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03-17-2004 CC MIN - JOINTJOINT MEETING OF THE ELK RIVER HOUSING & REDEVELOPMENT AUTHORITY AND CITY COUNCIL HELD AT LIONS PARK CENTER WEDNESDAY, MARCH 17, 2004 Members Present: Members Absent: Ci~ Council Present: City,- Council Absent: Staff Present: Also Present: Chair Wilson, Conmxissioners Lieser, Nfom~ and Toth Commissioner Thompson blayor l,~linzing, Councilmembers Kuester, Modn and Tveite Councilmember Dietz Director Catherine Mehelich, Assistant Director Heidi Steinmetz, City, Administrator Pat Klaers, Finance Director LonJohnson, Director of Planning b[ichele McPherson, City, Attorney Peter Beck, City Engineer Terry.' Maurer, Police Captain Brad Rolfe iv[aU' ippel, Attorney and Jim Prosser, Ehlers & Associates '2. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Ciw Council was called to order at 6:38 p.m. by Mayor I~dinzing. The Elk River Housing and Redevelopment Authority was called to order by Chair Wilson at 6:39 p.m. Project Background Catherine Mehelich, Director of Economic Development provided an overview of the Do~vntown Revitalization project. Ms. Mehelich revie~ved the project goals and the project Umeline, stating that studies of the doxvnto~vn area have been ongoing since 1970 and that the current phase of the revitalS, zadon project began in Mav 2001 with a joint meeting of the HtL5, Planning Commission and the Downtown Rivers Edge Business Association. Ms. Mehelich stated that MetroPlains, the current developer, ~vas 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 H2~5 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. NLr. 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. Tlzis meeting provides the Council and the HtLk an opportunity., to receive int'ormadon and no decision is being requested this evening. Housing & Redevelopment Authonu, March 17, 2004 3. Jackson Block Page 2 a. Historic Significance Director of Econormc 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 Preserw'ation Commission recommended that both d2e Municipal Utilities and the 641 Main Street building be restored and that Jackson Square should be retained as open space. At that dine, the HtL~_ accepted the recommendation of the Heritage Preservat/on Comrmssion but directed staff to proceed with the areas outlined in the Preliminary, Development Agreement. There ~vere no issues raised by the HtL5 and Council regarding the historic significance update. b. Title Ciu, Attorney Peter Beck reviewed the issues surrounding the dtle to the development parcel of Jackson Square. ]Mr. Beck stated that the areas described in the deeds received by the City can receive dtle insurance, however, there is a small portion of the site that may have underlying interests by three addidonaI pardes. In order to obtain clear dde, the City could pursue obtaining deeds from the three additional parties or proceed with a registration process to obtain clear dde. Councilmember Tveite asked if staff had contacted the oxvners to determine ho~v receptive thev would be to providing clear tide to the parcels. Mr. Beck stated that the map had onlv been received today and that property o~vner contact had not been made. Commissioner Larry Toth requested a clarification of the process. He requested information on who the owners ~vere. Mr. Beck revie~ved the otvnership issues and reiterated that staff had not had an opportunity to contact the owners at this trine. c. Purchase Price Mr. Prosser stated that one issue currendy being discussed through the negotiations of the Development Agreement is when dtle ~vould be transferred to the developer. He requested that Ma~ Ippel of Briggs & Morgan provide a clear discussion of the purchase price and the t/de issue. Ms. Ippel stated that the transfer of dde typically ~vill 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 urne 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 do~vntown area. Ms. McPherson reviewed the proposal to dose King Avenue, remove the Municipal Utilities building, and to provide additional parking. She introduced Capt:un Brad Rolfe to discuss the parking monitoring project that had occurred recenflv in the downtown area. bit. Rolfe stated the Police Department has been educating downto~vn employees and business o~vners regarding the four-hour parking regulations for the public parking behind Kemper Drug. The Police Department determined that txvo vehicles ~vere disabled; six belonged to commuters and S:x,MINUTESN2004~Council Minutes',,03171)4HIL\ & CC.doc Housing & Redevelopment :\utho~-i ,w Page 3 March 17, 2004 the remaining were multiple violations bv downto~vn employees. Captain Rolfe stated that violators were given warnings, not tickets. Mr. Prosser stated that during the individual stakeholder meetings for do~vntown tenants and business o~vners, staff received feedback regarding tine parking proposal and felt that there is a strong sense of investment by doxvnto~vn owners and tenants. He stated that successful downto~vns never have enough parking but that the City; needs to enter into a partnership ~vith downto~vn o~vners and tenants in order to successfully enforce the parking rules. e. Construction Staging Areas Director of Economic Development Mehe[ich reviewed the illustration sho~ving 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 par-king requirements for fine 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 par'king requirements for the First National Financial Center. 4. Regulatory Approvals Mr. Prosser introduced the subject of regulato~ 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 regulatoO' 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 Downto~vn District Standards and potentially some type of plat. Ma0' Ippel revie~ved the tax increment financing process, stadng 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 fimelines reladng to tax increment financing. 5. Development Agreement Issues a. Connecting Bluff Block andJackson Block Projects Mary, Ippei reviewed the meeting which occurred betxveen Cit7 staff and MetroPiains on March 10, 2004. The purpose of the meeting xvas 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 ~vould like to have the projects move independent of each of other and staff is attempting to determine what the CiU, is or is not willing to do. Input from the H2R~5 and Council would be appropriate regarding this issue. Mr. Prosser stated that this issue should be resoNed within the next two to three weeks. The consensus of the Council and HtL5 xvas that the t~vo projects should be connected. S:~MINUTI:'S\,201)4~xCouncil Minutes\031704HR~ & CC.doc Housing & Redevelopment Authori~ March 17, 2004 Page 4 b. Level of Assistance and Type Nfs. Ippel stated that the level and type of assistance has not yet been determined. There are opdons for the HP~A_ and Council to consider. The Ciw's fzrst choice is ~pically "pay-as-you-go" in which the developer "upfronts" the money and is reimbursed through the proper~ taxes by the Ci~. 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 addiuonal income streams to be consider besides those generated bv the project. biz. Prosser stated that the request for upfront money is not unusual, considering that oxvner-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 regulatoU' approvals. Mr. IClaers 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 daat the Bank of Elk River employees park in the Jackson Square parking lot and felt that there ~vas not enough par ~king for the bank. He stated he was concerned where those currently parking in the staging areas would then park. NIZ. HoLme stated that he ~vould like the City to continue to do occasional parking enforcement. Gary, Sant~vire, River's Crossing, stated that he had been hLred bv an Elk Pdver 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. Ci~ Attorney Peter Beck stated no. 2viz. Prosser stated that the City is not conducting a ~pical 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 forxvard. Mayor I<]inzing 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 t~vo xveeks or two months. Wendy Simonson, co-oxvner of Kemper Drug and President of Rivers Edge Downtovcn Business Association, stated that Rivers Edge lSked the initial proposal from MetroPl:dns which included the Bnck Block and the Bluff Block, however, now that the proposal has S:X, MINUTES'\2004¥]ouncit Minutes',03lTI)4141L\ & CC3oc Housing 8< Redevelopment Authority March 17, 2004 changed to include Jackson Square, they did not feel it was appropriate. felt that 1.25 parking spaces for the apartments was too iow. Page 5 She stated d~at she Cliff Lundberg, 400 Jackson Avenue, stated that there is a perception by downtown tenants, business o~vners and propertF' 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 communi~, is objecting to the Jackson Square project, as it ~vill be a loss of public open space. Mr. Lundberg stated that the parking ~vould not be adequate for stand-alone projects elsewhere and that the project should be held to the same standard in the do~vnto~vn. He felt that there is no parking space for the new commercial customers that ~vill be generated by the ne~v proposal. Keith Holrne stated that he would like assurances from the contractors that they \vould remain out of the customer par-king areas. Mr. Prosser stated that this could be included as part o£ the Development Agreement. 6. Adjournment The joint meedng of the Elk River Housing and Redevelopment Authority and Ci~' Council was adjourned at 8:45 p.m. Respectfully submitted, Mschele McPherson Director of Planning S:\MINUTES',201i4~¥Zouncil Minutes'\03171)4HRA & CC.doc