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8.1. PCSR 01-25-2022 Request for Action To Item Number Planning Commission 8.1 Agenda Section Meeting Date Prepared by Work Session January 25, 2022 Zack Carlton, Planning Manager Item Description Reviewed by The Mullins Group, Inc. Chris Leeseberg, Senior Planner  Concept Review for the Main and Gates Reviewed by redevelopment site, Case No. CR 22-01 Action Requested Provide the applicant with informal, non-binding, feedback regarding their proposed project at Main and Gates. Background/Discussion The Mullins Group has been working with staff and the Housing and Redevelopment Authority (HRA) on development of the HRA owned Main and Gates redevelopment site. The property includes seven parcels that have been acquired by the HRA and demolished to prepare the area for new development. The current proposal calls for a four-story, 55-unit market rate apartment building with approximately 4,000 SF of commercial on the ground floor, and seven townhome units. The apartment building would face main street and begin to establish and urbanized corridor between 169 and Main Street. The attached plans, elevations, and site renderings give a feel for the project and what it would bring to the area. Staff completed an initial review of the project and provided the applicant with a letter outlining initial comments and concerns, see attached. At first review, two concerns rise to the top, and warrant a closer discussion by the Planning Commission and City Council. First, due to the current zoning and performance standards, the project will likely need to be developed as a PUD. What are the Commissions thoughts on the overall fit to the site and location within the community? Second, the proposal is deficient on parking. The comment letter breaks down the current proposal and what we have reviewed in the past. What are the Commissions thoughts regarding the parking proposal and using street parking to address the deficit? Financial Impact None Attachments  Location Map  Applicant’s Narrative  Site Plans and Renderings  Staff Comment Letter The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity the mullins group January 10, 2022 Mr. Zack Carlson Planning Manager City of Elk River 13065 Orono Parkway Elk River, MN 55330 RE: Main and Gates Redevelopment Project Concept Review Dear Mr. Carlson: On behalf of the 4125 Sub S Corp team, thank you for considering us as your HRA’s project team for the redevelopment of the Main and Gates project area. We are excited about this opportunity and look for- ward to collaborating with the City of Elk River and various stakeholders on a unique project concept for this property. Please see the attached project narrative regarding the proposed mixed-use concept. Please note renderings and plans will be shared in a separate PDF file and updated renderings will be completed in the forthcoming weeks. 4125 Sub S Corp has assembled a team that has previous Elk River experience and is very familiar with the local Elk River real estate market and local development pattens in the community. Our ability to synthesize common goals and bring together community stakeholders will help define a plan to help the City of Elk River realize its vision for this redevelopment site. The proposed mixed-use project meets the city’s vision through infill redevelopment near Downtown Elk River while providing a vibrant streetscape with rental housing, first-floor commercial space, and connections to trails, sidewalks, and transporta- tion corridors. We look forward to discussing the project concept with your further and receiving your feedback. If you have any questions regarding our submittal, please do not hesitate to contact Matt Mullins at 612.281.6729 or mmullins@mullinsgroupinc.com. Sincerely, The Mullins Group, Inc. Matt Mullins President 4735 Spruce Way | Maple Plain, MN 55359 | 952.922.7310 | www.mullinsgroupinc.com Mr. Zach Carlson January 10, 2022 City of Elk River Planning Page 2 Project Overview 4125 Sub S Corp is proposing a mixed-use development featuring ground-level commercial space along Main Street (approximately 4,000 square feet) with three levels of rental housing above. The development will feature a main 4-story building with 55 units. However, the north portion of the site is planned for a second phase of townhomes should site acquisition proceed rd on the remaining single-family home along3Street NW. The following summarizes the proposed concept. Site plans and renderings are located in a separate PDF file attachment. Main & Gates Project Overview Lot Area (Acreage)1.73 Proposed Units55Units/Acre32 ZoningC2 (office)Proposed ZoningPUD Gross Sq. Ft.112,536Commerical Sq. Ft.3,967 # of Stories4Bldg. Height48'8" high parapet 45'8" low parapet SetbacksParking Stalls91 total Front - Main Ave.10'Underground51 Side - Gates 5'Surface41 Sides 15'Stalls/unit1.65 Unit Mix (subject to change)Est. Project Cost$14,300,000 1BR9 1BR + Den4Est. Ann. Property Taxes$137,500 2BR20 3 BR22 3BR Townhomes*8 * Future 2nd Phase The proposed land uses would provide a transitional buffer between the commercial land uses along Main Street and those residential uses to the north of the subject site. We believe the proposed mixed-use approach will complement all the surrounding land uses. Furthermore, the site has a potential to be a catalyst site for other redevelopment opportunities near the downtown area and the Main Street corridor. the mullins group Mr. Zack Carlson January 10, 2022 City of Elk River Page 3 The first-floor commercial space will take advantage of strong traffic counts along Main Avenue while providing easy accessibility to motorists that utilize Main Street as a roadway connection between Highway 169 and Highway 10 and/or Downtown Elk River. The commercial space will be neighborhood-oriented serving residents of Elk River while proving additional employment opportunities to area workers. Residents will enjoy pedestrian connectivity to Downtown Elk River and the proximity to trails and other commercial establishments while boasting walkabil- ity to the surrounding neighborhood. Zoning The subject site is currently zoned “C-2 Office District;” however multifamily housing or mixed useis not a permitted use in this zoning district. The Draft Comprehensive Plan identifies the site as “mixed use”. Therefore, the developer is proposing rezoningthe property to “PUD – Planned Unit Development District.” The PUD will provide creativity within the design and de- velopment concept and the proposed uses fall in-line with the proposed land use in the Com- prehensive Plan. Because the project is designed as an urban infill redevelopment the building has been brought up to the street to increase curb appeal and create a streetscape along both Main and Gates. As such, the proposed setbacks differ from more suburban style development. Setbacks for the property are as follows: Front lot (Main): 10 feet Side lot (Gates): 5 feet Sides (adjacent properties): 15 feet Comprehensive Plan A review of the Draft Comprehensive Plan supports the development of a mixed-use concept on the subject site. Key findings include: The promotion of infill development in the core areas in Elk River while increasing hous- ing choice and preserving the character of surrounding neighborhoods. Establish roadway, sidewalk, and trail connections. Expansion of pedestrian connections Encouragement of density in establishedareas Mixed-use land use identified in the future land use map the mullins group Mr. Zack Carlson January 10, 2022 City of Elk River Page 4 Height As proposed the project would be four stories and an estimated 45’ to 48’ pending the parapet. Parking The City of Elk zoning code identifies off-street parking for 2.5 stalls per unit for multifamily dwelling, one space of which must be completely enclosed. It is our professional opinion that this parking requirement is excessive as manycities have revised their zoning codes to 1 stall per unit + guest stalls. The zoning code also specifies one parking stall for every 200 square feet of floor area for retail space. Thus, a total of about 19 stalls would be needed for this parking ratio. As proposed, the project would have 91 total stalls, including 51 underground and 41 surface stalls. This results in a parking ratio of 1.65 stalls per unit; which we believe is sufficient to meet the needs of renters and commercial users on the site. Given this ratio, the developer will be requesting a variance for parking quotas on the site. Market Justification The City of Elk River has low vacancy rates and pent-up demand for rental housing. The most recent housing study for Sherburne County (2020) indicated the City of Elk River could support 288 market rate, 120 affordable, and 72 subsidized units over this decade. The Mullins Group, Inc. has found Elk River has a vacancy rate of less than 3% in 2021, a bal- anced market is considered a 5% vacancy; indicating strong demand for rental housing. We have also inventoried all the new rental construction along the Highway 10 and Interstate 94 corridor and have found new construction vacancy rates are 2.8%. At this time there are no other market rate rental developments formally proceeding in Elk River and we find the proposed project will help meet the need for housing in Elk River. The proposed project will feature larger unit sizes that will be attractive for larger households and a live-work environment as more households desire flexibility and more space since the pandemic. Renters are also seeking out locations outside the core Twin Cities as they seek more affordable housing options, good schools, more space, and flexibility. the mullins group Mr. Zack Carlson January 10, 2022 City of Elk River Page 5 Team Overview & Experience 4125 Sub S Corp is a family-owned real estate investment company focused on new construc- tion, value-add property acquisitions, and commercial management. We actively invest in multi-family properties and commercial lease projects. We are a privately held commercial real estate investment company, with over 25 years of ex- perience in development, new construction, management, and investment. With deep roots in the Minneapolis-St. Paul investment community and surrounding communities, we develop ground-up or buy and hold multifamily assets and commercial-leasehold properties with a focus on adding value. Our investment and management goals are long-term in scope, and we main- tain an active interest in both acquisition and partnership opportunities. The 4125 Sub S Corp real estate portfolio is outlined below. As illustrated in the table, 4125 Sub S Corp has investments of over $120 million to date. 4125 Sub S Corp is committed to Elk River for the long-term and would like to diversify our portfolio through additional investment in the Elk River and is excited about the opportunity to deliver a catalyst project on the Main and Gates property. 4125 LLC Real Estate Portfolio Yr. BuiltLocationProject NameType# Units/Sq. Ft.InvestmentProject Description 2022-20223Minneapolis9th Street CollectiveMR Rental, Commercial21, 90, 60$50MMixed-use Development 2022Austin, MNAustin City LimitsMR Rental56$3MHotel conversion to housing 2021HugoJack Pine PlaceMR Rental84$20MRental Townhomes 2019MahtomediMahtomedi FlatsMR Rental36$9MDeveloped, sold asset 2019LakevilleJuniper CommonsCommercial90,000$13MFlex space 1995Chippewa Falls, WIPumphouse CrossingMR Rental120$11MExisting Rental Acquisition 1980Black River Falls, WIBlack River HousingMR Rental116$7MExisting Rental Acquisition 1995Eau Claire, WIOxbox VillasStudent Rental56$7.5MExisting Rental Acquisition Total Investment$120.5M Matt Mullins – The Mullins Group, Inc. Mr. Mullins will assist with due diligence, entitle- ment support, and market feasibility. Matt has over 20 years of real estate, develop- ment, and market feasibility experience and has previously drafted the last two housing studies for the City of Elk River and recently completed the Sherburne County Compre- hensive Housing Assessment in 2020. Robin Mooney, Andy Wise, & Dean Dovolis – DJR Architecture. Ms. Mooney will pro- vide client relationship management and assist with assembling the architecture/design team and collaborationwith the team and City of Elk River stakeholders. Mr. Wise is the the mullins group Mr. Zack Carlson January 10, 2022 City of Elk River Page 6 project designer and will be the primary architect on the building design and function. Mr. Dovolis is the Principal at DJR and will be overseeing the design. Timing and Next Steps The 4125 Sub S Corpteam is excited about the opportunity to collaboratewith the City of Elk River, setting the vision to drive further investment in the neighborhood and surrounding areas. Our team of seasoned professionals will deliver a high-quality project that will be an amenity to the community and a catalyst for future growth. We look forward to discussing our development concept with you further. If you have any questions regarding our submittal, please contact us. Again, thank you for your consideration for our mixed-use development concept. the mullins group January 19, 2021 The Mullins Group, Inc. VIA EMAIL: mmullins@mullinsgroupinc.com Matt Mullins 4735 Spruce Way Medina, MN 55359 RE: Concept Review – Main and Gates Project Dear Applicant, Thank you for applying for a concept review. The submitted plans have been provided to all city departments to solicit initial feedback on your conceptual project. The following comments should be considered in preparing final plans butare not a comprehensive review of a formal submittal. General Comments: 1.The requested parking deviation was noted as a concern from multiple departments. Ordinance requires 138 parking stalls to support the residential use and 13 stalls to support the commercial space – for a total of 151 required stalls. Submitted plans include 91 parking stalls, or 60 stalls short of the ordinance standards. a.Staff and Planning Commission/Council have supported a reduced parking requirement in the past but has generally maintained a 2-stall per unit minimum. i.Excluding the townhomes, 110 residential stalls would be required at 2 stalls per unit. b.Assuming a 50% reduction to the commercial requirement, the current proposal provides residential parking at a rate of 1.5 stalls/unit. c.The potential for on street parking willneed tobe reviewed in more detail. 2.The proposed building height exceeds the maximum height outlined in the ordinance. This will need to be approved with a variance or through a PUD. rd 3.The existing water service line for 425 3 Street runs to Gates Ave through the former 326 Gates Avenue property (it was under the house that was demolished). This existing service rd needs to be considered for any construction at the corner of 3 Street and Gates Avenue. 4.There is an existing three-phase overhead line along Main Street that could impact the design and construction of a future project. 5.A six-foot wide sidewalk along all public streets will be recommended by staff. The project will also require ADA compliant pedestrian ramps at both entrances and at new crosswalk locations. Phone: 763.635.1000 www.ElkRiverMN.gov 6.The individual driveways accessing Gates Ave will not be supported by staff. Please amend the plans to show internal access from the site. rd 7.The sightlines at Gates/3 may not meet ordinance standards for a vision clearance triangle, or intersection visibility, please verify. a.Vision clearance triangle means the area of a corner lot bounded by the right-of-way lines and a line connecting the two points on the property lines 30 feet from the intersection of the property lines. 8.Stormwater treatment will be required for all new impervious (minus what the existing residential properties had prior to demolition). If impervious increase is net 1 acre or more, NPDES requirements will have to be met. 9.A landscaping plan will be required along with the final submittal. Thank you, and please let meknow if you have any questions. Sincerely, Zack Carlton, Planning Manager 763.635.1035