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HomeMy WebLinkAbout10/05/2017 EDAC Minutes 1 CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MINUTES DATE: October 05, 2017 MEMBERS PRESENT: Thomas Colgan, Jim Schueller, Don Johnson, Michael Ruhland, Nathan Vojtech, Lou Masonick, Chad Wagner, Patrick Kohler MEMBERS ABSENT: Julie Schwartz OTHERS PRESENT: Michael Grochala, Kirsten Barsness, Joe Widing APPROVAL OF MINUTES It was moved by Mr. Kohler to approve the minutes from August 8, 2017. The motion was seconded by Mr. Wagner and passed unanimously. DISCUSSION ITEMS a. Lino Lakes Tax Increment and Abatement Financial Incentives Policy Kirsten Barsness shared a policy update on tax increment and tax abatement financing options for the Board. Ms. Barsness explained that in June of 2016 the City revised its Business Subsidy Criteria as required by State Law. The criteria are intended to set minimum requirements which recipients must meet to be eligible to receive business subsidies. All business subsidy requests must comply with the State’s Business Subsidy Act. A business subsidy must meet a public purpose such as increasing the tax base. The requirements must include a specific wage floor for the wages to be paid for jobs created. In addition the City has both a Tax Increment Financing Policy and a Tax Abatement Policy. These documents are intended to provide a guide for use of these financial tools for private development above and beyond the requirements of set forth by state law. Staff is proposing to update and combine these two policies into one overall policy documen t. The committee asked if the City could make one piece of financing development abatement and the other piece increment financing. 2 Ms. Barsness replied that the differences between the two would make them incompatible within a single development. Abatement has more involved with other authorities and requires additional approval. Mr. Grochala stated that these would not be used on the same project and that abatement is more permissive. He continued that both have different revenue and support mechanisms. These tools would be used on a by project basis. The committee asked about if residential projects and if TIF would be a good use. Mr. Grochala stated that residential is different than commercial or industrial projects. He stated that increment financing would not work well for them and that abatement would be a more appropriate tool. TIF needs to be used on a single parcel or project that the tool is being used whereas abatement can be used on separate disparate properties within a jurisdiction. Ms. Barsness stated that TIF has limitations on what the money can be used on, but abatement is wider in scope for what the funds can be used for, but generally would have less money available for the project and require additional approvals. The committee asked if abatement is using a certain dollar amount on what the project is valued today and how long abatements typically take to be approved. Mr. Grochala answered that the abatement could be on the future value of the land like TIF. He also stated that the city still has both tax increment districts and abatement districts, Woods Edge and the Marshan Industrial Park are both in TIF districts. While the YMCA and the Lino Lakes fire hall are both abatement projects. Ms. Barsness added that abatement approval can vary, but can typically take 2 to 3 months from initial application to approval. Ms. Barsness began a discussion on what City objectives should be for TIF and abatement policies. Her first question was if City policies should still be specific to the town center area or to expand it to city wide. The Committee agreed that it should be expanded to include the entire city. Ms. Barsness asked next if the city should keep language about creating options for affordable housing or to include life cycle housing instead as it includes more options and affords the city more flexibility towards what kind of development can receive benefits. The Committee agreed that the language should provide more flexibility and questioned if the city wanted to be more open to retirement communities and housing for older people. Mr. Grochala stated that it was a question that is going to be looked at for the upcoming comprehensive plan. Mr. Grochala stated that abatement could be used to increase design standards for specific developments. Ms. Barsness asked if upfront payment should be included in the language or if its normal practice. Mr. Grochala answered that it is usually pay as you go, but that the language should stay to allow the City to bond for projects upfront. 3 Ms. Barsness next asked the committee if the language should be altered to provide the most amount of assistance and what limits should the city set for assistance. The committee inquired if this would include blight and what the City defines as blight. Mr. Grochala stated that it is statute and would require an inspector that would show that the cost to upgrade or repair a building exceeds the current value of it. He further explained that the 49 Club building was inspected and approved as blight and TIF was sued for its demolition and site cleanup. Mr. Grochala asked if the percentage for assistance on a project should stay as-is in the document. He stated that the 16% cap from the city keeps the developer with skin in the game on a project. The Committee agreed that the 16% cap is something that should stay as-is. The Committee discussed that project value is different than project cost and could be less than construction costs and minimum value agreements are needed to ok any TIF district to guarantee a revenue stream. This discussion was tabled for further conversation in a future meeting. b. Woods Edge Development Interest Mr. Grochala began the discussion by explaining that there is interest in developing the remaining large block in the Woods Edge development with a senior campus for the site. The original plan was for a mixed use district with commercial pads and residential above commercial uses. The area has been hoped for commercial to keep an active town center feeling to the area. The developer has submitted concept plans of a 200 unit facility with 100 independent living units and assisted living units for the remainder. The developer would maintain a retail pad nearer to Lake Drive with some first floor commercial abutting the community green area. All existing senior buildings in the area are 100% occupied currently. The city has some concern about the vertical mixed use, but the developer wants to build amenities onsite for residents and having them available for the public as well. Mr. Grochala asked the committee if the proposal is something the City should be interested in pursuing further. Committee members asked if there are similar projects in the area and if this would create too much senior living in the Woods Edge area. Mr. Grochala responded that the development near the Tria event center is similar and has been successful and that the City has some concern about having too much of a single housing type in the area, but with the townhome development coming online that the age mix could be fine. He also stated that the value of the project could be high enough on its own to merit construction. The Committee discussed the merits of senior living communities and the lack of them currently in the City. The Committee thought that this development fits the area as there is ample retail nearby, easy access to the freeway, a large programmable green space 4 adjacent and would be compatible with the housing options currently being constructed and already existing in the area. The Committee recommends that the city should pursue continuing to discuss the possibility with the developer. c. Projects Update Mr. Grochala stated that Lennar is still in the process of purchasing the site and the Planning and Zoning Board had approved the changes on the master at the last meeting and the City Council will see and make a decision on the changes soon. Mr. Grochala also mentioned that Lennar is looking to start phase one by as early as next spring. ADJOURNMENT The meeting was adjourned at 9:17 AM.