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HomeMy WebLinkAbout2011/11/07 - ADMIN - Agenda Packets - City Council - RegularAGENDA NOVEMBER 7, 2011 (Councilmember Sanger Out) 7:20 p.m. ECONOMIC DEVELOPMENT AUTHORITY – Council Chambers 1. Call to Order 2. Roll Call 3. Approval of Minutes 3a. Economic Development Authority Minutes October 17, 2011 4. Approval of Agenda 5. Reports 6. Old Business 7. New Business 7a. Third Amendment to Redevelopment Contract with PNMC Holdings Recommended Action: Motion to Adopt the Resolution approving the Third Amendment to Redevelopment Contract with PNMC Holdings (Park Nicollet Health Services). 7b. First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC. Recommended Action: • Motion to approve the EDA Resolution approving the First Amendment to the Contract for Private Redevelopment By and Between St. Louis Park Economic Development Authority and M & L Anodizing Properties, LLC. • Motion to approve the EDA Resolution authorizing an additional Interfund Loan for advance of certain costs in connection with the Hardcoat TIF District. 8. Communications 9. Adjournment 7:30 p.m. CITY COUNCIL MEETING – Council Chambers 1. Call to Order 1a. Pledge of Allegiance 1b. Roll Call 2. Presentations -- None 3. Approval of Minutes 3a. City Council Meeting Minutes of October 3, 2011 3b. Study Session Meeting Minutes of October 10, 2011 3c. City Council Meeting Minutes of October 17, 2011 3d. Study Session Meeting Minutes of October 24, 2011 Meeting of November 7, 2011 City Council Agenda 4. Approval of Agenda and Items on Consent Calendar NOTE: The Consent Calendar lists those items of business which are considered to be routine and/or which need no discussion. Consent items are acted upon by one motion. If discussion is desired by either a Councilmember or a member of the audience, that item may be moved to an appropriate section of the regular agenda for discussion. The items for the Consent Calendar are listed on the last page of the Agenda. Recommended Action: Motion to approve the Agenda as presented and items listed on the Consent Calendar; and to waive reading of all resolutions and ordinances. (Alternatively: Motion to add or remove items from the agenda, or move items from Consent Calendar to regular agenda for discussion.) 5. Boards and Commissions -- None 6. Public Hearings -- None 7. Requests, Petitions, and Communications from the Public -- None 8. Resolutions, Ordinances, Motions and Discussion Items 8a. 2012 Employer Benefits Contribution Recommended Action: Motion to approve Resolution establishing 2012 Employer Benefits Contribution. 9. Communication 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 of November 7, 2011 City Council Agenda CONSENT CALENDAR 4a. Adopt Resolution accepting work and authorizing final payment in the amount of $14,261.76 for the Dehumidification System project at Rec Center, Contract No. 45-11 4b. Adopt Resolution amending and restating Resolution No. 11-30 regarding the On-Sale Intoxicating and Sunday Liquor License for Toby Keith I Love This Bar probationary status extension for the license term through March 1, 2012 4c. Adopt Resolution reauthorizing a variance for West End Apartments 4d. Approve Resolution accepting a donation from the Minnesota Cycling Team in the amount of $1,000 to be available for individuals who qualify for financial assistance through the Parks and Recreation Department 4e. Adopt a resolution in support of the Minnehaha Creek Watershed District’s creek restoration project along Minnehaha Creek between Louisiana Avenue S. and Meadowbrook Road 4f. Adopt Resolution authorizing the special assessment for the repair of the water service line at 4000 Randall Avenue, St. Louis Park, MN - P.I.D. 06-028-24-14-0014 4g. Adopt Resolution authorizing the special assessment for the repair of the sewer service line at 3941 Dakota Avenue South, St. Louis Park, MN - P.I.D. 21-117-21-23-0042 4h. Adopt Resolution authorizing the special assessment for the repair of the sewer service line at 4073 Utica Avenue South, St. Louis Park, MN - PID 07-028-24-23-0078 4i. Approve Amendment No. 2 to City Agreement No. 1897, between the City and New Cingular Wireless (Cingular, f.k.a. AT&T) for communication antennas on the city water tower at 2541 Nevada Avenue 4j. Grant a drainage easement for 7301/7317 Lake Street West 4k. Adopt Resolution authorizing parking restrictions along the North Frontage Road of County Road 25 from Ottawa Avenue to Raleigh Avenue 4l. Approve for filing Board of Zoning Appeals Minutes August 25, 2011 4m. Approve for filing Parks & Recreation Advisory Commission Minutes September 14, 2011 4n. Approve for filing Human Rights Commission Minutes September 20, 2011 4o. Approve for filing Planning Commission Minutes October 5, 2011 St. Louis Park Economic Development Authority and regular City Council meetings are carried live on Civic TV cable channel 17 and replays are frequent; check www.parktv.org for the schedule. The meetings are also streamed live on the internet at www.parktv.org, and saved for Video on Demand replays. The agenda is posted on Fridays on the official city bulletin board in the lobby of City Hall and on the text display on Civic TV cable channel 17. The agenda and full packet are available by noon on Friday on the city’s website. Meeting Date: November 7, 2011 Agenda Item #: 3a UNOFFICIAL MINUTES ECONOMIC DEVELOPMENT AUTHORITY ST. LOUIS PARK, MINNESOTA OCTOBER 17, 2011 1. Call to Order Vice President Omodt called the meeting to order at 7:20 p.m. Commissioners present: Vice President Paul Omodt, Jeff Jacobs, Anne Mavity, Julia Ross, and Susan Sanger, and Sue Santa. Commissioners absent: President Phil Finkelstein. Staff present: Executive Director (Mr. Harmening), Director of Community Development (Mr. Locke), Economic Development Coordinator (Mr. Hunt), and Recording Secretary (Ms. Hughes). 2. Roll Call 3. Approval of Minutes 3a. Economic Development Authority Minutes of September 6, 2011 The minutes were approved as presented. 4. Approval of Agenda The agenda was approved as presented. 5. Reports 5a. Economic Development Authority Vendor Claims It was moved by Commissioner Jacobs, seconded by Commissioner Santa, to accept for filing Vendor Claims for the period August 27, 2011 through October 7, 2011. The motion passed 6-0 (President Finkelstein absent). 6. Old Business - None 7. New Business 7a. Authorization to Submit Environmental Cleanup Grant Applications - 3924 Excelsior Blvd. EDA Resolution No. 11-09 Mr. Hunt presented the staff report and explained that Bader Development is proposing to purchase the former American Inn property, remove the existing contamination, and construct a $12.6 million, five-story, 58-unit market rate apartment building that will EDA Meeting of November 7, 2011 (Item No. 3a) Page 2 Subject: Economic Development Authority Meeting Minutes of October 17, 2011 integrate with the Ellipse project. He advised the total cost to remediate the site is estimated at $980,000 and Bader Development has requested the EDA authorize the submission of grant applications to the Department of Employment and Economic Development (DEED), the Met Council, and Hennepin County to allow the proposed E2 project to proceed and each of the granting agencies requires an authorizing resolution indicating that the City is committed to the project. He added that applications to the agencies are due November 1st with grant awards announced in February. Commissioner Mavity expressed support for this effort to leverage additional money to clean up the site and develop the property. She requested clarification regarding the current relationship between the City and Bader Development and noted that the City currently owns the property and is being asked to submit the grant applications on behalf of Bader Development. Mr. Hunt explained that eventually the EDA will enter into a Purchase and Redevelopment Contract with the developer that will entail financial assistance provided to the project and will outline the developer’s responsibilities as well as the City’s responsibilities with respect to the grants being applied for and how the grants will be administered. He added that the grants are related to the E2 project and if the project does not proceed no grant monies will be received. It was moved by Commissioner Mavity, seconded by Commissioner Sanger, to approve EDA Resolution No. 11-09 Approving a Grant Application to the Department of Employment and Economic Development and Approving Local Matching Funds on Behalf of Bader Development. The motion passed 6-0 (President Finkelstein absent). It was moved by Commissioner Mavity, seconded by Commissioner Sanger, to approve EDA Resolution No. 11-10 Authorizing Application for the Metropolitan Council Tax Base Revitalization Account on Behalf of Bader Development. The motion passed 6-0 (President Finkelstein absent). It was moved by Commissioner Mavity, seconded by Commissioner Sanger, to approve EDA Resolution No. 11-11 Authorizing Application for a Grant From Hennepin County’s Environmental Response Fund on Behalf of Bader Development. The motion passed 6-0 (President Finkelstein absent). 7b. Authorization to Submit a Grant Application to Hennepin County – Open to Business Program EDA Resolution No. 11-12 Mr. Hunt presented the staff report and a brochure describing the Open to Business program, which offers free technical assistance to entrepreneurs and small business owners looking to expand their businesses. He advised that the EDA sponsored this program and entered into an agreement with the Metropolitan Consortium of Community Developers (MCCD) last spring. He stated that the Hennepin County Housing and EDA Meeting of November 7, 2011 (Item No. 3a) Page 3 Subject: Economic Development Authority Meeting Minutes of October 17, 2011 Redevelopment Authority has grant money available for municipalities that offer the Open to Business program and the EDA would apply for a $5,000 grant that would be applied to next year’s sponsorship of the Open to Business program in the City. Commissioner Sanger requested an update on the Open to Business program. Mr. Hunt advised that the program only recently began and the consultant has already met with 17 clients and has spent 125 hours with these clients. He stated that one small business loan is being considered that would leverage another loan of $148,000. He reported that the 17 clients consisted of four start-up businesses and 13 existing businesses. It was moved by Commissioner Sanger, seconded by Commissioner Santa, to approve EDA Resolution No. 11-12 Authorizing Application for a Grant From Hennepin County’s Housing and Redevelopment Authority for the “Open to Business” Program. The motion passed 6-0 (President Finkelstein absent). 8. Communications - None 9. Adjournment The meeting adjourned at 7:28 p.m. ______________________________________ ______________________________________ Secretary Vice President Meeting Date: November 7, 2011 Agenda Item #: 7a Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Third Amendment to Redevelopment Contract with PNMC Holdings. RECOMMENDED ACTION: Motion to adopt the resolution approving the Third Amendment to Redevelopment Contract with PNMC Holdings (Park Nicollet Health Services). POLICY CONSIDERATION: Does the EDA support the terms of the settlement with PNMC Holdings as specified in the proposed Third Amendment? BACKGROUND: The EDA entered into a Contract for Private Redevelopment with PNMC Holdings (the “Contract”) in 1993. The Contract called for the phased construction of much of what we now know as the Park Nicollet Clinic Campus at Excelsior Blvd and Hwy 100. Under the terms of the agreement the “3850 Building”, the “3900 Building” and the parking ramp serving the Park Nicollet Clinic were constructed. Development of this site required addressing significant environmental issues. An MPCA approved Remedial Action Plan (RAP) was prepared to address the environmental problems and Park Nicollet incurred substantial remediation expenses ($6.2 million) in the course of building the campus. Under the terms of the Contract, the EDA was to provide tax increment assistance to Park Nicollet in the form of a pay-as-you-go tax increment note to help offset the majority of the remediation expenses. The EDA is currently obligated to provide $4,975,000 in assistance. The Contract envisioned that remediation costs could be much higher and that the EDA could be obligated to provide up to $9 million in assistance. The Park Nicollet campus is within the former Excelsior Blvd TIF district (expired in August 2009) and a Hazardous Substance Sub-district was created specifically to address the contamination remediation expenses. This Sub-district is in effect until December 31, 2021. As part of Phase II under the Contract, Park Nicollet was required to construct at least 145,000 square feet of medical office space on the clinic campus. Of this amount, Park Nicollet constructed 49,310 square feet. The remaining 95,690 square feet of building construction has not occurred. As a result Park Nicollet is in default of the agreement. On October 5, 2007, the EDA sent Park Nicollet Health Services a letter notifying it of PNMC Holdings’ default under the amended Contract. Since that time City staff and Park Nicollet have been in extended discussions regarding how best to address the Contract default. In 2008 and 2009 Park Nicollet paid (two payments of $156,000 each), the amount the EDA would otherwise have collected as tax increment if the Phase II buildings had been built on schedule. The EDA also suspended payment on the pay-as-you-go Note reimbursing PNMC for remediation expenses as a result of the default condition. The EDA is withholding about $1.1 million in Note payments at this time. EDA Meeting of November 7, 2011 (Item No.7a) Page 2 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings In its discussions with Park Nicollet, Staff has been striving to find an equitable, “win, win” resolution to the default situation. Staff, in consultation with the EDA’s legal counsel, has reached a proposed settlement with Park Nicollet which addresses the default and terminates the contract early. The terms of the proposed settlement (contained within the proposed Third Amendment) were discussed at the October 24th Study Session where there was consensus reached by the City Council on proceeding with the formal consideration of the Third Amendment. Proposed Third Amendment To formalize the proposed agreement, the parties have agreed to enter into a Third Amendment to the Contract for Private Redevelopment. Key provisions contained within the proposed Third Amendment are listed below. 1. The current balance of unpaid environmental costs is approximately $2,315,000. The EDA will make further HSTI payments in the amount that leaves an unpaid balance of $500,000. In other words, the EDA will pay approximately $1,815,000 of additional HSTI payments, and the contract will then terminate. 2. The result is that Redeveloper’s total assistance will be reduced by $800,000, including the $500,000 left unpaid as described above, and the $300,000 cash payment made to the EDA in 2008. 3. The remaining payments will be made in three installments: Ten Days after the Third Amendment: This payment will be in the amount of all the previously withheld HSTI from the second-half 2010 taxes and the first-half 2011 taxes (i.e., the payments that would have been made on February 1, 2011 and August 1, 2011). The first-half 20111 amount is reduced by a holdback because of a pending Redeveloper tax petition. The net payment will be approximately $1,046,000. February 1, 2012: This payment will be the HSTI from the second-half 2011 taxes, again less a hold back to account for the pending 2011 tax petition; provided that if that tax petition is resolved before February 1, 2012, the holdback will be eliminated and actual payment will be based on the resolved market value. The payment amount is currently estimated to be approximately $544,000. August 1, 2012: This final payment will be the amount left, after the two earlier payments, that leaves a balance of $500,000 in unpaid environmental costs. The payment amount is estimated to be approximately $226,000. 4. Redeveloper is permitted to seek a reduction market value for taxes payable in 2012 (the source of the last payment on August 1, 2012). However, Redeveloper may not seek a reduction that would reduce the HSTI to a level below the amount of the August 1, 2012 payment. Such a reduction is almost impossible, because the final payment is approximately one-half of the full HSTI payments. That is, Redeveloper would have to reduce its property value in half in order to reduce the HSTI payment below the expected amount. 5. The other changes in the Third Amendment simply remove provisions that are no longer needed in light of the proposed resolution. EDA Meeting of November 7, 2011 (Item No.7a) Page 3 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings Under the Contract, the HSTI District terminates on December 31, 2021. Under the proposed Third Amendment, once the final payment is made on August 1, 2012, the Contract is effectively terminated. The EDA would then be required to decertify the HSTI District which would be nine (9) years early. Decertification of the HSTI District will bring the current full market value of the Park Nicollet Clinic Campus onto the tax rolls for the City and all other taxing jurisdictions. The HSTI from the first half of 2012 in excess of the payment on August 1, 2012, and all of the second half HSTI in 2012, will be redistributed to the City and other taxing jurisdictions. The estimated amount of HSTI redistributed in 2012 is approximately $938,000. The full value will be restored for taxes payable in 2013. FINANCIAL OR BUDGET CONSIDERATION: Execution of the proposed Third Amendment to the Redevelopment Contract with PNMC Holdings would essentially cap the qualified costs for which Park Nicollet is eligible for reimbursement at approximately $2,315,000 as well as reduce the total amount the EDA is currently obligated to pay PNMC by $500,000. Thus the net remaining amount of HSTI the EDA would pay PNMC Holdings under the proposed agreement would be approximately $1,815,000. It would also result in the early termination of the Excelsior Blvd HSTI TIF District in 2012, adding approximately $1 million or about 1.4% in tax capacity to the City total tax base. VISION CONSIDERATION: Not applicable. Attachments: Resolution of Approval Third Amendment to Redevelopment Contract with PNMC Holdings Staff Report of October 24, 2011 Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Kevin Locke, Community Development Director Approved by: Tom Harmening, EDA Executive Director and City Manager EDA Meeting of November 7, 2011 (Item No.7a) Page 4 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 11-_____ RESOLUTION APPROVING A THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, PNMC HOLDINGS, AND PARK NICOLLET HEALTH SERVICES BE IT RESOLVED By the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority is currently administering its Redevelopment Project No. 1 ("Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"), and within the Project has the Park Nicollet Hazardous Substance Subdistrict (“the “HSTI District”). 1.02. The Authority entered into a Contract for Private Redevelopment with PNMC Holdings and Park Nicollet Health Services dated as of March 3, 1993, as amended by a First Amendment thereto dated February 27, 1997 and a Second Amendment thereto dated May 7, 2001 (together, the “Original Contract”), regarding redevelopment of a portion of the property within the HSTI District. 1.03. The parties have agreed to revise certain terms of the Original Contract, and to that end have prepared a Third Amendment to Contract for Private Redevelopment (the “Third Amendment”). 1.04. The Board has reviewed the Third Amendment and finds that the approval and execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authority Approval; Other Proceedings. 2.01. The Third Amendment as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Third Amendment, and any documents referenced therein or otherwise required to carry out the transactions described in the Third Amendment, and to carry out, on behalf of the Authority its obligations thereunder. 2.03. Authority staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution. EDA Meeting of November 7, 2011 (Item No.7a) Page 5 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings Reviewed for Administration: Adopted by the Economic Development Authority November 7, 2011 Executive Director President Attest Secretary EDA Meeting of November 7, 2011 (Item No.7a) Page 6 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the _____ day of November, 2011 by and between the ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of Minnesota (the “Authority”), and PNMC HOLDINGS, a Minnesota nonprofit corporation (the “Redeveloper”), the owner of which is PARK NICOLLET HEALTH SERVICES, a Minnesota nonprofit corporation (the “Redeveloper Owners”). WITNESSETH: WHEREAS, the Authority has undertaken a program to promote the development and redevelopment of land which is underutilized within the City of St. Louis Park, Minnesota (the “City”), and in this connection administers the Redevelopment Project No. 1 in an area (hereinafter referred to as the “Project Area”) located in the City pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.090 to 469.1081 (the “Act”); and WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities to prepare such real property for development and redevelopment by private enterprise; and WHEREAS, the Authority and City have established the Excelsior Boulevard Tax Increment Financing District (“Tax Increment District”; referred to by Hennepin County as “TIF District 1301”) within the Project Area; and WHEREAS, pursuant to 1992 Minnesota Laws, Chapter 511, Article 9, Section 29, the Authority and City have established the Park Nicollet Hazardous Substance Tax Increment Financing Subdistrict (“HSTI District”) within the Tax Increment District; and WHEREAS, the Authority has entered into a Contract for Private Redevelopment with the Redeveloper dated March 30, 1993 (the “Original Contract”), providing for certain assistance by the Authority in connection with Redeveloper’s development of a medical office complex and related improvements (“Minimum Improvements”); and Whereas, the parties entered into an Amendment to Contract for Redevelopment dated February 27, 1997 (the “First Amendment”), which amended was later superseded in all respects by a Second Amendment to Contract for Private Redevelopment dated May 7, 2001 (the “Second Amendment”) ; and WHEREAS, the parties have determined a need to modify the Original Contract as modified by the Second Amendment, as described in this document; and WHEREAS, the Redeveloper has petitioned to reduce the market value of the Redevelopment Property or portions thereof for taxes payable in 2008, 2009, and 2010 (the “Tax Petitions), which Tax Petitions remain unresolved as of the date of this Third Amendment; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: EDA Meeting of November 7, 2011 (Item No.7a) Page 7 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings 1. Section 1.1 of the Original Contract, as amended by the Second Amendment, is revised to add definitions, or amend existing definitions, as follows: “Full Captured Tax Capacity” means the amount by which the current net tax capacity of tax parcels 07-028-24-22-031, 07-028-24-22-033, and 07-028-24-22-035 for any tax payable year exceeds the original net tax capacity of those tax parcels (which is $0), in accordance with Minnesota Statutes, Section 479.174, subd. 4. (1992). “HSTI” means the Tax Increment that is generated from the Full Captured Tax Capacity. The parties agree and understand that HSTI will be calculated in accordance with the terms of the letter from Hennepin County Taxpayer Service Department to the City of St. Louis Park dated March 7, 2001, attached hereto as Exhibit A. The term HSTI does not include interest earned on any Tax Increment, proceeds from the sale or lease of property purchased with Tax Increment, or repayments of loans or other advances made by the authority with Tax Increment. “HSTI District” means the Park Nicollet Hazardous Substance Tax Increment Financing Subdistrict approved by the Authority and the City on June 21, 1993 and requested for certification of the original tax capacity on September 3, 1993. “Maturity Date” means August 1, 2012, which is the date of the last payment of HSTI under Section 6.2 hereof. “Payment Date” has the meaning provided in Section 6.2 hereof. “Redevelopment Property” means Lots 1, 2, 3, 4 and 5, Block 1, Tower Place. “Remedial Action Plan” or “RAP” means the Remedial Design and Response Action Plan, Superior Outwash Groundwater Contamination, Old Beltline Dump, St. Louis Park, dated November 1991, approved February 1992, as modified by the MPCA as part of the Consent Decree and as modified by the Voluntary Remedial Action Plan Amendment—Soil Gas and Work Plan for the Natural Attenuation Investigation of the Superior Outwash Aquifer approved by the Authority May 17, 1999, and as it may be modified from time to time by MPCA. “Second Amendment” means the Second Amendment to Contract for Private Redevelopment between the Authority and the Redeveloper dated May 7, 2001. “Pay 2011 Tax Petition” means the petition filed with the County by Redeveloper to reduce the market value of the Redevelopment Property for tax payable year 2011. “Prior Tax Petitions” means the petitions filed with the County by Redeveloper to reduce the market value of the Redevelopment Property or portions thereof for tax-payable years 2008, 2009, and 2010. “Tax Settlement Holdback” means the amount necessary to compensate the Authority for reductions in Tax Increment created by prior-year tax petitions relating to property in the Tax Increment District (other than the Redevelopment Property). “Third Amendment” means this Third Amendment to Contract for Private Redevelopment between the Authority and Redeveloper. EDA Meeting of November 7, 2011 (Item No.7a) Page 8 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings 2. Section 6.2 of the Original Agreement, as amended by the Second Amendment, is deleted and replaced with the following: (a) The parties agree and understand that the aggregate Costs (submitted and calculated in accordance with Section 6.4 of the Original Contract) in the amount of $2,314,881.72 are outstanding and payable to Redeveloper after the most recent payment on October 29, 2011. The parties further agree and understand as follows: (i) The Remedial Action Plan is now complete, and no additional Costs may be submitted by Redeveloper for reimbursement by the Authority. (ii) While the Second Amendment stated that the payment on February 1, 2010 would be based on the Full Captured Tax Capacity (because the underlying Tax Increment District terminated as of August, 2009), the County calculated HSTI using the Base Value Captured Tax Capacity (as defined in the Second Amendment) for both the first and second half 2009 settlements. Redeveloper accepts the amount it received on or about February 1, 2010, notwithstanding any variation from the Second Amendment in how that payment was calculated. (iii) Because of the pending Prior Tax Petitions and the need to resolve the Redeveloper’s outstanding default regarding construction of Phase II, the Authority did not make the scheduled August 1, 2010 payment. Redeveloper acknowledges that the August 1, 2010 payment was instead made on October 29, 2010, and accepts such payment in lieu of the payment it would have received on August 1, 2010. The payment amount was $440,067.05, representing 95% of the HSTI from the first half tax payment for 2010, less an estimated holdback of $67,289.48 because of the Prior Tax Petitions the Tax Settlement Holdback. (iv) Because the parties had not yet resolved the Redeveloper’s outstanding default regarding Phase II, the Authority also did not make the scheduled February 1, 2011 or August 1, 2011 payments, based on the second-half taxes for 2010 and the first- half taxes for 2011, respectively. As of the date of this Third Amendment, the Prior Tax Petitions have been resolved, but the Pay 2011 Tax Petition is still pending. Accordingly, these two payments will be made ten days after the date of this Third Amendment, as described in Section 6.2(b) below. (v) The Authority acknowledges that, prior to the date of this Agreement, Redeveloper paid to the Authority the amount of $312,000, representing partial reimbursement to the Authority for lost revenues caused by Redeveloper’s failure to timely construct Phase in accordance with the Second Amendment. (b) The Authority will pay the remaining $2,314,881.72 of Costs to the Redeveloper in installments on the following dates (each a “Payment Date”), such payments being payable solely from the following sources and in the following amounts: EDA Meeting of November 7, 2011 (Item No.7a) Page 9 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings Payment Date Amount Ten business days after the date of this Third Amendment. $1,045,573.77, which amount includes (i) $501,973.95, representing 95% of HSTI generated from the Full Captured Tax Capacity and attributable to the taxes payable in 2010, less the first-half amount actually paid on October 29, 2010 as described above; plus (ii) $543,599.82, representing 95% of the HSTI generated from the Full Captured Tax Capacity and attributable to the first-half taxes paid in 2011 ($547,789.82), less a 10% holdback ($4,190) because of the Pay 2011 Tax Petition. February 1, 2012 95% of the HSTI generated from the Full Captured Tax Capacity and attributable to the second half-taxes actually paid in 2011, less a 10% holdback for the Pay 2011 Tax Petition; provided that if the Pay 2011 Tax Petition is finally resolved as of this date, the payment will be 95% of the HSTI generated from the Full Captured Tax Capacity attributable to the second-half 2011 taxes, but re-recalculated using the market value resulting from final resolution of the tax petition. August 1, 2012 The lesser of (a) the amount that, after payment leaves a $500,000 balance of unpaid Costs, or (b) 95% of HSTI generated from the Full Captured Tax Capacity and attributable to the first-half taxes actually paid in 2012. Redeveloper acknowledges that HSTI may be insufficient to pay the Costs as described in this Section, and that the Authority has no obligation to pay any amount of Costs after August 1, 2012. The Redeveloper further acknowledges that the payments to Redeveloper under this Section have been reduced, in consideration of the resolution of outstanding defaults related to Phase II as described in Section 4 of this Third Amendment. 3. Section 6.3 of the Original Contract, as amended by the Second Amendment, is revised as follows (deletions shown as strike-out and additions shown as underlined): Section 6.3. Hazardous Substance Subdistrict Tax Increment. (a) The parties acknowledge that the HSTI District was approved by the Authority and the City on June 21, 1993 and requested for certification of the original tax capacity on September 3, 1993. (b) The Authority pledges HSTI, as defined in this Amendment, to pay the Costs in accordance with Section 6.2 hereof. The Authority has not made any other pledge or appropriation of HSTI, and agrees not to make any pledge of HSTI prior to the Maturity Date except a pledge that is subordinate in all respects to the pledge described in this Section, Section 6.2, and Section 6.4. Any Tax Increment from the Tax Increment District that is not defined as HSTI is not pledged to pay the Costs and the Authority may use such Tax Increment for any purpose authorized by law. (c) The pledge of HSTI to pay the Costs is a limited obligation of the Authority. Neither the Authority nor the City has any obligation to pay Costs from any funds other than HSTI. The Authority makes no representation or covenant, express or implied, that HSTI will be sufficient to pay, in whole or in part, the amount of Costs incurred by Redeveloper. The Redeveloper acknowledges that the amount of HSTI may be affected by a variety of factors, including without EDA Meeting of November 7, 2011 (Item No.7a) Page 10 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings limitation legislative reductions in property class rates that could reduce the Base Value Captured Tax Capacity and the Full Captured Tax Capacity and hence reduce HSTI collected by the Authority. The Authority has no obligation to pay any portion of the Costs that exceed $9,000,000 the amounts described in Section 6.2 hereof (including payments made prior to the date of this Amendment), or to pay any Costs that remain unpaid after the Maturity Date. The Redeveloper waives any and all claims against the City and Authority, and agrees to indemnify, defend and hold harmless the City and the Authority, in connection with or arising from any effect on the HSTI District or the calculation of HSTI that is attributable to platting or replatting of the Redevelopment Property. (d) The parties agree and understand that the last possible date of collection of HSTI is December 31, 2021. If the Redeveloper submits Costs in an aggregate amount of less than $9,000,000, and such Costs are paid in full under Section 6.2 hereof prior to the Maturity Date, HSTI will thereafter be applied in accordance with this paragraph. On each Payment Date through the Maturity Date, the Authority will apply HSTI first to make payments under Section 6.2 if and to the extent there are outstanding Costs as of that Payment Date, and second to an escrow account held by the Authority until the balance in the account (together with the aggregate payments made to date under Section 6.2) equals $9,000,000 (the “Required Balance”). If there are no outstanding Costs as of any Payment Date, all HSTI less the annual deduction for Administrative Costs described in Section 6.2(c) must be deposited in the escrow account until the Required Balance is reached. Such escrow account shall be maintained and used solely to pay Costs not otherwise paid from HSTI until the Maturity Date. Interest earnings on funds in the escrow account are not pledged HSTI and may be applied by the Authority for any purpose permitted under law. Any HSTI received by the Authority after the escrow account reaches the Required Balance is not pledged HSTI and may be applied by the Authority for any purpose permitted under law. 4. Section 9.3 of the Original Contract, as revised by the Second Amendment, is revised to eliminate all references to Phase II other than the Expansion of 3850 Excelsior Boulevard (which was completed as of the date of the Second Amendment). The parties agree and understand that Redeveloper is relieved of all further obligations to construct the balance of Phase II or any additional Minimum Improvements beyond those already constructed. In consideration of such relief, the Authority’s payment obligations under Section 6.2 are modified as described therein. The Authority hereby waives any prior events of default related to failure to timely complete Phase II. 5. The Pilot Agreement referenced in the Original Contract and in the Second Amendment is released and terminated. 6. The Assessment Agreement with respect to the existing expansion of 3850 Excelsior Boulevard is released and terminated, and the parties agree to execute any documents necessary to effectuate such release and termination. The parties further agree that no additional Assessment Agreements will be entered into with respect to the Redevelopment Property prior to the Maturity Date. 7. The Authority further agrees to execute any documents reasonably requested by Redeveloper, in recordable form, necessary to remove encumbrances from the Redevelopment Property to the extent consistent with the terms of this Third Amendment. EDA Meeting of November 7, 2011 (Item No.7a) Page 11 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings 8. Sections 11.2, 11.3 and 11.4 of the Original Contract are deleted, and Section 11.5 is modified to eliminate all references to the “Redeveloper’s Promised Tax” and the Tax Guaranty. Nevertheless, the Park Nicollet Medical Center Guaranty otherwise remains in effect as to all other obligations of Redeveloper under the Original Contract as amended by this Third Amendment, including without limitation Section 8 of this Third Amendment. 8. Notwithstanding Section 7 of this Third Amendment (and in lieu of the property tax provisions in the now-deleted Sections 11.2, 11.3 and 11.4 of the Original Contract), Redeveloper agrees as follows: (a) The parties agree and understand that as of the date of this Third Amendment, Redevelopers has paid all property taxes due with respect to the Redevelopment property through tax-payable 2011 (though the Pay 2011 Tax Petition is still pending). Redeveloper agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Third Amendment to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements due and payable through the Maturity Date. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. (b) Nothing in this Third Amendment prohibits Redeveloper from seeking any administrative, judicial, or other legal action, with the County or any other entity, to reduce the estimated market value or tax capacity of the Redevelopment Property for ad valorem tax purposes for taxes payable in 2012, so long as Redeveloper does not seek a reduction that would reduce HSTI payable on August 1, 2012 below the amount payable on that date under Section 6.2(b) hereof. (c) Prior to the Maturity Date, Redeveloper shall not transfer or permit transfer of the Redevelopment Property or any portion thereof to an entity in whose ownership the subject property would be exempt from property taxes under State law. 9. The Original Contract remains in full force and effect and is not modified except as expressly provided in this Amendment. This Third Amendment supersedes the First Amendment and Second Amendment in all respects, except to the extent expressly provided otherwise herein. EDA Meeting of November 7, 2011 (Item No.7a) Page 12 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings IN WITNESS WHEREOF, the Authority and Redeveloper have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director EDA Meeting of November 7, 2011 (Item No.7a) Page 13 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings PNMC HOLDINGS By Its By Its EDA Meeting of November 7, 2011 (Item No.7a) Page 14 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings PARK NICOLLET HEALTH SERVICES By Its By Its EXHIBIT A Hennepin County Taxpayer Service Department Letter Regarding Calculation of HSTI EDA Meeting of November 7, 2011 (Item No.7a) Page 15 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings Meeting Date: October 24, 2011 Agenda Item #: 6 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Update on Redevelopment Contract with PNMC Holdings (Park Nicollet Health Services). RECOMMENDED ACTION: No action required at this time. POLICY CONSIDERATION: The purpose of this report is to update the EDA on the status of its redevelopment contract with PNMC Holdings and present the terms of a proposed third amendment for the EDA’s consideration. Under the terms of the contract, Park Nicollet was required to construct a certain amount of office space on the clinic campus by certain dates. Some of the building construction called for in that agreement has not occurred. As a result Park Nicollet is in default of the agreement. Over the last several years staff and Park Nicollet representatives have strived to find an equitable, “win/win” resolution to the default situation. Staff, in consultation with the EDA’s legal counsel, has reached a proposed settlement with Park Nicollet which addresses the default and terminates the contract early. Such a settlement would be the basis for a proposed Third Amendment to the Contract for Private Redevelopment. A summary of the proposed Third Amendment and the original Contract for Private Redevelopment has been prepared by the EDA’s legal counsel, Steve Bubul and is attached to this staff report. BACKGROUND: The EDA entered into a Contract for Private Redevelopment with PNMC Holdings (the “Contract”) in 1993. The Contract called for the phased construction of much of what we now know as the Park Nicollet Clinic Campus at Excelsior Blvd and Hwy 100. Under the terms of the agreement the “3850 Building”, the “3900 Building” and the parking ramp serving the Park Nicollet Clinic were constructed. Additional construction was required under the terms of the Contract. Development of this site required addressing significant environmental issues. An MPCA approved Remedial Action Plan (RAP) was prepared to address the environmental problems and Park Nicollet incurred substantial remediation expenses ($6.2 million) in the course of building the campus. Under the terms of the Contract, the City is providing tax increment assistance to Park Nicollet in the form of a pay-as-you-go tax increment note to help offset the majority of the remediation expenses. The City is currently obligated to provide $4,975,000 in assistance. The EDA Meeting of November 7, 2011 (Item No.7a) Page 16 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings Contract envisioned that remediation costs could be much higher and that the City could be obligated to provide up to $9 million in assistance. The Park Nicollet campus is within the former Excelsior Blvd TIF district (expired in August 2009) and a Hazardous Substance Sub-district was created specifically to address the contamination remediation expenses. This Sub-district is in effect until December 31, 2021. The original Contract has been amended twice, most recently in May 2001. The Second Amendment established new deadlines for construction of phase II of Park Nicollet’s project. The Second amendment called for PNMC Holdings to construct 50,690 square feet of new medical office space (Phase IIB) by December 31, 2006 and another 45,000 square feet of new medical office space (Phase IIC) by December 31, 2010. Neither of these deadlines has been met. As a result PNMC Holdings is in default under the terms of the Contract. On October 5, 2007, the EDA sent Park Nicollet Health Services a letter notifying it of PNMC Holdings’ default under the amended Contract. Since then efforts have been underway to find an acceptable resolution to the Redeveloper’s default. The Redeveloper’s failure to build the required additional phases has three primary impacts on the City: 1. A loss of approximately $300,000 in tax increment for the years 2008 and 2009 (when the underlying Excelsior Boulevard TIF District was still in place). This amount would have been payable to the EDA (not the Redeveloper) for ongoing redevelopment activities. 2. If both Phase IIB and IIC had been built on schedule, the tax increment revenues generated would have been sufficient to pay off the obligations to PNMC one year earlier, which EDA Meeting of November 7, 2011 (Item No.7a) Page 17 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings in turn would have allowed the EDA to terminate the Subdistrict one year earlier and make the tax base available to the City and all other taxing jurisdictions. The net “cost” of the Subdistrict to all taxing jurisdictions, caused by the lost tax increment revenue, is approximately $900,000. 3. The failure to complete the required improvements means the tax base after termination of the HSTI Subdistrict will be less than what was expected at the time the Contract was entered into. In 2008 it was estimated that Phases IIB and IIC would have added approximately $290,000 to the City’s total Tax Capacity. City staff and Park Nicollet have been in extended discussions regarding how best to address the default situation. In 2008 and 2009 Park Nicollet paid (two payments of $156,000 each), the amount the City would otherwise have collected as tax increment if the Phase II buildings had been built on schedule. The City has also suspended payment on the pay-as-you-go Note reimbursing PNMC for remediation expenses as a result of the default condition. The City is withholding about $1.1 million in Note payments at this time. While Park Nicollet has not constructed the 95,690 square feet of new medical office buildings called for in Phase II of the contract, it has made substantial investments in St. Louis Park. These include the 206,000 square foot Heart and Vascular Center, the Melrose Institute (68,000 square feet) and the Frauenschuh Cancer Center (80,000 square feet). Park Nicollet has demonstrated its commitment to St. Louis Park with these community investments and proven itself to be a dependable and strong community partner through numerous joint efforts with the City. However none of these buildings are within the HSTI Subdistrict and, in some cases, they do not pay property taxes. Thus they do not satisfy the construction requirements within the Contract. In its discussions with Park Nicollet, Staff has been striving to find an equitable, resolution to the default situation. NEXT STEPS: Assuming the proposed amendment terms are acceptable, staff will prepare the necessary documents and schedule the Third Amendment to the Redevelopment Contract for the EDA’s formal consideration in the very near future. FINANCIAL OR BUDGET CONSIDERATION: Execution of the proposed Third Amendment to the Redevelopment Contract with PNMC Holdings would essentially cap the qualified costs for which Park Nicollet is eligible for reimbursement as well as reduce total amount the City is currently obligated to pay PNMC by $500,000. It would also result in the early termination of the Excelsior Blvd HSTI TIF District, adding approximately $1 million or about 1.4% in tax capacity to the City total tax base. Furthermore, early termination of the district would save considerable staff time in the process. VISION CONSIDERATION: This proposal is consistent with the Strategic Direction of making a connected and engaged community. Attachments: PNMC Holdings Memo from Kennedy & Graven Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Kevin Locke, Community Development Director Approved by: Nancy Deno, EDA Executive Deputy Director and Deputy City Manager EDA Meeting of November 7, 2011 (Item No.7a) Page 18 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings Kennedy 470 US Bank Plaza 200 South Sixth Street Minneapolis MN 55402 & Graven (612) 337-9300 telephone (612) 337-9310 fax http://www.kennedy-graven.com C H A R T E R E D M E M O R A N D U M TO: Kevin Locke Greg Hunt FROM: Stephen Bubul DATE: October 18, 2011 RE: Third Amendment to Contract for Private Redevelopment between EDA and PNMC Holdings (the “Third Amendment”) You asked me to explain and summarize the above-referenced Third Amendment, which amends the original Contract for Private Redevelopment between the EDA and PNMC Holdings (“Redeveloper”) dated as of March 30, 1993 (the “Original Contract”) as amended by a Second Amendment thereto dated May 7, 2001 (the “Second Amendment”). The TIF District and the HSTI District The Original Contract required Redeveloper to construct a series of medical office buildings on its property on Excelsior Boulevard in the City. That development required significant remediation of hazardous substances, identified in a remedial action plan (“RAP”) approved by the Minnesota Pollution Control Agency. To help finance the RAP costs, in 1993 the EDA and City established the Park Nicollet Hazardous Substance Tax Increment Financing District (the “HSTI” District”), which encompassed certain parcels owned by Redeveloper. The HSTI District was an “overlay” within existing Excelsior Boulevard Tax Increment Financing District (the “TIF District”), which was created in 1976. The EDA was authorized to collect tax increment (referred to as “TI”) from the TIF District through August 1, 2009. The TI from that district was calculated in the conventional way; i.e., it represented the taxes generated from the incremental increase in value over the “base value” in 1976. Increment from the HSTI District (referred to as “HSTI”) is a special case: 1. While the underlying TIF District was in place, the HSTI represented the taxes generated from the “base value” of the TIF District. In other words, the taxes from value above the TIF District base value are TI going to the TIF District, and the taxes from value below the base value are HSTI going to the HSTI District (and useable only to finance RAP costs). The HSTI dollars are a relatively small amount (essentially, taxes on the land before redevelopment), compared to the TI created by the completed medical office buildings. EDA Meeting of November 7, 2011 (Item No.7a) Page 19 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings 2. In addition, the HSTI District allows collection of HSTI for 25 years from the date of the first HSTI (in this case, the tax-payable years 1997 through 2022). After the underlying TIF District was decertified in 2009, the HSTI expanded to include taxes from the entire value of the property. That is, beginning with taxes payable in 2010, the TI and HSTI are combined, and all are treated as increment from the HSTI District. This expanded HSTI may be collected through end of 2022, with the caveat that these funds may only be used to finance RAP costs. Redeveloper’s Performance Phase I of Redeveloper’s obligation was approximately 105,000 square feet of medical office space (the Park Nicollet Medical Center, West Lot; and the Mall Medical Office Building). Phase II called for an approximately 49,000 square foot expansion of the building at 3850 Excelsior Boulevard, plus another approximately 50,000 square feet of expanded or new medical facilities completed by December 31, 2006, and another approximately 45,000 square feet of expanded or new medical facilities by December 31, 2010. (These requirements are mostly found in the Second Amendment, which modified the construction sizing and timing somewhat from the Original Contract.) Redeveloper completed Phase I and the first component of Phase II (the 3850 Excelsior expansion). However, the remainder of Phase II has never been constructed. In exchange for these construction obligations, the EDA agreed to reimburse Redeveloper for a portion of the RAP costs. The reimbursement was payable (over time, on a pay-as-you-go basis) from 95% of the HSTI. As noted above, through 2009 these HSTI payments were the relatively small “base value” payments; but beginning 2010 the payments increased to the full developed value. Under the Original Contract, the maximum aggregate payments of HSTI was $9,000,000, but payment was conditioned upon Redeveloper demonstrating that it had spent qualified remediation costs under the RAP. Further, the Original Contract included a somewhat complex formula to determine how much of the RAP costs were eligible for reimbursement from HSTI. Since the date of the Original Contract, the Redeveloper demonstrated expenditures of approximately $6,200,000 million in qualified RAP costs, of which it was entitled to be reimbursed approximately $4,975,000 (under the formula referenced above). The EDA made semi-annual HSTI payments (based on the small base value) through February 1, 2010. Starting with taxes payable in 2010, the payments began to be based on the full value, and the EDA made one such payment in October, 2010 (from the first-half 2010 taxes). No further payments have been made since then, pending negotiation of the Third Amendment to the Original Contract. Impact of Failure to Complete Phase II Redeveloper understands that it has long been in “technical” default under the Second Amendment, as it failed to complete Phase II. This failure was especially significant while the underlying TIF District was in place, because (as explained above) the increment generated by those improvements would have been TI going to the TIF District, where it could have been used for ongoing EDA redevelopment activities. The EDA determined that failure to complete Phase II resulted in a loss of TI for the TIF District in the amount of approximately $312,000. Redeveloper acknowledged this financial impact, and paid that amount to the EDA (in two installments, paid in December 2008 and January, 2009). EDA Meeting of November 7, 2011 (Item No.7a) Page 20 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings However, the EDA also determined that, had Phase II been completed in accordance with the square footages and timing specified in the Second Amendment, the EDA could have paid all remaining RAP costs approximately one year earlier. This would have allowed the EDA to terminate the HSTI District one year earlier, which would have returned the entire market value of this site to the general tax rolls. Further, the City itself will not realize the long-term tax base that would have been created by Phase II, which was part of the original “bargain” in exchange for the tax increment assistance at the time the Original Contract was approved. Proposed Third Amendment EDA staff and Redeveloper have negotiated a resolution to the ongoing default with these goals in mind: (1) recognize Redeveloper’s significant accomplishments to date, and acknowledge that market forces have contributed to the Phase II default; and (2) recognize that the need for financial assistance has been reduced as well, and acknowledge that the EDA should be compensated in some fashion for the failure to realize the full tax base growth that was part of the consideration for the Original Contract. A complicating factor is that Redeveloper has filed petitions to reduce the market value of its existing buildings within the HSTI District. Such petition was permissible under the Original Contract, and is therefore not a default. However, the tax petitions complicate the payment of HSTI, because the correct amount of taxes (and therefore HSTI) is not known at the time of payment. Petitions for 2008 through 2010 have now been settled, but a petition for taxes payable in 2011 remains pending. Another complicating factor is that certain other property owners in the TIF District previously petitioned to reduce their taxes, which resulted in loss of tax increment from that district. Since the TIF District has now been decertified, the City will lose tax general tax dollars to account for the prior “overpayment” of TI. To account for this, the EDA needs to withhold a portion of HSTI payments to Redeveloper. In light of these considerations, the proposed Third Amendment contains these key features: 1. The current balance of unpaid RAP costs is approximately $2,315,000. The EDA will make further HSTI payments in the amount that leaves an unpaid balance of $500,000. In other words, the EDA will pay approximately $1,815,000 of additional HSTI payments, and the contract will then terminate. 2. The result is that Redeveloper’s total assistance will be reduced by $800,000, including the $500,000 left unpaid as described above, and the $300,000 cash payment made to the EDA in 2008. 3. The remaining payments will be made in three installments: Ten Days after the Third Amendment: This payment will be in the amount of all the previously withheld HSTI from the second-half 2010 taxes and the first-half 2011 taxes (i.e., the payments that would have been made on February 1, 2011 and August 1, 2011). The second- half 2010 amount is based on the stipulated market values for payable 2010, reduced by a holdback because of other property tax petitions that were not filed by Redeveloper, as described EDA Meeting of November 7, 2011 (Item No.7a) Page 21 Subject: Third Amendment to Redevelopment Contract with PNMC Holdings above. The first-half 20111 amount is reduced by a holdback because of a pending Redeveloper tax petition. The net payment will be approximately $1,046,000. February 1, 2012: This payment will be the HSTI from the second-half 2011 taxes, again less a hold back to account for the pending 2011 tax petition; provided that if that tax petition is resolved before February 1, 2012, the holdback will be eliminated and actual payment will be based on the resolved market value. The payment amount is currently estimated to be approximately $544,000. August 1, 2012: This final payment will be the amount left, after the two earlier payments, that leaves a balance of $500,000 in unpaid RAP costs. The payment amount is currently estimated to be approximately $226,000. 4. Redeveloper is permitted to seek a reduction market value for taxes payable in 2012 (the source of the last payment on August 1, 2012). However, Redeveloper may not seek a reduction that would reduce the HSTI to a level below the amount of the August 1, 2012 payment. Such a reduction is almost impossible, because the final payment is approximately one-half of the full HSTI payments. That is, Redeveloper would have to reduce its property value in half in order to reduce the HSTI payment below the expected amount. 5. The other changes in the Third Amendment simply remove provisions that are no longer needed in light of the proposed resolution. 6. After the final payment on August 1, 2012, the Original Contract is effectively terminated, and the EDA will be required to decertify the HSTI District (even though it could be in place through 2022, there are no further RAP costs to be paid, and there is no other possible use of the HSTI under State statutes). Decertification of the HSTI District will bring the current full market value onto the tax rolls for the City and all other taxing jurisdictions. The HSTI from the first half of 2012 in excess of the payment on August 1, 2012, and all of the second half HSTI in 2012, will be redistributed to the City and other taxing jurisdictions. The estimated amount of HSTI redistributed in 2012 is approximately $938,000. The full value will be restored for taxes payable in 2013. If you or EDA commissioners have questions about this memo or the Third Amendment, please contact me. Meeting Date: November 7, 2011 Agenda Item #: 7b Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC. RECOMMENDED ACTION: Motion to approve the EDA Resolution approving the First Amendment to the Contract for Private Redevelopment By and Between St. Louis Park Economic Development Authority and M & L Anodizing Properties, LLC. Motion to approve the EDA Resolution authorizing an additional Interfund Loan for advance of certain costs in connection with the Hardcoat TIF District. POLICY CONSIDERATION: Does the EDA support providing M & L Anodizing Properties, LLC (Hardcoat Inc.) an additional $80,000 in financial assistance thru the Construction Assistance Program (CAP) to help facilitate the renovation/expansion of the former Flame Metals building and extending the project commencement/completion dates as specified in the proposed First Amendment to the Redevelopment Contract? BACKGROUND: On December 20, 2010, the EDA entered into a Contract for Private Development with M & L Anodizing Properties, LLC in which the EDA agreed to provide $420,000 through the CAP to facilitate Hardcoat Inc.’s planned renovation/expansion of the former Flame Metals property (7301 - 7317 West Lake St.). The Proposed Project Hardcoat Inc., (located at 7300 W. Lake Street) wishes to acquire the former Flame Metals property located across the street to the south at 7317 W. Lake Street. The company plans to renovate the building and site, construct a small addition, and relocate its operations there. The existing industrial building is approximately 33,600 square feet and was constructed in 1963. Both the interior and exterior have numerous building code deficiencies. Renovation will include a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens, site amenities for employees, as well as the removal of unsightly volunteer trees and brush. Plans also call for the construction of a 1,500 SF addition for office/conference space on the north side of the building. Once the renovation/expansion is complete, Hardcoat will initially occupy approximately 25,000 square feet of the building. The balance will be leased to a complementary business and provide Hardcoat with future expansion capacity. Hardcoat plans to close on the property within the next week. It would then commence interior building renovations immediately. Exterior work and landscaping will likely have to wait until next spring. It is expected that the entire renovation/expansion should be completed by summer 2012. EDA Meeting of November 7, 2011 (Item No. 7b) Page 2 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC Request for Additional Financial Assistance At the October 10th Study Session, Michael Kelner, owner of Hardcoat Inc., explained that delays in the property closing had caused project costs to escalate by more than $515,000. He noted that the business had reached its maximum principal loan amount with its lender and that it was seeking an additional $80,000 from the EDA so as to enable it to complete the renovation/expansion of the former Flame Metals building as originally outlined. Mr. Kelner expressed that he had personally paid an additional $125,000 in expenses and that he was not in a position to provide more. There was consensus support for providing Hardcoat with an additional $80,000 in assistance through the CAP. Any substantial modification to the Redevelopment Contract must be approved through formal amendment. Terms of the Proposed First Amendment Under the proposed First Amendment to the Redevelopment Contract, the total amount of the CAP Loan would be increased from $420,000 to $500,000. All such funds would be provided on a reimbursement basis upon submission of evidence that qualified construction costs had been incurred. According to Section 4.3 in the Redevelopment Contract, the renovation/expansion of the former Flame Metals building was to have commenced by July 1, 2011 and been completed by December 31, 2011. In order for the Redeveloper to avoid being found in default, the project’s required completion schedule needs to be adjusted. Under the proposed First Amendment the project’s required commencement date is extended to July 1, 2012 and its required completion date is extended to December 31, 2012. Likewise a similar shift in the dates within the Minimum Assessment Agreement referenced in Section 6.3 is proposed. The proposed First Amendment also sets the Minimum Market Value of the subject property within the Contract’s Assessment Agreement at $2.4 million. This Minimum Market Value had not been determined at the time the Contract was approved. This Minimum Market Value is based upon a recent, more complete analysis of the subject property and the proposed Minimum Improvements by the City Assessor who estimated the market value range between $2.2 and $2.6 million. It is lower than the $2.6 million Ehlers previously included in its assumptions for what the Hardcoat TIF District would likely generate in tax increment. Based upon this latest Minimum Market Value, the TIF District will likely generate approximately $166,000 in total tax increment over the 9-year term (net present value). This is less than the previously estimated $190,000. These funds will be used to partially reimburse the Development Fund for the funds provided to Hardcoat. Thus, the net difference to the Development Fund of the EDA providing $500,000 in CAP funds to Hardcoat will be approximately $334,000 (net present value) which is approximately $24,000 more than previously estimated. If the property’s value appreciates faster than the projected total tax increment will be greater. FINANCIAL OR BUDGET CONSIDERATION: To stimulate private construction activity within the western part of the city and to move the acquisition, renovation and expansion of the former Flame Metals property forward, it is proposed that the EDA consider providing Hardcoat Inc. an additional $80,000 through the Construction Assistance Program. The supplemental assistance would bring total project funding to $500,000. Such funds would be provided on a reimbursement basis and added to the previously approved forgivable loan with Hardcoat. The funds would derive from pooled tax increment generated by the City’s various TIF districts; of which approximately $168,000 would EDA Meeting of November 7, 2011 (Item No. 7b) Page 3 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC be reimbursed from future tax increment generated from the Hardcoat TIF District. The proposed contract extensions reflect the realistic schedules for completing the project. A second Interfund Loan resolution is proposed so as to allow the EDA the authority to reimburse itself an additional $80,000 in administrative expenses in connection with the Hardcoat TIF District VISION CONSIDERATION: Facilitating the renovation and expansion of the former Flame Metals building as proposed by Hardcoat Inc. is consistent with elements of Vision St. Louis Park as it promotes environmental stewardship and green development. Attachments: Resolution Approving First Amendment Resolution Authorizing Interfund Loan First Amendment to Redevelopment Contract w/ M & L Anodizing Properties, LLC Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Kevin Locke, Community Development Director Approved by: Tom Harmening, EDA Executive Director and City Manager EDA Meeting of November 7, 2011 (Item No. 7b) Page 4 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC EDA RESOLUTION NO. 11-____ RESOLUTION APPROVING A FIRST AMENDMENT OF A CONTRACT FOR PRIVATE DEVELOPMENT BY AND BETWEEN THE ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY AND M & L ANODIZING PROPERTIES, LLC BE IT RESOLVED BY the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority, St. Louis Park, Minnesota (the "Authority") as follows: Recitals. 1.01. The Authority currently administers Redevelopment Project No. 1 (the “Project”), pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the “HRA Act”) within an area located in the City, and has approved a Tax Increment Financing Plan for the Hardcoat Tax Increment Financing District pursuant to Minnesota Statutes, Sections 469.174 to 469.1791 (the “TIF Act”), made up of certain property within the Project (the “Development Property”) to be developed by M & L Anodizing Properties, LLC (the “Developer”). 1.02. The Authority and Developer executed a certain Contract for Private Development, dated as of December 20, 2010 (the “Contract”), pursuant to which the Authority agreed to grant assistance to the Developer in the form of a CAP Loan upon construction by the Developer of certain Minimum Improvements on the Development Property (as such terms are defined in the Contract). 1.03. The parties have negotiated and propose to execute a First Amendment to the Contract (the “First Amendment”) to modify certain provisions of the Contract, notably the maximum principal amount of the CAP Loan and the dates of commencement and completion of construction of the Minimum Improvements. Section 2. First Amendment Approved. 2.01. The First Amendment as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the document by such officials shall be conclusive evidence of approval. The President and Executive Director are hereby authorized to execute, on behalf of the Authority, the First Amendment. Reviewed for Administration: Adopted by the Economic Development Authority November 7, 2011 Executive Director President Attest Secretary EDA Meeting of November 7, 2011 (Item No. 7b) Page 5 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 11-____ AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH THE HARDCOAT TAX INCREMENT FINANCING DISTRICT BE IT RESOLVED By the Board Of Commissioners of the St. Louis Park Economic Development Authority (the “Authority”) as follows: Section 1. Background. 1.01. The Authority has established the Hardcoat Tax Increment Financing District (the “TIF District”) within Redevelopment Project No. 1 (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.1799 (the “TIF Act”) and Sections 469.001 to 469.047 (the “HRA Act”), as amended. 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority or City funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority is authorized to advance or loan money from any fund from which such advances may be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The Authority has previously established a Spending Plan (the “Spending Plan”) pursuant to Laws 2010, Chapter 216, Section 32 (the “Job Creation Act”), pursuant to which the Authority may provide funds from certain designated preexisting tax increment financing districts including the Victoria Ponds, Park Center Housing, CSM, Mill City, and Elmwood tax increment financing districts (the “Prior TIF Districts”) to assist private developers and increase the creation of jobs, and has approved its Construction Assistance Program (“CAP”) as a framework for such private assistance. 1.05. The Authority entered into a Contract for Private Development dated as of December 20, 2010 (the “Agreement”) with M & L Anodizing Properties, LLC (the “Developer”), under which the Authority agreed to (among other things) provide a forgivable CAP loan to the Developer to assist with a portion of the costs of acquisition of the Development Property, in the principal amount of the lesser of $420,000 or 33% of the Construction Costs incurred (as such terms are defined in the Agreement). 1.06. By structuring the loan to the Developer as a forgivable loan, the Authority may forgo repayment of the loan. Such loan forgiveness represents an advance of Authority funds in the maximum amount of $420,000. EDA Meeting of November 7, 2011 (Item No. 7b) Page 6 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC 1.07. The Authority also previously determined that it will advance the actual costs of consultants and attorneys retained by the Authority in connection with creation and administration of the TIF District and the negotiation and preparation of the Agreement and other incidental agreements and documents related to the development contemplated hereunder (the “Administrative Costs”), in an amount not to exceed $80,000. 1.08. The Authority designated such advances as an interfund loan in accordance with the terms of the TIF Act and its resolution of December 20, 2010, pursuant to which it approved such interfund loan. 1.09. On the date hereof, the Authority has approved a First Amendment to Contract for Private Development between the Authority and Developer (the “First Amendment”), pursuant to which the Authority has agreed to increase the maximum principal amount of the CAP Loan to $500,000, which represents a potential increase of $80,000 in principal amount. 1.10. The Authority hereby designates the additional advance in Authority funds of $80,000 as an additional interfund loan, in accordance with the terms of the First Amendment and the TIF Act. Section 2. Repayment of Interfund Loan. 2.01. The Authority hereby authorizes the advance of up to $80,000 from the Spending Plan funds from the Prior TIF Districts to pay the Additional CAP Loan advances as described in the First Amendment, and will reimburse itself for such advances together with interest at the rate of 4.0% per annum (the “Interfund Loan”). Interest shall accrue on the principal amount of each advance from the date of such advance. The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2011. The interest rate will not fluctuate. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually on each August 1 and February 1 (each a “Payment Date”), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the City Manager, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as 100% of the tax increment from the TIF District received by the Authority from Hennepin County in the six-month period before any Payment Date. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments on this Interfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. 2.04. The principal sum and all accrued interest payable under this resolution is pre- payable in whole or in part at any time by the Authority without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the Authority in accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this EDA Meeting of November 7, 2011 (Item No. 7b) Page 7 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC resolution. The Interfund Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. 2.07. The Authority may from time to time amend the terms of this Resolution to the extent permitted by law, including without limitation amendment to the payment schedule. Section 3. Effective Date. This resolution is effective upon execution in full of the First Amendment. Reviewed for Administration: Adopted by the Economic Development Authority November 7, 2011 Executive Director President Attest Secretary EDA Meeting of November 7, 2011 (Item No. 7b) Page 8 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT This agreement is made as of November , 2011, by and between the ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, a public body politic and corporate (the “Authority”) and M & L Anodizing Properties, LLC, a Minnesota limited liability company (the “Developer”). WHEREAS, the Authority and the Developer entered into that certain Contract for Private Development dated as of December 20, 2010 (the “Contract”) providing, among other things, for the construction of certain improvements (the “Minimum Improvements”) on the property legally described within the Contract (the “Development Property”); and WHEREAS, the parties have determined to extend the dates of commencement and completion of construction of the Minimum Improvements, to increase the principal amount of the CAP Loan (as defined in the Contract), and to modify certain other provisions of the Contract. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Amendment to Section 3.4 of the Contract. Section 3.4 of the Contract is amended as follows: Section 3.4. CAP Loan. (a) Generally. The Authority has determined that, in order to make development of the Minimum Improvements financially feasible and to expedite such development and stimulate the retention and creation of jobs pursuant to the Job Creation Act (including construction jobs), it is necessary to provide the Developer with a forgivable CAP Loan for a portion of the costs of acquisition of the Development Property (the “Acquisition Costs”), subject to the terms of this Section. (b) Terms. To assist the Developer with payment of the Acquisition Costs incurred by Developer, the Authority shall provide the Developer with the CAP Loan in the principal amount of the lesser of $420,000 $500,000 or 33% of the hard costs actually incurred in the environmental testing, site preparation and interior and exterior renovation and construction of the Minimum Improvements (the “Construction Costs”). The terms of the CAP Loan will be substantially those set forth in the form of the CAP Loan Resolution shown in Schedule B, and the CAP Loan will be subject to all terms of the CAP Loan Resolution, which is incorporated herein by reference. The source of funds for the CAP Loan will be Tax Increments from the Prior TIF Districts pursuant to the Spending Plan, in accordance with the Job Creation Act. EDA Meeting of November 7, 2011 (Item No. 7b) Page 9 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC (c) Disbursement of CAP Loan. The Authority shall disburse the CAP Loan funds to Developer as follows: (i) Before disbursement of any CAP Loan proceeds, the Developer shall have submitted and obtained Authority approval of financing in accordance with Section 7.1. (ii) The Developer shall deliver to the Authority one or more certificates signed by the Developer’s duly authorized representative (the “Certificates”), containing written evidence satisfactory to the Authority that Developer has incurred the Construction Costs for which reimbursement is sought, which evidence must include copies of the paid invoices or other comparable evidence for the Construction Costs, along with a statement that no part of such costs has been included in any previous Certificate; provided that all Certificates must be submitted no later than December 1, 2011 2012. The Certificates shall be submitted on a monthly basis following commencement of construction of the Minimum Improvements. The Developer may submit Certificates on a more frequent basis if the Certificate submitted includes evidence of Construction Costs of more than $50,000 in aggregate. (iii) Within 30 days of receipt of each Certificate, the Authority shall review the Certificates and approve or reject the evidence of Construction Costs incurred; provided that approval of Construction Costs shall not be unreasonably withheld. (iv) Immediately upon approval of each Certificate, the Authority shall disburse CAP Loan funds in the amount of 90% of the certified Construction Costs identified in the approved Certificate. The total aggregate amount disbursed shall not exceed $378,000 $450,000. The Authority shall retain the remaining 10% of such costs (the “Holdback”) in a separate CAP Loan fund until released pursuant to paragraph (v) of this Section. (v) On or before December 1, 2011 2012, the Developer shall submit a certified accounting of total Construction Costs incurred for the construction of the Minimum Improvements (the “Certified Accounting”), provided that if the Authority’s authorization to expend CAP funds under the Jobs Act is extended by legislative action, the deadline for such Certified Accounting shall be extended by 30 days. No later than December 31, 2011 2012 (or 30 days after submission of the Certified Accounting in the event of the extension of Jobs Act CAP authority), the Authority shall release the Holdback to the extent that 33% of the total Construction Costs exceeds the amount of such costs disbursed through the CAP Loan. If CAP Loan disbursements exceed 33% of the total Construction Costs, the Developer shall repay the amount of such excess to the Authority. (d) The CAP Loan shall be forgiven in full, including any interest accrued thereon, on the date five years after issuance by the Authority of a Certificate of Completion for the Minimum Improvements, subject to the qualifications set forth in Section 3.4(g) hereof. (e) Termination of right to CAP Loan. In accordance with the Job Creation Act, construction of the Minimum Improvements must commence no later than July 1, 2011 2012, and no extensions of the commencement date will be considered. If the construction has not commenced by such date, the Authority has no further obligations under this Section 3.4. EDA Meeting of November 7, 2011 (Item No. 7b) Page 10 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC (f) Assignment of CAP Loan. The Authority acknowledges that the Developer may assign the CAP Loan to a lender that provides part of the financing for the Construction Costs or Acquisition Costs. The Authority consents to such an assignment, conditioned upon receipt of an investment letter from such lender in a form reasonably acceptable to the Authority. (g) Qualifications. The Developer understands and acknowledges that the CAP Loan must be fully repaid, along with accrued interest at the rate of 6.0%, if the Developer fails to maintain the Minimum Improvements in good repair and condition as required under Section 4.1 hereof, if a Transfer of the Development Property occurs at any time before the Termination Date, or if the Authority exercises its right to terminate this Agreement as a remedy for any Event of Default under Article IX hereof. Acquisition Costs exceeding the principal amount of the CAP Loan are the sole responsibility of Developer. 2. Amendment to Section 3.5 to the Contract. Section 3.5 of the Contract is amended as follows: Section 3.5. Interfund Loan. (a) The Authority has determined that the total assistance to be provided to the Developer is the lesser of $420,000 $500,000 or 33% of the Construction Costs. This amount represents the total to be invested by the Authority in assisting the Developer to acquire the Development Property and construct the Minimum Improvements. In addition, the Authority has determined that it will pay the actual costs of consultants and attorneys retained by the Authority in connection with creation and administration of the TIF District and the negotiation and preparation of this Agreement and other incidental agreements and documents related to the development contemplated hereunder (the “Administrative Costs”), in an amount not to exceed $80,000. (b) The Authority will treat the investment and Administrative Costs described in paragraph (a) as an one or more interfund loans (the each an “Interfund Loan”) within the meaning of Section 469.178, Subdivision 7 of the TIF Act. The maximum aggregate principal amount of the Interfund Loans shall be $500,000 $580,000. The terms of the Interfund Loans shall be substantially as are described in the resolution attached as Schedule C (the “Interfund Loan Resolution”). The Authority will pledge Available Tax Increment from the TIF District, as defined in the Interfund Loan Resolution, to payment of the Interfund Loans. The Developer has no rights or interest in any Tax Increment. 3. Amendment to Section 4.3 of the Contract. Section 4.3 of the Contract is amended as follows: (a) The Developer shall commence construction of the Minimum Improvements by July 1, 2011 2012. Subject to Unavoidable Delays, the Developer shall complete the construction of the Minimum Improvements by December 31, 2011 2012. All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the Development Property shall be in conformity with the Construction Plans as submitted by the Developer and approved by the Authority. For purposes of this Agreement, construction shall be deemed to commence upon the commencement of environmental remediation activities necessary to carry out the construction of the Minimum Improvements. EDA Meeting of November 7, 2011 (Item No. 7b) Page 11 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC The Developer agrees for itself, its successors, and assigns, and every successor in interest to the Development Property, or any part thereof, that the Developer, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Development Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3 of this Agreement. After the date of this Agreement and until the Minimum Improvements have been fully leased, the Developer shall make reports, in such detail and at such times as may reasonably be requested by the Authority, but no more than monthly, as to the actual progress of the Developer with respect to such construction and leasing. 4. Amendment to Section 6.3(a) of the Contract. Section 6.3(a) of the Contract is amended as follows: Section 6.3. Assessment Agreement. (a) Upon execution of this Agreement, the Developer shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor’s minimum Market Value for the Development Property and Minimum Improvements constructed thereon (the “Minimum Market Value”). The amount of the Minimum Market Value shall be set at the amount established beginning January 2, 2012, and each January 2 thereafter, notwithstanding the status of construction by such dates. The amount of the Minimum Market Value shall be $2,400,000 as of January 2, 2013, and each January 2 thereafter, notwithstanding the status of construction by such dates. 5. Miscellaneous. Except as amended by this Amendment, the Contract shall remain in full force and effect. Upon execution, Developer shall reimburse the Authority for all out-of pocket-costs incurred by the Authority in connection with negotiating, drafting and approval of this Amendment. (Remainder of this page intentionally left blank.) EDA Meeting of November 7, 2011 (Item No. 7b) Page 12 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC IN WITNESS WHEREOF, the Authority and Developer have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of November, 2011 by Phil Finkelstein and Tom Harmening, the President and Executive Director of the St. Louis Park Economic Development Authority, on behalf of the Authority. Notary Public Authority signature page to First Amendment to Contract for Private Development EDA Meeting of November 7, 2011 (Item No. 7b) Page 13 Subject: First Amendment to the Redevelopment Contract with M & L Anodizing Properties, LLC M & L ANODIZING PROPERTIES, LLC By Its _______________________ STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of November, 2011, by Michael Kelner, the ___________________________ of M & L Anodizing Properties, LLC, on behalf of the company. Notary Public THIS DOCUMENT DRAFTED BY: Kennedy & Graven, Chartered (MNI) 470 US Bank Plaza 200 South Sixth Street Minneapolis, Mn 55402 (612) 337-9300 Meeting Date: November 7, 2011 Agenda Item #: 3a UNOFFICIAL MINUTES CITY COUNCIL MEETING ST. LOUIS PARK, MINNESOTA OCTOBER 3, 2011 1. Call to Order Mayor Jacobs called the meeting to order at 7:30 p.m. Councilmembers present: Mayor Jeff Jacobs, Phil Finkelstein, Anne Mavity, Julia Ross, Susan Sanger, and Sue Santa. Councilmembers absent: Paul Omodt. Staff present: City Manager (Mr. Harmening), City Clerk (Ms. Stroth), Director of Parks and Recreation (Ms. Walsh), Environmental Coordinator (Mr. Vaughan), Communications Coordinator (Mr. Zwilling), City Engineer (Mr. Brink), Director of Inspections (Mr. Hoffman), and Recording Secretary (Ms. Hughes). 1a. Pledge of Allegiance 1b. Roll Call 2. Presentations - None 3. Approval of Minutes 3a. City Council Minutes September 19, 2011 The minutes were approved as presented. 4. Approval of Agenda and Items on Consent Calendar NOTE: The Consent Calendar lists those items of business which are considered to be routine and/or which need no discussion. Consent items are acted upon by one motion. If discussion is desired by either a Councilmember or a member of the audience, that item may be moved to an appropriate section of the regular agenda for discussion. 4a. Adopt Second Reading of Ordinance No. 2404-11 adopting fees for 2012 as outlined in Appendix A of the City Code of Ordinances, approve summary, and authorize publication. 4b. Adopt Second Reading of Ordinance No. 2405-11 amending Chapter 34 of the City Code relating to Native Vegetation Planting, approve ordinance summary and authorize publication. 4c. Adopt Resolution No. 11-090 appointing additional election judges needed to staff the polls at the General Election to be held November 8, 2011. 4d. Adopt Resolution No. 11-091 Authorizing Execution of a Renewed Lease with the State of Minnesota Department of Transportation (Mn/DOT) for Webster Park. City Council Meeting of November 7, 2011 (Item No. 3a) Page 2 Subject: City Council Meeting Minutes of October 3, 2011 4e. Adopt Resolution No. 11-092 authorizing award of the 2012 St. Louis Park Arts and Culture Grants. 4f. Adopt Resolution No. 11-093 authorizing special assessments for the replacements of various water service lines. 4g. Adopt Resolution No. 11-094 approving a re-authorization of the plat – Dental Office Addition. 4h. Approve Resolution No. 11-095 accepting a donation from St. Louis Park Parktacular in the amount of $350 to be available for individuals who qualify for financial assistance through the Parks and Recreation Department. 4i. Adopt Resolution No. 11-096 ordering the abatement of the hazardous buildings located at 3735 Texas Avenue South. 4j. Approve the St. Louis Park Outstanding Citizen Award Program. 4k. Approve for filing Planning Commission Minutes July 6, 2011. 4l. Approve for filing Planning Commission Minutes August 17, 2011. 4m. Approve for filing Parks & Recreation Advisory Commission Minutes June 22, 2011. 4n. Approve for filing Vendor Claims. It was moved by Councilmember Santa, seconded by Councilmember Mavity, to approve the Agenda and items listed on the Consent Calendar; and to waive reading of all resolutions and ordinances. The motion passed 6-0 (Councilmember Omodt absent). 5. Boards and Commissions It was moved by Councilmember Santa, seconded by Councilmember Mavity, to appoint Duncan McIntyre and Asa Goldstein to serve as joint youth representatives on the Police Advisory Commission. The motion passed 6-0 (Councilmember Omodt absent). 6. Public Hearings 6a. Public Hearing – Off-Sale Liquor License – Cedar Lake Wine & Spirits Ms. Stroth presented the staff report and advised that Cedar Lake Wine & Spirits has submitted an application for an off-sale intoxicating liquor license for a new liquor store at 5330 Cedar Lake Road in the Cedar Point Business Complex. She stated that the business will occupy 1,280 square feet and plans to open in mid-October. Mayor Jacobs opened the public hearing. No speakers were present. Mayor Jacobs closed the public hearing. It was moved by Councilmember Sanger, seconded by Councilmember Santa, to approve an off-sale intoxicating liquor license to Cedar Lake Wine & Spirits, Inc., located at 5330 Cedar Lake Road, Suite 500, with the license term through March 1, 2012. City Council Meeting of November 7, 2011 (Item No. 3a) Page 3 Subject: City Council Meeting Minutes of October 3, 2011 Councilmember Finkelstein suggested that Council review the number of liquor licenses in the City and discuss how many liquor licenses the City wants in various areas. He requested a written report identifying how many liquor licenses exist in the City today versus five years ago. The motion passed 6-0 (Councilmember Omodt absent). 7. Requests, Petitions, and Communications from the Public – None 8. Resolutions, Ordinances, Motions and Discussion Items 8a. Trunk Highway 169: Proposed Access Closure and Visual Barrier Construction. Resolution No. 11-097 Mr. Brink presented the staff report and explained that as part of Mn/DOT’s long-term safety initiative, Mn/DOT desires to close the Highway 169 access ramps at 22nd Street, 22nd Lane, and 23rd Street and to construct a visual barrier at this location. He stated that the City conducted a public process regarding the project and there was overall support in favor of the access closure. He advised that Mn/DOT will construct a 12’ visual barrier at this location and noted that it does not meet Mn/DOT’s threshold to justify a noise wall; however, the visual barrier will provide some noise mitigation and is intended to mitigate the impact of the highway to surrounding homes and provide aesthetic value. He indicated that construction will occur next year with the entire project funded by Mn/DOT. He stated that throughout the public process, residents expressed safety concerns and there were some concerns expressed about the closure’s impact on traffic on Cedar Lake Road and Flag Avenue. He stated the traffic study revealed that 200-300 cars use this ramp daily and the access ramp’s closure would have minimal impact. He added that if it is determined in the future to close the 16th Street ramp, impacts to traffic will have to be looked at further. Councilmember Ross thanked Mr. Brink and City staff for their help during the public process. It was moved by Councilmember Ross, seconded by Councilmember Finkelstein, to approve Resolution No. 11-097 supporting closure of the Highway 169 Access Ramps at 22nd Street, 22nd Lane and 23rd Street and Construction of a Visual Barrier. The motion passed 6-0 (Councilmember Omodt absent). 8b. Deer Management Policy Ms. Walsh presented the staff report and proposed Deer Management Policy. She advised that the City and Council have been managing and discussing deer management since 1993 and most recently, Council discussed this issue at its July 11, 2011, study session and reviewed an amended policy. Councilmember Mavity stated that one of the changes contained in the policy includes having property owners sign a contract with the City indicating their willingness to participate and Section I.E. requires property owners to notify their directly adjacent City Council Meeting of November 7, 2011 (Item No. 3a) Page 4 Subject: City Council Meeting Minutes of October 3, 2011 property owners. She agreed it was important that adjacent property owners be notified but felt it was incumbent on the City to provide this notification rather than the property owner, not only to insure full, clear, and complete notification, but also to make sure notification happens. She proposed that the second sentence of Section I.E. be revised to state “Property owners will be asked to sign a contract with the City ensuring their willingness to participate. and requiring them to notify their directly adjacent property owners The City will notify the property owners directly adjacent to the property in question.” Ms. Walsh agreed to make this change to the deer management policy. Councilmember Sanger pointed out that one of the things not being changed is the City’s current ban prohibiting the feeding of deer in the City. She stated it is incumbent on all residents to make sure they are not putting out food for the deer and to make certain that any bird food is placed high enough so it is not accessible to deer. It was moved by Councilmember Sanger, seconded by Councilmember Santa, to adopt the revised Deer Management Policy, as amended. The motion passed 6-0 (Councilmember Omodt absent). 9. Communications Councilmember Santa stated that the 30th annual Halloween party will be held on Friday, October 21st, and Saturday, October 22nd, from 6:30-9:00 p.m. at Westwood Nature Center. She indicated that tickets are still available but recommended that tickets be purchased now because the event will sell out. Councilmember Mavity indicated that anyone interested in volunteering at the Halloween party can call the volunteer office at (952) 928-6025. She added that interested volunteers should call by October 5th. Councilmember Sanger reminded residents of the 125th birthday celebration sponsored by the St. Louis Park Historical Society on Sunday, October 16th, from 1:00-4:00 p.m. at Wolfe Park. 10. Adjournment The meeting adjourned at 7:46 p.m. ______________________________________ ______________________________________ Nancy Stroth, City Clerk Jeff Jacobs, Mayor Meeting Date: November 7, 2011 Agenda Item #: 3b UNOFFICIAL MINUTES CITY COUNCIL STUDY SESSION ST. LOUIS PARK, MINNESOTA OCTOBER 10, 2011 The meeting convened at 6:30 p.m. Councilmembers present: Mayor Jeff Jacobs, Phil Finkelstein, Anne Mavity, Julia Ross, Susan Sanger, and Sue Santa. Councilmembers absent: Paul Omodt. Staff present: City Manager (Mr. Harmening), City Clerk (Ms. Stroth), City Attorney (Mr. Scott), Director of Community Development (Mr. Locke), Economic Development Coordinator (Mr. Hunt), Communications Coordinator (Mr. Zwilling), Chief Information Officer (Mr. Pires), Controller (Mr. Swanson), Finance Supervisor (Mr. Heintz), City Assessor (Mr. Bultema), and Recording Secretary (Ms. Hughes). 1. Future Study Session Agenda Planning – October 24, 2011 Mr. Harmening presented the proposed study session agenda for October 24th. 2. Toby Keith’s I Love This Bar & Grill Liquor License – Food/Liquor Sales Report Mr. Harmening presented the staff report and stated that the liquor license for Toby Keith’s I Love This Bar & Grill was placed on probationary status for six months starting March 1, 2011 through August 31, 2011 because it had not met the requirement of at least 50% of its gross receipts attributable to the sale of food. He presented the reported monthly sales percentages provided by Toby Keith’s through August 2011 for food, liquor, and other retail sales, as well as monthly sales percentages for food and liquor sales only. Ms. Stroth explained that the City’s liquor ordinance was amended in 2000 to include the 50% requirement and noted that the requirement is not part of the State statute. She then introduced representatives from Toby Keith’s: Barry Birks, Toby Keith’s Corporate General Manager; Matt Sutton, General Manager; and Jason Sisk, Store Manager. Mr. Birks stated that Toby Keith’s is committed to complying with the City’s ordinance requirements and indicated that they no longer sell t-shirts, hats, or other retail and the retail area in all the stores is being converted into private dining rooms. He advised that they have been aggressive with food sales, including marketing campaigns and lunch bunch cards. Councilmember Finkelstein stated that when Toby Keith’s appeared before Council in February, he did not feel they were treating this issue seriously enough and requested further information about what the restaurant has been doing to meet the 50% requirement. Mr. Birks explained they have been actively marketing with the hotels in the area to draw hotel guests in for lunch, dinner, and the after work crowd. He stated they have also extended invitations to local businesses. He indicated that they also had a two-day School of Rock promotion with the local schools that drew as many as 500 people. He stated that they want to make sure their food sales are consistent and that people come back to the restaurant. He added City Council Meeting of November 7, 2011 (Item No. 3b) Page 2 Subject: Study Session Meeting Minutes of October 10, 2011 that they have gone to great lengths to emphasize that they are a restaurant and not just a bar with live music. Councilmember Mavity stated the City has intentionally indicated that it does not want a bar district in St. Louis Park and the liquor ordinance is the tool to make that happen. She questioned whether there is anything different in the West End that might give Council reason to consider moving to a 60-40% requirement. She stated that if the City does not enforce the current ordinance, it is meaningless. She indicated at this point, Toby Keith’s has made strong efforts to comply with the City’s ordinance, but they are not yet in compliance. She noted that the City wants this business to be successful and it appears there are some tools available to the City, including imposing a civil fine up to $2,000. She proposed that the City impose a fine of $1,000 and to suspend that fine until Toby Keith’s renews its liquor license in 2012; if Toby Keith’s is in compliance when their liquor license is renewed, the civil fine would be forgiven and if they are not in compliance, the fine would go into effect. She also proposed that Council consider amending the 50% requirement contained in the ordinance. Councilmember Ross stated that the 60-40% discussion should not be part of the discussion related to Toby Keith’s. Councilmember Sanger commended Toby Keith’s for their efforts but did not feel that a one or two month improvement in food sales represented a trend. She stated she would like to continue the probation period for Toby Keith’s through the time of renewal consideration in February 2012 so that Council can be certain of compliance with the ordinance on a consistent basis. She agreed with Councilmember Mavity’s suggestion of imposing a civil fine. Councilmember Finkelstein stated he would like a written report detailing the activities undertaken by Toby Keith’s to increase food sales. He indicated if the probation period is extended, he wants a written report submitted to Council outlining these activities. He also agreed with Councilmember Mavity’s suggestion of imposing a $1,000 civil fine. Mr. Sutton agreed to provide the written reports requested by Councilmember Finkelstein. Councilmember Santa stated that she was pleased to see the food sales increase and commended the efforts of Toby Keith’s to meet the City’s ordinance requirements. She expressed support for extending the probation period and requested that Toby Keith’s remain mindful of the City’s earlier disappointment with Toby Keith’s management. Mayor Jacobs felt that management at Toby Keith’s has been putting forth a good faith effort to increase food sales and expressed support for extending the probation period for Toby Keith’s. He agreed that Council should have a further conversation about the 60-40% requirement at a later date. It was the consensus of the City Council to extend the probationary period through February 2012. It was also the consensus of the City Council to require that Toby Keith’s provide interim reports of food/liquor sales in December and at the time of liquor license renewal in February 2012. It was also the consensus of the City Council to leave open the question of a civil fine until February 2012. City Council Meeting of November 7, 2011 (Item No. 3b) Page 3 Subject: Study Session Meeting Minutes of October 10, 2011 Mr. Scott advised that an agreement will be prepared containing the reporting requirements and extension of the probationary period. He added this agreement can be approved by Council as a consent agenda item. Ms. Stroth reminded the City Attorney of the resolution approving the previous probation conditions and Mr. Scott stated he would provide the best course of action. 3. Supplemental Construction Assistance Program (CAP) Funding Request from Hardcoat Inc. Mr. Locke presented the staff report and introduced Michael Kelner, President of Hardcoat Inc. He stated that the City still feels this is a good project and is anxious to see the building renovated. Mr. Kelner introduced Reg Plowman, current owner of the Flame Metals property. Councilmember Sanger requested further information regarding the City’s CAP guidelines as well as the current balance in the fund and timing/use of the fund. Mr. Hunt explained that this project scored well under the City’s criteria and there is approximately $1 million left in the fund in terms of unallocated tax increment. He stated the City has been careful about future projects and this project will allow other projects to be funded as well. He indicated that the legislature recently extended the deadline on these projects and any new projects must commence by July 1, 2012. He discussed a pending CAP funding request from Stone Mountain Pet Lodge to facilitate the renovation and expansion of the former Bennigan’s property, as well as a CAP funding request from Anderson KM Builders to facilitate the construction of a 21,000 square foot office building at the former Oak Hill II site. Mr. Locke stated that the City’s guidelines require a demonstrated need, which was shown here, and the types of projects include physical improvements, especially when dealing with clean-up or corrections to the site. He stated in this case, the City is also making funding available for tenant improvements and noted that this project is creating a TIF district which will allow the City to reimburse itself. He added that the CAP funding requests from Stone Mountain Pet Lodge and Anderson KM Builders could easily be funded. Councilmember Finkelstein stated that he was initially opposed to Hardcoat’s CAP funding request, but given Mr. Kelner’s significant investment in the project, he felt it was appropriate to support Hardcoat’s request for additional assistance. Councilmember Santa requested further information regarding the Department of Agriculture’s involvement. Mr. Kelner explained that the MPCA had previously issued a No Action letter for the property, but the matter was transferred over to the Minnesota Department of Agriculture (MDA) because of the nature of the spill and for that reason, even though the No Action letter was issued in 1989, it was no longer acceptable to MDA, despite MPCA’s statement that it had no issue with the site. He stated that construction and financing have been postponed for five months because of this issue which has resulted in increased costs. He indicated they have gone through a series of water, soil, and bore testing and MDA’s concern was with a concrete pad that has been on the site since the original building, even though remediation was done. He reported that the monitoring wells on-site and all of the testing showed the water quality was better than the water City Council Meeting of November 7, 2011 (Item No. 3b) Page 4 Subject: Study Session Meeting Minutes of October 10, 2011 being delivered to the community. He added that MDA recently provided a draft report which requires him to remove a 10’x10’ area of dirt and to properly dispose of the dirt. Mr. Tom Johnson, attorney for Hardcoat Inc., stated that the draft letter from MDA was received last Friday and they hope to close the financing next week, with construction resuming shortly thereafter. Councilmember Sanger indicated she still has mixed feelings about this and stated that while the project is valuable, her concern is with the City’s CAP program and the fact that the City has already provided twice as much funding as called for in the guidelines. She also expressed concern about the vitality of Hardcoat and whether the additional $80,000 represents a make or break for the business. She stated that from a policy perspective, it is not okay for every business to come back to the City to underwrite unforeseen business expenses. Councilmember Finkelstein felt that the unforeseen expenses were no fault of Mr. Kelner. He added that this is a site the City wants to deal with and given the circumstances, he felt it made sense to approve the additional funding. It was the consensus of the City Council to support Hardcoat Inc.’s supplemental CAP funding request related to the acquisition and renovation of the former Flame Metals property. Mr. Kelner reported that his business has now grown to 18 employees and he is confident the business will continue to grow. He expressed his thanks and appreciation to the City Council. 4. 2012 Budget Discussion Mr. Harmening presented the staff report and stated that Council adopted a preliminary tax levy of 5.0% in September, representing an increase of approximately $1.1 million from the 2011 levy. He noted that the bulk of that adjustment will be used to help pay the debt service on the two new fire stations. He indicated that the City’s 2012 operating budget will increase 1.19% or approximately $243,000, and the proposed budget includes hiring one police officer and one engineer. Mr. Swanson discussed the legislative repeal of the Market Value Homestead Credit (MVHC) program and its replacement with the Market Value Homestead Exclusion program. He stated that the Market Value Homestead Exclusion represents a significant change for the City and will reduce the City’s net tax capacity by approximately 3.5% and will increase the City’s tax rate. He also discussed fiscal disparities and stated that in 2012, the City’s net contribution will increase approximately $380,000, for a total contribution of $3.2 million compared to $2.7 million in 2011. Mr. Harmening indicated that the State recently hired a consultant to look at fiscal disparities and conduct some case studies. He stated that he contacted the consultant to see if St. Louis Park could be used in the case study. Mr. Swanson reviewed the estimated City share of property taxes based on a 5.0% preliminary levy increase and noted that the property values are based on information from the Assessor and represent an approximate 2.5% reduction in values. He discussed the impact on the estimated City share of property tax adjustments based on a 5% levy increase and stated that homes with a City Council Meeting of November 7, 2011 (Item No. 3b) Page 5 Subject: Study Session Meeting Minutes of October 10, 2011 value of $193,000 or below will see a reduction in the City’s estimated tax, while higher valued properties are picking up the additional cost of the Market Value Homestead Exclusion program. Councilmember Mavity noted that the City’s estimated tax increase on the highest valued home with a 0% levy increase would be $81 and that same home with a 5% levy increase would see an estimated City tax increase of $145, for a difference of about $65. She felt that the 5% levy increase provides a cushion for the City. Councilmember Sanger noted that the difference between a 0% levy increase and a 5% levy increase is $10 on the low valued homes. She added that utility rates are partially under the control of residents and should encourage people to cut down and recycle more. Councilmember Mavity encouraged the City to concisely explain to residents the shift from Market Value Homestead Credit to Market Value Homestead Exclusion. Councilmember Finkelstein requested that the City also communicate with residents about how much of their property tax bill is related to the City and how much is the school district, County, etc. It was the consensus of the City Council to direct staff to continue with a 5.0% property tax levy increase from 2011. It was also the consensus of the City Council to direct staff to proceed with hiring one additional police officer. It was also the consensus of the City Council to direct staff to proceed with hiring one additional engineer. 5. ParkAlert Citizen Notification System Policy Mr. Pires presented the staff report and draft policy for use of the ParkAlert notification system. He advised that the Reverse-911 program is a powerful tool that will include other types of communications and the policy will define the conditions under which this tool will be initiated. He explained typical emergency situations and other non-emergency conditions and stated that the notification system has the ability to complete 130,000 phone calls per hour. Mr. Zwilling indicated that this technology is used by others as a marketing tool, but that is clearly not the City’s intent. He explained that residents and businesses will have flexibility in choosing their communications and can rank their preference for receiving messages. Mr. Pires stated that everyone who has a listed telephone number will automatically receive messages at that number; residents can then go on the web portal and select contact methods for receiving non-emergency messages. He noted that 67% of St. Louis Park residents are in the White Pages and an average of 25% do not have landlines, so the City will encourage those people to register. He stated that people can also register to be notified about events at five different locations, e.g., school and work. Councilmember Sanger stated it will be important for the City to have a privacy policy in place. Mr. Pires explained that a use policy has been reviewed by the City Attorney that states the City will not share information except as might be ordered by a Court. City Council Meeting of November 7, 2011 (Item No. 3b) Page 6 Subject: Study Session Meeting Minutes of October 10, 2011 Mr. Zwilling noted that the City will have a contract with Everbridge for use of its citizen notification system. Mayor Jacobs stated it will be important to assure residents that Everbridge is bound by the City’s contract with them with respect to privacy. Councilmember Sanger asked if the system could be used for notifying residents about variances or other similar requests so that the City does not have to mail out so many notices. Mr. Pires replied in the affirmative and stated that the system can define a geographical area for sending messages. He stated that every time the City sends a postcard to residents, it costs approximately $7,500 and the ParkAlert system will cost $15,000 per year for unlimited use. He added that residents will always receive emergency messages, but would have to opt in for non- emergency messages such as road detours, etc. It was the consensus of the City Council to proceed with formal adoption of the ParkAlert Citizen Notification System use policy at its October 17, 2011, regular meeting. 6. Communications/Meeting Check-In (Verbal) None. The meeting adjourned at 8:41 p.m. Written Reports provided and documented for recording purposes only: 7. 2012 Budget & Property Owner Service Charges – Special Service Districts No. 1-6 8. Redevelopment Project & EDA Contract Status Report: 3rd Quarter 2011 ______________________________________ ______________________________________ Nancy Stroth, City Clerk Jeff Jacobs, Mayor Meeting Date: November 7, 2011 Agenda Item #: 3c UNOFFICIAL MINUTES CITY COUNCIL MEETING ST. LOUIS PARK, MINNESOTA OCTOBER 17, 2011 1. Call to Order Mayor Jacobs called the meeting to order at 7:30 p.m. Councilmembers present: Mayor Jeff Jacobs, Anne Mavity, Paul Omodt, Julia Ross, Susan Sanger, and Sue Santa. Councilmembers absent: Phil Finkelstein. Staff present: City Manager (Mr. Harmening), City Attorney (Mr. Scott), City Clerk (Ms. Stroth), Deputy City Manager/Director of Human Resources (Ms. Deno), Communications Coordinator (Mr. Zwilling), Director of Public Works (Mr. Rardin), Finance Supervisor (Mr. Heintz), Inspection Services Manager (Ms. Boettcher), Public Works Operations Superintendent (Mr. Hanson), and Recording Secretary (Ms. Hughes). 1a. Pledge of Allegiance 1b. Roll Call 2. Presentations 2a. Acceptance of Monetary Donation from St. Louis Park Historical Society for Improvements to the Depot at Jorvig Park Mayor Jacobs presented the City with a flag donated to the City by Senator Franken in commemoration of the City’s 125th birthday. He congratulated the St. Louis Park Historical Society for their efforts in putting together a great event yesterday and indicated the event will be rebroadcast on cable and the City’s website. He requested that the flag by flown at City Hall or the Police Station and then given to the St. Louis Park Historical Society. He stated that Senator Klobuchar attended the 125th birthday celebration, along with former Mayors Phyllis McQuaid, Gail Dorfman, and Lyle Hanks. Mr. John Olson, President of the St. Louis Park Historical Society, appeared before the City Council and introduced trustees Jeanne Andersen, Kathy Johnson, Faye Ross, Henry Solmer, Sue Ainsworth, and Doug Johnson. He stated that renovations were done to the Depot at Jorvig Park this summer and invited residents to attend an open house at the Depot on Saturday, October 29th, from 1:00-4:00 p.m. He then presented a donation from the Historical Society to be used to help pay for the cost of the Depot renovations. Mayor Jacobs expressed the City Council’s thanks to the St. Louis Park Historical Society for their generous donation. 3. Approval of Minutes 3a. Special Study Session Minutes of September 19, 2011 City Council Meeting of November 7, 2011 (Item No. 3c) Page 2 Subject: City Council Meeting Minutes of October 17, 2011 The minutes were approved as presented. 3b. Study Session Meeting Minutes of September 26, 2011 The minutes were approved as presented. 4. Approval of Agenda and Items on Consent Calendar NOTE: The Consent Calendar lists those items of business which are considered to be routine and/or which need no discussion. Consent items are acted upon by one motion. If discussion is desired by either a Councilmember or a member of the audience, that item may be moved to an appropriate section of the regular agenda for discussion. 4a. Designate Visu-Sewer, Inc. the lowest responsible bidder and authorize execution of a contract with the firm in the amount of $109,605.00 for the 2011 Sanitary Sewer Mainline Rehabilitation Project - Project No. 2011-2200. 4b. Adopt Resolution No. 11-098 accepting work and authorizing final payment in the amount of $1,246.21 for the Micro-Surfacing on Monterey Drive, Contract No. 111-08. 4c. Adopt Resolution No. 11-099 accepting donation from St. Louis Park Historical Society in the amount of $3,880 to assist with the funding of HVAC and insulation improvements in the Jorvig Park Depot. 4d. Approve a Temporary On-Sale Intoxicating Liquor License for Job’s Daughters Foundation of Minnesota for an event to be held on Saturday, October 29, 2011 at Paul Revere Masonic Center at 6509 Walker Street in St. Louis Park. 4e. Adopt Resolution No. 11-100 authorizing the special assessment for the repair of the sewer service line at 1401 Flag Avenue South, St. Louis Park, MN - P.I.D. 06-117-21-32-0102. 4f. Approve for filing Telecommunication Commission Minutes August 25, 2011. 4g. Approve for filing Planning Commission Minutes September 21, 2011. 4h. Approval of Filing of Vendor Claims. It was moved by Councilmember Ross, seconded by Councilmember Santa, to approve the Agenda and items listed on the Consent Calendar; and to waive reading of all resolutions and ordinances. The motion passed 6-0 (Councilmember Finkelstein absent). 5. Boards and Commissions - None 6. Public Hearings 6a. Public Hearing – Intoxicating On-Sale Liquor License – Thanh Do Ms. Stroth presented the staff report and advised that Thanh Do has made application for an on-sale intoxicating liquor and Sunday license, which is an upgrade to their current wine liquor license. She reported that the findings of the police investigation showed the licensee has no criminal record, however, the licensee has two other establishments which reported a compliance incident in 2008 related to selling to a minor that was not City Council Meeting of November 7, 2011 (Item No. 3c) Page 3 Subject: City Council Meeting Minutes of October 17, 2011 disclosed in the license application, as well as a permit violation with the City of Minneapolis. She noted that the applicant has cooperated fully during the City’s investigation and the compliance issues were discussed at length with Lt. Harcey and staff is recommending approval of the liquor license upgrade at this time. Mayor Jacobs opened the public hearing. No speakers were present. Mayor Jacobs closed the public hearing. Councilmember Sanger indicated it was her understanding that one of the criteria for eligibility for a liquor license is the requirement that the applicant be current on payment of all liquor taxes. She asked if an applicant is considered to be in compliance if they are making payments on liquor taxes pursuant to a payment plan. Ms. Stroth replied in the affirmative and stated that the applicant is currently on a payment plan with the State for payment of liquor taxes. Councilmember Santa asked if the applicant would automatically lose their liquor license if they fall behind on their payments to the State. Ms. Stroth replied that this is correct and added that the State of Minnesota, not the City, is responsible for monitoring these payments. It was moved by Councilmember Santa, seconded by Councilmember Ross, to approve application from Thanh Do, Inc., dba Thanh Do for an on-sale intoxicating liquor license for their establishment located at 8028 Minnetonka Boulevard for the remainder of the license term through March 1, 2012. The motion passed 6-0 (Councilmember Finkelstein absent). 6b. Consolidated Public Hearing (1) 2012 Budget & Property Owner Service Charges for Special Service District No. 1 (2) 2012 Budget & Property Owner Service Charges for Special Service District No. 2 (3) 2012 Budget & Property Owner Service Charges for Special Service District No. 3 (4) 2012 Budget & Property Owner Service Charges for Special Service District No. 4 (5) 2012 Budget & Property Owner Service Charges for Special Service District No. 5 (6) 2012 Budget & Property Owner Service Charges for Special Service District No. 6 Resolution Nos. 11-101, 11-102, 11-103, 11-104, 11-105, 11-106 Mr. Harmening presented the staff report and introduced Mark Hanson, Public Works Operations Superintendent. He advised that the City has moved oversight of the Special Service Districts to Public Works following some reorganization within the Facilities Division of the Inspections Department. Mr. Hanson stated that the policies and procedures currently in place for the Special Service Districts will not be changed and will continue to use the same budgeting methods. He indicated that the City has given all property owners a chance to review the 2012 budgets and proposed service charges and all budgets and service charges were approved by the Special Service District Advisory Board. He advised that Special Service District No. 1 is the City’s oldest and largest district and is located along City Council Meeting of November 7, 2011 (Item No. 3c) Page 4 Subject: City Council Meeting Minutes of October 17, 2011 Excelsior Boulevard from Quentin Avenue to Highway 100 and along Park Center Boulevard and Monterey Drive. He stated the proposed 2012 budget is $126,672 and the proposed 2012 service charge is $126,672. Mr. Hanson advised that Special Service District No. 2 is located along Excelsior Boulevard from Monterey Drive/38th Street to France Avenue. He stated the proposed 2012 budget is $46,534 and the proposed 2012 service charge is $38,534. Mr. Hanson advised that Special Service District No. 3 is located along Excelsior Boulevard from Quentin Avenue to Monterey Drive/38th Street. He stated the proposed 2012 budget is $63,600 and the proposed 2012 service charge is $55,600. Mr. Hanson advised that Special Service District No. 4 is located along Excelsior Boulevard west of Highway 100 to Louisiana Avenue. He stated the proposed 2012 budget is $38,664 and the proposed 2012 service charge is $14,664. Mr. Hanson advised that Special Service District No. 5 is located along Park Place Boulevard between I-394 and Cedar Lake Road. He stated the proposed 2012 budget is $26,698 and the proposed 2012 service charge is $12,698. Mr. Hanson advised that Special Service District No. 6 is located along 36th Street W. from Wooddale Avenue to Highway 100. He stated the proposed 2012 budget is $24,655 and the proposed 2012 service charge is $16,655. Mr. Harmening noted that in some cases the service charges are less than the budget because the fund balance in those Special Service Districts is strong and part of the fund balance will be used to help pay for those Special Service Districts with strong fund balances, consistent with the City’s goal of maintaining a 50% fund balance. He added that this may not always be the case and may change from year to year. Mayor Jacobs opened the public hearing. No speakers were present. Mayor Jacobs closed the public hearing. It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt Resolution No. 11-101 Approving 2012 Budget and Service Charges for Special Service District No. 1. The motion passed 6-0 (Councilmember Finkelstein absent). It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt Resolution No. 11-102 Approving 2012 Budget and Service Charges for Special Service District No. 2. The motion passed 6-0 (Councilmember Finkelstein absent). It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt Resolution No. 11-103 Approving 2012 Budget and Service Charges for Special Service District No. 3. City Council Meeting of November 7, 2011 (Item No. 3c) Page 5 Subject: City Council Meeting Minutes of October 17, 2011 The motion passed 6-0 (Councilmember Finkelstein absent). It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt Resolution No. 11-104 Approving 2012 Budget and Property Owner Service Charges for Special Service District No. 4. The motion passed 6-0 (Councilmember Finkelstein absent). It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt Resolution No. 11-105 Approving 2012 Budget and Service Charges for Special Service District No. 5. The motion passed 6-0 (Councilmember Finkelstein absent). It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt Resolution No. 11-106 Approving 2012 Budget and Property Owner Service Charges for Special Service District No. 6. The motion passed 6-0 (Councilmember Finkelstein absent). 6c. Public Hearing for Assessment of Delinquent Utilities, Tree Removal/Injection, Mowing, False Alarms, and Other Miscellaneous Charges. Resolution No. 11-107 Mr. Heintz presented the staff report and explained the process used by the City in collecting overdue invoices for various City services. He stated that letters were sent in September to each of the customers notifying them of the delinquent amount and of this public hearing. He advised that as of the close of business today, there were 1,284 accounts representing a total of $700,959.80 in delinquent charges. He indicated that at the end of the certification process, any outstanding balances are sent to the County for collection as part of the property tax bill. He noted that the City will continue to attempt to collect payments and answer customer questions until the deadline of 4:30 p.m. on November 4, 2011. Mayor Jacobs opened the public hearing. A resident appeared before the City Council on behalf of his mother who is disabled and presented the City with a letter stating his mother’s intent to pay the outstanding balance. The resident stated his mother has a strong desire to pay but cannot pay the balance due all at once and is currently saving money in order to pay the bill. Councilmember Ross stated that families are experiencing tough economic times and questioned whether a payment plan could be worked out through the City or the County. Mr. Heintz indicated it has not been the City’s practice to make payment arrangements with customers and as long as the balance is paid in full by November 4th, the amount will not be certified to the County. City Council Meeting of November 7, 2011 (Item No. 3c) Page 6 Subject: City Council Meeting Minutes of October 17, 2011 Councilmember Sanger expressed concern about the overall process used by the City and stated there seem to be more customers every year who do not pay their invoices until such time as the City sends them a letter about certifying the delinquent amount. She questioned the City’s system which permits invoices to remain unpaid for many months before sending letters notifying the property owners that they are delinquent. She requested further information about what the City does when someone has not paid their invoice, including the types of notices sent, late fees, and accruing interest on the debt. She requested that the City review its procedures to see what can be done to tighten up the notification process. Mr. Heintz advised that the City does not wait until the end of the year to collect delinquent accounts and customers receive a quarterly bill. He indicated that the City charges a 10% penalty on each delinquent bill and no interest is charged. He noted that if the delinquent amount is placed on the property tax bill, interest at 5.85% is added. Councilmember Mavity acknowledged Councilmember Sanger’s concerns but felt that these are extraordinary times and that most residents will pay when they can. She did not agree with the assessment of a penalty on top of the outstanding balance and asked that the City consider ways to help residents do more in terms of conservation and to partner with residents in finding ways to reduce their costs. Mayor Jacobs closed the public hearing. It was moved by Councilmember Mavity, seconded by Councilmember Omodt, to adopt Resolution No. 11-107 Levying Assessment for Delinquent Utility Accounts, Tree Removal/Injection, False Alarm Fees and Other Miscellaneous Charges. The motion passed 6-0 (Councilmember Finkelstein absent). 7. Requests, Petitions, and Communications from the Public – None 8. Resolutions, Ordinances, Motions and Discussion Items 8a. ParkAlert Citizen Notification System Policy Mr. Zwilling presented the staff report and proposed policy regarding the ParkAlert Citizen Notification System. He advised that the ParkAlert system represents a new tool to enhance the City’s communications with residents and businesses. He indicated the ParkAlert system is an emergency notification system that would provide phone calls to telephone numbers listed in the St. Louis Park White Pages and others who choose to opt in and would notify them of significant emergencies, as outlined in the proposed policy. He explained that residents also have the option of opting in to the system for non- emergency notifications ranging from road closures to a significant public meeting. He indicated that the ParkAlert system would be offered beginning November 1st and the City intends to use the system sparingly. Councilmember Sanger asked what assurances can be given by the City that data provided by residents will be protected. City Council Meeting of November 7, 2011 (Item No. 3c) Page 7 Subject: City Council Meeting Minutes of October 17, 2011 Mr. Zwilling stated that a privacy policy will be available on the City’s website and added that any data provided to the City is not considered public data; any information provided will not be sold, used, or shared by the City or by the company providing the ParkAlert service. It was moved by Councilmember Mavity, seconded by Councilmember Omodt, to adopt the ParkAlert Citizen Notification Policy. Councilmember Sanger stated that the ParkAlert system provides an effective tool for notifying residents when a snow emergency parking ban is imminent, but the community should not rely solely on the City’s ParkAlert system for these notifications and residents should take their own initiative to find out when a snow emergency is going into effect. Councilmember Mavity reminded residents that snow emergencies occur when there is 3” or more of snow on the ground. The motion passed 6-0 (Councilmember Finkelstein absent). 9. Communications Councilmember Santa reminded residents of the 30th annual Halloween party on Friday, October 21st, and Saturday, October 22nd, from 6:30-9:00 p.m. at Westwood Nature Center. She stated that a Halloween party will also be held at the Rec Center on Friday, October 28th and volunteer opportunities are available. 10. Adjournment The meeting adjourned at 8:04 p.m. ______________________________________ ______________________________________ Nancy Stroth, City Clerk Jeff Jacobs, Mayor Meeting Date: November 7, 2011 Agenda Item #: 3d UNOFFICIAL MINUTES CITY COUNCIL STUDY SESSION ST. LOUIS PARK, MINNESOTA OCTOBER 24, 2011 The meeting convened at 6:30 p.m. Councilmembers present: Mayor Jeff Jacobs, Anne Mavity, Julia Ross, Susan Sanger, and Sue Santa. Councilmembers absent: Phil Finkelstein and Paul Omodt. Staff present: City Manager (Mr. Harmening), Director of Community Development (Mr. Locke), Economic Development Coordinator (Mr. Hunt), and Recording Secretary (Ms. Hughes). 1. Future Study Session Agenda Planning – November 14, 2011 Mr. Harmening presented the proposed study session agenda for November 14th. Councilmember Mavity requested an update regarding the Elliot School proposal. Mr. Locke advised that a preliminary proposal is being evaluated in the context of the design guidelines previously adopted and will likely be presented to Council on November 14th. 2. Discuss the City Manager’s 2011 Performance Evaluation Mayor Jacobs stated that Council has retained J. Forrest in the past to assist with the City Manager’s performance evaluation and felt that he should be retained again. It was the consensus of the City Council to retain consultant J. Forrest to assist Council in conducting the annual review of the City Manager’s performance. Mr. Harmening advised that he uses Mr. Forrest as a professional coach which may be useful in completing the performance evaluation. He added that the City plans to use the same performance evaluation instrument as last year and the evaluation will be conducted electronically or via hard copy. He stated that Council will receive the performance evaluation forms within the next two weeks. 3. Construction Assistance Program (CAP) Application – Stone Mountain Pet Lodge (former Bennigan’s Building) Mr. Locke presented the staff report and explained that Stone Mountain Pet Lodge has applied for a Construction Assistance Program (CAP) loan in order to renovate and expand the Bennigan’s property and construct a deluxe pet facility called Stone Mountain Pet Lodge. He indicated that Stone Mountain Pet Lodge would be the second facility owned by Dave and Maggie Larson. He noted that staff is still working with the owners to finalize the amount of the CAP loan request. Councilmember Santa asked how long the Bennigan’s building has been empty. City Council Meeting of November 7, 2011 (Item No. 3d) Page 2 Subject: Study Session Meeting Minutes of October 24, 2011 Mr. Locke replied that the property has been vacant for several years. Mr. Hunt introduced Dave and Maggie Larson, owners of Stone Mountain Pet Lodge and presented a short video tour of the facility. Mr. Dave Larson, Stone Mountain Pet Lodge, appeared before the City Council and encouraged Council to take a tour of their Blaine facility. He explained that they have been in Blaine for six years and this facility is the largest pet facility in the State. He presented architectural drawings and the proposed site plan of the facility and stated that they plan to retain the original Bennigan’s building. He indicated that the entire building will have a perimeter wall for noise reduction and security. Councilmember Ross asked if the C-2 zoning was appropriate for this type of business which will include a caretaker’s apartment. Mr. Locke replied that staff is working out the zoning details for the site and stated that there is understandably a need for a caretaker apartment with this type of business. Councilmember Sanger asked if a determination has been made that a CAP loan is necessary in order for the business to be viable. She also stated it appears that after all the construction is done, this building will be far more expensive than its value, which led her to question the viability of the business going forward. She added she would like some reasonable assurance that the business is going to be successful. Mr. Locke advised that staff is working with Ehlers & Associates to determine how much assistance might be justified. He stated that the total redevelopment costs include more than pure real estate costs which will determine the property’s real estate value following construction. Mr. Hunt noted that the Blaine facility has been very successful and the business was profitable by its second year. Mr. Larson stated that in 2009, their business grew 4%. Councilmember Sanger expressed concern that if this CAP loan is approved, it may contribute to the demise of two similar local businesses because this facility will be in a directly competitive position to the two other local businesses. Mr. Larson stated when they opened the Blaine facility, they felt they could draw customers from all over the Twin Cities, but their customers are mostly from only three zip codes. He indicated that Pampered Pooch and Petropolis are fairly specialized businesses and they feel they can be successful at this location. Ms. Maggie Larson, Stone Mountain Pet Lodge, appeared before the City Council and stated that Blaine Kennels is a business close to the Blaine facility and the Blaine Kennels business has actually gotten better since they moved in because Blaine Kennels has a niche which they do not have. Mayor Jacobs felt that the proposed business may help to clean up this corridor and jumpstart other businesses in the area. City Council Meeting of November 7, 2011 (Item No. 3d) Page 3 Subject: Study Session Meeting Minutes of October 24, 2011 Councilmember Ross expressed concern about the potential environmental impact to the area with a restaurant on either side. She also expressed concern about noise from barking dogs. Mr. Larson stated that the Williamsburg Pet Hotel in St. Louis is located on a street similar to Wayzata Boulevard and has a KFC on one side, a medical facility on the other side, and an apartment building behind it. He assured Council that they control barking, their staff interacts with the dogs, and they limit distractions to the dogs to avoid unwanted barking. It was the consensus of the City Council to support some level of assistance for the renovation, expansion, and transformation of the former Bennigan’s building into a pet boarding and retail facility. 4. Preliminary Tax Increment Financing (TIF) Application – Redevelopment of 3340 Republic Avenue (Oak Hill II Office Building) Mr. Locke presented the staff report and introduced Mr. Kent Carlson with Anderson-KM Builders. Mr. Locke advised that the EDA had approved providing assistance for the Oak Hill II project a few years ago, but economic conditions did not make it possible to go forward with the original plans for the site. He also indicated that conditions are different today and Anderson- KM Builders is prepared to move forward with a project if the City can provide assistance. What is proposed is that the City create a TIF district to fund providing assistance to the project. Today the City has the ability to create economic development TIF district more easily than several years ago. He stated that the proposal is to provide $300,000 in tax increment assistance and create a TIF District that would be the funding source for providing that assistance. Councilmember Santa asked if a TIF District was already in place in this area. Mr. Hunt replied that this site does not contain a TIF District and noted that the Oak Park Village TIF District which had been the primary source for funding for the assistance proposed originally will be decertifying next year. Councilmember Mavity asked if the City was far enough along on the design of Louisiana Avenue and Highway 7 to be certain that no part of this property will be needed for the interchange project. Mr. Locke stated that it is now clear that no part of this property will be needed for the interchange project. He added that there has been no indication that this project is tied to the Highway 7 improvements. It was the consensus of the City Council to preliminarily support Anderson-KM Builders’ proposed Oak Hill II project and directed staff to prepare for EDA consideration a Redevelopment Contract to provide financial assistance to facilitate the project. 5. Update on the Aquila Commons Project and Redevelopment Contract with Aquila Senior LLC Mr. Locke presented the staff report and advised that while this project is doing well, there are 15 units unsold and some of units are now being resold. He explained the proposal to modify the City’s agreement with the developer to adjust the limits on buyer’s financial assets and income. City Council Meeting of November 7, 2011 (Item No. 3d) Page 4 Subject: Study Session Meeting Minutes of October 24, 2011 The proposal is to apply income restrictions to the initial buyers of 95% of the units as required by state law but not to apply income limitations to any subsequent resale of units; and, to eliminate the City imposed buyer asset limits from all unit sales. He stated that this would allow people who may be the heirs to the original owners to not have the added complication of meeting these special requirements and will simplify the sales process going forward. Mr. Hunt indicated that at this point some of the rules are serving as an obstacle to having the building fully sold and the City would like to see the resale process run more smoothly for residents and their families. He then introduced Mr. Wally Johnson from Stonebridge Development. Councilmember Sanger expressed concern about the proposal and stated she did not support the TIF for this project because when the developer initially came forward, they said they would not need any TIF financing if the property was structured in a condominium format and they only needed TIF financing to structure it in a cooperative format. She felt this was a self-inflicted problem due to the way that they structured the housing program into a cooperative model. She stated that this is not the only multi-family, owner-occupied building in St. Louis Park and there are other buildings where owners cannot sell due to the decline in the real estate market and she did not feel the City should be in the business of bailing out multi-family housing because of insufficient sales of units. She stated that the City was told originally that there would be income limits because of the nature of the mortgage secured for this building and she was not comfortable with removing the asset restrictions. Mr. Locke stated that there are challenges with trying to sell a previously owned unit when there are still new units for sale and the asset and income restrictions further those challenges. He indicated that Aquila Commons Coop is essentially a neighborhood with special rules and these rules are making it harder for the Coop homeowners to go about the normal business of selling their homes. He stated that he felt it would be wise for the City to remove the extra income and financial asset restrictions, and that even with the extra restrictions removed Aquila Commons would still be a very affordable project. Councilmember Santa acknowledged Councilmember Sanger’s concerns and indicated that her position has not changed and she still supports this project. She stated she recalled that the resale prices were supposed to be in line with the original purchase prices so that the units would not increase in value as much as the outside market with the right of first refusal staying within the cooperative community, but that does not appear to be happening because of the income barrier. Mr. Johnson, Stonebridge Development, appeared before the City Council and stated that the 3% appreciation cap is still in place even though real estate values have gone down. He indicated that the 15 unsold units are still subject to the income restrictions and they are running into situations where children want to purchase a unit for a parent and the asset limitation is precluding them from purchasing the unit. He noted that this is the only cooperative in the State that has an asset limitation. Councilmember Mavity stated that there are many older residents living in homes with reduced values and everyone is suffering from decreased property values. She requested clarification regarding the cooperative’s requirement that the purchaser be 55 or older and questioned how a family member could qualify as the purchaser. She stated that one of the goals of this is to provide affordable, owner-occupied housing for seniors and to keep them in St. Louis Park. She City Council Meeting of November 7, 2011 (Item No. 3d) Page 5 Subject: Study Session Meeting Minutes of October 24, 2011 felt if the City could figure out a way to make sure that that is who is living there, she was willing to be creative in figuring out how to get this done but did not agree with removing all the restrictions. Mr. Johnson indicated that the occupant has to be 55 or older to live there. He added that they have significantly reduced their prices and this project continues to provide affordable, new construction housing. Councilmember Mavity stated that while she was sympathetic to the owner’s frustrations, she was not persuaded that sufficient reason exists to lift the income and asset requirements. Councilmember Santa stated that the price point is lower at Aquila than in other places and indicated that she was in favor of removing the asset requirements for resale. Mayor Jacobs stated that he was in favor of removing the asset requirements for resale. Ms. Pam Pellitier with Avanti appeared before the City Council and stated that she appreciated Council’s concerns. She indicated that 40% of their residents need to be within 80% of median household income adjusted for household size, and 79% of their residents are in the lowest income category. She agreed that this is a tough real estate market and the asset restriction creates another encumbrance to selling the units. She advised that one of their residents recently received an offer on her unit after being on the market for two years, but the deal fell through because of the cooperative’s limitations. She expressed concern that word gets out in the realtor community about these limitations and added that the majority of their residents have no assets and limited income. Councilmember Sanger stated she was not in favor of removing the asset requirements for resale. Councilmember Mavity stated that she would like to continue to study the issue but was leaning toward not removing the asset requirements for resale. Councilmember Ross stated she was in favor of removing the asset requirements for resale. It was the consensus of the majority of the City Councilmembers present to remove the asset requirements for resale of units. Mr. Hunt stated that staff will request a legal opinion regarding children purchasing units for a parent and whether the children would be considered the owner. Mr. Steve Bubul, Kennedy & Graven, stated the asset requirement is not imposed by State law and represents a St. Louis Park rule which means the City has more latitude in changing it. Councilmember Santa requested that Council receive an update on all legal issues before formal action is taken. 6. Update on Redevelopment Contract with PNMC Holdings (Park Nicollet Health Services) Mr. Locke presented the staff report. City Council Meeting of November 7, 2011 (Item No. 3d) Page 6 Subject: Study Session Meeting Minutes of October 24, 2011 Councilmember Mavity requested that staff provide a reference to previous discussions when items with a longstanding history are presented for Council consideration. Mr. Hunt indicated that under the existing agreement, Park Nicollet (PNHC) is eligible for reimbursement of a substantial portion of environmental remediation costs on its site. The maximum amount of remediation costs that can be incurred is $9 million and has not yet been reached. Without the proposed amendment to the PNHC contract, they could continue to incur additional costs upward to $9 million. With the proposed amendment Park Nicollet would no longer petition for additional costs. The City will pay Park Nicollet what it currently owes, but for the last $500,000 which will not be paid. Mr. Locke discussed the taxable and non-taxable components of the site and the petitioning process that has taken place in previous years. He noted that in the past, the disputed taxable valuations were in the range of 5-10%, e.g., $1 million versus $950,000. Mr. Locke explained that the City has now reached an agreement with Park Nicollet on an amendment to reduce how much the City pays to reimburse them for remediation costs. Mr. Hunt pointed out that the agreement also calls for terminating the TIF District in 2013 or 2014 rather than in 2022. Councilmember Mavity asked whether there are things being left undone on the site that will need to be done later in order for it to be developable, usable land. She also asked if the City is releasing Park Nicollet from anything related to future planning. Mr. Hunt replied that there are still issues on the site and a remediation action plan will be required anytime something is proposed to be done on site and if the TIF District is terminated early as proposed, the City would not be required to pay those remediation costs. Mr. Locke stated that the City hopes to have an opportunity to work with Park Nicollet in the future in transforming this area into a more pedestrian friendly area and releasing the development contract does not preclude the City from future planning with them. Councilmember Sanger encouraged the City to revise its process for resolving tax issues to make the process more streamlined and efficient. It was the consensus of the City Council to direct staff to proceed with a third amendment to the redevelopment contract with PNMC Holdings. 7. Communications/Meeting Check-In (Verbal) Mr. Harmening noted that the Greensboro HIA public hearing will not be held on November 7th and will instead be heard on November 21st. Mr. Harmening advised Council that Duke Realty recently entered into an agreement to sell their two office towers at West End to Blackstone Group. Mr. Locke indicated that he spoke with Pat Mascia at Duke Realty who reported that Duke will continue to own the West End and pursue the 1.1 million square foot office building at the West City Council Meeting of November 7, 2011 (Item No. 3d) Page 7 Subject: Study Session Meeting Minutes of October 24, 2011 End. Mr. Locke advised that staff is working with legal counsel to make sure any connections between the redevelopment project and the PUD approvals are all transferred properly. Mr. Harmening stated that the Police Department recently arrested a suspect after complaints were received about a person looking in windows. He added that the suspect told Police about some other criminal activities he has been engaged in in the community. Councilmember Sanger reported that she received a phone call today from someone who wanted to inform Council that she had been at a meeting attended by representatives from several faith congregations and someone made a presentation about witchcraft going on in St. Louis Park. She stated that the caller told her this faith group is now “praying for the City Council and Mayor to have leadership skills to address this.” She added that the caller also told her that it was all in the statistics on the City’s website and to look at the website. Councilmember Santa reported that she also received a phone call from someone in a faith circle and she was told it has to do with the City’s crime statistics and the dramatic and alarming increase in crime. Councilmember Ross reported that she received an email regarding this topic and agreed to send it to Mr. Harmening. Mr. Harmening agreed to follow-up on this issue. The meeting adjourned at 8:54 p.m. Written Reports provided and documented for recording purposes only: 8. September 2011 Monthly Financial Report 9. Third Quarter Investment Report (July – September, 2011) 10. Prism Dial-A-Ride Program 11. Interested Buyer for 9019 Cedar Lake Road – Vacant City Parcel 12. Update on Request by Greensboro Condominium Association to Establish the Greensboro Condominium Housing Improvement Area (Greensboro HIA) 13. Vision St. Louis Park Community Check-in Update ______________________________________ ______________________________________ Nancy Stroth, City Clerk Jeff Jacobs, Mayor Meeting Date: November 7, 2011 Agenda Item #: 4a Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Final Payment Resolution - Contract 45-11 with Cool Air Mechanical, Inc. - Project No. 2011 0090. RECOMMENDED ACTION: Motion to Adopt Resolution accepting work and authorizing final payment in the amount of $14,261.76 for the Dehumidification System project in The Rec Center, Contract No. 45-11. POLICY CONSIDERATION: Not applicable. BACKGROUND: Bids were received on April 12, 2011 for The Rec Center Desiccant Dehumidification project for the east arena. The City Council subsequently awarded a contract to Cool Air Mechanical, Inc. on April 25, 2011 in the amount of $284,728. New energy efficient dehumidification equipment was needed to remove moisture from The Rec Center’s east arena during spring, summer and early fall ice operations. The new system replaced a 14 year-old system that was energy inefficient and was no longer manufactured, which means replacement parts were unavailable. The Contractor completed the work within the contract time allowed at a final contract cost of $285,235.14. The additional expense for this project included an air exchange unit for $507.14. The total expenses of this project were $292,592.47 which is $7,407.53 under the $300,000 budgeted amount. FINANCIAL OR BUDGET CONSIDERATION: This project was part of the Council approved 2011 CIP program at a budgeted amount of $300,000. The source of funding is the Park Improvement Fund. The City will also apply for a rebate of up to $10,000 from Center Point Energy for upgrading to a more efficient system. VISION CONSIDERATION: The replacement of the dehumidification equipment with much more energy efficient equipment is in alignment with the City Council’s second Strategic Direction. “St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business.” Attachment: Resolution Prepared by: Stacy Voelker, Administrative Secretary Craig Panning, Manager of Buildings and Structures Reviewed by: Cindy Walsh, Director of Parks and Recreation Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4a) Page 2 Subject: Final Payment Resolution - Contract 145-11 w/Cool Air Mechanical - Proj No. 20110090 RESOLUTION NO. 11-___ RESOLUTION ACCEPTING WORK ON THE REC CENTER DESICCANT DEHUMIDIFICATION PROJECT CITY PROJECT NO. 20110090 CONTRACT NO. 45-11 NOW THEREFORE BE IT RESOLVED, by the City Council of the City of St. Louis Park, Minnesota, as follows: 1. Pursuant to a written contract with the City dated April 26, 2011, Cool Air Mechanical, Inc. has satisfactorily completed replacement of the desiccant dehumidification in The Rec Center per Contract No. 45-11. 2. The Director of Parks and Recreation has filed her recommendations for final acceptance of the work. 3. The work completed under this contract is accepted and approved. The City Manager is directed to make final payment on the contract, taking the contractor's receipt in full. Original Contract Price $284,728.00 Air Exchange Unit $507.14 Underruns / Overruns $0.00 Previous Payments $270,973.38 Balance Due $14,261.76 Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk Meeting Date: November 7, 2011 Agenda Item #: 4b Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Toby Keith Liquor License – Extension of Probation Status. RECOMMENDED ACTION: Motion to adopt Resolution amending and restating Resolution No. 11-30 regarding the On-Sale Intoxicating and Sunday Liquor License for Toby Keith I Love This Bar probationary status extension for the license term through March 1, 2012. POLICY CONSIDERATION: Does Council wish to approve resolution extending the probationary period for Toby Keith’s I Love This Bar with the conditions proposed by staff? BACKGROUND: At the October 10 Study Session, Council discussed the 6 month probationary status results of Toby Keith’s I Love this Bar & Grill located at 1623 Park Place Boulevard. As stated in the written staff report, the food sales reported from the licensee were increasing each month, but did not meet the ordinance requirement of at least 50% of gross receipts attributable to the sale of food. It was the consensus of the Council to extend the probationary period through the remainder of the license term and to require that Toby Keith’s provide interim reports of food/liquor sales in December and again at the time of liquor license renewal in February 2012. City Ordinance Section 3-70 (g) allows the city to place the license of any on-sale intoxicating liquor licensee on probationary status for up to one year, when the sale of food is reported, or found to be, less than 50 percent of gross receipts for any business year. During the probationary period, the licensee shall prepare any plans and reports, participate in any required meetings and take other action that the city may require to increase the sale of food. History of Licensee  April 5, 2010 Council approved liquor license for term through March 1, 2011.  June 4, 2010 Toby Keith began operation.  January 2011 Renewal application received with report of food/liquor sales not meeting city ordinance requirement of at least 50% of gross receipts attributable to the sale of food.  February 14, 2011 Council reviewed written report with conditions proposed by staff for renewal of license.  February 22, 2011 Council approved renewal of liquor license with conditions including 6 month probation (Resolution No. 11-30).  June 27, 2011 Council reviewed written interim probation report of food/liquor sales percentages covering Jan-May 31, 2011.  October 10, 2011 Council discussed final 6 month probation report of food/liquor sales percentages covering Jan-August 31, 2011. City Council Meeting of November 7, 2011 (Item No. 4b) Page 2 Subject: Toby Keith Liquor License – Extension of Probation Status Staff is proposing the following conditions for extending the probationary period to be included in the resolution for council consideration: 1. The licensee will be put on an extended probationary status for the remainder of the license term through March 1, 2012. 2. The license shall provide an interim report of food and liquor sales for the period of September 1, 2011 through November 31, 2011 by December 15, 2011. 3. Staff will report interim probationary results to Council in December 2011 and final probationary results again in February 2012 during the renewal process for Council consideration of renewal of the liquor license. 4. The licensee will continue working with city staff to meet liquor license compliance requirements. FINANCIAL OR BUDGET CONSIDERATION: Fees are set based on state statute and are only charged to the extent necessary to cover costs incurred by the city for services provided by Administrative Services, Police, and Inspections Departments and are budgeted each year to support the General Fund. VISION CONSIDERATION: Not Applicable Attachments: Resolution Prepared by: Nancy Stroth, City Clerk Reviewed by: Nancy Deno, Deputy City Manager/HR Director Reviewed by: Tom Scott, City Attorney Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4b) Page 3 Subject: Toby Keith Liquor License – Extension of Probation Status PROPOSED RESOLUTION NO. 11- _____ RESOLUTION AMENDING AND RESTATING RESOLUTION NO. 11-30 APPROVING ISSUANCE OF LIQUOR LICENSE RENEWAL WITH CONDITIONS FOR CRGE MINNEAPOLIS, LLC DBA TOBY KEITH’S I LOVE THIS BAR, 1623 PARK PLACE BOULEVARD FOR MARCH 1, 2011 THROUGH MARCH 1, 2012 WHEREAS, Minnesota Statutes Chapter 340A and St. Louis Park Ordinance Code Chapter 3 provide for liquor licensing in cooperation with the Alcohol and Gambling Enforcement Division of the Minnesota Department of Public Safety, and WHEREAS, no license may be issued or renewed if required criteria has not been met, and WHEREAS, City Ordinance Section 3-70 (g) allows the city to place the license of any on-sale intoxicating liquor licensee on probationary status for up to one year, when the sale of food is reported, or found to be, less than 50 percent of gross receipts for any business year, and NOW THEREFORE BE IT RESOLVED by the City of St. Louis Park City Council that the issuance of the on-sale intoxicating and Sunday liquor license for CRGE Minneapolis, LLC, dba Toby Keith’s I Love This Bar is hereby approved for March 1, 2011 to March 1, 2012 with the following conditions: 1. The licensee will be put on an extended probationary status for the remainder of the license term through March 1, 2012. 2. The license shall provide an interim report of food and liquor sales for the period of September 1, 2011 through November 31, 2011 by December 15, 2011. 3. Staff will report interim probationary results to Council in December 2011 and final probationary results again in February 2012 during the renewal process for council consideration of renewal of the liquor license. 4. The licensee will continue working with city staff to meet liquor license compliance requirements. Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk Meeting Date: November 7, 2011 Agenda Item #: 4c Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: West End Apartments – Reauthorization of Variance. RECOMMENDED ACTION: Motion to Adopt Resolution reauthorizing a variance for West End Apartments. POLICY CONSIDERATION: Does the City Council wish to re-authorize the variance relating to shadow regulations granted on September 7, 2010 for West End Apartments in order to grant the owner additional time to proceed with the development? DESCRIPTION OF REQUEST: The owner is requesting reauthorization of the variance in order to have more time to secure financing and obtain building permits for the development. BACKGROUND: City Council approved a PUD major amendment and a variance from the shadow provisions on September 7, 2010 to the property at 5310 16th Street West for the West End Apartments development. After the approvals, the applicant has been working diligently to secure financing for the development through the U.S. Department of Housing and Urban Development. That process has so far taken more than ten months and will not conclude until 2012. According to City Code and the variance approvals granted last year, the owner must complete the development, or obtain building permits and make continual progress to complete the development, within one year of the approval. The PUD major amendment does not have a similar requirement. The applicant requests a City Council resolution to reauthorize the variance, so that it is clear the City is willing to provide additional time for the development to proceed. The applicant has communicated with city staff several times over the past 14 months to report the status of the development and pursuit for financing. City staff finds that the owner is still actively pursuing the development, that circumstances have not changed since the variance was approved, and that there are no other violations of the conditions of approval. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. Attachments: Resolution Reauthorizing Shadow Variance for West End Apartments Applicant’s Letter Dated October 27, 2011 Prepared by: Sean Walther, Senior Planner Reviewed by: Meg McMonigal, Planning and Zoning Supervisor Kevin Locke, Community Development Director Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4c) Page 2 Subject: West End Apartments – Reauthorization of Variance RESOLUTION NO. 11-___ RESOLUTION REAUTHORIZING A VARIANCE AT 5310 16th STREET WEST WEST END APARTMENTS BE IT RESOLVED BY the City Council of St. Louis Park, Minnesota: Findings 1. City Council adopted Resolution 10-094 on September 7, 2010, granting a variance from Section 36-366(b)(1)g. of the Ordinance Code to permit a Planned Unit Development (PUD) to exceed the shadow regulations for property located at 5310 16th Street West and legally described as follows: Lot 3, Block 1, THE SHOPS AT WEST END, Hennepin County, Minnesota 2. The Zoning Code and a condition of approval required the work to be completed within one year of the variance approval, unless a building permit was obtained for the work and progress is being made to complete the improvements. 3. The Zoning Code also allows City Council to grant additional time to complete the work. Requests for additional time are required to be submitted 21 days before the deadline. 4. Construction has not started and a building permit has not been issued. The City did not receive a request for extension before one year had passed. 5. City Council also approved a PUD Major Amendment (Resolution 10-093) for the development on September 7, 2011 and a PUD Minor Amendment (Resolution 11-016) on January 18, 2011. The PUD approvals do not include a one-year deadline to complete work. 6. The property owner, WEA LLC, is requesting additional time to complete the development. 7. Circumstances surrounding the property have not changed substantially since the shadow variance was approved. 8. Except for the request for additional time to complete the development, there are no other violations of the City Code or variance approval. Conclusion 1. The shadow variance is hereby reauthorized subject to the following condition: a. Building permits shall be obtained and continuous progress shall be made to complete the development approved by Resolutions 10-093 and 10-094 by September 7, 2012. Additional time may be granted by the City Council in accordance with Zoning Code procedures. City Council Meeting of November 7, 2011 (Item No. 4c) Page 3 Subject: West End Apartments – Reauthorization of Variance The City Clerk is instructed to record certified copies of this resolution in the Office of the Hennepin County Register of Deeds or Registrar of Titles as the case may be. Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk City Council Meeting of November 7, 2011 (Item No. 4c) Subject: West End Apartments – Reauthorization of VariancePage 4 Meeting Date: November 7, 2011 Agenda Item #: 4d Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Acceptance of Donation to the Parks and Recreation Department. RECOMMENDED ACTION: Motion to approve Resolution accepting a donation from the Minnesota Cycling Team in the amount of $1,000 to be available for individuals who qualify for financial assistance through the Parks and Recreation Department. POLICY CONSIDERATION: Does the City Council wish to accept the gift with restrictions on its use? BACKGROUND: State Statute requires City Council’s acceptance of donations. This requirement is necessary in order to make sure the City Council has knowledge of any restrictions placed on the use of each donation prior to it being expended. The Minnesota Cycling Team has been using some of our trails and park system in St. Louis Park. To show their appreciation, they have sent a check to the department to use for our fee assistance program. The Minnesota Cycling Team is graciously donating to the Parks and Recreation an amount of $1,000. This donation is given to provide activities to individuals who are experiencing financial hardship. FINANCIAL OR BUDGET CONSIDERATION: This donation will assist the Parks and Recreation Dept in meeting needs of our residents. VISION CONSIDERATION: Collaboration with other organizations is related to the results of Vision St. Louis Park Strategic Directions stating that “St. Louis Park is committed to being a connected and engaged community”. Attachments: Resolution Prepared by: Stacy Voelker, Administrative Secretary Reviewed by: Cindy Walsh, Director of Parks and Recreation Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4d) Page 2 Subject: Acceptance of Donation to Parks and Recreation Department RESOLUTION NO. 11-___ RESOLUTION APPROVING ACCEPTANCE OF DONATION FROM THE MINNESOTA CYCLING TEAM IN THE AMOUNT OF $1,000 TO BE AVAILABLE FOR INDIVIDUALS WHO QUALIFY FOR FINANCIAL ASSISTANCE THROUGH THE PARKS AND RECREATION DEPARTMENT WHEREAS, The City of St. Louis Park is required by State statute to authorize acceptance of any donations; and WHEREAS, the City Council must also ratify any restrictions placed on the donation by the donor; and WHEREAS, the Minnesota Cycling Team desires to assist the Parks and Recreation Department’s Financial Assistance program with a donation of $1,000; and NOW THEREFORE BE IT RESOLVED, by the City Council of the City of St. Louis Park that the gift is hereby accepted with thanks to the Minnesota Cycling Team with the understanding it will be used toward activity fees for individuals who qualify for financial assistance. Reviewed for Administration Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk Meeting Date: November 7, 2011 Agenda Item #: 4e Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: MCWD Creek Restoration Project - Resolution of Support. RECOMMENDED ACTION: Motion to Adopt a Resolution in support of the Minnehaha Creek Watershed District’s Creek Restoration Project along Minnehaha Creek between Louisiana Avenue S. and Meadowbrook Road. POLICY CONSIDERATION: Does the Council support the Minnehaha Creek Watershed District project to restore a segment of Minnehaha Creek, including re-meandering the creek channel, improving future opportunities for pedestrian access, and constructing stormwater improvements? BACKGROUND: Over the past year, the City has been working with the Minnehaha Creek Watershed District (MCWD) on plans for the restoration of Minnehaha Creek between Louisiana Avenue S. and Meadowbrook Road. Through that stretch, the creek passes through an industrial area of St. Louis Park and was straightened and channelized during the early development of the City. To partially fund the project, the MCWD assisted the City in applying for grant funds from the Clean Water Legacy Grant, through the Minnesota Board of Soil and Water Resources. In late 2010, it was announced that the City had been named a grant recipient. At that time, MCWD engaged Interfluve, Inc., to begin design of the creek restoration project. Interfluve is an environmental engineering company; they worked on the creek restoration completed several years ago immediately to the west of Methodist Hospital. The creek restoration project was highlighted in a study session written report to the City Council on May 9th, 2011. The report was followed by a presentation to the Council by MCWD staff on July 11th, 2011. Issues raised by the City Council included provisions for year-round access to trails along the creek and the timing of their construction, and outreach to business owners within the study area to review opportunities for cooperation. Since that time, the MCWD held a neighborhood meeting on August 11th, where twelve residents and business owners were in attendance to provide input about the project. As the design for the creek restoration has progressed, there have been several important issues highlighted by City Staff, including:  The maintenance of City canoe landings during and after the creek restoration  Including an option for the future construction of a trail along Minnehaha Creek  The location and function of proposed stormwater improvements  Access and connectivity through the area, including consideration of the future LRT station at Louisiana Avenue S. City Council Meeting of November 7, 2011 (Item No. 4e) Page 2 Subject: MCWD Creek Restoration Resolution of Support The design for the creek restoration includes major ecological improvements for a wide variety of native plant, animal, and insect species, as well as water quality improvements that will improve water quality both within the creek corridor and downstream. It is hoped that the stormwater improvements associated with the project will reduce the need for future construction of stormwater infrastructure within the area. MCWD is moving forward this month to order the project, which would allow for construction to begin in 2012. Because the work is fully within the creek corridor, the work would take place in November-December of 2012; changes to the creek channel are easiest to construct when the ground is frozen and equipment can travel safely over the wetland areas adjacent to the creek. City Staff will remain involved as the project gets closer to construction. At this time, MCWD is asking for the City’s support of the project through a City Council Resolution of support. A graphic is attached depicting the proposed changes to the creek. FINANCIAL OR BUDGET CONSIDERATION: The creek restoration project is being funded by a Clean Water Legacy Grant and Minnehaha Creek Watershed District funds. The City was a partner with the MCWD in applying for grant funds. No City funds will be used on the current project. The project will make construction of a trail feasible along the Louisiana to Meadowbrook segment of the creek, which the City could fund in the future. VISION CONSIDERATION: The proposed creek restoration meets several Vision criteria, including goals for environmental improvement within the City, opportunities for additional sidewalk and trail connections, and increasing environmental consciousness and responsibility in all areas of city business. Attachments: Resolution Map – Project Area Prepared by: Adam Fulton, Planner Reviewed by: Meg McMonigal, Planning and Zoning Supervisor Kevin Locke, Community Development Director Cindy Walsh, Parks and Recreation Director Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4e) Page 3 Subject: MCWD Creek Restoration Resolution of Support RESOLUTION NO. 11-____ RESOLUTION IN SUPPORT OF THE MINNEHAHA CREEK WATERSHED DISTRICT’S CREEK RESTORATION PROJECT ALONG MINNEHAHA CREEK BETWEEN LOUISIANA AVENUE SOUTH AND MEADOWBROOK ROAD WHEREAS, the City of St. Louis Park is a partner with the Minnehaha Creek Watershed District and is supportive of the Watershed District’s goals for the creek within the City; and WHEREAS, the City was awarded a Clean Water Legacy Grant by the Minnesota Board of Water and Soil resources to partially fund a restoration project along Minnehaha Creek between Louisiana Avenue S. and Meadowbrook Road, allowing for the re-meander of the creek channel and the completion of stormwater improvements; and WHEREAS, the City seeks to support the Minnehaha Creek Watershed District in moving forward with construction of the Minnehaha Creek restoration project; and WHEREAS, the restoration project meets goals adopted by the City in its Comprehensive Plan that recognize Minnehaha Creek as a shared community asset; and WHEREAS, the City seeks opportunities to improve and maintain access to canoe landings along the creek, to incorporate trails along the creek where possible and to protect and improve the integrity of the creek by retaining and improving natural vegetation. NOW THEREFORE BE IT RESOLVED that the City Council of St. Louis Park, after appropriate examination and due consideration of the proposed improvements, expresses support for the reconstruction of Minnehaha Creek Reach 20-21, between Louisiana Avenue South and Meadowbrook Road. Reviewed for Administration Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk City Council Meeting of November 7, 2011 (Item No. 4e) Page 4 Subject: MCWD Creek Restoration Resolution of Support Meeting Date: November 7, 2011 Agenda Item #: 4f Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Special Assessment - Water Service Line Repair at 4000 Randall Avenue. RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the special assessment for the repair of the water service line at 4000 Randall Avenue, St. Louis Park, MN - P.I.D. 06-028-24-14-0014. POLICY CONSIDERATION: The proposed action is consistent with policy previously established by the City Council. BACKGROUND: John Brady, owner of the single family residence at 4000 Randall Avenue, has requested the City to authorize the repair of the water service line for his home and assess the cost against the property in accordance with the City’s special assessment policy. Analysis: The City requires the repair of service lines to promote the general public health, safety and welfare within the community. The special assessment policy for the repair or replacement of water or sewer service lines for existing homes was adopted by the City Council in 1996. This program was put into place because sometimes property owners face financial hardships when emergency repairs like this are unexpectedly required. Plans and permits for this service line repair work were completed, submitted, and approved by City staff. The property owner hired a contractor and repaired the water service line in compliance with current codes and regulations. Based on the completed work, this repair qualifies for the City’s special assessment program. The property owner has petitioned the City to authorize the water service line repair and special assess the cost of the repair. The total eligible cost of the repair has been determined to be $9,087.89. FINANCIAL OR BUDGET CONSIDERATION: The City has funds in place to finance the cost of this special assessment. VISION CONSIDERATION: Not applicable. Attachments: Resolution Prepared by: Scott Anderson, Utility Superintendent Through: Mike Rardin, Public Works Director Brian Swanson, Controller Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4f) Page 2 Subject: Special Assessment - Water Service Line Repair at 4000 Randall Avenue RESOLUTION NO. 11-____ RESOLUTION AUTHORIZING THE SPECIAL ASSESSMENT FOR THE REPAIR OF THE WATER SERVICE LINE AT 4000 RANDALL AVENUE, ST. LOUIS PARK, MN P.I.D. 06-028-24-14-0014 WHEREAS, the Property Owner at 4000 Randall Avenue has petitioned the City of St. Louis Park to authorize a special assessment for the repair of the water service line for the single family residence located at 4000 Randall Avenue; and WHEREAS, the Property Owner has agreed to waive the right to a public hearing, right of notice and right of appeal pursuant to Minnesota Statute, Chapter 429; and WHEREAS, the City Council of the City of St. Louis Park has received a report from the Utility Superintendent related to the repair of the water service line. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that: 1. The petition from the Property Owner requesting the approval and special assessment for the water service line repair is hereby accepted. 2. The water service line repair that was done in conformance with the plans and specifications approved by the Public Works Department and Department of Inspections is hereby accepted. 3. The total cost for the repair of the water service line is accepted at $9,087.89. 4. The Property Owner has agreed to waive the right to a public hearing, notice and appeal from the special assessment; whether provided by Minnesota Statutes, Chapter 429, or by other statutes, or by ordinance, City Charter, the constitution, or common law. 5. The Property Owner has agreed to pay the City for the total cost of the above improvements through a special assessment over a ten (10) year period at the interest rate of 5.85 %. 6. The Property Owner has executed an agreement with the City and all other documents necessary to implement the repair of the water service line and the special assessment of all costs associated therewith. Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk Meeting Date: November 7, 2011 Agenda Item #: 4g Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Special Assessment - Sewer Service Line Repair at 3941 Dakota Avenue South. RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the special assessment for the repair of the sewer service line at 3941 Dakota Avenue South, St. Louis Park, MN - P.I.D. 21-117-21-23-0042. POLICY CONSIDERATION: The proposed action is consistent with policy previously established by the City Council. BACKGROUND: David Nyberg, owner of the single family residence at 3941 Dakota Avenue South has requested the City to authorize the repair of the sewer service line for his home and assess the cost against the property in accordance with the City’s special assessment policy. Analysis: The City requires the repair of service lines to promote the general public health, safety and welfare within the community. The special assessment policy for the repair or replacement of water or sewer service lines for existing homes was adopted by the City Council in 1996. This program was put into place because sometimes property owners face financial hardships when emergency repairs like this are unexpectedly required. Plans and permits for this service line repair work were completed, submitted, and approved by City staff. The property owner hired a contractor and repaired the sewer service line in compliance with current codes and regulations. Based on the completed work, this repair qualifies for the City’s special assessment program. The property owner has petitioned the City to authorize the sewer service line repair and special assess the cost of the repair. The total eligible cost of the repair has been determined to be $5,450.00. FINANCIAL OR BUDGET CONSIDERATION: The City has funds in place to finance the cost of this special assessment. VISION CONSIDERATION: Not applicable. Attachments: Resolution Prepared by: Scott Anderson, Utility Superintendent Through: Mike Rardin, Public Works Director Brian Swanson, Controller Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4g) Page 2 Subject: Special Assessment – Sewer Service Line Repair at 3941 Dakota Avenue South RESOLUTION NO. 11-____ RESOLUTION AUTHORIZING THE SPECIAL ASSESSMENT FOR THE REPAIR OF THE SEWER SERVICE LINE AT 3941 DAKOTA AVENUE SOUTH, ST. LOUIS PARK, MINNESOTA P.I.D. 21-117-21-23-0042 WHEREAS, the Property Owner at 3941 Dakota Avenue South has petitioned the City of St. Louis Park to authorize a special assessment for the repair of the sewer service line for the single family residence located at 3941 Dakota Avenue South; and WHEREAS, the Property Owner has agreed to waive the right to a public hearing, right of notice and right of appeal pursuant to Minnesota Statute, Chapter 429; and WHEREAS, the City Council of the City of St. Louis Park has received a report from the Utility Superintendent related to the repair of the sewer service line. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that: 1. The petition from the Property Owner requesting the approval and special assessment for the sewer service line repair is hereby accepted. 2. The sewer service line repair that was done in conformance with the plans and specifications approved by the Public Works Department and Department of Inspections is hereby accepted. 3. The total cost for the repair of the sewer service line is accepted at $5,450.00. 4. The Property Owner has agreed to waive the right to a public hearing, notice and appeal from the special assessment; whether provided by Minnesota Statutes, Chapter 429, or by other statutes, or by ordinance, City Charter, the constitution, or common law. 5. The Property Owner has agreed to pay the City for the total cost of the above improvements through a special assessment over a ten (10) year period at the interest rate of 5.85%. 6. The Property Owner has executed an agreement with the City and all other documents necessary to implement the repair of the sewer service line and the special assessment of all costs associated therewith. Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk Meeting Date: November 7, 2011 Agenda Item #: 4h Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Special Assessment - Sewer Service Line Repair at 4073 Utica Avenue South. RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the special assessment for the repair of the sewer service line at 4073 Utica Avenue South, St. Louis Park, MN - PID 07-028-24-23-0078. POLICY CONSIDERATION: The proposed action is consistent with policy previously established by the City Council. BACKGROUND: Gregory and Tina Robertson, owners of the single family residence at 4073 Utica Avenue South, have requested the City to authorize the repair of the sewer service line for their home and assess the cost against the property in accordance with the City’s special assessment policy. Analysis: The City requires the repair of service lines to promote the general public health, safety and welfare within the community. The special assessment policy for the repair or replacement of water or sewer service lines for existing homes was adopted by the City Council in 1996. This program was put into place because sometimes property owners face financial hardships when emergency repairs like this are unexpectedly required. Plans and permits for this service line repair work were completed, submitted, and approved by City staff. The property owners hired a contractor and repaired the sewer service line in compliance with current codes and regulations. Based on the completed work, this repair qualifies for the City’s special assessment program. The property owners have petitioned the City to authorize the sewer service line repair and special assess the cost of the repair. The total eligible cost of the repair has been determined to be $2,500.00. FINANCIAL OR BUDGET CONSIDERATION: The City has funds in place to finance the cost of this special assessment. VISION CONSIDERATION: Not applicable. Attachments: Resolution Prepared by: Scott Anderson, Utility Superintendent Through: Mike Rardin, Public Works Director Brian Swanson, Controller Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4h) Page 2 Subject: Special Assessment – Sewer Service Line Repair at 4073 Utica Avenue South RESOLUTION NO. 11-____ RESOLUTION AUTHORIZING THE SPECIAL ASSESSMENT FOR THE REPAIR OF THE SEWER SERVICE LINE AT 4073 UTICA AVENUE SOUTH, ST. LOUIS PARK, MN P.I.D. 07-028-24-23-0078 WHEREAS, the Property Owners at 4073 Utica Avenue South have petitioned the City of St. Louis Park to authorize a special assessment for the repair of the sewer service line for the single family residence located at 4073 Utica Avenue South; and WHEREAS, the Property Owners have agreed to waive the right to a public hearing, right of notice and right of appeal pursuant to Minnesota Statute, Chapter 429; and WHEREAS, the City Council of the City of St. Louis Park has received a report from the Utility Superintendent related to the repair of the sewer service line. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that: 1. The petition from the Property Owners requesting the approval and special assessment for the sewer service line repair is hereby accepted. 2. The sewer service line repair that was done in conformance with the plans and specifications approved by the Public Works Department and Department of Inspections is hereby accepted. 3. The total cost for the repair of the sewer service line is accepted at $2,500.00. 4. The Property Owners have agreed to waive the right to a public hearing, notice and appeal from the special assessment; whether provided by Minnesota Statutes, Chapter 429, or by other statutes, or by ordinance, City Charter, the constitution, or common law. 5. The Property Owners have agreed to pay the City for the total cost of the above improvements through a special assessment over a ten (10) year period at the interest rate of 5.85%. 6. The Property Owners have executed an agreement with the City and all other documents necessary to implement the repair of the sewer service line and the special assessment of all costs associated therewith. Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk Meeting Date: November 7, 2011 Agenda Item #: 4i Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Lease Amendment No. 2 to City Agreement No. 1897 with New Cingular Wireless at EWT #4, 2541 Nevada Avenue South. RECOMMENDED ACTION: Motion to approve Amendment No. 2 to City Agreement No. 1897, between the City and New Cingular Wireless (Cingular, f.k.a. AT&T) for communication antennas on the city water tower at 2541 Nevada Avenue. BACKGROUND: Original Agreement In 1988, the City negotiated an antenna lease agreement with Cingular for placement of up to 8 communication antennas on our water tower. Cingular currently has 6 antennas on the water tower, located 131 feet above the ground. This was the first water tower antenna lease in the City and numerous others have occurred since. The agreement was for a 5-year term with the option of four renewable 5-year terms. The lease is currently in its 4rd term set to expire in 2013. Cingular has informed the City they are interested in extending the lease. At the time of expiration, the City intends to re-examine and renegotiate the terms of the lease. Amendment No. 1 In June 2001, Amendment No. 1 to the Agreement was approved revising some of the financial terms (CPI rent calculation) in Agreement No. 1897. Amendment No. 2 The existing Agreement allows for 8 antennas, with the amendment Cingular will be allowed to add 2 additional antennas (total of ten). Cingular is proposing to remove and replace the existing 6 antennas, located at a height of 131 feet above ground, with 9 antennas located in the same general locations on the water tower. In addition, Cingular is proposing to install a small GPS antenna mounted on their cable rack adjacent to the water tower approximately 15 feet above ground. FINANCIAL OR BUDGET CONSIDERATION: The financial terms of this agreement require monthly lease payments with a 3% annual rate increase. The current lease rate for 2011 is $1,097.47 per month increasing in 2012 to $1,130.21 per month. With the 2 additional antennas being installed under Amendment No. 2, the new rate for 2012 will increase to $1,731.04 per month. VISION CONSIDERATION: Not Applicable. Attachments: Amendment No. 2 to Contract No. 1897 Prepared by: Scott Merkley, Public Works Coordinator Reviewed by: Mike Rardin, Director of Public Works Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4i) Page 2 Subject: Lease Amendment # 2 to City Agreement #1897 - New Cingular Wireless at EWT #4 CITY OF ST. LOUIS PARK AMENDMENT NO. 2 TO WATER TOWER LEASE AGREEMENT CONTRACT NO. 1897 (New Cingular Wireless Site # MI-20 St. Louis Park) THIS AMENDMENT NO. 2 to Water Tower Lease Agreement (this “Amendment”) is entered into as of the 7th day of November, 2011, by and between the CITY OF ST. LOUIS PARK, a Minnesota municipal corporation hereinafter referred to as “Landlord”, and NEW CINGULAR WIRELESS PCS, LLC, a Delaware limited liability company, successor-in-interest to MINNESOTA CELLULAR TELEPHONE COMPANY, a Minnesota corporation (d/b/a Cellular One) hereinafter referred to as “Tenant”. WHEREAS, Landlord and Tenant entered into that certain Water Tower Lease Agreement dated December 13, 1988 and Amendment No. 1, dated June 4, 2001 (the “Agreement”); and WHEREAS, the existing Agreement allows for eight antennas and Landlord and Tenant desire to amend the Agreement to add two additional antennas (total of ten); and WHEREAS, Landlord and Tenant hereby express their mutual desire and intent to amend the Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, Landlord and Tenant hereby agree as follows: 1. Landlord and Tenant hereby acknowledge and agree that 6 existing antennas as described in Exhibit B to the Agreement will be replaced with 9 antennas (3 antennas at 80˚ east facing, 3 antennas at 200˚ south facing, and 3 antennas at 270˚ west facing) on the Water Tower at approximate height of 131’ above ground. In addition 1 GPS antenna will be installed on the ice bridge post between the equipment structure and the water tower at an approximate height of 15’ above ground. Antenna locations and locations of other equipment and associated cables are shown on the revised plans dated October 12, 2011. 2. The parties acknowledge that the current 2011Rent is One Thousand Ninety- Seven and 29/100 Dollars ($1,097.29) per month and currently scheduled 2012 Rent is One Thousand One Hundred Thirty and 21/100 Dollars ($1,130.21) per month. 3. Paragraph 3(01) of the Agreement is amended to read as follows: (01) Commencing January 1, 2012, Tenant shall pay Landlord, as rent, the sum of One Thousand Seven Hundred Thirty One and 04/100 Dollars ($1,731.04) per month (“Rent”). Rent shall be payable on the first day of each month in advance to the City of St. Louis Park at Landlord’s address specified in Paragraph 12 of the Agreement. City Council Meeting of November 7, 2011 (Item No. 4i) Page 3 Subject: Lease Amendment # 2 to City Agreement #1897 - New Cingular Wireless at EWT #4 4. The monthly rent of One Thousand Seven Hundred Thirty-One and 04/100 Dollars ($1,731.04) is subject to the three percent (3%) annual adjustment set forth in Amendment No. 1. 5. The color of the antenna and any equipment placed on the City's water tower shall at all times be painted and maintained, at the Tenant's expense, to match the color of the water tower or a color selected by the City's Director of Public Works. 6. The Tenant shall remove and dispose of all non-operating equipment on the site at the time the new antennas are installed. 7. The Tenant will be responsible for paying the cost of the consultant, hired by the City, for plan review and inspection services to ensure work is done to City standards. 8. In the event of any inconsistencies between the Agreement and this Amendment, the terms of this Amendment shall take precedence. Except as expressly set forth in this Amendment, the Agreement otherwise is unmodified, remains in full force and effect, and is incorporated and restated herein as if fully set forth at length. Each reference in the Agreement to itself shall be deemed also to refer to this Amendment. IN WITNESS WHEREOF, the parties below have caused this Amendment No. 2 to be executed as of the date first written above. CITY OF ST. LOUIS PARK NEW CINGULAR WIRELESS PCS, LLC By: AT&T Mobility Corporation ___________________________________ Its: Manager Jeffery W. Jacobs, Mayor By: ________________________________ ___________________________________ Name: ______________________________ Tom Harmening, City Manager Title: _______________________________ Attest: Date: _______________________________ __________________________________ Nancy Stroth, City Clerk Meeting Date: November 7, 2011 Agenda Item #: 4j Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Drainage Easement – 7301/7317 Lake Street West. RECOMMENDED ACTION: Motion to grant a drainage easement for 7301 / 7317 Lake Street West. POLICY CONSIDERATION: Does the City Council wish to approve a drainage easement to allow property located at 7301/7317 Lake Street West to drain into South Oak Pond located on City property at 7221 Lake Street West? DESCRIPTION OF REQUEST: The owners of the subject property are proposing to treat their storm water on their property, and then discharge the treated stormwater directly to the South Oak Pond. BACKGROUND: The property at 7301/7317 Lake Street West is the old Flame Metals property. It was recently purchased with the intent of remodeling and relocating Hardcoat Incorporated. As part of the remodel, Hardcoat will bring the parking lot and stormwater treatment into compliance with City Code and stormwater regulations. This entails constructing a large stormwater infiltration pond on the site. Typically the pond would outlet by stormwater pipe to the City’s stormwater system located in the public right-of-way. In this case, however, the public stormwater system located in Lake Street West outlets directly into the South Oak Pond, which is located directly adjacent to the new infiltration pond. Therefore, the property owner is asking to outlet directly into the pond, as opposed to constructing up to 490 feet of stormwater pipe to take the treated stormwater to the public stormwater system in Lake Street West. Taking the treated stormwater directly to South Oak Pond would save the property owner approximately $20,000. The City would typically allow a property to outlet directly into an adjacent pond without an easement. In this case, however, the property owner’s bank conditioned financing on the approval of an easement. So the easement is proposed to satisfy the bank’s condition. The proposed stormwater system and easement was reviewed and approved by the City Engineering Department, Community Development, Park & Recreation Department, and the City Attorney. The easement allows the property owner to install two stormwater outlets to South Oak Pond with the conditions that the City is not responsible for the outlets, and that any costs associated with removing, relocating or altering the outlets in the future is born by the property owner of 7301/7317 Lake Street West. City Council Meeting of November 7, 2011 (Item No. 4j) Page 2 Subject: Drainage Easement – 7301 / 7317 Lake Street West FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. Attachments: Location Map Proposed Easement Survey Showing Location of Easements Prepared by: Gary Morrison, Assistant Zoning Administrator Reviewed by: Meg McMonigal, Planning and Zoning Supervisor Kevin Locke, Community Development Director Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4j) Page 3 Subject: Drainage Easement – 7301 / 7317 Lake Street West Location Map Proposed Easement Proposed Easement Public Stormwater System RECIPROCAL EASEMENT (Storm Sewer) This Reciprocal Easement (“Easement”) is made and entered into as of the _____ day of ______________, 2011, by and between M&L Anodizing Properties, LLC, a Minnesota limited liability company (“M&L”), and City of St. Louis Park, a Minnesota municipal corporation (“St. Louis Park”). RECITALS: A. M&L is the fee owner of certain real property in St. Louis Park, Hennepin County, Minnesota legally described on Exhibit A attached hereto (“M&L Property”). B. St. Louis Park is the fee owner of certain real property adjacent to the M&L Property and legally described on Exhibit B attached hereto (“St. Louis Park Property”). C. M&L has requested an easement for storm sewer purposes over and across the St. Louis Park Property into the storm water basin to the east (“Storm Water Basin”) and St. Louis Park is willing to grant said easement to M&L. D. St. Louis Park has requested an easement for maintenance purposes over and across the M&L Property and M&L is willing to grant said easement to St. Louis Park. NOW, THEREFORE, in consideration of the Recitals, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, M&L and St. Louis Park hereby agree as follows: 1. Grant of Storm Sewer Easement. St. Louis Park hereby grants and conveys to M&L a perpetual easement for storm sewer purposes upon, over, under and through the portion of the areas legally described on Exhibit C attached hereto (the “Easement Parcels”) which are located on the St. Louis Park Property. The easement grants the right to survey, construct, and install storm sewers together with any and all necessary manholes, catch basins, connections, appliances and other structures and appurtenances as may be necessary to convey stormwater from the M&L Property into the stormwater system located on the St. Louis Park Property (collectively, the “M&L Drainage System”). City Council Meeting of November 7, 2011 (Item No. 4j) Subject: Drainage Easement – 7301 / 7317 Lake Street West Page 4 2. Grant of Maintenance Easement. M&L hereby grants and conveys to St. Louis Park and its agents a perpetual easement over the portion of the Easement Parcels located on the M&L Property for ingress, egress, and for the performance of storm sewer service and maintenance. 3. Initial Construction. M&L shall initially install, at its expense and according to plans approved by St. Louis Park, the M&L Drainage System. No modifications to the M&L Drainage System shall be made without the City’s written approval. 4. Maintenance. Upon completion of the initial installation of the M&L Drainage System, M&L shall thereafter perform, at its expense, all necessary repair, maintenance, replacement, reconfiguration and/or re-location of the System that may become necessary as a result of St. Louis Park’s operation or modification of the Storm Water Basin. 5 Failure to Maintain. In the event M&L fails to maintain the M&L Drainage System as required by this Agreement, St. Louis Park may, after written notice and reasonable opportunity to cure, perform such maintenance, and the costs thereof shall be promptly reimbursed by M&L to St. Louis Park. 6. Request to Redirect Drainage. If the use of the Storm Water Basin is discontinued, M&L agrees, at its cost, to re-route its drainage into St. Louis Park’s storm sewer system running along Lake Street immediately to the north of the M&L Property, if necessary. 7. Continuous Access. Neither M&L nor St. Louis Park shall do or permit anything on or to the Easement Parcels which may impede, limit or restrict the flow of drainage and storm water in accordance with the approved M&L Drainage System through the Easement Parcel. 8. Run with the Land. This easement will run with the title to the M&L Property and the St. Louis Park Property and is binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 9. Authority. M&L and St. Louis Park each represents to the other that all necessary approvals have been obtained for such party to enter into this Agreement, and that the persons signing this document have been duly authorized to do so and to thereby bind the entity for which such person is signing. 10. Counterparts. This Agreement may be executed and delivered by original signature or facsimile, and in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. City Council Meeting of November 7, 2011 (Item No. 4j) Subject: Drainage Easement – 7301 / 7317 Lake Street West Page 5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. M&L Anodizing Properties, LLC By _________________________ Its _________________________ City of St. Louis Park By ________________________ Its Mayor By ________________________ Its City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this ____ day of _____________, 2011, by ______________________, the _____________of M&L Anodizing Properties, LLC, a limited liability company under the laws of Minnesota, on behalf of said company. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 2011, by ______________________, the Mayor of the City of St. Louis Park, a municipal corporation under the laws of Minnesota, on behalf of said corporation. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of _____________, 2011, by ______________________, the City Manager of the City of St. Louis Park, a municipal corporation under the laws of Minnesota, on behalf of said corporation. Notary Public This instrument was drafted by: Gray, Plant, Mooty, Mooty & Bennett, P.A. 500 IDS Center 80 South Eighth Street Minneapolis, MN 55402 City Council Meeting of November 7, 2011 (Item No. 4j) Subject: Drainage Easement – 7301 / 7317 Lake Street West Page 6 EXHIBIT A M&L Property LEGAL DESCRIPTION: Parcel 1: All of Lot 17, Block 161, Parcel 2: That part of the Northwesterly 100 feet of Lot 16, Block 161, lying Southwesterly of the Southeasterly extension of a line running parallel with and 90.75 feet Northeasterly of the Southwesterly line of Lot 18, said Block 161. Parcel 3: Lot 19, Block 161, "Rearrangement of St. Louis Park", together with that part of vacated South Street, accruing thereto, Hennepin County, Minnesota. Parcel 4: That part of Lot 18, Block 161, "Rearrangement of St. Louis Park", lying southwesterly of a line parallel with and distant 10 feet southwesterly, measured radially from the centerline of spur track I.C.C.260 of the Chicago, Milwaukee, St. Paul and Pacific Railroad Company and the former Minneapolis and St. Louis Railway Company (now the Chicago and Northwesterly Railway Company), as same track is now located, and lying Southwesterly of a line parallel with and distant 10 feet Southwesterly, measured at right angles, from the Southeasterly extension of the tangent segment of said spur tract, Hennepin County, Minnesota. PARCEL 4 NOW KNOWN AS: That part of Lot 18, Block 161, "Rearrangement of St. Louis Park" lying southwesterly of the following described line: Commencing at the Northwest corner of said Lot ·18; thence North 64 degrees 40 minutes 20 seconds East, assumed bearing, along the northwesterly line of said Lot 18 a distance of 89.54 feet to the point of beginning of the line to be herein described; thence South 26 degrees 53 minutes 09 seconds East 197.06 feet; thence South 26 degrees 32 minutes 08 seconds East 191.02 feet to the Southeasterly line of said Lot 18 and there terminating. Said point of termination is 90.75 feet Northeasterly from the southwest corner of said Lot 18 as measured along the Southeasterly line of said Lot 18. Portion of property not stated on description is that part of vacated South Street adjacent to Lot 17 is considered to be accrued by vacation and is included as part of subject parcel. City Council Meeting of November 7, 2011 (Item No. 4j) Subject: Drainage Easement – 7301 / 7317 Lake Street West Page 7 EXHIBIT B St. Louis Park Property COM AT INTERSEC OF NWLY LINE OF IRWIN MANDEL NEIL BODERMAN ADDN WITH SWLY LINE OF LOT 5 BLK 160 RGT OF ST LOUIS PARK TH ON AN ASSUMED BEAR- ING OF S 44 DEG 44 MIN 41 SEC W DIS 136.6 FT TO ACTUAL PT OF BEG TH N 45 DEG 15 MIN 19 SEC W TO SLY R/W LINE OF CHI MIL ST P & P RR TH NWLY TO MOST NLY COR OF LOT 1 BLK 161 RGT OF ST LOUIS PARK TH SWLY ALONG NWLY LINE OF SAID LOT 1 AND ITS SWLY EXTENSION TO A LINE DRAWN PAR WITH AND 10 FT SWLY FROM CTR LINE OF SPUR TRACK 1CC 260 OF C M ST P & P RR TH SELY ALONG SAID PAR LINE TO PT OF CURVE TO THE RT TH CONT SELY PAR WITH THE TANGENT OF SAID CURVE TO THE SELY LINE OF NWLY 100 FT OF LOT 16 OF SAID BLK 161 TH SWLY ALONG SAID SELY LINE TO ELY LINE OF LOT 17 BLK 161 TH SLY ALONG SAID ELY LINE AND ITS SLY EXTENSION TO THE CTR LINE OF VAC 2ND ST S TH NWLY ALONG SAID CTR LINE TO S LINE OF EDGEBROOK DR TH WLY TO NW COR OF LOT 18 BLK 57A RGT OF ST LOUIS PARK TH SELY TO MOST SLY COR THOF TH NELY TO MOST SLY COR OF IRWIN MANDEL NEIL BODERMAN ADDN TH NWLY ALONG SWLY LINE THOF TO MOST WLY COR THOF TH NELY TO BEG City Council Meeting of November 7, 2011 (Item No. 4j) Subject: Drainage Easement – 7301 / 7317 Lake Street West Page 8 EXHIBIT C Easement Parcels A 20.00 foot strip of land for Utility Easement purposes over, under and across that part of Lot 18, Block 161, "Rearrangement of St. Louis Park", Hennepin County, Minnesota, which lies 10.00 feet on each side of and adjacent to the following described centerline: Commencing at the Northwest comer of said Lot 18; thence North 64 degrees 40 minutes 20 seconds East, assumed bearing, along the northerly line of said Lot 18 a distance of 89.54 feet; thence South 26 degrees 53 minutes 09 seconds East 59.59 feet; thence South 63 degrees 25 minutes 36 seconds West 51. 14 feet to the point of beginning of said centerline; thence North 63 degrees 25 minutes 36 seconds East 81.17 feet to the northeasterly line of said Lot 18 and there terminating. The sidelines of said strip are lengthened or shortened to intersect the northeasterly line of said Lot 18. A 20.00 foot strip of land for Utility Easement purposes over, under and across that part of Lots 16 and 17, Block. 161, "Rearrangement of St. Louis Park", Hennepin County, Minnesota, which lies 10.00 feet on each side of and adjacent to the following described centerline: Commencing at the southwest corner of Lot 18 said Block 161, "Rearrangement of St. Louis Park"; thence along the southeasterly line of said Lot 18 on an assumed bearing of North 63 degrees 27 minutes 52 seconds East 90.75 feet; thence South 26 degrees 32 minutes 08 seconds East 100.00 feet; thence South 63 degrees 27 minutes 52 seconds West 25.71 feet; thence South 89 degrees 56 minutes 23 seconds West 57.58 feet to the point of beginning of said center line; thence North 89 degrees 56 minutes 23 seconds East 86.50 feet and there terminating. The sidelines of said strip intersect a line drawn perpendicular to said centerline from the point of beginning and the point of termination of said centerline. GP:3025634 v3 City Council Meeting of November 7, 2011 (Item No. 4j) Subject: Drainage Easement – 7301 / 7317 Lake Street West Page 9 City Council Meeting of November 7, 2011 (Item No. 4j) Subject: Drainage Easement – 7301 / 7317 Lake Street West Page 10 Meeting Date: November 7, 2011 City Council Agenda Item #: 4k Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Traffic Study Number 627: Authorize the Installation of Parking Restrictions along the North Frontage Road of County Road 25 from Ottawa Avenue to Raleigh Avenue. RECOMMENDED COUNCIL ACTION: Motion to Adopt Resolution authorizing parking restrictions along the North Frontage Road of County Road 25 from Ottawa Avenue to Raleigh Avenue. POLICY CONSIDERATION: Does the City Council wish to authorize the installation of the parking restrictions as noted in this staff report? The proposed action is consistent with City policy. BACKGROUND: Recently, the Police Department has shared some concerns about access along the north frontage road of County Road 25, near Skippy Field, particularly on game nights. Currently, there are no restrictions on either side of the frontage road, and when cars park on both sides of the road it can be very difficult to get a vehicle through. The frontage road is narrow, at approximately 22 feet wide. This area is also near the emergency vehicle access to County Road 25, an important access for the Police Department. Staff from Public Works, Police, and Parks and Recreation has discussed this issue. Parks initially had some concern about restricting parking along the frontage road, as the area is heavily used for parking during games at Skippy Field. However, after clarifying that the head-in parking bay adjacent to Skippy Field would not be affected, and that there is excess parking available in the City Hall upper lot in the evenings, Parks is comfortable with restricting parking along the frontage road. Parks has discussed the parking restriction with Little League officials, who have also seen dangerous situations due to heavy parking on the frontage road, and they are supportive of the change. Parks will create a map and work with Little League to send out parking instructions for their participants, directing them to areas where they can park (both on- street and in City Hall lots). The proposed restrictions would read “No Parking,” and be posted along the south side of the North Frontage Road of County Road 25, from Ottawa Avenue South to Raleigh Avenue South (see map). Staff is recommending Council approve the attached resolution authorizing the installation of “No Parking” restrictions on the south side of the North Frontage Road of Highway 25, from Ottawa Avenue South to Raleigh Avenue South. The North Frontage Road of County Road 25 is a county road, and staff from Hennepin County have been notified of these parking restrictions. City Council Meeting of November 7, 2011 (Item No. 4k) Page 2 Subject: TS # 627: Authorize Installation of Parking Restrictions Cty Rd 25 and Ottawa FINANCIAL OR BUDGET CONSIDERATION: The cost of enacting these controls is minimal and will come out of the general operating budget. VISION CONSIDERATION: None. Attachments: Resolution Map Prepared by: Laura Adler, Engineering Program Coordinator Reviewed by: Scott A. Brink, City Engineer Michael Rardin, Director of Public Works Cindy Walsh, Director of Parks & Recreation Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 4k) Page 3 Subject: TS # 627: Authorize Installation of Parking Restrictions Cty Rd 25 and Ottawa RESOLUTION NO. 11-___ RESOLUTION AUTHORIZING INSTALLATION OF “NO PARKING” RESTRICTIONS ON THE SOUTH SIDE OF THE NORTH FRONTAGE ROAD OF COUNTY ROAD 25 FROM OTTAWA AVENUE SOUTH TO RALEIGH AVENUE SOUTH TRAFFIC STUDY NO. 627 WHEREAS, the City of St. Louis Park, Minnesota has been requested, has studied, and has determined that the following traffic controls meet the requirements of the City’s policy for installation of parking restrictions. NOW THEREFORE BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that the Director of Public Works is hereby authorized to install the following controls: 1. “No Parking” on the south side of the North Frontage Road of County Road 25 from Ottawa Avenue South to Raleigh Avenue South. Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk City Council Meeting of November 7, 2011 (Item No. 4k) Subject: TS # 627: Authorize Installation of Parking Restrictions Cty Rd 25 & OttawaPage 4 Meeting Date: November 7, 2011 Agenda Item #: 4l OFFICIAL MINUTES OF AUGUST 25, 2011 BOARD OF ZONING APPEALS CITY OF ST. LOUIS PARK The St. Louis Park Board of Zoning Appeals conducted a meeting on August 25, 2011, St. Louis Park City Hall, 5005 Minnetonka Boulevard, St. Louis Park, Minnesota – Council Chambers. Members Present: Susan Bloyer, Ryan Burt, Paul Roberts Members Absent: James Gainsley, Henry Solmer Staff Present: Gary Morrison, Assistant Zoning Administrator Nancy Sells, Administrative Secretary 1. CALL TO ORDER – ROLL CALL Vice-Chair Bloyer called the meeting to order at 6:10 p.m. 2. APPROVAL OF MINUTES OF JULY 28, 2011 Commissioner Roberts made a motion to approve the minutes of July 28, 2011. The motion passed on a vote of 3-0. 3. CONSENT AGENDA: None 4. PUBLIC HEARINGS A. Variance: Side Yard Setback Location: 3976 Princeton Ave. S. Applicant: Jon and Anne Gotte Case No.: 11-17-VAR Gary Morrison, Assistant Zoning Administrator, presented the staff report. He explained that the applicants would like to build a two car garage addition to the house with living space above at a 1.8 ft. variance to the 4.8 ft. interior side setback. He said these numbers are a little different than what appears in the staff report because applicants have reviewed their proposal and they are proposing changes to the plan to help accommodate some of the concerns raised in the report. He said he would present the original application and then will review the changes proposed by the applicant. Mr. Morrison said the proposed addition is along the north property line. They are proposing to remove the one car garage and replace it with a two car tandem garage. They are also proposing a living space addition in the back and above the entire addition. The house to the north is approximately 20 feet from the side property line so there will be a total of 23 feet wall to wall if this addition were approved as proposed. The total addition length is 44 feet from front to back. City Council Meeting of November 7, 2011 (Item No. 4l) Page 2 Subject: Board of Zoning Appeals Minutes August 25, 2011 Mr. Morrison reviewed existing garage conditions on the block. All of the properties on the block have detached garages except for three, including the applicant’s one car attached garage. Mr. Morrison showed pictures of the back yard. The back yard is relatively open and flat, with a little bit of grade change towards the back. He spoke about the effect of the proposal on the neighbor to the north. The proposed 2-story addition would be 2.2 ft. off the property line and would cast some shade in what is a good portion of the neighbor’s open space. In looking at the whole block, Mr. Morrison showed areas which identify a reasonable open use area for each of the properties. Mr. Morrison discussed the revisions proposed by the applicant. They have proposed to move the north wall 8 inches so it is 3 ft. from the property line, the standard minimum, reducing the total garage width from the proposed 14 ft. to just over 13 feet. They also propose to reduce the total depth from 44 ft. to 40 ft. He explained that 40 feet of building wall is allowed at the minimum setback. By reducing it to 40 feet it helps at least to meet the intent of the code in that there will be a minimum amount of wall allowed at the minimum setback distance. Mr. Morrison stated the applicant is proposing to move the second story over so that it meets the 5 ft. setback. That will reduce the shadow effect on the neighboring property. Mr. Morrison stated that in looking at the existing conditions survey, even though the house is 4.8 ft. from the property line and the district minimum is 5 ft., the code allows the applicant to add on to the house and maintain that 4.8 ft. setback without a variance for a total length of 40 ft. That addition can be a second story addition, also. Without a variance they can build a second story addition to the home 4.8 ft. off the property line. By proposing to change their plan so that the second story is moved to meet the 5 ft. setback, the second story meets code. The only variance would be for a two-car garage. Mr. Morrison said that addresses most of the concerns raised by staff as far as impact on the neighboring property. It still leaves open the idea that most of the properties in the area have detached garages and this property could accommodate a garage in the backyard and still have room for an addition to the home to accommodate their living space. He went on to say they can still build a kitchen off the back, they might lose a bedroom, or a laundry room, but the whole master suite could be moved over and built over the kitchen below and built over the existing family room. They can get most of what they want upstairs and have a detached garage in the backyard. He said staff has to point out a detached garage as a viable option for the property, especially since detached garages are common for the neighborhood. Mr. Morrison stated that staff finds that the proposed garage and living space as modified would not block sunlight and air to adjoining properties any more than an addition that meets all setbacks would, and that a 3 ft. side setback is the minimum setback that will provide a reasonable and safe access to the side of the house and backyard. He added that the proposed addition is not reasonable in size for this lot only because they are proposing the 3-bedroom plus additional full master suite, an office, a second bath, and a full laundry room all upstairs. If they can rearrange it so that it meets all the setbacks that is fine, but to grant a variance to allow all of that is something that staff is a little concerned about. City Council Meeting of November 7, 2011 (Item No. 4l) Page 3 Subject: Board of Zoning Appeals Minutes August 25, 2011 Mr. Morrison noted that a detached two-car garage can be constructed in the backyard without variances. Detached garages are typical for the neighborhood, and in addition to the detached garage, a reasonable size addition can be constructed without variances. Mr. Morrison concluded by saying based on the review, staff is still recommending denial of the requested variance for a 4.8 ft. sideyard for the proposed attached garage. Commissioner Burt asked if the revised second story would be moved back a little bit and would shorten the addition by 4 ft., why would that be unreasonable when the first plan was found to be reasonable in size for the neighborhood. Mr. Morrison replied that was a good point and it could be made reasonable in size. Vice-Chair Bloyer opened the public hearing. Jon Gotte, applicant, stated he and his wife Anne moved to St. Louis Park four years ago. They looked extensively in the Twin Cities for a neighborhood to live in. He said they love their St. Louis Park neighborhood and their goal is to stay on Princeton Ave. and raise their family. They’ve already invested a lot of time and resources to develop a plan which best meets the needs of their growing family, while being thoughtful to neighbors and respectful to ordinances. Mr. Gotte said based on staff’s concerns, he and Anne met with Brian Collins, their builder, to proactively address the questions and concerns. A new set of plans are being drawn. He said he wanted to explain how their request is reasonable and required in order to expand the current home to accommodate their growing family. Mr. Gotte said the request meets the 5 ft. setback on the top of the tandem garage. He said they are meeting the length requirement of 40 ft. and all height requirements. The revised variance request is only for the 3 ft. setback on the garage itself which seems to be a commonly granted and reasonable variance request. He added it was granted as recently as July, 2011 to Edwin Hollen, based on the staff report. Mr. Gotte addressed reasons why they need the living space above the garage. He said the lot is abnormally narrow, the width is 50 ft. which is about 16% less than the district minimum of 60 ft. Building in the way that staff suggests in terms of using a two car garage and building over the existing spaces is unreasonable as it would create a boxy, bowling alley feeling to the property. It would be very long and narrow, reduce the amount of natural light, reduce functional space and aesthetic appeal, and reduce long term resale value. He stated that the three season porch cannot be built on from an architectural standpoint in the way that staff suggests. Brian Collins, Brico Construction, the applicant’s builder, said in his professional opinion the footings and foundation of the porch addition do not meet his requirements to add a second story addition which would be structurally sound for the lifetime of the home. Mr. Gotte said for these reasons it would create an aesthetic which is neither financially or architecturally recommended. City Council Meeting of November 7, 2011 (Item No. 4l) Page 4 Subject: Board of Zoning Appeals Minutes August 25, 2011 Mr. Gotte said in response to the staff recommendation regarding extending and building over the current garage without a variance requirement, this isn’t an option as the current garage and garage door are too small. The current garage door is 8 ft. and most SUVs and vans can’t fit into the garage. He said they have two small children and they are unable to use the garage in its current state. They park in the driveway or road, exposing the children and the vehicles to the elements. Mr. Gotte spoke about why they feel it is unreasonable to locate a 2-car garage in the backyard. Adjusting for usable driveway and 2-car detached garage they would lose approximately 40% of the backyard on an already small lot. He said the lot is 7,147 sq. ft. which is 53 ft. less than the minimum lot size. Building a detached 2-car garage would result in the smallest amount of greenspace on the block which they feel is unreasonable and untenable for a growing family. Mr. Gotte said they feel their request for an addition is reasonable and also meets the stated St. Louis Park move-up vision and housing strategy. Commissioner Burt asked the applicant about the difficulty of using a tandem garage. Mr. Gotte responded if they had a bigger lot a tandem garage would probably not be their first choice. But the tandem garage seems to be the right solution for the property. Vice Chair Bloyer asked if it would be possible to reinforce the footings of the sunporch. Steve Kennedy, 3964 Princeton Ave., spoke about the layout of his own driveway and detached 2-car garage. He said the aerial view doesn’t show that it is a severe downhill driveway to the garage. Snow has to go uphill to move it. The result is the little tiny spot behind the garage is next to useless. A large driveway area is required to make garage access more useable and not have to back up the hill. He said he would not like the Gottes to contend with the same mess that he has. He said he loves the house, it’s a great house, and the downhill driveway is probably no more putzy getting around in than a tandem garage, but yet the Gottes would have the benefit of all the green space preserved. Mr. Kennedy said he is fully supports the Gotte’s request. They shared all the plans with him. He thanked the board for the variance process. Mr. Collins said a detached garage would require the elimination of the existing 1-car attached garage. The house with the 12 ft. garage is 38 ft. Elimination of the existing garage would decrease the house to 26 ft., making a very small looking house. He said what they are trying to produce with the new garage is a very nice architecturally detailed front elevation which will make the neighborhood even more attractive. Mr. Collins said the porch footings could be underpinned and shored up from the interior at great cost, without adding much value to the home. If an addition was built above the porch, it would eliminate a bedroom window. Eliminating a bedroom window is not an ideal choice. City Council Meeting of November 7, 2011 (Item No. 4l) Page 5 Subject: Board of Zoning Appeals Minutes August 25, 2011 Betsy Rechand, 3975 Princeton, lives right across the street from the Gottes. She said she is very comfortable with the plans and would welcome the Gottes to enhance their house in that way. She said it would be good for the neighborhood. She hopes the Gottes will stay in St. Louis Park. Mr. Collins made additional comments about the plan revisions. As no one else was present wishing to speak, Vice Chair Bloyer closed the public hearing. Commissioner Burt said he had a procedural question. He asked if there was an actual revised variance request. He asked if the proposed request is for a 1.8 ft. variance to the required 5.6 ft. side yard setback requirement. Mr. Morrison responded the request is for a 1.8 ft. variance to the required 4.8 ft. side setback. The setback has changed because the previous proposal had a 44 ft. long wall. With that gone and the total length now 40 ft., the basic setback requirement is 4.8 ft. To get that down to 3 ft. a 1.8 ft. variance is needed. Commissioner Burt asked if staff is comfortable moving forward without drawings of the revised proposal. Mr. Morrison replied he is comfortable moving forward as long as the Board defines parameters. Commissioner Burt said he was inclined to agree with the staff recommendation of denial for the initial request. He said he was inclined to support the revised variance, recognizing the applicant’s efforts to meet code. He added that he is especially bothered by the reduction of green space in the backyard for a detached garage. He concluded by saying that he believes it would be unreasonable and expensive to shore up the porch footings for an addition above. Commissioner Roberts said he agreed with Commissioner Burt. He was not in favor of granting a variance for the initial request. The revised proposal allows space for emergency personnel, space for utility work, and a reduction in the size of the wall. He said the lot itself does present somewhat of a hardship. Vice Chair Bloyer said she agreed with Commissioners Burt and Roberts. She said the narrow lot is a hindrance. She spoke about the City’s goal of move-up housing. She said she supports preserving green space, especially for a household with children. She added that there are a lot of little hindrances adding up on this request rather than just one factor. Commissioner Roberts recited conditions: it’s a variance for a 1.8 ft. variance on the north end of the property for the garage, the side wall of the addition can be no more than 40 ft., the 2nd story of the addition should be a 5 ft. setback, any future additions must meet the zoning regulations, and construction all to be in accordance with the exhibits as amended. City Council Meeting of November 7, 2011 (Item No. 4l) Page 6 Subject: Board of Zoning Appeals Minutes August 25, 2011 Commissioner Roberts made a motion to adopt a resolution approving the variance request for a 1.8 ft. side setback for the garage, noting the side wall on the north should be no more than 40 ft., the 2nd story addition should be a 5 ft. setback from the property line, all future additions must meet the zoning regulations at the time future additions are proposed, and the addition shall be constructed in accordance with the exhibits as amended. The motion passed on a vote of 3-0. 5. Unfinished Business 6. New Business 7. Communications A. Mr. Morrison said there is a possibility of an appeal of a staff decision on September 22nd. 8. Adjournment The meeting was adjourned at 6:50 p.m. Respectfully submitted, Nancy Sells Administrative Assistant Meeting Date: November 7, 2011 Agenda Item #: 4m OFFICIAL MINUTES Parks and Recreation Advisory Commission Meeting September 14, 2011 -- 7 p.m. 1. Call to Order Tom Worthington, Vice Chair, called the meeting to order at 7:02 p.m. Commission members present: Jim Beneke, Sophia Flumerfelt, George Foulkes, Steve Hallfin, Kirk Hawkinson and Tom Worthington Commission members absent: Christina Barberot and George Hagemann Staff present: Cindy Walsh, Parks and Recreation Director, Jim Vaughan, Environmental Coordinator, and Stacy Voelker, Administrative Secretary Guests present: None. Members introduced themselves and welcomed Sophia Flumberfelt, new student member. 2. Presentation: None. 3. Approval of Minutes a. June 22, 2011 It was moved by Commission member Hawkinson seconded by Commission member Beneke to approve the Minutes. Motion passed 6 – 0. 4. New Business a. Environmental Update (Jim Vaughan, Environmental Coordinator)  Applying for grant to establish picnic areas along Minnehaha Creek Mr. Vaughan explained to the Commission there are currently three canoe landings off Minnehaha Creek in St. Louis Park located at Knollwood/Target area, Creekside Park and by Louisiana Avenue. The City owns land along the Creek and feels it would be beneficial to add rest stops for people canoeing which would include a picnic table and/or park bench, garbage cans and educational signage. Members viewed proposed locations by Mr. Vaughan. The proposed locations are by Boone Avenue South / 34th Street and another by Wood Lane. Both areas are nice, away from the canoe landings, and accessible via the Creek and land for maintenance. Mr. Vaughan will apply for a grant through the Minnehaha Creek Cynthia Krieg Grant. Mr. Worthington suggested adding QR codes to signage also. Mr. Foulkes inquired on the cost for picnic table to which Mr. Vaughan quoted approximately $300 each. The picnic areas may be of interest for dedicated tables or benches, suggested Mr. Foulkes. City Council Meeting of November 7, 2011 (Item No. 4m) Page 2 Subject: Parks & Recreation Advisory Commission Minutes September 14, 2011 Members briefly discussed and ensured adjoining neighbors would be involved in discussions prior to composing. Members were in favor of moving forward with grant application.  Minnehaha Creek remeander update Mr. Vaughan advised the Minnehaha Creek Watershed District (“MCWD”) postponed the Creek meandering project as they want to ensure the project plans are in order. The same plan is proposed, just delayed until next winter.  Evergreen Award The Evergreen Award, Mr. Vaughan explained, is an award presented for landscapes that are extraordinary. Businesses and residential areas can be nominated for the award. Eight nominations were received this year with three awards to be presented at the September 19th Council meeting. Winners receive an award plus an evergreen tree. Ms. Walsh encouraged anyone interested in judging the award next year, to contact Mr. Vaughan. Ms. Flumerfelt inquired if the award is only for landscapes in front yards and Mr. Vaughan advised it’s generally for the area that’s visible but encourages nominations for any area of a yard.  Sphagnum Moss use at Twin Lakes The MCWD added Sphagnum Moss via baskets in Twin Lakes on a trial basis, indicated Mr. Vaughan. The water is filtered through these baskets before going into a sediment pond. The MCWD feels the addition to the lakes is beneficial but will obtain official results from a future study. Staff feels this procedure may assist with other ponds also and to keep at Twin Lakes permanently. Mr. Vaughan indicated a floating island, with plants, was added to a pond off I-394, in Minneapolis, to help with water filtering.  Tree disease and weed update Tree disease has been down this year, Mr. Vaughan indicated. This year staff marked 297 for Dutch Elm disease of which 136 were on private property, 68 on public property, 78 on public property that were non-elm and 15 on public property that were Ash trees. Many residents are still injecting elms which help. Emerald Ash Borer has traveled around the state but not present in St. Louis Park, advised Mr. Vaughan. The traps in St. Louis Park have not captured any Emerald Ash Borer. Shoreview is the only area in the metro that had noticed a new EAB presence. Mr. Vaughan indicated tree bags have been included in new plantings and park plantings to assist in the dry weather. Another tree disease that has been seen in the metro area is Bur Oak Blight (BOB) which affects mature Bur Oaks. There is also a chemical injection that can be used on this disease. City Council Meeting of November 7, 2011 (Item No. 4m) Page 3 Subject: Parks & Recreation Advisory Commission Minutes September 14, 2011 Mr. Vaughan suggested it has been an interesting year for weed control. Anything over 6” tall and/or noxious weeds must be cut or removed. There is an increase this year in notices due to an increase in foreclosed homes. The main challenge is to locate the responsible party on foreclosed property. In 2010, 300 citations were issued; this year staff has issued 280 citations to date. This year our contractor had to mow 57 lots. Mr. Hallfin inquired on what weeds are considered noxious. Mr. Vaughan indicates a list of noxious weeds are mandated by the state annually and listed on the Minnesota Department of Agriculture’s website. Mr. Worthington inquired on the coyote population in St. Louis Park. Mr. Vaughan advised calls of sightings continue which may increase with cool weather although the population has decreased in the Nature Center. b. Splash Pad Operating Recap Ms. Walsh provided an overview of this year’s changes implemented at the Oak Hill Splash Pad. The policy change was provided to numerous groups in various methods a month prior to opening. The Splash Pad was staffed from 9 a.m. to 4 p.m. July 1 – September 2. Approximately 39 groups (of 7 or more individuals) attended the splash pad during the period listed above. Fees in the amount of $5,400 were collected from these groups which exceeded expectations. The anticipated conflicts were minimal; very little negative feedback on the new policy was received from groups. It was determined that June 18 through August 17 were high use times and will be staffed next year. Mr. Hawkinson inquired on weekly attendance versus weekends. Ms. Walsh indicated attendance was much higher during the week due to day care, day camp outings, etc. Many residents in area expressed appreciation of the new policy. c. City Council Meeting Follow-up At the City Council meeting to discuss Commission goals, the City Council expressed their thanks and provided some ideas Ms. Walsh indicated. The Council expressed their desire to keep up with environmental stewardship and may ask the Commission to facilitate on other events. A joint meeting with Community Ed Advisory Committee (“CEAC”) was suggested by members and concluded Mr. Beneke could assist facilitating this meeting. The meeting will occur when it’s time to discuss facility recreation survey/planning. The results from the Decision Resources survey concurred with the recent facility survey. Council would like to move ahead and set up tours to see a few facilities. Staff will set up an outing to tour facilities in Eden Prairie, Chaska, and Plymouth. Staff plans to set up outing in October. PRAC and Council candidates will be invited when details are known. The members were advised that adjacent to the Plymouth Creek Center is a turf facility with dome which includes indoor walking track. The dome is down in the summer and up in winter to create a year-round facility. Various activities and sports utilize the turf in the dome. Important factors that need to be reviewed are trends Ms. Walsh advised. Trends, along with demographics and diversity changes, are important to view and follow. The population in the city is aging. Staff may invite someone to the City to inform on trends City Council Meeting of November 7, 2011 (Item No. 4m) Page 4 Subject: Parks & Recreation Advisory Commission Minutes September 14, 2011 and determine how to create a space that will fit those trends in 15-20 years. Ms. Walsh will pursue and may partner with the state association. Mr. Beneke inquired on the status of the visitor center. Ms. Walsh indicated there is a new convention and visitor bureau funded by the lodging tax and John Basil was hired as the new executive director the center. 5. Old Business a. Staff Appreciation Lunch Discussion Mr. Worthington reminded members the luncheon will be held Thursday, September 29, 2011 from 11:30 a.m. – 12:30 p.m. Members reviewed supply list from past year and discussed who was bringing certain items. 6. Staff Reports Ms. Walsh advised members the City Council discussed proposed trail and sidewalk project and authorized staff to move forward with the projects. Timelines, locations, and north/south connections will be added to the plan and brought back to Council. Mr. Worthington inquired on the Aquatic Park season to which Ms. Walsh advised the season was great. Rain days were minimal and staff was outstanding. The remaining leaks in the Aquatic Park were fixed the following week after it closed, indicated Ms. Walsh. Annually, staff will pressure test the main lines prior to the opening of the Aquatic Park. Can the Aquatic Park remain open longer, Mr. Beneke inquired? The Aquatic Park season dates are discussed annually, Ms. Walsh advised, but the primary reason the closing date is chosen is due to the loss of staff. Most staff are school-age so they leave for college or high school. Another reason for the chosen closing date is it was part of necessary budget cuts in 2009. After that time, staff reviewed calculations which indicate that beginning mid-August, the Aquatic Park loses money every day as daily admissions are less and concession purchases are less. Staff and the City Manager will discuss the option of staying open longer in the season. Following the Aquatic Park closure this year, staff was approached by the high school to host a large pre-season swim meet. The meet was held in the Aquatic Park the day after the pool closed, Ms. Walsh indicated. The event generated private rental revenue along with concession revenue. Mr. Hallfin indicated the Patch and Sun Sailor included good write-ups on the swim meet. Staff would like to continue this event in future years. Mr. Hawkinson inquired if staff could use the sewer camera from utilities to find leak in pool. Ms. Walsh indicated the camera was used but could not see hairline cracks in pipes. 7. Other / Future Agenda Items Ms. Walsh suggested starting regular meetings at 6:30 p.m. Members discussed and agreed to begin meetings at 6:30 p.m. starting in October. October meeting agenda will include annual calendar and future goals. City Council Meeting of November 7, 2011 (Item No. 4m) Page 5 Subject: Parks & Recreation Advisory Commission Minutes September 14, 2011 Mr. Hawkinson inquired why the trees on the corner of W. 36th Street were removed and what will be going into that area. The trees in that area were unhealthy and will be replaced by healthy trees, indicated Mr. Vaughan. Ms. Walsh noted an assisted living/care center will be added in that area. Mr. Hawkinson inquired on Cavalia. Members briefly discussed. Mr. Hallfin advised running for City Council. Members thanked for service to Commission. Ms. Flumerfelt indicated she attends Benilde-St. Margaret’s School and briefed members on her interests. 8. Adjournment It was moved by Commission member Hallfin seconded by Commission member Hawkinson to adjourn at 8:24 p.m. The motion passed 6 - 0. Respectfully submitted, Stacy Voelker Stacy Voelker Recording Secretary Meeting Date: November 7, 2011 Agenda Item #: 4n City of St. Louis Park Human Rights Commission Minutes – September 20, 2011 Westwood Room, City Hall I. Call to Order Chair Tomback called the meeting to order at 7:02 p.m. A. Roll Call Commissioners Present: Darla Aman, Lordia Fok, Joseph Glaab, Emily Goldstein, Jeff Mueller and Mary Tomback Commissioners Absent: Brian Johnson and Alison Knoche Prosser Staff: Lt. Lori Dreier and Amy Stegora-Peterson B. Approval of Agenda It was moved by Commissioner Fok, seconded by Commissioner Mueller, to approve the agenda as presented. The motion passed 6-0. C. Approval of Minutes It was moved by Commissioner Fok, seconded by Commissioner Glaab, to approve the minutes of July 19, 2011, as presented. The motion passed 6-0. II. Commissioner and Committee Reports A. Individual commissioner and staff reports Chair Tomback noted that the City Council had approved a membership change for the HRC to be decrease to nine members with two student members (whoever is in attendance can vote). The Commission will also need to vote on a new vice-chair at an upcoming meeting. Lt. Dreier indicated a bias crime had been reported and was still under investigation, but will probably be charged. It was a verbal assault against a Somali person. The Commission will follow up by sending a letter after the investigation is complete. III. Select Bullying Them Slogan Commissioners in attendance agreed to have the following slogan: Bullying: Step up so others won’t get stepped on. We are one Community. One People. One St. Louis Park. City Council Meeting of November 7, 2011 (Item No. 4n) Page 2 Subject: Human Rights Commission Minutes September 20, 2011 IV. Film Committee Update Chair Tomback indicated Commissioner Johnson was attending the movie, “The Bullying Project” this evening and was going to gather more information from the Director who would be attending. It is something they can possibly consider for the following year. Commissioner Johnson viewed another film that looked good and was contacting people about possibly using that film. They will probably run the film in spring or next fall. V. Lecture Subcommittee Chair Tomback suggested they find something that ties this together with the Bullying topic and can get a lot of people engaged (not just school specific). They can look at personality types and how bullying transcends into the next decades. Commissioners Goldstein and Fok agreed to work on the sub committee to come up with discussion topics and ways to present to schools and outside of schools in the community. Commissioners wanted to reach out to kids first. Chair Tomback agreed to contact the High School Principal and School Board to get their feedback and suggestions on how they might want to approach the subject. VI. New Business - None VII. Adjournment The meeting was adjourned at 7:44 p.m. Respectfully submitted, Amy L. Stegora-Peterson Recording Secretary Meeting Date: November 7, 2011 Agenda Item #: 4o OFFICIAL MINUTES PLANNING COMMISSION ST. LOUIS PARK, MINNESOTA OCTOBER 5, 2011--6:00 p.m. COUNCIL CHAMBERS MEMBERS PRESENT: Claudia Johnston-Madison, Dennis Morris, Richard Person, Carl Robertson and Larry Shapiro MEMBERS ABSENT: Lynne Carper and Robert Kramer STAFF PRESENT: Meg McMonigal, Adam Fulton, Amy Stegora-Peterson 1. Call to Order – Roll Call 2. Minutes: September 21, 2011 Commissioner Robertson made a motion to recommend approval of the minutes of September 21, 2011. Commissioner Morris seconded the motion, and the motion passed on a vote of 5-0. 3. Hearings A. Plan by Neighborhood – Amendment to Comprehensive Plan Applicant: City of St. Louis Park Case No.: 11-22-CP Meg McMonigal, Planning and Zoning Supervisor, presented the staff report. This process began in spring 2009 and eight neighborhood meetings were held. There was good participation and input from residents and businesses and approximately 150 people attended the meetings. Those who attended the meetings were able to fill out a survey, which was also available on-line. Neighborhoods were grouped into seven geographical areas for the meetings. Concerns included: walkability, traffic calming, noise and light issues, enhancing natural areas and open space, expansion of bike routes, improving and expanding commercial nodes, retain and attract small businesses, compatibility between industrial and residential areas, improving access from neighborhoods to the North Cedar Lake Regional Trail and neighborhood identity and gathering spaces. Notice of the amendment will be sent to the Met Council, neighboring communities and other agencies. Neighborhood leaders had also received notice of the meeting. Next steps include City Council approval. Chair Johnston-Madison stated this was one of the nicest Comprehensive Plan components and was very detailed. Is there a way the study about the Health of the City can be incorporated into part of the Comprehensive Plan? Ms. McMonigal replied that assessment was evaluating our Comprehensive Plan and there are many of those components in there. They are trying to integrate that into everything they do and working with active living and active communities. City Council Meeting of November 7, 2011 (Item No. 4o) Page 2 Subject: Planning Commission Minutes October 5, 2011 Chair Johnston-Madison opened the public hearing. As no one was present wishing to speak, the Chair closed the public hearing. Commissioner Morris made a motion to recommend approval of the Comprehensive Plan Amendment updating the Plan by Neighborhood chapter to the City’s Comprehensive Plan. Commissioner Person seconded the motion, and the motion passed on a vote of 5-0. 4. Other Business Ms. McMonigal noted two public hearings are scheduled for the October 19th meeting. Commissioners Carper, Kramer and Shapiro are unable to attend, so the Commission needs to have a quorum for the meeting. 5. Communications 6. Adjournment The meeting was adjourned 6:12 p.m. Respectfully submitted, Amy Stegora-Peterson Recording Secretary Meeting Date: November 7, 2011 Agenda Item #: 8a Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: 2012 Employer Benefits Contribution. RECOMMENDED ACTION: Motion to approve Resolution establishing 2012 Employer Benefits Contribution. POLICY CONSIDERATION: Does Council wish to approve the recommended amount for the 2012 employer contribution? BACKGROUND: This report details the City’s benefits planned for 2012, and staff’s recommendation for setting the employer contribution for 2012. Medical Insurance: The City has been insured through Blue Cross/Blue Shield since 2007. A renewal quote from BCBS for 2012 initially came in with an approximate 26% increase. Through many negotiations, we were able to get the renewal down to a 13.7% increase. During these negotiations, the City requested informal proposals from other vendors. HealthPartners responded with a very favorable proposal at approximately a 0% aggregate renewal, with substantially similar plan design, networks and benefits. The City has a Benefits Committee that consists of employees represented by all departments and all union groups. The purpose of the Committee is to help educate staff on benefits and to get a pulse on what our staff is interested in seeing in our benefits design. As in past years, benefit information was reviewed with the Benefits Committee. After analysis of the available proposals, the Committee recommended to accept the quote from HealthPartners. 2012 Medical Insurance Monthly Premiums (Aggregate 0% Increase for 2012) $30-Copay 2011 2012 Single $ 550.50 $ 535.50 Employee + Spouse $1,211.00 $1,178.00 Employee + Child(ren) $1,156.50 $1,124.00 Family $1,543.00 $1,499.00 High Deductible (VEBA) 2011 2012_ Single $ 420.00 $ 431.00 Employee + Spouse $ 924.00 $ 949.00 Employee + Child(ren) $ 880.50 $ 905.00 Family $1,174.50 $1,207.00 City Council Meeting of November 7, 2011 (Item No. 8a) Page 2 Subject: 2012 Employer Benefits Contribution A Refresher on VEBAs: The City continues to offer a Health Reimbursement Arrangement (HRA) with a VEBA funding mechanism in coordination with the High Deductible Health Plan. Funds from the employee’s monthly employer contribution will be placed in a VEBA trust in an individual’s name available for reimbursement of eligible medical expenses. VEBA funds not spent will stay with the individual and roll over each year for future expenses. VEBA funds are set aside tax free, earn tax free interest, and are reimbursed tax free. The VEBA account stays with the individual even after they leave employment and can be used for reimbursement of qualified medical expenses. Dental Insurance: We are a member of an alliance of cities who bid on dental rates together. We were required to request bids in 2011 and stayed with Delta Dental. 2012 will be the second year of our rate guarantee so we will have no rate increase or plan changes. Dental is a voluntary program for our employees. 2012 Monthly Dental Rates with Delta Dental (0% Increase) 2011 2012 Single $42.35 $42.35 Family $96.25 $96.25 Life Insurance: We are pleased to continue our life insurance program through Prudential Life with no rate increase for 2012. In our basic life insurance plan, all employees receive a mandatory benefit of $10,000 and a supplemental option to purchase additional insurance up to $500,000 as well as spouse and dependent life insurance. Exempt employees are provided with an additional basic insurance amount of 1.5 times their salary. Long Term Disability (LTD): LTD is a voluntary benefit for our non-exempt employees and is provided to our exempt employees at no cost. We did request proposals this year for 2012 insurance and received a favorable proposal from our current carrier, The Hartford, for 2012 and 2013 with a slight rate decrease. There are no changes to the plan designs for 2012 - 2013. Long Term Care (LTC): LTC is a new voluntary benefit that was offered in September, 2010 to our staff. Long Term Care Insurance provides coverage for employees and spouses who may need nursing home, assisted living, home health, or other care. Coverage is provided through the Municipal Pool and rates are set for the entire group. Employees who participate in this program are required to pay the full premium. Deferred Compensation: The City offers four deferred compensation programs (457 plans). Deferred compensation is a program that allows employees to invest today for retirement. Federal and (in most cases) state income taxes are deferred until assets are withdrawn, usually during retirement when employees may be in a lower tax bracket. This is a voluntary program for employees. Recommendation for 2012 Employer Contribution: Due to favorable rates for all our benefit offerings in 2012, staff recommends that no increase be provided for the monthly employer contribution. In 2011, the monthly employer contribution City Council Meeting of November 7, 2011 (Item No. 8a) Page 3 Subject: 2012 Employer Benefits Contribution was set at $815 per month, and it is pro-rated for part-time employees. It is recommended that this amount continue unchanged in 2012. As a reminder, Council has approved a Wellness Incentive program (Resolution 11-045) for 2012 which will provide an additional $25 per month to employees who complete certain required wellness and preventive health activities in 2011. FINANCIAL OR BUDGET CONSIDERATION: The amount recommended for approval of the employer contribution for benefits (insurance) has been included in the 2012 budget. VISION CONSIDERATION: Not Applicable Attachments: Resolution Prepared by: Ali Fosse, HR Coordinator Reviewed by: Nancy Deno, Deputy City Manager Approved by: Tom Harmening, City Manager City Council Meeting of November 7, 2011 (Item No. 8a) Page 4 Subject: 2012 Employer Benefits Contribution RESOLUTION NO. 11-____ RESOLUTION ESTABLISHING 2012 EMPLOYER BENEFITS CONTRIBUTION WHEREAS, the City Council has established a benefit plan that provides an effective means for providing employee group benefits; and WHEREAS, the City Council establishes rates and plans for each calendar year; and WHEREAS, the administration of such plans will be in accordance with plan documents as approved by the City Manager, who will also set policy and procedures for benefit level classification and administration of plans. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park: 1. Effective January 1, 2012, the monthly contribution of benefit dollars from the City for non-union regular employees, including the City Manager, who work at least 30 hours per week, be set at $815 per month (no change from 2011). 2. Effective January 1, 2012, the monthly contribution of benefit dollars from the City for non-union regular employees working 20 through 29 hours per week shall be set at 50% of the full time monthly contribution. 3. Employees are eligible for Wellness Incentive dollars in 2012 as approved by Resolution 11-045. 4. Employees who choose to waive health insurance coverage will have the highest single premium less $50 (or the entire employer contribution, whichever is less) deducted from their monthly employer contribution in accordance with City policy. 5. The City will continue to administer other benefit programs. 6. The appropriate City officials are hereby authorized and directed to deduct the balance of any sum premium from the compensation of an employee or officer and remit to the insurer under an approved contract the employee’s or officer’s share of any such premium. Reviewed for Administration: Adopted by the City Council November 7, 2011 City Manager Mayor Attest: City Clerk