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03-10-26 City Council Workshop Packet
City Council Workshop 3880 Laverne Avenue North Tuesday, March 10, 2026 6:30 p.m. AGENDA Call To Order Guidance On City Owned 180 -Acres Community Development Director Jason Stopa presenting COUNCIL MEMO - 180 -ACRES DISCUSSION 3.10.2026.PDF ADDITIONAL DOCS - LAKE ELMO ULI TAP REPORT.PDF CC PRESENTATION - NEXT STEPS CITY -180.PDF Use Of Stormwater Funds To Pay For Street Improvements Finance Director Clarissa Hadler presenting STORMWATER AND STREETS - COUNCIL REPORT - FINAL.PDF STORMWATER CASH VS ACCUMULATED DEPRECIATION.PDF STORMWATER CIP.PDF Agenda Procedures COUNCIL MEMO -AGENDA PROCEDURES.PDF CURRENT CITY CODE ORDER OF BUSINESS AT REGULAR MEETINGS.PDF EXAMPLES OF OTHER CITIES AGENDA SETTING PROCEDURES.PDF 250th Anniversary Of The USA Discussion COUNCIL MEMO -250TH ANNIVERSARY OF USA CELEBRATION.PDF Future Agenda Items FUTURE AGENDA ITEMS.PDF Adjourn Our Mission is to Provide Quality Public Services in a Fiscally Responsible Manner in Partnership with our Community I. 1. Documents: 2. Documents: 3. Documents: 4. Documents: 5. Documents: II. City Council Workshop3880 Laverne Avenue NorthTuesday, March 10, 20266:30 p.m.AGENDACall To OrderGuidance On City Owned 180 -AcresCommunity Development Director Jason Stopa presentingCOUNCIL MEMO - 180 -ACRES DISCUSSION 3.10.2026.PDFADDITIONAL DOCS - LAKE ELMO ULI TAP REPORT.PDFCC PRESENTATION - NEXT STEPS CITY -180.PDFUse Of Stormwater Funds To Pay For Street ImprovementsFinance Director Clarissa Hadler presentingSTORMWATER AND STREETS - COUNCIL REPORT - FINAL.PDFSTORMWATER CASH VS ACCUMULATED DEPRECIATION.PDFSTORMWATER CIP.PDFAgenda ProceduresCOUNCIL MEMO -AGENDA PROCEDURES.PDFCURRENT CITY CODE ORDER OF BUSINESS AT REGULAR MEETINGS.PDFEXAMPLES OF OTHER CITIES AGENDA SETTING PROCEDURES.PDF250th Anniversary Of The USA Discussion COUNCIL MEMO -250TH ANNIVERSARY OF USA CELEBRATION.PDF Future Agenda Items FUTURE AGENDA ITEMS.PDF Adjourn Our Mission is to Provide Quality Public Services in a Fiscally Responsible Manner in Partnership with our Community I.1.Documents:2.Documents:3.Documents:4. Documents: 5. Documents: II. STAFF REPORT DATE: March 10, 2026 DISCUSSION TO: Mayor and Councilmembers FROM: Jason Stopa, Community Development Director & Ashley Monterusso, City Planner AGENDA ITEM: Guidance on City Owned 180-acres CORE STRATEGIES: ☒ Vibrant, inclusive, connected community ☒ Efficient, reliable, innovative services ☒ Responsive, transparent, adaptive governance ☒ Balanced Finances now and future ☒ Managed Growth ☒ Resilient Infrastructure BACKGROUND: The City recently conducted a Technical Assistance Panel (TAP) with Urban Land Institute (ULI). As the City continues moving forward with the development of 180-acres, staff would like to request guidance on the next steps in the process. AREAS FOR GUIDANCE FROM COUNCIL: Generally The TAP Report explores a development framework to allow flexibility through a phasing solution that should support the site build-out. The phasing begins with Parcel 1, as it is the area most market-ready with sewer access available at the site. Staff recommend phasing out development as outlined in the TAP Report, beginning with marketing and selling Parcel 1. Does council support this phasing? Sewer Connection Community Development plans to begin working with Engineering to determine sewer connection costs and initiate a plan for connecting sewer to the remainder of the site this Spring. The TAP Report considers this approach “low/mid” level of effort from the City. Does Council support beginning work? Hiring a Broker Staff recommend hiring a commercial broker for Parcel 1 to obtain a broker price opinion and to field interest in the property. Staff have already begun speaking to brokers. One recommendation that has come out of preliminary discussions is that the property is marketed as being rail adjacent/accessible. A commercial broker typically will take 2-3% commission. The TAP report considers this a “low effort” level of effort by the City. Does council support moving forward with this approach? AUAR Ahead of expiration of previous AUAR on site, staff would like to work with consultants to renew the AUAR at the 180 acres. Renewing the AUAR before it expires may prevent costly updates to the study later and could prevent costly development delays. Does the council support renewing the AUAR on the City owned property at Ideal Ave and Stillwater Blvd? Community Engagement Process Community Development recommends conducting community engagement in house. The process will include: • Project announcement (City website, Fresh, social media) • Town hall • Public Survey (shared on social media, Fresh, City website) • Public hearing at EDA (will mailing notices sent out to project area) Does the Council support this community engagement strategy? RFP for Parcel 3 The TAP Report conveys that the northernmost parcel (Parcel 3) has the largest range of potential uses and the most financial value. With that in mind, staff are weighing the potential benefits of engaging in an RFP process for the site to engage with a range of accomplished developers nationally. Staff is seeking feedback from Council on this possibility. ISSUE BEFORE COUNCIL: Does the City Council have guidance or feedback on next steps for the sale of the City owned property at Ideal Ave and Stillwater Blvd? • Does Council support this recommended phasing for the project? • Does Council support engaging with Engineering to create a plan and determine costs for expanding sewer to remaining sites? • Does Council support hiring a commercial broker for Parcel 1? • Does the council support renewing the AUAR on the City owned property at Ideal Ave and Stillwater Blvd? • Does Council support staff’s recommended community engagement strategy? • Does Council have feedback about visioning for parcel three? ATTACHMENTS: • Final ULI TAP Report • Community Engagement Plan • Phase 1 Timeline Community Engagement Plan for City Owned Property at Ideal Ave & Stillwater Blvd Goal: The purpose of this engagement process is to share information about the project, how the decision to sell the property aligns with the City’s longer-term plans, and to invite feedback to help guide decision- making. The process invites residents to share their perspectives on priorities for the property’s future use, potential community benefits, and any questions or concerns, while noting that final decisions for the project will be made by City Council. Phase I: Announcement of Project/Informing • Update City webpage (City Property) o Property info, maps, images o ULI TAP report o FAQs Why is property being sold How it aligns with City priorities What decisions are fixed vs. flexible Financial implications How public input will be used (advisory) o Timeline o Quarterly updates o Newsletter announcement (The Fresh, social media) Phase II: Community Input • Online & Paper survey o Open for 6-8 weeks o To be shared on website, social media, newsletters, flyers with QR code at City Hall, local businesses, Arbor Day Event o 10-20 Questions Land use preferences Placemaking preferences Community priorities Community benefits desired Concerns City process • Open House/Town Hall o Informal o Information boards and visuals o Staff engagement with residents o Feedback collected in person, comment cards, and/or dot voting boards • Informational Public Hearing at EDA o Formal o Used to gauge sentiment, increase transparency o Formally notice adjacent properties (project area) o Short presentation from CD Director Stopa on project o Public Comments Phase III: Reporting • Analyze and summarize information received in the process • Publish to the City Project webpage • Present findings to commission/council for direction to staff on next steps Community Engagement Timeline City Owned Property at Ideal Ave & Stillwater Blvd Community Engagement Plan Date PHASE I - Informing Public April Announcement of Project/Informing Public Early April Story in the Fresh Website Update (main page, and project page) FAQ on webpage PHASE II -Community Input April - June Online survey (shared on website, social media, newsletters, flyers) Mid April Open House/Town Hall April/May Informational Public Hearing at EDA June EDA PHASE III - Reporting July Analyze and summarize information received in the process July Present findings to commission/council for direction to staff on next steps Mid July (workshop) Publish to the City Project webpage End of July Estimated Project Timeline – Phase 1 (2026) Phase 1 - City Owned 180-acres Ideal & Stillwater Blvd Item Date Notes CC Workshop 3/10/2026 Begin Engineering Planning of Sewer Connection March/April County Coordination March/April Work with WA County to discuss access and future projects near site Hiring Broker April Hire Broker to provide Broker Price Opinion on Parcel 1 and field interest in the property; research and find pricing and bring back recommendation AUAR Spring-Fall Work with consultants to renew AUAR on site Public Engagement Process April - August Survey April Town Hall April/May PH at EDA June Begin sewer work June to Parcel2 and 3 Marketing of Parcel 1 Late Summer/Fall Land Use& Zoning updates tbd Dependent on feedback and interest in property DEVELOPMENT OPPORTUNITIES ON CITY-OWNED LAND Lake Elmo, Minnesota Minnesota Technical Assistance Panel | October 22–24, 2025 Urban Land Institute The Urban Land Institute (ULI) was established in 1936 as a nonprofit educational and research institute. It is supported by more than 45,000 members in 82 countries representing all aspects of land use and development disciplines. ULI’s mission is to provide leadership in the responsible use of land to create and sustain thriving communities worldwide. ULI Minnesota was founded in 2001 to serve the Minneapolis-Saint Paul region and the state of Minnesota. Members are involved in all aspects of the development and city planning process and members have access to the global research and resources of the oldest and largest network of cross- disciplinary real estate and land use experts in the world. Local members lead ULI Minnesota’s efforts and engage public and private sector leaders to foster collaboration, share knowledge, and influence meaningful strategic action in the pursuit of ULI’s mission. ULI District Council Leadership Gabe Philibert Vice President of Real Estate Development and Asset Management, Project for Pride in Living, Inc. District Council Chair About ULI Advisory Services Since 1947, the ULI Advisory Services program has assembled well over 700 ULI-member teams to help sponsors find creative, practical solutions for complex land use challenges. A wide variety of public, private, and nonprofit organizations have contracted for ULI’s advisory services. National and international panelists are specifically recruited to form a panel of independent and objective volunteer ULI member experts with the skills needed to address the identified land use challenge. The program is designed to help break through obstacles, jump-start conversations, and solve tough challenges that need an outside, independent perspective. Three- and five-day engagements are offered to ensure thorough consideration of relevant topics. An additional national offering is the project analysis session (PAS) offered at ULI’s Fall and Spring Meetings, through which specific land use challenges are Cover photo: The study site in the city of Lake Elmo. (ULI) © 2025 by the Urban Land Institute 2001 L Street, NW | Suite 200 | Washington, DC 20036-4948 All rights reserved. Reproduction or use of the whole or any part of the contents without written permission of the copyright holder is prohibited. All photos are courtesy of ULI unless otherwise noted. Megan Flanagan, CAE Executive Director, ULI Minnesota Rachel Keenan Manager, ULI Minnesota Kelly Annis Technical Writer, Branch Communications Technical Assistance Panel and Project Staff evaluated by a panel of volunteer experts selected from ULI’s membership. This is a conversational format that lends itself to an open exchange of ideas among diverse industry practitioners with distinct points of view. From the streamlined two-hour session to the “deeper dive” eight-hour session, this intimate conversational format encourages creative thinking and problem solving. Learn more at americas.uli.org/programs/ advisory-services/. Distinct from Advisory Services panels, TAPs leverage local expertise through a half-day to two-day process. Contents Executive Summary 1 Introduction and Background 5 Market Feasibility 11 Local Benefit 18 Community Role 22 Phasing and Timing 25 Next Steps 28 About the Panel 30 Acknowledgments On behalf of ULI Minnesota, the panel would like to thank the City of Lake Elmo for inviting ULI to conduct this study. In particular, the panel would like to thank Nicole Miller, City Administrator, Jason Stopa, Community Development Director, Ashley Monterusso, City Planner, Sophia Jensen, Senior Planner, and the City’s elected leadership for working closely with ULI Minnesota staff in preparing for and hosting the panel. The panel would also like to thank the City’s elected leaders, municipal staff, the Economic Development Authority, the engineers, architects, business owners, local nonprofits, and Lake Elmo residents for sharing their insights and perspectives during the interview sessions. 1 Montefiore Einstein Health System: Envisioning a Transit-connected Campus in the Bronx, New York1 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Executive Summary 2 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Executive Summary The City of Lake Elmo, Minnesota, owns approximately 180 acres of undeveloped land on the city’s western edge. This acreage, the result of a 2019 settlement with 3M Corporation, is spread across three parcels and sits at an important intersection for the city. In an effort to identify the best path forward for potential development of this site that would provide flexibility to meet market demands and tax revenue to the City of Lake Elmo (the City), the City turned to the Urban Land Institute Minnesota district council (ULI) for insights and guidance. ULI, using its trusted and objective technical assistance panel (TAP) program, convened a panel of real estate professionals to study the site, interview stakeholders, and provide the City with a set of recommendations it can use as it determines how to best approach development of the site. Those recommendations, which address each of the three parcels, are outlined below. Guiding Principles To help set the stage for a thoughtful evaluation of the study site, the panel first outlined the following principles to help guide its work and shape its recommendations: • Use the site to maximize community benefit, enhancing the city’s fiscal strength, jobs, services, housing options, and more. • Maintain the image and character of Lake Elmo through development at the site. • Establish design and performance standards to help guide future development in a manner that will align with the community’s character. • Preserve flexibility by addressing development incrementally and working across the three parcels in phases. • Remain ready and responsive to the market by incorporating near-term and long-term actions. • Build internal staff capacity to help guide this and future development initiatives. • Define the city’s sustainability and resilience goals and create programs to support those goals. • Integrate open space and trails at the site to enhance community connectivity. • Effectively manage the transition of the site from farmland to development with a focus on open communication and easing community concerns. Market Feasibility The study site is spread across three parcels: Parcel 1, to the south, holds nearly 21 acres; Parcel 2, the center property, is over 51 acres; and Parcel 3, to the north, is comprised of over 102 acres. The panel created the following development framework, which is designed to allow for maximum development flexibility through a phasing solution that should support the site build-out with market- viable uses. Start with Parcel 1. With sewer access already available at this site, this is the most market-ready of the three parcels and could work well for a heavy industrial user that may also need outdoor storage space. Roadway access will need to be addressed at the site, but the panel believes the site might work well for a 250,000 square foot industrial building or two 115,000 square foot buildings. This site could also be a good location for approximately 100-150 units of workforce housing or could serve as the location for an expanded re-located Public Works facility. Address Parcel 2 in the next phase. With the addition of roadway access and sewer connectivity, which will need to tunnel under a Union Pacific rail line, Parcel 2 could be a good location for light industrial users. With room for an estimated five 100,000 square foot buildings, the site could fit a number of users comfortably. A utility easement runs through the site, north and south, and will need to be considered. Trail and greenway connectivity is possible at this site, particularly along its eastern edge, where an existing tree line could buffer the uses. The panel also considered the potential for a rail spur on this or Parcel 1, which would add to the industrial marketability of the sites. It is a topic that should be raised with Union Pacific. Consider a mix of uses for Parcel 3. Much like Parcel 2, designs for this parcel will need to account for the utility easements running through the site, and connecting to sewer will require tunneling underneath 34th Street. Roadway access at this parcel, particularly along 34th Street, could create new corner opportunities that would be attractive to potential retail tenants. The southwest corner of this parcel is already occupied by the City’s 3 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Public Works facility. Should the City entertain relocating those functions elsewhere in the city or even to Parcel 1, the site’s most valuable real estate could be repositioned for a new high-value retail tenant, and the signature red building could be repurposed into a more community-facing and profitable use. Trail and greenway connections through this parcel, again along the east side but also through the low land that bisects the parcel east to west, would also provide welcome community connections. The northern half of this parcel would work well for new residential development. Apartments, townhomes, and new small-lot single-family homes could provide welcome alternatives and new price points for the Lake Elmo residential market. Phasing development hinges on new road and utility access. Once roadway access is created to Ideal Avenue and 34th Street, and utilities are accessible, development can begin nearly anywhere across the three parcels. The phasing schedule outlined by the panel can help guide the infrastructure improvements, but should not be used to limit other development potential. Local Benefit The City asked the panel to consider the various opportunities to generate City tax revenue through development of the parcels. Potential property tax generation is similar across uses. The table on page 21 of this report models four potential development scenarios, including the mix of uses posed by the panel in the Market Feasibility section (starting on page 11). The key takeaway from this analysis is that the potential City tax revenue of development at the site is relatively similar across all potential uses. Industrial development does generate more tax revenue than the other uses under consideration; however, the impact of the Fiscal Disparities Program flattens that benefit to a point where it no longer presents a significant financial advantage to the City. These results can enable the City and its development partners to make decisions based on other factors rather than being driven primarily by the potential to generate tax revenue at the site. Address policies relating to the use of City financial tools. The City will likely be asked by developers to participate in site improvements in some fashion, most likely through a request for financial support for work on the site. Before those requests come in, the City is encouraged to establish its policies for the deployment of its financial tools. Establishing these policies now will equip City staff with the guidance needed to field those eventual developer requests in a timely manner. Generally, the City has access to and should have policies guiding its use of the following financial tools: • Tax increment financing to assist a qualified industrial development. • Tax abatement to assist with development or financing public infrastructure. • Land write-down or discounts to reduce the price of the land paid by a developer. • Bonding to finance public infrastructure, which in this case could help fund the sewer extension. Community Role The City was also interested in the panel’s recommendations for community participation in the development process. Given the size of the site, its location, and the passion residents have expressed for Lake Elmo, the City is encouraged to formulate its community engagement and messaging strategies early. Transparency and consistency will be key, and compromise, from all parties at some point, will likely be required. The panel’s ideas for development across the three parcels include a number of uses. UL I PA N E L 4 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota The City’s next cycle of comprehensive planning updates could be used to engage the community around the future of the site, laying the groundwork for future work as developers take an interest in the site. Generally, the panel outlined the following actions that can encourage and facilitate community participation in the evolution of the study site. • Host consistent in-person and virtual sessions with the community. • Provide insights into and education about the development process, particularly relating to terms and timing elements. • Hire professional engagement and communications professionals to help lead the efforts. • Provide design alternatives rather than using open-ended options to help manage expectations. • Always provide the “why” behind decisions to help bridge back to the community’s stated goals. • Rezone the site to allow for desired future land uses to accomplish the plan. • Use by-right zoning to speed processes where possible and reduce developer risk. • Build staff (or external) capacity, particularly for plan review, community engagement, and communications. • Streamline processes where possible to reduce the plan review to building permit application process to 12 months or less. Timing, Phasing, and Policy Throughout its deliberations, the panel noted a few key policy questions that the City should address in advance of significant development decisions at the study site. • Articulate the City’s financial positions relating to facilitating development. • Create design and other guidelines to encourage development that aligns with Lake Elmo’s character. • Build staffing and internal capacity to help move developers through City approvals. • Identify the City’s preferred timing for the disposition of this site. • Identify sustainability goals and make clear whether standards will be mandated or incentivized. • Anticipate future public service needs and consider setting land aside to serve those needs. A note about sewer capacity. Through an evaluation of the development scenario posed by the panel and considered previously by the City, the panel estimates that there will be enough capacity from the Oakdale sewer connection and agreement to service the type of development posed by the panel for the entire study site. Summary The panel outlined the range of positions the City could take in relation to development at the study site. The levels of involvement range from very hands-off, i.e., hiring a broker to put a “for sale” sign on the site, to very hands-on, wherein City staff would be involved in the development of each parcel and sub-parcel. Once the City has determined its preferred depth of involvement, it is encouraged to take the following steps. • Begin engaging with the public with early messaging. • Initiate conversations with Union Pacific about the sewer line work and the potential for a rail spur. • Plan for the sewer extension in capital planning and budgeting. • Work with Washington County to identify curb cuts into each of the three parcels. • Create a policy framework using the city’s comprehensive plan as a foundation. • Consider jurisdictional touchpoints with Oakdale to create beneficial alignments. The development potential of the study site and the high visibility of the parcels have created a unique opportunity for the City of Lake Elmo. The City’s careful and thoughtful approach to the site and the potential to add businesses, jobs, tax revenue, and potentially new housing to the broader community is exciting and could be transformative for this side of the city. While additional decisions will need to be made soon, the City’s elected leadership and professional staff are approaching the work with open minds and, with the additional guidance provided through this study, are well-equipped to make the decisions that will serve Lake Elmo well into the future. 5 Montefiore Einstein Health System: Envisioning a Transit-connected Campus in the Bronx, New York5 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Introduction and Background 5 6 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Lake Elmo, Minnesota, provides all of the small-town charm of a city of nearly 15,000 people while also maintaining easy access to the urban benefits of nearby Minneapolis and St. Paul. As the population of Lake Elmo has grown and more people are choosing to call Lake Elmo “home,” the City of Lake Elmo (the City)–its elected leadership and professional staff– has kept pace, ensuring ready access to the development services, utilities, and infrastructure needed to build the housing that new residents seek. Today, the City faces a new development challenge. A 2019 settlement with 3M Corporation placed in the City’s control approximately 180 undeveloped acres on the eastern side of the intersection of Ideal Avenue North and 34th Street North. The City, when faced with the potential to release the site for development, turned to the Urban Land Institute Minnesota district council (ULI) for guidance. ULI, using its trusted technical assistance panel (TAP) program, convened a small team of real estate professionals to study the challenge and provide the City with development recommendations. The ULI panelists had expertise in the areas of real estate development, architecture, engineering, urban design, and finance. Using ULI’s trusted two-day TAP process, the panel toured the study site and surrounding area, met with the City, and interviewed community stakeholders. Equipped with their professional experience and insights from this information gathering process, the panel spent the rest of the TAP discussing potential solutions for the community and outlining potential paths forward for the City. Site Context The study site is divided across three parcels and is being used today to grow crops. The City’s 7.4-acre Public Works facility also sits at the northeast corner of Ideal and 34th Street, is surrounded on two sides by the study area, but was excluded from the TAP. • Parcel 1. The southernmost parcel of 20.8 acres is bordered by a Union Pacific rail The VillageStudy Area I- 6 9 4 Route 36 34th St Stillwater Blvd I-94 • What land uses would generate the most property tax? ◦What land uses are most financially feasible? Are there current conditions that could affect this? ◦More generally, are there development trends that you are seeing for comparable properties? • What are the pros and cons of dividing the site or selling as one property? Should the site be offered in phases? ◦What would a phased development strategy look like? • Is now a good time to sell the property? Does the timing affect how it should be sold? ◦What is the preferred disposition method? Discussion of options. ◦What economic incentives would be most beneficial to the site, TIF, tax abatement, etc.? • What kind of requirements/strategies could the city put in place to encourage community participation in the development process? Questions for the Panel The study area is marked by good transportation access. GO O G L E EA R T H / UL I PA N E L 7 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota line to the north, a large residential parcel to the east, Ideal Avenue to the west, and a sliver of land still owned by 3M to the south. • Parcel 2. This parcel is approximately 51.3 acres and is bordered by 34th Street to the north, the rail line to the south, and Ideal Avenue to the west. On its eastern border, the land beyond is zoned as limited commercial, and there are two businesses operating in the area. • Parcel 3. The northern parcel of 102.2 acres is bordered to the north and east by residential developments that feature single-family homes on large lots. Ideal Avenue is on the west, and 34th Street forms its southern edge. The Public Works facility is at the southwestern corner of this parcel. Area Context The 180-acre site has good visibility and transportation access. The city of Oakdale and a number of its services are just west of the site, across Ideal Avenue, and the Village, the city of Lake Elmo’s downtown, is approximately two miles east of the study site and is home to much of Lake Elmo’s retail and public services. Parks and recreation. The study area is close to a number of recreational resources. Nearby parks include Lake Jane Hills Park, Tamblyn Park, and Heights Park. The Lake Elmo Park Preserve and Sunfish Lake Park are further east and offer a wide range of Parcel 3 102.2 acres Parcel 2 51.3 acres Parcel 1 20.8 acres 34th Street N Id e a l A v e n u e N rail line study area The three parcels vary considerably in size and potential use. The map to the right illustrates the potential trail and greenway connections that could be made through the study area. CI T Y OF LA K E EL M O / UL I PA N E L CI T Y OF LA K E EL M O / UL I PA N E L 8 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota recreational opportunities. A network of trails runs close to the study area, and the City’s 2040 comprehensive plan notes that citywide greenways should eventually connect to the site. At the time of the study, the City was also considering opportunities to build a large sports complex one mile east of the site on 77 acres of land it had recently purchased. Development trends. The residential market in Lake Elmo is strong. During the initial panel briefing, City staff noted that Lake Elmo is seeing approximately 250 homes added to the community annually. As of October 2025, the City’s housing development pipeline had 157 single-family homes, 391 townhomes, and several apartment buildings (combined total of 554 rental units) proposed. The school district is racing to meet the anticipated demand for space and is in the process of building new facilities to increase its capacity from 500 to 1,100 students. (The City noted that there were only two commercial projects in the pipeline at the time of the study.) Area zoning. The study site is zoned as Business Park on the City’s 2040 Future Land Use map, which also notes a small section of commercial use near the Public Works site. A strip of proposed parkland would buffer Parcel 3 on the east, and a small strip of residential uses was envisioned for the northernmost boundary of this same parcel. Utilities and infrastructure. Utilities and transportation access points are of particular note for the entire study site. Water is available across the study area, and a water Insights into Lake Elmo • Small-town feel, rural, open, and green • City is safe and friendly • Historic perceptions around development receptivity • Elected leadership and City staff are striving to get to “Yes” and solutions • Downtown is great; local retailers appreciated • Strong residential pipeline; commercial pipeline is quiet • Want to remain different from neighboring communities (no big box) • Residents generally commute to work outside the community • Mixed-use is missing from the city • Few (no) entry-level housing options • No central community gathering space • Parks are great but becoming a City chore • Limited staff capacity for growing list of tasks • Would like to see sustainability and resilience elevated • Make sure the community is kept informed on any plans • “You hit that intersection and the lights go off. You’re in Lake Elmo.” Insights into the Study Site • Site is owned outright by the City (no debt) • It is a gateway to the rest of the city • Topography will require significant grading What the Panel Heard The panel interviewed leaders and staff from the City, County, and State agencies, developers, industry experts, business owners, nonprofit organizations, and residents who shared this feedback: • Rail line separates P1 and P2 • Sewer in place on P1; sewer to P2 needs to go under rail lines; P3 would go under 34th Street • Southern site (P1) has significant grade drop and watershed constraints • Public Works is consuming the area’s premiere commercial corner on P3 • Existing residential around P3 needs consideration Broker Notes • Need to know constraints, City requirements (zoning, utilities, due diligence, access, special uses/trails/City buildings) • Need to know process and timeline for approvals; speedy to market • Retail across the intersection in Oakdale has struggled • Access points will be important • Good roadway connectivity via Interstate 694 and County and local roadway networks • Heavy industrial could work on the southern parcels • Office only makes sense with tenant in hand as a build-to-suit project • Keep options open and don’t divide the site until the first major user for each parcel is known • Help brokers get familiar with the site after the City makes infrastructure improvement decisions, land use plan updates, and determines zoning 9 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota tower currently sits on the Public Works land. While sewer connectivity is currently in place for Parcel 1, Parcels 2 and 3 will require tunneling under the rail line for one and crossing 34th Street for the other. Parcels 2 and 3 will also require two access points for vehicular traffic going forward. Guiding Principles As the panel considered opportunities for the site, the potential development constraints, and the goals for the site as articulated by City leadership, staff, and the community, the panel outlined the following principles, which served to guide the formation of the panel’s development recommendations: • Maximize community benefit. Any development on the site should enhance the city’s fiscal strength, jobs, services, housing options, and more. • Maintain image and character. Residents noted how they value the natural beauty and open character of Lake Elmo. Work at the site should support that image and serve as another welcoming gateway to the rest of the city. • Establish design and performance standards. There was some concern from community members that new uses at the site may look or feel out of step with the rest of Lake Elmo. Establishing compatible, quality, and efficient design and performance standards can help guide development in a manner that should align with the community’s broader character. • Preserve future flexibility. The size of the site and lagging commercial development in the area may necessitate a longer marketing and development runway. By addressing work at the site in phases and remaining flexible, the site may prove more adaptable to changing market conditions and allow for greater opportunity along the way. • Remain ready and responsive to the market. Development at the site will take time, yet there are improvements that can begin in the near term. By using an approach that incorporates both near- term and long-term arcs and actions, the City can help ensure that progress is made while also positioning the site to remain responsive to the market. • Build internal capacity. As the city’s population has grown, its service requirements have likewise grown. Development at the study site may provide the impetus the City needs to also advance and increase its internal staffing capacity in order to maintain the vision it and the community have set for Lake Elmo. 10 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota • Advance sustainability and resilience. Community members value the city’s natural beauty and recognize the opportunity to showcase sustainability and resilience in new developments. By encouraging lower-carbon building materials and processes, more sustainable products, and promoting resilience measures, development at the site could strive to become a net-zero addition to the city. These measures could help to advance some of the City’s sustainability goals while also advancing its economic and social goals. • Integrate open space and trails. The city’s open space and trail networks are valued across Lake Elmo. Planning early can help ensure that there are opportunities at the site to connect the eventual uses on the site to the broader citywide trail network, supporting greater connectivity and helping ensure that the site does not instead become a barrier to community connectivity. • Effectively manage transitions. Change can be difficult, and the public sector management of development across a site of this size and visibility will require extra care. Being mindful of community perceptions and communicating as openly and transparently as possible can help ease community concerns along the way. By continuing the engagement begun through the TAP process, there is also the potential to inspire community champions, neighbors who can engage with other neighbors constructively, rather than further the rise of potential NIMBYs. Contributions to the City Development at the study site has the potential to provide the following contributions to the Lake Elmo community. • Fiscal and economic benefits. Taxes, increased daytime population, and increased spending by new residents and employees at businesses locating on the site can all support the economic health of the city. • New services. New attractors and services for Lake Elmo could take the form of new jobs, new retail and services, and perhaps new destinations for community members to enjoy. • New and enhanced housing options. Housing at the site should cater to different lifecycle choices than those currently available in the city. These could include one-floor living options or smaller homes with less associated maintenance. The panel also recognized that smaller homes and smaller lots may also provide the community with new price points that could cater to first-time homebuyers, young professionals, and families with young children. • Gateway to Lake Elmo. The location of the site, so close to Oakdale, positions it as a gateway to Lake Elmo, and it should serve as a welcoming point to the community. • Green space network. The city’s parks and trails are important community amenities, and trails and connectivity across the site can help fill some of the gaps currently experienced in the city’s green network. The nearby Village can also be supported by development at the study site. • Economic benefits. Improvements at the site can help to feed the energy of the Village as a destination, connecting people in the uses at the study site with the offerings found in the Village. • Physical benefits. The physical distance between the study site and the Village could be covered by an enjoyable bike ride or a healthy walk, if given the opportunity to use trails instead of riding along 34th Street. Development at the study site should complement and not compete with uses in the Village. 11 Montefiore Einstein Health System: Envisioning a Transit-connected Campus in the Bronx, New York11 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Market Feasibility 12 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota With the information from the City and stakeholders in hand and with a clear eye on the guiding principles, the panel began to formulate a plan that could provide the City with maximum development flexibility while steadily moving toward a phasing solution that could attract market-viable uses. Parcel 1 The 20-acre site on the south provided the panel with a good starting point. With sewer access already available at this site, it is likely the most flexible and market-ready of the three parcels. The panel believes that this site might make the most sense for an industrial user, including heavy industry. The site is buffered from surrounding uses on all sides, including the rail line, Ideal Avenue, the existing 3M property, and a tree line and topography change to the east. Roadway access. Although there is a natural roadway access point already present along Ideal Avenue, creating an additional vehicular access point could prove challenging given its surrounding uses and limited access. Utility access. A utility easement runs along the eastern portion of the site, and a watershed is noted along the south. Building configurations. The panel’s rendering for the study site notes a potential light industrial use on this parcel situated across one 250,000 square foot building or two buildings, each with approximately 115,000 square feet under roof. The panel also believes that workforce housing could fit on this parcel and could be a welcome addition to Lake Elmo. Parcel 1Parcel 1 Parcel 3Parcel 3 Parcel 2Parcel 2 N (above) The panel labeled the three parcels sequentially, noting with a “1” the parcel that might be expected to develop first. (below) The potential uses across the three parcels range from industrial uses to the south to residential on the north. GO O G L E EA R T H / UL I PA N E L GO O G L E EA R T H / UL I PA N E L Parcel 1Parcel 1 Parcel 2Parcel 2 Parcel 3Parcel 3 13 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Parcel 2 The center parcel, with approximately 51 acres, presents a good opportunity for light industrial uses in the study area. Utility and roadway considerations. There is a utility easement that runs north and south through the eastern third of the site. It is near this easement that the panel envisioned road access from 34th Street that would complement another access point off Ideal Avenue. There is also an existing pipeline that traverses the entire study area, noted by the red line diagonally covering the map to the right. Connecting to the sewer line will require conversations with the Union Pacific Railroad, as the sewer connection will likely involve tunneling under the rail line. Building configurations. With the easements and potential roadways crossing the site, the panel was still able to find space for five buildings, each approximately 100,000 square feet, across what could become a light industrial business park. Trail and greenway connectivity. Trails would wind through the eastern edge of this parcel, connecting users to points north and south and making good use UL I PA N E L of the tree line and buffer that separates this parcel from the uses to the east. (The trail crossing for the rail line would likely need to happen by routing the trail west, crossing at the same point as Ideal Avenue, and then doubling back to the east.)Using potential new design guidelines, new industrial development could blend nicely with Lake Elmo’s character. SO U R C E Potential site development as envisioned by the panel. Additional panel renderings for Parcel 1 consider how uses could be positioned on the site and connect to Ideal Avenue. UL I PA N E L UL I PA N E L 14 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Potential rail opportunities. It is also worth exploring the potential for a railroad spur for either Parcel 1 or 2. There is an abandoned spur in the Village that once served Lake Elmo’s manufacturing businesses. Bringing a spur to the study area could elevate the market potential for these sites as they would be one of only two or three available rail-served sites in the market today. This rail potential is compelling and warrants exploration with Union Pacific representatives. Parcel 3 The 102-acre parcel on the north side of 34th Street provides the City with an excellent opportunity to bring a mix of uses to the area that can expand Lake Elmo’s capacity while still remaining true to the city’s identity and character. Utility considerations. Much like Parcel 2, Parcel 3 designs need to account for the utility easements running through the site, both in the form of an overhead power line and an underground pipeline. Bringing sewer to this parcel will require pulling service north from Parcel 2 underneath 34th Street. Roadways and retail opportunities. Much like Parcel 2, Washington County will require a second point of vehicular access on this parcel, and, with the sewer work and easements, led the panel to identify a location midway along 34th Street near the center of the site. The addition of roadway access there would create two highly visible corner lots that could be well-suited for new retail businesses. Positioned on the north side of a fairly busy commuter roadway, these retailers would be in the enviable position of capturing commuters on their way to work in the morning. Public Works. The continued location of the City’s Public Works operations at this corner is also worth evaluating. While the cost to move these functions might easily run in the millions, the ability to use this highly visible corner for a more economically productive UL I PA N E L Parcel 3 divides into residential uses to the north and commercial to the south, separated by a greenway and trail. SO U R C E SO U R C E Retail uses, even those including a drive through (top) and community gather spaces (middle) could be good additions to the uses in Parcel 3. The corner of Parcel 3, a high-visibility corner, is home to the City’s Public Works facility and a wide expanse of open space between the building and the roads. 15 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota use makes the math worth considering. If possible, the City could shift Public Works to Parcel 1, dedicating at least half of the site to Public Works functions and retaining half of the site for future City needs. This could allow for a new commercial tenant at the corner of Parcel 3, situated on the most marketable piece of property within the study area. The signature Public Works building, designed in a style that is very much in keeping with the Lake Elmo style and rural character, could possibly be repurposed into a more public- facing, profitable use. Community-centric retail. It is also interesting to consider the type of commercial and retail establishments that could locate on Parcel 3. Moving beyond just convenience-style retailers, the site would work well for a community-centered use that could bring people together while also not competing with retailers in the Village center. The Public Works building, in particular, could work well as a community gathering spot. Trail and greenway connections. Moving further north into the site, the panel envisions a greenway running east and west through Parcel 3. Lake Elmo is known for its open spaces and green belts, so this addition would complement that identity while also making use of the natural topography through the center of the parcel and assist with stormwater management, enhanced biodiversity, and creation of habitat. It would tie into the envisioned greenway that would eventually run north and south along the eastern edge of the site and connect to trails that could also run along the greenway. More broadly, trail connectivity at the site could effectively connect residents to the area the City is considering for a future sports complex. Just one mile to the east, this recreational complex could be reached through a new trail from the study site, along the south edge of the quarry, and link to the trails through Sunfish Lake Park. Trails moving east from there could then also connect to the Village another mile to the east. Housing opportunities. Housing would work well in Parcel 3. The panel envisions a progression of housing options across the northern two-thirds of the site, transitioning from apartments to townhomes to small single-family homes on the far northern edge. • Apartments. The panel sketched out two apartment buildings that could combine to provide another approximately 230 single-floor housing units to the city. • Townhomes. Grouped in roughly six buildings in the northeastern quadrant, the panel sees potential for approximately 56 townhomes on the site. • Small-lot single-family homes. The City has been considering the addition Study Area The Village Potential Sports Complex Broadening the city’s trail network to the study site can help connect residents in the area to some of the city’s current and potentially future areas of activity. GO O G L E EA R T H / UL I PA N E L 16 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota of small-lot single-family housing units. Using a 40-foot-wide configuration that would run approximately 115-feet deep, 44 smaller homes on smaller lots could fit on the site and be served by a central alley running behind the homes. These smaller housing types could be a welcome alternative in a community that is known for its one- to three-acre lots. Empty- nesters and young families alike might appreciate the opportunity to own a home that does not come with full days of lawn maintenance each week. • Single-family homes. Along the northern end of the site, the panel envisions that more traditional single-family homes could sit on 80-foot-wide lots that could be separated from the established neighborhood to the north by a 50- to 75- foot landscaping and tree buffer. Phasing Development Phasing development across the three parcels will largely be driven by utility access and road access. Once those foundational infrastructure needs have been addressed and are in place, development can begin nearly anywhere across the three parcels. The size of the parcels and the potential development scenarios also mean that several developers could be working concurrently in multiple areas on the site. (top) Multifamily housing would work well near the center of Parcel 3. (middle) Single-family homes and townhomes would also work well on the site as would (bottom) smaller homes on narrow lots like these new homes in Nashville, Tennessee, which are served by rear alleys and garages. SO U R C E ? 17 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Site Type Qty Units Size (SF, Units) Gross Acres Usable Land $/unit Land Value w/City Infrastructure Rent/SF or Sale Price/ Unit Raw Land Value (per acre) NOI Improved Property Value 1 (south)Industrial building 2 230,000 21 $5.00 per SF $3,400,000 $7.00 $163,000 $1,610,000 6% cap rate $27,000,000 2 (central)Light industrial buildings 5 500,000 51 $5.00 per SF $8,400,000 $8.00 $164,000 $4,000,000 6% cap rate $67,000,000 3 (north)Retail/ commercial 5 50,000 17 $12.00 per SF $7,500,000 $12.00 $440,000 $600,000 $10,000,000 Townhomes (8-plex)56 1,250 5 $50,000 per lot $1,100,000 $200,000*$140,000 n/a $11,200,000 Single family 17 9,600 5 $150,000 per lot $2,400,000 $600,000 $140,000 n/a $10,200,000 Mini single family 44 4,800 5 $75,000 per lot $3,200,000 $300,000 $140,000 n/a $13,200,000 Apartments 230 120,000 20 $20,000 per unit $4,800,000 $250,000 $140,000 n/a $60,000,000 Municipal building 1 n/a 20 n/a n/a n/a Greenway 1 n/a 30 n/a n/a n/a Subtotal 102 Total $30,800,000 $198,600,000 * This number could represent either a for sale or rental option. Information based on averages and current market prices. All information to be verified for each project and application moving forward. Information to be used for general purposes only. Exhibit 1. Potential Development Configurations and Associated Potential Value Creation The table below represents the potential buildout of the development scenario posed by the panel in the Market Feasibility section of this report. While the actual sales prices and associated property values will vary, this chart conveys the range of potential uses that can be realized on the combined 180 acres and the value that developers may potentially generate through the scenarios posed by the panel. As the City contemplates its preferred path forward for working on or contracting out the development of the site, these values can provide a point of reference. 18 Montefiore Einstein Health System: Envisioning a Transit-connected Campus in the Bronx, New York18 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Local Benefit 19 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota A key question posed to the ULI panel centered around the potential for generating City tax revenue through development on the study area parcels. While a number of stakeholders shared a perception that an industrial use or mix of industrial uses would generate the best taxable return for the City, the panel ran models of potential development scenarios to better identify how development across the site could be expected to generate City tax revenue. Potential Property Tax Generation The table on page 21 models four development scenarios for consideration. The first green column, “ULI TAP Development Scenario for Lake Elmo Land,” reflects the mix of uses across the three sites as detailed in the Market Feasibility section of this report. The second green column, “ULI TAP Hypothetical Industrial Development Only,” provides insights into the tax revenue potential in a scenario where only industrial uses were developed across all three parcels. The grey columns, “Comparison of Similarly Valued Property,” contain details of a real property scenario for a development of a similar size and configuration. The remaining teal columns, “Comparison of Illustrative Single Use Development on 100 Acres (Net of Wetland and Setbacks),” provide additional tax revenue insights for a 100-acre development that has also accounted for typical property setbacks, easements, etc. for illustration purposes. The takeaway for the City of Lake Elmo and its constituents is that the potential tax revenue for the site is relatively similar across all uses. Industrial development does generate more gross tax revenue than the other uses under consideration; however, the impact of the Fiscal Disparities Program reduces the City’s tax benefit to a point where it no longer presents a significant financial advantage to the City. (Note: this modeling does not take into account the potential City expenses associated with public services provided to the various uses over time.) The results of this modeling can be instructive as the City considers how it communicates its eventual chosen development path to its constituents. These results can also free the City and its development partners to make decisions based on factors other than primarily tax revenue potential. The removal of tax revenue as a driving force in decision-making can lead to other potential development scenarios that may provide other key benefits to the community, such as jobs, services, new and additional housing options, and more. Financial Tools As the City considers the potential tools in its financial toolbox, the panel provided the following initial information as broad and early guidance. It is too soon to make decisions as to which tool should be used to support development on the site—those conversations should be had when the City is approached by a developer with a specific request. In the right foreground, Parcel 1 lines Ideal Avenue. Parcel 2 sits beyond the rail line, also on the right. 20 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota In the meantime, the panel encouraged the City to have internal conversations now to determine its policies regarding the potential use of specific financing tools. Once decisions are made and conveyed to City staff, staff will be better equipped to field questions from developers and manage expectations of the broader community through the process. The following financing tools are generally a part of the development conversation and should be a part of the City’s policy discussions. Tax Increment Financing (TIF). TIF could be used to assist a qualified development. The potential land uses considered for the site in this report may qualify for inclusion in a TIF district pursuant to statutory limitations. TIF is often used to help fund early infrastructure improvements. Tax Abatement. Tax abatement can be used to assist with development of the property and can take the form of direct assistance to developer(s) or assistance with financing public infrastructure. The City may only “leverage” City taxes to assist the development and may not leverage taxes payable to the other taxing jurisdictions. Land Write Down. The City can choose to write down the value of the land in the sale to assist with development. This write-down or discount off the sale price of the land can be attractive to a developer as it provides financial value, in the form of reduced expenses, at the outset of the work. Bonding. The City may use its authority to issue tax-exempt bonds to finance public infrastructure. This may be accomplished by the City assessing a portion of the improvement costs to the property or pledging other sources of revenue to the bonds, which could include utility revenues, tax abatement levies, or ad valorem property taxes, among other sources. A bond could help fund the sewer extension needed to reach Parcels 2 and 3, which is estimated to cost around $700,000-800,000. Wildlife can be seen moving through Parcel 3. 21 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota ULI TAP Development Scenario for Lake Elmo Land ULI TAP - Hypothetical Industrial Dev. Only COMPARISON OF SIMILARLY VALUED PROPERTY COMPARISON OF ILLUSTRATIVE SINGLE USE DEVELOPMENT ON 100 ACRES (NET OF WETLANDS AND SETBACKS) Residential Owner Occ, Low Density Residential Owner Occ, Med Density Residential Rental, High Density Commercial Industrial Residential Owner Occ, Low Density Residential Owner Occ, Med Density Residential Rental, High Density Commercial Industrial RESIDENTIAL UNITS 357 - 63 83 172 255 425 850 COMMERCIAL/INDUSTRIAL SF 780,000 1,550,000 200,000 500,000 TAXABLE MARKET VALUE 198,600,000 199,589,041 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 204,000,000 255,000,000 246,500,000 76,750,000 76,400,000 TOTAL ANNUAL PROPERTY TAXES 3,832,348 5,272,061 574,883 574,883 575,880 1,319,543 1,319,543 2,348,593 2,935,991 2,839,088 2,026,345 2,017,097 City Taxes 675,625 688,940 167,477 167,477 167,813 172,493 172,493 684,339 855,508 827,316 264,846 263,637 County Taxes 599,885 611,707 148,702 148,702 149,000 153,156 153,156 607,622 759,602 734,570 235,155 234,082 School Taxes 896,317 909,455 223,375 223,375 223,668 227,747 227,747 912,271 1,140,412 1,102,681 349,653 348,058 Fiscal Disparities Taxes 919,503 1,765,584 - - - 442,056 442,056 - - - 678,734 675,637 All Other Jurisdiction Taxes 741,017 1,296,374 35,329 35,329 35,400 324,092 324,092 144,361 180,469 174,522 497,958 495,683 Future Value 15 years of City Taxes 10,134,377 10,334,104 2,512,153 2,512,153 2,517,188 2,587,390 2,587,390 10,265,091 12,832,622 12,409,734 3,972,683 3,954,557 Present Value 15 years of City Taxes 5,627,260 5,738,161 1,394,909 1,394,909 1,397,705 1,436,686 1,436,686 5,699,840 7,125,499 6,890,685 2,205,890 2,195,825 Exhibit 2. Potential Property Tax Generation Information based on averages and current market prices. All information to be verified for each project and application moving forward. Information to be used for general purposes only. Exhibit 3. Cost of Services for Every $1 of Property Taxes Received Potential Property Tax Generation This information was provided by the American Farmland Trust via Washington County. The panel cautions that Cost of Community Services studies rely on broad assumptions and often exclude long-term capital needs and broader economic benefits, among other factors. The information on Cost of Community Services is not warranted or guaranteed to be accurate by the panel. It is offered as a point of reference only. 22 Montefiore Einstein Health System: Envisioning a Transit-connected Campus in the Bronx, New York22 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Community Role 23 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Given the size of the study site, its prominent location, and the depth with which Lake Elmo residents like to engage in civic life, the City sought guidance on identifying potential requirements and strategies that might help encourage successful community participation in the development process. Across all avenues, transparency and consistency will be key to a successful communication and engagement strategy. Compromise, from all parties at some point along the way, will also likely be required. The following guidance from the panel can help the City ensure that it is inviting the community’s participation, acting transparently in every manner it is able, and is supporting and improving the economic vitality of the city while maintaining the character that continues to draw residents to Lake Elmo. It is also helpful to recognize that the City is on the edge of a new comprehensive planning cycle and process (anticipated for 2028). That process will necessarily come with its own community engagement process, which will help inform zoning decisions across the city. With that information in hand, developers can look at potential opportunities in Lake Elmo and know that a certain degree of public engagement has already occurred around future uses across the city. Going forward, the City is encouraged to pursue the following actions in its dealings with the potential development of the study site. • Host sessions consistently. Ideally, community updates would be provided at regularly scheduled sessions and held both in-person and virtually. • Provide insights into the development process. Development is a complex process that is not necessarily clear to the average resident. Providing community members with fundamental information on development terms and a somewhat typical development process can help level-set conversations and ensure that everyone has the basic information they need to participate constructively. • Seek professional engagement and communications assistance. Not all cities have professional staff who are trained in public engagement or effective communications. Hiring a special consultant for a contracted period of time or on a specific project basis can expand the city’s capacity to actively and effectively engage with the public around development progress. Additionally, and this may require a different person or firm, an outside professional can also equip the City with the tools it needs to ensure that residents and business owners and operators are kept apprised of what may be happening more generally in Lake Elmo. The panel learned that a number of community members only turn to NextDoor and Facebook for their information, so the City may want to focus even more on those platforms, ensuring accurate information is readily found. The panel deliberates where new uses could fit on the study site. 24 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota • Provide design and programmatic alternatives rather than open-ended options. At points in time when community feedback, insights, and/or buy- in are needed, providing participants with plan alternatives is helpful. Open-ended questions can often elicit responses that veer off track and may make it difficult to manage expectations going forward. • Always provide the “why.” Stakeholders noted that they prefer to understand the reasoning behind decisions. Providing the “why” behind the development path for the study site could include reasoning such as “enhancing the city of Lake Elmo per the stated goals and preventing a residential tax increase by increasing the tax base with new commercial development.” • Rezone to accomplish the plan. It is important that the development plans for the study site align with the city’s goals and that the plan creates increased tax revenue. If the site needs to be rezoned to reach these goals, then the City should do so. • Use by-right zoning. By-right zoning can advance the city’s goals by making certain uses easy to pursue. By-right zoning allows developers to bypass zoning review, which will reduce the pre- development timeline, reduce risk, and save developers money. More broadly, these time-saving measures can also increase developer interest in the site. • Build staff capacity. Lake Elmo staff are working hard to ensure that the City functions meet the needs of the community. As development activity builds, the City should also consider increasing the capacity of City staff, either through additional training or by hiring additional people. Managing the plan review process, conducting community engagement, and managing City communications are important functions that will support the city’s goals, and each deserves the attention of dedicated and trained staff. • Streamline the process. The City’s development review process is an important piece of the development puzzle. The City is encouraged to streamline and condense, where possible, the total time needed to advance projects from Plan Review/Building Permit Application to Construction, with a goal of no more than a 12-month process. This will help ensure that the city of Lake Elmo remains competitive and attractive to potential developers and business owners looking to land in the area. Lake Elmo is quickly out growing its existing elementary school and is in the process of building a new facility to allow the district to double its student population. 25 Montefiore Einstein Health System: Envisioning a Transit-connected Campus in the Bronx, New York25 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Phasing and Timing 26 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Throughout its deliberations, the panel noted a few key policy questions that the City may wish to address in advance of significant development decisions at the study site. These items, centered primarily around the City’s vision and direction, will assist in the eventual decision-making that will be needed and better equip City staff to respond capably when developers are ready to make a move on those parcels. Outstanding Policy Questions Articulate the City’s financial positions. The City is strongly encouraged to identify and quantify its willingness to take on debt and subsidy to finance improvements associated with any development at the site. Create guidelines. Providing the development community with certainty on development guidance will not only be helpful in the process, it can also be attractive, particularly in situations where former perceptions of an anti-development bias in the city may linger. This proactive approach, versus one that asks to be shown ideas or options, can help speed development at the site and reduce the risks associated with delays or process uncertainties. Build capacity. Staffing and capacity building will be required to manage processes like those associated with development across the study site. The City is encouraged to address those needs now to ensure that staff are ready and resources are in place when needed. Identify preferred timing. There needs to be a clear sense of the City’s preferred timing around the disposition of this site. Whether it wishes to unload the site in this budget cycle or patiently wait years for the right project, the stage needs to be set with appropriate timing for buildout across the parcels that is also tied to the capital plan and budget. Identify sustainability goals. “Sustainability” was mentioned several times with varying applications and meanings. Identifying specifically what “sustainability” means for Lake Elmo can help with decision-making around building and infrastructure upgrades. Identifying how the City wants to advance these sustainability goals will also be important, as will making clear whether the related measures will be mandated or incentivized in development. Anticipate future public service needs. The study site represents a significant opportunity for development, including the Phase 1 FuturePhases Future Sanitary Connection The potential phasing of development across the site leads with the southernmost parcel, leveraging the existing sanitary connection and then moving north, extending the sewer line as new road infrastructure is addressed. UL I PA N E L 27 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota development of public service functions. The City should identify and consider reserving space at the site for future public facilities. Sewer Connection The likely sewer connection, leveraging the existing sewer line from Oakdale that runs into Parcel 1, prompted the panel’s review of the existing Lake Elmo-Oakdale sewer agreements and potential additional capacity of that line. As of August 2021, the anticipated cost of Lift Station 6 was $893,000, with Oakdale covering 70 percent of the cost and Lake Elmo covering the remaining 30 percent. In an October 2021 memo, the estimated cost to connect the sewer service north into Parcels 2 and 3 was $772,000. In this scenario, Lake Elmo would pay Oakdale upfront for the connection and then pay annually for the service, which included a 500 Residential Equivalent Connection (REC) equivalent allocation. With the information outlined by these calculations, the City acquired 300 GPM of capacity from the City of Oakdale sanitary lift station, representing the maximum allowable sanitary flow to support approximately 500 Residential Equivalent Units (REU’s). This occurred four years after the sanitary sewer installation (or agreement execution) allowing the Oakdale townhomes and nearby housing to be completed first. The key takeaway from this analysis is that the capacity of the sewer connection from Oakdale into the study area has the additional capacity needed to serve the development envisioned by the panel. The road to the Public Works facility also notes where a new street might enter Parcel 3. 28 Montefiore Einstein Health System: Envisioning a Transit-connected Campus in the Bronx, New York28 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Next Steps 29 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota As the City considers the broader policy questions noted in the Phasing and Timing section, it will also need to determine its preferred level of involvement in the development of the study site. The table on this page begins to outline the range of roles the City may wish to consider as it relates to the development of the study area. Early Steps Once the City has determined its preferred depth of involvement in the site’s development, it is encouraged to take the following early steps. Begin engaging with the public. Early engagement should include key messaging items and outline the City’s plans for involvement in the site development. Initiate conversations with Union Pacific. The sewer line crossing at the rail line will be key to unlocking development on Parcels 2 and 3. Conversations with Union Pacific should not wait. Plan for the sewer extension. In addition to launching conversations about the physical expansion of the sewer line, capital planning and budgeting should also begin early. Identify curb cuts with Washington County. The road access points into each of the three parcels should be identified in partnership with Washington County, and discussions about the process for improvements should be formalized. Scenario PROS CONS Level of Effort FOR SALE SIGN: Find a master broker or developer to figure it all out • Cheap and easy • Can start immediately • Less control of outcomes • Potential longer lead time • Less net revenue Low BASIC INFRASTRUCTURE: City installs sewer connection • Maximum flexibility • Catalyzes first stages of development, suggests phasing • Some up-front costs and rail coordination needs Low/ Mid MEDIUM INFRASTRUCTURE: City installs the sewer and main roadway • Ensures basic infrastructure fits • Further sets the table for developers, defines areas • Up-front costs • Could misjudge the market and need to rework improvements Mid STAGED ROLLOUT: The site is platted and packaged with infrastructure • Makes more sites available for more developer types, provides infrastructure efficiently • More up-front costs and considerations, less flexibility for scenarios Mid CITY AS DEVELOPER: The City and staff are hands on throughout the entire development process • Most control and options • Much more resource intensive and costly • Need to be in tune with the market to work High Exhibit 4. The City’s Potential Role in Site Development The table below outlines the various scenarios the City may wish to consider as it contemplates its potential role in the development of the three parcels making up the study site. Create a policy framework. Using Lake Elmo’s comprehensive plan as a foundation, the City should update the processes associated with development at the site. Consider jurisdictional touchpoints. As Lake Elmo is on the cusp of a new comprehensive plan, so is Oakdale. Working with this neighboring jurisdiction could provide both cities with interesting opportunities to find alignments that could benefit both communities. Lake Elmo’s elected and staff leadership are clearly dedicated to the city’s growth and vitality. They have become and its new staff are becoming adept at navigating the challenges of a growing city that is also proud of and comfortable with a rural history and open space mindset. As the City continues to chart its path forward and provide the services the community needs, it may find this balance between rural and urban more challenging to maintain. The recommendations provided by this panel can serve as guidelines for future development opportunities, and, when combined with the City’s passion for and dedication to its residents, can provide Lake Elmo with the leadership it needs to succeed well into the future. 30 North Canyons Technical Advisory Panel | Castle Pines, Colorado About the Panel 30 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota 31 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota 32 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota John Slack Panel Co-Chair Associate Principal, Urban Design Practice Leader & Senior Landscape Architect Perkins & Will Having traveled to every US state except Alaska with his military family, John grew fascinated by how people use urban spaces, and how buildings interface with them. As an urban designer and landscape architect, John’s work is influenced by his love for nature, art, and design, as well as his Japanese culture, which was bestowed upon him by his mother. His admiration for the minimalistic characteristics of historic Japanese sites is reflected in his design process, where he carefully considers how to scale back a design. With rigor and dedication, he seeks to simplify and clarify. A long-term mentor with ULI and city volunteer, John seeks to serve his broader community and believes in the strength of the relationships to get things accomplished. He knows he’s successfully engaged his audience when he starts to see a shift in their mindset - from ‘we can’t’ to ‘I hadn’t considered that before.’ Mark Houge Panel Co-Chair President North Oaks Company LLC Mark Houge is a seasoned real estate executive with decades of experience leading complex development projects across residential, commercial, industrial, and mixed-use sectors. As President of North Oaks Company LLC, he oversees the land development of over 1,850 acres, including residential communities, light industrial, commercial centers, and land conservation areas. His career spans leadership roles at Opus, Cushman & Wakefield, Harstad Companies, and AP Technology, where he led design and project management and delivered award-winning corporate headquarters, manufacturing facilities, and housing projects. Mark holds a Bachelor of Science in Construction Management and Engineering from Minnesota State University, Mankato, and a Master’s in Corporate Real Estate from CoreNet Global. He is a licensed commercial real estate broker and an active member of industry organizations including the Urban Land Institute and the Sensible Land Use Coalition. Mitchell Cookas, PLA Senior Project Manager, Civil & LA ISG Mitchell is a driven, collaborative, and creative professional with over 15 years of experience in sustainable site design, landscape architecture, civil engineering, water resources, construction administration, and business development. He has worked together on a variety of public and private sector projects ranging from a quarter- acre residence to a “Big Box” retailer expansion, to multi-family apartments, and professional sports stadiums (Target Field and CHS Field). Mitchell’s volunteer experience includes being a past member of the Minnesota Design Team and he continues to support the Special Olympics of MN. Additionally, he was a member of Dakota County’s citizen advisory committee for the Farmland and Natural Areas Program (FNAP) from 2009-2011. Mitchell is actively involved with multiple non-profit and professional organizations including the MN Shopping Center Association (MSCA), U.S. Green Building Council (USGBC), Hearts & Hammers, and the Urban Land Institute. 33 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Haila Maze, AICP Community Planning Division Leader | Principal Bolton & Menk As a community planning division leader at Bolton & Menk, Haila is committed to advancing the long-term success of communities through planning and project management services. She draws on her experience in local and regional planning to connect with clients, helping them identify what they need and how to accomplish it. She began her planning career in 1998 and has extensive experience with land use and transportation planning, creative and inclusive engagement, and supporting work in health assessment, scenario planning and modeling, and implementation planning. Known for thorough studies, it’s not surprising Haila is fascinated with genealogical research and has traced her family history back to the 1600s. Tammy Omdal Managing Director Northland Securities Inc. Tammy Omdal is a Managing Director for Northland Securities, joining the firm in 2011. Tammy has worked in public and private financial management for more than 30 years. She provides Northland clients with extensive experience in economic and housing development, debt issuance and management, and financial planning. She advises clients on new money and refunding transactions, tax allocation bonds, limited obligation bonds, revenue bonds, and special tax bonds. Tammy joined Northland after a successful career working for municipal governments, including Burnsville, MN, Minneapolis, MN, and Dakota County, MN. She served as Deputy City Manager and Chief Financial Officer for Burnsville, Financial Services and Budget Director for Minneapolis, and Accounting Manager for Dakota County. Tammy has built upon her background as a municipal issuer and manager to provide client centered advice to her clients. Tammy creatively uses economic development finance tools and strategic capital financing to achieve the objectives of her clients. She has experience working on complex economic development, housing, and redevelopment projects, including financial evaluations of pro forma, financing of projects, and application of financial assistance tools or the securing of special legislation to assist a project. She communicates complex financial information in an easy-to-understand manner to help inform decision-making. Tammy received her bachelor’s degree in business from the University of Minnesota, Carlson School of Management, with an emphasis in Finance. Taylor Smrikarova Real Estate Developer TNS Taylor’s work is focused on the intersection of real estate development, architecture, urban-focused design and community orientation. She believes that the development process itself adds beauty in creating occupiable art. Taylor worked in mixed-use development at Redesign, Inc., The Excelsior Group, in both commercial real estate and architecture at THOR Companies, and office renovations at RSP Architects. She also worked in residential architecture at Nelson Architects (in Washington D.C.), commercial mortgages at Capital One (in Maryland), and assisted homeowners during the Home Affordable Refinance Program (HARP) after the 2008 crisis while at Dorner Law & Title Services (in Boston, MA). Taylor holds a Bachelor of Science in Architecture from Northeastern University and a Master of Real Estate Development from the University of Maryland. She currently holds several boards seat including Board Member of Commonbond Housing, Project Committee of Commonbond Housing, City of Minneapolis Zoning Board of Adjustments, Board Member of City of Lakes Land Trust, Project Committee of City of Lakes Land Trust, Board Member of Minnesota Chapter of the Urban Land Institute. 34 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota Tom Strohm Director of Development Likewise Partners Tom Strohm is Director of Development at Likewise and brings nearly 20 years of multi-disciplined experience to the team in development, design and project management. His experience includes providing leadership on a wide range of projects including industrial, retail, mixed use, affordable housing, and office. Before joining Likewise Partners, Tom worked for eight years at United Properties as a Senior Development Manager. He started his career as an architect and worked seven years at BWBR. Tom holds a Bachelor of Arts degree from the University of Minnesota and a Masters in real estate from the University of St. Thomas. City Owned Property at Ideal Ave & Stillwater Blvd Next Steps Discussion City Council | 3/10/2026 Urban Land Institute Technical Assistance Panel (ULI TAP) Report The TAP Report explores a development framework to allow flexibility through a phasing solution that should support the site build-out. The phasing begins with Parcel 1, as it is the area most market- ready with sewer access available at the site. Staff recommend phasing out development as outlined in the TAP Report, beginning with marketing and selling Parcel 1. 1. Does Council support this recommended phasing for the project? Sewer Connection Community Development plans to begin working with Engineering to determine sewer connection costs and initiate a plan for connecting sewer to the remainder of the site this Spring. The TAP Report considers this approach “low/mid” level of effort from the City. 2. Does Council support engaging with Engineering to create a plan and determine costs for expanding sewer to remaining sites? Hiring a Commercial Broker Staff recommend hiring a commercial broker for Parcel 1: •Obtain a broker price opinion •Field interest in the property •2-3% commission •TAP lists this as “low” effort in chart •Market as rail adjacent/accessible 3. Does Council support hiring a commercial broker for Parcel 1? AUAR Planning Ahead of expiration of previous AUAR on site, staff would like to work with consultants to renew the AUAR at the 180 acres •May prevent costly updates to the study later •May prevent costly development delays •Current AUAR expires 4. Does the council support renewing the AUAR on the City owned property at Ideal Ave and Stillwater Blvd Community Engagement Process Community Development recommends conducting community engagement in house. Community Engagement Timeline Date PHASE I - Informing Public April Announcement of Project/Informing Public Early April Story in the Fresh Website Update (main page, and project page) FAQ on webpage PHASE II -Community Input April - June Online survey (shared on website, social media, newsletters, flyers)Mid April Open House/Town Hall April/May Informational Public Hearing at EDA June EDA PHASE III - Reporting July Analyze and summarize information received in the process July Present findings to commission/council for direction to staff on next steps Mid July (workshop) Publish to the City Project webpage End of July 5. Does Council support staff’s recommended community engagement strategy? Parcel 3 – The TAP Report conveys that the northernmost parcel (Parcel 3) has: •Largest range of potential uses •Most financial value • With that in mind, staff are weighing the potential benefits of engaging in an RFP process for the site to engage with a range of accomplished developers nationally. Staff is seeking feedback from Council on this possibility. 6. Does Council have feedback about visioning for parcel three? Phase 1 - City Owned 180-acres Ideal & Stillwater Blvd Date Notes CC Workshop 3/10/2026 Begin Engineering Planning of Sewer Connection March/April County Coordination March/April Work with WA County to discuss access and future projects near site Hiring Broker April Hire Broker to provide Broker Price Opinion on Parcel 1 and field interest in the property; research and find pricing and bring back recommendation AUAR Spring-Fall Work with consultants to renew AUAR on site Public Engagement Process April - August Survey April Town Hall April/May PH at EDA June Begin sewer work June to Parcel 2 Marketing of Parcel 1 Late Summer/Fall Land Use& Zoning updates tbd Dependent on feedback and interest in property Estimated Project Timeline – Phase 1 (2026) Does the City Council have guidance or feedback on next steps for the sale of the City owned property at Ideal Ave and Stillwater Blvd (City owned 180 acres)? 1.Does Council support this recommended phasing for the project? 2.Does Council support engaging with Engineering to create a plan and determine costs for expanding sewer to remaining sites? 3.Does Council support hiring a commercial broker for Parcel 1? 4.Does the council support renewing the AUAR on the City owned property at Ideal Ave and Stillwater Blvd? 5.Does Council support staff’s recommended community engagement strategy? 6.Does Council have feedback about visioning for parcel three? STAFF REPORT DATE:03/10/2026 DISCUSSION TO: Mayor and Councilmembers FROM: Clarissa Hadler, Finance Director AGENDA ITEM: Use of Stormwater Funds to pay for Street Improvements CORE STRATEGIES: ☐ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services ☐ Responsive, transparent, adaptive governance ☒ Balanced Finances now and future ☐ Managed Growth ☒ Resilient Infrastructure BACKGROUND Councilmember Dragisich requested discussion regarding the use of the Stormwater Fund to pay for street improvements at the February 17 meeting, and there was a consensus of the Council to review it further at the March 3 meeting. The current practice of the City is to not use Stormwater funds for street projects. Street projects have largely been funded by bonds, to date, and we recently started moving toward a funding model and associated taxation to be able to pay for future street projects, at least in part, with cash. The bonds for Street Projects are repaid by a combination of property taxes and special assessments. Special assessments are generally 30% of the total project. The Stormwater Fund has paid for certain non-street, project-related capital projects, such as the Hudson Blvd culvert. That project cost was approximately $400,000, which is over 50% of our annual stormwater revenues and used over 20% of our cash in the fund for that one project. The Ordinance creating the Stormwater Fund in 2003 does indicate that one of the purposes of the fund is for “capital improvement in developed areas.” While that ordinance does dictate what the stormwater fund shall be used for, it does not dictate that all stormwater projects must be paid for by the stormwater fund. The residential stormwater fee started at $20 in 2004 and is currently $95. (See chart.) The fees for other land uses are determined by an equation based on the land use which is then applied to that $95 flat fee. Current Situation As part of this year’s utility study update, we’ve incorporated the goal of covering all expenses, including depreciation, within the next 10 years. Over time, that additional revenue could help cover capital improvements, including street project-related stormwater improvements. That said, those planned revenues for the stormwater fund may not support the level of outlays to street projects necessary to cover 100% of the stormwater portion of those improvements. Attached is a draft cash balance report from the utility study that will be presented at next week’s meeting. This report reflects the 8% increase to the flat fee every year for 10 years in order to reach a net positive revenue-less-expenses for the Stormwater Fund. The cash balance will increase each year, and we would be able to dedicate some portion of that to capital assets starting in 2030 if the Council chooses. Note, that while our recommendation for next week is to implement an increase in the flat fee for 2026, future increases in revenues may come from a combination of fee increases and fee structure revisions. If, instead of planning for incremental changes we tried to pay for all stormwater improvements, including those related to street projects, that fee increase may need to be significantly higher to cover this shift in practice. Because Finance staff does not have a thorough understanding of the costs of stormwater related expenses within each street project, and because our CIP only goes out 10 years, it’s difficult to project those future fee increases. A review of the project costs of a few of our more recent projects show it might be 30 – 45% of any street improvement project in developed areas. Our 10-year average for Residential Street Improvements is currently $2,440,000. So, we would need an average of between $730,000 to $1,100,000 in additional revenue to cover all stormwater improvements related to those projects. Annual revenue in the stormwater fund is approximately $650,000, so we would need to more than double our revenues in order to sustain ongoing contributions to street projects. So the question is then “should we or shouldn’t we use stormwater funds for capital”? What problem are we trying to solve? And how quickly do we need to solve it? One of the concerns mentioned that might motivate a change in practice was equity, part of which is the concern that stormwater capital expenses should be paid by stormwater users, similar to water and sewer. However, unlike the Water and Sewer Funds, which are only used by approximately 60% and 30% of properties respectively, Stormwater Fees are paid by the vast majority of properties and Stormwater Management is a city-wide issue. Based on the structure of the stormwater fee and its broad application across most properties, staff has not identified significant equity concerns related to the current funding approach. As such, staff has been looking at the idea of revising the Street Project funding mechanisms as a potential future improvement to our processes, in coordination with other incremental improvements in our asset management and financial modeling activities. Changing these processes is not a small task and we need to do so carefully and thoughtfully. There are pending reviews by staff, Engineering, and legal counsel regarding a number of other issues that may impact practice, policy and city code, including issues related to, lot size, agricultural land, impervious surfaces, street width, stormwater credits, the appeal process and HOAs. These issues are, to some degree, independent of the capital project funding issue, which at the moment is more about revenue sufficiency. The Stormwater Fund does not have sufficient revenues to fund the entirety of stormwater projects related to streets. It could, however, sustain some smaller transfers to street projects in coming years if Council decides this is appropriate and future fee increases are implemented. Steps Moving Forward: Review impacts to fund balance if using Stormwater Funds on street projects. How much might we be able to move out of the fund each year? Early estimates are between $200,000 to $750,000 within 10 years, depending on Council goals regarding which capital improvements they would like the Stormwater Fund to pay for and longer- term cash needs in the fund. Review stormwater fee structure and determine if changes are appropriate at this time (Bolton & Menk review pending discussion). Any change in fee structure will inform the utility study moving forward. Increase stormwater revenues over a 10-year period with the goal of covering all expenses, including depreciation. This will likely be a combination of increasing the flat rate and revising the fee structure. Continue increasing revenues after that to maintain that 1:1 ratio of revenues to expenses including depreciation. Review Fixed Asset inventory and revise as possible to clearly reflect total stormwater improvements and depreciation. Review depreciation methodology. Determine which portions of a Street Improvement project are Stormwater Improvements. o Stormwater structures? Curb and gutter? Ribbon curb? What portion of grading? o Estimate overall average of stormwater expenses within street improvement projects within the CIP, and/or o Direct Engineering to segregate those stormwater improvements in future drafts of the Street CIP? In future updates of the utility study model what level of stormwater fees might be necessary to cover additional street-related stormwater investments. Staff will incorporate any direction from the Council into the ongoing utility study and future drafts of the Capital Improvement Plan. Other Stormwater issues discussed at 3/3 meeting; Review the Stormwater Credit program and Appeals process – This would be addressed by Bolton & Menk’s review, some discussion w/ staff, and review by the City Attorney. Review HOA stormwater maintenance agreements policy – Bolton & Menk are providing an estimate to add this to their review. ISSUE BEFORE CITY COUNCIL : Does the City Council wish to provide different direction to staff for implementation of any of our current studies, fees, capital planning, or project funding streams? Specifically: o Is Council directing staff to utilize Stormwater Funds for the 2026 Street Project?(This decision can be made later this year.) o Is Council requesting a revision to the recommendation to increase the Stormwater Fee by 8% for 2026? o Is Council requesting that Engineering break out the stormwater portion of all street projects moving forward? Based on which portions of those projects? OR o Is Council requesting a regular annual transfer from the Stormwater Fund to the Infrastructure Fund?(This does not currently appear possible until 2030 though it may change after the other fee structure reviews.) - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 20 2 5 20 2 6 20 2 7 20 2 8 20 2 9 20 3 0 20 3 1 20 3 2 20 3 3 20 3 4 20 3 5 Mi l l i o n s Mi l l i o n s Year Ending Cash vs. Accumulated Depreciation Storm Sewer Fund Storm Sewer Accumulated Depreciation 2026 through 2035 Capital Improvement Plan Lake Elmo, MN Source Project # 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Total Storm Water Fund Phase 2 Regional Drainage Impr. - Northstar Pond SW-001 285,405 285,405 Phase 3 Regional Drainage Impr - Lions Park Pond SW-002 575,000 575,000 Stormwater Reuse - Development Irrigation Systems SW-003 40,000 40,000 80,000 Stormwater Reuse - Lions & VFW Park Irrigation SW-004 80,000 80,000 Stormwater Reuse - Irrigation Systems SW-005 40,000 80,000 40,000 160,000 Future Unidentified Stormwater Projects SW-TBD 50,000 50,000 50,000 50,000 50,000 50,000 50,000 350,000 Storm Water Fund Total 325,405 130,000 705,000 170,000 50,000 50,000 50,000 50,000 0 0 1,530,405 GRAND TOTAL 325,405 130,000 705,000 170,000 50,000 50,000 50,000 50,000 0 0 1,530,405 Produced Using Plan-It CIP Software STAFF REPORT DATE:March 10, 2026 WORKSHOP DISCUSSION TO: Mayor and Councilmembers FROM: Nicole Miller, City Administrator & Clark Schroeder, Special Projects Manager AGENDA ITEM: Agenda Procedures Discussion CORE STRATEGIES: ☐ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services ☒ Responsive, transparent, adaptive governance ☐ Balanced Finances now and future ☐ Managed Growth ☐ Resilient Infrastructure BACKGROUND: At the February 17, 2026 City Council meeting, Councilmember Dragisich requested a discussion of the agenda procedures be added to the next workshop. The City Council expressed unanimous support for adding this item. ISSUE BEFORE COUNCIL: Does the City Council wish to amend the City Code regarding Agenda Procedures? PROPOSAL DETAILS/ANALYSIS: How staff prioritizes work- City staff uses our draft future agenda tracker (which is included in the city council packets) as a way to prioritize work. Staff first focuses on advancing the goals and strategic priorities adopted by the policy setting City Council during their biennial goal setting. Staff also adds operational and statutory responsibilities that are essential to maintaining day-to-day service delivery. The future agenda tracker changes frequently to balance priorities, staff workload and meeting length. The City Administrator and Mayor routinely meet to review future agenda items. When new items are added to the agenda by consensus of the council, beginning the discussion at a workshop is the most effective approach. The purpose of the workshop is to allow for open discussion, brainstorming and clarification of objectives and scope before formal action is considered. The workshop is also when staff will deliver the research and information to aide in the discussion. Staff naturally need time to research, draft and prepare agenda topics Council wishes to explore. As discussed during goal setting the City Council and staff shared what they expect from each other. Staff requests clear/direct expectations, collaboration and resources to meet council expectations and the City Council expects staff to think critically, provide research/data, and conduct analysis of problem/issues, etc. The current ordinance was developed during of period of a less cooperative council. While the current council might feel they don’t require the impediments stated in the ordinance, that does not mean that future councils will be as accommodating. The ordinance should be able to function for both types of councils. Workshops provide a setting to help stream-line the decision-making process by allowing discussion to resolve issues and provides more transparency allowing for in depth discussions to take place before formal action is taken at a Regular meeting. RECOMMENDATION: I have attached examples of other cities procedures for adding agenda items. Some allow items to be added to the regular agenda and some add them to workshop agendas. Regardless of which agenda items are added to, the expectations of staff are the same. Staff are expected to provide research/data, analysis of problem/issues and think critically. If items are added to agendas and staff are not given time to deliver what is expected of them from council then it slows down the process by not having complete information and the need to have follow-up discussions. My recommendation would be to have items that are added by the consensus of the council, placed at a future workshop, also taking into consideration the workload of staff. ATTACHMENTS: Current City Code regarding Order of Business at Regular Meetings Examples of other cities agenda setting procedures 3.08.040 Order Of Business At Regular Meetings (a)Order established. (1)Generally. Each meeting of the council shall convene at the time and place appointed for the meeting. Council business shall be conducted in the order determined by the council at its first annual meeting or as thereafter amended by the majority vote of the council. (2)Order of business. The standard order of business for council meetings shall be the following: a.Call to order/Pledge of Allegiance; b.Approval of agenda; c.Approval of minutes from past meetings; d.Public comment; e.Presentations; f.Consent agenda; g.Regular agenda; h.Report of the council. Council reports will not be part of the order of business for meetings falling three months before a local election; i.Reports from city staff; and j.Adjourn. (b)Agenda. An agenda will be prepared for all regular council meetings by the staff or recommendation of the council at a work session. Members of the public wishing to place an item on the agenda must do so by contacting city staff or councilmembers, or by speaking during the public comment period. No member of the general public may add any items to the agenda. (1)Special meetings. When a special meeting is called pursuant to applicable law, the agenda for the special meeting must be included in the request for the meeting and in the publication of the notice of the meeting pursuant to M.S.A. § 13D.04, subd. 2. (2)Agenda procedures. Any staff member, the mayor or two councilmembers wishing to add an item to any agenda pursuant to this section shall do so by complying with the following: a.All requests from council to place an item on the posted agenda must be received by the city clerk/administrator by 10:00 a.m. 11 days prior to the next council work session meeting. For a regularly scheduled Tuesday work session, the deadline for agenda items would be 10:00 a.m. on the Friday preceding packet completion. All requests from the mayor or council must first be reviewed at a council work session before being placed on the agenda of a regular meeting. b.All requests to place an item on the posted agenda must be on the form prescribed by the city clerk/administrator. The form shall be completed with the goal of clearly describing the subject matter to be considered by the council and any action requested or required. Supporting information may be attached to the form as necessary. 2/27/26, 11:29 AM Print Preview https://lakeelmo.municipalcodeonline.com/book/print?type=ordinances&name=3.08.040_Order_Of_Business_At_Regular_Meetings 1/4 c.All requests to place an item on the posted agenda by city staff or councilmembers must be reviewed by the city clerk/administrator or their designee prior to being included in the agenda. d.The agenda, along with all related information materials, will be provided to all city councilmembers and the city attorney at least four days prior to the council meeting for which it applies. For a regularly scheduled Tuesday meeting, the packet will be provided by 5:00 p.m. the Thursday preceding. (c)Consent agenda. A consent agenda may be used to improve the efficiency of meetings. The consent agenda allows the council to consider several items at one time. Only one motion is necessary to approve all items on the consent agenda. (1)Items that require findings of fact or an explanation of council actions, such as land use matters and the consideration of licensing requests, should not be placed on the consent agenda. (2)An item on the consent agenda may be removed from such agenda for full consideration by the council upon request made by any member of the council. Items removed from the consent agenda will be placed on the regular agenda for discussion and consideration. (d)Presentation, discussion and agenda item decisions. The following is the order of business for presenting and discussing items on council agendas: (1)Introduction of item; (2)Report by staff or other presenter; (3)Questions from councilmembers to the presenter in a round robin manner. The presiding officer will facilitate the round robin process by asking each individual councilmember for one question and allowing for a response to the individual question. Then the presiding officer will ask the next councilmember, in sequence, until all councilmembers have asked and received responses to a question. No councilmember shall take more than three minutes to ask a question or comment on an item which is being presented before another councilmember has a turn to question and comment on the same item; (4)Receive questions/comments from the applicant/requesting party to the council, and allow each councilmember to respond in the round robin process; (5)Allow questions from councilmembers to the applicant/requesting party, if applicable, using the round robin process; (6)Allow questions/comments from the public to councilmembers. Each member of the public shall state his comments in six minutes. Council shall not interrupt or interact until all public comments are completed; (7)At the conclusion of the round robin process, the presiding officer calls for a motion or discussion among the council. Discussion on any presentation shall be kept to a minimum, and each councilmember shall only speak twice on the issue. This action is not an indication that the motion on the table is the motion that will be approved in its current form. It is purely for discussion purposes; (8)Discussion among councilmembers using the round robin process with each member speaking no more than twice on a motion; (9)Action by the council on the motion. 2/27/26, 11:29 AM Print Preview https://lakeelmo.municipalcodeonline.com/book/print?type=ordinances&name=3.08.040_Order_Of_Business_At_Regular_Meetings 2/4 (e)Meeting schedule. (1)Each meeting of the council shall convene at the time and place appointed. All public hearings shall commence at the advertised time. (2)Council business shall be conducted in the order of the prepared agenda, unless an alteration is approved by a majority of the council. (3)The last item on the agenda will be commenced no later than 12:00 midnight. (4)If all business has not been completed by 12:00 midnight, the meeting shall be continued to another date and time following the notice provisions contained herein. (f)Public participation and comment at council meetings. Council meetings are the forum for the council to conduct the city's business. While council meetings are open to the public pursuant to the Minnesota Open Meeting Law, they are not a forum for public expression. As such, members of the public are not allowed to participate in council discussion and debate without a specific invitation and/or formal recognition by the presiding officer. Members of the public shall not applaud, engage in conversation, or engage in other behavior through words or actions that may disrupt the proceedings of the council. (g)Members of the public shall follow the direction of the presiding officer. Members of the public who do not follow the direction of the presiding officer will be warned that further disruptive conduct will result in removal from the meeting. After such warning, if the conduct continues, the presiding officer may ask the member of the public to leave the meeting room. If the member of the public refuses to follow the direction of the presiding officer, the presiding officer may direct the sergeant-at-arms to remove the person through any lawful means. In emergency situations, or where the conduct is an egregious threat to the safety of the public or the council, a warning is not necessary before the sergeant-at-arms is directed to remove the person. (h)Public comment period. A limited forum for members of the public to speak with the council is provided on each agenda. Public comments during the public comment period are subject to the following limitations: (1)Speakers must be recognized by the presiding officer before speaking and are limited to six minutes for comment; (2)When multiple speakers appear to speak on the same topic, comments should not be repetitive. The presiding officer may request speakers to appoint a spokesperson; (3)The presiding officer may place a time limit on the public comment period if necessary to allow for the conduct of city business. If there is not sufficient time at the meeting to hear all public comments, the comment period may be deferred to the next regular council meeting or at a continued meeting; (4)Speakers must sign up prior to speaking and provide their name, address, and a brief summary of the subject matter which they wish to address. The sign-up sheet will be available at the start of the city council meeting; (5)Speakers must direct their remarks toward the presiding officer; (6)Speakers shall not use obscene, profane, insulting, or threatening language, nor conduct themselves in a threatening, loud, or boisterous manner that disrupts the conduct of the meeting or the security of the public; (7)Speakers are required to follow the direction of the presiding officer; and (8)The council will generally not respond at the same meeting where an issue is initially raised by a member of the public. Generally, the matter will be referred to staff for further 2/27/26, 11:29 AM Print Preview https://lakeelmo.municipalcodeonline.com/book/print?type=ordinances&name=3.08.040_Order_Of_Business_At_Regular_Meetings 3/4 research and possible report or action at a future council meeting. If council responds, council shall not interrupt or interact until all public comments are completed. (i)Public hearings. Public hearings are sometimes required by law to allow the public to offer input on council decisions. Unlike public comment periods, public hearings allow the public to speak on a matter currently before the council. When public hearings are required by law, notice shall be provided as required by state statute. Public hearings shall be commenced at the time advertised in any notice required by law. (1)General procedure for public hearings. The order of business for all public hearings conducted by the council shall be: a.Opening comments by the presiding officer announcing the purpose of the public hearing; b.The presiding officer opens the public hearing portion of the meeting; c.Staff presentation, if any (i.e., administrator/clerk, attorney, engineer, etc.); d.Developer/other presentation, if any; e.Public comment (all individual comments limited to six-minute maximum); f.The clerk/administrator shall make note of any submitted written testimony; and g.The presiding officer formally closes the public hearing portion of the meeting. (2)Speakers who wish to address the council at a public hearing must follow the same rules as contained herein for public comment periods. The presiding officer may allow more time, where appropriate. (3)Speakers may also provide written comments to the council before or at the meeting. Written comments shall be noted and provided to the council and to anyone else as required by law. (4)The presiding officer may continue the hearing, if necessary, following the procedures for continuing a meeting contained in this section. (5)Council shall not interrupt or interact until all public comments are completed. HISTORY Adopted by Ord. 08-253 on 11/3/2021 2/27/26, 11:29 AM Print Preview https://lakeelmo.municipalcodeonline.com/book/print?type=ordinances&name=3.08.040_Order_Of_Business_At_Regular_Meetings 4/4 Crystal -New Business. Any Council member may bring an item up for discussion during the New Business portion of the standing work session. Crystal has a work session before each council meeting. Discussion on each item is limited to three minutes. Upon the agreement of a minimum of two Council Members, the item may be added to the agenda for further discussion at the next regular work session, or as soon as reasonably possible. Upon the agreement of a minimum of three Council Members, the item may be added to the next Council meeting agenda. White Bear Lake -The mayor or a councilmember can request items be added to the regular agenda before it’s adopted. If an item is added councilmembers understand that if they want something added that night that it’s likely going under “Discussion” as there would be no memo nor staff time to prepare to present the agenda item. Ramsey -. Generally it takes two members (even the mayor gets a second person) to add an item. The idea behind it is that generates enough interest to direct staff time towards the topic. In the case of work session discussion items, there is some prep work done by staff in addition to what the councilmember provides. It goes for discussion for further direction on the matter. Little Canada-No formal process, informal process is it takes two councilmembers, preference is to go to workshop first, but that doesn’t always happen. Isanti -Two councilmembers or Mayor to add to the regular council agenda Moundsview -Takes two councilmembers and goes to workshop first. Andove r-Workshop agenda has item “Future agenda item requests” Councilmembers bring up topic and if the majority of the council agree, then it moves to an upcoming workshop to allow staff time to gather information for discussion. Roseville -Councilmembers and Commissioners are encouraged to introduce new items including background information and supporting materials for discussion and possible action. Councilmembers and Commissioners have the right to place items on the agenda as follows: 1.A Councilmember or Commissioner may, at a meeting, request that an item b e placed on a future agenda, or; 2.A Councilmember or Commissioner m a y make a request for an agenda item outside of a meeting b y submitting an email request to the city manager or staff liaison, no later than noon of the Wednesday preceding the meeting. An agenda item submitted per 1 or 2 above will be included on the agenda for the next meeting under the heading “Council (or Commission) Direction on Councilmember ( o r C o m m i s s i o n e r ) Initiated Agenda Items” at which time the Council, (or Commission) on consideration of any preliminary material provided by the initiating Councilmember (or Commissioner) for inclusion in the meeting packet, will by motion provide direction as to whether, how, and when the agenda item will be taken up at a subsequent meeting, or; Additionally,a Councilmember (or Commissioner)m a y request the addition of an agenda item at the same meeting at which the item is proposed to be addressed.However,the addition of s u c h an agenda item shall require the approval of a majority of the Councilmembers (or Commissioners) present. Wyoming -Two councilmembers or Mayor can add item to regular agenda. If the request comes with sufficient lead time and direction, staff will prepare background information and analysis just as we would for any other agenda item. If the item is added without prior coordination or with limited notice, the discussion typically serves as an initial conversation to clarify the issue, understand what the council is seeking, and determine what additional information or research is needed. In those cases, staff would return at a future meeting with a more complete report and recommendation. Newport - (Same as WBL) The mayor or a councilmember can request items be added to the regular agenda before it’s adopted. If an item is added councilmembers understand that if they want something added that night that it’s likely going under “Discussion” as there would be no memo nor staff time to prepare to present the agenda item. St. Anthony - Two councilmembers to add it to add it to the list of future work sessions. Council discusses list at worksession and the majority of the council has to agree to move it to a future worksession and have staff gather information for discussion. Hugo -Council can add items. Then the councilmember would explain item to council and then if it is the consensus of the council to move forward with the item they would direct staff to provide analysis and recommendation at future council meeting. STAFF REPORT DATE:March 10, 2026 WORKSHOP DISCUSSION TO: Mayor and Councilmembers FROM: Nicole Miller, City Administrator AGENDA ITEM: 250th Anniversary of the USA Celebration discussion CORE STRATEGIES: ☒ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services ☐ Responsive, transparent, adaptive governance ☐ Balanced Finances now and future ☐ Managed Growth ☐ Resilient Infrastructure BACKGROUND: At the February 4, 2026 City Council meeting, Councilmember Dragisich requested a discussion of adding a celebration to recognize the 250th anniversary of the USA, be added to the next workshop. The City Council expressed unanimous support for adding this item. ISSUE BEFORE COUNCIL: Does the City Council wish to direct staff to plan a celebration in recognition of the 250th anniversary of the USA? PROPOSAL DETAILS/ANALYSIS: Outlined in this memo is a framework to help guide the council discussion. One of the councils priorities is building a vibrant, inclusive, and connected community through celebration, engagement, and shared spaces. Community events can support this goal, however successful events require planning with clear objectives, defined scope, staff capacity, and a budget. Currently the city provides planning and participation support for three events hosted by community organizations. Those events are: Lake Elmo Night Out, Light up Lake Elmo and the 4th of July kiddie parade. Does the council intend to add an annual event that is hosted and planned by the city? What is the scope and scale of the event? Please provide clear detail on what event will include so staff can organize resources. Food, beverages, entertainment, fireworks, etc. What is the budget for this event? Where? When? Date, time, location. Lion’s Park is currently booked all day for baseball on July 4th. Who? City events require coordination across multiple departments. What staff will be needed for the event? What do you expect staff to provide? Communications and outreach desired. Public safety and Public Works have some concerns with staffing given this year the 4th of July falls on a Saturday. Staff are already expected to come in to provide public safety for the kiddie parade. Staff will provide public safety if an event is added, but we would request to know as soon as possible for requesting staff coverage. RECOMMENDATION: The City Council should provide staff with clear direction on the scope and expectations of staff if an event is added. Date Type Due date for packet Order Agenda Section Agenda item 3/17/2025 CC Meeting 3/10/26 Consent Agenda Approve Engineering Design Standards Manual, Dated March 2026 Consent Agenda Consent Agenda Approve 2026-2028 Mowing Contract Consent Agenda Reimbursement Resolution Regular Agenda Northstar 3rd Addition FInal Plat, Final PUD, and Development Agreement Regular Agenda Approve Cooperative Cost Share and Cooperative Maintenance agreements for Hwy 36/LE Ave Regular Agenda Utility Study / Rate Increases Regular Agenda Accept Bids and Award Contract for the CSAH 14 Watermain Improvements Consent Agenda HWY 36 Discover Crossing Eminent Domain Conservation Easement Payment Agreement Consent Agenda Tree Fund Budget Amendment 4/7/2026 CC Meeting 3/31/26 Consent Agenda Arbor Day Consent Agenda Approve 2026 Recycling Grant Consent Agenda Special Projects Manager Contract Consent Agenda Voter precint change Regular Agenda Granvia Preserve Preliminary Plat and OP PUD Regular Agenda Annual Report Regular Agenda Comprehensive Plan Contract 4/14/2026 CC Workshop 4/7/26 Discussion Sidewalk/Trail snow removal ordinance-continued from 5/6 Discussion Broadband Franchise Discussion Strategic Financial Plan - Initial Review of Models, Assumptions, and Strategic Financial Goals Discussion Washington County Presentation for CSAH 13 (Ideal Ave) Project Discussion Met Council Population Forecasts 4/21/2026 CC Meeting 4/14/26 Consent Agenda 1st Quarter Dashboards and Financials Consent Agenda Approve Special Event Permit for Lake Elmo Night Out Regular Agenda 1st Quarter Goals Update Regualr Agenda Approve Updated Open Burning Ordinance Regular Agenda 76 Acre Park Consultant Scope Regular Agenda Schiltgen West Village Frattalone Concept Plan 5/5/2026 CC Meeting 4/28/26 Consent Agenda Approve Special Event Permit for 4th of July Parade Closed Session Discuss sale of 11052 34TH ST N Regular Agenda Review Code Enforcement Case for 8017 50th St N Dunn Storm Water Appeal Watters Storm Water Appeal (4180 Irvin Cir N ) Stephen Johnson Stormwater Appeal Future Council Agenda Items *Please note: This list is subject to change* 5/12/2026 CC Workshop 5/5/26 Discussion Obstructions in ROW Discussion Old City Hall 5/19/2026 CC Meeting 5/12/26 6/2/2026 CC Meeting 5/26/26 6/9/2026 CC Workshop 6/2/26 City Council salary 6/16/2026 CC Meeting 6/9/26 Regular Agenda 2025 Audit Presentation 7/7/2026 CC Meeting 6/30/26 Consent Agenda Approve Special Event Permit for Lake Elmo Night Out Consent Agenda 2nd Quarter Dashboards and Financials Regular Agenda 2nd Quarter Goals Update 7/14/2026 CC Workshop 7/7/26 Discussion Draft 2027 - 2036 Capital Improvement Program 7/21/2026 CC Meeting 7/14/26 8/5/2026 CC Meeting 7/30/26 8/11/2026 CC Workshop 8/4/26 Discussion Draft 2027 Budget & Levy 8/18/2026 CC Meeting 8/11/26 9/1/2026 CC Meeting 8/25/26 9/8/2026 CC Workshop 9/1/26 9/15/2026 CC Meeting 9/8/26 Regular Agenda 2027 Preliminary Levy 10/6/2026 CC Meeting 9/29/26 Consent Agenda 3rd Quarter Dashboards and Financials Regular Agenda 3rd Quarter Goals Update 10/13/2026 CC Workshop 10/6/26 CIP F-012 Ladder 1 Replacement Approval 10/20/2026 CC Meeting 10/13/26 Regualr Agenda CIP F-012 Ladder 1 Replacement Approval 11/4/2026 CC Meeting Regular Agenda Bonding 11/10/2026 CC Workshop Employee Policies Updates 11/17/2026 CC Meeting Regular Agenda 12/1/2026 CC Meeting Regular Agenda 12/8/2026 CC Workshop 12/15/2026 CC Meeting