5. HRSR 02-06-2006ITEM # 5.
Citv of
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MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Catherine Mehelich, Director of Economic Development~J/~~
DATE: February 6, 2006
SUBJECT: Downtown Revitalization Project Update
Staff will provide the HRA a brief verbal update on the Downtown Revitalization Project.
Attached is the most recent publication of the Q & A Newsletter that was distributed in the
January 25, 2006 edition of Star News.
City of
E
~o~o~~ ant ion
~~
• ~~ JANUARY 2006
~~P ~ i Enhanang Downtoum Elk River's Role
vv - - - .- As a Vital Retail, Commeraal and Residential Area.
Q. Why do we have to pursue downtown revitalization?
A. The downtown riverfront is very important to Elk River. The City has
identified its long-term vitality as a community goal. For more than
30 years, studies have emphasized the need to better utilize the river-
front, capitalize on the traditional character of downtown, and ensure
safe pedestrian and vehicle movement. Investment in downtown has
stagnated and the riverfront is underutilized. The revitalization will
enhance downtown Elk River's role as a retail, commercial, and resi-
dential area and promote investment in the downtown business dis-
trict. The City has partnered with MetroPlains
Development to make this happen.
Q. What has happened to date in the
Downtown Revitalization Project?
A.
The King Avenue parking lot was completed in
August of 2005, adding 77 parking spots for
downtown employees. MetroPlains paid the
cost of the new parking lot. The former
Municipal Utilities building, Nadeau's dry
cleaners, U.S. Bank and The Jungle buildings
have all been removed and received environ-
mental clearance. New parking regulations are
being enforced and the City has approved a traffic f
construction.
(l. Why has the construction of the project stopped and when
is it expected to resume again?
A. Construction is ready to go, pending the refinement of language in
the development agreement regarding MetroPlains' financing.
MetroPlains is also completing its presale requirements. Both of
these activities are winding up and construction of The Bluffs of Elk
River is expected to resume in late winter or early spring. The con-
struction of Jackson Place will then follow by the summer.
Q. Exactly how will this project be funded and will it impact
my property taxes?
A. The approximately $25 million dollar project will primarily be funded
by MetroPlains. In addition, Tax Increment Financing (TIF) will be
used to offset the extraordinary site costs of the project such as prop-
erty acquisition, demolition, site work, and environmental clearances.
Under TIF, property tax revenue equivalent to what the current proper-
ty generates continues to go to all taxing jurisdictions. A portion of
the tax revenue that results from the increased value of the new devel-
opment, also called the "tax increment," goes to pay the extraordinary
site costs. Once the site costs have been paid, the tax increment goes
to the taxing jurisdictions.
Q. What are the details of the
Jackson Place and The Bluffs of Elk River
developments?
is located on the northeast corner of Jackson Avenue
and Main Street. It includes approximately 11,000 square feet of first
floor commercial space along Main Street and Jackson Avenue, 32
rental housing units on the upper two floors, and underground park-
ingfor commercial employees and rental housing tenants. The prop-
erty is currently aCity-owned parking lot.
The Bluffs of Elk River is located on the southwest corner of Main
Street and County Road 42. It includes about 11,000 square feet of
commercial space on the first floor along Main Street, 67 for-sale res-
idential condominiums on the upper three floors, underground park-
ing for commercial employees and homeowners, and a plaza on the
corner of Main Street and County Road 42. The site used to be occu-
pied by Natleau's dry cleaners, U.S. Bank, and The Jungle.
Q. What types of businesses will be locating within the
new developments and how can 1 find out more about
the availability of housing and retail units in the
new developments?
A. MetroPlains is talking with several interested businesses to locate in
the development. However, it is not expected that any commitments
will be made until the project is near completion.
(continued on next page)
Q. Why does the development agreement language have
to be refined?
A. Rather than obtaining a Tax Increment Financing (TIF) note after con-
struction is completed, MetroPlains has elected to obtain and sell
their TIF note upfront to investors. A TIF note defines the amount of
TIF the developer will receive as reimbursement for eligible site costs.
This method of financing will not impact the cost of the project to the
City or to taxpayers but does require revised language in the develop-
ment agreement.
Q. How many units have to be pre-sold
before construction can resume?
A. MetroPlains needs to have purchase agree-
ments for at least 23 condominium units at The
Bluffs of Elk River before it can close the construc-
tion financing. MetroPlains reached this require-
ment in January 2006 and is proceeding toward
the closing.
This' Q ~A newsletter
responds to some
o f the recent questions
-about Elk River's
- .downtown revitalization
and redevelopment.:.
low plan for during A. Jackson Place
CITY OF ELK RIVER DOWNTOWN REVITALIZATION Q&A NEWSLETTER IANI I~GV Anna
(continued from previous page)
For information on the availability of housing and retail units,
call the following numbers:
Commercial inquiries for both projects: 763-746-9400
The Bluffs of Elk River condo sales: 763-633-7010
Jackson Place apartment rental: 763-241-4004
Q. Have traffic patterns changed downtown since project
construction began?
A. Yes. First, the King Avenue access from Highway 10 was permanently
closed to provide room for more parking. Second, the City Council
has approved a traffic flow plan for during construction. The plan will
change as construction and other circumstances evolve. The no left
turn signs from 3-6pm onto Main Street from Parrish Avenue have
now been removed and The Bluffs of Elk River construction zone
encroaches onto Main Street, making it narrower for drivers. It is still
a two-way street, but this could change once The Bank of Elk River
expansion project begins this spring.
Q. How is public parking being handled downtown?
A. There is designated parking for downtown employees in the King
Avenue municipal parking lot. There are many large parking signs
identifying the public lot from Highway 10 and Main Street and addi-
tional signage within the lot directing employees and shoppers where
to park. The Police Department is issuing parking permits at no
charge to all downtown employees and to residents who live above
Brick Block businesses. Contact the Elk River Police Department to
receive your permit.
The on-street parking available downtown is also appropriately
signed. The Police Department enforces downtown parking along the
street and within all municipal parking lots to ensure that the best
parking remains available for shoppers.
Q. If we get a big snowstorm, does the City have a plan
for snowplowing downtown?
A. Yes. The City's Streets Superintendent has developed a plan in case of
a heavy snowfall to ensure downtown stays open for business. The
plan pays special attention to the streets already impacted by con-
struction to ensure continued free movement of traffic in those areas.
In addition, the snow will be plowed as quickly as possible.
Q. Were the downtown flag pole and the gazebo relocated?
A. Yes. The 100-foot flag pole that was donated to the City by Cretex
Companies in 1983 was moved by the City from Jackson Square to
east of the Elk River School District building and west of the King
Avenue parking lot.
Several local groups expressed an interest in the gazebo but because
of the cost of moving the gazebo, decided against it. The gazebo was
sold intact at the City's auction this past summer to a private party
from Otsego. The gazebo was originally built in 1996 to honor the
City's 150th anniversary by the River's Edge Downtown Association
and other volunteers with materials donated by the City.
4. Is the City coordinating the construction along the river
with the Minnesota Department of Natural Resources (DNR)?
A. Yes. The City's Environmental Administrator stays in contact with the
DNR about the construction to ensure that there are no issues and
concerns and the project complies with all DNR regulations. The City
has its own Environmental Division and takes issues like the monitor-
ing of this development very seriously.
ll. What can you tell me about the park that is being planned
in conjunction with the Downtown Revitalization Project?
A. In April of 2005, the City Council approved a concept design for the
park, which will be located in the green space between the Cinema
Professional Building and the Sunshine Depot in downtown Elk River.
The concept approved by the Council will consist of a park with three
levels that step down the slope to the river. The concept includes the
closure of the alley adjacent to the Sunshine Depot and removal of
four parking stalls (both for safety reasons), a downtown square, an
amphitheatre with performance area and a river overlook.
Construction of the park is anticipated to begin in late spring. For
more information on the park, please contact the City's Park and
Recreation Director at 763-635-1150.
ll. What is happening with The Bank of Elk River
expansion project?
A. The Bank of Elk River is undergoing an expansion of its corporate
offices which will create about $2.9 million in increased market value
for the downtown. The result will be a 20,000 square foot expansion
of their existing facility downtown. Because it is going to cost the
bank significantly more money to do their expansion project down-
town than it would be to construct a new building on bare land, the
Elk River Housing & Redevelopment Authority has agreed to a rebate
of $300,000, which is a portion the new property taxes generated
from the project. The Bank is also requesting that Sherburne County
rebate a matching share of $300,000 for the same period of time. The
County will review this request in February. The expansion will
accommodate current and future growth for the bank's corporate
offices and ensure it can remain downtown Elk River. The Bank antici-
pates commencing construction this spring.
Q. Who can I contact if I have questions about Downtown
Revitalization or construction activities downtown?
A. You can contact the Elk River Economic Development Division at
763-635-1040. Other ways to keep informed about the Downtown
Revitalization include:
• Visit the City's Web site at www.ci.elk-river.mn.us and click
on the "Downtown Revitalization Project" link found under the
"News & Events" section of the City's home page.
• Attend HRA and City Council meetings or watch them on ERtV
Channel 12. Meeting information is available on the City Web site.
• Read the Elk River Star News. Articles on
the project frequently appear in the Star
News and in the City's newsletter The
Current, which is distributed as a Star
News insert every other month.
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