District Overview
Tax Increment Financing District Overview
City of Otsego
Tax Increment Financing District No. 3 –
Guardian Angels Riverview Landing
The following summary contains an overview of the basic elements of the Tax Increment Financing Plan
for Tax Increment Financing District No. 3 – Guardian Angels Riverview Landing. More detailed
information on each of these topics can be found in the complete Tax Increment Financing Plan.
Proposed action: Establishment of Tax Increment Financing District No. 3 – Guardian Angels
Riverview Landing (the "District") and the adoption of a Tax Increment
Financing Plan (the "TIF Plan").
Modification to the Development Program for Development District No. 1 to
include the establishment of TIF District No. 3 – Guardian Angels Riverview
Landing, which represents a continuation of the goals and objectives set forth in
the Development Program for Development District No. 1.
Type of TIF District: A housing district
Parcel Numbers: 118264000010*
*The District will ultimately be comprised of a portion of the parcel listed
above subject to a future plat. The proposed legal description for the property is
Lot 1, Block 1 Guardian Angels Riverview Landing.
Proposed
Development:
The District is being created to facilitate the development of an approximately
142-unit independent and assisted-living campus facility in the City. Please see
Appendix A of the TIF Plan for a more detailed project description.
Maximum duration: The duration of the District will be 25 years from the date of receipt of the first
increment (26 years total). The City expects the year of first tax increment
receipt to be 2020. It is estimated that the District, including any modifications
of the TIF Plan for subsequent phases or other changes, would termina te after
December 31, 2045, or when the TIF Plan is satisfied.
Estimated annual tax
increment:
Including a 2% inflationary factor, the TIF plan identifies up to $274,891 in
year 26.
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Authorized uses:
The TIF Plan contains a budget that authorizes the maximum amount that
may be expended over the life of the district:
Land/Building Acquisition ..................................................... $446,022
Site Improvements/Preparation .............................................. $700,000
Utilities ................................................................................... $500,000
Other Qualifying Improvements ......................................... $1,029,808
Administrative Costs (up to 10%) .......................................... $557,441
PROJECT COSTS TOTAL ................................................ $3,233,271
Interest ................................................................................ $2,627,589
PROJECT COSTS TOTAL ............................................. $5,860,860
See Subsection 2-10, on page 2-5 of the TIF Plan for the full budget
authorization.
Form of financing: The project is proposed to be financed by a pay-as-you-go note issued to
reimburse the developer for up-front project costs. The TIF Note will be
payable from 90% of the available tax increment created annually and is
subject to conditions within a proposed development agreement.
Administrative fee: Up to 10% of annual increment, if costs are justified.
Interfund Loan
Requirement:
If the City wants to pay for administrative expenditures to be repaid from a
tax increment fund, it is recommended that a resolution authorizing a loan
from another fund be passed PRIOR to or within 60 days of the expenditure.
The developer has agreed to pay as a project expense the administrative costs
incurred in creation of the TIF agreement. No loan is anticipated at this time.
4 Year Activity Rule
(§ 469.176 Subd. 6)
After four years from the date of certification of the District one of the
following activities must have been commenced on each parcel in a TIF
District:
Demolition
Rehabilitation
Renovation
Other site preparation (not including utility services such as sewer and
water)
If activities have not started by that time, no additional tax increment may be
generated from that parcel until commencement of a qualifying activity.
The reasons and facts supporting the findings for the adoption of the TIF Plan for the District, as required
pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City TIF resolution.
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