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HomeMy WebLinkAbout2007/06/25 - ADMIN - Minutes - City Council - Study Session CITY OF T. LOUIS OFFICIAL MINUTES PARK CITY COUNCIL STUDY SESSION JUNE 25, 2007 The meeting convened at 6:30 p.m. Councilmembers present: Mayor Jeff Jacobs, John Basill, Phil Finkelstein, Paul Omodt, Loran Paprocki, and Susan Sanger. Councilmembers absent: C. Paul Carver. Staff present: Ms. Gohman (Ms. Gohman); Mr. Locke (Mr. Locke); Mr. Hunt (Mr. Hunt); Finance Director(Mr. DeJong); and Recording Secretary(Ms. Stoll). Guest: Bob Fnddle, Ellerbe Becket; Mick Johnson, Park Nicollet; Brian Cary, United Property. 1. Future Agenda Planning Ms. Gohman stated there is no meeting on July 2 and the next meeting will be a study session on July 9, 2007. Councilmember Sanger stated she requested adding a policy item to the July 9 meeting regarding the definition of single family homes. Council concurred it is a discussion they need to have. Councilmember Paprocki stated they should start discussing the different types of TIF. Council concurred to discuss the different types of TIF. Councilmember Finkelstein stated a future idea to consider is development districts. 2. Business Terms for EDI Project Mr. Locke reviewed the staff report regarding the business terms of the proposed sale of a portion of 3515 Belt Line Blvd and the development of Methodist Hospital's Eating Disorders Clinic on the site. He stated there were representatives from the project present. He noted one change being presented is ownership of the property. Previously it was presented as being a private property, and now it is publicly owned which would change the tax exempt status. He stated one concern to address was the best long term use of the site. He noted there is contamination on the site because it used to be a landfill, which requires a higher standard of mitigation for single family homes. He noted the land as it is being used now is safe from contaminants. Mayor Jacobs stated they have had a discussion about the contamination on the site. Councilmember Sanger stated the task force recommended it to be zoned for single family. She stated she is concerned about the process. Mayor Jacobs inquired if they should discuss the policy. Study Session Minutes -2- June 25, 2007 Councilmember Basill stated that when they went through the housing recommendation they discussed the possibility for single-family homes. He stated he came to the realization that the cost was prohibitive. He inquired what Councilmember Sanger preferred to have at this location. Councilmember Sanger stated she doesn't recall a discussion about multi-family homes or a non- profit being appropriate for the location. She noted that it wasn't marketed to see if other places were interested. Mayor Jacobs inquired about the terms of the agreement. Mr. Locke stated the proposed arrangement is 40 years of payments in lieu of taxes. He stated they have had many discussions regarding the City's interest and have invested a lot of time planning for EDI. Councilmember Paprocki concurred they have been discussing it for a long time and noted that they are taking park land and putting a commercial entity on it. Councilmember Finkelstein stated they haven't been able to get developers interested in the land and that was the reason a dog park was placed on it. He stated Council decided they wanted to build an eating disorder clinic. Councilmember Sanger stated she has been receiving resident feedback inquiring about the removal of the park. Ms. Gohman stated staff could put together a timeline of the discussions that have occurred. Councilmember Omodt stated the land is not designated as park land and it is zoned as residential. Councilmember Paprocki stated concern with changing to a non-profit owner. Councilmember Basill stated he would like to discuss the business terms. He noted that the remaining unsold land should remain community space. Councilmember Paprocki noted he is concerned about the statement in the staff report that indicates the property could be sold for private purposes. Mr. Hunt clarified that it is a potential option. Councilmember Finkelstein stated he thinks Council wants to reserve a portion of it for pubic purposes. Councilmember Basill stated that the solution may be to put the remaining land into the park zoning. Councilmember Paprocki clarified that they wouldn't be adding park land when it is compared to the present amount of park land. Mr. Locke presented a table with a comparison between a taxable and tax-exempt facility. He stated Park Nicollet's intent to buy the property indicates their desire to remain in the community. He stated the largest impact will be that they will not pay taxes. Councilmember Basill inquired about the life of the building. Mr. Locke stated that all buildings need updates within 40 years. Study Session Minutes -3- June 25, 2007 Councilmember Finkelstein inquired if it is a better deal for the City for it to be tax-exempt. He inquired if the City would have the ability to purchase the building if it were to be sold. Mr. Hunt stated that there will be terms in the purchase agreement that states if EDI does not go through with the plans the City has the right to get it back. Mick Johnson, Park Nicollet, stated they have wanted to build a clinic for 10 years that was off campus from the hospital. He stated the market has changed since they began working on the project. Mr. Johnson clarified that it would be a savings for Park Nicollet to do it as a tax- exempt facility. Councilmember Paprocki stated that it doesn't clanfy if it is a good deal for the City. Mr. Locke stated that the economic contribution may be subjective, but it would provide services benefiting many people and it would improve the property. Councilmember Basill stated that another concern is the present value of the money received up front. Brian Cary, United Properties, stated the present value of the deal is better than the value of the deal that was presented previously. Councilmember Basill inquired if Ehlers could look at it as well. Councilmember Finkelstein inquired if the fiscal disparities could be included in the analysis from Ehlers and if the land sale proceeds need to go to the County. Mr Locke stated that the sale proceeds can be negotiated with the County. Councilmember Sanger inquired if pilot payments were split with the other taxing distracts. Mr. Hunt stated they were not split. Councilmember Sanger inquired if they are limited to doing private activity bonds. Mr. Locke stated they receive money from the bonds annually. Councilmember Sanger inquired if Park Nicollet were to change the use of the facility would they still be tax exempt. Mr. Locke responded they will have to pay property taxes if they do something that is taxable. He stated a contract will be developed in the future if the project were to move forward. Mr. Hunt stated that any deviation would require an amendment to the contract. Councilmember Omodt stated he thought it is a better deal to move forward the new proposal. He noted that properties fall off the tax rolls on a regular basis. Councilmember Basill concurred with Councilmember Omodt. He stated he values the services that will be provided. Councilmember Paprocki stated it is difficult to say that this is a good deal. Mr. Hunt stated the City is ahead financially with the tax-exempt proposal. Ms. Gohman stated they can also put together a timeline on the discussions with financial data. Mayor Jacobs stated that they need to be careful when revisiting decisions that have been previously made. Study Session Minutes -4- June 25, 2007 Councilmember Sanger stated that it would be a buildable property for multi-tenant homes. Mr. Hunt presented the next steps. Councilmember Basill inquired when the present value analysis will be presented. Mr. Hunt stated they will receive it the night of the next meeting it is discussed at. Mayor Jacobs stated it would be helpful to have that information earlier. Councilmember Sanger inquired when the contract will come to a Council meeting. Mr. Locke responded probably in August. Councilmember Sanger stated Council has not had discussion of how the funding will be spent from the sale of the property. Mr. Locke stated that they currently have some funding, but spending options have not been determined yet. Councilmember Basill stated he has received inquiries about how the money will be spent. Mayor Jacobs noted that there is an intangible value to EDI. Mr. Hunt stated staff has articulated other financial benefits as well. Councilmember Basill noted the complexity of the deal. 3. Long-Range Financial Planning Mr. DeJong presented the staff report discussing the long-range financial management plan. Councilmember Paprocki clarified that the capital is depreciated. Councilmember Sanger inquired about receiving the tax settlement at one time. Mr. DeJong stated that they can ask for an advance to receive a portion of the funds. Councilmember Finkelstein noted they changed the range of investments. Mr. DeJong stated the long term interest rates are higher than the short term interest rates. Councilmember Sanger inquired about the types of policies Mr. DeJong would recommend developing and stated that it is important to plan for long-term assets. Mr. DeJong stated they have an understanding of the enterprise funds. He stated they don't have a good understanding of the cost for equipment replacement. Ms. Gohman stated those are concerns that are being brought forward. Councilmember Finkelstein inquired about the affect as TIF distncts are being de-certified and the size and use for the economic development fund. Mr. DeJong stated the economic development fund has about $20 million. Mayor Jacobs inquired if the money could be used to build the Wooddale Bridge. Mr. DeJong stated there are unrestricted funds in the economic development fund. Councilmember Finkelstein stated there had previously been discussions about the City contributing funds for TH 100. Ms. Gohman stated Mr. DeJong will map out the concerns for the funds. Study Session Minutes -5- June 25, 2007 Councilmember Sanger noted that the State can take large amounts of unrestricted funds. Mayor Jacobs inquired how they protect themselves from the State taking the funds. Mr. DeJong stated the City budgets for an excess in revenues over expenditures. He stated it is important for the Council to be thoughtful about where the money could be used long term. Councilmember Paprocki inquired about what happens to the funds at the end of the year. Ms. Gohman stated that if product is purchased to use some of the funds, it needs to be received by the end of the year. Councilmember Sanger inquired if it is expected to have an increase in delinquencies. Mr. DeJong stated that it wasn't expected. Mr. DeJong stated that Park and Reccreation have operated at a loss; the police and fire funds interest earnings have been spent, and they are beginning to spend the principal; and the debt services funds have stabilized. Councilmember Finkelstein inquired about the reason to pay in. Mr. DeJong stated the TIF will end prior to the bonds being paid. Councilmember Finkelstein clarified the rules for collecting the money for TIF. Councilmember Sanger inquired if it affects the bonds sold for other TIF projects. Mr. DeJong stated it would affect those bonds as well, but in many of those cases the bonds and projects are co-terminus. Councilmember Finkelstein clarified that this issue wouldn't anse in any other areas. Mr. DeJong stated that is correct. Councilmember Sanger inquired if WiFi would be part of the enterprise funds. Mr. DeJong stated it would. - Mr. DeJong stated in the CIP the expenditures exceed the funding source. Councilmember Finkelstein requested a wntten report about fiscal disparities. Councilmember Sanger suggested receiving an updated set of policies for all councilmembers. Ms. Gohman stated they are putting together instruction information. 4. Nestle/Novartis Update Mr. Locke updated City Council on the Nestle/Novartis project. The meeting adjourned at 8:52 p.m. Study Session Minutes -6- June 25, 2007 Written Reports provided and documented for recording purposes only: 5. Metropoint Parking Lot Improvements 6. May 2007 Monthly Finance Report 7. Park WiFi Update 8. Sidewalk Snow Removal Enforcement Program Update 9. Community Videos A_ Nancy Stroth, City Clerk Jeff aco , ayor