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HomeMy WebLinkAbout2011/01/10 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA JANUARY 10, 2011 (Sue Sanger Out) 6:30 p.m. CITY COUNCIL STUDY SESSION – Council Chambers Discussion Items 1. 6:30 p.m. Future Study Session Agenda Planning – January 24, 2011 2. 6:35 p.m. 2011 Annual Legislative Update 3. 7:50 p.m. Storm Water/Surface Water Management 4. 9:20 p.m. Communications / Meeting Check-in (Verbal) 9:25 p.m. Adjourn Written Reports 5. Business Terms of Development Contract between the EDA and CKJ Properties, LLC - 3540 Dakota Ave. South (former Bikemasters Building) 6. Highway 7 / Louisiana Avenue Interchange Project Update 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 Date: January 10, 2011 Agenda Item #: 1 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: Future Study Session Agenda Planning – January 24, 2011. RECOMMENDED ACTION: Council and the City Manager to set the agenda for the regularly scheduled Study Session on January 24, 2011. POLICY CONSIDERATION: Does the Council agree with the agendas as proposed? BACKGROUND: At each study session, approximately five minutes are set aside to discuss the next study session agenda. For this purpose, attached please find the tentative agendas and proposed discussion items for the study session scheduled for January 24, 2011. FINANCIAL OR BUDGET CONSIDERATION: None. VISION CONSIDERATION: None. Attachment: Future Study Session Agenda Planning January 24, 2011 Prepared by: Kris Luedke, Office Assistant Approved by: Tom Harmening, City Manager Study Session Meeting of January 10, 2011 (Item No. 1) Page 2 Subject: Future Study Session Agenda Planning Closed Executive Session, Monday, January 24, 2011 – 6:30 p.m. 1. City Manager Evaluation Study Session, Monday, January 24, 2011 – 7:30 p.m. Tentative Discussion Items 1. Future Study Session Agenda Planning – Administrative Services (5 minutes) 2. Community Check-in on Vision St. Louis Park – Administrative Services (15 minutes) At a September meeting the Council directed that the City do a “Community Check-In” on the 2006 Vision process and the four adopted Strategic Directions. This study session discussion will entail staff outlining a proposed process to be undertaken later this spring. 3. 2011 City Council Workshop – Administrative Services (30 minutes) The Council’s annual workshop is scheduled for March 11 and 12. To allow for preparation of this workshop staff would like to discuss with the Council the makeup of the agenda. 4. Bidding & Construction Project Management 101 – Public Works/City Attorney (90 minutes) The purpose of this discussion is to provide Council with basic information on public sector project development, bidding, and construction management processes and answer questions on these topics which were raised at the September 20, 2010 study session. 5. Communications/Meeting Check-in – Administrative Services (5 minutes) Time for communications between staff and Council will be set aside on every study session agenda for the purposes of information sharing. Reports: • Freight Rail Update • 2011 Community Development Block Grant • Industry Wireless Internet Services • Microsoft Home Use & E-Learning Programs • Park Nicollet Redevelopment Contract Amendment • W. 44th St. Reconstruction Project Update • Highway 100 Reconstruction Project Update End of Meeting: 9:55 p.m. Meeting Date: January 10, 2011 Agenda Item #: 2 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: 2011 Annual Legislative Update. RECOMMENDED ACTION: No formal action requested. Staff has prepared a list of legislative issues for Council’s annual review and discussion with Hennepin County Commissioner Gail Dorfman, Representative Steve Simon, Representative Ryan Winkler, and Senator Ron Latz, POLICY CONSIDERATION: Staff has attached a draft of 2011 legislative issues for the Council’s consideration and discussion with the city’s legislators. • Does the Council agree with the legislative issues identified in the attachment regarding priorities for 2011? • Is there anything else the City Council would like staff and our legislative delegation to pursue? • Does the Council wish to continue retaining legislative consulting assistance for 2011 to help promote the city’s state and federal legislative agenda? BACKGROUND: Staff has prepared the attached preliminary list of legislative issues for the discussion with our legislators. As has been the case in previous years, as the 2011 legislative session progresses, additional issues may come to light. It has been our practice to retain lobbying services to help us with legislative and regulatory issues. Administrative Services has utilized the legislative services of Doug Franzen and Vic Moore, Franzen & Associates, and Dennis McGrann and Emily Tranter of Lockridge, Grindal, and Nauen. Mr. Moore, Mr. Franzen and Ms. Tranter will be a part of this discussion and available for questions. FINANCIAL OR BUDGET CONSIDERATION: Funding for our lobbyists is included in the EDA budget. VISION CONSIDERATION: Promoting regional transportation issues and securing transportation funding is aligned with the Council’s Strategic Direction of being a Connected and Engaged Community. Attachments: 2011 Legislative Issues and Priorities (Draft) Prepared by: Tom Harmening, City Manager Study Session Meeting of January 10, 2011 (Item No. 2) Page 2 Subject: 2011 Annual Legislative Update City of St. Louis Park 2011 Legislative Issues and Priorities 1. TH 100 Full Build Project Purpose: To keep the TH 100 Full Build Project funded and on track for its proposed 2015 bid letting date. Status: The TH 100 project is among several other identified “expansion” projects in the metro area that are being “rescoped”. Recently Mn/DOT held a community meeting to present several different options for a rescoped project. If a rescoped project proceeds, it will be on a smaller scale than originally proposed by MnDOT. Mn/DOT is still working on the revised configuration and staff estimates that the final design will cost approximately $75 million, which is half of the original project cost. The current schedule identified by Mn/DOT for this project is as follows: Public Open House December 2010 Selection of a Preferred Alternative January 2011 Final Geometric Layout June 2011 Public Open House June 2011 Municipal Consent Approval Process July - December 2011 Revise Final Geometric Layout (as needed) January 2012 Develop Construction Plans and Specifications January 2012 - September 2015 Open Bids November 2015 Construction 2016 thru 2018 Background: The 2006 interim project added a third lane in each direction by decreasing lane widths from 12 feet to 11 feet and eliminating or severely reducing shoulders along that stretch of highway. The third lane is required for the full build project so that MnDOT can keep a minimum of two lanes open in each direction during construction. Improvements not included as a part of the interim project include construction of the noise walls, which MnDOT agreed to construct no later than 2015, expansion of lane widths, construction of on/off ramps, and bridge and storm water improvements. Bridges spanning TH 100 at Hwy 7 and Hwy 5, and storm sewers conveyance systems have no more than 10-15 years of useful life left and are deteriorating. In addition, there are approximately 20 residents who live in uncertainty because their homes are within the future right-of-way of the new project. 2. Grade Separated Crossing Project at Highway 7 & Louisiana Avenue Purpose: To secure approximately $11 - $12 million in funding to allow for the construction of a $22 million grade separated intersection (interchange) at Highway 7 and Louisiana Avenue. Study Session Meeting of January 10, 2011 (Item No. 2) Page 3 Subject: 2011 Annual Legislative Update Status: The project is programmed to be constructed in 2012, and would provide for a grade separated interchange. This project will not only mitigate congestion and accidents at the intersection itself, but will accommodate further growth and redevelopment in the immediate area, including current expansion at Methodist Hospital, a future nearby light rail station, and other adjacent redevelopment activity. The City of St. Louis Park has received a$7.63 million grant from the Metropolitan Council and Transportation Advisory Board in accordance with the federal Surface Transportation Program (STP) for the construction of this grade separated crossing. In accordance with grant requirements, the City is required to provide a local match to the STP funds noted above in the amount of $2,398,000. In addition, Mn/DOT has committed $594,000 to the project through its Cooperative Agreement program and $1,000,000 through its Access Management program. If this project is not under construction in 2012 the City likely will lose all of the STP and Mn/DOT funding described above. Securing the remaining funding for this project is critical. Background: The city owns most of the property or right-of-way in all four quadrants of the intersection. The city has undertaken significant design work for this project and has narrowed the design concepts down to one. At this time the Environmental Assessment process and Preliminary Design activities are being completed for the project. Final design is expected to start this spring with plan completion and right-of-way acquisition completion by year end. All final project documents must be submitted to Mn/DOT and FHWA for approval and bid authorization by March 31, 2012. 3. I-394/TH 100 Collector-Distributor Roads Purpose: To secure $1.8 million of a required $2.4 million to make improvements to the eastbound and westbound lanes of the TH 100 Commuter-Distributor Road at I-394. Status: The cities of Golden Valley and St. Louis Park, in partnership with Mn/DOT, have been working to find a solution to the congestion and flow of traffic in the vicinity TH 100 and I-394. This project is supported by Mn/DOT but is not in their current list of projects due to funding constraints. Background: The Trunk Highway 100 & Interstate 394/Xenia Avenue/Park Place Boulevard Collector-Distributor Road Improvement Project will benefit residents in St. Louis Park and the metropolitan region by improving the safety of the east and west bound traffic flow on I-394 and in the vicinity of Park Place and Xenia Avenue, as well as on TH 100. The traffic analysis indicates that the TH 100 Collector-Distributor (C-D) Road currently operates poorly in the eastbound and westbound directions during the morning and evening peak periods. Further analysis for year 2027 conditions indicate operations will continue to worsen based on normal growth of regional trips to a service level of E-F. To mitigate for this, an additional eastbound and westbound lane on the TH 100 C-D Road needs to be constructed to bring this area into acceptable levels of service. Study Session Meeting of January 10, 2011 (Item No. 2) Page 4 Subject: 2011 Annual Legislative Update 4. Reassignment of Bonding Bill Proceeds Purpose: To allow the $700,000 in capital bonding bill proceeds approved by the State Legislature in 2006 for the Glencoe Railroad Mitigation Project to be reallocated for other purposes of benefit to the City of St. Louis Park. Status: The Glencoe Railroad Mitigation project has not progressed largely due to the inability to obtain the remaining funding for this approximate $4.2 million project. Significant efforts were undertaken by the City to obtain the remaining funding thru Congress and the FRA to no avail. Given that, the bonding bill proceeds will not be spent on this project by this year, the State requires the allocation of the funds be eliminated. It is proposed that as part of the upcoming capital bonding bill package that these dollars be identified for some other purpose of benefit or interest to the City. Background: In 2001, the St. Louis Park Railroad Advisory Task Force recommended that the Twin Cities and Western Railroad (TC&W) blocking operations be eliminated in St. Louis Park, Hopkins and Minnetonka and relocated to a new switch yard west of the three cities. The cities of St. Louis Park, Hopkins and Minnetonka worked together on this project in partnership with the TC&W. One funding strategy employed was to request the State to help contribute to the cost of this project. With the strong support and efforts of our state legislators $700,000 was approved in the 2006 capital budget bill. However, there is a sunset by which these dollars have to be spent, which we are now facing. 5. Other Legislative Issues of Concern Levy Limits During the 2008 legislative session, levy limits were imposed on cities over 2,500 population for three years (2009 -2011). Levy limits replace local accountability with a state judgment about the appropriate level of local taxation and local services. Additionally, state restrictions on local budgets can have a negative effect on a city’s bond rating due to the restriction on revenue flexibility. Levy limits also fail to account for the decertification of tax increment financing districts. Upon decertification, the property taxes that were formerly collected and used to support the public improvements in the TIF district can no longer be collected at the same rate and used to support ongoing general city operations. Levy limits are currently not in place for 2012 and the City would ask legislative support for not extending the levy limit provision. Redistricting Wards in St. Louis Park The City of St. Louis Park, along with at least ten other cities throughout the state, will be required to adopt new ward boundaries this year under current state law (Minn. Stat. § 204B.135, subdivision 1) even if state legislative redistricting has not yet been completed. The League of Minnesota Cities (LMC) is seeking an amendment to this statute to allow St. Louis Park and the other affected cities to re-establish ward boundaries once legislative redistricting has been accomplished. This will make it possible for affected cities to avoid the necessity to re-adjust ward boundaries twice to comply with requirements that precinct boundaries not cross legislative district lines. The City is requesting legislative support for the amendment being proposed by the LMC. Study Session Meeting of January 10, 2011 (Item No. 2) Page 5 Subject: 2011 Annual Legislative Update Variances In June 2010 the Minnesota Supreme Court issued a decision in a Minnetonka landuse dispute that dramatically affects the ability of cities to issue zoning variances. Specifically, the Court’s decision in the case of Krummenacher v. City of Minnetonka changed the longstanding interpretation of the statutory standard for granting zoning variances. The Court narrowly interpreted the statutory definition of “undue hardship” and held that a variance could only be issued in circumstances where there is not a reasonable use of the property absent the grant of the variance. This is a much stricter standard than previous court interpretations and it severely limits municipal discretion. The Supreme Court stated that “unless and until the Legislature takes action to provide a more flexible variance standard for municipalities, we are constrained by the language of the statute to hold that a municipality does not have the authority to grant a variance unless the applicant can show that her property cannot be put to a reasonable use without the variance.” The City supports legislation that gives cities greater authority and discretion to grant zoning variances to respond to the unique land use needs of particular communities. Fiscal Disparities The City has been a net contributor (also known fiscal disparities “loser”) to the fiscal disparities pool for some time. Given extensive redevelopment and stronger commercial/industrial property values than most other metro area communities, the City’s contribution to the fiscal disparities pool for 2011 has increased by $1.54 million, or 125% from 2010. This creates additional burdens on local property tax payers to pay for local services. In 2010, legislation was passed to require an analysis of the fiscal disparities program. The study is being conducted by the Commissioner of Revenue and is due February 12, 2012 HF3434/SF2968 – Building Official Duty of Care and Liability This bill, which would establish that a local government owes a special duty of care for the protection of private property and its owner, was initiated last session but did not get a hearing. Although the initial language was crafted in response to a septic system that failed after inspection, discussion occurred that it could be easily changed to include all types of inspections a city performs. This would be a potential liability concern for any city performing Construction Code or Property Maintenance inspections. Inspections are currently performed for the public good and provide the city a general level or immunity in case of oversight or errors. HF2781/SF2510 – Plumbing Inspection by Licensed Plumbers This requirement was initially included in a Department of Labor (DLI) bill and would require that only a licensed plumber could perform plan review and inspection of any plumbing work. The provision was removed last year but will probably return in some other bill at some time. If ever passed, this requirement would significantly reduce the efficiency and service delivery of inspections within the city. While we currently employ a licensed plumber within one of our Construction Code inspector positions, many of the residential plumbing inspections are completed by a combination inspector (with building official and with plumbing competency certifications). Requiring trades people to perform inspections is a move away from professional multi-disciplined inspectors and could mean adding staff, as we would lose the ability for an inspector to review plumbing along with mechanical or building systems during an inspection. Additionally, it would mean multiple inspection appointments for a homeowner remodeling their basement, as separate inspectors would be required. An option for some cities would be turning plumbing permitting, revenue, and inspection over to the State DLI, resulting in a loss of local service and assistance. Study Session Meeting of January 10, 2011 (Item No. 2) Page 6 Subject: 2011 Annual Legislative Update Right of Entry for Inspection The potential for a bill limiting a cities ability to enter dwelling units for rental licensing or time- of-sale inspection (both property maintenance) could occur as a result of litigation in Red Wing. Since court decisions to date have supported current laws allowing entry for public health and safety inspection programs, one way for individual property right advocates to proceed would be an attempt to change the law. While unaware of any pending language, the effect on city inspection program effectiveness could be significant. Changes in Pawn Shop Regulations and Oversight There have been a number of discussions during recent legislative sessions driven by pawn shop operators and their representatives suggesting the need for less regulation of pawn shops. The use of the APS (Automated Pawn System) is an effective tool for police agencies to monitor property accepted at pawn shops. This system allows police departments to locate and return stolen property and deter the commission of crimes which are predicated on the ability to obtain cash from pawn shops. The ability of cities such as St. Louis Park to have ordinances regulating pawn shop operations by requiring APS participation is critical to our ability to effectively monitor pawn shop activity. Recent action taken by the City of Burnsville appears to be the template for what may be proposed in upcoming legislation. While the precise language of any proposed legislation is not available at this time, based on discussions with city staff from other communities it is believed legislation to de-regulate pawn shops may be proposed this year. Changes in Forfeiture Laws/Regulations The actions of the now defunct Gang Strike Force brought this issue into the legislature during the last session. On December 10th, 2010, cities belonging to the Northwest Metro Drug Task Force (Plymouth, New Hope, Robbinsdale, Golden Valley, Hopkins, Crystal, and St. Louis Park) invited our legislative representatives to a presentation on how our task force handles forfeitures and seizures. Our intent was to emphasize the Best Practices Model we are using, and the redundancies and legal oversights contained in our methods. Because federal dollars continue to shrink, our reliance on forfeiture funding as a source of economic support for our task force continues to grow. In addition to large scale investigations, the existence of this task force provides critical resources in responding to “quality of life” types of complaints when possible drug houses show up in our neighborhoods. While legislation to remove or re-allocate this forfeiture funding did not gain too much traction last session, we are concerned that it will be proposed again this session. Meeting Date: January 10, 2011 Agenda Item #: 3 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: Storm Water/Surface Water Management. RECOMMENDED ACTION: None at this time. The City Council requested an informational session on Storm Water/Surface Water Management. This report is an outline to assist with the presentation by staff at the Study Session. POLICY CONSIDERATION: Does Council desire any additional information or discussion regarding this topic? BACKGROUND: The City Council has developed a priority list of 6 items to be discussed at future study sessions. Staff is working to bring these discussion items to Council the first quarter of 2011. The list includes: 1. Construction/Project Management – January 24th 2. Review of Policies - Expenses that are City vs. Property Owner or Combination - February 3. Storm Water/Surface water Management – January 10th 4. BN Bridge Replacement 5. City Council Meeting Audience Norms/Rules 6. Reilly Tar 101 Storm Water/Surface Water Management Storm Water/Surface Water Management has many components. Staff will present an overview of the topics and allow time for questions. Additional time could be set at future study session(s) if Council would like more in depth information on a specific area of interest. We have 3 key staff members that will participate in the presentation at the Study session - Scott Anderson, Utilities Superintendent, Laura Adler, Engineering Program Coordinator and Jim Vaughan, Environmental Coordinator. Informational materials will be handed out at the study session and a power point presentation is planned for approximately 45 minutes with questions then taken afterward. The presentation will touch on: 1. The System – big picture overview in St. Louis Park • Map and overview of system • Sub drainage areas • Statistics on the infrastructure, surface area and underground system 2. Design • How our system was developed starting with water quantity as a focus, now emphasis on water quality • Ongoing system design, development and redevelopment Study Session Meeting of January 10, 2011 (Item No. 3) Page 2 Subject: Storm Water/Surface Water Management 3. Water Quality • Flooding and Storm Water including definitions of 10 year and 100 year events • Flood plain and FEMA • Localized flooding and how we are handling these issues. Examples are Lamplighter and Dakota Park. Projects are planned and included in CIP • Flood proofing grant program 4. Organizations that have a role in how we handle our storm water • Watersheds in St. Louis Park – Bassett Creek Watershed Management Commission (BCWMC) and Minnehaha Creek Water District (MCWD) 5. Regulations • Wetland Conservation Act • SWPPP – Storm Water Pollution Prevention Plan - 6 minimum control measures • NPDES II – what is this regulation and what does it mean (National Pollution Discharge Elimination System) - Impaired Waters - TMDL’s = Total Maximum Daily Loads 6. Surface Water Management Plan • Developed in 2001, updated in 2009 7. Current and Future plans for storm water/surface water management • Continue monitoring – currently meet all mandates/regulatory requirements • Education • Vegetation Management • Aesthetics of Storm Water Ponds • Successful partnerships and projects 8. Questions, comments, other thoughts The overview that has been presented is intended to show the ‘big picture” with our storm water and surface water management. If Council would like additional information, please inform staff of what materials you would like to receive in a report and if an additional study session is desired on a specific area related to this topic. FINANCIAL OR BUDGET CONSIDERATION: Not applicable at this time. VISION CONSIDERATION: 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. Prepared by: Nancy Deno Gohman, Deputy City Manager/HR Director Assisted by: Scott Anderson, Utilities Superintendent Laura Adler, Engineering Program Coordinator Jim Vaughan, Environmental Coordinator Approved by: Tom Harmening, City Manager Meeting Date: January 10, 2011 Agenda Item #: 4 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: Communications/Meeting Check-In (Verbal). RECOMMENDED ACTION: Not Applicable. POLICY CONSIDERATION: Not Applicable. BACKGROUND: At every Study Session, verbal communications will take place between staff and Council for the purpose of information sharing. FINANCIAL OR BUDGET CONSIDERATION: Not Applicable. VISION CONSIDERATION: Not Applicable. Attachments: None Prepared and Approved by: Tom Harmening, City Manager Meeting Date: January 10, 2011 Agenda Item #: 5 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Public Hearing Study Session Discussion Item Written Report Other: TITLE: Business Terms of Development Contract between the EDA and CKJ Properties, LLC - 3540 Dakota Ave. South (former Bikemasters Building). RECOMMENDED ACTION: None at this time. This report is intended to provide the Council/EDA with a preview of the proposed business terms that will serve as the basis for a Development Contract with CKJ Properties, LLC related to its renovation of the former Bikemasters Building. The proposed Contract is scheduled for formal consideration by the EDA on January 18th. Please let staff know if any questions or concerns that you might have. POLICY CONSIDERATION: Does the EDA support the business terms proposed for inclusion within a Development Contract with CKJ Properties, LLC to facilitate the renovation of the former Bikemasters Building? BACKGROUND: The EDA reviewed Mr. Curt Rahman’s (CKJ Properties, LLC’s) application for Construction Assistance Program (CAP) assistance at the November 22nd Study Session where it was favorably received. Mr. Rahman acquired the property located at 3540 Dakota Ave. South (the former Bikemasters building) in September 2010 with the intention of fixing it up and re-leasing it to several retail and office tenants. The two story building was built in the 1950’s and is approximately 18,000 SF. In recent years the building has been neglected and fallen into disrepair. The building went into foreclosure last year. As a result, the building sustained damage due to lack of maintenance and vandalism. CKJ Properties plans to make necessary repairs and renovate the former Bikemasters building. To date, the building has been emptied, and some repairs have been made but many code deficiencies remain to be addressed. Renovation will include new windows and doors, new bathrooms, new flooring and carpeting, new ceilings, new electrical and plumbing systems, new energy efficient HVAC equipment, new dock doors as well as interior and exterior painting, and screening of outdoor dumpsters. Request for Financial Assistance The total estimated cost to renovate the building is approximately $210,000. Of this amount, CKJ Properties applied for up to $70,000 in Construction Assistance. This amount equals 33% of total estimated project costs. This is the maximum amount for which businesses may apply under the CAP Policy. Mr. Rahman plans to apply the proposed CAP funds toward the replacement of inefficient, 20- year-old HVAC systems. Without CAP assistance, none of the HVAC system will be replaced as Mr. Rahman has no more than $150,000 remaining at his disposal through a credit line and those funds are being applied toward other necessary repairs and renovations to the building. Mr. Rahman cannot obtain another loan on the building as it is prohibited under the contract for deed on the property. Study Session Meeting of January 10, 2011 (Item No. 5) Page 2 Subject: Business Terms of Development Contract between the EDA and CKJ Properties, LLC Proposed Funding Source As allowed by recent legislation, the source of the CAP funds is tax increment generated by five of the City’s TIF districts which would be disbursed from the Development Fund. Structure of CAP Funds It is proposed through a Development Contract with Mr. Rahman that CAP funds be provided to CKJ Properties upon prove-up that qualified renovation costs (“Public Redevelopment Costs”) were incurred. The reimbursement will be structured as a forgivable loan. Provided the building is held and properly maintained by CKJ Properties for 5 years after project completion, the entirety of the loan will be forgiven. If the property is sold within 5 years of project completion, the entirety of the loan must be repaid along with 6% accrued interest from the date funding was provided. Project Schedule CKJ Properties is anxious to begin the proposed renovation work as soon as possible and have it all completed by spring 2011. Current/Estimated Market Value The subject property’s current assessed value is $725,000 (due to a tax court petition reflecting the building’s deteriorated condition). Upon renovation, tenancy and market conditions the building could be assessed for $1.2 to $1.3 million by 2012. Job Creation The proposed repair and renovation work would result in several temporary construction jobs. Additional employment opportunities will result from retail and office tenants in the building. Development Contract A summary list of specific business terms consistent with previous redevelopment projects is attached for review. The intent is to use these terms as the basis for a Redevelopment Contract with CKJ Properties. The proposed terms are subject to further negotiation and refinement with CKJ Properties. FINANCIAL OR BUDGET CONSIDERATION: To stimulate private construction activity within the city it is proposed that the EDA consider providing CKJ Properties, LLC with up to $70,000 through the Construction Assistance Program to repair and renovate the former Bikemasters property. Such funds would be provided on a reimbursement basis and as a forgivable loan from tax increment generated by five of the City’s TIF districts. VISION CONSIDERATION: Renovating existing buildings through the Construction Assistance Program is consistent with elements of Vision St. Louis Park as it facilitates and promotes environmental stewardship and green development. Attachments: Business Terms of the Development Contract with CKJ 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 Study Session Meeting of January 10, 2011 (Item No. 5) Page 3 Subject: Business Terms of Development Contract between the EDA and CKJ Properties, LLC Business Terms of Development Contract Between the St. Louis Park EDA and CKJ Properties, LLC The following are proposed Business Terms between the St. Louis Park Economic Development EDA (“EDA”) and CKJ Properties, LLC (otherwise known as “Redeveloper”), which, upon mutual agreement, will be incorporated into a Development Contract (“Development Contract”) for the repair and renovation of 3540 Dakota Ave. South. (the former Bikemasters property). 1. The activities of the EDA are undertaken pursuant to the Job Creation Act for the purpose of fostering the development and redevelopment of certain real property, which will provide employment opportunities, revitalize a portion of the Project Area, and increase the tax base. 2. The Redeveloper will construct the Minimum Improvements (repair and renovate the subject property) in accordance with the terms of the Contract, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). 3. The Redeveloper will use reasonable efforts to secure all permits, licenses and approvals necessary for construction of the Minimum Improvements. 4. The parties agree that the proposed development by the Redeveloper would not occur before July 1, 2011 but for the assistance being provided by the EDA. 5. The EDA has determined that, in order to make development of the Minimum Improvements financially feasible and to expedite such development and stimulate the rapid creation of jobs pursuant to the Job Creation Act, it is necessary to provide the Redeveloper with a CAP Loan for a portion of the costs of interior and exterior renovation and construction of the Minimum Improvements on the Redevelopment Property (the “Public Redevelopment Costs”). 6. To assist the Redeveloper with payment of the Public Redevelopment Costs, the EDA shall provide the Redeveloper with the CAP Loan in the principal amount of up to $70,000. The EDA shall loan the CAP Loan funds to Redeveloper upon Redeveloper having: (a) no later than December 1, 2011, delivered to the EDA written evidence satisfactory to the EDA that Redeveloper has incurred the Public Redevelopment Costs, which evidence must include copies of the paid invoices or other comparable evidence for the Public Redevelopment Costs; (b) delivered lien waivers from each contractor, including subcontractors, who shall be engaged to work on, or to furnish materials and supplies for the Minimum Improvements, for all work done and for all materials furnished by it for the Minimum Improvements. 7. The source of funds for the CAP Loan will be Tax Increments from the TIF Districts pursuant to the Spending Plan, in accordance with the Job Creation Act. Study Session Meeting of January 10, 2011 (Item No. 5) Page 4 Subject: Business Terms of Development Contract between the EDA and CKJ Properties, LLC 8. In accordance with the Job Creation Act, construction of the Minimum Improvements must commence no later than July 1, 2011, and no extensions of the commencement date will be considered. If the construction has not commenced by such date, the EDA has no further obligations under the Contract. 9. The EDA acknowledges that the Redeveloper may assign the CAP Loan to a lender that provides part of the financing for the Public Redevelopment Costs. The EDA consents to such an assignment, conditioned upon receipt of an investment letter from such lender in a form reasonably acceptable to the EDA. 10. The Redeveloper understands and acknowledges that the CAP Loan must be fully repaid, along with accrued interest at the rate of 6.0%, if the Redeveloper fails to maintain the Minimum Improvements in good repair and condition and if a Transfer of the Redevelopment Property occurs at any time before the Termination Date, or if the EDA exercises its right to terminate the Contract as a remedy for any Event of Default. 11. The parties agree and understand that the financial assistance described in the Contract does not constitute a business subsidy within the meaning of the Business Subsidy Act. The Redeveloper releases and waives any claim against the EDA and its governing body members, officers, agents, servants and employees thereof arising from application of the Business Subsidy Act to this Agreement, including without limitation any claim that the EDA failed to comply with the Business Subsidy Act with respect to the Contract. 12. The parties agree and understand that the Contract is subject to the job creation requirements of the Job Creation Act. Accordingly, through the use of the CAP Loan, the Redeveloper shall cause the renovation of the Minimum Improvements, which renovation shall create or retain construction jobs. In addition, the Redeveloper shall cause to be created at least ___ full-time equivalent jobs (annualized 2,080 hours per job) attributable to the Minimum Improvements as renovated. 13. The Redeveloper must submit to the EDA a written report regarding job goals and results by no later than February 1 of each year, commencing February 1, 2012 and continuing until the Termination Date. 14. Redeveloper agrees that it will construct or cause construction of the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans and that it will, during any period while the Redeveloper retains ownership of any portion of the Minimum Improvements, operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept in good repair and condition. 15. Before commencing construction of the Minimum Improvements, the Redeveloper shall submit to the EDA Construction Plans for the Minimum Improvements acceptable to the EDA. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with the Contract, the Redevelopment Plan and all applicable State and local laws and regulations. 16. If the Redeveloper desires to make any material change (meaning changes that increase or decrease construction costs by $100,000 or more) in the Construction Plans after their approval by the EDA, the Redeveloper shall submit the proposed change to the EDA for its approval. The EDA’s approval of any such change in the Construction Plans will not be unreasonably withheld. Study Session Meeting of January 10, 2011 (Item No. 5) Page 5 Subject: Business Terms of Development Contract between the EDA and CKJ Properties, LLC 17. The Redeveloper shall commence construction of the Minimum Improvements by July 1, 2011. The Redeveloper shall complete the construction of the Minimum Improvements by December 1, 2011. All work with respect to the Minimum Improvements to be constructed by the Redeveloper shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the EDA. 18. Promptly after completion of the Minimum Improvements in accordance with those provisions of the Contract relating solely to the obligations of the Redeveloper to construct the Minimum Improvements, the EDA Representative shall deliver to the Redeveloper a Certificate of Completion. (a) If the EDA Representative refuses or fails to provide the above certification, the Authority Representative shall, within thirty (30) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order for the EDA to issue the Certificate of Completion. (b) The construction of the Minimum Improvements shall be deemed to be substantially complete upon issuance of a certificate of occupancy for the Minimum Improvements, and upon determination by the EDA Representative that all related site improvements on the Redevelopment Property have been substantially completed in accordance with approved Construction Plans. 19. The EDA agrees to subordinate its rights under the Agreement to the holder of any Mortgage securing construction or permanent financing, in accordance with the terms of a mutually-approved subordination agreement. 20. Redeveloper agrees not to transfer the Redevelopment Agreement or the Redevelopment Property (except to an affiliate) during the term of the Contract. 21. Redeveloper agrees that the EDA and the City (the “Indemnified Parties”) shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Development Property or the Minimum Improvements. 22. Redeveloper agrees to protect and defend the Indemnified Parties and further agrees to hold the Parties harmless from any claim, demand, suit, action, or other proceeding whatsoever by the construction, installation, ownership, maintenance, and operation of the Development Property. 23. Redeveloper agrees until the Termination Date that it shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon. 24. The Redeveloper agrees that no portion of the Redevelopment Property will be used for a sexually-oriented business, a pawnshop, a check-cashing business, payday loan agency, a tattoo business; or a gun business. Meeting Date: January 10, 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: Highway 7 / Louisiana Avenue Interchange Project Update. RECOMMENDED ACTION: The purpose of this report is to update the Council on the recent planning and project development activities related to this project – Project No. 20120100. POLICY CONSIDERATION: None at this time. However, at the January 18 meeting the City Council will be asked to approve an amendment to the Phase 3 consulting contract with SEH. Further information on the proposed contract amendment is provided later in this report. Please let staff know of any questions or comments that you might have. BACKGROUND: History The City’s Capital Improvement Program (C.I.P.) indentifies the Highway 7/Louisiana Avenue intersection as a priority improvement project. The proposed project will provide for the construction of a grade-separated interchange at Louisiana Avenue and Highway 7. The project also includes pedestrian and bicycle friendly improvements along with re-configuration of the frontage roads in order to improve access, safety, and traffic flow for both the Highway 7 corridor and Louisiana Avenue. This proposed improvement is essential in meeting long term transportation and safety needs of both Mn/DOT and the City. RECENT ACTIVITIES: Phase 3 Work Since the last project update report provided to Council on November 22, 2010, work on Phase 3 activities, Preliminary Design and Environmental Assessment, has continued. The City’s consultant (SEH, Inc.) has completed a geometric layout of the preferred interchange concept for review and approval by Mn/DOT and the Federal Highway Administration (FHWA). A geometric layout is essentially a design of the roadway alignment for all segments of the proposed interchange. The geometric layout must meet all the design standards of Mn/DOT and FHWA. Once approved by Mn/DOT, FHWA and the City (Staff Approved Layout), this essentially establishes a footprint of the proposed project area whereby right-of-way and construction limits are identified. Approval of the layout is anticipated by February 2011. A draft Environmental Assessment (EA) has recently been completed and distributed to the various agency stakeholders and is currently undergoing their review and comment. Upon completion of the agency reviews, the EA will be revised and then made available for public comment. A public hearing will also be held to provide an additional opportunity for public comment. The public hearing is anticipated to occur in March, 2011. No significant environmental concerns have been identified with this project. Study Session Meeting of January 10, 2011 (Item No. 6) Page 2 Subject: Highway 7 / Louisiana Avenue Interchange Project Update As part of the EA process, a traffic noise study was done to assess existing noise levels and predict future noise levels. An evaluation has determined that existing levels and/or future levels exceed state and federal noise standards along certain areas of Highway 7 within the proposed project site. As a result, the project is required to consider noise mitigation measures such as noise walls. The areas which have been identified for noise walls include segments along Highway 7 in the northwest, southwest and northeast quadrants of the Highway 7/Louisiana Interchange Project area. As part of the noise study evaluation, a public process will be initiated to inform the nearby residents and property owners of the noise analysis and solicit feedback on noise mitigation measures. Similar to what was done for the Highway 7 and Wooddale Interchange project, meetings will be held for each of the areas where noise walls are required and surveys will be made to determine whether or not there is support for constructing noise walls as part of the project. The attached Noise Analysis Information Sheet will be posted on the project website to begin this public process. Meetings will be scheduled during January and February with the affected area residents. Phase 3 Contract Amendment Additional work from Phase 4 will be added to Phase 3 work at the request of Mn/DOT. This includes completing a Phase 2 Environmental Site Assessment for the project. This work is necessary to indentify contaminated areas within the project area and establish a plan to handle the materials should they be encountered or removed from the site during construction. SEH, Inc. has also performed additional work during Phase 3 as a result of the Value Engineering Study required by Mn/DOT in August 2010. Staff intends to request approval of an amendment to the Phase 3 contract work with SEH, Inc. at the January 18th City Council meeting. The amendment providing for the additional work above will increase the Phase 3 contract amount by $185,000. Project Schedule Completion of Phase 3 work is anticipated by July, 2011 when the Environmental Assessment work is expected to be finalized with a declaration of FONSI (Finding of No Significant Impact) for the project. The work to this point has been proceeding to allow for construction of the project to begin in 2012. However, Phase 4 services (which includes the final design, right of way acquisition, and preparation of plans and specifications for construction) will need to commence prior to completion of the Phase 3 services in order to meet the 2012 construction start (see attached - Schedule). A critical date that influences the project schedule is the sunset date on the $7.6 million of federal funding already secured by the city. Our commitment to accepting the federal monies is to deliver a project with plans completed and approved by Mn/DOT prior to the March 31, 2012 sunset date. Opening of bids then follows about 90 day after the sunset date. To meet this schedule, Phase 4 work needs to begin no later than early April, 2010. Knowing that the project is not yet fully funded, Staff plans to meet with Council at a February or March Study Session to discuss options for initiating Phase 4 services. At this time, a detailed scope of work for Phase 4 has not been completed and costs have not been determined. Study Session Meeting of January 10, 2011 (Item No. 6) Page 3 Subject: Highway 7 / Louisiana Avenue Interchange Project Update FINANCIAL OR BUDGET CONSIDERATION: Funding Sources and Opportunities $7,630,000 in federal funds has been secured through the Met Council’s State Transportation Program Urban Grant solicitation. Staff’s recent application for Mn/DOT Municipal Agreement funds was successful in securing $594,000 for the project. Mn/DOT has also recently committed $1,000,000 in Access Management Funds towards the project. However, the city’s recent application for $10 million in funding under a joint Mn/DOT and Department of Employment and Economic Development (DEED) solicitation for the Transportation Economic Development Pilot Program was unsuccessful. The estimated project costs and funding sources known at this time are: Project Costs Construction $16,500,000 Engineering $ 3,300,000 Right of Way $ 3,000,000 Total Costs $21,800,000 Funding Sources Federal (STP) Funds $7,630,000 City (20% match – undetermined source) $2,398,000 Mn/DOT Access Management $1,000,000 Mn/DOT Cooperative Agreement $ 594,000 Total Committed Funds $11,622,000 Unfunded Amount $10,288,000 Current funding for Phases 1, 2 and 3 is coming from HRA levy proceeds which have been designated to pay for infrastructure improvements in redeveloping areas. HRA levy proceeds could be the source of dollars for the City’s required match noted above. VISION CONSIDERATION: The following Strategic Direction and focus area has been identified by Council. St. Louis Park is committed to being a connected and engaged community. Focus will be on: • Promoting regional transportation issues and related dedicated funding sources affecting St. Louis Park including but not limited to Hwy. 100 and SWLRT. Attachments: Noise Analysis Information Sheet Project Schedule Prepared by: Jim Olson, Engineering Project Manager Reviewed by: Mike Rardin, Public Works Director Approved by: Tom Harmening, City Manager HIGHWAY 7/LOUISIANA AVENUE INTERCHANGE PROJECT Noise Analysis The Federal funding involved in the Highway 7/Louisiana Avenue Interchange Project requires completing an Environmental Assessment (EA). The EA considers a broad range of social, economic, and environmental issues, including highway traffic noise impacts. The proposed interchange project is a Type 1 project under the Federal Highway Administration (FHWA) noise regulation 23 CFR 772 and as a result requires detailed evaluation of traffic noise impacts. All traffic noise studies and analyses prepared for projects involving Mn/DOT must adhere to procedures and requirements as established by Federal law and State noise guidelines administered by the Minnesota Pollution Control Agency and Mn/DOT. The Highway 7 and Louisiana Avenue traffic noise study will assess existing noise levels and predict future noise levels to determine if impacts occur on sensitive receptors (e.g. residences, churches, businesses) in the project area. The noise analysis process requires the following steps: • Identify Noise Study Area and Receptors: the study area has been defined by the limits of the roadway improvements along Highway 7 and Louisiana Avenue. Receptors in the study area were identified using aerial photography and field surveys. • Collect Traffic Data: the traffic noise study relies on existing and forecast traffic volumes, vehicle type, and travel speeds in order to predict noise levels. Detailed traffic data collected for the project area has been utilized in the noise analysis. • Conduct Background Monitoring: existing noise level measurements were conducted in June 2010 and were used to validate the noise model. • Develop Noise Model: noise levels are being predicted using a federal and state approved computer model (STAMINA 2.0/ MINNOISE). • Consider Noise Mitigation: if noise impacts are identified, the City and Mn/DOT will be required to examine and consider noise mitigation measures. If these measures are found to be feasible and reasonable in accordance with FHWA and Mn/DOT defined criteria, they must be included as part of the interchange project. Typical mitigation measures include construction of barriers/walls. Study Session Meeting of January 10, 2011 (Item No. 6) Subject: Highway 7/Louisiana Avenue Interchange Project Update Page 4 analysis process and to provide them an opportunity to state their preference. It is anticipated these meetings will occur during the first few months of 2011. Additional information can be found at the following web sites: http://www.dot.state.mn.us/ environment/noise_analysis/ index.html http://dotapp7.dot.state.mn.us/edms/ download?docId=614361 http://www.dot.state.mn.us/ environment/noise_analysis/ policy.html http://www.dot.state.mn.us/ environment/pdf_files/ noise_brochure.pdf It is anticipated that highway noise levels surrounding the proposed interchange will exceed state and federal noise standards. As a result, noise barriers/walls will be evaluated as a potential means for mitigating noise impacts. The analysis will consider the feasibility and reasonableness of implement- ing the mitigation. A barrier is feasible if it can be constructed without major engineering or safety issues and if it provides a substantial noise reduction to adjacent receivers. A substan- tial reduction is defined as a five or more decibel reduction in noise levels. Reasonableness deals with whether or not the wall can be constructed in a cost-effective manner, the percentage of residential-type development, overall noise levels and noise level increases, and the desires of the affected landowners. Again, Federal and State criteria will be followed in conducting the mitigation analysis. Lastly, prior to concluding the environmental review process for the Highway 7/Louisiana Avenue Interchange Project, the City and Mn/DOT will need to verify that the majority of the property owners adjacent to a particular proposed noise wall support the construction. The City will host information meetings for affected property owners in order to provide them with an opportunity to learn more about the noise Highway 7/Louisiana Avenue Interchange Project Noise Analysis Study Session Meeting of January 10, 2011 (Item No. 6) Subject: Highway 7/Louisiana Avenue Interchange Project Update Page 5 Funding Sunset: March 31, 201220112012JanFebMarAprMayJunJulAugSepOctNovDecJanFebMarAprMayJunJulAugSepPhase 3 ‐ MilestonesLayout staff approvedFONSI (EA approved)Phase 4 ‐ Latest Letting (within 90 days of sunset)Final Design (April 1 Start)30% plans60% plansFinal plansSpecial ProvisionsEngineer's estimateState Aid Engineer approval of plansUtility relocation certificatePermit applications submittedR/W AcquisitionR/W identificationAppraisalsOffers/Negotiation/Title & PossessionCondemnation initiatedAdvertise for bidsOpen bidsAward contractBegin constructionItems in italics needed prior to sunset date.Within 90dSunset DatePhase 3 CompletionStudy Session Meeting of January 10, 2011 (Item No. 6) Subject: Highway 7/Louisiana Avenue Interchange Project UpdatePage 6