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HomeMy WebLinkAbout2004/08/02 - ADMIN - Minutes - Economic Development Authority - RegularAflhCITYOF ST. LOUIS PARK OFFICIAL MINUTES ECONOM IC DEVELOPME NT AUTHORITY ST. LOUIS PARK, MINNESOTA August 2, 2004 1. Call to Order President Santa called the meeting to order at 7:00 pm. 2. Roll Call. Commissioners present: Sue Santa, John Basill, Jeff Jacobs, Phil Finkelstein, Paul Omodt, Susan Sanger, and Sally Velick. Staff present: City Manager (Mr. Harmening), Community Development Director (Mr. Locke), Economic Development Coordinator (Mr. Hunt), Planning/Zoning Supervisor (Ms. McGonigal) and R ecording Secretary (Ms. Stegora-Peterson). 3. Approval of M inutes 3a. Economic Authority Minutes of June 21, 2004 The minutes were approved as presented. ) 4. Approval of Agenda 5. Reports Sa. Motion to accept and file vendor claim report It was motioned by Commissioner Jacobs, seconded by Commissioner Finkelstein to accept the vendor claims for filing. The motion passed 7-0. 6. Old Business 7. New Business 7a. Aquila Commons Tax Increment Finance District EDA Resolution No. 04-06 Mr. Hunt reported that Stonebridge Development had signed a purchase agreement for the currently vacant Talmud Torah school property located at 8200 W 33° Street. The developer planned to demolish the existing school building and construct a 122 unit senior housing development. The housing development would be structured as a limited equity cooperative and be an affordable housing option not currently available to seniors in St. Louis Park. The developers revised TIF application was discussed at the April 26 study session where it was favorably approved. At the May 3° Council meeting, a public hearing date was set for this evening for the proposed housing TIP District. The Planning EDA Minutes -2- August 2, 2004 Commission reviewed the proposed Aquila Commons TIF District on July 21 and found that it was in conformance with the City's Comprehensive Plan. The Aquila Comm ons TIF district consisted of a single property located at 8200 W 33'° St. The Developer, Aquila Senior LLC, otherwise known as Stonebridge Development and Acquisition, was requesting $1,077,500 in TIF assistance for a period not to exceed nine years. The estimated current value of the vacant Talmud Torah school site was approximately $1.9 million. The projected market value of the property upon completion of the redevelopment project was estimated at approximately $16.6 million and was a ratio of nearly 1.9, which was a significant increase in tax base. The property was currently tax exempt, and upon completion of the project, it would generate approximately $201,000 annually in net new taxes. The type of TIF District being proposed for the subject property was a Housing TIF District and met statutory requirements. Authorized by Statute, the duration of Housing TIF Districts was 25 years, however in this case, the proposed projects was likely to be paid off in approximately nine years. The proposed TIF plan and accompanying resolution had been prepared by the EDA's financial and legal consultants in consultation with staff. Staff recommended approval of the resolution establishing the Aquila Commons TIF District as presented. As stated at the neighborhood meeting last Wednesday, the adoption of the proposed TIF Plan allowed the City to create a Housing TIF District on the site, but did not commit the EDA to the proposed development because it was still subject to Comp Plan and PUD approval. Representatives from Ellers and Kenney & Graven were present at the meeting. Commissioner Omodt asked because they had to change the Comp Plan designation, this would not bind them or tie them to that project? Mr. Hunt replied that it would allow the City to create a Housing TIF District on the site, but did not tie them to the specific, proposed project. Commissioner Omodt clarified that they still had the right or the authority to make sure that the project matched what the neighborhood, the City and the developer all together believed was the right direction? Mr. Hunt replied correct, a development agreement would come before the EDA on August 16, provided that the other plans were approved prior to that. Commissioner Omodt indicated that some of the neighbors had called him and said that a plan was shown at the meeting with six-story building on this site. Was that a misinterpretation of what the drawing looked like or was that something staff knew of? Most neighbors he had talked with, were not comfortable with 3-stories. With 6-stories, they would be talking apples and oranges. Mr . Locke responded that would be more related to the zoning than the redevelopment of the site or the tax increment formation. The architect for the developer looked at how they could put 122 units on the site and meet the requirements of the zoning ordinance and stay within the maximum height and minimum setbacks and parking ratios, etc. They showed a simple schematic of how they could site a 122-unit building that met the zoning requirements that presently existed, but they would have to go to six stories to do it. That was not what they were proposing. Comm issioner Omodt believed that some of the neighbors thought that was a possibility and based on his conversations with them, they perceived that was a possibility and/or a threat. He thought they needed to be very careful because he didn't think a six-story building was right for that neighborhood and didn't know if that was what they intended. Neighbors wanted to be involved and enter into discussion with Stonebridge and the City and were scared about six-stories. Mr. Locke responded that he didn't believe anyone EDA Minutes -3- August 2, 2004 wanted six-stories and that was an exercise to look at what the current zoning allowed. It was not intended to be threat or even an option. C om mi ssioner Om odt asked if they were clear on the num ber of stories being pro posed? M r. Locke replied he believed part of the building would be three-stories and part would be fo ur-stori es. C ommi ssioner Finkelstein com m ented that it was set in a valley. C om m issioner Om odt stated that the gro und level from the houses on Texas would still have a fo ur -story building aro und it and the neighbors were very concern ed about anything above tw o-stories. If they were going fo rw ard he hoped they would listen to the neighbors because they would have to live with it. President Santa indicated that her understanding from the m eeting last week and conversations with staff and the developer were that additional m eetings with the neighbors would continue, specifi cally those neighbors living directly East of the project. She understood that would be scheduled fa irl y soon. Ron M ehl, Stonebridge D evelopm ent, indicated they were in com m unication and were coordinating a m eeting with the hom eow ners on Texas. M r. Locke indicated to answ er Commi ssioner Om odt' s concern s, the perspective from the E ast side of the project was actually three stories, and not fo ur. Com m issioner Om odt stated that the neighbors who had contacted him were very worried about three-stories. H e told them to com e to the m eeting. T hey saw six-stori es and that worri ed them , now they were talki ng three and fo ur -stories. They were com fo rtable with tw o and needed to work with the developer. H e wanted to be sur e they were listening to all of the parties in the C ity. Com mi ssioner Sanger liked the idea of having senior housing on the site, but could not support this part icular project. First, she did not believe it was an appro pri ate use of TIF fi nancing fo r this project. The developer had info rm ed them that they could build a senior condo building on the sam e site without any TIF assistance from the city being required. They indicated to do that, the units would be in the vicinity of $10-15,000 m ore per unit, which was a very sm all percentage considering what the overa ll prices were and the overa ll payouts that the ow ners would buy. She did not feel it was appro priate to be financed and didn't think it m et the but/for?? test when there obviously was a valid use that could be m ade of this pro perty without any taxpayer assistance. She also had som e concern s about the specifi cs of this project and the lim ited equity feature of the co-op pro posal. She didn't have a pro blem with the idea of a senior co-op, she had a pro blem and a concern about the limi ted equity fe atur e and the way that it was being described and com m unicated to the residents. They kept getting a changing story as to exactly what it was that residents, or potential residents, would be asked to pay and what the requirem ents would be in this condo. W hat she had been able to piece together based on the m ost recent com m unications, residents would be asked to pay a very substantial dow n-paym ent som ew here in the neighborhood of $40-60,000 and then m ake very hefty m onthly paym ents fo r their units to cover m ortgage paym ents, etc. and in return fo r that they would be lim ited so they could not get the sam e ra te of return when they sold their pro pert ies. T hey were limi ted and kept at a EDA Minutes .4. August 2, 2004 much lower rate than the rate of return that residents of St. Louis Park had been getting when they sold their houses now. To her, this was not a good financial option for the City to be investing in. She thought if the developer wanted to do it on their own, that was fine. From her perspective, this was not a good arrangement for the City to be subsidizing at this time. The main reason the developer had suggested this approach was because it tied into their preferred form of financing of the overall project. That was fine for the developer, she didn't think that meant that the City needed to be putting tax payers money into it. For those reasons, she would be voting against this and not be supporting TIF financing or a Comp Plan change for this project. It was motioned by Commissioner Jacobs, seconded by Commissioner Velick, to adopt EDA Resolution No. 04-06 modifying Redevelopment Project No. I and establishing the Aquila Commons Tax Increment Financing District and adopting a Tax Increment Financing Plan therefor. The motion passed 5-2, with Commissioners Omodt and Sanger opposed. 7b. Elmwood Village Tax Increment Finance District EDA Resolution No. 04-07 Mr. Hunt reported in early April of this year, Rottlund Home purchased the form er Quadion Corporation site on both sides of W ooddale Avenue and the two homes on the North side of Oxford Street for redevelopment purchases. Under the approved plan, called alternative one, the developer would demolish the form er manufacturing facilities that were on the site and construct 221 housing units. More specifically, the developer would construct 80 senior condos, 63 loft condominiums and 78 townhouses on the site West of W ooddale. This did not include development of the property on the East side of W ooddale. The EDA and Council reviewed the preliminary TIF application from Rottlund Homes for the project at the May 24" study session where it was favorably received. At the June 7 meeting, the Council set a public hearing date for this evening for the proposed Renewal and Renovation TIF District. Planning Comm ission reviewed the Tax Increment Financing Plan on July 21 and found that it was in conformance with the City's Comprehensive Plan. The proposed Elmwood Village TIF District consisted of seventeen properties located primarily along the West side of Wooddale Ave from Highway 7 on the North to Goodrich Avenue on the South and the boundaries were determined based upon the need for public infrastructure within that area. Four of the properties in the proposed Elmwood Village TIF District were currently included in the Trunk Highway 7 Redevelopment TIF District. Because the same properties could not be included in two different TIF Districts, a resolution would be before the Council recommending eliminating those parcels from the Trunk Highway 7 District. On May 24, in the study session it was demonstrated that the developer would incur a financing gap if it were to pursue alternative one, which was the development plan preferred by the City. The gap was due primarily to the cost of acquiring two additional homes on the North side of Oxford Street as well as additional demolition and site preparation costs. It was therefore agreed that Rottlund Homes request for $720,420 in TIF assistance was reasonable. Since that time, it had come to staff's attention that approximately $69,500 in additional costs would be incurred by the developer and therefore staff was recomm ending that the total TIF amount be adjusted to $790,000. This did not change the term by which the TIF district would be paid off, which was currently estimated at approximately four years. Currently the former Quadion property W est of W ooddale, not including the East side properties, and the four homes along the North side of Oxford Street had a total market EDA Minutes - 5- August 2, 2004 value of approximately $3.7 million. The project market value upon redevelopment of this property was approximately $52 million. The property taxes payable in 2004 for these same properties was less than $100,00 and upon redevelopment the site would generate an estimated $747,000. The type of TIF District proposed for the subject project was a Renewal and Renovation TIF District and the proposed district met statutory criteria. The duration of the district was likely to be four years, but by State Statute they were authorized to keep it open as long as 15 years. Staff recommended approval of the attached resolution establishing the Elmwood Village TIF District as presented. It was motioned by Commissioner Basill, seconded by Commissioner Jacobs, to adopt EDA Resolution No. 04-07 modifying Redevelopment Project No. 1 and establishing the Elmwood Village Tax Increment Financing District and adopting a Tax Increment Financing Plan therefor. The motion passed 7-0. 7c. Contract for Private Redevelopment with The Rottlund Company EDA Resolution No. 04-08 Mr. Hunt reported that at the May 24 study session the EDA and Council reviewed preliminary business points that would be the basis for a redevelopment contract with Rottlund Homes and those business points discussed and agreed to that evening were included in the development agreement before the Commission. A summary of the agreement was included in the materials. The assistance pro vided to the redeveloper under the agreement did not constitute a business subsidy under the Statutes because the assistance was for housing. Kennedy an d G ra ven , the EDA's legal Council was present for questions concerning the contra ct. Staff recommended appro val of the contra ct for private redevelopment between the EDA and the Rottlund Company as presented. It was motioned by Commissioner Basill, seconded by Commissioner Sanger, to adopt E DA R esolu tion No. 04 -08 approving a Contract for Private Redevelopment by and between the St. Louis Park Economic Development Authority and The Rottlund Company. The motion passed 7-0. 8. Communications: M r. Locke introduced the new Planning and Zoning Supervisor, Meg McGonigal. She had extensive experience in both the public and private sectors, most recently from the City of Bro oklyn Park. 9. Adjournment - T-h-;,e~m_e_e-ti_n_g_a_d-jo_u_m_ed~at_7_:_2=4-p_.m_. ---- /l ~ /J ~ g4 ,y {hfid Secretary President