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HomeMy WebLinkAbout03-11-2019 EDAPROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting March 11, 2019 Mounds View City Hall 2401 Mounds View Boulevard, Mounds View, MN 55112 1. CALL MEETING TO ORDER President Mueller called the meeting to order at 5:31 p.m. 2. ROLL CALL: President Mueller, Vice President Gunn, Commissioner Bergeron Commissioner Hull, Commissioner Meehlhause, and Executive Director Zikmund. NOT PRESENT: None. 3. APPROVAL OF AGENDA MOTION/SECOND: Gunn/Meehlhause. To Approve the March 11, 2019, Agenda as presented. Ayes – 5 Nays – 0 Motion carried. 4. CONSENT AGENDA A. February 25, 2019, EDA Open Minutes. B. February 25, 2019, EDA Closed Minutes. MOTION/SECOND: Bergeron/Meehlhause. To Approve the Consent Agenda as presented. Ayes – 5 Nays – 0 Motion carried. 5. PUBLIC INPUT None. 6. EDA BUSINESS A. Commercial Investors Group/Choice Hotels Proposal – Skyline Motel Site. Assistant City Administrator Beeman explained the EDA was in the process of acquiring the Skyline Motel property. He anticipated the purchase would be completed by May 1st. He Mounds View EDA March 11, 2019 Regular Meeting Page 2 reported the City has been contacted by several developers with proposals for the site. He explained one of those developers has requested to come before the EDA. He noted this developer was proposing to construct a hotel. Mike Sowers, Commercial Investors Group, introduced himself to the EDA. He provided the EDA with a PowerPoint presentation on his company and his proposal for the Skyline Motel site. He explained he would be one of the general partners for this project and provided further comment on how a hotel would be developed on this property. He stated he liked the visibility and access available for this site. He described the regional job growth in the healthcare industry in Ramsey County and noted there was a strong demand for a hotel in this area. Jaden Ghylin, Choice Hotels, described the market and demand for hotel rooms in Ramsey County noting at this time there was a demand that outweighed the supply. He explained he was proposing to construct a mid-scale hotel in this market. He stated he appreciated the visibility and access available on the Skyline Motel site and believed that a hotel would be the highest and best use for this property. Mr. Sowers indicated he was proposing to construct an 80-room hotel with 40 regular rooms and 40 extended stay rooms. He discussed the due diligence he would be completing for the project. He provided the EDA with a 3D video of the proposed Choice Hotel and further reviewed the hotel site plan. He commented on the timeline he would be following to close on the property. He estimated the hotel would take eight to twelve months to construct. Commissioner Meehlhause asked how the hotel would change if it were changed to an upper mid-scale hotel versus a midrange hotel. Mr. Ghylin reported a different hotel brand would be pursued, such as a Marriot or Hilton. Commissioner Meehlhause questioned if Medtronic’s visitors were staying in hotels in downtown Minneapolis. Assistant City Administrator Beeman stated this may be the case and described how Medtronic booked its extended stay hotels for visiting personnel. Commissioner Meehlhause inquired what zoning changes would be required for this project. Community Development Director Sevald indicated the site was currently zoned Industrial and would have to be rezoned to B-3 Highway Business. He explained this would require an amendment to the Comprehensive Plan. Commissioner Meehlhause asked how many jobs would be created by the proposed hotel. Mr. Ghylin estimated the hotel would generate 15 to 20 jobs long-term jobs. Commissioner Bergeron recommended the hotel have meeting rooms. President Mueller requested further clarification on how an extended stay hotel was defined. Mr. Mounds View EDA March 11, 2019 Regular Meeting Page 3 Ghylin explained an extended stay hotel was for visitors that were visiting for more than one night, or perhaps those visiting for a week at a time. President Mueller questioned how many stories the hotel would be. Mr. Sowers reported he was proposing to have a three-story hotel at this time with 80 units. President Mueller suggested the hotel have a workout room, onsite restaurant and laundry facilities. Mr. Ghylin indicated this would move the motel from a limited service hotel to a full- service hotel. Mr. Sowers reported the hotel would have laundry facilities and a workout room. President Mueller asked who would be managing the hotel after the project was completed. Mr. Sowers explained he would remain a general partner in the hotel and stated a third party would oversee the management of the hotel. President Mueller inquired if Mr. Sowers had any other commercial developments or hotels that he had completed in the metro area. Mr. Sowers explained he had recently shifted his business model from residential to commercial developments and noted this would be his first hotel project. President Mueller encouraged Mr. Sowers to speak with Steve Markuson from Twin Cities Gateway. Commissioner Meehlhause questioned how the zoning on this property could be changed. Community Development Director Sevald discussed the process that would have to be followed to rezone the property. President Mueller thanked Mr. Sowers and Mr. Ghylin for their presentation. B. Broker Fees Proposal – Keller Williams Real Estate. Assistant City Administrator Beeman reported a representative from Keller Williams was present to discuss broker fees for representing the EDA and the Skyline redevelopment site. Greg Rance, Keller Williams, explained his company would like to represent the City for the marketing and sale of the Skyline Motel property. He discussed the background of his company and reported Keller Williams was an award-winning establishment. He described how Keller Williams could market the property in order to achieve the highest and best use for the site. President Mueller asked what the next steps would be for Keller Williams. Mr. Rance stated he would like the EDA to define the highest and best use for the site prior to Keller Williams marketing the property. He commented medical tech and medical manufacturing would be great uses for this site. Mounds View EDA March 11, 2019 Regular Meeting Page 4 President Mueller thanked Mr. Rance for coming before the EDA and noted Assistant City Administrator Beeman would be in touch. President Mueller asked if staff had any further comments on the potential purchase of the Skyline Motel. Assistant City Administrator Beeman stated the City Attorney could discuss the difference between an exclusive and non-exclusive sale of this property. He reported the EDA would have to make a determination if they would like to have a professional firm representing the site, or if the EDA believes there was enough interest that the City could market the site itself. He indicated another option would be to create a cooperative agreement and this could be negotiated by staff. He explained staff was seeking direction on how to proceed with the marketing of the site. City Attorney Riggs provided the EDA with the definition of an exclusive and non-exclusive sale of the property. He described what occurred during the Medtronic sale and noted the City had not pursued exclusive sales in the past. MOTION/SECOND: Meehlhause/Gunn. To Recess the EDA Meeting to reconvene after the City Council Meeting. Ayes – 5 Nays – 0 Motion carried. President Mueller recessed the EDA meeting at 6:28 p.m. MOTION/SECOND: Gunn/Bergeron. To Reconvene the EDA Meeting. Ayes – 5 Nays – 0 Motion carried. President Mueller reconvened the EDA meeting at 6:47 p.m. Assistant City Administrator Beeman provided the EDA with a summary on the hotel concept Commercial Investors Group/Choice Hotels was proposing for the Skyline Motel site. He explained staff was seeking direction on how to proceed with the sale of this property or if staff should seek assistance with the marketing and sale of the property. Commissioner Gunn stated she did not believe the City needed a brokerage firm to assist with the marketing and sale of this property. She noted the City did not have a broker when the Medtronic project was completed. She indicated she liked the idea of having an extended stay hotel on this site as it would be a new option for the community. She anticipated those visiting Medtronic would appreciate having an extended stay hotel option in Mounds View. Commissioner Meehlhause explained he appreciated selling this property for redevelopment as Mounds View EDA March 11, 2019 Regular Meeting Page 5 quickly as possible. He commented this would allow the EDA to recoup its investment while also putting the property back on the tax rolls. In addition, he would like to see this site redeveloped prior to the development of TCAAP. He commented further on how Mounds View benefits from hospitality tax. Commissioner Hull stated if the EDA were to receive two other proposals it would allow for greater comparison and contrast of the concept plans. He indicated he did not support the EDA using a broker for the marketing and sale of this property. Commissioner Bergeron asked if the City would be financially stable if the sale were delayed. Finance Director Beer reported the City would remain financially stable if the sale were delayed. Commissioner Bergeron commented he did not support the EDA pursuing a broker at this time. He indicated he would rather see a hotel on this site versus another industrial use. He anticipated a hotel would thrive at this location given its close proximity to Medtronic and the NSC. He stated he had no problem moving quicker rather than slower on this project. President Mueller summarized the comments of the EDA noting the group appreciated the presentation from Keller Williams but was not interested in pursuing brokerage services for the sale of the Skyline Motel property at this time. Mr. Rance thanked the EDA for hearing his presentation and stated he would be available in the future if assistance were needed. President Mueller commented she supported a mid-scale hotel on the Skyline Motel property and explained she could support the building being higher than three stories. She indicated this would allow the hotel to buffer some of the noise from the adjacent manufactured home park. She questioned how the EDA wanted to proceed with this matter. Commissioner Meehlhause stated he would not oppose the hotel building being four or five stories in height, noting a taller building would improve visibility from 35W. Commissioner Bergeron indicated he could also support additional stories on the hotel. He requested further information from staff on the timing of this project. Assistant City Administrator Beeman discussed the timeline that would be needed for this project if it were to proceed as a hotel versus an industrial use. He reported an industrial use would lengthen the project timeline. Commissioner Bergeron requested further information from staff on the necessary rezoning. Community Development Director Sevald explained the City could amend the zoning Ordinance to permit hotels in the industrial zoning district. City Attorney Riggs advised staff does not see the zoning of this site being a concern for this project. Mounds View EDA March 11, 2019 Regular Meeting Page 6 Commissioner Hull questioned why there was a sense of urgency on this project or why the EDA was considering to move forward with the first project that was presented. Commissioner Gunn stated she did not believe there was a sense of urgency and explained she could support the City pursuing additional proposals. However, she did not want to see the City sitting on this property and miss out on a redevelopment opportunity. Commissioner Bergeron asked if staff should be directed to seek additional hotel proposals. City Attorney Riggs discussed the property closing timeline and noted the EDA could begin marketing this site and pursuing proposals. Commissioner Meehlhause questioned what deadline staff would recommend for this project. Assistant City Administrator Beeman stated he would like to see a deadline set for the middle of May. Executive Director Zikmund reported he could speak with staff and Ehlers and could report back to the EDA at their next meeting. President Mueller asked if the EDA wanted to see proposals for apartments or workforce housing for the Skyline Motel site. The EDA was not interested in seeing proposals for an apartment building or additional workforce housing. President Mueller inquired if the EDA wanted to see proposals for a commercial/industrial development on the Skyline Motel site, or a hotel. Commissioner Gunn and Commissioner Meehlhause supported a hotel concept on this site. Commissioner Hull stated he would like to see the scope of the proposals broadened. Commissioner Bergeron indicated he supported a hotel on this site. President Mueller commented the consensus of the Council was to pursue proposals for a hotel on this property. Commissioner Hull asked what cost Ehlers would be charging the City. Assistant City Administrator Beeman reported Ehlers would be charging the City by the hour for their assistance. Commissioner Hull questioned what other costs the City would be incurring by the delay of this project. Assistant City Administrator Beeman commented the only other cost would be the taxes on the property. He described the steps that would have to be followed if TIF were to be pursued for this site. Mounds View EDA March 11, 2019 Regular Meeting Page 7 President Mueller anticipated that a Choice Hotel would be a better neighbor to the adjacent manufactured home community than an industrial type development. However, she noted she wanted to see the future developer work with the existing neighbors. Commissioner Meehlhause questioned if the site was large enough to pursue an industrial development as it stands. Assistant City Administrator Beeman reported industrial projects are typically five acres or larger. Commissioner Bergeron commented he appreciated the presentation that was made by Commercial Investors Group/Choice Hotels as it took into consideration the neighboring properties. President Mueller asked if this site was large enough to support a four or five story hotel. Assistant City Administrator Beeman commented the site could support additional parking. President Mueller recommended staff request additional proposals for the Skyline Motel site for hotels and that the proposals be submitted by mid-May. Mr. Sowers thanked the EDA for their consideration and noted he would entertain an industrial development on the Bauer property. He stated it was his hope to break ground on a hotel by this fall in order to have the foundation completed before the ground freezes. He commented on the timeline it would take him to complete a market and feasibility study. He explained his interest in this site would diminish if the EDA were not able to move forward with this project in the next 60 days. Executive Director Zikmund questioned if the EDA would support the use of TIF or other public subsidies for this project. Commissioner Hull and Commissioner Gunn were open to TIF. Commissioner Meehlhause stated he would rather not pursue TIF for this project, but noted he could consider TIF if necessary, for the redevelopment of this property. Commissioner Bergeron stated he did not want to see anything taken off the table in order to have this site properly redeveloped. President Mueller commented she did not prefer to use TIF for the redevelopment of this property. She summarized the next steps for this project noting staff would be reaching out to Ehlers and the EDA would be reviewing proposals for this property in mid-May. Executive Director Zikmund requested the EDA keep the door open for the use of a broker. Mounds View EDA March 11, 2019 Regular Meeting Page 8 President Mueller encouraged the developer to be patient with the EDA as they would not be closing on the property until the end of April or early May. 7. REPORTS City Attorney Riggs provided the EDA with an update on the Skyline Motel property closing timeline. He noted individuals were being relocated at this time and easements were being addressed. 8. NEXT EDA MEETING: Monday, March 25, 2019 at 6:00 p.m. 9. ADJOURNMENT President Mueller adjourned the meeting at 7:49 p.m. Respectfully submitted, Recorded and transcribed by: Heidi Guenther TimeSaver Off Site Secretarial, Inc.