HomeMy WebLinkAboutCC WORKSESSION 06152020If you would like to request special accommodations or alternative formats, please contact the City Clerk at 612-782-3313
or email city@savmn.com. People who are deaf or hard of hearing can contact us by using 711 Relay.
Work Session Agenda
Monday, June 15, 2020
5:30 p.m.
This meeting will be conducted electronically under the authority of MN State Statutes 13D.021 since an in-
person meeting is not possible due to the COVID-19 Pandemic.
Please click the link below to join the webinar:
https://us02web.zoom.us/j/81221100007?pwd=WGFxTVdhSWdMdnlFek9aSDZNdkdsdz09
Password: 975075
Dial In Options:
iPhone one-tap :
US: +13017158592,,88478194659#,,1#,975075# or +13126266799,,88478194659#,,1#,975075#
Or Telephone:-Dial(for higher quality, dial a number based on your current location):
US: +1 301 715 8592 or +1 312 626 6799 or +1 646 558 8656 or +1 253 215 8782 or +1 346 248 7799 or +1
669 900 9128
Webinar ID: 884 7819 4659
Password: 975075
International numbers available: https://us02web.zoom.us/u/kbzkG19mDD
1. Development 65 Tax Increment Financing (TIF) Proposal. Stacie Kvilang, Ehlers,
presenting
2. Adjournment
City of St. Anthony
CITY COUNCIL WORK SESSION
Minutes
June 1, 2020
Present:
Mayor & Council
Randy Stille, Mayor; Bernard Walker, Councilmember; Thomas Randle, Councilmember; Wendy
Webster, Councilmember and Jan Jenson, Councilmember.
Absent:
None
Staff:
Mark Casey, City Manager and Charlie Yunker, Assistant to the City Manager
Call to Order:
Mayor Stille called the Work Session to order at 5:30 p.m.
Congresswoman Omar:
Staff reported that Congresswoman’s staff informed the City earlier that she was unable to meet.
Affordable Housing:
Staff presented the Housing Data Research prepared by City Planner, Comp Plan’s Housing Chapter and
Affordable Housing Discussion PowerPoint prepared by Ehlers. Mayor & Council discussed if goals
around affordable housing should be set, need for protecting natural occurring affordable housing and if
more affordable housing needs to be built. Mayor Stille reference the Dougherty Market Report and
will send to staff for distribution to the council.
Adjournment:
The meeting adjourned at 5:55 p.m.
Respectfully submitted by Mark Casey, City Manager.
THIS PAGE LEFT INTENTIONALLY BLANK
Memo
To: Mark Casey, City Manager
From: Keith Dahl and Stacie Kvilvang, Ehlers
Date: May 18, 2020
Subject: Development 65 Project – Analysis of Financial Request
Development 65 applied for TIF assistance in the approximate amount of $4.9 million to fill a
development gap for a senior independent living and assisted living/memory care community.
They’ve proposed to construct a 125-unit facility with 83-units of independent living, 26-units of
assisted living, and 16-units of memory care. The project would consist of studio, alcove, 1, and
2-bedroom units (the “Project”) with 5% of the independent living units (6 units) affordable to
residents at or below 50% AMI.
This memo has been prepared, at the request of the City, to conduct a review of their application
and determine how much TIF assistance, if any, is warranted. Below is a summary of our findings.
1. Extraordinary costs (costs above what a typical development would encounter) for
redeveloping the site are anticipated to be $789,059 as detailed below:
Demolition $ 63,610
Site Utilities $ 500,000
Roads & Walks (City Extension) $ 96,709
Soil Remediation $ 137,740
Note: Land is not considered an extraordinary cost even though the Developer is
paying approximately $34,000/unit. Prior projects for this site were paying
approximately $18,000/unit as is the Trident project (Doran project was
approximately $13,000/unit).
2. Impact of affordability over 15-years is estimated to be $689,251:
# of Units Unit Type Rent Type Rent Difference Annual Difference
6 Studio Affordable $ 867 $ 861 $ 61,992 Market $ 1,728
Recommendation:
Based on our review, the requested TIF assistance is more than what is necessary. We conclude
that TIF assistance in the amount of $1.5 million over an anticipated term of 6.5 years is supported
for this Project to cover the above referenced costs. We’d recommend providing this assistance
in the form of a PAYGO Note at an interest rate of 4% and repayable from 90% of the available
tax increment. We also recommend that the affordability be maintained for a minimum term of 15
years.
Please contact Stacie at 651-697-8506 with questions.
THIS PAGE LEFT INTENTIONALLY BLANK
1
Tax Increment Financing Workshop – St. Anthony Senior Living Project
June 15, 2020
General Issues
A. Current Site: Blighted, eye sore to the city and particularly the neighborhood. There is so much potential
for creating jobs, an asset of value, and remediating a scar on the city. We are working tirelessly to
accomplish that outcome, but we need the city’s help.
B. Senior Living: By leveraging these senior services within a parklike atmosphere to residents and
pedestrians, we can help improve a blighted site and the community. We could ensure pedestrians in the
area have a seamless transition from public walkways through the property while maintaining the same
park-like feel. We answered the request of neighborhood meeting attendees to ensure pedestrians and
bikers could get around the property and cars parked on the property could get out through Kenzie and
not always through Stinson’s access point. This came at a cost of adding sidewalks, moving surface
parking underground, and adding drive lane extensions.
C. The site is within a Historic District and building within one is more expensive. We acknowledge the
neighborhood’s desire to have as many surface parking spots removed from the west side of the building.
We did so and moved them underground, at a cost. We also added far more landscaping and walkways on
this site than a typical development. We acknowledged the neighborhood’s request to ensure the
western part around the sidewalk on Stinson is heavily landscaped and many mature trees are
preserved at a cost to an arborist.
D. Project would have to correct utilities and pathways at the border with Minneapolis to correct the
fragmented systems of the existing utility system.
E. Kenzie – We have been a part of the solution in working with Hennepin County, landowner, and developer
of Bremer Bank to minimize the number of access points on Kenzie. We have not received much response
from the county but are open to figuring out long term solutions. County wants to seal off all entries on
the north side of Kenzie close to Stinson Parkway. We will continue to be part of the solution with
neighboring Bremer Bank
F. Land – We have an option with the current landowner and will continue to work to reduce the purchase
price based on material factors that brings the price into alignment with market. The extraordinary cost
currently in the land cost is due, in part, to easement off of Kenzie, but land price must come down to a
number that does not crush the project. This is in the works with seller.
Definable Issues of Cost
1. Parking – At our neighborhood meeting in February 2020, it was clear that the neighbors do not want
any parking on the west side of the property. This may not be entirely possible, but we did work to
come close. The MNPLS Park Board wants to keep the intent and aesthetic of the Horace Cleveland
Plan intact where this property abuts the parkway. Therefore, we removed as much parking as
possible on the west surface parking lot. Forty-four surface spaces were removed and our
2
underground parking was maximized. We are excavating the whole building footprint to add
maximum underground parking to remove as much surface parking on the west side as possible. This
is not generally necessary, but the unique needs of this property and neighbors require us to do so.
Furthermore, per suggestions of the neighbors, we are building more circulation on the property for
cars to have another convenient option of exiting on Kenzie rather than Stinson.
2. Re-route of sanitary sewer – We have discussed this with Ehlers and it is included in their memo.
3. We made a commitment to the city of Minneapolis Parks Board that walks at the Island within Stinson
will be upgraded to Park Board standards. This is part of the Historic Horace Cleveland design of the
Grand Rounds. We are validating with Ehlers if this is included in the $96k in their memo.
4. Deliveries and staff parking will be at the back of the building and accessed off of Kenzie. This access
point is a part of our option with the seller and came at a price based on our limitation to access the
site on Stinson (e.g. large trucks cannot enter Stinson access point). This road comes at a high cost, but
it keeps staff, deliveries, move in, move out-from clogging up the neighborhood.
5. This same delivery route can be for future developments into Bremer Bank & East site as the county
wants to significantly limit access to Kenzie Terrace. This development wants to be a part of the
solution, but it will cost dollars to do so.
6. Water Service may need to be placed on the southside of the alley and an easement given to city. The
alley is currently filled with utilities making this difficult. This could be strategic as it would help city
for future development and even neighbor use on the north side of Alley. They may pay for the
upsizing of the line for 12” to 18”. Upsizing and taking land for easement should be a part of TIF size.
7. Stormwater retention will have to be under the parking lot. Future run off issues from storm water
should be addressed in how the project builds its storm water retention and prevents future flooding
of the neighbors just to the north which happens from time to time currently. Covering the costs of
solving this problem for the long term to prevent future run off issues would be a part of the TIF size
we request.
8. Northwest corner of the site has a significant and irregular grade change, coupling this with the fact
that it is on the Horace Cleveland Grand Rounds the retaining wall will protect the pedestrian
pathways. This cannot be a cheap modular retaining wall. We plan to build this with boulders to fit
into the aesthetic of the Horace Cleveland Plan
9. We plan to use native landscaping on entire site because it uses less water and has a deeper root
structure that absorbs more rainwater. Also fit into the aesthetic of the Horace Cleveland Plan
10. Land – The land is blighted and comes with a high price tag, but it is not an all or nothing proposition.
The seller is pricing the property based on 160 units and adding a high cost for access from Kenzie.
The development is continuing to negotiate with the seller as changes are made. We modified to 125
units and plan on signing an amended option with a lower purchase price. Additionally, without a fair
market land price the project, considering all the unique characteristics of the property, is a no go.
3
TIF Size Comparison
Our Project Solves Unique Issues with Land:
• Value is created by preserving and enhancing the Stinson Parkway in continuation of the Horace
Cleveland Plan.
• Project removes blight and provides high quality asset that provides to the city for generations to
come.
• Provides affordable housing for seniors.
• The Project improves the quality of life in and around the area because of the sidewalks, bikeways,
underground parking, utility renovation, landscaping, and other infrastructure changes to serve the
public.
• The Project creates well-paying jobs in the short term for construction workers and then in the long
term for senior living operational jobs. Project is bike and transit friendly encouraging local
employment.
• Finally, a successful project on this site would encourage more development of the surrounding land to
bring the area to its highest and best use and provide even more value to the city and its residents. We
would plan to continue with such developments because we believe it would best serve our future
residents.
TIF Eligible Costs
TIF Size
TIF Eligible Expense Description Ehler's Recommendation Development 65 Request Difference
Demolition 63,610$ 63,610$ -$
Site Utilities 500,000$ 500,000$ -$
Roads & Walks (City Extension) - We require all
sidewalks, car lane extensions 96,709$ 150,000$ 53,291$
Soil Remediation 137,740$ 137,740$ -$
Affordability (5% of IL units - 15 years affordability)689,251$ 689,251$ -$
Parking - Underground -$ 1,016,400$ 1,016,400$
Land - At $17k/unit; 125 units -$ 2,125,000$ 2,125,000$
Underground Water Retention Tank -$ 255,000$ 255,000$
Total 1,487,310$ 4,937,001$ 3,194,691$
We have TIF eligible costs greater than our request for $4.93M in TIF assistance. Thus, according to statute, our request
could be supported by city council.
Ehlers Memo dated May 18, 2020 recommends providing TIF assistance in an amount of $1.5M. We have broken out the
amounts detailed in the Ehlers Memo to compare with what the project requires for us to build it.
Attachment to Memo for TIF Workshop – June 15, 2020
Total Project TIF Eligible Costs Cost
1 Land Cost - (@ $17k/unit, 125 units)2,125,000$
2 Landscaping - In Excess of Normal 183,440$
3 Underground Storm Water Tank 432,430$
4 Repave Connection on Stinson Parkway 96,709$
5 Cost of Surface Parking Space 292,725$
6 Cost of Underground Parking Space 2,467,646$
7 All sidewalks on the property 209,596$
8 Cost of driveway from Kenzie 142,730$
9 Soil Cleanup 137,740$
10 Demolition of the buildings 63,610$
11 Rework Site Utilities from Minneapoilis to St.A 500,000$
12 Affordability for 5% of Units 689,251$
*Total TIF Eligible Costs of Project 7,340,877$
Site layout without landscape buffer Site layout with landscape buffer
St Anthony Village - Senior
St Anthony Village - Senior
St Anthony Village - Senior
St Anthony Village - Senior