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09-04-2018 CCM SPECIAL JOINT HRA MINSpecial Joint Meeting of the Elk River City Council and Housing and Redevelopment Authority Held at Elk River City Hall Tuesday, September 4, 2018 Members Present: Mayor John J. Dietz, Councilmembers Jerry Olsen, Matt Westgaard, Nate Ovall, and Jennifer Wagner; Chair Larry Toth, and Commissioners Denny Chuba, Michelle Eder, and Louise Kuester Members Absent: None Staff Present: Economic Development Director Amanda Othoudt, Economic Development Specialist Colleen Eddy, City Administrator Cal Pormer, and Recording Secretary/Sr. Administrative Assistant Jennifer Green 1. Call Meeting to Order Pursuant to due call and notice thereof, the meeting was called to order at 5:45 p.m. 2. Downtown Redevelopment Project Ms. Othoudt presented the staff report. Chair Toth noted the school district building was not included in the report Ms. Othoudt indicated the school district building did not qualify for the substandard test but doesn't necessarily need to as over 70% of the buildings in the proposed TIF district qualified as substandard. Tom Kolar, 708 Main St. NW representing building K — spoke on behalf of the owners of the building and stated they don't wish to put any more funds into it but they realize not doing so would make it difficult to sell a historic building built from 1903. He stated the building owners would welcome some type of program. Steve Johnson, 309 Jackson Ave. NW representing building W (Antiques Downtown) stressed the need for on -street and on-site parking. Frank Galli, 315 Jackson Ave. NW representing building U (Pompeii Pizza)— stated he has been owner of his building since the previous downtown re -development and asked if this proposal is all just to assist in selling the school district building. He stated he doesn't think downtown needs more density to be viable and stated his building has two profitable and viable businesses mainly in part to his recent building renovations. Ms. Othoudt stated the main purpose of this redevelopment concept was not just to sell the school district building but also to take advantage of the opportunity to City Council Minutes September 4, 2018 Page 2 review the entire downtown as a potential redevelopment project to find the highest and best use of all downtown parcels, and include alleviating parking pressures in some part by construction of a public parking ramp, thereby allowing the opportunity for more people to patronize businesses downtown. Alec Hendrickson, an 8 -year employee of Pompeii Pizza, requested the city consider moving the Farmers Market away from the downtown area and out of the parking lot, stating its presence takes away customers from their businesses on Thursdays and causes issues with customer parking. Mr. Galli stated the only parking issues were on Thursdays during the Farmers Market. Debra Leedahl, owner of 323 Jackson Ave. representing building T (Kemper Drug)— asked the HRA and Council what the next step would mean to her business. She stated she would personally love to receive funds to assist her in making improvements to her building but wasn't sure about a parking ramp or dense housing with retail space. She stated she was open to hear discussion of developer ideas and wondered if the city could still veto any proposals. Ms. Othoudt explained should the city move forward with this project, an assumable option agreement would afford the city some sort of site control. She stated staff recommends establishing a Request for Qualifications (RFQ) process instead of a Request for Proposals (RFP) from developers to allow them to establish their vision, strategy, and market themselves to the city to see if they're qualified to do a redevelopment project downtown. After receiving those RFQs, the city could determine what, if any, of those submittals meet the standards the council/HRA wishes to see in the downtown. Then the city would establish a development agreement and move forward with the project. She stated the council and HRA have the ultimate authority to determine what occurs and can dictate public input. Councilmember Ovall clarified that if a developer wishes to purchase the property they may do so and not require the surrounding property owners to be included in their project. Commissioner Chuba stated it wasn't up to the HRA to tell a property owner what to do with their building but the business owners decide if they wish to take part in the creation of a TIF district. He also expressed concerns with businesses remaining operable and viable during any construction or remodeling phases. Aaron Smith, 212 Norfolk Ave NW — stated he thinks the downtown buildings are a valuable asset and by removing them the city loses character in the area. He asked questions regarding TIF funds and how it works for the business owners. Ms. Othoudt provided a quick TIF overview. She also stated tax increment from the district would be used to create a financing program for the Jackson Street properties located within the district to make improvements to their buildings. She indicated a NAW City Council Minutes September 4, 2018 Page 3 study of the historic nature completed by the HRA and Historic Preservation Committee analyzed the downtown buildings in 2002 but they were not considered historic according to the National Park Service standards. She stated the next steps would be to work on obtaining site control using an assumable option agreement with a developer who would pay that cost later in the project. Sending out a RFQ for developers to share their vision and suggest their goals based on the frameworks/plans we have established would afford the city the flexibility and follow our requirements of what we would like to see in the downtown. Mr. Galli asked for comments regarding the redevelopment from 15 years ago and if it was successful. Mayor Dietz stated he felt the redevelopment from 15 years ago was a good idea but the recession hit as soon as it began. He stated some recently purchased both buildings and they are viable, and the main goal for both of those buildings was to bring more people downtown. Perhaps it wasn't a total success at the time but it seems now to be a successful project. Mr. Galli stated the density has helped a lot. He doesn't think the downtown needs more density. He stated there will be considerable costs to business owners even if they receive funds to fix their businesses and how would the business remain viable during construction. Mayor Dietz stated that would be something to consider and businesses would need to plan for during this project. Chair Toth asked Mr. Galli if he felt there was adequate parking in downtown today. Mr. Galli stated aside from the Thursdays when the Farmers Market occupies the entire Jackson Avenue parking lot, he does feel there's adequate parking downtown. Chair Toth asked the question because he's hearing from people stating there aren't enough parking spots as employees are using them. Ms. Othoudt stated this project could potentially help with parking concerns but noting the time constraints, she asked if the council had enough information to move forward with the process of obtaining site control through an assumable option agreement and send out an RFQ to seek requests from developers to provide their vision and goals. Councihnember Wagner stated she was not sold on the redevelopment project idea and stated there were too many unanswered questions. She stated a more concrete direction was required by city members to determine what they want this area to look like and not receive that information from a developer. Commissioner Chuba supports going to the next step as proposed by Ms. Othoudt, noting they weren't developers. PRMERII RI Ih1ATU I T City Council Minutes Page 4 September 4, 2018 Mayor Dietz stated he agreed with Commissioner Chuba and would be open to receiving suggestions from a developer. Commissioner Chuba requested the affected property owners provide their ideas to the city with what they feel would be the best option for them. It was the consensus of the HRA and City Council to continue this discussion at a later date. 3. Adjournment There being no further business, the meeting was adjourned at 6:29 p.m. Minutes prepared by Jennifer Green. Tina Allard, City Clerk P0VEe[e or 1 ATURE