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HomeMy WebLinkAbout11-14-2005PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting November 14, 2005 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 6:00 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Gunn, Commissioner Flaherty, and Commissioner Thomas. NOT PRESENT: None. 3. APPROVAL OF AGENDA MOTION/SECOND: Stigney/Flaherty. To Approve the November 14, 2005 Agenda as presented. Ayes –5 Nays – 0 Motion carried. 4. PUBLIC INPUT None. 5. APPROVAL OF MINUTES The following correction was requested: Page 4, Line 150, should read: “…to find another location for the compost site.” MOTION/SECOND: Flaherty/Gunn. To Approve the October 24, 2005 Minutes as revised. Ayes –5 Nays – 0 Motion carried. 6. CONSENT AGENDA None. Mounds View EDA November 14, 2005 Regular Meeting Page 2 7. EDA BUSINESS A. Continuation of a Joint Meeting Between the EDA and the Economic Development Commission (EDC) to address TIF Goals and TIF Funding Priorities Community Development Director Ericson explained this is a continuation of the meeting between the EDA and EDC which started in September at a work session where topics discussed included: TIF philosophy, goals, spending priorities, and level of increment to be received through the term of the TIF Districts. There was good discussion on various priorities and consensus reached that Highway 10 improvements remain a priority for the City. Director Ericson stated that other items need some substantial discussion. The EDC met and revised their priority list, which has been provided to the Council. Director Ericson recommended that discussion continue tonight so those goals can be finalized for adoption in January. Stacy Kvilvang, Ehlers & Associates, explained that they looked at the priorities previously discussed and broke them down into the categories of Capital Projects, Redevelopment, and Housing. They then determined possible funding sources. She explained that with Capital Projects and Housing Redevelopment Projects, it is good for the City to augment funding with grants. Ms. Kvilvang noted the four Capital Projects are the pedestrian trails along County Road 10, County Road 10 local match, road reconstruction (City-wide – 6 year plan) and future infrastructure/redevelopment needs. The Redevelopment priorities are the Skyline Motel, PAK Building, Premium Stop/Donut Connection, Moundsview Square, and County Road 10/Woodale. The Housing goals are the Housing Improvement Program, Laport Meadows, and Sherwood Housing Development for a total project cost of $18,619,923. Ms. Kvilvang noted the total of financing available equals $20,079,459 so the City is in good shape to consider these projects. Ms. Kvilvang noted their report included a brief description of the projects, issues related to the projects, and funding sources. She stated they would like direction from the EDA on whether these are the priorities, if the priorities are correctly listed, and to establish a timeline on each project. President Marty asked about funding sources. Ms. Kvilvang stated Shelly Eldridge will be addressing that issue and how it can be bonded in two different series. Shelly Eldridge, Ehlers & Associates, stated between the three Districts it appears there is approximately $1.5 million available annually from 2006 on until 2013 and then the Districts start to expire if they go full term. Looking at the most simplistic way, it will generate $15 Mounds View EDA November 14, 2005 Regular Meeting Page 3 million during the life of the Districts including pay-as-you -go and SYSCO. How the EDA chooses to spend it is up to them. These funds would pay approximately $11 million in bonds. She explained they looked at issuing them in a two-year period to provide capacity in the bonding if there are other debt needs. She recommended that the City stay under $10 million in bonding. President Marty asked if they will end up with $15 million. Ms. Eldridge stated that is correct if the District goes the full duration. President Marty asked if, after payments, it would equal $11 million. Ms. Eldridge stated that would be true if the EDA bonded; $11 million in capital and $5 million in interest for bonding. President Marty stated the Council has talked about doing road projects City-wide and asked if some of the TIF could be applied to road reconstruction. Ms. Eldridge stated they contacted the City’s TIF legal counsel who indicated that is an eligible TIF use because these districts were established in the mid-1980s. Since that time, TIF regulations have become much more restrictive. Vice President Stigney asked if that is true for any streets. Ms. Eldridge stated that is true of any streets within the larger redevelopment, which is coterminus with the City’s boundaries. Vice President Stigney asked about redoing the Districts to capitalize on fiscal disparities. Ms. Eldridge explained that now the districts are under A Election, which captures increment outside the boundaries and raises the tax rate. The City has the opportunity to change it to B Election, which reduces the tax increment for the life of the District by the fiscal disparities portion. That would give a cumulative value of $9 million and the City would be able to bond about $5.7 million. On the flip side, if that had been done by the end of this year, the City’s tax capacity rate for truth in taxation was 43.74 and would have been down to 40.748, all other things being equal. Vice President Stigney asked what it would cost to do that. Ms. Eldridge stated if it would only require a resolution, the cost would be minimal. However, she will have to check to determine if a public hearing process is needed. She explained that each District would have to be looked at individually. Commissioner Flaherty asked if it makes sense to do that at this time. Commissioner Thomas stated it may make sense to do that with District #1 but District #3 expires in two to three years. Vice President Stigney asked Ms. Eldridge to provide the Election information on District #1 to City Administrator Ulrich. Mounds View EDA November 14, 2005 Regular Meeting Page 4 Commissioner Thomas asked how changing to Election B impacts the tax rate within the district and tax disparity rates. Ms. Eldridge stated there is one obligation left in the District #1 and it only has a year or so left. She stated her bigger concern is with District #2. She advised that there is also an in-between consideration to share back with the County, School District, and City. Ms. Kvilvang stated the discussion before the EDA is the magnitude that can be captured versus going with the Election that would reduce the amount. She asked the EDA to first consider their priority projects. President Marty asked if the EDC members have recommendations. EDC Commissioner Torri Johnson stated they have discussed this list for about one year and take it seriously as the areas to focus on in the City. She stated based on the last discussion, County Road 10 is in the forefront. Other projects would be if a developer brings something to them or if there are safety issues. Commissioner Thomas noted County Road 10 is divided into two pieces. Ms. Kvilvang explained that typically with County Road projects, the City has a match of funding to dedicate to the project that are not County funds. Director Ericson noted that Page 2 of the report includes an engineer’s estimate regarding the County Road 10 project. He explained that they did their best work to identify the cost associated with that project and the total is estimated to be $9.1 million, which is less than the ballpark estimate. He advised that staff has already submitted grant and funding applications but that funding would not become available until 2007. TIF dollars are available that are not obligated and the City will face the real possibility of having to give them back if not used. Director Ericson noted the City has plans and priorities and it is a matter of moving forward with those projects. He stated he recognizes the benefit of looking at the Election A and B and fiscal disparities, but the priorities and funding needs must first be identified. Then consideration can be given of how to put those dollars back on the tax rolls. He stated it is important to look at the projects identified as priorities and provide feedback on what staff should move forward with. If not a priority for the EDA and Council, then it tells staff what is available. He noted that everything in the priority list can be funded with existing dollars available to the City. Commissioner Thomas asked if the local match is what should be considered on the priority list, or should the EDA be talking about a $10 million project and whether it is a City project, or someone else’s project. She stated that she believes it will be a long time if the City is going to wait for match dollars. Commissioner Thomas stated she thinks the City needs to talk about a $10 million project and whether the City should bond for it to make it happen. Mounds View EDA November 14, 2005 Regular Meeting Page 5 President Marty agreed that is a wise approach, noting it can take years to get matching funds and it is never guaranteed. He stated this project may not get done or it could be 10 or more years out if the City waits for matching funds. He stated County Road 10 has been talked about for years and with the exception of several signal changes, timing sequences, and a few trailways, that is all that has been done. He stated it is in the 2006 budget to move forward and that will have to be done to get the project going. President Marty referenced the staff report and commented on the listing of projects. He stated he does not see some of them as viable priorities but more like a “wish list” that the City would like to see happen. But, he does not see it as being realistic to invest City or TIF funds. Director Ericson explained that the EDC was looking at it from the perspective of what needs to be changed in the City, what areas are not presenting a positive image, and where the tax base can be increased and improved. He stated the Skyline Motel is a prime example of a property where taxes are not increasing, it is underutilized, and has caused problems in the past. He stated that will probably not change but for City involvement. Director Ericson stated all of the potential development projects presuppose there is a willing seller. He noted PAK is looking to redevelop but there is a funding gap so they are looking at the City for funding participation. He agreed that with the Donut Connection property, a restaurant is interested in the site so it is now a lost opportunity for the City. Previously it was for sale under the County assessed valuation but the City did not purchase it. Director Ericson stated the gas station is now for sale and suggested as part of Project #3 (Premium Stop/Donut Connection/Sitdown Restaurant) it would make good sense to acquire with TIF for a potential redevelopment. He advised that the gas station site was marketed as redevelopment but the only calls being received are from potential buyers who want to maintain it as an independent gas station. He stated he is not asking for authorization tonight but may in the future request the EDA look at possible acquisition. Director Ericson stated that Moundsview Square is a project where Paster would be looking for some assistance, as they did with the Hardee’s building. However in that case, they did not get all of their information to the City in a timely manner so they decided to go forward without City assistance. But, to redevelop the Moundsview Square property, they would be looking at the City for assistance and but for that assistance, it may not move forward. Director Ericson stated this may be a “wish list” but it impacts the aesthetics of Mounds View. He stated the City wants to reinvigorate the County Road 10 corridor and improve the tax base by investing in some of the properties to achieve that goal. Commissioner Thomas stated President Marty has indicated the infrastructure redevelopment is his first priority and redevelopment of the businesses would come second to that. She stated it Mounds View EDA November 14, 2005 Regular Meeting Page 6 comes down to the primary purchase of the property should be a developer, not the City. However, the City is the primary entity to install the infrastructure. She stated the hindrance on those properties may have been because of the City’s lack of infrastructure. So, during the next two years as other investments are made, it may encourage development to take place that does not require City involvement. Commissioner Thomas stated the Premium Stop is a serious concern for her but it is an independent property so the City has to wait for them to decide what they want to do. She stated that issue along with the heart-of-the City issue puts the Skyline Motel acquisition farther down on the list for her, even knowing about the public safety concerns. Commissioner Flaherty stated he concurs and appreciates the EDC bringing these priorities before the EDA. He stated he is in favor of controlling what the City can control. When dealing with the County Road 10 corridor, it involves contractors and the County and is somewhat out of the City’s control. However, City-wide road construction can be controlled by the City and there are no restrictions standing in the City’s way. He stated that ties into the County Road 10 corridor and is a very large “piece of pie.” He stated his support to move on the development of the City’s roads. President Marty stated Director Ericson mentioned that excess TIF funds will have to be returned if a project is not started before 2007 but he saw nothing about the trailway project on Silver Lake Road, which will take $350,000 and up, depending on the wetland areas. He stated he is still working with the County Commissioners in the City’s attempt to get a stop light at Silver Lake Road and County Road H. President Marty asked why that was not reflected in the list. Director Ericson stated that can be added and the funding priorities re-tabulated. He noted there are several other projects that could be added as well. President Marty stated it could be used for street reconstruction but Ehlers & Associates had it pegged out only six years. At the last meeting this issue was discussed, Public Works Director Lee said the street reconstruction was about an 18-year project to get all the streets done. He explained that his concern is that people within the next six years will get a $9 million break and then after that residents will be assessed. He asked if the $9 million can be stretched out so every resident gets a “piece of the pie.” City Administrator Ulrich stated the likely scenario would be to leave the assessment to residents the same but the 75% the City covers would not be taxed throughout the City. He agreed it would be nice to find a way to ease that in since it is a long term project. Commissioner Gunn stated she agrees that the City’s roads are the number one priority. However, she does not want to lose sight of the County Road 10 project. She stated the trails Mounds View EDA November 14, 2005 Regular Meeting Page 7 along the highway are also a number one priority because there are more pedestrians and bicyclers along County Road 10 than previously. She stated this is becoming a serious safety issue and needs to be a focus when the County Road 10 project starts. On the Premium Stop property, she supports having staff look into buying it because it is a main property along the corridor and impacts the image of the City. She noted that one of the considerations in buying a property is whether it is a safety issue and this property has a serious safety issue. She noted the canopy is now sitting next to a property where someone is starting a new business. Commissioner Gunn pointed out that if the City has control of the property, it can control who it is sold to but if it is independently owned, it will continue to be a gas station. Vice President Stigney stated he agrees with the importance of County Road 10 but disagrees with the City buying land for future development because it has limited funds and priorities have been set. He stated he differs with buying the gas station property and thinks the City should assist developers to do the project but not necessarily buying the property. He stated he agrees with the other statements made by the Commissioners. President Marty stated the EDA has reaffirmed the priorities as follows: 1. Pedestrian Trails along County Road 10 (safety and beautification issue that may help attract business to the corridor) 2. Road Reconstruction / Future Infrastructure Redevelopment Needs 3. County Road 10 President Marty stated the City needs to move forward with County Road 10 but the City’s roads have needed to be reconstructed for many years. He added that he wants to keep in the housing program in case dilapidated housing can be brought up to Code. President Marty stated if there is a way to assist some of the businesses along County Road 10 with TIF for upgrades or to help redevelop, he would support it. He noted the Community Development Department has already brought several viable businesses in to the community. EDC Commissioner Belting stated staff put together a great list and it was intended to outline some priorities for the Council to consider down the line. He agreed that trails and safety are huge issues and encouraged the City to use the TIF dollars to get trails started instead of having to return funds. EDC Commissioner Johnson stressed that they were also talking about “willing sellers” and she wanted to make that clear. EDC Commissioner Belting concurred that was the intent. President Marty stated he is not a proponent of eminent domain unless it is a life or death type of situation. He stated that is the prevailing view of the EDA as well. Mounds View EDA November 14, 2005 Regular Meeting Page 8 Commissioner Thomas stressed that the EDA is not just talking about purchase and if there is something the developer needs assistance with to make it work, they should talk to the EDA. Ms. Kvilvang stated the message is clear that County Road 10 is the priority for redevelopment. She suggested the EDA think about setting their vision beyond the infrastructure so if an opportunity comes forward with a property like the Donut Connection or Moundsview Square that is owned by Krause Anderson, they can take advantage. She noted the EDA has now identified three major projects. B. Resolution 05-EDA-210 Authorizing the Demolition of 7861 Groveland Road Community Development Director Ericson stated this is a request for authorization from the EDA to accept a bid to demolish the house at 7861 Groveland Road that the City acquired in 2000, tried to rent out but that didn’t work. The building has now been vacant for several years, there has been vandalism, so it has become a liability. Director Ericson advised that there are good neighbors who let the City know if there is a problem but staff recommends the City explore demolition. He noted three bids were received but came in somewhat high. If approved, the site would be restored to a natural level condition with the basement filled in and the ground sodded or seeded. Staff recommends approval. Vice President Stigney stated the report indicates that efforts were made to sell the house and move it. He asked if the house was advertised for free. Director Ericson stated they have and also contacted moving companies but he does not recall if it was advertised in the last year. He explained the problem with trying to move it anywhere into the metro area is that the building has to come up to current codes, which the building is not able to meet. So, it would have to be moved beyond the metropolitan area. In addition, it may not survive the move and the valuation is not high enough. Vice President Stigney asked about the new furnace. Director Ericson stated that anything of value can be salvaged. He stated some money may have been put into this house to rent it out, but a new furnace was not purchased. In addition, the appliances have been removed from the building. Vice President Stigney asked that the furnace be removed if it is new. Commissioner Thomas asked about the asbestos issue. Director Ericson stated the old linoleum floor tile may have asbestos but they do not expect it to be significant. Commissioner Flaherty agreed the demolition price seems to be high, noting the demolition of two other structures were in the area of $8,000. He asked why there is such a disparity in the demolition bids for this home that contains about the same square footage. He also asked when was the last time the house was rented. Mounds View EDA November 14, 2005 Regular Meeting Page 9 Director Ericson stated it was in 2002 and after that there were some negative experiences with renting out properties and the City realized they did not want to manage rental property. He noted that the City is not set up to be rental property managers. There were problems with the tenants not paying rent and doing damage. The City took the matter into court and received settlements that will never be collected. After that the building was boarded up because it was not worth renting out. President Marty noted this bid is to demolish a house and the other two structures that were demolished were prefab structures. Commissioner Flaherty asked why the tenants were not evicted if they were not good tenants. Director Ericson stated the City did evict them but it took a while. Commissioner Thomas stated the range for demolition does not appear high to her when you consider what is involved with home inspections. She stated that ten years ago when she was in this field, the demolition would be in the range of $12,000 so she is comfortable with the range of $16,000. Commissioner Gunn noted it also includes two out structures. President Marty asked how this fits into the City’s redevelopment plans, noting it is by the PAK building. Director Ericson explained that it is zoned commercial and in a redevelopment area so it was purchased in the context of future redevelopment. The City determined to rent it out until there was potential for redevelopment. However, currently it is costing the City money and creating a liability. President Marty asked about using it for Fire Department training. Director Ericson stated that was researched and determined to not be feasible. Vice President Stigney asked about getting a written asbestos estimate. Director Ericson stated it would require having an asbestos abatement specialist view the property but staff who has this type of training does not believe it will be a big project because with asbestos floor tile, hazmat suits are not required, just proper disposal. MOTION/SECOND: Gunn/Thomas. To Adopt EDA Resolution 05-EDA-210, Approving and Authorizing the Expenditure of Tax Increment Funds for the Demolition of 7861 Groveland Road for the Purpose of Future Redevelopment, in an amount not to exceed $16,580 plus asbestos abatement costs, and an additional ten percent contingency buffer to cover any unforeseen or unanticipated expenses. Commissioner Flaherty stated he does not know what the City paid for this property and the vote is now to spend another $16,000 to demolish it. He stated that the land proceeds will probably Mounds View EDA November 14, 2005 Regular Meeting Page 10 not equal what has been spent on this property, which is why the City should not be in the land business. Director Ericson stated there always was the intent to demolish the buildings and that fixed cost was always there with the understanding this would be a redevelopment. He noted it can probably be sold for $100,000 so the City may not come out ahead financially but it will remove a blighted condition and bring in a new structure and better tax base. He explained that sometimes it takes years to realize the benefit. Ayes –5 Nays – 0 Motion carried. 8. REPORTS None. 9. NEXT EDA MEETING: Monday, November 28, 2005 @ 6:30 p.m. 10. ADJOURNMENT President Marty adjourned the meeting at 7:25 p.m. Respectfully submitted, Recorded and transcribed by: Carla Wirth TimeSaver Off Site Secretarial, Inc.