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HomeMy WebLinkAbout2022/12/19 - ADMIN - Minutes - Economic Development Authority - Regular Official minutes EDA meeting St. Louis Park, Minnesota Dec. 19, 2022 1. Call to order President Rog called the meeting to order at 6:20 p.m. 1a. Roll call Commissioners present: President Rog, Tim Brausen, Sue Budd, Lynette Dumalag, Larry Kraft, Nadia Mohamed (arrived 6:25 p.m.), and Jake Spano Commissioners absent: none Staff present: City Manager (Ms. Keller), City Attorney (Mr. Mattick), Finance Director (Ms. Schmitt), Police Chief Harcey, Executive Director/Community Development Director (Ms. Barton), Communications and Technology Director (Ms. Smith) 2. Approval of agenda It was moved by Commissioner Brausen, seconded by Commissioner Dumalag, to approve the EDA agenda as presented. The motion passed 7-0. 3. Approval of agenda and items on consent calendar - none 4. Approval of EDA minutes - none 5. Unfinished business - none 6. New business a. Adopt final 2023 EDA levy Ms. Schmitt presented the report. She noted the EDA levy is proposed at $500,000 to be put into the development fund and used for staff salaries. Commissioner Brausen asked if the EDA levy is set at the same amount as last year. Ms. Schmitt stated yes, that is correct. Commissioner Budd asked for clarification on the levy increase last year over this year. Ms. Schmitt noted on a median value home, the EDA levy will increase by $1.61 per year and the HRA levy will increase by $3.83 per year. DocuSign Envelope ID: 40686F5C-5A00-40E1-A7F7-56E9CD1A3236 Economic Development Authority -2- Dec. 19, 2022 Commissioner Brausen asked about the EDA increase. Ms. Schmitt explained that because of the increase and the home value increase, even though the levy is the same as 2022, that tax burden is still $1.61 higher on that median value home . Commissioner Kraft asked if the projected cash balance in the development fund is $7 million. Ms. Schmitt stated yes. Commissioner Kraft stated with the sale of Beltline Boulevard and the cash balance, the total will be around $13 million. Ms. Schmitt stated that is correct; however, it will either be $13 million or under $6 million, and property sales are not predictable. Commissioner Kraft asked if the sale of Beltline will happen next year. Ms. Barton stated she is hopeful the Sherman project will go through next year. Commissioner Kraft stated if approved, the EDA levy will have about $13 million in the development fund and if it’s not approved, there will be about $12.5 million in the development fund. He stated given inflation and folks hurting in the community, this is not money we need to have this year and it is more of a nice to have. He added we should do the more prudent thing for taxpayers and not approve the EDA levy . He stated he will vote against this. Commissioner Brausen stated he disagrees with Commissioner Kraft, and noted the EDA levy is set for $500,000, the same as last year, to pay for the development fund and staff salaries. He stated this fund has no permanent funding source, and we have spent this fund down to invest in the community, promote affordable housing, environmental sustainability, and a variety of other goals. He stated this method of taxation is desirable and he will support this. He added this funding allows the city to provide a variety of affordable programs, he does not believe it’s a burden on the community, and the city will continue to provide the high level of services residents have become accustomed to, and he will support this. Commissioner Budd stated she will support this also. She noted this is her first budget cycle and she has tried to be as prudent as possible on this. Commissioner Spano asked about the cost on the average home for the $500,000 EDA levy. Ms. Schmitt stated it is around $19 per year. Commissioner Spano noted this is about $1-2 per month. He stated he will support this and agrees with Commissioner Brausen, noting the EDA levy has been a powerful tool to purchase property. He stated it was around $30 million at one point and the city has used it, but it has been used to purchase properties for developments that align with city goals, adding he will support this. Commissioner Dumalag stated she will also support the EDA levy and agreed with Commissioner Brausen’s comments. She stated the sale with Sherman has not closed DocuSign Envelope ID: 40686F5C-5A00-40E1-A7F7-56E9CD1A3236 Economic Development Authority -3- Dec. 19, 2022 yet, but she does appreciate Commissioner Kraft’s comments as this might be onerous to residents, and we are asking them to pay additional monies for this. However, she noted this tool is useful and she will support the EDA levy. Commissioner Mohamed added she also will support the EDA levy. President Rog noted impacts on average homeowners are discussed with these levies but added there is significant variability and depending on the value of property , and other increases, determines the impact on residents. She supports the work of the development staff and the challenges around the development fund, noting she does also support the EDA levy as a tool to support projects and is not opposed to using this tool under certain circumstances. However, given the significant tax burden on residents this year, in part from the school levy, and in the context of current economic conditions, it makes it hard for many to pay their bills, including seniors on fixed incomes. She stated because the city does expect a significant increase in the fund with the potential land sale, she will not support the 2023 EDA levy. She stated if the sale does not go through, she may revisit her position next year. President Rog added she looks forward to working with council to find middle ground and promoting and incenting developments and attending to the affordable housing needs of current homeowners, including but not limited to seniors on fixed incomes. It was moved by Commissioner Brausen, seconded by Commissioner Mohamed, to adopt the final 2023 EDA levy as proposed. The motion passed 5-2 (Commissioners Kraft and Rog opposed). b. Adopt EDA resolution authorizing the 2023 final HRA levy. Resolution No. 22-48 Ms. Schmitt explained the resolutions noting the HRA levy is proposed maximum $1,582,696 for the Housing Rehabilitation and Affordable Housing Trust Fund. Commissioner Kraft stated this is a success story with investment in affordable housing, and while there is work to do, AMI levels have been achieved. He is supportive of these kinds of investments that assist the public good. He stated given investments through TIF, he would like to see the HRA levy decreased, although staff has said no. He stated he will support the HRA levy. Commissioner Kraft stated TIF requests have increased over the years and when TIF requests are approved, we make an investment of taxpayer monies. He argues that is no different than increasing the tax levy, and over time to the taxpayer, it is the same amount of money. DocuSign Envelope ID: 40686F5C-5A00-40E1-A7F7-56E9CD1A3236 Economic Development Authority -4- Dec. 19, 2022 Commissioner Kraft suggested going forward it makes sense to track how much taxpayers are investing in affordable housing and green building items through TIF and levies. He noted TIF could be used to reduce levies if done properly and mak ing sure both investments are targeted toward city goals of affordability and home ownership. Commissioner Brausen thanked staff for their hard work on budgets, as well as the council. He supports the proposed HRA levy and agreed with Commissioner Kraft’s comments. He stated this levy has shifted to support affordable housing, which was neglected in the community for so long, which was focused on new development, and which comes at a price for those who cannot afford housing. He stated the city made a conscious decision to invest in these programs, adding he is not sure enough has been done yet. He stated housing has become expensive in St. Louis Park. Commissioner Mohamed stated she supports the HRA levy for the reasons Commissioners Kraft and Brausen stated. She stated it is easy to justify taxes increasing when we are working to keep affordable housing in St. Louis Park. Commissioner Dumalag thanked staff as well for their work on this and stated she will also support the HRA levy. She stated she is very supportive of the city’s investment in affordable housing as well. Commissioner Budd stated she will also support the HRA levy and appreciates all the efforts of staff and the comments of Commissioner Kraft . Commissioner Spano stated he will also support the HRA levy. He stated there has been success in certain affordability levels and pointed out this is something the city has become known for, noting the thoughtful and deliberate approach taken by the council in working through this. He thanked Commissioner Kraft for his spreadsheet, and noted we have tools that are used in certain ways, adding there is much more to be reviewed as well. President Rog stated she heard today only 1% of state funding is used for affordable housing, so with the surplus there is great opportunity for more state funding. She thanked Commissioner Kraft for his work on affordable housing and staff’s work as well . She supports affordable housing and takes into consideration the impact of the tax burden on residents and its impact on their affordability. She stated the HRA is deeply woven into city projects on affordable housing and she will support the HRA this year, with a plan to study this further in the future. She added she concurs with a focus on targeted investments, affordability and ownership going forward. It was moved by Commissioner Brausen, seconded by Commissioner Mohamed, adopt EDA Resolution No. 22-48 authorizing the 2023 final HRA levy as proposed. The motion passed 7-0. DocuSign Envelope ID: 40686F5C-5A00-40E1-A7F7-56E9CD1A3236 Economic Development Authority -5- Dec. 19, 2022 7. Communications – none 8. Adjournment The meeting adjourned at 6:53 p.m. ______________________________________ ______________________________________ Melissa Kennedy, secretary Nadia Mohamed, president DocuSign Envelope ID: 40686F5C-5A00-40E1-A7F7-56E9CD1A3236