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HomeMy WebLinkAbout2022/03/21 - ADMIN - Minutes - Economic Development Authority - Regular Official minutes EDA meeting St. Louis Park, Minnesota Mar. 21, 2022 1. Call to order President Rog called the meeting to order at 6:20 p.m. 1a. Roll call Commissioners present: President Rog, Tim Brausen, Sue Budd, Lynette Dumalag, Larry Kraft, and Jake Spano Commissioners absent: Nadia Mohamed Staff present: City Manager (Ms. Keller), Redevelopment Administrator (Ms. Monson), City Attorney (Mr. Mattick), Executive Director/Community Development Director (Ms. Barton), Deputy City Manager/Operations and Recreation Director (Ms. Walsh), Engineering Director (Ms. Heiser), Interim Information Resources Director (Ms. Smith) 2. Approval of EDA agenda It was moved by Commissioner Brausen, seconded by Commissioner Dumalag, to approve the EDA agenda as presented. The motion passed 6-0 (Commissioner Mohamed absent). 3. Approval of EDA consent agenda 3a. First amendment to preliminary development agreement – Wooddale Station LLC (Ward 2) EDA Resolution No. 22-03 It was moved by Commissioner Budd, seconded by Commissioner Spano, to adopt EDA Resolution No. 22-03 Approving the First Amendment to the Preliminary Development Agreement between the EDA and Wooddale Station LLC relative to the Wooddale Station Redevelopment Site. The motion passed 6-0 (Commissioner Mohamed absent). 4. Approval of EDA minutes – none 5. Unfinished business – none 6. New business DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Economic Development Authority -2- Mar. 21, 2022 6a. Establishment of the 9920 Wayzata Blvd Tax Increment Financing District (Ward 4) EDA Resolution No. 22-04, EDA Resolution No. 22-05, EDA Resolution No. 22-06 Ms. Monson presented the report. Commissioner Brausen asked if this proposal involves taking down the three billboards on the property. Ms. Monson stated that is correct. Commissioner Brausen noted billboards such as this are no longer allowed to be used in St. Louis Park . He asked if the contractor voluntarily agreed to remove the billboards. Ms. Monson stated yes, that is correct. Commissioner Dumalag stated she appreciated the report and particularly information on diversity goals for the project. She also appreciated the list of subs and asked if they could meet the goals on page 9. Ms. Monson stated those are goals established by MN Housing, however, they are goals and not requirements so she cannot guarantee they will meet all goals. She stated the developer has pointed out ways they will strive to meet the goals and staff will work with the developer on the goals as well. Commissioner Dumalag appreciated that and added she also appreciated statements on the developer’s own journey related to racial equity. Commissioner Brausen stated after years of discouraging various projects on this site including auto dealerships to parking ramps for auto dealerships, the city has before it a housing project that will finally further the goals of the city, on land that has sat vacant for over a decade. He stated the Bigos proposal includes 233 new housing units, including 47 units at 50% of the area median income, many of which are family sized. He added this and all the sustainability features included make him excited to support this proposal. He stated there will be a TIF request of $6.3 million and that is substantial but makes sense for this project and should be paid back to the city in 14.5 years approximately. He stated there are substantial remediation costs at the site, where we are entitled to reimburse the developer for their expenses. Commissioner Brausen stated the proposal meets and is consistent with the TIF policy adopted by the city council and recommended by Ehlers, the city’s financial consultant, who has reviewed the policy in depth and negotiated with the developer prior to recommending this amount of assistance necessary for the development to move forward and be feasible. He explained there is a “but-for” test and it is a recommendation our financial consultant could not make with the prior proposal , which staff worked on for 2 years. He noted the property owned by the developer currently generates about $45,000 annual in property taxes and the city will continue to collect this while the TIF is paid, which are additional tax revenues. He added the city will have new housing units, 47 of which are affordable, noting this is a fine example of sustainable development incorporating both affordable housing and significant DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Economic Development Authority -3- Mar. 21, 2022 sustainability features on these long vacant parcels. He stated if we funded a similar request in the past, the TIF loan would have almost been paid off by now. He added it is time to move forward and asked the council to join him in supporting this proposal. Commissioner Kraft stated he was impressed with the contractor’s experience with sustainable projects and appreciated information provided on their approach working with minority and women-owned businesses, wage theft issues, and safety precautions. He added he would be interested in an update on how this is going mid-way through the project. He agreed with the comments made by Commissioner Brausen. He did appreciate that the previous development was rejected for too high of a TIF request. He stated this project meets the TIF policies the city has, and he will support this. Commissioner Kraft stated there are some items that bother him, including reimbursement of a green building premium and solar panels listed in the total extraordinary costs. He stated this has bothered him in other requests and to him , the extraordinary cost to St. Louis Park is not building green, which would be higher utility bills, more air and water pollution, and less green space. He stated these items generate a return as the building is operated and they should not be considered extraordinary. He added because the state has not been able to put in a more suitable energy code for Minnesota, the city is investing in this, adding this is something we need to look at over time as it creates a return, and he wants to make sure this is built into the process. President Rog stated she will oppose this TIF request, not because she wants to stop this from being built, but because she is concerned the message being sent to developers is that TIF is readily available in St. Louis Park. This includes projects that could conceivably go forward without public subsidy, and which would support the budget and invest in strategic priorities like racial equity, climate action, and without increasing the burden on today’s taxpayers. She pointed out the tax increases currently are at 5-6% each year and do not include the EDA and HRA levies. President Rog stated she noted her concerns about the gap that emerges when adding more residents who utilize police, fire, parks, roads, sidewalks, and all the things property taxes support. She noted that the taxes new residents pay are not commensurate with the services they will receive for one or two decades or more. She stated that is a hidden cost of TIF over which she is concerned. She added that citywide, there are 2,500 new units coming online and are TIF supported, with an estimated 4,000+ new residents. She stated many of these projects are on properties with low- base property value on which the tax bill will be calculated for 10-20 years or more and increasingly, her concern is for today’s residents, especially seniors, low- and moderate- income earners and business owners who are truly burdened by their property taxes today, especially given sky-rocketing valuations. President Rog stated in light of current conditions, she would like more discer nment with TIF right now, to leave space for projects that are fully funded with private money DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Economic Development Authority -4- Mar. 21, 2022 as a viable way to achieve the city’s goals and thereby keeping tax increases more modest. She stated her rationale for not supporting TIF is as follows: Afforda bility at $4.4 million results in just 2 three-bedroom rental units, 16 two-bedroom units and 29 one-bedroom units for singles or small families earning 50% AMI or less. She stated this does not hit the sweet spot with the type of housing the city needs, including affordable units and ownership options. She agreed with Commissioner Kraft that the costs for solar panels as well as EV charging stations and bike storage all have significant ROI over time, and she hopes this can be discussed further. President Rog stated to be clear she is not unilaterally opposed to TIF, noting it can be a very useful tool, and something she will support at the Beltline Station development. She pointed out those living there will pay less in taxes than they will cost the city, which impacts the city’s bottom line. For this reason, she believes they need to be more discerning with TIF and encourages developers to have a Plan B if their development does not rise to the top. She noted that by continuing to provide a public subsidy for almost every private development that comes before the EDA, to ensure investors get their ROI, especially for rental projects, the EDA is perpetuating the status quo around the wealth gap and disparities and kicking the ball farther down the road for the changes they want to see in the community. With that, President Rog stated she will vote against this TIF. It was moved by Commissioner Brausen, seconded by Commissioner Spano, to adopt EDA Resolution No. 22-04 decertifying the Wayzata Boulevard Tax Increment Financing District (a redevelopment district), EDA Resolution No. 22-05 approving the establishment of the 9920 Wayzata Boulevard Tax Increment Financing District (a housing district), and EDA Resolution No. 22-06 authorizing an Interfund Loan for advance of certain costs in connection with the administration of the 9920 Wayzata Boulevard TIF District. The motion passed 5-1 (President Rog opposed, Commissioner Mohamed absent). 6b. Public Hearing – Purchase and redevelopment contract with Bigos – 9920 Wayzata, LLC – 9920 Wayzata Blvd (Ward 4) EDA Resolution No. 22-07 Ms. Monson presented the report. President Rog opened the public hearing. No speakers were present. President Rog closed the public hearing. It was moved by Commissioner Brausen, seconded by Commissioner Spano, to adopt EDA Resolution No. 22-07 approving the Purchase and Redevelopment Contract between the EDA and Bigos -9920 Wayzata, LLC. DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Economic Development Authority -5- Mar. 21, 2022 The motion passed 5-1 (President Rog opposed, Commissioner Mohamed absent). 7. Communications – none 8. Adjournment The meeting adjourned at 6:50 p.m. _____________________________________ ______________________________________ Melissa Kennedy, secretary Margaret Rog, president DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5