03-404oR������
RESOLUTION
OF SAINT PAUL, MINNESOTA
Presented
Referred To
coun�s� File # Q3 ��l�y
Green Sheet # 101349
Committee Date
1 WHEREAS, On September 24, 2002, the Port Authority of the City of Saint Paul (the "Port
2 Authority") adopted its Resolution No. 3966, creating the Energy Lane Business Centex Redevelopment Tas
3 Increment Financing Dishict (the "Dishict"), and, in connection with the creation of the Dishict, the Port
4 Authority Boazd approved the talc increment financing plan relating thereto (the "Plan"), all pursuant to and in
5 accordance with Minnesota Sratutes, Sections 469.048 through 460.068, inclusive, and Minnesota Statues,
6 Secrions 469174 through 469.179, inclusive; and
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WHEREAS, certain parcels within the Distdct require environmental remediarion before such pazcels
can be developed, and, to facilitate and finance that remediation in an effort to further develop the District, a
hazazdous substance subdistrict was established within the District in accordance with Mnanesota Stahttes,
Section 469.175, Subdivision 7; and
WAEREAS, the hazardous substance subdishict, as uutially created, included the following two
pazcels: Lot 5, Block I, Energy Paxk No. 2("Pazcel B") and Lot 1, Block 1, Energy Pazk No. 4("Parcel C");
and
WHEREAS, and the Port Authority now wishes to amend the Plan to include I.ot 4, Block 1, Energy
Pazk No. 2("Pazcel A") in the hazardous substance district as well; and
WHEI2EAS, Port Authority management has previously prepared and submitted a Response Action
Plan ("RAP") to the Minnesota Pollurion Control Agency (the "MPCA"), as required by Minnesota Statutes,
Secrion 469.174, Subdivision 17, and has received the necessary approvals from the MPCA for the RAP; and
WHEREAS, Port Authority management has prepazed a budget for the cost of xemoval and remedial
action specified in the RAP; and
W HEREAS, the Port Authority has found that: (a) development of the site, in the opinion of the Port
Authoriry, would not reasonably be expected to occur solely fluough private investrnent and tas increment
otherwise available, and therefore the hazardous substance dishict is deemed necessary, (b) other pazcels that
aze not designated hazardous substance sites are expected to be developed togethec with the designated
hazazdous substance site and (c) as modified the subdistrict is not larger than, and the period of time during
which inczements aze elected to be received is not longer than, that which is necessary in the opinion ofthe Port
Authority to provide for the additional costs due to the designated hazazdous substance site; and
WHEREAS, on the basis of such findings, the Port AuYhority management has transmitted the
necessary notices and has approved a modificarion to the Plan to add Parcel A to the hazardous substance
subdistdct at its meeting on March 25, 2003; and
WHEREAS, the Port Authority has performed all actions required by law to be performed by it prior to
the amendment of the Plan including, but not limited to, notification ofthe Ramsey County Auditor and Clerk of
the Boazd of School District No. 625; and
WHEREAS, the Port Authority kas asked that the City Council of the City of Saint Paul approve the
modification to the Plan to add Parcel A to the hazazdous substance subdishict created therein; and
WHEREAS, the City did publish a norice, a copy of which with proof of publication is on file in the
office of the City Clerk, of a public hearing on the proposal to amend the Plan, as requiued by Minnesota law;
and
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27097.1.
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WHEREAS, the City did conduct a public hearing �ursuan�to `said�tice, and all persons who
appeazed at the hearing were given an opportunity to express theu views with tespect to the proposed a�����
amendment to the Plan. �
NOW, THEREFORE, BE 1T RESOLVED by the City Council of the Ciry of Saint Paul as follows:
1. The C ity C ouncil h ereby adopts the findings of the Port Authority and agrees tUat: (a)
development of the site would not reasonably be eapected to occur solely through private investment and tas
increment otheiwise available, and therefore the l�azardous substance district is deemed necessary, (b) other
parcels that aze not designated lia�ardous substance sites aze espected to be developed together with the
designated hazaidous substance site and (c) as modifiedthe subdis5rict is not lazgei tt�an, and theperiod oftime
during which increments aze elected to be received is not longer than, that wluch is necessary to provide for the
additional costs due to the designated hazaidous substance site.
2. The City Council futther finds that: (a) the increased market value of the site that could
reasonably be expected to occur without the use of tas increment finaucing would be less than the increase in
the market value estunated to result from the proposed developmern after subffacting the present value of the
projected tax increments for the ma�tnum durarion of the dishict pertnitted by The Plan, (b) the Plan, as
amended, confoxms to the general plan for the development and redevelopment of the City of Saint Paul as a
whole and (c) the Plan, as amended, will affoxd maximum oppormuity, consistent with the sound needs of the
City of Saint Paul as a whole, for the development or redevelopmem of the project by private enterprise.
3. The modification to the Plan to add Pazcel A to establislvng ffie hazardous substance
subdistrict (the "Modified Plan"), as approved by the Port Authority, is heceby approved and adopted, and shall
be placed on file in the office of the Port Authority.
4. Port Authority management, along with the Port Authority's legal counsel, is hereby
authorized to proceed with the unplementarion of the Modified Plan and for this purpose to negoflate and
fmalize all further plans, resolutions, documents and contracts necessary for this purpose.
Adopted: April 23, 2003
z7oszl.
Yeas Nays Absent
Benanav �
Blakey ,/
Bosfrom �
coleman
Hazris
I,antry ✓
Reiter �/
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Adopted by CouncIl: Date �� �('�-,� a b �3
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Adoption Certified by CouncIl Secretary
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App�
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Requested by Department of:
p� .�t0�
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Form Approved by City Attomey
By. � - � �
�/r o� — 0 3
Mayor fox
27097.1.
O� -`�o�{
Saint Paul Port Authority
4/1/03
GREEN SHEET
N
K. Johnsonf K
ST BE ON COUNCALAGENM BY (p4Tq
April 23, 2403
TOTAL # OF SIGNATURE PAGES
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(CL1P ALL LOCA O FOR SIGNATUR�
Approval of the modi£ication of Energy Lane Business Center Redevelopment Tax
Increment Financing District and Hazardous Substance Subdistrict Financing
Plan for the District to include all of Parcel A in the H.S.S.
_ PIANNINGCOMMISSION
` CIBCAMMITfEE
CIVIL SERVICE COMMISSION
A Pdrt Authorit� Board
Has thic perwM�m erer xaketl under a wntract tarthic department9
YES NO
Ffas mis pereaNfirtn eKr heen a aty empbyee? ,
VES NO
ooesuua ae�soNfi�m aosaess a Sku na rarmelryo� bY anr curteM d"tv �wwvE'ea
VES NO
Is Viis pe�sonlfirm aterpeleE veiWoY! -
YES NO
Approval of this modification to the Tax Increment Financing Plan and
Hazardous Substance Subdistrict will assist the redevelopment and remediation
o£ the Energy Lane Business Center.
The Energy Lane Business Center will provide land and a related business
showroom to businesses to expand and/or relocate in Saint Paul. Further, job
potential w'ill be maximized with approximately 270 jobs beinq provided on
site.
IF
Private development is not likely to occur since the land is contaminated
and included as a Superfund site.
amouNr oF rwwsncnoN t 110 , 0 0 0
COS7/RE1/ENUE BUIXSETED (CIRCLE ON�
�i��;Z�
Tax Increment Financing
AC7NI7Y NIIMBER
INFORMAiION (IXPLAIN)
1900LandmarkTowers p O R T 7ei:651-224-5686
345 S4. Peter Street J � 9 fax: 651-223-5195
Saint PauV, Minnesota Q 1,1� � 7011 Free: 860-328-841�, ��{t'!�
55102-1661 a � x www.sppa.com
� °
2 �
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April 1, 2003
Ms. Martha Fuiler, Direc�or
Planning & Economic Development Department
1300 City Hall Annex
25 West Fourth Street
Saint Paul, Minnesota 55102
RE: MODIFICATION OF ENERGY LANE BUSIN�SS CEN7ER REDEVELOPMENT
TAX INCREMENT FINANCING DISTRICT TO WCLUDE ALL OF PARCEL A IN
THE �R��BSTANCE SUBDISTRICT
Dear Ms. II
We submit for your review and referral to the office of the Mayor, City Council, and City
Attorney's office, details pertaining to the modification of the Energy Lane Business Center
Redevelopment Tax Increment Financing District to include all of Parcel A in the Hazardous
Substance Subdistrict.
In addition to the staff inemorandum, we are attaching a draft copy of the proposed City
Council Resolution and a copy of the Tax increment Financing Plan that was approved by
the Port Authority's Board on March 25, 2003. City Counci4 action is requested at its
meefing on April 23, 2003.
Your expeditious handling of this matter wili be appreciated.
Sincerely,
��._
Kenneth R. Johnson
President
Attachment
cc: Mayor Kelly
27091.1.
SAINT PAUL
PORT AUTHORITY
, .�- .
TO• Board of Commissioners
(Regular Meeting of March 25, 2003)
FROM: Peter M. Klein %
Laurie J. Hansen
Kenneth R. John on
o�- � oy
DATE: March 19, 2003
SUBJECT: Amendment of the Tax Increment Financing Plan for the Energy Lane
Business Center Redevelopment Tax Increment Financing District
RESOLUTION NO. 3997
Action Requested:
Amend the Energy Lane Business Center Redevelopment Tax Increment Financing Plan (see
attached copy) to add one parcel (see attached map) to the Hazardous Substance Subdistrict
("HSS") created thereby. The only changes to the TIF Plan are on pages 9, 14 and 15.
Public Purpose:
The addition ofi the parcei to the HSS witl ailow a more appropriate accounting for tax increment
generated by the Business Center.
Business Subsidv:
Not Appiicabie
Backnround:
The Energy Lane Business Center Redevelopment Tax Increment District, and the related HSS,
were created in 2002 and will expire in 2029. When initially created, the HSS included only two of
the three tax parceis in the tax increment district. Since the buiiding to be buiit in the district will
cover all three tax parceis, it will be more difficult than contemplated to divide and account for tax
increment, if all three tax parcels are not included in the HSS. ln addition, the City has required
(as part of the building code process) that the three parcels be combined into a single tax parcel,
which cannot be done if all three parcels are not included in the HSS.
The effect of including Parcel A in the HSS will be to drive the value of that parcel to zero for
purposes of calculating subsequent tax increment. The additional tax increment coAected as a
result of this action can only be spent to pay for environmental remediation. it is anticipated that
the environmental remediation costs wiii exceed the amount of tax increment avaitabfe from the
HSS, even including Parcel A.
Workforce Impiications:
Nof Applicable
Recommendation:
We recommend approval for amending the Energy Lane Business Center Redevelopment Tax
Increment District to add Parcel A to the HSS created therein, as previously described.
2sssz�.
ds-�Dy
3/20/03
PORT AUTHORITY OF THE CITY OF SAINT PAUL
AMENDED
TAX INCREMENT FINANCING PLAN FOR THE
ENERGY LANE BIISINESS CENTER REDEVELOPMENT
TAX INCREMENT FTNANCING DISTRICT AND
AA7.ARDOUS SUBSTANCE SUBDISTRICT
I. Introduclion
A. Background
The Port Authority owns three pazcels of land consisting of approxixnately 8.9 acres
locateti at the southwest corner of the intersection of Energy Lane and Norris Circle in the
Energy Pazk area of St. Paul. The site is located in a former industrial area that has been
developed £or residences, commercial businesses, and light industry. It was previously part
of the Koppers Company Coke Plant property (Koppers Company, Inc, and subsequenfly
Beazer East, Inc), and has been placed on the United States Environmental Pollution Control
Agency's (USEPA) Superfimd Site National Priorities List (NPL) and the Nlumesota
Pollufion Control Agency's (MPCA's) Pexxnanent List of Priorities. The site has been the
subject of multiple environmental investigations and cleanup activities, and is currently part
of an ongoing groundwater monitoring program. Due to the cost of cleanup and increased
consh costs for building on the site, the land has been used for blacktop and gravei
surface parking.
In August 1979, the Port Authority Board of Commissioners created the St. Paul
Energy Park Industrial Development Bistrict. In May 1981, the Bnergy Park Tax Increment
District was created. The goal in creating the industrial development district and taa�
increment district was identified as being to create an impetus for commercial development
and to increase employment. Since the creation of the industrial development district, all of
the properiy in Energy Park, except the three parcels included in this redevelopment district
have been developed and improved to include residential, commercial and light industrial
uses. In 2001, the three parcels to be included in this redevelopment district were removed
from the Energy Park Taac Increment District.
B. Creation of Redevelopment Tax Increment District and Hazardous Substance
Subdistrict; Statutory Authority.
This tas i ncrement p lan relates t o the c reation, u nder M innesota Statutes Section
469.174, Subd. 10 of the Energy Lane Business Center Redevelopment T� Increment
District (the "District"), and the creation within the District of a Hazardous Substance
Subdistrict (the "HSS'� pursuant to Section 469.175, Subd.7.
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C. Need and Public Purpose
The North End neighborhoods of Saint Paul have seen a reduction in living wage
manufactuting jobs since the 1980's. Private sector development of the Energy Lane
Business Center has not been possible for a variety of zeasons. These reasons include soil
condition, pollurion remediation, and the site being included on the USEPA's Superfund
Site National Priorities list All of these conditions have resulted in a lack of private
investment in this azea. As a result, the property has not provided adequate employment
opportunities and has not contributed to the taY base and general economy of the City, the
schoo] dishict, the County, and the State to its full potential. The anticipated clean up of the
three parcels to be included in the District, which will be made possible by the creation and
development of the District and the HSS, will provide approximately 388,000 square feet of
land area to businesses to expand in or relocate to the City. The City's ta�c base will be
increased by the conshucrion of approxixnately 108,000 square feet of new office showroom
facilities. Job creation potential will be maz�ixnized with an estimated 270 jobs being
provided on site. These jobs will be available to Saint Paul residents. Further, customized
job training services may be available to employers locating their businesses in the Energy
Lane Business Center.
It is necessary that the Port Authority exercise its port authority powers under state
law to develop, impiement, and finance a program designed to encourage, ensure and
facilitate the redevelopment of the three parcels to be included in the Distict. Tlus
redevelopment will further accomplish the public purposes specified in this pazagraph.
II. Obiectives of the Port Authoritv for the Improvements in the District
A. Provide job opportunities for Saint Paul residents.
Given the new conshuction of approximately 108,000 square feet and using a rafio
of two and one-half job per 1,000 squaze feet, it is esfimated that the opporhxnity will exist
for a murimuxn of 270 jobs.
B. To redevelop underused, inappropriately used, or infrequently used
property.
The District is presently occnpied by blacktop and grauel surface parking. This is
an under-utilization of the area, and results in a stagnant and only mazginally productive
use of the property.
C. Develop the Energy Lane Business Center as an office showroom business
center .
The initial phase of development in the District will provide approximately 8.Q6 net
developable acres of land intended for office showroom users. There will be good access to
and from the business center on Norris Circle, Energy Lane, Energy Pazk Drive and
Lerington Parkway. The District area is currenfly zoned I-1. The Aistxict is located on two
major bus lines on Energy Park Drive and Lexington Parkway, which enhances access to
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jobs for Saint Paul residents. Construction values aze estimated at $75.00 per squaze foot
based upon recent business center build-out eacperience.
D. Expand tfie industriai tag base of the Ciry of Saint PanL
It is eacpected that the ta7cable market value of pazcels in the Dishict will increase by
appro�nately $8,000,000 once the Energy Lane Business Center is placed in service. This
value will come from private development of approxirnately 108,000 square feet of office
showroom buiidings with an average construction value of $75.00 per square foot. The
requirement is to have 34% coverage of the land by buildings. The t�able value of new
facilifies is assumed to be 90% of tl�eir construction cost. The estimated cost to remediate
the land in the District is approximately $1,SOO,OOQ which exceeds the estimated market
value of $1,160,000 foz similarly sized tracts of unpolluted land.
E. Hazardons Snbstance Remediation.
The Port Authority will undertake the remediation of the soil, as specified in a
Response Action Plan to be approved by the NIPCA. Contaminants, such as polynucleaz
azomatic hydrocarbons (PAHs), volatile organic compounds (VOCs), and diesel range
organics (DROs) will be addressed. These activities will el'uninate azeas of hazardous
substance in the designated hazardous substance sites.
III. Classification of the District
The Port Authority and the City of Saint Paul, in determining the need to create a tax
increment financing district in accordance with Section 469.174, find that the District is entifled to
be qualified as a redevelopment district pursuant to Mimiesota Statutes, Secfion 469.174, Subd. 10
because parcels consisting of 70% ofthe area ofthe Aistrict are occupied by blacktop and gravel
parking lots. There aze no buildings in the District.
In addifion, the District meets the requirements of a redevelopment district pursuant to
Miunesota Statutes, Section 469.176, Subd. 4, because at least 90% of the revenues derived from
taY increments from the Aistrict will be used to finance the cost of correcting condirions that
allowed designation of the Dishict as a redevelopment dishict under Section 469.174, Subd. 10
described above. These costs consist primarily of environmental cleanup and installation of
utiliries, roads and sidewalks for the site. The allocated administrative costs may also be included in
the qualifying costs.
The Port Authority and the City further find that it is appropriate to create an HSS within the
Dishict pursuant to Minnesota Statutes, Section 469.175, Subdivision 7 because:
a. Due to the presence of significant environmental contamination, and the
significant costs of the remediation that would have to be completed,
redevelopment of the District would not reasonably be expected to occur solely
throup� private investment or the tas increment otherwise available from the
Dishict;
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b. A portion of parcei A that is included in the District, and is expected to be
developed as part of the Energy Lane Business Center, is not included in the HSS;
and
c. The HSS is not lazger than, and the period of time which increments are elected to
be received is not longer than, fhat which is necessary to pay the addirional and
significant costs of the environmental remediation needed in the District.
IV. Descriution of the Development ProEram for the EnerQV Lane Business Center Site.
The development program consists of the development of an office showroom business
center to provide buildabie sites for up to eleven indushial users in the District. TYris will require
managing site ciearance, pollution remediation, installing infrash incurring financing related
expenses, and funding adnuiustrative functions, all as described in more detail below:
A. Remediate polluted soils.
Remediation and engineering oversight costs are estimated to total in excess of
$1,500,000. These costs aze estimates and may change. The cost will include line items for
field testing, soii remediaflon, MPCA oversight, and professional services.
B. Undertalie and install site improvements and atilities.
Site unprovements will include engineering, site grading, installation of storm and
sanitary sewers, water mains, roadway constnzction, gas and electric utili6es, street lighting
and landscaping. Total site improvement costs are anticipated to equal approximately
$200,000.
C. Contracts for professional services essen6al to the redevelopment activities.
Professional services will include land surveys and title work, reai estate, legal, civil
engineering, geotechnical engineering, appraisals, iraffic engineering and site design. The
total cost for professional services, other than bond issuance costs, is estimated at $400,000.
D. Incur costs and expenses connected with financing ac6vities.
The Port Authority shall, by the middle of the year 2003, issue taac increment bonds
in the approximate principal amount of $2,100,000 to finance approximately $1,600,000 of
total pm}ect costs including the cost of environmental remediation. Bond issuance costs
plus other financing related costs, including construction period interest, legal expenses,
printing, and undercvriter's discount, are anticipated to total appro�mately $400,000.
E. Incur costs and eapenses in connec6on with the marketing of the redeveloped
business center.
Once redeveloped, the office showroom in the business center will be marketed
for private use. Marketing costs, including advertising, promotional events and materials,
and broker commissions are expected to be $100,000.
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V. Description of Contracts Entered Into at the Time of Prenaration of the Plan
The following, as required by Section 469.175, Subd. 1(3), is a list of development activities
that aze proposed to take place within the Dishict for which conh�acts have been entered into at the
time of the prepazation of this plan, including the names of the parties to the contract, the acrivity
govemed by the contract, the cost stated in the contract, and the expected date of completion of that
activity.
A. Energy Lane Venture, LLC
The Port Authority has ageed to se118.06 acres of land to Capital City Properties,
Ina (CCP), a Minnesota 501(c)(3) entity, at the appraised market value. It is anticipated
that CCP will enter into a joint venture named Energy Lane Venture, LLC, a joint venture
between Ryan Builders, Inc. and CCP. Under this joint venture agreement, CCP will
conhibute the land to the Venture, which will then undertake remediation of the soil.
Uncontaminated land is estunated to have an appraised value of $1,050,000; however, an
appraisal will not be available on said property until September 2002. As noted above,
remediarion costs are estimated to exceed $1,500,000.
VI. Description of Other Tvpes of Development Activifies Which Can Reasonablv be
Exnected to Take Place Within the Enerav Lane Business Center Site.
It is expected that the end-users of the Energy Lane Business Center will consist of office
showroom businesses. These acfivities are anficipated to provide space that leads to the creation of
living wage jobs. This District will generate new construction value of approximately $8,100,000
based upon appmxiruately 108,000 square feet with a consiruction cost of $75.00 per square foot,
assumiug a 34% building to land coverage rafio applied to 8.06 acres. At least 270 jobs will be at
the site based upon an estimate of two and one-half jobs per 1,000 square feet of building space.
Construction of the new building is expected to commence during the fourth quarter of
calendaz year 2002 and will continue into 2003.
VII. Cost of the Proiect and Description of the Distric�
The following, as required by Section 469175, Subd. 1(5), are estimates of the (i) cost of
the project, including administration expenses; (ii) amount of bonded indebtedness to be
incurred; (iii) sources of revenue to finance ar otherwise pay public costs; (iv) the most recent
net taY capacity of taxable real property within the taac increment financing district; (v) the
estimated captured net taY capacity of the tax increment financing district at compierion; (vi) the
oziginal tax capacity and captured tas capacity of the HSS and (vii) the duration of the DistricYs
existence.
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A. Cost of the project, inclnding administrative egpenses.
The total cost of the project is estimated at �2,100,000 plus administrative charges in
an amount up to 10% of the taa� increment expenditures.
B. Amount of bonded indebtedness to be incurred.
_ The Port Authority shall be the issuer of one or more series of ta7c increment
bonds by the middie of the year 2003 in the approximate principal amount of $2,100,000.
C. Sources of revenue to f'mance or otherwise pay public costs.
The following aze the likely sources for funding the total project, including the tax
increxnents, which will be pledged ixritially to the bonded indebtedness:
i. Tax Increments
Tax increments, net of up to 10% for aduiinistrafive expenses, aze anticipated
to equal $196,000 annually. All tas increments will be first pledged to the
payment of debt service on the $2,100,000 taY increment bonds. It is fiuther
anricipated that tas increinents in excess of those needed to pay the
$2,100,000 tas increment bonds will either be used to support additional
indebtedness or to pay or reimburse the eligible costs incurred in the
redevelopment o f t he D istrict, t o the e xtent n ot p aid from t he $ 2,100,000
bond issue.
ii. Investment income
None expected. It is expected that all funds wiil be expended as received.
iii. Gan FundinQ
Presently, the proceeds of the proposed $2,100,000 bond issue are not
anticipated to be sufficient to fund the costs incurred in the redevelopment of
the District, and if three is a delay in issuing bonds or costs exceed current
estimates, the gap in funding will increase. It is anticipated that all costs will
be fully paid either from the proceeds of the proposed $2,100,000 bond
issue, from an addirional bond issue, or from direct payment or
reimbursement from taY increments. Complete funding sources will be
identified prior to full implementation of the Project.
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A. The Most Recent Net Tag Capacity of Taxable Real Property Within the Tax
Increment F�nancing District
At January 31, 2002, Ramsey County's estimated market value of the parcels to be
included in the District was $1,047,800. Since all the properiy was owned by the Port
AutYiority, it was not sub}ect to property taxes. It is anticipated that approximataly 8 acres
will be sold to a joint venture at which time the property will be placed back on the properly
taY roles. Prior to such a sale, an appraisal will be completed. The market value athibutable
to the land is assumed to remain constant. The original ta�� capacity and Ta�c Rate aze
calculated i n a ccordance w ith M innesota S tatutes, S ection 4 69.174, S ubd. 7 and S ection
469177, Subd. i.
E. The Estimated Captured l�et Tax Capacity of the T� Increment �nancing
District at Completion.
Eight acres of developable land at a 34% building to land rario and $75.00 per
square foot conshuction value aze expected to result in 108,000 square feet of new
construction with an aggregate assumed mazket value of $7,290,Q00 based upon a 90%
capitalizarion rate. With a$0 base tax capacity for buildings, and applying a 2.00% taY
capacity rate resuits in estimated captured t� capacity of approximately $146,000 at
January Z, 2004, the yeaz following expected completion of conshuction of buildings in the
industrial pazk. This captured tas capacity is calculated in accordance with Muuiesota
Statutes, Secrion 469.174, Subd. 4 and 469.177, Subd. 2.
F. The original tag capacity and captured t� capacity of the HSS.
At January 31, 2002, Ramsey County's esrimated market value of the parcels to
be included in the Dishict was $1,047,800. Since all the property was owned by the Port
Authority, it was not subj ect to property taxes. An appraisal of the property should be
completed in September 2002, and it is anticipated that the appraised value will be lower
than Ramsey County's estimated market value. At the present time, the original taaf
capacity of the HSS is $0. Expected remediation expenditures of $1,500,000 deducted
from the original tax capacity results in the maYimum captured taac capacity allowed in
the amount of $0.
G. The duration of the tax increment financing district's existence.
The request for certificarion of the District will be fiIed in 2002. The first tas
increments are anticipated to be generated for tases payable in the year 2004. The duration
of the District will run 25 years from the first receipt by the Port Authority of tax
increments, which is anticipated to be the calendar years 2004 through 2029.
VIII. Alternate Estimates of the Imnact of the Tax Increment �nancine on the Net Tag
Capacities of All Ta�in2 Jurisdictaons.
The tasing jurisdictions in which the District is located in whole or in part are as follows:
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a. Independent School Dishict #625, whose boundaries are coterniinous with those of
the City of Saint Paul.
b. The County of Ramsey, the total mazket value of wluch the City of Saint Paul
contributes approximately 45%.
c. The Housing and Redevelopment Authority of the City of Saint Paul, whose
boundaries aze cotemvnous with those of the City of Saint Paui.
d. The Port Authority of the City of Saint Paul, the requesting authoriTy, whose
boundaries aze coternunous with those of the City of Saint Pau1 and whose powers to levy
and use propezry taxes aze lunited.
e. Metropolitan authori6es, such as the Metropolitan Council, Metropolitan Airports
Commission, Metropolitan Waste Control Commission, and the Metropolitan Mosquito
Control Dishict. Of these, only the Metropolitan Council and the Metropolitan Mosquito
Control District currently levy tv:es on real estate.
The Port Authority is required by Miimesota Statutes Secrion 469.175, Subd. 1(a)(6) to make
statements relarive to the altemate estimates of the impact of the taac increment financing on the
net tax capacities of all taxing jurisdictions in which the tas increment financing district is
located in whole or in part. Far purposes of one statement, which is made in Statement A below,
the Port Authority shall assume that the estimated captured net tax capacity would be available to
the ta�:ing jurisdictions without creation of the District. For purposes of the second statement,
made in Statement B below, the Port Authority shall assume that none of the estimated captured
net tas capacity would be available to the taxing jurisdictions without creation of the District.
Statement A.
Under the assumption that the estimated captured net tax capacity would be available to the taacing
jurisdictions without creation of the Dish crearion of the District will serve to deny these ta�cing
jurisdictions the taxes from the captured net taac capacity in the amount estimated under 5ection
VII.E. above. In addition, the taa�es on the base value will also be lost due to the Hazardous
Substance Subdisriict created witrrin the District. Far the period 2002, when the property is held in
the name of the Port Authority and is exempt from ta7cation prior to being sold to private parties,
therefore there will be no tases paid from properiy in the District.
Statement B.
The Port Authority believes that none of the esrimated captured net tas capacity would be available
to the tazcing jurisdicfions without creation of the District due to the expense of getfang the land to a
state in which it would be conducive to the generation of such increased value. Assuining this to be
true, the taxing jurisdictions would continue to receive the same amount of taxes as they have
currently been receiving based on the current net tas capacity of the District as set forth in Secfion
VII.D. above. Once the tas increment district t�inates in 2029, the taxing jurisdicrions will
receive ta7ces for parcels estimated value after redevelopment at $8,350,000.
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IX. Studies and Analvsis Used to Determine Need for Tax Increment Fynancing.
The Port Authority has detennined that the proposed development or redevelopment of the
District would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value of the site that couid reasonably
be �pected to occur without the use of ta�c increment financing would be less than the increase in
the mazket value estimated to result from the proposed development after subtracting the present
value of the projected tas increments for the masimum duration of the district pemutted by the plan.
The Port Authority has studied the District and concluded that (a) due to the presence of
significant environmental contamination, and the significant costs of the remediafion that would
have to be completed, redevelopment of the District would not reasonably be expected to occur
solely through private investment or the tas increment otherwise available from the District; (b) a
portion of pazcel A that is included in tUe Districi, and is expected to be developed as part of the
Energy Lane Business Center, is not included in the HSS; and (c) the HSS is not larger than, and
the period of time which increments aze elected to be received is not longer than, that which is
necessary to pay the additional and significant costs of the environmental remediation needed in
the District.
The HSS District is amended to include Parcel A.
X. Identification of All Parcels to be Included in the District
Attached hereto in Appendix A is a list of the Property Identification Numbers for alI
properties to be included in the Distzict, a map showing the Project area, the District and the existing
properties, and a legal description identifying the boundaries of the Dishict.
XI. Hazardous 5ubstance Subdistrict
Certification of the HSS will allow ta;ces attributable to the base value of the District to be
used to reimburse or pay all or a portion of the estvnated $1,500,000 of pollution testing and
remediation costs. As was mentioned in Section VIII above, the HSS will cause taYes on the base
value of the District to be lost until such time as the pollution costs are satisfied. Total taxes payable
in 2002 were $0. A response action plan will be completed and submitted to the MPCA for
approval. The Port Authority has studied the t� increment dislrict and concluded the development
would not reasonably be expected to occur solely through private invesiment and tas increment
otherwise available from the District, and therefore the use o£ the HSS is deemed necessary.
Attached hereto in Appendix B is a list of the Properiy Identification Numbers for all
properties to be included in the ASS, a map showing the Project area, the HSS and the existing
properties, and a legal descriprion identifying the boundaries of the HSS.
23737. I.
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XII. District Administration and Annual Disclosure.
Admuush of the Dishict will be the responsibility of the Port Authority. The
resolutions of the City and the Port Authority approving and creating the District will direct the
County to forwazd all tax increment from the District to the Port Authority. Taa� inerements will be
deposited into interest bearing accounts separate and distinct from other funds of the Port Authority.
Tas increments will be used only for acrivities described in this tas increment plan.
The Port Authority will report annually to the State Auditor, county board, school board and
Depaztment of Revenue regazding activities in the District as required by Section 469.175,
subdivision 5 and subdivision 6 and will include inforxnation with regard to the District in the data
necessary to comply with subdivision 6a.
XIII. Modifications to District
In accordance with Mnmesota Statutes, Section 469.175, Subd. 4, any reduction or
enlargement of the geographic area of the Dishict; increase in amount of bonded indebtedness to be
incurt�ed, including a deternvnation to capitalize interest on debt if that detemiivation was not a part
of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized;
increase in the portion of the captured tax capacity to be retained by the Pozt Authority; increase in
total estimated tas increment expenditures; or designation of additional property to be acquired by
the Port Authority sha11 be approved only upon the nofice and after the discussion, public hearing
and findings requixed for approval of the original plan. The geographic area of a tax increment
financing disirict may be reduced, but shall not be eniazged after five yeazs following the date of
certification of the original taY capacity by the county auditor.
XIV. Administrative Expenses
In accordance with MinnesoCa Statutes, Section 469174, Subd. 14; and Miimesota Statutes,
Section 469.176, Subd. 3 administrative expenses means all expenditures of an authority other than
amounts paid for the purchase of land or amounts paid to contractors or others providing materials
and services, including azchitectural and engineering services, directly connected with the physical
development of the real properiy in the District, relocation benefits paid to or services provided for
persons residing or businesses located in the District or amounts used to pay interest on, fund a
reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative expenses
aiso include amounts paid for services provided by bond counsel, fiscal consultants, and plam�ing or
economic development consultants. Adniinistrative expenses of the District will be paid from tax
increments; provided that no tax increment shall be used to pay any adiiunistrative expenses for the
project which exceed ten percent of the total taz increment expenditures authorized by the taY
increment financing plan or the total tas increment expenditures for the proj ect, whichever is less.
Pursuant to Minnesota Statutes, Section 469.176, Subd. 4h, tax increments may be used to
pay for the county's actual adminish expenses incurred in connection with the District. The
county may require payment of those expenses by February 15 of the year following the yeaz the
expenses wereinciuted.
23737.1. 10
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XV. Necessarv Improvements in the District
No talc ancrement shall be paid to the Port Authority after three yeazs from the date of
certification o f t he o riginal n et t aY c apacity b y t he C ounty A uditor u nless w ithin the t Uree-year
period:
(1) bonds bzve been issued in aid of the Project pursuant to Secfion 469178 of the TIF
Act or any other law, except revenue bonds issued pursuant to Minnesota Statutes,
Section 469.159 to 469.165;
(2) the Port Authority has acquired properly within the Dishict; or
(3) the Port Auttiority has constructed or caused to be constructed public improvements
within the District.
The bonds must be issued, or the Port Authority must acquire properiy or consiruct or cause
public improvements to be constructed by approxixnately Decexnber, 2005.
Pursuant to Minnesota Statutes, Section 469.176, Subd. 6,
f after four years from the date of cerrifzcation of the original tax capacily of the tax
increment financing district pursuant to Minnesota Statutes, Section 469.177, no demolition,
rehabilitation or renovation of property or other site preparation, including qualified
improvement of a street adjacent to a parcel but not installation of utility service including
sewer or water systems, has been commenced on a parcel located within a tax increment
fznancing district by the authority or by the owner of the parcel in accordance with the tax
increment financingplan, no additional tax increment may be taken from that parcel and the
original tax capacity of that parcel shall be excluded fvom the original tax capacity of the
tcix incremenf financing district. If the authority or the owner of the parcel subsequently
comrrzences demolition, rehabilitation or renovation or other site preparation on that parcel
including improvement of a street adjacent to that parcel, in accordance with the tax
incrementfinancing plan, the authority shall certify to the county auditor in the annual
disclosure report that the activity has commenced. The county auditor shall cert� the tax
capacity thereof as most recently certifzed by the commissioner of revenue and add it to the
orio nal tax capacity of the tax increment fznancing district. The county auditor must
enforce the provisions of this subdivision.. For purposes of this subdivision, qual�ed
improvements are Iimited to (1) construction or opening of a new street, (2) relocation of a
street, and (3) substantial reconstruction or rebuilding of an existing street.
The Port Authority or a property owner must begin �uaking improvements to parcels within
the District by approxnnately December, 2006.
Pursuant to Minnesota Statutes, Section 469.1763, Subd. 3, revenues derived from tax
increments are considered to have been spent on an activity within the District only if one of the
following occurs:
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1. Before or within fzve years after certifzcation of the District, the revenues are
actually paid to a third party with respect to the activity;
2. Bonds, the proceeds of which must be used to fanance the activity, are issued and
sold to a third pat before or within fzve years after certification of the District, the revenues are
spent to repay the Bonds, and the proceeds of the Bonds either are, on the date of issuance,
reasonably expected to be spent before the end of the latter of (i) the five year period, or (ii) a
reasonabte temporary period within the meaning of the use of that term under Section I48(c)(1) of
the Intern¢l Revenue Code, or deposited in a reasonabiy required reserve or replacement fund;
3. Binding contracts with a third party are entered into for performance of the activity
before or within fzve years after certifacation of the District and the revenues are spent under the
contractual obligation; or
4. Costs with respect to the activity are paid before or within fzve years after
certification of the District and the revenues are spent to reimburse a parry for payment of the costs,
including interest on unreimbursed costs.
Therefore, one of the above four events must occur by approxunately December, 2407.
XVI. Use of T� Increment
Ail revenues derived from taac increment shall be used in accordance with this tax increment
financing plan, and pursuant to Mirniesota Statutes, Section 469.176, Subdivisions 4, 4e and 4j.
XVII. Notification af Prior Planned Improvements
Pursuant to Minnesota Statutes, Section 469.177, Subd. 4, the Port Authority has reviewed
the area to be included in the District and has not found properties for which building permits have
been issued during the 18 months immediately preceding approval of the Plan by the Port Authority.
XVIII. Excess Tax Increments
Pursuant to Mirniesota Statutes, Section 469.176, Subd. 2, in any yeaz in which the taY
increment e xceeds the a mount n ecessary t o p ay the c osts a uthorized b y t he t aY increment p lan,
including the amount necessary to cancel any tax levy as provided in Mimiesota Statutes, Section
475.61, Subd. 3, the Port Authority shall use the excess amount to do any of the following:
1. prepay the outstanding bonds;
2, discharge the pledge of tax increment therefor;
3. pay into an escrow account dedicated to the payment of such bonds; or
4. return the excess to the County Auditor for redistribution to the respective taa�ing
jurisdictions in proportion of their ta�c capacity rate.
XIX. Fiscal Disuarities
The Port Authority and the City have elected to compute Fiscal Disparities contzibution for
the District in accordance with Section 469.177, subdivision 3, paragraph a.
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27-29-23-42-0077
27-29-23-42-0073
27-29-23-42-0072
Appendix A
Property Identification Numbers within the Dishict
L,ot i, Block i, Energy Pazk No. 4(Pazcel C)
I,ot 5, Block 1, Energy Pazk No. 2(Parcel B}
Lot 4, Block l, Energy Pazk No. 2(Parcel A)
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Appendig B
Properry Idenrification Numbers within the HSS
27-29-23-42-0077 Lot i, Block 1, Energy Park No. 4(Parcel C)
27-29-23-42-0073 I.ot 5, Block I, Energy Park No. 2(Parcel B)
27-29-23-42-0072 Lot 4 Block 1 Enersv Park No 2(Parcel Al
23737.'I. 14
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Ramsey County Estimated Market Values:
Parcel C
Pazcel B
Pazcel A:
EMV Acres
$370,400 3.1492
331,800 2.8210
345 00 2.9380
Sq Ft
137,179
122,833
128 02
.�e�rs��r
... . .
., ... .._
r.zr.r,s..
•� _ •
Total
1,047,800 8.9082 388,041
23737.1. 1 S
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Resolution No. 3 9 9 7
RESOLiJTION OF'TE�
PORT AUTHORiTY OF TF� CITY OF SAINT PAUL
�
WHEIZEAS, On September 24, 2002, the Port Authority of the City of Saint Paul (the
"Port Authority") adopted its Resolution No. 3966, creating the Energy Lane Business Center
Redevelopment T ax Increment Financing Dishict (the "DistricP�, and, in connection with the
creation of the District, the Port Authority Board approved the taY increment financing plan
relating thereto (the "Plan"), ail pursuant to and in accordance with Minnesota Statutes, Sections
469.048 through 460.068, inclusive; and Minnesota Statues, Sections 469.174 through 469.179,
inclusive; and
WHEREAS, certain pazcels within the District require environmental remediation before
such parcels can be developed, and, to facilita2e and finance that remediation in an effort to
fiuther develop the District, a hazardous substance subdistrict was established within the District
in accordance with Minnesota Statutes, Section 469.175, Subdivision 7; and
WHEREAS, the hazazdous substance subdistrict, as inirially created, included the
following two parcels: Lot 5, Block 1, Energy Park No. 2("Parcel B") and Lot 1, Block 1,
Energy Pazk No. 4("Pazcel C"); and
WHEREAS, and the Port Authority now wishes to amend the Plan to include Lot 4,
Block 1, Energy Park No. 2("Parcel A") in the hazardous substance district as well; and
WHEREAS, Port Authority management has previously prepared and submitted a
Response Action Plan ("RAF") to the Minnesota Pollution Control Agency (the "MPCA"), as
required by Minnesota Statutes, Section 464.174', Subdivision 17, and has received the necessary
approvals from the MPCA for the RAP; and �
WHEREAS, Port Authority management has prepared a budget for the cost of removal
and remedial action specified in the RAP; and
WIIEREAS, the Port Authority has found that: (a) development of the site, in the opinion
of the Port Authority, wonld not reasonably be expected to occur solely through private
inveshnent and tax increment otherwise available, and therefore the hazardous substance district
is deemed necessary, (b) other parceis that aze not designated hazardous substance sites are
expected to be developed together with the designated hazardous substance site and (c) as
modified the subdistrict is not lazger than, and the period of tisne during which increments are
elected to be received is not longer than, that which is necessary in the opinion of the Port
Authority to provide for the addifional costs due to the designated hazardous substance site; and
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� WI�REA.S, the Port Author'sty has performed all actions required by law to he performed
by it prior to tlie amendment of the Plan including, but not limited to, notification of the Ramsey
_ County Auditor and the Clerk of the Boazd of School District No. 625; and
WHEREAS, the Port Authority has asked that the City Council of the City of Saint Paul
to publish notice of and hold a public hearing to consider the approval of the modification to the
Plan to add Parcel A to the hazardous substance subdishict created tkerein;
NOW, THEREFORE, BE IT RESOLVED by the Port Authoriry of the City of Saint Paul
as follows:
1. The Port Authority hereby finds that: (a) development of the site, in the opinion of
the Port Authority, would not reasonably be expected to occur solely through private investment
and ta�c increment otherwise availabie, and therefore the hazardous substance district is deemed
necessary, (b) other pazcels that aze not designated hazardous substance sites are expected to be
developed together with tl�e designated hazardous substance site and (c) as modified the
subdistrict is not lazger than, and the period of time during which increments are elected to be
received is not longer than, that which is necessary in the opuuon of the Port Authority to provide
for the additional costs due to the designated hazardous suhstance site.
2. The modification to the Plan to add Pazcel A to establishing the hazardous
substance subdistrict (the "Modified Plan") is hereby approved and adopted, and shall be placed
. on file in the office of the Port Authority.
3. Port Authority management, along with the Port Authority's legal counsel, is
hereby authorized to proceed with the implementation of the Modified Plan and for this purpose
to negotiate and finalize all fiuther plans, resolutions, documents and contracts necessary for this
ptupose.
Adopted: March 25, 2003
PORT AUTHORITY OF TIIE CITY
OR SAINT PALJL
�:��,r. / ��a�. 1. � �. .
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ATTEST;
�
Secr tary
i
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