CITY OF CRYSTAL FALLS
DOWNTOWN DEVELOPMENT AUTHORITY
DOWNTOWN DEVELOPMENT PLAN
DOWNTOWN DEVELOPMENT/TAX INCREMENT FINANCING PLAN
Effective Date: August 9, 2004
Crystal Falls City Council
Crystal Falls Downtown Development Authority
Board of Directors
Mayor Janet Hendrickson
TABLE OF CONTENTS
A. Purpose of Downtown Development Authority Act and the Downtown
Development and Tax Increment Financing Plan .5
Creation of Downtown Development Authority of the City of Crystal
Falls and the Downtown Development District 6
Approval of the Downtown Development and Tax Increment
Financing Plan 6
SECTION II - TAX INCREMENT FINANCING PLAN ..7
Boundaries of the Development Plan ..7
Existing and Proposed Land Uses in the Development Area ..7
Description of Existing Improvements 7
Contemplated Rehabilitation ...7
Statement Regarding Construction ..8
Open Space 8
Sales, Leases, Exchanges of Real Property with the City 9
Zoning & Public Street Changes Anticipated 9
Estimated Costs & Financing 9
Designations of Persons Benefiting from Project . 9
Bidding Procedures 10
Number of Persons Displaced 10
Relocation of displaced Persons 10
Costs of Relocating Displaced Persons 10
Compliance with Act 227 10
Additional Material 10
SECTION III- DOWNTOWN DEVELOPMENT/TAX INCREMENT FINANCING PLAN FOR THE DOWNTOWN DEVELOPMENT AUTHORITY
OF THE CITY OF CRYSTAL FALLS 11
Tax Increment Financing Procedure 11
B. Procedure for Preparing Tax Rolls 12
C. Estimates of Captured Assessed Values & Tax Increment Revenues 12
Use of Tax Increment Revenue .13
Operating and Planning Expenditures . 15
Duration of Plan 15
Impact on Assessed Values and Tax Revenues of Other Jurisdictions .15
H. Reports ...16
A. Legal description of development area
Map of the current Tax Increment Finance Plan area.
Initial assessed value of real and personal property.
Estimated captured assessed values.
A. Purpose of the Downtown Development/Tax Increment Financing Plan.
This Downtown Development/Tax Increment Financing Plan has been prepared pursuant to the provisions of Act No. 197 of the Michigan Public Acts of 1975, as amended, MCLA § 125.165 et. seq. (the "Act").
The Act was enacted to provide a means for local units of government to correct and prevent deterioration in business districts; to encourage historic preservation; to authorize the acquisition and disposal of interest in real and personal property; to authorize the creation and implementation of development plan in the districts; to promote the economic growth of the district; to create a board; to prescribe its powers and duties; to authorize the levy and collection of taxes; to authorize the issuance of bonds and other evidences of indebtedness; and to authorize the use of Tax Increment Financing.
Tax Increment Financing is a government financing program which contributes to economic growth and development by dedicating a portion of the increase in the tax base resulting from the economic growth and development to facilities, structures of improvements within a development area thereby facilitating economic growth and development. Tax Increment Financing mandates the transfer of tax increment revenues by municipal and county treasurers to authorities created under the Act in order to effectuate the legislative government programs to eliminate property value deterioration and to promote economic growth. MCLA 125.1652a.
The Act seeks to accomplish its goals by providing local units of government with the necessary legal, monetary and organizational tools to eliminate property value deterioration and to promote economic growth through publicity initiated projects undertaken cooperatively with privately initiated projects.
The way in which a downtown development authority makes use of the tools made available under the Act depends on the problems and priorities of each community. The Downtown Development/Tax Increment Financing Plan, as amended, have been developed in accordance with the purposes of the Act based on the problems and priorities as perceived by the Downtown Development Authority of the City of Crystal Falls (hereinafter sometimes referred to as the "DDA" or the "Authority").
The Downtown Development/Tax Increment Financing Plan is intended to describe the goal and objective of the Crystal Falls Downtown Development Authority for redevelopment of the downtown and outline the steps necessary for achieving these goals.
It is intended that the Plan becomes the basis for all future development/redevelopment projects in the downtown. After it has been adopted, the Downtown Development Plan should be all of the following: (1) a long range guide for evaluating proposals for physical changes and for scheduling improvements in the center business district; (2) a guide for making recommendations and establishing properties in the downtown capital improvement program; (3) a foundation for conducting more specific and detailed studies for the general business district and for assessing possible improvements and developments; and (4) a source of information and a statement of policy which is useful to citizens and businessmen in making private investment decisions.
B. Creation of Downtown Development Authority of the City of Crystal Falls.
The city council for the City of Crystal Falls adopted ordinance number 1.04 on April 9th, 1979. In so doing the Downtown Development Authority for the city of Crystal Falls was established.
C. Approval of the Downtown Development and Tax Increment Financing Plan.
The Downtown Development Authority prepared a Downtown Development/Tax Increment Finance Plan and has recommended it to the Crystal Falls City Council.
On_______________,2004 the City Council______________ the Downtown Development/Tax Increment Finance Plan was adopted by the Crystal Falls City Council.
DOWNTOWN DEVELOPMENT/TAX INCREMENT FINANCING PLAN
Boundaries of the Development Plan
The legal description of the area in question is contained in exhibit A.
Existing and Land Uses in the Development Area.
The existing land use is depicted in a map in exhibit B.
Description of Existing Improvements.
The main focus of development within the plan will be along Superior Street in the downtown area. It is anticipated that the structures along the street will be repaired by the owners or demolished. In some cases where the buildings are demolished the land may become publicly owned. As the downtown grows and expands it is anticipated that any residential property area near the downtown area would be demolished and replaced with a commercial enterprise where applicable.
Subject to priorities based upon general private development and budgetary constraints, the Authority has identified the following areas for rehabilitation and improvement:
1. Manor Renovation $250,000.00
2. Parking and Directional Signs $1,000.00
3. Market Strategy/advertising the City of Crystal Falls $20,000.00
Improve blight condition of deteriorating
store front facades $125,000.00
Develop a Harbour House park $95,000.00
Statement Regarding Construction.
Each project is expected to be a long term improvement during the lifetime of the plan, with priorities given to those projects and actions that coincide with private development and expansion into the rehabilitated areas.
The initial life of this Downtown Development/Tax Increment Finance Plan is extended over a fifteen (15) year time period. The fifteen (15) year time period is broken into five (5) year sections or "phases." The contemplated rehabilitation projects are phased out in the following manor:
Engineering for Harbour House Park
Develop plans for facades
Harbour House Park
Street front facades
Street front facades
Public space areas are planned along Superior Street in the downtown area in conjunction with the 2007 Streetscape Project. In addition the Riverside Park area along the Paint River is within the Downtown Development/Tax Increment Finance Plan, as is the proposed park area next to the Harbour House. This Plan will include the development and or improvement in the way of trees, shrubs, etc., to these projects.
Sales, Leases, Exchanges of Real Property with the City of Crystal Falls
The Authority does not anticipate being involved with the City in any real estate transactions. It is possible that the Authority and the City will work together to develop City owned property.
Zoning & Public Street Changes Anticipated.
The Authority does not anticipate any changes in public streets, street levels, intersections, or zoning. Those currently in place satisfy all potential actions contemplated.
J. Estimated Costs & Financing.
The Authority does not anticipate financing the works to be completed through this plan. Rather, the authority intends on using the annual revenues to complete projects as funds allow and circumstances suggest. The Authority has determined that sustained long term rejuvenation Tax Increment Finance Area and business growth will best be accomplished by proceeding slowly and permitting local private economics to determine where and how the annual funds will be best utilized.
Designations of Persons Benefiting from Project.
At this time the Authority does not know of any particular person or persons, natural or corporate, that will purchase, lease, convey to or otherwise benefit from the actions taken under this plan. It is the goal of the Authority to rehabilitate areas and improve City services to those areas as interest arise, with the Authority working initially on those projects that will provide general benefit to the Tax Increment Finance and City as a whole until specific interests develop. It is anticipated that private business interests will benefit indirectly from Authority action and will purchase, lease or convey real estate without Authority involvement.
Because it is not anticipated that the authority will own real estate, no bidding procedures are specifically established. In the event the Authority does own real property, all bidding procedures for the purchase of such property, the sale of such property or the leasing of such property will be conducted under the same procedures as would apply to the municipality under its Charter, as it now exists or as amended. In addition, the authority will be bound by all State laws, Federal laws and local Ordinances which would govern the Municipality if the Municipality were to be selling, purchasing or leasing real property.
Number of Persons/Displacement.
There are less than 100 persons in the Tax Increment Finance area and no displacement anticipated.
Relocation of Displaced Persons.
This Plan would not entail the relocation or displacement of anyone.
Costs of Relocating Displaced Persons.
This Plan would not entail the relocation or displacement of anyone.
Compliance with Act. No. 227 Public Acts 1972.
This Plan does not call for the Authority to undertake any action which would fall within the Act No. 227 of the Public Acts of 1972.
Because of the small size of the community and the uncertainties of private growth, where within the district such growth will occur first, where within the district such growth will spread, the needs of such growth and the types of commercial and industrial growth that might occur, the Authority deems it in the best interest of the public to create a flexible plan that will accommodate the circumstances as they change. Furthermore, under existing property tax laws, the growth in the Authorities budget under the tax capture provisions will vary by the Regional Consumer Price Index and the increase in tax base due to the transfers of land within the District. Because of the dilapidated condition of the structures and having city services within the District as well as the presence of vacant land and publicly owned land, the taxable assessments on the real property is artificially low. We expect transfers of land as a natural function of the passage of time, and that there will be increased transfers as a result of the improvements contemplated by this plan.
Since the Authority's budget is likely to increase at an uneven rate, the Authority deems that it is in the best interest of the public to set annual goals, within a known budget, to take such development of the Development Area.
DOWNTOWN DEVELOPMENT/TAX INCREMENT FINANCING PLAN FOR THE DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL FALLS
This Downtown Development/Tax Increment Financing Plan is established to make possible the financing of all or a portion of the costs associated with the carrying out and completion of those activities and improvements contained in the officially adopted Downtown Development Plan for the Downtown Development Authority of the City of Crystal Falls, as may be amended from time to time.
Tax Increment Financing Procedure.
The Tax Increment Financing procedure outlined in the Act requires the adoption by the City of Crystal Falls of a Downtown Development Plan and Downtown Development/Tax Increment Financing Plan. Following adoption of the ordinance approving the Development Plan and Downtown Development/Tax Increment Financing Plan, the municipal and county treasurers are required by law to transmit to the Downtown Development Authority that portion of the tax levy of all taxing jurisdictions paid each year on the captures assessed value of all real and personal property included in the Downtown Development/Tax Increment Financing Plan. A Downtown Development/Tax Increment Financing Plan may be modified if the modification is approved by the City of Crystal Falls following the same modification and public hearing procedures as were required for adoption of the original Plan.
At the time the Downtown Development/Tax Increment Financing Plan is adopted, the "initial assessed value" is determined. The initial assessed value means the assessed value, as equalized, of all the taxable property within the boundaries of the Development Area at the time the ordinance establishing the Downtown Development/Tax Increment Financing Plan is approved, as shown by the most recent assessment roll for which equalization has been completed at the time the ordinance is adopted. Property exempt from taxation at the time of the determination of the initial assessed value shall be included at zero. Property for which a specific local tax is paid in lieu of property tax shall not be considered exempt from taxation. The initial assessed value of property for which a specific local tax was paid in lieu of property tax is determined as provided below.
"Specific local tax" means a tax levied under Act No. 198 of the Michigan Public Acts of 1974, being Sections 207.551 to 207.572 of the Michigan Complied Laws, the Commercial Redevelopment Act, Act No. 255 of the Michigan Public Acts of 1978, being Sections 207.651 to 207.668 of the Michigan Complied Law, Act No. 189 of the Michigan Public Acts of 1953, being Sections 211.181 to 211.182 of the Michigan Complied Laws, and the Technology Park Development Act, Act No. 385 of the Michigan Public Acts of 1984, being Sections 207.701 to 207.718 of the Michigan Compiled Laws. The initial assessed value or current assess value or current assessed value of property subject to specific local tax shall be the quotient of the specific local tax paid divided by the ad valorem millage rage. However, after 1993, the Michigan State Tax commission shall prescribe the method of calculating the initial assessed value and current assessed value for which a specific local tax was paid in lieu of a property tax.
Presented in Exhibit "C" is a schedule of the initial assessed values of all real and personal property in the original Development Area.
Procedure for Preparing Tax Rolls for Property in the Development Area.
In order to provide for a more efficient and proper means of
accounting assessed values on personal property in the Development Area, the
City of Crystal Falls will, by adoption of this Plan, establish a tax report
filing system requiring owners of personal property to file on a yearly basis a
separate report to the City Assessor of possessions located within the
boundaries of the Development Area. In addition, the City shall follow the
procedures set forth in Exhibit "C" when preparing the assessment
The tax increment revenues or "captured assessed value" means the amount in any one year by which the current assessed value of the project area, including the current assessed value of property for which specific local taxes are paid in lieu of property taxes, exceeds the initial assessed value. The amount of tax increment that is transmitted to the DDA by the municipal and county treasurers is generally that portion of the tax levy of all taxing jurisdictions paid each year on the captured assessed value.
The DDA is not authorized to capture tax increment revenues from any ad valorem taxes or specific local taxes attributable to the levy by the State of the six mill education tax pursuant to Act No. 331 of the Michigan Public Acts of 1993, as amended, or taxes levied by any local or intermediate school district.
The DDA shall expend the tax increments received for the development program only in accordance with the Downtown Development/Tax Increment Financing Plan. Tax increment revenues in excess of the estimated tax increment revenues or in excess of the actual cost of the Plan to be paid by the tax increment revenues may be retained by the DDA only for purposes that, by the resolution of the DDA Board, are determined to further the development program in accordance with the Downtown Development/Tax Increment Financing Plan. The excess revenue not so used shall revert proportionately to the respective taxing jurisdictions. These revenues shall not be used to circumvent existing property tax laws or a local charter which provides a maximum authorized rate for the levy of property taxes.
The City of Crystal Falls may terminate the Downtown Development/Tax Increment Financing Plan if it finds that the purposes for which the Plan was established are accomplished. However, the Downtown Development/Tax Increment Financing Plan may not be terminated until the principal of and interest on any bonds issued under the Act have been paid or funds sufficient to make that payment have been segregated and placed in an irrevocable trust for the benefit of the holders of the bonds.
Use of Tax Increment Revenue.
The tax increment revenue paid to the DDA by the municipal and county treasurers is to be disbursed by the DDA from time to time in such manner as the DDA may deem necessary and appropriate in order to carry out the purposes of the Development Plan, including but not limited to the following:
The principal, interest and reserve payments required for any bonded indebtedness to be incurred in its behalf for purposes provided in the Development Plan.
Cash payments for initiating and completing any improvements or activity, called for in the Development, Plan, including lease payments.
Any annual operating deficits that the DDA may incur from acquired and/or leased property in the Development Area.
Interest payments on any sums that the DDA should borrow before or during the construction of any improvement or activity to be accomplished by the Development Plan.
Payments required to establish and maintain a capital replacement reserve.
Payments required to establish and maintain a capital expenditure reserve.
Payments required to establish and maintain any required sinking fund.
Payments to pay the costs of any additional improvements to the Development Area that are determined necessary by the DDA and approved by the City of Crystal Falls.
Any administrative expenditure required to meet the cost of operation of the DDA and to repay any cash advances provided by the City of Crystal Falls. This may include quarterly payments to the City to support overhead expenses.
The DDA may modify the priority of projects and payments at any time if, within its discretion, such modification is necessary to facilitate the Development Plan then existing and is permitted under the terms of any outstanding indebtedness.
Revenues to support these costs shall be derived from any of the following sources, or a combination of these sources:
Donations to the Authority for performance of its function;
Proceeds from the Downtown Development/Tax Increment Financing Plan;
Proceeds from a special assessment district created as provided by law;
The issuance of one of more series of revenue bonds which may be supported by a limited tax pledge if authorized by resolution of the Crystal Falls City Council or, if authorized by the voters of the City of Crystal Falls, the unlimited tax, full faith and credit of the City of Crystal Falls;
Tax increment bonds which are secured by tax increment revenue to be received from property within the Development Area and any other permitted designated revenues and which may be secured by a limited tax pledge of the City of Crystal Falls if authorized by resolution of the City of Crystal Falls Council or, if authorized by the voters of the City of Crystal Falls, the unlimited tax, full faith and credit of the City of Crystal Falls;
Funds borrowed from the City of Crystal Falls at rates and terms to be agreed upon;
Money obtained from any other lawful source.
Tax collection expected to be generated by the captured assessed value of property within the Tax Increment Finance Area are expected to be adequate to provide for payment of principal and interest on bonds or funds borrowed from the City of Crystal Falls.
The amounts of bonded indebtedness or indebtedness to be incurred by the DDA and/or the City of Crystal Falls for all bond issues or loans, including payments of capitalized interest, principal and required reserve, shall be determined at the time such bonds or other indebtedness is to be incurred. The Crystal Falls City Council must approve any bonds or indebtedness, which pledge the full faith and credit for the City of Crystal Falls.
Operating and Planning Expenditures.
All operating and planning expenditures of the DDA and the City of Crystal Falls, as well as all advances extended by or indebtedness incurred by the City or other parties, are expected to be repaid from tax increment revenues. The costs of the Downtown Development/Tax Increment Financing Plan, are also anticipated to be paid from tax increment revenues as received.
Duration of Plan.
This Amended and Restated Downtown Development/Tax Increment Financing Plan extends the duration of the Plan through the collection of the December 2019 tax levy. The term of the Plan may be modified from time to time by the City Council of the City of Crystal Falls upon notice and upon public hearing and amendments as required by the Act. The Authority may enter into agreements with taxing jurisdictions to share the tax increment revenues generated by the Downtown Development/Tax Increment Financing Plan.
Impact on Assessed Values and Tax Revenues of Other Taxing Jurisdictions.
The overall impact of the Downtown Development/Tax Increment Financing Plan is expected to generate increased economic activity in the City of Crystal Falls and Iron County at large. This increase in activity will, in turn, generate additional amounts of tax revenue to local taxing jurisdictions through increases in assessed valuations of real and personal property and from increases in personal income due to new employment within the Development Area, the City of Crystal Falls and other neighboring communities and throughout Iron County.
For purposes of determining the estimated impact of this Downtown Development /Tax Increment Financing Plan upon those taxing jurisdictions within the Development Area, estimates of captured assessed values were used along with 2004 tax millage allocations to determine tax increment revenue amounts that would be shifted from these jurisdictions to the DDA to finance the project activities called for in the Amended and Restated Development Plan.
The DDA shall submit annually to the City of Crystal Falls and the State Tax Commission a financial report on the status of the tax increment financing account. The report shall include the following:
The amount and source of revenue in the account.
The amount in any bond reserve account.
The amount and purpose of expenditures from the account.
The amount of principal and interest on any outstanding bonded indebtedness.
The initial assessed value of the project area.
The captured assessed value retained by the Authority.
The tax increment revenues received.
The number of jobs created as a result of the implementation of the Downtown Development/Tax Increment Financing Plan.
Any additional information the City of Crystal Falls or the State Tax Commission considers necessary.
The report shall be published in a newspaper of general circulation in the municipality.
TIF DISTRICT BOUNDARIES LEGAL DESCRIPTION
Beginning at the SW corner of the intersection of Marquette Avenue and Sixty Streets, then N on Sixth Street to the SE corner of the Iron County Courthouse property, then due W to the W side of Seventh Street, then N on Seventh Street to the N side of Crystal Avenue/Hwy US-2, then E on Crystal Avenue/Hwy US-2 to the W side of Fourth Street, then N to the first alley, then E along this alley to the E side of Third Street, then SEly along Third Street to the first alley S of Crystal Avenue, then due E along this alley to the E side of Round House Road, then S to the N side of East Superior Avenue, then E along East Superior Avenue to a point just W of Bridge View Road, then due N to the W Bank of the Paint River, said point being due W of a line extending due W from the N boundary of East Crystal Avenue, then due E on this line to the E side of Wagner Street, then S to the N boundary of East Superior Avenue to a point on the West bank of the Paint River, then SEly along said riverbank to a point due E of an extension of Michigan Avenue, then due W on this line to a point E of the intersection of Michigan Avenue and Odgers Street, then due N to a point being a line extending due east from the alley between Marquette Avenue and Superior Avenue/Hwy M-69, then due W along said alley to the midpoint between Second Street and Third Street, then due S to the S side of Marquette Avenue, then due W to the Point of Beginning, all within the City of Crystal Falls, Iron County, MI.