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HomeMy WebLinkAbout2016/02/16 - ADMIN - Minutes - City Council - Study Session�O/St. Louis Park OFFICIAL MINUTES MINNESOTA CITY COUNCIL SPECIAL STUDY SESSION ST. LOUIS PARK, MINNESOTA FEBRUARY 16, 2016 The meeting was called to order at 6:30 p.m. Councilmembers present: Mayor Jake Spann, Gregg Lindberg, Tim Brausen, Steve Hallfin, Anne Mavity, Thom Miller, and Susan Sanger. Councilmembers absent: None. Staff present: City Manager (Mr. Harmening), Director of Operations and Recreation (Ms. Walsh), Financial Supervisor (Mr. Heintz), Ree Center Manager (Mr. Eisold), Economic Development Coordinator (Mr. Hunt), Director of Conanunity Development (Mr. Locke), and Recording Secretary (Ms. Pappas). Guest: Brian Recker with RJM, Chad Nicholls with the St. Louis Park Hockey Association, and John Basil with the Hockey Association. 1. Outdoor Arena Project Ms. Walsh presented the staff report and reviewed results of the bids received for the outdoor arena project. She noted the bids did not come in on budget, and added that the reason for this was mainly because of the roof design and ADA compliance issues. Brian Recker, RJM, explained the roof structure is unique and customized, and bids were within the appropriate range, but were higher than expected. Mr. Heintz explained the total cost of the project is now $8.51 million. He noted the various areas where funding will be provided including G.O. bonds, grants and rebates, value engineering, Hockey Association donations, the park improvement fund, and general fund. Mr. Harmening stated the improvement fund is doing well, and in 2015, $825,000 went into the park dedication funds. He added these funds have not been designated for any other projects at this time. Councilmember Lindberg asked about the G.O. bonds and if a levy increase would be needed. Mr. Harmening explained the first payment on the bonds would not be until 2018, so a levy increase could begin in 2017 and then increase over time. Mr. Heintz stated the increase would be approximately $35 per year, for a median income home. Councilmember Sanger pointed out the most current bid represents a huge increase for the project and asked staff for information on alternative roofs and/or solutions. Ms. Walsh noted that Edina's similar project included use of a metal roof. She added if St. Louis Park pursued a metal roof, the project cost would decrease by $1 million. The other alternative would be to not include a roof at all; however, that would mean the structure would be used exclusively as an ice rink, with no turf, or drain tile, and would take away any options for other activities to be conducted on it. Special Study Session Minutes -2- February 16, 2016 Mr. Becker stated metal is the most economical choice, however, materials are limited. Councilmember Sanger stated she is not comfortable going ahead with the project at this time, especially since it will only serve a small amount of the City's population. Councilmember Mavity asked if the City would need to repay the Hockey Association if the project does not move forward. Ms. Walsh stated none of the grant funds have been spent and the majority of the design has already been completed. Mayor Spano asked if the design fees would also be figured into the project costs. Ms. Walsh stated the project did allow for some design fees. She cautioned the Council that construction costs are not going down and neither is the price of steel. Councilmember Miller said after discussing the project, he is very uncomfortable spending this amount of money for a small number of people in the community, noting there may be other opportunities to use these funds in St. Louis Park, and not just on this project. Chad Nicholls, St. Louis Park Hockey Association, commented that December was a record month and revenues have increased every year. When asked if the Association could contribute more to the project, Mr. Nicholls noted this would need to be discussed with the membership; however, the term could possibly be extended over more years. Councilmember Lindberg asked how many months the ice would be in use. Ms. Walsh stated ice would be in place November thru March, adding that with turf, the facility could also be used for lacrosse, baseball, and other activities. Councilmember Lindberg stated he would want the facility to be used for many other needs of the community. He noted this is much more of a community project for the community benefit, not just for a limited group, but for the whole community. He asked the Council to discuss further how to still make this project happen. Councilmember Hallfin asked if the Hockey Association could contribute additional funds. A Hockey Association member noted that the possibility more funds would be available over time, and added that families involved in hockey, baseball, and lacrosse are very excited about this project. Councilmember Hallfin stated he is a supporter of the hockey program, adding this is a tough decision. He suggested looking for additional funding sources. Ms. Walsh stated they would need to break ground on the project by March for completion next year. Mr. Eisold said staff would need to know the Council's final decision by the end of February, so as to be able to purchase refrigeration equipment. Councilmember Sanger asked the Council, if they move forward on this project, to be transparent in the process. Mr. Harmening added if the Council rejects these bids and holds off on the project for another year, construction costs will escalate again. Special Study Session Minutes -3- February 16, 2016 Councilmember Brausen stated he is willing to consider this project, but would need to talk more with his constituents before malting a final decision. Councilmember Mavity stated the project costs had essentially increased from $3 million to over $6 million. She said she is appreciative of the Hockey Association, but has serious reservations in moving forward on this project at this price. However, she added, if it's the will of the Council to move forward, then we should. Councilmember Sanger stated she is against moving forward and added if she had known about the costs, she would not have wanted to move forward, and would have been more willing to put funding into the community center project. Councilmember Miller agreed with Councilmember Mavity and Councilmember Sanger, noting the overall cost is out of line. Councilmember Hallfin added he would like use the next two weeks to get more information from staff on the project. Councilmember Lindberg said he wants to cautiously move forward with this project and encourage staff to look at more funding options, and perhaps even naming rights. Councilmember Mavity said she is leaning against this project and noted the gender equity issue with St. Louis Park programs. John Basil with the Hockey Association noted the girls' hockey program is being revitalized and in a few years there is hope to again have a St. Louis Park girls' hockey team. It was the consensus of the City Council to hold off on making a decision and to request more information from staff. Mr. Harmening stated this will be a special place and a special opportunity for the community's use. It will be a covered facility and there is potential for a unique partnership on this project. He added the City has the resources and is not cutting other projects to do this. The general fund is very healthy and the City needs to remain competitive in the marketplace, especially as a first - ring community and for new home owners. He added the City can make a difference with the addition of this facility. The Study Session recessed at 7:25 p.m. and reconvened at 8:30 p.m. It was noted that Mayor Spano was not in attendance. 2. Proposed St. Louis Park Revolving Loan Fund Program Mr. Hunt presented the staff report regarding the proposed revolving loan fund program. He noted that staff was asked to explore this concept farther, and they have been working on potential partnerships to efficiently and effectively provide a revolving loan fund to help expanding businesses in St. Louis Park. Mr. Hunt added the benefits of the program to borrowers is that it will help lower down payments and streamline the lending process. Loans would be based on criteria agreed to in advance. Guidelines were presented to the EDA in the packet. CMDC would administer the Special Study Session Minutes -4- February 16, 2016 program on the FDA's behalf, through a management contract. In order to implement the program, it would require an amendment to the bylaws to allow the Executive Director to sign off on loans up to $200,000. The sign off amount is currently $50,000. Funds would not be released by the City until an actual loan was approved. Mr. Hunt stated staff is looking for feedback on the proposed program, guidelines, and the contract with CMDC. Staff would bring the program back to the EDA for formal approvals on March 21. Councilmember Mavity said she likes this approach to helping businesses expand and stay in St. Louis Park. Mr. Hunt stated staff had discussed this option with Citizens Bank, noting they agreed it was a good concept. Councilmember Miller appreciated staff s efforts on this and asked what the overall advantage would be from a small business perspective. Mike Mulrooney, President of CMDC, stated this is a gap lending program and is mostly used if there is an appraisal gap or a gap in project costs, for a redevelopment project. He added it can also be used when a small business is given no credit in some instances, or when a business project is desired by the community and there is a gap. Councilmember Miller asked if businesses need a primary lender already in place. Mr. Mulrooney stated the application does require that the business disclose the primary lender. He added the goal is to leverage other options available to make a project work. However, the financial commitment is needed on the project first. Councilmember Brausen asked if the loan program could be promoted to women or minority- owned businesses. Mr. Mulrooney stated credit worthiness is the main criteria in the process. Councilmember Lindberg asked how the EDA pays for this. City Manager Harmening noted there is a balance of $10 million in the Development Fund which could be used for these loans. Councilmember Mavity asked how much goes into this fund annually. Mr. Harmening stated $500,000 comes into the fund each year with repayment of the HRA levy. Councilmember Mavity asked if a plan can be put in place that is more intentional for women and minority-owned businesses, including an outreach program. She asked how the City can then engage and recruit these businesses for the loans. Mr. Hunt noted that staff planned to reach out to organizations representing those groups, as well as others, to make them aware of St. Louis Park's new program. Councilmember Lindberg noted that there would be concern if funds were used for significant alterations to businesses in the Lake Street area. He asked how the City would consider these types of projects. Mr. Mulrooney stated all applications would be reviewed by staff prior to approval. Councilmember Lindberg added one caution would be if an application was contrary to the master plan. This would need to be discussed and reviewed prior to approval also. Special Study Session Minutes -5- February 16, 2016 Mr. Hunt added if there is ambiguity in an application, it could be brought to the EDA for further discussion. Councilmember Sanger stated her approval of the program, but asked staff if there has been any problem with default on these loans. Mr. Mulrooney noted that CMDC has had zero default and over $70 million has been loaned out. Councilmember Sanger asked if this loan process could be used to fund businesses that lease. Staff stated yes, if the business met the criteria, it would be fundable with collateral. Councilmember Brausen stated he supports the concept with a focus on minorities or women - owned businesses and also to underserved businesses. Councilmember Mavity asked if this would change the process at all. Mr. Mulrooney stated a credit score worksheet would be supplied, and a way to address this may be to allow businesses to receive additional points if they are women or minority-owned. However, he encouraged the EDA to not restrict the loans to only these types of businesses and to keep the program open to all businesses. Councilmember Mavity added she is comfortable giving staff authority on this process, but also noted it should be clear that approved applications reflect the vision of the EDA. Mr. Harmening noted that Mayor Spano had asked for preference to non-profit businesses. Mr. Hunt stated the way the guidelines are drafted now, the loans are earmarked for "for profit" businesses and credit worthiness. There was consensus amongst the EDA to support the revolving loan program, guidelines and management contract, with the understanding that they could be reviewed annually by staff and EDA. There was also consensus to allow the Executive Director to sign off on loans up to $200,000. The necessary documents would brought back to EDA for final approval on March 21st. Communications/Meeting Check -In (Verbal) None. The meeting adjourned at 9:19 p.m.