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HomeMy WebLinkAbout09/06/2001 EDAC Minutes 1 APPROVED CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MINUTES DATE: Thursday, September 6, 2001 MEMBERS PRESENT: H. Juni, F. Chase, K. Hansmann, D. Gorowsky, B. Hicks, T. Vacha MEMBERS ABSENT: R. Jensen, J. Milbauer, J. Schwartz OTHERS PRESENT: D. Carlson, C. Dahl, M. Divine, B. Wessel, R. Rafferty , A. Rolek GENERAL/MINUTES Mr. Chase noted that this is Mr. Wessel’s last EDAC meeting and thanked him for his years of leadership. The August 2, 2001 minutes were approved with one typographical correction. MARKETPLACE DEVELOPMENT Mr. Wessel stated that Councilmembers Dahl and Carlson abstained on the final PDO vote, which meant the project was not approved. At that time it was assumed that, as in the past, a super majority vote (4/5) vote was needed. After investigation by the city attorney, it was concluded that recent legislation mandated that cities use a 3/5 vote for this type of rezone, therefore the project was actually approved. The subsidy vote is at the next council meeting. The opening date for Target will likely slide to October 2002, due to the delays. Ms. Carlson stated that she and Ms. Dahl met with Mike Grochala and Linda Waite Smith and said they would reconsider their vote. She abstained because she had concerns she wanted worked on before it went to a vote. Her concerns included completion of Rice Creek Watershed review, and there is no contract with JADT, no development agreement, and outstanding road issues. Mr. Wessel stated all those issues were conceptually agreed to and will be implemented as part of the development process. Ms. Carlson read one paragraph from a resignation letter from the Environmental Board chairman that stated that economic development issues should not take precedence over environmental concerns. Mr. Chase said plans can be approved conditioned upon approval of other entities. In order to construction to begin, all the outstanding issues 2 need to be resolved, but all issues don’t need to be resolved to keep the project moving forward. Mr. Wessel stated the city is continuing to negotiate the Apollo Drive access with JADT. McDonald’s still wants to build when that is resolved. Mr. Chase noted that the city should not wait until a development like Marketplace is before it to decide policy. Ms. Dahl stated that EDAC members should understand the reasons for her abstaining, which included issues on 77th Street. Mr. Rolek stated that the structure of the Marketplace subsidy request has changed, and includes a request for abatement and waiver of some development fees. Council gave direction to work toward a 5-year payback. The fees waived are only a portion of the total fees that will be collected from the project. Mr. Chase said the legislative changes has worked against reaching the goal. Ms. Divine said the subsidy policies need to be reevaluated based on legislative changes. Mr. Rolek said waiving fees does not set a precedent, and each development must be evaluated on its own merits. It will not obligate the city to waive fees for any other developer. Mr. Wessel stated the project has to justify a subsidy, and whether the project would be here without an incentive. The long term benefit should be what directs the incentive. Mr. Gorowsky stated it would be helpful to have a primer on subsidies based on the latest changes. Past policies may not be as critical as what should be done in the future. Past policies may not be as critical as what should be done in the future. Mr. Chase asked for a straw vote regarding the length of payback: Mr. Gorowsky said 8 years seemed acceptable for the return the city will get on the Marketplace project. Mr. Juni said the city has to weigh the value of the project to the city, although EDAC should not be concluding the number of years a subsidy should be. Mr. Hicks questioned what Target expects in terms of a payback for their store. He is not comfortable with 8 years, and would prefer less than 5, but he does not have all the information to conclude what is best. Ms. Hansmann said she is for the project provided it goes through the process. The people she hears from say they want a Target, but they don’t want to pay for it. She prefers a 5-year payback. The purpose of development is to add to the tax base. Mr. Rolek reminded the board that any development using city tax abatement contributes to the school and county taxes immediately. Mr. Rafferty said the city needs to act like its buying something for itself. He questions that a billion dollar corporation with box architecture can’t stand on its own, and it should less than a 5-year abatement. Mr. Vacha said it is too great a gamble, fees shouldn’t be waived, and the abatement should be under 5 years. Mr. Chase said he preferred 5 years, but the impact of this project is greater than just the project, and a subsidy may have to be 8 years. 3 Mr. Wessel noted that of the six voting members present, the vote was split. It was noted that Mr. Rafferty is a liaison from the P&Z. Ms. Carlson stated that the Village is intended to be a more special project, and she could see an 8-year subsidy for that. Mr. Chase stated that school districts have never understood subsidies, and don’t see that these projects directly benefit them. School districts need to participate in economic development. Mr. Hicks said VILLAGE DEVELOPMENT Ms. Divine said the Village development is interdependent on a lot of things happening, including the Marketplace, the YMCA and site control. So this year’s LCDA application is the same as last year, for $1.5 million to secure the Tagg property. John Duffy, the developer interested in senior housing on the city property, partnered with the city to complete a market study. Preliminary results show a very strong market for senior housing, with a stronger market by 2006. The market is for higher end, higher amenity housing. Affordable housing for seniors is close to saturated in the market area. Twenty percent of the units would be affordable, but the remainder would be higher rents. However, the higher end apartments cannot be built next to a sandblasting site. The marketers are taking a closer look at the rental rates of a project next to the industrial site versus within a Village. Mr. Rafferty asked what the options are if the grant is not received. Is condemnation a possibility. Ms. Divine said it will take public assistance because of the type of development it is. The Target project can spur more interest. Mr. Wessel stated the Taggs have been consistent in their price, which is $3.50/SF for 29 acres, 10 of which are wetland, plus $1.5 million to relocate. That is not what the current market will pay. The last alternative is an RFP as a commercial property and let it develop as a conventional center. Mr. Hicks questioned why the city tries to find $3.50/SF if the market isn’t there, why not wait rather than pay above market. Ms. Divine stated that is why these types of grants are available, because the Metropolitan Council recognizes these types of developments are hard to get. The city doesn’t have regulatory mechanisms to guarantee the Village. So unless we continue down this path until there aren’t any other options. It will be very easy to lose the vision to conventional development. Meeting adjourned 8:30 a.m.