02/08/2006 Council Minutes - Laserfiche WebLink

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• CITY COUNCIL WORK SESSION FEBRUARY 8, 2006 APPROVED 1 2 Community Development Director Grochala stated in addition, the City was attempting • 3 to create a mixed use downtown that would be a source of community identity and pride, 4 and the YMCA was considered a vital link in providing that identity and helping to spur 5 further commercial development in the downtown. 6 7 Community Development Director Grochala explained that in the original agreement 8 approved in 1999, the City agreed to financial participation of $1.5 million in cash for 9 construction, plus land and infrastructure estimated at the time to be approximately 10 $500,000, for a total cash contribution of $2 million. The land was approximately 7 acres 11 that had been removed from the regional park in a "land swap" that was approved by the 12 Metropolitan Council. Through the swap the city received 14 acres for the city hall and 13 YMCA at a cost of $300,000. 14 15 Community Development Director Grochala stated in turn, the YMCA agreed to build 16 approximately 37,000 square feet that included a "teen center, gym, indoor pools, 17 running/walking track, cardiovascular/strength training area, aerobic studio, family 18 program space and Child Watch. Building design will provide for future expansion 19 opportunities. " City residents would receive discounted membership fees and "open 20 community" days where all residents could use the facilities. The Council considered this 21 joint venture a way to get a family oriented community center for approximately 30 cents 22 on the dollar with no long-term operations and maintenance costs. 23 24 Community Development Director Grochala advised that in 1999 Springsted, Inc. studied • 25 the financial implications of the city's commitment and analyzed financing options. At 26 the time of the study, the YMCA had completed market research that indicated a 46,000- 27 square foot facility would better serve the community, for a cost of approximately $6 28 million. The YMCA capital funding was to be limited to $2 million. The city's cash 29 contribution was estimated to be $2 million total. The remaining was to be from 30 community contributions. 31 32 Community Development Director Grochala stated an updated analysis in 2004 by 33 Springsted recommended using tax abatement, a tool that was not available in 1999, to 34 pay for the city's $1.5 million cash contribution. The City Council established a Tax 35 Abatement District in the southern portion of the Woods Edge development to capture the 36 city portion of taxes generated by new development. Springsted estimated the cost to a 37 taxpayer in a $228,000 home to be $20/year, declining over the life of the bonds, but 38 growth in residential tax base could offset any increase in the tax rate. 39 40 Community Development Director Grochala noted the City has also benefited from the 41 development of Legacy at Woods Edge with Hartford Group as the master developers. If 42 the YMCA had been constructed prior to Woods Edge being underway, the city would 43 have been obligated for the costs of construction of Town Center Parkway, including 44 improvements to the Lake Drive intersection, plus extension of utilities, to the YMCA •