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HomeMy WebLinkAbout2018/11/13 - ADMIN - Minutes - City Council - Study SessionAIr St. Louis Park Official minutes MINNESOTA City council study session rlrKrcHo , WFF- in the Park St. Louis Park, Minnesota November 13, 2018 The meeting convened at 6:30 p.m. at the Hamilton House. Councilmembers present: Mayor Jake Spano, Tim Brausen (arrived 7:40 p.m.) Steve Hallfin, Rachel Harris, Anne Mavity, Thom Miller, and Margaret Rog. Staff present: City Manager (Mr. Harmening), Chief Financial Officer (Mr. Simon), Economic Development Coordinator (Mr. Hunt), Community Development Director (Ms. Barton), Housing Program Coordinator (Ms. Olson), Housing Supervisor (Ms. Schnitker), Management Assistant (Ms. Carrillo Perez), and Recording Secretary (Ms. Pappas). Guest: Stacie Kvilvang, Ehlers; Residents of Hamilton House 1. Future study session agenda planning — November 26, 2018 Mr. Harmening noted recruiting will start soon for boards and commissions. He also stated the council will meet with legislators on December 31d. There will also be more discussion on commercial service and liquor stores. Councilmember Mavity asked to add to the December agenda, the crime -free ordinance as it relates to the affordable housing strategy goal discussion. Mr. Harmening added the STEP board has requested to build a deeper relationship with the city, and they have reached out, so a discussion item will be added. Councilmember Miller asked when there will be a discussion about the climate action plan. Mr. Harmening stated no date has been set yet, but added this will be a discussion on the bigger picture perspective. 2. Annual TIF district management report Ms. Kvilvang and Mr. Hunt presented. They asked the council if they have questions or concerns regarding the status of the tax increment financing (TIF) districts within the city and what other information would be helpful to them regarding the city's TIF districts. Ms. Kvilvang discussed the staff report at a high level. The purpose of the report is to review the status, financial condition, debt management and future value of the city's tax increment districts. The report describes the revenues generated from each TIF district and presents recommendations to consider. Staff updates the report each year in order to have a resource when analyzing data or preparing financial information to ensure a comprehensive picture for the council/EDA or other end users of the information. Ms. Kvilvang reviewed two administrative recommendations: • pooling for affordable housing and; 0 pooling for redevelopment, for public improvements such as SWLRT Study Session Minutes -2- November 13, 2018 Councilmember Miller asked Ms. Kvilvang to describe how Ehlers determines when it is appropriate for the city to provide TIF for a development. Ms. Kvilvang stated once staff and Ehlers reviews the proposed development's financials and the developer answers various questions related to the project's financial challenges, there is a negotiating process between staff, Ehlers and the developer. Following those discussions, the recommended amount of TIF is determined. Councilmember Harris asked if pooling for housing can be used across the city. Ms. Kvilvang stated yes. Councilmember Rog asked about the public benefit as it relates to TIF, if the council discusses this in detail when looking at TIF districts, and if there is any value in being more specific here. Ms. Kvilvang stated the council has goals and objectives for its use of TIF that are reviewed relative to proposed projects. Mr. Hunt added staff scores TIF applications according to the minimum and desired qualifications outlined in the city's TIF Policy and then presents those findings in its staff reports to the EDA. Councilmember Rog stated she attended a developer city council workshop and heard from developers that they crave more specificity, and asked if there could be opportunity here around the city's public benefit expectations for TIF. Mr. Hunt stated developers are provided a copy of the city's TIF policy and are briefed on the EDA's current priorities, but added it is still at the EDA's discretion as to whether TIF is provided for various projects. Councilmember Rog asked what is considered underfunded within the City's housing programs. Ms. Barton stated there are things that need to be added, and opportunities to expand into the housing trust fund. She noted there will be more discussion around the programs staff is looking at, and programs the city can fund, and also additional funding that will be needed. Mr. Harmening added many resources will be necessary to fund affordable housing. Mayor Spano noted that Councilmember Brausen emailed him and stated he is in favor of looking at pooling for affordable housing, and thereby capturing dollars that would otherwise go to other jurisdictions and the county. Councilmember Miller asked if pooling is not used, what the alternative is. Mr. Harmening stated it will return to the various taxing jurisdictions. Councilmember Rog asked about the impact on the school district budget. Ms. Kvilvang stated there is really no impact to the school district, and the only impact is capital levies. Councilmember Mavity asked if any state legislative authority is needed to allow pooling. Mr. Harmening stated the city would not need any legislative authority in order to do pooling. Councilmember Hallfin asked if the city does pooling, how will it affect the budget and levy in future years. Ms. Kvilvang stated staff will need to do those calculations. Mr. Harmening added if the council wants to take the next step on pooling for affordable housing, staff will need to look further into this. Study Session Minutes -3- November 13, 2018 It was the consensus of the council to have staff further explore pooling as an option to help fund affordable housing and various qualified public improvement projects related to SWLRT in the city. 3. Affordable housing strategies and tools update Ms. Schnitker and Ms. Olson presented. Ms. Schnitker stated they will review strategies and tools to create and preserve affordable housing that the council had identified for further exploration, and ask if the council will support these strategies and tools as presented. Ms. Schnitker reviewed three proposed housing programs that preserve and stabilize NOAH properties and promote affordable homeownership in St. Louis Park including: • 4d tax classification program • Multi -family rental rehab program • Down payment and closing cost homeownership program Both Ms. Schnitker and Ms. Olson presented additional affordable housing strategies and tools to determine council's interest in further discussion: • Fair housing policy • Multi -family land trust • Affordable housing fee applied to new development • One for one replacement policy • Reduce building and permit fees for affordable housing development • Nondiscrimination of use of rent subsidies Councilmember Miller asked how the 20% figure came to be for the 4d program. He added he would like to get as many landlords on board as soon as possible. Councilmember Mavity stated the city will want landlords to enroll, and then they can say no. She added the bigger question and concern is most landlords own properties around the greater Twin Cities, and not only in one locale, and would St. Louis Park look to extend duration of affordability vs. the amount of units. Ms. Schnitker stated the city wants this as an incentive adding a commitment of 10 years might be too long, whereas at 5 years, landlords might be more willing to commit, thereby getting more participation. Councilmember Rog thanked staff for their work on this, adding she feels the 5 years is also too short, and the city should start higher at 10 years, and try it out, and then reduce it if no one participates. She asked if staff had talked with landlords about their interest more recently. Ms. Schnitker stated the Housing Justice Center had a committee that met with landlords, who indicated that a 40% tax cut on the rent restricted units wasn't a big enough incentive for owners to lower their rents to affordable rates, however she added there was some interest. Study Session Minutes -4- November 13, 2018 Councilmember Hallfin stated this discussion is the epitome of small bowl conversation and he would like to let staff do their job. He added if this is implemented city-wide, he would like to see numbers related to tax capacity and where the levy will land. Councilmember Brausen added he trusts staff to do their job, and added he liked the strategies in that they further the city's climate action plan as well. Councilmember Harris asked how many eligible rental units exist in the city and what sort of guarantees are there for residents. Ms. Schnitker stated the number of units that can be served by the program depends on how much funding the council wants to designate for the program, adding that for $50,000 the city could do 250 units, and then could build on this each year without increasing the annual budget. Councilmember Rog asked what happens to the agreement after a building is sold. Ms. Schnitker stated she does not know, but can research this and bring information back to the council. Councilmember Harris asked about the timeline and when it could be implemented. Ms. Schnitker stated for 2019, applications need to be in by March 31st It was the consensus of the city council to support the three housing programs noted in the staff report. Ms. Schnitker stated she will come back with another version and proposal and answer additional questions. Councilmember Rog asked if these programs are in the 2019 budget. Ms. Schnitker stated they can be included and implemented in 2019, adding it does not affect the general fund levy for 2019 since the programs will be funded through the housing rehab fund. Ms. Olson noted that staff is proposing to revise the Live Where You Work program by adding a larger amount for the deferred loan, up from $2500 to $15,000 for eligible applicants, and an additional $5000 for applicants who also work in the city. She stated in the best year of the program, there were only 4 participants, and the match from employers did not pan out, adding it is difficult to find affordable homeownership housing in St. Louis Park. She added the program does have the potential of assisting first time home buyers and reducing the cost of ownership. Councilmember Rog stated she is really supportive of looking at home ownership as a way to accumulate wealth, and there are many ways to approach this. She stated the city needs to be sure it is leveraging the maximum with its resources. Ms. Olson added there are also many additional items that go along with home ownership, so they will need to be sure those who purchase through the program are able to maintain the home as well. It was the consensus of the council to pursue this program. Study Session Minutes -5- November 13, 2018 Councilmember Mavity pointed out a concern about not doing enough for people at 30% AMI or lower, and the need to work harder to help folks at the lowest income levels. She stated this would be a policy correction —to shift to 30% AMI and target those with the greatest need. Ms. Schnitker stated staff can look at this further and also consider doing project -based vouchers. Councilmember Rog stated she agrees with the 30% AMI, but needs to understand more, adding her main concern is loss of housing. She added those renting Airbnb's in the city should be taxed. Ms. Barton noted Airbnb's are not permitted in St. Louis Park. Councilmember Rog stated people are still doing it, so they need to be taxed. Mayor Spano stated the council needs to give staff their priorities, and not get into discussion of the programs. Councilmember Miller stated that these are all great solutions, however he had not heard the council direct staff regarding affordable housing solutions for households at 30% AMI before. Councilmember Mavity stated rent subsidies are the easiest way to do this. Mayor Spano stated if the council says loss of affordable housing and 30% AMI is what they want staff to work on, then the council should not give them advice on the policies as they are not qualified to tell staff this. The council must give staff direction on the big bowl level and tell them what the council's highest priorities are, and then have staff come back with solutions. Councilmember Brausen stated the challenge is this is becoming about income redistribution, where we tax our residents, and take money from the rich and give it to the poor. He added he approves of the programs staff has presented and would like to work to get near the 30% AMI. Councilmember Hallfin reiterated his point that whenever the topic of affordable housing comes up, the issue is really about people not having enough money. He stated the council must speak with their legislators about the need to raise the minimum wage in the whole state of Minnesota, and at least attack the wage issues. Councilmember Mavity stated the minimum wage should be increased in St. Louis Park also. It was the consensus of the council to have staff continue to review NOAH preservation, and consider programs that would address the 30% AMI affordability. Communications/Meeting Check-in (Verbal) Councilmember Harris stated there is a meeting on Wednesday, November 14 regarding Walker Lake, at Central Cafeteria from 6:30 — 8 p.m., and all are welcome to attend. She also noted on Thursday, November 15 there is a conversation on Texatonka reinvestment, and the plans of a new property owner at the shopping mall to fill empty store fronts. The meeting is at 6:30 p.m. in the Aquila media room. Study Session Minutes -6- November 13, 2018 Mr. Harmening stated truth in taxation notices have been mailed out to residents. Councilmember Mavity asked about the Comprehensive Plan, if it needs to be presented to the Met Council at the end of the year, and then if the city still has 6 months to change zoning. Ms. Barton stated yes, that is correct, and added the Met Council is not rigid on the 6 month timeframe. Mr. Harmening asked how the council would like to handle the city manager evaluation this year. The council consensus was to do a lighter survey this year, and a more substantive one again next year. Councilmember Brausen stated he and others attended the National League of Cities Conference last week, and he would like to share with the council what was discussed at a future meeting. Mr. Harmening noted that bids for the Westwood Hills Nature Center came in under the $12.5 million budget, and more information will be coming at a future meeting. The meeting adjourned at 9:10 p.m. Written Reports provided and documented for recording purposes only: 4. Living streets policy update 5. 2040 Comprehensive plan highlights and background Melissa ennedy, City Clerk