Loading...
HomeMy WebLinkAbout08/06/2020 EDAC PacketHow to Join the Meeting Phone: Dial 1-312-626-6799 Meeting ID: 875 2942 4722 Web link: https://us02web.zoom.us/j/87529424722 CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MEETING ACF,NDA 1. CALL TO ORDER AND ROLL CALL 2. APPROVAL OF MINUTES: June 4, 2020 3. DISCUSSION ITEMS A. Woods Edge Developer Forum B. Anoka County Business Relief Program C. Chain Of Lakes YMCA Update D. Project Updates 4. ADJOURN Thursday, August 6, 2020 11 Meeting to be held electronically Pursuant to MN Statute 13D. 021 CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MINUTES DATE : June 4, 2020 TIME STARTED : 8:02 A.M. TIME ENDED : 8:30 A.M. MEMBERS PRESENT : Jim Schueller, Andrew Cravero, Chad Wagner, Thomas Colgan, Julie Jeffrey -Schwartz, Nathan Vojtech, Patrick Kohler, Don Johnson STAFF PRESENT : Michael Grochala, Janele Waterman I. CALL TO ORDER Chair Schueller called the Economic Development Advisory Committee meeting to order at 8:02 A.M. on June 4, 2020. I1. APPROVAL OF MINUTES Mr. Cravero made a MOTION to approve the May 7, 2020 Meeting Minutes. Motion was supported by Mr. Wagner, passing unanimously. III. DISCUSSION ITEMS A. COVID — 19 Update — Outdoor Seating for Restaurants and Bars Mr. Grochala, Community Development Director, presented the staff report. On May 20, Governor Walz announced bars and restaurants would be allowed to provide limited outdoor dining services beginning June 1. Mr. Grochala commented while it provides businesses with the opportunity to open to the public, there are several obstacles business owners need to navigate in order to be able to serve the public. The City is actively working with businesses who want to pursue outdoor dining options. B. Lyngblomsten/County Road Improvements Mr. Grochala, Community Development Director, presented the staff report. Lyngblomsten will be seeking final plan and final plat approval from the Planning and Zoning Board on June 10. The City is working with Lyngblomsten, Anoka County, and Ramsey County on improvements to Hodgson Road and County Road J. Mr. Cravero asked when we can expect the watermain work off of Raven's Court to begin. Mr. Economic Development Advisory Committee June 4, 2020 Page 2 Grochala stated the watermain work is in the design process at this time. The project will likely be bid out late fall and constructed next spring. The watermain and sanitary sewer will be extended from Woodridge Lane to the Lyngblomsten site. The watermain will then be continued through the Lyngblomsten site to Raven's Court. Mr. Wagner inquired of Lyngblomsten's presale on the townhomes. Mr. Grochala replied while we do not have hard data, Lyngblomsten has received a lot of interest from the public. Mr. Vojtech asked what the requirements are for the townhomes. Mr. Grochala specified the townhomes are rentals and have a minimum age requirement. Mr. Wagner questioned if the range for rent has been determined. Mr. Grochala said he did not know what the range for rent was. He further stated Lyngblomsten is working on establishing the price range. C. Laborer's Training Facility Expansion Mr. Grochala, Community Development Director, presented the staff report. A public hearing will be held June 1 Oth by the Planning and Zoning Board regarding the conditional use permit for Laborer's Training Center campus expansion. D. Board Appointments Mr. Kohler and Mr. Wagner received reappointment notices for the Economic Development Advisory Committee. Mr. Vojtech was appointed to serve on the Planning and Zoning Board. He will continue to serve on the Economic Development Advisory Committee as well. E. Updates Mr. Grochala discussed an affordable housing grant, previously received from Met Council for the Lakewood Apartment building. The grant was applied to the project as a loan and was recently repaid in full. The money can be retained by the City for use in future affordable projects or returned to Metropolitan Council. The Committee recommended retaining the money for future use. IV. ADJOURNMENT Mr. Cravero made a MOTION to adjourn the meeting at 8:30 A.M. Motion was supported by Mr. Wagner. Motion carried 8-0. Respectfully submitted, Janele Waterman, Administrative Assistant DRAFT MINUTES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala, Community Development Director EDAC MEETING DATE: August 6, 2020 TOPIC: Woods Edge Developer Forum REQUEST: Discussion BACKGROUND In 1998 the City of Lino Lakes, following award of a Metropolitan Council Livable Communities Planning Grant, retained the services of the Calthorpe Associates to design a Master Plan for the City's Town Center District. The purpose of the Lino Lakes "Town Center" development is to provide for the orderly and integrated development of a high -quality Town Center which includes a mix of shops, offices, entertainment, housing, recreation, community facilities, and open space. The mix of uses was designed to implement the principles of the Livable Communities Act and the City's Comprehensive Plan by creating a Town Center for the community and providing more diverse, life -cycle housing —including affordable and rental housing —within an active and interesting pedestrian -oriented community. The development was a cooperative effort intended to leverage public and private investment to create sustainable value, ecologically, economically and culturally. The City entered into an agreement with the Hartford Group to develop the property in 2004. When the project was first envisioned and approved, it was based on a set of core principles and objectives: • Develop land uses linked to local and regional transportation systems • Connect housing and centers of employment, education, retail, and recreational uses • Provide a range of housing choices • Protect and enhance natural resources The project started off strong with the YMCA, Lakewood Apartment Building, and Country Inn and Suites as the initial project components. However, during the great recession, development came to halt and the developer lost the property. In 2010, the Legacy at Woods Edge property forfeited to the State of Minnesota for failure to pay property taxes. In June of 2013, the City facilitated the sale of approximately 1 acre of land to Lino Lakes Assisted Living in the amount of $321,000. The sale allowed for a 36 unit expansion of the existing facility with a value of nearly $2,000,000. The City's Economic Development Authority (EDA) obtained title for the remaining 20 acres of undeveloped land in September of 2013. The acquisition was made possible through special legislation approved in the 2013 legislative session. The property transfer was made at no cost to the City. The purpose of the transfer was to streamline the conveyance process and allow the City opportunity to recoup outstanding special assessment debt with land sale proceeds. In 2015, the city sold approximately 11 acres to DR Horton for $1,000,000. Horton constructed a 112 townhomes on the site which are nearing completion. The City has approximately 9 acres of land remaining. Town Square Block Two (2) acres remain for development in this area. The town square block was originally guided for civic uses (YMCA) and mixed uses allowing for 1 st floor commercial with multi -family residential uses above. The concept master plan provides for either a multi -family building or commercial pads on the west side of the block. Urban Block Approximately 7 acres are available for development. The Urban Block was originally guided for mixed use (1st floor commercial with housing above) along the community green. The balance of the property was guided for commercial. The Mixed Use area allows up to 24 units an acre. A total of 450 residential units were originally proposed for the development, of which, approximately 172 have been constructed. Over the past three months, staff has been working with Elhers and Associates to gauge interest insight. A series of developer roundtables was held with four metropolitan area developers. Each of the groups interviewed offered their perspectives on density, uses, price points and market conditions. A summary of the meeting is attached. EDAC CONSIDERATION Staff is seeking EDAC's perspective on the developer comments and potential development options for the property. ATTACHMENTS 1. Ehlers Memo dated July 8, 2020. 2. Woods Edge Site Plan 2 EHLERS PUBLIC FINANCE ADVISORS Memo To: Michael Grochala, Community Development Director From: Keith Dahl and Jason Aarsvold, Ehlers Date: July 8, 2020 Subject: Developer Roundtables — Summary of Meetings At the end of June, we coordinated staff -level roundtables with you and four (4) developers to solicit market insight, perspective, and feedback as it relates to the remaining three (3) parcels in the Legacy at Woods Edge development. The intent of these roundtable discussions was to familiarize developers with the area and ascertain what a potential development could look like, specifically development types, size, density and rent structure. We also discussed current market trends, the need for public financial assistance, positive and negative attributes to the area, and what the City could do to remove any barriers to development. Below are the common themes discussed during the developer roundtables. Common Themes Discussed: 1. Positive Attributes: • Public infrastructure is already constructed • Access to 1-35W • Proximity to parks, trails, and open spaces • Established surrounding uses, such as YMCA, City Hall and retail • Development is shifting out into suburbs • Strong demographics in the area • Population is expected to increase 2. Negative Attributes: • Economic uncertainty • Construction costs continue to increase • Access to a grocery store • Not directly adjacent to Lake Drive • Unproven multi -family apartment market • Development fee structure is too high 3. Residential Development: • The remaining parcels are well suited for a high quality, high amenity multi -family development o Total number of multi -family units could range anywhere from 125 — 300 o Average rents would need to be between $1.80 — $2.05 per sq. ft. to support construction of a high quality, high amenity multi -family development • A for -sale townhome development could be possible as well o Total number of townhome units could range between 60 — 70 o Price point would need to be between $300,000 — $350,000 per unit BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com �, 1 (800) 552-1171 ® www.ehiers-inc.com 4. Retail Development: • Retail development could be possible if it were service -oriented to the immediate residents and members of the YMCA • Total square footage could range anywhere from 5,000 sq. ft. — 20,000 sq. ft. depending on the types of tenants • A triple net lease would need to be about $20 per sq. ft. for new construction 5. Barriers to Development: • Current rental rates for multi -family development and lease rates for retail development are too low to support new construction o Multi -family rental rates are estimated to be $1.25 — $1.50 per sq. ft. in the City; however, rental rates need to be between $1.80 — $2.05 per sq. ft. to support new construction of a high quality, high amenity project o Retail triple net lease rates are currently around $12 per sq. ft.; however, these lease rates need to be around $20 per sq. sf. to support new construction • Since Lino Lakes has an unproven multi -family market and lower than normal market rate rents and lease rates, public assistance would be required with any type of rental multi -family and/or retail development to achieve the necessary operating revenue • Development fee structure is too high for rental residential and/or retail development o This will prohibit any type of rental residential and retail development to occur, or drastically increase the amount of public assistance necessary o The only viable development that could support the current fee structure is a for -sale development similar to the townhomes built by DR Horton Summary of Developer Roundtables: Timberland Partners, Ryan Sailer and Biorn Strommen — Timberland Partners focuses on multi -family development and mixed -use development, but they've also taken on townhome development as well. • Development Types: o Retail: Service -oriented, fast casual, and/or medical (5,000 — 8,000 sq. ft.) o Residential: Senior cooperative development (250 units maximum), or a Townhome development (9-10 units per acre) similar to DR Horton's development • For -Sale Developments: $300,000 - $350,000 per unit • Rental Developments: Average rent of $1.80 per sq. ft. • Positive Attributes: o Development is shifting out into suburbs o Demographics are good o Great access to 1-35W o Parks and public outdoor space nearby o Good location • Negative Attributes: o Construction cost are high and won't be decreasing in the near future o Underwrite flat rent growth since Lino Lakes is an unproven multi -family apartment market o Economic uncertainty o Development fee structure in the City it too high o Grocery access is poor • Land acquisition price for a multi -family development would be about $8,000 per unit • Public assistance would be required with any type of development BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com �, 1 (800) 552-1171 ® www.ehiers-inc.com 2. Ron Clark Construction, Mike Waldo — Ron Clark Construction mainly specializes in single-family development, townhome development, and condominium development. As of recently, they've also began to expand into multi -family development. • Development Types: o Retail: Neighborhood and service -oriented retail, such as a dry cleaner and restaurant (5,000 — 6,000 sq. ft.) o Residential: Market rate multi -family development (minimum units 125) o There is no market for condominiums, plus concerns about liability • Rental Development: Average rent of $1.96 per sq. ft. • Commercial Development: Triple net lease between $12-15 per sq. ft. • Parking Ration would need to be around 1.5 -1.6 per unit • Positive Attributes: o Lake Drive traffic numbers per day range from 17,000-19,000 o Great access to 1-35W o Parks and public outdoor space nearby o Good location with big box retail across 1-35W o Willing city to identify development • Negative Attributes: o Immediate access to public transit o Site not directly off Lake Drive; it's more or less hidden from sight o Economic uncertainty o Development fee structure in the City it too high • Land acquisition price for a multi -family development would be about $11,000 - $12,000 per unit • Public assistance would be required with any type of development 3. Alatus, Bob Lux and Chris Osmundson — Alatus specializes in multi -family development and mixed -use development, but also undertakes condominium development, single-family development, and commercial development. Development Types: o Retail: Service -oriented retail (day care, coffee shop, restaurant, etc.) paired with a grocery store with an indoor/outdoor market space for community - oriented commerce like a business incubator, farmers market, and/or space for a bizarre (12,000 — 20,000 sq. ft.). o Residential: Upper end luxury senior housing (Approximately 240 units) Rental Development: Average rent of $2.00 - $2.05 per sq. ft. Positive Attributes: o Proximity to a freeway o Public infrastructure has already been constructed o Good soils are found onsite for multi -family development o Population is expected to increase within the city o Good surrounding uses, such as the YMCA, bank, health clinic, and city hall o Lake Drive traffic numbers per day range from 17,000-19,000 o Parks and public outdoor space nearby; Great bike/walkability score o Great location o Willing city to identify development Negative Attributes: o Development fee structure in the City it too high Land acquisition price would be on the lower end, most likely would need to be free Public assistance would be required with any type of development on top of the land BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com �, 1 (800) 552-1171 ® www.ehiers-inc.com 4. Inland Development Partners, Kent Carlson — Inland Development Partners predominantly focuses on commercial development and industrial development, but when the opportunity presents itself, they will also undertake multi -family development and townhome development. • Development Types: o Retail: There isn't a market for retail since most retailors want to be on the other side of 1-35W closer to Target o Residential: Market rate multi -family apartment and townhome development (300 unit maximum) • Rental Development: o Apartments: Average rent of $1.90 - $1.95 per sq. ft. o Townhomes: Average rent of $1.70 - $1.75 per sq. ft. • Positive Attributes: o Great access to 1-35W o Parks and public outdoor space nearby o Good amenities in the immediate surrounding area • Negative Attributes: o Development fee structure in the City it too high o Economic uncertainty o The big box retail (Target and Kohls) is across a major freeway • Public assistance would be required with any type of development Conclusion: In conclusion, current market conditions have drastically changed since development started in the Legacy at Woods Edge. The provided market insight, potential types of developments, and feedback we received from the developer roundtables should be used as a benchmark for discussions with the Economic Development Advisory Committee and City Council as they determine what type of development they would like to see on the remaining parcels. BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com �, 1 (800) 552.1171 0 www.ehiers-inc.com 'NEIGHBORHOODM_, BLOCK i I ( r TOWN SQUARE ' `; BLOCK • URBAN J®/ ► `'> ... BLOCK SITE MASTER PLAN ECONOMIC DEVELOPMENT ADVISORY COMMITTEE AGENDA ITEM 3B STAFF ORIGINATOR: Michael Grochala, Community Development Director EDAC MEETING DATE: August 6, 2020 TOPIC: Business Relief Funding — CARES ACT REQUEST: Discussion BACKGROUND Both Anoka County and the City of Lino Lakes are receiving federal funding through the CARES ACT to offset costs associated with the COVID — 19 pandemic. These funds may be used for assisting local, small businesses. Anoka County has established a grant program for both for -profit and nonprofit businesses. $5,000,000 has been set aside through the program for businesses and an additional $1,000,000 for nonprofits. The maximum grant amount is $10,000. The City Council is still evaluating the City's share of CARES Act funding and has not prioritized a business relief program at this time. Should the City move forward with a program, it can be modeled after the Anoka County setup. Anoka County has made available their guidelines, vendor contract outlines, and procedures. It should be noted that under the terms of the Anoka County program, businesses are not eligible for the Anoka County grant if already in receipt of a grant from either the city or state. EDAC CONSIDERATION Should the City consider establishing a Business Relief program in addition to the Anoka County program? ATTACHMENTS 1. Anoka County Business Relief Grant Program — Guidelines 2. Anoka County Nonprofit Relief Grant Program — Guidelines Anoka County Business Relief Grant Program Anoka County will offer a business relief grant program to support local businesses impacted by COVID-19. Grants will be awarded in an amount not to exceed $10,000. Applications will be accepted electronically during a 10 day time frame beginning at which time the County's administrator will evaluate the applications. Application will be made available in Spanish, Hmong, Somali, Arabic, and Russian. In addition, application technical assistance will be available through Anoka County Regional Economic Development Department and additional technical assistance providers. Grants will be awarded based upon the extent of hardship and need. Grant Amount: Grants will not exceed $10,000 to cover eligible expenses incurred as a result of the COVID pandemic after March 1, 2020 (see examples of eligible use of grant funds below). Recipients must submit a list of COVID related expenditures during the application review process. The total amount of CARES Act funds allocated towards the Anoka County business relief grant program will be equitably distributed among each of the seven county districts based upon economic hardship and need. Eligibility Criteria: • Applicant must be locally owned, operated and domiciled in the State of Minnesota with a physical establishment in Anoka County. If there is a parent company or a second location outside of Anoka County, only the entity located in Anoka County will be eligible. • Applicant must be able to demonstrate financial hardship as a result of the COVID-19 outbreak. • Applicant must be in good standing with the Minnesota Secretary of State and the Minnesota Department of Revenue as of January 1, 2020. If there is an issue pending with the Minnesota Secretary of State, applicant may still apply for the grant, but will need to demonstrate the issue has been satisfactorily resolved in order to be eligible and receive grant funds. • If required, applicant must be licensed, in good standing. • Applicant must be current on property taxes. • Applicant must employ 50 or less employees as of January 1, 2020. • Applicant must have been in operation 12 months prior to application. o Anoka County will not disqualify an applicant if there was an ownership change and the business remained in operation within 12 months prior to application. • Applicant must disclose all federal, state or local grant or loan applications for which applicant has applied which has been received or remains pending at the time of application. 11Page • Applicant must Certify in good faith that the "uncertainty of current conditions makes the grant request necessary to support ongoing operations." Ineligible Businesses/Restrictions • Applicants who have previously received federal, state or local grants for the same expenses. • If an applicant receives any funding from a local city and the County, applicant may only accept one of the grants. • Multi -state chains are generally ineligible except for locally owned franchisees. • Nonprofit organizations. • Businesses that primarily derive income from gambling or adult entertainment. • Home -based businesses are generally ineligible except for in -home licensed childcare providers. • Businesses that derive income from passive investments; property rentals or property management; billboards; or lobbying. • Payment of taxes or government utilities or fees are ineligible. Examples of Eligible Usage of Grant Funds 1. Commercial lease or mortgage payments. 2. Accounts payable (AP) if the AP is a COVID-19 related expense incurred since March 1, 2020. 3. Payroll, unless the business received Paycheck Protection Program (PPP) funds or pandemic unemployment insurance (UI), to assist with payroll expenses incurred after March 1, 2020. 4. Reopening costs or safety improvement costs expended since March 1, 2020 (i.e. outdoor seating, plexiglass, cleaning products, re -staffing costs, etc.) 5. Operating utilities or fees for those facilities interrupted or forced to shut down incurred after March 1, 2020. The categories outlined above are intended to be general guidance. Final grant decisions will be made in consultation with the County's Administrator after a thorough review of all application factors. After the initial funding round, County reserves the right to amend any criteria for eligibility as needed to best address the impact of the current pandemic. 2 1 P a g e Anoka County Nonprofit Relief Grant Program Anoka County will offer a nonprofit relief grant program to support local nonprofits impacted by COVID-19. Grants will be awarded in an amount not to exceed $10,000. Applications will be accepted electronically during a 10 day time frame beginning at which time the County's administrator will evaluate the applications. Application will be made available in Spanish, Hmong, Somali, Arabic, and Russian. In addition, application technical assistance will be available through Anoka County Regional Economic Development Department and additional technical assistance providers. Grants will be awarded based upon the extent of hardship and need. Grant Amount: Grants will not exceed $10,000 to cover eligible expenses incurred as a result of the COVID pandemic after March 1, 2020 (see examples of eligible uses of grant funds below). Recipients must submit a list of COVID related expenditures during the application review process. The total amount of CARES Act funds allocated towards the Anoka County business relief grant program will be equitably distributed among each of the seven county districts based upon economic hardship and need. Eligibility Criteria: • Applicant must be locally owned, operated and domiciled in the State of Minnesota with a physical establishment in Anoka County. If there is a parent organization/company or a second location outside of Anoka County, only the entity located in Anoka County can apply to receive a grant and grant funds issued must be used for the local organization's expenditures. • Applicant must be a 501(c)(3) nonprofit organization or 501(c)(19) veteran's organization. • Applicant must be able to demonstrate financial hardship as a result of the COVID-19 outbreak. • Applicant must be in good standing with the Minnesota Secretary of State and the Minnesota Department of Revenue as of January 1, 2020. If there is an issue pending with the Minnesota Secretary of State, applicant may still apply for the grant, but will need to demonstrate the issue has been satisfactorily resolved in order to be eligible and receive grant funds. • If required, applicant must be licensed, in good standing. • Applicant must be current on property taxes. • Applicant must employ 50 or less employees as of January 1, 2020. • Applicant must have been in operation 12 months prior to application. o Anoka County will not disqualify an applicant if there was an ownership change and the business remained in operation within 12 months prior to application. 11Page • Applicant must disclose all federal, state or local grant or loan applications for which applicant has applied, which has been received or remains pending at the time of application. • Applicant must Certify in good faith that the "uncertainty of current conditions makes the grant request necessary to support ongoing operations." Ineligible Nonprofits/ Restrictions • Applicants who have previously received federal, state or local grants for the same expenses or services. • If an applicant receives any funding from a local city and the County, applicant may only accept one of the grants. • Nonprofits that primarily derive income from gambling or adult entertainment are ineligible. • Payment of taxes or government utilities or fees are ineligible. • A nonprofit corporation that receives funds under the Non-profit Relief Grant Program may not use such funds to provide a loan to a related business. Examples of Eligible Usage of Grant Funds 1. Commercial lease or mortgage payments, except for government leases. 2. Accounts payable (AP) if the AP is a COVID-19 related expense incurred since March 1, 2020. 3. Payroll, unless the nonprofit received Paycheck Protection Program (PPP) funds or pandemic unemployment insurance (UI), to assist with payroll expenses incurred after March 1, 2020. 4. Reopening costs or safety improvement costs expended since March 1, 2020 (i.e. outdoor seating, plexiglass, cleaning products, re -staffing costs, etc.) 5. Operating utilities or fees for those facilities interrupted or forced to shut down incurred after March 1, 2020. The categories outlined above are intended to be general guidance. Final grant decisions will be made in consultation with the County's Administrator after a thorough review of all application factors. After the initial funding round, County reserves the right to amend any criteria for eligibility as needed to best address the impact of the current pandemic. 2 1 P a g e ECONOMIC DEVELOPMENT ADVISORY COMMITTEE AGENDA ITEM 3C STAFF ORIGINATOR: Michael Grochala, Community Development Director EDAC MEETING DATE: August 6, 2020 TOPIC: YMCA Update REQUEST: Discussion BACKGROUND As many of you are aware, the Chain of Lakes YMCA recently notified the City and residents that the local facility would not be reopening as a result of the COVID-19 impacts. Staff and the City Council will be holding additional meetings with the YMCA to further discuss this issue. The City and YMCA entered into a Development Agreement in 2006 to build a recreational facility that included a teen center, gym, indoor lap swimming pool, leisure style zero -depth pool, cardiovascular/strength training area, aerobic studio, locker rooms, family program space and childcare on certain property defined in the Development Agreement as the "Site." The City provided the land, infrastructure (streets and utilities), grant funds in the amount of $150,000, and a subsidy in the amount of $2,460,000. The City also assisted the YMCA through the issuance of conduit bonds in the amount of $4,000,000. These are not an obligation of the City, but allowed for lower interest rates for the YMCA. The deed conveying the property does place a continuing restriction on the property for thirty years from the date of conveyance. If the YMCA (i) sells the land and building to an entity which is not a 501(c)(3) corporation; (ii) becomes insolvent or bankrupt; or (iii) no longer operates the facility as a recreational facility, the City has the right to re-enter and take possession of the property. The City will be exploring every option available to obtain a satisfactory resolution to this issue. EDAC CONSIDERATION None required. Discussion only. ATTACHMENTS 1. None.