HomeMy WebLinkAbout2024/08/19 - ADMIN - Minutes - City Council - Study SessionOfficial minutes
City council special study session
St. Louis Park, Minnesota
Aug. 19, 2024
The meeting convened at 7:55 p.m.
Council members present: Mayor Nadia Mohamed, Paul Baudhuin, Tim Brausen, Sue Budd,
Yolanda Farris
Council members absent: Council Members Lynette Dumalag and Margaret Rog
Staff present: City manager (Ms. Keller), development planner (Mr. Walther), economic
development manager (Mr. Hunt)
Guests: Rick McKelvey and Evan Jacobson, Hempel Real Estate
Discussion items.
1. Development proposal for 5401 Gamble Drive – Ward 4.
Mr. Walther presented the staff report.
Council Member Brausen asked about the vacant parcel next to the 10 West End office tower.
Mr. Walther stated that parcel is planned for another 11-story office tower and the area north
of Gamble Drive has been part of an environmental assessment called an alternative urban
areawide assessment (AUAR). That has received preliminary city approval and is the last phase
of the overall West End development. He added the AUAR has been updated every five years.
Council Member Brausen noted utility and stormwater has been reviewed in the past and
stated there is adequate capacity for the uses in this area. Mr. Walther confirmed and added
the city has not studied this particular block south of Gamble Drive, noting sanitary sewer
begins northwest of the site and goes north to Golden Valley and another in Parkdale Drive that
goes east under Hwy 100. An environmental assessment will need to evaluate which section it
could connect to and would have capacity for this and potential future redevelopment of this
block.
Council Member Brausen asked if these office buildings are considered Class B. Mr. Walther
confirmed that they are. Council Member Brausen asked about the occupancy of the northwest
building. Mr. Walther introduced Mr. McKelvey, the Vice President of Development for Hempel
Real Estate. Mr. McKelvey stated the northwest building has occupancy below 50%.
Council Member Budd asked about the driveway and the private road indicated in the report.
Mr. Walther stated it is a right-in and right-out on Park Center Blvd.
Council Member Brausen stated he supports the proposed redevelopment concept and policy
questions 1, 2 and 4, but is opposed to policy question 3 due to the drive-thru's climate
impacts.
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Mr. McKelvey stated the coffee store with a drive-thru will pay twice the amount of rent, so the
bank will value that space at $2 million more because of the coffee store’s commitment to
dependable income. Mr. Walther stated the city assessor affirms this also.
Mr. McKelvey added there is a commitment from a grocery store for space at the development
as well. Mr. Walther stated this development and city financial assistance with TIF would be
subject to a green building standard, inclusionary housing policy requirements and DEI policy
goals.
Council Member Baudhuin asked if there is anything that would force a grocery store with an
employee union and are there any labor-related requirements included in this development.
Mr. Walther stated there is nothing in the TIF policy regarding employee unions as a
requirement.
Council Member Budd asked how the zoning at 5401 Gamble Drive would be affected. Mr.
Walther stated there is a special permit that covers all four of the office building parcels that
would require amendments. Mr. McKelvey stated the same owner owns all the office buildings,
so they are still in negotiations.
Council Member Budd asked about the green terraces and whether they qualify as green space.
Mr. Walther stated the terraces may qualify toward landscaping but would contribute to
designed outdoor recreation area, which must be 12% of the lot area.
Mr. Jacobson stated the terraces are integral to the identity of the project and its character. He
stated there will be a terrace with a pool or soaking tub and private spaces for residents of the
development. He added there will also be a green roof assembly.
Council Member Budd asked about TIF and the requested amount. Mr. Walther stated the
higher taxes paid by the property owner and collected following development, the increment, is
captured and disbursed back to the developer for qualifying extraordinary costs to help close
the gap. The development’s pro forma demonstrate the project could not proceed but for
financial assistance to close the gap. Council Member Budd asked if the TIF request would be
lower here. Mr. Hunt stated not necessarily, depending on the site’s extraordinary costs such as
poor structural soils, the high water table and other costs as well as the cost of the affordable
housing.
Council Member Budd asked if demolition of the existing structure is included in extraordinary
costs. Mr. Walther stated that would be an eligible expense, as the comparison is made to a
greenfield site. Council Member Budd asked if there would also be recycling of materials. Mr.
Walther stated yes as well as potentially salvage and reuse.
Council Member Brausen stated the current property taxes are $218,000 per year. He asked if
the city gets 36% of that. Mr. Hunt stated that was approximately correct, due to the fiscal
disparities which shares tax revenues from commercial properties regionally, and noted mixed-
use developments pay considerably more property taxes than an office building.
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Council Member Budd asked about 50% area median income units and if 30% AMI units may be
on the horizon. Mr. Hunt stated staff was currently in discussions with the developer on that
topic.
Council Member Baudhuin asked if there were no drive-thru, would making it financially
feasible come through TIF. Mr. Hunt stated the TIF assistance request would then likely be
higher.
Council Member Baudhuin stated he agrees with all the policy questions except for 3 and is
willing to consider 4.
Council Member Budd stated she agrees on 1, 2 and 3, and more to be determined on TIF.
Council Member Farris stated she agrees also on 1, 2 and 3, and more to be determined on TIF.
Mayor Mohamed stated she supports this and the development at West End. She supports the
policy questions as well, with more information expected to come.
Council Member Brausen asked what the maximum term on TIF was. Mr. Hunt stated 26 years,
but added the city’s TIF policy indicates the city’s preference is to stay under 15 years.
Communications/meeting check-in (verbal)
The meeting adjourned at 8:36 p.m.
______________________________________ ______________________________________
Melissa Kennedy, city clerk Nadia Mohamed, mayor
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