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Folder: CC MINUTES AND AGENDAS 2003
Document: CC MINUTES 09232003
City Council Regular Meeting Minutes
September 23, 2003
Page 1
CITY OF ST. ANTHONY
3 CITY COUNCIL REGULAR MEETING MINUTES
4
5 SEPTEMBER 23, 2003
6
7 CALL TO ORDER
8 Mayor Hodson called the meeting to order at 7:03 p.m.
9
10 PLEDGE OF ALLEGIANCE.
11 Mayor Hodson invited the Council and audience to join him in the Pledge of Allegiance.
12
13 ROLL CALL.
14 Present: Mayor Hodson; Councilmembers Horst, Sparks, Thuesen, and Faust.
15 Absent: None.
16 Also Present: City Manager Mike Mornson and City Attorney Jerome Gilligan.
17
18 CONSIDERATION, DISCUSSION,AND POSSIBLE ACTION ON ALL OF THE FOLLOWING
19 ITEMS.
20
21 I. APPROVAL OF SEPTEMBER 23, 2003, CITY COUNCIL MEETING AGENDA.
22 Motion by Councilmember Sparks to approve the City Council Meeting Agenda of September
0 23, 2003.
25 Motion carried unanimously.
26
27 II. PROCLAMATIONS AND RECOGNITIONS.
28 A. Proclamation for St. Anthony Kiwanis Peanut Day.
29 Councilmember Sparks read the proclamation designating Friday, September 26, 2003, as St.
30 Anthony Kiwanis Peanut Day in order to raise funds for its many and varied programs.
31
32 Motion by Councilmember Thuesen to approve the proclamation designating Friday, September
33 26, 2003, as St. Anthony Kiwanis Peanut Day.
34
35 Councilmember Sparks asked for a demonstration and the Kiwanis members offered bags of
36 peanuts in exchange for donations. It was noted this was the Kiwanis' 32nd year of asking for
37 donations in St. Anthony Village. It was added young children were their first priority.
38
39 Motion carried unanimously.
40
41 III. COMMUNITY FORUM.
42 Pat Baker, 3223 Croft Drive, stated she had lived in the community approximately two years and
43 this was a community where many homes had been sold to young people with small families.
44 She indicated these were good homes in a good location that were selling for"top dollar." She
16 noted St. Anthony was an"up and coming"city; however, taxes had been increasing.
City Council Regular Meeting Minutes
September 23, 2003
Page 2
Ms. Baker referred to a newspaper article that discussed the City's redevelopment project and
asked why an"up and coming"community with a good location needed to spend so much
3 money to have someone come in to develop. She asked who was carrying the paper on the
4 property and felt, from reading the article, the City was giving the developers a tax break"on top
5 of it."
6
7 Ms. Baker indicated she was attending the meeting not only for herself but also for other people
8 who had been discussing these issues. She asked if anyone in the City Council was involved in
9 the bidding process, as that was a question she had been sent to ask. Councilmember Sparks
10 responded no one in the City Council was involved in the bidding process.
11
12 Ms. Baker quoted from the newspaper article and asked why taxpayers were being charged for
13 prime property. Mayor Hodson replied the funding for the redevelopment was extremely
14 complex and would be addressed later in the meeting. Ms. Baker indicated it should be
15 presented in a simplified form.
16
17 Fern Ostberg, 2704 Murray Avenue, stated she felt privileged to call St. Anthony Village her
18 home. She indicated the Work Force Housing Group was thrilled the developer was planning
19 rental units in the Apache Plaza area, as she felt work-force units should be available for lower-
20 income families. She added this segment of the population was as interested in buying a home
21 as she had been when she bought her first home.
22
Ms. Ostberg indicated the development would be more attractive with less landscaping. She
added simplified roof lines and fewer cosmetic details would provide more money for the work-
25 force housing. She suggested "Big Box" supply some of the money as many of their employees
26 would come from this segment of the population.
27
28 Ms. Ostberg stated there was still time before final approval and she urged Council to include
29 some work-force housing that could be sold.
30
31 Mary Stevenson, 2912 Silver Lake Court, indicated she also was a part of the St. Anthony
32 housing group. She cited a young couple that had not been able to find comparable housing in
33 St. Anthony Village and had moved to the Coon Rapids area, which meant the loss of a nice
34 family and children for the school district. She stated affordable housing was a concern as the
35 City wanted to attract young families.
36
37 George Marks, 3424 Silver Lake Road, stated he had lived in St. Anthony Village for 32 years
38 and remembered when redevelopment was initiated for Apache Plaza. He gave a brief history of
39 Apache Plaza's"heyday"and the beginning and continuation of decline. He added the current
40 redevelopment plan, in his opinion,was in good condition with one possible exception. He
41 indicated concern that there was a proposal to bring in Wal-Mart, as he felt Wal-Mart had a
42 reputation for destroying the downtowns of cities. He stated he did not want to see Wal-Mart in
43 such an important part of the City, as it would not blend with the type of city St. Anthony has
44 been and still is.
0 Mr. Marks indicated he did not want to see any tax money used to help Wal-Mart. He stated he
47 did not want Council to allow that part of the plan to move forward and did not want any
City Council Regular Meeting Minutes
September 23, 2003
Page 3
financing to aid Wal-Mart. He added taxing was an essential development tool and had been
used very profitably. He asked that past efforts not be besmirched by bringing Wal-Mart into the
3 City.
4
5 A St. Anthony resident who lives on 29`"Avenue NE, felt the issues brought to Council were a
6 failure of the community to understand the details of the plan. He indicated a good job had not
7 been done explaining the financing and the needs of the community. He stated he understood
8 the needs of the community were being addressed; however, people were frustrated by this being
9 "thrown on them,"as it was not what they wanted to see. He noted St. Anthony Village was
10 located on a fantastic site and Council needed to explain how the needs of the community were
11 being addressed.
12
13 IV. CONSENT AGENDA.
14 A. Approve September 9, 2003, Council meeting minutes.
15 B. Consider licenses and permits.
16 C. Consider payment of claims.
17 D. Consider Resolution 03-079, re: Amend North Suburban Mutual Aid.
18 E. Consider Resolution 03-078, re: Consider Election Judge list for 2003 Local Election.
19 F. Consider Ordinance 2003-012, re: Water and sewer connection permits (2nd reading).
20
21 Motion by Councilmember Sparks to approve the Consent Agenda items.
22
0 Motion carried unanimously.
25 V. REPORTS FROM COMMISSIONS AND STAFF.
26 A. Planning Commission meeting— September 16, 2003.
27 1. Resolution 03-080, re: Northgate Condominium Owners/LeRoy Sign CompAnL
28 2500 Highway 88: setback variance.
29 Planning Commissioner Randy Stille noted Northgate Condominium Owner's Association had
30 submitted a three-foot setback variance from the roadway to allow for an identification ground
31 sign. He explained the applicant proposed a pylon sign for the front of their building in July,
32 along with other variance requests, and Council denied the application because it veered too far
33 from the City's sign ordinance.
34
35 Commissioner Stille stated the applicant was returning to the City with an application for a
36 ground sign and was asking for one variance for the three-foot setback variance from the
37 roadway to allow for a 12-foot setback. He added the variance request was necessary because
38 City ordinance stated ground signs must be located at least 15 feet from any street or other
39 easement. He explained the applicant stated this setback was from the east property line and was
40 necessary so the sign did not interfere with traffic flow. He noted City staff saw this as an
41 improvement to the site.
42
43 Commissioner Stille noted the Planning Commission held a public hearing on September 16,
44 2003, to consider the request.
0 It was noted the Planning Commission recommended Council approve said request due to
47 applicant's adherence to conditions 1 to 3 of the Petition for Sign Variance and noting the
City Council Regular Meeting Minutes
September 23, 2003
• Page 4
hardship requirement was met due to the triangular shape of the lot. Staff also recommended
2 approval of the variance request, as the applicant had presented a ground sign that was
3 aesthetically pleasing and met City ordinance requirements. Staff suggested the following
4 condition: Prior to building permit approval, the applicant would submit a landscaping plan for
5 the ground sign.
6
7 Councilmember Sparks asked if signage for the office front had been discussed. Commissioner
8 Stille responded he understood none was planned. It was noted the only sign planned was the
9 one from the street.
10
11 Commissioner Stille stated it was hard to determine the location of the sign by the provided
12 sketch. He explained the sign would be approximately two feet from the curb.
13
14 Motion by Councilmember Thuesen to adopt Resolution 03-080 approving a variance for
15 Northgate Condominium Owner's Association at 2500 Highway 88 with stated condition.
16
17 Motion carried unanimously.
18
19 2. Resolution 03-073, re: St. Anthony Shopping Center, for 2900 Pentagon Drive:
20 amend Comprehensive Sim
21 Planning Commissioner Stille noted the St. Anthony Shopping Center recently signed leases
22 with two tenants that have regional and national scope: Bumper to Bumper and Subway. He
explained, according to the petitioner, the current Comprehensive Sign Plan did not provide
sufficient flexibility of sign design to accommodate regional and national tenants that had logo
25 signage for all their locations.
26
27 Commissioner Stille stated the St. Anthony Planning Commission considered a request by the
28 owners of the St. Anthony Shopping Center for an amendment to the Comprehensive Sign Plan
29 at a public hearing held on August 19, 2003.
30
31 Commissioner Stille indicated the petitioner's amendment request was to add the following to
32 the Plan:
33 1. The signage is in substantial conformance with tenant's internal sign criteria and
34 specifications.
35 2. The total width of the sign shall not exceed 80 percent of the tenant's storefront width.
36 3. The sign height shall be a minimum of 16 inches and maximum of 40 inches.
37 4. Sign color or colors are those found on typical retail signage in the Minneapolis/St. Paul
38 area.
39 5. Tenant submits two drawings for lessor's written approval prior to fabrication of the
40 signs.
41 6. Lessor approves tenant's sign contractor.
42
43 Commissioner Stille stated the St. Anthony Planning Commission recommended Council
44 approval of the following addition to the Plan at a public hearing held on September 16, 2003:
0 7. Lettering may be yellow in color.
47
City Council Regular Meeting Minutes
September 23, 2003
Page 5
Commissioner Stille indicated the Planning Commission did not feel a public hearing was a
good place to work out the details. He explained the deviation was considered due to sympathy
3 toward the new Subway tenant; therefore, the outcome was the Commission recommended
4 approval of adding yellow as a permitted color to the Plan. He added the Commission would
5 look at the Bumper-to-Bumper issues at a later date.
6
7 Motion by Councilmember Sparks to adopt Resolution 03-073 approving an amendment to the
8 Comprehensive Sign Plan for the St. Anthony Stopping Center.
9
10 Discussion:
11
12 Councilmember Horst asked if the only item added was the color. Commissioner Stille
13 responded that was correct.
14
15 Councilmember Horst asked if item 1 listed in the resolution meant the petitioner was planning
16 future signs to be in the same style as previous signs. Commissioner Stille responded it was his
17 understanding that the Subway sign was going to conform to the Plan in every way except the
18 color.
19
20 Councilmember Horst asked if the Subway logo would be internally lit separate letters.
21 Commissioner Stille responded that was his understanding. Councilmember Horst indicated he
22 did not have a problem with the request if only the color was being changed.
0 Councilmember Sparks asked if the existing language was used and the only change was
25 allowing yellow. Mr. Stille responded he believed that was correct.
26
27 Motion carried unanimously.
28
29 VI. NORTHWEST QUADRANT.
30 A. Resolution 03-081. re: Apache Redevelopment. LLC, for Northwest Quadrant area:
31 gpproval of the preliminary development plan and preliminga 12lat for the entire project
32 area and the final development plan and final plat for the retail portion.
33
34 Planning Commissioner Stille noted the Planning Commission held a public hearing September
35 16, 2003, to discuss the Village at St. Anthony project. He indicated the impact of the project
36 was discussed, along with such issues as parking, affordable housing, traffic flow, lighting,
37 landscaping, drainage, signage, price points and project name. He stated the end result was to
38 approve the preliminary development plan and preliminary plat for the entire project and the
39 final plan and final plat for the retail portion of the project. He added the Planning Commission
40 also recommended approval of Resolution 03-01 regarding modification to redevelopment plan
41 and tax increment financing plan for Northwest Quadrant redevelopment. He noted the
42 Commission findings were the proposed development of parcels within the TIF district
43 conformed to the City's comprehensive plan.
44
0 Commissioner Stille introduced John Shardlow of DSU.
City Council Regular Meeting Minutes
September 23, 2003
• Page 6
Mayor Hodson stated he wanted to mention the task force started by 26 people approximately
2 three years ago. He noted several of its members were present and noted the City would not be
3 at the current stage with the Northwest redevelopment without the task force. Mayor Hodson
4 read the names of the members of the task force and indicated this was the group that started the
5 process, as they put together the criteria and listened to the residents around the project. Mayor
6 Hodson stated the City had a great team working on this project.
7
8 Mr. Shardlow indicated there had been a three-year planning process that was long,open and
9 deliberate. He noted information had been distributed through a community newsletter and on
10 the City's website and a large amount of input had been received regarding the process. He
11 added at least two major open houses had been held where the opportunity was given to submit
12 comments, which did shape the plan.
13
14 Mr. Shardlow stated he had 25 years experience working in this area and it was frustrating to get
15 questions from people who had not followed the process from the beginning. He added the only
16 thing that could be done was to explain as much as possible.
17
18 Mr. Shardlow noted the Northwest Quadrant Redevelopment Plan included a number of criteria
19 and goal statements when it was put together. He added each of the task force recommendations
20 to Council were cited and, in the team's opinion, every one of those had come back. He noted
21 all of the issues raised by residents had also received a response.
22
Mr. Shardlow explained the topic of discussion at the present meeting was land-use approval.
0 He stated the City approved land uses but did not have the authority to approve specific
25 businesses to occupy that land. He noted a planned unit development was currently before
26 Council, which enhanced the City's control before, during and after construction.
27
28 Mr. Shardlow discussed a layout of the plan from the Design Framework Manual. He indicated
29 the location of the retail portion of the project and stated the Planning Commission was
30 recommending final plan and final plat approval for that segment of the plan. He discussed the
31 importance of the park feature in the development and indicated amenities that would be
32 provided.
33
34 Mr. Shardlow also presented the illustrative site plan and indicated one of the main directives
35 was to open up the site area as there was a vast underuse of the center of the site. He stated a
36 high amenity roadway was needed. He noted there were three types of housing: rental
37 apartment units, urban townhomes or flats and the future side-by-side townhomes.
38
39 Mr. Shardlow indicate a planning report had been prepared which included findings of fact for
40 consideration by the Planning Commission. He stated the Planning Commission had accepted
41 each of the findings of fact and had incorporated them into the recommendation to Council. He
42 noted the recommendation to Council was to follow the Planning Commission recommendation
43 and approve the application for the Village at St. Anthony PUD Preliminary Development Plan
44 and Preliminary Plat, as well as the Final Development Plan and Final Plat of Subdivision for the
I* retail portion of the PUD, subject to the following conditions of approval:
• City Council Regular Meeting Minutes
September 23, 2003
Page 7
1. The PUD shall be developed in accordance with the following exhibits, which are
incorporated by reference to the Village at St. Anthony PUD:
3 a. PUD General Concept Plan and Preliminary Plat Submission, dated August 8,
4 2003.
5 b. Design Framework Manual, dated August 19, 2003.
6 C. Final Development Plan Site Plan, dated September 3, 2003.
7 d. Final Development Plan Water main and Sanitary Sewer Plan, dated September 3,
8 2003.
9 e. Final Development Plan Storm Sewer Plan, dated September 3, 2003.
10 f. Final Development Plan Finish Grade Plan, dated September 3, 2003.
11 g. Final Landscape Plan, dated September 3, 2003.
12 h. Final Plat, dated September 3, 2003.
13 2. The PUD shall be developed in accordance with a Planned Unit Development Agreement
14 to be entered into by the City and the developer. Mr. Shardlow noted this would be a
15 binding contract with the applicant, which would indicate that the only way this property
16 could be developed was in accordance with the contract.
17 3. The developer shall provide an Erosion Control Plan, subject to review and approval by
18 the City Engineer,prior to recording the Final Plat.
19 4. The developer shall secure an NPDES Permit prior to recordation of the Final Plat.
20 5. The developer shall secure a Rice Creek Watershed District Permit prior to record the
21 Final Plat.
22
Mr. Shardlow explained this was a redevelopment project and the State statute that authorized
0 housing in redevelopment areas stated that a finding of blight was needed before authority was
25 used under the redevelopment plans. He noted a Northwest Redevelopment Area Blight
26 Analysis had been prepared, which he presented to Council. Discussion followed regarding the
27 information contained in the Analysis.
28
29 Motion by Councilmember Thuesen to adopt Resolution 03-081 relating to the Northwest
30 Quadrant redevelopment project, approving the preliminary development plan and the
31 preliminary development plat for the entire project area and the final development plan and final
32 plat for the retail area.
33
34 Discussion:
35
36 City Attorney Gilligan indicated there should be one addition to the resolution. He requested the
37 following be added to the"NOW, THEREFORE, BE IT RESOLVED" clause at the end of the
38 document: "and adopt findings of fact and conditions presented to Planning Commission by
39 DSU."
40
41 Councilmember Sparks asked if a level of maintenance could be specified in the PUD. Mr.
42 Shardlow responded a general statement could be included that indicated the owner needed to
43 maintain the property. Councilmember Sparks asked if wording was included in the current
44 PUD. Mr. Shardlow responded that document did not exist yet. He explained there were two
agreements: the Redevelopment Agreement and the PUD Agreement, which would be drafted as
a result of the action taken by Council with respect to zoning. He added all of the exhibits would
47 be incorporated by reference, along with the conditions of approval. He noted the current
City Council Regular Meeting Minutes
September 23, 2003
Page 8
meeting was a proper time to discuss specific maintenance issues to be incorporated. He
indicated a periodic review of the Agreement could be incorporated into the language.
3
4 Councilmember Horst asked if a TIF district could incorporate areas not considered blighted.
5 Mr. Shardlow responded this was not his area of expertise; however, he understood TIF
6 financing could be used if a certain percentage met the criteria.
7
8 Councilmember Sparks asked Mr. Shardlow to explain what should be expected of the PUD
9 process in the next few months. Mr. Shardlow responded the City Attorney, along with his
10 assistance, would prepare the PUD Agreement for Council's consideration. He indicated the
11 developers would continue to acquire additional properties and would seek final development
12 plan approval for other residential portions of the properties, at which time they would move
13 forward to develop it. He added the developers would then go forward with construction and
14 occupancy. Mr. Shardlow explained they were currently in a significant part of the PUD
15 process.
16
17 Motion carried unanimously.
18
19 A. Resolution 03-082, re: to modify the Redevelopment Plan for Redevelopment Project
20 Area No. 3: and to establish TIF District No. 3-5 within Redevelopment Project Area No.
21 3 and approve the removal of certain parcels from the HRH's TIF No. 3-3 for inclusion
22 into District No. 3-5 and to adopt a TIF plan therefor.
0 Mayor Hodson opened the public hearing at 8:00 p.m.
25
26 Sid Inman, Executive Vice President of Ehlers and Associates, noted the City was considering
27 establishing Tax Increment Financing District 3-5 to facilitate the redevelopment of the Apache
28 Plaza Shopping Center and surrounding area, commonly referred to as the Northwest Quadrant,
29 in accordance with the Redevelopment Plan. He stated TIF District 3-5 consisted of 24 parcels
30 of land and adjacent and internal rights-of-way and was approximately 65 acres in size. He
31 noted the duration of District 3-5 would be 25 years from the date of receipt of the first
32 increment, which would be approximately 2006; therefore, it was estimated the District,
33 including any modifications of the Plan for subsequent phases or other changes, would terminate
34 in 2031.
35
36 Mr. Inman noted four parcels to be included in District 3-5 were located within Apache TIF
37 District 3-3, a Redevelopment District created in 1993. These parcels were the following: pond
38 by Cub, pond behind mini-mall, vacant land between SAV II and Conoco and vacant land next
39 to Taco Bell. He noted the proposed action currently before Council requested approval of the
40 tax increment financing plan for District 3-5 and approval of the decertification of the foregoing
41 parcels from Apache TIF District 3-3 in order to include them in the newly created District 3-5.
42
43 Mr. Inman stated the Planning Commission reviewed the Plan on September 16, 2003, and the
44 Commission found the Development Plan for TIF District 3-5 was consistent with the City's
Comprehensive Plan.
City Council Regular Meeting Minutes
September 23, 2003
Page 9
Mr. Inman noted it was said this property was a prime piece of real estate. He indicated if that
were true it would have been developed and the City would not need to assist it. He explained
3 residents did not see the amount of revenue needed to develop this property and bringing in
4 retailers and homeowners was market driven according to what they were willing to pay. He
5 added the buildings would need to be purchased and torn down and there was a significant gap
6 on this piece of property, which the redevelopment process was trying to fill. He noted the
7 increased taxes from the redevelopment motivated this project, as this was a self-contained
8 project.
9
10 Mr. Inman indicated reduction of the tax district duration was contemplated if the project
11 proceeded better than anticipated. He stated the estimated annual tax increment was
12 approximately$2 million a year, assuming the development goes to full value, and 10% of that
13 amount could be used for administration so the City's general fund would not be used to pay any
14 expenses. He explained the form of financing proposed was pay-as-you-go, which meant that
15 once the gap referred to earlier was established it was the developer's obligation to finance that
16 gap. He noted the tax increment received would be used to repay the developer for taking on the
17 obligation. He added the district would disappear if something happened and the project did not
18 go forward.
19
20 Mike Fisher, LHB Architects, stated his firm had been hired by the City to make sure the TIF
21 district met statutes. He explained an inventory completed by LHB Architects concluded that
22 parcels consisting of 70% of the area in the district were occupied by buildings, streets, utilities
or other improvements. He noted LHB also conducted an interior and exterior inspection of all
the parcels/properties and concluded that more than 50%of the buildings in the district, not
25 including outbuildings, were structurally substandard to a degree requiring substantial renovation
26 or clearance, which meant the buildings could not be modified to satisfy the building code at a
27 cost of less than 15% of the cost of constructing a new structure of the same square footage and
28 type on the site.
29
30 Mr. Fisher continued to discuss the blight analysis and explain the formulas and numbers used to
31 reach the stated conclusions.
32
33 Councilmember Faust complimented Mr. Fisher on having done a very thorough analysis and
34 stated his analysis met the "but if for" scrutiny. He asked if Mr. Fisher felt the TIF requirements
35 were met for the City to move ahead. Mr. Fisher responded he was very confident the
36 requirements were met.
37
38 Councilmember Horst asked if there were potential problems in the future. Mr. Fisher replied
39 the analysis was completed after being physically present in the buildings. He added the
40 analysis used conservative findings.
41
42 Councilmember Horst asked regarding the source of the objections. City Attorney Gilligan
43 responded it could be coming from the State auditor or property owners.
44
Mr. Fisher stated an inspector was making the evaluation and he was the most senior architect in
the company. Mr. Fisher added he took the role as analyst. He noted the inspector was very
City Council Regular Meeting Minutes
September 23, 2003
Page 10
conservative and would not push too far. He reminded Council that, in this case, 72%of the
buildings were found to be structurally substandard and met code deficiencies.
3
4 Mr. Gilligan explained Council was finding the district met the requirements by approving the
5 TIF plan and the report served as a basis to vote for the resolution.
6
7 Councilmember Thuesen stated he was encouraged that the City"would be covered"; however,
8 he indicated it was discouraging there was so much blighted property in the area. He added it
9 was good something was finally being done.
10
11 Mayor Hodson asked if any residents wished to address Council at this time.
12
13 Dennis Cavanaugh, 2909 St. Anthony Boulevard, stated he wished to thank those involved for
14 all the work they had done and he stated the project had been open to the residents. He indicated
15 Apache Plaza should probably never have been built and he had seen a lot of proposals come and
16 go. He complimented Mr. Shardlow and Ehlers and Associates, as he felt they had done the
17 most thorough planning in the history of the City's property development. He noted this project
18 had taken a long time to happen and he agreed it was a difficult piece of land to develop. He
19 stated he admired the people who had tackled it.
20
21 Mr. Cavanaugh stated he understood how a marriage of retail and housing was needed for
22 economics. He noted it was difficult to stay in the first-ring suburbs and find affordable housing.
He added there were seniors who wished to move out of their homes into something they could
afford. He noted affordable housing only stayed affordable for one cycle and he felt this was an
25 important issue, as the residents wished to have a diverse community.
26
27 Mr. Cavanaugh commented on the criticism of Wal-Mart. He stated we are now in globalization
28 and the"Big Box"seemed to be the direction retail was taking. He felt Wal-Mart would benefit
29 the community, as it would expand the economic choices available.
30
31 Mr. Cavanaugh noted TIF was the economics of doing redevelopment, although it had been
32 weakened by property tax reform. He stated this property needed help and TIF was what was
33 available. He restated if the housing development had affordable components it would be good
34 for the community. He applauded those involved for tackling a tough project and stated they
35 would not be able to please everybody. He commended the staff, developer and consultants for
36 doing an excellent job and asked them to "stay the course."
37
38 Jake Cadwallader, 3800 Apache Lane, stated he wished to ask a question that had been
39 addressed to the Planning Commission and City Attorney and was never answered. He noted
40 action had been taken to rezone and plat his property; however, the application required he sign
41 it. He stated he never signed the application; therefore, the City took action on property he
42 owned without his approval.
43
44 Mr. Cadwallader also had questions regarding the redevelopment district. He noted the
redevelopment district had been established as a large parcel for quite some time and, at recent
meetings, some of the parcels had been included in the district and others excluded. He asked
47 why the US Bank building was removed from the TIF district, for example, as they were well
City Council Regular Meeting Minutes
September 23, 2003
Page 11
within the district. He noted Erickson's and Video Update had been removed. He also asked
regarding the status of the Equinox Apartments.
3
4 Mr. Cadwallader indicated he felt the City had picked and chosen who would be included and
5 excluded. He asked if US Bank had indicated they did not want to be part of the district and,
6 therefore, they were not part of it. He stated he did not want to be part of the district; however,
7 he had not been given a choice. He added his property had been rezoned and replatted before a
8 TIF district had been established. He asked why the City was taking these actions without
9 authority to do so.
10
11 Mr. Cadwallader agreed this had been a long, complicated process and asked why there was a
12 rush at this point in the process. He felt actions were being taken without a proper foundation,
13 even though he agreed the actions might be doable. Mr. Cadwallader asked that all of the
14 process be completed prior to taking action.
15
16 Bruce Malkerson, Malkerson Gilliland Martin LLP, noted he was the attorney representing Pratt-
17 Ordway, Inc. He stated he had a question regarding Resolution 03-082. He suggested the
18 following reports be added to paragraph 1.04, which referred to "certain written reports relating
19 to the Plans and to the activities contemplated therein": NW Area Quadrant Plan and the update
20 of that plan, summary of inspections of findings by LHB Architects, full report of inspection
21 procedures and results for determining the qualification of the TIF district and building code and
22 conditions deficiencies report. He felt these reports should be included because they were part
0 of the overall study of the district.
25 Mr. Gilligan stated he agreed with Mr. Malkerson and indicated the third sentence in paragraph
26 1.04 should read as follows: These reports include the Summary of the Inspections and Findings
27 prepared by LHB, the Environmental and Asbestos Reports prepared by Braun Intertec, the NW
28 Quadrant Task Force Report and the NW Redevelopment Area Blight Analysis prepared by
29 DSU.
30
31 Mr. Malkerson indicated Stacie Kvilvang of Ehlers and Associates might also have a
32 presentation on blighting conditions in the area and asked if that should also be included. Mr.
33 Gilligan responded he was not aware of such a report.
34
35 Peter Beck stated he represented the owners and managers of the Apache Medical Building. He
36 indicated they had been concerned earlier in the process when the medical building had been
37 included in the potential PUD and were now pleased to see it was not a part of the PUD. He
38 stated the owners and managers of the Apache Medical Building would like confirmation that
39 the building was not included and access would not be closed to 39`h Avenue.
40
41 Mr. Beck explained the owners of the building were planning to renovate and reposition the
42 building in exciting ways. He noted it was understood the building was also in the TIF district,
43 which was more of a concern. He added, if the decision was made to make the investment in the
44 property, the primary concepts being pursued would require some measure of assistance. He
stated the owners would like to clarify that the intent of the building being in the TIF district
would not be that any investment made would generate TIF for the PUD but would be increment
City Council Regular Meeting Minutes
September 23, 2003
Page 12
that could potentially be used to redevelop the Apache Medical Building, which he understood
also met the criteria.
3
4 Mr. Inman responded comment could not be made on future actions, as the current proposal only
5 involved tax increment generated from the particular parcels considered in the two phases.
6
7 Mr. Beck indicated they were not asking for a commitment but were asking that whatever came
8 to them did not go elsewhere. He stated they could move ahead with their own plans if there was
9 no intent to acquire the property. He added they were supportive of what had been put together,
10 as success of the redevelopment project was positive for the medical building.
11
12 Ms. Baker asked if money was being allocated to buy out and condemn apartments, which would
13 displace tenants. Mayor Hodson responded condemning of apartments was not planned.
14 Discussion followed regarding buildings that would be affected.
15
16 Ms. Baker asked who was going to take responsibility for the park property. Councilmember
17 Horst responded that would be included in the Redevelopment Agreement that would be
18 formulated after the current process.
19
20 Ms. Baker stated she understood the contractor would be carrying"his own paper,"receive the
21 tax breaks and make a profit when selling the property. Councilmember Horst explained there
22 was a 26-year time period to pay the developer the money he had loaned to himself. He added
0 there were no tax breaks involved and that this was a"good deal" for the City.
25 Ms. Baker indicated she wanted to see some of the profit come back to the City in the form of
26 taxes. She asked if the contractor would pay full tax as she must pay on her home.
27 Councilmember Thuesen responded it was not uncommon for these types of projects to come
28 onto the tax roles sooner than planned. Discussion followed. It was noted Ms. Kvilvang from
29 Ehlers and Associates would address this issue further.
30
31 Mr. Cadwallader stated he had not received any answers to his questions. Mr. Gilligan
32 responded there was no final zoning approval on the property. He added there was no
33 recommendation for the owner's signature on the preliminary approval; however, it was needed
34 with the final approval. Discussion followed regarding the developer's ability to apply for
35 redevelopment of Mr. Cadwallader's property.
36
37 There was further discussion regarding the reasons why some properties were included and
38 others excluded from the district. Mr. Gilligan explained the included properties were properties
39 where development was likely to occur.
40
41 Mr. Cadwallader asked why the US Bank building was excluded. Mr. Gilligan replied there was
42 no development planned for that property.
43
44 Mr. Malkerson noted the US Bank building was in another TIF district and was not being
0 decertified for placement in the new district. It was noted Mr. Malkerson was correct.
47 Mayor Hodson closed the public hearing at 8:50 p.m.
City Council Regular Meeting Minutes
September 23, 2003
Page 13
Motion by Councilmember Horst to adopt Resolution 03-082 adopting a modification to the
Redevelopment Plan for Redevelopment Project Area No. 3; and establishing Tax Increment
3 Financing District No. 3-5 within Redevelopment Project Area No. 3 and approving the removal
4 of certain parcels from the HRA's Tax Increment Financing District No. 3-3 for inclusion in
5 District No. 3-5 and adopting a Tax Increment Financing Plan therefor, with the inclusion of
6 earlier stated reports in Section 1.04 as recommended by the City Attorney.
7
8 Motion carried unanimously.
9
10 C. Resolution 03-085. re: Redevelopment of property in Redevelopment Project Area No. 3
11 and authorizing preparation, execution and delivery of a contract for private development
12 thereof.
13
14 Stacie Kvilvang, Ehlers and Associates, Inc., noted this redevelopment process was started two
15 years ago. She gave a history of how those involved in the project came together. She also
16 discussed why development of this project area was necessary for the health of the City. She
17 noted the costs of not redeveloping were loss in the tax base, loss in jobs and areas within the
18 City would start to decline generating increased public safety issues and a negative perception,
19 which would make it hard to attract people to the area.
20
21 Ms. Kvilvang also discussed the history of Apache Plaza while giving a slide presentation, which
22 showed pictures of Apache Plaza in the past and also of Apache Plaza's current state. She also
9 explained the reasons why Apache Plaza suffered its decline.
25 Ms. Kvilvang explained the proposed Development Agreement looked at two phases. She stated
26 Phase I consisted of constructing 223,000 square feet of retail space. She added the housing
27 development would include 220 rental units and two phases of for-sale housing, with 128 units
28 being built in each phase. She noted the for-sale housing would have sale price values from
29 $160,000 to $400,000 and the rental unit rates would be $900 to $1,600 per month, which did
30 not include the affordable rent amounts.
31
32 Ms. Kvilvang indicated Phase IIA would consist of 80 units of senior housing; IIB, 26 higher-
33 end townhomes; UC, the urban flats. She noted it appeared the timing of these developments
34 was to begin construction in 2004 and finish in 2007, which she stated might be slightly
35 aggressive. She anticipated the commercial component would be starting immediately and
36 added the Development Agreement would include desired start dates, along with default dates.
37 She explained the default date was usually kept at approximately six months and, if the
38 development had not begun by that date, the City would have the opportunity to seek another
39 developer.
40
41 Ms. Kvilvang discussed the following timeline: Phase I commercial, begin 2004/finish 2005;
42 Phase I apartments, begin Fall 2004/finish 2006; Phase IA for-sale flats, begin Fall 2004/finish
43 2006; Phase IB flats,begin Fall 2005/finish 2007; Phase IIA senior component, begin Fall
44 2005/finish 2007; Phase IIB townhomes, begin Fall 2005/finish 2007; HC flats,begin Fall
46 2006/finish 2007.
City Council Regular Meeting Minutes
September 23, 2003
Page 14
Ms. Kvilvang noted financing for Phase I had been discussed over the last few meetings. She
explained a detailed analysis was completed, which looked at development performance, land
3 prices, construction costs and standards. She added the tax increment financing was going
4 toward "qualified costs,"which were statutory costs such as land acquisition, demolition,
5 environmental issues, relocation, etc.
6
7 Ms. Kvilvang stated one of the questions asked was why public assistance should be provided.
8 She indicated the assistance was needed and warranted. She added this site would have been
9 developed many years ago if it were"such a great site." She indicated Council wanted this
10 development to be successful, as it would increase values, say good things about the community
11 and provide the opportunity for the district to end earlier than planned.
12
13 Ms. Kvilvang explained and detailed the money sources and costs for the components of Phase 1.
14 She noted the for-sale urban flats would be paying an average of$10,000 per unit; however, it
15 was divided among the two phases to allow the initial phase to pay less for land up front to allow
16 the developer the flexibility to address any market issues and legal, financing and design issues
17 occurring disproportionately in the first phase.
18
19 Ms. Kvilvang stated 39`h Avenue would be reconstructed from Silver Lake Road to Stinson
20 Boulevard and upgrades would be made to the sanitary sewer lines as well. She anticipated it
21 would cost approximately$2.205 million to complete these improvements and the cost would be
22 assessed to and paid for by the development and other benefitting properties within the TIF
0 district.
25 Ms. Kvilvang explained the redeveloper would pay for the open space/ponding and site
26 improvements, which were estimated to cost approximately$1.43 million. She stated the City
27 and HRA would reimburse them for a portion or all of the site/ponding improvements through
28 Park Dedication Fees generated from the development, which were estimated at $205,000, any
29 grants the City might receive and from tax increment. She added the site improvements might
30 be phased over a three-year period if the City did not receive the $900,000 in LCDA funds it
31 requested from the Metropolitan Council. She noted phasing of the site improvements would
32 allow the development team to pay for the improvements as cash became available. She
33 indicated $325,000 of the cost had not yet been identified.
34
35 Ms. Kvilvang noted the redeveloper would construct and furnish a new municipal liquor store
36 within the commercial development. She anticipated the liquor store would be constructed prior
37 to demolition of the existing store, causing minimal disruption to the City's liquor operation.
38 She added the City would work with Tires Plus to find a suitable location for their business. She
39 noted the redeveloper would pay the cost to relocate the existing Tires Plus building and the cost
40 to construct the new liquor store, up to an amount not to exceed $1.7 million.
41
42 Ms. Kvilvang indicated the redeveloper had a signed purchase agreement for the existing Cub
43 Foods store for$10.85 million, inclusive of the restrictive property covenants. She stated the
44 redeveloper intended to rehabilitate the store to upgrade its appearance to the quality of the new
0 commercial development at an estimated cost of$580,000.
City Council Regular Meeting Minutes
September 23, 2003
Page 15
Ms. Kvilvang explained the redeveloper had requested assistance in acquiring the three
commercial properties upon which the Phase IA for-sale housing units would be located. She
3 stated the development team held discussions with Fannie Mae to assist in providing the "up
4 front"money needed to acquire these properties and Fannie Mae was willing to provide this
5 assistance but would require, as collateral, the land, Developer Guarantee and a pledge of funds
6 from the City. She anticipated the City would utilize funds from the water filtration fund as
7 collateral for the loan and would not be required to provide its general obligation taxing
8 authority. She noted the terms of the collateral were still being discussed with Fannie Mae and
9 terms of a revolving fund for future property acquisitions were still being discussed with the
10 redeveloper. She added any final loan agreement would be brought before Council and the HRA
11 for approval.
12
13 Ms. Kvilvang indicated the developer of the for-sale housing units anticipated a 12%profit on
14 the development. She explained, once the developer obtained this profit margin, they would
15 provide a prorated "pay back"to the City and HRA of 25%of the excess profit. She added the
16 City and HRA's prorated share of the profit would be increased by 50% if the project profit
17 exceeded 15%. She noted the profit calculations excluded any unit"upgrades"requested by
18 homeowners.
19
20 Ms. Kvilvang stated, provided the for-sale developer was not in default, in the event the return to
21 the for-sale developer was less than 12%, the City and HRA would provide the for-sale
22 developer a subordinated pay-as-you-go (PAYG) tax increment note in the amount needed to
0 attain a 12%return.
25 Ms. Kvilvang indicated mutually agreed-upon preliminary development proformas for the for-
26 sale housing and commercial development would be attached as an exhibit to the Development
27 Agreement. She explained this would be the basis for determination of assistance for the
28 developments and,when the developments were completed, the actual development proformas
29 would be compared with the preliminary develop proformas. She noted the excess proceeds
30 would be disbursed to the City and HRA as excess TIF and would be made available for Phase II
31 developments within the TIF district if the projects performed better than anticipated, the for-
32 sale developer received their required profit amount of 12% and the commercial developer met
33 their construction and lease goals.
34
35 Ms. Kvilvang noted the City and HRA would enter into a separate redevelopment contract with
36 the rental housing developer.
37
38 Ms. Kvilvang indicated the redeveloper would utilize reasonable efforts to acquire all property
39 privately prior to requesting the City to initiate condemnation, including use, where appropriate,
40 of City-sponsored mediation. She noted the City would agree to undertake condemnation of all
41 real properties located within the redevelopment district that would restrict redevelopment as
42 contemplated. She explained all costs of condemnation proceedings would be paid by the
43 redeveloper, subject to reimbursement of certain costs as a public redevelopment cost from tax
44 increment in accordance with the Redevelopment Agreement.
0 Ms. Kvilvang stated the redeveloper had reimbursed, and agreed to do so in the future, the City
47 and HRA for all costs of the City and Authority in advancement of the project, including but not
City Council Regular Meeting Minutes
September 23, 2003
Page 16
limited to the costs of the City consultants, financial analysis of the project and tax increment
plan, redevelopment and TIF district analysis and creation, legal fees, survey and title costs,
3 environmental review costs, environmental site investigation costs, etc. She noted the
4 redeveloper would be reimbursed for these costs and costs associated with acquiring and holding
5 the Apache Plaza property and other overhead as a qualified tax increment cost in an amount
6 currently estimated to be$2.645 million.
7
8 Ms. Kvilvang explained any cost savings by the redeveloper on negotiating the purchase, non-
9 statutory relocation payments and demolition of the three commercial properties for the Phase IA
10 for-sale housing component would be used to first cover any overruns in any other redeveloper
11 category and 50% of the remainder would be paid to the redeveloper and 50% made available to
12 the City and HRA for other public redevelopment costs. She noted the incentive fee would not
13 be payable to the redeveloper if they were in default under the Redevelopment Contract.
14
15 Ms. Kvilvang stated the City and HRA would provide the redeveloper with the $586,000 grant it
16 received from the Metropolitan Council for asbestos abatement at Apache Plaza. She added the
17 City and HRA would use its best efforts to obtain LCDA and tax-base revitalization grant
18 funding, in addition to any other available funding from Metropolitan, State and Federal
19 Sources.
20
21 Ms. Kvilvang indicated the master redeveloper would be paid a$1 million fee for the Phase I
22 development at the time of the closing of the land sale to each project element. She noted the
0 timing and conditions attached to payment of the fee.
25 Ms. Kvilvang explained the redeveloper may create and assign its development rights and the
26 right to enter into the Redevelopment Contract to a single-purpose entity to undertake the
27 project, without the consent of the City and HRA, provided Len Pratt and John Ordway continue
28 to hold a majority voting interest in the new entity. She added the redeveloper might thereafter
29 assign portions of the rights and obligations under the Redevelopment Contract to the
30 commercial, rental and for-sale developers, with the consent of the City and HRA, which would
31 not be unreasonably withheld.
32
33 Councilmember Sparks stated it was important to remind residents this information had been
34 given multiple times.
35
36 Ms. Kvilvang anticipated the Development Agreement would be brought to Council sometime in
37 October and noted it may require a special meeting. She added this was a great development for
38 the City, as it was physically prudent and met the overall redevelopment goals of the City.
39
40 Mayor Hodson noted this had been a partnership between residents, Council, development team,
41 staff, consultants and experts. He added everyone had worked well together to make this
42 happen.
43
44 Motion by Councilmember Horst to adopt Resolution 03-085 relating to the redevelopment of
property in Redevelopment Project Area No. 3 and authorizing the preparation, execution and
delivery of a contract for private redevelopment thereof.
47
City Council Regular Meeting Minutes
September 23, 2003
Page 17
Discussion:
2
3 Councilmember Faust noted it had been a long process to get to this point. He stated it had been
4 tedious and detail oriented; however, he felt the City had a good financial package and the
5 developers felt the situation was a win/win for them and the community. He added not many
6 redevelopments of this size happened in communities the size of St. Anthony Village. He
7 indicated there had been enough due diligence with the developers to be assured the project
8 would stand the test of time and was reasonable and prudent.
9
10 Councilmember Thuesen stated a lot of information had been received over the months and
11 years and he was comfortable with the results, as there were many knowledgeable people
12 working toward the same goal. He noted the process had been careful not to financially
13 compromise residents or future residents.
14
15 Motion carried unanimously.
16
17 Mr. Pratt came forward and stated he felt humbled once again that the City had selected him
18 some 18 months ago. He noted he knew things would need to be solved as the project moved
19 forward. He indicated he had kept three things in mind: the need to listen to residents and
20 consultants, the need to keep the resulting quality development in mind and the need to treat
21 change with respect. Mr. Pratt thanked those involved who had been helpful moving the project
22 to this point.
0 VII. GENERAL POLICY BUSINESS OF THE COUNCIL.
25 A. Resolution 03-083, re: $585,000 GO Refunding Bonds Series 2003D, authorizing
26 issuance, awarding sale, fixing form, etc.
27 B. Resolution 03-084 re: $1,170,000 Taxable GO Tax Increment Refunding Bonds Series
28 2003E, authorizing issuance, awarding,sale, fixing form, etc.
29
30 Mr. Inman stated the City was selling two refunding bonds. He explained these bonds were not
31 a new money issue and did not create any new obligation but were simply sold for the refunding.
32
33 Mr. Inman reviewed the bids received for the $1,170,000 Taxable General Obligation Tax
34 Increment Refunding Bonds Series 2003E and noted Cronin and Company, Inc., was the lowest
35 responsible bidder with a true interest rate of 4.4679%. He recommended Cronin and Company,
36 Inc., be accepted as the successful bidder.
37
38 Motion by Councilmember Faust to adopt Resolution 03-084 approving Cronin and Company,
39 Inc., as the successful bidder for the$1,170,000 Taxable GO Tax Increment Refunding Bonds
40 Series 2003E with a true interest rate of 4.4679%.
41
42 Motion carried unanimously.
43
44 Mr. Inman reviewed the bids received for the $585,000 General Obligation Refunding Bonds
Series 2003D and noted UMB Bank,N.A., Kansas City, Missouri, was the lowest responsible
is bidder with a true interest rate of 2.6436%. He recommended UMB Bank,N.A., Kansas City,
47 Missouri,be accepted as the successful bidder.
City Council Regular Meeting Minutes
September 23, 2003
Page 18
Motion by Councilmember Sparks to adopt Resolution 03-083 approving UMB Bank,N.A.,
Kansas City, Missouri, as the successful bidder for the$585,000 General Obligation Refunding
3 Bonds Series 2003D with a true interest rate of 2.6436%.
4
5 Motion carried unanimously.
6
7 VIII. REPORTS FROM CITY MANAGER AND COUNCILMEMBERS.
8 City Manager Momson stated he had no report.
9
10 Councilmember Horst stated he had no report.
11
12 Councilmember Sparks stated she had no report.
13
14 Councilmember Thuesen noted the St. Anthony Lions Club had been allowed to stand on some
15 street corners last weekend to raise money for White Cane Days. He explained the money raised
16 would go to the local eye bank and projects like training dogs for sight-impaired persons. He
17 thanked the City for allowing the Lions Club to raise the money.
18
19 Councilmember Faust noted he had asked to be given the authority to go to the Minnesota
20 Department of Revenue to attend the meeting discussing local sales tax options. He stated a
21 reporter from the Sun Focus who attended the last Council meeting asked if she could
22 accompany him to the meeting. He noted her article should be in Thursday's Sun Focus. He
explained the Department of Revenue was charged by the State Legislature to take input from
cities regarding local sales taxes and the implications involved. He stated there was a loud and
25 clear message from the counties and cities to "do no harm." He noted there was an editorial in
26 the September 23, 2003, issue of the Star Tribune, which addressed the issue. He also indicated
27 looking forward to the Sun Focus article.
28
29 IX. INFORMATION AND ANNOUNCEMENTS.
30 None.
31
32 X. MISCELLANEOUS INFORMATIONAL DOCUMENTS.
33 None.
34
35 XI. ADJOURNMENT.
36 Motion by Councilmember Horst to adjourn the meeting at 9:42 p.m.
37
38 Motion carried unanimously.
39
40 Respectfully submitted,
41
42 Marjorie R. Jenkins
43 TimeSaver Off Site Secretarial, Inc.
44
ayor
ATTEST: t -
47 City Clerk