HomeMy WebLinkAbout2018/02/12 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA
FEBRUARY 12, 2018
5:30 p.m. STUDY SESSION – Community Room Council Chambers
Discussion Items
1. 5:30 p.m. Future Study Session Agenda Planning – February 20 & 26 and
March 5, 2018
2. 5:35 p.m. Proposed Tenant Protection Ordinance and NOAH Preservation
Workgroup Initiatives
3. 6:35 p.m. Request for Funding for the SLP Nest
4. 7:20 p.m. SLP Park Ventures, LLC’s Application for TIF Assistance – Platia
Place Apartments & Hotel
5. 7:50 p.m. Louisiana Avenue Preliminary Layout Discussion – Project No.
4018-1700
6. 8:35 p.m. Update on Activities/Initiatives in Historic Walker-Lake Area
9:20 p.m. Communications/Updates (Verbal)
9:25 p.m. Adjourn
Written Reports
7. Proposed Allocation of 2018 Community Development Block Grant (CDBG)
Funds
8. Health in the Park Update
9. 2018-2022 Organics and Yard Waste Processing Proposals
10. Temporary Suspension of Local Gambling Tax
Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call
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Meeting: Study Session
Meeting Date: February 12, 2018
Discussion Item: 1
EXECUTIVE SUMMARY
TITLE: Future Study Session Agenda Planning February 20 & 26 and March 5, 2018
RECOMMENDED ACTION: The City Council and the City Manager to set the agenda for the
Special Study Session scheduled for February 20, the Boards & Commissions Annual
Meeting/Study Session (Reports Only) on February 26 and the Special Study Session on March 5,
2018.
POLICY CONSIDERATION: Does the Council agree with the agendas as proposed?
SUMMARY: This report summarizes the proposed agenda for the Special Study Session
scheduled for February 20, the Boards & Commissions Annual Meeting/Study Session (Reports
Only) on February 26 and the Special Study Session on March 5, 2018. Also attached to this report
is the Study Session Prioritizaton & Tentative Discussion Timeline..
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Tentative Agenda – February 20 & 26 and March 5, 2018
Study Session Prioritization & Projected Discussion Timeline
Prepared by: Debbie Fischer, Administrative Services Office Assistant
Approved by: Tom Harmening, City Manager
Study Session Meeting of February 12, 2018 (Item No. 1) Page 2
Title: Future Study Session Agenda Planning – February 20 & 26 and March 5, 2018
FEBRUARY 20, 2018
6:15 p.m. – Special Study Session – Community Room
Tentative Discussion Items
1.Boards & Commissions Application Review & Appoinment Process – Administrative Services
(30 minutes)
At the request of City Council, staff will provide information on the process that is used on an
annual basis to fill vacancies of the St. Louis Park Boards & Commissions.
2.Off-sale Intoxicating Liquor Study – Administrative Services (30 minutes)
Council requested follow-up discussion on parameters for off-sale liquor study.
FEBRUARY 26, 2018
5:30 p.m. – Boards & Commissions Annual Meeting – Council Chambers
Written Reports
1.Dockless Bicycles
2. Open to Business Program Update
3. 2040 Comp Plan Update
4. Housing Activity
5. Knollwood Target Minor Amendment to CUP for Mall Façade Enhancements
MARCH 5, 2018
6:30 p.m. – Special Study Session – Community Room
Tentative Discussion Items
1. 2018/2023 Solid Waste Collection Proposal Update – Operations & Recreation (45 minutes)
Staff will review with Council proposals received from haulers for 2018-2023 collection of
garbage, recycling, organics and yard waste.
Study Session Meeting of February 12, 2018 (Item No. 1) Page 3
Title: Future Study Session Agenda Planning – February 20 & 26 and March 5, 2018
Study Session Prioritization & Projected Discussion Timeline
Priority Discussion Topic Comments Date Scheduled
4 Preserving the Walker Building
Combined w/Walker Lake Branding
Discussed on 8/28, 11/20 & 12/11, 2017;
Report 1/22/18
Ongoing
4 Climate Action Plan Consultant updated draft; E&S Comm/staff
review; Council review 1/22/18; Adopted 2/5/2018
4 Affordable Housing Preservation
Policies/Ordinance
Discussed 9/25/17; Work Group met and
meeting again in December.
Council review-
February 12, 2018
4 Race Equity Communication to HRC
on Outreach & Next Steps Most recently discussed on 9/11/17 Ongoing
4 Race Equity/Inclusion
Courageous Conversations Most recently discussed on 9/11/17 Ongoing
3 Revitalization of Walker/Lake Area Part of Preserving Walker Building
Reports: 8/28/17, 9/25/17, 1/22/18
Ongoing; Design
Study Feb 12, 2018
3 The Nest Postponed to 2018 per their request February 12, 2018
3 Utilization of DBE Vendors Discussed on 9/11/17 Ongoing
3 Ranked Choice Voting Sent to Charter Commission on 10/2/17;
Meetings held on 12/6/17 & 1/10/18
Public Mtgs 2/2018
Comm Mtg 3/2018
3 Policy for Funding Non-Profits Part of 2018 Budget discussion on 10/9/17 Ongoing
3 Field Imprvmts/Girls Fastpitch Softball Design consultant hired Const. starts 2018
3 Historical Society Space Part of Walker Bldg discussions on 8/28/17
& 11/20/17 and 12/11/17
Ongoing
3 Living Streets Policy After Vision 3.0 work is completed 1st Qtr 2018
3 Develop a Youth Advisory Commission 1st Qtr 2018
2 Bird Friendly Glass
2 Dark Skies Ordinance (Light Pollution)
2 Community Center Project
? Overview of Crime Free Ordinance Priority not yet determined. ?
? SEED’s Community Green House /
Resiliant Cities Initiative Priority not yet determined ?
5 SLP Policing Model/Critical Incident
Planning Session 1 of 4 (held on 8/14/17) Completed/
Ongoing
5 SLP Policing Model/Critical Incident
Planning Session 2 of 4 (held on 9/25/17) Completed/
Ongoing
5 SLP Policing Model/Critical Incident
Planning Session 3 of 4 (held on 10/16/17) Completed/
Ongoing
5 SLP Policing Model/Critical Incident
Planning Session 4 of 4 (held on 11/27/17) Completed/
Ongoing
4 Flavored Tobacco Ordinance Second reading approved 12/4/17 Complete
TH 169 Mobility Study Direction provided on 9/11/17
3 Property Tax Relief for Seniors Part of 2018 Budget item (Councilmember
Brausen: "No further study needed.") October 9, 2017
2 Sidewalk Snow Removal Part of 2018 Budget item (Majority of council
determined no need to discuss further at this time.) October 9, 2017
2 Active Space Matching Grants w/
Multi- Family Communities
Part of 2018 Budget item (Will be included in
2018 Budget Proposal.) October 9, 2017
Priority Key
5 = High priority/discuss ASAP
4 = Discuss sooner than later
3 = Discuss when time allows
2 = Low priority/no rush
1 = No need to discuss
Meeting: Study Session
Meeting Date: February 12, 2018
Discussion Item: 2
EXECUTIVE SUMMARY
TITLE: Proposed Tenant Protection Ordinance and NOAH Preservation Workgroup Initiatives
RECOMMENDED ACTION: None at this time. The purpose of the report and study session
discussion is to review the draft Tenant Protection ordinance and update the council on the status
of other NOAH preservation strategies identified by the NOAH Preservation Workgroup.
POLICY CONSIDERATION: Does the council wish to consider adopting an ordinance that
would require multi-family residential property owners to pay tenant relocation benefits if they
raise rents, implement non-renewals without cause, or implement new screening criteria for
existing residents within a three month tenant protection period following the ownership transfer
of a NOAH multi-family residential rental property? Will the adoption of this ordinance result in
the protection of low income tenants? Could there be unintended consequences if this ordinance
is adopted?
SUMMARY: At the September 25, 2017 city council study session, staff presented a draft
ordinance that would implement an Advance Notice of Sale requirement for owners of multi-
family residential rental buildings. The ordinance required owners to give advance notice to the
city prior to entering into a purchase agreement for the sale of a building. Staff also provided a
brief update on the status of several other NOAH (Naturally Occurring Affordable Housing)
preservation strategies being considered by the council along with a summary of the two rental
community meetings held to seek input.
Following a discussion of the draft ordinance, council directed staff to convene a workgroup with
representatives from MN Multi-Housing Association, the St. Louis Park rental industry and
representatives from agencies advocating for NOAH preservation strategies. The purpose of the
workgroup is to review and discuss the preservation strategies being considered by the council and
determine if there is any middle ground for a workable solution. The workgroup has met three
times and have generated several NOAH preservation strategies in which they’ve reached general
agreement to move forward. At the study session, staff will review a draft ordinance implementing
a three month Tenant Protection policy for residents of NOAH properties in which there is a
transfer in ownership. Staff will also provide the council with an update on other NOAH
preservation strategies endorsed by the workgroup, including a “Legacy Program” to encourage
owners to transfer ownership of their NOAH properties to preservation buyers, a program that
would provide rehab financing in exchange for rent restrictions and possible revisions to the 4d
tax classification. Work is continuing on these initiatives.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Draft Ordinance
Prepared by: Michele Schnitker, Housing Supervisor
Reviewed by: Karen Barton, Community Development Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of February 12, 2018 (Item No. 2) Page 2
Title: Proposed Tenant Protection Ordinance and NOAH Preservation Workgroup Initiatives
DISCUSSION
BACKGROUND: Since the September 25 council study session, the NOAH Preservation
Workgroup has met three times to discuss the four NOAH preservation strategies being considered
by the council. The four strategies include:
•Advance Notice of Sale
•Non-renewal of Lease for Cause
•Non-discrimination of Housing Subsidy Recipients
•Rehab Financing in Exchange for Rent Restrictions
NOAH Preservation Workgroup
The workgroup meetings were facilitated by Cathy Bennett, an independent consultant, and 12
individuals participated in at least one of the three meetings. Although the workgroup did not reach
agreement or identify any middle ground on three of the four strategies being considered by the
council, they did generate several NOAH preservation strategies in which the workgroup was able
to reach general agreement. These strategies include:
Tenant Protection Ordinance: This ordinance would require a three month period following the
ownership transfer of a NOAH multi-family residential property in which the new owner would be
required to pay relocation benefits to tenants if the new owner increases the rent, rescreens existing
residents or implements non-renewals without cause and the tenant chooses to move during this
period. NOAH properties would be defined as buildings where at least 18% of the units have rents
affordable to households with incomes at or below 60% Area Medium Income (AMI). Eighteen
percent mirrors the percent of affordable housing required at 60% AMI per the city’s Inclusionary
Housing Policy. This ordinance would not prohibit a new owner from taking the actions listed
above; however, the owner would be required to pay resident relocation benefits if they do take
any of those actions during the tenant protection period. The ordinance would allow for a three
month period of time for residents to work with housing support resources and seek alternative
housing if they are facing unaffordable rent increases, new screening criteria requirements that
would be problematic for them, or a thirty day non-renewal without cause notice to vacate. The
ordinance also requires the new owner of an affordable housing building to provide notice of the
ordinance protections to tenants of affordable housing units within 30 days of the sale of an
affordable housing building. The city attorney drafted the ordinance based on the input and
guidance of the NOAH Preservation Workgroup. The workgroup has reviewed the final draft of
the ordinance being presented for your review. Staff will review the ordinance with council at
Monday’s meeting. The city attorney will be present to answer questions.
Legacy Transfer: This idea was generated as an outcome of the workgroup’s discussion on the
Advance Notice of Sale ordinance. The workgroup acknowledged that the majority of owners
appreciate and care about their residents and that there are owners that would be interested in
creating a “legacy” by preserving their property as affordable housing. The workgroup discussed
the creation of a program that could be marketed to owners to make them aware of the financial
advantages of transferring their NOAH property to a non-profit preservation buyer. All
participants agreed that this could be a collaborative effort between Minnesota Multi-Housing
Association (MMH), preservation buyers and local communities. Several members of the
workgroup including representatives from MMH, Greater MN Housing Fund and Common Bond
have volunteered to explore this idea further. The group will be hold its first meeting in March.
Study Session Meeting of February 12, 2018 (Item No. 2) Page 3
Title: Proposed Tenant Protection Ordinance and NOAH Preservation Workgroup Initiatives
Rehab Funding in Exchange for Rent Restricted Units/4D Tax Classification: The workgroup
members endorsed this strategy in theory but felt the terms and requirements of the program will
determine if the program will appeal to rental owners. This program may attract mid- and small
property owners with less access to capital. The Urban Land Institute (ULI), Family Housing Fund
(FHF) and MN Housing have established a workgroup to explore establishing a pilot for a rental
rehab program targeted at small and mid-size properties modeled after a current program funded
and administered by MN Housing for greater MN. The workgroup also noted that eligibility for
the 4D tax classification as a result of participation might incent more owners to use the
program. The workgroup discussed the feasibility of lowering the 4D tax rate which would make
the requirement to establish rent-restricted units more financially manageable. The workgroup also
discussed exploring how the 4D tax benefit could be used as an incentive to leverage commitments
from property owners to accept Housing Choice Voucher participants. For example, an owner
agreeing to rent up to 20% of their units could qualify for the 4D tax classification.
Other NOAH Preservation Strategies: Update
The workgroup also discussed the other three strategies being considered by the council but were
unable to reach agreement or identify any middle ground. The following is a brief summary of
workgroup’s outcome on each of the strategies:
Advance Notice of Sale of NOAH: An Advance Notice of Sale policy would require owners of
multi-family residential rental buildings to give advance notice to the city prior to entering into a
purchase agreement for the sale of a building. The city would use the notification information to
inform preservation buyers of an impending sale of a possible NOAH property.
The rental owners did not support this strategy and questioned the impact such a policy would
have on preserving units as affordable. Concerns related to the impact a 90 day delay would have
on sale negotiations and closing deadlines was also expressed. Preservation buyers, including
Aeon and CommonBond, also expressed concerns that such a policy could result in greater
competition and increased sale prices. Owners also stated that a $1000 fine may have little or no
impact. If the property has sold, the seller no longer has ties to the property so enforcing a fine
could be challenging and may not be a deterrent. New owners who want to reposition their property
will do so regardless of the requirement. In the course of the discussion it was determined that if
one of the goals of this ordinance was to provide an extended notice period for tenants to find
another place to live if needed, a focus on a tenant protection strategy might be more effective.
Non-Renewal for Cause: Rental owners were adamant that implementation of this strategy would
take away a valuable management tool for dealing with problem tenants and have the unintended
consequence of increasing the number of evictions filed and strengthening screening standards.
Owners stated that they seldom file an eviction except in the case of non-payment of rent.
Evictions are expensive, there is no certainty that they will prevail in housing court, and it goes on
the tenant’s record. Instead, owners typically wait and do a non-renewal at the end of a lease term.
Owners stated that they value their tenants and turnovers are costly. Preservation buyer
representative and affordable housing developer Alan Arthur, Aeon, also acknowledge that they
use non-renewals as a management tool to address problem tenancies and expressed concern
regarding the consequences of prohibiting or encumbering the use of non-renewals. Owners stated
that they don’t want to see good tenants move out. Owners claimed that they seldom do non-
renewals and give tenants fair warning to remedy issues prior to non-renewing a lease. It was also
pointed out that the city’s current crime-free ordinance training endorses the use of non-renewals
to address violations of the crime free ordinance. Tenants avoid having an eviction on their record
with a non-renewal. It was noted that a non-renewal notice for cause ordinance would not have
Study Session Meeting of February 12, 2018 (Item No. 2) Page 4
Title: Proposed Tenant Protection Ordinance and NOAH Preservation Workgroup Initiatives
changed the outcome of the Crossroads and Meadowbrook properties. The owner’s goal was to
reposition these properties and the extensive rehab would have been “cause” to allow non-
renewals.
Nondiscrimination Based on the Use of Public Rental Assistance: A lawsuit has been filed
challenging Minneapolis’ recent adoption of a nondiscrimination ordinance based on the use of
public rental subsidy. The ordinance is scheduled to go into effect May 1, 2018. Metro
communities are deferring further action related to this policy until the outcome of the lawsuit is
known. Although staff proposes that St. Louis Park act similarly and delay further action on this
policy until the outcome of the lawsuit is determined, the workgroup did discuss this policy and
the rental owners expressed a number of concerns.
Owners agreed that there is a lot of misinformation related to the Housing Choice Voucher
program requirements but were still hesitant to support a policy that would require
nondiscrimination of applicants receiving public rent subsidize. Owners noted that the
Minneapolis PHA voucher program processes were not owner friendly and in some cases resulted
in the loss of rent as owners waited for inspections and approvals. Although it was noted that
Minneapolis has made significant progress in addressing the owners concerns, owners stated that
the ease of participating in the program is dependent on the jurisdiction administering the program.
St. Louis Park may have a good relationship with the landlords and owners and be responsive to
any concerns or issues that arise, but that may not be the case in other communities.
NEXT STEPS: Based on council’s direction, staff will continue to focus efforts on exploring the
strategies identified by the SLP NOAH Preservation Workgroup. A subgroup of the SLP NOAH
Preservation workgroup along with representatives from CommonBond will be meeting in March
to work on the creation of a “Legacy” program to educate rentals owners on the benefits of
preserving the affordability of their properties through sale to a preservation buyer.
Staff will also continue participating in the ULI of MN facilitated work group of city, state, county,
housing industry and advocates interested in exploring strategies and tools for preserving NOAH
properties. A meeting is scheduled for February 15 to continue exploration of the pilot rehab
financing program initiative as well as other NOAH strategies.
Tenant Protection Ordinance: Should the council decide to move forward with the Tenant
Protection ordinance, the timeline listed below is the proposed schedule that could be used for
implementation of the ordinance. Staff is proposing a July 1, 2018 effective date. This timeline is
tentative and may need to be adjusted based on the council input provided during the study session
discussion.
Item Date
Staff/city attorney finalize Ordinance revisions In progress
Public Hearing/First Reading of Ordinances March 5, 2018
Second Reading of Ordinances March 19, 2018
Date of Publication March 29, 2018
Date Ordinances take effect July 1, 2018
Study Session Meeting of February 12, 2018 (Item No. 2) Page 5
Title: Proposed Tenant Protection Ordinance and NOAH Preservation Workgroup Initiatives
ORDINANCE NO. ____-18
CITY OF ST. LOUIS PARK
HENNEPIN COUNTY, MINNESOTA
AN ORDINANCE RELATING TO
AFFORDABLE HOUSING
THE CITY OF ST. LOUIS PARK DOES ORDAIN:
SECTION 1. The St. Louis Park City Code is amended by adding Chapter 8, Section 8-336 as
follows:
Sec. 8-336. Sale of Affordable Housing Building
(a)Definitions. The following definitions apply in this Section of this Code. References
to “Section” are unless otherwise specified, references to this Section of this Code. Defined terms
remain defined terms, whether or not capitalized.
(1)Affordable housing building means a multifamily rental housing building having
three or more housing units, where at least 18% of the units rent for an amount that
is affordable to households at or below 60 percent of area median income, as median
income was most recently determined by the United States Department of Housing
and Urban Development for the Minneapolis-St. Paul-Bloomington, Minnesota-
Wisconsin Metropolitan Statistical Area, as adjusted for household size and number
of bedrooms.
(2)Affordable housing unit means a rental unit in an affordable housing building that
rents for an amount that is affordable to households at or below 60 percent of area
median income, as median income was most recently determined by the United
States Department of Housing and Urban Development for the Minneapolis-St. Paul-
Bloomington, Minnesota-Wisconsin Metropolitan Statistical Area, as adjusted for
household size and number of bedrooms.
(3)Cause means the tenant or a member or the tenant’s household materially violated a
term of the lease or violated a provision of the City’s Rental Housing Ordinance, City
Code Section 8-331 Crime Free/Drug Free and Disorderly Use Lease Requirements.
(4)Tenant protection period means the period that commences when a real estate closing
transfers ownership of an affordable housing building and runs through the end of
the 3 calendar months following the month in which written notice of the transfer is
sent to each affordable housing unit tenant.
(b)Relocation Assistance
(1)If during the tenant protection period the new owner of an affordable housing
building terminates or refuses to renew any affordable housing unit tenant’s rental
agreement without cause, then upon terminating or refusing to renew the tenant’s
lease, the new owner shall pay to the tenant, as relocation assistance, no later than the
Study Session Meeting of February 12, 2018 (Item No. 2) Page 6
Title: Proposed Tenant Protection Ordinance and NOAH Preservation Workgroup Initiatives
day upon which the tenant vacates the unit, a payment in the amount as follows:
$2,600 for a studio or single room occupancy dwelling unit, $3,000 for a one-
bedroom dwelling unit, $3,600 for a two-bedroom dwelling unit, and $4,100 for a
three-bedroom or larger dwelling unit.
(2) If during the tenant protection period the new owner of an affordable housing
building raises any affordable housing unit tenant’s rent, or rescreens an existing
affordable housing unit tenant, and the tenant gives written notice to the new owner
to terminate the rental agreement, the new owner, shall within 30 days of receiving
tenant’s written notice of termination of the rental agreement, pay to the tenant as
relocation assistance, a payment in the amount as follows: $2,600 for a studio or
single room occupancy dwelling unit, $3,000 for a one-bedroom dwelling unit,
$3,600 for a two-bedroom dwelling unit, and $4,100 for a three-bedroom or larger
dwelling unit.
(c) Notice. Whenever ownership of an affordable housing building shall transfer, the new
owner shall within thirty (30) days of the real estate closing that transfers ownership of the affordable
housing building give written notice to each affordable housing unit tenant of the building that the
property is under new ownership stating:
(1) The name, mailing address, and telephone number of the new owner.
(2) St. Louis Park City Code Section 8-336 provides for a tenant protection period for
affordable housing unit tenants. Under Section 8-336, affordable housing unit tenants
may be entitled to relocation assistance from the new owner if the new owner
terminates or does not renew the tenant’s rental agreement without cause within the
tenant protection period. Affordable housing unit tenants may also be entitled to
relocation assistance from the new owner if the tenant terminates their rental
agreement because the new owner raises the rent or initiates a tenant rescreening
process within the tenant protection period.
(3) Whether there will be any rent increase within the tenant protection period with the
amount of the rent increase and the date the rent increase will take effect.
(4) Whether the new owner will require existing affordable housing unit tenants to be re-
screened to determine compliance with existing or modified residency screening
criteria during the tenant protection period and if so, a copy of the screening criteria.
(5) Whether the new owner will terminate or not renew rental agreements without cause
during the tenant protection period and if so, notice to the affected affordable housing
unit tenants whose rental agreements will terminate and the date the rental
agreements will terminate.
(6) Whether the new owner intends to increase rent, require existing affordable housing
unit tenants to be rescreened to determine compliance with existing or modified
residency screening criteria, or terminate or not renew affordable housing unit rental
agreements without cause on the day immediately following the tenant protection
period.
Study Session Meeting of February 12, 2018 (Item No. 2) Page 7
Title: Proposed Tenant Protection Ordinance and NOAH Preservation Workgroup Initiatives
The new owner shall provide a copy of the notice required by this part to the city at the same time
notice is provided to the tenants. The new owner of an affordable housing building shall not terminate
or not renew a tenant’s rental agreement without cause, raise rent, or rescreen existing tenants during
the tenant protection period without giving the notice required by this part.
(d) Penalty.
(1) A violation of subpart (b) of this Section is an administrative offense that may be
subject to an administrative citation and civil penalties as provided in City Code
Section 1-14. Notwithstanding any provision of City Code Section 1.14, the penalty
for a violation of subpart (b) of this Section shall be the sum of the applicable
amount of relocation assistance plus $500.
(2) A violation of subpart (c) of this Section is an administrative offense that may be
subject to an administrative citation and civil penalties as provided in City Code
Section 1-14.
(3) A violation of this ordinance as to each dwelling unit shall constitute a separate
offense.
SECTION 3. This Ordinance shall take effect July 1, 2018 and expire on July 1, 2023.
ADOPTED this ______ day of _______________, 2018, by the City Council of the City
of St. Louis Park.
Public Hearing
First Reading
Second Reading
Date of Publication
Date Ordinance takes effect July 1, 2018
Reviewed for Administration
____________________________________
Thomas K. Harmening, City Manager
Adopted by City Council
____________________________________
Jake Spano, Mayor
Attest:
___________________________________
Melissa Kennedy, City Clerk
Approved as to Form and Execution:
____________________________________
Soren Mattick, City Attorney
Meeting: Study Session
Meeting Date: February 12, 2018
Discussion Item: 3
EXECUTIVE SUMMARY
TITLE: Request for Funding for the SLP Nest
RECOMMENDED ACTION: No formal action required at this time. St. Louis Park High
School students and advisors will be in attendance to provide an update on the SLP Nest and a
request for funding.
POLICY CONSIDERATION: Conceptually, is the Council supportive of providing financial
assistance for this initiative? As the Council considers this question, what additional information
does it need to assist in making a decision?
SUMMARY: Two years ago a group of St. Louis Park High School students developed an idea
to create a space for students and community members. This idea became known as the SLP Nest
At the May 1, 2017 city council meeting, students provided an update of their activities relating to
the creation of the SLP Nest. Since that time, the students have organized as a 501(c)(3) non-profit
business, have built awareness and created important community partnerships raising over $7,000
in donations to date. The students have also created a brand logo and tagline, entered into a
preliminary business agreement with Muddy Paws Cheesecake Company, and partnered with the
school district’s College and Career office to design accredited internships for students involved
in the SLP Nest.
The students have set a goal of opening on September 4, 2018 and will be requesting financial
assistance from the city to help make that happen.
Additional information about the SLP Nest can be found at www.slpnest.org
FINANCIAL OR BUDGET CONSIDERATION: Students will be requesting financial
assistance from the city in the amount of $25,000.
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Karen Barton, Community Development Director
Approved by: Tom Harmening, City Manager
Page 2 Study Session Meeting of February 12, 2018 (Item No. 3)
Title: Request for Funding for the SLP Nest
DISCUSSION
BACKGROUND: For nearly two years, the SLP Nest student board has been working to create
a welcoming, teen-centric space that nurtures individual expression, encourages a diverse
community, and builds life skills. The culmination of that work has resulted in the creation of a
501(c)(3) non-profit business that has built awareness and created community partnerships raising
over $7,000 in donations to date, created a brand logo and tagline, entered into a preliminary
business agreement with Muddy Paws Cheesecake Company, and partnered with the school
district’s College and Career office to design accredited internships for students involved in the
SLP Nest, among other things. Students are continuing fund-raising activities, as well as making
applications to various organizations for grant funds to help them reach their goal of being open
and operational by September 4, 2018.
The SLP Nest board has created important partnerships in efforts to bring their idea and vision to
fruition through funding and support. These partnerships include:
•Hennepin County
•Gleason Printing (gratis printing in exchange for students coming to learn the process)
•Commercial Real Estate Professionals (Curt Rahman)
•Bluestem Construction
•Perspectives, Youth Frontiers, Teaming Up For Teens
•SLP Police
•SLP Community Ed Advisory Council
•SLP Community Clinic Medical Director (Mary Wagner)
PRESENT CONSIDERATONS: The SLP Nest team is at a point in which they have identified
several possible sites in the Walker Lake area in which to locate. These sites include:
●6416 Library Lane
●6532 W Lake St (Next to Park Yogurt)
●3424 Wooddale Ave S (Behind D&D Auto)
It is anticipated that whichever site is selected, some build-out of the space will be necessary. This
build-out will likely include:
●Carpentry: Demo all finishes and install new (floor, wall, maybe ceiling in some, paint)
●Mechanical: Electrical & HVAC
●Plumbing (for prep kitchen/coffee service)
●Sprinkled space (if required)
The SLP Nest team is asking the city for financial assistance in the amount of $25,000 to assist in
paying one year of rent. This base funding will act as a catalyst for other grant and community
funding. They are also seeking city staff assistance with the build-out requirements, specifically
conforming to building code.
Additional information about the SLP Nest can be found at www.slpnest.org
Meeting: Study Session
Meeting Date: February 12, 2018
Discussion Item: 4
EXECUTIVE SUMMARY
TITLE: SLP Park Ventures, LLC’s Application for Tax Increment Financing Assistance –
Platia Place Apartments and Hotel
RECOMMENDED ACTION: Staff wishes to review SLP Park Ventures, LLC’s application for
Tax Increment Financing (TIF) in connection with its Platia Place redevelopment proposed at
9808 and 9920 Wayzata Blvd and receive feedback on the recommended amounts of TIF
assistance.
POLICY CONSIDERATION: Does the EDA continue to support SLP Park Ventures, LLC’s
apartment and hotel redevelopment project (called Platia Place) proposed at 9808 and 9920
Wayzata Blvd (former Santorini’s restaurant property)? Is the EDA willing to consider entering
into a purchase and redevelopment contract to reimburse the Developer for up to $3,474,000 in
extraordinary site preparation costs through tax increment generated by the apartment and hotel
projects so to achieve financial feasibility?
SUMMARY: SLP Park Ventures, LLC (“Developer”) a real estate development company led by
Bill Stoddard of Stoddard Companies, has a purchase agreement to acquire 9808 and 9920
Wayzata Blvd (former Santorini’s restaurant property). The Developer proposes to clean up the
current vacant site, remove its three billboards and construct a six-story, 205,669 SF apartment
building as well as a six-story, 61,411 SF hotel together called Platia Place. The apartment project
would consist of 149 housing units of which 134 would be market rate and 15 (10%) would be
affordable at 50% of the Area Median Income (AMI). The hotel would have 100 rooms and offer
limited services. This redevelopment proposal was previously presented to the Council/EDA in
study session and was well received. On October 16, 2017, the City Council approved a
Preliminary Planned Unit Development (PUD) for the subject properties from Office to PUD. Due
to the subject site’s poor structural soils, there are considerable extraordinary costs associated with
preparing both project sites for redevelopment. These costs negatively impact both projects’
financial feasibility. In order for both projects to achieve a market rate of return, the Developer
applied to the EDA for Tax Increment Financing (TIF) assistance.
FINANCIAL OR BUDGET CONSIDERATION: The cost to construct the apartment building
is approximately $37 million and the cost to construct the hotel is $20 million. Upon completion,
the apartment’s total taxable market value is estimated at nearly $30 million and the hotel’s total
taxable market value is estimated at approximately $8.5 million. Upon review of the Developer’s
pro forma for both projects, the apartment project demonstrated a financing gap of $2,760,000 and
the hotel demonstrated a financing gap of $714,000 due to extraordinary site preparation costs. To
offset these gaps, it is proposed that the EDA consider reimbursing the Developer up to a total of
$3,474,000 in pay-as-you-go tax increment generated by both projects for a maximum term of 9
years. The EDA would sell former right-of-way needed by the projects to the Developer for
$73,772 or $4/SF.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Karen Barton, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
Study Session Meeting of February 12, 2018 (Item No. 4) Page 2
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
DISCUSSION
BACKGROUND: The subject redevelopment site is approximately 3.13 acres consisting of two
properties: 9808 and 9920 Wayzata Blvd and adjacent rights-of-way. It is located in the upper
northwest quadrant of the city within the Shelard Park Neighborhood. It is bounded by the
Westmarke Condominiums to the west, the MetroPoint Office Park to the north, US Highway 169
to the east and I-394 to the south. The subject site is currently vacant, and given its proximity to
the highway interchange, is highly visible. The site has been subject to occasional dumping which
has created a public nuisance. According to the St. Louis Park Plan by Neighborhood Input Report
dated July 2009, “the most critical neighborhood improvement identified [within the Northwest
Neighborhood Planning Area] was decreasing public nuisances, which was primarily related to
concerns about [property] maintenance...” Encouraging redevelopment of the subject site as
proposed is consistent with this objective.
Subject redevelopment site: 9808 and 9920 Wayzata Blvd
On March 21, 2016, the EDA and City Council created the Wayzata Blvd. TIF District so as to
proactively encourage redevelopment of the vacant site. Given the site’s location at I-394 and US
169, it was envisioned that the subject site would be conducive to a multi-story office building,
hotel, or apartment building or some combination thereof with associated structured parking. Such
buildings would be complementary to, and create synergies with, the surrounding land uses.
Additionally, these potential uses were considered economically viable under current market
conditions and consistent with the City Council’s preference to see the property redeveloped with
some intensity and density.
CURRENT PROPOSAL:
SLP Park Ventures, LLC (“Developer”) a real estate development company led by Bill Stoddard
of Stoddard Companies, has a purchase agreement to acquire 9808 and 9920 Wayzata Blvd (former
Santorini’s restaurant property). The Developer proposes to clean up the current vacant site,
remove its three billboards and construct a six-story, 205,669 SF apartment building as well as a
six-story, 61,411 SF hotel together called Platia Place. The apartment project would consist of
Study Session Meeting of February 12, 2018 (Item No. 4) Page 3
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
149 housing units of which 134 would be market rate and 15 (10%) would be affordable at 50%
of the Area Median Income (AMI) which meets the requirements of the city’s Inclusionary
Housing Policy. The building would also include five 3-bedroom units one of which would be
affordable. The hotel would have 100 rooms and offer limited services. The developer has shared
the potential hotel flags with staff; none of which are an extended-stay type hotel.
Rendering of proposed Platia Place apartment building and hotel
The project’s proposed apartment unit mix is as follows:
Unit Type Market Affordable Total
Studio 9 1 10
1 bedroom 81 9 90
2 bedroom 40 4 44
3 bedroom 4 1 5
Total 134 15 149
As required under the city’s Inclusionary Housing Policy, the project’s affordable units are in the
approximate proportion as the market rate units.
Job Creation
The proposed project is expected to create 10 FTE jobs related to the apartment building and an
estimated 25 FTE jobs related to the hotel for a total of 35 new FTE jobs.
Land Use, Zoning, and Other Requirements
The subject property is guided and zoned Office. On October 16, 2017, the City Council approved
a Preliminary Planned Use Development (PUD) for the subject properties from Office to PUD.
The purpose of a PUD District is to benefit the city and its residents by providing a comprehensive
procedure intended to allow greater flexibility in the development of land than would be possible
under a conventional zoning district. The PUD creates a new zoning district and zoning regulations
for uses and dimensional standards that are unique to the subject site and building plans. The
proposed uses of Platia Place include multi-family residential and hotel both of which will be
allowed through the PUD rezoning. The site is suitable for the proposed development and meets
many of the objectives of the Comprehensive Plan. Thus, the proposed project is consistent with
the City’s Comprehensive Plan and will be allowable under its Zoning Ordinance upon approval
of the Final PUD.
The proposed development is a mixed-use project that promotes efficient use of the land, existing
infrastructure, and existing roadway system. It also incorporates underground parking, additional
sidewalks, and enhanced bicycle facilities making the project walkable and multi-modal.
Study Session Meeting of February 12, 2018 (Item No. 4) Page 4
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
The development will be required to adhere to the City’s Green Building and Building Readiness
policies. Additionally, given the City’s recent adoption of the Climate Action Plan (CAP),
conformance with the CAP will be addressed in conjunction with the Purchase and Redevelopment
contract.
Application for Tax Increment Financing Assistance
According to the Developer, the extraordinary costs to redevelop the subject site adversely impact
both projects’ financial performance rendering them infeasible. Consequently, it submitted a tax
increment financing application requesting $4.7 million in assistance for the apartment building
and $2.9 million for the hotel for a total of $7.6 million to mitigate its perceived financial gap for
both projects. Tax increment financing uses most of the increased future property taxes generated
by a new development to finance certain qualified development costs incurred by that project (such
as those noted below) for a limited period of time.
Overview of the Platia Place’s Sources and Uses
The Platia Place project will consist of three primary components: market rate housing, affordable
housing, and a hotel. The EDA’s financial consultant, Ehlers, compared each component’s sources
and uses statements, cash flow projections, and investor rate of return with general industry
standards and collaborated with staff to determine to what extent the proposed projects may have
a financial gap justifying the use of TIF.
Apartment Project Financing Sources: Financing sources for the proposed apartment project are
as follows:
SOURCES AMOUNT ($) % of TDC Per Unit
First Mortgage Debt 27,927,059 76% 187,430
Developer Equity /Other 5,946,928 16% 39,912
City of St. Louis Park TIF 2,760,000 8% 18,523
TOTAL Project Sources $36,633,987 100% 245,866
Project Uses: The Total Development Cost (TDC) of the apartment project is approximately $36.6
million which consists of the following:
USES AMOUNT ($) % of TDC Per Unit
Land Acquisition 1,936,886 5% 12,999
Construction Costs 27,492,408 75% 184,513
Environmental Abatement/Soil Correction 1,796,350 5% 12,056
Professional Services 1,693,000 5% 11,362
Developer Fee 1,500,000 4% 10,067
Permits/Fees 1,241,888 3% 8,335
Financing Costs 775,455 2% 5,204
Cash Accounts/Escrow 198,000 1% 1,329
TOTAL Project Costs $36,633,987 100% $245,866
Study Session Meeting of February 12, 2018 (Item No. 4) Page 5
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
Property Acquisition Cost: As indicated above, the land contribution for the subject property is
$1.9 million which equals nearly $13,000 per unit. According to Ehlers, this per unit cost is within
the typical market range of $5,000 to $15,000 per unit for similar residential projects.
In addition, the application proposes to acquire publicly-owned land adjacent to the site along
Wayzata Boulevard. The city recently acquired the land from MNDOT. The land was released to
the city in 2013 and conveyed by quitclaim deed to the city in August 2017. The Developer intends
to acquire the land needed for both projects for $73,772 or $4/SF which would be evenly split
between the two projects.
Construction/Extraordinary Costs*: The combined construction and soil correction costs are
higher than found in other residential projects as the site includes considerable soil
correction/piling work and two levels of underground parking. The Developer estimates the
apartment project will incur over $3.1 million in extraordinary site preparation costs along and
$6,500,000 for structured parking as shown below.
Extraordinary Cost Estimates AMOUNT ($)
Demolition 21,000
Soil correction/pilings/foundation support system 1,796,350
Excavation & grading 788,000
Utilities/Utility relocations 525,200
Underground Parking 6,500,000
TOTAL Extraordinary & Structured Parking Costs $9,630,550
*Extraordinary costs are expenses encountered over and above those which a developer would typically expect
to incur in a suburban development (e.g. asbestos removal, building demolition, contaminated soil removal
and disposal, storage tank removal and disposal, shoring, utility replacement, specialized stormwater
management, underground parking, etc.)
These costs inhibit the project’s financial feasibility and are the types of expenditures within a
Redevelopment TIF District that are eligible for reimbursement with tax increment.
Developer Fee: SLP Park Ventures, LLC included a 4 percent developer fee, which is within
the typical 2% to 5% range found in other multifamily projects using conventional financing.
Total Development Cost (TDC): The TDC for the apartment project is approximately $246,000
per unit which is within industry standards for new multi-family developments with
underground parking.
Project Cash Flow Projections
1. Market Rate Apartment Rents The apartment building includes a mix of studio, one-
bedroom, two-bedroom, and three-bedroom units. The market rate rents range from
$1,493/month ($2.21/sf) for a studio to $3,335/month ($2.23/sf) for a three-bedroom unit.
The average per square foot market rate rent is $2.20 and is within market expectations.
The rental rates are supported by market study information prepared by Maxfield
Research.
2. Affordable Apartment Rents: Per the City’s Inclusionary Housing Policy for projects
requesting financial assistance, the Developer has elected to provide 10% of the
apartments (15 units) with rents that are affordable to households at 50% of the area
Study Session Meeting of February 12, 2018 (Item No. 4) Page 6
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
median income (AMI). The Policy also requires the affordable units to be distributed
proportionally throughout the building by unit type, which the developer has done. The
income and rent limits along with the proposed distribution are as follows:
2017 Income Limit by Household Size
Household Size 50% AMI Income
Limit
1 $31,650
2 $36,200
3 $40,700
4 $45,200
Rents by Unit Type
Unit Type Market
Units
Rent Affordable
Units
Rents
Studio 9 $1,493 1 $791
1 bedroom 81 $1,638 9 $931
2 bedroom 40 $2,521 4 $1,017
3 bedroom 4 $3,335 1 $1,220
Total 134 15
As shown above, the affordable unit rents are at the regulatory maximum rents for
households at 50% of area median income (AMI), which translates to rents between
$791/month for a studio and $1,220/month for a three-bedroom unit. The inclusion of
10% of the units having rents restricted to 50% of area medium income reduces net
operating income by approximately $182,350/year thereby reducing the amount of
mortgage or returns the project could generate.
Rent Comparison
Unit Type # of
Units
Monthly
Affordable
Rent
Monthly
Market
Rent
Monthly
Difference
Per Unit
Annual
Difference
Total Annual
Revenue
Difference
Studio 1 $791 $1,493 ($702) ($8,424) ($8,424)
1 Bedroom 9 $931 $1,638 ($707) ($8,484) ($76,356)
2 Bedroom 4 $1,017 $2,521 ($1,504) ($18,048) ($72,192)
3 Bedroom 1 $1,220 $3,335 ($2,115) ($25,380) ($25,380)
15 ($60,336) ($182,352)
3. Operating Expenses: The operating expenses of $3,865 per unit per year (before
management fees, property taxes, and replacement reserves) are within the typical market
range of $3,500 to $4,500 per unit per year. The proposed management fees of 2.8% of
income is on the lower end of the range found in comparable projects.
4. Financing Structure: The Developer anticipates using a conventional 30-year mortgage at
a 5.5% interest rate and private equity. The financing terms are typical and reasonable for
the product type.
5. Returns/Cash Flow: Without TIF assistance, the project’s estimated cash-on-cash (COC)
return on equity would be approximately 3.6% to investors at stabilization (year 3) which
Study Session Meeting of February 12, 2018 (Item No. 4) Page 7
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
is below industry standards. Multi-family projects typically must generate around a 10%
cash-on-cash return to raise private equity and secure conventional debt financing. With
$2,760,000 in tax increment assistance, the apartment project would achieve an average
cash-on-cash return of 9.4%. Based on the project information and subsequent analysis,
that level of assistance would mitigate enough of the extraordinary site costs described
above such that it allows the project to achieve a rate of return sufficient to attract the
necessary equity capital to enable the project to secure debt financing.
HOTEL
Hotel Project Financing Sources: Financing sources for the hotel project are as follows:
SOURCES AMOUNT ($) % of TDC Per Unit
First Mortgage Debt 12,740,119 65% 127,401
Developer Equity /Other 6,146,064 31% 61,461
City of St. Louis Park TIF 714,000 4% 7,149
TOTAL Project Sources $19,600,182 100% 196,002
Project Uses: The Total Development Cost (TDC) of the hotel project is approximately $36.6
million which consists of the following:
USES AMOUNT ($) % of TDC Per
Room
Land Acquisition 1,836,886 9.4% 18,369
Construction Costs 12,232,540 62.4% 122,325
Environmental Abatement/Soil Correction 898,175 4.6% 8,982
Furniture, Fixtures, & Equipment 1,470,000 7.5% 14,700
Professional Services 832,000 4.2% 8,320
Developer Fee 680,000 3.5% 6,800
Permits/Fees 518,615 2.6% 5,186
Financing Costs 851,966 4.3% 8,520
Cash Accounts/Escrow 280,000 1.4% 2,800
TOTAL Project Costs $19,600,182 100% $196,002
Property Acquisition Cost: As indicated above, the land contribution for the subject property is
$1.8 million which equals $18,369 per room. According to Ehlers, this per unit cost is within the
typical market range of $5,000 to $20,000 per room.
Construction/Extraordinary Costs*: The combined construction and soil correction costs
($131,300/room) are on the higher side of the range found in other limited service hotels. The
Developer estimates the hotel project will incur approximately $900,000 in soil correction/piling
costs due to the poor structural soils on the property.
Developer Fee: SLP Park Ventures, LLC included a 3.5 percent developer fee, which is
within the typical 2% to 5% range found in other hotel projects using conventional financing.
Study Session Meeting of February 12, 2018 (Item No. 4) Page 8
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
Total Development Cost (TDC): The TDC for the hotel project is approximately $196,000 per unit
which is within industry standards for the proposed type of development.
Project Cash Flow Projections
6. Average Daily Room Rates The projected average nightly room rate of $125 and 68%
average occupancy are supported by data from Maxfield Research and Discover St. Louis
Park.
7. Financing Structure: The Developer anticipates using a conventional 30-year mortgage at
a 5.5% interest rate and private equity. The financing terms are typical and reasonable for
the product type.
8. Returns/Cash Flow: Without TIF assistance, the hotel project’s estimated cash-on-cash
(COC) return on equity would be approximately 5.4% to investors at stabilization (year
3) which is below industry standards. With $714,000 in tax increment assistance, the hotel
project is anticipated to achieve a cash-on-cash return of 9.4%. Based on the project
information and subsequent analysis, that level of assistance would mitigate enough of
the extraordinary site costs described above such that it allows the project to achieve a
rate of return consistent with market expectations thereby enabling the project to secure
debt financing.
Recommended Amount of Assistance
Based upon its analysis of the financial information provided by the Developer, Ehlers determined
that the proposed mixed-income apartment building would not be reasonably expected to occur in
the foreseeable future but/for the provision of $2,760,000 in tax increment assistance and the hotel
would not be reasonably expected to occur but/for the provision of $714,000 in tax increment
assistance. In accordance with the TIF statutes, the proposed assistance would be made available
to reimburse the Developer for the extraordinary site preparation costs cited above upon
submission of documented evidence that the costs were incurred. The TIF assistance would be
provided in the form of two pay-as-you-go TIF Notes; one for each project.
Consistent with other recent redevelopment projects with which the EDA has been involved, a
"look back" provision would be incorporated into the redevelopment contract with SLP Park
Ventures, LLC. Per the contract, the Redeveloper would be required to submit a final proforma
detailing the actual financial performance of each project. The look back provision establishes a
cap on the return that the Developer earns on a cash-on-cash basis, once the projects reach
stabilized income. The cap is essentially an industry standard for similar projects. The look back
provision ensures that if either project cash flows at a higher rate than currently estimated, the
EDA shares economically in the success of the project by reducing the amount of TIF assistance
provided.
Providing tax increment financing assistance to Platia Place makes it possible to construct a
quality, mixed income, multi-family housing building and a hotel development 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, additional hotel rooms as
well as create new tax base and employment opportunities. Such assistance would represent 7.5%
of the apartment’s total project costs and less than 4% of the hotel’s total project costs which is in-
line with other developments the EDA has previously assisted. As a reminder, the proposed tax
increment would be generated by each project and would only be provided once construction had
Study Session Meeting of February 12, 2018 (Item No. 4) Page 9
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
been completed and the Developer supplies statements verifying that it had incurred the specified
qualified costs. The assistance would be provided from the increased property taxes paid by the
Developer provided sufficient tax increment from the project was available. The EDA would be
obligated to provide assistance to the project only to the extent that the project generates sufficient
tax increment to make the bi-annual payments.
TIF Notes
It will take approximately 16 months to construct the proposed Platia Place apartment and hotel
projects. The first increment would be paid in 2021. Given current estimates of market value, it is
projected that the apartment project’s TIF Note would be paid off in approximately 9 years and
the hotel project’s TIF Note would be paid off in approximately 8 years with increment generated
by the respective projects (on a net present value basis). The Notes would terminate with final
payment during or before 2030. The proposed project would be financed on a "pay-as-you-go"
basis, which is the desired financing method under the City's TIF Policy. The Notes would bear
interest at 5.5% or the Developer’s actual rate of financing, whichever is less. The size of the TIF
Notes is based upon no inflationary value in the project (as with all projects). This is more
conservative estimating and thus it is anticipated that the pay-as-you-go Notes will likely be paid
off earlier than projected. As with most of the City’s redevelopment contracts, the Developer will
be required to execute a separate Minimum Assessment Agreement for the value utilized for
projecting the amount of TIF assistance available for each project.
TIF District
On January 23, 2012, the City's Inspection Department sent a letter to the property owner declaring
both the former Santorini restaurant building and the garage building located next door at 9808
Wayzata Blvd had fallen into such disrepair that they were unsafe and a public nuisance and
therefore ordered their repair or removal. On June 18, 2012, prior to the restaurant building’s
demolition, the EDA adopted a resolution citing both properties as structurally substandard and
pre-qualified them for a potential Redevelopment TIF District should a project that met the City's
vision for the site emerge. The restaurant building was then demolished in February 2013 and the
garage was removed in July 2014.
Statutorily, the City had three years after the completion of demolition to create a TIF district on
a property. It was the consensus of the EDA that it wished to preserve its ability to utilize tax
increment to facilitate a future redevelopment that met with its vision for the subject site. Thus on
March 21, 2016, so as to proactively encourage redevelopment of the site, the EDA and City
Council approved findings to qualify the site as a Redevelopment TIF District and formally
established the Wayzata Blvd TIF District. Due to statutory limitations, the EDA now has
approximately 2 years remaining to commit tax increment to a qualified project before the District
must be decertified.
The Wayzata Blvd TIF District consists of two parcels: 9808 and 9920 Wayzata Blvd and
adjoining rights-of-way. Together, these parcels equal approximately 3.13 acres.
Property Value and Taxes
The taxable market value of the proposed apartment building site (9920 Wayzata Blvd) is $1.1
million and generates approximately $6,800 in City property taxes. The estimated taxable market
value of the site upon construction completion (for TIF estimation purposes) is nearly $30 million.
Study Session Meeting of February 12, 2018 (Item No. 4) Page 10
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
The taxable market value of the proposed hotel site (9808 Wayzata Blvd) is $1.2 million and
generates approximately $7,800 in City property taxes. The estimated taxable market value of the
site upon construction completion (for TIF estimation purposes) is $8.5 million.
Most of the new values would be captured as tax increment and used to make payments on the
proposed TIF Notes until they are paid off and the TIF district is terminated. The City, County and
School District would continue to receive the property taxes collected on the subject site’s base
value. Once the TIF Notes are retired, the additional property taxes generated by the two projects
would accrue to the local taxing jurisdictions. Upon termination of the District, the City’s portion
of the property taxes is projected to increase to $177,400/year (or 2,500%) for the apartment site
and approximately $54,000/year (or a nearly 600%) for the hotel site (assuming preliminary pay
2018 property tax rates and no increase in property valuation over the next 9 years).
Conformance and Analysis under the City’s TIF Policy
The Platia Place projects meet the following Minimum Qualifications as outlined in the City’s
TIF Policy:
• Promotes neighborhood stabilization and revitalization by the removal of blight and the
upgrading of existing housing stock.
• Provides a balanced and sustainable housing stock to meet diverse needs both today and in
the future.
• The projects are consistent with the City’s Comprehensive Plan and Zoning Ordinances.
• The Developer has demonstrated that the proposed projects are not financially feasible
“but-for” the use of tax increment financing.
• The Developer has a proven track record of successful real estate development
performance and has demonstrated the capability to fully complete the projects as
proposed.
The proposed projects meet the following “Desired Qualifications” as outlined in the TIF Policy:
• Creates a substantially higher ratio of property taxes paid before and after redevelopment
and provides a significant increase in taxable market value.
• Facilitates new construction on a site which would not be redeveloped without such
assistance.
• Redevelops underutilized property.
• Creates two high quality buildings (e.g. sound architectural design, quality construction
and materials).
• Creates new employment opportunities.
In addition to the above, the proposed projects would have the following additional benefits:
• Intensifies the subject site and makes optimal use of the property with an attractive mixed-
use development that is walkable and human-scale.
• Complements, integrates with, and strengthens the surrounding multi-family and
commercial office neighborhoods.
• Complements and helps stabilize the tenancy within the adjacent MetroPoint office
buildings.
• Further increases and diversifies the housing options available in the St. Louis Park market.
• Creates additional market rate and affordable housing.
• Incorporates Green Building design and features.
• Incorporates Livable Communities and Transit Oriented Design principles.
• Located along an existing transit route.
Study Session Meeting of February 12, 2018 (Item No. 4) Page 11
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
Grading under Project Report Card
The TIF application for the Platia Place projects were graded according to the Project Report Card
provided within the City’s TIF Policy. The application for the apartment building was graded as
follows:
• Promotes housing for large families.
Five 3-bedroom units are proposed to be included in the apartment project’s unit mix. This
means that 3.4% of the units will accommodate large families which resulted in a grade of
“D” on the report card’s scale.
• Provides economic integration of rental or ownership projects.
Of the proposed 149 apartment units, 15 (or 10%) would be designated as affordable; this
garnered a grade of “C” on the scale.
• Ratio of soft costs to Total Project Costs.
Soft costs of the total project were estimated at approximately $4.1 million or 11.37% of
the total development costs, which corresponded to a grade of “A” on the scale.
• Ratio of private to public (TIF) financing.
$36.6 million in private development costs to $2,760,000 in TIF equals a $13.27 private /
$1 public ratio which garnered an “A” on the scale.
• The value of the site before and after redevelopment
The total taxable market value of the proposed apartment site is $1.1 million. The projected
market value of the site upon redevelopment is: $29.8 million. This is a ratio of $1:$27
which represented an “A” on the scale.
The application for the hotel building was graded as follows:
• Ratio of private to public (TIF) financing.
$19.6 million in private development costs to $714,000 in TIF equals a $27.45 private / $1
public ratio which garnered an “A” on the scale.
• The value of the site before and after redevelopment
The total taxable market value of the proposed hotel site is $1,220,000. The projected
market value of the site upon redevelopment is: $8,500,000. This is a ratio of $1:$7 which
represented an “A” on the scale.
• Job creation within the City.
The limited service hotel is expected to create 35 FTE employment positions which
resulted in a grade of “C” on the scale.
• Pay level of FTE Jobs.
The pay range of the employment positions, represented a grade of “C” on the scale.
The two proposed projects received bonus points for:
• assembling all the properties required for the redevelopment
• redeveloping blighted/contaminated property
• incorporating New Urbanism principles and being a mixed-use development
Study Session Meeting of February 12, 2018 (Item No. 4) Page 12
Title: SLP Park Ventures Application for Tax Increment Financing Assistance – Platia Place Apartments & Hotel
• adding value to the neighborhood
• incorporating green building principles
• incorporating livable communities planning principles
• likely stimulating further investment in the surrounding neighborhood
• having a positive community impact
• being consistent with the City’s Vision and Comprehensive Plan
Upon calculation of all applicable factors and bonus points, the Platia Place apartment project
received a final grade of “C+” and the hotel project received a final grade of “B-” according to the
Project Report Card within the TIF Policy.
Conformance with the City’s Business Subsidy Policy
Any TIF assistance provided Platia Place project would be exempt from state business subsidy
requirements as it relates to housing, pollution control/abatement, and redevelopment (Section
116J.993, Subdivision 3). Therefore, no public subsidy hearing would be required; however, the
EDA would still be subject to modified reporting requirements.
Summary
The cost to construct the apartment building is approximately $37 million and the cost to construct
the hotel is $20 million. Upon completion, the apartment’s total taxable market value is estimated
at nearly $30 million and the hotel’s total taxable market value is estimated at approximately $8.5
million. Upon review of the Developer’s pro forma for both projects, the apartment project
demonstrated a financing gap of $2,760,000 and the hotel demonstrated a financing gap of
$714,000 due to extraordinary site preparation costs. Based upon its analysis of the Developer’s
proforma, Ehlers determined that Platia Place apartment project is not financially feasible but/for
the provision of $2,760,000 in tax increment financing and the hotel is not financially feasible
but/for the provision of $714,000 in tax increment financing due, in both cases, to extraordinary
site preparation costs. To offset these gaps, it is proposed that the EDA consider reimbursing the
Developer up to a total of $3,474,000 in pay-as-you-go tax increment generated by both projects
for terms of approximately 9 and 8 years respectively.
SLP Park Ventures, LLC’s proposed Platia Place redevelopment meets the City’s objectives for
the provision of Tax Increment Financing as specified in the City’s TIF Policy. As noted above,
both projects meet nearly all the Minimum and Desired Qualifications for providing TIF assistance
with the apartment project receiving a final grade of “C+” and the hotel project receiving a final
grade of “B-” according to the Project Report Card within the TIF Policy. Given these findings,
staff supports reimbursing SLP Park Ventures, LLC up to $3,474,000 in qualified development
costs in the form of pay-as-you-go tax increment generated by each project so as to allow each
redevelopment to proceed.
NEXT STEPS: Should the EDA chose to support providing financial assistance to the Platia
Place project as proposed, the next steps in the TIF approval process would be as follows:
1. Negotiation of business terms for the provision of financial assistance
2. Review of proposed business terms of the Purchase and Redevelopment Contract
3. Approval of the Purchase and Redevelopment Contract
Note: There will be no need to establish a new TIF district for the Platia Place project as the
previously created Wayzata Blvd TIF District incorporates the two subject redevelopment
properties.
Meeting: Study Session
Meeting Date: February 12, 2018
Discussion Item: 5
EXECUTIVE SUMMARY
TITLE: Louisiana Avenue Preliminary Layout Discussion – Project No. 4018-1700
RECOMMENDED ACTION: None at this time. Staff will provide an overview of the
preliminary layout for scheduled improvements to the corridor between Oxford St. and Excelsior
Blvd. and requests feedback from the Council.
POLICY CONSIDERATION: Does the City Council wish to continue to pursue the proposed
bridge replacement and street rehabilitation project scope identified in this report?
SUMMARY: In 2019, the Louisiana Avenue Bridge over Minnehaha Creek is proposed to be
replaced along with the rehabilitation of Louisiana Avenue between Louisiana Circle and
Excelsior Boulevard. In order to develop the design recommendations for the 2019 project, a
corridor study for Louisiana from Excelsior Boulevard to just north of Oxford Street was
completed. This is to ensure that the bridge reconstruction project fits well with the future
SWLRT, and the station area redevelopment study. Kimley Horn has developed a preliminary
layout for the entire corridor.
The scope of the Preliminary Layout for the corridor includes:
•Bridge replacement
•Construction of a trail connection under Louisiana Avenue at Minnehaha Creek
•Street reconstruction
•Bikeway along Louisiana Avenue (cycle track)
•Sidewalk reconstruction
•Streetlight replacement
•Intersection updates at Louisiana Circle and Oxford Street
•Watermain replacement
•Storm sewer replacement
FINANCIAL OR BUDGET CONSIDERATION: Funding will be provided by a combination
of MSA, Pavement Management, State Funding, Utility Funds, and General Obligation Charter
Bonds. This project is proposed to be constructed in 3 phases. Phase 1 is included in the City’s
Capital Improvement Program (CIP) for 2018 and 2019. A construction cost estimate for the entire
Project is being worked on and will be provided at the meeting.
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: Discussion
Layout
Prepared by: Joseph Shamla, Senior Engineering Project Manager
Reviewed by: Debra M. Heiser, Engineering Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of February 12, 2018 (Item No. 5) Page 2
Title: Louisiana Avenue Preliminary Layout Discussion – Project No. 4018-1700
DISCUSSION
BACKGROUND: In 2019, Louisiana Avenue between Excelsior Blvd. and Louisiana Circle is
proposed to be rehabilitated. This work includes the replacement of the existing bridge over
Minnehaha Creek and the connection of the trail along the creek.
Louisiana Avenue is one of only 4 continuous north/south routes in the City. This road serves
residents, visitors, the industrial area around Oxford Street and Methodist Hospital. The average
daily traffic on Louisiana Avenue is approximately 13,000 ADT. Due to the proposed light rail
station just off Louisiana Avenue, this road is expected to carry 19,000 ADT by 2038. Louisiana
Avenue is a B Minor Arterial and is designated as a Municipal State Aid (MSA) road making it
eligible for state funding (gas tax dollars). In order to qualify for funding, the project needs to be
designed to meet state aid standards.
The existing bridge over Minnehaha Creek was constructed in 1970 and is a channel span bridge.
Channel span bridges are not recommended in Minnesota anymore as the road salt has caused the
steel in these types of bridges to deteriorate quicker than other bridge types.
At this time, the bridge replacement is high priority. An inspection completed in 2011 confirmed
that replacement of the bridge would be more cost effective than making repairs. The bridge
inspection consultant - WSB and Associates - inspected the bridge in October of 2015, 2016, and
2017 and is suggesting that the bridge be replaced in 2019 or sooner. This bridge will be inspected
annually until it is replaced.
In order to ensure that the reconstructed Louisiana Avenue Bridge will meet the needs of the City
for at least another 50 years, the city hired Kimley Horn and Associates to take a look at existing
and future transportation needs in the corridor. The design is being guided by a group made up of
staff from the Community Development, Operations and Recreation, and Engineering
Departments. In addition, Minnehaha Creek Watershed District is also at the table to weigh in on
design recommendations.
The following is a summary of preliminary layout recommendations for the corridor
Louisiana Avenue Corridor Design
A corridor study has been completed to help guide the design of the Louisiana Avenue corridor.
Using forecasted traffic data, the Comprehensive Plan, and the information in the Louisiana Station
Area Framework and Design Guidelines (2014), we have put together a recommended preliminary
layout for the future road corridor. (See attachment).
The recommended typical section of Louisiana Avenue includes the following components:
•Two vehicle travel lanes in each direction
•Separated pedestrian facility
•Bikeway (cycle track)
•Construction of a trail connection under Louisiana Avenue at Minnehaha Creek
•Streetlight replacement
•Signal or Roundabout at Louisiana Circle
•Signal or Roundabout at the intersection of Oxford Street and Louisiana Avenue
•Watermain replacement
•Storm sewer replacement
Study Session Meeting of February 12, 2018 (Item No. 5) Page 3
Title: Louisiana Avenue Preliminary Layout Discussion – Project No. 4018-1700
The overall corridor design also includes:
• Pedestrian safety improvements
• ADA improvements at intersections and at signals
• Storm water management
At this time staff has not identified the storm treatment strategy for the corridor. Once a
preliminary layout is approved by City Council, Kimley Horn will start work on developing
possible regional storm water treatment opportunities.
Construction Phasing
This preliminary layout would be built in phases.
Phase 1 is from Excelsior Blvd. to Louisiana Circle and includes the replacement of the bridge
over Minnehaha Creek. This phase is the most critical due to the condition of the bridge over
Minnehaha Creek and is scheduled for 2019.
Phase 2 is the reconstruction of the intersection of Oxford Street and Louisiana Avenue. This
intersection is directly adjacent to the Louisiana Avenue Light Rail Station. We have reviewed
the intersection for both the existing signal system and for a roundabout. We are recommending
the construction of an unbalanced roundabout. This is called an unbalanced roundabout because
the north and south legs of the intersection are two lanes and the east and west legs are one lane.
The benefits of a roundabout at this intersection are provided below.
• Traffic calming as cars need to slow down as they enter the roundabout.
• Improved level of service for vehicles using the intersection.
• Reduction in greenhouse gas emissions as cars continue to move versus come to a stop at
a red light and idling.
• Safer for pedestrians – Cars slow down as they enter the roundabout, and are required to
yield to pedestrians trying to cross at each leg of the intersection. In addition, there are
shorter pedestrian crossing distances
• Safer for vehicles – MnDOT collected data at existing roundabouts and released a report
in 2017. The data shows a 78% reduction in serious injury crashes at an unbalanced
roundabout.
Staff recommends that the work at this intersection take place in coordination with the work on
the rail bridges over Louisiana Avenue for the SWLRT Project. Once we have a schedule for
SWLRT construction we will program this work into the CIP and work on reserving funds.
Phase 3 is Louisiana Avenue from Oxford Street to Louisiana Circle. This would complete the
missing link between phase 1 and phase 2. In June of 2014, this section of road was closed due to
the elevation of the creek. Due to flooding issues on Louisiana Avenue between Louisiana Circle
and Oxford Street, we recommend raising the grade of the road to be able to keep the road open
when the creek is high. The emergency department at Methodist Hospital needs reliable access to
be able to provide a high level of service to its patients.
One of the major constraints for Phase 3 construction is the existing railroad spur. This spur serves
one business which is located next to the Municipal Service Center. If this spur were to be
removed, it could provide a better pedestrian connection between Methodist Hospital and the Light
Rail Station and also enable the City to raise Louisiana Avenue so that it would not flood when
Minnehaha Creek is high. Staff is estimating that this phase would take place around 2028.
Study Session Meeting of February 12, 2018 (Item No. 5) Page 4
Title: Louisiana Avenue Preliminary Layout Discussion – Project No. 4018-1700
Bicycle and Pedestrian Connections
The 2030 Comprehensive Plan shows a bikeway on this segment of Louisiana Avenue. The
Connect the Park implementation plan identified this bikeway segment as a part of the connected
city wide network of 32 miles of bikeways being proposed for implementation by 2023.
The preliminary plans for Louisiana Avenue between Excelsior Blvd. and Oxford Street provide
a bikeway in the form of a unidirectional cycle track separated from the sidewalk for pedestrians.
Each section of cycle track would be constructed in conjunction with each phase. The cycle track
would be 5 foot wide and located at the back of the proposed curb.
Since the corridor is proposed to be constructed in phases, as a part of the phase 1 final plan
development, we will be making recommendations to create a continuous bicycle and pedestrian
connections through the corridor.
In 2014, the City and Minnehaha Creek Watershed District partnered to build a trail along
Minnehaha Creek. The bridge is proposed to be constructed high enough to allow trail users to
cross under the bridge versus using the current at grade crossing of Louisiana Avenue. This will
create safe and comfortable mobility options for users of all ages and abilities.
Private Utility Replacement:
Staff will work with private utility companies to determine their corridor replacement needs. Our
plan is to complete the Phase 1 final plans in the summer of 2018 to allow private utilities time to
relocate or replace their utilities in the fall of 2018. This will hopefully minimize any delays for
the City led work.
Pavement Rehabilitation:
Staff is recommending a full reconstruct of the pavement along this corridor. A full reconstruct
consists of the removal of the curb and gutter, pavement, and sidewalk. Staff is recommending
that the existing concrete road be replaced with bituminous. This should help lower the noise
created by the cars driving on the concrete. In addition to the reconstruct, staff is anticipating the
need to upgrade the curb ramps to meet the American with Disabilities Act (ADA) at Excelsior
Boulevard.
Stormwater Management
Since, the current plan is designed at a 30% level design, staff has not yet identified the corridor
storm water treatment strategy. Once a preliminary layout is approved by City Council, Kimley
Horn will start work on developing possible regional storm water treatment opportunities.
City Utility Construction
As a part of all of our street rehabilitation projects, the City evaluates the condition of the existing
sanitary sewer, storm sewer, and water main. Due to the condition, location, and its age, the
watermain and storm sewer is proposed to be replaced within each phase of construction.
Public Process
Engineering hosted a public meeting on October 4th to gather public input prior to starting the
preliminary layout design. The meeting was attended by a representative of Park Nicollet/
Methodist Hospital and one resident interested in the bicycle connections. Park Nicollet/
Methodist Hospital owns the majority of the property along this corridor. We have met with their
staff three times in the last few months to ensure they are aware of the project and have input into
Study Session Meeting of February 12, 2018 (Item No. 5) Page 5
Title: Louisiana Avenue Preliminary Layout Discussion – Project No. 4018-1700
the design of Louisiana Avenue. We have received the following feedback from Methodist
Hospital on the proposed design scope:
•Entrance modifications – one of the bridge options requires the closure of the north
entrance into 6600-6700 Louisiana Avenue as long as the south entrance is widened to
accommodate staff and visitors.
•They support the pedestrian underpass for their staff and visitors to be able to access the
trail along Minnehaha Creek without crossing Louisiana Avenue.
•Concerned about safety of the pedestrian underpass but liked that we are planning to add
sufficient lighting.
•Methodist staff reviewed two options at Louisiana Circle. One option is updating of the
signal system and one is converting the intersection to a roundabout. We received
comments for and against both options.
•Concerned that raising the bridge near the Stilts Building could create more noise.
•Traffic Management – Park Nicollet has provided staff feedback that they are concerned
with the speed of traffic on Louisiana Avenue.
•They like the cycle track as it provides an additional and healthier way to access the
hospital.
Staff has also reached out to ERA Apartments to arrange for an onsite project meeting. Thus far
we have been unsuccessful in scheduling a meeting.
Proposed Schedule:
Staff will be asking the City Council to hold a public hearing later this spring to approve the
preliminary layout. This will ensure that residents and businesses are able to share their thoughts
about this project.
The following is the proposed schedule:
Public Hearing - Approve Preliminary Layout Spring 2018
60 Percent Plans (Phase 1) June 2018
City Council- Approve Final Plans (Phase 1) August 2018
Private Utility Relocation Fall 2018
Construction May – Nov 2019
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Title: Louisiana Avenue Preliminary Layout Discussion – Project No. 4018-1700 Page 6
Meeting: Study Session
Meeting Date: February 12, 2018
Discussion Item: 6
EXECUTIVE SUMMARY
TITLE: Update on Activities/Initiatives in Historic Walker-Lake Area
RECOMMENDED ACTION: None at this time. Staff will provide an overview of the various
activities and initiatives in the Walker Lake Historic District and request feedback from the
Council.
POLICY CONSIDERATION: Do the Walker-Lake initiatives identified meet with Council’s
expectations and does the Council support staff’s continued work in this business area?
SUMMARY: The following discussion provides a summary of all the initiatives and activities
that are currently underway in Historic Walker-Lake and identifies next steps. The summary
includes information on Historic Walker-Lake grant activities, the Walker building, Perspectives,
The Nest, Historical Society Space, the Holiday Train, Walker-Lake Street reconstruction, design
guidelines, and the comprehensive plan update.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: Discussion
Location Map
Prepared by: Julie Grove, Economic Development Specialist
Meg McMonigal, Principal Planner
Jennifer Monson, Planner
Gary Morrison, Assistant Zoning Administrator
Debra Heiser, Engineering Director
Reviewed by: Karen Barton, Community Development Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of February 12, 2018 (Item No. 6) Page 2
Title: Update on Activities/Initiatives in Historic Walker-Lake Area
DISCUSSION
SUMMARY:
Historic Walker – Lake Design Study
In the 10 year Capital Improvement Plan, the City has dedicated funding to rehabilitate streets,
reconstruct alleys, and install bikeways in Historic Walker Lake area. The locations of the work
proposed in the next 5 years includes:
• Library Lane (Lake Street to Walker Ave)- includes on-street parking
• Walker Ave (Lake Street to Brunswick) - includes the reconfiguration of the intersection
of Walker Ave/ Lake Street, and on-street parking
• Brunswick (Walker to Frontage Road)
• Frontage road (Brunswick to alley)
• Alley between Walker and Frontage Road
• Alley between Library Lane and Railroad tracks.
• Bikeway (Lake Street)
• Bikeway (Wooddale)
It is anticipated that these projects will include the following work:
• Replace pavement
• Remove and replace curb and gutter as needed
• Remove and replace sidewalk as needed, and incorporate ADA improvements
• Reconstruct gravel alleys in concrete – standard alley width is 10 feet
• Intersection enhancements/ improvements
• Planting of street trees
• Boulevard restoration
In October 2017, the City entered into an agreement with SRF Consulting to develop a design
study to guide the future of this District. The goal of the design study is to develop a design
concept for the public infrastructure in this District. The future design will leverage the
infrastructure investment and take advantage of opportunities to enhance the district including:
• Improve pedestrian connections
• Improve the intersections at Walker Street/ Lake Street and Lake Street/ Wooddale Ave/
Dakota Avenue
• Parking
• Create gateway elements into the district
• Build on the main street feel on Walker Street
• Create public gathering spaces
• Landscaping
• Streetlights
• Decorative pavement
• Public Art
• Wayfinding
The consultant has completed initial design concepts. These will be presented to the Council at
the study session for comment. Staff is planning on sharing them with stakeholders on February
21. Once a design concept is selected, it will be used as a guide for type and placement of place-
making elements including art, streetscape design, event locations, wayfinding, etc.
Study Session Meeting of February 12, 2018 (Item No. 6) Page 3
Title: Update on Activities/Initiatives in Historic Walker-Lake Area
Moving the Market Grant
For the past two years staff has been working with the businesses, high school and community
members in the Walker-Lake Street area to promote and rejuvenate the area neighborhood and
businesses. In November 2016, the city was awarded a $35,000 “Moving the Market” grant from
Hennepin County to help reactivate the Walker/Lake business area. Since then, staff has been
working with stakeholders on grant activates through focus group meetings, surveys,
neighborhood meetings, an open street event and email correspondence. Grant activities include:
• Brand Development: The city engaged
the firm of Nemer Fieger and organized a
focus group consisting of business
owners, property owners and
neighborhood residents, for planning,
research and design concepts. "Historic
Walker Lake" was selected as the name
for the area. A brand logo was designed
and will be used in way finding and
placemaking elements such as signs,
lighting, benches, bike racks and marketing.
• Activation Plan: The Musicant Group wrote an Activation Plan which provides easy to
implement steps designed to generate more activity in the Historic Walker Lake business
area. This plan includes recommendations for enhancing the area and a prioritized list of
improvements, systems and activities that could be implemented over time that would
enliven the area. View the entire St. Louis Park Historic Walker-Lake Activation Plan for
more information. The plan will be distributed to businesses, property owners and
neighborhood representatives as staff meet with them over the winter. The plan can be used
by these groups and the city as a guide to install suggested enhancements, hold an event or
plan an activity.
• Implementation: With the remaining grant funds, permanent placemaking and wayfinding
elements will be installed in spring/summer 2018 to spur reinvestment, attract new
businesses and broaden the customer base for local businesses. These elements could
include directional signage, identification signs, banners, benches or lights. As noted
earlier, staff is currently work on a study that will incorporate plans for street reconstruction
and streetscape design in this area. The plan will identify where placemaking and
wayfinding should be located. Once the study is complete staff will utilize the remaining
grant funds to install placemaking elements.
Walker Building
The current ownership status of the Walker Building is that a prospective buyer and the property
owner have reached a purchase agreement for the property. The prospective buyer is in the final
stages of its due diligence of the property which includes an environmental site assessment (ESA).
Closing on the property has been tentatively scheduled for the end of February pending the results
of the ESA. In the event that sale does not occur, the EDA is prepared to submit a Purchase
Agreement for the property.
Perspectives
Perspectives is located at 3381 Gorham Ave. It is an award winning, multi-program, human service
agency for women and their children suffering from addictions, mental illness, and poverty. The
services offered span from recovery and mental health programs to employment and parenting
Study Session Meeting of February 12, 2018 (Item No. 6) Page 4
Title: Update on Activities/Initiatives in Historic Walker-Lake Area
education. Perspectives is the only supportive housing program that provides a 12-month, in-house
academic, social, and nutritional enrichment program for children. Their programs successfully
return 83% of their residents to permanent housing, and nearly 100% of their clients reside in
Hennepin County. Perspectives is in the final stages of planning a substantial addition to the
facility. The addition will expand on teaching and counseling services offered to children and
families and establish a daycare. Construction is anticipated to begin in the spring of 2018.
Historical Society
Staff will continue to work with the Historical Society on a search for a new location. Staff is
prepared to conduct a location search and provide an Inventory of Prospective space options for
the Historical Society once the organization prepares preferred location criteria and a business plan
reflecting how the space will be financially supported.
The Nest
Staff prepared an Inventory of Prospective Properties for the Nest in the Walker-Lake area. The
Nest Team will be presenting an update of their activities and a request for funding to the City
Council at a study session on February 12, 2018 to facilitate renting and building out a space. Their
goal is to be open and operational by September 4, 2018.
Holiday Train
The Canadian Pacific Holiday Train returned to St. Louis Park for a second year on Sunday,
December 10, 2017. Large crowds turned out for this festive event, which is designed to draw
attention to the issue of food insecurity and to raise money for local food shelves. This year, the
St. Louis Park Emergency Program (STEP) raised $32,245 from the Holiday Train event,
including a $7,000 donation from Canadian Pacific. Additionally, participants donated 5,451
pounds of food.
Design Guidelines
The majority of buildings in the Historic Walker-Lake District are one and two story, smaller scale
retail and service uses. The city would like to explore the potential for design guidelines that
preserve the character and scale of the district as reinvestment occurs. In the coming months, the
city will be issuing a request for proposals (RFP) to hire a consulting firm to write design
guidelines for the district. The city plans to form a focus group, research the existing building
character, and present design guidelines to the city council. A component of this plan may include
a study of the district’s parking requirements and allowed uses. The scope of the request for
proposals is still being finalized, and can be expanded based on feedback from Council.
Comprehensive Plan
The city’s Comprehensive Plan is being updated in 2018. Current land uses in the area consist of
a wide mix of uses including schools, commercial, industrial, residential and city owned parking.
Based on community input thus far, wholesale redevelopment of the area is not envisioned; rather,
reinvestment and revitalization of the area will be the focus. The city intends to improve the
existing streets and landscaping and is working on branding and way- finding to highlight and
enhance the area. In addition, as stated previously, the city is looking at creating Design Guidelines
that would preserve and enhance the area’s identity and character, while encouraging and
facilitating reinvestment. Land use and zoning changes could possibly follow as an outcome of the
Comprehensive Plan Update process.
Study Session Meeting of February 12, 2018 (Item No. 6) Page 5
Title: Update on Activities/Initiatives in Historic Walker-Lake Area
Comprehensive Plan Land Use Map
Plan Categories:
• red = Commercial
• white = low density residential
• gold = medium density residential
• light green = civic
• green = parks and open space
• grey = general industrial
Zoning Map
Zoning categories:
• red = C2 Commercial
• yellow = residential
• green = parks and open space
• grey = general industrial
NEXT STEPS
• Develop a design concept for the public infrastructure in the Historic Walker Lake District:
Open Houses: February – May 2018
City Council Meetings: February – June 2018
30% Plans: April –May 2018
60% Plans: June 2018
Construction (Private utilities): Fall 2018
City infrastructure construction: May- November 2019
• Utilize the remaining grant funds to install permanent placemaking/ way finding elements
in 2018 in locations identified in the Historic Walker Lake Design Study:
Wayfinding Signs made by local company, Hard Imagining April-May 2018
Wayfinding Sign Installation: May-July 2018
• Issue a request for proposals (RFP) to hire a consulting firm to write design guidelines,
potentially form a focus group, research the existing building character, and present design
guidelines to city council:
Issue RFP Spring 2018
Begin study Summer 2018
Completion Early 2019
Study Session Meeting of February 12, 2018 (Item No. 6) Page 6
Title: Update on Activities/Initiatives in Historic Walker-Lake Area
• Complete Comprehensive Plan Update:
Land Use discussion
(with Planning Commission and City Council):
Spring 2018
Resident review of draft plan: Spring 2018
Final Draft out for review: July- Dec 2018
Completed Plan Submitted to Met Council: December 2018
• Pursue additional grant funding and as funds become available the city will work with
stakeholders to encourage building façade improvements, implement placemaking
activities and facilitate improvements that engage and connect the Historic Walker lake
community (i.e., Hennepin County Business District Initiative grant program).
• Continue to assist The Nest and the Historical Society with site search prospects, as needed,
with the understanding that these organizations will need to lead their respective site search
processes.
The above activities, combined with the city’s capital improvement projects for the area including
adding bike lanes, Walker Street infrastructure improvements, and the combined efforts of the
City, Hennepin County, Metropolitan Council and Three Rivers Park District should further
improve access to the regional trail and LRT stations at Wooddale and Louisiana Avenue, as well
as improve local business viability, foster greater community cohesiveness, and foster
revitalization of the area.
Staff would like feedback on the above initiatives. Staff is also interested in any other ideas the
Council may wish staff to explore in reactivating this business area.
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Study Session Meeting of February 12, 2018 (Item No. 6)
Title: Update on Activities/Initiatives in Historic Walker-Lake Area Page 7
Meeting: Study Session
Meeting Date: February 12, 2018
Written Report: 7
EXECUTIVE SUMMARY
TITLE: Proposed Allocation of 2018 Community Development Block Grant (CDBG) Funds
RECOMMENDED ACTION: No action required at this time. This report is being provided to
inform the council of the proposed allocation of 2018 CDBG funds.
POLICY CONSIDERATION: Does the City Council concur with the recommendations made
for the allocation of $147,050 in 2018 CDBG funds and an additional $20,000 in prior year CDBG
funds?
SUMMARY: Each year the city must decide how to use its annual allocation of CDBG Funds.
CDBG funds are US Housing and Urban Development (HUD) funds distributed through Hennepin
County. The city must submit its proposed use of the allocation to Hennepin County by February
23, 2018. Prior to submittal, the city must hold a public hearing. The hearing and official city
council action is scheduled for February 20, 2018. The city’s estimated direct allocation is
$147,050 and the city also has an additional $20,000 to allocate in 2018 from prior year CDBG
funds that were not expended by Perspectives.
This year’s proposed use of CDBG funds reflects the city’s priorities to preserve existing housing
and increase affordable home ownership opportunities. The allocation focuses on assisting low-
income residents with emergency repairs, rehab loans, improvement projects and affordable
ownership opportunities. New this year, fifteen percent of the overall CDBG budget is being set
aside by Hennepin County for Public Service activities and awarded through a single combined,
competitive RFP covering all the cities in the county program.
FINANCIAL OR BUDGET CONSIDERATION: CDBG funds allow cities discretion, within
HUD guidelines, to fund projects that meet the national low income objectives and the needs of
cities. The federal budget has not been finalized; however, Hennepin County estimates the St.
Louis Park 2018 allocation will be $173,000, a 3% increase from 2017. The St. Louis Park set
aside amount for public service programs awarded through the consolidated RFP is estimated at
$25,950. The city’s estimated direct allocation is $147,050 and the city also has an additional
$20,000 in prior year CDBG funds as noted above. The 2018 CDBG year runs from July 1, 2018
through June 30, 2019. The city still has remaining funds from 2017 CDBG allocated to the
Meadowbrook Park Program that can be expended through June 30, 2018.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Program Descriptions
Draft Resolution
Prepared by: Marney Olson, Assistant Housing Supervisor
Reviewed by: Karen Barton, Community Development Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of February 12, 2018 (Item No. 7) Page 2
Title: Proposed Allocation of 2018 Community Development Block Grant (CDBG) Funds
DISCUSSION
BACKGROUND: The national objectives of the CDBG program are to benefit low and
moderate-income persons, prevention or elimination of slum or blight and/or to meet a particular
urgent community development need. From a policy perspective, the city council has typically
focused CDBG funds on “sticks and bricks” improvements to the housing stock for low-income
families. Historically a small portion of funds have also been allocated to support public services
for St. Louis Park Housing Authority (SLPHA) residents and park programming for low-income
youth. New this year, fifteen percent of the overall CDBG budget is being set aside by Hennepin
County for public service activities and awarded through a single combined, competitive RFP
covering all the cities in the county program. Hennepin County has advertised the RFP process
and sent information to a long list of public service providers. The information was also posted on
the city’s website. STEP, Senior Community Services, and HOME Line have all requested letters
of support for their applications. The city is no longer allowed to allocate any funds directly for
public service activities.
PRESENT CONSIDERATIONS: The proposed use of CDBG funds reflects the city’s priorities
to preserve existing housing and increase affordable ownership opportunities. This year’s proposed
allocation is summarized in Table 1 below. The allocation focuses on assisting low-income
residents with emergency repairs, rehab loans, home renovations and affordable ownership
opportunities. The allocation includes the estimated 2018 direct allocation of $147,050 and
$20,000 of prior year CDBG funds that are being reallocated. The prior year funds are from a
Perspectives security project at Louisiana Court. Perspectives did complete the project; however,
they did not comply with CDBG prevailing wage requirements and could not be reimbursed for
the work. These funds were returned to the city to be reallocated for 2018.
Table 1: Proposed 2018 CDBG Allocation
Project Activity
Proposed Ongoing
Activity Allocation
Low Income Single Family Emergency Repair Program $40,000 yes
Low Income Single Family Home Rehab Loan $107,050 yes
Affordable Housing Land Trust – Homes within Reach $20,000 yes
Total $167,050
NEXT STEPS:
February 8, 2018 Publication of Public Hearing Notice
February 14, 2018 Discussion at Housing Authority Board Meeting
February 20, 2018 Public Hearing and Approval of Resolution Outlining Proposed Activities
February 23, 2018 Deadline for Submission of CDBG Application to Hennepin County
Study Session Meeting of February 12, 2018 (Item No. 7) Page 3
Title: Proposed Allocation of 2018 Community Development Block Grant (CDBG) Funds
Proposed Program Descriptions
Emergency Repair Program – Single Family $40,000
This program is consistent with the council’s adopted housing goals and has proven its
responsiveness to low income seniors and vulnerable residents with annual incomes of 50% or less
of the median area income, or $31,650 for a single person household, and assets less than $25,000.
It provides grants of up to $4,000 for emergencies such as leaking roofs, plumbing repairs, water
heaters or code violations. Community Action Partners Hennepin County (CAP-HC) currently
administers this program for the city. This is an ongoing and very impactful CDBG activity.
Low Income Single Family Deferred Loan Program - $107,050
This is the primary ongoing CDBG zero interest deferred rehab loan program targeted for homeowners
with annual income of 50% or less of the median area income based on family size ($31,650 for a
household of one, $54,250 for a household of 4) and assets less than $25,000. Families up to 80% of
AMI would have a 3% simple interest rate. The rehab focuses on improvements to bring homes into
code compliance and provide long-term maintenance free housing. The maximum loan amount is
$30,000 and is forgiven after 15 years. Repayment is required if homeowners sell the property before
the 15-year period expires.
This program is administered by Hennepin County Housing staff. There is currently a waiting list for
the low income single family deferred loan program so staff recommends an increase of approximately
$20,000 to this project over 2017 funding levels, which accounts for the $20,000 reallocation of prior
year funds. Continued funding, along with the program income realized from repayment of previous
CDBG deferred loans, should make it possible to serve four to seven residents depending on project
scope.
Affordable Housing Land Trust – Homes Within Reach - $20,000
Homes within Reach is a program of West Hennepin Housing Land Trust that purchases homes
and sells them to low income homeowners. Buyers pay for the cost of the building only and lease
the land for 99 years. St. Louis Park funds are leveraged with Met Council and Hennepin County
HOME funds, and Homes within Reach administers this activity. Homes within Reach has
purchased sixteen homes in the city that have been sold to low income families.
Study Session Meeting of February 12, 2018 (Item No. 7) Page 4
Title: Proposed Allocation of 2018 Community Development Block Grant (CDBG) Funds
DRAFT RESOLUTION NO. 18 - ____
RESOLUTION APPROVING PROPOSED APPLICATION FOR 2018 URBAN
HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
PROGRAM FUNDS AND AUTHORIZING EXECUTION OF SUBRECIPIENT
AGREEMENT WITH URBAN HENNEPIN COUNTY AND ANY THIRD PARTY
AGREEMENTS
WHEREAS, the City of St. Louis Park, through execution of a Joint Cooperation
Agreement with Hennepin County, is cooperating in the Urban Hennepin County Community
Development Block Grant Program; and
WHEREAS, the City of St. Louis Park has developed a proposal for the use of 2018 Urban
Hennepin County Community Development Block Grant funds; and
WHEREAS, the City held a public hearing on February 20, 2018 to obtain the views of
citizens on housing and community development needs and priorities and the city's proposed use
of $147,050 from the 2018 Urban Hennepin County Community Development Block Grant; and
WHEREAS, the City of St. Louis Park proposed to reallocate unexpended prior year CDBG
funds in the amount of $20,000; and
BE IT RESOLVED, that the City Council of St. Louis Park approves the following projects
for funding from the 2018 Urban Hennepin County Community Development Block Grant
Program and authorizes submittal of the proposal to Urban Hennepin County/Consolidated Pool.
BE IT FURTHER RESOLVED that the City Council hereby authorizes and directs the
Mayor and its City Manager to execute the Subrecipient Agreement and any required Third Party
Agreement on behalf of the City to implement the 2018 Community Development Block Grant
Program.
BE IT FURTHER RESOLVED, that should the final amount of FY2018 CDBG available
to the city be different from the preliminary amount provided to the city, the city council hereby
authorizes the city manager to adjust the following activity project budget(s) proportionally to
reflect the actual amount of funding available.
Reviewed for Administration: Adopted by the City Council February 20, 2018
Thomas K. Harmening, City Manager Jake Spano, Mayor
Attest:
Melissa Kennedy, City Clerk
Activity Budget
Low Income Single Family Emergency Repair Program $40,000
Low Income Single Family Home Rehab Loan $107,050
Affordable Housing Land Trust – Homes within Reach $20,000
Total $167,050
Activity Budget
Low Income Single Family Home Rehab Loan 100% of any increase or decrease
Meeting: Study Session
Meeting Date: February 12, 2018
Written Report: 8
EXECUTIVE SUMMARY
TITLE: Health in the Park Update
RECOMMENDED ACTION: None at this time. The purpose of this report is to provide the
City Council with an update on the Health in the Park initiative.
POLICY CONSIDERATION: None at this time. Please inform staff of any questions you might
have.
SUMMARY: Health in the Park (HIP) began in 2013, and continues to inspire community driven
initiatives through two programs: the Health in the Park Champion Program and the Healthy
Living Grant Program. The following is an update on these two programs.
FINANCIAL OR BUDGET CONSIDERATION: $15,000 was approved in the 2018 bud get to
fund the Healthy Living Grant program.
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Laura Smith, Wellness and Volunteer Coordinator
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Study Session Meeting of February 12, 2018 (Item No. 8) Page 2
Title: Health in the Park Update
DISCUSSION
Health in the Park Champion Program
Health in the Park Champions work with the city, school district and local organizations to advance
health through programs and policy. Champions meet quarterly to discuss projects, learn about up
and coming activities and share ideas. 2017 was a great year for our Champions. Below are a few
highlights:
•Eight new Champions were trained and welcomed in 2017, bringing the group total to 12.
•Champions continue to meet with school district leadership to champion healthy eating,
physical activity and mental wellbeing initiatives for young people.
•Champions assisted in the Vision 3.0 process by attending the Train the Trainer session, and
hosting and participating in a community feedback session.
•Three Champions applied for the Healthy Living Grant Program and hosted community
wellbeing initiatives.
•A sub-committee was formed to review Healthy Living Grants as they come in from the
community, ensuring grant funds are spent in accordance with guidelines. This sub-committee
also provided recommendations and guidance for 2018 grant guideline revisions.
Healthy Living Grant Program
The Healthy Living Grant Program is available to all community members who desire to
implement a community health initiative in St. Louis Park. The Healthy Living Grant Program
launched June 2017 and we were pleased with the community response. Six grants were awarded
and successfully completed between June 2017 and December 2017. A total of $6,000 was
awarded from a budget of $15,000. Below is a recap of 2017 grant initiatives:
•Jeanne Wolfe (HIP Champion) held a mental health support group at Honey and Rye
Bakehouse for those who are experiencing depression to bake and connect with one another.
•Wayside Recovery Center held healthy cooking classes for residents with a focus on nutrition
and recovery. They had a high turnout for classes and had positive feedback from residents.
•Susan Ericksen (HIP Champion) hosted free yoga classes for teachers and adults at Susan
Lindgren Elementary School. As many as 25 adults attended each session.
•Birchwood Neighborhood used funds to host their annual neighborhood 5K. Approximately
135 adults and children participated in the event.
•Union Congregational United Church of Christ utilized funds to educate their members on
plant based cooking and organics recycling.
•Andrea Nyhusmoen (HIP Champion) partnered with the Westwood Hills Nature Center to host
the “Be the Light Walk” in December. More than 150 people participated in this winter event
with an outdoor luminary walk, crafts for kids, a bonfire and discussion about mental wellbeing
in the community.
We thank all of our 2017 Champions and applicants for championing health in St. Louis Park and
look forward to the continuation of this program in 2018.
Meeting: Study Session
Meeting Date: February 12, 2018
Written Report: 9
EXECUTIVE SUMMARY
TITLE: 2018 – 2022 Organics and Yard Waste Processing Proposals
RECOMMENDED ACTION: The purpose of this report is to provide Council with an update to
the Request for Proposals for Organics and Yard Waste Processing.
POLICY CONSIDERATION: Does Council support contracting for organics recycling and yard
waste processing?
SUMMARY: In current and past solid waste collection contracts it has been the responsibility of
the collection contractor to find a location for processing of the City’s residential organics
recycling and yard waste, with the City paying a pass-through cost charged by the processor to the
collection contractor. Staff is recommending that we change our business practice and start
contracting directly with the processor for the following reasons: 1) it will guarantee there is a
location for our material to be processed during the term of the contract; and 2) the per ton
processing cost will be set for the term of the contract which eliminates unforeseen cost increases.
Staff worked with the MPCA to determine who the material processors are in this area. We found
five possible processors. Of the five, two processors are in the metro area and three are outside the
metro area. We contacted all five processors to gauge their interest and sent RFP’s to the four
expressing interest. We had contact with the two metro area processors and expected to receive
proposals from both of them, as well as hoping to receive proposals from the others. Ultimately,
only one proposal was received from Specialized Environmental Technologies (SET), who is our
current processor. The other local processor (Shakopee Mdewakanton Sioux Community) didn’t
submit a proposal because of new business opportunities and capacity concerns at their facility.
SET’s proposed processing unit cost is lower than it was previously. However the delivery location
for the collector/hauler has changed, so total cost comparisons can’t be made until collection
contracts are finalized later this spring. Staff is recommending the city negotiate and enter into a
contract with SET for processing. Details of the SET proposal are provided in the Discussion
section of this report.
FINANCIAL OR BUDGET CONSIDERATION: There will be no cost implications to the
General Fund resulting from the city contracting for processing, as the Solid Waste Enterprise
Fund covers all these costs. Processing costs were budgeted for in the current Solid Waste budget.
VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental
stewardship. We will increase environmental consciousness and responsibility in all areas of city
business.
SUPPORTING DOCUMENTS: Discussion
Prepared by: Scott Merkley, Public Works Services Manager
Reviewed by: Mark Hanson, Public Works Superintendent
Cynthia S. Walsh, Director of Operations & Recreation
Approved by: Tom Harmening, City Manager
Study Session Meeting of February 12, 2018 (Item No. 9) Page 2
Title: 2018 – 2022 Organics and Yard Waste Processing Proposals
DISCUSSION
Request for Proposals (RFP) Information
The RFP included general information such as: program background, historical tons of organics
and yard waste collected in the past four years, current processing costs, transporting and weighing
requirements, regulatory requirements, EAB requirements, organics study requirements,
contractor questionnaire and a pricing worksheet.
Minority Owned and Women Owned Business Research
We did send a request for proposal to the Shakopee Mdewakanton Sioux Community. In addition,
staff reviewed both the Office of State Procurement and Minnesota United Certification Program
for other minority or women owned businesses doing compost processing and found none.
Processors Considered
Staff worked with the MPCA to determine who the compost processors were in this area that were
capable of providing processing services. The processors that received RFP’s were Specialized
Environmental Technologies (SET, located in Empire Township), Shakopee Mdewakanton Sioux
Community (SMSC, located in Shakopee), Advanced Disposal (located in Eau Claire), Midwest
Recycling Solutions (Mankato), and Carver County (operates at the MN Arboretum and works
with SET).
Timeline
The contract term is from April 1, 2018 to December 31, 2022. RFP’s were sent to all interested
parties on January 16, 2018 and were received by January 31, 2018.
Proposal Information
Proposal Evaluation Criteria – Many factors go into making the decision to award a contract for
compost processing services. The City desires a processor that produces high grade compost,
adheres to all environmental rules and regulations, provides residents and the City with finished
compost for home use, community gardens and special events, and participates in resident
education. Staff evaluation includes review proposal content, questionnaire responses, processing
cost, and reference checks.
Proposals Received – the only proposal received was from SET, who is our current processor and
operator of the city’s brush drop-off site. The other processors (SMSC, Advanced Disposal,
Midwest Recycling Solutions and Carver County) received RFP’s but chose not to submit a
proposal. SMSC had indicated they would submit a proposal, but didn’t because of new business
opportunities and capacity issues at their facility.
SET’s Proposal
SET has been processing the City’s yard waste for many years and processing our co-collected
organics since 2013.
Processing Locations - The City has a range of processing locations for organics and yard waste
depending upon the manner in which it is delivered and the daily capacity of each facility. SET
will process the material at their Empire (organics and yard waste), Shakopee (yard waste), or
Burnsville (yard waste) sites. They also have the option to divert some material to SMSC, from
time to time if there are capacity issues at their sites, through their cooperative processing
agreement with SMSC.
Study Session Meeting of February 12, 2018 (Item No. 9) Page 3
Title: 2018 – 2022 Organics and Yard Waste Processing Proposals
Processing Costs
Below is a comparison of the proposed processing costs compared to the cost for 2017:
Delivery method Proposed 2018-2022 2017
Co-collected organic and yard waste - Empire $56-$61.50 / ton $70 / ton
Co-collected organic and yard waste - Malcolm $73 / ton $70 / ton
Organics only – Brooklyn Park Transfer Station $25 / ton
Organics only - Empire $56-$61.50 / ton $70 / ton
Yard waste only (seasonal split) – City Brush Site $36-$39 / ton $34 / ton
Note: The proposed processing unit cost is lower than they were previously; however the delivery
location for the collector has changed so total cost comparisons can’t be made until 2018-2023
collection contracts are finalized.
Next Steps
Assuming the City Council is in support of contracting for organics/yard waste processing, staff
will negotiate an agreement with SET and bring back to Council for discussion and approval at an
upcoming meeting in the near future (possibly February 20, 2018).
Process / Timeline
Below are the major steps needed for implementing the new processing contracts and the
upcoming collections contract(s):
Item Completion Date
Staff reviews processing proposal / recommendations with Council Feb. 12, 2018
Staff prepares processing contract for Council approval Feb. 2018
Staff negotiates processing contract with SET Feb. 2018
Council approves new processing contract Feb. 20, 2018
Staff prepares collection contract(s) for Council consideration Feb. - March 2018
Staff reviews collection proposals / recommendations with Council March 5, 2018
Staff discusses collection contracts with Council and requests
authorization to negotiate contract with selected Hauler(s) March 19, 2018
Staff negotiates collection contract(s) with Hauler(s) March 2018
Council approves new collection contract(s) April 2, 2018
Staff conducts public education outreach with residents April – Sept. 2018
New collection contract(s) begin Oct. 1, 2018
Note: Timeline above is subject to change based on input from Council.
Meeting: Study Session
Meeting Date: February 12, 2018
EXECUTIVE SUMMARY
TITLE: Temporary Suspension of Local Gambling Tax
RECOMMENDED ACTION: None at this time. Staff is providing information about required
changes involving the local gambling tax imposed in Section 15-9 of the City Code.
POLICY CONSIDERATION: Not applicable. The measures outlined below are required by
the state.
SUMMARY: Section 15-9 of the City Code imposes a local gambling tax in the amount of $3,000
annually per premises or three percent (3%) of the net receipts of a licensed organization selling
pull tabs within the City payable 25 days after the end of each month. There are currently three
premises where pull tabs are sold within the City. Texa-Tonka Lanes and Park Tavern pull tab
sales are operated by Community Charities and Bunny’s by the St. Louis Park Hockey Boosters.
The Minnesota Gambling Control Board allows cities to impose this tax only to the extent
necessary to cover the costs to regulate gambling within the City. Regulating gambling is defined
very specifically to include site inspections, compliance reviews and corrective action, and all
documentation of these activities must be submitted to the Gambling Control Board. Any tax
collected and not used for this purpose must be refunded to the licensed organizations.
The Gambling Control Board contacted the City of St. Louis Park in 2017, as well as other area
cities who impose a local gambling tax, regarding the allowable use of the tax collected and the
related reporting requirements. Because the Gambling Control Board no longer considers
reimbursement of administrative staff time as an allowable use of the tax collected, staff has
determined that we are not able to continue the collection of the tax, nor retain the balance of tax
collected in 2017 and the prior year carryover. As a result, to comply with the requirements of the
Gambling Control Board, refunds must be issued to the licensed gambling organizations to return
the balances held by the City as of December 31, 2017.
Staff will be bringing a request to Council on February 20, 2018 to adopt a resolution to
temporarily suspend collection of the local gambling tax for 2018 until a more in depth discussion
can take place later this year.
FINANCIAL OR BUDGET CONSIDERATION: The local gambling tax must be entirely
offset by expenditures for regulating gambling as defined by the Gambling Control Board.
Reimbursement of administrative staff time is no longer allowed. The maximum amount collected
annually is $9,000.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: None
Prepared by: Darla Monson, Accountant
Reviewed by: Melissa Kennedy, City Clerk
Tim Simon, Chief Financial Officer
Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Written Report: 10