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MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR:
MEETING DATE:
Administration
City Administrator/Finance
Director Flaherty
September 23, 2019
PRESENTER(s)
REVIEWED BY:
ITEM #:
Administration
for the Parkview Retail development. This development received preliminary plat
5.2
STRATEGIC VISION
MEETS:
THE CITY OF OTSEGO:
hearing on the proposed property tax abatement program for the Parkview Retail
Is a strong organization that is committed to leading the community through innovative
communication.
X
Has proactively expanded infrastructure to responsibly provide core services.
No
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
X
Is a social community with diverse housing, service options, and employment opportunities.
for the Parkview Retail development. This development received preliminary plat
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council approve a resolution calling a public
hearing on the proposed property tax abatement program for the Parkview Retail
development.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No
Yes—To be held October 14, 2019
BACKGROUND/JUSTIFICATION:
The City of Otsego has received a request for financial assistance from Rice Companies
for the Parkview Retail development. This development received preliminary plat
approval in July 2019. A final plat and development stage building plans were submitted
on September 17, 2019, with the City Council expecting to review the application on
October 14, 2019.
The financial assistance request from Rice Companies was for the construction of certain
streets, utilities and related public improvements within the Parkview Retail
development. The improvements are currently estimated to cost $871,171; however, it
should be noted that the improvements have not been through engineering design or the
contractual bidding process, so the cost is subject to change.
Upon receipt of the financial assistance request, the City of Otsego asked Wright County
to participate in funding the improvements. At a County Board work session on August
13, 2019; the County Board provided verbal support to participate in the project funding
through a loan to the City, with a requirement the City only repay 50% of said loan. The
County would fund the other 50% through tax abatement.
City staff is recommending that the City Council provide funding for the improvements
through tax abatement. The City is authorized to establish tax abatement through
Minnesota Statute §469.1812 through §469.1815. The City has adopted a Tax Abatement
Policy to be used as a guide in the processing and review of financial assistance requests.
The proposed tax abatement program would establish an abatement of a portion of the
increase in property taxes caused by the Parkview Retail development to finance and
provide the public infrastructure improvements. The maximum amount of the tax
abatement is estimated to be $950,000 based on eligible development costs, estimated
values of the new development and current property tax rates.
Minnesota Statute and City Policy require a public hearing to be held for the proposed
property tax abatement program. City staff is recommending the public hearing be called
for October 14, 2019 to coincide with the City Council review of the final plat and
development stage building plans.
City staff is recommending the City Council approve the attached resolution, which will
officially call for the public hearing. The public hearing will be noticed in the City's official
newspaper, the Star News, on September 28, 2019.
City staff along with Nick Anhut from Ehlers, the City's development finance consultant
have already begun the financial analysis of the tax abatement program. This information
will be presented to the City Council and the public at the public hearing.
Briggs and Morgan, the City's bond counsel has begun drafting a tax abatement
agreement as well. The parties to said agreement would include the City, Wright County
and the developer. This agreement will be presented to the City Council for consideration
of approval via resolution at the public hearing.
Wright County, who is also providing funding in the form a tax abatement program, will
mirror the process being completed by the City. The County Board is expected to hold a
public hearing on October 15, 2019 and would consider approval of a resolution
establishing a tax abatement program and respective tax abatement agreement.
SUPPORTING DOCUMENTS ATTACHED:
• Resolution 2019-51
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES:
Motion to approve Resolution 2019-51 calling a public hearing on proposed property tax abatement
program.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2019-51
CALLING FOR A PUBLIC HEARING
ON PROPOSED PROPERTY TAX ABATEMENT PROGRAM
WHEREAS, the City Council of the City of Otsego, Minnesota (the "City") has received
a request from Rice Companies (the "Developer") for the establishment of a Tax Abatement
Program, pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815 (the "Act"),
concerning property located at the following parcel numbers within the City's jurisdiction: 118-
500-221203, 118-257-000010, 118-257-000020, 118-257-001010, 118-257-001020, 118-500-
221205, and 118-500-221206; and
WHEREAS, the proposed tax abatement program would grant an abatement of a portion
of the increase in property taxes caused by new development on the land, and this tax abatement
would correspond with eligible public infrastructure project costs pursuance to Minnesota
Statutes; and
WHEREAS, it is necessary to hold a public hearing on the proposed tax abatement
program.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Otsego,
Minnesota, as follows:
i) Hearing. A public hearing on the consideration of the property tax abatement for the
Development will be held at the time and place set forth in the Notice of Hearing attached hereto
as Exhibit A and hereby made a part hereof.
ii) Notice. The City Administrator is hereby authorized and directed to cause notice of
said hearing in substantially the form attached hereto as Exhibit A to be given one publication in
a newspaper of general circulation in the City at least 10 days but not more than 30 days before
the hearing. The newspaper must be one of general interest and readership in the City, and must
be published at least once.
Member moved for the adoption of the foregoing resolution, and said
motion was duly seconded by member and, upon a vote being taken thereon
after full discussion thereof, the following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted this 23rd day of
September, 2019.
Mayor
Attest:
City Clerk
EXHIBIT A
CITY OF OTSEGO
NOTICE OF PUBLIC HEARING
REGARDING PROPOSED PROPERTY TAX ABATEMENT
NOTICE IS HEREBY GIVEN that the City Council of the City of Otsego, Minnesota
(the "City"), will hold a public hearing at a meeting of the Council beginning at 7:00 p.m., on
October 14, 2019 to be held in the Otsego Prairie Center, 8899 Nashua Avenue NE, in Otsego,
Minnesota, on the proposal that the City abate property taxes levied by the City on the property
proposed for development by Rice Companies. The property is located in Otsego, Minnesota
and consists of parcel numbers 118-500-221203; 118-257-000010; 118-257-000020; 118-257-
001010; 118-257-001020; 118-500-221205; and 118-500-221206. The proposed tax abatement
program would establish an abatement of a portion of the increase in property taxes caused by
development of the property to finance and provide public infrastructure. The maximum amount
of the tax abatement by the City is estimated to be $950,000 based on eligible development costs,
estimated values of the new development, and current property tax rates.
All interested persons may appear at the October 14, 2019 public hearing and present
their views orally or in writing. Following the public hearing, the City Council will take action
concerning the adoption or rejection of the proposed tax abatement program.
Dated: September 24, 2019
/s/
City Administrator