The URL can be used to link to this page

Home My WebLink About3.B. Adopting Tax Increment Financing Policy-Res. No. 5965-EDA Res. No. 2003-7 EO.4 3, B I COone i J /3. B. CITY OF SHAKO PEE Memorandum TO: Mayor and City Council Economic Development Authority FROM: Paul Snook, Economic Development Coordinator SUBJECT: Adopting Tax Increment Financing Policy MEETING DATE: October 21, 2003 Introduction & Background City Council and Economic Development Authority are asked to adopt the amended Tax Increment Financing Policy. The TIP policy was part of the City's business subsidy policy when the subsidy policy was originally adopted in 1999. The new subsidy policy will not include the TIP policy, which will now be separate (a local TIP policy is not required by State law, but the City of Shakopee has adopted one). The Tax Increment Financing (TIP) policy has been separated from the Business Subsidy Policy since TIP can be used for reasons other than attracting or retaining businesses, and are not business subsidies (examples: soils correction, redevelopment; housing; etc.). There are a few non-substantive changes in the TIP policy that do not require a public hearing (paragraph structure, numbering, etc.; no changes of goals, objectives and criteria). Action Required City Council 5'CJb> Offer and pass Res. No. , Resolution Adopting a Tax Increment Financing Policy EDA Offer and pass Res. No. /.00,; 1, Resolution Adopting a Tax Increment Financing Policy tifmo 10-21-03 .doc ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF SHAKOPEE RESOLUTIONNO. ;JoO} ---1 RESOLUTION ADOPTING A TAX INCREMENT FINANCING POLICY BE IT RESOLVED By the Economic Development Authority ("EDA") of the City of Shakopee ("City") as follows: Section 1. Recitals. 1.01. The EDA has determined that it is in the best interest of the sound development and redevelopment of the City to adopt a Tax Increment Financing Policy. 1.02. The City's Business Subsidy Policy may, but does not necessarily, apply to projects applying to the City for tax increment financing. The City's Tax Increment Financing Policy and Business SUb~dY Policy are separate, distinct policies. Sectio 2. Tax fucrement Financing Policy Adopted. I 2.01. The EDA adopts the Tax Increment Financing Policy on file in City Hall, which policy supersedes any prior tax increment financing policy or criteria adopted by the EDA. Adopted by the Economic Development Authority of the City of Shakopee this 21 8t day of October, 2003. Mayor ATTEST: Executive Director City Clerk EMT-238286vI SH235-14 CITY OF SHAKOPEE RESOLUTION NO. >q~S" RESOLUTION ADOPTING A TAX INCREMENT FINANCING POLICY BE IT RESOLVED By the City Council ("Council") of the City of Shakopee ("City") as follows: Section 1. Recitals. 1.01. The Council has determined that it is in the best interest of the sound development and redevelopment ofthe City to adopt a Tax Increment Financing Policy. 1.02. The City's Business Subsidy Policy may, but does not necessarily, apply to projects applying to the City for tax increment financing. The City's Tax Increment Financing Policy and Business Subsidy Policy are separate, distinct policies. Section 2. Tax: Increment Financing Policy Adopted. 2.01. The Council adopts the Tax: Increment Financing Policy on file in City Hall, which policy supersedes any prior tax: increment financing policy or criteria adopted by the City. Adopted by the City Council of the City of Shako pee this 21st day of October, 2003. Mayor ATTEST: City Clerk EMT-238286vl SH235-14 CITY OF SHAKOPEE SHAKOPEE ECONOMIC DEVELOPMENT AUTHORITY Tax Increment Financing Policy S COM1v1UNlTY PRIDE SINCE 1857 129 Holmes Street South Shakopee, MN 55379 Phone (952) 233-3800 Fax (952) 233-3801 EMT-23655I vI SH235-I4 CITY OF SHAKOPEE SHAKO PEE ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT FINANCING POLICY I. Purpose Tax Increment Financing (TIF) districts are established by the City or Economic Development Authority (EDA) to achieve development, redevelopment, or other permissible goals through use of the increased property tax revenues, or tax increment, generated by the project. The fundamental principle that makes Tax Increment Financing viable is that it is designed to encourage development that would not otherwise occur. TIF is often used by the City and EDA as a tool to attract and retain businesses in which case the TIF provided is a business subsidy and must be granted, pursuant to the City's Business Subsidy Policy. However, the Business Subsidy Policy applies to any business subsidy granted, whether or not TIF is involved, and this TIF Policy applies to any TIF project, including those that are created for reasons other than attracting or retaining business, and are not business subsidies. The City shall consider TIF in cases that serve to accomplish the City's economic development goals, and to assist projects that would not occur "but for" the assistance provided through Tax Increment Financing. TIF will be evaluated according to whether projects meet a legitimate public purpose and further the City's development, redevelopment, housing, and related goals. II. TIF Program Goals and Objectives It is the City's intent to advance the following goals and objectives in granting TIF assistance. a.) To promote development or redevelopment that would not otherwise occur. b.) To promote development or redevelopment that will build a strong tax base. c.) To improve the community's economic vitality through the creation and expansion of employment opportunities. d.) To assure that development projects are constructed and maintained with quality consistent with the goals of the City of Shakopee. e.) To enhance the competitive position of the City of Shakopee regarding new and expanding business. EMT-236551 vI 2 SH235-14 III. TIF Program Eligibility Criteria Qualified project (applicants) must meet or exceed the following criteria to be eligible for TIF' assistance. Meeting the threshold of eligibility does not mean automatic approval for the applicant. The Shakopee Economic Development Authority and City Council shall make final approval ofTIF' assistance. Ifthe applicant is proposing a project that creates or retains business, an Application for Business Subsidies must be filled out pursuant to the Business Subsidy Policy, and will be one measure ofproject eligibility. a.) Ifthe project is a manufacturing or warehouse/distribution use, the following criteria apply; 1. The project must be located in an I-I (Light Industry), 1-2 (Heavy Industry), or BP (Business Park) zoning district. 2. The project must occupy a minimum land area of 5 acres. b.) The project must occupy a minimum land area of 5 acres. c.) If the project involves redevelopment, the applicant must provide evidence of the building and site conditions needed to evaluate whether the project qualifies for establishment of a redevelopment district or renovation and renewal district. d.) The project must be consistent with environmental regulations and not create an environmental hardship for the community. e.) The applicant must be willing to enter into a developer's agreement approved by the City. f.) The applicant should at all times retain and be assisted by qualified financial consultants and/or underwriters, and by legal counsel. g.) Construction of the project shall not commence until the City has approved a TIF' plan for the project. h.) The City reserves the right to select a third party administrator/consultant to assist in the review and project development process, the costs of which will be paid by the applicant. i.) The applicant must submit preliminary plans of the project and evidence of ability to finance the project. EMT-236551vl 3 SH235-14 j.) The applicant must provide security to the City to cover all costs paid by tax increment, unless the TIP plan is a "pay as you go" agreement. k.) The City reserves the right to deny any application for TIP financing for any reason at any stage of the proceedings prior to adoption of the final approval of a Developers Agreement. 1.) The developer will provide a minimum of 10% owner and/or developer equity in the proj ect. The City reserves the right to deny projects which substantially comply with the eligibility criteria, but which fail to have a significant positive impact on the community or to accomplish the City's economic development or redevelopment goals as determined by the Economic Development Authority and City Council. The City reserves the right to consider and approve projects which substantially comply with the eligibility criteria, as set forth in the program providing other tangential items such as building materials, building quality, etc., meet or exceed minimum standards and have, in the Council's judgment, a significant positive impact on the community and have accomplished the City's economic development or redevelopment goals. IV. Cost Eligible for Tax Increment Financing Assistance Project costs qualifying for TIP assistance, as defined under the Minnesota TIP Act, include without limitations the following: 1. Acquisition of property 2. Clearing of land 3. Relocation and demolition of existing structures 4. Site preparation 5. Soils correction 6. Removal of hazardous waste or pollution 7. Installation of utilities 8. Construction of public or private improvements 9. Administrative costs directly related to the parcels identified 10. Other similar activities EMT-236551vl 4 SH235-14