6.3. SR 11-20-2006
City of Elk River
REQUEST FOR COUNCIL ACTION
Agenda Section Meeting Date
Community Development November 20, 2006
Item Number
6.3.
Prepared by
Scott Clark, Community Development
Director
Reviewed by
Item Description
Request by the HRA of The City of Elk River for Approval of a
Redevelopment Plan for Downtown Elk River Redevelopment
Pro"ect Dated November 1,2006 - Public Hearin
Introduction
Pursuant to Minn. Stats. Section 469.001-.047, (Housing and Redevelopment Authority Act), the
City's Housing and Redevelopment Authority must adopt a redevelopment plan prior to any
action that would result in land acquisition and other types of traditional redevelopment
objectives. The process in adoption includes:
1. Acceptance by the Housing and Redevelopment Authority of the Plan (affirmed on
November 6, 2006).
2. Planning Commission action to make a finding regarding land use consistency
(confIrmed on November 14, 2006)
3. Approval by the City Council
Discussion
The intent and purpose of the redevelopment plan is stated in attached memorandums dated
November 1, 2006 to the Housing and Redevelopment Authority, and a separate memorandum
dated November 14, 2006 to the Planning Commission. The key points of this plan are three-
fold:
1. The plan meets the statutory minimums to allow the HRA to acquire the property known
as the "Main Street Mall". This action is anticipated to be considered by the Housing and
Redevelopment Authority in December.
2. The plan memorializes past HRA actions regarding the Jackson Place and the Bluffs of
Elk River transactions.
3. The intention of this plan is to serve as a "placeholder" and will be replaced when a new
plan is completed by the recently assembled Downtown Task Force and City Council
action on the same.
4. The Council in its approval is incorporating the statutory findings which include: 1) the
land in the redevelopment area would not be made available for redevelopment without
the financial aid sought; 2) the redevelopment plan for the redevelopment area in the City
will afford maximum opportunity consistent with the needs and locality as a whole for the
redevelopment area by private enterprise; and 3) the redevelopment plan conforms to the
general plan for the development of the City as a whole.
Downtown Redevelopment Plan
November 20, 2006
Page 2
Financial Impact
Pursuant to the Statutes, the plan must contain a budget for implementation. Attached with the
plan is a budget for the total cost of acquiring the Main Street Mall in Phase II, and also
incorporates the amount of tax increment assistance for the Phase I properties Gackson Place and
the Bluffs of Elk River). It should be noted that the budget was increased from the amount
shown to the Housing and Redevelopment Authority by approximately $90,000, which consists
of the amount of capitalized interest that will have to be paid on a S-year contract for deed,
anticipating a $720,000 acquisition price. It is anticipated that the acquisition would happen
through the Housing and Redevelopment Authority's fund balance and through their annual levy
with no fees coming directly from City funds.
Attachments
· Redevelopment Plan for Downtown Elk River Redevelopment Project dated November
1,2006
· Memorandum to the Housing and Redevelopment Authority dated November 1,2006
. Memorandum to the Planning Commission dated November 14,2006
Note: Phase III area was expanded at the Housing and Redevelopment Authority meeting
and budget was modified to show interest fmancing.
Action Requested
Approval of "Redevelopment Plan for Downtown Elk River Redevelopment Project dated
November 1, 2006 by the Housing and Redevelopment Authority of the City of Elk River,
Minnesota", including the findings of fact as established within the plan.
Council Action
Motion by _
Second by _
Vote
Follow Up
S:\Community Development\Scott Clark\HRA \112006 CC DT Redev memo.doc
REDEVELOPMENT PLAN
FOR
DOWNTOWN ELK RIVER REDEVELOPMENT PROJECT
DATED NOVEMBER 1,2006
HOUSING AND REDEVELOPMENT AUTHORITY OF THE
CITY OF ELK RIVER, MINNESOTA
TABLE OF CONTENTS
I. INTRODUCTION AND LEGAL BASIS ................................................................... 1
A. Intent ................... ................................ ............................. .................... .............. 1
B. Statement............................................................................................................. 1
C. Redevelopment Area Boundaries... ............. ............ ........ ...................... ........ ......... 1
D. Statement of Authority...................... .......................... ......... .................. .............. 1
E. Findings and Declaration...................................................................................... 2
II. REDEVELOPMENT PLAN........ ................... .......................................... ........ ......... 2
A. Redevelopment Plan Goals and Objectives............................................................ 2
B. Land Use............................ ...................... ............... ...... ....................... ................ 3
C. Redevelopment Activities....................... ............................... ................... ............. 3
D. Financing Plan..................................................................................................... 3
E. Development Standards........... ................... .................................. .... ......... ........... 4
F. Environmental Controls..... ........................ ............ ......... ..................... .......... ....... 4
G. Administration of Phase II Improvements ............................... ............................. 4
H. Modification of Plan ............................................................................................ 4
Attachment I - Phase II Budget
Attachment II - Redevelopment Area Boundary Map
I. INTRODUCTION AND LEGAL BASIS
A. Intent
The Housing and Redevelopment Authority of the City of Elk River (the BRA) proposes to
establish a redevelopment project area as described herein (the Redevelopment Area
Attachment 1), in connection with the redevelopment of downtown Elk River. It is assumed
that redevelopment will occur in multiple phases. Phase I, identified on Attachment 1 is
known as the Bluffs of Elk River and the Jackson Place project, which will result in a total of
67 for sale condominium units, 32 rental units, and 20,000 square feet of commercial lease
space and underground parking. Phase II consists of two contiguous buildings commonly
known as "Main Street Mall", consisting of two buildings; 716 Main Street (3,950 sq. ft.) and
720 Main Street (5,180 sq. ft.) for a total of 9,130 square feet. The City of Elk River
anticipates that they will secure by contract for deed the Phase II property in order to expand
the King Avenue parking lot. Phase III is the remainder of the Redevelopment Area and will
be the subject of future City-directed studies.
Phase I development was publicly secured through the placement of tax increment bonds not
to exceed a present value of $3,093,563. Phase II improvement costs are estimated to not
exceed $900,000, which includes acquisition, demolition and related soft costs (see Attachment
I - Phase II Budget). In Phase III, the City has appointed a special task force that will study
and prepare a comprehensive report for the City Council and, as appropriate, assist the
Council in acquiring land and/or repairing public infrastructure improvements to effectuate
private redevelopment.
B. Statement
The City and the BRA have determined that development may not occur within the
Redevelopment Area by private enterprise in accordance with the goals and objectives of the
BRA and the City.
The development of these parcels in accordance with the goals and objectives of the BRA and
the City are not attainable in the foreseeable future without the intervention of the BRA and
the City in the private development process. The BRA has prepared this Redevelopment Plan
and subsequent plans, to make the land useful and valuable for contributing to the public
health, safety and welfare.
C. Redevelopment Area Boundaries
The boundaries of the Redevelopment Area are outlined on the Redevelopment Area
Boundary Map (Attachment II). All land included in the Phase I, II and III is within the legal
boundaries of the City.
D. Statement of Authority
Minnesota Statutes Section 469.001-469.047 (Housing and Redevelopment Authority Act)
grants municipalities the authority to designate redevelopment areas within the boundaries of
the municipalities. Within these areas, the municipality may adopt a redevelopment plan and
Page 1
establish a project consistent with the municipality's public purpose. The project as
contemplated by this plan consists of a redevelopment project as defined in Section 469.002,
Subdivision 14.
E. Findings and Declaration
The City and the HRA make the following findings:
1. The land in the Redevelopment Area would not be made available for
redevelopment without the financial aid sought.
2. The Redevelopment Plan for the Redevelopment Area in the City will afford
maximum opportunity consistent with the needs of the locality as a whole, for the
redevelopment of the area by private enterprise.
3. The Redevelopment Plan conforms to the general plan for the development of the
City as a whole.
II. REDEVELOPMENT PLAN
A. Redevelopment Plan Goals and Objectives
The HRA through implementation of this plan, seeks to achieve the following goals and
objectives:
1. Primary Goal: To ensure the long-term viability of downtown by making a connection
to the rest of the community and by utilizing the riverfront location. Redevelopment
will enhance downtown Elk River's role as a residential, retail and commercial area and
also revitalize investment in the downtown business district.
2. Development Objectives:
. Mixed use (residential/ retail/ service)
· Consideration of the historic context study results
· Strengthen connection to the community
. Traditional downtown design elements
. Brick, stucco, stone materials with visual breaks in the building design
. Increased residential density
. Pedestrian orientation
· Increase exposure to the riverfront
. Recognize those buildings that have potential for rehabilitation
. Replace market/economic obsolete buildings
. Multiple types of housing products (i.e. townhomes, senior rental coops, market
rate apartments)
2
B. Land Use
Any proposed land uses for the Redevelopment Area shall be consistent with the City's
Zoning Ordinance, specifically, to the Downtown District, Section 30-1026.
"Commercial and residential parking lots and ramps", as proposed in Phase II, is a
conditional use as described in Section 30-1026 (d) (4) (i). At the time any buildings are razed
and a new parking area established, the conditional use permit process will be initiated.
C. Redevelopment Activities
1. Acquisition
The City anticipates the acquisition of the Phase II properties on which the municipal
parking facilities will be located. Other than that property, other property in the
Redevelopment Area may be acquired in the future by the HRA if and when required to
facilitate development or redevelopment within the Redevelopment Area.
2. Relocation
It is not expected that any persons will be displaced as a result of the Phase II
Redevelopment Plan.
3. Municipal Facilities
From time to time, the Housing and Redevelopment Authority, working with the City, will
assess not only the need for expansion of the King Avenue parking lot, but the totality of
parking needs based on the type and level of future redevelopment.
D. Financing Plan
1. Project Budget
Attached hereto as Exhibit B is a budget which details estimated development costs
associated with constructing and equipping the Phase II improvements as currently
contemplated and installing public improvements. The items of cost and the costs thereof
shown in the budget are estimated to be necessary based upon information now available. It
is anticipated that the items of cost and the costs thereof shown in each category in the
budget may decrease or increase, but that the total project costs will not exceed the amount
shown above.
2. Source of Funds and Security
The HRA is entering into a contract for deed for the Phase II properties, pursuant to
Minnesota Statutes, Section 465.71. The contract for deed agreement is payable from the
HRA's general sources including tax levies and existing fund balances, and is not limited to a
specific fund or specific source of revenues.
3
E. Development Standards
The HRA will consider among other things, the following factors when evaluating future
redevelopment proposals for projects within the Redevelopment Area seeking public
assistance and support:
1. Degree to which redevelopment objectives are provided for or enhanced.
2. Consistency with this plan and the City of Elk River's Comprehensive Plan.
3. Consistency with the Comprehensive Downtown Redevelopment Plan, proposed for
completion in May/June 2007, detailing the Phase III goals and objectives.
F. Environmental Controls
It is presently anticipated that the Phase II improvements in the Redevelopment Area will
not present major environmental problems. All municipal actions and public improvements
will be carried out in a manner that will comply with applicable environmental standards.
The environmental controls to be applied within the area are contained within the codes and
ordinances of the City.
G. Administration of Phase II Improvements
The City Council has authorized the HRA to be responsible for seeing that the contents of
this Plan as it relates to the Phase II improvements are properly administered.
H. Modification of Plan
A Redevelopment Plan may be modified at any time. The modification must be adopted by
the HRA and the City, upon notice and after the public hearing required for the original
adoption of the Redevelopment Plan.
Changes that do not alter or affect the exterior boundaries and do not substantially alter or
affect the general land use established in the plan, shall not constitute a modification of the
Redevelopment Plan, nor require approval by the City.
4
ATTACHMENT I
PHASE II BUDGET
$720,000 ACQUISITION
90,000 INTEREST FINANCING
40,000 DEMOLITION
30,000 ENVIRONMENTAL CONTINGENCY
25,000 PROFESSIONAL FEES
45,000 PARKING SITE IMPROVEMENTS
$950,000 TOTAL COST
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MEMORANDUM
TO: Housing and Redevelopment Authority
FROM: Scott Clark, Community Development Director
DATE: November I, 2006
SUBJECT: Redevelopment Plan for Downtown Elk River Redevelopment
Project
Pursuant to Minnesota State Statute Section 469.001-047 (Housing and Redevelopment
Authority Act), the City's Housing and Redevelopment Authority must adopt a
redevelopment plan prior to any action that would result in land acquisition or other types of
traditional redevelopment objectives. Attached is the "Redevelopment Plan for Downtown
Elk River Redevelopment Project, dated November 1, 2006" and consists of the minimum
sections that are required for review pursuant to the aforementioned statutes.
This redevelopment plan includes three phases:
· Phase I - The Bluffs of Elk River and Jackson Place
· Phase II - The Main Street Mall, currently being reviewed by the Housing and
Redevelopment Authority for acquisition
· Phase III is the residual of the downtown project.
The boundaries for the redevelopment area are coterminous with those that are found in the
Maxfield Market Study that was completed in April, 2001.
The redevelopment plan as written is intended to be a placeholder that meets the minimum
State standards. It is anticipated that the plan will be replaced when a more comprehensive
redevelopment plan for the subject area is completed by the recently approved City task
force. The Housing and Redevelopment Authority, in approving this redevelopment
finding, is making the following declarations:
1. The land in the redevelopment area would not be made available for redevelopment
without the financial aid sought.
Housing and Redevelopment Authority
Downtown Redevelopment Plan
November 1, 2006
Page 2
2. The redevelopment plan for the redevelopment area in the City will afford maximum
opportunity consistent with the needs of the locality as a whole for the redevelopment of
the area by private enterprise.
3. The redevelopment plan conforms to the general plan for development of the City as a
whole.
After the Housing and Redevelopment Authority acts on the redevelopment plan, it will
then be forwarded to the Planning Commission, which will give an advisory opinion relevant
to the consistency of the proposed land use. In this particular case, the land use is that the
site would used for parking and/ or a parking ramp (this constitutes a public redevelopment
infrastructure need) and that such facility is allowed as a conditional use within the City's
Zoning Ordinance. It is intended that after the actions of the Housing and Redevelopment
Authority and the Planning Commission, this item would then be forwarded on to the City
Council on November 20, 2006 for final action. Once this redevelopment plan is approved
by all applicable entities, the Housing and Redevelopment Authority can then take action
regarding the potential acquisition of the properties known as the Main Street Mall at their
December meeting.
Recommendation
Staff recommends approval of the "Redevelopment Plan for Downtown Elk River
Redevelopment Project, dated November 1, 2006".
S:\Community Devdopment\Scott Oark\HRA \110106 HRARedevel memo.doc
Item # 5.3.
MEMORANDUM
TO: Planning Commission
FROM: Scott Clark, Community Development Director
DATE: November 14, 2006
SUBJECT: Redevelopment Plan for Downtown Elk River Redevelopment
Project
The City of Elk River's Housing and Redevelopment Authority is presently in the process of
adopting a "Redevelopment Plan for Downtown Elk River Redevelopment Project, dated
November 1, 2006." The purpose of the plan is highlighted in the attached memorandum
dated November 1, 2006. The Housing and Redevelopment Authority approved the plan
with a modification to the boundary area for what is defined as Phase III. Pursuant to State
Statutes, the Planning Commission must make a finding that the "Redevelopment Plan
conforms to the general plan for development of the City has a whole". Specific to the plan,
this finding means that the Phase II activity, which will be the BRA's anticipated acquisition
of the Main Street Mall and its conversion eventually to some form of parking, is consistent
with both the City's Comprehensive Plan and Zoning Ordinance. The City's
Comprehensive Plans shows this area as Old Town, which anticipates this type of
development and the Zoning Ordinance shows this area designated as "Downtown" District
(which allows parking as a conditional use permit). Based upon the consistency of the
proposed use with both the Comprehensive Plan and the Zoning Ordinance, staff is making
a recommendation to approve the redevelopment plan as written and to forward the same
onto the City Council.
Recommendation
Staff recommends that the Planning Commission approve the Redevelopment Plan for
Downtown Elk River Redevelopment Project, dated November 1, 2006, and finds that "the
redevelopment plan conforms to the general plan for development of the City as a whole."
S:\Community Devdopment\Scott C1ark\HRA \111406 PC memo.doc