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HomeMy WebLinkAbout11-28-2005 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA NEW BRIGHTON CITY HALL Monday, November 28, 2005 6:30 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. November 14, 2005 EDA Minutes. 6. CONSENT AGENDA 7. EDA BUSINESS A. Discuss Possibility of Expanding Medtronic Project to Include Phase Two 8. REPORTS 9. NEXT EDA MEETING: Monday, December 12, 2005 @ 630pm 10. ADJOURNMENT PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 November 14, 2005 6 Mounds View City Hall 7 2401 Highway 10, Mounds View, MN 55112 8 6:00 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: None. 17 18 3. APPROVAL OF AGENDA 19 20 MOTION/SECOND: Stigney/Flaherty. To Approve the November 14, 2005 Agenda as 21 presented. 22 23 Ayes –5 Nays – 0 Motion carried. 24 25 4. PUBLIC INPUT 26 27 None. 28 29 5. APPROVAL OF MINUTES 30 31 The following correction was requested: 32 33 Page 4, Line 150, should read: “…to find another location for the compost site.” 34 35 MOTION/SECOND: Flaherty/Gunn. To Approve the October 24, 2005 Minutes as revised. 36 37 Ayes –5 Nays – 0 Motion carried. 38 39 6. CONSENT AGENDA 40 41 None. 42 43 Mounds View EDA November 14, 2005 Regular Meeting Page 2 7. EDA BUSINESS 44 45 A. Continuation of a Joint Meeting Between the EDA and the Economic 46 Development Commission (EDC) to address TIF Goals and TIF Funding 47 Priorities 48 49 Community Development Director Ericson explained this is a continuation of the meeting 50 between the EDA and EDC which started in September at a work session where topics discussed 51 included: TIF philosophy, goals, spending priorities, and level of increment to be received 52 through the term of the TIF Districts. There was good discussion on various priorities and 53 consensus reached that Highway 10 improvements remain a priority for the City. Director 54 Ericson stated that other items need some substantial discussion. The EDC met and revised their 55 priority list, which has been provided to the Council. 56 57 Director Ericson recommended that discussion continue tonight so those goals can be finalized 58 for adoption in January. 59 60 Stacy Kilvang, Ehlers & Associates, explained that they looked at the priorities previously 61 discussed and broke them down into the categories of Capital Projects, Redevelopment, and 62 Housing. They then determined possible funding sources. She explained that with Capital 63 Projects and Housing Redevelopment Projects, it is good for the City to augment funding with 64 grants. 65 66 Ms. Kilvang noted the four Capital Projects are the pedestrian trails along County Road 10, 67 County Road 10 local match, road reconstruction (City-wide – 6 year plan) and future 68 infrastructure/redevelopment needs. The Redevelopment priorities are the Skyline Motel, PAK 69 Building, Premium Stop/Donut Connection, Moundsview Square, and County Road 10/Woodale. 70 The Housing goals are the Housing Improvement Program, Laport Meadows, and Sherwood 71 Housing Development for a total project cost of $18,619,923. Ms. Kilvang noted the total of 72 financing available equals $20,079,459 so the City is in good shape to consider these projects. 73 74 Ms. Kilvang noted their report included a brief description of the projects, issues related to the 75 projects, and funding sources. She stated they would like direction from the EDA on whether 76 these are the priorities, if the priorities are correctly listed, and to establish a timeline on each 77 project. 78 79 President Marty asked about funding sources. Ms. Kilvang stated Shelly Aldrich will be 80 addressing that issue and how it can be bonded in two different series. 81 82 Shelly Aldrich, Ehlers & Associates, stated between the three Districts it appears there is 83 approximately $1.5 million available from 2006 on until 2013 and then the Districts start to 84 expire if they go full term. Looking at the most simplistic way, it will generate $15 million 85 Mounds View EDA November 14, 2005 Regular Meeting Page 3 during the life of the Districts including pay-as-you-go and SYSCO. How the EDA chooses to 86 spend it is up to them. These funds would pay approximately $11 million in bonds. She 87 explained they looked at issuing them in a two-year period to provide capacity in the bonding if 88 there are other debt needs. She recommended that the City stay under $10 million in bonding a 89 year. 90 91 President Marty asked if they will end up with $15 million. Ms. Aldrich stated that is correct if 92 the District goes the full duration. 93 94 President Marty asked if, after payments, it would equal $11 million. Ms. Aldrich stated that 95 would be true if the EDA bonded; $11 million in capital and $5 million in interest for bonding. 96 97 President Marty stated the Council has talked about doing road projects City-wide and asked if 98 some of the TIF could be applied to road reconstruction. Ms. Aldrich stated they contacted the 99 City’s TIF legal counsel who indicated that is an eligible TIF use because these districts were 100 established in the mid-1980s. Since that time, TIF regulations have become much more 101 restrictive. 102 103 Vice President Stigney asked if that is true for any streets. Ms. Aldrich stated that is true of any 104 streets within the larger redevelopment, which is terminus with the City’s boundaries. 105 106 Vice President Stigney asked about redoing the Districts to capitalize on fiscal disparities. Ms. 107 Aldrich explained that now the districts are under A Election, which captures increment outside 108 the boundaries and raises the tax rate. The City has the opportunity to change it to B Election, 109 which reduces the tax increment for the life of the District by the fiscal disparities portion. That 110 would give a cumulative value of $9 million and the City would be able to bond about $5.7 111 million. On the flip side, if that had been done by the end of this year, the City’s tax capacity rate 112 for truth in taxation was 43.74 and would have been down to 40.748, all other things being equal. 113 114 Vice President Stigney asked what it would cost to do that. Ms. Aldrich stated if it would only 115 require a resolution, the cost would be minimal. However, she will have to check to determine if 116 a public hearing process is needed. She explained that each District would have to be looked at 117 individual. 118 119 Commissioner Flaherty asked if it makes sense to do that at this time. 120 121 Commissioner Thomas stated it may make sense to do that with District #1 but District #3 122 expires in two to three years. 123 124 Vice President Stigney asked Ms. Aldrich to provide the Election information on District #1 to 125 City Administrator Ulrich. 126 127 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 128 and tax disparity rates. Ms. Aldrich stated there is one obligation left in the District #1 and it 129 only has a year or so left. She stated her bigger concern is with District #2. She advised that 130 there is also an in-between consideration to share back with the County, School District, and 131 City. 132 133 Ms. Kilvang stated the discussion before the EDA is the magnitude that can be captured versus 134 going with the Election that would reduce the amount. She asked the EDA to first consider their 135 priority projects. 136 137 President Marty asked if the EDC members have recommendations. 138 139 EDC Commissioner Torri Johnson stated they have discussed this list for about one year and take 140 it seriously as the areas to focus on in the City. She stated based on the last discussion, County 141 Road 10 is in the forefront. Other projects would be if a developer brings something to them or 142 if there are safety issues. 143 144 Commissioner Thomas noted County Road 10 is divided into two pieces. Ms. Kilvang explained 145 that typically with County Road projects, the City has a match of funding to dedicate to the 146 project that are not County funds. 147 148 Director Ericson noted that Page 2 of the report includes an engineer’s estimate regarding the 149 County Road 10 project. He explained that they did their best work to identify the cost 150 associated with that project and the total is estimated to be $9.1 million, which is less than the 151 ballpark estimate. He advised that staff has already submitted grant and funding applications but 152 that funding would not become available until 2007. TIF dollars are available that are not 153 obligated and the City will face the real possibility of having to give them back if not used. 154 155 Director Ericson noted the City has plans and priorities and it is a matter of moving forward with 156 those projects. He stated he recognizes the benefit of looking at the Election A and B and fiscal 157 disparities, but the priorities and funding needs must first be identified. Then consideration can 158 be given of how to put those dollars back on the tax rolls. He stated it is important to look at the 159 projects identified as priorities and provide feedback on what staff should move forward with. If 160 not a priority for the EDA and Council, then it tells staff what is available. He noted that 161 everything in the priority list can be funded with existing dollars available to the City. 162 163 Commissioner Thomas asked if the local match is what should be considered on the priority list, 164 or should the EDA be talking about a $10 million project and whether it is a City project, or 165 someone else’s project. She stated that she believes it will be a long time if the City is going to 166 wait for match dollars. Commissioner Thomas stated she thinks the City needs to talk about a 167 $10 million project and whether the City should bond for it to make it happen. 168 169 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 170 it is never guaranteed. He stated this project may not get done or it could be 10 or more years out 171 if the City waits for matching funds. He stated County Road 10 has been talked about for years 172 and with the exception of several signal changes, timing sequences, and a few trailways, that is 173 all that has been done. He stated it is in the 2006 budget to move forward and that will have to 174 be done to get the project going. 175 176 President Marty referenced the staff report and commented on the listing of projects. He stated 177 he does not see some of them as viable priorities but more like a “wish list” that the City would 178 like to see happen. But, he does not see it as being realistic to invest City or TIF funds. 179 180 Director Ericson explained that the EDC was looking at it from the perspective of what needs to 181 be changed in the City, what areas are not presenting a positive image, and where the tax base 182 can be increased and improved. He stated the Skyline Motel is a prime example of a property 183 where taxes are not increasing, it is underutilized, and has caused problems in the past. He stated 184 that will probably not change but for City involvement. 185 186 Director Ericson stated all of the potential development projects presuppose there is a willing 187 seller. He noted PAK is looking to redevelop but there is a funding gap so they are looking at the 188 City for funding participation. He agreed that with the Donut Connection property, a restaurant 189 is interested in the site so it is now a lost opportunity for the City. Previously it was for sale 190 under the County assessed valuation but the City did not purchase it. 191 192 Director Ericson stated the gas station is now for sale and suggested as part of Project #3 193 (Premium Stop/Donut Connection/Sitdown Restaurant) it would make good sense to acquire 194 with TIF for a potential redevelopment. He advised that the gas station site was marketed as 195 redevelopment but the only calls being received are from potential buyers who want to maintain 196 it as an independent gas station. He stated he is not asking for authorization tonight but may in 197 the future request the EDA look at possible acquisition. 198 199 Director Ericson stated that Moundsview Square is a project where Paster would be looking for 200 some assistance, as they did with the Hardee’s building. However in that case, they did not get 201 all of their information to the City in a timely manner so they decided to go forward without City 202 assistance. But, to redevelop the Moundsview Square property, they would be looking at the 203 City for assistance and but for that assistance, it may not move forward. 204 205 Director Ericson stated this may be a “wish list” but it impacts the aesthetics of Mounds View. 206 He stated the City wants to reinvigorate the County Road 10 corridor and improve the tax base by 207 investing in some of the properties to achieve that goal. 208 209 Commissioner Thomas stated President Marty has indicated the infrastructure redevelopment is 210 his first priority and redevelopment of the businesses would come second to that. She stated it 211 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. 212 However, the City is the primary entity to install the infrastructure. She stated the hindrance on 213 those properties may have been because of the City’s lack of infrastructure. So, during the next 214 two years as other investments are made, it may encourage development to take place that does 215 not require City involvement. 216 217 Commissioner Thomas stated the Premium Stop in Moundsview Square is a serious concern for 218 her but it is an independent property so the City has to wait for them to decide what they want to 219 do. She stated that issue along with the heart-of-the City issue puts the Skyline Motel acquisition 220 farther down on the list for her, even knowing about the public safety concerns. 221 222 Commissioner Flaherty stated he concurs and appreciates the EDC bringing these priorities 223 before the EDA. He stated he is in favor of controlling what the City can control. When dealing 224 with the County Road 10 corridor, it involves contractors and the County and is somewhat out of 225 the City’s control. However, City-wide road construction can be controlled by the City and there 226 are no restrictions standing in the City’s way. He stated that ties into the County Road 10 227 corridor and is a very large “piece of pie.” He stated his support to move on the development of 228 the City’s roads. 229 230 President Marty stated Director Ericson mentioned that excess TIF funds will have to be returned 231 if a project is not started before 2007 but he saw nothing about the trailway project on Silver 232 Lake Road, which will take $350,000 and up, depending on the wetland areas. He stated he is 233 still working with the County Commissioners in the City’s attempt to get a stop light at Silver 234 Lake Road and County Road H. 235 236 President Marty asked why that was not reflected in the list. Director Ericson stated that can be 237 added and the funding priorities re-tabulated. He noted there are several other projects that could 238 be added as well. 239 240 President Marty stated it could be used for street reconstruction but Ehlers & Associates had it 241 pegged out only six years. At the last meeting this issue was discussed, Public Works Director 242 Lee said the street reconstruction was about an 18-year project to get all the streets done. He 243 explained that his concern is that people within the next six years will get a $9 million break and 244 then after that residents will be assessed. He asked if the $9 million can be stretched out so every 245 resident gets a “piece of the pie.” 246 247 City Administrator Ulrich stated the likely scenario would be to leave the assessment to residents 248 the same but the 75% the City covers would not be taxed throughout the City. He agreed it 249 would be nice to find a way to ease that in since it is a long term project. 250 251 Commissioner Gunn stated she agrees that the City’s roads are the number one priority. 252 However, she does not want to lose sight of the County Road 10 project. She stated the trails 253 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 254 bicyclers along County Road 10 than previously. She stated this is becoming a serious safety 255 issue and needs to be a focus when the County Road 10 project starts. On the Premium Stop 256 property, she supports having staff look into buying it because it is a main property along the 257 corridor and impacts the image of the City. She noted that one of the considerations in buying a 258 property is whether it is a safety issue and this property has a serious safety issue. She noted the 259 canopy is now sitting next to a property where someone is starting a new business. 260 Commissioner Gunn pointed out that if the City has control of the property, it can control who it 261 is sold to but if it is independently owned, it will continue to be a gas station. 262 263 Vice President Stigney stated he agrees with the importance of County Road 10 but disagrees 264 with the City buying land for future development because it has limited funds and priorities have 265 been set. He stated he differs with buying the gas station property and thinks the City should 266 assist developers to do the project but not necessarily buying the property. He stated he agrees 267 with the other statements made by the Commissioners. 268 269 President Marty stated the EDA has reaffirmed the priorities as follows: 270 271 1. Pedestrian Trails along County Road 10 (safety and beautification issue that may help 272 attract business to the corridor) 273 2. Road Reconstruction / Future Infrastructure Redevelopment Needs 274 3. County Road 10 275 276 277 President Marty stated the City needs to move forward with County Road 10 but the City’s roads 278 have needed to be reconstructed for three years. He added that he wants to keep in the housing 279 program in case dilapidated housing can be brought up to Code. 280 281 President Marty stated if there is a way to assist some of the businesses along County Road 10 282 with TIF for upgrades or to help redevelop, he would support it. He noted the Community 283 Development Department has already brought several viable businesses in to the community. 284 285 EDC Commissioner Belting stated staff put together a great list and it was intended to outline 286 some priorities for the Council to consider down the line. He agreed that trails and safety are 287 huge issues and encouraged the City to use the TIF dollars to get trails started instead of having 288 to return funds. 289 290 EDC Commissioner Johnson stressed that they were also talking about “willing sellers” and she 291 wanted to make that clear. EDC Commissioner Belting concurred that was the intent. 292 293 President Marty stated he is not a proponent of eminent domain unless it is a life or death type of 294 situation. He stated that is the prevailing view of the EDA as well. 295 Mounds View EDA November 14, 2005 Regular Meeting Page 8 296 Commissioner Thomas stressed that the EDA is not just talking about purchase and if there is 297 something the developer needs assistance with to make it work, they should talk to the EDA. 298 299 Ms. Kilvang stated the message is clear that County Road 10 is the priority for redevelopment. 300 She suggested the EDA think about setting their vision beyond the infrastructure so if an 301 opportunity comes forward with a property like the Donut Connection or Moundsview Square 302 that is owned by Krause Anderson, they can take advantage. She noted the EDA has now 303 identified three major projects. 304 305 B. Resolution 05-EDA-210 Authorizing the Demolition of 7861 Groveland Road 306 307 Community Development Director Ericson stated this is a request for authorization from the 308 EDA to accept a bid to demolish the house at 7861 Groveland Road that the City acquired in 309 2000, tried to rent out but that didn’t work. The building has now been vacant for several years, 310 there has been vandalism, so it has become a liability. Director Ericson advised that there are 311 good neighbors who let the City know if there is a problem but staff recommends the City 312 explore demolition. He noted three bids were received but came in somewhat high. If approved, 313 the site would be restored to a natural level condition with the basement filled in and the ground 314 sodded or seeded. Staff recommends approval. 315 316 Vice President Stigney stated the report indicates that efforts were made to sell the house and 317 move it. He asked if the house was advertised for free. Director Ericson stated they have and 318 also contacted moving companies but he does not recall if it was advertised in the last year. He 319 explained the problem with trying to move it anywhere into the metro area is that the building 320 has to come up to current codes, which the building is not able to meet. So, it would have to be 321 moved beyond the metropolitan area. In addition, it may not survive the move and the valuation 322 is not high enough. 323 324 Vice President Stigney asked about the new furnace. Director Ericson stated that anything of 325 value can be salvaged. He stated some money may have been put into this house to rent it out, 326 but a new furnace was not purchased. In addition, the appliances have been removed from the 327 building. Vice President Stigney asked that the furnace be removed if it is new. 328 329 Commissioner Thomas asked about the asbestos issue. Director Ericson stated the old linoleum 330 floor tile may have asbestos but they do not expect it to be significant. 331 332 Commissioner Flaherty agreed the demolition price seems to be high, noting the demolition of 333 two other structures were in the area of $8,000. He asked why there is such a disparity in the 334 demolition bids for this home that contains about the same square footage. He also asked when 335 was the last time the house was rented. 336 337 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 338 renting out properties and the City realized they did not want to manage rental property. He 339 noted that the City is not set up to be rental property managers. There were problems with the 340 tenants not paying rent and doing damage. The City took the matter into court and received 341 settlements that will never be collected. After that the building was boarded up because it was 342 not worth renting out. 343 344 President Marty noted this bid is to demolish a house and the other two structures that were 345 demolished were prefab structures. 346 347 Commissioner Flaherty asked why the tenants were not evicted if they were not good tenants. 348 Director Ericson stated the City did evict them but it took a while. 349 350 Commissioner Thomas stated the range for demolition does not appear high to her when you 351 consider what is involved with home inspections. She stated that ten years ago when she was in 352 this field, the demolition would be in the range of $12,000 so she is comfortable with the range 353 of $16,000. 354 355 Commissioner Gunn noted it also includes two out structures. 356 357 President Marty asked how this fits into the City’s redevelopment plans, noting it is by the PAK 358 building. Director Ericson explained that it is zoned commercial and in a redevelopment area so 359 it was purchased in the context of future redevelopment. The City determined to rent it out until 360 there was potential for redevelopment. However, currently it is costing the City money and 361 creating a liability. 362 363 President Marty asked about using it for Fire Department training. Director Ericson stated that 364 was researched and determined to not be feasible. 365 366 Vice President Stigney asked about getting a written asbestos estimate. Director Ericson stated it 367 would require having an asbestos abatement specialist view the property but staff who has this 368 type of training does not believe it will be a big project because with asbestos floor tile, hazmat 369 suits are not required, just proper disposal. 370 371 MOTION/SECOND: Gunn/Thomas. To Adopt EDA Resolution 05-EDA-210, Approving and 372 Authorizing the Expenditure of Tax Increment Funds for the Demolition of 7861 Groveland 373 Road for the Purpose of Future Redevelopment, in an amount not to exceed $16,580 plus 374 asbestos abatement costs, and an additional ten percent contingency buffer to cover any 375 unforeseen or unanticipated expenses. 376 377 Commissioner Flaherty stated he does not know what the City paid for this property and the vote 378 is now to spend another $16,000 to demolish it. He stated that the land proceeds will probably 379 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 380 business. 381 382 Director Ericson stated there always was the intent to demolish the buildings and that fixed cost 383 was always there with the understanding this would be a redevelopment. He noted it can 384 probably be sold for $100,000 so the City may not come out ahead financially but it will remove 385 a blighted condition and bring in a new structure and better tax base. He explained that 386 sometimes it takes years to realize the benefit. 387 388 Ayes –5 Nays – 0 Motion carried. 389 390 8. REPORTS 391 392 None. 393 394 9. NEXT EDA MEETING: Monday, November 28, 2005 @ 6:30 p.m. 395 396 10. ADJOURNMENT 397 398 President Marty adjourned the meeting at 7:25 p.m. 399 400 Respectfully submitted, 401 402 403 Recorded and transcribed by: 404 405 Carla Wirth 406 TimeSaver Off Site Secretarial, Inc. 407 408 Item No: EDA 7A Meeting Date: November 28, 2005 Type of Business: Discussion Administrator Review : ____ City of Mounds View EDA Staff Report To: Mounds View Economic Development Authority From: James Ericson, Community Development Director Item Title/Subject: Review Possible Amendment to the Medtronic Contract for Private Development to Include Phase 2 Discussion: Staff has become aware of the possibility that Medtronic may be exploring options for additional office space in the metro area even before ground has been broken at the Bridges site in Mounds View. While Medtronic has many options for additional office development regionally and worldwide, staff feels that Mounds View is in a unique position to capture the additional growth demands of Medtronic years before Phase 2 had been originally contemplated. As such, the purpose of this report is to discuss the possibility with the EDA and to ascertain its willingness to explore accelerating the phasing of the Medtronic CRM office campus development to construct Phase 1 and Phase 2 concurrently. As the EDA is aware, the Medtronic CRM development was approved in three phases. Phase 1 involved construction of two eight-story office buildings totaling 820,000 square feet plus a three-level parking structure to the north. Phase 2 involves a third eight-story building of 380,000 square feet plus two additional levels to the Phase 1 parking ramp. Phase 3 represents the fourth eight-story building of approximately 300,000 square feet. In the third phase a new parking ramp would be constructed on the Blaine parcels to accommodate the additional demands. Full project buildout would likely include 6,000 Medtronic employees. During the review and consideration of the Medtronic development agreement, a concern was raised that there was no requirement or obligation for Medtronic to construct Phase 2 or Phase 3. While true, staff feels that there may be an opportunity to coordinate the immediate implementation of Phase 2 concurrent with the construction of Phase 1 due to substantial company growth as well as the amount of time it took to gain approval of the project, recognizing that Medtronic had been in negotiations with another community a full year prior to approaching the City of Mounds View. Recommendation: In summary, Staff is presenting this information to alert the EDA of the potential to coordinate an immediate development of Phase 2 of the Medtronic CRM development which would involve 380,000 addition square feet of office space and two additional levels to the parking structure. If the EDA would like to explore this opportunity, Staff would contact Medtronic officials to ascertain their space needs and construction expectations. Respectfully submitted, ________________________ James Ericson Community Development Director