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03-17-2004 HR MIN JOINT MTG CC JOINT MEETING OF THE ELK RIVER HOUSING & REDEVELOPMENT 411 AUTHORITY AND CITY COUNCIL HELD AT LIONS PARK CENTER WEDNESDAY, MARCH 17, 2004 Members Present: Chair Wilson,Commissioners Lieser,Motin and Toth Members Absent: Commissioner Thompson City Council Present: Mayor Klinzing,Councilmembers Kuester,Motin and Tveite City Council Absent: Councilmember Dietz Staff Present: Director Catherine Mehelich,Assistant Director Heidi Steinmetz,City Administrator Pat Klaers,Finance Director Lori Johnson,Director of Planning Michele McPherson,City Attorney Peter Beck,City Engineer Terry Maurer,Police Captain Brad Rolfe Also Present: Mary Ippel,Attorney and Jim Prosser,Ehlers&Associates 1. Call Meeting To Order Pursuant to due call and notice thereof,the meeting of the City Council was called to order at 6:38 p.m.by Mayor Klinzing. The Elk River Housing and Redevelopment Authority was called to order by Chair Wilson at 6:39 p.m. 2. Project Background Catherine Mehelich,Director of Economic Development provided an overview of the Downtown Revitalization project. Ms.Mehelich reviewed the project goals and the project timeline,stating that studies of the downtown area have been ongoing since 1970 and that the current phase of the revitalization project began in May 2001 with a joint meeting of the HRA,Planning Commission and the Downtown Rivers Edge Business Association. Ms.Mehelich stated that MetroPlains,the current developer,was selected in May of 2002. Ms.Mehelich reviewed the project components including the development concepts for the Bluff Block and Jackson Blocks. Ms.Mehelich reviewed the financing components of the project. She also reviewed the communication methods that staff and the HRA have utilized to inform the public of the project and keep them informed of the various project developments. Jim Prosser of Ehlers&Associates outlined the current status of the project and the various issues for discussion. Mr.Prosser stated that the City has elected to utilize a process that includes a lot of public participation and this evening's meeting is one more step in that process. This meeting provides the Council and the HRA an opportunity to receive information and no decision is being requested this evening. r Housing&Redevelopment Authority Page 2 March 17,2004 3. Jackson Block • a. Historic Significance Director of Economic Development Mehelich provided an overview of the process used to review the historic significance of the Municipal Utilities building as well as Jackson Square. In 2002,the Heritage Preservation Commission recommended that both the Municipal Utilities and the 641 Main Street building be restored and that Jackson Square should be retained as open space. At that time,the HRA accepted the recommendation of the Heritage Preservation Commission but directed staff to proceed with the areas outlined in the Preliminary Development Agreement. There were no issues raised by the HRA and Council regarding the historic significance update. b. Title City Attorney Peter Beck reviewed the issues surrounding the title to the development parcel of Jackson Square. Mr.Beck stated that the areas described in the deeds received by the City can receive title insurance,however,there is a small portion of the site that may have underlying interests by three additional parties. In order to obtain clear title, the City could pursue obtaining deeds from the three additional parties or proceed with a registration process to obtain clear title. Councilmember Tveite asked if staff had contacted the owners to determine how receptive they would be to providing clear title to the parcels. Mr.Beck stated that the map had only been received today and that property owner contact had not been made. Commissioner Larry Toth requested a clarification of the process. He requested information on who the owners were. Mr.Beck reviewed the ownership issues and reiterated that staff had not had an opportunity to contact the owners at this time. c. Purchase Price Mr.Prosser stated that one issue currently being discussed through the negotiations of the Development Agreement is when title would be transferred to the developer. He requested that Mary Ippel of Briggs&Morgan provide a clear discussion of the purchase price and the title issue. Ms. Ippel stated that the transfer of title typically will not occur until the financing is ready to close. She stated that timing of the transfer will be a key component of the Development Agreement. She stated that a purchase price had not been identified at this time and that the purchase price will likely be spread over both components of the project. d. Parking Replacement Director of Planning McPherson reviewed the past research regarding the amount of parking in the downtown area. Ms.McPherson reviewed the proposal to close King Avenue,remove the Municipal Utilities building,and to provide additional parking. She introduced Captain Brad Rolfe to discuss the parking monitoring project that had occurred recently in the downtown area. Mr.Rolfe stated the Police Department has been educating downtown employees and business owners regarding the four-hour 11111 parking regulations for the public parking behind Kemper Drug. The Police Department determined that two vehicles were disabled;six belonged to commuters and $:\MINUTES\2004\Housing&Redevelopment Authority\031704HRA&CC.doc Housing&Redevelopment Authority Page 3 March 17,2004 the remaining were multiple violations by downtown employees. Captain Rolfe stated • that violators were given warnings,not tickets. Mr.Prosser stated that during the individual stakeholder meetings for downtown tenants and business owners,staff received feedback regarding the parking proposal and felt that there is a strong sense of investment by downtown owners and tenants. He stated that successful downtowns never have enough parking but that the City needs to enter into a partnership with downtown owners and tenants in order to successfully enforce the parking rules. e. Construction Staging Areas Director of Economic Development Mehelich reviewed the illustration showing the construction staging areas. They include utilizing the commuter parking areas north of Highway 10 and north of the railroad tracks. Commission Toth inquired as to the parking requirements for the First National Financial Center,as they had offered one of their parking lots as an opportunity for temporary parking during the construction phase. Ms.McPherson reviewed the parking requirements for the First National Financial Center. 4. Regulatory Approvals Mr.Prosser introduced the subject of regulatory approvals indicating that several approvals would be required after an executed Development Agreement and prior to construction • commencing. He noted that no assurances have been given to the developer in regards to receiving the approvals from the City. Director of Planning McPherson reviewed the regulatory approvals that will be required from a land use perspective. They include,but are not limited to,Wild and Scenic requirements,setback variance,and an evaluation of the Downtown District Standards and potentially some type of plat. Mary Ippel reviewed the tax increment financing process,stating that it has not been determined if the projects will be located in one district or two. Staff is looking at either a housing or a redevelopment district. Ms.Ippel reviewed the public hearing notification and process timelines relating to tax increment financing. 5. Development Agreement Issues a. Connecting Bluff Block and Jackson Block Projects Mary Ippel reviewed the meeting which occurred between City staff and MetroPlains on March 10,2004. The purpose of the meeting was to review the components of the final Development Agreement,including financing,timing of construction,and connecting the Bluff and Jackson Block projects. This is an outstanding issue;the developer would like to have the projects move independent of each of other and staff is attempting to determine what the City is or is not willing to do. Input from the HRA and Council would be appropriate regarding this issue. Mr.Prosser stated that this issue should be resolved within the next two to three weeks. The consensus of the Council and HRA was that the two projects should be connected. S:\MINUTES\2004\Housing&Redevelopment Authority\031704HRA&CC.doc Housing&Redevelopment Authority Page 4 March 17,2004 b. Level of Assistance and Type Ms. Ippel stated that the level and type of assistance has not yet been determined. There are options for the HRA and Council to consider. The City's first choice is typically "pay-as-you-go"in which the developer"upfronts"the money and is reimbursed through the property taxes by the City. A second alternative would be"upfront bonds" issued on the full faith and credit of the City which then assumes an income stream from the project. In addition,there are additional income streams to be consider besides those generated by the project. Mr.Prosser stated that the request for upfront money is not unusual,considering that owner-occupied housing is included in the proposal. Typically,they create financing issues through the private sector. c. Concept Plan This issue was briefly touched on in Director of Economic Development Mehelich's overview of the project. Mr.Prosser stated that the concept plan will be tied to the development agreement and needs to be specific enough to get what the City wants without granting the regulatory approvals. Mr.Klaers stated that funding for the parking lot construction including King Avenue and the Municipal Utilities area will come from the revenue generated by the tax increment district. 5. Comments from the Audience Keith Holme,co-owner of Kemper Drug, stated that he was pleased with the parking enforcement attempts by the City. He noted that the Bank of Elk River employees park in the Jackson Square parking lot and felt that there was not enough parking for the bank. He stated he was concerned where those currently parking in the staging areas would then park. Mr.Holme stated that he would like the City to continue to do occasional parking enforcement. Gary Santwire,River's Crossing,stated that he had been hired by an Elk River corporation to attempt to understand the scope and components of the project. He stated that there are too many assumptions to evaluate the project at this time,but encouraged simultaneous construction of the Jackson and Bluff Blocks. He inquired if any part of Jackson Square had been vacated. City Attorney Peter Beck stated no. Mr.Prosser stated that the City is not conducting a typical redevelopment process and that the public is sharing the difficulties of the project during an open process and being able to participate as the process moves forward. Mayor Klinzing stated that it is frustrating when there is not enough time to thoroughly review the information. This has been a two-year process to date and it cannot be understood in two weeks or two months. Wendy Simonson,co-owner of Kemper Drug and President of Rivers Edge Downtown • Business Association,stated that Rivers Edge liked the initial proposal from MetroPlains which included the Brick Block and the Bluff Block,however,now that the proposal has S:\MINUTES\2004\Housing&Redevelopment Authority\03 1704HRA&CC.doc Housing&Redevelopment Authority Page 5 March 17,2004 changed to include Jackson Square,they did not feel it was appropriate. She stated that she • felt that 1.25 parking spaces for the apartments was too low. Cliff Lundberg,400 Jackson Avenue,stated that there is a perception by downtown tenants,business owners and property owners that a decision has already been made on the project. He stated that there is support of the Bluff Block project,but that the community is objecting to the Jackson Square project,as it will be a loss of public open space. Mr. Lundberg stated that the parking would not be adequate for stand-alone projects elsewhere and that the project should be held to the same standard in the downtown. He felt that there is no parking space for the new commercial customers that will be generated by the new proposal. Keith Holme stated that he would like assurances from the contractors that they would remain out of the customer parking areas. Mr.Prosser stated that this could be included as part of the Development Agreement. 6. Adjournment The joint meeting of the Elk River Housing and Redevelopment Authority and City Council was adjourned at 8:45 p.m. Respectfully submitted, 4111 Michele McPherson Director of Planning S:\MINUTES\2004\Housing&Redevelopment Authority\031704HRA&CC.doc