HomeMy WebLinkAbout2005/01/18 - ADMIN - Minutes - City Council - Study Session T.tit
CITY LOUIOFS OFFICIAL MINUTES
CITY COUNCIL STUDY SESSION
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January 18, 2005
The meeting convened at 9.05 p.m.
Councilmembers present: John Basil], Phil Finkelstein, Susan Sanger, Sue Santa, Sally Velick,
Paul Omodt, and Mayor Jeff Jacobs.
Staff present: City Manager(Mr. Harmening), Community Development Director(Mr Locke),
Housing Program Coordinator(Kathy Larsen), Housing Supervisor(Michelle Schnitker),
Planning/Zoning Supervisor(Ms. McMonigal), and Recording Secretary (Ms Stegora-Peterson)
1. Move Up in the Park Housing Program
Staff met with council to ask direction on proposed new housing initiatives designed to facilitate
and promote additional large single family homes in the City. This package of new housing
initiatives would complement existing home improvement and inspection strategies to address
the determined need for more large single family homes in St. Louis Park.
Regarding the small home acquisition/expansion program and the pilot they were considering which
would focus on seniors moving into Aquila Commons, Councilmember Finkelstein liked the concept
but thought it could appear as an improper business subsidy.
Councilmember Sanger felt it was improper She believed small houses will continue to sell
without help from the City and is a function of the market
Mr. Locke indicated that if the program was adopted, the city would pay market value for the
homes suitable for expansion. The program would apply only to those homes where the cost to
remodel and expand might be greater than a builder could recoup from the final sale
Councilmember Sanger would rather subsidize buyers wanting help expanding their homes.
Mr Locke indicated the basic concept was to find small homes that could be expanded.
Councilmember Sanger also felt the focus should be on people who had already bought their
homes and were looking for ways to help expand them.
Ms Schnitker didn't believe this was a subsidy to the seller The city would purchase the home
seniors at market value. Mr. Locke also suggested that the city could also look for houses that
were not selling, purchase them and expand to accomplish the move up housing desired by our
residents and the city council.
Ms Schnitker stated that many people would rather buy a larger home already finished than go
through the process of getting the transformation loan and facilitate construction. A pilot program
through Aquila Commons is a good option because there was an identified pool of small homes
being vacated by seniors The program would also be offered to persons who were not seniors
Councilmember Omodt liked the program and thought it fit with the housing goals. He didn't
feel it was subsidizing the seller because the property would be purchased at market rate. This
was another way to get people to stay in St. Louis Park. Using the resource of people that might
be getting out of their small single-family house in that neighborhood was a great way to have a
ready pool and not spend a lot of time looking for it.
Study Session Minutes -2- January 18, 2005
Councilmember Santa indicated most of the seniors she had talked to that were going to Aquila
Commons or Quadian, were living in small single-family homes that were to 1954 code and had
deferred maintenance because of finance and ability Though these homes would sell, the price
may not be good and the properties would present many challenges to buyers. She would not ,
want the program limited to Aquila Commons because there may be an appearance of
impropriety. There are a number of available homes that need work.
Mayor Jacobs liked the idea of using some public money to subsidize expansion of homes. He
supported the idea of improving and expanding homes, but he wanted limitations to ensure the
city was not in competition with the private market.
Mr. Locke clarified that this program would provide the city with better control in terms of
standards and design.
Councilmember Santa noted single people were buying many smaller homes. When they chose
to start a family, they move someplace else. They were not encouraging people to stay in St.
Louis Park and they need to jump start the idea that they could turn these into bigger homes.
Councilmember Sanger asked the program would be limited to seniors' homes. Mr. Locke
replied they those homes were easily identified.
Councilmember Finkelstein stated they should be required to spend a specific amount of money on
remodeling. Ms. Schnitker clarified that the program was proposing that they sell it to a developer.
Councilmember Sanger asked why these homes would go through the already adopted home
renewal program. Ms. Larsen responded that these homes did not meet the test of being
substandard or blighted.
Councilmember Sanger suggested modifying the requirements of the home renewal program. Ms.
Schnitker replied that the only difference was that with the newly proposed program , the homes
would need a lot of work, but weren't teardowns. The focus of this program would be on homes
that didn't require a great deal of work, but would be candidates for expansion.
Councilmember Basill agreed the program shouldn't be limited to those homes vacated be persons
moving to Aquila Commons. He supported the program because so many people didn't want to buy a
home and go through the loan and remodeling process, but wanted to live in St. Louis Park
Councilmember Velick saw where this accomplished the housing goals and believed it should be
expanded because there were many homes where this could apply.
Councilmember Santa believed this had merit, but needed more work. She didn't want to have
the City involved and then have the homes not sell
Councilmember Finkelstein asked if the project would work if they started with a smaller number?
Mayor Jacobs stated that the worst case scenario would be that they get the house back or it doesn't
sell, but the city would have already sold it to the developer
Councilmember Sanger believed the worst case scenario would be that they get criticized for
spending $300,000 in competition with the private market and for people whose houses they
didn't buy and wished they had.
Study Session Minutes -3- January 18, 2005
Councilmember Basill thought the worst thing that could happen in his mind was that they paid
$200,000 for a home and ended up selling it for$160,000.
Mr. Locke asked if council was willing to commit resources to develop move-up housing in St.
Louis Park. Mayor Jacobs thought everyone agreed that they needed more move-up housing, but
the question was whether this program was the best and most cost efficient way to accomplish
that.
Councilmember Sanger understood the goal, but felt the money was going in the wrong place to
accomplish that goal because they were paying to buy a house and sell it to a developer. If there was
a$20,000 gap, she'd much rather put that toward a subsidy or a deferred loan to help underwnte the
cost of the expansion on the buyers side.
Councilmember Basill stated he wasn't advocating over-paying for a house. They needed to
have a procedure in place and if an appraiser said it is worth $200,000, they may have a policy to
start negotiations at 85% of that. What he liked about this program was that the developer had
cntena of how it should be built. There were too many people moving out of the community
that were not willing to do this themselves with the other programs.
Councilmember Omodt indicated this was pre-1979 TIF money that needed to go somewhere
and met their goals He did not believe staff would advocate paying higher than market value.
This program would allow our residents to get a larger homes. He supported the idea of
beginning this program in one neighborhood. He also believed developers would identify cost
efficiencies and work effectively with the City. There was a lot of good to this.
Councilmember Finkelstein thought they should start with a lesser amount of homes in the first
year, but felt it made sense to give it a try Many people didn't want to go through the loan and
remodeling process This was a lot easier.
Mr Locke indicated the goal would be to have three or four developers interested in each home
and sell to the one willing to pay the most.
Councilmember Sanger would much rather have the subsidies go straight to the buyer, possibly a
forgivable loan if they lived there for a certain number of years.
Councilmember Velick asked about the properties that were being bought by corporations and what
they were intending to do with them. Councilmember Basill believed this might help prevent that
Mr Harmening stated that this acquisition program was one more way of providing move-up
housing in St Louis Park. They had heard through the housing summit process that they needed
to be more aggressive on providing move-up housing and this was one of a number of ways to do
that. They could begin with five homes.
Mayor Jacobs had the same concerns that the worst case scenano was that they sold the house
for less than they purchased it and then determined the cost of remodeling was more than they
would sell it for. If the worst case scenario was that the deal didn't work economically, they
ended up with five house with four bedrooms
Study Session Minutes -4- January 18, 2005
Councilmember Sanger asked who the rehab advisors would be. Ms. Larsen replied they talked
to a couple of different companies, the Center for Energy and Environment and the Greater
Metropolitan Housing Corporation.
Councilmember Sanger asked if there was a potential for conflicts between the rehab advisors
and the Inspections staff Ms. Larsen didn't believe there would be a conflict because the rehab
advisor goes to the homes and meets with the owners to indicate the violations and work with the
residents and are aware of city codes.
Councilmember Sanger asked about the design services and if there were rate limitations if a
person hired that architect. Mr. Locke replied they didn't want to create a situation where there
would be undue pressure for the resident to hire any specific architect.
Councilmember Sanger indicated a concern about only recruiting houses for the remodeling tour
from people who used this program, it may not be enough of a variety of housing types and the
scale may be too low
Councilmember Santa added concerns about liability and security issues.
Ms. Larsen responded part of the reason they suggested a smaller number of homes was because
of staffing issues
Councilmember Santa suggesting using before and after photos
Ms. Larsen indicated that staff would bring this to the Home Remodeling Fair for a kick-off and
talk about the program.
2. Update on Proposed Development at Al's Bar/Motel Site
Mr. Locke displayed two site plans for the proposed development at Al's Bar/Motel site and
described their layout/designs. The mixed-use plan met the current zoning. In both plans, there
were 129 condo or housing units. On the mixed-use plan, there was about 6,000 sq. ft of
neighborhood retail space and the cleaners would remain in place. The residential only plan did not
meet the zoning and would require variances The neighbors seemed to prefer the residential plan
because of concerns over traffic and impact There was no application in at this point and the
original application for MX zoning had been withdrawn. They talked with staff about the
residential only version Staff indicated it didn't meet the intent of the zoning or comp plan for that
area because mixed use was-the plan, and also had not created a pedestrian environment. They had
talked about tax increment financing help for the project, although they hadn't applied for anything.
Mayor Jacobs stated he didn't like either one of the plans
Mr. Harmening stated that a process had taken place in the late 1990's the Comp Plan was
updated and as part of that, they identified some future land use for specific sites, which included
this site. There were detailed conversations at Planning Commission, Council and the
neighborhood level about what was recommended for land use on this site. In this case, the Al's
site (not the motel site) was studied and talked about and they deliberately guided it as mixed-
use It is a signature corner in St. Louis Park and a gateway, and ultimately rezoned the property.
This particular project combined the motel site with Al's. The motel site was guided RC,
residential His concern was that the developer was working the City against the neighborhood
Study Session.Minutes -5- January 18, 2005
Councilmember Basill noted that the neighborhood was not aware that the developer might
request TIF money. This could happen without TIF. The neighborhood didn't like the
townhomes and he suggested they request that they be removed
Mayor Jacobs asked if they could build the mixed-use project without additional city approvals?
Mr Locke replied they would need a PUD approval.
Mayor Jacobs asked if they would need tax increment financing to build that project? Mr. Locke
believed so. He thought they might indicate they could build the residential only project without
tax increment assistance.
Mayor Jacobs stated this is the "front door" and wanted to see top of the line design If they
wanted funds contributed, he wanted to see it done with mixed-use.
Mr. Locke indicated there were two other alternatives that weren't being shown. If they needed
a lot of assistance for the mixed-use plan, they could make it smaller. On the residential only
plan, they couldn't approve it because it didn't meet the goals of the zoning and Comp Plan. The
other alternative was that nothing happened now.
Councilmember Sanger commented if there were to be any TIF dollars involved, the dry cleaners
needed to go. She had a concern about environmental problems associated with the site She
didn't want to deviate from mixed-use, but also thought it was important that this building have
classy architecture They might consider making the building taller and move it closer to the
street and further from the neighbors with green space in the back. Those units would have great
views of Lake Calhoun and the golf course and have higher value condos.
Mayor Jacobs asked if there was a height limitation? Ms McGonigal replied no.
Councilmember Basill stated that they went through a long process with neighbors to agree on
the height. This would throw out the process in the community. He wasn't saying he agreed
with this plan, but wanted to be clear that the neighborhood had many meetings
Councilmember Santa thought that this process started in the 1990's with neighbors citywide
discussing this site.
Councilmember Basill believed at that time they agreed on three or four stones. Mr. Harmening
was unsure if they adopted any policies on the building height, but it had always been an issue.
Councilmember Santa believed that the site should have mixed-use.
Mr. Harmening thought this was a classic case of the public process and the interests of a couple
of neighborhoods and the interests of the community as a whole If you go back to the guiding
principals, it didn't say that the neighborhoods dictated what the final decision was. The
stakeholders were allowed to participate in the process and express their views, but it was not to
be used to circumvent the authority or responsibility of elected officials to make decisions, even
difficult or unpopular decisions. What residents were saying at the meetings was that they
believed the Council had to do what they decided.
Study Session Minutes -6- January 18, 2005
Councilmember Sanger clarified her comments were intended to say that the process was not done
and needed to continue. The developer was proposing things that were not consistent with the Comp
Plan and zoning and were being misleading The neighbors needed education about what was and
wasn't possible and what some other possibilities might be that the developer hadn't talked about
Councilmember Finkelstein believed the developer would request tax increment financing and
try to use the neighborhood to get it. He, along with other Councilmembers, had not studied the
information from the previous planning and would like to review that information. He wanted
the whole Council to study this earlier review so that they could have an idea of what the long-
range planning was for that corner.
Councilmember Velick noted she would want to see public art. She was not sure if they needed
more coffee shops or flower shops.
Councilmember Finkelstein noted on the height limitation, they were creating precedence and
any time they went above four-stones. Councilmember Basill stated that had recently happened.
Mayor Jacobs thought the neighborhood was a stakeholder and an important voice, but a lot of
thought and other voices went into zoning and changing the Comp Plan.
Mr Locke indicated the neighborhood was talking about a large group meeting. The developer
may try to push a different plan than they had already gotten neighborhood input on. He thought
they needed to get more control of how this went, including satisfying the neighborhood.
Councilmember Basill noted that some in the small group leadership indicated they didn't want
retail, didn't want it to be a gateway or to have public art. They wanted four-stones or less, a lot
of green space and less traffic.
Councilmember Basill suggested that he would like get the message to them that the City had no
obligation or interest of doing any TIF financing unless something really special happened. This
was not something they had planned Secondly, he would recommend that they get staff, the
small group, himself and the Mayor to meet before the large group meeting.
Councilmember Finkelstein suggested informing them of the "but/for" test and that they were
only supposed to use tax increment financing if the development would not otherwise take place.
If they didn't find the project met the City's goals, something else would come.
Councilmember Sanger also pointed out the city goal of move-up housing and they could have
really exclusive condos. They were thinking small and could have better use of the site and
possibly fewer units.
Ms. McGonigal stated that the neighborhood needed to be aware that they could get a different,
much better project. It was not retail vs. non-retail; fewer units with some retail would work.
They could work on their issues and concerns with a different project.
Mr. Harmening thought rather than getting transfixed on these two plans, they should talk about
what the issues were with the neighborhood and what they were concerned about and start to
create a project that touched on those issues.
Study Session Minutes -7- January 18, 2005
Mr. Locke believed the neighborhood thought they were going to decide what the Council would do
They wanted to meet with the neighborhood leaders to be sure they understood the Comp Plan.
Councilmember Sanger stated that there was previously another plan proposed by the Lander
Group and asked if they could find that plan It may help stimulate other ways of looking at this.
Mr. Harmening suggested it would have been better if they could do a"mini Elmwood" and look
at appropnate land use, traffic, development possibilities, include the neighborhood and
determine development principals for the corner and use that as guidance for a developer to do a
project. Now they were reacting to a couple of proposals. The neighborhood was fixated on
these site plans and not able to see other possibilities
Councilmember Santa thought Councilmember Basill could indicate that they had gone through
this process in the past and that this was a key area where a study should have been done and
now they were being reactive and not proactive. They needed to have a broader vision.
Councilmember Basill thought they needed to be aware that the neighborhood had been meeting
for seven months. In their mind, they had followed the process of neighborhood involvement
and worked with the developer. They needed to be made aware that the City had no plans to put
public money into this project.
Councilmember Santa stated they could discuss the Elmwood study and indicate that the
neighborhoods time and effort had gotten them closer to a project that they wanted.
Councilmember Basill thought they could have more meetings to decide exactly what they
wanted if another developer came along
Councilmember Sanger understood the process, but they needed to recognize if they had the
pnncipals and the neighborhood bought into them, they were in effect saying that they may be
willing to pay TIF to another developer to make these principals work. They needed to
recognize that was the path they may take.
Mayor Jacobs stated he was usually willing to put in some TIF money if they got what they wanted
Councilmember Velick stated what they wanted as a city wasn't the same thing as what the
neighborhood wanted.
Mayor Jacobs thought they could work with them within that process He wasn't sure if the
neighborhood knew what they wanted. They were confronted with limited choices and told that
it was "either/or" The neighborhood was choosing between the lesser of two evils. That was
not good public process. What should happen is the "Elmwood study" which would be a process
to incorporate those neighborhoods and other stakeholders.
Councilmember Basill suggested they meet with the small group and ask them to say what they
wanted and discuss other options.
Councilmember Sanger indicated one"of her concerns was that they were learning about what
should and should not be public process for big projects One of the things they should take
from this was a document about what might be considered appropriate public process for
Study Session Minutes -8- January 18, 2005
developers to think about when they were meeting with neighborhoods and expectations about
what should and shouldn't happen.
Councilmember Omodt added that they also needed to say what the City had guided this to and
what they thought was acceptable.
Councilmember Finkelstein-thought they also needed to make it clear that the neighborhoods
didn't have complete veto on these projects.
Councilmember Basill reiterated that the neighborhood leaders needed to be made aware that
they were asking for city dollars.
Mr. Locke agreed that they should meet with the small group. They could provide information and go
beyond the small group They could put together information for everyone about what the zoning and
Comp Plan said and what the process would be and also clarify if the developer was requesting TIF.
3. Adjournment -The meeting adjourned at 11:10 p.m
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