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HomeMy WebLinkAbout03-11-2014 CCMLAKE ELMO CITY COUNCIL WORKSHOP MINUTES MARCH 11, 2014 Page 1 of 7 CITY OF LAKE ELMO CITY COUNCIL/EDA JOINT WORKSHOP MINUTES MARCH 11, 2014 Mayor Pearson called the meeting to order at 6:30 pm. PRESENT: Mayor Mike Pearson, Council Members Wally Nelson, Anne Smith, Justin Bloyer and Mike Reeves. Planning Commissioner Kathy Haggard, EDA Members Dan Raleigh, John Schiltz, John Thompson, NOT PRESENT: Planning Commission Chair Williams(?), Park Commission Chair Weis, EDA members Steve Nelson and Tony Yocum Also Present: City Administrator Zuleger, Community Development Director Klatt, City Planner Johnson, City Engineer Griffin, Communication and Taxpayer Relations Coordinator MacLeod, Deputy Clerk Gumatz II. Focus of the Workshop: Developing a Vibrant Downtown City Administrator gave an overview of what the workshop will consist of. With the addition of sewer, downtown is going to be changing. Focus on 4 issues tonight. Going to look at the fundamentals of a downtown. III. What Can We Be? – Downtown Market Analysis, University of Minnesota Community Development Director Klatt introduced Ryan Pesch, speaker from the University of Minnesota Extension. Mr. Pesch presented the Market Area Profile with the University of Minnesota Extension Program. Primary project objectives. Number one reason communities come to them and ask for market are profile is they are looking for realistic ideas for their downtown business district. Given size or location of our town, what types of businesses are realistic for our community. Often driven by vacancies, that is the case in western mn. Another reason is branding and niche development, where strengths lie as a downtown community. Last major reason is to have a resource for local entrepreneurs or those looking to move into business community. Market area profile overview. They do not do any data collection, it is based on secondary data analysis. Assemble data together for a given trade area. Four main parts. customer profile- combined demographic data from census with state of MN. Gives info on age profile, income level, number of households, breakdown of values of homes. Tapestry Segmentation- going beyond demographics. Identify what types of customers live in the trade area. Can be used to fine tune how business owners market. Market potential data– gives info about the media that people use in the trade area. Retail hierarchy- what’s realistic for our neighborhood? Larger the community, more variety. Do a retail gap analysis to see how people spend their dollars. Council Member Bloyer asked what a realistic trade area for LE being so close to the metro area? Mr. Pesch answered that they have done this project in the metro area before, it is a little trickier, the way they define a trade area is by doing a focus group of folks from the community, so they know the area. Council Member Nelson asked how differentiate between them and commercial real estate broker? Mr. Pesch answered that they are not in the business of real estate development or putting together pro forma. As part of university they want to work with community to learn about what is the market and then the community would use the market data to recruit the individual businesses or developing properties. They just gather the numbers and do the analysis. Todd Streeter(?) asked about secondary source information and where they get their information from and why they don’t use primary data. Mr. Pesch answered that they use (3 data places: economic something, LAKE ELMO CITY COUNCIL WORKSHOP MINUTES MARCH 11, 2014 Page 2 of 7 media something, and us census). Talked with Kyle and decided that secondary data would be best at this time. Project process. Application- 3 buckets. Recruitment efforts to drum up local entrepreneurs or to convince regional retailers to enter market. marketing efforts to target market customers by preferred media and plan inventory and store concepts. and technical assistance efforts to assist entrepreneurs in developing business plans and guiding local comprehensive planning and redevelopment efforts. First they do a local area study group to draw the trade area. Then have a second study group meeting to draft recommendations. Then have a workshop to finalize recommendations. Trade area exercise, work with retail study group to decide the trade area- where the community pulls a majority of the local customers. Mayor Pearson asked Mr. Streeter if Chamber has done anything like this. Mr. Streeter answered that they have done some with like credit card companies to see who buys what where or something. Council Member Reeves asked if the trade area analysis takes into account where people currently get goods and services. LE in self contained area, does it take into account wher people get things today? Mr. Pesch answered that no it does not. There is no good data source for that. One other source they will bring in sometimes, sales tax data that they can get from Dept of Revenue. City Administrator Zuleger commented that you can use psychographics and zipcode to look at where people shop. Found out that 90% of shopping, not including cars and other luxury items happened within 7 mile radius of lake elmo. Asked Ryan how much the project is. Answer is $750. Klatt talked about this item coming to the council at the next council meeting to see if this is something they would like to move forward with. IV. How Will it Look? – Reconstructing Lake Elmo Avenue City Planner Johnson presented. County workshop on Thursday. Message #1: being communicated as a county project. From staffs prospective it is a partnership between city, county and watershed district. County owns LE Ave. City components are streetscape, sewer, water, improvements to drainage, bells and whistles, etc. Going to focus on key decision points for the city going into the project. 1. Laverne Ave – to include or not include. Why do include? 1. Optimal sewer location, it will need it anyway. 2. Maximize efficiencies and reduce overall cost, doing it all at one time – one contractor, one public process. 3. Initiate and stimulate redevelopment activity. 4. Integrate bicycle and pedestrian facilities into planning of the downtown. County always looking to expand transportation to bikes and peds. 2. Burying Overhead Utilities. Going to talk more about that later. Preliminary estimates for burying power are 276K (from Xcel). City has not gotten an estimate for cable. Burying overhead utilities greatly improves downtown aesthetic. 3. Municipal Parking. Need to have good, adequate parking facilities. Very common for City to take lead on trying to provide additional parking. Using existing properties. Don’t see growth and success occurring without expanded parking. Key component of trying to maximize onstreet parking is eliminating alleys or driveways. That would create more parking. 4. Streetscape Improvements. Damon Farber Study. Was very helpful to create consensus. Now is time for city to implement the themeing improvements. Includes working with landscape architect to implement. Potential improvements include: lighting, trees, landscaping, benches, trash recepticals, bollards, banner poles, etc. Purpose and function of open houses is to talk to as many people as possible to get sense of what do they want to see. 5. Other Considerations. Drainage. Will be discussed later. Railroad crossing. City to consider whistle free infrastructure- would be a city expense. Would have to have double gate arms. Decision does not need to be made now, but it could go whistle free in the future. LAKE ELMO CITY COUNCIL WORKSHOP MINUTES MARCH 11, 2014 Page 3 of 7 Mayor thanks Nick for presentation. Steve DeLapp speaks about parking. Hopes they do marketing study to find out how many parking spots are needed. Dean asks about Laverne. Anne in favor. Mayor also in favor. But a little fearful of cost. Anne talked about burying utilities. Thinks it’s a key component of dressing up the downtown. Would look so much nicer and friendly. Hopes its something that is looked at. Would encourage desire to come to our downtown. Mayor agrees. Nick added that this is the opportunity to do it because the street is being redone at this time as well. Mr. Reeves asked about parking and would it be possible to envision a parking ramp. Nick ansered that would need quite a bit of redevelopment for that to become cost effective and necessary. Would need a lot of demand. Asked Stillwater city councilman about private entity lot next to Lowell inn. Answered that Lowell inn owner donated the land and that it was done before he got on council. Major part of their downtown. Mr. Reeves would like to keep an open mind about doing a vertical ramp. Nick briefly went over the project schedule. Don’t have a lot of time to decide what city wants to do. Really have to decide by September. Mayor comments that doing Laverne at the same time makes sense. V. How Can We Pay for it? – Establishing a Downtown TIF District Tammy Omdahl(?) from Northland Securities presented on TIF. Challenge is paying for infrastructure before you have a project. Needs to be new tax base generated or there is no way to pay for new improvements – it would fall to existing tax payers. How would a redevelopment TIF district work? Establishing a redevelopment TIF district. There are specific findings that Council and EDA need to use. City will need to adopt a project area, including findings as to development authority powers being used and public purpose findings. Need to define the project area for redevelopment. Goes over what is a TIF district. Redevelopment must meet certain qualifications. Needs to be blighted parcels with structurally substandard buildings. 2 tests that you need to meet. 70% of TIF district must be occupied by buildings, streets, parking lots, etc. and more than 50% of buildings must be structurally substandard. Bloyer asked what chances of LE qualifying would be. Tammy answerd that she cannot answer to the buiding code part. Bloyer asked follow up question on shaping of TIF district. Mayor asked about lack of sanitary sewer would be part of structurally substandard. Tammy answered that utilities is a part of it. Reeves asked if there is a new development TIF district – portion of downtown with buildings that qualifty with some open space area. can you use space with no buildings. Tammy answered that bare parcels can be included if you meet the minimum tests. Want to be able to capture the increase in taxes. Nick gives example of 25 acres of substandard buildings you could add 25 acres of green space, as long as you stay at or above the 50%. John asked if Lumber Yard would constitute as substandard buildings. Tammy answered if they are substandard with respect to building code, then yes. Preparing the findings for use of TIF. But for clause. Revelopment would not occur but for the use of TIF. These findings are documented in a TIF plan. TIF plan contains the following: authority’s objectives, list of development activities, estimated source and use of funds, estimated bonded indebtedness to be incurred, duration of district (max is 25 years), estimated captured net tax capacity and original local tax rate, list of parcels within the district and other required info/findings. City would need to hold a Public Hearing. Must provide notice to county and school district at least 30 days before public hearing. After notice and the public hearing, the City approves the TIF plan and establishment of the district. TIF plan is then filed with Dept of Revenue and State Auditor’s Office. Request is submitted to county. LAKE ELMO CITY COUNCIL WORKSHOP MINUTES MARCH 11, 2014 Page 4 of 7 There are limitations to what you can use the funds for. Use of TIF in redevelopment TIF district. 90% of the TIF revenues must be used to correct the conditions that allow designation of a redevelopment TIF district. Goes over some of the TIF eligible project costs. Biggest thing to keep in mind is can’t use TIF to pay for building costs. Kathy Haggard asked about part housing part business. Could that qualify. Tammy answered that if it is substandard then yes, and if not then it still could if it would qualify for ?? (something about market rate housing) Anne asked about folks living on fixed income. Could 20% of that building be housed by those people? Tammy answered that yes, housing could be restricted to seniors. Has to income qualify the residents once a year. Bloyer asked if we establish TIF district, how would this work? Tammy answered that would go through what future development may generate. Challenge becomes that unless development materializes you’re not going to generate revenue to pay back bonds. Bloyer has fear that TIF district would be established but we would not meet the revenue. Can we be specific about what the project would be used for? Tammy answered yes, that would be done when you make a project plan. But yes, there is some risk. Wally asked about if we’re doing sewer and TIF district, City is paying for it, the risk is that the taxpayers would pay for it if we don’t get any new development? If we get revenue in, taxpayers off the hook? Tammy answered that that is correct. Anne asked that if you’re doing a TIF isn’t there an incentive for folks to come in. Tammy answered yes, increment provides an incentive but you need the development to happen to generate the revenue. Bloyer asked for an example of what we would offer through TIF. Tammy answered it depends on how much increment is generated. Depends on what you say you’re going to be spending the money on. Mayor asked if it goes over expected increment, do we continue to capture it? Tammy asnwerd yes. Something about 5 years. John Thompson asked if we want to help a contractor or pay for a building from TIF proceeds that we could not pay a contractor to develop a building. Tammy asnerwerd yes, you can’t reimburse for cost of physical building. Could pay for soil improvements though. Dean comments that incentives that are generally provided are site plan, dirt, drainage, etc. John Thompson explained that sometimes it may be advantageous to have smaller, separate TIF districts, if they can hold their own weight rather than doing one great big TIF district. Schiltz asked how many districts can oen city have. Tammy answered that there is no limit. IT just depends on if you can qualify it. Other statutory factors to be aware of. Administrative expenses limited to 10%. There is a 4 year rule – certain activities must occur on each parcel in the TIF district within 4 years of certification or the parcel is “knocked out” of the district. Pooling is the ability to spend tax increments outside of the TIF district (but within project area). 5 year rule – 5 years from the date of certification to spend or obligate TIF, after this time period passes, TIF can only be spent on prior obligations, on administrative expense, or under limited pooling authority. There is a bill being introduced in legislature eto extend that to 8 years. Mayor asked any idea on what the increment could be? What taxes it could generate? John Thompson presented an example if we establish a TIF district we’re collecting 100,000 for taxes, we estimate based on plan, now we’re going to collect 500,000 in taxes. The difference, but for, is 400,000 in taxes that we are estimating to generate. That is our TIF money. John Thompson asked if we get all of that money, and in TIF district #2 is made part multi family housing, does that change what the school district or county can come and get because the county ownes the road and kids go to school? Answered that no, it all still goes to city. LAKE ELMO CITY COUNCIL WORKSHOP MINUTES MARCH 11, 2014 Page 5 of 7 Tammy went back to Mayor’s question. Don’t know answer to that. But will work with planning staff to look at each parcel and figure out what type of development do they see on each. Then can calculate an estimate based on that. Dean adds that we have already done part of that. Determined base value of a district. Mayor asked about timeline for the bonds. Does it have an effect on city’s bond rating. Tammy answered that it depends on how much increment is generated. Ed Gorman asked about fiscal disparities part. Tammy answered that the EDA and City make a decision about whther or not fiscal disparities wil be payed out of the district or not. What will happen is we will show how much increment will generate if you have district pay for fiscal disparities or if rest of tax base pays for it. DeLapp commented about back in 80s and 90s when housing properties were going up, cities were factoring in every building going up 10% every year, but then property values weren’t increasing that much, so state changed 15 year limitation on TIF to 25. Would be a lot safer to get into it now with longer period of distirct. (?) Mayor thanked Tammy for presentation. Break at 8:24pm Resume at 8:39pm Mayor asked Mr. Zuleger to describe why we want ot have a TIF. Dean answered that the purpose of TIF is to use the increment you create to pay off the debt without affecting the entire city. The TIF district pays for itself. Has experience with 3 TIF districts, very seldom to have a distressed TIF district. Talked about Developer Agreement that we have in place, acts as a safety net. VI. Who Can Help? Strategic Partnerships Alyssa MacLeod presented. Went over downtown development partners; business owners, property owners, chamber of commerce, financial institutions, consumers, government, local service organizations and committees. Goes over a couple ways to bring these things together. Busienss Improvement District (BIDs) is one way. (get powerpoint). Went over the attributes of what a BID offers. Went over how to establish a BID. Ms. MacLeod also went over some additional programs. Main Street Programs. Estbalished in 1980 as a program of the National Trust for Historical Preservation, encouraging preservation based economic revitilzation. Program uses a 4 point approach, organization, promotion, blank, blank. Based on 8 guiding principles. It is a membership-based program that provides technical and financial assistance and training and resources. Provides a membership network and marketing benefits. Funding sources include city government, memberships and sponsorships, fundraisers and product sales, and retail and services fees. A lot of what they are based on is historic preservation, like our historic downtown. To be a part of it there is an intensive application process. Mr. Todd Streeter from Stillwater Chamber of Commerce has used model like this for the Stillwater Downtown Revitilization Project. He described their program which is a community symposium. Started in 2011, held a series of town hall sessions. Came up with 20 pages of ideas. Came up with 6 economic categories that merged the ideas. First one they are doing is downtown revitalization. Went over some of the opportunities and challenges due to the new lift bridge. Kicked off 6 subcommittees from main downtown revitalization committee to work on different areas. Opportunity for City and businesses to all work together. Other nice thing about this arrangement is that it’s a community driven process, there is community ownership. Mayor thanked Todd for his work and asked about some of the struggles Stillwater downtown is having? Mr. Streeter talked about Stillwater having many different parts. Some of the challenge is long held beliefs. Mantra of DRC is to create the best downtown, period. The other challenge is because it’s so tourist focused that looking at economic viability was a problem. There are seasonal businesses. LAKE ELMO CITY COUNCIL WORKSHOP MINUTES MARCH 11, 2014 Page 6 of 7 Mayor asks how we can access info that their group has come up with? Mr. Streeter answered that they have created a lot of things. The one document One Vision, One Voice may be helpful for Lake Elmo. Anne asked if they have looked at what Hudson does to keep themselves busy 12 months a year or if they have issues in the winter also. And, does Hudson or would Stillwater use local discounts to try and pull in business? Mr. Streeter answered that Hudson has the benefit of being contained in a footprint of its downtown. They also are the fastest growing county in Wisconsin, which brings more people. The problem for Stillwater, is that they have 8 blocks of downtown, whereas Hudson is 3 or 4 blocks. VII. Key Issues – Overhead Power, Drainage, and Village Green Overhead Power. City Planner Johnson presented on overhead power. Got a ballpark estimate from Xcel, 276K. Doesn’t include domestic connections. Still waiting on Comcast and some other utilities. This is the type of improvement that there is one shot at. LIkelyhood of doing it 5-10 years down the road is not very good. Mayor Pearson would have a hard time voting for it tonight, without any funding source help. It is over 10% of our tax budget. John Schiltz would really like to see the power go underground. Anne would also like it to be underground. Can either move forward and do things spectacularly or so-so. Mr. Streeter commented Mayor Pearson Council Member Reeves Drainage. City Engineer Griffin presented on drainage. There are issues in the downtown. County is leading a limited Village Area drainage study. Only focused on the heart of the downtown. As we come up with plan from the street, need to put storm sewer in. The City is then required to supplement this study to develop a comprehensive Village Area storm water management plan. Stormwater solution is probably going to be 3 phased approach. Site by site compliance, the newer land will have storm water accomplished onsite. If you start to manage it on the north side, it will help the whole city. Regional stormwater facility. Build one large facility for whole downtown area. 3rd piece is innovative stormwater management. Take stormwater ponds and make it an amenity. Storm water reuse, storm water recycling, etc. Lots of innovate techniques or grant funding. Bloyer asked Mr. Streeter about traffic in the summer in downtown Stillwater. They are requesting to have a pedestrian study done this summer. Traffic can be as high as 22-25K in the winter per day (?) Talked about MnDOT program SIMS (?) Mr. Zuleger spoke more on drainage. Most expensive thing you do. Notion of the green is in the comp plan. Talked about the village green being a sense of place in downtown lake elmo. As old village work group looked at components of a green, business community came to us and wanted it to be as close to LE ave as possible. Village Green. Council Member Smith presented on Village Green. Part of the Old Village Working Group. Talked about having a water feature in the village green area. Having a space where anyone from lake elmo, or anywhere, could come and spend time in. Bloyer asked about what size. Anne answered that it depends on the roads and parking spaces needed. Nick added need to define what activity you want to have there when talking about determining size. Also have to think about parking. The importance of parking is discussed. Mayor Pearson asked about how big the village green was in the comp plan. DeLapp Mayor Discussion of where the ball fields could be moved to. LAKE ELMO CITY COUNCIL WORKSHOP MINUTES MARCH 11, 2014 Page 7 of 7 Council Member Nelson talked about taking care of existing businesses. Need to help these businesses succeed before expanding businesses beyond that. Council Member Reeves talked about really needed to decide on the village green and what are the things that are going to happen on that. Council Member Smith Council Member Bloyer Council Member Reeves talked about it not being as much about the Council’s vision but about what the business owners and the residents want. The more we can collaborate with people, the better. Mayor Pearson adjourned the meeting at 9:49pm. LAKE ELMO CITY COUNCIL ATTEST: ________________________________ Mike Pearson, Mayor _______________________________ Beckie Gumatz, Deputy Clerk