Approve Resolution No. R2018-101 Approving a Tax Increment Financing Plan for Tax Increment (Soils Condition) District No. 21 and a Modified Redevelopment Plan for the Minnesota River Valley Housing and Redevelopment Project No. 1

Planning Commission Recommendation
On August 9, 2018, the Planning Commission by a 4-0 vote recommended approval of the TIF plan.

Shakopee Crossings has applied for a Soils Condition TIF to clean up its site between The Home Depot and the Marcus Theaters. The site has garbage materials that make new construction and development at the site not economically viable because of the identified clean up and remediation costs.

Soil Condition TIFs are not the common. The law permits increments to be collected for 20 years after the receipt of the first increment from the district. Counting the first year of increment, 21 years of increment may be collected.

A soils condition TIF district may be created for a site only if two conditions are met:

1. Hazardous substances, contaminants, or pollution are present on the site, and the must be cleaned up "to sue" the property. The law does not specify whether this cleanup requirement applies to (1) any use of the property or (2) a proposed use of the property (e.g. under the plan) which may differ from the existing uses of the property.

2. The costs of cleanup exceeds the lesser of (1) the property's fair market value or (2) $2 per square foot. This test may be applied to the entire parcel or to each parcel of property.

The city is allowed to take its 10% administrative fee from the district.

The applicant has submitted that they can meet the requirements for creation of the district.

Unlike other TIF districts, the increment is collected throughout the 21 years as development occurs with no development timeline.