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091304 EDA CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes September 13, 2004 Regular Meeting City Hall CALL TO ORDER President Collier called the meeting of the Economic Development Authority to order at 8:40 p.m. ROLL CALL Present: Don Collier, President Doug Andersen, Commissioner Sharon Cassen, Commissioner Mary Gwin-Lenth, Commissioner Steve Sommer, Commissioner APPROVE MINUTES Motion was made by Commissioner Andersen, seconded by Commissioner Gwin-Lenth, to approve the Regular Meeting Minutes of August 23, 2004. Voting in favor: Collier, Andersen, Cassen, Gwin-Lenth. Voting against: None; Absent: None. Abstained: Sommer. Motion carried. IMP. PROJECT 751 President Collier introduced for discussion Item 4, Resolution authorizing Item 4 negotiation of an option for certain property within the Winnetka East Redevelopment (south portion of 7603 Bass Lake Road Extension) (improvement project no. 751). Kirk McDonald, community development director, stated that this resolution would give two property owners an option to purchase the ‘bump out’ lot described in the Request for Action if Phase 3 does not go forward. Mr. Steve Sondrall, city attorney, explained the contractual obligations to convey property to Ryland Homes. Mr. McDonald added that at the August 30 work session, council directed staff to work with the city attorney on preparing a resolution to address the ‘bump out’ lot. EDA RESOLUTION Commissioner Cassen introduced the following resolution and moved its 2004-32 adoption “RESOLUTION AUTHORIZING NEGOTIATION OF AN Item 4 OPTION FOR CERTAIN PROPERTY WITHIN THE WINNETKA EAST REDEVELOPMENT (SOUTH PORTION OF 7603 BASS LAKE ROAD EXTENSION) (IMPROVEMENT PROJECT NO. 751).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Sommer, and upon vote being taken thereon, the following voted in favor thereof: Collier, Andersen, Cassen, Gwin-Lenth, Sommer, and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. EDA Meeting September 13, 2004 Page 1 IMP. PROJECT 734 President Collier introduced for discussion Item 5, Discussion and update Item 5 regarding concept plans for the proposed development of 4301-4317 Nevada Avenue North (improvement project no. 734). Mr. McDonald introduced Shawn Siders, community development specialist. Mr. Shawn Siders detailed the proposed 6-unit townhome development and showed concept drawings of the site. Per the direction of the EDA, the plans deviate slightly from what was originally proposed as two of the proposed units are handicap accessible, rather than one. Staff is seeking preliminary approval of the proposed concept so the owner of 4301 and contract purchaser of 4317, Northwest Community Revitalization Corporation (NCRC) can proceed with developing the necessary documents to receive planning approval. Mr. Siders illustrated drawings of the two proposed triplexes and future plan. The plans meet the city’s scattered site housing program requirements and would be owner-occupied. Construction would begin this winter with completion in spring/summer 2005. Commissioner Gwin-Lenth inquired as to the wide semi circle on the east side of the plan. Mr. Gene Nicolleli, project architect, explained that it represents a change in topography. Commissioner Cassen asked if the complex is considered twinhome, townhome, or triplex and if there will be an association. Ms. Kris Madson, executive director of NCRC, responded that it is a townhome complex and that a decision has not yet been made regarding an association. She explained that an association is problematic with a small number of units and they are looking into how the project may benefit from partnering with another association. Commissioner Cassen stated her concern about the common entrance, especially snow removal if there is not an association. Commissioner Cassen continued that if there is no association perhaps the units should front Nevada and be twinhomes with a series of use-in- common driveways. She asked the reason why the units do not face Nevada. Mr. Nicolleli answered that the goal was to be as efficient as possible in construction costs and land use. Commissioner Cassen asked about the status of the property at 4415 Nevada Avenue North to which Ms. Madson responded that no decision has been made yet. NCRC is considering the development at that property as a phase 2 acquisition and development. Commissioner Cassen remarked that if there is a phase 2 with additional townhomes, she would be more comfortable with the proposed concept. Otherwise the current proposal is too problematic and may not serve the best interest of the city. If there is no association and no additional property, she would not be in favor of the proposed concept. She asked if the project is financially feasible with five units instead of six. Ms. Madson EDA Meeting September 13, 2004 Page 2 stated that five units may not be feasible. Commissioner Cassen questioned why there were not more one-level not accessible units to which Mr. Nicolleli responded that the proposed design is the most efficient use of the land while accounting for site improvement costs. Commissioner Cassen reiterated the need for more one-level homes in the city. Commissioner Sommer stated he likes the layout of the land but shares the concerns of Commissioner Cassen and agrees that it is too small for an association to take care of all maintenance. Commissioner Sommer stated that NCRC should consider an association that would only maintain the lawn, plow snow, and remove garbage, leaving the owners responsible for the exterior. Ms. Madson replied that NCRC is researching various alternatives for the association and understands the importance of proper maintenance. President Collier inquired as to the selling price. Ms. Madson stated it will be in the $155,000 to $165,000 range and will appraise higher. They have gap financing available for lower income buyers. Commissioner Cassen asked if a buyer could add amenities and was told yes. She emphasized that the owner should be able to make choices. IMP. PROJECT 776 President Collier introduced for discussion Item 6, Public Hearing – Item 6 Resolution authorizing the transfer of real property (5501 Boone Avenue North) (improvement project no. 776). Mr. Kirk McDonald, community development director, explained that this is a public hearing to consider approving the sale of the property located at 5501 Boone Avenue North to Project for Pride in Living, Inc. (PPL), for $1.00. At its meeting March 23, 2004, the EDA approved a term sheet between PPL and the city of New Hope. Total acquisition cost was $376,764. The city used $100,000 in CDBG funding to assist in the original acquisition of the site. The original EDA investment was $276,764.00. The original EDA investment will be reimbursed through the tax increment generated from the proposed $14.5 million development. Mr. McDonald explained that Item 6 has two parts: the Public Hearing and the resolution to transfer property to PPL. Item 7 considers the development contract. This project has been discussed many times. As a brief review, 5501 Boone Ave North was acquired by the city in 1993 through eminent domain. At that time, a project did not proceed. A number of proposals for that property had been submitted; however, none of those were finalized and the city-owned property remained vacant. In the spring of 2003, PPL submitted a development proposal for the site consisting of 70 housing units. Of these, 35 would be affordable rental units and 35 would be market rate owner-occupied condominium units. At that time the EDA directed the developer to consider adding additional market rate, owner occupied condominium units so that the number of owner EDA Meeting September 13, 2004 Page 3 occupied units is greater than the number of rental units. The developer responded to this request and proposed the construction of 41 market rate, owner occupied condominium units. The property is currently tax-exempt and will be taxable once the property is transferred to PPL. Once developed, the property will generate approximately $163,964 in annual tax revenue. If the property were to be developed as either a commercial or industrial project, it would generate approximately $90,000 in annual tax revenue. A portion of the proceeds from the TIF district will be used to reimburse the city for the original land acquisition cost, plus interest as well as provide approximately $14,000 annually to assist the city with its redevelopment programs in administration fees. Any inflationary increases in market value will allow the TIF district to be decertified more quickly. Mr. Shawn Siders, community development specialist, gave a short presentation regarding the financial distinction between using the development of this property as a residential use as proposed by PPL versus an industrial/commercial use. The bottom line shows that residential use on this site will generate more tax revenue over 25 years and it’s likely that the city will decertify the TIF district in less than 25 years. Commissioner Cassen thanked Mr. Siders for the comparison and stated commercial/industrial on this site is less sensible in the long run. Messrs. Steve Kramer and Chris Wilson from PPL stated that with this approval, PPL will start construction this fall and have the apartments fully leased by the end of 2005. They would move forward on the condos in spring 2005, completing them in the spring of 2006. Ms. Gay Greiter of Krass Monroe stated that the agreement adheres to the term sheet approved earlier this year. They are contemplating conveyance of land as soon as financing is in order for the apartments; the city is providing a grant of $550,000 for the apartments and up to $650,000 for the condos, to be provided when site improvements begin. Ms. Johnelle Opem, 2733 Zealand Avenue North, was recognized. She inquired about the certainty of getting funding for the condos and asked what guarantees are in place to protect the city if the funding is not secured. Ms. Greiter stated that the agreement stipulates that if funding is not secured, the city would be able to take back the site, which would already have ponding and grading completed. Mr. Martin Opem, 2733 Zealand Avenue North, was recognized. He stated that the financial comparison shows the residential option is a better deal than industrial/commercial, but it actually comes out a dead wash. He also expressed concerns about other city services and felt that costs will be higher than anticipated. He emphasized that residents have stood before the EDA and Council and stated they do not want additional affordable apartments. Mr. Opem also commented on the water level and traffic on EDA Meeting September 13, 2004 Page 4 Boone Avenue North. He stated there are enough reasons not to let this project proceed. He stated he believes this project is a waste of city resources and should be stopped now. Mr. Andy Hoffe, 4632 Flag Avenue North, stated that by adding more high- density housing, the EDA is going against city goal 2. Mr. Hoffe inquired as to what would be developed adjacent to this site. He requested the EDA table this item and search for businesses to go into this area. Mr. James Fackler, 4031 Nevada Avenue North, was recognized. He noted he has been opposed to this project all along because even though the EDA says there is a tax advantage, New Hope has more than its share of affordable housing. Mr. Fackler suggested development of a park on this site if a business cannot be sought. Ms. Karen Nolte, 8232 Northwood Parkway, was recognized. She stated that according to local housing studies, the city should not consider additional affordable housing units as New hope has already approved the development of enough affordable units. Mr. Keith Pahl, 5432 Quebec Avenue North, was recognized. He stated that he drove this area of Boone in midday and had a hard time navigating with crowded streets and parking. He expressed concern regarding the impact this housing project will have on existing traffic conditions. At the request of President Collier, Vince VanderTop, assistant city engineer, addressed the stormwater issue and parking on Boone. The needed adjustment can be made for stormwater. As for traffic, Boone is 42 feet wide for two lanes of traffic and parking on one side; the city could add bumpouts like 36 Avenue to slow the traffic. Although traffic will be th heavier than it is now, it won’t exceed the capacity of Boone, which is 10,000 vehicles per day. He stated that when Boone Avenue is scheduled for updating, the city will consider left turn lanes, etc. Due to the minimal amount of trips generated by this project, it is not necessary to consider upgrading Boone Avenue North at this time. President Collier explained that Carebreak wanted a PILOT (Payment in Lieu of Taxes). Under those terms, the EDA was supportive of conveying the property, but the business was sold and the new owners decided not to pursue adult daycare. Ms. Juanita Hoffe, 4632 Flag Avenue North, was recognized. She stated that some of the previous speakers do not intend to cast aspersions on individuals who rent. She believes the city did a good job of planning and developing apartments, resulting in 49% of the housing units in New Hope being renter occupied. She expressed her support of PPL as a developer, yet would prefer to see PPL help existing communities rather than developing commercial/industrial land. Ms. Hoffe stated her concern with the lack of EDA Meeting September 13, 2004 Page 5 dedicated park area on the PPL site as well as the Winnetka Green project. Ms. Hoffe stated that the developers should be required to develop park areas rather than provide a park dedication fee to the city. Ms. Hoffe reiterated the concerns of others regarding traffic on Boone Avenue. President Collier stated that he understands the traffic and parking concerns, however, this project will add a nominal number of new trips to Boone Avenue. President Collier stated that when Boone Avenue is upgraded in the future, the city will need to consider parking issues as well as the placement of traffic calming devices. PPL agrees that there will be families with kids and the project will have a playground. PPL has a great partnership in New Hope. PPL took troubled properties and improved them. Engineering will be successful on the points raised. The flow of income to the EDA and city of $2.1 million is in addition to site improvements reimbursed through the TIF district. Commissioner Cassen added that there will be green space in both projects, as Elm Grove Park will be refurbished next to St. Raphael’s. PPL on Bass Lake Road asked for a playground, the city paid half and there is a playground there now. Ms. Susanne Remus, 5432 Quebec Avenue North, was recognized. She stated that the placement of the stormwater retention pond has decreased the size of the park area near Winnetka Green. Ms. Remus stated she feels the park size is unacceptable. She felt the city unnecessarily replaced playground equipment to compensate for the loss of space. Ms. Nolte stated that apartments are a business and the city should support the current apartment community by not granting approvals for additional rental units in New Hope. President Collier stated that a competitive rental market is advantageous for tenants. Commissioner Cassen reminded the audience that the city is considering redevelopment of the 60-unit apartment complex next to the golf course. The hope is that this PPL project would be complete when those 60 units are demolished. At that time, the city will be replacing 60 units with 35 units of which eight are eligible for section 8 subsidy. Commissioner Gwin-Lenth pointed out that not everyone in our community can afford a single-family home. Speakers tonight have talked about helping people be able to own their own home. Condominium units are more affordable than $300,000 to $350,000 single-family homes. It is necessary to develop a variety of housing types that will continue to serve all of the residents of New Hope including those that cannot afford a large single family home. EDA Meeting September 13, 2004 Page 6 Commissioner Cassen stated that many of the renters in New Hope are elderly and cannot afford a large single-family home on a fixed income. Commissioner Cassen expressed pride in the senior housing projects the city has approved. Commissioner Sommer stated his opposition to the PPL proposal. He indicated that New Hope has more than enough affordable housing and it needs to proactively recruit more commercial/industrial tax base. Commissioner Sommer stated that he has voted against this project in every instance except when PPL indicated that it did not need financial assistance from the city. MOTION Motion was made by Commissioner Cassen, seconded by Commissioner Item 6 Grwin-Lenth, to close the public hearing. All present voted in favor. Motion carried. EDA RESOLUTION Commissioner Cassen introduced the following resolution and moved its 2004-33 adoption “RESOLUTION AUTHORIZING THE TRANSFER OF REAL Item 6 PROPERTY (5501 BOONE AVENUE NORTH) (IMPROVEMENT PROJECT NO. 776).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Gwin-Lenth, and upon vote being taken thereon, the following voted in favor thereof: Collier, Cassen, Gwin-Lenth, and the following voted against the same: Andersen, Sommer; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. IMP. PROJECT 776 President Collier introduced for discussion Item 7, Resolution authorizing Item 7 execution and delivery of a contract for private redevelopment by and between the New Hope Economic Development Authority and Project for Pride in Living, Inc. for the redevelopment of 5501 Boone Avenue North (improvement project no. 776). EDA RESOLUTION Commissioner Cassen introduced the following resolution and moved its 2004-34 adoption “RESOLUTION AUTHORIZING EXECUTION AND Item 7 DELIVERY OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND PROJECT FOR PRIDE IN LIVING, INC. FOR THE REDEVELOPMENT OF 5501 BOONE AVENUE NORTH (IMPROVEMENT PROJECT NO. 776).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Gwin-Lenth, and upon vote being taken thereon, the following voted in favor thereof: Collier, Cassen, Gwin-Lenth, and the following voted against the same: Andersen; Sommer. Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. EDA Meeting September 13, 2004 Page 7 ADJOURNMENT Motion was made by Commissioner Sommer, seconded by Commissioner Gwin-Lenth, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 10:39 p.m. Respectfully submitted, Eve Lomaistro Human Resources Coordinator EDA Meeting September 13, 2004 Page 8