7.0. HRSR 06-30-2004 ITEM # 7.
O
City of
Elk*1
River
MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Heidi Steinmetz, Assistant Director of Economic Development
DATE: June 30, 2004
SUBJECT: Discuss Redevelopment Plan for Downtown North of Hwy 10
Attachments
• Redevelopment Process
• Aerial Photo of Downtown Elk River
Issue
At the June 7, 2004 meeting, the HRA scheduled a visioning worksession to review and
identify priority redevelopment issues for downtown north of Hwy 10.
Redevelopment Process
The attached redevelopment process is currently being used for the Downtown
Revitalization Project. It is staff's recommendation that this process be used for developing
a plan for downtown north of Hwy 10. This process provides a framework for
redevelopment. Each phase may or may not be used, depending on the redevelopment
project.
Context/Foundation for Visioning
There are many issues to consider when participating in a visioning worksession. It is
important to begin with a"clean slate"in order to generate the largest number of ideas. It is
also important to consider recent planning efforts and current conditions of the area.
Recent Planning Efforts
Approximately twelve inquiries and opportunities for downtown north of Hwy 10 have
taken place within the last few years. One of the most significant inquiries was the Arrow
Building Center redevelopment project,which prompted the City Council and HRA to
recognize the need for a visioning workession for the area.
41110
Discuss Redevelopment Plan for Downtown North of Hwy 10
June 30,2004 HRA Meeting
Page 2 of 3
• Current Conditions
Land Use
Downtown north of Hwy 10 has a diverse mix of land uses,including industrial,
public/institutional, office, service,retail,and housing. What types of land uses should be
added or deleted to/from this mix?
Traffic
Traffic issues are another item to consider when planning for this area. The railroad tracks,
Hwy 10, and the Jackson Avenue/Hwy 10 and Main Street/Hwy 10 intersections are traffic
issues to consider. In addition,Mn/DOT has long-term plans for Hwy 10. City Engineer
Terry Maurer will present Mn/DOT's plans at the worksession. What traffic
improvements or changes do you see occurring?
Connections
Another item to consider is the manner in which this area connects to the rest of Downtown
Elk River and the city in general. The Downtown Revitalization Project and overall city
growth will impact the area. What improvements should be undertaken to connect this
area to downtown south of Hwy 10 and to the rest of the city?
Worksession Tasks
In all likelihood, this worksession will be the first of several to formulate a vision and a plan
for downtown north of Hwy 10. For this meeting, staff would like the HRA to focus on the
following two tasks:
• 1. Define the study area boundary
2. Express a long-term vision for the study area
The HRA must reach a consensus upon the completion of each task. In doing so, staff
recommends that the HRA consider the majority rule.
Define Study Area Boundary
During the recent Economic Development Strategic Planning sessions, discussion took
place regarding the question "What are the geographical boundaries of the Central Business
District?" There were several different answers. This emphasizes the importance of
defining the geographical boundary of downtown north of Hwy 10. Using the aerial photo
provided, draw the study area boundary.
Express Long-Term Vision for Study Area
Picture yourself driving along Jackson Avenue or Main Street north of Hwy 10 in fifteen or
twenty years. What do you see? Is it similar to what you see today or something completely
different? Once the HRA defines the geographic boundaries for the area, the HRA must
brainstorm and develop its vision for the area. Think about land uses, traffic, and
connections.
•
Discuss Redevelopment Plan for Downtown North of Hwy 10
June 30,2004 HRA Meeting
Page 3 of 3
• Steps for Next Worksession
Develop Concept Options
Based on the HRA's consensus of its vision, staff will develop two or three concept options
for this area. These options will be brought back to the HRA for consideration at a future
worksession for further refinement.
Review Research
Research of the entire downtown was completed for use in the 2001 Downtown
Redevelopment Plan,including several analyses. This research will be updated to reflect the
study area boundary and will assist the HRA when evaluating concept options.
Market Analysis
This analysis was completed by Maxfield Research,Inc. in April of 2001. The study
examines the potential for housing,retail and office development in Downtown Elk River
through 2010 and includes redevelopment recommendations.
Historical Significance Analysis
This analysis was completed in the Summer of 2001. The Heritage Preservation
Commission completed a survey for each downtown property for evaluation of historic
significance. This analysis should not be confused with the Historic Context Study,which
was completed in November of 2001 and did not include the area downtown north of Hwy
10.
• Building Condition Analysis
This analysis was also completed in the Summer of 2001. Staff building inspectors
completed a"windshield" survey for each property in the area. Each property was rated as
"good, fair or poor" condition.
Priority Principles and Projects
Priority Principles and Projects were developed for the entire downtown in June 2001 by the
HRA and Planning Commission for use in the 2001 Downtown Redevelopment Plan.
Discuss Barriers
The HRA and staff will discuss potential barriers to implementing the concept options.
•
City of
Elk
River
Downtown Revitalization Project
Redevelopment Process
The phases of Redevelopment Process include:
Phase I — Need Identification
The HRA has identified the Core Central Business District as the focus area for redevelopment. The
primary goal is to assure the long-term viability of downtown by making a connection to the rest of the
community and by utilizing the riverfront location. A communications strategy is developed to keep the
public informed of the project and to provide opportunities for public comment.
Phase II — Concept Development
Various design concepts have been developed which incorporates consistent themes from the previous 30
years of planning, current design objectives,and input from the development community. The design
concepts identify desired outcomes,potential redevelopment uses and design ideas, and designates potential
areas for redevelopment.
Phase III — Concept Refinement
In this phase the concept is tested for market and financial feasibility with the help of developers and market
specialists. The redevelopment concept is then refined,based on the financial and market analysis. This
phase includes an opportunity for the public to provide comments on the alternative design concepts.
Phase IV— Request for Proposals/Developer Selection
The City will be contacting qualified developers to discuss the redevelopment concept. Developers'
experience and financial capabilities are assessed. One or more developers are selected for further analysis
of the redevelopment feasibility. The City reviews general plans,including uses, design concepts,densities
and financial feasibility with developers.
Phase V— Development Agreement
Most of the planning is completed and a developer has been selected,but the project is still months from
construction. A pre-development agreement is negotiated with one or more developer,providing a period
of exclusive right for development. During this period the developer must refine plans and assess market
feasibility. In the development agreement,the developer secures a lease commitment and financing for the
project, completes land use and other regulatory issues. The development agreement occurs when the
developer completes contingencies and initiates land acquisition and building design.
Phase VI — Construction
All development agreements are final, acquisition has begun and even some initial demolition of existing
properties has occurred.
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City of &A Newsletter
Elk -�-�
� JUNE 2004
II ...1'S.Te f Enhancing Downtown Elk River's Role
As a Vital Retail,Commercial and Residential Area.
Q. What is happening with the Downtown River and to assure the public's involvement in the planning
Revitalization Project? and design stage.
A. On May 3, 2004, the Elk River Housing & Redevelopment Q. What is the anticipated schedule for
Authority(HRA) approved the key points of a final develop- the project?
ment agreement with MetroPlains Development for the Bluff A. The anticipated project schedule is as follows:
and Jackson Blocks. The HRA and developer are working
on the final development agreement which will be finalized • TIF District established—late summer 2004
upon the establishment of the Tax Increment Financing (TIF) Final development agreement—late summer 2004
District. This is expected in late summer 2004.
•
Q. What type of development is proposed for Land use approvals-fall/winter 2004
the Bluff and Jackson Blocks? • Property acquisition—summer/fall 2004
A. The Bluff Block is located on the southwest corner of Main St. Land clearance and construction—spring 2005
and County Rd. 42(Parrish Ave. Bridge).
The Bluff Block proposal includes a four Q. How will the project be funded?
story building with an estimated 68 A. The project will be funded primarily by
This Q&A newsletter
• underground parking stalls; about 10,000 MetroPlains'financing related to future
square feet of commercial space on the responds to some sales and rentals of residential and com-
first floor along Main Street; 52 for-sale or the recent questions mercial space. The City provides assis-
residential units and a riverwalk connec- about the Elk River tance through Tax Increment Financing
tion to a city park. (TIF) as necessary for public improve-
Downtown Revitalization ments. The City has retained financial con-
The Jackson Block is located on the Pro•ect. sultants to ensure that any assistance pro-
northeast corner of Jackson Ave. and vided to the developer is only the amount
Main St. The Jackson Block proposal that is justifiable and reasonable.
includes a three story building with an estimated 50 under-
ground parking stalls; 32 rental housing units and about Q. What is Tax Increment Financing (TIF)?
10,000 square feet of commercial space on the first floor A. TIF is a financing tool created by the Minnesota Legislature
along Main Street and Jackson Avenue. in the 1970s to help encourage development and redevel-
opment of underutilized and/or blighted properties. Under
Q. Which of the blocks will be developed first? TIF, property tax revenue equivalent to what the current
A. MetroPlains has agreed with the HRA's goal that the Bluff property generates continues to go to all taxing jurisdictions.
Block be redeveloped first before the Jackson Block. At this The portion of the tax revenue that results from the
time it is unknown how much longer after construction increased value of the new development, also called the
begins on the Bluff Block that construction will begin on the "tax increment," is used to pay site costs such as acquisi-
Jackson Block. It is possible that construction of both blocks tion, demolition, water, sewer and street improvements.
could be done simultaneously. Once the site costs have been paid, the tax increment goes
Q. What is the typical time frame for a to the taxing jurisdictions.
redevelopment project? Q. Why does the HRA need to establish
A. The planning process for a typical redevelopment project a TIF District?
can take up to two years. Construction then begins and that A. Minnesota State Statute permits cities to establish TIF
.
could take two years depending on the size of the project. Districts as a method to assist with redevelopment.
For a redevelopment project to work, it must not only meet Establishing a TIF District allows the HRA/City Council to
community goals, but also make sense from both a market capture the tax increment created by the new development.
and financial perspective. Elk River's project is unique due Then the HRA/City Council may use portions or all of the
to the complexities of developing adjacent to the Mississippi increment to provide financial assistance to the developer.
CITY OF ELK RIVER DOWNTOWN REVITALIZATION O&A NEWSLETTER JUNE 2004
The amount of the actual assistance provided is determined Q. How will the City address parking needs
by an analysis by the City's independent financial advisor. when the Jackson Block is developed?
The financial performance submitted by the developer will A. The City recognizes that since many of the businesses rely•
be analyzed to determine the gap or amount that would be on public parking, adequate and well located parking
necessary to make the development financially feasible. spaces are a key ingredient to the continued vitality of exist-
ing and new businesses in downtown. An important part of
Q. Will providing TIF assistance to the developer the project will be the development of replacement parking
impact my property taxes? by closing the King Avenue access to Highway 10 and
A. No. Because the tax increment comes from only the expanding the parking lot behind Kemper Drug for down-
increased value of the property and the pre-existing level of town businesses and employees. Preliminary designs indi
taxes still continues to be paid to local governments (city, cate approximately 50 additional spaces. The timing of the
county and school district), there should be no impact on replacement parking will be coordinated with the Jackson
your property taxes. Block construction.
Q. Once the final development agreement is
Q. Does MetroPlains own the Bluff Block signed, is the redevelopment a "sure thing"?
property? A. No, there will still be land use and other regulatory
A. MetroPlains is currently negotiating with the Bluff Block prop- approvals, securing of financing, and acquisition of property
erty owners. The negotiation process is a private process that must occur before the development is a"sure thing".
held between MetroPlains and the property owners. Q. How can I stay informed?
A. There are several ways you can stay informed:
Q. What happens if the property owners cannot Attend regular HRA meetings, which are held on the first
•reach an agreement with MetroPlains? g g '
Monday of each month at 5:00 p.m. at Elk River City Hall,
A. The City will encourage MetroPlains to reach a voluntary 13065 Orono Parkway. In addition, regular HRA meetings
agreement with property owners. If the developer and the are broadcast live and replayed on ERtV Channel 12.
property owner are unable to reach agreement, a mediator
will be used to assist with the process. If the mediation • Visit the Downtown Revitalization Project Update page of the
process is unsuccessful, the City could pursue the process City's Website located at www.ci.elk-rivermn.us
of condemnation, but it would only be used as a last resort. • Attend regular Rivers Edge Downtown Business Associations
meetings held on the second Wednesday of each month at
Q. How do the Jackson Block rental housing 8:00 a.m. at the Elk River Area Chamber of Commerce office.
rates compare to the current rental housing • Read the Elk River Star News. Articles on the project fre-
rates in the downtown? quently appear in the Star News and in the City's newsletter,
A. The Jackson Block rates will be$600 to$700 per month, The Current, which is distributed as a Star News insert every
which are slightly higher than the current rental housing other month.
rates in the downtown. Monthly rent payments will be paid in • Contact the Director of Economic Development Cathy
full by the tenant and not subsidized. In today's market- Mehelich or the Assistant Director Heidi Steinmetz at any
place, the Jackson Block must compete with market rate time. The Economic Development Department number is
developments for it to be successful. (763) 635-1040.
. a//
City of
Elk -�-1
River
13065 Orono Parkway
Elk River, MN 55330 •
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