPORT April 1, 2009 #4 1 5762 Oakgreen Avenue Feb. 2, 2009, 11:20 a.m. Interior /Exterior It is our professional opinion that this building is Not Substandard because: Building Code deficiencies total more than 15% of replacement cost. - Substantial renovation (more than 20% of building replacement value) is required to correct Conditions found. However, energy code accounts for too high a percentage of the code deficiency items. Estimated Replacement Cost: Estimated Cost to Correct Building & Energy Code Deficiencies: Percentage of Replacement Cost: Estimated cost to correct code and non -code condition deficiencies (20 %): $204,478 $41,920 20.5% $40,896 (Estimated Cost to Correct Building and Energy Code Deficiencies is the total of code - related items priced on the `unit' and `assembly' estimate lists. The two are combined for the Total Cost. Other costs identified as `Condition Related' are not priced on those sheets). DESCRIPTION OF CONDITION DEFICIENCIES Minnesota Statutes, Section 469.174, Subdivision 10, states that 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." A. Defects in Structural Elements 1. Several cracks in basement foundation walls (4991/4992). B. Combination of Deficiencies 1. Essential Utilities and Facilities a. House - Insulate exterior walls to meet present requirements (4990- 4999). b. House - Insulate basement exterior walls to meet present requirements. c. House - Replace deteriorated roof shingles (4958/4959/4967/5321/5322). d, House - Replace deteriorated fascia board at Garage (5061). e. House - Replace damaged fascia board at Garage (5322). f. House - Refinish fascia board around House (5061/5065/5067). g. House - Correct exterior grade at basement window (4962). h. House - Provide cover plate at telephone in -box (4963). i. House - Repair corner cover for siding to make air /water tight (4964). j . Garage - Replace deteriorated garage door (5010). k. Garage - Correct heater vent 1 to meet requirements (501115322). 1. Garage - Correct heater vent 2 to meet requirements (4960/5012/5013). m. Basement - Provide fresh air - intake for furnace to meet requirements. n. Basement - Provide egress window and well in basement floor IRC310.1. 0. Basement - Repair cracks in basement foundation walls (4991/4992). 1 P. q. r. s. t. u. v. w x. y. z. Basement - Basement - . Basement - Basement - Basement - Basement - Basement - Correct sewer pipe slope to meet requirement: Min. 118 " =1' -0" (49901499514998). Basement - Relocate power outlet away from water pipe to meet requirements (4995). Basement - Provide missing light fixture cover (4999). Basement - Correct sump discharged to meet requirements: Existing discharged into exterior grade (4995/4966). Basement -- Correct discharge from washing machine into sewer in lieu of sump to meet requirem ents (4994/4998). Correct hot vent from hot -water heater to meet requirements (5001). Replace several electrical wiring to meet requirements (5002). Connect domestic water to city main (4996). Replace deteriorated windows to make air/water-tight (4990/4991/4997). Provide hard -wired smoke alarm in floor: MN299F.362. Correct stair risers and treads to meet requirements, existing 7.75" risers /9" tread (5004- 5006). aa. Basement - Install rails on stair to meet requirements (4989/4993). bb. Main -- Provide landing at door to meet requirement (5009). cc. Main - Provide threshold and seal to second door to make air/water tight (5009). dd. Main - Provide landing on other side of door at basement stair to meet requirements. ee. Main - Remove sprayed foam on front entry door to comply with exit requirements (4984). ff. Main - Provide exhaust fan to vent outside of building to meet requirements (5321). gg. Main - Provide GFI in bathroom (4972/4973). hh. Main - Provide GFI in kitchen (4985- 4987). ii. Main - Provide hard -wired smoke alarm in all (3) sleeping rooms & hall: MN299F.362. j j. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. kk. Main - Replace damaged switch cover at hallway (5007). 11. Attic - Insulate attic to meet present requirements. 2. Light and Ventilation a. No combustion/make -up air for furnace. 3. Fire Protection/Adequate Egress a. Provide hard -wired smoke alarm in all floors: MN299F.362. b. Provide hard -wired smoke alarm in all (3) sleeping rooms & hall: MN299F.362. c. Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. d. Provide egress window and well in basement floor IRC3 10.1. e. Remove sprayed foam on front entry door to comply with exit requirements (4984). 4. Layout and Condition of Interior Partitions/Materials a. Interior condition of wall partitions is fair to good. b. House - Insulate basement exterior walls to meet present requirements. c. House - Provide cover plate at telephone in -box (4963). d. House - Repair corner cover for siding to make air/water tight (4964). e. Garage - Replace deteriorated garage door (5010). f. Garage - Correct heater vent 1 to meet requirements (501115322). g. Garage - Correct heater vent 2 to meet requirements (4960/5012/5013). h. Basement - Provide fresh air - intake for furnace to meet requirements. i. Basement - Provide egress window and well in basement floor 1RC3 10.1. j. Basement - Repair cracks in basement foundation walls (4991/4992). k. Basement - Correct sewer pipe slope to meet requirement: Min. 118 " =1' -0" (4990/4995/4998). 1. Basement - Relocate power outlet away from water pipe to meet requirements (4995). m. Basement - Provide missing light fixture cover (4999). n. Basement - Correct sump discharged to meet requirements: Existing discharged into exterior grade (4995/4966). 2 0. Basement - Correct discharge from washing machine into sewer in lieu of sump to meet requirements (4994/4998). p. Basement - Correct hot vent from hot -water heater to meet requirements (5001). q. Basement -- Replace several electrical wiring to meet requirements (5002). r. Basement - Connect domestic water to city main (4996). s. Basement - Replace deteriorated windows to make air/water-tight (4990/4991/4997). t. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. u. Basement - Correct stair risers and treads to meet requirements, existing 735" risers /9" tread (5004- 5006). v. Basement - Install rails on stair to meet requirements (4989/4993). w. Main - Provide landing at door to meet requirement (5009). x. Main - Provide threshold and seal to second door to make air/water tight (5009). y. Main - Provide landing on other side of door at basement stair to meet requirements. z. Main - Remove sprayed foam on front entry door to comply with exit requirements (4984). aa. Main - Provide exhaust fan to vent outside of building to meet requirements (5321). bb. Main - Provide GFI in bathroom (4972/4973). cc. Main - Provide GFI in kitchen (4985- 4987). dd. Main - Provide hard -wired smoke alarm in all (3) sleeping rooms & hall: MN299F.362. ee. Main - Provide hard-wired CO2 detector 10' -0" of any sleeping room: MN299F.50. ff. Main - Replace damaged switch cover at hallway (5007). gg. Attic - Insulate attic to meet present requirements. 5. Exterior Construction a. House - Insulate exterior walls to meet present requirements (4990- 4999). b. House - Replace deteriorated roof shingles (4958/4959/4967/5321/5322). c. House - Replace deteriorated fascia board at Garage (5061). d. House - Replace damaged fascia board at Garage (5322). e. House - Refinish fascia board around House (5061/5065/5067). f. House - Correct exterior grade at basement window (4962). g. House - Provide cover plate at telephone in -box (4963). h. House - Repair corner cover for siding to make air/water tight (4964). i. Basement - Connect domestic water to city main (4996). DESCRIPTION OF CODE DEFICIENCIES 1. House - Replace deteriorated fascia board at Garage (5061). 2. House - Replace damaged fascia board at Garage (5322). 3. House Correct exterior grade at basement window (4962). 4. House - Provide cover plate at telephone in -box (4963). 5. House - Repair corner cover for siding to make air/water tight (4964). 6. Garage - Replace deteriorated garage door (5010). 7. Garage - Correct heater vent 1 to meet requirements (50 1115322). 8. Garage - Correct heater vent 2 to meet requirements (4960/5012/5013). 9. Basement - Provide fresh air - intake for furnace to meet requirements. 10. Basement - Provide egress window and well in basement floor IRC310.1. 11. Basement - Repair cracks in basement foundation walls (4991/4992). 12. Basement - Correct sewer pipe slope to meet requirement: Min. 1 /8 " =1' -0" (4990/4995/4998). 13. Basement - Relocate power outlet away from water pipe to meet requirements (4995). 14. Basement - Provide missing light fixture cover (4999). 15. Basement - Correct sump discharged to meet requirements: Existing discharged into exterior grade (4995/4966). 16. Basement - Correct discharge from washing machine into sewer in lieu of sump to meet requirements (4994/4998). 17. Basement - Correct hot vent from hot -water heater to meet requirements (5001). 18. Basement - Replace several electrical wiring to meet requirements (5002). 3 19. Basement - Connect domestic water to city main (4996). 20. Basement -- Replace deteriorated windows to make air/water-tight (499014991/4997). 21. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. 22. Basement - Correct stair risers and treads to meet requirements, existing 7.75" risers /9" tread (5004- 5006). 23. Basement - Install rails on stair to meet requirements (4989/4993). 24. Main - Provide landing at door to meet requirement (5009). 25. Main - Provide threshold and seal to second door to make air/water tight (5009). 26. Main -- Provide landing on other side of door at basement stair to meet requirements. 27. Main - Remove sprayed foam on front entry door to comply with exit requirements (4984). 28. Main - Provide exhaust fan to vent outside of building to meet requirements (5321). 29. Main - Provide GFI in bathroom (4972/4973). 30. Main - Provide GFI in kitchen (4985- 4987). 31. Main - Provide hard -wired smoke alarm in all (3) sleeping rooms & hall: MN299F.362. 32. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. 33. Main - Replace damaged switch cover at hallway (5007). ENERGY CODE In addition to the building code deficiencies listed above, the existing building does not comply with the current energy code. These deficiencies are not included in the estimated costs to correct code deficiencies and are not considered in determining whether or not the building is substandard: - House - Insulate exterior walls to meet present requirements (4990- 4999). - House - Insulate basement exterior walls to meet present requirements. - Attic - Insulate attic to meet present requirements. M: 108Proj10806291ADMN 1TIF\Building Reports\080629-Substandard Building Report-5762 Oakgreen Ave.doc 4 Map No. & Building Name: Inspection Date(s) & Time(s): Inspection Type: Summary of Deficiencies: A. Defects in Structural Elements 1. None observed. Oak Park Heights, Minnesota Carriage House TIF District CODE /CONDITION DEFICIENCY REPORT April 1, 2009 #6 1 5770 Oakgreen Avenue February 4, 2009, 10:00 a.m. Interior /Exterior It is our professional opinion that this building is Not Substandard because: - Building Code deficiencies do not total more than 15% of replacement cost. or Substantial renovation (more than 20% of building replacement value) is not required to correct Conditions found. Estimated Replacement Cost: Estimated Cost to Correct Building Code Deficiencies: Percentage of Replacement Cost: Estimated cost to correct code and non -code condition deficiencies (20 %): $240,559 $17,271 7.18% $48,112 (Estimated Cost to Correct Building Code Deficiencies is the total of code - related items priced on the 'unit' and `assembly' estimate lists. The two are combined for the Total Cost. Other costs identified as `Condition Related' are not priced on those sheets). Descrption of Condition Deficiencies Minnesota Statutes, Section 469.174, Subdivision 10, states that 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." B. Combination of Deficiencies 1. Essential Utilities and Facilities a. House - Replace single pane windows to meet present requirements (5010/5090/5091). b. House - Provide exterior weather -proof power outlet. c. Garage - Replace damaged garage door to make air /water -tight (5072). d. Garage - Provide landing at entry door (5076). e. Garage - Provide rails at step at entry door (5076). f. Garage - Provide cover plate missing at power outlets (5150/5073/5078). g. Basement - Provide egress window and well in basement floor 1RC310.1. h. Basement - Provide fresh air - intake for furnace to meet requirements. 1. Basement - Provide hard-wired smoke alarm in floor: MN299F.362. j. Basement - Connect laundry sink waste line to sewer line to meet requirements: Existing to sump pump (5138/5139/5143). k. Basement - Provide and finish basement wall with gypsum board (5138/5142). 1. Basement - Replace damaged sump cover (5140). m. Basement - Provide gypsum wallboard over exposed sprayed insulation at basement windows (5122/5141). n. Basement - Secure power outlet missing at laundry room (5142). 0. Basement - Correct sump pipe to discharge to exterior grade (5143/5144). p. Basement - Replace /reinstall removed water softener (5145). q Basement - Correct stair to meet requirements, existing exceed 318" riser variant: existing 6.5"17.75" and open risers (5118-5120/5145/5134). r. Basement - Install rails on stair to meet requirements (5117/5121/5145). s. Basement - Connect domestic water to city main (5123/5132). t. Basement - Provide grille missing from duct (5127). u. Main - Provide guards at sliding door: existing drop greater than 18" (5066). v. Main - Provide base missing at Living room (5181). w. Main -- Provide cover plate missing at power outlets (5082/5115). x. Main -- Provide floor grille missing at bathroom outlet (5095). y. Main - Provide exhaust fan to vent outside of building to meet requirements (5097). z. Main - Provide GFI in kitchen (5083/5084/5086). aa. Main - Provide safety glazing at bay window to meet requirements (5089- 5091). bb. Main - Provide exhaust fan in bedroom bathroom and vent to exterior of building to meet requirements (5102 - 5105). cc. Main - Finish expose wall at basement stair (5114). dd. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. ee. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. ff. Main - Provide code compliant (20 "x30 ") attic access. gg. Attic - Insulate attic to meet present requirements. 2. Light and Ventilation a. No combustion/make-up air for furnace. 3. Fire Protection/Adequate Egress a. Smoke detector is required in all sleeping room, hall, and floor: MN299F.50. b. CO2 detector is required 10' -0" of any sleeping room: MN299F.50. c. GFI is required in all bathroom and kitchen. d. Exterior weather -proof power outlet is required. e, Provide egress window and well in basement floor IRC310.1. 4. Layout and Condition of Interior Partitions /Materials a. Interior condition of wall partitions is fair to good. House - Replace single pane windows to meet present requirements (50105090/5091). Garage - Provide landing at entry door (5076). Garage - Provide rails at step at entry door (5076). Garage - Provide cover plate missing at power outlets (5150/5073/5078). Basement _, Provide egress window and well in basement floor IRC310.1. Basement - Provide fresh air - intake for furnace to meet requirements. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. Basement - Connect laundry sink waste line to sewer line to meet requirements: Existing to sump pump (5138/5139/5143). Basement - Provide and finish basement wall with gypsum board (5138/5142). b. c. d. e. f. g. h. J• k. 1. m. n. 0. p. q. r. s. Basement Basement (5122/514 Basement Basement Basement Basement 6.5 "17.75" Basement - Replace damaged sump cover (5140). - Provide gypsum wallboard over exposed sprayed insulation at basement windows 1). - Secure power outlet missing at laundry room (5142). - Correct sump pipe to discharge to exterior grade (5143/5144). - Replace /reinstall removed water softener (5145). - Correct stair to meet requirements: Existing stair risers exceed 318" riser variant: existing and open risers (5118-5120/5145/5134). - Install rails on stair to meet requirements (5117/5121/5145). Basement - Connect domestic water to city main (512315132). Basement - Provide grille missing from duct (5127). t. u. v. w. x. y. z. aa. bb. cc. dd. ee. ff. Main - Provide guards at sliding door: existing drop greater than 18" (5066). Main - Provide base missing at Living room (5181). Main - Provide cover plate missing at power outlets (5082/5115). Main - Provide floor grille missing at bathroom outlet (5095). Main - Provide exhaust fan to vent outside of building to meet requirements (5097). Main - Provide GFI in kitchen (5083/5084/5086). Main - Provide safety glazing at bay window to meet requirements (5089- 5091). Main - Provide exhaust fan in bedroom bathroom and vent to exterior of building to meet requirements (5102 - 5105). Main - Finish expose wall at basement stair (5114). Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. Main - Provide code compliant (20 "x30 ") attic access. Attic - Insulate attic to meet present requirements. 5. Exterior Construction a. House - Replace single pane windows to meet present requirements (5010/5090/5091). b. House - Provide exterior weather -proof power outlet. c. Garage - Replace damaged garage door to make air/water-tight (5072). Description of Code Deficiencies 1. House - Provide exterior weather -proof power outlet. 2. Garage - Replace damaged garage door to make air/water-tight (5072). 3. Garage - Provide landing at entry door (5076). 4. Garage - Provide rails at step at entry door (5076). 5. Garage - Provide cover plate missing at power outlets (5150/5073/5078). 6. Basement - Provide egress window and well in basement floor IRC310.1. 7. Basement -- Provide fresh air - intake for furnace to meet requirements. 8. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. 9. Basement - Connect laundry sink waste line to sewer line to meet requirements: Existing to sump pump (5138/5139/5143). 10. Basement - Provide and finish basement wall with gypsum board (5138/5142). 11. Basement - Replace damaged sump cover (5140). 12. Basement - Provide gypsum wallboard over exposed sprayed insulation at basement windows (5122/5141). 13. Basement - Secure power outlet missing at laundry room (5142). 14. Basement - Correct sump pipe to discharge to exterior grade (5143/5144). 15. Basement - Replace /reinstall removed water softener (5145). 16. Basement - Correct stair to meet requirements, existing exceed 318" riser variant: existing 6.5 "17.75" and open risers (5118-5120/5145/5134). 17. Basement - Install rails on stair to meet requirements (5117/5121/5145). 18. Basement - Connect domestic water to city main (5123/5132). 19. Basement - Provide grille missing from duct (5127). 20. Main - Provide guards at sliding door: existing drop greater than 18" (5066). 21. Main - Provide base missing at Living room (5181). 22. Main - Provide cover plate missing at power outlets (5082/5115). 23. Main - Provide floor grille missing at bathroom outlet (5095). 24. Main - Provide exhaust fan to vent outside of building to meet requirements (5097). 25. Main - Provide GFI in kitchen (5083/5084/5086). 26. Main - Provide safety glazing at bay window to meet requirements (5089- 5091). 27. Main - Provide exhaust fan in bedroom bathroom and vent to exterior of building to meet requirements (5102 - 5105). 28. Main - Finish expose wall at basement stair (5114). 29. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. 30. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. 31. Main - Provide code compliant (20 "x30 ") attic access. Energy Code In addition to the building code deficiencies listed above, the existing building does not comply with t e current energy code. These deficiencies are not included in the estimated costs to correct code deficiencies and are not considered in determining whether or not the building is substandard: - House .. Replace single pane windows to meet present requirements (5010/5090/5091). - Attic - Insulate attic to meet present requirements. M :108Proj1080629\ADMNYMABuilding Reports1080629 -Not Substandard Building Report Template -5770 Oakgreen Ave.docx Map No. & Building Name: Inspection Date(s) & Time(s): Inspection Type: Summary of Deficiencies: Oak Park Heights, Minnesota Carriage House TIF District CODE /CONDITION DEFICIENCY REPORT April 1, 2009 #515800 Oakgreen Avenue Feb. 2, 2009, 12:05 p.m. Interior /Exterior Estimated Replacement Cost: Estimated Cost to Correct Building Code Deficiencies: Percentage of Replacement Cost: Estimated cost to correct all deficiencies exceeds (20 %): A. Defects in Structural Elements 1. Several cracks in basement foundation walls (5023/5027). It is our professional opinion that this building is Substandard because: - Building Code deficiencies total more than 15% of replacement cost. r- Substantial renovation (more than 20% of building replacement value) is required to correct Conditions found. $240,959 $240,959 100% $48,192 (Estimated Cost to Correct Building Code Deficiencies is the total of code - related items priced on the `unit' and `assembly' estimate lists. The two are combined for the Total Cost. Other costs identified as `Condition Related' are not priced on those sheets). DESCRIPTION OF CONDITION DEFICIENCIES Minnesota Statutes, Section 469.174, Subdivision 10, states that 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." B. Combination of Deficiencies 1. Essential Utilities and Facilities a. Total replacement cost - Gut building and reconstruct home. Extensive mold infestation worst on the north -half of 4- season porch; especially on ceiling and walls; spread on to the other portion of home; very heavy mold smell; pose a health hazard (5032- 50341503615038- 5042). • Non - functioning HVAC • Require handrail at front steps (505 8) • Missing window pane at Garage (5026) ▪ Unconnected rain leader at rear (5025) • Provide egress window and well in basement floor IRC310.1. • Require handrail at rear steps (5025) • Damaged glazing at rear entry door (5025/5031) • Provide penetrating roof vent from toilet • Provide weather -proof power outlet • Provide GFI in bathroom and kitchen • Provide hard -wired smoke alarm in all (1) sleeping rooms, hall, & basement: MN299F.362. • Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. • Rotted woof fiber siding, especially at garage (5021/5022) 1 O Unsecured abandon underground pipe - possible well /septic system (505415024) • Cracked foundation wall (5023/5027) • Missing ceiling light fixture cover (503515041) • Damaged exterior light fixture (5057) O Missing basement vent seal at rear (5046) • Missing vent cover at chimney (5048) • Loose wiring at garage (5050/5051/5053) • Insulate exterior walls to meet present requirements • Provide fresh air - intake for furnace to meet requirements • Provide landing on other side of door at stair to meet requirements • Insulate attic to meet present requirements • Provide code compliant (20 "x30 ") attic access • Single pane window glazing - frosted and ice built -up on interior of glazing (5020) • Floor finished removed (5039) • Paint peel and holes on fascia board and siding (5019/5025/5056) 2. Light and Ventilation a. Total re .lacement cost - Gut buildin and reconstruct home. Extensive mold infestation• worst on the north -half of 4- season porch; especially on ceiling and walls; spread on to the other ortion of home• ver heav mold smell' s ose a health hazard 5032 - 5034/503615038 -5042 . • No combustion/make -up air for furnace. 3. Fire Protection/Adequate Egress a. Total replacement cost -- Gut building and reconstruct home. Extensive mold infestation; worst on the north -half of 4- season porch; especially on ceiling and walls; spread on to the other ortion of home• ver hea mold smell. ose a health hazard 5032 - 5034/5036/5038 -5042 . • Smoke detector is required in all sleeping room, hall, and floor: MN299F.50. O CO2 detector is required 10' -0" of any sleeping room: MN299F.50. • GFI is required in all bathroom and kitchen. • Exterior weather -proof power outlet is required. • Provide egress window and well in basement floor IRC310.1. 4. Layout and Condition of Interior Partitions /Materials a. Total re .lacement cost -- Gut buildin and reconstruct home. Extensive mold infestation worst and walls. s i read on to the other on the north --half of 4-season heav arch. es ecia ll on ceilin mold smell. ose a health hazard motion of home. ver O Interior condition of ceiling, wall partitions, and doors are contaminated with extensive mold. • Provide egress window and well in basement floor IRC310.1. • Provide exterior GFI outlet. • Non - functioning HVAC • Missing window pane at Garage (5026) • Damaged glazing at rear entry door (5025/5031) • Provide penetrating roof vent from toilet • Provide GFI in bathroom and kitchen • Provide hard -wired smoke alarm in all (1) sleeping rooms, hall, & basement: MN299F.362. • Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. O Missing ceiling light fixture cover (5035/5041) • Loose wiring at garage (5050/5051/5053) • Provide fire- suppression system to meet requirements • Insulate exterior walls to meet present requirements • Provide fresh air-intake for furnace to meet requirements 2 5032-5034/5036/5038-5042 • • Insulate attic to meet present requirements • Provide code compliant (20 "x30 ") attic access • Single pane window glazing - frosted and ice built-up on interior of glazing (5020) • Floor finished removed (5039) 5. Exterior Construction a. Total replacement cost - Gut building and reconstruct home. Extensive mold infestation; worst on the north -half of 4- season porch; especially on ceiling and walls; spread on to the other portion of home; very heavy mold smell; pose a health hazard (5032-5034/5036/5038-5042). • Insulate exterior walls to meet present requirements. • Require handrail at front steps (5058) • Missing window pane at Garage (5026) • Unconnected rain leader at rear (5025) • Require handrail at rear steps (5025) • Damaged glazing at rear entry door (5025/5031) • Provide penetrating roof vent from toilet • Provide weather -proof power outlet • Rotted woof fiber siding, especially at garage (5021/5022) • Unsecured abandon underground pipe - possible well /septic system (5054/5024) • Cracked foundation wall (5023/5027) • Damaged exterior light fixture (5057) • Missing basement vent seal at rear (5046) • Missing vent cover at chimney (5048) • Provide fresh air - intake for furnace to meet requirements • Paint peel and holes on fascia board and siding (5019/5025/5056) DESCRIPTION OF CODE DEFICIENCIES 1. Total replacement cost - Gut building and reconstruct home. Extensive mold infestation; worst on the north -half of 4- season porch; especially on ceiling and walls; spread on to the other portion of home• ve hea mold smell• ose a heathl hazard 5032 - 50341503615038 -5042 . • Non - functioning HVAC • Require handrail at front steps (505 8) • Missing window pane at Garage (5026) • Unconnected rain leader at rear (5025) • Provide egress window and well in basement floor IRC310.1. • Require handrail at rear steps (5025) • Damaged glazing at rear entry door (5025/5031) • Provide penetrating roof vent from toilet • Provide weather -proof power outlet • Provide GFI in bathroom and kitchen • Provide hard -wired smoke alarm in all (1) sleeping rooms, hall, & basement: MN299F,362. • Provide hard -wired CO2 detector 10 -0" of any sleeping room: MN299F.50. • Rotted woof fiber siding, especially at garage (5021/5022) • Unsecured abandon underground pipe - possible well /septic system (5054/5024) • Cracked foundation wall (5023/5027) • Missing ceiling light fixture cover (5035/5041) • Damaged exterior light fixture (5057) • Missing basement vent seal at rear (5046) • Missing vent cover at chimney (5048) • Loose wiring at garage (5050/5051/5053) • Insulate exterior walls to meet present requirements 3 O Provide fresh air - intake for furnace to meet requirements • Provide landing on other side of door at stair to meet requirements • Insulate attic to meet present requirements • Provide code compliant (20 "x30 ") attic access O Single pane window glazing - frosted and ice built -up on interior of glazing (5020) • Floor finished removed (503 9) • Paint peel and holes on fascia board and siding (50191502515056). ENERGY CODE In addition to the building code deficiencies listed above, the existing building does not comply with the current energy code. These deficiencies are not included in the estimated costs to correct code deficiencies and are not considered in determining whether or not the building is substandard: - House - Insulate exterior walls to meet present requirements. - House - Insulate basement exterior walls to meet present requirements. - Attic - Insulate attic to meet present requirements. M.108 Proj '10806291ADMN\TIF\Building Reports1080629- substandard Building Report-5806 Oakgreen Ave.doc 4 Map No. & Building Name: Inspection Date(s) & Time(s): Inspection Type: Summary of Deficiencies: Estimated Replacement Cost: Estimated Cost to Correct Building Code Deficiencies: Percentage of Replacement Cost: Estimated cost to correct code and non -code condition deficiencies (20 %): (Estimated Cost to Correct Building Code Deficiencies is the total of code - related items priced on the `unit' and `assembly' estimate lists. The two are combined for the Total Cost. Other costs identified as `Condition Related' are not priced on those sheets). Description of Condition Deficiencies Minnesota Statutes, Section 469.174, Subdivision 10, states that 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." A. Defects in Structural Elements 1. None observed. B. Combination of Deficiencies 1. Essential Utilities and Facilities House - Insulate exterior walls to meet present requirements. House - Replace single pane windows in basement to meet present requirements (5157/5161/5164). House - Replace deteriorated roof shingles (5156-5159/5162/5163). House - Provide hood over hot vent stack at chimney (5162). House - Paint peeling from siding (5162). House - Repair damaged step and masonry at exterior entry (5153/5166). House - Repair end of gutter (5162). Basement - Provide egress window and well in basement floor IRC310.1. Basement - Insulate rim joist (5201/5203/5206). Basement - Repair water seepage (5202). Basement - Remove hanging wires from floor joist (5198/5199/5203 /5204/5206). Basement - Replace wiring with outlet and plug-in to meet requirements (5202). . Basement - Insulate basement exterior walls to meet present requirements (5194/5152-5210). Basement - Provide fresh air - intake for furnace to meet requirements (5107/5110). Basement - Provide hard -wired smoke alarm in floor: MN299F.362. Basement - Correct stair treads to meet requirements, existing tread 9 "; riser 7.5" (5212/5213). Basement - Install rails on stair to meet requirements (519015191). a. b. c, d. e, f. g. h. J. k. l . m n. o. P. q. Oak Park Heights, Minnesota Carriage House TIF District CODE /CONDITION DEFICIENCY REPORT April 1, 2009 #9 1 5830 Oakgreen Avenue February 4, 2009, 11:00 a.m. Interior /Exterior It is our professional opinion that this building is Not Substandard because: - Building Code deficiencies do not total more than 15% of replacement cost. - or Substantial renovation (more than 20% of building replacement value) is not required to correct Conditions found. $227,713 $14,418 6.33% $45,543 r. Basement - Connect domestic water to city main: Existing well (5202). s. Main - Provide landing on other side of door at attic stair to meet requirements (5176). t. Main - Provide GFI in bathroom (5178/5180). u. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. v. Main - Provide hard -wired CO2 detector 1 -0" of any sleeping room: MN299F.50. w. Main - Replace mercury type thermostat (5229). x. Attic - Provide GFI in bathroom (5225- 5227). y. Attic - Provide exhaust fan to vent outside of building to meet requirements. z. Attic - Provide hard -wired smoke alarm in all (1) sleeping rooms & hall: MN299F.362. aa. Attic - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. bb. Attic - Install rails on stair to meet requirements (5215). cc. Insulate attic to meet present requirements. 2. Light and Ventilation a. No combustion/make-up air for furnace. 3. Fire Protection/Adequate Egress a. Basement - Provide egress window and well in basement floor IRC310.1. b. Basement - Remove hanging wires from floor joist (5198/5199/5203/5204/5206). c. Basement - Replace wiring with outlet and plug -in to meet requirements (5202). d. Basement - Provide fresh air-intake for furnace to meet requirements (5107/5110). e. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. f. Provide hard -wired smoke alarm in all sleeping rooms, hall, and floors: MN299F.362. g. Provide hard-wired CO2 detector 10' -0" of any sleeping room: MN299F.50. 4. Lay out and Condition of Interior Partitions/Materials a. Interior condition of wall partitions is good to excellent. b. House - Insulate exterior walls to meet present requirements. c. House - Replace single pane windows in basement to meet present requirements (51571516115164). d. Basement - Provide egress window and well in basement floor IRC310.1. e. Basement - Insulate rim joist (5201/5203/5206). f. Basement - Repair water seepage (5202). g. Basement - Remove hanging wires from floor joist (5198/5199/5203/5204/5206). h. Basement - Replace wiring with outlet and plug -in to meet requirements (5202). i. Basement - Insulate basement exterior walls to meet present requirements (5194/5152-5210). j. Basement - Provide fresh air-intake for furnace to meet requirements (5107/5110). k. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. 1. Basement - Correct stair treads to meet requirements, existing tread 9 "; riser 7.5" (5212/5213). m. Basement - Install rails on stair to meet requirements (5190/5191). n. Basement - Connect domestic water to city main: Existing well (5202). 0. Main - Provide landing on other side of door at attic stair to meet requirements (5176). p. Main - Provide GFI in bathroom (517815180). q. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. r. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. s. Main - Replace mercury type thermostat (5229). t. Attic - Provide GFI in bathroom (5225 - 5227). u. Attic - Provide exhaust fan to vent outside of building to meet requirements. v. Attic - Provide hard -wired smoke alarm in all (1) sleeping rooms & hall: MN299F.362. w. Attic - Provide hard -wired CO2 detector 10" -0" of any sleeping room: MN299F.50. x. Attic - Install rails on stair to meet requirements (5215). y. Insulate attic to meet present requirements 5. Exterior Construction a. House - Replace deteriorated roof shingles (5156-5159/5162/5163). b. House - Provide hot vent hood at chimney (5162). c. House - Paint peeling from siding (5162). d. House - Repair damaged step and masonry at exterior entry (5153/5166). e. House - Repair end of gutter (5162). f. Basement - Provide egress window and well in basement floor IRC310.1. g. Basement - Repair water seepage (5202). Description of Code Deficiencies 1. House - Provide hood over hot vent stack at chimney (5162). 2. Basement - Provide egress window and well in basement floor IRC310.1. 3. Basement - Insulate rim joist (5201/5203/5206). 4. Basement - Repair water seepage (5202). 5. Basernent - Remove hanging wires from floor joist (5198/5199/5203/5204/5206). 6. Basement - Replace wiring with outlet and plug -in to meet requirements (5202). 7. Basement - Provide fresh air - intake for furnace to meet requirements (5107/5110). 8. Basement - Provide hard -wired smoke alarm in floor: MN299F.362. 9. Basement -- Correct stair treads to meet requirements, existing tread 9 "; riser 7.5" (5212/5213). 10. Basement - Install rails on stair to meet requirements (5190/5191). 11. Main - Provide landing on other side of door at attic stair to meet requirements (5176). 12. Main -- Provide GFI in bathroom (5178/5180). 13. Main - Provide hard -wired smoke alarm in all (2) sleeping rooms & hall: MN299F.362. 14. Main - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. 15. Main - Replace mercury type thermostat (5229). 16. Attic - Provide GFI in bathroom (5225- 5227). 17. Attic - Provide exhaust fan to vent outside of building to meet requirements. 18. Attic - Provide hard -wired smoke alarm in all (1) sleeping rooms & hall: MN299F.362. 19. Attic - Provide hard -wired CO2 detector 10' -0" of any sleeping room: MN299F.50. 20. Attic - Install rails on stair to meet requirements (5215). Energy Code In addition to the building code deficiencies listed above, the existing building does not comply with the current energy code. These deficiencies are not included in the estimated costs to correct code deficiencies and are not considered in determining whether or not the building is substandard: - House - Insulate exterior walls to meet present requirements. - House - Replace single pane windows in basement to meet present requirements (5157/5161/5164). - Basement - Insulate basement exterior walls to meet present requirements (5194/5152-5210). - Insulate attic to meet present requirements. M: 108Proj1080629 \ADMN1TIF\Building Reports1080629 -Not Substandard Building Report Template -5830 Oakgreen Ave.docx img_5230.jpg Img_5235.jpg Img_5240.jpg Img_5247.jpg Img_5255.jpg Img_5260.jpg Img_5231.jpg img_5236.jpg Img_5243.jpg Img_5248.jpg img_5256.jpg 080629 - 5710 Oakgreen Ave #1 Img_5232jpg Img_5237,jpg Img_5244.jpg Img_5249.jpg Img_5257.jpg Img_5262.jpg Page 1 Img_5233.jpg img_5238.jpg Img_5245.jpg Img_5253.jpg Img_5258.jpg Img_5263.jpg Img_5234.jpg Irng_5239.jpg img_5246.1pg Irrig_5254.jpg Img_5259.jpg Img_5264.jpg Img_5265.jpg Img_5270.jpg Img_5277.jpg Img_5282.jpg Img_5287.jpg Img_5292.jpg Img_5266,jpg Img_5271.jpg Img_5278.jpg Img_5233.jpg Img_5288.jpg Img_5293.jpg 080629 - 5710 Oakgreen Ave #1 img_5267.jpg Img_5272.jpg 1mg_5279.jpg Img_5284.jpg Img_5289.jpg lmg_5294.jpg Page 2 Img_5268.jpg Img_5275.jpg Img_5280.jpg Img_5285.jpg img_5290.jpg Img_5269 jpg Img_5276.jpg Img_5281.1pg Img_5286.jpg img_52911pg Img_5296.jpg Img_5297.jpg Img_5302.jpg 1mg_5307.jpg Img_5316.jpg Img_5323jpg img_5328.jpg Img_5298.jpg Img_5303.jpg Img_5309.jpg Img 5317 jpg lmg_5324.jpg 080629 - 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5762 Oakgreen Ave #4 Img_4960.jpg Img_4970.jpg Img_49751pg Img4980.jpg img_4985.jpg Page 1 Img_4961.1pg Inig_4966.jpg Irng_4971.jpg Irng_4976.jpg Img_4981.jpg Img_4986.jpg Irrig4962.1pg Img_4967.jpg Img_4972.jpg Img_4977.jpg Img_4982.jpg Img_4987.jpg Img_4988.jpg Img_4993.jpg Img_4998.jpg Img_5003.jpg Inig_5008.jpg Img_5013.jpg Img_4989.jpg 1nig_4994.jpg Img_4999.jpg Img_5004.jpg Img_5009.jpg Img_5014.jpg 080629 - 5762 Oakgreen Ave #4 lmg_4990.jpg Img 4995.jpg img_5005.jpg img_5010.1pg Img_5015.jpg Page 2 Img4991.1pg lmg_4996.jpg Img_5001.jpg Img_5006.jpg Img_5011.jpg Inig_5016.jpg Img_4992jpg ling_4997.jpg img_5002.jpg lrng_5007.jpg Img_5012.jpg img_5060.jpg Img_5061 jpg Img_5321.jpg 080629 - 5762 Oakgreen Ave #4 Img_5322jpg Page 3 Img_5062.jpg Img_5067.jpg Inng_5072,jpg Img_5082.jpg img_5087.jpg Img_5063.jpg img_5068.jpg Img_5073.jpg 1ing_5078.jpg In Irng_5088.jpg 0810629 - 5770 Oakgreen Ave #6 Img_5064.jpg Img_5069,jpg trng_5074.jpg Img_5079.jpg Img_5084.jpg Irng_5089.jpg Page 1 img_5065.jpg img_5070.jpg Inig_5075.jpg Img_5080.jpg img_5085.jpg Img_5090.jpg lmg_5066.jpg Img_5076.jpg Img_5081 ,jpg Img_5086.jpg Img_5001 .jpg img_5092.jpg lmg_5097.jpg Img_5102.jpg Img_5107.jpg Img_5112.jpg lmg_5117.jpg Img_5093.jpg Img_5098.jpg Img_5103.jpg img_5108.jpg Img_5113.jpg Img_5118.jpg 080629 - 5770 Oakgreen Ave 46 Img_5094.jpg Img_5099.1pg Img_5104.jpg Img_5109.jpg Img_5114.jpg img_5119.jpg Page 2 img_5095:jpg Img_5100.jpg Img_5105.jpg Img_5110.jpg Img_51 15.jpg img_5120.jpg img_5096.jpg Img_5101.1pg Irng_5106.jpg img_5111 jpg img_5116.jpg Img_5122.jpg Img_5127.jpg Img_5132.1pg inig_5137.jpg img_5142.jpg Img_5147.jpg Img_5123.jpg Img_5128.jpg Img_5133.jpg Img_5138.jpg lmg_5143.jpg Img_5148.jpg 080629 - 5770 Oakgreen Ave 46 Img_5124.jpg Img_5129.jpg Img_5134.jpg img_5139.jpg Img_5144jpg Irng_5149.jpg Page 3 Img_5125.jpg Img_5130.jpg img_5135.jpg Img_5145.jpg Img_5150.jpg Img_5126.jpg Img_5131.jpg Img_5136.jpg Img_5141.jpg Img_5146.jpg Img_5018.jpg Img_5023.jpg Img_5028.jpg Img_5033.jpg Img_5038.jpg Img_5043.jpg Img_5019.jpg Img_5024.jpg Img_5029.jpg img_5034.jpg Inng_5044.jpg 080629 5800 Oakgreen Ave #8 Img_5020.jpg Img_5025.jpg Img_5030.jpg irng_5035.jpg Img_5039.jpg Irng_5040.jpg Ir Page 1 Img_5021.jpg Img_5026.jpg ir Img_5041.jpg Irfig_5046.jpg Irng_5022.jpg Img_5027.jpg Irng_5032.jpg Img_5037.jpg Img_51342.jpg Img_5047.jpg Img_5048.jpg Img_5053.Jp9 Img_5058.jpg Img_5049.jpg Img_5054.jpg Irng_5059.Jpg 080629 - 5800 Oakgreen Ave #8 Img_5050.jpg Img_5055.Jpg Page 2 Img_5051.jpg Img_5056 jpg Img_5052.jpg Irng_5057.jpg Img_5151jpg img_5156.jpg Img_5161.jpg Img_5166.jpg Img_5171.jpg Img_5176.jpg Img_5152jpg Img_5157.jpg Img_5162.jpg Img_5172.jpg Img_5177.jpg 080629 - 5830 Oakgreen Ave #9 Img_5153jpg Img_5158.jpg img_5163.jpg - Img_5168.jpg img_5173.jpg Page 1 Img_5154.jpg img_5159.jpg img_5164.jpg irng_5169.jpg Irng_5174.jpg Img_5179.jpg - Img_5155.jpg Img_5160jpg Img_5165.jpg Img_5170.jpg Img_5175.jpg Img_5180.jpg Img_5181.jpg Img_5186.jpg I mg_5191. jpg Img_5196.jpg lmg_5201.jpg Img_52O6.jpg Img_5182.jpg Img_5187.jpg Img_5192.jpg Img_5197.jpg Img_5202.jpg rng_5207.jpg 080629 - 5830 Oakgreen Ave #9 Img_5183.jpg Img_5188.jpg Img_5193.jpg Img_5198.jpg Img_5203.jpg lmg_5208.jpg Page 2 lmg_5184.jpg Img_5189.jpg Img_5194.jpg Img_5199.jpg Img_5204.jpg Img_5209.jpg Img_5185.jpg Img_5190.jpg Img_5195.jpg Img_5200.jpg Irng_5205.jp9 Irg_5216.jpg Img_5211.1pg Img_5216.jpg lmg 5221.jpg Img_5226.jpg Img_5212.jpg Img_5217.jpg Img_5222.jpg Img_5227.jpg 080629 - 5830 Oakgreen Ave #9 Img_5213.jpg Img_5218.jpg Img_5223.jpg Inig_5228.jpg Page 3 Img_5214.jpg I mg_521 9.jpg img_5224.jpg Img_5229.jpg img_5215.jpg I mg_5220.jpg Anchobaypro, Inc Oak Park Heights City Council City of Oak Park Heights 14168 Oak Park Blvd. N Oak Park Heights, MN 55082 RE: Tax Increment Financing Request and Future Assisted Living Facility Dear Council Members: P.O. 119 STILLWATER, MN 55082 -0119 651 -430 -3981 We recently applied for Tax Increment Financing Assistance (TIF), for our Oakgreen project. In order for us to qualify we have to meet certain requirements under State law. The City has hired an expert (Michael Fischer) in these matters to assure compliance with said law. Before further discussion, I will point out how our project complies with the City's own Tax Increment Financing Policy. The city states it will consider TIF for projects that achieve three considerations; long term benefits to the community, quality employment opportunities, and addition to the tax base, by providing a high — quality development. Our assisted living facility provides long term benefits to the city because it allows its citizen's to continue to reside locally, at an "affordable" rate in a high -class facility. We intend to provide a facility where a majority of the residents, who cannot afford a Boutwell's or Croixdale, can reside in essentially the same type of complex at a lower price. c PCA. ''^ 5 x Dna, vDO G \c,r '` �P 1�` ... The two buildings we propose will gel. rate over two hundred jobs during the construction period and provide 16 full time and 24 part time e nployment opportunities. The gross development costs on both buildings will exceed $24,000,000, generously adding to the tax base. We are removing "blighted" homes, creating jobs, strengthening the tax base, and upgrading the neighborhood. One law we also must meet is the "but for" test. This essentially says that if it were not for tax increment assistance, the proposed development would not occur. We offer the following reasons we need this assistance: 1. The costs of acquiring the six homes along Oakgreen Avenue were extraordinarily higher compared with a normal market purchase. These costs cannot be recovered from the sale or rental of the units in the new project. 2. The project is using higher quality materials than similar projects in the twin cities area, such as brick and hardi -plank exteriors, and Andersen windows and patio doors. 3. Property acquired by us will be contributed to the city for additional right -of way improvements, which also adds costs to the project. 4. Most important, the recent economic events have made financing virtually impossible. The few remaining Lenders require much more equity than earlier. TIF is a form of such equity. We enclose project pro- formas, which demonstrate that without TIF the returns would be sub- standard and the project much more difficult if not impossible to finance. Other reasons for granting our request are: 1. The project is "pay-as-you-go". The City is NEVER financially liable. 2. Development fits the City's comprehensive plan and further benefits the "streetscape ", namely, complementing the new City Hall and Boutwells' Landing, on the city's last developable parcel. 3. We are removing sub - standard homes, outdated septic systems, and old wells. * e e e a . . o v e o o 20 of 21 NOLDE TIF DOCUMENTS March 21, 2009 Page 2 4. We gave the existing homeowners along Oakgreen a "good deal ", which they otherwise never would have received. 5. The p roject will use limited city services due to its elderly population and existence of private streets. 6. We are only asking for a 15 year vs. 25 year financing, thereby allowing the project to reach the tax rolls earlier. Sincerel Tim Nolde Anchobaypro, Inc. 21 of 21 NOLDE TIF DOCUMENTS OAKGREEN COMMONS ASSISTED LIVING FACILITY Oakgreen Commons is a high quality project. Southview Senior Living LLC will be the owner /manager. They are an experienced operator and have been in business for over 30 years. There is a large demand for these services due to an aging population, however not everyone can afford a Boutwell's. This project will have essentially the same services such as: full -time nursing, dining, computer and library rooms, guest room, exercise room, individual patios, Activities Director, beauty salon, community room and a Memory Care Unit. Oakgreen Commons will allow our relatives and friends to remain in their community, and live with dignity at an affordable price. It has come to our attention that Planning and /or Staff is concerned about the height of our building. In our initial negotiations and planning, we determined that allowing our Senior Cooperative building to only be two stories, thus taking advantage of the most desirable parcel (i.e. better views, water, etc.), we could achieve much needed density on the less desirable parcel. This parcel is obviously less desirable due to the power lines and the proximity to the highway and other commercial uses. We need the density to enable the project to operate in the most efficient manner. You cannot provide affordable, high - quality housing in a small building. Our neighbors and future customers do not think the building's height is obtrusive; in fact they would rather look at a nice building instead of the P ower lines. Precedent exists for our request, since the Boutwell project has taller buildings than we are proposing. In closin g we think our request for TIF finding and the design of the Assisted Facility is reasonable. All the p arties of this transaction stand to benefit. With your guidance and cooperation we can make this happen. We are excited about our concept. Thanks once again for your support and patience. Please let me know if you need anything else. 4 P.O. 119 STILLWATER, MN 55082 -0119 651 -430 -3981 c1ithwi=ro Inc Oak Park Heights City Council City of oak Park Heights 14168 Oak Park Blvd. N Oak Park Heights, MN 55082 RE: Tax Increment Financing Request Dear Council Members: Please allow this correspondence to accompany our letter submitted last week. Our consultants have determined that based upon our current schedule of costs and revenues, (which are likely to change as we further refine our plan); we believe we need $ 1 70,920.00 per year for the 15 year term of the District. This includes BOTH projects. This translates into 80% of the net revenue captured during the 15 year term of the District or a present value of $975,000.00 Without this assistance, our projects, as planned, will not be economically viable; therefore our submission is dependant on TIF approval. Please remember that once the District is established, the fifteen year time period begins. Because our Senior Cooperative project relies on pre - sales, we may not start building for awhile, thereby potentially lowering the amount of assistance we applied for. Thanks once again for your support and patience. Please let me know if you need anything else. Tim Nolde Anchobaypro, Inc. • • • 0 0 0 0 0 0 0 • 0 0 04 it 0 0 6 0 0 0 0 0 • • 0 m TIC' - House Research m • Pu osQ • Source • Mechanics • Typical Uses • Example • Full taxes v. captured value Captused.value • Types of Development • Limitations Return to top How TIF Works: Basic Mechanics rit Legislature Home 1 Links to the World 1 Help 1 Advanced Search House 1 Senate I Joint Departments and commissions 1 Bill Search and Status . I Statutes, Laws, and Rules Page 1 of 5 What is the primary purpose of TIF? Tax increment financing (TIF) is a method of financing real estate development costs- -i.e.: 1. to encourage developers to construct buildings or other private improvements, or 2. to pay for public improvements, such as streets, sidewalks, sewer and water, and similar improvements. Rcigr to to. What is the source of the financing? TIF uses the additional property taxes paid as a result of development in the district to pay for part of the development costs. When a new building is constructed, the market value of the property and its property taxes typically rise. Classic examples would be building a new store on an undeveloped parcel or replacing one or more old buildings with a new, larger building. In both of these instances, the market value of the property will rise because the improvements add value to the parcel. How do the mechanics of TIF work? When a TIF district is created, the county auditor certifies the current tax capacity of the properties in the district as the T1F district's "original tax capacity." As the property in the district increases in value, these increases above the original tax capacity are "captured." The law refers to this amount as the district's "captured tax capacity." When a T1F district is created, the county auditor also certifies an "original tax rate." The original tax rate is total property tax rate that applies in the district, i.e., the tax rates imposed by all of the local governments that levy taxes (the city /town, county, school TIF - House Research district, and special taxing districts). The "tax increment or increment" for the district is determined by multiplying the original tax rate by the captured tax capacity. This roughly equals the taxes paid by the captured tax capacity or the increase in taxes that occur as a result of the development. g Y Return to top What are the typical uses of TIF? TIF traditionally was used as a means of redeveloping urban areas that had old or worn -out buildings in need of replacement or rehabilitation. It was initiated as a tool to help with urban renewal (redeveloping "slums" and "blighted" areas). Its use has spread to other purposes. TIF in Minnesota is generally used to: O Redevelop areas occupied with substandard buildings O Build housing for low - income and moderate- income families O Clean up pollution O Provide general economic development incentives O Finance p ublic infrastructure, such as streets, sewer, water, sidewalks, and similar improvements. (This is not an explicit purposes of TIF, but Minnesota cities frequently use it for this purpose.) Return to top Paget of What is an example of how TIF is used? Developer is considering building an office building. The city would like to redevelop a site that consists of three parcels of property (parcels A, B, and C in the FIGURE below). Parcel A is vacant and Parcels B and C contain substandard commercial buildings. Parcel D contains a building in good shape. Construction of the office building will require demolition of the two buildings, new utilities (sewer and water), and closing an alley. The cost of acquiring the property, demolishing the substandard buildings, and putting in the utility and alley improvements is $1.5 million. However, Developer could obtain a comparable site elsewhere in the area for $500,000, including special assessments for utilities. The three parcels have a tax capacity of $24,000 and pay $33,600 a year in property (at a 1.4 rate). But if Developer builds the planned $5 million office building, the tax will rise to $304,000 per year (an p ert Y taxes ( increase of $280,000 }. To induce Developer to build on the site, the city designates a project area and creates a TIF district that includes the development site. The district consists of parcels A, B, C, and D (the shaded area). (Parcel D must be included to permit the site to qualify as a red e, vela p ment district under state law.) The district is illustrated in the FIGURE. The city agrees with Developer to acquire the site, demolish the substandard buildings, and put in the utility improvements and vacate the alley. The city, in turn, sells the site to Developer for its market value of $500,000. This is commonly called "writing down the cost of the land. The city's $1.5 million cost is p "written down" to $500,000. (The city could write it down to zero - -in effect, giving the land to Developer.) The computation o t e increment is shown in the table. The "project area" is the area in which increment may be spent (e.g., if some of the p sewer and water "pooling." improvements may actually be outside of the district). The extent to which this may be done is restricted by the rules on pooling. m Figure TIF - House Research Project Area TIF District Page 3 of 5 Parcel B (substandard bldg) Parcel A (vacant land) Parcel C (substandard bldg) Parcel D (bldg in good condition) Table Computation of Tax Increment Parcel A B C D Total Tax Rate Tax Increment Original Tax Capacity $18,000 $3,000 $3,000 $124,000 $148,000 1.4 Post Development Tax Capacity $224,000 $124,000 $348,000 Captured Tax Capacity $200,000 0 $200,000 $280,000 (tax rate x captured tax capacity) Return to top Does the increment equal the full taxes paid by the captured value? In Minnesota this is frequently not the case. The original tax rate limits increment to the taxes generated by the tax rates in effect when the district was created. Thus, if the local governments increase their tax rates (e.g., to increase revenues or because of changes in the tax base), the increased rates do not yield more increment. Furthermore, in the Twin Cities metropolitan area and in the taconite tax relief area, increment may be reduce by the fiscal disparities contribution for the district's properties, if the city elects that option. m TIF - House Research Page 4 of 5 Return to top Does TIF captured value increases from inflation or general market effects, as well as those attributable to new improvements? Yes, the mechanics of TIF capture all of the increase in value of the district. Thus, increments may be attributable to: • Construction of improvements • Overall inflation in property values unrelated to development • Market effects that are attributable to the TIF development, if the properties are in the TIF district. (Proximity to a new development, in many cases, will Increase the value of surrounding properties.) • Market effects that are unrelated to the TIF development, if the properties are in the TIF districts. (Market values in areas around TIF districts may increase and these increases may be caused by factors, such as shifts in locational values or tastes, other than the TIF development. For example, some researchers have observed the tendency of cities to put TIF districts in areas that are already experiencing rising property values.) Return to top. What types of developments are not good candidates for TIF assistance? TIF works because developments frequently increase taxable market values. For developments that do not significantly increase taxable market value, TIF will not generate enough revenues to use to help finance the development. This presents problems for: O Developments that do not increase the intensity of land uses or that decrease the intensity of land use. For example, TIF works if the development replaces an apartment building with a Iarge office building or single family homes with Iarge apartment buildings. But it does not work well if one wishes to replace a deteriorated apartment building with single family homes. O Tax- exempt developments (e.g., nonprofits or government buildings). Since these properties are exempt from property taxes, they do not generate increments and, thus, cannot be financed with increments, unless increments are taken from other developments. Return to top What are other limitations to using TIF as a financing method? Development costs must be paid "up- front" or at the very beginning of the development, but the increased property taxes (increments) are not paid until later and, then, only in modest amounts (relative to the development costs) spread over many years. This creates an imbalance or mismatch between costs and revenues. TIF traditionally overcomes this mismatch by issuing bonds. These bonds pay for: Before 1986, bonds were routinely used as part of TIF financing. These bonds were usually tax exempt, providing a lower interest m 1. Development cost (e.g., site acquisition), 2. Interest on the bonds until increments are received. The need to pay these interest costs on borrowing, pending receipt of increments is commonly referred to as capitalizing interest. The need to capitalize interest means that increment flows must be larger to pay off this component of the cost. TIF - House Research Page 5 of 5 rate to the city and the developers. The 1986 tax reform made it more difficult to issue tax - exempt bonds for this purpose. This took away much of the incentive for the local governments to borrow in anticipation of receipt of tax increments. The practice in Minnesota now often does not use bonds, but instead expects developers to pay the costs and to be reimbursed as increments become available. This approach (called "pay- as-you go" financing) shifts the "capitalized interest" costs to the developers. In some cases, the city or development authority absorbs the cost by advancing its money (e.g., from another city or authority fund) until it can be reimbursed with the increments. if the city accepts lower or no interest on these advances, it is using these funds to assist or subsidize the development. Return to top Return _tp_Properi ll axes Return to House Research home m Renewal and Renovation TIF Districts - House Research Page 1 of 3 House Senate I Joint Departments and Commissions 1 Bill Search and Status Renewal and Renovation TIF Districts 8 Duration Limit • Geographic Areas that Qualify • Permitted Uses of Increments • Data on Use of Districts Duration Limit Legislature Home 1 Links to the World 1 Help 1 Advanced Search Statutes, Laws, and Rules • How long can increments be collected from a renewal and renovation district? The law permits renewal and renovation district increments to be collected for 15 years after the receipt of the first increment. Minn. Stat. a 469.176, subd. lb(2). Thus, counting the first year of increment, 16 years of increment may be collected. What is the history of changes in the duration limit for renewal and renovation districts? The duration limit for renewal and renovation districts has been changed once since the Tax Increment Financing Act was passed in 1979. The current duration limit was enacted by the 1990 Legislature and applies to requests for certification made after April 30, 1990. 1990 Minn. Laws 2588 -89, ch. 604, art. 7 § 15, codified at Minn. Stat. § 469.176, subd. lb. The original 1979 TIF act allowe d areas meeting the criteria for renewal and renovation districts to qualify as redevelopment districts. Thus, these districts had the same 25 -year duration limits that apply to redevelopment districts. 1979 Minn. Laws 840 and 844, ch. 322 §§ 3, 5, codified at Minn. Stat. §§ 273.73, subd. 10(a)(2); 273.75, subd. 1 (1979 Suppl.). Return to top, Geographic Areas that Qualify Where may a renewal and renovation district be created? An area must meet a "blight test" to qualify for establishment of a renewal and renovation district. This test is similar to that required for redevelopment districts. However, areas that contain lower proportions of structurally substandard buildings qualify. In return, renewal and renovation are subject to a shorter duration limit than redevelopment districts. What areas qualify under the blight test? To qualify under the blight test: 1. 70 percent of the area of the district must be occupied by buildings, streets, utilities, or other improvements. m Renewal and Renovation TIC` Districts - House Research Page 2 of 3 2. 20 percent of the buildings must be structurally substandard. 3. 30 percent of the other buildings must have conditions that require clearance or substantial renovation. Minn. Stat. § 469.174, subd. 10a. The statute lists the conditions that satisfy #3: • 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 • other identified hazards to the health, safety, and general well -being of the community. As is the case with the blight test for redevelopment districts, application of these criteria requires a good deal of subjective judgment by the authority. How do the blight tests for redevelopment districts compare with those for renewal and renovation districts? This table compares the two blight tests. Blight Criterion Area occupied by buildings and improvements Substandard buildings Obsolete or incompatible land uses etc. Redevelopment Districts 70% 50% NA Renewal and Renovation Districts 70% 20% 30% Return to top Permitted Uses of Increments What are the permitted uses of renewal and renovation district increments? The spending restrictions applicable to a redevelopment district also apply to renewal and renovation districts:.90 percent of the increments must be spent for blight correction -- i.e., fixing the conditions that allowed designation of the district. The statute contains a list of qualifying expenditures: The law explicitly provides that this is not an exhaustive list. Administrative expenses of the authority that are allocated to these activities also meet the 90 percent test. m O Site acquisition of blighted sites or sites requiring pollution cleanup O Acquisition of adjacent parcels to assemble a site large enough to redevelop O Cleanup of hazardous substances, pollution, or contaminants O Site preparation, such as clearing the and and installation of utilities, roads, sidewalks O Providing parking facilities, Minn. Stat. § 469.176, subd. 4j. Renewal and Renovation TIF Districts - House Research Page 3 of 3 Return to top Data on Use of Districts How many renewal and renovation districts are active? According to the May 2003 Report of the State Auditor, there were 20 renewal and renovation districts at the end of calendar year 2001. This is less than 1 percent of all active districts, the smallest category of TIF districts. It represents a decrease of one district over the number reported in 2002. Return to toy? Return to Property Taxes Return to House Research home m ;�': 'I Li I-LEYON a 1. -I I- r.d.' • 'HA V Prigg?3,19)1V9 LAY OUT PL CURB LINLEaS NOTED OTHERWISE SUMMARY 1401,110.0 tn.. 014 tl$p$]NN4V dp 31 Via HS dp .;MVI 7HL d174N11 E!3]NIpN] IYNp'Ia�3ip21d O75N73E1 A1f79 Y !YV LV flNV Np � VU43drK 1p]tl k}7 30Nf ttp ]YI A0 0] aYd3Md SYM LL1pd7E! i!p Np11V3�d 'HYId S Ltl H I Ai1171 A fl7tl7s{ �t:ls7lJli.� V 0071 . m1 isman 3Yj VI MOM t 3V1 M gill.. -eo 'tar lg., I ...1 tW4rtt ims NK`Grfl3 DM TLI.1... HIM SfrP/1 Z9099 NA ',IDIVAMILLS AVM DIML N3amo 5 LL 30 NIN 'SIHOIAH >ftlVd )VC ONIAll CI31SiSSV 7 d000 351101135 19.iFUSUR is AO 5173H5 _ 6 0 0. 11,1.0 AIMS .114,11 CINVI tr , M `011dAV801-13NV EIRTAWITNiel NiVid inoAv S Lab _____, I 'I Li I-LEYON a 1. -I I- r.d.' • 'HA V Prigg?3,19)1V9 LAY OUT PL CURB LINLEaS NOTED OTHERWISE SUMMARY • Frz WON ' ,C d -- -� •_•,. -�� tea_.- .... ----•= "--� -. �, ---� x _ _ _ _ ILLZION "1,411 TWOS VAON • -a" cJ7LT ?1k =T5CTJI LT1fi7�rTTrELrT� r r :IiL1C e ` aTa', 'r ,� � , I �. ;.• 1 I �I 1 f& iron 1 1 IJ . ' 1 ! 1 I .sl i 1; W : ONVO Al v V11039 V .ON . ' �� L77- J 7 �uJ�i�.'fIST.YCCi .l"1TLT3.U1 =1 U1! ti Odd Proliw Iq� doll= MKS kfl`OM] ] V111L11oW1311115ItI S91z .11,11,110. 1.{7 41111 S Ot.Nr‘rld .Y1 au trxcss�t��� NOSS NV41 'a3J VM1111S AVM %WIN331k3 `0/1dAYa0HDNV TREWITENZi PVi+51 'S1HE17H }i2:1Vd) VO Dfl1117 0l1SISSV'2 d003 3SflOH 3 v1 YO NY1d ISWNI ciN U WHEREAS, the City of Oak Park Heights, Minnesota (the "City"), has prepared a Development Plan for Municipal Development District No. 1 (the "Program ") and a Tax Increment Financing Plan (the `Plan ") for Tax Increment Financing (Renewal and Renovation) District No. 1 -1 (Carriage House Project) therein and has submitted the Program and the Plan to the City Planning Commission pursuant to Minnesota Statutes, Sections 469.027 and 469.126, and WHEREAS, the Planning Commission has reviewed said Program and Plan to determine conformity of said Program and Plan to the general plan for the development or redevelopment of the City as a whole, and WHEREAS, the Planning Commission is in agreement with the Program and Plan. NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of Oak Park Heights that the proposed Program and Plan conform to the general plan for the development or redevelopment of the City as a whole and the Commission recommends the Program and Plan to the City Council of the City for its approval. Adopted by the Planning Commission of the City of Oak Park Heights, this 14th day of May, 2009. 2327356v1 RESOLUTION OF THE PLANNING COMMISSION FINDING THE DEVELOPMENT PROGRAM FOR MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING (RENEWAL AND RENOVATION) DISTRICT NO. 1 -1 WITHIN MUNICIPAL DEVELOPMENT DISTRICT NO. 1 (CARRIAGE HOUSE PROJECT) CONFORMS TO THE CITY PLANS FOR DEVELOPMENT OF THE CITY AS A WHOLE Chair Planning Commission of the City of Oak Park Heights THis wsr BE It-11`°M By PL4///11WG Cosolt55/W.