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HomeMy WebLinkAbout2004/05/03 - ADMIN - Minutes - Economic Development Authority - RegularArth CITYOF ST. LOUIS PARK OFFICIAL MI NUTES ECONOM IC DEVE LOPME NT AUTHORITY ST.LOUISPARK,M INNE SOTA M ay 3, 2004 1. Call to Order Chair Santa called the meeting to order at 7:25 p.m. 2. Roll Call. ) Commissioners present: John Basill, Phil Finkelstein, Susan Sanger, Sue Santa, Paul Omodt, Sally Velick, and Jeff Jacobs. Staff present: Executive Director (Mr. Harmening), Economic Development Director (Mr. Hunt) and Recording Secretary (Ms. Teagarden). 3. Approval of M inutes 3a. Economi c Development Authority Special M eeting Minutes of March 22, 2004 The minutes were approved as presented 3b. Economic Development Authority Minutes of M arch 1, 2004 The minutes were approved as presented. 4. Approval of Agenda It was moved by Commissioner Velick, seconded by Commissioner Jacobs, to approve the agenda. Motion passed 7-0. 5. Reports Sa. M otion to accept and fil e vendor claim report. ®®NW®AMAN It was moved by Commissioner Jacobs, seconded by Commissioner Sanger, to accept and file vendor claim report. Motion passed 7-0. 6. Old Business - none 7. New Business 7a. Talmud Torah Tax Increment Finance District EDA Resolution No. 04-02 E D A M eetin g M inutes -2- M ay 3, 20 04 T he staff report w as given by M r. H unt. H e announced a representativ e fr o m S to neb ridg e D evelopm ent is present if there are questions of the developer. A t the A pri l 26, 20 04 S tu d y S essio n , staff and the E D A 's fi nancial consult ant, E hlers & A ssociates, w ere ask ed to elabora te on the pro posed pro ject, and how it m eets the "but fo r" test. S tacy K ilvang , E hlers & A ssociates, report ed tw o item s in the statu tes relevan t to th e "b ut fo r" test. T he fi rst one is in regar d to fi n ancial feasibili ty. W ould this developm en t m o v e fo rw ard "but fo r" publi c assistance? In other words, only with private investment would this project move forward. It is seen through pro forma analysis provided, and looking at everything from land cost, development cost, construction cost with regard to the development and industry standards. We found the public financial assistance is warranted. The key is to protect public assistance by providing only what is warranted and setting a cap in a look-back provision. The cap is set at one million dollars. Once development is completed, then go back to see how it actually performed. If it performs better, then assistance is reduced accordingly. The second item is looking into the foreseeable future at what is reasonably expected. If public assistance is not provided to this developer, would another developer or a similar development come forward and be developed. We look to what is supported in Maxfield Research Analysis. Looking at this from marketing standpoint, the most likely scenario is construction of for-sale condominiums. At the same level of density, we would look at higher value condominiums. According to the market study completed by Maxfield, the values in the current neighborhood are between $145,000 to $180,000. The average value is $160,000. From the market perspective, could they sell those units at a higher value? If another developer came in, could they sell at a higher value? The price points of $180,000 and above are more realistic because of where the project is located. In our opinion, the "but for" test for financial feasibility and the potential for another developer/similar development, have been met. Mr. Hunt asked the EDA to ask the City Council to set a Public Hearing to establish the proposed district. Setting a public hearing would not mean approving the specifics of the districts this evening, nor would the City Council be approving the specifics of the proposed project, but merely establishing the Public Hearing Date. By doing so, the wheels are set in motion to move forward on the project. It was moved by Commissioner Finkelstein, seconded by Commissioner Velick to adopt EDA Resolution No. 04-02 requesting the City Council to call for a public hearing on the establishment of the Talmud Torah Tax Increment Financing District (A Housing District), Commissioner Omodt looked ahead to the Consent Agenda for the City Council Meeting, Item 4i deals with the same item, and that is what we need to do? Mr. Hunt asked the EDA to request of the City Council to schedule the Public Hearing. The City Council acts on it. It is the same thing. Commissioner Sanger said she would be voting against this proposal, as she does not believe the "but for" test has been satisfied by the admission of the developers themselves. They could sell this as condominiums for the value of the units only $10,000 to $15,000 more than EDA Meeting Minutes -3- May 3, 2004 the value if they did it by a senior coop method. That is such a small gap, that she does not see any reason the City should be spending more than a million dollars in tax increment to support this particular project. Commissioner Finkelstein responded by saying he supported this motion and proposal because it is financially appropriate. He feels that the tax increment financing will be returned and the city will share in the gain. He believes it is appropriate for the market considering the surrounding area and the research by Maxfield. In addition, there are more than 500 condominiums coming online: this is a limited equity co-op which is an opportunity for seniors to sell their homes and live in dignity. He thinks there is a difference between what is currently available in St. Louis Park, this is what the community needs. Motion passed 6-1, Commissioner Sanger opposed. It was moved by Commissioner Velick, seconded by Commissioner Jacobs to authorize staff to negotiate a redevelopment agreement with Stonebridge Development relative to the former Talmud Torah school site. Motion passed 6-1, Commissioner Sanger opposed. 8. Com m unications - none ) 9. Adjournm ent The meeting was adjourned at 7:35 p.m. ®+ Secretary President