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HomeMy WebLinkAbout07-25-2005PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting July 25, 2005 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 6:30 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: President Marty; Vice President Stigney, Commissioners Flaherty, Gunn and Thomas. NOT PRESENT: 3. APPROVAL OF AGENDA Director Ericson asked to move Item 6A from the Consent Agenda to Item 7C EDA Business for discussion. MOTION/SECOND: Thomas/Stigney. To Approve the July 25, 2005 Agenda as amended. Ayes – 5 Nays – 0 Motion carried. 4. PUBLIC INPUT None. 5. APPROVAL OF MINUTES. A. EDA Minutes June 27, 2005 Commissioner Thomas had the following correction: • Page 13, line 456, she clarified that tabling of a motion was not in order because there is no motion. President Marty had the following corrections: • Page 2, line 56, reads: ‘Executive Session’; should read: ‘Executive Sessions’ • Page 3, line 97, reads: ‘patterns are currently and how they would proceed if there were a development on the site.’; should read: ‘patterns are currently, and how they would proceed if there were a development on the site.’ • Page 6, line 253, reads: ‘and have all answers’; should read: ‘and have all the answers’. Mounds View EDA July 25, 2005 Regular Meeting Page 2 • Page 7, line 279, Brian Amundsen’s statement, reads: ‘gives a tax business’; should read: ‘give a business a tax break’ • Page 9, line 368, reads: ‘the EDA to negotiation this project’; should read: ‘the EDA to negotiate this project’. • Page 10, line 406, reads: ‘adding that the do not believe’; should read: ‘adding that they do not believe’. • Page 12, line 506, asked Commissioner Flaherty to clarify the $778,000 per year.  Commissioner Flaherty explained that he had factored in the $5 million of surplus the City received and spread that out over the 25-years for the district. • Page 14, line 590, reads: ‘approximately $3 million’; should read: ‘approximately $300 million’. • Page 15, line 602, reads: ‘noting that they would have the resources’; should read:’ noting that they would not have the resources’. • Page 15, line 604, reads: ‘over the last number years’; should read: ‘over the last number of years’. • Page 16, line 649, reads: ‘He stated that this is not a fair’; should read: ‘She stated that this is not a fair’. MOTION/SECOND: Marty/Flaherty Approve the Minutes of June 27, 2005 as amended. Ayes – 5 Nays – 0 Motion carried. 6. CONSENT AGENDA A. Moved to EDA Business Item 7C for discussion. Set a Public Hearing for August 8, 2005 for Discussion of the Proposed Business Subsidy for the SYSCO Minnesota Expansion Project. 7. EDA BUSINESS A. Review and Consider Possible Acquisition of 2617 Sherwood Road, a Property identified as a Blighted and Hazardous Building. Community Development Director Ericson stated that 2617 Sherwood Road is vacant and currently uninhabitable. He noted that last year on October 11th the City Council adopted a resolution ordering the abatement of the property and since that point the City has been working with the property owners in trying to correct the deficiencies. He stated that so far they have been unsuccessful in getting anything accomplished. He stated that they have set multiple court dates, there have been continuances adding that Kennedy and Graven have been working on this on the City’s behalf noting that they have come to a possible agreement that they City could look at this as a potential housing replacement program parcel. He stated that it is on the City’s list and does meet all the requirements for blighted parcel for redevelopment. He stated that Staff Mounds View EDA July 25, 2005 Regular Meeting Page 3 has put together a resolution asking for the Commission’s approval to get an appraisal done on the property and negotiate a price and bring it back for the EDA’s consideration. He stated that they did seek quotes for an appraisal and it could be done for approximately $400.00 Commissioner Thomas asked what the difficulty is with the homeowners, is it a difficulty in contacting them or are they not willing to do the repairs. Director Ericson explained that it is a combination of things noting that they are dealing with a mortgage company and an individual who acquired the property as a potential investment property not realizing there were so many issues with the property. He stated that originally the City was dealing with a pair of property owners that are no longer in the picture and are now dealing with a bank that has never visited or seen the property. He stated that it is difficult trying to convince them that they now need to spend $25,000 to make repairs to a property that they already have $175,000 invested into it. He stated that someone is making the determination that it isn’t prudent to put any more money into the property. Commissioner Flaherty asked if the property has been forfeited to the mortgage company. Director Ericson stated that there is a property owner noting that he is not sure if there was a sale of the property noting that over the last year the City has been dealing with four different groups in effort to correct the deficiencies. He stated that the current property holder is Deutsch Bank. Commissioner Flaherty asked if the City is anticipating forfeiture. Director Ericson stated that at this point the City is not anticipating forfeiture. He explained that they are not dealing with a resident they are dealing with an investment corporation. Commissioner Flaherty asked if the City knows the loan value of the existing mortgage. Director Ericson stated that the City has been told that it is approximately $179,000. He stated that the City would seek an appraisal and offer fair market value for the property, which might not be in that price range. President Marty noted that in the Staff report the owner has agreed to a potential purchase by the City and suggested moving forward with the appraisal. Vice President Stigney clarified that if the bank now owns the property then they are responsible for the condition it is in and asked if the City has leverage to have them repair the property versus the City. Director Ericson stated that Staff is looking at this option and explained that it is time consuming. He noted that legal fees have been expended due to several continuances, delays and Mounds View EDA July 25, 2005 Regular Meeting Page 4 negotiations. He explained that the City is dealing with an owner that is not local and it has been difficult trying to convince the property owner, the bank, that they should the corrections identified and called out by the Housing Department or remove the building, which is what the City is recommending. He agreed that the City could continue through the court process but Staff believes this might be the quicker remedy. Commissioner Gunn asked if the lot is dividable. Director Ericson stated that at this point it is not dividable because Greenwood Drive, at that point, is unapproved right-of-way adding that at some point in the future it could be subdivided. MOTION/SECOND Gunn/Thomas To Approve Resolution 05-EDA-205 Authorizing an Appraisal be conducted on the Residential Property located at 2617 Sherwood Road. Ayes-5 Nays-0 Motion carried. B. Resolution 05-EDA-206 Authorizing Payment of Pay-As-You-Go Developer Payments to Heartland-Mounds View Common Bond, and Bridges Leasing Company. Economic Development Coordinator Backman stated that there are currently three on-going developer agreements, the Mermaid, Silver Lake Point and The Bridges. He noted that the Mermaid has a slightly different schedule adding that the Heartland-Mounds View Common Bond for the Silver Lake Point project in the amount of $34,078.73 and for The Bridges Leasing Company in the amount of $27,423.00 would be due August 1, 2005. President Marty stated this is the City’s obligation to pay back the developers per the City agreement. Vice President Stigney clarified that these are both TIF. Economic Development Coordinator Backman confirmed noting that The Bridges leasing would be done in Feb 2006. MOTION/SECOND. Stigney/Flaherty To Approve the motion to Adopt Resolution 05-EDA- 206 Authorizing Payment of Pay-As-You-Go Developer Payments to Heartland-Mounds View Common Bond; and Bridges Leasing Company and waive the reading. Ayes -5 Nays-0 Motion carried Mounds View EDA July 25, 2005 Regular Meeting Page 5 C. Set a Public Hearing for August 8, 2005 for Discussion of the Proposed Business Subsidy for the SYSCO Minnesota Expansion Project. Economic Development Coordinator Backman stated that as part of the process for business subsidies the current legislation requires that there be a business subsidy hearing, which has a minimum requirement of a ten-day notice. He stated that Staff is looking to schedule a hearing for August 8, 2005. He stated that last Wednesday Scott McGuire submitted a TIF application along with a check noting that the application shows when they would like to start construction and also includes a breakdown of the revised budget. He indicated that the previously submitted budget was a bit low on the electrical work and has been revised to reflect the changes. He referenced the portion of the budget as it relates to stormwater management and explained that they are asking that a portion of the wetland mitigation/stormwater management component be paid for via TIF assistance. He stated that they are in discussion with the Rice Creek Watershed District noting that this is a significant component of the project, which would be the expansion of the of the proposed parking lot. He referenced the map noting that approximately three-acres of the land, to the east and to the south, would be transferred back from the City of Mounds View to SYSCO for this project. Director Ericson explained that one of the reasons this was pulled from the agenda is because Staff would need to draft a development agreement for review at the August 8, 2005 meeting. He stated that they would like to have something that the EDA would be comfortable with in terms of a dollar amount that could be entered into the development agreement. He clarified that Staff is not asking for authorization at this time but rather to get a consensus on the dollar amount noting that it would be helpful. President Marty clarified that they are considering possibly $250,000 as TIF eligible. Commissioner Thomas clarified that it is basically saying that there is approximately $300,000 plus dollars that would be TIF eligible. Economic Development Coordinator Backman stated that right now SYSCO is requesting $250,000 adding that they do recognize that the costs would exceed that amount. Vice President Stigney referenced TIF noting that in listening to some of the EDC meetings they don’t have handle on it. He suggested a meeting with the EDA and EDC to see where they are with all of the TIF districts, what the balances are, and determine when they would be closed out or would they be stretched out to maintain the current TIF districts. He stated that they should look at the big picture stating that it is important to get these items clarified first. He recalled that the SYSCO property could have been turned back over to the tax base in 2006. Economic Development Coordinator Backman stated that the final obligation for TIF District 3 is the payment to Bridges Leasing, which is around $30,000.00 for the Spring 2006. He stated that Mounds View EDA July 25, 2005 Regular Meeting Page 6 the EDA has the option to look at de-certification or consider a continuance. He stated that if they continue the TIF District 3 there should be projects that are looked at within that district. He stated that they could not hoard the dollars and they cannot have dollars coming in and not spend it for the purpose it was intended, which is economic development. He explained that in terms of this particular district it is a healthy district noting that they get well over $300,000 a year in increment payments. He stated that it is primarily derived by SYSCO, some derived by ZEP and some derived by Bridges Leasing, but the majority is derived by SYSCO. He stated that they have had some discussions with Ehlers about doing a complete analysis of all of the districts but the initial review is that they are fairly close to the original figure of approximately $1 million. Vice President Stigney stated that he would like to see it in black and white as to where the City is at and what the priorities are for the expenditures of the funds as to whether it would be put back and paying the down the tax base or keep the Districts going. He stated that there is a need for further discussion noting that they now have SYSCO asking for money and eventually Snyder’s would be coming in to ask for the same thing. He expressed concerns about the amounts being spent. He stated that he wants the details and the big picture of the project. He stated that he has problems with the amounts and has problems with mitigating offsite. He expressed concerns about the removal of the trees to make way for the parking lot adding that he would like to see a joint meeting with Council and Staff to determine the philosophy and direction on TIF for all of the districts. President Marty agreed with Vice President Stigney. Director Ericson agreed stating that this is what Staff is planning to do noting that if they can get the information prepared and presented from Ehlers for the September work session. He stated that this would be the perfect opportunity to discuss the philosophy, the health of the TIF districts, whether the City would de-certify or are they going to fund other projects and at what level. He stated that these are all issues that should be discussed with the EDA, the City Council and Staff. He stated that this should be on the September or October work session agenda. He stated that Staff would have a plan for the future but also need to know where they are today. He stated that in terms of cash on hand, Economic Development Coordinator Backman indicated that the City would have approximately $1 million in the TIF account this year adding that what is being proposed would not be out of the TIF pool, but rather an ongoing obligation similar to the original SYSCO agreement, which is a pay as you go note. He stated that it would not impact the account as to what is on hand adding that Staff recognizes and appreciates the comments from the EDA. Vice President Stigney stated that it would impact the taxpayers noting that the City either extends the district and pay as you go or close the district. He stated that he has concerns noting that the public hearing is scheduled for August 8, 2005 and he would like the information prior to the public hearing. He suggested rescheduling the public hearing in order to give them the opportunity to review all of the information. He stated that this is bigger than just looking at this Mounds View EDA July 25, 2005 Regular Meeting Page 7 spot with SYSCO, it is what they are doing with the $1 million. President Marty stated that SYSCO does have a need and they are showing the need at this time. Economic Development Coordinator Backman stated that he has two observations, one, in terms of the trees, what they are talking about would impact less than 5-percent of the area that is out there with the former SYSCO property adding that it is not his belief that there would be a huge impact on the Cottonwoods and other trees on the property; secondly, in terms of the process here, the applicant has presented a good project and they are facing a situation where they do need to expand this year or the project would move elsewhere. He encouraged EDA to consider this project at this time. Commissioner Thomas stated that she has questions about what the City is planning to do with TIF noting that she is not comfortable with continuing the pay as you go for TIF District 3 when it is an option that they could begin discussions for closing the district next year. She asked if they have to decide if it comes from the pool funds or the TIF District 3 funds by the August 8th hearing or can they say they are comfortable with the number and sort out what they have from the TIF or whether it comes from the pool or TIF District 3 at some point following that meeting. Director Ericson stated that it has been recommended that they do not utilize the TIF pool for this and that it has been recommended by the City’s Financial Advisors that the City should do a pay as you go note if the City does offer financial assistance. He explained that providing a $250,000 lump sum, upfront payment, sets a pretty precedent in terms of future requests. Economic Development Coordinator Backman stated that if this were set as a pay as you go over a three-year period the EDA would have the ability to de-certify this district in 2008. Commissioner Flaherty stated that he is all in favor of having a meeting with the Authority and asked SYSCO to be patient with the Authority. He stated that the Authority understands that SYSCO does have a need and asked them to allow the Authority, as a body, to take a week to get their information together to see where they are at with the districts. He stated that they want to do what is right for SYSCO and the citizens of Mounds View. President Marty clarified that it would not be a week or two that it would be over a month and is a construction issue. Commissioner Flaherty acknowledged noting that they are looking at November completion. Economic Development Coordinator Backman stated that they have had discussions with Shelly at Ehlers and given their schedule the soonest timeframe they could get the information would be in the August/September timeframe referenced by Director Ericson. Mounds View EDA July 25, 2005 Regular Meeting Page 8 President Marty stated that he is comfortable with this as a pay as you go for $250,000. He agreed that they do need to sort this out and would also look forward to meeting with the EDC and Staff to review some of the priorities, what direction they are going and the goals of the City. He noted that SYSCO is operating under a timeframe and he does see this as a valid request. Commissioner Gunn asked for clarification of the de-certification in 2008. Economic Development Coordinator Backman explained that if there were an approval in 2005 the City would have 2006, 2007 and 2008 as potential years for incremental payments as developer payments back to SYSCO. He further explained that there could be action taken at the end of 2008, effective in 2009 to end the district noting that it would end the district five years early. Vice President Stigney asked if it would mean $82,500 for next the next three years or would it be divided over four years. He stated that he is not comfortable with the $250,000.00 amount. Economic Development Coordinator Backman stated that this could be a decision made by this body. President Marty clarified that he is hearing that the August 8th date should be kept for the public hearing. Economic Development Coordinator Backman asked if they were considering the three-year timeframe. President Marty stated that the timeframe could be discussed at the hearing. Director Ericson stated that they could invite the EDC to the September meeting to discuss this issue. Barbara Haake, 3024 County Road I, clarified that the EDA is planning to have the public hearing for August 8, 2005 and asked what the purpose of the public hearing would be if there has been no public input. She agreed that the EDC meeting and workshop is long overdue noting that they are mentioning $125,000 versus $250,000. She stated that she likes SYSCO too and clarified that she is not trying to say anything against the pay as you go option noting that at least it is not being taken from the $1 million. She expressed concerns stating that they don’t have a referendum yet to know how it would be paid and referenced the issues with Medtronic. She referenced the Rice Creek Watershed stating that she does not have this included on the agenda for Wednesday night and there are things that they should review. She stated that they prefer to mitigate on site noting that there are things that they haven’t had input on and if the EDA is planning to do a public hearing usually they would wait for the information that would help them in making a decision. Mounds View EDA July 25, 2005 Regular Meeting Page 9 Commissioner Thomas clarified that whenever they do a public hearing they always start with a base document and frequently amend it as they work through the document. She explained that the EDA should have something for the discussion to determine agreement or disagreement. She stated that this is common practice for all public hearings and it then gives the public something to discuss. She stated that they need the base document to start with. Vice President Stigney asked if this would be by resolution or ordinance. Director Ericson stated that this would be by resolution and it would only need one public hearing Vice President Stigney stated that this is premature at this point. Commissioner Flaherty agreed stating that he would prefer to meet with the EDC first. He stated that he has asked for indulgence on the timetable adding that he does understand the time constraints on the construction. He stated that he feels they should do what they need to do first. MOTION/SECOND Gunn/Thomas To Approve and Set a Public Hearing for August 8, 2005 for the discussion of the proposed business subsidy for the SYSCO Minnesota Expansion Project. Ayes-3 Nay-2 (Stigney, Flaherty) Motion carried. 8. REPORTS None. 9. NEXT EDA MEETING: Monday, August 8, 2005 at 6:30 p.m. 10. ADJOURNMENT President Marty adjourned the meeting at 7:14 p.m. Respectfully submitted, Recorded and transcribed by: Bonnie Sullivan TimeSaver Off Site Secretarial, Inc.