HomeMy WebLinkAbout2006/11/06 - ADMIN - Agenda Packets - City Council - Study SessionCity Council Study Session
November 6, 2006
6:30 PM
Council Chambers
Discussion Items
Approximate
Times
1. 6:30 p.m. Bass Lake/EDI Concept Plan
Written Items
7:20 p.m. Adjourn
Auxiliary aids for individuals with disabilities are available upon request. To make
arrangements, please call the Administrative Services Department at (952) 924-2525 (TDD
(952) 924-2518) at least 96 hours in advance of meeting.
City Council Study Session
Discussion Item: 110606 - 1 - Bass Lake Edi Site Plans Business Terms
Page 1
1. EDI/Bass Lake Preliminary Site Plans and Proposed Business Terms of
Redevelopment Contract with United Properties
PURPOSE OF DISCUSSION:
Staff wishes to discuss preliminary site plans for the Bass Lake property and outline general
business terms of a proposed redevelopment contract between the City, EDA and United
Properties. Staff hopes to elicit comments from the Council as to whether the parties are on the
“right track” with this project.
BACKGROUND:
At the May 22, 2006 Study Session the City Council/EDA expressed its general support to allow
United Properties to develop a medical office building on a portion of the City’s Bass Lake
property located at 3515 Belt Line Boulevard (“subject property”). The facility would
subsequently be leased to Methodist Hospital for it’s nationally-recognized Eating Disorders
Institute. As a result, staff was directed to prepare a Preliminary Development Agreement (PDA)
with United Properties. This Agreement was subsequently approved by both the EDA and City
Council on June 19, 2006. In it, the parties were required, along with other matters, to “complete
refinements to the preliminary concept plan” and negotiate “toward a mutually satisfactory
redevelopment contract”. Since that time staff, United Properties and representatives from Park
Nicollet Health Services have been undertaking the respective actions required under the
Agreement.
PROPOSED SITE PLANS:
It has been a working assumption that approximately half of the subject property would be
conveyed to United Properties in order to allow for the construction of the medical office
building and related parking. The remaining property would be held by the City for a compatible
use to be determined in the future. Suggested ideas for this remaining property have included:
arts & culture center, multi-purpose conference facility, library, or some combination of these or
other similar uses. Should it later be determined that none of the above uses are suitable or
needed on the remaining property, it could potentially be sold for private purposes such as for
another office building or senior housing.
The three parties have cooperatively developed several preliminary site plans for the subject
property that appear to meet each group’s respective objectives. These plans (attached) have the
following common elements: 3-story, 75,000 square foot medical office building, structured
parking facility and a generic building footprint reserved for a future civic use. All the site plans
depict a trail around the subject property that provides better connections with the adjacent
George Haun Trail, a substantial amount of green space, and room for a potential sculpture
garden and/or stormwater pond.
What is not shown, but may be needed, is added surface parking. The specific size and location
are yet to be determined but, if needed, will be designed to contribute to meeting the overall
parking needs of the subject property and the Rec Center.
City Council Study Session
Discussion Item: 110606 - 1 - Bass Lake Edi Site Plans Business Terms
Page 2
It should also be noted that the proposed parking ramp will be required to be expandable in order
to accommodate parking needs generated in the event a civic building or other use is later
constructed on the remaining site.
Staff plans to discuss these preliminary site plans Monday evening and hopes to elicit comments
as to whether the parties are “on the right track”.
SITE DESCRIPTION AND PROJECT UPDATE:
Listed below are some of the salient facts regarding the subject property discovered during the
current due diligence phase.
According to the recent survey, the subject site contains 5.91 acres and approximately
60,000 square feet of excess street ROW. When the City vacates these rights of way it
will bring the combined site area to nearly 7.29 acres.
The subject property is large enough to accommodate the proposed 75,000 square foot
medical office building, a structured parking facility, a surface parking lot (that could
potentially be converted for a future civic building), a potential sculpture garden and/or
stormwater pond, two tennis courts (if needed), and substantial green space.
To enable the proposed development, the property conveyed to the Redeveloper will
require Comp Plan reguidance and rezoning.
The subject property is the site of the former municipal Bass Lake Dump which was in
operation during the 1960s and early 1970s. During that time, approximately 70,000
cubic yards of fill and waste material (primarily incinerator ash) was deposited over peat
at the site at a maximum depth of 17.5 feet. This material was overlaid with between 2
and 12 feet of topsoil to provide a protective cover. Analytical results have identified low
levels of various metals in the ash material.
The City’s environmental consultant, ENSR, tested for Dioxins on the subject site and
determined that they did not achieve levels that exceed the MPCA’s threshold.
ENSR is currently communicating with the MPCA in order to obtain a more precise
understanding of the environmental clean up activities likely required in the project’s
Response Action (Development) Plan. From these discussions it appears that little to no
exporting of contaminated material will be required and that the waste material may
remain in place provided structures and a sufficient level of clean topsoil remain in place
as a protective cover. ENSR is also preparing cost estimates relative to the likely
required environmental activities.
Groundwater level below the ground surface of the subject property is 8 to 11.5 feet deep.
The actual depth and location of the groundwater table fluctuates seasonally and annually
with variations in the amount of precipitation, surface run-off, and infiltration.
City Council Study Session
Discussion Item: 110606 - 1 - Bass Lake Edi Site Plans Business Terms
Page 3
The subject site also has poor soil conditions due to the presence of peat and other
unstable material. It was determined that bedrock is 62 – 67 feet under the surface and
that any buildings will require piling.
United Properties and its consultants have calculated that the premium costs associated
with constructing on the poor soils (contamination aside) is approximately $2.0 to $2.3
million.
Parks & Rec is working with Benilde-St. Margaret High School on relocation of the
existing tennis courts on the site. Parks & Rec has also indicated it would be desirable to
retain two tennis courts somewhere on the site for general resident use.
SRF has been requested to make recommendations for improvements to the current
configuration of the Belt Line-West 36th Street intersection and improvements to the
ingress and egress at the north side of the Rec Center. Before development occurs on the
Bass Lake site it is important to make sure that the best long-term design for the
intersection can be accommodated and that pedestrian connections between the subject
property and the Rec Center are safe and effective.
Since all the proposed concept plans are generally acceptable to Methodist Hospital, it
has yet to be determined which portion and precisely how much of the subject property
would be acquired for the proposed medical office building and ramp.
Staff is currently working with United Properties to determine the appropriate selling
price per square foot of the subject property but both parties have agreed the land sale
should be for fair market value.
The total amount of the environmental costs (beyond piling) is currently being estimated.
As a result, the total amount of TIF assistance needed for the project is currently
unknown. What is known is that the proposed project will require some level of public
financial assistance in order to overcome the environmental and geotechnical challenges
facing this property, which make it currently undevelopable.
PROPOSED BUSINESS POINTS:
The following are general deal points, mutually negotiated between staff and United Properties
(“Redeveloper”), which are proposed to be incorporated into a future redevelopment contract for
the subject property.
The City/EDA agrees to acquire clear title for the portion of the subject property needed
for the proposed medical office building and parking ramp and reconvey it to the
Redeveloper for fair market value.
Redeveloper agrees to construct an approximately 75,000 square foot medical office building,
structured parking ramp, and surface parking (as appropriate) in accordance with approved
construction plans and all applicable building codes and requirements. The proposed
City Council Study Session
Discussion Item: 110606 - 1 - Bass Lake Edi Site Plans Business Terms
Page 4
building is to be leased and operated by Methodist Hospital/Park Nicollet Health Services
for its primary use as a world class eating disorders clinic.
It is acknowledged by both the City and Redeveloper that the subject property has
unstable soils due to a substantial amount of peat, a high groundwater table, and previous
use as a dump site. As a result, there are significant extraordinary costs associated with
structurally supporting buildings, structured parking, any heavy utilites, as well as
environmental-related costs associated with developing the subject property.
In order to offset the extraordinary costs associated with developing the subject property,
the City is willing to consider the establishment of a Soils Condition TIF District and to
utilize tax increment to fund the costs associated with the environmental contamination,
and poor soils.
The City may also reduce the acquisition price of the subject property to address the
environmental and geotechnical issues impacting the site.
It is understood that the City may develop the remaining portion of the subject property
for undetermined civic purposes or other mutually compatible purposes.
Redeveloper and the City agree to split site improvement costs that serve both clinic and
civic uses.
Redeveloper agrees to obtain all necessary approvals from the City, watershed district e.g.
permits, licenses, etc. for the construction of the minimum improvements.
Redeveloper agrees to obtain all necessary approvals from the MPCA, City, watershed
district, etc. for the management, correction, and, if applicable, remediation of
environmentally impacted soils on its portion of the subject property. The City agrees to
assist and work with Redeveloper to obtain:
1. No Association Letter
2. MPCA-approved Development and Contingency Plans
3. No Further Action Letter
Redeveloper will be responsible for all maintenance costs directly associated with the site
purchased for the office building and parking while the City will remain responsible for
all maintenance costs of the property not acquired by Redeveloper. The City and
Redeveloper will work cooperatively to establish any shared maintenance expenses that
may be appropriate either initially, or at a point in time when the City has a more active
use of the site.
Redeveloper agrees to allow public parking in the structured parking ramp and surface
parking lot. (This arrangement will need to be further defined in order to ensure there is
sufficient parking for both clinic and civic uses).
City Council Study Session
Discussion Item: 110606 - 1 - Bass Lake Edi Site Plans Business Terms
Page 5
Redeveloper agrees to maintain any surface parking lots in good operating condition and
assume any costs related to the maintenance and repair of the lot.
Redeveloper agrees to design its structured parking facility to be expandable in the event
that a parking study determines additional parking is required due to the construction of
future uses on the site. The City agrees to assume the construction costs associated with
providing this flexibility and the expansion of the parking facility to meet future public
parking needs.
Redeveloper agrees to substantially complete the development project including required
landscaping by December 31, 2008. Upon completion, the EDA will provide the
Redeveloper with a Certificate of Completion.
Redeveloper agrees not to transfer the agreement or the redevelopment property (except
to an affiliate) prior to receiving a Certificate of Completion without the prior written
consent of the EDA.
Redeveloper agrees to grant the City any necessary easements on the Redevelopment
Property for making trail and utility connections.
NEXT STEPS:
If it is the consensus of the EDA/Council that the preliminary site plans and business terms
outlined above are generally acceptable, the EDA and United Properties will work toward
refining the terms into a term sheet for a formal Redevelopment Contract along with a more
detailed TIF requirement which will be brought back for further consideration in December of
this year.
Attachment: Preliminary Site Plans (supplement)
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director