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HomeMy WebLinkAbout01-28-2008 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA MOUNDS VIEW CITY HALL Monday, January 28, 2008 6:00 PM 1. CALL TO ORDER 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Flaherty, Commissioner Hull, Commissioner Mueller 3. APPROVAL OF AGENDA 4. PUBLIC INPUT: Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. 5. APPROVAL OF MINUTES: NONE 6. CONSENT AGENDA 7. EDA BUSINESS A. Continued Discussion regarding Resolution 08-EDA-239, a Resolution Authorizing the Submission of a Redevelopment Grant Application for the Acquisition and Redevelopment of 2400 County Road H2 8. REPORTS 9. NEXT EDA MEETING: Monday, February 11, 2008. 10. ADJOURNMENT Item No. 7A Meeting Date: January 28, 2008 Type of Business: EDA Administrator Review: _____ City of Mounds View Staff Report To: Economic Development Authority From: Heidi Steinmetz, Economic Development Specialist Item Title/Subject: Continued Discussion regarding Resolution 08-EDA- 239, a Resolution Authorizing the Submission of a Redevelopment Grant Application for the Acquisition and Redevelopment of 2400 County Road H2 Introduction: Previous EDA Discussions On December 3 and 10, 2007, the City Council and EDA discussed the potential of participating financially with the redevelopment of the 2.05-acre Robert’s Sports Bar parcel, located at 2400 County Road H2. This staff report will further refer to the parcel as “Robert’s”. On January 14, 2008, staff requested authorization to submit a grant application to the Minnesota Department of Employment and Economic Development (DEED) to assist with the acquisition and redevelopment of Robert’s. The EDA postponed authorization to submit the application and asked staff to simplify Resolution 08-EDA-239. The project site map and an updated version of the grant application are attached for the EDA’s reference. Background: EDA’s Investment The City Council and EDA have invested $670,000 towards acquisition, demolition, site improvements and planning activities within the Premium Stop Redevelopment Area, which is defined in the December 2006 DSU/Bonestroo study as the 12.3-acre stretch from County Road H2 to Woodale Drive along County Highway 10. The EDA and City Council’s investment thus far has demonstrated a commitment to the redevelopment of the area. This commitment equates to approximately 4.5% of the $15 million cost, as estimated by Master Development, to build only the first phase of the DSU/Bonestroo Concept C-1. Established Partnership with Master Development It is important that the EDA-owned, former Premium Stop parcel be added back to the tax rolls and the November 2007 Preliminary Development Agreement with Master Development was the EDA’s first step in making this possible. The Agreement offered Master Development exclusive negotiating rights to assemble a project to be located on the former Premium Stop parcel and also encouraged the developer to maximize the project footprint to include Robert’s and the Taiko Japanese Restaurant. At this time, Master Development is unable to commit to the EDA’s asking price of $625,000 for the former Premium Stop parcel. Ramsey County’s current market value of the parcel is $8.00 per square foot or $446,056. The EDA’s $625,000 asking price equates to $11.21 per square foot, which Master feels does not reflect the value of the property. In addition, Master is unsure at this time if the DEED funds would completely erase the estimated gap to finance the project. Mike Tobin of Master Development plans to attend tonight’s meeting to answer any questions the EDA might have. Adjacent Homeowner Support Letters of support from homeowners located immediately adjacent to Robert’s were included in the EDA’s January 14th meeting packet as exhibits to the draft grant application. Both homeowners have expressed interest in attending tonight’s EDA meeting to show additional support for the redevelopment of Robert’s. Additional Market Interest Staff has received preliminary interest from a workforce housing developer who would like to construct workforce housing on the Robert’s parcel. Another commercial builder inquired of the Premium Stop Redevelopment Area as a whole and stated that his company would not be interested unless the Robert’s parcel was included. Perhaps additional market interest would be generated if DEED grant funds are secured. Discussion: DEED Grant Details The DEED Redevelopment Grant Program was established by the 1998 Minnesota State Legislature to assist with complex and costly redevelopment projects that might not occur without public financial assistance. Pursuant to Minnesota Statutes 116J.561 - 116J.565, DEED has the authority to award grants to assist development authorities with eligible redevelopment costs. More details regarding the program are attached for your reference. Since the Premium Stop Redevelopment Area project is eligible to receive a Redevelopment Grant, staff presented a draft application to the EDA on January 14th. A revised version of the application is attached, which includes a letter of commitment from Master Development. As a reminder, the EDA would need to provide a local match if the grant funds are received. To clarify, at least one half of the costs associated with the acquisition and redevelopment of Robert’s would need to be paid by the EDA, or funds available to the EDA, which means that Master Development or another developer can provide the match. Staff is suggesting that the EDA apply for $510,000 of DEED grant funds, which would assist Master Development or another developer to purchase Robert’s at an appropriate price (not the asking price). The funds would also be used for demolition and site improvements. The grant application is based on the partnership between Master Development and the EDA; however redevelopment complexities often lead to partnership changes. Such a change would not necessarily jeopardize the receipt of the grant dollars. If grant funds are received and changes occur, the EDA and DEED would work together to revise the grant agreement. Next Steps If the EDA authorizes staff to do so, the DEED grant application would be submitted with cosmetic changes (“draft” stamp would be removed, exhibit numbers would be added, etc.) by February 1st, which is the exact due date of the application. Master Development or another developer may chose to begin negotiations with the Robert’s property owner contingent upon the potential grant award, which is anticipated for mid- March. Summary The Minnesota State Legislature did not create Tax Increment Financing laws or grant programs to unnecessarily profit private developers but rather to facilitate redevelopment that would not otherwise occur but for the assistance. At this time, staff feels that Robert’s will not be redeveloped without public assistance given the added cost presented by the building demolition and removal of the impervious surface, which covers the property. Recommendation: Staff recommends that the EDA consider approving Resolution 08-EDA-239, a Resolution Authorizing the Submission of a Redevelopment Grant Application for the Acquisition and Redevelopment of 2400 County Road H2. Furthermore, staff is requesting authorization to obtain feedback from property owners located adjacent to the area regarding the potential vacation of a portion of Greenfield Avenue as shown on the attached site map. Respectfully submitted, ____________________________ Heidi Steinmetz Economic Development Specialist Attachments: 1. Site Map 2. Redevelopment Grant Details 3. Draft Grant Application dated January 24, 2008 4. Resolution 08-EDA-239