HomeMy WebLinkAbout07-10-2006
CITY OF MOUNDS VIEW
ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA
MOUNDS VIEW CITY HALL
Monday, July 10, 2006
6:00 PM
1. CALL TO ORDER
2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Flaherty,
Commissioner Gunn, Commissioner Thomas
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:
6. CONSENT AGENDA
7. EDA BUSINESS
A. Review the Mounds View Tax Increment Financing (TIF) Policy
8. REPORTS
A. Update Regarding the Acquisition of 2390 County Road 10 (Verbal Report)
9. NEXT EDA MEETING:
10. ADJOURNMENT
PROCEEDINGS OF THE MOUNDS VIEW EDA 1
CITY OF MOUNDS VIEW 2
RAMSEY COUNTY, MINNESOTA 3
4
Regular Meeting 5
June 26, 2006 6
Mounds View City Hall 7
2401 Highway 10, Mounds View, MN 55112 8
6:30 P.M. 9
10
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1. CALL MEETING TO ORDER 12
13
2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Gunn, 14
Commissioner Flaherty, and Commissioner Thomas. 15
16
NOT PRESENT: None. 17
18
3. APPROVAL OF AGENDA 19
20
MOTION/SECOND: GUNN/FLAHERTY. To Approve the June 26, 2006 Agenda as presented. 21
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Ayes – 5 Nays – 0 Motion carried. 23
24
4. PUBLIC INPUT 25
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There was none. 27
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5. APPROVAL OF MINUTES 29
30
A. EDA Minutes, June 12, 2006. 31
32
MOTION/SECOND: FLAHERTY/STIGNEY. To Approve the June 12, 2006 Minutes as 33
amended. 34
35
Ayes – 5 Nays – 0 Motion carried. 36
37
6. CONSENT AGENDA 38
39
None. 40
41
7. EDA BUSINESS 42
43
A. Consider EDA Resolution 06-EDA-220 Authorizing the Acquisition of the 44
Premium Stop Property Located at 2390 County Road 10 Consistent with the 45
terms of the Approved Purchase Agreement. 46
Mounds View EDA June 26, 2006
Regular Meeting Page 2
Community Development Director Ericson stated this item was on the last agenda but tabled 1
pending additional review of environmental issues. He stated Staff reviewed the proposal and the 2
sellers have agreed to escrow $25,000 for two years to take care of remediation or environmental 3
issues on the site. 4
5
Community Development Director Ericson said the site has been closed by the MPCA and the 6
engineer gave it a full bill of health. In the Environmental Report there is trace contamination 7
and the MPCA said it is fairly common in places like this. They stated further action is not 8
required. 9
10
Community Development Director Ericson explained the City has requested a “no liability “ 11
letter that releases the City of any liability in the chain of ownership and the previous owners of 12
the property will be responsible for any contamination. He stated Staff believes they have 13
enough information to go ahead with the purchase and recommends authorizing the acquisition 14
of the property. He stated it is the same resolution as was presented at the last meeting with the 15
added clause. 16
17
Community Development Director Ericson explained the payment will be for the full amount 18
and the title company will set the amount aside in escrow. Everyone feels it is a clean site and 19
there is a strong likelihood that no remediation will be necessary. He added that redevelopment 20
for commercial or retail should be fine. 21
22
Commissioner Flaherty asked for clarification about the purchase price. Community 23
Development Director Ericson responded the purchase price is $625,000. 24
25
Commissioner Flaherty asked about the way the MPCA identifies the site versus the way the 26
City identifies the site. Community Development Director Ericson stated that the way the MPCA 27
designates the property is as the original owner and it has no effect on the purchase. 28
29
Commissioner Flaherty asked about the MPCA letter regarding the liability language. He 30
questioned the fact that nobody is saying it is a clean site and asked if nobody is saying it’s a 31
clean site. City Attorney Riggs stated that under federal law, anyone who purchases the property 32
must go through the MPCA and the liability letter will remove the City from the chain of 33
ownership. 34
35
Commissioner Flaherty asked who would be responsible if a future developer insists on a clean 36
site. City Attorney Riggs responded that the City will not be able to say it’s a clean site and will 37
not enter an agreement that indemnifies the City. He stated based on his discussions, and based 38
on potential usage and zoning, there will not be an issue with the site. 39
40
Commissioner Flaherty stated he wants to make sure the City is not “thrown a curveball” later on 41
and is on the hook for a large clean up. City Attorney Riggs said his staff has been trying to 42
make sure that the City will not be responsible. He stated it appears the City will not be 43
responsible, but there is no 100% guarantee. He said the City cannot say it’s a clean property 44
and, in case soil has to be moved or remediated, the $25,000 in escrow will take care of the 45
expense. City Attorney Riggs said the escrow covers any kind of environmental problem that 46
Mounds View EDA June 26, 2006
Regular Meeting Page 3
comes up in the next 2-2.5 years and it favors the EDA. 1
2
Commissioner Thomas said until the letter is in hand, her trust level is very low. She said she is 3
less concerned about financial liabilities and more concerned about timing issues. She said she 4
has very little trust that the previous owners, who will be liable legally, can be contacted in a 5
timely manner. She said she believes the City is in a tenuous position. She said if something 6
were to happen, she suspects the City will have to step in and is not thrilled with the idea. She 7
said she is looking for every shred of assurance before she will sign off on the purchase. 8
9
President Marty said he feels the same way and would like to have the letter in hand. He 10
commended the staff report with the several options about how to market the land. He said there 11
were two options for the site, and he likes the second option of hiring consultants to conduct a 12
site-specific market analysis as to the highest and best use of the parcel recognizing its inherent 13
impediments such as lot configuration, access, and lot size rather than simply reacting to 14
proposals as they are presented. 15
16
President Marty stated that Staff could actively market the site to developers who specialize in 17
areas identified in the analysis consistent with the declared plans optioned by the City. He said 18
such a plan could conceivably involve adjacent properties as well. He stated Staff is 19
recommending such a plan and if the EDA concurs, they will go ahead and receive proposals 20
from consultant firms. 21
22
President Marty added he sees this as proactive rather than reactive and commends Staff for such 23
a stance. He said he would like to have some consultants look at the area and market it as is 24
determined. He stated he agrees with the Staff report. 25
26
President Marty explained that some of the costs could be passed on to future developers. 27
Community Development Director Ericson said those costs could be passed on to the developers 28
through the asking price of the property. 29
30
Vice President Stigney said they are talking about adjacent properties as well and asked how it 31
would be paid for, whether through TIF funding or development funds. He said he wished all of 32
that was “ironed out” before it was brought to the EDA. 33
34
President Marty noted that one of the adjoining property owners has stated willingness to sell 35
depending on the price. He said the other property just opened, but it would not necessarily be up 36
to the City to acquire the properties, but having the consultants looking at the adjacent properties 37
for future development. 38
39
Vice President Stigney asked if TIF funds would be used, and Community Development Director 40
Ericson said that would not be indicated up front. He said the EDA could communicate to 41
potential developers that TIF funding would not be used, but does not want to “close the door” 42
on TIF funding. 43
44
Vice President Stigney stated TIF could always be opened up, but if the developers know TIF 45
Mounds View EDA June 26, 2006
Regular Meeting Page 4
could be used, they may try to get TIF funding. He added that the EDA should not offer TIF 1
funding. 2
3
President Marty agreed, and said he would like to keep TIF off the table. He said if something 4
comes in that appeals to the Council, it will be addressed at that time. Commissioner Thomas 5
said this discussion is premature and should wait until it is the Council’s to discuss. She said 6
there is some thought the EDA could put into it as far as options for the property once that time 7
comes. 8
9
Commissioner Flaherty said he agrees, but does not believe he would say right now that TIF is 10
not available and added developers could ask on a case-by-case basis. He asked that any City 11
funds put toward demolition reflect in the selling price of the property. 12
13
Community Development Director Ericson said the liability letter is forthcoming and states that 14
the tanks were removed prior to the City maintaining ownership. The letter is a statement to the 15
fact that the City has not caused any of the contamination that is out there. He said the 16
letter is coming and it is clear that the City has nothing to do with the contamination. He said 17
from a Staff perspective, he shares the concern about not having the letter, but if the property is 18
before June 30th, it will save the City close to $20,000 in 2007 taxes. 19
20
Commissioner Thomas suggested that a resolution be contingent on receipt of the letter, although 21
it still makes her nervous. Community Development Director Ericson stated the letter could be 22
here as soon as tomorrow. President Marty said he would like it to be contingent on the letter as 23
well and Vice President Stigney agreed. 24
25
Vice President Stigney said the City should not buy the property since it is currently on the tax 26
roll and will be off the tax roll once it is purchased by the City. He stated he does not support the 27
purchase. 28
29
President Marty that it is one mile of streets off of the tax roll, but is blighted property right on 30
the main street and if it can be developed, he hopes the City will get a higher and better use for 31
property which will generate considerable more taxes than the gas station brought in. He said the 32
only other interest has been from other gas station companies and he would like to get a higher 33
and better use. 34
35
Vice President Stigney said there will have to be a pretty high price to gain more tax income. 36
President Marty said depending on how it is developed, the City should be able to recoup some 37
money. 38
39
MOTION/SECOND: GUNN/FLAHERTY. To Approve the Resolution 06-EDA-220 40
Authorizing the Acquisition of the Premium Stop Property Located at 2390 County Road 10 41
Consistent with the terms of the Approved Purchase Agreement, contingent upon the receipt of 42
the liability letter from the MPCA. 43
44
Ayes – 4 Nays – 1 (Stigney) Motion carried. 45
Mounds View EDA June 26, 2006
Regular Meeting Page 5
1
B. Review Mounds View Tax Increment Financing (TIF) Policy 2
3
Community Development Director Ericson suggested this action be deferred until the next EDA 4
meeting since it is a potentially long discussion. 5
6
MOTION/SECOND: GUNN/STIGNEY. To postpone the review of the Mounds View Tax 7
Increment Funding (TIF) Policy until the July 10th meeting. 8
9
Ayes – 5 Nays – 0 Motion carried. 10
11
8. REPORTS 12
13
Economic Development Coordinator Backman said he attended the Economic Development 14
Association of Minnesota, or EDAM, conference the past week where nine awards were 15
presented to various projects. He stated the best business retention and expansion was to Red 16
Wing, the Best Recruitment Project award went to Greater Mankato for the Wal-Mart 17
distribution center, Best Redevelopment award was to Columbia Heights for Parkview, and 18
Presidents Award for best overall project was awarded to Mounds View for the Medtronic 19
project. 20
21
Economic Development Coordinator Backman presented the award to the EDA. He said past 22
winners have included the Phalen Corridor in St. Paul, and stated Mounds View is in honored 23
company for the award. He said it was a team effort on part of Council and other parties 24
involved. 25
26
Economic Development Coordinator Backman explained the selection criteria and stated the 27
City did well in all categories. He stated it is an honor to be recognized by peers on a statewide 28
level. 29
30
9. NEXT EDA MEETING: Monday, July 10, 2006 at 6:30 p.m. 31
32
10. ADJOURNMENT 33
34
President Marty adjourned the meeting at 7:05 p.m. 35
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Respectfully submitted, 37
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Recorded and transcribed by: 40
Lauren McKay 41
TimeSaver Off Site Secretarial, Inc. 42
Item No: 7A
Meeting Date: July 10, 2006
Type of Business: EDA Business
Administrator Review: _____
City of Mounds View Staff Report
To: Mounds View Economic Development Authority
From: Jim Ericson, Community Development Director
Item Title/Subject: Review the Mounds View Tax Increment Financing (TIF) Policy
Background:
On March 29, 2006, the Economic Development Authority (EDA) reviewed the existing
economic development policies and the present status of the TIF revenues. The EDA
discussed potential TIF-supported expenditures recognizing that the projects identified for
potential TIF funding far exceeded the total projected revenues to be collected through the
remaining life of the districts. The Council requested additional financial analysis regarding
the scenarios discussed and how each of those scenarios would impact a median valued
home from a local tax perspective. This information, along with updated increment
spreadsheets, was presented to the EDA on May 22, 2006. On a split vote, the EDA chose to
make no changes to the TIF revenue stream.
It was asked that staff bring back to the EDA an update from the Planning Commission who
had discussed funding priorities at their meeting on April 19, the City’s TIF policy and the city
of Saint Anthony Village’s TIF Policy which they recently adopted. This information is
presented herein for the EDA’s consideration.
Discussion:
The Mounds View Planning Commission discussed the options relating to the three tax
increment financing (TIF) districts and whether there was support for a reduction in the
increment collected. The Commission spent most of its time reviewing the funding priorities
rather than taking a position on the scenarios that would scale back the levels of increment
collected by the City. The Commission felt that it was not in a sufficient position to make a
recommendation regarding the scenarios until they had information as to the impacts of each
scenario on a median-valued property. The Commission explained that if a given scenario
reduced increment by $2,000,000 yet only reduced the annual tax bill to a home-owner by
$10, it would not seem prudent to reduce the increment given the identified funding needs of
the City. (The information the Commission requested was available and presented to the
EDA on May 22, 2006.) The Planning Commission will review the updated financial reports
and scenario analyses at their meeting on July 5, 2006.
As far as funding priorities, the Commission as a whole felt that the City should utilize the
increment collected to improve County Road 10 and to promote meaningful commercial
redevelopment within the corridor, highlighting specific area such as Moundsview Square,
Silverview Plaza and the PAC building. The Commissioner agreed that the City’s streets and
infrastructure would also be a worthy funding priority. (The April 19 Planning Commission
minutes are attached for your reference.)
TIF Report
July 10, 2006
Page 2
Mounds View TIF Policy
The City’s TIF Policy was reviewed by the EDA on September 6, 2005 and again on March
29, 2006. The present policy was originally adopted by the City in 1997 with a revision
approved in June of 2000. The revisions were very minor and involved (1) an amendment to
the square footages within the TIF Application Review Worksheet and (2) an amendment to
have the Economic Development Commission (EDC) review and make a recommendation
regarding any proposed parcel or district decertifications.
The City of Saint Anthony Village recently adopted their TIF policy which is included in your
packet for review. The structure of the St. Anthony policy is similar to our own, however St.
Anthony significantly expands on the policy considerations, goals and objectives and is less
detailed in the more technical and administrative aspect of TIF considerations. The
applications are similar and both Mounds View and St. Anthony require a non-refundable
deposit. (Mounds View requires $5,000, St. Anthony requires $3,000 plus a $10,000 escrow.)
Mounds View’s policy on the use of TIF is as follows:
It is the responsibility of the Mounds View EDA to use TIF as a tool to accomplish the
City’s economic development and redevelopment goals and objectives. The EDA
understands and abides by the fundamental principal which makes TIF viable to
encourage development and redevelopment which would otherwise not occur. The
EDA shall consider TIF in cases that serve to accomplish the City’s development goals
and activities as hereby defined in projects eligible for TIF.
Mounds View further identifies projects which are eligible for TIF funding as follows:
Projects eligible for consideration of TIF assistance include, but are not limited to (1)
the attraction, retention, rehabilitation and preservation of commercial, industrial, retail,
residential, recreational and public service facilities; (2) new and rehabilitated public
infrastructure; (3) community and other public service centers; (4) senior/mature adult
and/or other housing development partnerships or other multi-use housings projects
and facilities; (5) other public utilities (including telecommunications); (6) business
incubator loan and other business programs; and (7) transportation systems. More
emphasis will be placed on those items which increase the tax base, eliminate blight,
and the meet the City’s economic and redevelopment goals.
While staff is not recommending any changes to the policy at this time, the EDA may want to
consider amendments that take into consideration present economic issues within the City
and the lifespan of the existing TIF districts. The only policy statement regarding the creation
of a new district is fairly generic:
New tax increment finance districts in the City of Mounds View will be established in
accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan,
and the Development District Plan.
TIF policy Report
July 10, 2006
Page 3
Conclusion:
Please review the Mounds View TIF Policy. If the EDA believe that amendments or revisions
are necessary, staff will endeavor to draft language to address whatever changes are desired.
Respectfully submitted,
Jim Ericson
Community Development Director
763-717-4021
Attachments:
1. Mounds View TIF Policy
2. Saint Anthony Village TIF Policy
3. Bulletin News Article – May 31, 2006
4. Planning Commission Minutes – April 19, 2006
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Additional Information available upon request, but not provided with staff report:
o Tax Increment Financing Basics – Ehlers, 2005
o Tax Increment Financing Legislative Report – Office of the State Auditor, Jan 2006
o TIF – The Burnsville, MN Experience - 2000
o Dakota County TIF Policy – 2002
o Lake City TIF Policy – (undated)
o Minneapolis TIF Policy – 2005
o Prior Lake TIF Policy - 2004