HomeMy WebLinkAbout2017/04/24 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA
APRIL 24, 2017
5:00 p.m. SPECIAL CITY COUNCIL MEETING – Council Chambers
1. Call to Order
2. Resolutions, Ordinances, Motions and Discussion Items
2a. Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
Recommended Action: Motion to approve First Reading of an ordinance amending
Section 36-268 PUD 7 of the Zoning Code for property located at 4005, 4015, & 4027
County Road 25, and set the second reading for May 1, 2017.
3. Adjournment
5:30 p.m. CITY COUNCIL STUDY SESSION (Written Reports Only) – Community Room
1. Business Terms for Purchase and Redevelopment Contract with PLACE
2. 2017 Market Value Overview
3. Utility Box Wrap Program
4. 2017 Monthly Financial Report
5. First Quarter Investment Report (January – March 2017)
5:30 – 10 p.m. Boards & Commissions Interviews
Auxiliary aids for individuals with disabilities are available upon request.
To make arrangements, please call the Administration Department at
952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting.
Meeting: Special City Council
Meeting Date: April 24, 2017
Action Agenda Item: 2a
EXECUTIVE SUMMARY
TITLE: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
RECOMMENDED ACTION: Motion to approve First Reading of an ordinance amending
Section 36-268 PUD 7 of the Zoning Code for property located at 4005, 4015, & 4027 County
Road 25, and set the second reading for May 1, 2017.
POLICY CONSIDERATION: Does the City Council support the proposed Major Amendment
to the Parkway 25 PUD?
SUMMARY: Parkway 25, LLC submitted an application for a Major Amendment to Section
36-268 PUD 7 that established the zoning for the Parkway 25 redevelopment located at 4005,
4015, & 4027 County Road 25 (the former Vescio’s restaurant and Valu Stay Inn). City Council
approved the Parkway 25 PUD in September 2016 which allowed for the construction of a five
story, mixed-use building with 112 residential units, 8,850 square feet of ground floor
commercial space, and parking located in two surface lots and in an underground parking ramp.
The original proposal included a restaurant and a fitness center. The applicant is requesting an
amendment to the PUD to allow for medical uses and to increase the size of the commercial
square footage from 8,850 square feet to 12,040 square feet. The plan would decrease the west
surface parking lot from 25 spaces to 14 spaces to accommodate the additional commercial
space, and reduce the east surface parking lot from 30 parking spaces to 29 spaces to install a
turnaround space. The change from restaurant to medical office decreases the parking demand
and the proposed parking counts would meet the city’s requirements.
The additional 3,190 square feet of commercial space would be added to the west side of the
building’s ground floor, which was previously parking spaces located under a cantilevered
portion of building. The additional commercial space requires the parking lot to be shifted 5 feet
to the west to allow for increased circulation, resulting in the removal of landscaping on the west
property line. Additional landscaping is being installed elsewhere on the site to make up for the
removals. The development will include 112 residential dwelling units and will remain 5 stories
in height. The only proposed changes occur on the ground floor of the building.
FINANCIAL OR BUDGET CONSIDERATION: None at this time.
VISION CONSIDERATION: St. Louis park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Ordinance Draft
Proposed Development Plans
Prepared by: Jennifer Monson, Planner
Reviewed by: Sean Walther, Planning and Zoning Supervisor
Michele Schnitker, Deputy CD Director
Approved by: Tom Harmening, City Manager
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 2
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
DISCUSSION
SITE LOCATION MAP:
SITE INFORMATION:
Site Area: 1.574 acres
Zoning: PUD – Planned Unit Development
Comprehensive Plan: Commercial
Neighborhood: Triangle
BACKGROUND: City Council approved the Parkway 25 PUD in September 2016 which
allowed construction of a five story, mixed-use building with 112 residential units, 8,850 square
feet of ground floor commercial space, and parking located in two surface lots and in an
underground parking ramp.
PUD ANALYSIS:
Description: The developer requests a major amendment to Section 26-268 PUD 7 of the city’s
zoning ordinance which established the zoning for the Parkway 25 development.
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 3
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
Existing Approved Plans
Proposed Plans
Commercial
Commercial
Commercial
/Restaurant
5 Units
7 Units
2 Units
Commercial Glenhurst Ave Glenhurst Ave
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 4
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
Zoning Compliance Table:
Factor Required Adopted Proposed
Use Commercial Mixed Use-Commercial and
Residential
No Change
Lot Area 2.0 acres, or less with City
Council approval
1.574 acres No Change
Height No maximum with PUD 67 feet No change
Building
Materials
Minimum of 60% Class I
materials
A: 69.4% Class I
B: 62.8% Class I
C: 73.4% Class I
D: 70.7% Class I
E: 71.0% Class I
F: 70.5% Class I
G: 85.8% Class I
H: 68.4% Class I
A: 72.6% Class I
B: 62.8% Class I
C: 73.4% Class I
D: 70.7% Class I
E: 71.0% Class I
F: 70.5% Class I
G: 85.8% Class I
H: 68.4% Class I
Density 50 units/acre, or more with
PUD
66.7 units/acre No Change
Floor Area
Ratio
None with PUD 2.09 2.12
Ground
Floor Area
Ratio
N/A 0.2 0.34
Off-Street
Parking
Residential: 154 spaces
•1 space/bedroom
Commercial: 54 spaces
•1 space/200 square feet
for commercial (58
spaces)
•-10% transit reduction
(-6 spaces)
Total: 206 spaces required
•159 underground spaces
•55 off-street surface spaces
•16 on-street spaces
Total Provided: 230 spaces
Total Required: 230 spaces
•159 underground spaces
•43 off-street surface
spaces
•16 on-street spaces
Total Provided: 218 spaces
Total Required: 206 spaces
Bicycle
Parking
Residential: 127
•1 space/unit (112 spaces)
•1 space/10 automobile
spaces (15.4 spaces)
Commercial: 6
•10% of required vehicle
parking
Total: 133 spaces
•132 interior bike spaces in
underground ramp
•14 exterior bike spaces
Total: 146 bike spaces
•130 interior bike spaces
in underground ramp
•14 exterior bike spaces
Total: 144 bike spaces
DORA 12% total lot area 12,187 square feet, 17.7% 12, 626 square feet, 18.4%
Landscaping See Landscaping section
Setbacks None with PUD Front (North): 0’
Side (East): 14’
Rear (South): varies, 17’-
70’
Side (West): varies 47’- 73’
Front (North): 0’
Side (East): 14’
Rear (South): varies, 17’-
70’
Side (West): varies 47’-
53’
Uses: The proposal includes a mix of commercial and residential amenity space and dwelling
units on the ground floor and residential units on floors two through five. The ground level was
originally approved with 7 ground floor dwelling units split between the buildings east and west
sides and 8,850 square feet of commercial space. The developer proposes moving all ground
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 5
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
floor residential units to the building’s east side while modestly reducing the size of those units.
The applicant proposes commercial space on both the east and west sides of the building: 2,237
gross square feet of commercial space on the building’s east side and 9,785 gross square feet of
commercial space on the west side, for a total of 12,040 square feet of commercial space.
Height: No changes to height are proposed. Parkway 25 will remain 67 feet and 5 stories tall.
Parking: A restaurant use requires more parking than a medical use which reduces the overall
parking requirements from 230 parking spaces to 209 parking spaces. The plans include 218
parking spaces and meet the parking requirements for the amended uses.
Landscaping: The revised plans decrease the number of trees and plantings on the site due to the
shifting of the west parking lot. The plan proposes 87 deciduous trees, 317 shrubs, and 1083
perennials, while the original plan called for 91 deciduous trees, 306 shrubs, and 1,146
perennials. Due to the loss of landscape materials, the applicant worked with the city’s Natural
Resource Coordinator to increase the quality and diversity of the tree and plant species. The
plans continue to meet the intent of the landscape ordinance.
Designed Outdoor Recreation Area (DORA): The proposed development plans illustrate
DORA through the inclusion of the 12,626 square feet outdoor space in the rear of the building,
including 11,654 square feet for an outdoor recreation plaza and a 972 square foot dog park. The
plan exceeds the City’s minimum 12% DORA requirements, and provides approximately 18.4%
of DORA. The previous approved plans included 12,187 square feet (17.7%) of DORA space.
NEIGHBORHOOD MEETING: A neighborhood meeting was held on April 6, 2017 to
discuss the proposed changes to the uses and ground floor of the building. There was
disappointment that a restaurant is no longer part of the proposed development, and there were
questions to clarify the location of parking.
STAFF RECOMMENDATIONS:
Staff recommends amending Section 36-268 PUD 7 and the Official Exhibits for Parkway
25:
1.The site shall be developed, used and maintained in accordance with the conditions of
this ordinance, approved Official Exhibits, and City Code.
PLANNING COMMISSION: The Planning Commission will hold a public hearing on April
19, 2017 to gather comments on the proposed amendment. Staff will summarize the public
hearing and Planning Commission’s recommendation during the City Council meeting on April
24, 2017.
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 6
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
ORDINANCE ____-17
ORDINANCE AMENDING THE ST. LOUIS PARK
CITY CODE RELATING TO ZONING BY
AMENDING SECTION 36-268-PUD 7
THE PLANNED UNIT DEVELOPMENT ZONING DISTRICT
FOR THE PROPERTY LOCATED AT 4005, 4015, & 4027 COUNTY ROAD 25
THE CITY OF ST. LOUIS PARK DOES ORDAIN:
Findings
Sec. 1. The City Council has considered the advice and recommendation of the Planning
Commission (Case No. 17-13 PUD) for amending the Zoning Ordinance Section 36-268-PUD 7.
Sec. 2. The Comprehensive Plan designates the following described lands as
Commercial:
Lot 1, Block 1, Parkway 25 Addition, Hennepin County, Minnesota
Sec. 3. The St. Louis Park Ordinance Code, Section 36-268-PUD 7 is hereby amended to
add the following changes:
Section 36-268-PUD 7.
(a) Development Plan
The site shall be developed, used and maintained in conformance with the following
Final PUD signed Official Exhibits:
1. C0.0 G000P – Cover Sheet
2. C0.1 – Site Survey
3. C1.0 – Removals Plan
4. C2.0 – Site Plan
5.C2.1 – Alley Plan and Profile
6. C3.0 – Grading Plan
7. C3.1 – Grading Plan Interim
8. C4.0 – Utility Plan
9. C5.0 – Civil Details
10. C5.1 – Civil Details
11. C5.2 – Civil Details
12. SW1.0 – SWPPP – Existing Conditions
13. SW1.1 – SWPPP – Proposed Conditions
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 7
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
14. SW1.2 – SWPPP – Narrative and Details
15. SW1.3 – SWPPP – Attachments
16. SW1.4 – SWPPP- Attachments
17. L100 – Tree Preservation Plan LS100 – Tree Preservation and Replacement Plan
18. L200 – Preliminary Landscape Plan– LS300 - Site Landscape Plan
19. L400 – Reference Plan
20. L401 – Layout Plan
21. L500 – Planting Details
22. G000 – Cover Sheet
23. A100P – Floor Plan – Level -1
24. A110P – Floor Plan – Level 1
25. A120P – Floor Plan – Level 2-4
26. A150P – Floor Plan – Level 5
27. A160P – Roof Plan
28. A200 – Exterior Elevations A200P – Exterior Elevations
29. A201 – Exterior Elevations A201P – Exterior Elevations
30. AS100 – Architectural Site Plan AS100P – Architectural Site Plan
31. A300P – Building Sections
32.Site Lighting Photometric Plan
33. Zoning Map Amendment Exhibit
34.Preliminary Plat
35.Final Plat
36.Traffic Study
37.Parking Management Plan
38.Parking Agreement
The site shall also conform to the following requirements:
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 8
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
1)The property shall be developed with 1112 residential units and 8,850 12,040
square feet of ground floor commercial space.
2)At least 214 202 off-street parking spaces shall be provided. At least 16 on-street
parallel parking and loading spaces shall be installed adjacent to the site. An off-
street parking management plan shall be approved by the city and managed by
the property owner, with the goal of avoiding spill over parking into surrounding
streets in the neighborhood and maximizing the benefits of mixed use
development and shared parking. At least 10% of the parking shall be permitted
for use as guest parking.
3)The maximum building height shall not exceed 67 feet and five stories.
4)The development site shall include a minimum of 17.7% percent designed
outdoor recreation area based on private developable land area.
(b) Permitted Uses
(1)Multiple-family dwellings. Uses associated with the multiple-family dwellings,
including, but not limited to, the residential office, fitness facility, mail room,
assembly rooms or general amenity space are limited to a maximum of 40% of the
building first floor.
(2)Commercial uses. Commercial uses are only permitted on the first floor, and are
limited to the following: medical office, restaurant, office, private entertainment
(indoor), retail shops, service, showrooms and studios.
a.a. All parking requirements must shall be met for each use.
b.b. Hours of operation for commercial uses shall be limited to 6 a.m. to 12 a.m.
including commercial deliveries
c.No more than 3,950 square feet of gross building floor area shall be used for
restaurant.
d.c. Each commercial tenant space on the first floor shall have a direct and
primary access to the outside of the building on the north building elevation
that is open during business hours.
e.d. In vehicle sales is prohibited.
f.e. Restaurants are prohibited.
(3)Civic and institutional uses. Civic and institutional uses are limited to the
following: education/academic, library, museums/art galleries, indoor public
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 9
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
parks/open space, police service substations, post office customer service facilities,
public studios and performance theaters.
(c) Accessory Uses
Accessory uses are as follows:
(1)Incidental repair or processing which is necessary to conduct a permitted use and
not to exceed ten percent of the gross floor area of the associated permitted use.
(2)Home occupations complying with all of the conditions for home occupations
located in the R-C district.
(3)Catering, if accessory to food service, delicatessen or retail bakery.
(4)Gardens.
(5)Parking lots.
(6)Public transit stops/shelters.
(7)Outdoor seating, public address (PA) systems are prohibited.
(8)Outdoor uses and outdoor storage are prohibited.
(d) Special Performance Standards
(1)All general zoning requirements not specifically addressed in this ordinance shall
be met, including but not limited to: outdoor lighting, architectural design,
landscaping, parking and screening requirements.
(2)All trash, garbage, waste materials, trash containers, and recycling containers shall
be kept in the manner required by this Code. All trash handling and loading areas
shall be screened from view within a waste enclosure.
(3)Signage shall be allowed in conformance with the MX- Mixed Use District
requirements found in the sign code.
(4)Façade. The following façade design guidelines shall be applicable to all ground
floor non-residential facades:
Special City Council Meeting of April 24, 2017 (Item No. 2a) Page 10
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7
a.For street-facing facades, no more than 10% of total window and door area
shall be glass block, mirrored, spandrel, frosted or other opaque glass,
finishes or material including window painting and signage. The remaining
90% of window and door area shall be clear or slightly tinted glass, allowing
views into and out of the interior.
b.Visibility into the space shall be maintained for a minimum depth of three
feet. This requirement shall not prohibit the display of merchandise.
(5)Awnings.
a.Awnings must be constructed of heavy canvas fabric, metal and/or glass.
Plastic and vinyl awnings are prohibited.
b.Backlit awnings are prohibited.
Sec. 4. The contents of Planning Case File 17-13 PUD are hereby entered into and made
part of the public hearing record and the record of decision for this case.
Sec. 5. This Ordinance shall take effect fifteen days after its publication.
Public Hearing April 19, 2017
First Reading April 24, 2017
Second Reading May 1, 2017
Date of Publication May 11, 2017
Date Ordinance takes effect May 26, 2017
Reviewed for Administration Adopted by the City Council May 1, 2017
Thomas K. Harmening, City Manager Jake Spano, Mayor
Attest: Approved as to Form and Execution:
Melissa Kennedy, City Clerk Soren Mattick, City Attorney
PARKWAY25
15-066.00
PARKING AND BIKE RACK CALCULATIONS
UNIT
ALCOVE
COUNT
1
69
42
BR/UNIT BEDROOMS
1
TOTAL PARKING
1
1 BEDROOM
2BEDROOM
TOTAL 112
TOTAL RESIDENTIAL PARKING REQUIRED
69
84
154
TOTAL RESIDENTIAL PARKING PROVIDED (IN UNDERGROUND GARAGE)
TOTAL RESIDENTIAL GARAGE = 159 SPACES · (5 SPACES FOR COMM. P
OFFICE= 12,040 GSF TOTAL (WEST· 9,785 GSFI EAST· 2,237 GSF)
PA RKING REQ= 1 STALU200 GSF
69
84
TOTAL OFFICE PKG REQUIRED 11,548 SF/200 (SF AS DE FINED BY SLP CO
REDUCTION IN PARKING FOR TRANSIT (10% OF REQUIRED SPACES)
TOTAL COMMERCIAL PARKING REQUIRED
TOTAL COMMERCIAL PARKING PROVIDED
ON GRADE PARKING -43 SPACES
STRE ET PARKING -16 SPACES
BE LOW GRAOE PA RKIN G • 5 SPACES
GRAND TOTAL PARKING PROVIDED
GRAND TOTAL PARKING REQUIRED
RESIDENTIAL BIKE RACKS REQUIRED= 1 PER UNIT+ 1/10 PARKING STAL
112+(154110)
COMMERCIAL BIKE RACKS REQUIRED= 1110 PARKING STALLS
TOTAL BIKE RACKS REQUIRED
TOTAL BIKE RACKS PROVIDED
Allworkstlallcomplywithsllspplicsble Wltsandlocsl codes111nd ordl11111m:111s.
Worklsto beoompletadi'laccordance with d documants indudi119 drawings, 9pecificatio11s.andcot1ditionsof oontr8d f«work .
Refertooomplatasetof lssued oolllractdocumentslndudlngdrawings alld spedflcetlonsofllll dlsclpllnesfa 111pplicablenotes,111bbreviations,111nd symbols.Contractorisrespomillelor ooordination ofwork.NotifyArchit9ct of81lydlsaepandesbelore proceedlngwithwork.
FoodsaMCefor coordl11111tlononly. Food sarvice equipment and i'latllllation noti'lconlJ'llcl
(64/10)
(130 AT LEVEL ·1, 14 AT LEVEL 1)
MN BUILDING CODE 1303.1500
trttps:1iw-.rev1sor.roo.gov/l\lles/?ld=1303.1SOO
GROSS PARKING: 56,099 l! .001 • 56 GROSS RESIDENTIAL: 134,725 � .0025 = 337 GROSS COMMERCIAL: 8,096 l! .001 = 6
AREA REQUIRED: 401 SF AREA PROVIDED: 1037 SF
BEDROOM
1 1015 SF
B2 992 SF
83 1056 SF
1311 SF
1108SF
1183 SF
1183 SF
1209 SF
1194SF
1295 SF
LEVEL 1 ALCO VE
1 BEDROOM
1+BEDROOM
2BEDROOM
TOTALS
839 GSF
967 GSF
986 GSF
1094 GSF
1093 GSF
1152 GSF
1417 GSF
1183 GSF
1265 GSF
1276 GSF
1311 GSF
1275 GSF
1406GSF
27
LEVEL 2 LEVEL 3 LEVEL 4
0 0 0
12 12 12
4 4 4
11 11 11
27 27 27
24
LEVEL 5 TOTAL
0 1
3
12
15
12
2
2
1
11 53
4 16
9 42
24 112
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,/ ) ... f I I •
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2.12
0.34
I I
I ,-• ,.,....
-J
71 UNITS/ACRE
ENERGY CODE MODEL:
GSF
56,099 SF
26,120SF
30,337 SF
30,337 SF
30,337 SF
28,481 SF
201,711 SF
56,099 SF
133,572 SF
12,040 SF
/
LEED FOR HOMES RATING SYSTEM· MULTIFAMILY MIO.RISE
4015 CSAH 25, SAINT LOUIS PARK, MINNESOTA 55416
PROJECT PARTICIPANTS
OWNER
P�AY25,LLC 4915 W 35TH ST. #102 SAINTLOUIS PARK. MN 55416 952.925.3878 ARCHITECT OJR ARCHITECTURE, INC. 333 WASHINGTON AVENUE N SUITE#210 MINNEAPOLIS, MN 55401
CONTACT: Stleldon Berg (612)676-2719 (612)676-2796(fax) sb e�r-lnc.com
CONTRACTOR
DORAN COMPANIES 7803 GLENROY RD #200 MINNEAPOLIS, MN 55439 952.288 .2000
CONTACT:AndyWells (952)288-2076(ofllce) (612)750-0871 (mobile) andy.wells@doraneompanias.com
PROJECT PARTICIPANTS
CML
CIVIL SITE GROUP 4931 W 35TH ST SUITE 200 ST LOUIS PARK, MN 55416
CONTACT: David Knaebla (783)234-7523(direct) (612)615-00SO{offlce) dknaable@civilsitagroup.com
STRUCTURAL
ERICKSEN ROED & ASSOCIATES 2550 UNIVERSITY AVE W ST PAUL,MN 55114 (651)251-7570
CONTACT: Matt Kahle (651)414-6147(dlrect) mkahla@araeng .com
CONTACT: Tom Root (651)414-6143(direet) lroot@eraeng.com
SHEET INDEX· GENERAL
co.o
C0.2
C1.0
C2.1
C3.1
cs.o
SW1.0
SW1.2
L500
LS100
LS300
A110P
A120P
A1SOP
A160P
A201P
AS100P
I COVER SHEET
SHEET INDEX· CML
ALTASlSVB)'
TITI.ESHEET
REMOVALS PLAN
ALLEY PLAN AND PROFILE
GRADING PLAN-INTERIM
SWPPP • EXISTING CONDITIONS
SWPPP • NARRATIVE AND DETAILS
SWPPP-NOTES
SHEET INDEX· LANDSCAPE
REFERENCE PLAN
DETAILS· AMENITY DECK
DETAILS -AMENITY DECK
TREE PRESERVATION AND REPLACEMENT PLAN
SITE LANDSCAPE Pl.AN
SHEET INDEX· ARCHITECTURAL
FLOOR PLAN • LEVEL· 1
FLOOR PLAN - LEVEL 1
FLOOR PLAN • LEVEL
FLOOR PLAN - LEVEL
ROOF PLAN PLANNING)
EXTERIOR ELEVATIONS
BUILDING SECTIONS
ARCHITECTURAL SITE PLAN
PROJECT PARTICIPANTS
MECHANCIAU ELECTRICAL
EMMANUELSON-POOAS, INC. 7705 BUSH LAKE ROAD, ED1NA,MN 55439 (952)930-0050
CONTACT: Jotln Noro&trom (952)540-4011(dlrect) Jnorditrom@epslc.com
CONTACT:JustinArtz (952)540-4023(direct) jarlz@epiric .com
LANDSCAPE ARCHITECT
CONFLUENCE 530 N 3ROST#120 MINNEAPOLIS, MN 55401 (612)333-3702
CONTACT: Brad Aldrich (612)237-5046 baldricil@thlnkcoofluenoe.com
PROJECT PARTICIPANTS
INTERIORS
BKVGROUP 222 NORTH 2ND STREET SUITE101 MINNEAPOLIS, MN 55401
CONTACT: Serah Tracey (612)373-9532(dired) st racey@bkvgroup.com
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Special City Council Meeting of April 24, 2017 (Item No. 2a)
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7 Page 11
EXTENT OF '-==----UNOERGROUND t-PARKING GARAGE --I I I
I I I I I I _________ _J
14PARKING SPACES
---------1
I I L.
D
D
D
D
D
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9,376 SF
9,785GSF
-------->j<---
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TRENCH DRAIN
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'---1_ DOG I RUN�
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L __ -
GARAGE BELOW-�-�
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Lobby
3,058 SF
El
ACCESS ALLEY
D n
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486 SF
1BR i;:;i
524SF
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2,098SF
2.237GSF
A 1 ���� �':."-LEVEL 1
65'-8112"
METAL TRELLIS see LANDSCAPE DWGS
'--W--'1--------- (4) INVERTED
USTYLE BIKE PARKING
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A110P
Special City Council Meeting of April 24, 2017 (Item No. 2a)
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7 Page 12
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Special City Council Meeting of April 24, 2017 (Item No. 2a)
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7 Page 13
BUILDING MATERIA L BY ELEVATION
Elevation Malerlal Class A Brick Class 1 Stone Class 1 Stucco Class 1 Glass Class 1 Metal Class2
Total Class 1 Total Class 2
B Stooe Class 1 Glass Class 1 Metal Class 2
Total Class 1 Total Class 2
C Stone Class 1 Glass Class 1 Metal Class 2
Total Class 1 Total Class 2
D Stooe Class 1 Stucco Class 1 Glass Class 1 Metal Class 2
Total Class 1 Total Class 2
E Stooe Class 1 Brick Class 1 Stucco Class 1 Glass Class 1 Metal Class 2
Total Class 1 Total Class 2
F Brick Class 1 Stone Class 1 Stucco Class 1 Glass Class 1 Metal Class2
Total Class 1 Total Class 2
G Stucco Class 1 Glass Class 1 Metal Class2
Tota1Clau1 Total Class 2
H Stucco Class 1 Brick Class 1 Glass Class 1 Metal Class 1
Total Class 1 Total Class 2
Grand Total Class1 Class 2
o Building Material By Elevation 12"= 1'-0"
8 NORTH EXTERIOR ELEVATION C-CS AH 25 3/32"= 1'-0"
% 3.4% 19.5% 12.4% 37.3% 27.4%
n.6% 27.4%
15.7% 47.1% 37.2%
62.8% 37.2%
25.8% 47.6% 26.6%
73.4% 26.6%
23.8% 9.5% 37.4% 29.3%
70.7% 29.3%
3.1% 12.7% 23.6% 31.9% 28.7%
71.0% 29.0%
10.2% 1.9% 18.1% 40.3% 29.5%
70.5% 29.5%
41.8% 44.0% 14.2%
85.8% 14.2%
13.5% 24.4% 30.5% 31.6%
68.4% 31.6%
71.9% 38.1%
C B
A->\G F-> -H _j
E
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CAST STONE CAP
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PREFINISHED METAL PARAPET
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Special City Council Meeting of April 24, 2017 (Item No. 2a)
Title: Parkway 25 – PUD Major Amendment to Section 36-268 PUD 7 Page 14
Meeting: Study Session
Meeting Date: April 24, 2017
Written Report: 1
EXECUTIVE SUMMARY
TITLE: Business Terms for Purchase and Redevelopment Contract with PLACE
RECOMMENDED ACTION: This report presents the proposed business terms for the Purchase
and Redevelopment Contract with PLACE. The terms are consistent with the discussion held at
the April 3rd Special Study Session. Unless staff is informed otherwise, the terms will be
incorporated into a Purchase and Redevelopment Contract with PLACE which will be presented
for formal consideration at the May 1, 2017 EDA meeting.
POLICY CONSIDERATION: Are the proposed business terms for the sale of property and
provision of TIF assistance to the PLACE project consistent with the direction provided at the
April 3rd Study Session and does the EDA/City Council continue to support the project as proposed?
SUMMARY: Nonprofit developer, PLACE (“Redeveloper”), submitted plans for a major
redevelopment at the southeast quadrant of Highway 7 and Wooddale Ave, and the northeast
corner of W 36th Street and Wooddale Ave. The proposed plans depict a mixed-use, mixed-income,
transit-oriented, and environmentally sustainable development. There is a financial gap in the
project’s residential financial pro forma. Accordingly, PLACE submitted an application for Tax
Increment Financing (TIF) assistance. There are significant extraordinary costs associated with
redeveloping the subject site. These include: environmental investigation and reporting, asbestos
abatement, building demolition, site preparation, shoring, underground stormwater retention, and
structured and underground parking. Consequently PLACE applied to the EDA for Tax Increment
Financing (TIF) assistance to offset a portion of these costs so as to enable the PLACE project to
proceed. The Redeveloper’s TIF application was reviewed at the April 3rd Special Study Session
where it received favorable support.
FINANCIAL OR BUDGET CONSIDERATION: The Total Development Cost (TDC) to
construct the PLACE redevelopment is approximately $123 million. According to the analysis of
PLACE’s project proforma conducted by the EDA’s financial consultant, Ehlers, the project is not
financially feasible but/for the provision of $5.66 million in tax increment assistance. Such
assistance is necessary to offset a portion of the project’s $9.5 million in extraordinary site
preparation costs. It is proposed that the EDA/City enter into a Purchase and Redevelopment
Contract with PLACE under which PLACE agrees to acquire the assembled redevelopment site
from the EDA/City for $6 million plus the EDA’s holding costs, construct the project as proposed
and then be reimbursed for qualified site improvement costs up to $5,660,000 in pay-as-you-go
tax increment generated by the project over a maximum term of 15 years. To safeguard the
EDA/City’s interests, closing on the site will not occur until PLACE provides evidence that
financing for the entire project has been fully secured. Once the TIF Note is retired the additional
property taxes generated by the project would accrue to the local taxing jurisdictions.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
Study Session Meeting of April 24, 2017 (Item No. 1) Page 2
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
DISCUSSION
BACKGROUND: PLACE E-generation One, LLC (PLACE), a 501(c)(3) nonprofit developer,
(“Redeveloper”) proposes to acquire nine properties from the EDA and City generally located at
the southeast quadrant of Highway 7 and Wooddale Ave and the northeast corner of W 36th Street
and Wooddale Ave. The entire site consists of approximately 5.2 acres net of right-of-way. The
site runs parallel to the Cedar Lake LRT Regional Trail and is situated on either side of the future
SWLRT Wooddale Station.
Location of PLACE redevelopment at SWLRT Wooddale Station
The proposed redevelopment site requires the assemblage of nine parcels.
Properties proposed to be sold to PLACE
Study Session Meeting of April 24, 2017 (Item No. 1) Page 3
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
The north side of the proposed redevelopment includes the following four properties and adjacent
rights-of-way:
• 5925 Highway 7 is a vacant 1.16 AC remnant site.
• 5815 Highway 7 is a vacant 0.18 AC remnant site.
• 5725 Highway 7 is the former McGarvey Coffee manufacturing property.
• 3520 Yosemite is a vacant 0.4 AC remnant rail site.
The south side of the proposed redevelopment includes the following five properties, the vacated
ROW between 3575 Wooddale and 5816 36th Street and adjacent rights-of-way:
• 3565 Wooddale is a 0.065 AC parcel occupied by a 16,739 SF commercial building that
was leased to Nash Frame.
• 3548 Xenwood Ave is a vacant 0.8 AC remnant rail site.
• 3575 Wooddale is an approximate 0.37 AC parcel.
• 5816 36th Street is an approximate 0.36 AC parcel which is part of a municipal parking lot
constructed in 1976 for commercial parking purposes.
• 5814 36th Street is an approximate 0.25 AC parcel which is part of a municipal parking lot
constructed in 1976 for commercial parking purposes.
Redevelopment Summary: PLACE plans to raze the former McGarvey Coffee and Nash Frame
buildings, and redevelop the subject properties into a mixed-income, mixed-use, environmentally
sustainable, transit-oriented development with live/work units.
Proposed PLACE site plan
Study Session Meeting of April 24, 2017 (Item No. 1) Page 4
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
Project plans depict four buildings split on the north and south sides of the future SWLRT
Wooddale Station. The proposed PLACE project consists of the following components:
299 apartments (200 affordable, 99 market-rate), including 99 mixed-income live/work
110-room Fairfield by Marriott hotel
Approximately 16,200 square feet of commercial/retail space to accommodate such uses
as a café, coffee house, bike shop, maker space and five ground floor microbusiness units.
An e-generation/greenhouse facility of approximately 10,200 square feet.
447 parking stalls (surface and structured) which leaves ground space for a “woonerf/place-
making plaza” adjacent to the LRT station.
• 510,778 square feet of total program space
0.88 acres of urban forest, for public access to nature, stormwater management, and habitat
29,500 square feet of green roof for additional stormwater management and habitat
The entire project is being designed to achieve LEED Silver or Gold certification.
Developer’s Request for Public Financing Assistance
The Total Development Cost (TDC) to construct the proposed PLACE redevelopment is
approximately $123 million. There are significant extraordinary costs associated with
redeveloping the subject site. These include: environmental investigation and reporting, asbestos
abatement, building demolition, contaminated soil removal and disposal, site preparation,
underground stormwater retention, circulation enhancements and structured parking. Altogether,
these costs exceed $9.5 million and prevent the project from achieving financial feasibility.
Consequently PLACE applied to the EDA for Tax Increment Financing (TIF) assistance to offset
a portion of these costs. Tax increment financing uses the increased future property taxes generated
by a new development to finance certain qualified development costs incurred by that project for
a limited period of time.
Level and Type of Financial Assistance
PLACE’s sources and uses statements, cash flow projections, and investor rate of return (ROR)
related to each component of the PLACE project were reviewed by staff and Ehlers (the EDA’s
financial consultant). Based upon its analysis of the PLACE project proformas, Ehlers determined
that the PLACE project is not financially feasible but/for the provision of $5.66 million in TIF
assistance. The assistance would be provided in the form of a TIF Note and would be made
available to exclusively reimburse PLACE for a portion of the extraordinary site preparation costs
cited above. Upon project completion, tax increment generated from the increased value of the
property would be provided to the Developer on a "pay-as-you-go" basis, which is the preferred
financing method under the City's TIF Policy. Upon completion, it is estimated the proposed
project would generate the requested assistance in 15 years.
TIF Application Review
The EDA/City Council reviewed PLACE’s TIF Application for the proposed PLACE project at
the February 13th and April 3rd Study Sessions. There was consensus support for favorably
considering the Developer’s request for tax increment assistance. As a result, staff was directed to
call for a public hearing on the proposed Wooddale Station Redevelopment TIF District and
prepare business terms for a formal purchase and redevelopment contract with PLACE.
Study Session Meeting of April 24, 2017 (Item No. 1) Page 5
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
Proposed Business Terms – PLACE Project
The following are proposed business terms between the St. Louis Park Economic Development
Authority (“EDA”), the City of St. Louis Park (“City”) and PLACE E-generation One, LLC
(“Redeveloper”) and are consistent with EDA Policy, past practices and previous discussions with the
EDA/City Council of the City of St. Louis Park (“City”). Upon mutual agreement, these terms will be
incorporated into a Purchase and Redevelopment Contract (“Contract”) for the PLACE mixed-use
development (the “Minimum Improvements”) to be constructed generally at the SE quadrant of
Highway 7 and Wooddale Ave and the NE quadrant of Wooddale Ave and 36th Street, St. Louis Park
(the “Redevelopment Property”).
1. For purposes of the proposed Purchase and Redevelopment Contract, the following parcels,
the vacated ROW between 3575 Wooddale and 5816 36th Street and adjacent rights-of-way
shall together be considered the Redevelopment Property:
• 5925 Highway 7 (EDA Property)
• 5815 Highway 7 (City Property)
• 5725 Highway 7 (EDA Property)
• 3520 Yosemite (EDA Property)
• 3565 Wooddale (EDA Property)
• 3548 Xenwood Ave (EDA Property)
• 3575 Wooddale (City Property)
• 5816 36th Street (City Property)
• 5814 36th Street (City Property)
2. The EDA and City own the Redevelopment Property (consisting of the “EDA Property”
and “City Property”) and agree to convey title to and possession of the Redevelopment
Property to the Redeveloper by quit claim deed, subject to the terms and conditions of the
Contract including:
(a) Prior to Closing, the Redeveloper shall prepare and obtain City approval of a
Final PUD ordinance for the Redevelopment Property and a Final Plat of the
Redevelopment Property at Redeveloper’s cost and subject to all City
ordinances and procedures.
(b) The EDA will use its best efforts to obtain approval by the City Council before
Closing of any amendment to the City zoning ordinance in order to permit
construction and use of the Minimum Improvements on the Redevelopment
Property.
3. The purchase price for the nine EDA and City Properties shall be $6,245,000 which includes
the EDA and City’s holding costs for the Redevelopment Property. Upon execution of the
Contract, the Redeveloper will place $________ (amount still being discussed) as earnest
money into an escrow account administered by a title company mutually agreeable to the
parties to be held and applied to the Purchase Price on the date of Closing. At Closing the
Redeveloper shall pay $5,047,000 of the Purchase Price, less the Earnest Money. The EDA
will defer the payment of the remaining $1,500,000 of the Purchase Price, but will be paid
over time out of the Minimum Improvements’ available cash flow at an interest rate of 4%
(anticipated to be repaid over a period of ten (10) years).
Study Session Meeting of April 24, 2017 (Item No. 1) Page 6
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
To secure the deferred payment of the Purchase Price, the Redeveloper will provide a
mortgage lien on the Redevelopment Property in favor of the EDA in the principal amount of
$1,500,000, which shall be subordinate to any mortgage provided under the Contract.
Additionally, the EDA will adopt an interfund loan resolution providing for an interfund loan
in this amount, plus an additional $100,000 to cover any additional administrative costs not
covered by the Redeveloper as permitted under the TIF Act (the “Interfund Loan”). In the
event that the Redeveloper fails to make the scheduled payments for the deferred portion of
the Purchase price, the Interfund Loan shall be repaid from the Available Tax Increment on a
subordinate basis to the payments on the TIF Note.
4. The EDA's obligation to convey the Redevelopment Property to the Redeveloper is subject to
satisfaction of the following terms and conditions:
(1) The Redeveloper having closed on permanent financing at or before Closing on
transfer of title to the Redevelopment Property from the EDA to the Redeveloper,
or having received a binding commitment from a lender to provide financing
sufficient for construction of the Minimum Improvements, or having otherwise
provided the EDA with proof of funds available to finance construction of the
Minimum Improvements.
(2) The City having approved the Final Redevelopment Plat and PUD and the
Redeveloper having recorded the Redevelopment Plat at or before Closing.
(3) The City having approved all necessary zoning variances to the Redevelopment
Property.
(4) The EDA having approved Construction Plans for the Minimum Improvements.
(5) The Redeveloper having reviewed and approved (or waived objections to) title to
the Redevelopment Property and having obtained a commitment from a title
company acceptable to the Redeveloper (the “Title Company”) to issue a suitable
owner’s policy.
(6) The City having conveyed the City Property to the EDA.
(7) The Redeveloper being satisfied with the results of its due diligence inspections
and testing with regard to the Redevelopment Property.
(8) No events of default under the Contract having occurred.
5. Closing on the Redevelopment Property shall occur within 30 days of satisfaction or waiver
of the above conditions but no later than April 30, 2018 unless extended by agreement of the
parties.
6. The Redeveloper shall have the right to enter the Redevelopment Property at reasonable times
for the purpose of inspection and testing and to determine the feasibility of the Redevelopment
Property for the Redeveloper’s intended use. The Redeveloper agrees that it shall cause all
studies, investigations and inspections performed at the Redevelopment Property to be
performed in a manner that does not disturb the Redevelopment Property and that that the
Redevelopment Property shall be returned to its original condition after the Redeveloper’s
Study Session Meeting of April 24, 2017 (Item No. 1) Page 7
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
entry, provided that the Redeveloper shall not be responsible for any existing conditions on
the Redevelopment Property or for any environmental remediation or response actions
required as a result of such investigations and inspections. Except for soil borings and test
pits, the Redeveloper shall not conduct or cause to be conducted any physically intrusive
investigation, examination or study of the Redevelopment Property (any such investigation,
examination or study hereinafter an Intrusive Investigation as part of its inspection or
otherwise without obtaining the prior written consent of the EDA.
7. The Redeveloper acknowledges that the EDA makes no representations or warranties as to
the condition of the soils on the Redevelopment Property or the fitness of the Redevelopment
Property for construction of the Minimum Improvements or any other purpose for which the
Redeveloper may make use of such property, and that the assistance provided to the
Redeveloper neither implies any responsibility by the EDA or the City for any contamination
of the Redevelopment Property nor imposes any obligation on such parties to participate in
any cleanup of the Redevelopment Property.
8. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the EDA,
the City, and their governing body members, officers, and employees, from any claims or
actions arising out of the presence, if any, of hazardous wastes or pollutants existing on the
Redevelopment Property on or after closing.
9. Grant Disbursement.
(a) The EDA has obtained, or has covenanted to apply for, the following grants:
(1) To finance a portion of the environmental remediation costs on the Redevelopment
Property, the EDA has received a County Environmental Response Fund grant in
the amount of $92,230 and will apply for a Minnesota Department of Employment
and Economic Development grant and a Metropolitan Council TBRA grant in the
aggregate total amount of between $600,000 and $800,000.
(2) To finance a portion of the costs for eligible transit-oriented developments, the
EDA has received a Metropolitan Council LCA-TOD Pre-Development grant in
the amount of $100,000, a Metropolitan Council LCA-TOD grant in the amount
of $2,000,000, and a County TOD grant in the amount of $750,000. The Authority
will also apply for a Metropolitan Council LCDA-TOD grant for $850,000
relating to public art, solar, and placemaking elements.
(3) To finance a portion of the costs relating to the E-Generation Facility Component,
the EDA will apply for an MPCA CAP grant in the amount of $2,000,000.
(b) The EDA will pay or reimburse the Redeveloper for Grant-Eligible Costs from and to the
extent of the grant proceeds received in accordance with the terms of the respective grant
agreements and the terms of the Contract. If Grant Eligible Costs exceed the amount to be
reimbursed such excess costs shall be the sole responsibility of the Redeveloper (except
to the extent reimbursable under the Note).
10. The EDA has determined that, in order to make development of the Minimum Improvements
financially feasible, it is necessary to reimburse Redeveloper for a portion of the cost of: soil
testing and investigation, asbestos abatement, building demolition and disposal,
environmental remediation and reporting, utility relocations and construction, site
preparation, street and plaza improvements, and underground and structured parking related
Study Session Meeting of April 24, 2017 (Item No. 1) Page 8
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
to the Minimum Improvements (the “Public Redevelopment Costs”). The tax increment
generated from the Wooddale Station TIF District will be payable to Redeveloper in the
form of one tax increment revenue note (the “Note”), which would be structured on the
following basis:
Issue total: $5,660,000
Type: Pay-as-you-go
Term: Until full repayment – not to exceed 15 years
Interest Rate: 5% (subject to Redeveloper’s actual financing)
Admin Fee: 5%
Fiscal Disparities: Paid from within the district
The EDA shall issue and deliver the Note upon Redeveloper having:
(a) delivered to the EDA one or more certificates containing the following: (i) a
statement that each cost identified in the certificate is a Public
Redevelopment Cost as defined in the Contract and that no part of such cost
has been included in any previous certification; (ii) evidence that each
identified Public Redevelopment Cost has been paid or incurred by or on
behalf of the Redeveloper; (iii) evidence that Redeveloper has paid all its
contractors and subcontractors in full for all work to be reimbursed as a
Public Redevelopment Cost; and (iv) a statement that no uncured Event of
Default by the Redeveloper has occurred and is continuing under the
Agreement.;
(b) submitted and obtained EDA approval of finance; and
(c) delivered to the EDA an investment letter in a form reasonably satisfactory to
the EDA.
(d) The EDA acknowledges that the Redeveloper may assign the Note to a third
party. The EDA consents to such an assignment, conditioned upon receipt of
an investment letter from such third party in a form reasonably acceptable to
the EDA.
(e) The Redeveloper understands and acknowledges that the EDA makes no
representations or warranties regarding the amount of Tax Increment, or that
revenues pledged to the Note will be sufficient to pay the principal and interest
on the Note. Any estimates of Tax Increment prepared by the EDA or its
financial advisors in connection with the TIF District or this Contract are for
the benefit of the EDA, and are not intended as representations on which the
Redeveloper may rely. Public Redevelopment Costs exceeding the principal
amount of the Note are the sole responsibility of Redeveloper.
11. The EDA will perform a “lookback” calculation to verify the requested amount of TIF
assistance was justified similar to those conducted on other projects that received TIF
assistance. The precise triggers and formula relative to the Minimum Improvements is
currently being drafted.
Study Session Meeting of April 24, 2017 (Item No. 1) Page 9
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
12. Both parties agree that any assistance provided to the Redeveloper under the Redevelopment
Contract is not expected to constitute a “business subsidy” under Minnesota Statutes because
the assistance is for redevelopment.
13. Redeveloper agrees that it will pay the reasonable costs of consultants and attorneys retained
by the EDA in connection with the preparation of the TIF Plan, the establishment of the TIF
District, the negotiation and preparation of the Redevelopment Contract and other incidental
agreements and documents. Upon termination of the Redevelopment Contract the
Redeveloper remains obligated for costs incurred through the effective date of termination.
14. Redeveloper agrees to undertake the Minimum Improvements and Redeveloper Public
Improvements as shown in the PUD and Planning Development Contract. In summary, the
Redeveloper agrees to remediate the site in compliance with MPCA requirements,
construct the Redeveloper Public Improvements, and construct the Minimum
Improvements which together consist of the North and South Components in accordance
with the PUD and Planning Development Contract.
“North Apartments Component” means the approximately 218 apartments,
including 152 affordable apartments and 66 market rate apartments. Of these
apartments 18 shall be live/work Type I units.
“North Commercial Space Component” means the approximately 2,484 square foot
retail bike and repair shop and the approximately 2,624 square foot makers space.
“E-Generation Facility Component” means the approximately 10,200 square foot
facility with an anaerobic digester and energy balancing equipment and a vertical
greenhouse for urban agriculture.
“North Components” means, collectively, the North Apartments Component, the
North Commercial Space Component, the E-Generation Facility Component, and
associated parking to be constructed on the north side of the Redevelopment
Property.
“South Apartments Component” means the approximately 81 apartments,
including 48 affordable apartments and 33 market rate apartments. Of these
apartments 71 shall be live/work Type I units and 5 shall be Type II units.
“South Commercial Space Component” means the approximately 4,644 square foot
café, the approximately 1,173 square foot coffee house, and the approximately
4,000 square foot maker/co-working space (work hub) to be constructed on the
south side of the Redevelopment Property.
“Hotel Component” means the approximately 48,047 square foot hotel with
approximately 110 rooms.
“South Components” means, collectively, the South Apartments Component, the
South Commercial Space Component, the Hotel Component, and associated
parking to be constructed on the south side of the Redevelopment Property.
Study Session Meeting of April 24, 2017 (Item No. 1) Page 10
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
15. Before commencing construction of the Minimum Improvements or Redeveloper Public
Improvements, the Redeveloper must submit plans and specifications regarding the
Redeveloper Public Improvements for approval by the City Engineer, and must submit
Construction Plans regarding the Minimum Improvements for approval by the EDA
(together, the “Construction Plans”). Plans related to any environmental remediation,
however, do not require approval by the City or EDA. All work on the Redeveloper Public
Improvements and Minimum Improvements shall be in accordance with the approved
Construction Plans and shall comply with all City requirements regarding such
improvements. The parties agree and understand that the City will accept the Redeveloper
Public Improvements in accordance with City procedures as specified in the Planning and
Development Contract between the City of St. Louis Park and the Redeveloper.
16. If the Redeveloper desires to make any material change in the Construction Plans after their
approval by the EDA, the Redeveloper shall submit the proposed change to the EDA for its
approval. The term “material” means changes that increase or decrease construction costs by
$500,000 or more.
17. Subject to Unavoidable Delays, Redeveloper agrees to commence construction of the
Minimum Improvements by May 31, 2018 and substantially complete them by December
31, 2019. If the Redeveloper anticipates that the above timetable will not be met, Redeveloper
shall provide a written and oral presentation to the City Council at a regular City Council
meeting at least 45 days prior to the Required Commencement Date or Completion Date. The
report must describe the reasons for the expected failure to meet the schedule, evidence of
Redeveloper’s due diligence in working toward construction of the relevant Phase, and a
detailed revised schedule. Approval of a modified schedule for construction by the Authority
shall not be unreasonably withheld, conditioned or delayed. Failure to timely provide such
written and oral report is an Event of Default.
18. The Redeveloper shall comply with the City’s Green Building Policy, adopted by the City
Council on February 16, 2010 and as such policy may be amended as of the date of issuance
of a building permit for the Minimum Improvements, and shall use commercially reasonable
efforts to design the Minimum Improvements to Leadership in Energy and Environmental
Design (“LEED”) standards. Redeveloper shall submit to the EDA evidence of certification
from LEED and agrees to use good faith efforts to achieve “silver” or “gold” LEED
certification status.
19. Promptly after completion of each Component of the Minimum Improvements in accordance
with those provisions of the Contract relating solely to the obligations of the Redeveloper to
construct the Minimum Improvements (including the dates for beginning and completion
thereof and the efforts regarding LEED or comparable certification described above), the
EDA Representative shall deliver to the Redeveloper a Certificate of Completion in
recordable form and executed by the EDA.
20. The Redeveloper shall install dedicated wired connections for the Minimum Improvements
in conformity with the terms and specifications provided in the City Planning Development
Contract.
21. In addition to construction of the Minimum Improvements, the Redeveloper shall construct,
at the Redeveloper’s sole cost, the Redeveloper Public Improvements, as provided in the
Study Session Meeting of April 24, 2017 (Item No. 1) Page 11
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
PUD and Planning Development Agreement. All Redeveloper Public Improvements shall
be constructed in accordance with the PUD and Planning Development Agreement.
22. The Redeveloper shall provide public art installations curated by the Museum of Outdoor Arts
throughout the Redevelopment Property as required under the PUD.
23. The Redeveloper agrees to comply with the City’s Inclusionary Housing Policy, as adopted
June 1, 2015, including without limitation the following:
(a) The Redeveloper agrees to reserve 200 of the apartment units (66.8%) within the
North Apartments Component and South Apartments Component (collectively, the
“Affordable Apartments”) for households earning sixty percent (60%) of Area
Median Income (“AMI”) for at least twenty-five (25) years following building
occupancy.
(b) The monthly rental price for Affordable Apartments shall include rent and utility costs
and shall be based on sixty percent (60%) of AMI for the metropolitan area that
includes the City adjusted for bedroom size and calculated annually by Minnesota
Housing in connection with establishing rent limits for the Housing Tax Credit
Program.
(c) The size and design of the Affordable Apartments shall be consistent and comparable
with the market rate units in the Minimum Improvements and is subject to the
approval of the City. The Affordable Apartments shall be distributed throughout the
North Apartments Component and the South Apartments Component.
(d) The Affordable Apartments shall have a number of bedrooms in the approximate
proportion as the market rate units.
(e) The Redeveloper agrees to prepare an affordable housing plan as defined in the City’s
Inclusionary Housing Policy (the “Affordable Housing Plan”). The Affordable
Housing Plan shall describe how the Redeveloper complies with each of the
applicable requirements of the Inclusionary Housing Policy. The Affordable Housing
Plan shall be prepared by the Redeveloper and must be approved by the City prior to
or in conjunction with delivery of the Certificate of Completion for the North
Apartments Component or the South Apartments Component, whichever is earlier.
(f) The Redeveloper agrees to design 99 of the units of the North Apartments Component
and South Apartments Component as live/work units (“Live/Work Units”), comprised
of Live/Work Type I and Live/Work Type II units. Approximately 94 Live/Work
Type I units will include a large working space within the dwelling unit, but no
physical storefront, with approximately 18 Live/Work Type I Units will be located in
the North Apartments Component and approximately 76 Live/Work Type I Units
located in the South Apartments Component. There will be approximately five
Live/Work Type II Units, which will include a large work space within the dwelling
unit and a storefront, with all Live/Work Type II Units located in the South
Apartments Component.
24. Redeveloper agrees that the Minimum Improvements will be professionally managed by a
property management company with substantial experience in operating mixed use
Study Session Meeting of April 24, 2017 (Item No. 1) Page 12
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
developments. The Redeveloper’s selection of the property management company is subject
to EDA approval, which shall not be unreasonably withheld.
25. The Redeveloper agrees to file any petition or other document required to participate in the
City’s Special Service District No. 6 and to become subject to special service charges levied
on all commercial properties in the Special Service District with regard to the South
Components. The Redeveloper further waives all rights to veto, appeal or otherwise object to
imposition of a service charge levied in accordance with this paragraph, provided that the
Redeveloper shall be entitled to raise any objections, appeals or challenges to special district
changes upon the termination of the Contract.
26. The Redeveloper agrees to comply with the terms of the Maintenance Plan for the
Redevelopment Property as specified in the Planning Development Contract.
27. If the Redeveloper fails to perform the Maintenance in accordance with the Maintenance Plan,
the City, at its option and following thirty (30) days written notice from the EDA to the
Redeveloper, may enter the Redevelopment property and perform the Maintenance. The
Redeveloper agrees to permit the City to specially assess any costs of the Maintenance
proportionately against the Minimum Improvements.
28. As part of the construction of the Minimum Improvements, the Redeveloper agrees to
construct an approximately 0.88-acre urban retreat parallel to the Cedar Lake LRT Regional
Trail as a public amenity, as detailed in the Site Plan and PUD (the “Urban Forest”). The
Urban Forest will include play space for younger residents, walking trails and outdoor
artwork.
29. The Redeveloper agrees to include the following amenities for the North Apartments
Component and South Apartments Component of the Minimum Improvements: indoor
bicycle storage, exercise rooms, sound proof rooms, storage, laundry facilities, and play
structures. The South Components will include a placemaking plaza (the “Plaza”). The Plaza
will be located between the Hotel Component and South Apartments Component adjacent to
the SWLRT Wooddale Station area platform. The Plaza is intended to be primarily a
pedestrian plaza, but will be open to cars and bicyclists. The Plaza will be programmable for
hosting outdoor events, and will incorporate native landscaping and artwork.
30. At Closing, the Redeveloper shall, with the Authority, execute one or more Assessment
Agreements pursuant to Section 469.177, subd. 8 of the TIF Act, specifying an assessor’s
minimum market value for the Redevelopment Property and each of the North Components
and the South Components constructed thereon.
31. Before issuance of the TIF Note, the Redeveloper shall submit to the EDA, consultants and
agents, evidence reasonably satisfactory to the EDA that Redeveloper has available funds, or
commitments to obtain funds, whether in the nature of mortgage financing, equity, grants,
loans, or other sources sufficient for paying the cost of the developing the Minimum
Improvements.
32. The EDA agrees to subordinate its rights under the Contract to the Holder of any Mortgage
securing construction or permanent financing, in accordance with the terms of a mutually-
approved subordination agreement.
Study Session Meeting of April 24, 2017 (Item No. 1) Page 13
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
33. Redeveloper agrees not to transfer the Redevelopment Contract or the Redevelopment
Property (except to an affiliate) prior to receiving a Certificate of Completion without the
prior written consent of the EDA, except for construction mortgage financing and/or
permanent financing. The EDA's consent shall not be unreasonably withheld, conditioned
or delayed.
34. Redeveloper agrees that any proposed transferee, shall, for itself and its successors and
assigns, and expressly for the benefit of the EDA, expressly assume all of the obligations
of the Redeveloper under this Agreement as to the portion of the Redevelopment Property
to be transferred and agrees to be subject to all the conditions and restrictions to which the
Redeveloper is subject.
35. Redeveloper shall undertake all work related to the Minimum Improvements and Redeveloper
Public Improvements in compliance with all applicable federal and state laws, including
without limitation all applicable state and federal Occupational Safety and Health Act
regulations. Any subcontractors retained by Redeveloper shall be subject to the same
requirements. All Redeveloper Public Improvements shall be constructed in accordance with
the City Ordinance.
36. Redeveloper agrees that the EDA and the City will not be held liable for any loss or damage
to property or any injury to or death of any person occurring at or about or resulting from
any defect in the Redevelopment Property or the Minimum Improvements.
37. The Redeveloper, for itself and its successors and assigns, agrees that during the construction
of the Minimum Improvements provided for in the Contract it will comply with all applicable
federal, state, and local equal employment and non-discrimination laws and regulations.
38. Redeveloper agrees that no portion of the Redevelopment Property will be used for a
sexually-oriented business, a pawnshop, a check-cashing business, payday loan agency, a
tattoo business, or a gun business, and that such restrictions may be placed in the
Redevelopment Deed.
39. Redeveloper agrees that the EDA and the City will not be held liable for any loss or damage
to property or any injury to or death of any person occurring at or about or resulting from
any defect in the Redevelopment Property or the Minimum Improvements.
40. The Redeveloper agrees not to discriminate upon the basis of race, color, creed, sex or
national origin in the construction and maintenance of the Minimum Improvements and
Public Improvements as well as lease, rental, use or occupancy of the Redevelopment
Property or any improvements erected thereon.
41. EDA may exercise a right of reverter against the Redevelopment Property in specified
circumstances. This means EDA may retake possession and fee ownership of the
Redevelopment Property if there is an event of default. If right of reverter is exercised, the
EDA must use its best efforts to sell the Redevelopment Property to a qualified purchaser.
When sold, proceeds are used to reimburse EDA for expenses related to resale, then to
reimburse Redeveloper for original purchase price/completed improvements.
Note that the right of reverter is likely to be subordinated to the mortgage for acquisition
of the Redevelopment Property and/or construction of the Minimum Improvements. Any
Study Session Meeting of April 24, 2017 (Item No. 1) Page 14
Title: Business Terms for Purchase and Redevelopment Contract with PLACE
proposed subordination agreement must be approved by the EDA. The practical effect of
subordination is that EDA may exercise its right of reverter in the case of a default by
Redeveloper, but would have to pay off the mortgage to do so, so is unlikely to choose this
remedy.
The above terms will serve as the basis for and be incorporated into a Purchase and Redevelopment
Contract with PLACE. Such terms are subject to further definition, revision and/or refinement.
NEXT STEPS: Staff will work with the EDA’s legal counsel to prepare the formal Purchase and
Redevelopment Contract with PLACE based on the proposed business terms and any input
provided by the EDA. The Contract is expected to be brought to the EDA and City Council for
formal consideration at the May 1st public hearing; the same evening as the public hearing for the
proposed Wooddale Station TIF District.
Meeting: Study Session
Meeting Date: April 24, 2017
Written Report: 2
EXECUTIVE SUMMARY
TITLE: 2017 Market Value Overview
RECOMMENDED ACTION: No action needed. This summary report is provided for
informational purposes to assist the Council in preparing for the Local Board of Appeal and
Equalization process that begins in May.
POLICY CONSIDERATION: None at this time. Please inform staff of any questions you might
have.
SUMMARY: The assessed market valuation and classification for each property determines their
individual tax capacity and thus the overall tax capacity of the community. In addition to fiscal
budgeting and property tax implications, the composition of value and trending are important for
Council to understand as it focuses on overall governance of the community.
This review is being made to give the Council additional information on how the community’s
real estate is reacting to the significant evolution of the housing stock, market demand trends for
commercial-industrial space, thoughts on the current market cycle and the foundation to look
forward.
The appeal process will also be reviewed briefly with additional outline of the Board duties to be
published in the packet for the meeting date (May 1). The Department of Revenue has directed
changes to the adjustment of sales (time) as well as procedures for the Local Board of Appeal and
Equalization.
The St. Louis Park Local Board of Appeal and Equalization convenes its organizational meeting
on Monday May 1, 2017 at 7:00 pm with the follow-up meeting scheduled for May 15.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Cory Bultema, City Assessor
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Page 2 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
DISCUSSION
Overview of the Minnesota Property Tax System
Minnesota law establishes a specific process and timeline for the entire property tax system,
including the assessment of property. The system is summarized as follows:
1.All real property is valued at market value annually and classified according to usage. In
addition, there are a multitude of sub-classifications which are applied administratively. The
owners are notified, generally in March, with multiple options for discussion and appeal.
2.State law defines how the value and class rate are translated into tax capacity and refined via
subsidies, exclusions and credits (i.e., homestead, veteran exclusion, et al, etc.).
3.Budgets for each taxing jurisdiction are set annually. Funding sources include the property tax
levy, voter approved market value referendums, bonding, special assessments,
programs/grants and other sources such as user fees from a variety of operational sources.
4.The total property tax levy is divided by the total capacity of each jurisdiction (city, county,
school district and others) to determine the total levy extension multiplier. The multiplier is
applied to each individual property to calculate property taxes. It is essential to understand
that the property tax “rate” is only a math equation as used in the Minnesota system.
The Assessing function deals with the first step above as staff renders an opinion of market value
and classification annually for 17,000+ parcels in St. Louis Park as of January 2 each year. The
assessment must comply with standards established by the Minnesota Department of Revenue,
Minnesota statutes and with review/approval by the Hennepin County Assessor’s Office.
Market value is defined in Minnesota Statute 272.03 subd 8 as “the usual selling price at the place
where the property to which the term is applied shall be at the time of assessment; being the price
which could be obtained at a private sale or an auction sale, if it is determined by the assessor that
the price from the auction sale represents an arm's-length transaction. The price obtained at a
forced sale shall not be considered.”
Classification of the property use is also defined by Minnesota statute. The rationale for this
requirement is that the Minnesota property tax system applies differing classification rates in
determining how the value is translated into tax capacity. The following table presents a summary
example of the two dominant property types and their associated class rates:
Base Homestead Non-Homestead e.g. Tax Capacity at Taxable Values
Property Type Value Base Over-Base Base Over-Base 250,000 500,000 1,000,000
Comm & Industrial 150,000 N/A N/A 1.50% 2.00% 4,250 9,250 19,250
Residential 500,000 1.00% 1.25% 1.00% 1.25% 2,500 5,000 11,250
As can be seen above, the class system greatly favors residential properties in translating the
assessed market value into initial tax capacity. This difference widens further as commercial
properties are subject to additional state based levies while residential properties are reduced by
subsidy factors such as the homestead value exclusion (formerly known as the homestead credit).
Voter approved referenda, on the other hand, are market value based so all properties are taxed
equally on each dollar of property value.
Page 3 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
The Assessment Process
The purpose of the assessment process is to annually render an accurate and equitable opinion of
market value of each parcel of property. Doing so requires current information about the properties
being assessed and the local real estate market. In addition to the economic market forces at work,
the individual property location, use and physical characteristics play a significant role in the
valuation.
The St. Louis Park Assessing division maintains a record of every property in the city including
its size, location, physical characteristics and condition. As there are 17,000+ taxable parcels in
the city, it is virtually impossible to have complete knowledge of each property, which may or may
not sell in a given year.
The Minnesota property tax system therefore requires periodic inspections. The current cycle of
inspection is on a five year rotating schedule (known as the quintile) which may be altered due to
physical change of the property due to new construction, renovations, additions and damage. The
goal of the periodic and interim inspection process is to assess the characteristics and
corresponding market value of each property as closely as possible versus the property’s
competitive position.
It is important to know that the valuation process for residential properties in the State of Minnesota
is based on mass appraisal. The valuations are modeled by the use of a computer assisted mass
appraisal (CAMA) methodology. To summarize, the physical characteristics for each property are
maintained in a large data base which calculates the individual valuations based upon the location,
style and physical characteristics for each property. While often seen by the public as a
mathematical equation to be manipulated, a truly functional CAMA system is not linear math but
instead is focused on modeling selected individual parcels and their competitive niche for valuation
movement. The purpose of modeling is to produce a mirror image of market performance using
the competitive properties that have sold during the comparison time period (fact based modeling).
Minnesota requires almost all sales to be recorded in an electronic Certificate of Real Estate Value
(e-CRV) data system. In all cases, the sales information is scrutinized and qualified. Initial clerical
screening occurs at the city and county level. The sale information is then frequently augmented
with more detail from a variety of professional data services and staff may follow-up with direct
buyer/seller verifications and re-inspections in the case where the sale indicates that we may have
imperfect information.
Evidence suggesting anything but an arms-length transaction (a forced sale, foreclosure, a sale to
a relative, etc.) results in the sales information being excluded from study. This is important as
the market information constitutes the measurable database for the statistical comparisons
necessary to make the property assessment.
The mass appraisal process is different from the individual appraisal system used by banks,
mortgage companies and others. For example, the mass appraisal system for residential properties
involves the comparison of thousands of properties with the fact-based market transactions from
the same or closely competitive neighborhoods, and market sales of the same quality and type of
property throughout the city. In the appeal process, the assessing staff looks to both the mass
valuation models and a current individual appraisal analysis for further review.
Page 4 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
The Appeal Process
We receive inquiries and questions about market value, the assessment process and how the
property tax system operates throughout the year. An open dialogue between staff and the property
owner is a key aspect of the mass appraisal system. We recognize that some properties receive
statistic-based adjustments to market value and owners may have differing degrees of knowledge
and perspective on both their own real estate and market performance. Three important points are
stressed in the informal and formal appeal processes:
•By statute, the assessing staff utilizes the traditional market in setting valuations. We do
not disregard the impact of the distressed sub-market or value-in-use transactions, but we
do emphasis the use of open market and arm’s length sales. This is not only by legal
precedent but also good appraisal methodology. All assessed market values are set on a
similar competitive basis which allows for a better understanding of the nuances of (often)
highly localized sub-markets.
•The mass assessment is time adjusted. When reviewing appeals, we apply similar time
trends to the comparable sales when re-appraising individual properties.
•Appeals on the basis of comparative assessment can be problematic. While a valid
rationale from the owner perspective, the neighbor’s assessment is (also) an opinion.
Transactions are the facts which define the market. Assessment equity is measured with
distinct performance metrics as published by the Minnesota Department of Revenue. The
post assessment “report cards” are relied upon by the Tax Court.
Questions are common during informal appeals. The assessing staff will check the last date of
interior inspection as condition can evolve over time. Inspections are often requested to re-verify
property attributes and public record sales information is often discussed. A very large majority
of property owner concerns can be resolved through this informal review. Assessing staff will
review and adjust the assessed market value as warranted prior to the Boards during the informal
review process. If needed, the next step is the appeal process.
Formal appeal steps are summarized as:
1.Local Board of Appeal and Equalization: The St. Louis Park Board is set to have its
organizational meeting on May 1, 2017. The owner is the appellant and is notified of the Board
process including the need to present information to the Board. The assessing staff serves as
the respondent and prepares a report of sales and related market information to be presented at
the re-convene meeting. The Board hears the respective points and makes the determination
on value and/or classification.
2.County Board of Appeal and Equalization: To be eligible, the owner must first appeal at the
Local Board. An application to appeal at the Hennepin County Board is required by May 17
and this Board convenes in June. The process is similar as the owner makes their case and
county staff serves as the respondent and the Board makes the determination.
3. Tax Court: Property owners may appeal directly to the Minnesota State Tax Court. Petitions
regarding the 2017 Assessment may be filed until April 30, 2018. This method of appeal is
more formal and often takes a lengthy period of time to resolve. This avenue of appeal is much
larger in the number of cases, their complexity and the valuations/classifications in dispute.
The average volume of appeals resolved at this level has been $765 million annually over the
past eight years (sense of scale – this represents 10% to 15% of the total valuation).
Page 5 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
Big Picture of the Residential Market – Realtor Perspective
Before discussion of the 2016 assessment, we want to provide a big picture overview from the
perspective of Realtors. The broad spectrum of residential real estate peaked in 2006-2007 and
bottomed out around 2011. The market has fully returned in the 2016 timeframe although stability
varies to a degree. The following chart is an aggregate of single-family homes, condos and
townhomes from 2009 through 2016. This provides a comparative reference for St. Louis Park
and our immediate neighbors through the roller coaster ride of recent history.
Historic Median Sale Price – Aggregate of Single-Family Homes, Condos and Townhomes
% Change
2009 2010 2011 2012 2013 2014 2015 2016 11-to-'16
St. Louis Park 214,000 213,250 185,600 198,950 219,000 230,000 239,700 245,000 32.0%
Edina 330,000 345,000 345,000 349,000 351,000 380,000 399,900 441,500 28.0%
Golden Valley 220,000 235,500 199,450 218,000 247,700 248,700 264,200 290,725 45.8%
Hopkins 160,000 149,500 126,250 160,500 181,500 182,000 213,500 215,000 70.3%
Minnetonka 245,000 266,000 233,750 255,400 280,000 273,984 300,550 310,000 32.6%
Source: Minneapolis Association of Realtors Sales Data (MAAR)
In contemplating the historical figures above, all of the owner-based housing options are included.
This aggregate price structure gives an interesting but incomplete perspective for each community.
The sales will vary from year-to-year depending on which market segment has more sales and
especially tends to ride high for single-family new construction/major renovations. Being curious
on the mix of options available, the chart below breaks out the annual performance in the past year.
Annual 2016 Market Performance: Sale Volume – Median Sale Price – Days on Market
Single-Family Condominiums Townhomes
# Median Days on # Median Days on # Median Days on
Sales Sale Price Market Sales Sale Price Market Sales Sale Price Market
St. Louis Park 746 259,894 34 199 149,900 28 64 180,650 21
Edina 686 536,250 32 240 159,800 32 53 275,000 29
Golden Valley 379 308,000 27 20 88,750 29 55 206,000 21
Hopkins 161 242,000 20 61 75,000 29 49 158,025 24
Minnetonka 642 368,750 33 172 137,000 26 192 224,950 29
Source: Minneapolis Association of Realtors Sales Data (MAAR)
Several facts in the above table are notable. First and often surprising (to outsiders) is that our
annual transaction volume is generally high in terms of turnover rate. This is due in part to our
pricing structure, the housing options available, the mix of options available and the balance
between single-family, condo and townhome stock. The most significant fact in the table above,
however, is timing of market exposure (Days on Market). All of the local communities are clearly
showing short exposure times with limited inventory available – creating a seller’s market which
in turn tends to push pricing. While recent value appreciation has been modest and relatively
stable, the current market is healthy for the most part and poised to advance at a more rapid pace
than in years past. Whether that supply/demand equation is influenced by increasing interest rates
and a stable (jobs) economy remains to be seen.
Page 6 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
Summary of the St. Louis Park 2017 Assessment Roll
The Notice of Valuation and Classification commence mailing in March of each year. Each notice
reflects the property value and classification for a two year period with the format as required by
the MN Department of Revenue. As of January 2, 2017, the total valuation of the city stands at
$6.721 billion. Further understanding of the value composition and year-over-year trending is
explored in the following chart.
Assessed Market Value Change for Dominant Sectors (Comparison of 2017 Versus 2016 Assessment)
Single-Family Residential + 5.0% Static Basis versus + 5.8% with Improvements
Condominium +5.8% Static Basis versus + 7.0% with Improvements
Townhomes +4.8% Static Basis -same- + 4.8% with Improvements
Apartments + 6.4% Static Basis versus + 9.5% with Improvements
Commercial-Industrial + 5.8% Static Basis versus + 6.9% with Improvements
St. Louis Park Total +5.4% Static Basis versus + 6.6% with Improvements
Value change on a static basis reflects an apple-to-apple comparison of market driven change. The
static change figure is inherently the primary focus for the mass appraisal methodology. The (total)
value change with improvements reflects the value-add economic activity for the community. The
total value change also reflects any related tax capacity shifts about to occur for the tax period
payable 2018.
Each of the above categories will be explained at further length in the following report sections.
We begin our review of the overall residential sector by breaking it down into the three dominant
categories: low density (single-family homes); mid-to-high density ownership based (condos and
townhomes) and apartment units.
Housing Unit Composition – St. Louis Park for the 2017 Assessment
11,613
9,195
3,556
432 114
Single-Family
Apartments
Condo & Townhome
Duplex
Cooperatives
Page 7 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
Single Family Homes: Just under one-half of the total housing units are single family homes.
Setting the assessment included the traditional sales review, on-market listings at multiple points
throughout the year, accessing listing data, quintile inspections (approximately 20% of the stock
is reviewed each year) and new construction and renovation permit reviews. We feel confident
that the 2017 assessment is the best quality we can derive by mass modeling which includes
individual refinements as needed.
St. Louis Park is broken down into 35 distinct neighborhoods which are configured to local history
rather than cohesive competitive influences. Of the 32 neighborhoods with single-family
properties, all are increasing in valuations for the 2017 assessment. The neighborhood adjustments
ranged from +0.6% to +12.1% with the majority of neighborhoods between +3.0% to +7.0%. We
also track the annual change on a rolling five-year period to provide a longer term viewpoint.
As has become routine, much of our attention has been on reviewing the price brackets
(stratifications). Our single-family stock is normally a bell curve style of pricing with heavy
emphasis currently moving into the $200,000 to $350,000 range. When combining market
appreciation, a low volume of distressed properties, an active renovation/addition sub-market and
the sales, there is an indisputably wider degree of variation in the stratifications over the past year.
This is relatively healthy in an advancing market as it reflects a growing array of housing options.
Condominiums: There are 47 distinct condominium complexes in the community. The complexes
are a decidedly diverse stock in terms of structural vintage, design format (apartment conversions,
row-house, lo-rise, hi-rise and most everything in between).
As noted in prior years, condos and townhomes tend to be considerably more volatile in valuations.
This is generally due to four major factors: condos tend to have an in-complex sub-market which
can swing quickly, the complexes do compete locally and into nearby cities, perceptions of value
differ between the owner-occupant buyer versus the investor/rental buyer and sale pricing can be
affected in a significant manner by association assessments.
The local market exhibits a very wide pricing structure. Time reference on the market adjustments
can be illustrative: the 2013 assessment was at -7.5%; the 2014 assessment was at +7.8%; the 2015
assessment was at +8.5%; and 2016 assessment was at +8.2% and the 2017 assessment stands at
+5.8%. There are considerable variations among the complexes with seven adjusting downward
for equalization reasons while six complexes were adjusted upward at 15+% this year.
Townhomes: There are 19 distinct townhome complexes in the community. About one-half of
them are relatively small with less than 20 units in the complex. The other half are predominantly
in the 20-50 unit count bracket with three larger complexes. In general, the market forces at play
in this property type are similar to that of the condos with several mitigating factors. They include
a higher average unit value which seems to be more economically durable. It is also our perception
that the physical designs tend to be less problematic with few exceptions, while the rate of
distressed transactions and on-market listings have tended to be less dramatic.
The following charts provide additional overview for the 2017 assessment.
•The first page reflects the single-family neighborhoods over the past five years.
•The second page provides a complex breakdown of the condos and townhomes by unit count
and median market value (the five year history is multiple pages and not included with this
report; it can be provided to Council upon request).
Page 8 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
St. Louis Park -- Single Family Residential Properties
Historical Change of Assessed Market Values (Quintile Cycle)
Year of Assessment 2013 2014 2015 2016 2017
a. Median Assessed Value: 204,600 217,600 227,500 240,100 254,200
b.City-Wide Static Change:-2.3%4.8% 4.0% 4.4% 5.0%
Neighborhood Reference 2013 2014 2015 2016 2017 Parcels Median
1 Shelard Park N/A N/A N/A N/A N/A 0 N/A
2 Kilmer 0.0% 2.4% 3.8% 0.8% 8.3% 243 221,000
3 Crestview -4.1%2.2% 9.4% 4.3% 6.9% 68 377,200
4 Westwood Hills -3.7%1.5% 4.9% 5.6% 4.9% 292 409,500
5 Cedar Manor 1.2% 2.2% 2.9% 6.5% 7.5% 573 250,500
6 Northside (x) Willow Park -6.6%8.9% 3.0% 5.3% 10.4% 302 264,600
7 Pennsylvania Park -4.9%4.5% 8.6% 2.2% 5.4% 304 238,300
8 Eliot -6.5%8.3% 0.0% 5.6% 7.9% 508 232,200
9 Blackstone -5.9%2.0% 1.9% 6.8% 1.5% 95 185,500
10 Cedarhurst -4.6%6.0% 2.1% 4.1% 1.3% 48 215,800
11 Eliot View -5.8%1.0% 9.6% 6.0% 6.8% 165 231,300
12 Cobblecrest -5.7% 11.3%6.2% 5.6% 2.9% 382 277,600
13 Minnehaha -5.3% 10.6%0.6% 8.8% 0.6% 128 352,700
14 Amhurst N/A N/A N/A N/A N/A 0 N/A
15 Aquila 4.8% 4.5% 6.3% 6.7% 4.5% 504 207,000
16 Oak Hill -0.3%5.2% 8.4% 4.5% 7.5% 636 221,800
17 Texa Tonka -0.2%8.1% 8.7% 2.9% 9.6% 385 222,300
18 Bronx Park -6.5%8.4% 7.7% 4.0% 3.4% 991 236,000
19 Lenox -4.1%7.9% 2.0% 5.0% 5.4% 831 232,700
20 Sorenson -4.1%9.6% 0.0% 6.4% 2.4% 450 244,200
21 Birchwood -1.4%0.4% 4.6% 4.5% 3.7% 629 249,000
22 Lake Forest -0.6%3.6% 4.7% 3.6% 0.7% 195 581,500
23 Fern Hill -1.7%2.4% 3.1% 3.2% 2.9% 958 387,600
24 Triangle -0.7%3.6% 0.0% 0.7% 7.0% 102 227,700
25 Wolfe Park -1.8%5.4% 6.7% 5.0% 5.1% 18 257,400
26 Minikada Oaks -0.4%6.9% 8.7% 0.9% 11.1% 76 385,200
27 Minikada Vista 0.1% 1.9% 2.7% 2.9% 5.4% 798 414,700
28 Browndale 1.6% 5.0% 2.9% 3.7% 4.2% 549 371,900
29 Brookside 2.8% 3.3% 0.0% 6.7% 9.2% 328 259,200
30 Brooklawns 1.8% 0.9% 0.0% 5.0% 12.1% 149 276,400
31 Elmwood -6.2%3.6% 6.0% 6.4% 7.1% 267 283,200
32 Meadowbrook N/A N/A N/A N/A N/A 0 N/A
33 South Oak Hill -5.3% 10.2%2.5% 4.9% 1.9% 291 211,100
34 Westdale -1.9%0.4% 10.2% 1.3% 4.5% 106 236,400
35 Creekside -8.6%9.7% 3.6% 7.6% 2.3% 170 297,400
Quintile Counts 1,349 2,552 2,278 2,461 2,902 11,541
a: Median assessed market values for all single-family parcels - including improvement values.
b: The % change is market driven value change and does not include improvement values.
Source: Annual Compilations by the St. Louis Park Assessing Office
Page 9 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
St. Louis Park – Condominiums & Townhomes (Assess 2017)
Dist Condominium # Median Dist Townhomes # Median
Code Complex Name Units Mkt Value Code Complex Name Units Mkt Value
AC Aquila Commons Coop 106 195,000 BG Brunswick Gables 7 223,400
MO Monterey Coop 8 79,400 DB Dan-Bar 4 184,500
BR Bridgewalk 92 100,100 EW Excelsior Way 38 162,800
BK Brookside Lofts 41 214,000 GR2 Greensboro 96 158,000
CA Calhoun Hill 7 312,300 HE Hampshire Estates 8 145,800
CT Cedar Trails 280 119,700 HH Hampshire House 13 143,700
CS Cedar Trails South (TH) 32 169,600 LL Lamplighter Park 5 356,200
CW Cedar Trails West (TH) 48 177,200 LA Lohman's Amhurst 276 172,300
CH Coach Homes 128 116,100 ME Medley Row 22 266,800
EV Elmwood Village 77 297,300 MP Monterey Park 18 343,350
EL Excelsior Lofts 86 227,600 PC Princeton Ct 14 420,200
55+ 55+ Sr Condos 60 169,650 QC Quentin Ct 10 416,900
FH Fern Hill 30 192,500 SH Shamrock 16 141,900
TG Grand Northwest 96 399,650 SK Skyehill 31 228,500
GW Grand Way 124 307,900 SW Sungate West 48 164,000
GR Greensboro 164 82,600 VP Victoria Ponds 72 361,700
HV Harmony Vista 74 189,300 WT Westwood Twnhmes 38 182,500
IB Inglewood Boutique 6 334,950 ZA Zarthan Apt 18 178,500
LN Lynn Ave Condos 12 176,600 ZP Zarthan Park 16 182,500
LY Lynnwood Condos 11 145,900
MC Monterey Place 30 234,650
MW Monterey West 7 241,500
MR Murphy Ridge 4 154,700 Outlined complexes have active Housing Improvement
NP Natchez Place 26 153,600 Associations (HIA's); balance information may be
OX Oxford Gardens 12 91,500 obtained by calling 952-924-2696. The general info
P0 Parkside U.L. (460) 24 285,900 number for special assessments and delinquent
P2 Parkside U.L. (462) 22 253,300 utilities is 952-924-2111 (Utility Billing/Finance).
P4 Parkside U.L. (464) 22 249,900
PW Pointe West 86 290,500
PP Pondview Park 30 116,100
S1 Sungate I 20 113,600
S2 Sungate II 26 127,600
S3 Sungate III 14 196,600
SR Sunset Ridge 240 123,400
TF Twin Fountains 88 101,900
VL Village Lofts 60 170,900
WM Westmarke 64 184,150 St. Louis Park Universe Units Mkt Value
WE Westmoreland 72 76,100
WO West Oaks 75 196,100 Condominium Median 2017 2,830 143,500
WV Westwood Villa 66 72,600 Condominium Average 2017 2,830 174,022
WL Wolfe Lake 131 133,800
WF Wooddale Flats 34 495,400 Townhome Median 2017 750 174,900
WY Wynmoor 56 81,900 Townhome Average 2017 750 203,862
33 3300 On The Park 128 138,500
35 35th St Condos 11 118,400 Source: St. Louis Park Assessing Office
Page 10 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
Apartments: This sector is largely driven in the historic sense by income stream and the basic
equation of supply and demand. To begin, a brief review of recent market adjustments with
reference to total value change including new construction:
- For 2012 – market change at + 4.9% which included very little new construction value.
- For 2013 – market change at + 8.2% and +13.9% including new construction.
- For 2014 – market change at + 8.2% and +20.2% with multiple new complexes on-line.
- For 2015 – market change at +12.1% and +13.3% for the next phase of new complexes.
- For 2016 – market change at +12.0% and +17.8% including new construction.
- For 2017 – market change at + 6.4% and new construction brings it to +9.5%.
It is clear looking at the above stacked series of increases both from market appreciation and from
multiple new construction projects that our apartment market is in a very interesting position.
Regarding the attribute of annual market change – our unit values are at an unquestionable market
peak. Future signals are mixed with the market appreciation trend slowing to a more “normal”
rate with distinct expansion of selective geographic premiums. In that sense our locale and stock
mix are viewed as a competitive advantage (we are inner ring with good access and have a very
large apartment unit count which is increasingly spreading across the quality spectrum).
In terms of new construction, the bulk of new projects are adding luster to the previously under-
built A/B stock as construction costs effectively enforce market discipline on what will be built.
While in-process and pending new projects will logically drive this sector’s total valuation forward
in St. Louis Park for the short term future, the metro market as a whole is showing signs of being
very late in the expansion cycle for both value appreciation and new construction.
Meanwhile, the C market (commonly less than 3 stories, built circa 1960-1975) comprises about
one-half of the total apartment unit count in St. Louis Park and an overwhelming percentage of the
total apartment properties. Thus, the sales in this market niche dominate the assessment ratios
which in turn determine the adjustments moving forward. These complexes were essentially stable
for the 2014 assessment and rapidly advanced for the 2015 and 2016 assessments. They stabilized
to a significant extent with the 2017 assessment with a word of caution. While it is true that the
transactions are clearly at elevated values, the dominant buyer perception is to complete nominal
value add improvements (counter-tops, fridge, stove, laminate flooring) to get (also) nominal rental
increase while also accepting lower yields in their purchase decision (i.e., the capitalization rate).
This performance metric is decidedly different than the A and B stock where the lower yield
expectations are in conjunction with significant rental increase assumptions. For the C stock,
rental increases have been seen but nowhere near the trending for the newer stock. As such we
have adjusted the C stock values to mirror the market movements but we caution that we do not
foresee this trend to be long term sustainable and likely to be closely related to interest rates.
Closing comments on the apartment sector are a clear observation on being late in the cycle. While
new construction expansion can/will continue locally given the opportunities available, projects
are likely to be considerably less abundant in the larger picture. And while new construction is
typically healthy for the entire stock as it spreads unit amenities/pricing across a broader market
spectrum, it seems quite clear we are at/near market apex. Historic pricing is illustrative. The
current pricing in virtually all apartment sectors stands at 50% to 90% over previous market levels.
While we cannot look much farther forward given our annual function, this sector is acknowledged
industry wide as being in the final stages of a cyclic expansion.
Page 11 Study Session Meeting of April 24, 2017 (Item No. 2)
Title: 2017 Market Value Overview
Commercial and Industrial: These properties have been relatively stable over the past five years in
terms of value growth albeit with their own interesting performance issues. It is important to
realize that these properties comprise about 5% of our total parcel count while accounting for over
22% of total value and approaching 36% of the total tax capacity for the community.
For the 2014 assessment review, we noted two dominant issues in setting the assessment. First,
the 2013 assessment ratio performance was near perfect at 99.0% with more qualified sale
transactions versus many preceding years. Second, the sale verification and equalization of this
sector is much more closely scrutinized across city/county boundaries as these properties tend to
compete on a much larger geographic scale.
For the 2015 assessment, the going in ratio from 2014 was again dialed in at 96.0% although the
number of sales was down slightly. This assessment performance, while very good, also means
that true market movements are already closely mirrored which in turn means that there is minimal
room in which to move statistically.
For 2016, a very active sales market throughout 2015 was again tight in terms of the ratio
performance with 97.7% for commercial, 91.5% for industrial and a combined ratio of 95.9%. The
bulk of adjustments were driven by rapid escalation in distinct geographic areas.
For 2017, the bulk of the commercial sector has stabilized at a growth rate of +3.6%. The industrial
stock has been adjusted at +14.6% which is somewhat of a misnomer as land values and specific
sales combined to drive the market on what is likely to be a short legged final advance. Both of
these sectors are also at/near historic high levels with an expansion running far longer than is
typical. While fundamentals remain technically sound, an attitude of caution is again clearly stated.
Meeting: Study Session
Meeting Date: April 24, 2017
Written Report: 3
EXECUTIVE SUMMARY
TITLE: Utility Box Wrap Program
RECOMMENDED ACTION: None at this time. Please inform staff of any questions you might
have.
POLICY CONSIDERATION: This program and funding source is consistent with adopted
policy of the City Council.
SUMMARY: In collaboration with the Wolfe Park neighborhood, city staff successfully
completed the pilot program of the first utility box wrap in St. Louis Park. Residents have
expressed their appreciation for the additional artwork in the community. With the success of the
pilot, the utility box wrap program has continued. A group of St. Louis Park high school students
in the Roots and Shoots organization is partnering with the city to create a wrap for the utility box
at 28th St. and Louisiana. The students organized a contest, having students from the high school
and junior high submit images that will be reviewed by teachers, city staff and neighborhood
representatives. Selected images will create a collage that will be used as the wrap.
The utility box wrap program has evolved to include community organizations as eligible
participants, in addition to the neighborhoods. The purpose of the program will continue to be to
improve aesthetics, further enhance neighborhood connectivity, and also provide a way to
incorporate more art in the community. Organizations will be required to include the
neighborhood(s) as part of the process of selecting an image. If the utility box borders two
neighborhoods, both would be given the opportunity to be involved. Neighborhoods/organizations
interested in the program would be responsible for completing an application, pre-wrap inspection
and preparation of the utility box, ensuring all neighborhood residents are given the opportunity to
participate in the image selection process and working with the wrap printing company to finalize
wrap installation and removal.
Two additional utility boxes are budgeted to be wrapped in 2017. There is currently one
neighborhood interested in having a utility box wrapped. In addition to the photographs supplied
by the city, Friends of the Arts is also working to find artists to submit images for more options to
wrap a box.
FINANCIAL OR BUDGET CONSIDERATION: Staff is proposing to use $4,000 from the
CVB Administration Fees in 2017 and beyond (if the program is successful) to fund this program
VISION CONSIDERATION: St. Louis Park is committed to promoting an integrating arts,
culture and community aesthetics in all City initiatives, including implementation where
appropriate.
SUPPORTING DOCUMENTS: Program Description and Application
Prepared by: Breanna Freedman
Reviewed by: Michael Harcey, Chief of Police
Approved by: Tom Harmening, City Manager
Study Session Meeting of April 24, 2017 (Item No. 3) Page 2
Title: Utility Box Wrap Program
UTILITY BOX WRAP PROGRAM
Utility box wraps have been used in several cities nationwide to add artistic flare and detract graffiti
in neighborhoods and communities. The purpose of the program is to further enhance
neighborhood connectivity and provide a way to incorporate more art in the community. Only
city-owned utility boxes are available for wrapping at this time. Included is a map for utility box
locations.
ABOUT THE WRAPS:
•A utility box can be wrapped in an adhesive vinyl with a lifespan of five to seven years.
The wrap material is similar to what is used on vehicles.
•The vinyl is graffiti resistant, allowing for graffiti to be easily removed with water and
rubbing alcohol.
•The utility box needs to be in good condition prior to being wrapped; scratches, dents, dirt
and other material must be removed.
•Neighborhoods are able to select wrap designs from pre-approved images.
ELIGIBILITY: This program is eligible for St. Louis Park organizations and all neighborhoods
that have a city-owned utility box in or bordering their neighborhood. If the utility box borders
two or more neighborhoods, both must be given the opportunity to be involved. Neighborhoods
and organizations interested in the program would be responsible for completing an application,
pre-wrap inspection and preparation of the utility box, ensuring all neighborhood residents are
given the opportunity to participate in the image selection process and working with the wrap
printing company to finalize wrap installation and removal. Two neighborhood residents must be
involved in the process in the event that one neighbor moves or is unable to complete the project.
NEIGHBORHOOD/ORGANIZATION RESPONSIBILITY:
•Contact city to select a box
•Box prep: Clean and get box measurements
•Engage neighborhood residents in the selection process
o As part of application process, applicants are required to provide a strategy for
incorporating neighborhood residents (i.e. survey, post throughout the
neighborhood, meetings, etc.)
o If box boarders another neighborhood:
Organized neighborhood: Must partner with existing neighborhood
association steering committee in application (or get their approval if they
do not want to participate)
Unorganized neighborhood: Must do direct outreach to include
neighborhood input in final selection process
•Maintenance: Removing graffiti; on-going maintenance: Cleaning the box, repainting after
wear
•Selecting and working with the vendor. The city cannot recommend vendors. However, the
city can provide the names of vendors that have experience with utility box wraps.
Study Session Meeting of April 24, 2017 (Item No. 3) Page 3
Title: Utility Box Wrap Program
UTILITY BOX WRAP APPLICATION
Neighborhood/organization name(s): ______________________________________________________
Applicant names: ____________________________________ Email: ___________________________
____________________________________ Email: ___________________________
____________________________________ Email: ___________________________
____________________________________ Email: ___________________________
Phone number: ____________________________
Address: ____________________________________________
Please describe why your neighborhood(s)/organization is/are interested in the utility box wrap program:
If the utility box you wish to wrap borders various neighborhoods but has decided to not be a part of the
process, please check here: ☐ Bordering neighborhood name:
Please indicate how neighborhood residents will be engaged in selecting the final design/image for the
utility box wrap:
Utility box location:
Utility box measurements:
The neighborhood(s) is/are required to inspect the box and clean the box prior to wrap installation. If the
utility box you wish to have wrapped has significant scratches or dents, please contact Jay Hall at
952.924.2557.
As part of the application, you must submit a picture of the utility box.
By signing my name below, I agree to continue the maintenance of the utility box wrap after it has been
installed, including:
•Removing graffiti
•Cleaning of, especially during/after winter
Signed: Date:
Signed: Date:
Signed: Date:
Signed: Date:
Meeting: Study Session
Meeting Date: April 24, 2017
Written Report: 4
EXECUTIVE SUMMARY
TITLE: March 2017 Monthly Financial Report
RECOMMENDED ACTION: No action required at this time.
POLICY CONSIDERATION: None at this time.
SUMMARY: The Monthly Financial Report provides a summary of General Fund revenues
and departmental expenditures and a comparison of budget to actual throughout the year. A
budget to actual summary for the four utility funds is also included in this report.
FINANCIAL OR BUDGET CONSIDERATION: At the end of March, General Fund
expenditures total approximately 23% of the adopted annual budget. The attached analysis
explains variances.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Discussion
Summary of Revenues & Expenditures – General Fund
Budget to Actual – Enterprise Funds
Prepared by: Darla Monson, Senior Accountant
Reviewed by: Tim Simon, Chief Financial Officer
Approved by: Tom Harmening, City Manager
Study Session Meeting of April 24, 2017 (Item No. 4) Page 2
Title: March 2017 Monthly Financial Report
DISCUSSION
BACKGROUND: This report is designed to provide summary information of the overall level
of revenues and departmental expenditures in the General Fund and a comparison of budget to
actual throughout the year. A budget to actual summary for the four utility funds is also included
in this report.
PRESENT CONSIDERATIONS:
General Fund
Actual expenditures should generally run at about 25% of the annual budget at the end of March.
General Fund expenditures are under budget at approximately 23% of the adopted budget in
March. Revenues tend to be harder to measure in this same way due to the timing of when they
are received, examples of which include property taxes, State aid payments and seasonal
revenues for recreation programs. A few comments on variances are noted below.
Revenues:
License and permit revenues are at 45% of budget in March because the majority of the 2017
business and liquor license revenue has already been received. Permit revenue is at 32% of
budget through March.
Expenditures:
Communications & Marketing is at 32.9% of budget through March. This is a temporary
variance due to some large expenditures in March for prepayment of postage, the Park
Perspective, and the Park & Recreation brochure.
Organized Recreation also has a temporary variance of 32.8% because the full annual community
education contribution in the amount of $187,400 was paid to the school district in January.
Utility Funds
Revenues:
Revenue typically lags one month behind for commercial accounts and up to a full quarter
behind for some residential accounts depending on the billing cycle. Much of the revenue billed
in the first quarter of 2017 actually applied to 2016.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Actual $2,742 $5,447 $8,263
Budget $2,984 $5,969 $8,953 $11,93 $14,92 $17,90 $20,89 $23,87 $26,85 $29,84 $32,82 $35,81
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$ THOUSANDS Monthly Expenditures -General Fund
Summary of Revenues & Expenditures - General Fund As of March 31, 201720172017201520152016201620172017 Balance YTD Budget Budget Audited Budget Unaudited Budget Mar YTD Remaining to Actual %General Fund Revenues: General Property Taxes22,364,509$ 22,653,095$ 23,597,282$ 24,193,360$ 24,748,436$ -$ 24,748,436$ 0.00% Licenses and Permits3,248,158 4,312,700 3,496,177 4,320,078 3,745,736 1,687,828 2,057,908 45.06% Fines & Forfeits320,200 263,951 341,200 299,808 254,200 65,832 188,368 25.90% Intergovernmental1,292,277 1,669,395 1,419,017 1,656,072 1,631,669 351,869 1,279,800 21.56% Charges for Services1,907,292 2,116,313 1,956,593 2,063,241 2,027,637 285,621 1,742,016 14.09% Miscellaneous Revenue1,196,018 1,357,373 977,546 1,131,632 1,274,415 337,235 937,180 26.46% Transfers In1,851,759 1,867,398 1,872,581 1,881,274 1,899,927 472,482 1,427,445 24.87% Investment Earnings 140,000 68,908 140,000 114,957 140,000 140,000 0.00% Other Income17,900 61,025 27,450 20,440 30,450 9,402 21,048 30.88% Use of Fund Balance286,325 - 254,891 - 58,541 - 58,541 0.00%Total General Fund Revenues32,624,438$ 34,370,158$ 34,082,737$ 35,680,861$ 35,811,011$ 3,210,269$ 32,600,742$ 8.96%General Fund Expenditures: General Government: Administration979,183$ 1,012,841$ 1,037,235$ 1,118,873$ 1,049,123$ 214,051$ 835,072$ 20.40% Finance912,685 902,901 933,624 869,759 957,275 208,660 748,615 21.80% Assessing602,299 601,687 641,038 607,443 707,139 150,609 556,530 21.30% Human Resources805,929 857,950 748,718 801,958 754,699 172,878 581,821 22.91% Community Development1,245,613 1,253,687 1,385,036 1,281,000 1,366,055 322,385 1,043,670 23.60% Facilities Maintenance1,094,836 1,072,749 1,115,877 1,099,973 1,132,774 262,754 870,020 23.20% Information Resources1,468,552 1,374,074 1,564,128 1,492,734 1,570,712 318,973 1,251,739 20.31% Communications & Marketing635,150 571,815 608,228 657,758 646,841 212,756 434,085 32.89% Community Outreach24,677 22,380 25,587 22,718 26,553 4,915 21,638 18.51% Engineering492,838 381,148 549,251 436,228 376,601 53,542 323,059 14.22%Total General Government8,261,762$ 8,051,233$ 8,608,722$ 8,388,443$ 8,587,772$ 1,921,521$ 6,666,251$ 22.38% Public Safety: Police8,511,557$ 8,248,745$ 8,698,661$ 8,754,092$ 9,217,988$ 2,335,970$ 6,882,018$ 25.34% Fire Protection3,722,396 3,759,386 4,030,153 3,939,435 4,407,656 999,719 3,407,937 22.68% Inspectional Services2,139,325 2,002,445 2,216,075 2,082,694 2,419,073 526,858 1,892,215 21.78%Total Public Safety14,373,278$ 14,010,577$ 14,944,889$ 14,776,220$ 16,044,717$ 3,862,548$ 12,182,169$ 24.07% Operations & Recreation: Public Works Administration232,437$ 213,383$ 241,304$ 240,497$ 266,249$ 56,443$ 209,806$ 21.20% Public Works Operations2,763,735 2,388,560 2,907,781 2,699,375 3,019,017 708,755 2,310,262 23.48% Organized Recreation1,304,470 1,360,454 1,431,260 1,396,737 1,472,996 483,201 989,795 32.80% Recreation Center1,591,115 1,575,042 1,602,935 1,687,724 1,744,651 336,619 1,408,032 19.29% Park Maintenance1,550,033 1,513,700 1,634,249 1,627,700 1,721,732 360,997 1,360,735 20.97% Westwood564,055 560,744 576,173 555,887 602,400 137,701 464,699 22.86% Natural Resources472,049 377,617 479,408 362,094 550,235 90,918 459,317 16.52% Vehicle Maintenance1,333,520 1,118,048 1,358,946 1,130,622 1,384,038 286,531 1,097,507 20.70%Total Operations & Recreation9,811,414$ 9,107,547$ 10,232,056$ 9,700,637$ 10,761,318$ 2,461,165$ 8,300,153$ 22.87% Non-Departmental: General -$ 123,720$ 30,351$ 63,648$ 31,909$ 7,965$ 23,944$ 24.96% Transfers Out- 2,194,245 - 1,873,000 - - - 0.00% Contingency177,984 14,438 266,719 104,224 385,295 10,083 375,212 2.62%Total Non-Departmental177,984$ 2,332,403$ 297,070$ 2,040,871$ 417,204$ 18,048$ 399,156$ 4.33%Total General Fund Expenditures32,624,438$ 33,501,760$ 34,082,737$ 34,906,172$ 35,811,011$ 8,263,282$ 27,547,729$ 23.07%Study Session Meeting of April 24, 2017 (Item No. 4) Title: March 2017 Monthly Financial ReportPage 3
Budget to Actual - Enterprise FundsAs of March 31, 2017Current BudgetMar Year To DateBudget Variance% of BudgetCurrent BudgetMar Year To DateBudget Variance% of BudgetCurrent BudgetMar Year To DateBudget Variance% of BudgetCurrent BudgetMar Year To DateBudget Variance% of BudgetOperating revenues: User charges 6,420,438$ 633,410$ 5,787,028$ 9.87% 6,915,804$ 935,267$ 5,980,537$ 13.52% 3,319,001$ 348,259$ 2,970,742$ 10.49% 2,853,520$ 471,425$ 2,382,095$ 16.52% Other 375,000 89,834 285,166 23.96% 30,000 3,336 26,664 11.12% 148,000 564 147,436 0.38% - - - Total operating revenues6,795,438 723,244 6,072,194 10.64% 6,945,804 938,603 6,007,201 13.51% 3,467,001 348,823 3,118,178 10.06% 2,853,520 471,425 2,382,095 16.52%Operating expenses: Personal services1,322,998 344,158 978,840 26.01% 613,321 193,249 420,072 31.51% 590,172 130,804 459,368 22.16% 705,221 126,897 578,324 17.99% Supplies & non-capital544,800 24,591 520,209 4.51% 65,050 1,252 63,798 1.93% 153,350 53,052 100,298 34.60% 30,800 - 30,800 0.00% Services & other charges1,688,398 334,135 1,354,263 19.79% 4,764,546 1,164,681 3,599,865 24.44% 2,692,499 199,256 2,493,243 7.40% 597,828 45,401 552,427 7.59% Depreciation * Total operating expenses3,556,196 702,884 2,853,312 19.77% 5,442,917 1,359,183 4,083,734 24.97% 3,436,021 383,113 3,052,908 11.15% 1,333,849 172,298 1,161,551 12.92%Operating income (loss)3,239,242 20,359 3,218,883 0.63% 1,502,887 (420,580) 1,923,467 -27.98% 30,980 (34,290) 65,270 -110.68% 1,519,671 299,127 1,220,544 19.68%Nonoperating revenues (expenses): Interest income 3,408 - 3,408 1,953 - 1,953 0.00% 30,849 - 30,849 0.00% 2,875 - 2,875 0.00% Other misc income- - - - - -2,500 - 2,500 0.00%- - - Interest expense/bank charges(182,037) (90,659) (91,378) 49.80% (16,016) (4,509) (11,507) 28.15% (11,000) (2,263) (8,737) 20.57% (30,604) (12,061) (18,543) 39.41% Total nonoperating rev (exp)(178,629) (90,659) (87,970) 50.75% (14,063) (4,509) (9,554) 32.06% 22,349 (2,263) 24,612 -10.13% (27,729) (12,061) (15,668) 43.50%Income (loss) before transfers3,060,613 (70,300) 3,130,913 -2.30% 1,488,824 (425,089) 1,913,913 -28.55% 53,329 (36,553) 89,882 -68.54% 1,491,942 287,066 1,204,876 19.24%Transfers inTransfers out(584,451) (146,113) (438,338) 25.00% (799,648) (199,912) (599,736) 25.00% (227,229) (56,807) (170,422) 25.00% (313,067) (78,267) (234,800) 25.00%NET INCOME (LOSS)2,476,162 (216,413) 2,692,575 -8.74% 689,176 (625,001) 1,314,177 -90.69% (173,900) (93,360) (80,540) 53.69% 1,178,875 208,799 970,076 17.71%Items reclassified to bal sht at year end: Capital Outlay(3,163,298) (509) (3,162,789) 0.02% (785,983) (509) (785,474) 0.06%- - - (2,191,667) (509) (2,191,158) 0.02%Revenues over/(under) expenditures(687,136) (216,922) (470,214) (96,807) (625,510) 528,703 (173,900) (93,360) (80,540) (1,012,792) 208,290 (1,221,082) *Depreciation is recorded at end of year (non-cash item).Water SewerSolid WasteStorm WaterStudy Session Meeting of April 24, 2017 (Item No. 4) Title: March 2017 Monthly Financial ReportPage 4
Meeting: Study Session
Meeting Date: April 24, 2017
Written Report: 5
EXECUTIVE SUMMARY
TITLE: First Quarter Investment Report (January – March 2017)
RECOMMENDED ACTION: No action required at this time.
POLICY CONSIDERATION: None at this time.
SUMMARY: The Quarterly Investment Report provides an overview of the City’s investment
portfolio, including the types of investments held, length of maturity, and yield.
FINANCIAL OR BUDGET CONSIDERATION: The total portfolio value at March 31, 2017
is approximately $46 million. About 80% of the portfolio is in longer term investments that
include U.S. Treasury notes, Federal agency bonds, municipal debt securities, and certificates of
deposit. The remainder is held in money market accounts and commercial paper for future cash
flow needs. The overall yield is at 1.17%, which is up from .88% at the end of 2016.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Discussion
Investment Portfolio Summary
Prepared by: Darla Monson, Senior Accountant
Reviewed by: Tim Simon, Chief Financial Officer
Approved by: Tom Harmening, City Manager
Study Session Meeting of April 24, 2017 (Item No. 5) Page 2
Title: First Quarter Investment Report (January – March 2017)
DISCUSSION
BACKGROUND: The City’s investment portfolio is focused on short term cash flow needs and
investment in longer term securities. This is done in accordance with Minnesota Statute 118A
and the City’s Investment Policy objectives of: 1) Preservation of capital; 2) Liquidity; and 3)
Return on investment.
PRESENT CONSIDERATIONS: The total portfolio value decreased by $18 million in the
first quarter of 2017 from approximately $64 million at 12/31/2016 to $46 million at 3/31/2017.
The decrease was almost entirely in the money market accounts as the 2016A bond proceeds
continued to be spent down on the recreation projects, the final balloon payment was made on
the McGarvey property acquisition, and cash was needed for the February 1 debt service
payments and Pay As You Go TIF note payments, as well as for normal payroll and general
operating expenses.
The overall yield of the portfolio rose to 1.17% compared to .88% at 12/31/2016 as balances in
the lower yielding money market accounts was spent down. While there was limited trading
activity of longer term securities, rates in the 4M Fund money market also increased during the
quarter by about .15%. Cities generally use a benchmark such as the two year Treasury, which
was at 1.27% on 3/31/2017 or some similar measure for yield comparison of their overall
portfolio.
In addition to $6.7 million of cash held in money market accounts, the portfolio currently has
about $2.8 million of commercial paper with maturity dates of up to 6 months and interest rates
between 1.1% and 1.35% for investment of cash in the shorter term. Commercial paper are
promissory notes with short maturity periods issued by financial institutions and large
corporations.
Another $5.5 million of the portfolio is invested in longer term fixed and step rate certificates of
deposit. There are currently 23 CD’s in the portfolio, each with a face value of $245,000 or less,
which guarantees that each CD is insured by the FDIC up to $250,000. They have varying
maturity dates over the next 3 ½ years with rates of up to 2.3%.
The remaining two thirds or approximately $31.2 million of the portfolio is invested in other
long term securities which include municipal bonds ($8.5 mil), Federal agency bonds ($10.2 mil)
and U.S. Treasury notes ($12.5 mil). Municipal bonds are issued by States, local governments,
or school districts to finance special projects. Agency bonds are issued by government agencies
such as the Federal Home Loan Bank or Fannie Mae, which may have call dates where they can
be called prior to their final maturity date.
Here is a summary of the City’s portfolio at March 31, 2017:
12/31/16 3/31/17
<1 Year 49% 39%
1-2 Years 17% 12%
2-3 Years 15% 18%
3-4 Years 15% 19%
>4 Years 4% 12%
12/31/16 3/31/17
Money Markets/Cash $24,945,638 $6,716,375
Commercial Paper $2,739,183 $2,792,173
Certificates of Deposit $5,487,070 $5,472,967
Municipal Debt $8,514,385 $8,521,700
Agency Bonds/Treas Notes $22,631,208 $22,711,042
City of St. Louis Park
Investment Portfolio Summary
March 31, 2017
Institution/Broker Investment Type CUSIP Maturity Date
Yield to
Maturity Par Value
Market Value at
3/31/2017
Estimated Avg
Annual Income
Citizens Indep Bank Money Market 0.06%451,420 451,420 271
4M Liquid Asset Money Market 0.43%707,480 707,480 3,042
4MP Liquid Asset Money Market 0.50%3,522,456 3,522,456 17,612
4M 2016A Bonds Money Market 0.43%83 83 0
4MP 2016A Bonds Money Market 0.50%802,668 802,668 4,013
5,032,686
UBS Institutional Money Market 0.51% 1,103,757 1,103,757 5,629
UBS Institutional Money Market 0.51% 128,511 128,511 655
1,232,268
PFM Comm Paper - Credit Agricole CIB NY 22533TS98 05/20/2017 1.12% 1,000,000 998,780 11,200
PFM Comm Paper - JP Morgan 46640PTL7 06/20/2017 1.14% 1,000,000 997,220 11,400
PFM Comm Papter - Bank Tokyo 06538BVF7 08/15/2017 1.35% 800,000 796,173 10,800
2,792,173
PFM CD - Discover Bank DE 254671AG5 05/02/2017 1.75% 240,000 240,190 4,200
PFM CD - GE Cap Retail Bank UT 36160NJZ3 05/04/2017 1.75% 240,000 240,223 4,200
PFM CD - Sallie Mae Bnk UT 79545OPE9 08/29/2017 1.70% 240,000 241,001 4,080
PFM CD - Sun Natl Bank NJ 86682ABV2 10/03/2017 1.00% 240,000 240,204 2,400
PFM CD - Everbank Jacksonvl FL 29976DPB0 10/31/2017 1.00% 240,000 240,185 2,400
PFM CD - Comenity Bank DE 981996AX9 12/05/2017 1.25% 200,000 200,362 2,500
PFM CD - Banco Popular PR 05967ESG5 12/05/2017 1.10% 240,000 240,893 2,640
PFM CD - Ally Bank UT 02006LNL3 02/05/2018 1.25% 240,000 240,456 3,000
PFM CD - Third Fed S&L Assn OH 88413QAT5 02/22/2018 1.35% 240,000 240,614 3,240
PFM CD - Cit Bank UT 17284CH49 06/04/2019 1.90% 240,000 241,562 4,560
PFM CD - Amer Exp F UT 02587CAC4 07/10/2019 1.95% 240,000 242,014 4,680
PFM CD - Capital One Bank 14042E4S6 07/15/2019 1.95% 240,000 241,418 4,680
PFM CD - First Bk Highland IL 3191408W2 08/13/2019 2.00% 240,000 240,338 4,800
PFM CD - Webster Bk NA CT 94768NJX3 08/20/2019 1.90% 240,000 241,992 4,560
PFM CD - Capital One Bank 140420PS3 10/08/2019 2.10% 240,000 242,530 5,040
PFM CD - State Bk India IL 856283XJ0 10/15/2019 2.10% 240,000 242,587 5,040
PFM CD - Goldman Sachs Bank NY 38148JHB0 01/14/2020 2.20% 240,000 243,168 5,280
PFM CD - Amer Express UT 02587DXE3 01/30/2020 1.95% 240,000 241,646 4,680
PFM CD - Camden Nat'l Bank ME 133033DR8 02/26/2020 1.80% 240,000 242,078 4,320
PFM CD - Private Bank & Tr IL 74267GVA2 02/27/2020 1.75% 240,000 242,417 4,200
PFM CD - HSBC Bank DE Step Rate 40434ASZ3 03/30/2020 2.22% 240,000 240,144 5,330
PFM CD - World's Foremost 9159919E5 08/06/2020 2.30% 200,000 198,612 4,600
PFM CD - Comenity Cap Bk UT 20033AND4 10/13/2020 2.00% 245,000 248,332 4,900
5,472,967
PFM Muni Debt - New York, NY 64966HJS0 04/01/2017 1.20% 500,000 500,000 6,000
PFM Muni Debt - Fond Du Lac WI Schl 344496JQ8 04/01/2017 1.05% 1,000,000 1,000,000 10,500
PFM Muni Debt - N. Orange Cty CA 661334DR0 08/01/2017 1.01% 1,000,000 1,000,570 10,110
PFM Muni Debt - NYC Trans Fin Auth 64971QH55 11/01/2018 1.33% 1,000,000 999,060 13,280
PFM Muni Debt - Williamston Mich Sch 970294CN2 05/01/2019 1.37% 2,000,000 2,025,960 27,360
PFM Muni Debt - New York City 64971WUX6 08/01/2019 1.29% 2,000,000 1,997,060 25,780
PFM Muni Debt - Connecticut St 20772JKN1 10/15/2020 1.75% 1,000,000 999,050 17,520
8,521,700
PFM Fannie Mae 3136G1AZ2 01/30/2018 1.00% 400,000 399,688 4,000
PFM FHLB Bond 3130A7CX1 03/19/2018 0.88%3,400,000 3,392,214 29,750
PFM FHLB Global 3130A9AE1 10/01/2018 0.91%2,000,000 1,988,060 18,200
PFM US Treasury Note 912828WD8 10/31/2018 0.89% 370,000 370,289 3,293
PFM FHLB 3130AAE46 01/16/2019 1.25% 730,000 729,299 9,125
PFM FNMA 3135G0H63 01/28/2019 1.04%1,600,000 1,601,824 16,608
PFM FHLB Global 3130A9EP2 09/26/2019 1.04%1,400,000 1,384,712 14,560
PFM US Treasury Note 912828VP2 07/31/2020 1.23% 2,250,000 2,278,305 27,675
PFM US Treasury Note 912828L32 08/31/2020 1.34% 1,100,000 1,089,814 14,740
PFM US Treasury Note 912828L32 08/31/2020 0.93% 1,200,000 1,188,888 11,160
PFM US Treasury Note 912828L32 08/31/2020 0.89% 1,000,000 990,740 8,900
PFM US Treasury Note 912828L32 08/31/2020 1.09% 700,000 693,518 7,630
PFM US Treasury Note 912828N48 12/31/2020 1.02% 250,000 250,185 2,550
PFM US Treasury Note 912828N48 12/31/2020 1.12% 750,000 750,555 8,400
PFM US Treasury Note 912828Q78 04/30/2021 1.86% 1,050,000 1,032,360 19,530
PFM US Treasury Note 912828Q78 04/30/2021 1.87% 675,000 663,660 12,623
PFM US Treasury Note 912828R77 05/31/2021 1.38% 1,600,000 1,571,504 22,000
PFM FHLB Global 3130A8QS5 07/14/2021 1.25% 750,000 726,548 9,375
PFM US Treasury Note 912828D72 08/31/2021 1.93% 1,600,000 1,608,880 30,880
22,711,042
GRAND TOTAL 46,214,257 541,502
Current Portfolio Yield To Maturity 1.17%
Study Session Meeting of April 24, 2017 (Item No. 5)
Title: First Quarter Investment Report (January – March 2017)Page 3