Request for Action
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator / Finance Director
Flaherty
July 17, 2017
PRESENTER(s) REVIEWED BY: ITEM #:
City Administrator / Finance
Director Flaherty
City Attorney MacArthur 1
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council conduct the public hearing for consideration of tax
increment financing on the Riverview Landing senior housing project.
After the hearing has been conducted, City staff is recommending that the City Council approve the
attached resolutions.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
Yes Yes
BACKGROUND/JUSTIFICATION:
At a special meeting on May 22, 2017, the City Council concurred to move forward with the consideration
of tax increment financing on the Riverview Landing senior housing project.
The project will include the construction of 142 senior housing units comprising of independent, assisted
living and memory care. The project will be undertaken on approximately 6 acres in the Waterfront East
development area. This project meets the City’s economic development goals by increasing the number of
jobs within the City as well as increasing the tax capacity on the development site. The project will also
meet a community need of providing senior housing, with at least 20% of the units being restricted to
tenants at or below 50% of the area median income.
The tax increment district will include approximately 6 acres owned currently by 521 Land Company, with
ownership transferring to Riverview Landing, Inc. as the project develops. The current taxable market value
of the district is calculated to be $603,904. The future taxable market value projects to be $12,115,000 in
year 1, and assuming a 2% inflationary factor, the taxable market value projects to be $19,875,942 in year
26.
The tax increment district is projected to generate approximately $5,016,968 of revenue over the life of the
district. The City will enter into a development agreement including the issuance of a pay-as-you-go note.
Payments on the note will be made semi-annually, with approximately 90% of the available increment
being reimbursed to Guardian Angels Riverview Landing over the life of the district. The remaining 10% of
the available increment will be retained by the City to cover the costs of administering the TIF district.
The following TIF plan documents, agreements and resolutions have been a cooperative effort between
City staff, Nick Anhut (Ehler’s) and Mary Ippel (Briggs & Morgan).
In order to continue, the City Council will need to approve the following items:
1] Resolution 2017-57
This resolution will adopt a modification to Development District No. 1, formally establish Tax Increment
Financing District No. 3 and will formally approve the attached Tax Increment Financing Plan. The Tax
Increment Financing Plan provides a summary of the District and provides a budget for the sources and
uses of the tax increment revenue.
2] Resolution 2017-58
This resolution will authorize the execution of a development agreement by and between the City of
Otsego and Riverview Landing, Inc. This agreement outlines certain understandings of the project between
the City and the developer as they relate to the Tax Increment Financing District.
The City and developer will also enter into another separate agreement that will include, but not limited to
the following: land use approvals; conveyance of outlots to the City; construction and reimbursement of
park improvements; use of community facilities; and calculations of City fees, escrows and securities; etc.
This agreement will also be presented for approval at this meeting.
SUPPORTING DOCUMENTS ATTACHED:
Tax Increment Financing District Overview
Tax Increment Financing Plan
Resolution 2017-57: Adopting a Modification of the Development District, Establishing a Tax
Increment District & Approve Tax Increment Financing Plan
Development Agreement
Resolution 2017-58: Authorizing Execution of a Development Agreement
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to approve Resolution 2017-57 adopting a modification to Development District No. 1; establishing
Tax Increment Financing District No. 3; and approving a Tax Increment Financing Plan therefor.
Motion to approve Resolution 2017-58 authorizing the execution of a development agreement by and
between the City of Otsego and Riverview Landing, Inc.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A