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HomeMy WebLinkAbout07/14/2011 EDAC Minutes 1 APPROVED CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MINUTES DATE: Thursday, July 14, 2011 MEMBERS PRESENT: M. Keller, L. Thor, L. Masonik, L. Salzman, J. Stranik MEMBERS ABSENT: J. Schwartz, D. Johnson, L. Masonik OTHERS PRESENT: M. Divine, Paul Bengtson (part) APPROVAL OF MINUTES The minutes of June 2, 2011 were approved. OPPIDAN PROPOSAL Members reviewed the Planning & Zoning staff report regarding the concept plan and how the grocer has addressed concerns raised by the city council and the neighborhood. P&Z held a public hearing July 13, and comments from P&Z was generally supportive for the project, but concerns they raised included traffic, transition to adjacent neighborhood, how the site is compatible with master plan, impact of new intersection on the east side of Hodgson. Mr. Tucci noted that at the neighborhood meeting the main items of concern were: size of store, hours of operation, delivery hours, truck docks and orientation of the building. Also cleaning up the 49 Club corner has come up. The revised concept plan includes a smaller size from the original plan, but 49,500 sq. ft. is the smallest their users can go. The Hugo Festival is about the same size. A smaller store requires more truck deliveries as well. Truck docks were moved to the north end of building, farther from neighborhoods, and all drive traffic is removed from the west side where it abuts the neighborhood. Store hours are 6 a.m. to either 11 p.m. or 12 a.m. Delivery hours will not be nighttime. Wells Fargo is interested in selling the liquor store and the insurance company wants what they have into it. The 49 Club is priced at a point that is not feasible to include in the project. The road access is based on 1130 feet from J. The master plan was at 990 feet. Oppidan is open to either access, but believe it will require a stoplight wherever it is. The secondary access onto J is a right in/right out, but won’t happen until further development. Mr. Tucci said TIF will be required for extension of utilities. He explained the trade area, which runs mainly east/west. Traffic studies will be included in the formal application. Ms. Keller noted the city has been talking about this for months, an article in the paper talked about how Blaine was cutting back a large development from a medical complex to a Kwik Stop. They had scaled back on their expectations, and this city needs to realize that they are not going to get the ideal uses that match the master plan. Mr. Salzman supports all the points except the request for TIF. Mr. Tucci said Oppidan would do it without TIF if the entire district was assessed. But if it’s up to the developer to do it all for the entire area, it’s unaffordable. Mr. Grochala noted there is a unique opportunity to use TIF to bring utilities by using TIF on a 2 grocery store, which sets up the entire area. There is still a question of whether the increment from the store would cover the improvements to the area. It’s undecided whether it would be a “pay-as-you-go” where the developer is reimbursed from the taxes generated, versus city developed improvements that are paid back through TIF. Infrastructure is the major impediment, so it’s a choice to use the tools temporarily available or wait for a number of years. Mr. Tucci stated that there is a value to the right of way that would be dedicated with this project. Mr. Stranik questioned why size was an issue. Mr. Grochala said the look, bulk, and intensity of use has been an issue. The original master plan calls for approximately 70,000 sq. ft. of uses on the west side of Hodgson. The grocery has been reduced 10,000 sq. ft. from when Oppidan started. Virtual reality imaging may need to be used to show the scope of development. Ms. Divine asked about jobs created. Mr. Tucci said it creates about 130, with 20% full time. This will likely be a union grocery store. Mr. Tucci said a $7 million project could bring approximately $50,000 in city taxes after it is on the tax rolls. Mr. Stranik proposed a recommendation adding that EDAC should specifically add TIF as a consideration. The recommendation read as follows: EDAC has reviewed the Concept Plan submitted by Oppidan for the grocery store on Hodgson Road/County Road. J. EDAC recommends that the City Council move this project forward to application based on the following: 1. A grocery store is a permitted use on the site 2. The 49/J intersection is a gateway to the city. Costs of municipal services and road improvements have made development of the area prohibitive. 3. An anchor tenant on 49/J is needed in order to bring municipal services to the area and improve the 49/J intersection 4. An anchor tenant on 49/J is necessary to kick start further development/redevelopment of the 49/J intersection area 5. A grocery store will provide needed tax base and jobs 6. The developer has responded to neighborhood concerns in a reasonable manner 7. EDAC encourages use of the economic development tool (TIF) that is temporarily available to the city to assist with the costs of municipal services and road improvements. This opportunity will no longer be available by July 2012. Mr. Salzman said that the city is asking the taxpayers to be a cosigner because of bonds that will be issued. It’s financially challenging, and the city should learn from the Legacy project. If the developer and the city don’t have the money, it’s not a time to speculate. Mr. Grochala responded that the issue with the Legacy project was not TIF, it was special assessments not being paid. The scope of the improvements for this grocery project will likely make it a city- installed project. It will be an assessment project with improvement bonds, TIF bonds, or revenue bonds, but because of the charter, the city probably won’t be able to levy assessments until other landowners develop. There would be a dual track, where TIF would provide interim financing, but when other landowners do develop, they would pay connection charges. The scope of this project will include buying some additional right of way, which would happen regardless if improvements are to occur. 3 Mr. Tucci said that Oppidan’s argument will be that they are bringing added dollars that are not there today. They will generate those dollars and they’ll be asking that the city and county reinvest those dollars in infrastructure in development that unlocks development on this corridor. Mr. Salzman said it’s speculation and this is not a good time to speculate and plan on development happening. Mr. Grochala said the financing would not be based on peripheral development, but only on the increment brought in by that store. If that store gets built, that’s the cash flow. The risk is if the store’s value doesn’t hold. But a minimum assessment agreement would require that the value of the store not fall below a set value until the TIF obligations were met. Everything would hinge on the issuance of a building permit. Worst case scenario is that the developer defaults and the city would have to levy. However, special assessments always get paid ultimately, but the question is how the bonds are paid in the interim. That’s why the city would only base this on the value of the grocery, not any development that has not occurred. Mr. Tucci said a lender will be involved. Lenders are underwriting tightly and will keep taxes current. Roads and infrastructure will go in concurrently. Mr. Salzman said he likes the plans, and if the city had money for it, he’d support it. Ms. Keller moved to send EDAC’s recommendation to the City Council. Mr. Stranik seconded the motion. Motion passed with Mr. Salzman voting nay. PROPOSED COMMERCIAL ZONING CHANGES Ms. Divine reported that city staff was reviewing the city’s zoning ordinances and updating them to reflect changes in the draft Comprehensive Plan. One new zoning category is being considered after completion of EDAC’s Redevelopment Task Force report because certain commercial properties north of Main Street that were previously guided for residential and commercial, will not have available municipal services in the foreseeable future. The new Comp Plan guides these areas for commercial. The proposed category called “Existing Business-Future Services District” would allow for reasonable continuation and /or expansion of existing commercial businesses that were established in accordance with official controls in effect at the time. The city requires that all new commercial areas have municipal services available to them. Because that is unlikely on these properties, this proposed ordinance brings them into conformity without having services available. P&Z reviewed this and will have further discussion. Mr. Salzman would like compare this draft with the General Business zoning. He asked to table until further information was available. OUTDOOR STORAGE CODE ENFORCEMENT Mr. Grochala stated that a truss manufacturer is leasing space in the Apollo Business Park and storing trusses outdoors. In that specific location outdoor storage is not allowed because they are not adjacent to residential property and technically abutting 35W. Exterior storage is really a property value issue and its impact on neighboring businesses and residential areas. The city initiated an enforcement action and has had numerous discussions with the users. The council is not interested in pursuing any changes in the current zoning ordinance to allow outside storage in these areas. There are areas in the city where they could locate outdoor storage. The city should not have to change its rules due to a bad business decision by a company. Ms. Keller asked if they could be allowed to put up an accessory shed to keep them under cover and out of sight. Mr. Grochala said they could add on to the building, but not an accessory structure. Mr. Salzman said a berm screens the trusses from neighboring homes, but not 35W. Mr. Stranik said it is 4 appropriate for EDAC to look at zoning ordinances to see if the city should change its standards regarding outside storage. He doesn’t feel that EDAC needs to take action on a specific issue. Ms. Divine noted that this is an example that can be used to further discussions on some of Mr. Salzman’s written suggestions about EDAC’s mission and goals. BUSINESS RETENTION AND EXPANSION (BRE) Ms. Divine asked members to review the BRE example from the City of Hugo and see if this two-year process with the U of M Extension Service might be worthwhile for Lino Lakes. Mr. Stranik said the Hugo committee was a very solid group, but what was produced did not have much meat. Most businesses want services with minimal property taxes. Ms. Keller said she’s seen many BRE reports and they are virtually the same in every city. It does provide local statistics. EDAC reached consensus that this was not something they wanted to pursue. Meeting adjourned.