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HomeMy WebLinkAbout11-18-2016Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting November 18, 2016 City of Mounds View, Council Chambers 2401 County Road 10, Mounds View, MN 55112 1. CALL TO ORDER Chair Jason Helgemoe called the meeting to order at approximately 7:30 a.m. 2. ROLL CALL 3. 4. Members Present: Chair, Jason Helgemoe, Vice Chair, Jim Freichels, Commissioners, Dan Larson, Jessica Rieland, Gary Stevenson & Laurie Shoop Members Absent: Royal Dahlstrom Staff Present: Business Development Coordinator, Brian Beeman, City Administrator, Jim Ericson Meeting Attendees: Gary Meehlhause APPROVAL OF NOVEMBER 18, 2016, AGENDA Motion/Second: Commissioner Freichels moved and Commissioner Shoop seconded the approval of the November 18, 2016 EDC agenda. Motion Carried: 6 Ayes, 0 Nays APPROVAL OF JULY 15 2016, EDC MINUTES Motion/Second: Commissioner Freichels moved and Commissioner Shoop seconded the approval of the July 15, 2016 EDC minutes, as presented. Motion Carried: 6 Ayes, 0 Nays 5. EDC BUSINESS Resignation of Commissioner Dahlstrom Chair Helgemoe announced the resignation of Commissioner Royal Dahlstrom. Dahlstrom had written a letter dated November 8, 2016 to Business Development Coordinator Beeman stating that he is sorry to have to give up his seat, but the meeting time conflicts with his new job. In the letter Dahlstrom thanked the EDC and staff for their hard work in moving the city forward. EDC Minutes November 18, 2016 Page 2 of 8 Beeman informed the Commission that no resolution or motion is required by the EDC. Dahlstrom's vacancy will be posted with the other EDC vacancies with one seat to fill the remainder of Dahlstrom's term ending December 31, 2017. 6. REPORTS OF STAFF Crossroad Point RedeveloDment Proiect Business Development Coordinator, Brian Beeman provided the Commission with an update on the Crossroad Pointe redevelopment site. Beeman provided a background stating that he had received a note from The Beard Group that they had changed their plans to construct 119 units to 205 based on market study demand, however their financial consultants couldn't make the numbers work even with their proposed Housing Tax Credits, a land write down, and the Ramsey County Housing grant. They felt they would not be able to meet the deadline and demands for the project and as a result, had to back out of the project. However, they left open the possibility of doing business with the City in the future. The Tax Credit program requires a 20% affordability aspect which increased the cost of the project causing them to look at lessor quality materials and the developers didn't want to go down that road. In the meantime, Coordinator Beeman has been talking to other developers. A Council work session is scheduled in December to reevaluate and consider the vision for the Crossroad Pointe site. Beeman said he has received requests for storage units, day care, outdoor storage, and flea markets; however the City felt these types of requests did not fit the intended use and vision for that area. If the City's intent was to fill the space as quickly as possible with whatever use came to the City first, then that could have been accomplished, however the City's vision is to use the space wisely for long- term implications and have a product that the community can be proud of in the long- term rather than just filling the space. If the City would have had a project in mind when the three buildings were demolished, then a TIF could have been better utilized. However, rather than allowing the buildings to sit vacant for years, creating more blight in the area, the City felt that demolishing the three buildings was the best decision at the time. The down side is that if a TIF is to be used for that area in the future, the use of the TIF will be limited. Recently, there have been inquiries from developers for restaurants, senior housing, and affordable housing. Maybe with The Beard Group backing out, this will give the City time to reevaluate what makes the most sense for the site. Staff will be seeking further direction from the City Council and is encouraging the EDC to make suggestions. Beeman will bring those suggestions forward to the Council or the EDA Members can attend the meeting which is public. Commissioner Helgemoe asked when the TIF district ends. Beeman said there is no longer a TIF district on that site. The City would need to recreate a TIF district if a new project requires it. This is why an EDA levy is important. Beeman said this is why the government gets involved in economic development. If it doesn't work for the private sector then government comes along side to assist the development to help spur economic growth. Rather than having vacant lots and blighted buildings with little tax valuation and an eye sore to the community, government's role is EDC Minutes November 18, 2016 Page 3 of 8 to help the private sector developers in making the project financially feasible. Once built, the buildings increased tax value helps to reduce the tax burden overall on the residents and makes the area aesthetically pleasing which increases the quality of life in the community. Ideally, the government would not need to get involved and the private sector would create the development without any subsidies to fill the demand. In fact, subsidies like a TIF have a statutory requirement that doesn't allow Cities to use this type of financial assistance unless the project passes the "But For" test. The "But For" test essentially means the project would not occur on its own "But For" the assistance of a TIF. Cities can also pass this type of test for tax abatements if desired. That is why government would need to step in on a development; otherwise there wouldn't be a need for the government to get involved financially. Therefore, this is a good time to reevaluate the project and define what the City envisions for this area. Commissioner Rieland asked if there was any interest from a grocery store. Beeman said there was not and the closest thing to a grocery store is requests from restaurants. Beeman said the area is too small for this type of use unless there was an express grocery store. Wal-Mart, Target, and Amazon have all experimented with the concept of express stores and while the early stages of the trend seemed promising, the trend has seemed to stagnate. Beeman said the City had talked about a mixed-use development at one time but when talking to the developers on the developer tours last year, all of them cautioned against the mixed-use idea based on their experiences in other parts of the metro where they have vacant store fronts. They also said in a mixed-use development what normally happens are the existing businesses in the community flock to the new development leaving behind vacancies from their original locations. This robbing Peter to pay Paul effect doesn't create any new businesses for the community and the developers felt that no new net gain is the result at the end of the day. One of the original ideas was to create a destination down town but there isn't enough room for this concept. The City could require the developer to add amenities such as ponding and landscaping to create the desired effect, however Greenfield Ave splits the property and the water and wastewater utilities are already installed under the roadway. Relocating those utilities comes with an added cost that some developers may find financially unreasonable. The other challenge is the corner of County H2 and Mounds View Boulevard. That corner is a safety concern if making a left hand turn into the Crossroad Pointe development. Reconfiguring the intersection or only allowing a right -in may help with the safety aspect, but if the Crossroad Pointe site is not easily accessible then this is a deterrence to retail uses on the site. The City would need to work with the County to come up with a road ingress and egress plan that makes sense depending on the type of development that untimely is constructed. Beeman informed the Commission that the City had contracted with Stantec who had completed a concept drawing of the site and had met with the residents in a visioning session and documented their comments. The report was completed in 2014. So, the question is, should the City redo some of the reports such as conducting a new survey to residents and/or holding another open house to receive comments etc. or should the City use the existing Stantec reports. This is a question that the Council will need to address at their next Council workshop in December. Trends and economic factors change over time, like the recession. However, the economy seems to be improving and the fundamentals of the report are still usable. EDC Minutes November 18, 2016 Page 4 of 8 Commissioner Helgemoe asked about the current zoning and uses. Beeman said the site is currently zoned B-3 which is a highway business use however the plan is to rezone the area to a Planned Urban Development (PUD) which will allow more flexibility in the uses. An overlay district was also approved allowing buildings to be constructed closer to the street to maximize the space. This is what The Beard Group was planning with the front porch and steps of the apartments to be located close to the street and proposed sidewalk. The south side of Mounds View Boulevard near the Crossroad Pointe site already has much existing residential, so it may make sense to complete that side of Mounds View Boulevard with more housing then focus on the north side for more business use. There has been interest in developing the southeast corner from BelRae Senior living for retail. If the City desires a downtown destination then potentially all four corners of Mounds View Boulevard and County Road H2 including Crossroad Pointe, Moe's restaurant, Vino's Stogies, and Rydell Auto, may allow for enough space to create this type of development. However, the City doesn't own those properties and this is where an EDA levy would be able to help in purchasing more land for development. We could potentially put another business in the movie theater parking lot and look at the entire area as a downtown destination rather than limiting ourselves to only one corner on 4.25 acres. Having a more long-term vision may make some sense rather than waiting for a developer to tell us what they want to put there. Commissioner Larson asked if the developer for the TCAAP development had been contacted. Beeman stated that he did in fact contact Alatus, the master developer for the site and sent them all the current marketing materials and information about the Crossroad Pointe site. Beeman was told that the information had been sent to the appropriate people at Alatus and they will be reviewing the materials and will contact City staff if interested. Beeman also stated that he had contacted several developers this week trying to renew some interest in the site and gauge what types of development they may have in mind before going back to the Council work session in December. Beeman said he had a sophisticated senior housing developer who was interested in the site with the market studies showing a high demand for senior housing, however at the time the RFP's were sent out, the developer had several other projects and couldn't meet the deadline for submitting their proposal. Beeman said this raised another question. The Council will need to decide if the City should be setting firm formal proposal deadlines or if the Council will do a wait and see approach and consider each project as they come forward. The good thing is that the City controls the site, so a decision can be made on the best fit and benefit to the community. Commissioner Stevenson stated that the workshop has been set for December 5 and he will be attending. Helgemoe asked how Commissioners should get their recommendations to the Council. Beeman stated that they can express their opinions and suggestions to him directly and he will pass those along to the Council or they are also welcome to attend the meeting. EDC Minutes November 18, 2016 Page 5 of 8 Business Retention & Expansion Visit (BR&E) Updates Next Beeman updated the Commission on the business retention and expansion efforts. Beeman informed the Commission that most of the near 150 businesses have been visited. The most recent visit was with Western Bank. Commissioner Stevenson and Beeman conducted that visit and the person interviewed had several good suggestions that Beeman passed along to the appropriate people. Western Bank seems like they are doing a stable business. They were bought out by a bank in Omaha about four years ago and have six employees. Beeman provided an update on Snap Market stating that the person who was looking at the building for an off -sale liquor use had conducted a market study and found that the location was not a good site for his type of business. As a result, he backed out of the deal and the space is available. Bioclean is still looking for a site, Mounds View Square has 7 vacancies with EI Loro closing its business. EI Loro is consolidating and spreading their employees to their existing businesses. Helgomoe asked about the many vacancies. How are they going to address those vacancies? Beeman said a Tap Room Ordinance was passed by the City and he had contacted Pastor Enterprise and informed them about the new Ordinance. At one time they had a tap room prospect looking for space but have since moved on. The main issue is that Pastor doesn't negotiate its leases. Many businesses have contacted Beeman and said that is the reason they have left and that the lease rates for Mounds View Square are too high. Helgemoe said the strip mall across the street seems to be full. Commissioner Freichels stated that is because the school district moved into nearly half of those spaces and but for their occupancy, the building would still be nearly vacant. Beeman said the coin laundry business recently changed ownership however it will remain and now there is only one vacancy in that building. Beeman talked to an owner at the Minnesota Muscle Gym and they said they were doing fine and will remain in their space for a while. Helgemoe stated that the point is that Silver View Plaza is full and Mounds View Square isn't. Freichels said they have the right tenant. Beeman said that Mounds View Square has a lot of potential but they don't seem willing to negotiate their leases. Beeman said he has received two inquiries on the EI Loro site but nothing serious at this time. Beeman continued, stating Tom's Collectibles has closed and the owner has already leased a new space in Roseville as a Business Consultant. The hobby industry is stalling and moving to more digital and video games. Empire House is still looking for a new site. The Mermaid is looking to construct a gas station or coffee shop. Beeman said this is on the right side of the road so this could be a good concept for the area. Rice Creek Commons Development Update Beeman informed the Commission that the County has communicated that the County Road H intersection and bridge project is on schedule and should be substantially completed by the end of December. EDC Minutes November 18, 2016 Page 6of8 Website UDdate Beeman provided an update on the website stating that it is in need of an update and the Website Task Force has met several times to interview many companies. Commissioner Rieland who is on the Task Force said it is exciting and the project, once approved, the project will take about a year to complete. Trail Projects Beeman said the trail projects have been completed except for some minor landscaping and few more utility poles for lighting. Snyder Building The Snyder building is still vacant and the owner is still unwilling to come down on price, therefore there is no movement on this site. Mounds View Boulevard Since County Road 10 was changed to Mounds View Boulevard, it was found that the USPS was delivering some of the City's mail to a wrong address but staff contacted them and it seems to be corrected now. Helgemoe asked about signage. Beeman said he was told it should be installed in the next month or so. Beeman said Google Maps was the first to change its street name in their database, but Tom Tom and Garmin and others are slow to update. North Metro Business Council The Mounds View Business Council which has changed its name to the North Metro Business Council to include Arden Hills and Shoreview met in September to hear a presentation from Alatus, the master developer for the Rice Creek Commons development. Helgemoe attended that meeting and stated that County Commissioner Blake Huffman, the Mayor from Arden Hills, and Bob Lux where in attendance and answered questions about the project. One issue brought up at the meeting was that Arden Hills didn't want the buildings to be as high as the developer wanted them. However, they are working through those issues. Dec 14 is the next meeting and someone from the Met -Council will be speaking. Manufacturing Week Manufacturing Week was October 2-8 and this year Quanex, a local window framing manufacturer participated. The point is to get local high school students interested in the manufacturing industry by providing tours and working with local high schools and technical colleges, and government officials. Beeman presented some statistics on the manufacturing industry stating the average manufacturing job paid $63,251 in 2015 and contributed $48.2 billion to the state's economy in 2015. Minnesota has 317,200 jobs in manufacturing with an impact of 914,000 jobs when adding jobs in other industries that are dependent on manufacturing. EDC Minutes November 18, 2016 Page 7 of 8 Upcoming Events/Reports Beeman informed the Commission that there are three Resident Commission positions open and to submit application soon if interested. Beeman informed the Commission that he attended the Local Political Leadership Luncheon recently and the City of Mounds View has received an award for business retention and expansion for the second year in a row. The trophy is a symbol emphasizing Mounds View's aggressive BR &E program. Helgemoe said it is nice to be recognized. Beeman thanked the Commission for participating in the program stating that it is helpful to have Commissioners attend the visits showing their support for local businesses and business appreciate the City expressing their interest in having them operating in Mounds View. 7. REPORTS OF COMMISSIONERS Helgemoe asked Commissioners if they had any reports. Hearing none, Helgemoe said the next meeting is December 16, 2016 at 7:30 a.m. Talk to your friends and neighbors about attending the North Metro Business Council meeting in December to get face time with important decision makers. Council Member Meehlhause added that Commissioners and residents are welcome to attend the upcoming Council work session to discuss the Crossroad Pointe project. The Council will also be discussing the budget as part of the Truth in Taxation requirements. The EDA levy will also be discussed. Helgemoe asked about the use of the EDA levy. Meehlause said it will be used for economic development purposes like the purchase of property for redevelopment, to fund currently unfunded housing loan projects, and to help pay for economic development staff time. The Public Works building will be built in 2017. This is a much needed building. Currently, the trucks are sandwiched into the building and much maneuvering is required to get all of the vehicles into the building. The new building will be located on the same parcel; however the old building will remain while the new building is being constructed. The Area I project will continue into next year. Met -Council has been doing a sewer line project which has impacted the Area I project. The trail ways have been completed and the Council is considering an additional extension for 2017 to truly complete the trail way system in Mounds View. Helgemoe asked for any additional updates. Beeman said that the Santa Parade will begin soon and will be in Mounds View Thursday December 1 to pick up canned foods. Beeman posted the event on the City's website and Face Book and it is also in the City's newsletter. Beeman said the next EDC meeting will be held December 16 and the Commission will be making a recommendation of EDC Commissioners to the EDA and setting the 2017 EDC schedule. There will be more administrative actions needed at the next few meetings. Helgemoe said that it is important that all Commissioners try to be in attendance at the next few meetings so that business can take place. Helgemoe also encouraged Commissioners to pass along any suggestions on the Crossroad Pointe development to Beeman so that he can inform the Council at their work session meeting in December. EDC Minutes November 18, 2016 Page 8 of 8 8. NEXT REGULAR EDC MEETING Chair Helgemoe reminded everyone that the next EDC meeting will be held December 16 at 7:30 a.m. 9. ADJOURN There being no further business, Chair Helgemoe adjourned the November 18, 2016, meeting at 8:25 a.m. Respectfully submitted, Brian Beeman Business Development Coordinator