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Commissioner: ‘We’re All Dressed Up With No Place To Go’

Richfield City Council and Housing and Redevelopment Authority members hear Pillsbury Commons developer’s plans for moving forward Tuesday night.

After , developer Ron Clark Construction & Design is going back to the drawing board.

“We want to submit an application that the city and community will support,” Jim Susag, land use counsel for the developer, said. “After last week’s meeting we found that we didn’t have the critical support from the city and [that’s why we withdrew the application].”

Susag assured city officials the developer was working diligently on coming up with a new plan and hoped to resubmit applications next week. Susag also addressed officials’ concerns regarding the .

“Has there been changes to this plan since 2009 to where we stand today in 2012? Absolutely. … And we aren’t saying otherwise,” Susag said. “That’s very typical. We are trying to make sure that we have that critical support. We’re going to work hard on [making a plan to get that support] and get back to the city very, very quickly.”

Currently, the city has an agreement with Ron Clark Construction & Design to not sell the property nor discuss development with other developers, which is effective until Feb. 16, 2012. However, the Richfield Housing and Redevelopment Authority can terminate the agreement if it feels the developer isn’t working diligently to propel the project forward—which Commissioner Steven Quam brought up.

“Here we’re all dressed up with no place to go because the application has been withdrawn,” Quam said.

While Quam said he wasn’t prepared to present a motion to consider terminating the agreement, he said if the developer pulled the next round of applications, he would.

The next step for city officials will be determined after the new applications are submitted. There is a 60-day review period that allows applications to make it through the appropriate commissions, while also having time to call and properly announce a public hearing before an official vote is taken. The 60-day period stopped when the applications were pulled and will start over completely when the new applications are submitted.

said the old application requesting to , wasn’t a smart option now.

“All I can say, is that that ain’t gonna to fly anymore and I hope and think you understand that,” he said. “I was so supportive of you when you wanted to come here and bring those townhomes. I think you should look at getting back to that.”

Susag said the developer was still looking at rental units, however, it aimed to make use of the land in the best way possible. Going forward, Susag also said the developer would be very direct with city officials and address all issues that have surfaced, such as the fear of a rise in crime and a decline in property values.

Barry L. April 17, 2012 at 04:23 PM
You know what a good article would be? A Plain , Laymen term, Street level explanation of TIF. and use Pillsbury Commons to relize the actual numbers. For the most part the numbers are public, and we start off with LIHTC award, Wells Fargo buying of the Tax credit, Land Sale, TIF and the other 2 or 3 subsidized grants to make this project happen. Then take the tax break down and see where if any reaches back into the City of Richfield or the school system.
Caitlin Burgess (Editor) April 17, 2012 at 05:02 PM
I'm working on an article right now about it. But from what I was just told by the superintendent and district business manager, TIF districts are not subject to the standard property taxes that would be paid to the school. However, the school still receives per pupil and general funding from the state. In addition, if a referendum is passed by vote, then those districts are subject to pay their fair share of that increase in property taxes. Does that make sense?
David Haines April 17, 2012 at 05:32 PM
I too would like to know how TIF works. Right now it is like looking into a foggy forest and trying to count all the trees.
Barry L. April 17, 2012 at 05:57 PM
Ok, lets break this down...1)TIF districts are not subject to the standard property taxes that would be paid to the school. 2) However, the school still receives per pupil and general funding from the state., Ok I get these parts, But what is " if a referendum is passed by vote, then those districts are subject to pay their fair share of that increase in property taxes" So if the TIF district is not paying any taxes for schools how or what is required for the TIF District to pay? That is one of three questions. So the city of Richfield is paying for $XXX amount out of city taxes per child. What doses it pay for a child in a TIF district? What budget dose this come from? Answer those questions and the money trail will be in full light. Thanks .. .
Caitlin Burgess (Editor) April 17, 2012 at 06:02 PM
A referendum, such as the one that was proposed this past November, is an additional request for funds. This is separate from state funding, as it aims to collect more money from property taxes. In this case, Schwartz told me if one is passed by voters then everyone including TIF districts share in the pot. The city doesn't pay for the schools. That is all done at the state level. I can't remember what the exact amount for each child, but I doubt they have numbers specifically for children who live in TIF districts. If I find anymore on that, I will let you know. But, bottomline, the district is taking a position on this and says TIF doesn't affect the schools either way.
Caitlin Burgess (Editor) April 17, 2012 at 06:43 PM
This is just what I got from John Stark, director of Richfield Community Development: "I see there is a dialog on Patch regarding whether the Pillsbury Commons project would pay property taxes to Richfield Public Schools. The answer is a qualified yes. If a TIF District were to be approved then the property owner would have a semiannual tax payment due on the entire value of the project. That tax payment would be sent to Hennepin County who would then return any portion that is considered “tax increment” to the Richfield HRA to be distributed by them in accordance with whatever the TIF Plan and Redevelopment Agreement ultimately state. The taxes on the “base value” of the property, however, are not considered tax increment and those taxes would be split up amongst all the taxing jurisdictions (including the Richfield Public Schools) at the same ratio that all other property taxes are divided by the taxing jurisdictions on all other properties. "We’ve been waiting to get all of Ron Clark’s information before we draft the TIF Plan which would help give a precise amount." When I get the TIF info, I'll have another story. I'm also including Stark's comments in the story with the superintendent and business manager, which will post shortly.
Caitlin Burgess (Editor) April 17, 2012 at 08:49 PM
Here it is folks: http://patch.com/A-s4xx
Barry L. April 18, 2012 at 05:01 AM
What I like about this open forum is transparency for all that read, It is a friendly engaged way to spread the information. I for one am learning the hows and whats to this whole TIF.
Barry L. April 18, 2012 at 05:10 AM
So in the above statement I posted I would like to admen and correct my statement, After Ron Clark takes TIF, the school system gets NOT ONE PENNY for the families that would live in Pillsbury Commons. I stand corrected. I would like to see the TIF Plan for this project before it is voted posted on the city web site for all to see. But the rest of the comment above, I am not ashamed to post. Barry LeBlanc
Caitlin Burgess (Editor) April 18, 2012 at 06:04 AM
Yes. TIF is extremely confusing for most, I attempted to address it in a recent article on some of the jargon being thrown out there, but I think I'm going to reach out to John Stark to see if he'd be willing to put a little something together for me. Keep you posted!
Garri April 18, 2012 at 09:15 AM
Just be aware, as the practice of Minnesota balancing its budget through borrowing from the payments to school districts, and the delayed payments becomes standard practice, school districts are caught in the middle and need to borrow funds to make up the shortfall on their end until state payments arrive. Maybe this was just a one time practice that happened last year, but probably not likely.
Richfield Commoners United April 18, 2012 at 01:09 PM
http://finance-commerce.com/2012/02/report-minnesotans-responsible-for-410m-in-tif-debt/ Minnesota taxpayers are on the hook for hundreds of millions of dollars related to tax increment financing districts, according to the Office of the State Auditor’s first measurement of statewide debt related to TIF. Local governments in the state owed $1.7 billion related to TIF districts in 2010, according to the auditor’s office. About a fourth, $410 million, involved general obligation bonds that cities must pay regardless of whether the district is generating the property tax revenue expected from development. State Auditor Rebecca Otto, though, points out that a much larger portion, $780 million, represented pay-as-you-go setups where developers are reimbursed for expenses after the fact and only if the district produces the expected extra tax revenue. (More in Article)
Mike E April 19, 2012 at 05:28 AM
Thanks for the clarifications Caitlin. From my understanding of TIF financing; the school district would only receive their fare share of property tax disbursements based on the BASE VALUE of the property. The tax disbursements for any incremental value is redirected to the HRA; therefore excluded from all other taxing districts. The properties funding to the school district would be less with TIF than if TIF was not in place. it is correct that the school district would receive funding from the state based on per-pupil calculations; but history has shown that the state is shifting more and more of school funding away from the state budget; causing school districts to depend on property tax income more and more.
Caitlin Burgess (Editor) April 19, 2012 at 09:54 PM
One more thing from John Stark: People should keep in mind that currently there are zero taxes on the base value (because it is publicly owned) whereas the base value would be fully taxed once the property is developed; I just don’t know what that base tax will be calculated at yet (mostly because I don’t know which pieces of property will be in [Ron Clark Construction's application).
Barry L. April 19, 2012 at 10:56 PM
(mostly because I don’t know which pieces of property will be in [Ron Clark Construction's application). Well, a lot of us residents feel the same...What is he asking for? So they gave him a break on the land value from $ xxxx amount to $XXXX amount so I wunder what he will pay for taxes. The next question I would ask city hall, is HOW many TIF districts do we have and can we see them? How much of the city is under TIF?
Richfield Commoners United April 21, 2012 at 03:26 AM
So the DEVIL is in the details after it is voted on?
Caitlin Burgess (Editor) April 21, 2012 at 01:09 PM
John Stark told me he would let me know as soon as he got the TIF application! I'll update everybody when I get the details!
Caitlin Burgess (Editor) April 21, 2012 at 01:12 PM
I'll see if I can find any info on that. Best Buy is for sure a TIF district and the new Lyndale Plaza project on 64th and Lyndale I also believe got some TIF. I'm not sure if Kensington Park or City Bella got some as well. I'll connect with John next week! TIF, TIF, TIF! You guys are really making me work this week! :)
Caitlin Burgess (Editor) April 21, 2012 at 01:13 PM
Are you talking about the TIF application?
Richfield Commoners United April 21, 2012 at 02:06 PM
When will the general public view the TIF application? and will it break down the taxes so some one on the street can understand it? You know what it would be interesting is the Best Buy TIF. Could the city staff post it on line or here and so the general public can see?
Caitlin Burgess (Editor) April 22, 2012 at 02:15 PM
John Stark was still waiting on the application when we spoke last week. He promised he would let me know when it was submitted.
Richfield Commoners United May 16, 2012 at 02:00 PM
At the May 8th City Council meeting it was revealed that members of the city council & HRA commission had been privately contacted by Ron Clark to discuss his new proposal. The topic was brought up when Fred Wroge announced that Ron Clark had called his private phone to request a meeting. Councilman Wroge declined Clark's request, Tom Fritzhenry also declined saying "If he has something to say he can say it to all of us." , When Wroge's 'outing' of Clark prompted Councilman Elliott's admission that he too had been contacted and met with Ron Clark, saying he would not apologize for behind closed door meetings.
Richfield Commoners United May 16, 2012 at 02:00 PM
Given that Ron Clark Construction has received ample time to present their plans to the City Council, HRA and the Planning Commission in meeting after meeting it is very suspect that they would want to meet in round robin format with the HRA and City Council and circumvent Minnesota's Open Meeting Law. Where is the transparency with dealing with Ron Clark? Shouldn't his plans be discussed in the open? What does Ron Clark have to say to them about Pillsbury Commons that cannot be said in a public meeting? While it is unknown if Ron Clark Construction violated any laws, the ethics of this matter is certainly not becoming of a recipient of the Minnesota Business Ethics Award and someone who says, “Honesty, integrity and fair play have always been of utmost importance to us." Please contact members of the City Council and the HRA and let them know that meetings with Ron Clark Construction or their representatives outside of public meetings is not ok.
David Haines May 16, 2012 at 03:17 PM
I agree. The discussions about any proposed project that affects the citizens and uses TAXPAYER money should be in the open. This doesn't look good and Councilman Elliott 's defiant stance should be troubling to all citizens of Richfield. He sees nothing wrong with meeting with some stakeholders and leaving others out of the loop. Shame!
Richfield Commoners United May 16, 2012 at 07:50 PM
"People have this idea that there are going to be people living there who don't have jobs and don't have income," said Stark, who specified that "affordable housing" is not the same as the much-stigmatized Section 8 housing. Plans at the Pillsbury development call for one Section 8 unit, Stark said.http://www.mnsun.com/articles/2011/11/22/headlines/ri24pillsbury.txt
Richfield Commoners United May 22, 2012 at 03:56 PM
So Ron Clark team said last night at City Council that there was no SECTION 8 housing. I wounder if the Team member looked at his application...or past city hall videos that said there was 21 units available to section 8 applicants...All 3 bed room units...
Richfield Commoners United May 22, 2012 at 03:57 PM
Look on the city web site...CH16 HRA meeting 5/21/2012
Richfield Commoners United May 29, 2012 at 02:37 AM
So Ron Clark pulls a another one... Lets take the Planning commission for a ride...with WE HAVE NOT FILLED OUT OUR APPLICATION AGAIN....Why will the city elected let Ron Clark jerk the city residents around...Now the VOTE for Planning Commission will be pushed back till June 25th...YEA right, and the city staff says ...?
Richfield Commoners United June 01, 2012 at 02:30 PM
So now we need to ask if TIF sheds some tax dollars to the school system. In all Ron Clark will only pay $3900. per year in taxes on the land for 30 years, what will the school get in cash for the next 30 years? The next question that should be asked is this, Kennisington Place on 76th and Lyndale was given $500K in up front TIF but now the courts have decided that Richfield was a second mortgage and we not getting one cent back ? How much did the school system loose on that one? Ron Clark is the only one walking away with the cash in hand!
Richfield Commoners United June 13, 2012 at 02:33 PM
http://richfield.patch.com/articles/pillsbury-commons-project-effectively-dead?ncid=newsltuspatc00000001#comment_3596579

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