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HomeMy WebLinkAbout09/18/2003 Council MinutesCITY COUNCIL WORK SESSION SEPTEMBER 18, 2003 APPROVED 1 • 2 3 CITY OF LINO LAKES 4 MINUTES 5 6 DATE : September 18, 2003 7 TIME STARTED : 5:39 p.m. 8 TIME ENDED : 9:25 p.m. 9 MEMBERS PRESENT : Mayor Bergeson and Councilmember 10 Carlson, Dahl (left at 8:00 p.m.), and 11 O'Donnell 12 MEMBERS ABSENT : Reinert (arrived at 9:05 p.m.) 13 14 Staff members present: Director of Administration, Dan Tesch; Community Development 15 Director, Michael Grochala; City Engineer, Jim Studenski; City Planner, Jeff Smyser; 16 and Economic Development Assistant, Mary Alice Divine 17 18 CITIZEN OF YEAR AWARD 19 20 Mayor Bergeson stated the City has received two applications and recommends they 21 award those two people the "Citizen of the Year" awards. He directed staff to schedule 22 the ceremony for the first meeting in October. 23 24 MARSHAN LAKES INDUSTRIAL PARK (MICHAEL GROCHALA AND MARY • 25 DIVINE) 26 27 Tax Increment Financing (TIF) Request - Economic Development Assistant Divine stated 28 Paul Steimen of Springsted is representing the City in this matter and Pat Perstring and 29 Rob Davidson are representing Distribution Alternatives. 30 31 Mr. Steimen stated TIF District 1-10 was created in August of 2003 and now Panattoni 32 Development is requesting to use TIF for the Distribution Alternatives project. The 33 submitted request is $1,00,021,000, which is eighty percent of what would be generated 34 for that district over eight years. 35 36 Mr. Steimen stated the City would like to put an alternative proposal on the table. This 37 proposal would provide five years of TIF for a total subsidy of $638,000. The subsidy 38 will go back to the company directly as income and will offset the lease rate, for a 39 projected 10 -year lease. 40 41 He stated with the $1,00,021,000 subsidy, it would be $5.84 per square foot for the gross 42 lease rate for a 10 -year lease. With the alternative proposal, it would be $5.98 per square 43 foot for the gross lease rate for a 10 -year lease. He stated the developer's original request, 44 using different assumptions, showed a target lease rate of $5.88 per square foot. An 45 additional $.10 per square foot over 10 years equals $265,000. The total project is $12 46 million and this would be two percent of that total. When this was discussed previously, 47 this company was willing to do this project for $5.88 per square foot and the City is at • 48 $5.98. The City needs to cap the number at a "not to exceed" number. 49 • CITY COUNCIL WORK SESSION SEPTEMBER 18, 2003 APPROVED 1 Mr. Davidson stated $.10 per square foot sounds like a small number, but it is a large 2 number for them. The limitation of a five-year TIF is a large penalty. He stated they could 3 get facilities with lower numbers elsewhere, but they want to come to Lino Lakes and 4 provide jobs. This company has a certain threshold they are unwilling to go beyond. This 5 would be the largest facility in the county and would produce taxes for more years than 6 the district. 7 8 Mr. Perstring stated they would be creating 63 jobs and this number would go up for 9 temporary jobs. These would be prime earner positions and they project adding another 10 15 people over 10 years. They are willing to certify that they will create four more jobs in 11 the future. 12 13 He stated the estimated property taxes generated for this project are $290,000. He 14 explained how the taxes are broken down. He stated because fiscal disparities and tax 15 base are removed, the figures don't work. Therefore, $.10 per square foot is a significant 16 amount for this type of business. 17 18 Mr. Steimen stated there is no "magic formula" to get to these numbers and that the City 19 is trying to minimize public dollars. He stated they are trying to achieve a workable 20 solution to get the job done. He stated it was a policy decision and that the Council 21 needed to decide what it will take to get this done. 22 23 Councilmember O'Donnell asked what the top three reasons for choosing this site in Lino 24 Lakes were. Mr. Davidson responded the proximity to the existing facility in Arden Hills 25 and the combination of the two separate facilities along with the subsidy can make their 26 business more efficient. He stated those were their main two reasons. 27 28 Councilmember Dahl questioned what besides TIF was bringing them to this site versus 29 other sites. Mr. Davidson stated cost is one component and if cost was the only 30 consideration, they would choose a different site. He stated even with the tax abatement, 31 they will be paying more than other locations, but the transportation savings and other 32 savings are bringing them to this site. They are willing to pay more because of the 33 reasons stated previously. 34 35 Economic Development Assistant Divine stated the development agreement and business 36 subsidy agreement are ready for the September 22, 2003 City Council meeting. 37 38 Councilmember O'Donnell stated he is having problems with the "but for" test and this is 39 difficult to determine without company financials. He stated since they are telling us $.10 40 per square foot is significant to them, it is difficult for the Council to assess that without 41 their financials. 42 43 Mayor Bergeson asked how this project was comparable to other City projects. Economic 44 Development Assistant Divine stated Ad Graphics was 130,000 square feet, which is 45 about half the size of this project. The total subsidy for that project was $800,000 in 1997 46 / 1998 over five years. 47 • CITY COUNCIL WORK SESSION SEPTEMBER 18, 2003 APPROVED 1 Mayor Bergeson stated the five-year term has worked before, so the City should keep 2 using it. 3 4 Mr. Davidson stated their property will be over double the size of Ad Graphics, but they 5 are not asking for double the subsidy. 6 7 Mayor Bergeson stated he also needs to consider the "but for" test. He questioned if this 8 business did not go there, what would and when. He asked the Council to consider the 9 scope of this single building and the City will probably not get another building this size 10 again and would instead get three or four buildings with less taxable values. 11 12 This item will be discussed further at the EDA and Council meeting on Monday, 13 September 22, 2003. 14 15 Environmental Assessment Worksheet - Community Development Director Grochala 16 stated because this site exceeds 300,000 square feet, an EAW is required. He explained 17 the City is working with Bob Moberg of SEH and Glen Vanwormer on this report. The 18 City has received comments from MNDOT and the PCA. He explained where the subject 19 property is located and how the concept is laid out. He noted in the report 7A(i) that they 20 are stating there is no significant impact for the project. 21 22 Mr. Moberg stated this item was reviewed by the Environmental Board and it received 23 their recommendation for approval. 24 25 Councilmember Carlson questioned what the traffic issues were. Mr. Vanwormer stated 26 MNDOT's main concern is over the interchange and they would like to see an overall 27 study of the interchanges, which the City is doing now. He stated this new project would 28 not generate enough traffic to cause problems at the interchange. He stated there are only 29 two potential concerns at p.m. peak and left turns but there will be signals so these should 30 not cause problems. He stated he has spoken to MNDOT and Anoka County and there 31 were no concerns. 32 33 Mayor Bergeson questioned what percentage of traffic the Panattoni's site would 34 generate. Mr. Vanwamer stated two-thirds of the traffic would come off this site. 35 36 Councilmember O'Donnell questioned where the ponding would be located. Mr. Moberg 37 explained there were four locations and indicated them on the site plan. 38 39 Mr. Moberg then described what was assessed in the EAW. He stated wetlands would not 40 be affected on this site. 41 42 Councilmember Carlson questioned what were the major concerns of the Environmental 43 Board. Mr. Moberg stated it was mostly wording changes. 44 45 Community Development Director Grochala reviewed the preliminary plat by stating it 46 was a fairly simple four -lot subdivision and there would be one minor issue with the 47 setback to Lake Drive. The Planning and Zoning Board made recommendations for the 48 access at the county road and approved the preliminary plat. CITY COUNCIL WORK SESSION SEPTEMBER 18, 2003 APPROVED 2 This item will be discussed further at the Council meeting on Monday, September 22, 3 2003. 4 5 MILLERS CROSSROADS (BRUGGMAN DEVELOPMENT) (MICHAEL 6 GROCHALA, JEFF SMYSER). 7 8 City Planner Smyser stated this item was tabled at the last Council meeting because the 9 Council had questions that needed answers before considering approval. The questions 10 were about layout, commercial designation, road improvements, PUD issues and interior 11 open space as a public park. 12 13 Developers Paul Bruggeman and Greg Schlink presented three optional layouts for the 14 Council to consider. Mr. Bruggeman stated they preferred the attached townhome 15 concept with threeone-story units. 16 17 Councilmember Carlson stated this was not what she imagined to make the transition 18 from single-family across street. 19 20 Mayor Bergeson stated because they are double fronted he was concerned about storage 21 in the rear yard. Mr. Schlink stated the deed restrictions would prohibit that. 22 23 Mayor Bergeson questioned where does the Council go from here. City Planner Smyser • 24 stated the applicant is looking for direction from the Council whether this layout works 25 for them. Mayor Bergeson stated the Council is not in the design business but it is a 26 question of compatibility with what is across the street. He stated if the Council dictates 27 one of the options, they might be getting too much into the designing of the project. 28 29 Councilmember Dahl left at 8:00 p.m. 30 31 Councilmember O'Donnell stated he prefers the three -unit townhomes. 32 33 Councilmember Carlson stated she prefers the twinhomes. 34 Mayor Bergeson stated he was ok with either the twinhomes or three -unit townhomes. He 35 directed staff to poll the missing Councilmembers. 36 37 City Planner Symser then introduced the next question of which commercial designation 38 is appropriate for this project, NB or LB. He explained the differences between the two 39 districts. 40 41 Mayor Bergeson stated he was comfortable with LB because he wants the building to be 42 successful and there are more options in LB. 43 44 City Planner Symser stated the City has received the latest estimates for the road 45 improvement cost and the costs will be covered by two projects. 46 •47 City Engineer Studinski stated the total cost of the project would be $600,000. The south 48 portion (Bruggeman's) would be $340,000 and the north site's portion would be • • CITY COUNCIL WORK SESSION SEPTEMBER 18, 2003 APPROVED 1 $240,000. The costs would be split between developments and Anoka County would 2 contribute for the signal lights. 3 4 Community Development Director Grochala stated the project could not be done without 5 the improvements. 6 7 Mr. Bruggeman stated their projects would affect the intersection by five percent and that 8 it is a pre-existing condition. Now the City is asking them to pay for all of the 9 improvements and this is why our requested density is important to make the project 10 work. 11 12 Mayor Bergeson stated this should not have been a surprise. Mr. Schlink stated it was, 13 but he understood the last guy in gets kicked. 14 15 City Planner Smyser reviewed the PUD issues. 16 17 Councilmember Carlson stated she does not see additional parking. Mr. Schlink stated 18 each unit has four parking spaces, which should be adequate and parking on the street is 19 also available. 20 21 City Planner Smyser reviewed the central open space issue and stated it does not work 22 well for a public park. If the Council is concerned about offering credit for it, then they 23 should not. 24 25 Mayor Bergeson stated they have established the Council wants the greenspace and 26 questioned whethere the Council should get involved in whether or not there are 27 playground equipment or picnic tables there. 28 29 Councilmember O'Donnell stated the Park Board supports it being a private park and left 30 it up the Council whether equipment would be required. 31 32 Councilmember Carlson stated she was ok with it as a private park and with not offering 33 funding for it. 34 35 City Planner Smyser stated the density of the project is right under six units, which is 36 within the Zoning and Comprehensive Plan guidelines. Staff is recommending approval 37 of the project. 38 39 This item will be discussed further at the Council meeting on Monday, September 22, 40 2003. 41 42 TAX INCREMENT FINANCING DISTRICT 1-11 (MICHAEL GROCHAL, 43 MARY DIVINE). 44 45 Economic Development Assistant Divine reviewed the report for this item and stated the 46 preliminary work for establishing this district has been done. A study was done to 47 identify the redevelopment district and she indicated the area involved for the Council. 48 She stated a public hearing has been set for November 11, 2003 for this item. • • CITY COUNCIL WORK SESSION SEPTEMBER 18, 2003 APPROVED 1 2 This item will be discussed further at the EDA and Council meeting on Monday, 3 September 22, 2003. 4 5 2004 MSA STREET IMPROVEMENT PROJECTS (HOLLY DRIVE/62ND 6 STREET) (MICHAEL GROCHALA). 7 8 Community Development Director Grochala stated this project was moving forward and 9 brought the Council up-to-date on its issues. He stated the feasibility study is complete 10 and that this project will be done in three phases. The total cost of the project is $1.8 11 million and they have collected assessments already from the Trapper's project. He 12 questioned whether they should hold up the project two to three months for assessments 13 of only $9,000 (three properties, $3,000 each). 14 15 Mayor Bergeson stated the City Engineer should decide which portion of the project will 16 be the starting phase.. 17 18 This item will be discussed further at the Council meeting on Monday, September 22, 19 2003. 20 21 REGULAR AGENDA ITEMS 22 23 The City Council reviewed the regular agenda items for Monday, September 22, 2003. 24 25 Councilmember Reinert arrived at 9:05 p.m. 26 27 Councilmember O'Donnell suggested they continue to work on the Council Guidelines. 28 He stated because there are legality questions, these would not be an ordinance, but only 29 guidelines. They would be a set of behaviors councilmembers would operate under. 30 31 Councilmember Carlson stated she sees it as sanctions, which she sees as an ordinance. 32 33 Councilmember O'Donnell stated he does not see it that way and sees it as a code of 34 ethics. 35 36 Mayor Bergeson stated this conversation will be tentatively continued on October 15, 37 2003 and directed Council to send comments on the draft guidelines to staff. He also 38 directed staff to check the legalities of this with the City Attorney. 39 40 ADJOURN 41 42 The meeting was adjourned at 9:25 p.m. 43 44 45 46 47 These minutes were considered, corrected and approved at the regular Council meeting held on 48 October 13, 2003. 6 CITY COUNCIL WORK SESSION SEPTEMBER 18, 2003 APPROVED 1 • 2 3 4 5 Ann Blair, Ci 6 7 8 9 10 11 12 • • Clerk Transcribed by: Robin Leslie TimeSaver Off Site Secretarial, Inc. Jo Bergeson, Mayor