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HomeMy WebLinkAboutCCMin_03Jun25 CITY OF FALCON HEIGHTS COUNCIL MINUTES JUNE 25, 2003 Mayor Gehrz convened the regular City Council meeting at 7:00 PM. PRESENT: Mayor Sue Gehrz, Council members Laura Kuettel, Robert Lamb, Peter Lindstrom and Richard Talbot Also present: City Administrator Heather Worthington and City Attorney Thomas Scott. Deputy Clerk Mary Shea Kodluboy was absent with prior notice. COMMUNITY FORUM: There was no commentary from the audience. APPROVAL OF MINUTES: The Council minutes dated June 11, 2003, were unanimously approved as submitted. PUBLIC HEARINGS: None Scheduled CONSENT AGENDA: Mayor Gehrz asked that Consent Agenda Item F3 be moved to the Policy Agenda, for discussion purposes, and relabeled as Item G3. The current Item G3 will be relabeled as Item G4. In response to a question from Council member Lamb about process, City Attorney Thomas Scott recommended that the Council consider the amendment to the development agreement first, followed by the condemnation resolution, and consideration of the acquisition and relocation proposal from Wilson Development Services. Consequently, Policy Agenda Items G1 and G2 were reversed for discussion and continuity purposes. Kuettel moved that the Consent Agenda be amended as requested, and approved, as outlined below. The motion was unanimously approved. 1. General Disbursements through June 17, 2003 in the Amount of: $ 78,832.70 Payroll (6/1/03 – 6/15/03) $ 11,778.49 Licenses – The Council, to encourage residents to patronize local businesses, read aloud the names of the most current businesses renewing their licenses for 2003. FALCON HEIGHTS CITY COUNCIL MINUTES -2- June 25, 2003 POLICY AGENDA: First Amendment to the Development Agreement Between the City of Falcon Heights and the Falcon Heights Town Square Limited – Multi-Family Attorney Scott said that at the June 11, 2003 Council meeting, the City Council approved three development contracts. What is before the City Council tonight is an amendment to the development agreement for the Falcon Heights Town Square Limited Partnership, a resolution authorizing the condemnation of three parcels, and the hiring of Wilson Development Services to provide relocation services in connection with the Pizza Hut property. Pizza Hut is a tenant of the owner of the shopping center. Why would the City consider condemnation? The developer has come to the City and requested this. He has been unable to finalize the land acquisitions to enable this project to go forward and is requesting the City to exercise its authority, under its condemnation authority, to acquire these parcels. This is a new concept for the City of Falcon Heights, but it is a fairly common undertaking for cities in the context of redevelopment. There is some risk to the City in taking this step. The ultimate cost falls back to the redeveloper. The City does the acquisitions, but under the amendment to the development contract, it falls back to the redeveloper to reimburse the City for all of the costs. At this time, the redeveloper will deposit $250,000 with the City. The first step will be to attempt to negotiate and then initiate condemnation, and Attorney Scott described the properties that will be a part of this process. Council member Lamb said that the Council packet contained legal descriptions of the properties involved, but, for the benefit of the people in attendance and those watching the Council meeting on cable, he asked Administrator Worthington if she would give a “real world” description of the parcels, and she did. Council member Lamb asked what will happen if the City doesn’t do the condemnations. Attorney Scott said that if the Council doesn’t authorize the condemnations, the fall back position will be what the current development contract says. Mr. Sherman would continue to attempt to acquire the parcels on his own. Until then, the project would not go forward. In response to a question from Council member Lamb about the possibility of Sherman Associates providing some time of a performance bond to the City, Attorney Scott said there are different mechanisms that could be looked at. A number of them were explored with Mr. Sherman, but it was determined that they would not work in the context of this particular project. Mr. Rod Krass, Krass Monroe, an attorney representing Sky Ventures, the company that operates Pizza Hut, said there were two issues he wanted to discuss. This is a tax increment project and it will be “pay as you go”. FALCON HEIGHTS CITY COUNCIL MINUTES -3- June 25, 2003 First Amendment to the Development Agreement Between the City of Falcon Heights and the Falcon Heights Town Square Limited – Multi-Family (continued) Mr. Krass asked if the TIF agreement authorizes, as a permitted expense, the reimbursement of the developer for all of his acquisition costs? Administrator Worthington said the TIF agreement does cover project acquisition costs for the developer. Mr. George Sherman, the developer, said that one of the permitted uses of TIF is property acquisition. Attorney Scott said that he would be happy to get Mr. Krass copies of all of this information. Mr. Krass said the second issue deals more with public purpose in condemnation. What is primarily public purpose? The developer has been attempting to put together a project, has been unable to do so, has asked the City to condemn property, and will reimburse the City for all costs. He hopes that the City will consider whether the primary purpose is for the people or for a developer and his particular development. If the City doesn’t condemn this property, the market place and the economy will take care of that property. Mr. Sherman is required to reimburse the City for acquisition costs. What happens if a court rejects the condemnation? He talked briefly about the Walser/City of Richfield condemnation case. Mr. James Erickson, an attorney for Sky Ventures, said that he understands the City has an objective in mind. They certainly want to turn the lemon into lemonade. This isn’t just another pizza location for them. It is a most profitable location. They have been working with Mr. Sherman, Administrator Worthington and Tom Scott. This is a very important piece of ground. He suggested the City Council lay the condemnation issue over for two weeks. He reiterated that they don’t want to go anywhere until they have a good location. Mr. Sherman said that timing is an issue for this development project. He and the City have spent about three years working on this project. This is about a plan that the City has had for this area for about 8-10 years—redevelopment of a very key part of the City. A delay won’t make this a better site for the City. Timing is critical. A substantial amount of money has been raised and he has worked with a variety of tenants. At this time he is asking the City to move forward with this. He has to stay with the schedule in order to start building the project this year. Council member Lamb asked when Pizza Hut first became aware that this parcel of land was slated for redevelopment? Ms. Barbara Schneider, Vice President of Development for Sky Ventures, said that Sky Ventures purchased 91 Pizza Huts in 2000. Some time after that a letter was delivered to the restaurant manager. FALCON HEIGHTS CITY COUNCIL MINUTES -4- June 25, 2003 First Amendment to the Development Agreement Between the City of Falcon Heights and the Falcon Heights Town Square Limited – Multi-Family (continued) Ms. Schneider said they employ 4,000 employees. She said she could tell the Council that their landlord made no attempt to contact them. Recently, an appraiser came into the restaurant unannounced and upset the employees. They pay over $1 million a year in taxes on the properties they own. Mayor Gehrz said that the City has held eighteen community meetings about the development, and businesses in that area have been invited to them. She doesn’t recall anyone in attendance who represented Pizza Hut. Administrator Worthington said that, to her knowledge, no one from Pizza Hut attended any of the community meetings. Mayor Gehrz said that much was made of public purpose. If you were to read any of the documentation about this project, you would find out this project came about in an unusual way. The shopping center property went on the market and the City Council asked to work with the developer of the property. Multiple meetings were held, including inviting business owners and representatives from that area. Over a series of meetings, the people of the Falcon Heights community developed a concept of what they needed and wanted at that site. A planner assisted with the concept plan, and the City sent it out to 50 developers. The City selected Sherman for a variety of reasons and is pretty proud of how this is a community-evolved plan. Council member Kuettel said the owners of the shopping center property had a very difficult time attracting interested buyers, and the community is not going to want to see the property just sit there. Mr. Erickson said the Pizza Hut property didn’t need to be a part of this development. They want to work with the City. If they can’t be left out, there are some locations in the area that are feasible. Mayor Gehrz said the City Council already tabled the condemnation action for two weeks. She asked Administrator Worthington if anything in the condemnation action would preclude Mr. Sherman and the City from working with Pizza Hut. Is there any benefit to postponing this any longer? Administrator Worthington said no. Mr. Sherman and the City will be spending a lot of time working with Pizza Hut to find a new location for them. Attorney Scott said he didn’t see any need to delay. Everyone has every intention of going full bore ahead. He said he talked to Mr. Erickson for the first time about two weeks ago, and had an extensive meeting with him earlier in the day, along with the relocation company. FALCON HEIGHTS CITY COUNCIL MINUTES -5- June 25, 2003 First Amendment to the Development Agreement Between the City of Falcon Heights and the Falcon Heights Town Square Limited – Multi-Family (continued) In response to a request from Attorney Scott to expand a little more on the critical nature of getting the project started this fall, as opposed to another point in time, Mr. Sherman said the private and public financing is complicated. About $5 million has to have expenses incurred before the end of this year in order for the funding to stay in place. Another $6 million is required to be committed in the form of mortgage closings by the end of the year. Programs work that way. He said he started working with the City in 2000. He had his first meeting with Pizza Hut in 2001. They met in 2002 and again in 2003. He needs to commence with construction by the end of this year. Extensive asbestos remediation needs to be done on the shopping center prior to demolition and preparation of the building site before construction can start. Mayor Gehrz said that part of this project is senior housing. There are a lot of seniors in Falcon Heights who want to get into this building. They ask frequently when construction is going to start. This may not be the same kind of risk as $11 million in funding, but it is urgent. Kuettel moved approval of the first amendment to the development agreement between the City of Falcon Heights and Falcon Heights Town Square Limited – Multi-Family. The motion was unanimously approved. Condemnation Resolution for: * Snelling Avenue Frontage Road – South Portion * Shopping Center and Adjacent Snelling Avenue Frontage Road * Snelling Avenue Frontage Road – North of Larpenteur (continued from the June 11, 2003 Council meeting) RESOLUTION 2003-11 Lamb moved adoption of Resolution 2003-11, authorizing condemnation of the land, outlined below, for public purposes. The motion was unanimously approved. * Snelling Avenue Frontage Road – South Portion * Shopping Center and Adjacent Snelling Avenue Frontage Road * Snelling Avenue Frontage Road – North of Larpenteur FALCON HEIGHTS CITY COUNCIL MINUTES -6- June 25, 2003 Acceptance of Proposal from Wilson Development Services to Assist with the Acquisition and Relocation of Pizza Hut Lindstrom moved acceptance of the proposal from Wilson Development Services to assist with the acquisition and relocation of Pizza Hut. Council member Lamb said the Council has not talked about why these people were picked. Who are they? What are our expectations for them? Administrator Worthington said that Mr. Wilson has 33 years of experience in the acquisition and relocation field, and has been self-employed for 22 years. He has already participated in a meeting this morning with Pizza Hut. Council member Kuettel said the City Council would like Pizza Hut up and running as soon as possible. Council member Gehrz said that she would like to echo what Council member Kuettel said. The City is eager to work with Pizza Hut and looks forward to having a successful outcome. She looks forward to seeing the Pizza Hut representatives again, maybe at a groundbreaking ceremony. The motion was unanimously approved. Recognition of Leo Lindig and His Family for Thirty-Eight Years of Service to the Falcon Heights Fire Department Mayor Gehrz introduced Leo Lindig and said that he is retiring from the Falcon Heights Fire Department after thirty-eight years of service. Clem Kurhajetz, Fire Chief, said that he has only known Leo for eighteen years and it has been a real pleasure to know him. He was an excellent teacher for the “younger people” and will be missed a lot. Clem, on behalf of the Fire Department, presented Leo with a decorative pike pole. Mayor Gehrz, on behalf of the City Council, presented Leo with a leather fire chief’s hat and said that she will miss his kind, smiling face. REPORTS FROM COUNCIL MEMBERS: None INFORMATION AND ANNOUNCEMENTS: Council member Talbot said that the Curtiss Field ballfield is submerged right now, but next year at this time, after the retention pond is dredged and improvements are made, the City should have a working field. For the next few days there will be a lake there. FALCON HEIGHTS CITY COUNCIL MINUTES -7- June 25, 2003 Council member Kuettel said that the League of Cities conference was very interesting. It was shorter this year. She enjoyed herself and learned a lot. She commented that Jim Prosser, Ehlers and Associates, came up to her at the conference and told her how much he admired what the City has done with the SE Corner. He expressed interest in having the City do a presentation about the process that it followed. Mayor Gehrz reminded everyone that Farmer’s Market is now located in Twin City Co-ops rear parking lot, just east of City Hall. The Farmer’s Market is held there every Tuesday morning, from 8 AM to 12 noon, and they have wonderful produce for sale. She said that last weekend the “Back to the 50’s” event was held at the State Fairgrounds and the City got quite a few calls. This event has grown over the years and is having a bigger impact on some of the neighborhoods. She and Administrator Worthington met with representatives from the State Fair on Monday about the event. Next year there will be more police on duty and the cost will be reimbursed by the car show. Council member Lindstrom suggested that the car show also set up garbage cans in the neighborhoods, the same way the State Fair does. Mayor Gehrz said that, hopefully, in future years, there would be better control of some of the issues connected with the car show. Mayor Gehrz said that she got to meet Tom Ridge, the Secretary of Homeland Security, at the Homeland Security conference in Saint Paul on June 19, 2003. She was very impressed with the people who were in attendance at the conference. Administrator Worthington said that staff is keeping an eye on Curtiss Field. The Folwell water main project is currently under water and probably will be that way until the water can drain away. She reminded residents to call 911 if they see a problem and ask that Public Works be dispatched. Staff will be carrying cell phones. The regular City Council meeting was adjourned at 8:15 PM. Respectfully submitted, Mary Shea Kodluboy Deputy Clerk