HomeMy WebLinkAboutResolution 18-044 Resolution 18-044
Resolution Concerning Tax Incremental District Number Seven Project Plan
Whereas, the City of Brookings adopted Resolution No. 16-14, A Resolution
Providing for the Creation of Tax Incremental District Number Seven and
Resolution No. 17-14, A Resolution Approving Tax Incremental District Number
Seven Project Plan, on February 11, 2014; and
Whereas, the Tax Incremental District Seven Project Plan included eligible
project costs of$7,355,000 which are sufficient to complete the improvements as
outlined in the Project Plan provided the project costs are re-allocated in
accordance with SDCL 11-9-14 to permit the City of Brookings to expend the
eligible project costs; and
Whereas, eligible project costs of a Tax Increment Project Plan may be
reallocated during the five years from the creation of the TIF District as described
in the Project Plan.
Now, Therefore, It Is Hereby Resolved that the sum of $7,355,000 be allocated
as Discretionary Costs in Tax Incremental District Number Seven Project Plan to
permit the City of Brookings to expend the funds to complete the Project as set
forth in the Project Plan.
Passed and approved this 12th day of June, 2018.
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Shari Thornes, City Clerk
TAX INCREMENTAL DISTRICT
NUMBER SEVEN,
CITY OF BROOKINGS
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TAX INCREMENTAL
PROJECT PLAN
TABLE OF CONTENTS
INTRODUCTION AND PURPOSE.....................................................................................................................................3
GENERAL DEFINITIONS AS USED IN TNIS PLAN.............................................................................................................3
Listing Of Kind, Number, Location And Detailed Costs Of Proposed Public Works And Improvements.......................6
Costs of Public Works or Improvements..................................................................................................................7
Expenditures exceeding Estimated Cost..................................................................................................................8
FEASIBILITYSTUDY. .......................................................................................................................................................8
BLIGHTSTUDY...............................................................................................................................................................8
DETAILED LIST OF ESTIMATED PROJECT COSTS............................................................................................................$
FISCALIMPACT STATEMENT.........................................................................................................................................8
METHOD OF FINANCING,TIMING OF COSTS AND MONETARY OBLIGATIONS.............................................................8
Maximum Amount of Note or Bonded Indebtedness...................................................................................................8
DURATION OF TAX INCREMENTAL PLAN ......................................................................................................................8
ESTIMATED IMPACT OF TAX INCREMENT FINANCING ON REVENUES OF TAXING JURISDICTIONS..............................9
CONDITIONS MAP, IMPROVEMENTS MAP,ZONING CHANGE MAP.............................................................................9
CHANGES TO THE CITY OF BROOKINGS MASTER PLAN, MAP, BUILDINGS CODES AND CITY ORDINANCES.................9
LIST OF ESTIMATED NON-PROJECT COSTS..................................................................................................................10
STATEMENTOF DISPLACEMENTAND RELOCATION PLAN..........................................................................................10
PERFORMANCE BOND,SURETY BOND OR GUARANTY............................................................................................... 10
SCHEDULE 1—"DETAIL OF PROJECT COSTS"...............................................................................................................12
SCHEDULE 2—"ESTIMATED CAPTURED TAXABLE VALUES"........................................................................................13
SCHEDULE 3—"ECONOMIC FEASIBILITY STUDY"........................................................................................................14
SCHEDULE4. BLIGHT STUDY.......................................................................................................................................17
Section1-Introduction...........................................................................................................................................17
Section2-Study Area Boundary............................................................................................................................17
Tax Increment District Seven,City of Brookings,South Dakota Page 1
Section3-Establishing Blight.................................................................................................................................17
Section 4-History of the Study Area .....................................................................................................................18
Section5-Study Area Description.........................................................................................................................18
Section 6-Conditions Within the Study Area........................................................................................................19
Section 7-Findings within the Study Area—Analysis............................................................................................20
Section8-Conclusions...........................................................................................................................................20
SCHEDULE 5-"fISCAL IMPACT STATEMENT".............................................................................................................21
FISCAL IMPACT STATEMENT-TAX INCREMENT DISTRICT NUMBER ONE...............................................................21
Introduction.......................................................................................................................................................21
Definitions .........................................................................................................................................................21
Assumptions:.....................................................................................................................................................21
FISCALIMPACT:..................................................................................................................................................22
ATTACHMENT1...........................................................................................................................................................23
ATTACHMENT2...........................................................................................................................................................24
ATTACHMENT3...........................................................................................................................................................25
Tax Increment District Seven, City of Brookings,South Dakota Page 2
INTRODUCTION AND PURPOSE
The purpose of this Pian, to be implemented by the City of Brookings, is to satisfy the requirements for a
Tax Incremental District Plan Number Seven, City of Brookings as specified in SDCL Chapter 11-9. There
are 11 mandated requirements of the Plan, each to be addressed in this Plan. The principal purpose of the
Plan is to define eligible property and to define a Tax Increment Plan for funding eligible activities of a
functionally obsolete and blighted area of the City.
This Plan was prepared for adoption by the City Council in recognition that the renewal area requires a
coordinated, cooperative strategy, with financing possibilities, to eliminate the blight and prevent the
spread of blight, and accomplish the City's development objectives for improving the continued viability of
public and private development in the City.
The driving interest in the establishment of this Plan is to offer tax increment financing as a tool to
stimulate and leverage private sector development and redevelopment, to help eliminate statutory
defined blight, and to prevent the spread of such blight.
Development and redevelopment in the area is anticipated to occur in the near future through public and
private partnerships, with the potential for Tax Increment financing to provide the impetus and means to
undertake this redevelopment at a faster pace than might occur otherwise.
The development of commercial, institutional, and residential property and to stimulate further economic
development is an essential governmental purpose.
GENERAL DEFINITIONS AS USED IN THIS PLAN
The following terms found in this Plan have the following meanings:
"Base" or "Tax Incremental Base" means the aggregate assessed value of all taxable property located
within a Tax Incremental District on the date the district is created, as determined by SDCL§ 11-9-20.
"Blighted"means property that meets any of the following criteria:
Any area, including slum area, in which the structures, buildings, or improvements, by reason of:
(1) dilapidation, age,or obsolescence;
(2) inadequate provisions for ventilation, light, air,sanitation, or open spaces;
(3) high density of population and overcrowding;
(4) the existence of conditions which endanger life or property by fire and other causes; or
(5) any combination of such factors;
are conducive to ill health,transmission of disease, infant mortality,juvenile delinquency,
or crime, and which is detrimental to the public health, safety, morals, or welfare, is a
blighted areal; or
Any area which by reason of:
1 SDCL§11-9-9
Tax Increment District Seven,City of Brookings,South Dakota Page 3
(1) the presence of a substantial number of substandard, slum, deteriorated, or deteriorating
structu res;
(2) predominance of defective or inadequate street layouts;
(3) faulty lot layout in relation to size, adequacy, accessibility, or usefulness;
(4) unsanitary or unsafe conditions;
(5) deterioration of site or other improvements;
(6) diversity of ownership,tax, or special assessment delinquency exceeding the fair value of
the land;
(7) defective or unusual conditions of title;
(8) the existence of conditions which endanger life or property by fire and other causes; or
(9) any combination of such factors;
substantially impairs or arrests the sound growth of a municipality, retards the provision
of housing accommodations, or constitutes an economic or social liability and is a menace
to the public health, safety, morals, or welfare in its present condition and use, is a
blighted area Z; or
Any area which is predominantly open and which because of obsolete platting, diversity of
ownership, deterioration of structures or of site improvements,or otherwise,substantially impairs
or arrests the sound growth of a municipality, is a blighted area.3
"City Councils"means the Brookings City Council.
"City of Brookings"means Brookings,South Dakota,a home rule form of government.
"Department of Revenue"means the South Dakota Department of Revenue.
"District"means the Tax Incremental District.
"Economic Development" means all powers expressly granted and reasonably inferred pursuant to SDCL
§9-54.
"Fiscal year"means that fiscal year of the City of Brookings.
"GenerallyApplicable Taxes"shall have the same meaning as set forth in 26 CFR§ 1.141-4(e).
"Governing body"means the Brookings City Council
"Infrastructure Improvements" means a street, road, sidewalk, parking facility, pedestrian mall, alley,
bridge, sewer, sewage treatment plant, property designed to reduce, eliminate, or prevent the spread of
identified soil or groundwater contamination, drainage system, waterway, waterline, water storage
facility, rail line, utility line or pipeline, or other similar or related structure or improvement,together with
z SDCL§11-9-10
3 SDCL§11-9-11.
Tax Increment District Seven,City of Brookings,South Dakota Page 4
necessary easements for the structure or improvement, for the benefit of or for the protection of the
health,welfare, or safety of the public generally.
"Municipality"any incorporated city in this state.
"Planning Commission"means the City Planning Commission.
"Plan"means this Project Plan.
"Project Costs" means any expenditure or monetary obligations by the City of Brookings, whether made,
estimated to be made, incurred or estimated to be incurred, which are listed as Project Costs herein will
include any costs incidental thereto but diminished by any income, special assessments, or other
revenues, other than tax increments, received, or reasonably expected to be received, by the City of
Brookings in connection with the implementation of this Plan.
"Project Plan"means properly approved Plan for the development or redevelopment of a tax incremental
district including all properly approved amendments thereto as recommended pursuant to SDCL § 11-9-
13.
"Public Works" means the acquisition by purchase or condemnation of real and personal property within
the Tax Incremental District and the sale, lease, or other disposition of such property to private
individuals, partnerships, corporations, or other entities at a price less than the cost of such acquisition
which benefit or further the health,safety,welfare and economic development of the City.
"Taxable Property"all real taxable property located in a Tax Incremental District;
"Tax Incremental District"a contiguous geographic area within a City defined and created by resolution of
the governing body and named City of Brookings Tax Incremental District Number Seven;
"Tax Increment Valuation" is the total value of the Tax Incremental District minus the tax incremental
base pursuant to § 11-9-19.
"Tax Increment Law"means South Dakota Codified Laws Chapter 11-9.
Tax Increment District Seven,City of Brookings,South Dakota Page 5
PROPERTY WITHIN THE TAX INCREMENT ZONE
The real property to be located within the Tax Increment District is legally described as follows:
DesCription: E % in Section 2-T109N-R50W and abutting rights-of-way of Main Avenue South, 2p`n
Street South,and 32"d Street South.
NW%4 including all road rights-of-way, but excluding that portion still lying within Medary
Township outside Brookings City Limits in Section 2-T109N-R50W.
N%z of the NE%including all road rights-of-way, but excluding the platted areas thereof, in
Section 3-T109N-R50W.
LISTING OF KIND, NUMBER, LOCATION AND DETAILED COSTS OF PROPOSED
PUBLIC WORKS AND IMPROVEMENTS4.
In order to implement the provisions of SDCL Chapter 11-9, the following are Project Costs and
expenditures made or estimated to be made and the monetary obligations incurred or estimated to be
incurred by the City. The Project Costs includes capital costs,financing costs, real property assembly costs,
professional fee costs, imputed administration costs, relocation costs, organizational costs and
discretionary costs, plus any costs incidental thereto, diminished by any income, special assessments, or
other revenues, other than tax increments, received, or reasonably expected to be received, by the City.
The City is working to develop an economic and competitive base to benefit the City and the State as a
whole. All the Project Costs, land acquisition and professional fees, are found to be necessary and
convenient to the creation of the Tax Incremental District and the implementation of the Tax Increment
District. The City shall enter into all contracts in accordance with South Dakota law.
A combination of private investment, public investment and tax increment recapture will assist progress
toward the following additional objectives:
• To address and remedy conditions in the area that impair or arrest the sound growth of the City;
• To implement the Comprehensive Plan and its related element;
• To redevelop and rehabilitate the area in a manner which is compatible with and complementary
to unique circumstances in the area;
• To effectively utilize undeveloped and underdeveloped land;
• To improve pedestrian, bicycle,vehicular, and transit-related circulation and safety;
• To ultimately contribute to increased revenues for all taxing entities;
°SDCL§11-9-13(1).
Tax Increment District Seven,City of Brookings,South Dakota Page 6
• To encourage the voluntary rehabilitation of buildings, improvements, and conditions;
• To watch for market and/or project opportunities to eliminate blight, and when such
opportunities exist,to take action within the financial, legal and political limits of the Authority to
acquire land, demolish and remove structures, provide relocation benefits, and pursue
redevelopment, improvement and rehabilitation projects; and
• To improve areas that are likely to enhance significantly the value of substantialiy all property in
the district.
COSTS OF PUBLIC WORKS OR IMPROVEMENTS
In accordance with SDCL 11-9-13(1) & (3)the following is the kind, number, location and dollar amount of
estimated Project Costs, costs of public works and improvements.
. . . . .- . . .
Capital Costs 11 In District $6,550,000* 11-9-14(1)
Financing Costs 11-9-14(2)
Real Property Assembly 11-9-14(3)
ProfessionalFees $600,000 11-9-14(4)
Administrative Costs 11-9-14(5)
Relocation Costs 1-9-14(6)
Organizational Costs $5,000 11-9-14(7)
Discretionary Costs $200,000 11-9-14(8)
Eligible Project Costs $7,355,000*
*Eligible Projed costs may be reallocated during the five years from creation of the TIF.
The above total represents eligible Project Costs.
SDistrict shall mean the Tax Increment District.
6SDCL§11-9-14(1) Capital costs, including the actual costs of the construction of public works or improvements, buildings, structures,and
permanent fixtures;the demolition,alteration,remodeling,repair,or reconstruction of existing buildings,structures,and permanent fixtures;the
acquisition of equipment;the clearing and grading of land;and the amount of interest payable on tax incremental bonds or notes issued pursuant
to this chapter until such time as positive tax increments to be received from the district,as estimated by the Project Plan,are sufficient to pay the
principal of and interest on the tax incremental bonds or notes when due;
(2) Financing costs,including all interest paid to holders of evidences of indebtedness issued to pay for Project Costs,any premium paid over the
principal amount thereof because of the redemption of such obligations prior to maturity and a reserve for the payment of principal of and
interest on such obligations in an amount determined by the governing body to be reasonably required for the marketability of such obligations;
(3) Real property assembly costs, including the actual cost of the acquisition by a municipality of real or personal property within a tax
incremental district less any proceeds to be received by the municipality from the sale,lease,or other disposition of such property pursuant to a
Project Plan;
(4) Professional service costs, including those costs incurred for architectural, planning, engineering, and legal advice and services;
(5) Imputed administrative costs, including reasonable charges for the time spent by municipal employees in connection with the
implementation of a Project Plan;
(6) Relocation costs;
(7) Organizational costs,including the costs of conducting environmental impact and other studies and the costs of informing the public of the
creation of tax incremental districts and the implementation of project plans;and
(8) Payments made,at the discretion of the governing body,which are found to be necessary or convenient to the creation of tax incremental
districts or the implementation of project plans.
Tax Increment District Seven,City of Brookings,South Dakota Page 7
EXPENDITURES EXCEEDING ESTIMATED COST
Any expenditures which in sum would exceed the total amount stated in Eligible Project Costs will require
an amendment of this plan. All amendments are undertaken pursuant to SDCL §11-9-23. When the
expenditures are increased above the total Eligible Project Costs, the Department of Revenue will be
required to reset the base, in accordance with SDCL§11-9-23.
FEASIBILITY STUDY.�
An economic feasibility study is attached as Schedule 3.
BLIGHT STUDY
Not less than 25% of the area within the proposed district is blighted and in need of redevelopment as
indicated in the Blight Study attached as Schedule 4.
DETAILED LIST OF ESTIMATED PROJECT COSTS8
Attached as Schedule 1 is a detailed list of estimated Project Costs. No expenditure for Project Costs is
provided for more than five years after the district.
FISCAL IMPACT STATEMENT9
Attached as Schedule 5 is the Fiscal Impact Statement on other taxing districts found within the Tax
Increment District, both until and after the bonds are repaid.
METHOD OF FINANCING, TIMING OF COSTS AND MONETARY
OBLIGATIONS10
Project Costs shall be paid by the City. There shall be multiple advances by the City. The City will
reimburse for employee time and expense from the tax increment fund.
MAXIMUM AMOUNT OF NOTE OR BONDED INDEBTEDNESS
The City intends to issue no bonded indebtedness payable from the tax increment fund. The City will
provide for the improvements through general funds and pay itself back through tax increment revenue.
DURATION OF TAX INCREMENTAL PLAN
The duration of the Plan will extend to the number of years it will take for the retirement of bonded
indebtedness except that the Plan duration shall not exceed 20 years from the date of creation of the
District.
'SDCL§11-9-13(2)
8 SDCL§11-9-13(3)
9 SDCL§11-9-13(4).
'o SDCL§11-9-13(5)
Tax Increment District Seven,City of Brookings,South Dakota Page 8
ESTIMATED IMPACT OF TAX INCREMENT FINANCING ON REVENUES OF
TAXING JURISDICTIONS
The site will generate taxes to the local jurisdictions at or above the assessed of the Base. All taxing
districts shall receive that base which was established in 2013. The tax increment will be available to the
taxing jurisdictions at or before 20 years after the creation of the District. Schedule 3 details the tax
capture implications to each of the local taxing jurisdictions. After the repayment of the bonds, taxing
entities will receive their proportionate share of tax dollars for the base value and the tax incremental
values.
CONDITIONS MAP11, IMPROVEMENTS MAP12, ZONING CHANGE MAP13
The conditions map is attached as Attachment 1. The Improvements map is attached as Attachment 2.
The Zoning Change Map is attached as Attachment 3.
CHANGES TO THE CITY OF BROOKINGS MASTER PLAN, MAP, BUILDINGS
CODES AND CITY ORDINANCES14
The City has made changes in the master plan, map, building codes and City ordinances as indicated on
Attachment 3.
11 SDCL§11-9-16(1)
lz SDCL§11-9-16(2)
13 SDCL§1i-9-16(3)
14 SDCL§11-9-16(4)
Tax Increment District Seven,City of Brookings,South Dakota Page 9
LIST OF ESTIMATED NON-PROJECT COSTS1s
The following is a list of the projected non-Project Costs.
Commercial and residential buildings and facilities in an amount not determinable at this time.
STATEMENT OF DISPLACEMENTAND RELOCATION PLAN16
No residents or families will be displaced by the Project. There are no families or persons residing on the
premises. Therefore, no relocation Plan is needed.
PERFORMANCE BOND, SURETY BOND OR GUARANTY.
As security for its fulfillment of the agreement with the governing body, a purchaser or lessee of
redevelopment property shall furnish a performance bond, with such surety and in such form and amount
as the governing body may approve or make such other guaranty as the governing body may deem
necessary in the public interest.
ls SDCL§11-9-16(5)
16 SDCL§11-9-16(16)
Tax Increment District Seven,City of Brookings,South Dakota Page 10
LIST OF SCHEDULES
SCHEDULE 1 Detail of Project Costs
SCHEDULE 2 Estimated Captured Taxable Values
SCHEDULE 3 Economic Feasibility Schedule
SCHEDULE 4 Blight Study
SCHEDULE 5 Fiscal Impact Statement
ATTACH M E NTS
Attachment 1. Map and Legal Description and existing uses and conditions
Attachment 2. Map of Real property Improvement and uses
Attachment 3. Map of proposed changes in zoning ordinances
Tax Increment District Seven,City of Brookings,South Dakota Page il
SCHEDULE 1 - "DETAIL OF PROJECT COSTS"
The project contains 5,600 linear feet of sanitary sewer, 3,100 linear feet of sanitary sewer force main, lift
station, 5,800 linear feet of water, 1,600 linear feet of storm sewer, a half mile of street reconstruction on
Main Avenue South, one-third mile of street construction on 26th Street South with a gravel base course on
the remaining one-quarter of a mile, one mile of street reconstruction on 20th Street South, traffic signals
and the necessary infrastructure to accommodate drainage associated with the project as well as playground
equipment to complete the park development.
This project provides for complete infrastructure for a 300 acre area of commercial, residential,and
institutional development in the southwest portion of the community and adjacent Main Avenue South, 26`n
Street South,and 20th Street South right-of-way in Brookings.
Tax Increment District Seven, City of Brookings,South Dakota Page 12
SCHEDULE 2 - "ESTIMATED CAPTURED TAXABLE VALUES"
BASE-ESTIMATED TAXES THAT WILL GO TO TAXING DISTRICTS DURING TIF
INCREMENT-ESTIMATED TAXES THAT WILL GO TO TAX INCREMENT FUND DURING TIF
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BRING YOUR DREAMS. So � TH DAKOTA
Projected Revenue for Tax Increment District #7
Base Value $4,714,500 Non Ag.Zone Payable in 2016 Equalized 92.50%
City School County EDWD
Construction Valuation Revenue Accumulated Positive Total Mill
Year Year Year Valuation Increment Mill Mill Mill Mill Rate Total Increment
Rate Rate Rate Rate
2014 2015 2016 $ 940,000.00 2.563 15.253 4.68 0.028 22.524 $ 19,584.62
2015 2016 2017 $ 2,320,000.00 2.563 15.253 4.68 0.028 22.524 $ 48,336.50
2016 2017 2018 $ 3,715,000.00 2.563 15.253 4.68 0.028 22.524 $ 77,400.91
2017 2018 2019 $ 4,905,000.00 2.563 15.253 4.68 0.028 22.524 $ 102,194.20
2018 2019 2020 $ 6,835,000.00 2.563 15.253 4.68 0.028 22.524 $ 142,405.17
2019 2020 2021 $ 8,575,000.00 2.563 15.253 4.68 0.028 22.524 $ 178,657.55
2020 2021 2022 $ 11,115,000.00 2.563 15.253 4.68 0.028 22.524 $ 231,577.69
2021 2022 2023 $ 13,280,000.00 2.563 15.253 4.68 0.028 22.524 $ 276,684.82
2022 2023 2024 $ 16,095,000.00 2.563 15.253 4.68 0.028 22.524 $ 335,334.50
2023 2024 2025 $ 18,975,000.00 2.563 15.253 4.68 0.028 22.524 $ 395,338.43
2024 2025 2026 $ 21,710,000.00 2.563 15.253 4.68 0.028 22.524 $ 452,321.34
2025 2026 2027 $ 24,255,000.00 2.563 15.253 4.68 0.028 22.524 $ 505,345.65
2026 2027 2028 $ 27,175,000.00 2.563 15.253 4.68 0.028 22.524 $ 566,182.97
2027 2028 2029 $ 29,820,000.00 2.563 15.253 4.68 0.028 22.524 $ 621,290.75
2028 2029 2030 $ 32,385,000.00 2.563 15.253 4.68 0.028 22.524 $ 674,731.76
2029 2030 2031 $ 34,400,000.00 2.563 15.253 4.68 0.028 22.524 $ 716,713.68
2030 2031 2032 $ 36,245,000.00 2.563 15.253 4.68 0.028 22.524 $ 755,153.70
2031 2032 2033 $ 38,275,000.00 2.563 15.253 4.68 0.028 22.524 $ 797,448.14
$6,896,70239
Note: These numbers are for projection purposes only and do not reflect what the actual number(s)may be. These
numbers are based on the following assumptions.
Assumptions:
1. Positive valuation increment was calculated on structures only.
2. Calculations based upon projected build-out schedule of residential and commercial structures.
3. Any positive increment will go towards the TIF debt.
Tax Increment District Seven,City of Brookings,South Dakota Page 13
SCHEDULE 3 — "ECONOMIC FEASIBILITY STUDY"
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The City of Brookings is installing necessary infrastructure for a 300 acre area of commercial,
residential, and institutional development in the southwest portion of the community and adjacent Main
Avenue South, 26th Street South, and 20`h Street South right-of-ways in Brookings. With the expansion of
industrial and manufacturing within the community, a key component is the availability of affordable
housing to continue economic development opportunities in attracting a quality workforce. The
commercial development within the district is proposing to include office related businesses which further
expands upon diversifying the economic base while providing employment opportunities closer to
residential areas. An essential component of the City's participation is City funding for certain Project
Costs ("Project Costs") needed to support the Project (or any other comprehensive redevelopment of the
site), all of which is currently estimated to cost in excess of$7,355,000.
The City is paying the project costs pursuant to (SDCL 11-9-30) and intends to be reimbursed
through positive tax increment pursuant to SDCL (11-9-32). If the Tax Increment District#7 dissolves prior
to full reimbursement,the City will not be reimbursed for the remaining outstanding balance.
In tax increment financing, the current real property tax assessed value of all properties in a
designated project area ("tax increment financing district") is established as the "base value." As
development in the tax increment financing district increases the assessed values of the redeveloped
Tax Increment District Seven,City of Brookings,South Dakota Page 14
properties, a portion of the additional tax revenue generated by the increase in assessed value over the
base value is set aside and committed by the City for debt service on tax increment bonds,the proceeds of
which would be used for the construction of the Project Costs.
Use of a Tax increment fund is permitted only in connection with a "Project Plan" duly adopted by
the City.The process is set forth in the Tax Increment District Law, and is generally as follows:
• Any person may request the City Council to designate a tax increment financing district.
The request may be through a formal application process, or a presentation to the City
Council. Upon receiving any request, the City Council determines preliminary feasibility of
the project. This preliminary feasibility determination includes fiscal, legal and political
considerations.
• If it is determined feasible, the City Council directs staff or the Planning Commission to
initiate the process. The Planning Commission then sets a proposed hearing date and
starts the notice procedure.
• Notice of the intent to create a Tax Increment District is published and sent to all taxing
districts not less than 10 days prior to the hearing.
• The Planning Commission holds a hearing and allows members of the general public to
comment upon the proposed creation of a Tax Increment District. At the end of the
hearing, the Planning Commission may recommend the creation of the Tax Increment
District to the City Council. The Planning Commission may also recommend a tax
increment Project Plan and forward to the City Council for their determination.
• The City Council places the recommendation on the agenda and at the public meeting may
pass a resolution to create the Tax Increment District in accordance with the Tax
Increment District Law. The resolution is published and becomes effective on the 21s2 day
after publication, unless it is referred to a vote of the electors. This resolution may also
approve the project plan.
• After the resolution becomes effective, the Department of Revenue of the State of South
Dakota is sent a letter requesting to determine the base.
• After the Project Plan is approved, the City Council at any time may authorize the issuance
of tax increment bonds "for the purpose of carrying out or administering a Project Plan".
The resolution would irrevocably pledge its tax increment revenues to the debt service on
the City's tax increment bonds. (See Tax Increment District Law Section 11-9-37).
• The City has five years to spend tax increment revenues or bond proceeds on or for
Project Costs.
Tax Increment District Seven,City of Brookings,South Dakota Page 15
Estimated Tax Increment Fund Balance is as follows:
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ro o in s
BRING YOUR DREAMS. So � TH DAKOTA
Projected Revenue for Tax Increment District #7
Base Value $4,714,500 Non Ag.Zone Payable in 2016 Equalized 92.50%
City School County EDWD
Construction Valuation Revenue Accumulated Positive Totai Mill
Year Year Year Valuation Increment Mill MiII Mill Mill Rate Total Increment
Rate Rate Rate Rate
2014 2015 2016 $ 940,000.00 2.563 15.253 4.68 0.028 22.524 $ 19,584.62
2015 2016 2017 $ 2,320,000.00 2.563 15.253 4.68 0.028 22.524 $ 48,336.50
2016 2017 2018 $ 3,715,000.00 2.563 15.253 4.68 0.028 22.524 $ 77,400.91
2017 2018 2019 $ 4,905,000.00 2.563 15.253 4.68 0.028 22.524 $ 102,194.20
2018 2019 2020 $ 6,835,000.00 2.563 15.253 4.68 0.028 22.524 $ 142,405.17
2019 2020 2021 $ 8,575,000.00 2.563 15.253 4.68 0.028 22.524 $ 178,657.55
2020 2021 2022 $ 11,115,000.00 2.563 15.253 4.68 0.028 22.524 $ 231,577.69
2021 2022 2023 $ 13,280,000.00 2.563 15.253 4.68 0.028 22.524 $ 276,684.82
2022 2023 2024 $ 16,095,000.00 2.563 15.253 4.68 0.028 22.524 $ 335,334.50
2023 2024 2025 $ 18,975,000.00 2.563 15.253 4.68 0.028 22.524 $ 395,338.43
2024 2025 2026 $ 21,710,000.00 2.563 15.253 4.68 0.028 22.524 $ 452,321.34
2025 2026 2027 $ 24,255,000.00 2.563 15.253 4.68 0.028 22.524 $ 505,345.65
2026 2027 2028 $ 27,175,000.00 2.563 15.253 4.68 0.028 22.524 $ 566,182.97
2027 2028 2029 $ 29,820,000.00 2.563 15.253 4.68 0.028 22.524 $ 621,290.75
2028 2029 2030 $ 32,385,000.00 2.563 15.253 4.68 0.028 22.524 $ 674,731.76
2029 2030 2031 $ 34,400,000.00 2.563 15.253 4.68 0.028 22.524 $ 716,713.68
2030 2031 2032 $ 36,245,000.00 2.563 15.253 4.68 0.028 22.524 $ 755,153.70
2031 2032 2033 $ 38,275,000.00 2.563 15.253 4.68 0.028 22.524 $ 797,448.14
$6,896,702.39
Note: These numbers are for projection purposes only and do not reflect what the actual number(s)may be. These
numbers are based on the following assumptions.
Assumptions:
1. Positive valuation increment was calculated on structures only.
2. Calculations based upon projected build-out schedule of residential and commercial structures.
3. Any positive increment will go towards the TIF debt.
Since the City is reimbursing itself through collected tax increment, the plan is feasible. The City will
collect only such tax increments as are collected in the tax increment fund. The above sheet is only an
estimate and will be subject to actual collections. This document represents the feasibility study required
under Tax Increment District Law Section 11-9-13 (Subsections 2, 4 and 5). The study concludes that the
proposed redevelopment project in the project area is feasible.
Tax Increment District Seven,City of Brookings,South Dakota Page 16
SCHEDULE 4. BLIGHT STUDY
SECTION 1- INTRODUCTION
The City has initiated the creation of a tax increment district located in the southwestern part of the city.
In order to determine whether a tax increment district may be created, it has been recommended that city
staff together with outside consultants conduct a study of the area to determine if conditions exist that
meet the definitions of blight described in Title 11-9 and allow consideration of a Tax Increment District
to alleviate those conditions. If the City finds, by Resolution, that "blighted" conditions exist in not less
than 25%of the area, it may after notification of affected taxing districts and after a public hearing, create
a Tax Increment district.
The Purpose of the study is to determine if impediments to development and other issues of blight exist,
pursuant to state law, sufficient enough to warrant the creation of a district in the southwestern portion
of the City.
In addition to studying the subject area for the defined blighted conditions, staff has evaluated the area
for the existence of assets or opportunities for private investment, as creation and reinvestment of TIF
funds in a District depends primarily on new private investment generating new property taxes. Finally,
staff reviewed the Study Area for localized physical and institutional impediments to investment in the
study area.
SECTION 2 - STUDY AREA BOUNDARY
The Study of Blight is broadly described as:
Description: E% in Section 2-T109N-R50W and abutting rights-of-way of Main Avenue South, 20`h Street South, and
32�d Street South.
NW % including all road rights-of-way, but excluding that portion still lying within Medary Township
outside Brookings City Limits in Section 2-T109N-R50W.
N %z of the NE %including all road rights-of-way, but excluding the platted areas thereof, in Section 3-
T109N-R50W of 5`h P.M., City of Brookings, Brookings County,State of South Dakota.
SECTION 3 - ESTABLISHING BLIGHT
South Dakota law describes a blighted area as one that contains a set of conditions which constitute
blight. There are three statutory areas of blight:
SDCL§ 11-9-9 Any area, including slum area, in which the structures, buildings, or improvements,
by reason of:
(1) Dilapidation, age,or obsolescence;
(2) Inadequate provisions for ventilation, light, air,sanitation, or open spaces;
(3) High density of population and overcrowding;
Tax Increment District Seven,City of Brookings,South Dakota Page 17
(4) The existence of conditions which endanger life or property by fire and other causes;
or
(5) Any combination of such factors;are conducive to ill health,transmission of disease,
infant mortality,juvenile delinquency, or crime, and which is detrimental to the public
health,safety, morals, or welfare, is a blighted area.
SDCL§ 11-9-10. Developed areas impairing growth defined as biighted. Any area which by
reason of:
(1) The presence of a substantial number of substandard,slum, deteriorated, or
deteriorating structures;
(2) Predominance of defective or inadequate street layouts;
(3) Faulty lot layout in relation to size, adequacy, accessibility,or usefulness;
(4) Insanitary or unsafe conditions;
(5) Deterioration of site or other improvements;
(6) Diversity of ownership,tax,or special assessment delinquency exceeding the fair
value of the land;
(7) Defective or unusual conditions of title;
(8) The existence of conditions which endanger life or property by fire and other causes;
or
(9) Any combination of such factors; substantially impairs or arrests the sound growth of
a municipality, retards the provision of housing accommodations, or constitutes an
economic or social liability and is a menace to the public health,safety, morals,or
welfare in its present condition and use, is a blighted area.
SDCL§ 11-9-11. Any area which is predominantly open and which because of obsolete platting,
diversity of ownership, deterioration of structures or of site improvements, or otherwise,
substantially impairs or arrests the sound growth of a municipality, is a blighted area.
Under South Dakota law the finding of blight may be made based upon a single factor found in SDCL§ il-
9-9, 11-9-10 or 11-9-11.
SECTION 4 - HISTORY OF THE STUDY AREA
The study area is comprised of agricultural, commercial, and residential area. A majority of the area is
non developable without direct infrastructure improvements by the City of Brookings. The City has
initiated a development plan whereby it intends to expand into the geographical area and provide
infrastructure improvements where private developers will not.
SECTION 5 - STUDY AREA DESCRIPTION
An open area with inadequate street layouts, lack of sanitary sewer and water facilities, no storm
drainage, or fire control improvements,which, due to geographical limitations,substantially arrests the
sound growth of a municipality, constitutes an economic or social liability and is a menace to welfare of
the City in its present condition and use.
Tax Increment District Seven,City of Brookings,South Dakota Page 18
Area contains substantial diversity of ownership which substantially impairs and arrests the sound growth
of a municipality.
SECTION E - CONDITIONS WITHIN THE STUDY AREA
Infrastructure
Public Utilities
Sewer- Analysis of the City of Brookings Sanitary Sewer Maps reveals that the Study Area has limited
wastewater coverage.
Storm water — Analysis of the City of Brookings Sanitary Sewer Maps reveals that the Study Area has
limited storm sewer coverage.
Potable Water — Analysis of the City of Brookings Water Maps reveals that the Study Area has limited
water coverage.
Street & Sidewalk Condition—Analysis of the City of Brookings Street Maps reveals that the Study Area is
in need of additional street and sidewalk infrastructure.
Transportation
According to the Engineering department, the District is in need of street extension and alignment to
maintain better control and flow of traffic.
Public Safety
Fire—The City of Brookings Fire Department supplied information pertaining to life safety aspects within
the study area. More than twenty-five percent of the District does not meet fire safety standards.
Demographic Character of the Study Area
There exists population in less than 25%of the study area.
Tax Generation from the Area
More than twenty-five percent of the District does not generate taxes sufficient to supply the required
infrastructure improvements.
Land Use and Plannin�
Comprehensive Plan_ The Comprehensive plan suggests that public and private improvements are
needed within the District.
Zoning — One parcel, Christie Heights, will require a zoning change from Agriculture to a Residential
District prior to developrnent.
Tax Increment District Seven,City of Brookings,South Dakota Page 19
SECTION 7 - FINDINGS WITHIN THE STUDY AREA—ANALYSIS
In accordance with State Law, the foliowing addresses specific characteristics of blight found within the
Study Area with corresponding portions of 11-9-10 and 11-9-11:
Defective or inadepuate street lavout. - For the most part, the streets in the Study Area are not adequate,
as the current streets are two lane rural standard streets that are not designed to handle the traffic
volumes anticipated with the development of a new elementary school, residential homes, and
commercial facilities as well as not providing access and connectivity. The study area would benefit
greatly from an improved street and connectivity with existing streets.
Faulty lot layout in relation to size, adepuacy, accessibility, or usefulness.
Lots and blocks in the Study Area need to be laid out in not less than 25%of the area.
Unsanitarv or unsafe conditions.
Some conditions within localized portions of the Study Area listed above achieve unsafe status due to life-
safety issues.
The existence of conditions that endanper life or property by fire or other causes.
Some conditions within localized portions of the Study Area listed above achieve unsafe status due to life-
safety issues.
SECTION 8 - CONCLUSIONS
Based on the findings of this study, it is determined that the Study Area contains conditions defined as
"blight".
Tax Increment District Seven,City of Brookings,South Dakota Page 20
SCHEDULE 5 - "FISCAL IMPACT STATEMENT"
FISCAL IMPACT STATEMENT-TAX INCREMENT DISTRICT NUMBER SEVEN
INTRODUCTION
The fiscal impact statement is intended to provide a succinct analysis of the estimated impact of the Tax
Increment District to the public pursuant to SDCL§ 11-9-13(4). It is not intended to rival the level of detail
required by a detailed financial analysis. A fiscal impact statement shows the impact of the Tax Increment
District, both until and after the City is repaid, upon all entities levying taxes upon property in the district.
DEFINITIONS
"Assumptions" means factors or definitions used in the fiscal analysis. Assumptions may include facts
and figures identified by the District and educated guesses that are sometimes necessary when not all
of the information is available. Assumptions are often used to extrapolate an estimate. Assumptions
may include an estimate of tax levies of each taxing entity, the school aid formula contribution, the
value of the real property, etc.
"ease Revenues"means the taxes collected on the base value.
"Fiscal Impact" means the increase or decrease in revenues and generally refers to an impact to
revenues caused by the district.
"Revenue"means ad valorem taxes.
"Tax/ncrement District"means City of Brookings,Tax Increment District Number Seven.
"Taxing Districts" means all political subdivisions of the state which have ad valorem taxing power
over property within the boundaries of the Tax Increment District.
"Tax Increment Revenues"means all revenues above the Base Revenues.
ASSUMPTIONS:
1. The property will have improvements which at completion will be valued for taxable purposes at
$38,275,000.
2. The average tax levy of all taxing districts will be$22.52 per thousand dollars of taxable valuation.
3. Tax increment will start to be collected in 2016 and end in 2033.
4. Interest: None:
5. The discretionary formula: 20%, 40%, 60%, 80% applies to residential lots if platted in groups of
five or more and remain undeveloped.
Tax Increment District Seven,City of Brookings,South Dakota Page 21
FISCAL IMPACT:
The total fiscal impact upon the taxing entities during the term of the Tax Increment District is as follows:
Taxing District will receive taxes on the base value of property within district, but will not receive any new
increment generated until the expiration of the Tax Increment District.
BRING YOUR DREAMS. rOO ln S
S O U T H D A K O T A
Projected Revenue for Tax Increment District #7
Base Value $4,714,500 Non Ag.Zone Payable in 2016 Equalized 92.50%
City School County EDWD
Construction Valuation Revenue Accumulated Positive Total Mill
Year Year Year Valuation Increment Mill Mill Mill Mill Rate Total Increment
Rate Rate Rate Rate
2014 2015 2016 $ 940,000.00 2.563 15.253 4.68 0.028 22.524 $ 19,584.62
2015 2016 2017 $ 2,320,000.00 2.563 15.253 4.68 0.028 22.524 $ 48,336.50
2016 2017 2018 $ 3,715,000.00 2.563 15.253 4.68 0.028 22.524 $ 77,400.91
2017 2018 2019 $ 4,905,000.00 2.563 15.253 4.68 0.028 22.524 $ 102,194.20
2018 2019 2020 $ 6,835,000.00 2.563 15.253 4.68 0.028 22.524 $ 142,405.17
2019 2020 2021 $ 8,575,000.00 2.563 15.253 4.68 0.028 22.524 $ 178,657.55
2020 2021 2022 $ 11,115,000.00 2.563 15.253 4.68 0.028 22.524 $ 231,577.69
2021 2022 2023 $ 13,280,000.00 2.563 15.253 4.68 0.028 22.524 $ 276,684.82
2022 2023 2024 $ 16,095,000.00 2.563 15.253 4.68 0.028 22.524 $ 335,334.50
2023 2024 2025 $ 18,975,000.00 2.563 15.253 4.68 0.028 22.524 $ 395,338.43
2024 2025 2026 $ 21,710,000.00 2.563 15153 4.68 0.028 22.524 $ 452,32134
2025 2026 2027 $ 24,255,000.00 2.563 15.253 4.68 0.028 22.524 $ 505,345.65
2026 2027 2028 $ 27,175,000.00 2.563 15.253 4.68 0.028 22.524 $ 566,182.97
2027 2028 2029 $ 29,820,000.00 2.563 15.253 4.68 0.028 22.524 $ 621,290.75
2028 2029 2030 $ 32,385,000.00 2.563 15.253 4.68 0.028 22.524 $ 674,731.76
2029 2030 2031 $ 34,400,000.00 2.563 15.253 4.68 0.028 22.524 $ 716,713.68
2030 2031 2032 $ 36,245,000.00 2.563 15.253 4.68 0.028 22.524 $ 755,153.70
2031 2032 2033 $ 38,275,000.00 2.563 15.253 4.68 0.028 22.524 $ 797,448.14
$6,896,702.39
Note: These numbers are for projection purposes only and do not reflect what the actual number(s) may be. These
numbers are based on the following assumptions.
Assumqtions:
1. Positive valuation increment was calculated on structures only.
2. Calculations based upon projected build-out schedule of residential and commercial structures.
3. Any positive increment will go towards the TIF debt.
Tax Increment District Seven,City of Brookings,South Dakota Page 22
ATTACHMENT 1
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Legal Description:
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32°d Street South.
NW %4 including all road rights-of-way, but excluding that portion still lying within Medary Township
outside Brookings City Limits in Section 2-T109N-R50W.
N %z of the NE %including all road rights-of-way, but excluding the platted areas thereof, in Section 3-
T109N-R50W of 5`h P.M., City of Brookings, Brookings County,State of South Dakota.
Tax Increment District Seven,City of Brookings,South Dakota Page 23
ATTACHMENT 2
(List of Real Property Improvements) Improvements are to be located and are shown below:
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within the 32nd Street South right-of-
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sewer. Pedestrian improvements
along Main Avenue, 26th Street South,
and 20th Street South. 32nd Sveet South
The Improvements shall be located in the real property described in Attachment 1 in the Main Avenue South,26`n
Street South,32"d Street South and 20th Street South rights-of-way and the park area adjacent to the elementary
school is the highest and best use for the real property.
Tax Increment District Seven, City of Brookings,South Dakota Page 24
ATTACHMENT 3
Zoning Changes
The following map reveals the property is currently zoned Business (B-2), Planned Development District
(B-2A & B-2), Residential (R-1B, R-1C, R-2, R-3) and Agriculture (A). The property within the district is
consistent with the comprehensive plan, building codes and municipal ordinances. One parcel will require
a rezoning from Agriculture to a Residential zoning district designation prior to development.
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Tax Increment District Seven, City of Brookings,South Dakota Page 25