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HomeMy WebLinkAbout08-09-1999 EDA EDA CITY OF MOUNDS VIEW MEETING MINUTES MONDAY, AUGUST 9, 1999 7:00 P.M. CALL MEETING TO ORDER ROLL CALL: Coughlin, Marty, Quick, Stigney, and Thomason. NOT PRESENT: None. 1. AGENDA ADDITIONS President Coughlin asked the members of the Authority if anyone would like to add items to the agenda. No additional items were considered. MOTION/SECOND: Stigney/Marty. To approve the August 9, 1999 EDA Agenda as presented. Ayes—5 Nays—0 Motion carried. 2. APPROVAL OF EDA MINUTES A. Approve minutes of July 26, 1999. MOTION/SECOND: Stigney/Thomason To approve minutes of EDA for July 26, 1999 as presented. Ayes—4 Nays—0 Abstain— 1 (Marty) Motion carried. 3. SPECIAL ORDER OF BUSINESS None. President Coughlin stated, in consideration of Senator Novak's busy schedule, the Authority would hear his report at this time. 4. CONSENT AGENDA None. I C:\ADMIN\MINUTES\EDA\8-9-99.EDA 5. EDA BUSINESS A. Public Hearing 7:05 p.m., for the Consideration of Resolution 99-EDA-116, a Resolution approving the Sale of City owned Property located at 6991 Pleasant View Drive to Vista Construction, Inc. President Coughlin opened the Public Hearing at 7:30 p.m. Economic Development Coordinator Kevin Carroll stated that prior to leaving the City, Housing Inspector Steve Dorgan, had come before the EDA periodically to discuss this project. He stated this project was involved in the City's Housing Replacement Program. He stated the owner of the property had expressed an interest in participating in the program, in April of 1998. He stated, at that time, the City, with the EDA's consent, obtained an appraisal of the value of the property. He stated the property was purchased from the owner for$60,500 which was the assessed value at that time. Economic Development Coordinator stated the property was located at 6991, Pleasant View Drive, on the southeast corner of the City. He stated it was a nice lot, with trees,which slopes off towards the back. He stated the appraisal of the land itself, in June of 1998, was $35,000, and once the property was acquired by the City, and the house and garage were removed, the property was put up for sale, and the City received five bids. He stated the City had established a minimum asking price of the lot of$40,000. Economic Development Coordinator Carroll stated Marquis Builders, Inc. a developer, was the high bidder, with an offer of$49,500 for the lot. He stated they had proposed to build a 16,000 square foot residence, and the total value of the property after the construction of the home was projected to be $184,500. Mr. Carroll stated, unfortunately, after a substantial amount of time had been devoted to this proposal, Marquis' purchaser withdrew from the project. He provided the EDA with copies of a letter explaining the circumstances of that withdrawal. He noted that Marquis had paid a$500 non-refundable deposit which they forfeited upon withdrawal, and this money would be used to cover some of the costs involved, and redoing some of the legal work. Economic Development Coordinator Carroll stated, when it became apparent in July that Marquis was not going to be able to proceed, attention turned to the second highest bidder, Vista Construction, Inc. He stated that Vista proposed a purchase price of$47,250, which was 4.5 percent less that Marquis had offered. He stated however, Vista proposes to construct a larger home, of 1860 square feet, which is 16 percent larger than Marquis had proposed. He stated the total value of the house, once constructed was projected to be very similar to the total value Marquis had projected. He stated they proceeded to sign a participation agreement with Vista, who paid a$500 non-refundable deposit. He stated, as a result of signing the participation agreement, Vista had the exclusive right to enter into a more complicated redevelopment agreement with the City. 2C:\ADMIN\MINUTES\EDA\8-9-99.EDA Economic Development Coordinator Carroll stated this was basically why the matter was before the Council at this time. He stated notification of the public hearing was mailed to all residents within 350 feet of the subject property on July 21. He stated that he, City Attorney Riggs, and Housing Inspector Dorgan had been preparing a draft of a purchase redevelopment agreement, which is now in final form, and available to be signed by the developer and the City in the event the EDA approves this agreement. Economic Development Coordinator Carroll stated the resolution under consideration was the same as the resolution drafted for the Marquis proposal, with the different specifics, as was the redevelopment agreement. He stated once the purchase redevelopment agreement is signed, the developer would be required to pay$1,000 earnest money within three days. He stated they would then proceed to set a closing date. He indicated the developer is very interested in setting a closing date as soon as possible. He stated there was a provision in the redevelopment agreement that requires the closing be held by September 15, 1999 at the latest, or whatever earlier date can be achieved. Economic Development Coordinator Carroll stated the purchaser for Vista is not in the process of selling another home, so that contingency does not exist, and they have arranged their financing, and are ready to proceed. He stated, under the agreement, the minimum improvements to the house must be completed by March 1, 2000. He stated the exterior work and landscaping require completion by July 1, 2000. He stated, in addition, the construction must commence within 60 days of the signing of the redevelopment agreement. He stated this was an overview of the project. There was no public input. President Coughlin closed the Public Hearing at 7:40 p.m. Commissioner Marty stated he thought the decision was close between Vista and Marquis, and he did not see any problem with this proposal. Vice President Stigney stated he also had no objections to the proposal, noting that he preferred the house Vista had proposed. MOTION/SECOND: Marty/Stigney. To Approve Resolution No. 99-EDA-116, a Resolution Approving and Authorizing a Purchase and Redevelopment Agreement By and Between the Mounds View Economic Development Authority and Vista Construction, Inc. Ayes— 5 Nays—0 Motion carried. A. Consideration of Resolution 99-EDA-117, a Resolution Decertifying Certain Parcels in TIF District No. 2. 3C:\ADMIN\MINUTES\EDA\8-9-99.EDA City Administrator Whiting stated the resolution in question was in regard two parcels in TIF District No. 2, a parcel containing the Holiday Stationstore, and the parcel containing the ReaLife Cooperative. He stated that by removing these two parcels from the district, they would no longer generate an increment for the Tax Increment District. He stated this matter has been reviewed a number of times, with discussion at a number of meetings within the past month or so, and it is a fairly simple matter, from a procedural standpoint, as indicated in the resolution itself. Commissioner Marty stated he spoken to this issue when running for office, and did not see that the removal of the two parcels from the TIF District No. 2, would create any significant deficit in the district. He stated that neither one of these parcels has applied for, or used any TIF funds, and as he had stated prior to his election, he would like to do this, and this is what he would go through with. He stated he would like to see this adopted. President Coughlin stated he believed the City needed a policy for all aspects of tax increment financing for the City. He stated there is not a comprehensive policy, and therefore, thought it ill advised to consider the smaller picture, without having a larger picture to compare it to. He stated they do not have a policy, and do not know what impact this would have on future plans. He stated he thought it was unwise, and foolhardy to consider this before having the big picture in sight. He stated he had recently heard "if you have your fingers around the neck of a person, you should know if you intend to commit bodily harm or kill the person before you tighten your grip." He stated he would request the Authority not move forward with this proposal. Commissioner Thomason stated she was not present at the Work Session, however, she did have time to review this matter. She stated she was one of the parties initially in favor of de- certification. She stated, in retrospect, reviewing the specifics, and gaining the Finance Director and Economic Development Coordinator's input on the matter, she thought that decertified or not, this was a minor matter. She stated, as a liaison for the EDA, she noted they are very close to incorporating a TIF policy into their comprehensive plan. She stated she would like to see that work go forward, and requested the Authority table the resolution until after the Council has a TIF policy in place, and to have that policy in place no later than six months, March 1, 2000, and then recommend to the EDC to finish their work on their recommendations on the TIF policy. MOTION/SECOND: Thomason/Quick To Table Consideration of Resolution 99-EDA-117, a Resolution Decertifying Certain Parcels in TIF District No. 2, Until March 1, 2000, or Until Such Time Required to Provide a Comprehensive Policy, and During This Time the Authority Will Continue to Develop a Larger Policy, and Will Direct the Economic Development Commission to Further Investigate the Specifics and Provide Their Recommendations on TIF Policy. Ayes—3 Nays—2 (Stigney, Marty) Motion carried. President Coughlin asked Economic Development Director Carroll for his input, in regard to the proper direction to provide the Economic Development Commission. Mr. Carroll stated, as the 4C:\ADM IN\MINUTES\EDA\8-9-99.EDA primary staff contact person with the EDC, his preference would be to continue to separate these tasks into two categories. He stated the first task would be completing the EDC's work on the Economic Development Section of the Comprehensive Guide Plan. He stated one of his concerns was, if they suddenly injected a comprehensive review of the TIF policy into that process, they would delay it even further, and other departments and staff members, who are working diligently to complete their parts of the plan, might end up being delayed. He stated they had requested and were granted two extensions of time, but desired to complete the process. Economic Development Coordinator Carroll stated, as Commissioner Thomason is aware, they are very close to completing the Economic Development Section, and hoped to have the matter resolved by the next meeting on August 26. He stated they might or may not include something about TIF in the Economic Development Section, however, if they do, it would be by necessity, and something generic in nature. He stated this could possible be a reference to the fact that the City has provided this type of assistance in the past, and may continue to do so in the future. He stated, once this is completed and behind them, and they know they have done their part in getting the Comprehensive Guide Plan completed, there would be no other pressing Economic Development issues, and the EDC would then be able to turn their attention on the TIF issues. Economic Development Coordinator Carroll stated, in his opinion, the EDC is probably as good a body as any to consider this, as he believed there was a divergence of opinions with the EDC which probably reflect the divergence of opinions within the community. He stated he thought the specific time frame was a good idea. He stated he had found, with many committees and commissions, especially with complicated issues, if there is not a fixed amount of time, they will take much time, as the issues are very interesting to the members of these bodies. He stated the EDC would attempt to work within those time parameters, and if they required additional EDC meetings to follow through, that was what they would do. He inquired how far the Council would like the EDC to go. He stated he assumed this involved reviewing not only what the Council and EDA have done with TIF in the past, and existing TIF policy, but also a future projection. He stated they would also attempt to provide some recommendations as to what the City should or should not do in regard to TIF. He stated this would include recommendations for overall goals, and strategies for accomplishing those goals. He stated they could also conduct research in terms of the possible removal of parcels from the districts, and determine if that is an acceptable tactic for accomplishing some of the strategies and goals that are recommended. President Coughlin stated he considered the goals the most dynamic of the discussions. He stated he agreed with Economic Development Coordinator. Carroll's assessment that the EDC is a microcosm of the City as an entirely, and thought this would be of major emphasis as well. Mr. Carroll stated the minutes of the EDC meetings were available. He stated they were not customarily provided to Council Members, however, in light of the importance of this issue, he could devote extra attention to preparing the minutes of those meetings, and provide them to the 5C:\ADM IN\MINUTES\EDA\8-9-99.EDA Council. He stated they could also provide progress reports regarding the discussion and the issues the EDC is addressing, so the Council may offer input as those issue moves forward. City Administrator Whiting stated one of the parallel efforts that would take place simultaneously would be the development of the Economic Development Budget for 1999, which is financed out of TIF for housing or Economic Development programs. He stated the budget is a policy statement of the City's needs and issues, and should not be forgotten along with the work discussed that evening. Mr. Carroll stated he thought would assist with the budget discussion, as it is useful to discuss the specifics. President Coughlin stated the previous item discussed at the EDA meeting was a direct result of some of the funding that has come available to the City. Economic Development Coordinator Carroll agreed. He stated this was a good example of how they would begin with a property that is worth $60,000, and have a$180,000 property when the project is completed. He stated this triples the value, and improves the appearance of the neighborhood. President Coughlin stated one of his personal goals would be to greatly increase the funding to Housing Redevelopment, with approximately 80 percent of the tax base in residential. He stated this was a fairly old residential group of housing in the City, and he sees it as essential, that they do whatever they can to redevelop, as this is the core and cornerstone of their tax base, which has been somewhat neglected in recent years. Vice President Stigney clarified that approximately 23 percent of the City's tax capacity is presently sitting in TIF Districts, which means this money does not go directly to the taxpayers to offset their taxes. He stated it goes for TIF projects and development. He stated they were certainly needed, but there has to be a balance. He stated the Council had the opportunity to pull two parcels off, and reduce the tax rate for the residents, and the Council elected not to do that. He stated he hoped in the future, when reviewing this, and the entire comprehensive package, they would attempt to reduce taxes to the residents, rather than"TIF and build." Commissioner Quick inquired, when a TIF District is set up, the district pays the taxes as of the date of conception of the district, so it is only the increase that is actually considered increment. Mr. Carroll stated this was essentially correct. Commissioner Quick stated therefore, it isn't all the property, it is just the increase, the actual gain or improvement to the tax base that pays into the pool. Mr. Carroll stated this was correct. Commissioner Quick stated his point was that this is not a"black hole"where the tax base disappears from the coffers. He stated what is there, is there, and the increase in the property value is what they are referring to. Vice President Stigney stated he took a different view, in that the Council had the opportunity to pull two parcels off and could have gained a full increment for the tax base, rather than putting it into a TIF District. 6C:\ADM IN\MINUTES\EDA\8-9-99.EDA President Coughlin stated the 23 percent of the tax base in TIF had been debated. He stated that this was in comparison to the entire picture, including the new development that has occurred within those TIF Districts. He stated on some level it was like "comparing apples to oranges", in that prior to these districts, this was 100 percent of the City's tax base. He stated you create the districts, and have new development, and that new development is in addition to the existing amount of development. He stated every building that is developed adds to the percentage, and therefore, the size of this percentage is a positive thing. He stated there was a good deal of development in the City that would not have otherwise taken place. Commissioner Quick requested Economic Development Coordinator Carroll to summarize all of the areas or buildings that have been developed through the TIF process. Economic Development Coordinator Carroll stated these included the entire business park along Highway 10, both north and south sides, Zep Manufacturing, Cisco, Midwest IB, and Silver Lake Point. Commissioner Quick stated this represented a significant change in the last fifteen years. Vice President Stigney stated that the Legislature itself has restricted this amount of TIF for a City the size of Mounds View. He stated this indicates they believe it is in excess. He requested the EDC research all of these issues, and bring the information forward to the residents, so that they can understand them, and what the effects really are. President Coughlin stated that the EDC meetings were open to the public and televised. He stated that anyone wishing to speak before the EDC certainly could. Commissioner Marty stated the research in the entire metro area indicates that Mounds View has the highest percentage of their taxes invested in TIF Districts. He stated the next closest city had approximately 17 percent. He stated the two properties they were considering were fairly insignificant overall, however, he thought if they were decertified and brought the increment down one or two percent, this would go directly into the tax base and the general fund. He stated they could use the money either way. He stated if these properties were decertified, it would probably affect everyone individually by .37 cents, however, it would be money that would go directly into the general fund. President Coughlin stated this would not be additional money going into the general fund,but would spread out the money over a couple more properties. He stated the 23 percent figure was deceptive in that Mounds View is a small town. He stated he thinks this speaks more to the fact that they had very little development prior to these districts, than it does to the percentage of development within other towns in the area. 6. REPORTS None. 7. ADJOURNMENT 7C:\ADMIN\MINUTES\EDA\8-9-99.EDA President Coughlin adjourned the meeting at 8:00 p.m. Respectfully submitted, Recorded and transcribed by: Trish Pearson TimeSaver Off Site Secretarial, Inc. 8C:\ADM IN\MINUTES\EDA\8-9-99.EDA