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6. HRSR 11-05-2007ITEM # 6. fiver MEMORANDUM TO: Housing and Redevelopment Authority FROM: Scott Clark, Community Development Director DATE: November 5, 2007 SUBJECT: Arts Alliance Lease Request for 716 Main Street (Houlton Building) Attachments • June 4, 2007 HRA Meeting Minutes • August 6, 2007 HRA Meeting Minutes • September 4, 2007 HRA Meeting Minutes • Email correspondence from Patrick Grace dated October 11, 2007 On June 4, 2007, staff approached the HRA with the idea of the city's Arts Alliance organization using the Houlton building space as an interim use for up to two years. The rationale behind this request is that Arts Alliance is looking for more public exposure, and by placing them in the heart of the downtown area this continues to add to the energy that has been created by the opening of the Bluffs and Jackson Place buildings, in addition to all of the activity surrounding River's Edge Park. In late summer, staff had put this item on hold until after the City Council completed their discussions on the recently reviewed parking study. Staff approached the Arts Alliance on October 11`" and asked them for various information including a description of what the building would be used for, hours of operation, anticipated leasehold improvements, would they be providing insurance for themselves, minimum length of a lease, utility payments and other related items. Attached with this memorandum is a response email dated October 11, 2007 from Patrick Grace, Executive Director of the Arts Alliance, responding to these various requests. It appears that the main discussion with the HRA is two-fold; 1) allowing the use, and 2) allowing a minimum two-year lease period. The Arts Alliance wants the two years since they will be doing some leasehold improvements and view that this is the time necessary to properly amortize out their efforts and any costs that would be associated with the building. Staff is recommending that we would enter into a lease agreement based upon the framework that has been presented by the Arts Alliance, in addition to any other concerns Arts Alliance Lease Request for 716 Main Street November 5, 2007 HRA Meeting Page 2 of 2 by the HRA, since this will provide additional energy to the downtown area and also fills a storefront that has been problematic from a retail standpoint fox an extended period of time. If the HRA is in agreement with the business items as presented, the next step would be to have the city attorney prepare a formal lease for HRA review in December. It is anticipated that if a lease is signed, that the Arts Alliance would immediately start the work and occupy the building in early 2008. S:ACommunity Development\Scott Clark\2007 I R2A memos\11 OS 07 Arts A1Gance lease.doc Housin e ve p uthority Date ~ ~~ a y Page 2 Fred McCoy of McCoy's Pub -Stated that the 2006 contribution was used to cover the cost of city employees setting up barriers, on-duty police officer, portable toilets, and related expenses. He stated that over 300 people attended the event and he is hopeful the event will continue to grow. Mr. McCoy stated that without the HRA contribution, there may not be enough money coming in as gate fees to cover their expenses. Acting Chair Kuester asked if the event would be held at the same time as last year. Mr. McCoy stated that the event is scheduled one week earlier than last year. Commissioner Motin asked Ms. Steinmetz if an event has been planned for the completion of the downtown construction. Ms. Steinmetz stated that nothing has been planned. Ms. Mehelich stated that the downtown projects have been phased very differently, noting that the Jackson Place project will not be completed until late fall. She stated that the Bank of Elk River, Bluffs and city park projects are nearing completion. Ms. Mehelich stated that HRA contribution was not specifically tied to any of the projects, but for an overall grand opening of downtown. Commissioner Motin stated that he attended the 2006 event, noting that the Sunshine Depot did not participate and in fact, hired bands which took away from the River's Edge group event. Mr. McCoy stated that 150 - 175 people attended for the first band, and that the numbers dwindled for the second one. Commissioner Motin expressed concern for spending money on event that was not supported by all the downtown business owners. He stated that he was not opposed to the contribution, but that he would like to see the group work together to make the event successful. Mr. McCoy stated that he hopes to add a 5 - 10K running event to the block party schedule. He stated that when the new business space begins filling up in the downtown, he will try to work with the owners to participate in the event. Commissioner Lieser stated that since the HRA has already given informal approval to the expenditure, she felt they should go ahead and honor the contribution. MOTION BY COMMISSIONER LIESER AND SECONDED BY COMMISSIONER MOTIN TO AUTHORIZE THE $2,000 CONTRIBUTION FOR THE DOWNTOWN RIVER'S EDGE GROUP BLOCK PARTY SCHEDULED FOR AUGUST 18, 2007. THE MOTION CARRIED 3-0. Ms. Mehelich noted that the contribution will be made in the same form as last year, by providing a police officer, staff time for setting up barriers, and services such as garbage, utilities, and will not be an actual cash contribution. Mr. McCoy stated that he was willing to incorporate the grand opening of the Bluffs of Elk River with the event. Commissioner Motin stated that the group should not expect a contribution from the HRA next year. Mr. McCoy stated that he understood and hoped that they would be able to support the event themselves next year. Discuss HRA Intentions for 716 & 720 Main Street Buildings ~` Ms. Mehelich provided background information regarding the subject properties. She stated that due to cost/benefit and the pending downtown parking study, that it may be premature Housing & Redevelo ment Authority Date ~ ~ ~ Page 3 to remove the buildings to provide 21 parking spaces. Staff recommends that short term public/private use of the buildings continue to be explored. Mr. Clark stated that they are not looking at uses for the O'Reilly Building at this point, since there are code and structural issues that would need to be addressed first. He explained that use of the building by the Arts Alliance for gallery and classroom space has been discussed with Patrick Grace. Mr. Grace has informed him that the Arts Alliance would not be able to pay rent for the space, but would be willing to discuss paying overhead costs. Mr. Clark stated that further discussion of the option will be discussed with the Arts Alliance representatives after the Art Soup event is completed. He stated that producing revenue may not be as important as bringing vitality to the downtown by not allowing the space to sit empty. Commissioner Motin stated it sounded like a good temporary use and he could understand that the Arts Alliance would not want to invest money into the building, since it would be temporary. He noted that parking may be addressed in two phase; surface parking spaces, and a possible structure later. Mr. Clark stated that he was hopeful the parking study would help them in the decision-making process. Commissioner Moon asked if the parking study will not be completed until the end of August, would they be able to do anything with the property before spring? Mr. Clark stated that he was not sure if the Arts Alliance would be interested in only a 3 - 5 month lease. Commissioner Kuester suggested that the Arts Alliance could use the building to hold an art sale or display. Mr. Clark stated that would be a potential option. Commissioner Lieser suggested the Arts Alliance may be interested in the former O'Reilly building for storage. Mr. Scott stated that would be a possibility, but he would like to explore the issue further. Commissioner Lieser asked if the former Houlton building was being used for storage now. Ms. Mehelich stated yes, on a month-to-month lease, in order to maintain flexibility. She stated the storage area and the rest of the building had separate entrances and locks. Commissioner Lieser suggested that a sign be place indicating the building was available for lease for storage space. Commissioner Motin stated he did not feel that would be a good idea, since that would identify that the building was unoccupied. Ms. Mehelich stated that the Arts Alliance proposal was the best option they have heard so far and staff will continue discussions with them. Downtown Parking Update Ms. Mehelich stated that the HRA received a copy of the notification which was sent to the downtown business and property owners regarding the new parking regulations. She stated that applications for a limited number of parking permits must be submitted by June 5. She noted that the mailing also provided information regarding the status of the 716 and 720 Main Street buildings. The information stated that relocation of the O'Reilly Auto Parts store was not a reflection of the downtown business climate, but was a result of meeting the corporate model, and that the city is not tearing down the buildings for a parking lot at this time. Ms. Mehelich noted that questions have been coming in regarding the new parking regulations, and that new signage will be posted regarding parking tune limits. Commissioner Kuester asked if employees parking across Highway 10 would need a parking permit. Ms. Mehelich stated no, that those parking spaces are free, as well as parking along Main Street down to Handle School. Ms. Mehelich stated that the parking permits will be ~~ © 7 that staff will be investigating financial resource opportunities for housing rehabilitation to find out what is currently available and what the city could do. She stated that the housing market study research will be based on supply and demand, rather than on housing conditions. Commissioner Motin questioned why there is such an increase in cash received. Mr. Simon explained that the increase is due to the increase in the net tax capacity from $1.7 billion to $2 billion. Commissioner Motin asked why $25,000 was being budgeted for the housing study. He stated it was his recollection that the previous study was around $1,000. Ms. Mehelich stated that staff has not yet explored all of the options for who can complete the study and that the Central MN Housing Partnership could be a cheaper option. Chair Wilson noted that the item will require a separate action by the HRA when options for the study are presented. Mr. Simon noted that the basis for the transfer out to the HRA is to create capital project funding. Chair Wilson asked where the existing I-IRA cash balance would be placed. Mr. Simon stated that the HRA can decide where to designate the funds. MOTION BY COMMISSIONER MOTIN TO APPROVE THE 2008 HRA BUDGET. MOTION CARRIED 4-0. MOTION BY COMMISSIONER TOTH AND SECONDED BY COMMISSIONER LIESER TO APPROVE THE RESOLUTION AUTHORIZING THE 2008 HOUSING AND REDEVELOPMENT AUTHORITY LEVY. ~~ Other Business Mr. Clark stated the Arts Alliance has been notified that City Council will be reviewing the parking study in September. If it appears the Houlton buildings will remain for some time, staff will meet with the Arts Alliance to discuss a possible lease. If the Arts Alliance is still interested, an agreement will be presented to the HRA in October for approval. Mr. Clark noted that they are interested in a minimum of two-year agreement. Ms. Mehelich noted that the regular meeting date for the September HRA meeting falls on Labor Day. It was the consensus of the HRA to call a special meeting for Tuesday, August 4th to conduct regular HRA business. Adjournment There being no other business, Chair Wilson adjourned the meeting. The meeting of the Elk River Housing and Redevelopment Authority adjourned at 6:27 p.m. ~~~ x~/ Debbie Huebner Recording Secretary I ~~ d~ ent Authority Minutes September 4, 2007 Page 3 and/or IIRA could work on in the interim. He felt that other work could be done in the interim to prevent further delay. Commissioner Moon stated that he felt that it would be better to wait, since there may be significant changes, such as where accesses are located, etc. Commissioner Kuester felt the high density housing proposed to be located close to Lions Park was a possible topic that could be worked on during the six months of the study process. Commissioner Motin stated that funding has been approved in the 2008 budget for a housing study. He noted that high density housing may not be feasible, depending on where accesses are located. Commissioner Toth stated that if it takes six months to complete the study, it could be another 4 - 5 months for discussions on other issues. Commissioner Motin stated that if they are trying to accomplish a 20-year vision, another six months would not "kill" the plan. Commissioner Toth stated he was concerned with keeping the Task Force together if they don't meet for six months, and then start up again for another six months. Chair Wilson noted that there have been no responses to date from Task Force members that they would not be available to continue. Commissioner Kuester stated that the City has had these issues for a long time, and agreed they need to take time to be thorough. Commissioner Toth asked if the downtown buildings structural feasibility study has been funded. Mr. Clark stated the funding was eliminated from the 2008 budget. Commissioner Toth asked for an update on the parking study. Ms. Mehelich stated that City Council will discuss it on September 17~h. Chair Wilson suggested a work session, possibly joint with the City Council, to discuss possible projects for the upcoming months. Commissioner Toth asked if more information was available on housing rehabilitation grant programs. Ms. Mehelich stated that staff will research the existing programs and provide an update at a future HRA meeting. 3. Consider Consent Agenda MOVED BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER TOTH TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. CONSIDER AUGUST G, 2007 REGULAR MEETING MINUTES 3.2. CHECK REGISTERS 3.3. BALANCE SHEET -JULY 2007 3.4 REVENUE/EXPENDIITURE REPORTS -JULY 2007 3.5 CALL SPECIAL HRA MEETING FOR SEPTEMBER 17, 2007 FOR PRESENTATION OF DOWNTOWN PARKING STUDY. MOTION CARRIED 5-0. C 6. J Consider Facility Use Request for 716 Main Street Ms. Mehelich stated that Chuck Ripka of Pray Elk River has requested temporary use of the 716 Main Street building on Tuesdays from noon to 1:30 p.m. She explained that the group has been meeting at the Elk River Library and they can no longer use the space, since the library staff is using the space for packing to move to the new library. She stated that Mr. Ripka is aware the Arts Alliance may use the 716 Main Street building in the near future. I Iousing & Redevelopment Authority Minutes September 4, 2007 Page 4 Chair Wilson asked who is involved in the group. Ms. Mehelich explained that membership includes primarily Elk River area community members, and noted that some members come from as far as Ely to participate. The purpose of the group is to pray for the community and public leaders. Ms. Mehelich stated that the group has 30-50 members and they are proposing to use the space on a month-to-month basis. Commissioner Kuester asked if the group has requested meeting space in the new library. Ms. Mehelich stated that Mr. Ripka has not spoken with Parks & Recreation Director Bill Maertz yet, and is unsure what the library's new policy will be for meeting space. Commissioner Kuester asked if the City's property on Highway 169 and Main Street was an option. Ms. Mehelich stated that the building is used for recreational programming and there were no chairs for seating. Commissioner Kuester asked how issues such as heating of the building, chairs, and insurance liability would be handled. Ms. Mehelich stated that the building will be kept heated and cooled regardless, and that Pray Elk River would provide their own chairs. City Administrator Lori Johnson noted that the City's general meeting liability insurance would cover the use. Commissioner Motin asked if the group would be paying rent. Ms. Mehelich stated that they did not discuss rent, noting that they have used the library for 13 years at no cost. Chair Wilson stated that he felt the group may be better off finding a permanent location now. Commissioner Kuester asked if the group has explored the possibility of staying at the "old" library, since the building will still be in use for senior programming. Commissioner Motin stated that the parking issue downtown is a concern. He stated he was not in favor of adding 30-50 additional cars downtown during lunchtime. Mehelich asked if parking would be a strong concern, if the group only meets there for three weeks. Chair Wilson stated he did not have a problem with allowing the group to use the space for a limited amount of time. Commissioner Toth concurred. MOTION BY COMMISSIONER TOTH AND SECONDED BY COMMISSIONER LIESER TO APPROVE THE REQUEST BY THE PRAY ELK RIVER GROUP TO USE THE 71G MAIN STREET PROPERTY FOR TEMPORARY MEETING SPACE FOR A PERIOD OF THREE WEEKS. Commissioner Motin stated that he would vote against the issue due to the parking concern. Commissioner Toth asked if there is currently a problem with downtown parking. Commissioner Motin stated that he does not have a problem finding a parking space for lunch now, but if 50 more cars are added, there could be a problem. THE MOTION CARRIED 4-1. Commissioner Motin opposed. 7. Adjournment There being no other business, Chair Wilson adjourned the meeting. The meeting of the Elk River Housing and Redevelopment Authority adjourned at 6:28 p.m. ~i~~icc ~C~~,~-t-- Debbie Huebner Recording Secretary Page 1 of 3 Clark, Scott From: Patrick Grace [patrick.grace@eraaa.org] Sent: Thursday, October 11, 2007 4:36 PM To: Clark, Scott Cc: Mehelich, Catherine; Wendy Simenson Subject: [!! SPAM] Re: Houlton Building Scott: Thanks for the update. Here is a first go at your questions. Please let me know if any of this is not clear or you need more information. I would be able to attend the Council meeting next week if having someone from the Arts Alliance present would help answer any questions. I do have an internal document that was developed as a business plan for the storefront; with some modifications we could make this available, if deemed required. I will be out of the office November 5-9. A description of what you will use the building for. The storefront will be used by the Arts Alliance as 1) administrative offices; 2) changing art gallery with sales by Arts Alliance members; 3) small meetings and arts programming including lectures, recitals, workshops; This will eventually include daytime programming for seniors, after school programming for young adults, and weekend programming for families; 4) receptions for visiting artists and performers as well as Arts Alliance events. What would be the hours of operation? Office hours are generally 9-4 Tuesday through Friday. Gallery hours will be Tuesday through Friday 11-4 and also include Thursday evenings through 8pm, some Friday evenings, and Saturdays, 11-5. Sundays are a possibility, but are not planned yet. Special events and receptions will be Thursday and Friday evenings, Saturdays. Do you anticipate doing any leasehold improvements at your cost. We anticipate providing partitions for art displays, additional temporary lighting as needed for art displays. Some external signage would also be developed. Will you be providing insurance for yourself? The Arts Alliance will provide liability insurance as required. How long do you want the lease to run for at a minimum? We are seeking a minimum of two years with options to extend a possibility. From our previous discussion, will your organization pay for all utility costs? We will be responsible for utilities in the areas we occupy in the building. 10/31 /2007 Page 2 of 3 Are you proposing a rent to the City (HRA) or are asking for free rent? We are seeking a dollar a year lease with the City/H1ZA. Other preliminary thoughts or ideas. The Arts Alliance is eager to be a part of the revitalization of the downtown area. We believe that having the arts in the downtown area will help furthering the work already done by the City of Elk River. The storefront will offer the Arts Alliance the opportunity to strengthen our programming and expand our ability to service the community and help make the community a better place to live and have a business by having a strong arts presence. The Arts Alliance relies upon community volunteers and anticipates more participation as we have a presence in the downtown area. Patrick Grace Executive Director Elk River Area Arts Alliance 763.441.4725 patrick.grace ~elkriverart.org December 1st, Joe Chavala & the Flying Foot Forum @ the Zabee Theater Tickets now available. Visit www.elkriverart.org for full details. bringing the arts home. On Oct 11, 2007, at 11:40 AM, Clark, Scott wrote: As you may be aware the City Council accepted the parking study as is (except for adding quarterly parking surveys to be completed by staff ). Based on this it seems that we should be able to go back to the HRA in November for a preliminary discussion on the use of the building by your agency. To start with, can you provide me with the following information: (I recognize some of these will be estimates ) A description of what you will use the building for What would be the hours of operation Do you anticipate doing any leasehold improvements at your cost Will you be providing insurance for yourself How long do you want the lease to run for at a minimum 10/31 /2007 Page 3 of 3 From our previous discussion, will your organization pay for all utility costs Are you proposing a rent to the City (HRA) or are asking for free rent Other preliminary thoughts or ideas I will get the past historical water and electric costs to you as promised. Scott P.S. I will be taking a small leave starting on the 19th of this month and returning on the 29th. Thanks 10/31 /2007