HomeMy WebLinkAbout10/06/2004 Council MinutesCITY COUNCIL WORK SESSION OCTOBER 6, 2004
APPROVED
• 1
2
3 CITY OF LINO LAKES
4 MINUTES
5
6 DATE : October 6, 2004
7 TIME STARTED : 5:40 p.m.
8 TIME ENDED : 8:17 p.m.
9 MEMBERS PRESENT : Councilmember Carlson, Stoltz and
10 Mayor Bergeson
11 MEMBERS ABSENT : Dahl and Reinert
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13
14 Staff members present: City Administrator, Gordon Heitke; Community Development
15 Director, Mike Grochala; City Engineer, Jim Studenski; Community Development
16 Coordinator, Mary Alice Divine (part); City Planner, Jeff Smyser (part); and Finance
17 Director, Al Rolek (part)
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20 CSAH 14 PROJECT, JIM DVORAK/SRF
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22 Mr. Jim Dvorak, SRF Consulting, stated SRF has been working with Anoka County on
• 23 the CSAH 14 (Main Street) reconstruction project. He referred to a preliminary layout of
24 the improvements to CSAH 14 within the City of Lino Lakes. He stated MnDOT has
25 come up with a preliminary plan for the interchange. He indicated he would like to
26 discuss the access issues on 21' Avenue. The plan shows a median with no turn lanes
27 that may cause problems to business owners in that area. He noted the reason for the
28 median is for safety issues due to the close proximity of the interchange area. The plan
29 currently shows a trail on one side and sidewalk on the other side of CSAH 14. He
30 recommended the City look at some type of northern loop for another connection to that
31 area.
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33 Community Development Director Grochala noted the CSAH 14 project does not include
34 the interchange improvements. It is anticipated improvements will be made to the
35 interchange but that is not part of this project.
36
37 Mr. Dvorak noted he is not aware of any funds that have been committed to the
38 interchange improvements.
39
40 Mr. Dvorak advised SRF is meeting with the City of Centerville next week to review the
41 preliminary plan. The road issues have been worked out through the County Park. He
42 stated he believes the final plans will be completed in March 2004. It is anticipated that
43 construction would begin on the project in the spring of 2006.
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45 Mr. Dvorak noted the next public meeting in Lino Lakes is scheduled on October 26,
46 2004, 5:00 — 7:00 p.m., at Chomonix Golf Course.
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CITY COUNCIL WORK SESSION OCTOBER 6, 2004
APPROVED
• 1 LEGACY PROJECT — REVIEW OF REDEVELOPMENT CONTRACT, MIKE
2 GROCHALA AND MARY ALICE DIVINE
3
4 Community Development Director Grochala stated Steve Bubul, Kennedy & Graven, has
5 been working extensively on the development contract for the Legacy Project. Mr. Bubul
6 is present this evening to discuss the major points of the contract.
7
8 Community Development Director Grochala reviewed the numbers relating to the
9 housing that the developer has committed to within the project in response to Council
10 discussions. The developer has committed to a total minimum of 60 senior units. The
11 developers are continuing to work on a variety of senior alternatives including
12 condominiums, cooperative housing, assisted living and rental.
13
14 Mr. Bubul reviewed the following summary of the Contract for Private Redevelopment
15 Between Lino Lakes Economic Development Authority, City of Lino Lakes, and Legacy
16 Holdings/Lino Lakes, LLC:
17
18 I. Land Acquisition/Platting/Zoning.
19
20 A. The "City Parcel" is the parcel now owned by the City, located outside the
21 TIF District. The "TIF Parcel" is the parcel now owned by the Tagg's, located
22 within the TIF District. Together, these parcels are referred to as the
•23 "Development Property."
24
25 B. Developer will acquire the City Parcel (under a separate purchase
26 agreement with the City); and Developer will acquire the TIF Parcel from the
27 Tagg's (under an existing purchase agreement). Developer indemnifies the City
28 and EDA from any claim related to relocation benefits in connection with TIF
29 Parcel.
30
31 C. Developer must obtain final plat and PUD approval consistent with a
32 Master Site Plan. In connection with those actions, the City and Developer will
33 enter into a "Planning Contract" that addresses typical planning and land use
34 requirements.
35
36 II. Direct Financial Assistance.
37
38 A. The EDA will provide a total of $2.7 million in assistance toward
39 acquisition of the TIF Parcel. Up to $1.7 million will be in the form of an
40 interfund loan, and $1 million will be in the form of a tax increment revenue note
41 (referred to as the "Note"). In addition, the City will provide $450,000 from Met
42 Council grant funds for site work.
43
44 B. Interfund Loan:
45
46 1. The City will provide up to $1,700,000 from sale of the City Parcel
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47 to fund an interfund loan. If the City receives additional Met Council grant
48 money, those funds will be used to reduce the amount of the interfund loan.
CITY COUNCIL WORK SESSION OCTOBER 6, 2004
APPROVED
• 1
2 2. The interfund loan (and any grant monies) will be placed in escrow
3 when these conditions have been met:
4
5 • Closing on the TIF Parcel
6 • All buildings on TIF Parcel have been demolished.
7 • Billboard on TIF Parcel has been removed
8 • Final plat for townhome development has been approved.
9
10 3. The interfund loan (and any grant monies) will be disbursed from
11 the escrow when these conditions are met:
12
13 • City has issued the first building permit in the townhome
14 development
15 • EDA and Developer have entered into Assessment
16 Agreements setting minimum market value sufficient to
17 create enough increment to pay the interfund loan (and TIF
18 Bonds, if they have been issued at the time).
19
20 If these conditions are not met within two years after funding the escrow,
21 the monies are released back to the EDA.
22
23 4. The EDA will approve an interfund loan resolution that specifies a
24 payment schedule, with interest set at the maximum rate permitted by statute
25 (currently, 4%; the rate changes annually).
26
27 C. TIF Note.
28
29 1. The TIF Note will be issued at closing on acquisition of the TIF
30 Parcel. The initial principal amount will be $1 million, with interest at 6%.
31
32 2. The TIF Note will be paid solely from 90% of the tax increment
33 generated by the property in the TIF District. This note is always subordinate to
34 the TIF Bonds (described in part IV below), and is subordinate to the interfund
35 loan as well until Assessment Agreements have been signed that produce enough
36 increment to pay the TIF Bonds, the interfund loan, and the TIF Note. From then
37 on, the interfund loan and the TIF Note are on "parity" (which means increment is
38 applied based on the relative outstanding amounts of those obligations).
39
40 3. If the total special assessments on the Development Property are
41 less than $5,382,565, the Note will be reduced on a dollar for dollar basis.
42
43 D. Met Council Grant. The City will disburse grant funds for site work on
44 the TIF Parcel, subject to all the terms and conditions of the grant agreement
45 between the City and the Met Council.
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CITY COUNCIL WORK SESSION OCTOBER 6, 2004
APPROVED
1 E. The Developer must pay the City and EDA's out-of-pocket costs in
2 connection with this project.
3
4 F. The financial assistance is exempt from statutory business subsidy law
5 requirements, because the Developers investment in land and site improvements
6 will exceed 70% of the current market value of the TIF Parcel.
7
8 III. Minimum Improvements and Additional Improvements.
9
10 A. Generally, the Developer is required to develop the entire Development
11 Property according to a specified phasing schedule. Improvements built within
12 the TIF District are referred to as the "Minimum Improvements," and the
13 improvements built outside the TIF District are referred to as the "Additional
14 Improvements."
15
16 B. The Minimum Improvements consist of a "Commercial Component," a
17 "Rental Housing Component," and an "Owner -Occupied Housing Component."
18 The required construction schedule for these components is summarized as
19 follows:
20
21 Commercial Component: 47,200 square feet by the end of 2006;
22 additional 52,200 square feet by the end of 2007; additional 10,000 square feet by
23 the end of 2008; and additional 5,000 square feet by the end of 2009.
24
25 Rental Housing Component: 16 units by the end of 2005; additional 32
26 units by the end of 2006; and additional 16 units by the end of 2007.
27
28 Owner -Occupied Housing Component: 41 units by the end of 2005;
29 additional 41 units in each of the years 2006, 2007 and 2008.
30
31 C. The Additional Improvement requirements and phasing schedule to be
32 determined. [Note: these improvements do not generate tax increment.] See part
33 D, below for discussion of particular covenants that may apply to the Additional
34 Improvements.
35
36 D. Covenants regarding housing types.
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38 1. At least 60 percent of all housing units (inside and outside the TIF
39 Distsrict combined) must be owner -occupied.
40
41 2. At least 60 housing units (inside and outside the TIF District
42 combined) must be senior, whether owner -occupied or rental. If owner -
43 occupied, they may be the same units that are "affordable," as described
44 below.
45
46 3. At least 90 units (inside and outside the TIF District combined)
47 must be affordable as described in this paragraph.
CITY COUNCIL WORK SESSION OCTOBER 6, 2004
APPROVED
• 1
2 • At least 60 units must be rental units that meet the income
3 and rent limits for federal tax credits (generally, 40% of the
4 units at 60% of median income, or 20% at 50%).
5 • At least 30 units must be owner -occupied, sold at a
6 purchase price, and to initial buyers, that meet the Met
7 Council price and income limitations for affordable owner -
8 occupied housing.
9
10 E. Assessment Agreements. By at least the required dates for completion of
11 each component of the Minimum Improvements described in part B above, the
12 Developer must enter into Assessment Agreements that set a specified minimum
13 market value for the component or portion thereof. Assessment Agreements at
14 specified levels must in any case be in effect before the interfund loan is disbursed
15 (See Part II.B above) and before TIF Bonds are issued (See Part III.0 below)
16
17 IV. Public Improvements.
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19 A. The City will construct all streets, sewer, water, stormsewer and related
20 infrastructure to serve the entire Development Property (referred to as the "Public
21 Improvements"). The City will also construct improvements to the Lake Drive/I-
22 35 intersection (referred to as the "Lake Drive Improvements").
.23
24 B. The City will assess the Development Property for most of the cost of the
25 Public Improvements, up to a maximum of $5,382,865. Park dedication fees and
26 a small amount of City utility funds will also be used.
27
28 C. The City will finance the Lake Drive Improvements mostly through
29 issuance of general obligation tax increment bonds (the "TIF Bonds"). The City
30 is not required to issue the TIF Bonds and begin the Lake Drive Improvements
31 until the Developer has signed Assessment Agreements that provide sufficient tax
32 increment to pay both the TIF Bonds and the interfund loan (described in Part II
33 above). As noted above, the TIF Bonds have the first claim on all tax increment.
34
35 V. Transfer/Partners.
36
37 The Developer may not assign or other transfer its rights and obligations under
38 Contract without the EDA's prior consent in writing. However, it is anticipated
39 that the Developer will sell portions of the Development Property to
40 subdevelopers (each a "Subdeveloper") and transfer certain rights and obligations
41 under the Contract to those parties to undertake certain portions of the project.
42 The EDA must approve the Subdeveloper and the terms of the transfer in writing
43 in each such case. This approval does not apply for any transfer to an affiliate of
44 the Developer.
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CITY COUNCIL WORK SESSION OCTOBER 6, 2004
APPROVED
• 1 VI. Defaults.
2
3 If Developer defaults (for example, fails to complete a component of the Minimum
4 Improvements as scheduled), the EDA may withhold payments under the Note. If
5 property has been transferred to a Subdeveloper, the required improvements will be
6 allocated to that Subdeveloper, and the EDA may withhold increment only from the
7 parcel that is in default. However, default in the overall required housing types
8 (described in Part III.D) will allow withholding of increment from the entire TIF
9 District.
10
11 Economic Development Coordinator Divine advised copies of the development contract
12 will be distributed in the Friday update.
13
14 This item will appear on the regular Council agenda Tuesday, October 12, 2004, 6:30 p.m.
15
16 UPDATE: HARDWOOD CREEK OPEN HOUSE, MIKE GROCHALA
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18 Community Development Director Grochala advised on September 20, 2004, Hardwood
19 Creek, LLP, held a public informational meeting at the Lino Lakes Senior Center.
20 Approximately 20 community residents attended. He reviewed a summary of comments
21 received at the meeting noting the developer is in the process of setting up a website for
22 presenting information to the community on the project and for residents to send in
23 comments. The website will be linked to the City of Lino Lakes website.
• 24
25 DSU Corridor Planning/AUAR Contract — Community Development Director
26 Grochala stated that while the proposed Hardwood Creek development provides an
27 opportunity to master plan a large area, the site is relatively small when compared to the
28 long term development potential of the I -35E corridor. While the proposal will likely
29 require some level of environmental review, it is staff's opinion that the City would
30 benefit from a more comprehensive examination of the surrounding area.
31
32 Community Development Director Grochala advised City staff has received a proposal
33 from Dahlgren, Shardlow & Urban, Inc. (DSU) to complete an Alternative Urban
34 Areawide Review (AUAR) for the proposed area along the eastern side of the City
35 encompassing approximately 5,000 acres.
36
37 Community Development Director Grochala advised the estimated contract price for the
38 AUAR is $296,400 plus $8,000 to $10,000 in expenses mostly attributable to printing
39 costs associated with the final document. The project is proposed to be funded by a yet -
40 to -be established environmental review area charge collected in conjunction with
41 development. Interim financing will be provided through the City's Trunk Utility Fund
42 and Stormwater Management Fund. The City is requesting a no -interest loan from the
43 Metropolitan Council in the amount of $75,000 to assist with the interim financing. The
44 City is also expecting a contribution from Anoka County as well as the Hardwood Creek
45 developer.
46
•47 Community Development Director Grochala stated that from a planning perspective, the
48 AUAR process is an excellent opportunity to evaluate cumulative development impacts.
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CITY COUNCIL WORK SESSION OCTOBER 6, 2004
APPROVED
1 It is a very proactive approach to development, which provides the community with a
2 better opportunity to plan for development rather than react to it.
3
4 Consider Resolution No. 04 — 147, Authorization of DSU Contract for 35E Corridor
5 AUAR, will appear on the regular Council agenda Tuesday, October 12, 2004, 6:30 p.m.
6
7 PROPOSAL FOR 9.8 ACRES IN APOLLO BUSINESS PARK, MARY ALICE
8 DIVINE
9
10 Economic Development Coordinator Divine advised United Properties is interested in
11 building approximately 100,000 sq. ft. of warehouse/office space on the 9.8 -acre site
12 remaining in the Apollo Business Park.
13
14 Economic Development Coordinator Divine stated the parcel is within TIF District 1-9,
15 which expires in December 2009. Because the district is aging, new projects would not
16 generate enough increment to provide the type of subsidy most users are requesting
17 without creating a new district, and the parcels have remained undeveloped.
18
19 Economic Development Coordinator Divine advised staff is seeking Council direction on
20 whether Councilmembers wish to pursue this project using TIF to pay assessments on the
21 parcel. Using TIF, the City can guarantee it recovers the City investment by 2009, or the
22 Council can choose to wait and see if the property develops on its own.
23
24 Mayor Bergeson and Councilmember Stoltz indicated they were comfortable with staff
25 moving forward with the proposed project.
26
27 Councilmember Carlson indicated she needs more information about the proposed
28 project.
29
30 Mayor Bergeson advised staff to obtain an opinion regarding this issue from
31 Councilmembers Dahl and Reinert.
32
33 REGULAR AGENDA ITEMS
34
35 Item Dii, Consideration of Resolution No. 04 —149, Approving Development Agreement,
36 Pheasant Hills Preserve 12th Addition — City Engineer Studenski noted a revised
37 development agreement would be included in the Friday update.
38
39 There were no other changes to the regular agenda.
40
41 The meeting was adjourned at 8:17 p.m.
42
43 These minutes were considered, corrected and approved at the regular Council meeting held on
44 October 25, 2004.
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2 Ann Blair, 'ity Clerk
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6 Transcribed by:
7 Kim Points
8 TimeSaver Off Site Secretarial, Inc.
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CITY COUNCIL WORK SESSION
APPROVED
8
OCTOBER 6, 2004
John rgeson,-� ayor