Loading...
HomeMy WebLinkAboutEDA PACKET 03.19.24If you need accommodations for the EDA meeting please contact Rachel Juba at (651) 762-6304 or rjuba@ci.hugo.mn.us, thank you. Agenda ECONOMIC DEVELOPMENT AUTHORITY (EDA) Tuesday, March 19, 2024 Hugo City Hall 6:00 PM 6:00 pm 1. Call to Order 6:01 pm 2. Roll Call (Arcand, Chrun, Denaway, Klein, Puleo, Weidt) 6:02 pm 3. Approval of Minutes EDA Meeting of January 16, 2024 6:03 pm 4. Discussion on City Owned Property Downtown 6:45 pm 5. Adjournment If you need accommodations for the EDA meeting please contact Rachel Juba at (651) 762-6304 or rjuba@ci.hugo.mn.us, thank you. Background memo for the EDA Meeting of Tuesday, March 19, 2024 3. Approval of Minutes Staff recommends approval of the minutes from the December 19, 2023 meeting as presented. 4. Discussion on City Owned Property Downtown The EDA will discuss options for planning the future of the city-owned property in Downtown Hugo. Staff included a draft marketing plan for the property to discuss with the EDA. MINUTES FOR THE EDA MEETING OF JANUARY 16, 2024 President Weidt called the meeting to order at 5:56 PM PRESENT: Arcand, Chrun, Denaway, Klein, Puleo, Weidt ABSENT: None STAFF: Rachel Juba, Community Development Director Max Gort, Associate Planner Bryan Bear, City Administrator APPROVAL OF MINUTES FOR THE EDA MEETING OF DECEMBER 19, 2023 Commissioner Chrun made a motion, seconded by Commissioner Denaway, to approve the December 19, 2023 EDA meeting minutes. Ayes: All. Nay: None. Motion carried. REVIEW AND APPROVE 2024 EDA GOALS Juba reviewed a draft of the 2024 EDA goals created at the December 19, 2023 meeting. Klein asked if the EDA should note water-related issues, such as focusing development efforts towards sustainable practices and water reuse. Bear says that water is a significant issue that effects all aspects of a City, and that the EDA can try to learn more about and stay engaged with water related issues if they so choose. Commissioner Arcand says that the EDA could have more of an awareness role, similar to the Highway 61 Visioning Study. Commissioner Puleo asks if an update on the current litigation related to White Bear Lake can be given at the next EDA meeting. Commissioner Denaway made a motion, seconded by Commissioner Klein, to approve the 2024 EDA Goals. All ayes. Motion Carried. DISCUSSION ON THE FUTURE OF CITY OWNED PROPERTIES Juba presented with background on the history of the City-owned property on Egg Lake, including the EDA acquiring a number of parcels downtown to assemble enough property for commercial development. Work that was done prior to development included title work and environmental assessments. The City Council has approved three projects for the site since 2009, and there have been several other proposals in that time. The Caprenters Restaurant plan was approved in 2009, which included a standalone restaurant building; the approval included a purchase agreement and tax increment financing. However, the building burned down shortly after starting and the project did not finish. A second plan, for the Cattle House restaurant on the north end of the property and 2 additional commercial buildings nearer the south end was approved in early 2020. However, the onset of the COVID-19 pandemic caused the project to not be able to finish. The most recent approved project, proposed by Denny Trooien of Dennis Properties, LLC, was much more intense than the previous approved plans. The plan met some pushback from the DNR relating to the setback from the Ordinary High-Water Level (OHWL). The DNR required the plan to be changed to have an average setback from the OHWL of 37.5 feet. Once the plan was changed, the DNR required an additional 30- foot buffer from the OHWL. Ultimately, Mr. Trooien withdrew the project. The EDA reviewed a summary of their 2017 workshop with the Urban Land Institute (ULI), who consult on land and real estate development, providing advice to community leaders. Highlights from the discussion include high-level considerations about economic development that are significant in Hugo and similar communities. Juba says that many of the takeaways from the workshop are still applicable in 2024. Juba provided a review of the development criteria for the property, which included a requirement for a full-service restaurant or event center, a plan that is situated so that customers can take advantage of views of Egg Lake, a phasing plan with all development to be complete within 3 years, adherence to the Downtown Plan and Design Guidelines, and adequate parking. Several options for the future of the property were given. Juba said that the EDA wasn’t expected to make a formal decision at this meeting, and that the path forward may include any number of these options. These options include: • Starting a process of obtaining implementation flexibility on shoreland rules from the DNR • Starting a strong marketing campaign for the property • Hire a commercial real estate broker • Develop a plan for other ways the property can be used in the interim, such as community events or as a recreational space • Survey the community for what it wants to see on this property • Creation of planning documents, such as a market study, a master plan, a review of the Downtown Plan and Design Guidelines, grant applications, further engagements with ULI, etc. • The City could develop the property themselves • Doing something completely different, such as a zoning change to allow housing or other commercial uses, or using the property as a park or other public use The EDA primarily discussed going through the process of receiving implementation flexibility from the DNR on shoreland rules, which is intended to address situations where the rules impede development. The process usually requires the City to have higher standards to offset the flexibility, such as shoreland restoration or enhancement. The City and the DNR area hydrologist must agree on the flexibility and offsetting measures. The process for obtaining this flexibility is lengthy, expected to take roughly one year. Commissioner Arcand asked if this option was offered to Trooien. Juba responded that Staff and Trooien decided to focus on navigating the DNR’s pushback while maintaining the character of the project. Commissioner Chrun asked how far from the DNR’s requirements the project ended up. Juba said that the average setback was 37.5 feet, with some parts of buildings as close as 12 feet. The DNR was requiring everything to be buffered by at least 30 feet. Commissioner Chrun asked if purchasing the existing single-family home property to the north would have given Trooien some more flexibility for site design. Juba said that it probably wouldn’t have, since the DNR’s main concern was proximity to the water, and that the phasing plan included evaluating parking needs with each building as it was constructed. Commissioner Puleo asked if the City can view the last project’s process as an outline for understanding what the DNR may approve for implementation flexibility. Juba said that the formal implementation flexibility process would still be necessary, and Bear said that what staff learned is that an ecological and scientific basis is not the DNR’s primary concern. Commissioner Arcand said that the implementation flexibility option lends to Trooien’s vision specifically. President Weidt said that the DNR has had a certain degree of involvement with each approved project, and that there hasn’t been a consistent understanding of what can happen on this property. Juba stated that the implementation flexibility should provide a better understand of development capabilities city-wide, especially related to required setbacks from ditches. Bear stated that the DNR’s decision relating to any given project is highly dependent on the individual area hydrologist at that time, and that having a permanent framework will provide a higher degree of certainty going forward. Staff recommended that the EDA review and discuss the options provided and provide direction to staff. Commissioner Klein asked if the City has received any recent, serious interest in developing this property. Juba said no, and that a change in the advertising approach could change that. President Weidt said that the situation of economic development in the area likely hasn’t changed since the 2017 ULI workshop, meaning that another ULI engagement wouldn’t likely provide new insight. Weidt said he felt a sense of urgency to show that the City is doing something with the property ahead of the upcoming 2024 election, such as the interim community event space option. Commissioner Puleo suggested engaging with the DNR to avoid future problems related to development along the lake, with an interim use and waiting to find a developer who can do something special being good options. Commissioner Puleo asked if staff can research how other communities have utilized space for community events. Commissioner Arcand asked what the City’s reservations could be about developing the property themselves. President Weidt responded that a lot of cities have seen negative consequences, and that developing property puts a lot of risk on taxpayer money. Bear stated that a problem faced by restauranteurs is securing financing beyond the planning stages, signaling that even with the land being essentially free they don’t have the capital to complete the project. Bear suggested that the EDA could consider alternative ownership options for the land, such as a lease agreement. No further discussion. The EDA recommended that staff begin the process of obtaining implementation flexibility with the DNR, and in the meantime do some soft marketing of the property and explore interim community uses. ADJOURNMENT Commissioner Chrun made a motion, seconded by Commissioner Klein, to adjourn the meeting at 6:53 PM. Ayes: All Nay: None Motion carried. Respectfully submitted. Max Gort, Associate Planner City Owned Property - Marketing Plan Process/Organization There are several items the City has already completed as a great way to set up the property for development and marketing to a commercial user. Below are a list of items completed to date:  Property Control  Proper Zoning  Community Input  Downtown Plan and Design Guidelines  Market Study for Downtown – getting pretty old now  Registered Survey with Clean Title  Geotechnical Information (soils)  Environmental Evaluation Marketing Efforts The City Council and EDA approved the incentive to market the property for one dollar based on specific development criteria. Staff has completed the following tasks in an effort to market the City owned property. • Create a summary of financing options/savings o Incentive based on development criteria – if meet could be sold for $1.00 o Cost saving for not having to pay sewer/water trunk fees o Sewer Availability Change (SAC) Met Council Credits • Put together a marketing brochure and marketing flyers o Site Features o Development Criteria o Benefits/Finance Savings o Area Highlights o Fast Facts o Area Demographics, etc. • Reach out to brokers o Join and/or attend events of MNCAR, EDAM, MSCA, etc. o Showcase on various commercial real estate websites  Commercial Search - MNCAR  Loopnet – Greater MSP o Email blast and mailings o Send mailing to commercial brokers and developers o Set up meeting with commercial brokers and restaurateurs • Sign on the property