HomeMy WebLinkAbout2010.11.08 EDA Packet AGENDA
CITY OF HUGO
ECONOMIC DEVELOPMENT AUTHORITY
MONDAY, NOVEMBER 8, 2010
8:30 AM
8:30 am 1. Call to Order
8:31 am 2. Roll Call
8:32 am 3. Approval of Minutes
EDA Meeting of October 11, 2010
8:35 am 4. Presentation from Development Team for the City
Owned Properties
• Mark Finnemann, Dick Fischer, & Mike Brass
9:15 am 5. Update on Park Dedication Policy
9:30 am 6. Update on TIF Certification
9:45 am 7. Update City Rental Properties in Downtown
10:10am 8. Update on Downtown Redevelopment
10:30 am 9. Adjournment
BACKGROUND MEMO FOR THE EDA MEETING OF
MONDAY, NOVEMBER 8, 2010
3. APPROVAL OF MINUTES
Staff recommends approval of the minutes from the October 11, 2010 EDA Meeting as
presented.
4. PRESENTATION FROM DEVELOPMENT TEAM FOR THE CITY OWNED
PROPERTIES
The development team that has the purchase agreement for the City owned property will
be presenting their plans for the property to date. They will showcase a site plan and
elevations proposed for the building. The EDA should provide feedback to the
development team on their proposed plans.
5. UPDATE ON PARK DEDICATION POLICY
At its October 28, 2010, meeting the Planning Commission considered the park
dedication policy at a public hearing. They were presented with the Parks Commission
and EDA recommendation regarding the commercial and industrial park dedication fees.
The Planning Commission made a recommendation to the City Council to keep the
language to require commercial and industrial development to pay park dedication fees.
6. UPDATE ON TIF CERTIFICATION
Springsted has talked to Washington County on certifying the TIF district on the original
request date of July 22, 2009. Springsted will be resending all the required documents to
Washington County and does not expect any problems with the request. Staff will
continue to update the EDA as the request for certification is processed.
7. UPDATE CITY RENTAL PROPERTIES IN DOWNTOWN
Staff will present to the EDA the holding costs for the rental properties the City owns.
8. UPDATE ON DOWNTOWN REDEVELOPMENT
Staff will update the EDA on the progress of downtown redevelopment.
MINUTES FOR THE EDA MEETING OF OCTOBER t 1, 2010
Fran called the EDA meeting, to order at 8:30 am.
PRESENT: Jan Arcand, Tom Denaway, Phil Klein, Brian Thistle and Fran Miron
ABSENT: Jim Bever and Mike Granger
CITY STAFF PRESENT: City Administrator, Mike Ericson, Community Development
Director, Bryan Bear, and Planner, Rachel Simone.
APPROVAL OF MINUTES FOR THE EDA MEETING OF SEPTMEBER 13, 2010
Denaway made motion, Thistle seconded, to approve the minutes for the EDA meeting of September
13, 2010.
All ayes. Motion carried.
UPDATE ON PARK DEDICATION POLICY
At its September 20, 2010, meeting the City Council considered both the EDA and Park
Commission recommendations regarding park dedication fees for commercial and industrial
development. The City Council directed staff to revise the park dedication ordinance by
removing the requirement for commercial and industrial land/fee dedication. The ordinance
will be considered by the Planning Commission on October 28, 2010. Staff will continue to
update the EDA on the park dedication ordinance.
UPDATE ON TIF CERTIFICATION
On July 22, 2009, the request to certify the TIF district was delivered to Washington County.
The EDA decided to request certification at that time, because there is a three year time limit
to use buildings that have been demolished to qualify. In order for the city to reimburse itself
for the purchase of the properties and the demolition, the district needed to be certified within
three years of the date that the property was deemed substandard.
Staff was expecting to hear back from the County on the certification this summer. Staff
contacted Washington County in August and they stated that they did not receive the
certification request. The request was also sent to the State of Minnesota and they were aware
of the request.
Over the last month staff has been meeting with Springsted to come up with options on
where to go from here. There were three topics of discussion:
1. Talk to Washington County and ask them to certify the TIF district on the date of
the original request.
2. Re-request certification for the TIF district. This option will not be feasible
because we need to use the buildings that were demolished to quality for the TIF
district and for the City to reimburse itself for the purchase and demolition.
3. Offer development incentives for property owners and developers other than TIF.
Staff recommended that the EDA discuss each topic and provide direction to staff on how to ,
move forward.
Miron stated that he liked the idea of partnering up with Washington County for economic
development incentives like tax abatement.
Denaway stated that we do not lose anything by requesting that the County certify the district
on the original request date. TIF is certain in this case and tax abatement is not.
The CD Director stated that we can drop parcels from the district at any time if we leave the
TIF district as is, but there may be other incentives for developers that the City can provide.
Thistle stated that he thinks the EDA should request certification on the original date. The
City has spent time and money on the creation of the district. The City has been advertising
the TIF District to the public.
Denaway made a motion, seconded by Klein, to move forward with option one and request
that the County certify the district on the original request date. Staff should work on other
development incentive if TIF Financing does not work for a project.
All aye. Motion Carried.
DISCUSSION ON CITY RENTAL PROPERTIES IN DOWNTOWN
The City owns two rental properties in downtown across from City Hall (barber
shop/printing building and a duplex). For the last several years the duplex has been rented out
and the barber shop has been rented out. Staff discussed what the future will be for the two
building with the EDA.
The CD Director stated the house that the City rents out is in bad condition and will be
vacant soon. The print building is also expected to be vacant soon. The buildings could be
rented out again or demolished.
Miron asked what the holding costs for each building was.
The CD Director stated that staff did not have that information for the EDA this morning, but
the City does pay insurance, utilities and staff time to manage and maintain the buildings.
Miron asked staff to bring the holding costs to the EDA at their next meeting.
Klein asked if we take then down, would that be an incentive for developers to come to Hugo
and build in downtown.
Arcand asked what the inside of the buildings looked like and would be going in and fix
them up to rent out again.
The CD Director stated that there are a lot of items to Fix and would be a large cost.
Thistle stated that once a building is vacant it starts to look bad pretty quick and becomes a
security issue. If the buildings are not rented out they should be removed.
Miron stated that the EDA should discuss this item at their next meeting when they can look
at the holding costs for the buildings.
UPDATE ON BR&E IMPLEMENTATION PROJECT TEAMS
Staff had another joint meeting with the HBA on September 23, 2010, to discuss the
Marketing and Events Action Plan. There is now a rough draft of the action plan and we will
meet again on October 28, 2010, to Finalize the action plan. The action plan items relate to
both the City and the HBA. After the action plan is final we will then distinguish roles
between and City and the HBA and there may be a few items that overlap. Staff will continue
to work with the HBA on the action plan and bring the final plan to the EDA for its review.
UPDATE ON DOWNTOWN REDEVELOPMENT
Staff discussed the Highway 61 project completion with the EDA.
The antique store has been demolished in downtown.
Pete Sampair has been meeting with staff on a possible redevelopment of his property.
Staff stated that Glamos Wire is having an open house on October 15, 2010.
Miron made a motion, seconded by Denaway, for staff to post on the bulletin board that there
will be a possible quorum of EDA at the Glamos Wire open house.
All Aye. Motion Carried.
ADJOURNMENT
Klein made a motion, seconded by Arcand, to adjourn at 10:30 am.
All Aye. Motion Carried.
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The Subject Property is located conveniently on the picturesque Egg Lake with 400 lineal feet of lake ! _
frontage and an additional 380 feet of lineal visibility to Highway 61. Consisting of approximately 3
acres it is located in the heart of downtown Hugo and just minutes from the newt expanded freeway
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interchange of 35E and County Road 14. This Subject Property offers prime development for multiple, Egg Lake
community friendly/entertainment business.
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CONCEPT SITE PLAN
Demographics 1 Mile 3 Miles 5 Miles H M
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2009 Population 3,919 16,280 34,625 _... �.._
Average Household Income $78,559 $86,095 $93,211
Median Household Income $81,195 $83,582 $85,233
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4.000 S.F. 4,000 S.F. 4.500 S.F. Wagner's Nursery
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• Papa Murphy's
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DRAFT
Parks Commission Recommendation
CITY OF HUGO
AN ORDINANCE REQUIRING PARK DEDICATION
WITHIN THE CITY OF HUGO, MINNESOTA
THE CITY OF HUGO ORDAINS:
SECTION 1. The'City Council of the City of Hugo does hereby amend Chapter 90,
Section 90-324 Park Dedication to the following:
Sec. 90-324. Park Dedication.
(a) General Dedication Standards
In order to develop a system of parks within the community to serve the public's health
and recreational needs, a percentage of the net buildable acreage based on the density of
all land subdivided for residential purposes shall be dedicated to the city as public
parkland. The city finds that the more dense a development is, the more demand for park
land it creates since lots can be smaller affording less private recreational space and more
occupants per acre. The following formula will be used to determine the dedication
requirement where a land dedication is required:
Density Percentage of Land to be Dedicated (of the
buildable land)
0-3.99 units per acre 10%
4.00-5.99 units per acre 11%
6.00-7.99 units per acre 13%
8.00-9.99 units per acre 15%
10.00 < units per acre 17%
The land so dedicated shall be subject to approval by the city council in accordance with
the city's Comprehensive Plan for parks. At the city council's discretion, a parkland
dedication fee may be accepted or required instead of or connection with land dedication.
The parkland dedication fee shall be set annually by the City Council and adopted as part
of the City's fee schedule. The parkland dedication fee shall be charged for each
dwelling unit originated by the subdivision or development of any property in the city,
not including any dwelling unit that may be in existence at the time of the adoption of the
ordinance from which this article is derived, or which is subject to an approved
development agreement with the city that includes a parkland dedication provision.
(b) Commercial/Industrial Development Dedication
A parkland dedication fee shall be charged to commercial and industrial property
development as set annually by the City Council and adopted as part of the City's fee
schedule.
(c) Appeal Process
The parkland dedication fee may be appealed to the City Council before the City Council
makes a decision on the final plat and shall be calculated as follows: The percentage of
land to be dedicated will be multiplied by the fair market value of the net buildable
acreage.
The fair market value shall be determined by the City Council, following their review of
a current appraisal submitted to the city at the developer's expense. The appraisal shall
be made by appraisers who are approved members of the SREA or MAI, or equivalent
real estate appraisal societies.
If the city receives written notice of a dispute over the parkland dedication fee before
approval of the final plat, the developer shall pay the fee into an escrow account pending
a decision of an appeal of the fee. If an appeal is not filed within 60 days following
approval of the final plat, or if the person aggrieved by the fee does not prevail on the
appeal, then the funds paid into escrow must be transferred to the city.
SECTION 2. Severability. In the event that a court of competent jurisdiction adjudges
any part of this Ordinance to be invalid, such judgment shall not affect any other
provision of this Ordinance not specifically included with that judgment.
SECTION 3. Effective Date. This amendment shall take effect upon its passage and
publication.
ADOPTED BY THE HUGO CITY COUNCIL ON
Fran Miron, Mayor
ATTEST:
Michele Lindau, City Clerk
14667 Forest Boulevard
Income and Expense Summary
14667 Forest Boulevard 2006 2007 2008 2009 2010 Cumulative
Cost of Acquisition $ 195,411.96
Land = 10,381 square feet
Thru Sept
Assessed Value: Building $ - $ - $ - $ - $ -
Assessed Value: Imps $ 50,200 $ 50,200 $ 50,200 $ 48,100 $ 48,100
Assessed Value: Land $ 74,200 $ 74,200 $ 74,200 $ 124,600 $ 124,600
Assessed Value: Total $ 124,400 $ 124,400 $ 124,400 $ 172,700 $ 172,700
Rent Received $ 7,315.00 $ 6,980.00 $ 3,780.00 $ 3,780.00 $ 2,835.00 (1) $ 24,690.00
Expenses:
Electric Utilities $ 492.99 $ 1,235.59 $ 1,345.39 $ 1,287.06 $ 881.29 $ 5,242.32
Gas Utilities $ 90.17 $ 278.48 $ 253.56 $ 259.91 $ 185.38 $ 1,067.50
Insurance $ 1,017.00 $ 733.00 $ 782.00 $ 774.00 $ 844.00 $ 4,150.00
Interest (Contract for Deed) $ 2,858.44 $ 8,498.21 $ 8,377.50 $ 5,576.43 $ - $ 25,310.58
Legal Fees $ 1,111.00 $ - $ - $ - $ - $ 1,111.00
Repair& Maintenance (2) $ 185.63 $ 21.91 $ 782.24 $ - $ 140.81 $ 1,130.59
Taxes $ 1,347.00 $ 2,790.00 $ 2,860.00 $ 2,860.00 $ 4,252.00 $ 14,109.00
$ 7,102.23 $13,557.19 $ 14,400.69 $ 10,757.40 $ 6,303.48 $ 52,120.99
Revenue over Expenses $ 212.77 $ (6,577.19) $ (10,620.69) $ (6,977.40) $ (3,468.48) $ (27,430.99)
Return on Acquisition 0.11% -3.37% -5.44% -3.57% -1.77%
Comparison:
Rate on 5-Year Treasury Bond 4.75% 4.43% 2.80% 2.20% 1.26%
(1) Current tenant is Priscilla Deveau (Barbershop)on a month-to-month lease
(2) Repairs & Maintenance does not include staff time making repairs
14701 Forest Boulevard _
Income and Expense Summary
14701 Forest Boulevard 2002 2003 2004 2005 2006 2007 2008 2009 2010 Cumulative
Cost of Acquisition $ 179,436.22
Land= 12,005 square feet
Bldg= 1,499 square feet
Building Built in 1901
Thru Sept
Assessed Value: Building $ 116,400 $ 128,000 $ 133,100 $ 142,000 $ 129,600 $ 126,600 $ 123,800 $ 9,700 $ 8,600
Assessed Value: Land $ 21,000 $ 23,000 $ 45,000 $ 45,000 $ 52,500 $ 52,500 $ 47,300 $ 115,700 $ 113,400
Assessed Value: Total $ 137,400 $ 151,000 $ 178,100 $ 187,000 $ 182,100 $ 179,100 $ 171,100 $ 125,400 $ 122,000
Rent Received $13,650.00 $14,400.00 $14,375.00 $14,300.00 $ 9,150.00 $14,400.00 $13,050.00 $ 6,592.00 (1) $ 99,917.00
Expenses:
Electric Utilities $ 630.53 $ 970.50 $ 180.74 $ 273.39 $ 3,017.60 (2) $ 1,590.90 $ 1,570.46 $ 1,746.46 $ 9,980.58
Gas Utilities $ 918.03 $ 1,336.46 $ 453.04 $ - $ 3,313.85 (2) $ 2,206.87 $ 1,639.69 $ 1,191.24 $ 11,059.18
Insurance $ 727.00 $ 855.50 $ 916.00 $ 1,017.00 $ 1,789.25 $ 1,245.50 $ 1,234.00 $ 1,346.00 $ 9,130.25
Legal Fees $ - $ - $ - $ - $ 1,717.83 (3) $ 44.56 $ - $ - $ 1,762.39
Repair&Maintenance(4) $ 333.91 $ - $ - $ 182.48 $ 861.09 $ 303.83 $ 662.03 $ 678.39 $ 3,021.73
Taxes $ 1,314.00 $ 1,666.00 $ 1,780.00 $ 1,844.00 $ 1,696.00 $ 1,822.00 $ 1,740.00 $ 1,344.00 $ 13,206.00
$ 3,923.47 $ 4,828.46 $ 3,329.78 $ 3,316.87 $12,395.62 $ 7,213.66 $ 6,846.18 $ 6,306.09 $ 48,160.13
Revenue over Expenses $ 9,726.53 $ 9,571.54 $11,045.22 $10,983.13 $ (3,245.62) $ 7,186.34 $ 6,203.82 $ 285.91 $ 51,756.87
Return on Acquisition 5.42% 5.33% 6.16% 6.12% -1.81% 4.00% 3.46% 0.16%
Comparison:
Rate on 5-Year Treasury Bond 2.97% 3.43% 4.05% 4.75% 4.43% 2.80% 2.20% 1.26%
(1)Tenants owe$2,127 in back rent as of 09/30/10-Does not include staff time spent collecting rent
(2)Xcel was billing tenant but ultimately held city responsible for past due bills under a PUC rule prohibiting a tenant from being billed for gas and electric
service when one meter is used for a multiple unit rental property
(3)Unlawful detainer action to evict tenant for nonpayment of rent and utility bills
(4)Repairs&Maintenance does not include staff time making repairs