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HomeMy WebLinkAbout01/08/2004 EDAC MinutesAPPROVED CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MINUTES DATE: Thursday, January 8, 2004 MEMBERS PRESENT: D.Gorowsky, K. Hansmann, H. Juni, T. Vacha, J. Milbauer, F. Chase, J. Schwartz, H. Karth MEMBERS ABSENT: None OTHERS PRESENT: M. Divine GENERAL/MINUTES Minutes of November 6, 2003 were approved. Members agreed to wait until members had been reappointed to elect a 2004 chair. UPDATES LEGACY AT WOODS EDGE Ms. Divine stated all comments are in from other agencies for the EAW. The main issue is with MnDot and traffic, but staff has been proactive in working with them. The TIF district was established in November. The Tagg property is in the TIF district, the city- owned land will not be, so anything built on that part will be on the tax rolls immediately. Hartford has not submitted a formal TIF application. When they do, Springsted will perform the analysis of the request. Ms. Divine exhibited a graph that showed the maximum taxes that would be generated over the life of the district, both inside and outside the district, provided the project is built out. The budget of the district is the amount that will be generated over the life of the district. This is not the amount that will be provided in subsidy. That amount has not been determined. The city hopes to use some of the district’s capacity to pay its portion of the 35W bridge reconstruction and improvements to Lake Drive. Mr. Juni asked if members had specific questions about the TIF District. He stated there was a 3 to 2 split vote on establishment of the district. No decisions have been made regarding TIF except to establish a district to provide the capacity. Mr. Chase asked if the project doesn’t go, would the city still have the capacity to provide TIF. Ms. Divine stated the district won’t be certified with the county until the project is approved. Once it is certified the clock starts ticking on the district. She explained that the current budget is based on full buildout of the Hartford project. If a project of lesser value is built within 1 the district, much less would be generated. The Hartford Group is only asking for approval of the senior housing with 50,000 square feet of commercial, which is not in the TIF district. So at this point, there is no TIF to provide. They are being very selective about townhome developers, and are hoping to come in this spring with a townhome project and a condo site plan. Ms. Divine stated that preliminary discussions for use of TIF will be pay-as-you-go for the infrastructure costs. The TIF plan lists the types of uses for TIF, including site acquisition, infrastructure, site improvements. Mr. Milbauer questioned Hartford’s capability to move ahead without the market feasibility study. Ms. Divine stated this is an important issue but they are committed to the senior housing and are awaiting the market study on the commercial. They intend to build Phase 1 this summer. The YMCA has also indicated it could be prepared to start this year. Mr. Juni said the Y still has $2 ½ million to raise, but they have brought on someone to concentrate on fundraising. Mr. Juni believes within a few months there will be a clear picture whether the Y can raise the money. The redesign of the site has helped the Y. The Y has not submitted plans for approvals, so they are at best months out before construction. Mr. Gorowsky stated the essence of the issue is the difference between the current zero capacity and full capacity. Other cities are not giving the maximum. People want to be aware and comfortable with what the city ultimately does and how that will affect the economics of it. This group could provide some indication, and market information about what surrounding communities are doing. Members also suggested that the press be educated about TIF. Ms. Hansmann stated the budget is skewed to the maximum buildout, which may not happen, and people don’t understand it. Ms. Divine stated that districts in the city have averaged five years of increment. The larger the project, the larger the subsidy, but the more taxes it generates. Mr. Milbauer suggested an update to the council regarding the TIF Districts. Ms. Divine stated in 2003 the city decertified three districts and the council received information regarding the amount now on the tax rolls. Members questioned if the original capacity of those districts could be shown so that the council could see that only a portion of the capacity was used. Ms. Divine explained earlier districts were done differently. The district budget was set at the amount of subsidy the first project received, then the district was modified each time a project was added. In the last few districts, the budget has been set at the estimate of full buildout of the district. Those could be used to demonstrate that the full budget is not spent. Mr. Gorowsky said an historical perspective, and some indication to the council in terms of where we might go will be helpful. For example, if the capacity of past TIF districts has been 100% of the potential buildout, but the city has awarded less, that would give some comfort. Then to know what comparable cities do, such as Blaine and Forest Lake, would give perspective. Perhaps EDAC should provide some input. Mr. Juni said he saw confusion and misunderstanding on this issue. Ms. Divine stated there is no doubt TIF 2 will be required on this project because of the high amenity, high quality that is expected. But at that time an extensive analysis will have been completed and the number will be what is required to get the job done. Mr. Karth stated that council members should not have an attitude that they would never vote for TIF. Everything has a place and a use. Mr. Milbauer agreed they need to look at projects based on whether there is a benefit and long-term reward for the city. Ms. Hansmann questioned what would happen if the quality of the project was downsized. Ms. Divine showed a graph that depicted the amount of revenue generated on the Target site versus the potential on the Woods Edge site. Ms. Hansmann questioned whether it depicted what was currently built on the Target project, or what was estimated at full buildout. Ms. Divine said she would have to check. The point is that the Hartford type of development generates considerably more tax base on the same size site as conventional commercial development. Mr. Chase moved to have a chart updated on past districts showing the tax capacity, what the improvements were made, and what TIF was paid out, and what taxes were generated. We need to recreate the number that matches the $25 million. Mr. Gorowsky seconded the motion. Motion passed unanimously. Mr. Gorowsky said many people don’t understand TIF. They have a base knowledge, but could use updates. Mr. Milbauer asked if someone could do a TIF tutorial for those involved in the decision making. YMCA GRANT APPLICATION Ms. Divine explained a Community Development Block Grant is federal funding administered by Anoka County. The city is applying for $300,000 for construction of the YMCA teen center. The purpose of the funds is to help underserved groups in the community. 2003 YEAR IN REVIEW Ms. Divine suggested saving it for the next meeting when members have been selected. OTHER ISSUES Ms. Divine stated she will be on vacation for the February meeting. Members agreed to tentatively schedule a meeting for January 29. Ms. Divine stated the P&Z will hold a special meeting to review the Woods Edge project on January 28. Gordon Heitke from Cambridge is the city’s new city administrator. Mr. Juni suggested he be invited to EDAC. Dan Stoltz is the new city council member. Meeting adjourned. 3