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HomeMy WebLinkAbout2017/11/20 - ADMIN - Minutes - City Council - Study SessionWISt. Louis Park OFFICIAL MINUTES M I N N E S 0 T A CITY COUNCIL SPECIAL STUDY SESSION ST. LOUIS PARK, MINNESOTA NOVEMBER 20, 2017 The meeting convened at 6:08 p.m. Counciimembers present: Mayor Jake Spano, Tim Brausen, Steve Hallfin, Gregg Lindberg, Anne Mavity, Thom Miller, and Susan Sanger. Staff present: City Manager (Mr. Harmening), Economic Development Coordinator (Mr. Hunt), Director of Community Development (Ms. Barton), Planning/Zoning Supervisor (Ms. McMonigal), Asst. Zoning Administrator (Mr. Morrison), and Recording Secretary (Ms. Pappas). Guest: Derek Burrows Reise, STEP Executive Director, and STEP staff members 1. Developer for SWLRT Beltline Blvd Station Redevelopment Site Mr. Hunt stated that the Request for Proposal (RFP) for the SWLRT Beltline Boulevard Station Redevelopment Site (located at the southeast quadrant of CSAH 25 and Beltline Boulevard) was distributed to the development community in July. Three development teams - Kraus Anderson, Flaherty & Collins, and Sherman Associates - submitted proposals. Staff evaluated and scored the proposals according to the criteria outlined in the RFP. Staff determined that Sherman Associates' proposal most closely aligned with the city's vision, development objectives, and preferred programming for the site, and staff is recommending Sherman Associates be selected as the development team with which the EDA should partner to redevelop the SWLRT Beltline Boulevard Station Site. Mr. Hunt noted that the Sherman proposal was more detailed than the others, and more thought went into their proposal. He stated that staff liked the mix of uses proposed with 20% affordable housing at 50% AMI. He added that Sherman Associates took the office component seriously and is excited about the office space component, noting that job creation was one of the important objectives for redeveloping this site. Mr. Hunt stated that Sherman offered a modest amount of neighborhood commercial and is willing to propose more retail, adding that the proposed types of retail were unique for the area. Mr. Hunt stated that Sherman Associates also offered more for the land than the other developers and included numerous sustainable features, such as a solar garden in Carver County that would supply clean energy to the redevelopment, which meets the city's net -zero energy goals. He noted that Sherman is a Minneapolis-based, fully integrated development company, with a substantial portfolio of completed projects and a good reputation, as well as a tremendous track record of successful mixed use and affordable housing development. Mr. Harmening stated that staff recommends entering into a preliminary development agreement with Sherman Associates. He stated this would be an agreement where the city agrees to work cooperatively with the developer toward a final development agreement. Ms. Barton noted the preliminary agreement includes milestones, also. Councilmember Sanger asked if staff is looking for feedback from the council on whether or not to work with Sherman or if they are looking for feedback on the details of the proposal. Mr. Hunt stated staff is looking for council's feedback on the developer, adding the specifications of the proposed project can be modified to the council's preferences at a later date. Special Study Session Minutes -2- November 20, 2017 Mr. Haimening added that staff is asking council to give feedback as to whether the Sherman proposal meets the requirements of the RFP and if staff should move forward in preparing a preliminary development agreement with the developer. Councilmember Mavity thanked staff for that clarification, adding she has lots of opinions on this area and is not happy about the pedestrian experience in this area. Councilmember Mavity stated that George Shennan sits on her board, so she will recuse herself on any more discussion on this topic. Councilmember Sanger stated she is not happy with the high-level plan included in the packet. Her concern is that the parking ramp should be surrounded by the building. She recalled that they had discussed the ramp was to be hidden behind the development. Councilmember Sanger stated she also has concerns on the TIF costs and feels like they are not getting the whole story on finances. Mr. Hunt stated that the specifics on exact financing will depend on the project ultimately proposed, adding that, of the three proposals, Sherman Associates demonstrated the best grasp of financing needed for the project. However, staff will need to work closely with the developer on financing. Councilmember Brausen asked if the project will have federal funding to support the parking structure. Mr. Hunt stated that is correct. Councilmember Hallfin stated that he is fine with the Sherman proposal and moving forward with them. He asked for the EDA portion of the cost of the parcel in the future, and which part of those funds would go to the city. Mr. Hunt stated that the EDA would enter into a purchase agreement where the developer would purchase the land from the EDA. Councilmember Hallfm noted that when the EDA decided to purchase this property, it hoped to make a profit on the land. He added that in the future he would like to see the financials related to this purchase. Councilmember Miller stated he is not comfortable going ahead with Sherman Associates and would also like to look at Kraus Anderson. He added that there is not enough information fiom staff to just decide on Sherman, stating that Kraus Anderson provides more retail than Sherman in the proposal. He is thinking about the community that surrounds this development. Councilmember Miller added that he would also like to see more three-bedroom apartments, noting that residents want larger apartments. He asked about the deadline on this project, adding that he would like to see more public process at this time rather than farther down the line. Councilmember Mavity stated that for the past 8 years she has been on the council, the public process related to this project has been extensive, with much vetting. She stated that there will be more opportunities for public input as this project continues; however, she wanted to acknowledge the enormous public process that had already occurred. Councilmember Lindberg stated that he is confident and comfortable with Sherman and Associates, also noting that the public process around this project has been robust. He thanked staff for their work, stated he has the utmost confidence in them, and is happy to move forward. Councilmember Sanger added that if Sherman is willing to expand retail space, it makes sense to her to include a daycare center in the project, as well. She further stated that there is no need for another grocery store here. She would also encourage more 2 -3 -bedroom units and affordable units. Special Study Session Minutes -3- November 20, 2017 Councilmember Brausen stated that he is comfortable moving ahead with Sherman, as well, and likes the mix of affordable units. He added that he likes the office space and the sustainability piece, also adding that he would be interested to see if the developer would dedicate some of the project to historical space, as well. Mayor Spano stated he likes what has been presented by Sherman Associates. He added that he would like to see something bold related to the Beltline Station area and would look for robust retail. He stated that this proposal captures the high-level strategy the council wants in this area and added that he does want there to be further discussion. Councilmember Brausen agrees with Councilmember Miller that he would like the council to review more detailed development proposals of the other developers, so they can see the alternative developments. Ultimately, it was the consensus of the City Council/EDA to move ahead with a preliminary development agreement with Sherman Associates. Mr. Harmening stated that staff will move forward with the preliminary development agreement and invite the developer for further discussion with the council. 2. Walker Building and Historical Society Space Options Mr. Hunt stated the council had asked staff to explore potential options relative to how the Walker Building could be preserved through various ownership scenarios, as well as how the Historical Society's space needs could be met. Mr. Hunt added that staff has met with the owner of the Walker Building and the Historical Society and has developed several potential options for the council to consider regarding the Historical Society's space needs which include: • Monitor the sale of the property and work with the prospective buyer in some manner to see that the building's historic character is maintained and, if possible, restored. • Provide an Annual Stipend to the Historical Society to offset its lease payments. • Provide the Historical Society with funds to acquire the Walker Building. • Purchase of the Walker Building by the EDA, subsequently leasing space to the Historical Society • Provide STEP with the funds to acquire the Walker Building and allow it to be the property owner and manager. Councilmember Miller thanked staff for these options. He added that he loves the idea of STEP owning and managing the building and that the city could make it possible. He would want to know STEP's vision for the building, and if they would lease it to other organizations, how it could be written into an agreement. Councilmember Miller added that this would be a key component of a greater plan for the Historic Walker Lake District. Councilmember Brausen stated that he also liked the possibility of using the building in multiple capacities, although he is not sure the city should spend upwards of $1 million on the project, noting he feels it is worth about $600,000. He is leaning toward Option 1, but would need more information, adding that he would like to see a community listening session around this proposal. Councilmember Brausen also stated that he would like to see a real defined vision for this area before making a large commitment to the project. Special Study Session Minutes -4- November 20, 2017 Councilmember Sanger added that she is very supportive of a plan where the city provides funds to STEP to purchase the building, adding that this makes more sense than the city owning it outright. Option 5 meets the goal for providing space for the Historical Society and also for STEP office space. She stated that she hopes there would be spaces for other non -profits groups in the building, which could be a benefit for the entire community. Councilmember Sanger noted there are state grants available to help address costs, and she would be in favor of moving forward to help STEP purchase the building. Councilmember Mavity stated that having STEP manage the building is an interesting idea. She is supportive in general; however, she noted that there will need to be more partners. She stated that the city does not need to provide the full purchase price, and she would look for a pro forma and much more due diligence on this before moving forward. Councilmember Mavity stated that this is a large cost for the city, and it causes her concern. Her suggestion was to learn how much could be leveraged from lenders and to compile more information on total costs for renovations and repair. She stated that this project is moving in the right direction; however, she is not ready to Commit to it. Councilmember Lindberg agreed that the list price appeared too high on the building, adding that negotiation will be key. He likes the value and benefit of this being a centralized community space or hub. He added that we would need to consider next year's budget, along with creative ideas for making funds available for the project. Mr. Hai-rnening noted that the Development Fund would be the likely funding source to assist in STEP's purchase of the building. Councilmember Lindberg stated that having heard this, the city should move forward with Option 5. Councilmember Hallfin stated that all of the options are good, and he likes the idea of the Historical Society funding a permanent home in an historic building. He added that the Historical Society gives value to the city and having STEP there would help the community in many ways. He stated he is on the STEP Board of Directors, and would need to recuse himself from the vote on this issue. Mayor Spano stated that he envisions the Walker Building as a place to house the Historical Society and to serve STEP's needs. He added that this may also be a place for NEST, or a place for neighborhood leaders to meet. He is supportive of the city spending the money on this project; however, he noted that Councilmember Mavity does make a good point. His preference is Option 4, noting that he thinks this option has a bigger vision for the Walker Lake Area. Mr. Hunt noted that if the EDA purchased the property, and for whatever reason the existing tenants had to be relocated, it could potentially expose the EDA to relocation claims fiom those tenants, which could be very costly and in excess of $500,000. Councilmember Brausen stated that he would like to see a pro foirna. He is not clear on STEP's resources, or how they would handle being in the landlord business. Councilmember Sanger stated that she has concerns about the city being title holder and possible ramifications down the road, so she would like more staff input. She also asked about operating Special Study Session Minutes -5- November 20, 2017 and remodeling costs and what types of grant money are available to help move the project forward. Councilmember Mavity stated that typically a signed purchase agreement is sufficient for getting a grant, adding that it could be worked out without a final purchase agreement. She stated that she absolutely supports city involvement but does not believe the city should have any legal ownership or landlord role here. Councilmember Lindberg agreed with Councilmember Mavity, adding that it makes sense for the city to grant STEP the money, but he hesitates to have the city take ownership of this building. Councilmember Miller stated that he would like to see the city purchase the building in order to get it off the market and then work out the details to sell it to STEP. Mayor Spano asked if there has been any type of arrangement like this in the past in St. Louis Park. Mr. Harmening and Mr. Hunt both stated no, they could not recall this having been done previously. Councilmember Sanger stated that she is not in favor of sitting on this unique opportunity and doing nothing at all. She stated that the process needs to start as soon as possible. Mayor Spano stated that if the council is serious about making this a historic district, it is about the people and not the building. He added that it will need to be moved to the top of the priority list for the council to discuss, and there will need to be a deeper conversation with STEP. Mr. Hunt noted that Mr. Reise, STEP Executive Director, was available at the meeting this evening to answer questions. Councilmember Sanger asked what the timeframe is on this project. Mr. Harmening stated that staff would come back to council on this after the first of the year. Mr. Reise stated that STEP needs leverage to get financing to purchase the building, adding that they are working to get a purchase agreement now with the owner. However, STEP needs the city's financial backing for the purchase, and then STEP would also work to get grants. He added that before STEP can enter into a purchase agreement, they will need to know if the city is serious in financially supporting them. Mr. Curl Rahman, STEP Treasurer, stated that he told the STEP board not to purchase the building unless the city was involved. He added that there is much to consider in this project. The building is not perfect for STEP, but they can make it work Mayor Spano asked if STEP is able to meet with staff in the next 2-3 weeks to discuss this issue. Mr. Reise stated yes, adding that they are not looking for a funding commitment, but for consensus or understanding that the city is serious about option 5 as soon as possible. Councilmember Mavity urged staff to complete their due diligence and hoped there could be a 90 -day period for the city to clarify costs and what is expected from the city as a piece of the funding options. Special Study Session Minutes -6- November 20, 2017 Councilmember Brausen asked Mr. Reise if the city provided $600,000, if STEP would be able to get the additional funding. Mr. Reise stated that he would have to discuss that with the STEP board and get back to the city. It was the consensus of the City Council to have STEP discuss this further with staff and bring it back for further discussion before year end. The meeting adjourned at 7:45 p.m. Written Reports provided and documented for recording purposes only: 3. Solid Waste Ordinance Revision (Chapter 22) Melissa ennedy, City lerk