HomeMy WebLinkAbout2020/05/18 - ADMIN - Agenda Packets - City Council - RegularAGENDA
MAY 18, 2020
All meetings of the St. Louis Park City Council will be conducted by telephone or other electronic
means starting March 30, 2020, and until further notice. This is in accordance with a local emergency
declaration issued the city council, in response to the coronavirus (COVID-19) pandemic. Additionally,
city facilities are closed to the public until May 18 in keeping with the April 30, 2020, Executive Order
20-48 issued by Gov. Tim Walz extending the order directing Minnesotans to Stay at Home until May 18.
Some or all members of the St. Louis Park City Council will participate in the May 18, 2020 city council
meeting by electronic device or telephone rather than by being personally present at the city
council's regular meeting place at 5005 Minnetonka Blvd.
Members of the public can monitor this meeting by video and audio at https://bit.ly/watchslpcouncil
and on local cable (Comcast SD channel 17 and HD channel 859, or CenturyLink SD channel 8117 and
HD channel 8617 ) or by calling +1-312-535-8110 meeting number (access code): 372 106 61 for audio
only. Cisco Webex will be used to conduct videoconference meetings of the city council, with council
members and staff participating from multiple locations.
Members of the public wishing to address the city council regarding items on the agenda should call:
952.928.1304
−Consent agenda item (4a) Bid tab Monterey Drive improvements (Phase 1) – project no. 4020-1101
−Public hearing item (6a) Establishment of the Parkway Residences Tax Increment Financing District
−Public hearing item (6b) So. Cedar Trails Housing Improvement Area (HIA) 1st reading of ordinance
952-562-2888
−Discussion item (8a) Consider complaint of alleged violations of St. Louis Park Home Rule Charter
If you wish to provide public comment, please call when the meeting starts at 6:30 p.m. and follow
instructions provided. Comments will be taken during each item in the order they are received. Public
comments must relate to an item on the current city council agenda.
6:00 p.m. ECONOMIC DEVELOPMENT AUTHORITY
1.Call to order
2.Roll call
3.Approval of minutes -- None
5.Reports -- None
7.New business
7a. Redevelopment contract with Cedar Partners LLC – The Quentin
Recommended action: Motion to adopt EDA Resolution approving the Redevelopment
Contract between the EDA and Cedar Partners LLC.
Meeting of May 18, 2020
City council agenda
7b. Establishment of the Parkway Residences Tax Increment Financing District
Recommended action:
• Motion to adopt resolution approving the establishment of the Parkway Residences Tax
Increment Financing District (a redevelopment district).
• Motion to Adopt EDA Resolution authorizing an Interfund Loan for advance of certain costs
in connection with the administration of the Parkway Residences TIF District.
7c. Redevelopment contract with Sela Group and affiliates – Parkway Residences
Recommended action: Motion to adopt resolution approving the Redevelopment Contract
between the EDA, Parkway Place, LLC and other affiliates of Sela Group, LLC.
6:30 p.m. CITY COUNCIL MEETING
1. Call to order
1a. Pledge of allegiance
1b. Roll call
2. Presentations -- None
3. Approval of minutes
3a. LBAE meeting minutes of May 18, 2020
3b. City council meeting minutes of April 20, 2020
4. Approval of agenda and items on consent calendar
NOTE: The consent calendar lists those items of business which are considered to be routine and/or which need no
discussion. Consent items are acted upon by one motion. If discussion is desired by either a councilmember or a
member of the audience, that item may be moved to an appropriate section of the regular agenda for discussion.
The items for the consent calendar are listed on the last page of the agenda.
Recommended action: Motion to approve the agenda as presented and items listed on the consent
calendar; and to waive reading of all resolutions and ordinances. (Alternatively: Motion to add or remove
items from the agenda, or move items from consent calendar to regular agenda for discussion.)
4a. Designate Thomas and Sons Construction the lowest responsible bidder and authorize a
contract with the firm in the amount of $586,676.30 for Monterey Drive improvements
(Phase 1) – project 4020-1101
5. Boards and commissions -- None
6. Public hearings
6a. Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Recommended action: Mayor to open public hearing, take testimony, and then close the
public hearing. Motion to adopt Resolution approving the establishment of the Parkway
Residences Tax Increment Financing District (a redevelopment district).
6b. Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners
Association HIA
Recommended action: Mayor to reopen the public hearing, take testimony, and then close
the public hearing. Motion to approve first reading of an ordinance establishing the South
Cedar Trails Homeowners Housing Improvement Area pursuant to Minnesota statutes
428A.11 to 428A.21 and to set second reading date for June 1, 2020.
Meeting of May 18, 2020
City council agenda
7. Requests, petitions, and communications from the public – None
8. Resolutions, ordinances, motions and discussion items
8a. Consider complaint of alleged violations of the St. Louis Park Home Rule Charter
Recommended action: Review information provided in staff report, hear the basis for the
complaint from the complainants, and allow Councilmember Mavity to provide a response to
the complaint. Unless the council determines that more information is needed, the council is
then asked to deliberate and vote on the issue of whether or not a violation of Section 2.09
has occurred. If the council determines that a violation has occurred, the council must follow
the requirements of Section 2.09 related to public censure and imposition of any additional
penalty.
9. Communications – None
St. Louis Park Economic Development Authority and regular city council meetings are carried live on civic TV cable channel 17 and replays
are frequent; check www.parktv.org for the schedule. The meetings are also streamed live on the internet at www.parktv.org, and saved
for video on demand replays. During the COVID-19 pandemic, agendas will be posted on Fridays on the entrance doors to city hall and on
the text display on civic TV cable channel 17. The agenda and full packet are available after noon on Friday on the city’s website.
If you need special accommodations or have questions about the meeting, please call 952-924-2525.
Meeting: Economic development authority
Meeting date: May 18, 2020
Action agenda item: 7a
Executive summary
Title: Redevelopment contract with Cedar Partners LLC – The Quentin
Recommended action: **Due to the COVID-19 emergency declaration, this item is considered
essential business and is categorized as a Required Action**
•Motion to adopt EDA Resolution approving the Redevelopment Contract between the EDA
and Cedar Partners LLC.
Policy consideration: Does the EDA wish to approve the proposed redevelopment contract with
Cedar Partners LLC to facilitate The Quentin project?
Summary: Cedar Partners LLC (“redeveloper”) is proposing a new development called The
Quentin (originally called Cedar Place) in the Cedarhurst neighborhood along Cedar Lake Road
and Quentin Ave South to the east of the FIAT dealership. The proposed $21.3 million
redevelopment entails the removal of three existing buildings and construction of a five-story,
79-unit apartment building that includes two levels of structured parking. In compliance with
the city’s inclusionary housing policy, 10% (eight) of the units will be affordable to households
at or below 50% Area Median Income (AMI). There are extraordinary costs associated with
preparing the project site for redevelopment. In order for the redevelopment to achieve a
market rate of return, the redeveloper applied to the EDA for tax increment financing (TIF)
assistance. The EDA/city council received a staff report (pages 95-102) detailing the
redeveloper’s TIF application at the March 9, 2020 study session along with a recommendation
for the appropriate level of assistance. Key business terms for providing the proposed financial
assistance were provided in the April 13, 2020 study session staff report (pages 44-48).
Financial or budget considerations: Under the proposed redevelopment contract, Cedar
Partners agrees to construct the proposed multi-family redevelopment as specified under the
PUD approved April 20, 2020 and the EDA agrees to reimburse the redeveloper for qualified
redevelopment costs up to $500,000 in pooled tax increment from the Ellipse and Eliot Park TIF
districts. Use of this tax increment does not impact the tax increment pooling to be used for
affordable housing via the city’s affordable housing trust fund. The tax increment would be
disbursed to the redeveloper upon prove-up that sufficient public redevelopment costs had
been incurred during the project’s construction and a “lookback” analysis was completed
verifying the amount of TIF assistance was justified. The Contract also requires the redeveloper
to reimburse the EDA for all administrative and consulting costs the EDA incurred in conjunction
with the project.
Strategic priority consideration: St. Louis Park is committed to providing a broad range of
housing and neighborhood oriented development.
Supporting documents: Discussion
EDA resolution
Prepared by: Julie Grove, economic development specialist
Greg Hunt, economic development coordinator
Reviewed by: Karen Barton, community development director
Approved by: Tom Harmening, city manager, EDA executive director
Economic development authority meeting of May 18, 2020 (Item No. 7a) Page 2
Title: Redevelopment contract with Cedar Partners LLC – The Quentin
Discussion
Background: Cedar Partners LLC’s proposed project called The Quentin is located in the
Cedarhurst neighborhood along Cedar Lake Road and Quentin Ave South, directly east of the
FIAT dealership. The three existing buildings on the site age in range from 58-69 years old and
were determined to be structurally substandard by the city’s building official. The total
redevelopment project area is approximately 1.5 acres and is underutilized from a market
perspective given its proximity to both The West End and downtown Minneapolis.
Rendering looking NW from Cedar Lake Road
Proposed Project: The proposed $21.3 million redevelopment entails the removal of three
existing buildings and construction of a five-story, 79-unit apartment building that includes two
levels of structured parking. In compliance with the city’s inclusionary housing policy, 10% (8) of
the units will be affordable to households at or below 50% Area Median Income (AMI). The
second reading of the ordinance creating the PUD allowing construction of this redevelopment
was approved by the city council on April 20, 2020.
The Quentin will be designed to meet or exceed the requirements of the city’s Green Building
Policy and Efficient Building Ordinance. Notably the project will include a green roof on the east
side of the parking pedestal; no-mow, native plants and drought/salt-tolerant landscaping;
electric vehicle charging stations for residents and guests; and a solar array on the roof to offset
common area electricity use. Internal building systems will include all electrical heating in the
residential units, LED lighting with motion sensors in low-use common and parking areas, smart
thermostats, high-efficiency HVAC, Low-E glass, ventless dryers, low-flow showers, dual flush
toilets, reflective blinds, and energy star appliances.
Redeveloper’s request for tax increment financing assistance: The estimated total
development cost (TDC) to construct the proposed office building is approximately $21.3
million. There are considerable extraordinary costs associated with redeveloping the subject
site, including erosion control, soil correction, asbestos abatement, excavation, shoring and
Economic development authority meeting of May 18, 2020 (Item No. 7a) Page 3
Title: Redevelopment contract with Cedar Partners LLC – The Quentin
grading work, as well as two levels of structured parking. Altogether, the development will incur
more than $500,000 in extraordinary site preparation costs and over $3 million in structured
parking costs, which prevent the proposed project from achieving a market rate of return. To
enable the project to proceed, the redeveloper applied to the EDA for tax increment financing
(TIF) assistance to offset a portion of these costs.
Level and type of financial assistance: The redeveloper’s sources and uses statements, cash
flow projections, and investor rate of return (ROR) related to the proposed redevelopment
project was reviewed by staff and Ehlers (the EDA’s financial consultant). Based upon its
analysis of the redeveloper’s financial proforma, Ehlers determined that the proposed
redevelopment would not be reasonably expected to occur in the foreseeable future but for
the provision of $500,000 in pooled tax increment assistance. The TIF assistance would be
made available to exclusively reimburse the redeveloper for a portion of the qualified site
preparation costs, noted above.
TIF application process: The EDA/city council received a staff report (pages 95-102) detailing
the Redeveloper’s TIF Application at the March 9, 2020 study session. Key business terms for
providing the proposed financial assistance were provided in the April 13, 2020 study session
staff report.
Job Retention and Creation: Cedar Partners expects to create approximately 2 full-time
equivalent (FTE) positions upon completion of the proposed project.
Property Value and Taxes: The current combined assessed market value of the three subject
redevelopment parcels is approximately $1,228,600. Current property taxes for the three
subject parcels is approximately $32,800. The combined estimated market value of these sites
upon the proposed project’s completion (for TIF estimation purposes) is approximately
$21,330,000. Upon full project completion and occupancy, it is estimated that The Quentin
would generate approximately $359,000 in annual property taxes.
Proposed redevelopment contract: The proposed redevelopment contract with Cedar Partners
(“redeveloper”) specifies the mutual obligations between the EDA and the redeveloper as well
as the precise terms of the financial assistance to be provided. The following is a summary of
the proposed key business terms between the St. Louis Park EDA and the redeveloper, which
are consistent with EDA’s TIF Policy, past practices and previous discussions with the EDA/city
council. For clarification purposes, the Redevelopment Property consists of those properties
shown in the aerial photo below outlined in yellow.
Economic development authority meeting of May 18, 2020 (Item No. 7a) Page 4
Title: Redevelopment contract with Cedar Partners LLC – The Quentin
Proposed redevelopment site for The Quentin
1. The redeveloper agrees to construct a new 79-unit, five-story multi-family apartment
building. and related structured parking on the following parcels:
• 4900 Cedar Lake Road (contains a small one-story office building).
• 4905 Old Cedar Lake Road (contains a single-family home.
• 5005 Old Cedar Lake Road contains an office building).
2. The EDA agrees to reimburse the redeveloper for a portion of Redeveloper’s Public
Redevelopment Costs (defined as building demolition; site preparation including
excavation, erosion control, and shoring; soil correction; and environmental
remediation including asbestos abatement), through tax increment assistance in an
amount up to $500,000. The TIF assistance will not constitute a business subsidy under
Minnesota statutes because the assistance is for housing.
3. The EDA agrees to issue tax increment assistance to the redeveloper from pooled tax
increments from two previously created TIF districts up to $500,000. The TIF assistance
funds, less retainage of 10 percent, will be disbursed to the redeveloper upon prove-up
that eligible redevelopment costs had been incurred.
4. Final disbursement of the retainage will be subject to a “lookback” provision verifying
the amount of TIF assistance was justified. The lookback would be performed by Ehlers,
the EDA’s financial consultant upon stabilization (on or before December 31, 2022). The
look back provision ensures that if the total development costs are lower or if the
project performs better financially upon stabilization than the redeveloper’s estimates,
the EDA shares economically in the success of the project by reducing the amount of TIF
assistance provided.
5. Construction of the redevelopment will commence by September 1, 2020 and will be
substantially completed by December 31, 2021.
Economic development authority meeting of May 18, 2020 (Item No. 7a) Page 5
Title: Redevelopment contract with Cedar Partners LLC – The Quentin
6.Redeveloper will comply with the city’s current Inclusionary Housing Policy. Specifically,
redeveloper agrees to a 25-year covenant designating at least eight (10%) of the units as
affordable to households at or below 50% AMI.
7.Redeveloper will comply with the city’s current Green Building Policy/Climate Action Plan
requirements.
8.The Redeveloper will install dedicated wired fiber optic connections for the Minimum
Improvements in conformity with the City’s Planning Development Contract.
9.The Redeveloper agrees to pay reasonable administrative costs incurred by the EDA,
including consultant and attorney fees, in connection with the project.
A copy of the redevelopment contract is available for review in the community development
department.
Summary: As indicated in the March 9, 2020 study session staff report, the proposed $21.3
million (The Quentin) project has a verified financial gap and is not financially feasible but for
the provision of tax increment financing. To offset this gap, it is proposed that the EDA consider
reimbursing the redeveloper up to $500,000 in pooled tax increments from the Ellipse and Eliot
Park TIF districts. The use of this pooled TIF does not impact the TIF pooling for affordable
housing purposes via the city’s affordable housing trust fund.
Providing tax increment financing assistance to the proposed redevelopment makes it possible
to construct a high-quality multi-family apartment building consistent with the Comprehensive
Plan, to bring the subject properties to optimal market value, and provide the community with
additional market rate and affordable housing units with numerous energy efficient features.
Cedar Partners’ proposed Quentin development meets all the minimum and desired
qualifications and the city’s objectives for the provision of Tax Increment Financing as specified
in the city’s TIF Policy. The proposed amount of TIF assistance is in-line with other
developments the EDA has previously assisted.
Recommendation: Staff supports approval of the proposed redevelopment contract with Cedar
Partners LLC as outlined above to advance The Quentin redevelopment. The attached
resolution of approval allows for modifications to the contract that do not alter the substance
of the transaction without bringing the contract back to the EDA for amendment.
Next steps: Upon execution of the redevelopment contract, Cedar Partners plans to
immediately start clearing the site and begin construction of the 79-unit apartment building.
Economic development authority meeting of May 18, 2020 (Item No. 7a) Page 6
Title: Redevelopment contract with Cedar Partners LLC – The Quentin
EDA Resolution No. 20 -____
Resolution approving Contract for Private
Redevelopment with Cedar Partners LLC and awarding
certain Tax Increment Financing Assistance
Whereas, the St. Louis Park Economic Development Authority (the “Authority”) and the
City of St. Louis Park have previously approved the establishment of the Elmwood Apartments
Tax Increment Financing District and the Eliot Park Tax Increment Financing District (together,
the “TIF Districts”) within Redevelopment Project No. 1 (“Project”), and have adopted tax
increment financing plans for the purpose of financing certain improvements within the
Project; and
Whereas, pursuant to Minnesota Statutes, Sections 469.174 to 469.1794 as amended
(the “TIF Act”), the Authority is authorized to enter into agreements for the redevelopment of
property within the Project for the purpose of financing a portion of the public development
costs of the Project. Such assistance is payable from revenues derived from the TIF Districts,
subject to the limitations of Section 469.1763 of the TIF Act; and
Whereas, the Authority hereby finds and determines that it is in the best interests of
the Authority that it provide a grant of tax increment revenues (the “Grant”) for the purpose of
financing certain public redevelopment costs of the Project.
Now therefore be it resolved that the Contract for Private Redevelopment (the
“Agreement”) between the Authority and Cedar Partners LLC (the “Grantee”), as presented to
the Board, is hereby in all respects approved, subject to modifications that do not alter the
substance of the transaction and that are approved by the President and Executive Director,
provided that execution of the Agreement by such officials shall be conclusive evidence of
approval. Authority staff and officials are authorized to take all actions necessary to perform the
Authority’s obligations under the Agreement as a whole, including without limitation execution of
an escrow agreement and any other documents to which the Authority is a party referenced in or
attached to the Agreement, all as described in the Agreement.
It is further resolved that the Authority hereby authorizes Authority staff to disburse
the Grant in accordance with the Agreement. All capitalized terms in this resolution have the
meaning provided in the Agreement unless the context requires otherwise.
It is further resolved that the Grant shall be disbursed into escrow in the amount of
$500,000 and shall be disbursed to the Grantee in consideration of certain eligible costs
incurred by the Grantee under the Agreement, subject to adjustment based on the finalized
actual amount of Public Redevelopment Costs submitted and approved in accordance with
Section 3.3 of the Agreement. The Grant is payable from pooled Tax Increment from the TIF
Districts available for outside-district expenditures, as further described in the Agreement.
It is further resolved that this resolution shall be effective upon approval.
Economic development authority meeting of May 18, 2020 (Item No. 7a) Page 7
Title: Redevelopment contract with Cedar Partners LLC – The Quentin
Reviewed for Administration: Adopted by the Economic Development
Authority May 18, 2020
Thomas K. Harmening, executive director Rachel Harris, president
Attest:
Melissa Kennedy, secretary
Meeting: Economic development authority
Meeting date: May 18, 2020
Action agenda item: 7b
Executive summary
Title: Establishment of the Parkway Residences Tax Increment Financing District
Recommended actions: **Due to the COVID-19 emergency declaration, this item is considered
essential business and is categorized as a Required Action**
•Motion to adopt EDA Resolution approving the establishment of the Parkway Residences
Tax Increment Financing District (a redevelopment district).
•Motion to adopt EDA Resolution authorizing an Interfund Loan for advance of certain costs
in connection with the administration of the Parkway Residences TIF District.
Policy consideration: Does the EDA wish to support the establishment of a redevelopment tax
increment financing district to facilitate construction of the proposed Parkway Residences
multi-family housing project?
Summary: A staff report regarding Sela Group and affiliates’ (“redeveloper”) application for tax
increment financing (TIF) assistance in connection with its proposed Parkway Residences
project was provided at the February 24, 2020 study session. As stated in the report,
constructing the multi-phase project is not financially feasible but for the use of the proposed
tax increment assistance for which there was consensus support. On March 16, 2020 the EDA
adopted a resolution designating certain buildings along 31st Street structurally substandard to
a degree requiring removal in conjunction with the proposed redevelopment TIF district. It is
now time to take the final steps in the TIF process which is to formally authorize the creation of
the redevelopment TIF district and approve the proposed Redevelopment Contract. Such
authorizations enable the EDA to designate tax increment generated from the 94-unit
apartment building (“Building 1”) of the multi-phase Parkway Residences project as partial
reimbursement for certain qualified redevelopment costs incurred in connection with the
construction of the project so as to make it financially feasible.
Financial or budget considerations: Authorizing the establishment of the Parkway Residences
TIF District does not in itself, commit the city to any specific level of financial assistance for the
proposed project. Procedurally, it simply creates the funding vehicle to reimburse the
redeveloper for a portion of its qualified project costs. The terms and amount of TIF assistance
are specified within the Redevelopment Contract with Sela Group, LLC which is also scheduled
for consideration May 18, 2020. Authorizing an Interfund Loan allows the EDA to recoup certain
costs in connection with the administration of the new TIF District.
Strategic priority consideration: St. Louis Park is committed to providing a broad range of
housing and neighborhood oriented development.
Supporting documents: Discussion
EDA resolutions
TIF district overview
Prepared by: Greg Hunt, economic development coordinator
Reviewed by: Karen Barton, community development director
Approved by: Tom Harmening, city manager, EDA executive director
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 2
Title: Establishment of the Parkway Residences Tax Increment Financing District
Discussion
Background: The proposed Parkway Residences project includes 15 properties currently
consisting of single-family homes and an assortment of smaller apartment buildings along both
sides of 31st Street West between Inglewood Avenue South and Glenhurst Avenue South in the
Triangle Neighborhood. The buildings range in age from 41 to 113 years old with all but one of
the buildings at least 50 years old. Consulting firm LHB has determined that the buildings to be
removed are structurally obsolete and all but one display noticeable material blight. The total
redevelopment project area is approximately 2.5 acres and is underutilized from a market value
perspective given the new multi-story buildings to the north and its half-mile proximity to two
planned light rail stations.
Site information:
Site area (acres):
2.5 acres
Current use: Surrounding land uses:
Commercial, single-family, duplex, and
multi-family residential uses
Neighborhood: Triangle
North: Multi-family residential and right-
of-way
East: Multi-family residential
South: Multi-family residential
West: single-family and multi-family
residential uses.
Proposed Project: Sela Group’s proposed redevelopment is to be constructed immediately
adjacent to its Parkway 25 project (a 112-unit, mixed-use development with 12,000 square feet
of commercial) completed in 2018. The proposed Parkway Residences would entail the removal
of 12 existing buildings and construction of four new multi-family housing buildings with up to
211 new units. The redeveloper also plans to rehabilitate three existing apartment buildings
along 31st Street that contain 24 units creating a total of 235 new or renovated residential units
within the project. The redevelopment plan segments the project into four building sites to be
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 3
Title: Establishment of the Parkway Residences Tax Increment Financing District
built in phases: west campus, north campus, southwest campus and southeast campus plus the
three apartment buildings to be rehabbed. The development properties are not all contiguous,
thus the project will be built amongst other existing buildings. The four building sites are
described below.
Site 1 (the north campus– see map below) is toward the center of the site and includes six
existing residential buildings north of 31st Street West. The homes will be replaced with a 4-
story, 95-unit apartment building called “Parkway Place” with two-levels of underground
parking. This apartment building is planned to be the first phase of the project. The total area of
this building is 163,000 square feet.
Site 2 (the southeast campus – see map below) consists of two single-family homes that will be
redeveloped as a 6-unit apartment building. The apartment building will be developed with
affordable units as part of the city’s inclusionary housing policy requirement to provide
replacement housing for the naturally occurring affordable housing (NOAH) existing in the
project area that will be removed as part of the project. It is 7,500 square feet in size.
Site 3 (the southwest campus – see map below) is at the corner of Inglewood Avenue South and
31st Street West. It includes the removal of three existing single-family homes for the
construction of a 4-story, 37-unit apartment building with one level of underground parking.
The southwest campus is proposed to be a later phase of the project.
Site 4 (the west campus – see map below) includes an existing strip center at the southeast
corner of Inglewood Avenue South and County Road 25 that will be replaced with an 11-story
apartment building. The building will consist of eight-floors of residential units (73 units) with
parking and lobby space in the first two floors and the top floor dedicated to amenity space.
There is one-level of underground parking.
The three apartment buildings to be renovated lie on the south side of 31st Street West
(Buildings 5a, 5b, and 5c in the map below). The apartments include a total of 24 units of which
22 are considered naturally occurring affordable housing (NOAH) and will remain as NOAH
designated housing units by covenant for 25 years.
The Second Reading of the Ordinance creating the PUD to allow construction of the proposed
multi-phase redevelopment site was approved by the city council on February 3, 2020.
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 4
Title: Establishment of the Parkway Residences Tax Increment Financing District
Redeveloper’s request for public financing assistance and TIF Application review: Please see
the corresponding February 24,2020 EDA staff report.
TIF district approvals: On March 16, 2020 the EDA adopted a resolution designating certain
buildings along 31st Street as structurally substandard to a degree requiring removal and
authorized demolition of those buildings pending inclusion of the parcels in the proposed
redevelopment TIF district.
TIF District Overview and Plan: The attached Tax Increment Financing District Overview
summarizes the basic elements of the proposed Parkway Residences TIF District. Additional
details of the proposed TIF District may be found in the larger Parkway Residences TIF District
Plan (available by contacting the Community Development Department). Both the Overview
and TIF Plan were prepared by the EDA’s TIF consultant, Ehlers. The TIF Plan establishes the
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 5
Title: Establishment of the Parkway Residences Tax Increment Financing District
proposed TIF district’s classification, geographic boundaries, maximum duration, maximum
budget authority for tax increment revenues and expenditures, fiscal disparities election as well
as estimated impact on various taxing jurisdictions along with findings which statutorily qualify
the district. The specific mutual obligations between the EDA and the redeveloper, as well as
the specific terms of the financial assistance are contained in the separate Redevelopment
Contract between the parties. Both the TIF Plan and the Redevelopment Contract need to be
approved in order for redevelopment projects requiring tax increment to proceed.
Synopsis of the proposed Parkway Residences TIF District: The entire Parkway Residences
redevelopment site and proposed TIF district is within the City’s Redevelopment Project Area
which is the portion of the city where the EDA may statutorily establish TIF districts. In order to
provide the redeveloper with the proposed tax increment, a new Redevelopment TIF District
needs to be established and is shown in the map below.
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 6
Title: Establishment of the Parkway Residences Tax Increment Financing District
Location of proposed Parkway Residences TIF District
In this case, it was determined that the entirety of the tax increment to be provided to the
redeveloper would be derived exclusively from the Building 1 site. Therefore, the proposed
redevelopment TIF district includes the following six parcels which constitute the Building 1
site:
• 4000 W. 31st Street
• 4008 W. 31st Street
• 4012 W. 31st Street
• 4020 W. 31st Street
• 4100 W. 31st Street
• 4108 W. 31st Street
Subject properties within proposed redevelopment TIF district
Qualifications of the proposed TIF district: Consulting firm LHB conducted a TIF district
feasibility analysis to determine if the subject Building 1 site qualified as a Redevelopment
District under the MN TIF Act. After inspecting and evaluating the subject properties and
applying current statutory criteria, LHB determined the site qualifies under the MN TIF Act as a
redevelopment TIF district.
Duration of the proposed TIF district: Under the MN TIF Act, the duration of redevelopment
districts is up to 25 years after receipt of the first increment by the city (a total of 26 years of
tax increment). The first tax increment for this project is expected to be received in 2022. Thus,
the full term of the district is estimated to terminate after 2047. The EDA and city have the right
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 7
Title: Establishment of the Parkway Residences Tax Increment Financing District
to decertify the district prior to the legally required date. The city’s expressed obligations to the
redeveloper, per the terms of the Redevelopment Contract, are estimated to be satisfied in
approximately 15 years. Once those obligations are satisfied, the city may terminate the
district.
TIF district budget: The TIF Plan authorizes the use of tax increment funds generated by the
District to reimburse the redeveloper for certain qualified redevelopment costs incurred in
connection with the construction of Building 1 the project. It should be noted that the Sources
of Revenue and Uses of Funds within the TIF Plan is a not-to-exceed budget and not the actual
expected project budget.
Recommendation: The EDA’s financial consultant, Ehlers, prepared the Parkway Residences TIF
Plan in consultation with the EDA’s legal counsel, Kennedy & Graven and staff; all of whom
recommend approval of the establishment the Parkway Residences Tax Increment Financing
District and authorization of an Interfund Loan in connection with the administration of the
new TIF District.
Next steps: The redevelopment contract between the EDA and Sela Group and affiliates which
specifies the terms, conditions and amount of TIF assistance related to the proposed Parkway
Residences project is also scheduled for consideration by the EDA on May 18, 2020.
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 8
Title: Establishment of the Parkway Residences Tax Increment Financing District
EDA Resolution No. 20 -___
Resolution approving a modification to the Development Program
for Redevelopment Project No. 1 and the establishment of Parkway
Residences Tax Increment Financing District within the
Redevelopment Project, and adopting a Tax Increment Financing
Plan for the TIF District.
Whereas, the City of St. Louis Park, Minnesota (the “City”) and the St. Louis Park
Economic Development Authority (the “Authority”) have previously established Redevelopment
Project No. 1 (the “Redevelopment Project”) within the City, pursuant to Minnesota Statutes,
Sections 469.001 through 469.047, as amended, and Minnesota Statutes, Sections 469.090
through 469.1081, as amended; and
Whereas, the City and the Authority have proposed to approve a modification to the
Development Program for the Redevelopment Project (the “Program Modification”) and a tax
increment financing plan (the “TIF Plan”) for Parkway Residences Tax Increment Financing
District (the “TIF District”), a redevelopment district, within the Redevelopment Project,
pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF
Act”), all as described in a plan document presented to the Board on the date hereof.; and
Whereas, pursuant to Section 469.174, subdivision 2 of the TIF Act, the proposed
Program Modification and TIF Plan and the estimates of the fiscal and economic implications of
the TIF Plan were presented to the Board of Education of Independent School District No. 283
(St. Louis Park Public Schools) and to the Board of Commissioners of Hennepin County,
Minnesota (the “County”) at least thirty (30) days prior to the date of publication of the notice
of public hearing on establishment of the TIF District; and
Whereas, immediately following the meeting of the Authority on the date hereof, the
City Council will hold a duly noticed public hearing on the Program Modification and
establishment of the TIF District, and is expected to approve the creation of the TIF District and
the associated TIF Plan following such public hearing.
Now therefore, be it resolved as follows:
1. Subject to their approval by the City Council, the creation of the Program
Modification, the establishment of the TIF District, and the TIF Plan for the TIF District are
hereby approved.
2. Authority staff is hereby authorized and directed to file a request for certification
of the TIF District with the Taxpayer Services Division Manager of the County and to file a copy
of the TIF Plan with the Minnesota Commissioner of Revenue and the Office of the State
Auditor as required by the TIF Act.
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 9
Title: Establishment of the Parkway Residences Tax Increment Financing District
3.The Taxpayer Services Division Manager of the County is requested to certify the
original net tax capacity of the TIF District, as described in the TIF Plan, and to certify in each
year thereafter the amount by which the original net tax capacity has increased or decreased.
4.Authority staff, consultants, and legal counsel are authorized to take all actions
necessary to implement the TIF Plan and to negotiate, draft, prepare and present to the Board
for its consideration all further plans, resolutions, documents, and contracts necessary for this
purpose. Approval of the TIF Plan does not constitute approval of any project or a development
agreement with any developer.
Reviewed for Administration: Adopted by the Economic Development Authority
May 18, 2020
Thomas K. Harmening, executive director Rachel Harris, president
Attest:
Melissa Kennedy, secretary
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 10
Title: Establishment of the Parkway Residences Tax Increment Financing District
EDA Resolution No. 20 -___
Resolution authorizing an Interfund Loan for advance of certain
costs in connection with the Parkway Residences Tax Increment
Financing District.
Whereas, the City Council for the City of St. Louis Park, Minnesota (the "City"), intends
to establish Parkway Residences Tax Increment Financing District (the "TIF District") within
Redevelopment Project No. 1 (the "Project"), and will adopt a Tax Increment Financing Plan
(the "TIF Plan") for the purpose of financing certain improvements within the Project; and
Whereas, the St. Louis Park Economic Development Authority (the “Authority”) has
determined to use tax increments from the TIF District to pay for certain administrative costs
identified in the TIF Plan (the "Qualified Costs"), which costs may be financed on a temporary
basis from Authority funds available for such purposes; and
Whereas, under Minnesota Statutes, Section 469.178, Subd. 7, the Authority is
authorized to advance or loan money from the Authority's general fund or any other fund from
which such advances may be legally authorized, in order to finance the Qualified Costs; and
Whereas, the Authority intends to reimburse itself for the Qualified Costs from tax
increments derived from the TIF District in accordance with the terms of this resolution (which
terms are referred to collectively as the "Interfund Loan").
Now Therefore Be It Resolved as follows:
1. The Authority hereby authorizes the advance of up to $50,000 from any legally
authorized Authority fund or so much thereof as may be paid as Qualified Costs. The
Authority shall reimburse itself for such advances together with interest at the rate
stated below. Interest accrues on the principal amount from the date of each advance.
The maximum rate of interest permitted to be charged is limited to the greater of the
rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 as of the
date the loan or advance is authorized, unless the written agreement states that the
maximum interest rate will fluctuate as the interest rates specified under Minnesota
Statutes, Section 270C.40 or Section 549.09 are from time to time adjusted. The
interest rate shall be 5% and will not fluctuate.
2. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-annually on
each August 1 and February 1 (each a "Payment Date"), commencing on the first
Payment Date on which the Authority has Available Tax Increment (defined below), or
on any other dates determined by the Executive Director of the Authority, through the
date of last receipt of tax increment from the TIF District.
3. Payments on this Interfund Loan are payable solely from "Available Tax Increment,"
which shall mean, on each Payment Date, tax increment available after other obligations
have been paid, or as determined by the Executive Director of the Authority, generated
Economic development authority meeting of May 18, 2020 (Item No. 7b) Page 11
Title: Establishment of the Parkway Residences Tax Increment Financing District
in the preceding six (6) months with respect to the property within the TIF District and
remitted to the City by Hennepin County, all in accordance with Minnesota Statutes,
Sections 469.174 to 469.1799, as amended. Payments on this Interfund Loan may be
subordinated to any outstanding or future bonds, notes or contracts secured in whole or
in part with Available Tax Increment, and are on parity with any other outstanding or
future interfund loans secured in whole or in part with Available Tax Increment.
4.The principal sum and all accrued interest payable under this Interfund Loan are pre-
payable in whole or in part at any time by the Authority without premium or penalty.
No partial prepayment shall affect the amount or timing of any other regular payment
otherwise required to be made under this Interfund Loan.
5.This Interfund Loan is evidence of an internal borrowing by the Authority in accordance
with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable
solely from Available Tax Increment pledged to the payment hereof under this
resolution. This Interfund Loan and the interest hereon shall not be deemed to
constitute a general obligation of the State of Minnesota or any political subdivision
thereof, including, without limitation, the Authority. Neither the State of Minnesota,
nor any political subdivision thereof shall be obligated to pay the principal of or interest
on this Interfund Loan or other costs incident hereto except out of Available Tax
Increment, and neither the full faith and credit nor the taxing power of the State of
Minnesota or any political subdivision thereof is pledged to the payment of the principal
of or interest on this Interfund Loan or other costs incident hereto. The Authority shall
have no obligation to pay any principal amount of the Interfund Loan or accrued interest
thereon, which may remain unpaid after the final Payment Date.
6.The Authority may amend the terms of this Interfund Loan at any time by resolution of
the Board, including a determination to forgive the outstanding principal amount and
accrued interest to the extent permissible under law.
Reviewed for Administration: Adopted by the Economic Development
Authority May 18, 2020
Thomas K. Harmening, executive director Rachel Harris, president
Attest:
Melissa Kennedy, secretary
TAX INCREMENT FINANCING DISTRICT OVERVIEW
City of St. Louis Park
Parkway Residences Tax Increment Financing District
The following summary contains an overview of the basic elements of the Tax Increment Financing
Plan for the Parkway Residences Tax Increment Financing District. More detailed information on each
of these topics can be found in the complete Tax Increment Financing Plan.
Proposed action: ➢Modification to the Development Program for Redevelopment Project No.
1. The modification represents a continuation of the goals and objectives
set forth in the Development Program for Redevelopment Project No. 1.
➢Establishment of the Parkway Residences Tax Increment Financing
District (District) and the adoption of a Tax Increment Financing Plan (TIF
Plan).
Type of TIF District: Redevelopment District
Parcel Numbers: 06-028-24-11-0017 06-028-24-11-0018
06-028-24-11-0019 06-028-24-11-0020
06-028-24-11-0021 06-028-24-11-0022
Proposed
Development:
The District is being created to facilitate the construction of an approximate
95-unit market rate apartment in the City. The EDA intends to enter into an
agreement with Sela Investments and construction is anticipated to
commence in mid-late 2020. Please see Appendix A of the TIF Plan for a
more detailed project description.
Maximum duration: The duration of the District will be 25 years from the date of receipt of the first
increment (26 years of increment). The EDA elects to receive the first tax
increment in 2022. It is estimated that the District, including any modifications
of the TIF Plan for subsequent phases or other changes, would terminate
after December 31, 2047, or when the TIF Plan is satisfied.
Estimated annual tax
increment:
Up to $747,349
Economic development authority meeting of May 18, 2020 (Item No. 7b)
Title: Establishment of the Parkway Residences Tax Increment Financing District Page 12
City of St. Louis Park
Parkway Residences TIF District 2
Authorized uses:The TIF Plan contains a budget that authorizes the maximum amount that
may be expended:
Land/Building Acquisition ...................................... $ 2,000,000
Site Improvements/Preparation ............................ $ 2,530,000
Utilities .................................................................. $ 600,000
Other Qualifying Improvements ............................ $ 3,188,168
Administrative Costs (up to 10%) ......................... $ 659,134
PROJECT COSTS TOTAL .................................. $ 8,977,302
Interest .................................................................. $ 5,523,734
PROJECT COSTS TOTAL .................................. $ 14,501,036
See Uses of Funds on page 8 of the TIF Plan for the full budget
authorization.
Form of financing: The project is proposed to be financed by a pay-as-you-go note and interfund
loan.
Administrative fee: Up to 10% of annual increment, if costs are justified.
Interfund Loan
Requirement:
The EDA will be approving an interfund loan to pay for administrative and/or
capital expenses that will be incurred prior to receiving the first TIF dollars
from the District.
4 Year Activity Rule
(§ 469.176 Subd. 6)
After four years from the date of certification of the District one of the
following activities must have been commenced on each parcel in the
District:
•Demolition
•Rehabilitation
•Renovation
•Other site preparation (not including utility services such as sewer and
water)
If the activity has not been started by approximately May 2024, no additional
tax increment may be taken from that parcel until the commencement of a
qualifying activity.
5 Year Rule
(§ 469.1763 Subd. 3)
Within 5 years of certification revenues derived from tax increments must be
expended or obligated to be expended.
Any obligations in the District made after approximately May 2025, will not be
eligible for repayment from tax increments.
The reasons and facts supporting the findings for the adoption of the TIF P lan for the District, as
required pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution.
Economic development authority meeting of May 18, 2020 (Item No. 7b)
Title: Establishment of the Parkway Residences Tax Increment Financing District Page 13
City of St. Louis Park
Parkway Residences TIF District 3
Economic development authority meeting of May 18, 2020 (Item No. 7b)
Title: Establishment of the Parkway Residences Tax Increment Financing District Page 14
Meeting: Economic development authority
Meeting date: May 18, 2020
Action agenda item: 7c
Executive summary
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
Recommended action: **Due to the COVID-19 emergency declaration, this item is considered
essential business and is categorized as a Required Action**
•Motion to adopt EDA Resolution approving the Redevelopment Contract between the
EDA, Parkway Place, LLC and other affiliates of Sela Group, LLC.
Policy consideration: Does the EDA wish to approve the proposed redevelopment contract
with Parkway Place, LLC and affiliates, to facilitate the Parkway Residences project?
Summary: Parkway Place, LLC and various other Sela entities (“redeveloper”) are proposing a
multi-phase redevelopment called Parkway Residences along 31st Street West near Glenhurst
Avenue South adjacent to its recently completed Parkway 25 project. The $92 million
redevelopment entails the removal of 12 existing buildings and construction of four new multi-
family housing buildings with a total of up to 211 new units. The project also includes the
rehabilitation of three existing apartment buildings that contain 24 units between them for a
project total of 235 residential units. Of these units, 24 are designated as naturally occurring
affordable housing (NOAH) units which would be affordable to households at or below 50%
Area Median Income (AMI), and 6 units would be affordable to households at or below 60%
AMI. There are considerable extraordinary costs associated with preparing the Building 1 site
for redevelopment which negatively impact the project’s financial feasibility. In order for the
redevelopment to achieve a market rate of return, the redeveloper applied to the EDA for tax
increment financing (TIF) assistance. The EDA/city council received a staff report detailing the
redeveloper’s TIF Application at the February 24, 2020 study session along with a
recommendation for the appropriate level of assistance. Key business terms for providing the
proposed financial assistance were provided in the April 13, 2020 study session staff report.
Financial or budget considerations: Under the proposed redevelopment contract, the
redeveloper agrees to construct the proposed multi-phase, multi-family redevelopment as
specified under the PUD approved February 3, 2020 and the EDA agrees to reimburse the
redeveloper for qualified redevelopment costs related to Building 1 of the redevelopment up
to $3.35 million in pay-as-you-go tax increment generated by Building 1 upon its completion.
The financial assistance would be provided on a pay-as-you-go basis over a maximum term of
15 years.
Strategic priority consideration: St. Louis Park is committed to providing a broad range of
housing and neighborhood oriented development.
Supporting documents: Discussion
EDA resolution
Prepared by: Greg Hunt, economic development coordinator
Reviewed by: Karen Barton, community development director
Approved by: Tom Harmening, city manager, EDA executive director
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 2
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
Discussion
Background: The proposed Parkway Residences project includes 15 properties currently
consisting of single-family homes and an assortment of smaller apartment buildings along both
sides of 31st Street West between Inglewood Avenue South and Glenhurst Avenue South in the
Triangle Neighborhood. The buildings range in age from 41 to 113 years old with all but one of
the buildings at least 50 years old. Consulting firm LHB determined that the buildings proposed
for removal related to Building 1 are structurally obsolete and all but one display noticeable
material blight. The total redevelopment project area is approximately 2.5 acres and is
underutilized from a market value perspective given the new multi-story buildings to the north
and its half-mile proximity to two planned light rail stations.
Proposed Project: Parkway Place, LLC, and three related entities, Parkway Plats, LLC, Sela
Group, LLC, and Sela Investments, Ltd., LLP (together “redeveloper”) are proposing a multi-
phase redevelopment called Parkway Residences along 31st Street West near Glenhurst Avenue
South adjacent to its recently completed Parkway 25 project. The redevelopment entails the
removal of 12 existing buildings and construction of four new multi-family housing buildings
with up to a total of 211 new units. The redeveloper also plans to rehabilitate three existing
apartment buildings along 31st Street that contain 24 units between them for a total of 235 new
or renovated residential units within the project. The redevelopment plan segments the project
into four building sites to be built in phases: west campus, north campus, southwest campus
and southeast campus plus the three apartment buildings to be rehabbed. The development
properties are not all contiguous, thus the project will be built amongst other existing buildings.
The four building sites are described below.
Site 1 (the north campus– see map below) is toward the center of the site and includes six
existing residential buildings north of 31st Street West. The homes will be replaced with a 4-
story, 95-unit apartment building with two-levels of underground parking. This first apartment
building (“Building 1”) will have total area of 163,000 square feet.
Site 2 (the southeast campus – see map below) consists of two single-family homes that will be
redeveloped as a 6-unit apartment. The apartment will be developed with affordable units as
part of the city’s inclusionary housing policy requirement to provide replacement housing for
the naturally occurring affordable housing (NOAH) existing in the project area that will be
removed as part of the project. It will have total area of 7,500 square feet.
Site 3 (the southwest campus – see map below) is at the corner of Inglewood Avenue South and
31st Street West. It includes the removal of three existing single-family homes for the
construction of a 4-story, 37-unit apartment building with one level of underground parking.
Site 4 (the west campus – see map below) includes an existing strip center at the southeast
corner of Inglewood Avenue South and County Road 25 that will be replaced with an 11-story
apartment building. The building will consist of eight-floors of residential units (73 units) with
parking and lobby space in the first two floors and the top floor dedicated to amenity space. It
will also have one-level of underground parking.
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 3
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
The three apartment buildings to be renovated lie on the south side of 31st Street West
(Buildings 5a, 5b, and 5c in the map below). The apartments include a total of 24 units of which
22 are considered naturally occurring affordable housing (NOAH) and will remain as NOAH
designated housing units by covenant for 25 years.
The redeveloper has also agreed to include a number of energy efficient design features and
components into the multi-phase redevelopment (detailed further in this report) which exceed
the city’s Green Building Policy requirements and consequently the Climate Action Plan. The
Second Reading of the Ordinance creating the PUD to allow construction of the proposed multi-
phase redevelopment site was approved by the city council on February 3, 2020.
Redeveloper’s request for tax increment financing assistance: The estimated total
development cost (TDC) to construct the proposed Parkway Residences is approximately $92
million. Of that total, the TDC to construct the 95-unit apartment building (“Building 1”) within
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 4
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
Phase I is approximately $38.4 million. There are considerable extraordinary costs associated
with redeveloping the entire redevelopment site and the Building 1 site in particular. These
include soil correction, excavation, shoring and grading work, stormwater management for the
neighborhood, and underground parking. It is estimated that the entire development will incur
about $7.6 million in extraordinary site preparation costs and the Building 1 site will incur
approximately $3.7 million in such costs, preventing the proposed project from achieving a
market rate of return. To enable the project to proceed, the redeveloper applied to the EDA for
tax increment financing (TIF) assistance to offset a portion of these costs.
Level and type of financial assistance: In summary, the redeveloper’s sources and uses
statements, cash flow projections, and investor rate of return (ROR) related to the proposed
multi-phase redevelopment were reviewed by staff and Ehlers (the EDA’s financial consultant).
Based upon its analysis of the redeveloper’s financial proforma, Ehlers determined that the
redevelopment in general and Building 1 in particular would not be reasonably expected to
occur in the foreseeable future but for the provision of up to $3,350,000 in tax increment
assistance.
The TIF assistance would be made available to reimburse the redeveloper for a portion of the
qualified site preparation costs related to Building 1 exclusively. Upon completion of Building 1
and verification of the redeveloper’s qualified Public Redevelopment costs, tax increment
generated from the increased value of the property would be provided to the redeveloper on a
"pay-as-you-go" basis, which is the preferred financing method under the city's TIF Policy. It is
projected that the TIF Note would be retired in approximately 15 years with increment
generated by Building 1 which is consistent with other redevelopments the EDA has previously
facilitated.
TIF application process: The EDA/city council received a staff report detailing the Redeveloper’s
TIF Application at the February 24, 2020 study session. Key business terms for providing the
proposed financial assistance were provided in the April 13, 2020 study session staff report.
Job Creation: Sela expects to create approximately 5 to 7 full-time equivalent (FTE) positions
upon completion of all phases of the proposed project.
Property Value and Taxes: The current combined assessed market value of the 6 parcels that
constitute the Building 1 site is just over $3 million. This is the proposed TIF District’s Base
Value. The estimated market value of the Building 1 site upon completion (for TIF estimation
purposes) is approximately $25,650,000. Most of this value would be captured as tax increment
and used to make payments on the TIF Note until it is paid off and the TIF district is terminated.
Upon completion and occupancy of Building 1, it is estimated to generate over $432,600
annually in total property taxes. The city, county and school district would continue to receive
the property taxes collected on the subject site’s Base Value.
Buildings 2, 3, 4 and 5 will not be included in the proposed TIF District and therefore will make
an immediate increased contribution to the tax base upon their completion. These
developments will have a combined estimated market value of over $34 million and will
generate an estimated $523,600 annually in total property taxes.
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 5
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
Once the TIF Note is retired and the TIF district is decertified, the additional property taxes
generated by the project would accrue to the local taxing jurisdictions. Based on current
estimates, the entire Parkway Residences redevelopment will generate approximately $956,000
in total property taxes annually.
Proposed redevelopment contract: The proposed redevelopment contract specifies the mutual
obligations between the EDA and the redeveloper as well as the terms of the financial
assistance to be provided. The following is a summary of the proposed key business terms
between the St. Louis Park Economic Development Authority (“EDA”) and the redeveloper,
which are consistent with the EDA’s TIF Policy, past practices and previous discussions with the
EDA/city council. For clarification purposes, the Redevelopment Property consists of those
properties shown in the aerial photo below outlined in red.
Properties comprising the Parkway Residences’ “Redevelopment Property”
1.The redeveloper agrees to construct a phased multifamily rental development on the
Redevelopment Property consisting of the following “Minimum Improvements”:
•Phase I, comprising of a four-story, 95-unit apartment building and two levels of
underground parking (“Building 1”), the construction of a two-story, six-unit
apartment building (“Building 2”), and the renovation of three apartment
buildings with a total of 24 units (“Buildings 5a, 5b, 5c”);
•Phase II, comprising of a four-story, approximately 37-unit apartment building
and one level of underground parking (“Building 3”);
•Phase III, comprising of an 11-story, approximately 73-unit apartment building
and associated structured parking (“Building 4”).
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 6
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
2.The EDA agrees to reimburse the redeveloper for a portion of redeveloper’s Public
Redevelopment Costs (defined as building demolition, soil mitigation, earthwork, radon
mitigation, soil retention, excavation, shoring and site grading, as well as construction of
storm water management systems and structured parking) associated with the Building
1 site through tax increment financing (TIF) up to $3,350,000. The TIF assistance will not
constitute a business subsidy under Minnesota statutes because the assistance is for
housing.
3.The EDA agrees to issue a tax increment revenue note to the redeveloper in the
maximum principal amount of $3,350,000 (the “TIF Note”) payable from available tax
increment, generated by Building 1 on a “pay-as-you-go” basis, over a period not to
exceed 15 years. The TIF Note will bear interest at the lesser of 4% or redeveloper’s
actual financing interest rate.
4.In order to provide the tax increment to the redeveloper, the EDA agrees to establish a
new redevelopment TIF district including the following six parcels:
•4000 W. 31st Street
•4008 W. 31st Street
•4012 W. 31st Street
•4020 W. 31st Street
•4100 W. 31st Street
•4108 W. 31st Street
5.The EDA will issue the TIF Note to Parkway Place, LLC upon redeveloper providing the
EDA with a statement specifying the Public Redevelopment Costs incurred by the
redeveloper related to Building 1 along with evidence that each identified Public
Redevelopment Cost has been paid or incurred by the redeveloper.
6.A two-part "look back" provision will be incorporated into the proposed Contract. The
look back will be performed by Ehlers, the EDA’s financial consultant upon Buildings 1
and 2’s stabilization (the date they both achieve 93% lease-up). The look back provision
ensures that if Building 1’s total development costs are lower or if Buildings 1 and 2
perform financially better upon stabilization than the redeveloper’s estimates, the EDA
shares economically in the success of the project by reducing the amount of TIF
assistance provided. In addition, the TIF Note will be subject to adjustment if the
Redeveloper fails to commence construction of Phase II and/or III of the Minimum
Improvements by specified dates. The principal amount of the TIF Note will be reduced
by $550,000 for each Phase for which construction has not commenced (subject to
unavoidable delays) by the date required under the Contract.
7.Construction of Phase I will commence by August 30, 2020 and will be substantially
completed by April 30, 2022; construction of Phase II will commence by June 30, 2022
and will be substantially completed by September 30, 2023; and construction of Phase
III will commence by April 30, 2024 and will be substantially completed by December 31,
2025.
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 7
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
8.Redeveloper will comply with the city’s current Inclusionary Housing Policy. Specifically,
redeveloper agrees to a 25-year covenant designating the 24 units within Buildings 5a, 5b,
and 5c as affordable to households at or below 50% AMI and designating the 6 units of
housing within Building 2 as affordable to households at or below 60% AMI. In addition,
Redeveloper agrees to assist any current residents in the Buildings 5a, 5b, and 5c with
relocation and moving and transition costs during the Phase I construction period.
9.In the construction of all Phases, redeveloper will comply with the city’s current Green
Building Policy and will use commercially reasonable efforts to obtain “green”
certification for each phase of the redevelopment. Sustainable features to be
incorporated into the redevelopment include solar panels on Building 1, solar-ready
roofs on Buildings 3 and 4; white roofs and partial green roofs throughout the Minimum
Improvements; insulated underground parking structures and EV charging outlets
serving the majority of indoor parking spaces; and LED lighting. In addition, the
redeveloper will construct Building 2 as a Demonstration Building, including a near net-
zero energy performance design, high-performance insulation and windows, energy-
efficient lighting and mechanical systems, and solar roof panels.
10.The redeveloper will install public art and dedicated wired fiber optic connections for the
Minimum Improvements in conformity with the city’s Planning Development Contract.
11.The redeveloper and EDA mutually agree to enter into a Minimum Market Value
Assessment Agreement setting a minimum property tax value for Building 1.
12.The redeveloper agrees to pay reasonable administrative costs incurred by the EDA,
including consultant and attorney fees, in connection with the project.
A copy of the redevelopment contract is available for review in the community development
department.
Summary: As indicated in the February 24, 2020 study session staff report , the proposed $92
million multi-phase Parkway Residences redevelopment has a verified financial gap and is not
financially feasible but for the provision of tax increment financing. To offset this gap, it is
proposed that the EDA consider reimbursing the redeveloper up to $3.35 million in pay-as-you-go
tax increment generated by Building 1 of the redevelopment for a term of approximately 15 years.
Providing tax increment financing assistance to the proposed redevelopment makes it possible
to construct four, high quality multi-family apartment buildings and rehabilitate three existing
apartment buildings consistent with the Comprehensive Plan, to bring the subject properties to
optimal market value, and provide the community with additional market rate and affordable
housing units with numerous energy efficient features.
Sela’s proposed Parkway Residences redevelopment meets the minimum and desired
qualifications, and the city’s objectives for the provision of Tax Increment Financing as specified
in the city’s TIF Policy. The proposed amount of TIF assistance is in-line with other
developments the EDA has previously assisted.
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 8
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
Recommendation: Staff supports approval of the proposed redevelopment contract with
Parkway Place, LLC and affiliates as outlined above so as to advance the multi-phase Parkway
Residences redevelopment. The attached resolution of approval allows for modifications to the
contract that do not alter the substance of the transaction without bringing the contract back
to the EDA for amendment.
Next steps: Upon execution of the redevelopment contract, the redeveloper plans to begin
construction on Buildings 1 and 2 and complete renovations to Buildings 5a, 5b, and 5c (the
three existing apartment buildings).
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 9
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
EDA Resolution No. 20 -____
Resolution approving contract for private
redevelopment and awarding the sale of, and providing
the form, terms, covenants and directions for the
Issuance of its Tax Increment Revenue Note (Parkway
Residences Project) to Parkway Place, LLC
Be it resolved BY the Board of Commissioners (“Board”) of the St. Louis Park Economic
Development Authority, St. Louis Park, Minnesota (the “Authority”) as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority and the City of St. Louis Park have approved the
establishment of Parkway Residences Tax Increment Financing District (the “TIF District”) within
Redevelopment Project No. 1 (“Project”), and have adopted a tax increment financing plan for
the purpose of financing certain improvements within the Project.
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue
and sell its bonds for the purpose of financing a portion of the public development costs of the
Project. Such bonds are payable from all or any portion of revenues derived from the TIF
District and pledged to the payment of the bonds. The Authority hereby finds and determines
that it is in the best interests of the Authority that it issue and sell its Tax Increment Revenue
Note (Parkway Residences Project) (the “Note”) for the purpose of financing certain public
redevelopment costs of the Project.
1.02. Approval of Agreement; Issuance, Sale, and Terms of the Note.
(a)The Contract for Private Redevelopment between the Authority and Parkway Place,
LLC (the “Owner”) et al., as presented to the Board, is hereby in all respects approved, subject to
modifications that do not alter the substance of the transaction and that are approved by the
President and Executive Director, provided that execution of the Agreement by such officials shall
be conclusive evidence of approval. Authority staff and officials are authorized to take all actions
necessary to perform the Authority’s obligations under the Agreement as a whole, including
without limitation execution of any documents to which the Authority is a party referenced in or
attached to the Agreement, all as described in the Agreement.
(b) The Authority hereby authorizes the President and Executive Director to issue the
Note in accordance with the Agreement. All capitalized terms in this resolution have the
meaning provided in the Agreement unless the context requires otherwise.
(c) The Note shall be issued in the maximum aggregate principal amount of $3,350,000
to Parkway Place, LLC (the “Owner”) in consideration of certain eligible costs incurred by the
Owner under the Agreement, shall be dated the date of delivery thereof, and shall bear interest
at the lesser of 4.0% or the actual rate of financing obtained by the Owner, from the date of
issue per annum to the earlier of maturity or prepayment. The Note will be issued in the
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 10
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
principal amount of Public Redevelopment Costs submitted and approved in accordance with
Section 3.4 of the Agreement, and shall be subject to adjustment in accordance with Section 3.5
of the Agreement. The Note is secured by Available Tax Increment, as further described in the
form of the Note herein. The Authority hereby delegates to the Executive Director the
determination of the date on which the Note is to be delivered, in accordance with the
Agreement. The Note will mature on the earlier of (i) the date that all outstanding principal and
accrued interest has been paid, or (ii) the thirtieth semiannual Payment Date.
Section 2. Form of Note. The Note shall be in substantially the form attached
hereto as Exhibit A, with the blanks to be properly filled in and the principal and interest rate
amounts adjusted as of the date of issue.
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R-1.
The Note shall be issuable only in fully registered form. Principal of and interest on the
Note shall be payable by check or draft issued by the Registrar described herein.
3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be
payable by mail to the owner of record thereof as of the close of business on the fifteenth day
of the month preceding the Payment Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints the City Finance Director to perform
the functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto
shall be as follows:
(a) Register. The Registrar shall keep at its office a bond register in which the
Registrar shall provide for the registration of ownership of the Note and the registration of
transfers and exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form
reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Registrar shall authenticate
and deliver, in the name of the designated transferee or transferees, a new Note of a like
aggregate principal amount and maturity, as requested by the transferor. The Registrar may
close the books for registration of any transfer after the fifteenth day of the month preceding
each Payment Date and until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly
cancelled by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 11
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
endorsement on such Note or separate instrument of transfer is legally authorized. The
Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its
judgment, deems improper or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person
in whose name the Note is at any time registered in the bond register as the absolute owner of
the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or
on account of, the principal of and interest on such Note and for all other purposes, and all such
payments so made to any such registered owner or upon the owner’s order shall be valid and
effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of
the sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the
Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for
any tax, fee, or other governmental charge required to be paid with respect to such transfer or
exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become
mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount,
Termination Dates and tenor in exchange and substitution for and upon cancellation of such
mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon
the payment of the reasonable expenses and charges of the Registrar in connection therewith;
and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence
satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof,
and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance,
and amount satisfactory to it, in which both the Authority and the Registrar shall be named as
obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such
cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has
already matured or been called for redemption in accordance with its terms, it shall not be
necessary to issue a new Note prior to payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
Executive Director and shall be executed on behalf of the Authority by the signatures of its
President and Executive Director. In case any officer whose signature shall appear on the Note
shall cease to be such officer before the delivery of the Note, such signature shall nevertheless
be valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery. When the Note has been so executed, it shall be delivered by the Executive Director
to the Owner thereof in accordance with the Agreement.
Section 4. Security Provisions.
4.01. Pledge. The Authority hereby pledges to the payment of the principal of and
interest on the Note all Available Tax Increment as defined in the Note.
Available Tax Increment shall be applied to payment of the principal of and interest on the Note
in accordance with the terms of the form of Note set forth in Section 2 of this resolution.
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 12
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal
thereof or interest thereon (to the extent required to be paid pursuant to this resolution)
remains unpaid, the Authority shall maintain a separate and special “Bond Fund” to be used for
no purpose other than the payment of the principal of and interest on the Note. The Authority
irrevocably agrees to appropriate to the Bond Fund on or before each Payment Date the
Available Tax Increment in an amount equal to the Payment then due, or the actual Available
Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond Fund shall
be transferred to the Authority’s account for the TIF District upon the termination of the Note
in accordance with its terms.
4.03. Additional Obligations. The Authority will issue no other obligations secured in
whole or in part by Available Tax Increment unless such pledge is on a subordinate basis to the
pledge on the Note.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized
and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings
and records of the Authority, and such other affidavits, certificates, and information as may be
required to show the facts relating to the legality and marketability of the Note as the same
appear from the books and records under their custody and control or as otherwise known to
them, and all such certified copies, certificates, and affidavits, including any heretofore
furnished, shall be deemed representations of the Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon approval.
Reviewed for Administration: Adopted by the St. Louis Park Economic
Development Authority May 18, 2020
Thomas K. Harmening, executive director Rachel Harris, president
Attest
Melissa Kennedy, secretary
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 13
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
EXHIBIT A to AUTHORIZING RESOLUTION
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $_____________
TAX INCREMENT REVENUE NOTE
(PARKWAY RESIDENCES PROJECT)
Date
Rate of Original Issue
__% ___________, 20__
The St. Louis Park Economic Development Authority (the “Authority”) for value received,
certifies that it is indebted and hereby promises to pay to Parkway Place, LLC or registered assigns
(the “Owner”), the principal sum of $__________ and to pay interest thereon at the rate of
______ percent (__%) per annum, solely from the sources and to the extent set forth herein.
Capitalized terms shall have the meanings provided in the Contract for Private Redevelopment
between the Authority and the Owner and affiliated entities, dated as of ___________________,
2020 (the “Agreement”), unless the context requires otherwise.
1. Payments. Principal and interest (“Payments”) shall be paid on August 1, 20__
and each February 1 and August 1 thereafter to and including February 1, 20__ (“Payment
Dates”) in the amounts and from the sources set forth in Section 3 herein. Payments shall be
applied first to accrued interest, and then to unpaid principal. Interest accruing from the date of
issue through and including February 1, 20__ shall be compounded semiannually on February 1
and August 1 of each year and added to principal.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon thirty (30) days written notice to the Authority. Payments on this
Note are payable in any coin or currency of the United States of America which, on the Payment
Date, is legal tender for the payment of public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. Interest shall be computed on the basis of a year of
360 days and charged for actual days principal is unpaid.
3. Available Tax Increment. (a) Payments on this Note are payable on each Payment
Date solely from and in the amount of Available Tax Increment, which shall mean, on each
Payment Date, Ninety-five percent (95%) of the Tax Increment attributable to the Phase I Large
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 14
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
Apartment of the Minimum Improvements and Redevelopment Property that is paid to the
Authority by Hennepin County in the six months preceding the Payment Date.
(b) The Authority shall have no obligation to pay principal of and interest on this Note
on each Payment Date from any source other than Available Tax Increment and the failure of the
Authority to pay the entire amount of principal or interest on this Note on any Payment Date
shall not constitute a default hereunder as long as the Authority pays principal and interest
hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay
any unpaid balance of principal or accrued interest that may remain after the final Payment on
February 1, 20__.
4. Default. If on any Payment Date there has occurred and is continuing any Event
of Default under the Agreement, the Authority may withhold from payments hereunder under
all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the
Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid,
without interest thereon, within thirty (30) days after the Event of Default is cured. If the Event
of Default is not cured in a timely manner, the Authority may terminate this Note by written
notice to the Owner in accordance with the Agreement.
5. Prepayment. (a) The principal sum and all accrued interest payable under this
Note is prepayable in whole or in part at any time by the Authority without premium or penalty.
No partial prepayment shall affect the amount or timing of any other regular Payment otherwise
required to be made under this Note.
(b) Upon completion of the lookback calculations as described in Section 3.5(c)(i), (ii),
or (iii) of the Agreement, any amounts resulting from such calculations will be deemed to
constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed
prepayment is effective as of the date of delivery of such statement to the Owner, and will be
recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority
will deliver to the Owner a statement of the outstanding principal balance of the Note after
application of the deemed prepayment under this paragraph.
6. Nature of Obligation. This Note is one of an issue in the total principal amount of
$_________, issued to aid in financing certain public redevelopment costs and administrative
costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001
through 469.047, and is issued pursuant to an authorizing resolution (the “Resolution”) duly
adopted by the Authority on ________, 2020, and pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174
to 469.1794, as amended. This Note is a limited obligation of the Authority which is payable
solely from Available Tax Increment pledged to the payment hereof under the Resolution. This
Note and the interest hereon shall not be deemed to constitute a general obligation of the State
of Minnesota or any political subdivision thereof, including, without limitation, the Authority.
Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the
principal of or interest on this Note or other costs incident hereto except out of Available Tax
Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota
or any political subdivision thereof is pledged to the payment of the principal of or interest on
this Note or other costs incident hereto.
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 15
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth
therein, this Note is transferable upon the books of the Authority kept for that purpose at the
principal office of the City Finance Director, by the Owner hereof in person or by such Owner’s
attorney duly authorized in writing, upon surrender of this Note together with a written
instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such
transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge
required to be paid by the Authority with respect to such transfer or exchange, there will be
issued in the name of the transferee a new Note of the same aggregate principal amount, bearing
interest at the same rate and maturing on the same dates.
Except as otherwise provided in Section 3.3(d) of the Agreement, this Note shall not be
transferred to any person or entity, unless the Authority has provided written consent to such
transfer.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in
due form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the St. Louis Park Economic
Development Authority have caused this Note to be executed with the manual signatures of its
President and Executive Director, all as of the Date of Original Issue specified above.
ST. LOUIS PARK ECONOMIC DEVELOPMENT
AUTHORITY
Executive Director President
Economic development authority meeting of May 18, 2020 (Item No. 7c) Page 16
Title: Redevelopment contract with Sela Group and affiliates – Parkway Residences
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the City’s Chief Financial Officer, in the name of the person last listed below.
Date of
Registration
Registered Owner
Signature of
Chief Financial Officer
_________, 20__ Parkway Place, LLC
Federal Tax I.D No_____________
Meeting: City council
Meeting date: May 18, 2020
Minutes: 3a
Unofficial minutes
Local Board of Appeal & Equalization
St. Louis Park, Minnesota
April 13, 2020
1. Convene the local board of appeal and equalization
The St. Louis Park local board of appeal and equalization convened at 6:20 p.m.
2. Roll call – declaration of quorum
Board Members present: Chair Jake Spano, Tim Brausen, Anne Mavity, Larry Kraft, Rachel
Harris, Nadia Mohamed, and Margaret Rog
Board Members absent: none
Staff present: City Manager (Mr. Harmening), City Assessor (Mr. Bultema), Senior
Management Analyst (Ms. Solano), Recording Secretary (Ms. Pappas)
Guests: Janene Hebert, Hennepin County
3. Appoint chair
It was moved by board member Rog, seconded by board member Kraft, to appoint board
member Spano as Chair of the April 27, 2020 local board of appeal and equalization meeting.
The motion passed 7-0.
4. Acknowledgement of trained member (Kraft and Rog)
The board acknowledged board members Kraft and Rog as trained members.
5. Acknowledgement of assessing staff members in attendance
The Board acknowledged Cory Bultema (City Assessor) and Janene Hebert (Hennepin County).
6. Accept roster of appellants and call for any additions
Mr. Bultema presented the initial roster of appellants to the Board.
The Board accepted a total of 19 parcels into the record, for local board of appeal and
equalization actions. The copy of the roster is attached to these minutes.
A call for roster additions was made. No other appellants appeared.
City council meeting of May 18, 2020 (Item No. 3a) Page 2
Title: Local Board of Appeal and Equalization minutes of April 13, 2020
7.Determination of date and time for continued proceedings (reconvene)
It was moved by board member Brausen, seconded by board member Mavity, to reconvene the
local board of appeal and equalization on April 27, 2020 at 6:30 p.m. prior to the study session
in the council chambers, and also request appellants to present in writing ahead of time and
be available for questions during the April 27, 2020 reconvened meeting.
The motion passed 7-0.
8.Instruct assessor to:
a.Inform appellants for reconvene date via telephone and mail
b.Inform appellants of board process
c.Inform appellants of the county board application date (5/20/2020)
d.Re-inspect and re-appraise parcels under appeal
9.Completion of the local board certification form
The board completed the local board of appeal and equalization certification form
10.Recess
The local board of appeal and equalization recessed the meeting at 6:31 p.m.
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) ss
CITY OF ST. LOUIS PARK )
The undersigned, being the duly qualified city clerk of the City of St. Louis Park, Minnesota,
certifies that the foregoing is a full, true and correct copy of the official local board of appeal
and equalization minutes of April 13, 2020 that are on file in the office of the city clerk.
WITNESS my hand and the seal of the City of St. Louis Park this day of May, 2020.
Melissa Kennedy, city clerk
Date: May______, 2020
Roster - City of St. Louis Park Local Board of Appeal & Equalization - Convene April 13, 2020
Reference 2020 A ppealed A ssessing O w ner Board
N a m e Property Address Prope rt y ID # 2019 Value Classifi cation 2020 Value Revaluatio n Ind icated A ctio n
K arin Larso n 320 Ford Rd #8 01-1 17 -22 -11-0 035 $142,100 X-Condominium - H $157,100 Sustain Appeal
Tho m as Snoo k 3725 Huntington Ave S 06 -02 8-24-44 -017 0 $718,400 R-Single Family - H $730,700 $680,000 Appeal
B rent LaM ar 2061 Utah Ave S 07-1 17-21-1 1-0 0 18 $431,000 R-Single Family- H $440,000 $405,000 Appeal
B rend a Ro senh am e r 4262 Wooddale Ave 07-028 -24 -3 1-012 5 $368,300 R-Single Family Non $379,700 Sustain Appeal
Ja m e s M a liso w 2819 Aquila Ave S 07-11 7 -2 1-43-0038 $462,000 R-Single Family - H $481,800 $4 50,000 Appeal
Ed w ard R o che 7414 22nd St W #103 08-1 17-2 1-2 1-00 03 $98,600 X-Condominium - RH $118,100 Sustain Appeal
MMP (by representative) 5901 Wayzata Blvd 04 -1 17 -2 1-32 -008 8 $9,032,000 Commercial-Hotel $9,032,000 Pending Appeal
MMP (by representative) 1400 Zarthan Ave S 04-11 7 -2 1-32 -008 9 $7,420,000 Commercial-Hotel $7,4 20,000 Pend ing Appeal
36 P ark, LLC 3601 Park Center Blvd 06-02 8-24-33 -0 0 19 $44,500,000 Apartment $47,671 ,000 Pend ing Appeal
HSSLP, LLC (by representative) 5305 Wayzata Blvd 30-029 -24-32 -0 025 $11,201,000 Commercial-Hotel $11,668,000 Pending Appeal
RISLP, LLC (by representative) 5075 Wayzata Blvd 30-029 -24-32 -002 9 $11,880,000 Commercial-Hotel $11,880,000 Pend ing Appeal
Richard H a rriso n 1550 Zarthan Ave S #506 04-1 17 -2 1-32 -0174 $339,800 X-Condominium - H $332,000 $310,000 Agree
P au l B ische l 3700 Glenhurst Ave 06 -028 -24-44 -000 9 $491,400 R-Single Family - H $517,500 $4 91,400 Agree
W illiam Ko rdaris 3727 Inglewood Ave S 06-028 -24-44 -0 110 $289,700 R-Single Family - H $299,800 $279,000 Agree
M att he w D e lisle 4272 Wooddale Ave 07-028 -24 -3 1-012 8 $411,600 R-Single Family - H $423,600 $395,000 Agree
Richard C o he n 2222 Oregon Ct 08 -1 17 -2 1-2 1-035 0 $225,200 Y-Townhouse - H $228,000 $216,600 Agree
Lau ren Stich a 2901 Georgia Ave S 08 -1 17 -2 1-44 -02 15 $283,700 R-Single Family - H $299,600 $288,600 Agree
D avid Krocak 3246 Sumter Ave S 17 -1 17-21-23 -0 0 15 $322,000 R-Single Family - H $324,000 $307,000 Agree
A brah am Ju ng bau e r 7806 Cambridge St 20 -117 -2 1-22 -01 12 $492,400 R-Single Family - H $528,000 $470,000 Agree
City council meeting of May 18, 2020 (Item No. 3a)
Title: Local Board of Appeal and Equalization minutes of April 13, 2020 Page 3
Meeting: City council
Meeting date: May 18, 2020
Minutes: 3b
Unofficial minutes
City council meeting
St. Louis Park, Minnesota
April 20, 2020
1. Call to order
Mayor Spano called the meeting to order at 7:18 p.m.
Councilmembers present: Mayor Jake Spano, Tim Brausen, Rachel Harris, Larry Kraft, Anne
Mavity, Nadia Mohamed, and Margaret Rog
Councilmembers absent: None
Staff present: City Manager (Mr. Harmening), City Attorney (Mr. Mattick), Economic
Development Coordinator (Mr. Hunt), Community Development Director (Ms. Barton),
Communications Manager (Ms. Smith), Senior Planner (Mr. Walther), Planner (Ms. Monson),
CIO (Mr. Pires), and Recording Secretary (Ms. Pappas)
Guests: None
1a. Pledge of allegiance
1b. Roll call
2. Presentations
2a. National Volunteer Week proclamation and annual volunteer update
Mayor Spano read the proclamation.
Councilmember Harris acknowledged all who serve on the city’s boards and
commissions, noting she wrote thank you cards to all in Ward 3 who serve.
Mayor Spano concurred with Councilmember Harris, adding that those who serve at the
Nature Center volunteer over 4,000 hours of service each year. He stated many
volunteers in St. Louis Park are not even residents of the city.
2b. National Public Safety Telecommunications Week
Mayor Spano read the proclamation. He acknowledged and thanked the work of
dispatchers in the city’s fire department and police force, and the importance of those
first contacted for 911 calls.
3. Approval of minutes
3a. City council meeting minutes of March 2, 2020
City council meeting of May 18, 2020 (Item No. 3b) Page 2
Title: City council meeting minutes of April 20, 2020
Councilmember Kraft noted on page 6, 2nd paragraph it should read, “…such as mostly
paint and signs.”
It was moved by Councilmember Rog, seconded by Councilmember Kraft, to approve the
March 2, 2020 city council meeting minutes as amended.
The motion passed 7-0.
3b. Study session minutes of March 9, 2020
It was moved by Councilmember Rog, seconded by Councilmember Mavity, to approve
the March 9, 2020 study session minutes as presented.
The motion passed 7-0.
3c. City council meeting minutes of March 16, 2020
Councilmember Rog noted on page 6, 3rd paragraph down, it should read, “… public art
being proposed is a fraction of the cost of the bridge.”
It was moved by Councilmember Rog, seconded by Councilmember Kraft, to approve the
March 16, 2020 city council meeting minutes as amended.
The motion passed 7-0.
4. Approval of agenda and items on consent calendar
4a. Approve second reading and adopt Ordinance No. 2584-20 adding Section 36-268-
PUD 16 to the zoning code and amending the zoning map from R-C high-density
multiple-family residence to PUD 16 and approve the Summary Ordinance for
publication.
4b. Adopt Resolution No. 20-074 accepting work and authorizing final payment in the
amount of $20,998.05 for the 2019 Alley reconstruction project with G.L.
Contracting, Inc. - city contract No. 97-19.
4c. Adopt Resolution No. 20-075 declaring the official intent of the City of St. Louis
Park to reimburse certain expenditures from the proceeds of bonds to be issued by
the city.
4d. Approve an extension until April 20, 2021 to act upon the approved conditional use
permit (CUP) and variance at 8105 Minnetonka Boulevard.
4e. Designate GMH Asphalt the lowest responsible bidder and authorize execution of a
contract with the firm in the amount of $412,947.10 for street maintenance-
project no. 4020-1200.
It was moved by Councilmember Mavity, seconded by Councilmember Rog, to approve
the agenda as presented and items listed on the consent calendar; and to waive reading
of all resolutions and ordinances.
The motion passed 7-0.
City council meeting of May 18, 2020 (Item No. 3b) Page 3
Title: City council meeting minutes of April 20, 2020
5. Boards and commissions - none
6. Public hearings
6a. Amendment to Ordinance 2581-20 vacating portions of alley right-of-way – 31st
Street W.
Ms. Monson presented the staff report.
Mayor Spano opened the public hearing. No speakers were present. Mayor Spano
closed the public hearing.
It was moved by Councilmember Rog, seconded by Councilmember Brausen, to approve
first reading of ordinance amending and reinstating Ordinance 2581-20 vacating the
right-of-way between 31st Street W. and the Highway 7 frontage road between
Glenhurst Avenue and Inglewood Avenue and set the second reading of the ordinance
for May 4, 2020.
The motion passed 7-0.
7. Requests, petitions, and communications from the public – none
8. Resolutions, ordinances, motions and discussion items - none
9. Communications
Councilmember Mohamed stated she is interested in applying to be a board member of STEP.
Mr. Harmening stated he will discuss this with Councilmember Mohamed, in light of potential
conflict of interest issues or the perception of a conflict.
Councilmember Mohamed also noted that Ramadan begins on Friday, April 24.
Councilmember Kraft noted Wednesday, April 22, is the 50th anniversary of Earth Day. He
reminded folks that many events planned are now virtual, noting Earth Day is a good reminder
that we are all globally connected and the climate crisis continues.
Councilmember Brausen agreed with Councilmember Kraft and stated because of climate
change, 800,000 people die of respiratory illnesses each year. He stated we need to start
reacting to this and press our legislators.
10. Adjournment
The meeting adjourned at 7:40 p.m.
______________________________________ ______________________________________
Melissa Kennedy, city clerk Jake Spano, mayor
Meeting: City council
Meeting date: May 18, 2020
Consent agenda item: 4a
Executive summary
Title: Bid tab Monterey Drive improvements (Phase 1) – Project 4020-1101
Recommended action: **Due to the COVID-19 emergency declaration, this item is considered
essential business and is categorized as a Required Action**
• Motion to designate Thomas and Sons Construction the lowest responsible bidder and
authorize a contract with the firm in the amount of $586,676.30 for Monterey Drive
improvements (Phase 1) – project 4020-1101
Policy consideration: Does the city council wish staff to continue to pursue the bikeway and
roadway improvements identified in this report?
Summary: A total of five (5) bids were received for this project on May 7, 2020. A summary of
the bid results is as follows:
CONTRACTOR BID AMOUNT
Thomas and Sons Construction $586,676.30
Ramsey Companies $612,127.15
Bituminous Roadways, Inc. $639,475.98
S.M. Hentges & Son, Inc. $669,508.15
GMH Asphalt Corporation $688,030.16
Engineer’s estimate $653,800.00
The bid review indicates Thomas and Sons Construction submitted the lowest responsible bid.
Thomas and Sons Construction has completed this type and size of work successfully in other
cities. Staff recommends that a contract be awarded to the firm in the amount of $586,676.30
Financial or budget considerations: This project is included in the city’s Capital Improvement
Plan (CIP) for 2020. A combination of development funds, municipal state aid, sanitary sewer,
storm sewer and watermain funds are expected to be utilized to fund this phase. Additional
information on the breakdown of the funding can be found later in this report.
Strategic priority consideration: St. Louis Park is committed to providing a variety of options for
people to make their way around the city comfortably, safely and reliably.
Supporting documents: Discussion
Project overview map
Prepared by: Jack Sullivan, senior engineering project manager
Reviewed by: Debra Heiser, engineering director
Approved by: Tom Harmening, city manager
City council meeting of May 18, 2020 (Item No. 4a) Page 2
Title: Bid tab Monterey Drive improvements (Phase 1) – Project 4020-1101
Discussion
Background: Council approved the final plans and specifications and authorized bidding
documents on March 16, 2020.
An advertisement for bids was published in the St. Louis Park Sun Sailor on April 9, 2020 and
April 16, 2020, and in Finance and Commerce on April 9 through April 22, 2020. Email
notification was provided to four (4) minority associations, and final printed plans were
available for viewing at City Hall. In addition, plans and specifications were made available
electronically via the internet on the city’s eGram website.
Thirty-three (33) contractors/vendors obtained plan sets, including two (2) Disadvantage
Business Enterprises (DBE).
Project scope: The limits of the project on Monterey Drive (Phase 1) are from Excelsior
Boulevard to just north of Park Commons Drive. The project was initiated as a project to
enhance biking along Monterey Drive to connect it to the larger existing and proposed bike
network in the city. There are numerous related infrastructure projects that have been added
to the scope of this project. An overview of the aspects of the project can be found below:
• Restrict the intersection of Park Commons Drive and Monterey Drive to a three-fourths
access (no left turn to northbound Monterey Drive from eastbound Park Commons
Drive)
• Improvements to the sidewalk adjacent to Bridgewater Bank
• Improvements to the sanitary sewer forcemain
• Rehabilitation of the existing pavement
• Add space for on-street bike facilities- these will be installed as a part of phase 2
• Reduction from four lanes of traffic to three lanes north of Park Commons Drive
• Changes to the signal system at the intersections at Excelsior Boulevard Monterey Drive
to prioritize the safety of all users of the intersection with emphasis on pedestrians and
bicyclists
• No changes to parking restrictions
Financial considerations: A combination of development funds, municipal state aid, sanitary
sewer, storm sewer and watermain funds are expected to be utilized to fund this phase. The CIP
anticipated using general obligation bonds to pay for the sidewalk and bikeway costs included
with this project, however, in order to reduce the future bond sale amount, municipal state aid
funds are being used.
The lead time on delivery for items such as traffic signal poles and streetlights is 3 to 6 months.
In order to ensure the traffic signal pole at the northeast corner of Excelsior Boulevard and
Monterey Drive could be installed this summer, the city ordered the new pole in January
separate from the current bid from Thomas and Sons Construction.
There are some savings present in the current design when compared to the CIP shown below.
During the plan development, the condition and location of the existing westerly curb line,
storm sewer or multiuse trail adjacent to the curb did not need to be removed and replaced as
City council meeting of May 18, 2020 (Item No. 4a) Page 3
Title: Bid tab Monterey Drive improvements (Phase 1) – Project 4020-1101
part of the project. Leaving this infrastructure in place results in considerable savings to certain
funding sources. Based on the low bid received, cost and funding details are as follows:
CIP Low bid
Construction costs $1,000,000 $586,676.30
Traffic signal pole purchase n/a $16,073.00
Engineering and administration (25%) $250,000 $150,687.33
Total $1,250,000 $753,436.63
Funding sources
Development fund $75,000 $49,804.38
Sidewalks and bikeways (GO bonds) $250,000 $0.00
Municipal state aid $581,250 $589,492.25
Sanitary sewer $131,250 $81,763.75
Stormwater utility $187,500 $24,501.25
Watermain $25,000 $7,875.00
Total $1,250,000 $753,436.63
Due to the nature of our construction projects, unexpected costs do come up. To address this,
past practice has been to show a contingency for all aspects of the project. What follows is a
table that shows this contingency and how this would affect the project costs.
Low Bid Contingency (5%) Engineering Total
Development Funds $39,843.50 $1,992.18 $10,458.92 $52,294.59
Sidewalk and Bikeway (GO Bond) $0.00 $0.00 $0.00 $0.00
Municipal State Aid $471,593.80 $23,579.69 $123,793.37 $618,966.86
Sanitary Sewer $65,411.00 $3,270.55 $17,170.39 $85,851.94
Stormwater Utility $19,601.00 $980.05 $5,145.26 $25,726.31
Watermain $6,300.00 $315.00 $1,653.75 $8,268.75
Total $602,749.30 $30,137.47 $158,221.69 $791,108.46
Schedule and next steps: Monterey Drive near Excelsior Boulevard is an active area with
limited room for a contractor to work. There are expected to be numerous lane shifts necessary
to facilitate safely completing the work. These site constraints are expected to increase the
duration of the work. The intersection of Park Commons Drive and Monterey Drive is expected
to be closed for approximately two weeks to safely complete the work at this location.
Construction for Phase 1 is expected to start in early June and be completed in August of 2020.
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City council meeting of May 18, 2020 (Item No. 4a)
Title: Bid tab Monterey Drive improvements (Phase 1) – Project 4020-1101 Page 4
Meeting: City council
Meeting date: May 18, 2020
Public hearing: 6a
Executive summary
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Recommended actions: **Due to the COVID-19 emergency declaration, this item is considered
essential business and is categorized as a Required Action**
•Mayor to open public hearing, take testimony, and then close the public hearing. Motion to
adopt Resolution approving the establishment of the Parkway Residences Tax Increment
Financing District (a redevelopment district).
(The EDA will have considered establishment of the Parkway Residences TIF District earlier in the
evening.)
Policy consideration: Does the city council wish to support the establishment of a
redevelopment tax increment financing district to facilitate construction of the proposed
Parkway Residences multi-family housing project?
Summary: A staff report regarding Sela Group and affiliates’ (“redeveloper”) application for tax
increment financing (TIF) assistance in connection with its proposed Parkway Residences
project was provided at the February 24, 2020 study session. As stated in the report,
constructing the multi-phase project is not financially feasible but for the use of the proposed
tax increment assistance for which there was consensus support. On March 16, 2020 the EDA
adopted a resolution designating certain buildings along 31st Street structurally substandard to
a degree requiring removal in conjunction with the proposed redevelopment TIF district. It is
now time to take the final steps in the TIF process which is to formally authorize the creation of
the redevelopment TIF district and approve the proposed Redevelopment Contract. Such
authorizations enable the EDA to designate tax increment generated from the 94-unit
apartment building (“Building 1”) of the multi-phase Parkway Residences project as partial
reimbursement for certain qualified redevelopment costs incurred in connection with the
construction of the project so as to make it financially feasible.
Financial or budget considerations: Authorizing the establishment of the Parkway Residences
TIF District does not in itself, commit the city to any specific level of financial assistance for the
proposed project. Procedurally, it simply creates the funding vehicle to reimburse the
redeveloper for a portion of its qualified project costs. The terms and amount of TIF assistance
are specified within the Redevelopment Contract with Sela Group, LLC which is also scheduled
for consideration May 18, 2020.
Strategic priority consideration: St. Louis Park is committed to providing a broad range of
housing and neighborhood oriented development.
Supporting documents: Discussion
Resolution
TIF District Overview (provided in the related EDA staff report)
Prepared by: Greg Hunt, economic development coordinator
Reviewed by: Karen Barton, community development director
Approved by: Tom Harmening, city manager, EDA executive director
City council meeting of May 18, 2020 (Item No. 6a) Page 2
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Discussion
Background: The proposed Parkway Residences project includes 15 properties currently
consisting of single-family homes and an assortment of smaller apartment buildings along both
sides of 31st Street West between Inglewood Avenue South and Glenhurst Avenue South in the
Triangle Neighborhood. The buildings range in age from 41 to 113 years old with all but one of
the buildings at least 50 years old. Consulting firm LHB has determined that the buildings to
removed are structurally obsolete and all but one display noticeable material blight. The total
redevelopment project area is approximately 2.5 acres and is underutilized from a market value
perspective given the new multi-story buildings to the north and its half-mile proximity to two
planned light rail stations.
Site information:
Site area (acres):
2.5 acres
Current use: Surrounding land uses:
Commercial, single-family, duplex, and
multi-family residential uses
Neighborhood: Triangle
North: Multi-family residential and right-
of-way
East: Multi-family residential
South: Multi-family residential
West: single-family and multi-family
residential uses.
Proposed Project: Sela Group’s proposed redevelopment is to be constructed immediately
adjacent to its Parkway 25 project (a 112-unit, mixed-use development with 12,000 square feet
of commercial) completed in 2018. The proposed Parkway Residences would entail the removal
of 12 existing buildings and construction of four new multi-family housing buildings with up to
211 new units. The redeveloper also plans to rehabilitate three existing apartment buildings
along 31st Street that contain 24 units creating a total of 235 new or renovated residential units.
The redevelopment plan segments the project into four building sites to be built in phases: west
City council meeting of May 18, 2020 (Item No. 6a) Page 3
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
campus, north campus, southwest campus and southeast campus plus the three apartment
buildings to be rehabbed. The development properties are not all contiguous, thus the project
will be built amongst other existing buildings. The four building sites are described below.
Site 1 (the north campus– see map below) is toward the center of the site and includes six
existing residential buildings north of 31st Street West. The homes will be replaced with a 4-
story, 95-unit apartment building called “Parkway Place” with two-levels of underground
parking. This apartment building is planned to be the first phase of the project. The total area of
this building is 163,000 square feet.
Site 2 (the southeast campus – see map below) consists of two single-family homes that will be
redeveloped as a 6-unit apartment building. The apartment building will be developed with
affordable units as part of the city’s inclusionary housing policy requirement to provide
replacement housing for the naturally occurring affordable housing (NOAH) existing in the
project area that will be removed as part of the project. It is 7,500 square feet in size.
Site 3 (the southwest campus – see map below) is at the corner of Inglewood Avenue South and
31st Street West. It includes the removal of three existing single-family homes for the
construction of a 4-story, 37-unit apartment building with one level of underground parking.
The southwest campus is proposed to be a later phase of the project.
Site 4 (the west campus – see map below) includes an existing strip center at the southeast
corner of Inglewood Avenue South and County Road 25 that will be replaced with an 11-story
apartment building. The building will consist of eight-floors of residential units (73 units) with
parking and lobby space in the first two floors and the top floor dedicated to amenity space.
There is one-level of underground parking.
The three apartment buildings to be renovated lie on the south side of 31st Street West
(Buildings 5a, 5b, and 5c in the map below). The apartments include a total of 24 units of which
22 are considered naturally occurring affordable housing (NOAH) and will remain as NOAH
designated housing units by covenant for 25 years.
The Second Reading of the Ordinance creating the PUD to allow construction of the proposed
multi-phase redevelopment site was approved by the city council on February 3, 2020.
City council meeting of May 18, 2020 (Item No. 6a) Page 4
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Redeveloper’s request for public financing assistance and TIF Application review: Please see
the corresponding February 24,2020 EDA staff report.
TIF district approvals: On March 16, 2020 the EDA adopted a resolution designating certain
buildings along 31st Street as structurally substandard to a degree requiring removal and
authorized demolition of those buildings pending inclusion of the parcels in the proposed
redevelopment TIF district.
TIF District Overview and Plan: The attached Tax Increment Financing District Overview
summarizes the basic elements of the proposed Parkway Residences TIF District. Additional
details of the proposed TIF District may be found in the larger Parkway Residences TIF District
Plan (available by contacting the Community Development Department). Both the Overview
and TIF Plan were prepared by the EDA’s TIF consultant, Ehlers. The TIF Plan establishes the
City council meeting of May 18, 2020 (Item No. 6a) Page 5
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
proposed TIF district’s classification, geographic boundaries, maximum duration, maximum
budget authority for tax increment revenues and expenditures, fiscal disparities election as well
as estimated impact on various taxing jurisdictions along with findings which statutorily qualify
the district. The specific mutual obligations between the EDA and the redeveloper as well as the
specific terms of the financial assistance are contained in the separate Redevelopment Contract
between the parties. Both the TIF Plan and the Redevelopment Contract need to be approved
in order for redevelopment projects requiring tax increment to proceed.
Synopsis of the proposed Parkway Residences TIF District: The entire Parkway Residences
redevelopment site and proposed TIF district is within the City’s Redevelopment Project Area
which is the portion of the city where the EDA may statutorily establish TIF districts. In order to
provide the redeveloper with the proposed tax increment, a new Redevelopment TIF District
needs to be established and is shown in the map below.
City council meeting of May 18, 2020 (Item No. 6a) Page 6
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Location of proposed Parkway Residences TIF District
In this case, it was determined that the entirety of the tax increment to be provided to the
redeveloper would be derived exclusively from the Building 1 site. Therefore, the proposed
redevelopment TIF district includes the following six parcels which constitute the Building 1 site:
•4000 W. 31st Street
•4008 W. 31st Street
•4012 W. 31st Street
•4020 W. 31st Street
•4100 W. 31st Street
•4108 W. 31st Street
Subject properties within proposed redevelopment TIF district
Qualifications of the proposed TIF district: Consulting firm LHB conducted a TIF district
feasibility analysis to determine if the subject Building 1 site qualified as a Redevelopment
District under the MN TIF Act. After inspecting and evaluating the subject properties and
applying current statutory criteria, LHB determined the site qualifies under the MN TIF Act as a
redevelopment TIF district.
Duration of the proposed TIF district: Under the MN TIF Act, the duration of redevelopment
districts is up to 25 years after receipt of the first increment by the city (a total of 26 years of tax
increment). The first tax increment for this project is expected to be received in 2022. Thus, the
full term of the district is estimated to terminate after 2047. The EDA and city have the right to
City council meeting of May 18, 2020 (Item No. 6a) Page 7
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
decertify the district prior to the legally required date. The city’s expressed obligations to the
redeveloper, per the terms of the Redevelopment Contract, are estimated to be satisfied in
approximately 15 years. Once those obligations are satisfied, the city may terminate the district.
TIF district budget: The TIF Plan authorizes the use of tax increment funds generated by the
District to reimburse the redeveloper for certain qualified redevelopment costs incurred in
connection with the construction of Building 1 the project. It should be noted that the Sources
of Revenue and Uses of Funds within the TIF Plan is a not-to-exceed budget and not the actual
expected project budget.
Recommendation: The EDA’s financial consultant, Ehlers, prepared the Parkway Residences TIF
Plan in consultation with the EDA’s legal counsel, Kennedy & Graven and staff; all of whom
recommend approval of the establishment the Parkway Residences Tax Increment Financing
District.
Next steps: The redevelopment contract between the EDA and Sela Group and affiliates which
specifies the terms, conditions and amount of TIF assistance related to the proposed Parkway
Residences project is also scheduled for consideration by the EDA on May 18, 2020.
City council meeting of May 18, 2020 (Item No. 6a) Page 8
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Resolution No. 20-____
A Resolution approving a modification to the development program for
Redevelopment Project No. 1, the establishment of Parkway Residences Tax
Increment Financing District; and the adoption of a Tax Increment Financing
Plan for the TIF District
Whereas, the City of St. Louis Park, Minnesota (the “City”) and the St. Louis Park
Economic Development Authority (the “Authority”) have previously established Redevelopment
Project No. 1 (the “Redevelopment Project”) within the City, pursuant to Minnesota Statutes,
Sections 469.001 through 469.047, as amended, and Minnesota Statutes, Sections 469.090
through 469.1081, as amended (together, the “Act”); and
Whereas, the City and the Authority have proposed to approve a modification to the
Development Program (the “Program Modification”) for the Redevelopment Project and a tax
increment financing plan (the “TIF Plan”) for the establishment of Parkway Residences Tax
Increment Financing District (the “TIF District”), a redevelopment district, within the
Redevelopment Project, pursuant to Minnesota Statutes, Sections 469.174 through 469.1794,
as amended (the “TIF Act”), as described in a plan document presented to the City Council of
the City (the “City Council”) on the date hereof; and
Whereas, pursuant to Section 469.174, subdivision 2 of the TIF Act, the proposed
Program Modification and TIF Plan and the estimates of the fiscal and economic implications of
the TIF Plan were presented to the Board of Education of Independent School District No. 283
(St. Louis Park Public Schools) and to the Board of Commissioners of Hennepin County,
Minnesota (the “County”) at least 30 days prior to the date hereof; and
Whereas, the City Council has reviewed the contents of the Program Modification and
TIF Plan and on this date conducted a duly noticed public hearing on these documents, at which
the views of all interested parties were heard.
Now, therefore, be it resolved as follows:
Section 1. Findings for the Program Modification for the Redevelopment Project.
(a)It is hereby found and determined that within the Redevelopment Project there
exist conditions of obsolescence, underutilization, and inappropriate use of land constituting
blight within the meaning of the Act.
(b)It is further specifically found and determined that (i) the land within the
Redevelopment Project would not be made available for redevelopment without the public
intervention and financial assistance described in the Program Modification; (ii) the Program
Modification will afford maximum opportunity, consistent with the sound needs of the City as a
whole, for the redevelopment of the Redevelopment Project by private enterprise; and (iii) the
Program Modification conforms to the general plan for the development of the City as a whole.
City council meeting of May 18, 2020 (Item No. 6a) Page 9
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Section 2. Findings for the Establishment of the TIF District.
(a) It is found and determined that it is necessary and desirable for the sound and
orderly development of the Redevelopment Project, and for the protection and preservation of
the public health, safety, and general welfare, that the authority of the TIF Act be exercised by
the City to provide financial assistance to the TIF District and the Redevelopment Project.
(b) It is further found and determined, and it is the reasoned opinion of the City,
that the development proposed in the TIF Plan could not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future and the increased
market value of the site that could reasonably be expected to occur without the use of tax
increment financing would be less than the increase in the market value expected to result
from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration of the district permitted by the TIF Plan.
(c) The proposed public improvements to be financed in part through tax increment
financing are necessary to permit the City to realize the full potential of the TIF District and the
Redevelopment Project in terms of housing density, elimination of blight and blighting factors,
and increased tax base.
(d) The TIF Plan conforms to the general plan for development of the City as a
whole, as the development has gone through extensive planning and zoning approvals and a
Planned Unit Development for the development has been approved by ordinance.
(e) The TIF Plan will afford maximum opportunity, consistent with the sound needs
of the City as a whole, for the development of the TIF District and the Redevelopment Project
by private enterprise because it will enable the construction of diverse housing options, retain
naturally occurring affordable housing units, and eliminate blight and blighting factors within
the Project and City.
(f) The TIF District is a redevelopment district under Section 469.174, subdivision 10
of the TIF Act.
(g) Reasons and facts supporting all the above findings are set forth in Appendix C of
the TIF Plan and are incorporated herein by reference. The City Council has also relied upon
reports and recommendations of its staff and consultants, as well as the personal knowledge of
members of the City Council, in reaching its conclusions regarding the TIF Plan.
Section 2. Public Purpose. The adoption of the TIF Plan conforms in all respects to
the requirements of the Act. The TIF Plan will help facilitate development that will create diverse
housing opportunities and retain naturally occurring affordable housing units, eliminate blighting
factors, and improve the tax base. The City expressly finds that any private benefit to be received
by a private developer is incidental, as the tax increment assistance is provided solely to make the
development financially feasible and thus produce the public benefits described. Therefore, the
City finds that the public benefits of the TIF Plan exceed any private benefits.
City council meeting of May 18, 2020 (Item No. 6a) Page 10
Title: Public Hearing - establishment of the Parkway Residences Tax Increment Financing District
Section 3. Approvals; Further Proceedings.
(a) The TIF Plan for the TIF District is hereby approved and adopted in substantially
the form on file at City Hall.
(b) The City Council authorizes and directs the Authority to file a request for
certification of the TIF District with the Taxpayer Division Services Manager of the County and
to file a copy of TIF Plan with the Minnesota Commissioner of Revenue and the Office of the
State Auditor as required by the TIF Act.
(c) The Taxpayer Division Services Manager of the County is requested to certify the
original net tax capacity of the TIF District, as described in the TIF Plan.
(d) City staff, advisors, and legal counsel are authorized and directed to proceed
with the implementation of the TIF Plan and to negotiate, draft, prepare, and present to the
City Council for its consideration all further plans, resolutions, documents, and contracts
necessary for this purpose.
Reviewed for administration: Adopted by the City Council May 18, 2020
Thomas K. Harmening, city manager Jake Spano, mayor
Attest:
Melissa Kennedy, city clerk
Meeting: City council
Meeting date: May 18, 2020
Public hearing: 6b
Executive summary
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails
Homeowners Association HIA
Recommended action: **Due to the COVID-19 emergency declaration, this item is considered
essential business and is categorized as Time-Sensitive**
• Mayor to reopen the public hearing, take testimony, and then close the public hearing.
Motion to approve first reading of an ordinance establishing the South Cedar Trails
Homeowners Housing Improvement Area pursuant to Minnesota statutes 428A.11 to
428A.21 and to set second reading date for June 1, 2020.
Policy consideration: Does the city council support the creation of a Housing Improvement
Area for the South Cedar Trails Homeowners Association?
Summary: The city is authorized by the state to establish HIAs as a finance tool for private
housing improvements. An HIA is a defined area within a city where housing improvements are
made, and the cost of the improvements are paid in whole or in part from fees imposed on the
properties within the area. The city adopted an HIA policy in 2001 and has previously
established seven HIAs. The South Cedar Trails HIA proposal meets the intent of the city policy.
In April 2020, the South Cedar Trails Homeowners Association (Association) submitted signed
petitions from a majority of owners requesting the city council schedule a public hearing to
establish the HIA and impose fees. Per state statute, cities may only establish an HIA when 50%
or more of the association owners petition the city to do so. As of April 28, petitions have been
received and validated from 88%, or 28 of the 32 owners.
Following the petition process the association and city were notified of some windows and a
garage door that did not need to be replaced. The city will work with the association and Ehlers
to update the fee schedule prior to adoption of the resolution on June 1.
The public hearing was held May 4 and the mayor kept the hearing open for testimony until
May 18. Written comments received by May 13 are attached to the report.
Financial or budget considerations: HIA will be funded using an internal loan from the housing
rehab fund. The total project cost, including soft costs is $623,300.
Strategic priority consideration: St. Louis Park is committed to providing a broad range of
housing and neighborhood oriented development.
Supporting documents: Discussion
Public comments
Resolution
Ordinance
Prepared by: Marney Olson, assistant housing supervisor
Reviewed by: Michele Schnitker, housing supervisor and Karen Barton, CD director
Approved by: Tom Harmening, city manager
City council meeting of May 18, 2020 (Item No. 6b) Page 2
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
Discussion
Background: The city is authorized by the state to establish HIAs as a finance tool for private
housing improvements. An HIA is a defined area within a city where housing improvements are
made, and the cost of the improvements are paid in whole or in part from fees imposed on the
properties within the area.
The city adopted an HIA policy in 2001 for private housing improvements for condominium and
townhouse associations. At that time Vision St. Louis Park and the city’s comprehensive plan
stated that the two primary housing goals are to provide a balanced and sustainable housing
stock and to ensure all housing is safe and well maintained. In 2001 the city’s strategy to
preserve and enhance its housing stock did not address condominium and townhouse
structures. The HIA tool was seen as similar to commercial special service districts in that cities
may issue bonds to pay for improvements, and levy fees to the homeowners, via property
taxes. After much discussion the council proceeded with the HIA policy ensuring that the HIA
tool would serve as “lender of last resort” and that the average unit market value within the
association’s complex did not exceed the maximum home purchase price established for the
Minnesota Housing First Time Homebuyer program. The city has previously adopted seven HIAs
and the South Cedar Trails HIA proposal meets the intent of the city policy.
The association first expressed interest in learning about the HIA process in spring 2019 to
assist with financing needed repairs. The association board began meeting with city staff April
2019. At the June 2019 association meeting the association voted 32-0 to move forward with
the HIA. The association had urgent roof and siding repairs that need to be completed more
quickly due to weather concerns and insurance requirements. With the tight timeline required
the association passed an assessment of $7,000 per unit for the siding and roofing only and that
work has been completed.
The association conducted a physical needs assessment and financial plan review, known as a
reserve study, to assist in making decisions related to property improvements. Per the city’s
policy, HIA financial assistance is last resort financing and should not be provided to projects
that have the financial feasibility to proceed without the benefit of HIA financing. The
association’s current reserve does not cover the cost of the work needed and the association
has been turned down by Belle Bank and Royal Credit Union for funding.
On March 11, 2020 the city received the associations updated preliminary application for the
HIA. In April 2020, the city and association hosted a virtual meeting with the owners to review
the HIA process and walk through the petition that each homeowner received.
Petitions submitted: The South Cedar Trails Homeowners Association submitted signed
petitions from a majority of owners April 14 requesting the city council schedule a public hearing
to establish the HIA and impose fees. Per state statute, cities may only establish an HIA when
50% or more of the association owners petition the city to do so. As of April 28, petitions have
been received and validated from 88%, or 28 of the 32 owners.
Filing an objection and veto period: Before the ordinance is adopted or at the hearing in which
it is to be adopted, the owner of a housing unit in the proposed HIA may file a written objection
with the city clerk asserting that the owners’ property should not be included in the HIA or should
City council meeting of May 18, 2020 (Item No. 6b) Page 3
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
not be subjected to a housing improvement fee and objecting to the inclusion of the housing unit
in the HIA, for the reason that the property would not benefit from the proposed improvements
If residents of 45 percent or more of the housing units in the HIA file an objection to the
ordinance with the city clerk before the effective date of the ordinance, the ordinance will not
become effective.
As of April 28, the city has not received any written objections to the HIA; however, one
homeowner notified the city that they had made a down payment to the association on two
windows and their garage door had already been replaced. The South Cedar Trails association
has provided information to the city that five units made a down payment on windows and
those windows were at 2019 prices, so the city will work with the association and Ehlers to
update the fee schedule.
Funding: staff is recommending that the HIA loan be funded using internal funding based on
the amount of the loan. The use of internal funds will earn interest income for the city and
decrease the cost to the association compared to the cost of issuing bonds. The use of internal
funds also allows owners the ability to pay off the balance of their fee in the future. The loan
will come from the housing rehab budget.
Association information: South Cedar Trails is located at 4401 - 4561 Cedar Lake Road.
• The association is comprised of 32 townhomes built in 1977.
• There are 17 units with two bedrooms and 15 units with three bedrooms.
• The 2020 median estimated market value (EMV) is $202,150 and the range of EMV is
$190,300-$216,800.
• 20 of the 32 units (63%) are homesteaded.
Analysis of application: The purpose of the city’s HIA policy is to establish the city’s position
relating to the use of HIA financing for private housing improvements. The policy is used as a
guide in processing and reviewing applications requesting HIA financing and is attached to this
report.
The current HIA proposal has been reviewed by staff and meets the city’s HIA policy and
intentions of the housing improvement area state statute. The city’s financial advisor, Ehlers
and Associates, and legal counsel, Kennedy and Graven, have reviewed the HIA financing to
ensure it is within applicable state statute and financial requirements.
1. HIA meets city goals. The proposed improvements meet the city HIA goal of preserving
and upgrading the existing housing stock in a neighborhood.
2. The city’s HIA policy states the average market value of units in the association should
not exceed the maximum home purchase price for existing homes under the state’s
first-time home buyer program which is currently $330,100. The home values in this
association meet this requirement. Metropolitan council considers a home valued at
$254,500 to be affordable at 80% AMI and $199,500 affordable at 60% AMI. All of the
townhomes at South Cedar Trails are affordable at 80% and a portion are affordable at
60% AMI.
City council meeting of May 18, 2020 (Item No. 6b) Page 4
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
3. The association contracted with a third party to conduct a reserve study. The association
received the reserve study report in September 2019. The study includes a physical and
capital needs assessment and a financial analysis of the existing and projected financial
situation. It also includes recommended increases to the association dues required to
meet maintenance and capital improvement needs in the future.
4. Project costs are eligible for use of the HIA. The association went out for bids in 2019
and then received updated bids based on 2020 prices. All of the work proposed in the
scope of work is eligible for use of the HIA.
Proposed scope of work scheduled for 2020.
Site work
Remove and replace parking lot.
New landscaping and drainage to include a new French drain system, replacing retaining
walls and new plant materials.
Remove and dispose of existing fence and install new privacy fence.
Garage Doors
Remove and replace 31 garage doors.
Windows
Remove and replace windows in individual units.
Total loan amount: The total loan amount is $623,300, comprising $598,300 for
construction costs and $25,000 for city administrative, legal and financial costs. The
term of the loan and imposed fees would be 15 years.
South Cedar Trails HIA 15 Years
Breakdown of capital costs
Parking Lot $84,000
Landscaping/drainage $115,500
Fencing $80,850
Garage doors $27,300
Windows $263,070
Contingency (5%) $27,580
Total capital costs $598,300
Breakdown of soft costs
City administrative fee $5,000
Legal fee $15,000
Financial advisor $5,000
Total $25,000
Total project costs $623,300
Preliminary estimates of the fees to be imposed on housing units in the South Cedar
Trails Housing Improvement Area are based on an interest rate of 3.71%. This interest
rate is subject to change based on market conditions. The fee schedule was prepared by
Ehlers and Associates.
City council meeting of May 18, 2020 (Item No. 6b) Page 5
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
5. The city requires the majority of owners to support the HIA. The association board has
been meeting with the association since spring of 2019 and the city has participated in
two meetings with the HIA. Per submitted minutes the association members voted 32-0
in support of the HIA at their June 26, 2019 meeting. The association met the petitioning
requirements with 88% of homeowners petitioning for the creation of the HIA.
6. HIA financing is necessary for this project. The association’s current reserve does not
cover the work needed and the association has been turned down by two banks. This
meets the requirement that HIA financial assistance is last resort financing.
7. Fees and loan terms. The fee per unit (prepayment amount) ranges from $11,257 -
$22,404. The annual fee per unit if paid over the 15-year term will range from $1,041.66
- $2,073.13. If a homeowner does not prepay the HIA fee, their annual fee is calculated
at 105% to cover delinquent or deferred payments. The interest rate is based on market
conditions and is subject to change.
Total Loan amount $623,300
Term (years) 15
Interest Rate 3.71%
Average Annual Debt Service $52,682
Required coverage (105%) $55,316
Total units 32
If the HIA is approved, owners not prepaying would begin making payments with their
2021 real estate tax payments. Funding the loan internally allows owners flexibility in
prepaying without interest or paying off the loan in the future.
8. Association’s desired method of fee imposition. State statute 428A.14 requires that “if a
fee is imposed on a basis other than the tax capacity or square footage of the housing
unit, the council must make a finding that the alternative basis for the fee is more fair
and reasonable.”
The association is requesting that fees be based as follows: The portion of the HIA fee
attributable to common elements shall be divided evenly among the 32 housing units
and the portion of the HIA fee attributable to windows shall be allocated based on the
number of windows installed in each housing unit.
City staff consulted with Kennedy and Graven regarding the basis of the fees which have
been found to meet statutory requirements of being more fair and reasonable since it is
consistent with the association’s HOA dues which are divided evenly among the 32
housing units and the windows are being calculated separately so homeowners only pay
for widows they are having installed.
Homeowner issues or concerns: The association held multiple meetings related to the
proposed scope of work and costs associated with improvements. The association initially
approved up to $800,000 for the HIA but the costs came in much lower. City staff met with the
association in spring 2019 to give an overview of the HIA process and held a meeting in early
April to walk through the petition and explain the petition and public hearing process.
City council meeting of May 18, 2020 (Item No. 6b) Page 6
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
The city’s attorney, Kennedy and Graven, drafted the petition according to state statute and the
city included an information piece explaining the process and fees. The signed petitions were
submitted to the city and the city clerk and assistant housing supervisor reviewed, counted and
verified the petitions. There were three petitions in question that the city consulted with
Kennedy and Graven on and they were verified.
The terms of the HIA loan provide a low interest, 15-year loan. The city also allows for hardship
deferrals for low income seniors and low-income disabled owners. The hardship deferral allows
the fee, including interest, to be deferred until the owner occupant sells or transfers title.
Hardship deferral information was included in the petition packet which was both mailed and
emailed to homeowners.
The HIA will be funded using an internal loan from the housing rehab fund. Funding the HIA
with internal funding allows owners more flexibility in paying off the assessment in the future.
The HIA process does allow for an objection and veto period. Although the city has not received
any written objections to the creation of the HIA, the city is working with the association to
remedy the window and garage door discrepancy of at least one homeowner. The city has
consulted with Kennedy and Graven and the finalized numbers may not exceed the amount in
the petition and notice of public hearing.
City issues or concerns: The city is protected from financial risk in several ways:
• Repayment of the loan is made through owner’s real estate tax payments.
• In foreclosure events, tax liabilities including special assessments, must be paid by any
party that purchases the unit. In cases of foreclosure, HIA fees have been treated the
same as special assessments.
• There is a 105% debt coverage as shown on the attached fee table.
• A development agreement is required which will provide additional contractual conditions
to ensure financial stability of the association including, but not limited, to requiring the
use of professional property management and submitting annual audits.
City staff have consulted with Kennedy and Graven to ensure all statutory requirements are
met and Ehlers and Associates has prepared the HIA assessment structure and fee schedule.
Next steps: The next step in the HIA process is first reading of the ordinance followed by the
second reading/adoption of the ordinance and adoption of the resolution.
June 1, 2020 Second reading/adoption of ordinance and adoption of resolution
By June 6, 2020 Mail summary of ordinance to unit owners
By July 1, 2020 Mail ordinance to Commissioner of Revenue.
July 15, 2020 Veto period ends
July 27, 2020 Prepayments due
August 3, 2020 Housing rehab fund loan and development agreement approved
August 4, 2020 Association can move forward with construction
City council meeting of May 18, 2020 (Item No. 6b) Page 7
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
Public comments
The public hearing was held May 4 and the mayor kept the hearing open for testimony until
May 18. The following comments were received as of May 13, 2020:
1. This email is in regard to the HIA at South Cedar Trails. I am a member ofour board and
have owned my townhouse since 2003. With the exception of new roofs and siding this past
fall, no capital improvements have been made since I purchased my townhouse. Funds
have only been used to put a bandaid on larger problems.
We are currently in need of new windows, new fences, new garage doors, a new parking lot
and major landscaping work to not only improve the grounds, but to manage drainage
issues.
We had to assess the owners for the siding and roofing. We are not in a situation where our
owners will be able to afford additional assessments in the near future. I believe this
inability to do an assessment and lack of funds will result in the further decay and
destruction of our association buildings and grounds.
An HIA from the City of St. Louis Park seems to be our only option to maintain our buildings
and grounds as I know the city would like us to do. Thank you for your consideration of our
HIA application and we are very hopeful the city will approve it so we can begin the
improvements.
Thank you, Jamie Bundul
4517 Cedar Lake Rd
2. This email is to confirm our association would like to move forward with obtaining financing
for our association from the city.
With the repairs needed and lack of resources and access to funds, the establishment of the
HIA is imperative in order for the association to move forward with the improvements and
finish work that is needed.
Shelli Wojciechowski, President South Cedar Trails Homeowners Association
3. I am fully supportive of the HIA and I fear that if it does not go through, there is only two
outcomes for the South Cedar Trails Townhouses. One would be that the condition of the
exterior of the units and the shared grounds will continue to deteriorate, as the HOA does
not have the funding in reserves to properly maintain the units. With the conditions on the
exteriors declining, I am worried that the value will go down meaning, which would mean
that owners will stop investing in the inside of their units as well.
Second, it that the HOA will have to issue assessment(s) to properly maintain all of the
units. This will put a lot of the owners in tough situations as they do not have the capital
today and might not have access to the full amount of capital. My worry is that if we cannot
work something out, it might end up with the HOA putting property liens on the units. If
City council meeting of May 18, 2020 (Item No. 6b) Page 8
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
that was to happen, that would be devastating to the sense of community that we have
built within South Cedar Trails.
As for the benefit of the city, I believe that these town-homes offer a great starter home for
families that will end up drawing more of a younger demographic into the city. The location
is terrific, being close to jobs, close to trails, close to lakes, close to entertainment, etc. This
is why I believe it is important to the city to help properly maintain the homes and keep SLP
an attractive option to keep it growing.
As for the association, we voted 32-0 to pursue this loan. That is unprecedented for our
association as since I have lived here, we can barely get a majority to agree to a $20-
$30/month increase in dues. There now might be a few members frustrated with how the
loan was handled and the speed of it, but a majority are still in strong support, as you have
seen from the petitions being sent it.
Thanks,
Nick Pugleasa, Secretary South Cedar Trails Homeowners Association
4. Please consider the following comments and observations intended to encourage the SLP
City Council to approve the HIA loan request for SCTHA. Our observation while living in the
city at this location for the last 17 years is the city has made a tremendous investment in
the development of luxury apartments in the immediate West End area that continues to
this day. At the same time, there seems to be little consideration for the existing affordable
aging housing. Especially multi-family dwellings.
Our townhomes were built in 1977, There has been no major required maintenance done
due to inefficient management. The current president recognized the seriousness of this
problem as our homes were deteriorating and losing value. She, along with the board, took
action to hire a contractor who secured insurance money for the association based on
previous damage. Unfortunately this was not enough to complete all of the required work.
We look to the city of St. Louis Park to invest in the existing affordable housing stock for the
current long term, committed residents of this association and for future generations. We
come to the city for this HIA after exhausting all traditional financing options.
A council member at the introductory meeting held on May 4th inquired about our ability to
pay back the loan. It appeared she asked this jokingly. We take this matter seriously and
would like to point out that 88% of the association's homeowners approved the loan. That
demonstrates their understanding and obligation to repay. It is also our understanding that
the annual amount will be due with our real estate taxes on the property and paid with
them.
Thank you for your consideration.
Respectfully,
Robert Kozlowski
Marlene Typpo
4513 Cedar Lake Rd, SCTHA
City council meeting of May 18, 2020 (Item No. 6b) Page 9
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
Ordinance No. ____-20
Ordinance establishing the South Cedar Trails
Homeowners Association Housing Improvement Area
pursuant to Minnesota Statutes, Sections 428A.11 to 428A.21
The City of St. Louis Park does hereby ordain:
Section 1. Recitals.
1.01. The City of St. Louis Park (the "city") is authorized under Minnesota Statutes,
Sections 428A.11 to 428A.21 (the "Act") to establish by ordinance a housing improvement area
within which housing improvements are made or constructed and the costs of the improvements
are paid in whole or in part from fees imposed within the area.
1.02. The City Council of the city (the “council”) adopted a Housing Improvement Area
policy on July 16, 2001 (the “HIA Policy”).
1.03. The city has determined a need to establish the South Cedar Trails Homeowners
Association Housing Improvement Area (South Cedar Trails HIA) as further defined herein, in order
to facilitate certain improvements to property known as South Cedar Trails Homeowners
Association, Inc. (the “Association"), all in accordance with the HIA Policy.
1.04. The city has consulted with the Association and with residents in the proposed South
Cedar Trails HIA regarding the establishment of the South Cedar Trails HIA and the housing
improvements to be constructed and financed under this ordinance.
Section 2. Findings.
2.01. The council finds that, in accordance with Section 428A.12 of the Act, owners of at
least 50 percent of the housing units within the proposed South Cedar Trails HIA have filed a
petition with the City Clerk requesting a public hearing regarding the establishment of the South
Cedar Trails HIA.
2.02. The council conducted a public hearing on May 4, 2020, duly noticed in accordance
with Section 428A.13 of the Act, regarding adoption of this ordinance, at which all persons,
including owners of property within the proposed South Cedar Trails HIA, were given an
opportunity to be heard.
2.03. The council finds that, without establishment of the South Cedar Trails HIA, the
Housing Improvements (as hereinafter defined) could not be made by the Association or the
owners of housing units therein.
2.04. The council further finds that designation of the South Cedar Trails HIA is needed to
maintain and preserve the housing units within such area.
2.05. The council further finds that by Resolution No. _____ adopted on the date hereof
(the “Fee Resolution”), the city has provided full disclosure of public expenditures, loans, or other
City council meeting of May 18, 2020 (Item No. 6b) Page 10
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
financing arrangements in connection with the South Cedar Trails HIA, and has determined that
the Association will contract for the Housing Improvements.
2.06. The city will be the implementing entity for the South Cedar Trails HIA and the
Housing Improvement Fee (as set forth in the Fee Resolution and Section 5 below).
2.07. The council finds that the South Cedar Trails HIA meets each of the approval criteria
contained in the HIA Policy (listed as 4.01A- 4.01N), including the criterion that a majority of the
association owners support the project and the financing thereof. The Association presented
evidence to the council adequate to demonstrate that these criteria were met, including
presentation to the council of the petitions described in 2.01 above.
Section 3. Housing Improvement Area Defined.
3.01. The South Cedar Trails HIA is hereby defined as the area of the city legally described
in Exhibit A attached hereto.
3.02. The South Cedar Trails HIA contains 32 housing units as of the date of adoption of
this ordinance, along with garage units and common areas.
Section 4. Housing Improvements Defined.
4.01. For the purposes of this ordinance, the Fee Resolution, and the
South Cedar Trails HIA, the term "Housing Improvements" shall mean the following
improvements to housing units, garages, and common areas within the South
Cedar Trails HIA: remove and replace parking lot; new landscaping and drainage
to include a new French drain system, replacing retaining walls and new plant
materials; remove and dispose of existing fence and install new privacy fence;
remove and replace 32 garage doors; remove and replace windows as needed in
individual units.
4.02. The Housing Improvements shall also be deemed to include:
(a) all administration, legal and consultant costs in connection with the South Cedar
Trails HIA;
(b) costs of arranging financing for the Housing Improvements under the Act; and
(c) interest on the internal loan as described in Section 6.01.
Section 5. Housing Improvement Fee.
5.01. The city may, by resolution adopt in accordance with the petitions, hearing and
notice procedures required under Section 428A.14 of the Act, impose a fee on the housing units
within the South Cedar Trails HIA, at a rate, term or amount sufficient to produce revenues
required to finance the construction of the Housing Improvements (hereinafter referred to as the
"Housing Improvement Fee"), subject to the terms and conditions set forth in this Section.
City council meeting of May 18, 2020 (Item No. 6b) Page 11
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
5.02. The portion of the Housing Improvement Fee attributable to the Common
Elements shall be divided evenly among the 32 housing units, and the portion of the Housing
Improvement Fee attributable to windows shall be allocated based on the number of windows
installed in each housing unit.
5.03. The Housing Improvement Fee shall be imposed and payable for a period no
greater than 15 years after the first installment is due and payable.
5.04. Housing unit owners shall be permitted to prepay the Housing Improvement Fee in
accordance with the terms specified in the Fee Resolution.
5.05. The Housing Improvement Fee shall not exceed the amount specified in the notice
of public hearing regarding the approval of such fee; provided, however, that the Housing
Improvement Fee may be reduced after approval of the Fee Resolution setting the Housing
Improvement Fee, in the manner specified in such resolution.
Section 6. Housing Improvement Area Loan.
6.01. At any time after a contract with the Association for construction of all or part of
the Housing Improvements has been entered into or the work has been ordered, and the period
for prepayment without interest of the Housing Improvement Fee has begun as described in
Section 5.04 hereof, the council may begin disbursement to the Association of the proceeds of an
internal loan (the “Loan”) of available city funds in the principal amounts necessary to finance the
cost of the Housing Improvements that have not been prepaid, together with administrative costs.
Section 7. Annual Reports.
7.01. No later than August 15, 2021, and each August 15 thereafter until there are no
longer any outstanding obligations issued under the Act in connection with the South Cedar Trails
HIA, the Association (and any successor in interest) shall submit to the City Clerk a copy of the
Association's audited financial statements.
7.02. The Association (and any successor in interest) shall also submit to the city any
other reports or information at the times and as required by any contract entered into between
the Association and the city, or as the city may request.
Section 8. Notice of Right to File Objections.
8.01. Within five days after the adoption of this ordinance, the City Clerk is authorized
and directed to mail to the owner of each housing unit in the South Cedar Trails HIA: a summary of
this ordinance; notice that owners subject to the proposed Housing Improvement Fee have a right
to veto this ordinance if owners of at least 45 percent of the housing units within the South Cedar
Trails HIA file a written objection with the City Clerk before the effective date of this ordinance;
and notice that a copy of this ordinance is on file with the City Clerk for public inspection.
Section 9. Amendment.
9.01. This ordinance may be amended by the council upon compliance with the public
hearing and notice requirements set forth in Section 428A.13 of the Act.
City council meeting of May 18, 2020 (Item No. 6b) Page 12
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
Section 10. This ordinance shall take effect 45 days after adoption hereof.
Reviewed for administration: Adopted by the City Council June 1, 2020
Thomas K. Harmening, city manager Jake Spano, mayor
Attest: Approved as to form and execution:
Melissa Kennedy, city clerk Soren Mattick, city attorney
First reading May 18, 2020
Second reading June 1, 2020
Date of publication June 11, 2020
Date ordinance takes effect July 15, 2020
City council meeting of May 18, 2020 (Item No. 6b) Page 13
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
Exhibit A to Ordinance No. ____-20
Legal description
Lots 1-64, both inclusive, Block 1, South Cedar Trails, Hennepin County, Minnesota
and
Lot 65, Block 1, South Cedar Trails, Hennepin County, Minnesota
City council meeting of May 18, 2020 (Item No. 6b) Page 14
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
Resolution No. 20-____
Resolution approving a housing improvement fee for the South Cedar Trails
Homeowners Association Housing Improvement Area pursuant to Minnesota
statutes, sections 428A.11 to 428A.21
Be it resolved by the City Council of the City of St. Louis Park as follows:
Section 1. Recitals.
1.01. The City of St. Louis Park (the "city") is authorized under Minnesota Statutes,
Sections 428A.11 to 428A.21 (the "Act") to establish by ordinance a housing improvement area
within which housing improvements are made or constructed and the costs of the improvements
are paid in whole or in part from fees imposed within the area.
1.02. The City Council of the city (the “council”) adopted a Housing Improvement Area
policy on July 16, 2001 (the “HIA Policy”).
1.03. By Ordinance No. _________ adopted on June 1, 2020 (the "Enabling Ordinance"),
the council has established the South Cedar Trails Homeowners Housing Improvement Area (the
“South Cedar Trails HIA”) in order to facilitate certain improvements to property known as the
"South Cedar Trails Homeowners Association, Inc." (the “Association”) all in accordance with the
HIA Policy and the Act.
1.04. In accordance with Section 428A.12 of the Act, owners of at least 50 percent of the
housing units within the South Cedar Trails HIA have filed petitions with the City Clerk of the city
requesting a public hearing regarding imposition of a housing improvement fee for the South
Cedar Trails HIA.
1.05. The council conducted a public hearing on May 4, 2020, duly noticed in accordance
with Section 428A.13 of the Act, regarding adoption of this resolution at which all persons,
including owners of property within the South Cedar Trails HIA, were given an opportunity to be
heard.
1.06. The council finds that the South Cedar Trails HIA meets each of the approval criteria
contained in the HIA Policy (listed as 5.01A- 5.01M), including the criterion that a majority of the
condominium association owners support the project and the financing thereof.
1.07. Prior to the date hereof, the Association has submitted to the city a financial plan
prepared by Cedar Management, Inc., an independent third party, that provides for the
Association to finance maintenance and operation of the Common Elements in the Association (as
defined in the Association’s bylaws) and a long-range plan to conduct and finance capital
improvements therein, all in accordance with Section 428A.14 of the Act.
1.08. For the purposes of this resolution, the terms "South Cedar Trails HIA" and
"Housing Improvements" have the meanings provided in the Enabling Ordinance.
Section 2. Housing Improvement Fee Imposed.
City council meeting of May 18, 2020 (Item No. 6b) Page 15
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
2.01. The city hereby imposes a fee on each housing unit within the South Cedar Trails HIA
(the "Housing Improvement Fee"), as specified in Exhibit A attached hereto, which is imposed for
(i) Housing Improvements divided evenly among the housing units, and (ii) windows based on the
number of windows installed in each unit, all as prescribed in the Amended and Restated
Declaration of South Cedar Trails Association.
2.02. The council hereby finds that the Housing Improvement Fee for the Common
Elements is imposed based on 1/32 ownership of the Common Elements, as provided in the
Association’s bylaws. The Housing Improvement Fee is divided evenly among the 32 units in the
South Cedar Trails HIA, with the exception of the portion of the Housing Improvement Fee
allocated to windows, which is based on the number of windows installed in each unit. The
Council expressly finds that this basis for allocation of costs aligns with the ownership and
Association fee methodology in effect for the Association, and is thus more fair and reasonable
than imposition of a Housing Improvement Fee on the basis of tax capacity or square footage.
2.03. Housing unit owners may prepay the Housing Improvement Fee in total and
without interest thereon between the effective date of this resolution and July 27, 2020. The
amount of the prepayment is shown under the heading “Total Cost (Prepayment Amount)” in
Exhibit A attached hereto. Partial prepayment of the Housing Improvement Fee shall not be
permitted. Prepayment must be made to the City Treasurer. Housing unit owners may also fully
prepay the unpaid portion of their Housing Improvement Fee in any subsequent year. If a
prepayment is made by November 15 of any year, the amount must include interest at the rate
of 3.71% through the end of that calendar year. If the prepayment is made after November 15,
the amount must include interest through the end of the following calendar year.
2.04. If the total Housing Improvement Fee is not paid between the effective date of this
resolution and July 27, 2020, the Housing Improvement Fee shall be imposed as an annual fee, in
the amount shown under the heading “Annual Fee” in Exhibit A. The Housing Improvement Fee
shall be imposed in equal installments, beginning in 2021, for a period no greater than 15 years
after the first installment is due and payable. The Annual Fee shall be deemed to include interest
on the unpaid portion of the total Housing Improvement Fee. Interest at an annual interest rate of
3.71 percent per annum shall begin to accrue on the Housing Improvement Fee from the date of
closing on the loan of city or Economic Development Authority funds to finance the Housing
Improvements. The Annual Fee shall be structured such that estimated collection of the Annual
Fee will produce at least five percent in excess of the amount needed to meet, when due, the
principal and interest on the Housing Improvement Fee.
2.05. Unless prepaid between the effective date of this resolution and July 27, 2020, the
Housing Improvement Fee shall be payable at the same time and in the same manner as provided
for payment and collection of ad valorem taxes, as provided in Sections 428A.15 and 428A.05 of
the Act. As set forth therein, the Housing Improvement Fee is not included in the calculation of
levies or limits on levies imposed under any law or charter.
2.06. A de minimis fee may be imposed by Hennepin County for services in connection to
administration required in order for the fee to be made payable at the same time and in the same
manner as provided for payment and collection of ad valorem taxes.
Section 3. Notice of Right to File Objections.
City council meeting of May 18, 2020 (Item No. 6b) Page 16
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
3.01. Within five days after the adoption of this resolution, the City Clerk is authorized and
directed to mail to the owner of each housing unit in the South Cedar Trails HIA: a summary of this
resolution, notice that owners subject to the Housing Improvement Fee have a right to veto this
resolution if owners of at least 45 percent of the housing units within the South Cedar Trails HIA
file a written objection with the City Clerk before the effective date of this resolution, and notice
that a copy of this resolution is on file with the City Clerk for public inspection.
Section 4. Effective Date.
4.01. This Resolution shall be effective 45 days after adoption hereof.
Section 5. Filing of Housing Improvement Fee.
5.01. After July 28, 2020, the City Clerk shall file a certified copy of this resolution together
with a final update of Exhibit A hereto to the Hennepin County Director of Taxation to be recorded
on the property tax lists of the county for taxes payable in 2021 and thereafter.
Reviewed for administration: Adopted by the City Council June 1, 2020
Thomas K. Harmening, city manager Jake Spano, mayor
Attest:
Melissa Kennedy, city clerk
City council meeting of May 18, 2020 (Item No. 6b) Page 17
Title: Public hearing and first reading of an ordinance establishing South Cedar Trails Homeowners Association HIA
Exhibit A to Resolution No. 20-____
City of St. Louis Park
Housing Improvement Area - South Cedar Trails HIA
Assessment Allocation
Association Unit No.Percentage
Interest
Total Common
Area Construction
Cost
Total Financing &
Soft Costs
Total Construction
Cost for 2 Windows
Total Construction
Cost for 3 Windows
TOTAL COSTS
(PREPAYMENT
AMOUNT)
* Annual Fee
(105% of Total
Costs)
Total P & I Paid
Per Unit (105%) -
Non prepaid only
4401 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4405 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4409 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4413 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4417 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4421 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4425 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4429 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4433 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4437 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4441 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4445 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4449 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4453 0.03125 $10,476 $781 $1,934 $0 $13,191 $1,220.62 $18,309.34
4457 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4461 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4501 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4505 0.03125 $10,476 $781 $0 $0 $11,257 $1,041.66 $15,624.95
4509 0.03125 $10,476 $781 $0 $0 $11,257 $1,041.66 $15,624.95
4513 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4517 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4521 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4525 0.03125 $10,476 $781 $5,580 $0 $16,837 $1,558.00 $23,369.98
4529 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4533 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4537 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4541 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4545 0.03125 $10,476 $781 $0 $11,147 $22,404 $2,073.13 $31,096.96
4549 0.03125 $10,476 $781 $8,538 $0 $19,795 $1,831.71 $27,475.68
4553 0.03125 $10,476 $781 $0 $0 $11,257 $1,041.66 $15,624.95
4557 0.03125 $10,476 $781 $5,580 $0 $16,837 $1,558.00 $23,369.98
4561 0.03125 $10,476 $781 $0 $0 $11,257 $1,041.66 $15,624.95
GRAND TOTAL 100.00%$335,230.00 $25,000.00 $107,012.00 $156,058.00 $623,300.00 $57,675.93 $865,139.01
SOUTH CEDAR TRAILS HOUSING IMPROVEMENT AREA
South Cedar
Trails
* Note: Annual fee amount is calculated based upon payment of total costs at 105%
Meeting: City council
Meeting date: May 18, 2020
Action agenda item: 8a
Executive summary
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter
Recommended action: Review information provided in staff report, hear the basis for the
complaint from the complainants, and allow Councilmember Mavity to provide a response to
the complaint. Unless the council determines that more information is needed, the council is
then asked to deliberate and vote on the issue of whether or not a violation of Section 2.09 has
occurred. If the council determines that a violation has occurred, the council must follow the
requirements of Section 2.09 related to public censure and imposition of any additional penalty.
Policy consideration: Does the city council have the information needed to determine if a
violation of the St. Louis Park Home Rule Charter Section 2.09 occurred?
Summary: On March 12, 2020 the city manager received a written complaint from the
communications committee for the UCC/PPL development proposal in Elmwood alleging that
Councilmember Mavity violated multiple sections of the city charter (attached). The complaint
in essence alleges two violations. The first allegation is that Councilmember Mavity violated
Section 2.09 of the charter by interfering with city staff regarding the UCC/PPL proposal. The
second allegation is that Councilmember Mavity has a conflict of interest regarding the
UCC/PPL proposal, specifically Sections 12.01, 12.18, 12.19 and 12.20 of the charter.
On April 22, 2020 Councilmember Mavity submitted an email to the city manager declaring in
writing a conflict of interest with the UCC/PPL development application (attached). By
declaring the conflict of interest, Councilmember Mavity must recuse herself from any future
vote(s) regarding the project, whether that vote occurs as a member of the council or EDA.
Because Councilmember Mavity has declared a conflict of interest, the city attorney has opined
there is no further action required of the council regarding the alleged violations of Sections
12.01, 12.18, 12.19 and 12.20 of the charter.
The remaining item for council to consider is whether a violation of Section 2.09 occurred:
“Section 2.09. Interference with administration. Except for the purpose of inquiry, the council
and its members shall deal with and control the administrative services solely through the city
manager, and neither the council nor any member thereof shall give orders to any of the
administrative personnel of the city, other than the city manager, either publicly or privately. If
this section is violated by any member of the city council, such violation shall result in the public
censure by the council of the offending party, and may, in addition, result in the imposition of a
civil penalty to be paid to the city in an amount equal to one (1) month's compensation payable
by the city to such member. The determination whether any violation of the provisions of this
section has occurred shall be made by the council upon its own inquiry and by a two-thirds (2/3)
majority of all of the councilmembers except the councilmember or members being charged
with the violation.”
Supporting documents: Exhibit A – complaint; Exhibit B – St. Louis Park Charter Sections; Exhibit
C – Declaration of conflict of interest; Exhibit D – Written statements of alleged violation of
Section 2.09; Exhibit E – Email correspondence; Exhibit F – information provided by complainant
Prepared by: Tom Harmening, City Manager
Complaint of Alleged Violations of Home Rule Charter (City Charter) by an Elected Official and
Officer of the City Anne Mavity
Delivery Method: Via hard copy to City Manager and City Attorney
Background and Allegations of Misconduct
] REcEivE
] MAR1?209
I I ,
CITY MAMACER'S OFF!CE I ·-------~--"--3
Upon reason and belief Council Member Mavity violated multiple sections of the City Charter,
including sections 2.09, 12.01, 12.18, 12.19 and 12.20 of the City Charter (attached) and
engaged in inappropriate conversations and actions with, including with but not limited to,
Project for Pride in Living (PPL) and Union Congregational Church (UCC).
On or about the fall of 2019, there is reason and belief that Council Member Mavity
communicated with both PPL and UCC. These conversations lacked independence, were not
impartial, were meant to avoid normal channels, and had an inherent conflict of interest.
Furthermore they were exclusive, deliberately intended to avoid an established practice of an
inclusive interactive process, which assures the equality of rights of all resident stakeholders in
St. Louis Park.
Upon reason and belief Council Member Mavity for her own benefit, now and in the future,
engaged in actions that purposefully set and framed the components of the project. Direct or
indirect communication, involvement, or requests that are an attempt to influence or induce
the process, where there is known conflict of interest, is a clear violation of the City Charter and
the sections referenced within.
Upon info rmation and belief Council Member Mavity has consulted in the past for PPL and
personally stands to gain by enhancing her positon with PPL now and in the future through her
actions. As info rmation you can find Council Member Mavity, as a spokesperson, on PPL's
media marketing.
Upon reason and belief Council Member Mavity guided the UCC on how best to minimalize the
public process of relevant stakeholders to help assure the project would be expedited and to
prevent any changes in the project and/or that would jeopardize PPL being the developer, in
which she had an established relationship.
On or about September of 2019, the pastor of UCC communicated to a stakeholder that she
was not to share, at the time, any details of the PPL project, even though information was
1
City council meeting of May 18, 2020 (Item No. 8a)
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter Page 2
av a ila b le a b o u t th e p la n s a n d d e sign . U C C w a s u n e a sy a n d w a s u n w ill in g to sha re an y d e ta ils,
in fe rrin g th o s e d e ta ils wo u ld co m e la te r w h e n th e p la n s w e re fu ll y co m p le te d . It w a s e v id e n t
the y w e re n o t in te re s ted in c o ll a b o ra tio n a n d w o u ld sha re th e fi n ish e d p rod u ct w ith re sid e n t
sta k e h o ld e rs w h e n th e y fe lt b e s t, w ith on ly th e in te re s t o f UC C , P P L, an d C oun c il M e m b e r
M a v ity c o n s ide re d -a ll b en e fa cto rs o f th e d e v e lo p m e n t.
O n o r a bo u t O cto be r o f 2 0 1 9 , C o un ci l M e m b e r M a v ity co n fi de d in a sta k eh o ld e r th a t th e
n e ighb o rs w ill b e m o re c o n c e rn e d o n w h a t sh e w a s g o in g to p la c e o n th e U C C p ro p e rt y ve rsu s
o the r p ro p o s e d d e v e lo p m e n t p ro je cts , in c lud in g th e p ro p o s e d d e v elo p m e n t o n th e Je sse n
P rin tin g site .
In th e fa ll o f 2 0 1 9 , th e pa sto r o f UC C sta te d to a n eig h b o rh o o d lea d e r th a t the re w ill ab so lu tely
n o t be d is cu ss io n a b o u t the ir p ro je ct at a n u p c o m in g n e ig h b o rh o o d m e e tin g b e in g h e ld at th e
UC C. It is n o te w o rth y sh e fe lt e m po w e re d to d icta te a n d c o n tro l su c h a m e ssa g e an d tim in g to
rele v a n t sta k eh o ld e rs . U C C e x u d e d co n fi de n c e in the ir p o sitio n d u e to co n ne ctio n s w ith a
p e rs o n in a p o s ito n o f p o w e r at b o th th e C ity a n d P P L.
U p o n re a s o n a n d b e lie f C o u n c il M e m be r M a v ity h a s in fe rre d th a t sh e is th e d riv e r an d de ci sio n
ma k e r o n p ro je cts n o t th e M a y o r o r h e r p e e rs o n th e co un c il. T he re h a s b ee n an g st an d
re d ire c tio n b y C ou n c il M e m b e r M a v ity w h e n sh e h a s b ee n ask e d o r u rged to h e lp fi n d a b a lan c e
w ith a n ad ju s te d o r a lte rn a tiv e p ro je ct a n d /o r d e v e lo p e r. In th is ca se , w o rkin g co o p e ra tiv ely
a n d c o lla b o ra tiv ely w ith a ll sta k e h o lde rs to w a rd s a so lu tio n th a t wo u ld b a la n c e all n eed s is n o t
a n op tio n fo r C o u n ci l M e m b e r M a v ity d u e to th e co n fl ict o f in te re st.
U po n re a s o n a n d b e li e f UC C, P P L , a n d C o u n ci l M e m b e r M a v ity w o rk ed to co n c e a l an d d e la y
c o m m un ic a tio n o n th is p ro je ct u n til sta g e d w ith a p re -p a c k a g e d ou tc o m e to h e lp ad v a n ce its
a p p ro v a l.
U po n re a s o n a n d b e lie f C o un ci l M e m b e r M a v ity 's p ro a ctiv e ly fr a m in g o f th is p ro je ct in te n d e d
stra teg ic a lly to le ad a n d in fl u e n c e c ity sta ff , so th e y w ill co n sid e r sig n ifi c a n t co n c e ssio n s,
ig n o rin g p re c e de n t an d a d o p te d stu d ie s , su p p o rt in g a ro un d 1 m ill io n in ci ty fu nd ing , u ltim a tely
h o p e fu l th e y wo u ld g o a lo n g w ith h e r p ro je ct d riv e n b y pa rt ia lity an d a co n fl ic t o f in te re st.
U p o n re a s o n a n d b e lie f o n o r a ro u n d la te Ja n ua ry o r e a rly Feb ru a ry o f 2 0 20 , th e p a sto r o f UC C
co mm un ic a te d to a sta k eh o ld e r th a t th e in itia l d e la y in h a v in g n eig h bo rh oo d m e e tin g s w as
fr o m c ity g u id a n c e . T h e re is re a so n a n d b e li e f th a t C o u n c il M e m b e r M a v ity h a d u ndu e
in fl uen c e in a n u m be r o f a rea s in cl u d in g th e tim ing o f sta k e h o lde r m e e ting s.
U po n in fo rm a tio n a n d b e lie f o n D e c e m be r 19 , 2 0 1 9 , C ou n ci l M e m b e r M a v ity sta ted p u b lic ly , as
p a rt o f h e r p a id p ro fe ss io n , th a t h e r g o a l w a s 3 0 0 ,00 0 n e w affo rd a b le h o u sin g b e b u ilt.
A lth o u g h th is is a wo rth w h ile g o a l an d o n e th a t th e C ity a n d sta k e h o lde rs wo u ld w a n t to he lp
2
City council meeting of May 18, 2020 (Item No. 8a)
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter Page 3
'
achieve with the proper balance and mix, her personal and professional goals result in a lack of
independence, are of conflict, and thus actions she has taken have been exclusionary, and are
adversely disadvantaging relevant stakeholders. Her responsibilities as a Ward Council Member
are to assure fair representation and to execute such duties independently and free from any
conflict of interest whatsoever, to the best of her ability. Council Member Mavity's actions
have led to nefarious influence and an unjust process that has detrimental influence on
affected stakeholders. This is contrary to the proper democratic operation of the city that
requires public officials, under the charter, to be impartial and responsible to the people.
Upon reason and belief Council Member Mavity played a part in having the PPL project placed
on a city study session on January 13, 2020. Since she has previously served PPL, it is reasonable
to assume that Council Member Mavity stands to personally benefit now and in the future by
circumventing and controlling the process, by taking actions to induce and sway other decision
makers, through securing early knowledge and support, to get a major project approved for a
developer in which she has a relationship. At this meeting, months after her efforts to push this
project began; Council Member Mavity finally disclosed her relationship with PPL as an attempt
to appear to be transparent. This delay was clearly inappropriate and was done strategically
only after one poorly communicated meeting with relevant parties and the damage had already
been done. It is also noteworthy that the January 13, 2020, study session agenda was arranged
prior to any neighborhood meetings occurring. This further illustrates the insincerity of the
process and personal motives of Council Member Mavity.
On February 20, 2020, Council member Mavity acknowledged to a stakeholder that she in fact
had conversations with UCC prior to any meetings that involved both stakeholder residents and
city staff.
Council Member Mavity worked to put the burden of any community meeting communication
on neighborhood leaders not PPL or UCC. This was for the purpose of minimizing and
discouraging public input. This was done to have a process that excluded genuine input and to
set up the project to benefit UCC, PPL, and Council Member Mavity. Moreover Council
Member Mavity was specific in inferring that the poor meeting communication was the
neighborhood leaders' fault and their responsibility. The burden must be on the parties
wanting a significant zoning change and a Planned Unit Development to communicate
effectively. It is uncommon to pass this on to unincorporated and aggrieved stakeholders.
Council Member Mavity' s actions in regards to the aforementioned are further evidence of
attempting to silence stakeholders and being disingenuous in really wanting any meaningful
public input. Rather her actions for the sole purpose of advancing her own interests. When a
second meeting was finally considered ultimately the communication increased only marginally
due to the demands and efforts of neighborhood leaders.
3
City council meeting of May 18, 2020 (Item No. 8a)
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter Page 4
B a s e d u p o n in fo rm a tio n a n d b e lie f, a n d a s m e m o ria lize d in U C C p ub lic atio n s, th e U C C C h u rc h
C o u n c il h e ld a m e e tin g o n Feb ru a ry 2 3 , 2 0 2 0 , to a pp ro v e th e p ro je ct in its e n tire ty an d th e
c o n tra ct w ith P P L. T h is w a s ra tifi e d a n d p u b lic ize d Feb ru a ry 2 5 , 20 2 0 . Fu rth e rm o re th is w a s
d o n e to p re -e m p t an y sta k e h o ld e r in p u t a n d a n eig h b o rh oo d m e e tin g w a s strate g ic a lly d e la y e d
u n til aft e r th e y h a d se c u re d su c h a p pro v a l. T h e rea so n s fo r app ro v a l in cl ud e d U C C 's fi n a n c ia l
p ro b le m s. R e le v a n t sta k eh o ld e rs sh o u ld n o t b e sub je ct to an u n ju st an d a co rru p t p ro ce ss d u e
to the ir fi n a n c ia l w o e s , w h ile b en e fi tin g U C C , C o un c il M e m b e r M a v ity , an d P P L.
O n o r ab o u t Feb ru a ry 2 0 2 0 , a sta k e h o ld e r h a d a d ire ct c o n v e rsa tio n w ith P P L. D u rin g th is
c o n v e rs a tio n P P L co m m u n ic a te d th a t fr o m th e b eg inn in g th e y h a v e b ee n ta k in g d ire ctio n fr o m
UC C , th e c ity , a n d th a t o n g o in g co n v e rs a tio n s h ad o cc u rre d fo r se v e ra l m o n th s. T h e y also w e re
cl ea r th e y d id n o t se e k ou t th is p ro je c t. T h e se e a rly c o n v e rs a tio n s w e re 'b e h in d cl o se d d oo rs'
b e fo re an y d iscl o su re s.
U p o n re a s o n a n d b e lie f C o u n c il M e m b e r M a v ity p ro a c tiv ely e ng a ge d re side n ts an d o th e rs fo r
th e p u rp o s e o f e n c o u ra g in g th e m to co m e fo rw a rd a n d su p p o rt p ro je cts tha t u ltim a te ly are
in te n d e d to b e ne fi t h e r p e rs o n a lly n o w a n d in h e r fu tu re e nd e a v o rs. Su c h ac tio n s e x h ib it a
cl e a r la c k o f in d ep en d e n c e a n d ill u s tra te s sh e w ill d o w ha te v e r is n e c e ssa ry to b en e fi t h e rse lf
p e rs o na lly .
U p o n re a so n a n d b e lie f C o u n c il M e m b e r M a v ity g u ide d U C C to h a v e m e m be rs th a t liv e in th e
c o m m un ity c o m e o u t p u b licl y in su p p o rt o f th e P P L p ro je ct w ith o u t d iscl o sin g h e r co n fl ict o f
in te re s t a n d h e r o p p o rtu n ity to p e rs o n a ll y g a in .
U p o n in fo rm a tio n a n d b e lie f a ro u n d la te Fe b rua ry o r M a rc h 20 2 0 U C C an d P P L in fo rm e d ci ty
sta ff the y w o u ld b e p u tti n g in fo rm a l a p p lic a tio n s , a n d su b se que n tly e x e c u te d th is actio n , in
a d v a n c e o f th e a lrea d y sc he du le d c o mm u n ity m e e tin g . T h is is n o te w o rth y as the y w e re
c o n fi d e n t C o u n c il M e m be r M a v ity w a s in fu ll su p p o rt o f th e p ro je ct p rio r to th e M a rc h 10 ,
2 0 2 0 , m e e tin g w ith sta k e h o ld e rs. T he m e e tin g o n M a rch 1 0 , 2 0 2 0 , in c lu d e d th e sta k eh o lde rs
d o in g m u c h o f th e c o m m un ic a tio n ab o u t th e mee tin g , a n d w ha t wo u ld b e n o rm a l an d p rop e r
n o tic e w a s m in im a li z e d a n d la te . T h is is e v ide n c e th a t th e c o m m u n ity m e e tin g w a s m e re
'w indo w d re ss in g ' a n d th e re w a s n e v e r a n y in te n tio n to ta k e su b s ta n tiv e ac tio n o n im pe ra tiv e
in p u t.
S u c h c o n du c t is u nb e c o m in g o f a sittin g C ity C o un c il M e m b e r, w a s d e li be ra te to p la c e u ndu e
in fl u e n c e o n th e p ro c e s s , is o f c o n fli c t, la c k s in d epen d e n c e , an d is fo r p e rso na l g a in p a st,
p re s e n t, a n d fu tu re . T h e a ctio n s o f C o un c il M e m b e r M a v ity h a s th w a rte d th e v a lu e s o f the
c o m m u n ity a n d h o n e st/fo rth rig h t g o v e rn m e n t, w a s d o n e to w o rk aro u n d co ll a b o ra tio n w ith
in te n t to av o id in cl u siv e n e ss o f re le v a n t sta k eh o ld e rs. T he d a m a g e to sta k eh o lde rs fr o m
d e trim en ta l a n d n e fa rio u s in fl uen c e is sig n ifi c a n t as th e y h a v e b ee n e x cl u d e d in an y m e a n ing fu l
4
City council meeting of May 18, 2020 (Item No. 8a)
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter Page 5
in p u t o r fa cets o f th e pro je ct. It w o u ld be irre spo n sible no t to add ress th e se se riou s co nce rn s
an d tak e im m e d iate co rre ctiv e actio n . St. Lo u is Park de alt w ith a sim ilar bre ach, alth oug h on e
co u ld arg u e le ss eg reg io u s, th a t in vo lved a co n fl ic t of in te rest w ith pe rso na l/fa m ily interests in
th e 19 7 0 's, th at re su lte d in an ele cted o ff ici a l re sign in g/en din g th eir te rm fr om offi ce . T he C ity
re co g n ize d to pro te ct th e C ity 's in te g rity an d pro fe ssio na l eth ics, it w as esse n tial to ad h e re to
ve ry hig h stan d a rd an d exp e ctatio n s fo r all ele cted offi cials/o ff ice rs to no t ero d e the pu b lic 's
co n fi de n ce . Sim ila rly situ ate d an d rele v an t de cision m a kers m u st assu re th e y do no t
in a p p ro p riately excep t an d lo b b y aro u n d su ch actio n s bu t assu re rectifyin g actio n . T he ultim ate
re sp o n sib ility is no t to an in d ivid u a l, bu t to th e co m m un ity .
T h e C ity M a n age r, in co njun ctio n w ith th e C ity A ttorn e y , are em p ow e red an d have a du ty un de r
5.0 2 of th e C ity C ha rte r, to co m m e n ce a pro cess and assu re rectifyin g actio n is taken to
pre se rve th e city 's va lue s an d in teg rity . T h e C ity C ha rte r is de sig ne d to assu re th at su ch
vio latio n s are no t de fe n d ed , bu t add re ssed , an d reco gn ized prin ciple d co n du ct is fund am e ntal
to th e eth ics of th e o rg an izatio n . C ity A ttorn e y s, in sim ilar case s, in othe r jurisd iction s have
ta ke n ap p ro p riate actio n , pu ttin g th e pro te ctio n of th e inte nt an d sp irit of th e C ity's C harte r
fi rst.
Relief
A t a m in im u m , d u e to m u ltip le C ity C h a rte r vio lation s in cl ud in g bu t no t lim ited to section s 2.09,
12 .0 1, 12 .18 , 12 .1 9 an d 12 .2 0 , th e ap pro v al fo r th is pro je ct m u st be imm ediately halte d,
in cl u d in g de n yin g an d vo id in g an y app licatio n s su bm itt ed as calle d fo r unde r th e charter.
A pp ro p riate tim e ly actio n m u st be ta ke n to sto p furth e r irre p arable da m ag e to stake hold e rs
an d dise n fr an ch ise d rele v an t an d en title d pa rt ie s. Fund am e ntal to th e C ity C h arte r is that th e
pu b lic m u st hav e th e co n fi d e n ce of th e in te g rity of its local go ve rn m e nt. This co de of eth ics
m u st be en fo rced to th e hig he st of stand a rd s; harsh actio n m ust be take n ag ain st any party
w h e n ab u se s occu r, esp e ci a lly in case s w h e re an in d ividu a l is in a position of pow e r an d can
utilize th e ir po sitio n fo r p e rso n a l gain. It w ou ld be irresp o nsible an d in co nsiste nt w ith th e C ity
C h a rte r to , ratio n a lize , o r to tak e th e se action s by Coun cil M em b er M avity lig htly. M o reo ver,
an y ap p licatio n o r tran sactio n m u st be vo id e d as C oun cil M em be r M avity had a pe rson al
fi n a n cia l in te re st in driv in g th is pro je ct sin ce in ce ptio n, lacked ind ep e n den ce, an d had an
estab lishe d co n fl ict o f in te re st. C ity C ou n cil M a vity's actio n s w e re a cl e ar atte m p t to
ci rcu m v e n t th e sp irit o f th e C ity C ha rte r. A d d itiona lly , th is in vio lation of th e o ath C o un ci l
M e m be r M avity to o k be fo re en te rin g th e du tie s of th e off ice as an ele cted off ice r, he r action s
w e re d e libe rate , an d w e re in te n d e d to in te rfere w ith estab lish e d practice. The late attem p t at
5
City council meeting of May 18, 2020 (Item No. 8a)
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter Page 6
th e discl o su re of confl ict of inte rest lacks gen u in e ne ss and cann ot undu e the irrep arab le
da m ag e to th e fl aw ed pro cess in du ced to set up th e project, and her in app ro p riate actions,
in clu d in g m o v in g th e pro je ct fo rw ard fa st, eve n aft e r such discl osure . A ny late recusal at this
jun ctu re w ou ld be an att e m p t to app e ar to be non -b iased aft er the dam age to the pro cess has
alread y occu rre d. It is im pe rative un de r th e C ity C h arter, that even a m ere pe rception of
co n fli ct of in te re st, be de alt w ith fo rcefully. A ny reasonab le perso n w ou ld con cl u de that
sta ke h o ld e rs have be e n silen ced an d dise nfr an ch ised thro ugh an un der han ded attem pt to
sh o w pro ce ss by U C C , PP L an d C oun cil M e m be r M avity, an d stakeholders are entitled to
im m ed iate actio n an d relie f. A revie w of past an d present practices along w ith pattern s of
co n d u ct illu strates th e se con ce rn s. M o reo ve r, the se kind s of ro gue actions an d violations m ust
no t be to le rate d in a H o m e R u le C h arte r fo rm of go vern m ent. Co un cil M e m be r M avity' s
A ctio n s alo ne , ev en w ith o ut th e establish e d confl ict inte rest, circum vent the system , co nstitute
un d u e in fl u en ce , abu se of po w e r of he r off ice in con sistent w ith the charter, and fa il to be both
in d e p en d e n t an d im p artial as requ ired und er th e C ity Charter. W ith the m u ltitud e of these
eg reg io u s action s it w o u ld be unju st an d ju st plain w ro ng if left to stan d.
T h e Elm w oo d area is kn ow n fo r its histo ry, in cl u siven ess of diversity in cl ud in g so cio eco nom ic
div e rsity, an d ha s w o rke d collab oratively to w e lc om e many changes in cl uding m ore affo rdable
ho u sin g , as ev ide nt in othe r com pleted de velop m e n ts. So any insinu ation that this is no t the
case is fa lse an d w ou ld be red irection fo r on e's ow n ben efit. W hat the stakehold ers in
Elm w o o d sh o u ld be able to expe ct is a pro cess of in clu sion, actual in put w he re su bsequ ent
actio n o n a sig n ifi can t ch ang e is taken , an d genu in e inde pe nd ent rep resentation fr o m their
ele cte d off icia l. C oun cil M em be r M avity's action s, driven by a confl ict of inte rest and her
po sitio n of po w e r, have be e n an yt h in g le ss th an re p resentation w ith in tegrity, an d are
in co n sisten t w ith th e eth ics con tain e d w ith in th e C ity Charter.
R e a l co n cern exists th at C oun cil M em be r M avity co uld retaliate an d/or disp arage those
ag g rie v ed sta ke h old ers w ho com e fo rw ard to vo ice valid ated concern s. Fu rthe rm ore there is
co n ce rn sh e w ou ld use her pow e r to w ork to divide fo lks w ithin the com m unity. Coun cil
M e m b e r M a vity 's actio n s set fo rt h abo ve make it certainly not un reason ab le, that one could
an tici p ate sh e w ou ld use her posito n of po w e r to furthe r disadvantag e th ese stakehold ers. This
co u ld in clu d e , not o n ly to th e de sig n of th is pro je ct, but sub seque nt area de velop m e nts. Thus,
pro te ctio n cou ld be sou g ht unde r app ro priate an onym ity/w histle blow er statues. Up on serious
co n side ration it w as felt be st, base d on th e com pe llin g fa cts, th at the comm u nications
co m m itte e fo r th e UC C pro je ct w o u ld execute th is co m plaint on behalf of m ultip le aff ected
sta ke h o ld e rs, w ith trust th at go od jud g m e nt w ill be used to prevent an y such actions in cluding
bu t no t lim ite d to retaliatio n .
6
City council meeting of May 18, 2020 (Item No. 8a)
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter Page 7
jJ
Respectfully subm itted this 12' day of M arch 2020 by the com m unications comm ittee for the
UCC Proiect:
" @~-
hristel Chong
J .4el
Sue Basill ..-- s w6
q'us-z a o le so
Correspondence V ia: Com m unications com m itt ee fo r the UCC pro ject in Elm w ood at:
enccucc@ gm ail.com
7
City council meeting of May 18, 2020 (Item No. 8a)
Title: Consider complaint of alleged violations of the St. Louis Park Home Rule Charter Page 8
St. Louis Park Home Rule Charter
Section 2.09. Interference with Administration
Except for the purpose of inquiry, the Council and its members shall deal with and control the
administrative services solely through the City Manager, and neither the Council nor any member
thereof shall give orders to any of the administrative personnel of the City, other than the City
Manager, either publicly or privately. If this section is violated by any member of the City Council,
such violation shall result in the public censure by the Council of the offending party, and may, in
addition, result in the imposition of a civil penalty to be paid to the City in an amount equal to one
(I) month's compensation payable by the City to such member. The determination whether any
violation of the provisions of this section has occurred shall be made by the Council upon its own
inquiry and by a two-thirds (2/3) majority of all of the Councilmembers except the Councilmember
or members being charged with the violation.
Section 12.01. Declaration of Policy.
The proper operation of democratic government requires that public officials be independent,
impartial and responsible to the people; that governmental decisions and policy be made in the
proper channels of the governmental structure; that public office not be used for personal gain, and
that the public has confidence in the integrity of its government. In recognition of these goals, there
is hereby established a Code of Ethics for all public officials. The purpose of this Code is to
establish ethical standards of conduct for all such officials by setting forth those acts or actions that
are incompatible with the best interests of the City and by directing disclosure by such officials of
private financial or other interests in matters affecting the City. The provisions and purpose of this
Code and such rules and regulations as may be established are hereby declared to be in the best
interests of the City of St. Louis Park.
Section 12.18. Personal Financial Conflicts of Public Officials.
(a)Contracts Void. Except for any contract permitted by M.S.A. § 471.88, any public official
who is authorized to take part in any manner in making a sale, lease or contract in his/her
official capacity shall have no personal financial interest in that sale, lease or contract or
personally benefit financially therefrom unless the effect on the public official's personal
financial interest is no greater than on any other person and/or property similarly situated.
Any sale, lease, or contract entered into by the City with regard to which a public official
has acted in violation of this section is void. Any money which is paid by the Council in
violation of this paragraph may be recovered from any and all persons interested therein.
Any vote pursuant to M.S.A. § 471.88 must be unanimous by Council.
(b)Noncontractual transactions voidable. Any public official who in the discharge of his/her
duties would be authorized to take an action, vote, or make a decision concerning a
noncontractual transaction of the City which would affect the public official's interests,
unless the effect on his/her interests is no greater than on other persons and/or property
similarly situated, shall disqualify himself/herself from such action, vote or decision. Any
transaction entered into by the City with regard to which a public official has acted in
violation of this paragraph is voidable at the option of the Council. Any money, which was
paid by the Council in violation of this paragraph, may be recovered from any and all
persons interested therein.
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Section 12.19. Financial Conflicts of Associates of Public Officials; Contracts and Transactions Voidable.
Any public official who in the discharge of his/her duties would be authorized to take an
action, vote or make a decision concerning a contractual or noncontractual transaction which would
affect the interests of his/her associates, unless the effect on the interests of his/her associates is no
greater than on other persons and/or property similarly situated, shall disqualify himself/herself
from such action, vote or decision.
Any contract or transaction entered into by the City with regard to which a public official has
acted in violation of this Section is voidable at the option of the Council. Any money, which was
paid by the Council in violation of this section, may be recovered from any and all persons
interested therein.
Section 12.20. Gifts and Favors.
No public official shall accept any valuable gift, whether in the form of money, service, loan,
thing or promise, from any person, firm or corporation which to his/her knowledge is concerned,
directly or indirectly, in any manner whatsoever in business dealings with the City; nor shall any
public official(!) accept any gift, favor or thing of value that may tend to influence his/her in the
discharge of his/her duties; or (2) grant in the discharge of his/her duties any improper favor,
service, or thing of value or accept an offer which would not have been given if he/she were not an
official; or (3) accept or receive anything of value through sale or gift of goods or services which
would result directly or indirectly from his/her position as a public official of the City of St. Louis
Park.
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From: Elmwood UCC <enccucc@gmail.com>
Sent: Sunday, April 19, 2020 5:51 PM
To: Tom Harmening <THARMENING@stlouispark.org>; Soren Mattick <SMattick@ck-law.com>
Subject: Fwd: FW: scanned documents
Tom and Soren,
Thank you as well for the meeting. We appreciate you listening to the complaints.
Attached are some of the applicable portions included in the informational guidance memo, in
regards to official conflict of interest and ethics, from the League of Minnesota Cities
(LMC). This guidance further substantiates and brings credence to the complaint submitted.
You are aware that we were very concerned about retaliation, intimidation, and continued undue
influence on the entire process and multiple parties. Thus we are hopeful that the guidance
provided bt the LMC is followed including the section on self judgement.
Again we appreciate your time and attention to this matter.
The UCC Communication Committee
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