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2000-11-28A MINUTES OF THE MOUND HOUSING AND REDEVELOPMENT AUTHORITY TUESDAY, NOVEMBER 28, 2000, 6:30 P.M. PRESENT AT MEETING: Mayer Pat Meisel; City Manager Kandis Hanson; Council Members: Bob Brown, Mark Hanus, and Leah Weycker. Absent and excused Pauline Payne. Bruce Chamberlain. Jim Prosser and City Attorney John Dean. Recording Secretary Sue Schwalbe. PUBLIC PRESENT: Pete Meyer, Klm Anderson OPEN MEETING AT 6:30 P.M. NO TENANT REPORT. EXECUTIVE DIRECTORS REPORT: 1. Consent Agenda consisting of the monthly bills and the Minutes for October 24, 2000. NO DISCUSSION MOTION by Council Member Hanus, seconded by Weycker to approve the Consent Agenda. MOTION carried unanimously. 2. Accountants Reports and Bank Account Report. NO DISCUSSION MOTION by Council Member Hanus, seconded by Weycker to approve the Consent Agenda. MOTION carried unanimously. i ,11 I I , J ~, RESOLUION #00-24 MANAGEMENT OPERA TION CERTIFIC,,I TION Ms. Charon explained that Management Operation Certification is our "report card". This is one of four (4) phases and this must be certified with a motion. NO DISCUSSION MOTION by Council Member Hanus, seconded by Weycker to approve the Management Operation Certification. MOTION carried unanimously. Ms. Charon explained the rest of the agenda is information items and asked Council if they had any questions. Council Member Weycker asked about the letter we received back. Ms. Charon explained that basically she wrote to Grams back in February of this year regarding the Management Operation Certification. The State has been modifying this and more adjustments will be made. CUSTER REDE VEL OPMENT PR OPOSAL Mr. Chamberlain addressed the City Council and explained that at the previous City Council Meeting Mr. Ken and Sally Custer submitted a letter stating their interest in a potential redevelopment of their site at the intersection of Bartlett Blvd. and County Road 15. Council then asked Staff for recommendations or suggestions as to how to proceed. Staff suggests to continue to work with the Custers to define their development proposal to a level of detail that defines general building size requirements, uses, land area needed, and potential parcels involved. The Custers almost to that level right now. One additional meeting might be needed. Staff also suggests a draft of a Preliminary Development Agreement between the Custers and the Mound HRA. This would define the steps and responsibilities in working toward a final development Agreement. This would be similar to what was done in the past with other developers. The City Attorney has previously developed these documents and it would be fairly simple to pull from the developed one for this case as well. Staff also suggests identifying what the potential TIF District outline for the area would be. Then return to the City at the first meeting in January to report and look for the Councils decision as to whether or not proceed with the establishment of a TIF district within that area. Also review the boundaries that have been established. By doing these things we will minimize the costs associated with this kind of project. Also the Council will be sure the Custers are ready to move forward with a development project before expending dollars on establishing a TIF district. Mr. Custer added that they are waiting for the recommendation of the Minnesota Pollution Control Agency. They will probably require monitoring wells for the next two to three years. This is not in writing so it might change. All unanswered questions must be completed before any decision as to building size and location of building on lot. We are waiting for State to determine what kind of cleanup this will be. NO FURTHER DISCUSSION REDEVELOPMENT OF AUDITOR'S ROAD AND LANGDON DISTRICT Mayor Meisel is stepping down due to a possible conflict of interest. Mark Hanus will be acting City Mayor. Mr. Prossor gave a ground of the Auditors Road and Langdon District Redevelopment. Several months ago the HRA directed Staff to solicit interest from developers for the Redevelopment of Auditors Road and Langdon District. Staff went through a process identifying qualified developers. This means developers that had a retail background and the financial capability to complete this project. This list was narrowed to seven developers. Staff made a special effort to identify developers with a background in commercial retail. What staff learned from developers was that, at least in this initial phase, we were not likely to see a significant increase in commercial retail sufficient to draw the interest of a primary commercial retail developer. What Staff has are proposals from two developers that will be presented this evening. The project team reviewed the development programs that have been submitted and provided a summary. In essence the two developers are very similar. In terms of the development programs, they are primarily residential with some retail. Their level of retail is about the same. It is also important to keep in mind and to communicate to the public, while there was a strong desire for retail in this area the proposal that is being considered now by Metro Plains adds a significant portion of retail (approximately 60,000 square feet). Given the location of the community and the nature of the development that is occurring right now, this is an aggressive effort already. Later on more retail interests can be considered. Clearly what Staff is seeing not only in this area but also in other areas in the Midwest is that there is very strong demand in increases in the type and variety of housing options that are available to residents. People are looking for different housing options. The City Council may choose to select one or neither of these developers. The City Council has requested Ehlers and Associates to develop TIF projects and review the general capabilities of developers who have submitted development programs for the redevelopment of Auditors' and Langdon Districts. A summary of that review is provided herein. The development programs provided by the developers projected taxes based on various methodologies. Ehlers developed independent tax estimates based on our experience with similar developments. TIF projections have been calculated on a net present value basis with an 8.5% interest rate over a 26-year term with a 10% deduction for city administrative fee. Some observations regarding the analysis of proposals include: In addition to the project TIF revenue, it is expected that the developer would pay land costs reducing the net development cost to the city. Gramercy has included luxury apartment development of the Lost Lake site. The option of revising the development concept as outlined in "Mound Visions" was provided to both developers. This site has been previously identified for hotel development. Both proposals would leave the Meisel and Koening buildings along the west side of Commerce Blvd. The cost/benefit to acquire and redevelop does not support redevelopment of these buildings at this time. Both projects development programs are quite similar and appear to be equally financially feasible. The experience of the developer may make a difference in the ability to secure project financing. Neither project has undergone design review. However, it would appear that the development programs are generally consistent with the Mound Visions Plan. The proposed new retail in the Metro Plains Development combined with limited market support for an expansion in retail in this area does not support retail dominated redevelopment plan for the foreseeable future. DEVELOPMENT TIF EXPERIENCE FINANCIAL PROGRAM CAPABILITY THE BEARD GROUP/ DOMINIUM AUDITORS $6.3 High quality work in Hopkins, "honest, The Beard Group *35 units two story rental million delivered as promised, responsive to community would apparently sell town homes ($150k/unit) needs, worked well with the public process", of the housing to their Hopkins downtown project did not include land housing partner, *80 units four story rental assembly. Dominium. (Similar apartments ($95k/unit) Excellent design capability, to a housing project LANGDON Limited experience in Robbinsdale. HRA in Hopkins with * Restaurant * 8,000 square provided land assembly and city acted as Ryland homes) feet ~ $125 per square foot developer. TBG provided plan and project Dominium has good management, access to financing *Mixed use retail (15,000 Financial and market experience is relatively and excellent square feet ~ $75 square foot limited, knowledge of * 150 units two and three story Dominium has extensive housing experience financing options. apartments above retail especially in moderate-income housing. ($95k/unit) Mixed reviews for property management. GRAMERCY LOSTLAKE $6.7 Very strong housing experience, principally in Good to excellent *38 units senior co-op four million senior housing, access to capital. story ($100k/unit) Excellent knowledge of market. Excellent knowledge Large mixed use (office, housing, retail) of financing methods. AUDITORS downtown project in approval stage in Richfield. * 132 units rental apartments city very satisfied with design, resident ($100k/unit). 36,000 square communications, land assembly, sensitive to feet restaurant and retail community needs. ($137 per square foot) Excellent reports on property management. LANDGON 94 units senior rental town home 4 story ($100k/unit) In consideration of the information provided it is recommended that the Mound HRA direct the project team to draft a development agreement with Gramercy Corporation. The recommendation is based on the following: A significant portion of the redevelopment is housing related. Overall, Gramercy has a demonstrated a consistent reputation in housing development and management. Gramercy has demonstrated the ability to bring projects to completion. Gramercy has excellent knowledge of redevelopment financing and access to capital. The proposed Gramercy project is generally consistent with the Mound Visions plan. QUESTIONS TO BEARD DEVELOPMENT GROUP BILL BEARD, PAUL SWEEN AND MARK MOREHOUSE Council Member Brown stated he is very opposed to rental property and would rather see homeowners. He questioned what happens when there are no high enders to rent to Mr. Beard explained this risk is very low at this time. They are making a very large investment and want it to work. Council Member Brown further asked what the average length of time does Beard Group hold properties? Mr. Beard explained that they have been involved with 140 locations and have sold four of them. They have no plan to sell any of their housing. Council Member Hanus asked of the management of rentals will be internal or external? Mr. Paul Sween responded that will be a separate company under dual ownership with onsite management. QUESTIONS TO GRAMERCY COROPRATION MIKE COMLAND, PRESIDENT AND JOHN OF KKE ARCHITECTS Mr. Comland explained there would be a hotel site with a 38 unit, four-story luxury co-op building and a reinforcement of the dredged marina area. Auditors Road will have a 4 story, 132 unit building. Both will have below ground parking. There will be a 94 unit, 4 story building along Langdon with underground parking. Along Shoreline Drive will be a 9,000 square foot restaurant. This ties into the pedestrian walkway along Auditors Road. There will be points of penetration through the building at three different locations. A plaza will provide a visual relief and a focus point. The vast majority of parking is below the plaza (350 cars). There will be retail on the ground floor and housing above. Council Member Weycker asked if the west side of Commerce Blvd. would be the current owners or would you acquire the property? Gramercy responded it would be left as is and maybe they could be renovated and see what the market develops. Council Member Brown asked if this would be all rental units? Gramercy responded that they would be the top of the market for the rental units. The rents would probably be at the high end. Council Member Brown questioned Gramercy on their length of property ownership. Gramercy stated they always stay in as managers and have never sold a building. "We are in it for the long term". Council Member Hanus asked how much are you relying of having dockage and a marina on this site? Gramercy responded that it is very important but not critical. If the lake access is strictly for view, then the rental prices will come down. If it is a marina location, the rental prices will be effective. Council Member Brown inquired if Gramercy would go forward without a hotel site? Mr. Comland responded that they would not be comfortable with that because 1500 to 2000 square foot apartments would probably take the entire site. Council Member Brown inquired of the Beard Group if their proposal includes the hotel site/lost lake land and would having the hotel site make a difference in your proposal? Mr. Beard responded that they were aware of the City's desire to have a hotel at this site. So they focused on the Auditors Road area. Council Member Brown asked Gramercy if they did not utilize the Lost Lake Site would they still go ahead with the project. Mr. Comland responded that yes, that is correct. Council Member Weycker agrees with the idea of leaving the retail on the west side of Commerce Blvd. but has many concerns with water levels and underground parking. MOTION by Council Member Brown, seconded by Weycker to table this issue until the next HRA meeting December 4, 2000, to have staff check with Mr. Bloomquist to see if there is any further interest in this site, and to check with the gentleman with the use of the marina. Motion carried unanimously. ME TR 0 PLAINS DE VEL OPMENT PRESENTATION OF CONECPT PLAN Larry Olson of Metro Plains Development and Kathy Olson of KKE Architects gave an overview of the status of the project. All new streets constructed within the Village by Cook's Bay will be private and are being planned in accordance with Planned Development Area (PDA) requirements. The designation of these streets as private will not restrict its use to the public, it only means that they will be constructed and maintained by the owner and eventually the homeowner's association. The Village by Cook's Bay will not be gated community. Great care is being taken to plan and design this community so it will integrate itself into the surrounding neighborhood, not isolate it. General access by vehicles or pedestrians is anticipated and expected. Although streets are designated as private, we would expect public services such as police and fire protection would be provided to the community residents. At the recent Planning Commission Meeting, additional information was requested pertaining to enforcement of no parking on private streets and snow removal. Garsten/Perennial Property Management, a related entity to Metro Plains Development, LLC, has been involved in the management of condominium associations since September 1986. Many of these properties have had private streets. An excellent example is Lakewinds Association Condominiums, which are located at 4363 - 4407 Wilshire Blvd. in Mound. We have managed this property since October 1987. The density of this property is quite high. There are 191 condominium homes, and only 265 places to park including garages, carport, visitor parking and surface parking. Providing a 1:1.38 ratio. The Village by Cook's Bay is planning a 1:4 ratio for townhomes and a 1:1.5 ratio for the flat units, plus additional on-site guest parking. The homeowner association staff who ticket cars that fail to comply with parking guidelines achieves parking compliance. The parking tickets are affixed to the cars and non-compliance is met with bigger and more 'sticky' tickets each time non-compliance occurs. In addition, garages are inspected periodically and must have enough space in them to accommodate a car, so residents are not using visitor spaces for their everyday use. Residents who do not comply with parking and garage space rules are fined. Our policy of ticketing and fining for non- compliance has been quite successful. A parking problem is not anticipated at the Village by Cook's Bay although the same parking policies will be implemented for a site that has three times as much parking capacity as the Lakewinds site. When parking guidelines are enforced and managed properly, there is not a problem for police and fire department access. This is particularly true if the local officials will assist by ticketing cars that park in Association designated fire lanes. In regard to snow removal, to put it simply, the members of the Association tend to force the management and Board of Directors to provide good snow removal. The property manager and the President of the Board of the Directors interview vendors, check references and make certain that snow removal is done. The non- stop calls from the membership when snow removal is not done properly reinforce the Property Manager and Board President's motivation to make certain that snow removal is completed. Council Member Brown asked if the trail could be extended around the Pond? Mr. Olson responded that this could be done it fits on the site. The pond will be taking the entire storm water for the entire site. During dry spells a well will be used to keep the pond as an enmity. There is a shelf around the pond for safety for children. Landscaping will be installed so it will not be inviting to wade into the pond. Council Member Hanus asked what the purpose of this presentation is. Is it just to be kept up to date and at what point do we need to deal with specifics and/or design issues and when does it become too late to 'tweek' the plan. Mr. Chamberlain responded that the most appropriate time would be when dealing with the final plat. At the time you are approving a final plat, you are approving a PUD issue, which will give enough detail from the developer. This should be during the final plat stage between preliminary and final approval. SET PUBLIC HEARING FOR THE APPROVAL OF A BUSINESS SUBSIDY AGREEMENT Mr. Prossor explained that this is an additional obligation placed on the City by the Department of Trade and Economic Development of the State of Minnesota. Whenever a unit of government provides economic assistance, the unit of government must enter into a Business Subsidy Agreement. That agreement will be presented to the City Council on December 12, 2000, for consideration and approval. It basically says what the level of assistance is, what it is for, and what the terms and conditions of the agreement of the assistance are. MOTION by Brown, seconded by Weycker to set the public hearing for December 12, 2000. MOTION carried unanimously. ACTION ON LONGPRE PROPERTY PURCHASE AGREEMENT Mr. Prossor stated that the downtown redevelopment group had an opportunity to meet with Ms. Longpre last Wednesday to discuss the matter and at that time she was presented with a draft of a Purchase Agreement. There was discussion concerning critical missing terms in the Purchase Agreement i.e. purchase price. It was suggested to Ms. Longpre to pass a copy of the draft to her attorney for review, At this time we are trying to schedule a meeting with her attorney which will probably be later this week. Staff will continue to pursue this matter. MOTION by Brown, seconded by Weycker to continue to pursue action on the Longpre Property Purchase Agreement. MOTION carried unanimously. MOTION by Brown, seconded by Weycker to adjourn meeting. MOTION carried unanimously. Recording Secretary Sue Schwalbe