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07-11-1994 EDA MIN MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, JULY 11, 1994 Members Present: Vice-President Dwyer, Commissioners Dietz, Duitsman, Farber, and Holmgren Members Absent: President Gongoll, Commissioner Scheel Staff Present: Bill Rubin; EDA Executive Director, Phil Hals; Street/Park Superintendent 1. Call Meetinq To Order Pursuant to due call and notice thereof, the meeting of the Elk River Economic Development Authority was called to order at 7:03 p.m. by Vice-President Dwyer. 2. Consider July 11. 1994 Aqenda Item 11.1. - Conflict of Interest Issue, was added to the July 11, 1994, Economic Development Authority Agenda. COMMISSIONER HOLMGREN MOVED TO APPROVE THE JULY 11, 1994 EDA AGENDA AS AMENDED. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 3. Consider June 13, 1994 EDA Minutes COMMISSIONER HOLMGREN MOVED TO APPROVE THE JUNE 13, 1994 EDA MINUTES. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 4-0-1. COMMISSIONER FARBER ABSTAINED. 4. Open Mike No one appeared for this item. 5. Rnancial Update Bill Rubin reviewed the financial updated prepared by Lori Johnson: - Micro-Loan Fund - The Micro Loan Fund had a cash balance of $132,328.66 on June 30, 1994. Bill noted that as of this date, July 11, all July payments are current with the exception of Indy Lube. Block Grant Micro Loan Fund - This Fund had a cash balance of $5,463.21 on June 30, 1994. Tescom is current on its loan payment. EDA Minutes July 7, 1994 Page 2 6. Consider Interim Park Improvements for EDA Main Street Site Vice-Mayor explained that at the June 13, 1994 EDA meeting, the EDA asked that Phil Hals prepare cost estimates for filling and landscaping improvements for the Main Street Redevelopment site. In addition, costs for removing the improvements, should a buyer require their removal were requested. Phil Hals, Street/Park Superintendent, introduced a member of his staff, Chris Leeseberg who is a student at North Dakota State. Phil explained that Chris designed three sketches and created models with 3 inserts to display the proposals for the site. Phil indicated that excess fill material is available from the Jackson Road and School Street project. and would be furnished and delivered without cost. He stated that the only cost that would be incurred by the City would be approximately $3,900 for renting an dozer and compactor to put the fill material in place. Phil Has explained each of the 3 proposals as follows: Proposal A - Cost: Approx. $40,000 A banister-type railing next to the sidewalk at street-level, double steps going down, with a concrete enclosure at the bottom that could double as a warming house for winter skating. The oval at the base could be used as a skating rink in the winter and possibly a sand court or paved basketball court for use the rest of the year. Outdoor seating such as picnic tables would also be provided. Rve feet of fill would be added the existing site for this proposal and would blend with the apartments located next to the site. Handicap parking could be provided at the bottom and top of the site. Phil Hals stated that Cliff Skogstad, the City's Building Official, inspected the site and indicated in his memo that he was comfortable with filling the lower one- third of the building, but recommended consulting a structural engineer if the wall were to be filled higher. Phil Hals noted that he did not feel the cost of maintaining the area would be significant due to its size. Proposal B - Cost: Approx. $32,000 3 levels, with some type of amphitheater for community band, I}rts in the Park, etc. at the lower level. Commissioner Holmgren stated that the downtown business owners have expressed an interest in constructing a replica of the old bandshell. He explained that there are pictures at the Prairie House restaurant showing a hexagon-shape bandshell, approximately 14 feet in diameter. Phil Hals stated that the original bandshell was taken to the Engstrom farm and could be used to design a replica, if there was anything left of it. EDA Minutes July 7, 1994 Page 3 Proposal C - Cost: Approx. $28,000 The top level would be a larger area with a sidewalk cafe-type atmosphere, with grassy areas gradually sloping down to the bottom, and a trail winding down through the middle. Phil Hals explained that Cliff Skogstad felt that the bottom one-third of the wall was concrete and would be able to withstand a filled condition, but he was not as sure about the next level (12 feet in depth, up to street level), and recommended consulting a structural engineer. Phil noted that improvements to the outside of the cinema building, such as stucco, were not included in his cost estimates. Bill Rubin stated that a low interest loan could be provided to the owners of the cinema building for those types of improvements.' . Commissioner Holmgren stated that he felt Proposal A would be attractive to a potential buyer, with the concrete slab at the bottom. Commissioner Duitsman asked what the removal costs would be. Phil Hals stated that Proposal A would be more expensive than Proposal C, because of the concrete at the bottom level. He explained that the fill could be hauled away at a cost of $1.50 a cubic yard, for a total of approximately $5,000. He further explained that it would cost of approximately $7,500 to clean the site out all the way to the bottom. He noted that a buyer would likely not want all the fill taken out, so the $7,500 was a maximum removal cost. Commissioner Dwyer expressed interest in Proposal B with its terraced areas, and good view of the river at the sidewalk level. Members of the EDA thanked Chris for the excellent job he did on the sketches and models. Phil Hals indicated that the City must act in the next four to six weeks in order to take advantage of the fill. The EDA suggested that representatives of the Downtown Development Corporation and Chamber of Commerce review the proposals within the next two weeks, if possible. Phil Hals noted that if there is a consensus to go ahead with. some type of interim park, they could partially fill the hole and stockpile the rest of the fill until a plan is finalized. COMMISSIONER HOLMGREN MOVED TO RECOMMEND THAT THE CITY COUNCIL DIRECT STAFF TO BEGIN SITE PREPARATION FOR INTERIM PARK IMPROVEMENTS FOR THE EDA MAIN STREET SITE. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. EDA Minutes July 7, 1994 Page 4 7. Consider Business Park Task Force Issues Bill Rubin explained that the Business Park Task Force Subcommittee met with the principals of Panger/Benson Appraisal Professionals to discuss the appraisal of the proposed business park property. As a result of this meeting, a follow-up report was submitted by , which excluded expenses such as real estate tax, profit, and, provided for discount rates of 10.5 percent and 4.5 percent, respectively. Utilizing this approach, Panger/Benson indicates a fair market value of $283,947 ($.19 per square foot) at the 10.5 percent discount rate, and, $383,566 ($.25 per square foot) at the 4.5 percent discount rate. Bill Rubin indicated that Patrick Dwyer, Carol Mills, Hank Duitsman and himself, met with Tony Emmerich and Jay Johnson, representatives of Country Ridge Partnership on July 5, 1994. Country Ridge Partnership indicated that its price for the 34 acre Business Park was $556,750 ($16,375 per acre; $.376 per square foot). The Negotiating Committee indicated that it would recommend to the EDA a. price of $296,208 ($8,712 per acre; $.20 per square foot) for the site. Vice-President Dwyer explained that the difference in opinion was largely over the zoning of the property. The present owners of the property consider the highest and best use of the property to be Highway Business and have determined their asking price accordingly. He explained that based on the current zoning (Planned Unit Development with an underlying land use of 1-1, Light Industsrial), the market would command a lower value for the property. Vice-President Dwyer noted that in order for the City to break even when the lots are sold, the City's offer must be based on the property value, including cost of improvements. Country Ridge stated that its counter offer would not change from its original asking price. Vice-President Dwyer noted that the representatives briefly mentioned the possibility of litigation to pursue the Highway Business zoning issue. Vice-President Dwyer recommended that the EDA accept the proposal from Panger/Benson. Bill Rubin suggested that it may be appropriate for Council to implement Business Park Zoning at this time. Commissioner Holmgren indicated that it was his understanding that the rezoning issue had been before the City Council previously, but it was put off because Councilmember Scheel was absent, and a four-fifths vote was needed for rezoning. COMMISSIONER DUITSMAN MOVED TO ACCEPT THE PANGER/BENSON APPRAISAL REPORT. COMMISSIONER HOLMGREN SECONDED THE MOTION~ THE MOTION CARRIED 5-0. Discussion followed regarding the best use of the property in question and whether or not the property should be rezoned at this time. Commissioner Duitsman stated that he felt any rezoning should be delayed until the Comprehensive Plan Steering Committee has completed its update of the Comp Plan. EDA Minutes July 7, 1994 COMMISSIONER HOLMGREN MOVED TO REFER THE BUSINESS PARK PROPERTY ISSUE TO THE BUSINESS PARK TASK FORCE COMMITTEE FOR FURTHER DISCUSSION. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. Page 5 Commissioner Farber left the meeting at this time (7:50 p.m.). 8. Request Joint Meetinq with City Staff and Utilities Commission COMMISSIONER HOLMGREN MOVED TO AUTHORIZE STAFF TO ARRANGE A JOINT MEETING OF THE EDA, CITY STAFF AND UTILITIES COMMISSION THE FIRST WEEK OF AUGUST. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 9. Discuss July 14, 1994 Comp Plan Steerinq Committee Meetinq on Elk River's Commercial Sector Bill Rubin reviewed a map, identifying uses in the Central Business D~strict (CBD). He stressed the importance of reinvestment in the CBD and the City's/EDA's/HRA's role in facilitating redevelopment. Bill cited TIF grants or redevelopment grants, assembling land in anticipation of redevelopment, and a willingness by the City to absorb some redevelopment costs. Bill explained that it is the City's responsibility to explore possible sources of revenue, but cautioned that public dollars that are not repaid or are left on the table as a result of a future redevelopment project should not burden the typical taxpayer. Discussion followed regarding properties located on the same block as the Sherburne County administration building. Discussion of TIF issues then followed. Vice-President Dwyer questioned whether or not the City would be willing to accept TIF districts and possibly lose state aid. Bill Rubin stated that a portion of the joint meeting with the Utilities Commission could be set aside to discuss issues in the Central Business District and potential City funds which could be utilized to invest in redevelopment. In response to Commissioner Holmgren asked about creating a Port Authority. Bill Rubin explained that the Economic Development Authority concept evolved due to the increasing number of requests for Port Authority, which requires special legislation. A Port Authority operates under the same set of guidelines as the EDA, with the ability to use TIF districts and issue industrial revenue bonds, but that an EDA operates under greater local control and reports directly to the City Council. Commissioner Duitsman indicated that he was not aware of any funds that were available at this time to use for redevelopment projects. Bill Rubin -stated that he was aware there is a long list of projects that need to be completed in the City and suggested that they be prioritized. Bill stressed the importance of a vibrant Central Business District in order to have an economically healthy community. Commissioner Holmgren stated that he feels that the downtown district has been ignored, as far as improvements are concerned. He also feels that a high priority should be given to the issue of Highway 10 and East Main Street. and EDA Minutes July 7, 1994 Page 6 Gates Avenue and East Main Street, noting the traffic problems there with School Street shut down. He also mentioned Railroad Drive as a problem area. Commissioner Duitsman stated that there should be funds available in the future due to development that is taking place right now. Commissioner Holmgren indicated that a resident has expressed concern that some of the new buildings on East Main Street were built too close to the street, and there may not be enough right of way to widen the street in the future. Bill Rubin stated that those projects were implemented under current zoning and setback standards. 10. Discuss Minnesota Housinq Finance Aoency's Rental Rehab Proqram (Commissioner Holmgren left the meeting at this time - 8:20 p.m.) Bill Rubin stated that he has received information that the new owners of the Lake Orono Estates are interested in rehabing the apartments. He explained the Minnesota Housing Finance Agency (MHFA) as a potential source of financing to cover 75 percent of the costs. Bill noted that there are rent and income restrictions which ensure that the project benefits low and moderate income wage earners. It was the consensus of the EDA to table discussion on this issue until the new owners of Lake Orono Estates contact the City directly, and more information on the MHFA program is received. The City Attorney noted that this property has received some assistance in the past, in the form of an extension for payment of connection charges over a period of years. 11. Conflict of Interest Issue Bill Rubin noted that at the June 20, 1994 City Council meeting, the Council took action to amend the of the Conflict of Interest Ordinance by deleting the section that prohibits board members or commissioners from acting on behalf of another individual in a matter before City Council, Planning Commissioner, Park Board, etc. However, there was no action on the issue of individuals serving on boards and commissions who had direct business dealings with the City of Elk River. Peter Beck explained that the Council directed him to prepare an amendment to the Ordinance to make it consistent with State law. There being no further business, COMMISSIONER DIETZ MOVED TO ADJOURN THE MEETING. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 5-0. EDA Minutes July 7, 1994 Page 7 The meeting of the Elk River Economic Development Authority adjourned at 8:28 p.m. Respectfully submitted, be/;-&P 1)1e~ Debbie Kleckner Recording Secretary