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04-05-2004 HR MIN MEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT ELK RIVER SENIOR HIGH LITTLE THEATER MONDAY, APRIL 5, 2004 Members Present: Chair Wilson,Commissioners Toth,Lieser and Motin Members Absent: Commissioner Thompson Staff Present: Director of Economic Development Catherine Mehelich,Assistant Director of Economic Development Heidi Steinmetz,City Administrator Pat Klaers,Recording Secretary Debbie Huebner 1. Call Meeting To Order Pursuant to due call and notice thereof,the meeting of the Elk River Housing and Redevelopment Authority was called to order at 5:00 p.m.by Chair Wilson. 2. Consider April 5,2004 HRA Agenda MOVED BY COMMISSIONER TOTH AND SECONDED BY COMMISSIONER MOTIN TO APPROVE THE APRIL 5,2004,HRAAGENDAAS PRESENTED. MOTION CARRIED 4-0. • 3. Consider Consent Agenda MOVED BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER LIESER TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 1. MARCH 1,2004 HRA MINUTES 2. MARCH 17,2004 SPECIAL MEETING MINUTES 3. CHECK REGISTER 4. FEBRUARY 2004 REVENUE/EXPENDITURE REPORT 5. FEBRUARY 2004 BALANCE SHEET 6. MARCH 2004 REVENUE/EXPENDITURE REPORT 7. MARCH 2004 BALANCE SHEET MOTION CARRIED 4-0. 4. Open Mike There was no one present for Open Mike. 5. Downtown Revitalization Project Update Director Mehelich stated that there is no new information with regard to arriving at a development agreement since the March 17,2004 joint meeting with the City Council. She • stated that Sid Inman of Ehlers&Associates and Vern Hanson of MetroPlains were present to discuss the project status. Ms.Mehelich explained that two financing applications remain Housing&Redevelopment Authority Page 2 April 5,2004 411 in process,including the City application to the MN Department of Employment& Economic Development (DEED) for Small Cities Development Program grant funds,and the second round application submitted by MetroPlains to the MN Housing Finance Agency for additional housing tax credits. Vern Hanson of MetroPlains stated that they have been working on the following items for the past 60 days: Additional funding,site assembly process, and selection of a"for sale" agent/team. He stated that he believes they have found a way to tie the Bluff and Jackson Block projects together. Larry Olson of MetroPlains stated that MetroPlains prepared to do the projects on a linked basis. He stated that City,DNR,Army Corps of Engineers,and MnDOT approvals will be required for portions of the Bluff and Jackson Block projects. He stated that property may be acquired prior to the start of construction.He stated that MetroPlains would like the Jackson Block to precede the Bluff Block. Sid Inman of Ehlers&Associates stated that he believed MetroPlains is getting closer to linking the two projects together. Commissioner Toth asked when a Development Agreement would be ready. Mr.Inman stated that the Development Agreement could be completed as soon as the City directs that it be done. Commissioner Toth asked if the Bluff Block could be done first. Mr.Inman stated that MetroPlains does not believe the Bluff Block can go without the Jackson Block in place. Mr.Inman asked that the HRA give a deadline for the Development Agreement. Commissioner Toth stated that it was his understanding that April 5th was the deadline for the Development Agreement. Mr.Inman stated that numerically,the Bluff Block stands alone,but that he was not sure that it would stand alone in terms of tax increment need, reduction in city fees,or marketing. Commissioner Motin asked if the contract with MetroPlains were not extended,if the City was free at this point to seek other proposals. Mr.Inman stated yes.Chair Wilson stated that he would prefer that the City operate without a pre-development agreement at this point. Larry Olson stated that it was not possible to complete a development agreement after the March 17th meeting due to scheduling. He stated that their attorney,Bob Dieke,is ready to move forward with the development agreement. Commissioner Motin stated that he would prefer to see Mr.Inman and MetroPlains continue to work together. He stated that he felt it was the right thing to do to develop the Jackson Block before the Bluff Block,since it will be tougher to do the Bluff Block. He stated that he questioned whether or not it was appropriate for MetroPlains to ask for additional financial incentives. Chair Wilson stated that he would like to see strong strides made in the next 30 days to get the development agreement wrapped up. Commissioner Toth stated that he is unsure if MetroPlains is entirely the reason for the hold up in the process and stated that Ehlers&Associates needs to be aware that the City is not willing to continue delaying the process much longer. Housing&Redevelopment Authority Page 3 April 5,2004 • Ms.Mehelich asked if it was the consensus of the HRA to continue to work primarily with MetroPlains or if they wished to open it up to others. Commissioner Toth asked Larry Olson of MetroPlains if the City continues to work with them,can they get the job done. Mr.Olson stated yes. Ms.Mehelich noted that the parameters for the final development can be set,but they cannot complete the final development agreement without the Tax Increment Financing District in place. Commissioner Toth stated that he would like to have the Chair and Vice Chair participate in the process. Chair Wilson stated that he felt the terms of the agreement should be completed in 30 days,or less,so that the City can decide whether or not to move ahead with MetroPlains. Commissioner Lieser suggested that an opportunity be provided for public opinion on the Development Agreement.Ms.Mehelich stated that the draft development agreement will be public information and that it will be presented at a regular HRA meeting. Commissioner Toth stated that once the document is presented to the HRA,it will be up to the Commissioners to discuss the merits of the agreement,and that the HRA is aware of what the public comment has been. Chair Wilson stated that he would encourage the public to obtain a copy of the Development Agreement when it is available and to contact the HRA with their comments. Mr.Hanson asked if Bob Dieke or Mary Ippel would be starting the process of drafting the Agreement. Ms.Mehelich stated that Mary Ippel would be drafting the documents which • will be sent to MetroPlains. Richard Hinrichs,owner of 641 Main Street buildings,asked if purchase agreements for acquiring property would be required before or after the final development agreement. Mr. Inman stated that it could go either way. Commissioner Toth stated that he would like to remind the legal staff of both parties that the HRA expects them to be expedient. Marcy VanValkenburg(business owner,Elk River Travel), stated that she felt that a public hearing should be held on the matter. She asked if the HRA is extending the pre- development agreement an additional 30 days. Chair Wilson stated that the preliminary agreement with MetroPlains expires today,April 5th, but that MetroPlains is still negotiating with the City and HRA. MetroPlains will no longer have exclusivity and that other developers could approach the City. Mr.Inman noted that if the City continues to work with MetroPlains,there would be at least two public hearings held during the process; one to set up the TIF District,and one for the selling of public land. It was the consensus of the HRA to proceed with drafting of Development Agreement terms with MetroPlains. City Administrator Pat Klaers stated that the City would hope to have the terms and • conditions of the agreement finalized within 30 days. Housing&Redevelopment Authority Page 4 April 5,2004 Commissioner Motin stated that staff and the HRA are available for questions and issues, but that they are not interested in further financial contributions by the City. Ms.Mehelich stated that she did not anticipate any new issues within the next 30 days. Commissioner Lieser asked if the public could utilize the Open Mike portion of the next HRA meeting to express their opinion on the Development Agreement. Ms.Mehelich stated that the Open Mike portion is reserved for issues that are not on the agenda and this issue would be a regular agenda item. Keith Holme, co-owner of the Kemper Drug building,asked when the public hearings would be held. Chair Wilson stated that the public hearing will be published in the Star News and that typically,the HRA will formally call for a public hearing to be held at a regular meeting 30 days prior. Mr.Inman noted that the HRA will know approximately 60 days ahead of time when the public hearing will be held and that the schedule will be approved by the City Council. Chair Wilson noted that the public can contact City staff as to when the public hearing will be held,as well. 6. Arrow Building Center Redevelopment Concept Director Mehelich reviewed the concept plan by Arrow Building Center for redevelopment including the existing Eagles Club building,former NAPA building,Arrow Building Center office building and two warehouse buildings. Arrow Building proposes to construct two new facilities;a 6,400 square foot office/showroom building and a 12,840 square foot warehouse building. Arrow Building Center has requested Tax Rebate Financing (abatement) from the City. John Weicht,contractor for the project,estimates the cost of acquiring the Eagles Club building and for NAPA building at$400,000,and cost of demolition and asbestos removal for the 5 buildings at$100,000. Arrow Building Center is requesting the City's and County's abatement assistance toward demolition costs. Ms.Mehelich noted that Arrow Building Center continues to consider relocation in Becker as well as other sites. Ms.Mehelich reviewed issues for the HRA to consider regarding this redevelopment project. Commissioner Motin asked if this proposal fit within the current zoning guidelines. Ms. Mehelich stated that the property is currently zoned C3 Highway Commercial and lumber yards are permitted as a Conditional Use,but that the applicant may request rezoning for a PUD (Planned Unit Development). Commissioner Toth stated that one of the buildings originally was a livery stable. Ms. Mehelich stated that the Heritage Preservation Commission will have an opportunity to review and comment on the redevelopment proposal. Chair Wilson asked if the tax abatement funds would be requested for demolition only. Mr. Weicht stated yes,and that this determination was made after working with the County Assessor regarding the value of the old buildings versus new construction. Commissioner Toth asked what type of site Arrow Building Center was looking for. Ms. Mehelich stated that they would like a 5-acre site but that they felt they could work with the proposed 3-acre site. Commissioner Toth stated that he felt there must be other sites available in the City. Housing&Redevelopment Authority Page 5 April 5,2004 • Chair Wilson asked how many employees there would be. Mr.Weicht stated that there will ultimately be 14 employees,but that 6-8 employees will be added initially with the new building. Commissioner Lieser asked how long Arrow Building Center has been on this site. Mr. Weicht stated that the site has been a lumber yard for approximately 50 years,but that it has changed ownership four times over the years. Ms.Mehelich stated that the HRA needs to determine if the proposed use meets the City's vision for the area north of Highway 10 downtown,and that the request for funding will require City Council approval.Commissioner Toth stated that redevelopment of this area would be moving in the right direction. Mr.Weicht stated that Arrow is a large company and that they may find a better site,but if the abatement is approved they feel they could make the site work. Ms.Mehelich stated that the$100,000 tax abatement would be split 50/50 by the City and County. She stated that she was not sure how long the pay-as-you go time period would be. Chair Wilson stated that he did not see any reason to not consider the proposal. Commissioner Motin stated that the City has not discussed what should happen north of the railroad tracks and that he was not sure if the proposed use would be compatible. Mr. Weicht stated that since Arrow Building generally serves large customers,the business would not generate a large volume of traffic and is not open on Saturdays. • Chair Wilson stated that he also felt the future of the area north of the railroad tracks should be discussed by the HRA. Ms.Mehelich stated that the HRA could discuss redevelopment needs for the area north of the railroad at a future work session. It was the consensus of the Commission to review a completed application by Arrow Building Center at the May 3rd HRA meeting. 7. Adjournment There being no other business,MOVED BY COMMISSIONER TOTH AND SECONDED BY COMMISSIONER LIESER TO ADJOURN THE MEETING. MOTION CARRIED 4-0. ``The meeting of the Elk River Housing and Redevelopment Authority adjourned at 6:18 p.m. e(Qi //e-1 � G`t tic w Debbie Huebner Recording Secretary