Loading...
HomeMy WebLinkAbout08-22-2005 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA Monday, August 22, 2005 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 A. July 11, 2005 EDA Minutes. 6. CONSENT AGENDA 7. EDA BUSINESS A. Consideration of EDA Resolution 05-EDA-208A, a Resolution approving the Elimination of Parcels from TIF District No. 3 and 05-EDA-209B, a Resolution Approving the Establishment of TIF District No. 5, a Special-Legislation Economic Development District (Backman) B. Resolution 05-EDA-209 Authorizing Payment of Pay-As-You-Go Developer Payment to Red Cent Management, LLC for the Building N Project in Mounds View. 8. REPORTS 9. NEXT EDA MEETING: Monday, September 12, 2005 at 6:30pm 10. ADJOURNMENT PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 July 11, 2005 6 Mounds View City Hall 7 2401 Highway 10, Mounds View, MN 55112 8 6:30 P.M. 9 10 11 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: 17 18 3. APPROVAL OF AGENDA 19 20 MOTION/SECOND: Flaherty/Gunn. To Approve the July 11, 2005 Agenda as presented. 21 22 Ayes – 5 Nays – 0 Motion carried. 23 24 4. PUBLIC INPUT 25 26 NONE 27 28 5. APPROVAL OF MINUTES. 29 30 A. EDA Minutes June 13, 2005 31 32 MOTION/SECOND: Gunn/Thomas Approve the Minutes of June 13, 2005 as presented. 33 34 Ayes – 5 Nays – 0 Motion carried. 35 36 B. EDA Minutes for June 27, 2005 will be presented at the July 25th Meeting. 37 38 6. CONSENT AGENDA 39 40 NONE 41 42 7. EDA BUSINESS 43 44 Mounds View EDA July 11, 2005 Regular Meeting Page 2 A. Presentation by Phil Seipp, President/CEO and Scott McGuire, CFO of 45 SYSCO Minnesota regarding the company’s TIF Request to facilitate 46 expansion of the company’s Mounds View parking 47 48 Phil Seipp, President/CEO, stated that the original building was built in 1989 and that since that 49 time they have had two expansions of the warehouse. He stated that when they built the building 50 they donated 47-acres to the City to be used as part of the park lands within the City. He stated 51 they currently employee 629 individuals noting that his challenge is to grow the business, add 52 jobs and strengthen their customer base. He indicated that their biggest obstacle right now is 53 parking noting that they have adequate employee parking for the day in/day out business, they 54 run into problems when they have large events such as sales training. He stated that during those 55 periods of time they park in driveway areas and fire lanes. He stated the other times where they 56 have constraints is when their large customers come in to do training and hold large meetings. 57 He stated that they have also run out of truck spots, which creates a real impediment when trying 58 to move trucks around, load them and move them out for the day. He explained the proposal 59 stating that the project would involve moving the service drive to the east and adding employee 60 parking along the east side of the building. He stated that these spots would be for overflow 61 parking. He stated that they plan to relocate the water retention pond to the south and create 53 62 additional truck parking spots along the south side of the building on both sides of the entry 63 drive. He stated that they expect to add approximately 100 jobs over the next five years and 64 would span across all three shifts. He indicated that some of the positions would be sales 65 positions where the individuals would work out of their homes. 66 67 Commissioner Thomas asked how many additional trucks would be brought in and out over the 68 next five years. 69 70 Mr. Seipp stated that they would probably hire approximately 30 new drivers, which would add 71 30 trucks. 72 73 Mr. Seipp noted that there is approximately three acres of land that had been previously donated 74 to the city that borders the property line to the east and south that they are asking the city to give 75 back. He stated that they are also asking for tax increment financing because this project could 76 potentially create considerable additional expenses when they begin to consider the stormwater 77 retention issues and square footage requirements. He indicated that this project would probably 78 exceed what they would normally expect for the additional square footage in the parking area and 79 reviewed with the Commission. 80 81 Commissioner Thomas asked if they are actually asking for tax increment financing or the ability 82 to utilize the TIF funds. She stated that the Commission is not looking to create another TIF 83 District. 84 85 Mr. Seipp clarified that they are asking for funds from the current TIF account. 86 Mounds View EDA July 11, 2005 Regular Meeting Page 3 87 Economic Development Coordinator Backman referenced the packet provided to the 88 Commission noting that it includes a letter of explanation from Mr. Seipp discussing the estimate 89 for the current project, an estimate done in April by RLK, and an estimate done by SYSCO’s 90 Houston Engineers showing a higher estimate of costs due to the construction and engineering 91 work that would have to be done, especially with the electrical work due to the need to relocate 92 some of the utilities. He explained that he had asked them to provide a breakout of what the 93 stormwater/wetlands portion of the project would be and reviewed the numbers with the 94 Commission. He clarified that he is not suggesting that the City fund the parking lot but he is 95 suggesting that if there is a consideration for this project that it be limited to the stormwater 96 management and items typically dealt with through the Rice Creek Watershed District. He 97 reviewed the existing conditions stating that the project would relocate the pond further to the 98 southeast and it would move the road further to the east. He provided a brief overview of the 99 proposed parking areas and explained that the three acres, previously donated to the city, would 100 be needed for the additional parking if they move the pond further south. He provided the 101 Commission with an overview of the project timeline noting that it also includes a comparison of 102 the estimates and what they are asking for in addition to a breakdown of costs per job within the 103 overall project. 104 105 President Marty referenced last two pages noting that the amount for SYSCO’s stormwater 106 management is $250,000 and it also shows the EDC’s recommendation for $250,000 and asked if 107 this would be $500,000 or are these two numbers referring to the same amount, $250,000. 108 109 Economic Development Coordinator Backman explained that the EDC considered this request in 110 June and their recommendation was to fully fund the request at $250,000. He stated the request 111 is for $250,000 and the recommendation is for the $250,000 noting that the EDC does have the 112 ability to set other limits if they wish. He noted total cost per square foot is not applicable 113 because they are not talking about a building addition, they are talking about a parking lot 114 expansion and utility costs. He referenced the city cost per job noting that this is the typical unit 115 of measurement in economic development terms, shows $2500 and total investment per job 116 created would be approximately $12,000 in capital investment for both private and public 117 investment. 118 119 Vice President Stigney asked if the TIF contribution would be an upfront contribution and would 120 it be a pay as you go or is this a grant. 121 122 Economic Development Coordinator Backman stated that they have asked for upfront noting that 123 it could be a pay as you go over a period of time. 124 125 Vice President Stigney clarified that this is in TIF District 3 and asked if this proposal were 126 granted would the funds be taken from TIF District 3 or from pooled funds taken from all of the 127 district funds. 128 Mounds View EDA July 11, 2005 Regular Meeting Page 4 129 Economic Development Coordinator Backman stated that currently the financial health for TIF 130 District 3 is good and is generating approximately $300,000 to $400,000 a year with modest 131 obligations. He stated that the City would pay off all obligations related to TIF District 3 in 132 approximately one year. He stated that most of the increment is being generated by SYSCO 133 noting that the City has assisted them in the past. He stated that this was paid off in 1997. 134 135 Vice President Stigney asked if the money would come from TIF District 3 or TIF pooling and if 136 it came from TIF District 3 how long would it extend the district out. 137 138 Economic Development Coordinator Backman stated that the TIF District 3 is set to expire in 139 July 2014 and this would not extend the TIF District beyond that period of time. He noted that if 140 there was an amount approved over a period of time it is conceivable that the entire district could 141 be de-obligated within a couple of years as opposed to going out eight years. He stated that 142 currently the City has obligations that are out approximately one year and once the City is done 143 with these obligations, increment is coming in and the City has to show the Ramsey County how 144 the City is using the money for economic development or close the District. 145 146 Vice President Stigney asked what the duration would be to pay it back. 147 148 Economic Development Coordinator Backman stated that if the $250,000 is approved it would 149 take approximately two years to pay off. 150 151 Vice President Stigney referenced the 2 to 1 mitigation and asked where it would be mitigated to. 152 153 John Dietrich, RIK, SYSCO, explained that the current proposal is to go offsite for mitigation in 154 order to preserve the wooded wetlands that are up against the proposed improvements. He stated 155 that they have had conversations with City Staff and the Rice Creek Watershed Staff noting that 156 they have not made formal applications to the Rice Creek Watershed at this time. He stated that 157 their proposal is to go offsite within the Rice Creek Watershed district adding that the mitigation 158 would have to be within the same sub-watershed of the Rice Creek district. He noted that they 159 have not had detailed discussions regarding the actual locations with Rice Creek at this time. 160 161 President Marty recalled that some of the land SYSCO deeded to the City was like a wetland 162 area. He noted that years ago Rice Creek Watershed came to Mounds View to discuss creating 163 ponding in this area and he would like to look at the possibility of controlling the water on the 164 land versus mitigating and paying somewhere else to control it. 165 166 President Marty acknowledged that SYSCO has been a good neighbor to Mounds View and 167 clarified that SYSCO ‘s request is for $250,000, noting that their spreadsheet shows an estimate 168 of approximately $233,000 in addition to requesting that the City allow SYSCO to use some of 169 the land they previously deeded to the City. He indicated that he did not have a problem with the 170 Mounds View EDA July 11, 2005 Regular Meeting Page 5 land-use noting that he would prefer that SYSCO work to keep the costs closer to the $233,000 171 estimate shown on the spreadsheet. 172 173 Commissioner Thomas referenced the land transfer and asked for clarification on the total 174 acreage. 175 176 Mr. Seipp clarified that the totally acreage would be approximately three acres and would include 177 the land for the stormwater retention pond. He indicated that SYSCO did not care whether they 178 own the land or not but in discussions with the City it was felt that it would be better not to have 179 the property line run right through the stormwater retention pond. He noted that they would 180 maintain the pond either way adding that it would probably make the most sense to have it 181 located on their land. 182 183 President Marty asked if there are any legal costs to transfer the land back to SYSCO. 184 185 City Attorney Riggs explained that they are discussing a type of development contract noting that 186 simple deed does not cost that much. He explained that the contract itself and how it would be 187 handled is the more substantial cost. He stated that the costs could range from $200 to $1000 188 overall. 189 190 Vice President Stigney referenced the costs to change the Comprehensive Plan and asked how 191 this would be paid for. 192 193 Director Ericson explained that this would be a cost born by the applicant, which includes the 194 cost of the application fee and the processing of the application. 195 196 Commissioner Flaherty asked Mr. Seipp why there is a need for assistance. 197 198 Mr. Seipp explained that the corporation has other alternatives available to them to spend this 199 money here noting that they have sister companies in Wisconsin, Iowa and North Dakota that 200 have capacity noting that it would not surprise him if they suggested contracting the borders and 201 allow them to serve customers from their facilities. He expressed concerns noting that this would 202 not help them to grow or create jobs. He stated that they are trying to hold the costs under $1 203 million noting that the receptivity to the costs of wetland mitigation and moving a stormwater 204 retention pond would be a difficult struggle for them to convince the corporation of the need. 205 206 President Marty noted that SYSCO has operated on this property for several years and has made 207 several changes over the years and asked if there is a possibility that SYSCO might end up back 208 here asking for more space. He asked if the three acres would be enough or should they review 209 the plans further and possibly consider transferring five acres now to avoid having to go through 210 this process again in the future. He asked if SYSCO has a long-range plan that indicates further 211 expansion in the future. 212 Mounds View EDA July 11, 2005 Regular Meeting Page 6 213 Mr. Seipp explained that based on the constraints they have they would probably have to push 214 the stormwater retention pond further south if they were to try to add additional spaces. He 215 indicated that they do have relief coming in approximately five to seven years noting that they 216 would be serviced out of a re-distribution center located somewhere in the Midwest area. He 217 explained that this would change their business dramatically noting that the product stored at 218 their facility would be decreased and the process would totally revolutionize the way they do 219 their business. He stated that it would also help to alleviate some of the trucking problems they 220 are currently experiencing. He stated that SYSCO believes that the three acres would be 221 adequate. 222 223 B. Discussion and Potential Recommendation regarding Assistance for 224 Business/Parking Expansion for SYSCO Minnesota. 225 226 President Marty stated that he does not have a problem authorizing $235,000. He asked if the 227 expenses to transfer the land would be passed on to SYSCO. 228 229 City Attorney Riggs stated that typically this is what is done in any type of development 230 situation. 231 232 Mr. Seipp assured the Commission that this is acceptable to SYSCO. 233 234 Commissioner Gunn noted that costs go up and clarified that the $250,000 requested is probably 235 to ensure that all expenses for the project are covered. 236 237 Commissioner Thomas suggested placing a cap on the costs at $250,000 and asked if it would be 238 possible to invoice the actual costs as they go through the process. 239 240 Economic Development Coordinator Backman stated that when the City did the Highway 10 241 Business Center the City did bill actual costs when they did the demolition. 242 243 Vice President Stigney stated that he would like to see a TIF Assessment or evaluation sheet for 244 this project before they move forward. He stated that if they do grant any money for this project 245 it should also be tied to the number of new employees it would bring in versus the projected 100 246 employees over five years. He stated that reimbursement should be based on the actual number 247 of new employees. He stated that SYSCO should be willing to pay for half of it and be thankful 248 they got $125,000 out of the City. 249 250 Barbara Haake, County Road I, asked how much money is actually in the TIF Fund. 251 252 Vice President Stigney clarified that it has not been established yet as to whether the funds would 253 come from the TIF District 3 or the pooled funds. 254 Mounds View EDA July 11, 2005 Regular Meeting Page 7 255 Economic Development Coordinator Backman stated that the fund is currently in healthy 256 condition noting that they have paid off major bond payments and his understanding is that the 257 fund balance is approximately $1 million right now. 258 259 Ms. Haake noted that the community is going for a referendum on Medtronic and suggesting that 260 the TIF funds be used for development costs and if the City is over $300,000 in development 261 costs for Medtronic and if it ends up going for referendum this would have to be paid. She stated 262 that she just wanted to be sure that the City has enough funds and she is now comfortable that the 263 City does have enough to cover the costs. 264 265 Commissioner Flaherty asked if the City has a time limit to spend the funds. 266 267 Economic Development Coordinator Backman explained that Ramsey County would give the 268 City a grace period of time if there is no activity within a district. He further explained that if, in 269 2006, all obligations have been paid, he would expect that by the following year the City would 270 have to show some form of obligations or the County would likely ask for dollars back. 271 272 Vice President Stigney referenced mitigation noting that he has some problems with mitigating 273 outside the City limits noting that it would cost a lot more. He asked who would be responsible 274 for paying the mitigation fee and would it be part of the TIF reimbursement. 275 276 Economic Development Coordinator Backman explained that the costs associated with the 277 stormwater management and wetland mitigation are TIF eligible costs and reviewed the budget 278 breakdown for wetland mitigation with the Commission. 279 280 Vice President Stigney stated that he does have a problem with paying premium price to go 281 outside to mitigate on land and then have Mounds View pay for it. He stated that he believes that 282 SYSCO should pay 50-percent of the costs. 283 284 President Marty stated that he would also like to see the mitigation kept on the property and 285 asked how time sensitive this issue is. He asked if SYSCO could come back with a ‘but for’ 286 workup for the Commission in two weeks. 287 288 John Dietrich, RLK, stated that it was their hope to be in process here and moving towards the 289 Planning Commission and Council in July. He stated that this would allow them the time to 290 make their application to the Metropolitan Council in order to start the process moving forward, 291 which could go up to a 60-day timeframe. He stated this would start to impact any ability to 292 place anything into the ground this year. He stated that the process has already been accelerated 293 to the greatest extent possible. He stated that a two-week delay would put the fall start time for 294 this project in jeopardy. 295 296 Mounds View EDA July 11, 2005 Regular Meeting Page 8 Vice President Stigney noted that one of the City requirements is to have a TIF Evaluation sheet 297 completed before requesting TIF. He stated that he would like this to happen before the 298 Commission grants any funds. He clarified that it is his understanding that the agenda says 299 nothing about the Commission taking any actions on this item tonight. 300 Economic Development Coordinator Backman confirmed noting that the intent was to get a 301 sense of how the EDA viewed this project noting that if the EDA was not interested in 302 transferring land back to SYSCO it was important to get that knowledge now. He stated that he 303 does think it is possible to have an action, contingent upon review of the appropriate submittals, 304 adding that he does not think it would take SYSCO long to fill out the appropriate forms. He 305 stated that he would work with SYSCO and assured the Commission that they would be ready 306 within two weeks. 307 308 President Marty stated that he does not see any problems with the land transfer back. He stated 309 that if they could put together the TIF Evaluation sheet put together and to the Planning 310 Commission by July 20th for review by the EDA on July 27th. He asked that they provide as 311 much detail as possible. 312 313 8. REPORTS 314 315 None. 316 317 9. NEXT EDA MEETING: Monday, July 25, 2005. 318 319 10. ADJOURNMENT 320 321 President Marty adjourned the meeting at 7:10 p.m. 322 323 Respectfully submitted, 324 325 Recorded and transcribed by: 326 Bonnie Sullivan 327 TimeSaver Off Site Secretarial, Inc. 328