RES 17-49EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY
OF OTSEGO, MINNESOTA
HELD: June 12, 2017
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of Otsego, Wright County, Minnesota, was duly called and held on the 12th day of June, 2017, at
approximately 7:00 p.m.
The following members of the Council were present: Stockamp, Heidner, Darkenwald,
Warehime, Tanner
and the following were absent: None
Member Heidner introduced the following resolution and moved its adoption:
RESOLUTION 2017-49
RESOLUTION ESTABLISHING TAX INCREMENT
FINANCING (ECONOMIC DEVELOPMENT) DISTRICT NO.2 AND APPROVING A TAX
INCREMENT FINANCING PLAN
THEREFOR
A. WHEREAS, it has been proposed that the City of Otsego, Minnesota (the "City")
establish Tax Increment Financing (Economic Development) District No. 2 within Development
District No. 1 (the "TIF District") and approve and accept the proposed Tax Increment
Financing Plan therefor, pursuant to Minnesota Statutes, Sections 469.124 through 469.133 and
Minnesota Statutes, Sections 469.174 through 469.1794, both inclusive, as amended (collectively
the "Act"); and
B. WHEREAS, the proposed Tax Increment Financing Plan for the TIF District (the
"Plan') has been prepared and is contained in that certain document entitled in part "Tax
Increment Financing Plan for Tax Increment Financing (Economic Development) District No.
2", dated as of June 12, 2017, and presented for the Council's consideration; and
C. WHERAS, the City has performed all actions required by law to be performed
prior to the establishment of the TIF District, and the adoption of a proposed Plan therefor,
including, but not limited to, notification of Wright County and Independent School District
No. 728 having taxing jurisdiction over the property to be included in the TIF District; and the
holding of a public hearing upon published and mailed notice as required by law; and
D. WHEREAS, certain written reports (the "Reports") relating to the Plan and to the
activities contemplated therein have heretofore been prepared by staff and submitted to the
Council and/or made a part of the City files and proceedings on the Plans. The Reports include
data, information and/or substantiation constituting or relating to (1) the "studies and
( analyses" on why the TIF District meets the so-called "but for" test and the tests for establishing
l a economic development tax increment financing district under the Act and (2) the basis for the
other findings and determinations made in this Resolution. The Council hereby confirms,
ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of
this resolution to the same extent as if set forth in full herein; and
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Otsego as
follows:
1. Tax Increment Financing District No. 2. There is hereby established in the City of
Otsego within Municipal Development District No. 1, Tax Increment Financing District No. 2,
the initial boundaries of which are fixed and determined as described in the Tax Increment
Financing Plan.
2. Tax Increment Financing Plan. The Tax Increment Financing Plan is adopted as
the tax increment financing plan for Tax Increment Financing District No. 2, and the City
Council makes the following findings:
(a) The Tax Increment Financing District No. 2 is an economic development
district as defined in Minnesota Statutes, Section 469.174, Subd. 12, and
development in the TIF District will result in increased employment in the State
and the preservation and enhancement of the tax base of the State.
(b) Development in the Tax Increment Financing District No. 2 will increase
t employment in the state, including construction jobs, through the construction of
commercial and industrial improvements.
(c) The proposed development, in the opinion of the City Council, would not
occur solely through private investment. The reasons supporting this finding are
that:
i. The need for the use of tax increment financing has been
determined in negotiations with the developer of the project. The
developer has provided supporting materials to attest to inability to
proceed with construction of the project without the assistance for the
development. The developer proposes to finance and construct
improvements, including a commercial industrial building, for occupant
by Bury Industries, LLC (a manufacturing company). The extraordinary
cost of the improvements and the building results in costs, which have
proven to be prohibitive. Therefore, tax increments are needed primarily
to assist with infrastructure costs for the development property.
ii. The proposed project will allow an industrial manufacturing
business to be built within the City of Otsego. The proposed development
consists of the phased construction of, once completed, an approximately
61,092 square foot manufacturing facility on property within the City.
Attracting this company and related jobs in Otsego is important to the
economic future of the community.
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iii. Private investment will not finance these development activities
because of the prohibitive costs of the underlying site improvements and
infrastructure. It is necessary to finance a portion of these costs through
the use of tax increment financing.
iv. A comparative analysis of estimated market values both with and
without establishment of the Tax Increment Financing District No. 2 and
the use of tax increments has been performed as described above. Such
analysis is found in Exhibit I of the TIF Plan and is incorporated herein by
reference, and indicates that the increase in estimated market value of the
proposed development (less the indicated subtractions) exceeds the
estimated market value of the site absent the establishment of the Tax
Increment Financing District No. 2 and the use of tax increments.
V. In the opinion of the City Council, 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 can be found in Exhibit I of the TIF Plan.
(d) The TIF Plan for the TIF District conforms to the general plan for
development of the City as a whole.
The reasons for supporting this finding are that:
(i) The TIF District is properly zoned; and
(ii) The TIF Plan will generally complement and serve to implement
policies adopted by the City.
(e) The TIF Plan will afford maximum opportunity, consistent with the
sound needs of the City as a whole, for the development or redevelopment of the
Development District No. 1 by private enterprise.
The reasons supporting this finding are that the development activities are
necessary so that development and redevelopment by private enterprise can
occur within the Development District No. 1.
3. Public Purpose. The adoption of the Tax Increment Financing Plan for Tax
Increment Financing District No. 2 therein conform in all respects to the requirements of the Act
and will help fulfill a need to develop an area of the State which is underused to help improve
the tax base and to improve the general economy of the State and thereby serves a public
purpose.
4. Certification. The Auditor of Wright County is requested to certify the original
net tax capacity of Tax Increment Financing District No. 2 as described in Tax Increment
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Financing Plan, and to certify in each year thereafter the amount by which the original net tax
capacity has increased or decreased in accordance with the Act; and the City Administrator is
authorized and directed to forthwith transmit this request to the County Auditor in such form
and content as the Auditor may specify, together with a list of all properties within Tax
Increment Financing District No. 2 for which building permits have been issued during the 18
months immediately preceding the adoption of this Resolution.
5. Filing. The City Clerk is further authorized and directed to file a copy of the Tax
Increment Financing Plan for Tax Increment Financing District No. 2 with the Commissioner of
Revenue and the Office of the State Auditor.
6. Administration. The administration of Tax Increment Finance District No. 2 is
assigned to the City Administrator who shall from time to time be granted such powers and
duties pursuant to Minnesota Statutes, Sections 469.130 and 469.131 as the City Council may
deem appropriate.
The motion for the adoption of the foregoing resolution was duly seconded by member
Darkenwald and upon vote being taken thereon, the following voted in favor thereof:
Stockamp, Heidner, Darkenwald, Warehime, Tanner
and the following voted against the same: None
Whereupon said resolution was declared duly passed and adopted.
M
STATE OF MINNESOTA
COUNTY OF WRIGHT
I, the undersigned, being the duly qualified and acting City Clerk of the City of Otsego,
Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that the same is a full, true and
complete transcript of the minutes of a meeting of the City Council of said City, duly called and
held on the date therein indicated, insofar as such minutes relate to the establishment of Tax
Increment Financing District No. 2 in the City.
WITNESS my hand this 12th day of June, 2017.
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