2009-02-10PLEASE TURN OFF CELL PHONES & PAGERS IN COUNCIL CHAMBERS.
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AGENDA
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MOUND HOUSING & REDEVELOPMENT AUTHORITY
REGULAR MEETING
TUESDAY, FEBRUARY 10, 2009, 7:15 P.M.
MOUND CITY COUNCIL CHAMBERS
Page
1. Open meeting
2. Action approving agenda, with any amendments
3. Action approving minutes for January 27, 2009
' 4. Discussion/action on proposal to expand the five-year rule for
the Mound Harbor Tax Increment Financing District 1-3 through
legislative efforts
5 . Adjourn
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Mound HRA Minutes -January 27, 2009
other city departments, which equates to $30,000 per year: In addition, the
Police Department Administrative Assistant will be split 50/50 between the
Police and the HRA, beginning February 1, 2009.
MOTION by Osmek, seconded by Skinner to adopt the following resolution. The
following voted in favor: Osmek, Gesch, and Skinner. The following voted
against: Salazar and Hanus. Motion carried.
RESOLUTON NO.09-01H: RESOLUTION REJECTING PROPOSALS FOR
PROPERTY MANAGEMENT SERVICES AND TERMINATING THE CURRENT
OUTSIDE MANAGEMENT AGREEMENT WITH WESTPORT PROPERTIES
C. Approve bills: MOTION by Osmek, seconded by Salazar to approve payment of
claims in the amount of $24,287.59 for December, 2008. All voted in favor.
Motion carried.
D. Approve resolution making a selection not to waive the statutory tort limits for
liability insurance purposes.
MOTION by Osmek, seconded by Salazar to adopt the following resolution. All
voted in favor. Motion carried.
RESOLUTION NO. 09-02H: RESOLUTION MAKING A SELECTION NOT TO
WAIVE THE STATUTORY TORT LIMITS FOR LIABILITY INSURANCE
PURPOSES
5. Recess meeting
MOTION by Osmek, seconded by Salazar to recess the HRA meeting at 7:35 p.m. All
voted in favor. Motion carried.
6. Reconvene meeting, held jointly with Mound Citv Council Meeting
The HRA meeting reconvened at 7:50 p.m., running concurrently with the City Council
meeting. _.<...
7. Operation Black Cat emergency training exercise
A. Recap of status of properties on Shoreline Drive.
Catherine Pausche gave an overview of the proposed training exercise that is to take
place on May 2, 2009. This exercise will be performed by the Lake Area Emergency
Management Group and take place in the 5500 block of Shoreline Drive. The group has
received a $25,000 federal grant to conduct a large scale emergency preparedness
exercise to include all disciplines of local government including police, fire, public works,
and emergency medical services. The four properties targeted for this exercise are
5533/5545/5555/5567 Shoreline Drive. The group has determined that this area is large
enough to manage the full scale operation and can safely accommodate partial
structural collapse, control burns, and prop staging. The City owns all of these properties
except 5567 Shoreline Drive and has an option agreement for this parcel, which will
terminate on March 15, 2009. This agreement provides for amendment and extension.
Total project costs are estimated between $85,000 and $100,000 for building demolition
and asbestos/regulated waste removal activities. Pausche indicated that costs for the
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• HRA Minutes -January 27, 2009
total demolition and remediation following the exercise could be financed through TIF
District 1-3, These costs are separate and not included in the $25,000 federal grant.
The grant is for the actual exercise itself, not the property demolition and remediation.
Pausche verified that no City funds will be expended for the actual exercise because that
is all covered by the grant.
MOTION by HRA Commissioner Osmek, seconded by Salazar to adopt the following
resolution. It was noted that this approval is for the revised addendum handed out prior
to the meeting as prepared by John Dean. All voted in favor. Motion carried.
RESOLUTION N0.09-03H: RESOLUTION APPROVING ADDENDUM TO OPTION
AGREEMENT FOR PROPERTY AT 5567 SHORELINE DRIVE
C. Discussion/action on financing plan for Operation Black Cat exercise with funding to
be provided by TIF 1-3 (HRA action item)
MOTION by HRA Commissioner Osmek, seconded by Salazar to approve the financing
plan for the Operation Black Cat demolition and remediation, with funding to be provided
by TIF-1-3. All voted in favor. Motion carried.
• D. Discussion/action on financing plan for the Operation Black Cat exercise including
acceptance and use of $25 000 grant for emergency response training (City Council
MOTION by Councilmember Osmek, seconded by Salazar to approve the financing plan
for the Operation Black Cat exercise and accept the use of the $25,000 grant for
emergency response training. All voted in favor. Motion carried.
8. Ad'ourn
MOTION by Commissioner Osmek, seconded by Salazar to adjourn the meeting at 8:09
p.m. All voted in favor. Motion carried.
Mayor Mark Hanus
Attest: Bonnie Ritter, City Clerk
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A bill for an act
relating to the City of Mound; authorizing extension of time for certain
activities in a tax increment financing district
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. [CITY OF MOUND; EXTENSION OF TIME FOR ACTIVITY 1N A
TAX INCREMENT FINANCING DISTRICT NO 1-3 (MOUND HARBOR)]. The
requirement of Minnesota Statutes, section 469.1763, subdivision 3, that activities must be
undertaken within afive-year period from the date of certification of a tax increment
financing district, is considered to be met for the Mound Harbor Tax Increment Financing
District administered by the Housing and Redevelopment Authority in and for the City of
Mound, Minnesota if the activities are undertaken within ten years from the date of
certification of the district.
[EFFECTIVE DATE]. This section is effective upon compliance by the governing
body of the city of Mound with the requirements of Minnesota Statutes, section 645.021.
346179v1 JBD MU195-15
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City of Mound
Five-Year Rule Amendment Legislation
Overview Summary Paper
What tax increment legislation is the City of Mound proposing?
The City's Housing and Redevelopment Authority ("HRA") needs to expand the
five-year rule (under Minnesota Statutes, Section 469.1763, subdivision 3) for the Mound
Harbor Tax Increment Financing District 1-3 (the "TIF District") from an ending date of
May 5, 2010 to May 5, 2015. The subject rule limits the HRA's ability to issue any new
obligations or enter into new contracts after five years from the original date of the TIF
District's certification.
Background of Mound Visions redevelopment program
The City and HRA committed themselves to revitalizing its downtown efforts
through an effort called "Mound Visions." Mound Visions began in 1991 when the City
and HRA began to explore ways to strengthen its downtown business community. For
some time, the downtown struggled to realize its full potential, not because of the efforts
of private businesses, but largely due to the lack of image, connectivity, and pedestrian
appeal. Many of the elements so important to the area, such as natural amenities and
pedestrian comfort had been forgotten. Early efforts focused on general beautification,
facade improvements and limited streetscape improvements. Through this exercise, the
community learned it needed much more than aesthetics for a successful downtown.
Mound Visions incorporated a comprehensive approach to planning, design and
implementation projects and included strategies and plans to redevelop downtown as a
mixed-use, pedestrian-oriented, friendly environment to be oriented towards Mound's
greatest natural asset, Lost Lake, its historic boat channel which extends to Lake
Minnetonka. -The Mound Vision Plan included several important themes and design
components including, but not limited to, the following:
• Establishing a traditional downtown by creating a distinctive community place for
Mound.
• Creating a central core of traditional, multi-story "main street" type buildings with
retail along the street and office or housing uses located above.
• Keeping the downtown vital by mixing retail, entertainment and office uses with a
wide range of lifecycle housing.
• Connecting the downtown area with new greenways, trails and traditionally
designed streets and sidewalks.
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• Incorporating streetscape and landscaping elements along the new mainstreet and
realigned CSAH 15 corridor.
• Providing central, downtown parking areas including both structured and surface
lots.
• Enhancing community appreciation of and. access to, the area's natural resources
by reclaiming the historic Lost Lake channel and providing public dock and boat
slip amenities for both residents and visitors.
• Projecting and enhancing the City's natural resources through the incorporation of
innovative and unique stormwater strategies.
• Planning for regional transportation connections including the former Dakota rail
corridor being planned for a possible future LRT route and transit station as well
as its interim use as a multi-use recreational trail.
• Removing blighted buildings in and near downtown.
One of the key tools for accomplishing the objectives of the Mound Visions
redevelopment program was the creation of the Tax Increment District.
The TIF District was certified by Hennepin County on May 5, 2005 as a 25-year
"Redevelopment Tax Increment District." The District was created to assist with
Mound's redevelopment areas including the Lost Lake, Auditor's Road (new mainstreet)
and Lake Langdon Districts.
What TIF activities associated with the Mound Harbor Renaissance project have taken
place to date
The downtown plan proposed by Mound Harbor Renaissance (MHRD), the City's
development partner, is the heart of the Mound Visions plan and will complete the
activities programmed for the City's redevelopment districts. A current update of the
construction activities in Lost Lake and Auditor's Road areas in the Tax Increment
District is provided below:
Lost Lake Area
Significant progress has been made in the Lost Lake District, which includes the
clean-up of a former municipal dump, plans for 371akeside townhomes, dredging
for 37 docks, creation of two (2) mitigation wetlands in the City of Minnetrista,
the incorporation of innovative stormwater strategies in cooperation with the
Minnehaha Creek Watershed District (MCWD) to reduce runoff and improve
water quality, completion of the Lost Lake Greenway Trail and construction of a
tasteful commercial retail building nestled in the midst of the district. To date, all
.site and dock-related improvements have been completed and 11 townhome units
have been constructed. Due to adverse market conditions, the developer has been
unable to secure permission to construct additional townhome units. The new
Villa commercial building was constructed in 2007 and has room for at least two
tenants. Caribou Coffee is the east anchor tenant and opened for business in
March 2008. It is anticipated that a new tenant will move into half the remaining
space on the west side of the building in February 2009. At the time the district
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was created, it was contemplated that the Lost Lake area would be built out by
December 31, 2008.
Auditor's Road Area
Efforts for the past 2-years have concentrated on the "east end" of the Auditor's
Road Area. Generally, the plans for this area include a significant restaurant
anchor with additional retail on the first level and offices above on a second level
as well as a structured parking facility. This first phase of Auditor's Road
capitalizes on the progress in the other portions of the downtown and serves as the
catalyst for development of the second phase of Auditor's Road which is expected
to result in a "west end" anchors. Welsh Companies, the commercial leasing agent
retained by MHRD, continues to have significant discussion with several possible
restaurant tenants for the Auditor's Road site (east end.) Additionally, it is
important to mention that the HRA has purchased three (3) of the involved
properties in the subject area and has executed option agreements for two (2)
other parcels in Auditor's Road, which fully demonstrates the City and HRA's
continued commitment to our new downtown. Four structures in Auditor's Road
will be demolished in 2009 to get the area "site ready" for redevelopment. At the
time the district was created, it was anticipated that the Auditor's Road area
would be built out by December 31, 2009.
Lake Langdon Area
Deteriorating market conditions and the delays in development in Lost Lake and
Auditor's Road have resulted in no activity in the Lake Langdon area. At the time
the district was created, it was anticipated that the Lake Langdon area would be
built out by December 31, 2009, subject to the right of developer to delay
completion by up to 18 months.
What repercussion does the City of Mound face by not getting the five-rule extension?
Once the five-year period has been reached, any new obligations (e.g, pay-as-you
go notes or bonds) would be treated as expenditures outside the district and subject to
strict pooling limits. The net effect is that new obligations are not practically possible in
any significant amount. In this case, this creates the following ramifications to the City
of Mound:
1) The City's HRA currently has an approved developer's agreement for the TIF
District. This proposal calls for $35,000,000 in tax increment assistance by
means of apay-as-you-go note, issuance of bonds, and construction of certain
public improvements to serve the project. Due to the severe economic climate,
this project may not be constructed until 2015 or later. Because the costs to be
reimbursed with apay-as-you-go note will not have been obligated within the
five-year deadline, the agreement could not be implemented and the projects
would be lost.
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What are the overall benefits to the City by securing this amendment?
This extension allows the HRA to 1) complete the original redevelopment goals
for the TIF District, by ensuring that the existing redevelopment project can be successful
if economic considerations force its delay into late 2010 or beyond, and 2) leverage the
increment from this TIF District to help address the foreclosure crisis in an area adjacent
to the original TIF District, which also helps prevent the emergence of blight that might
impair the HRA's investment within the original TIF District boundaries. Like many
metropolitan area communities (and indeed, the State as a whole), the City has been
affected by general economic decline and poor market conditions that have created
significant delay in development projects, compounded by a serious foreclosure problem,
all of which has created the need to amend this time-sensitive rule in order to complete a
difficult and complex redevelopment project.
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