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HomeMy WebLinkAboutCCWS 03-28-2005 . ~ ~ . ~~ILLS Approved: April 11, 2005 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION MONDAY, MARCH 28, 2005, 8:15 P.M. CITY HALL COUNCIL CHAMBERS, 1245 WEST HIGHWAY 96 CALL TO ORDER Mayor Aplikowski called the meeting to order at 8: 15 p.m. Present: Mayor Beverly Aplikowski, Councilmembers David Grant, Gregg Larson, and Brenda Holden. Absent: Councilmember Lois Rem (excused). Staff Present: City Administrator, Michelle Wolfe; Director of Operations & Maintenance, Thomas Moore; Finance Director/Treasurer, Murtuza Siddiqui; Community Development Director, Scott Clark; and Recording Secretary, Kathleen Altman. . TCAAP PUBLIC FINANCING Mr. Clark presented the draft and amended Resolution and the reformatted Public Finance Policy as recommended by the City Attorney. He asked what additional questions did Council have regarding the Public Financing Plan and when would Council want to act on this item. Councilmember Grant asked with the financing tools, where was the risk. Stacie Kvilvang, Ehlers & Associates, replied with General Obligation Assessment Bonds they would be assessing 100 percent back to the property owners. Collin Barr stated the City's assessment had a first interest before a mortgage and the land would be more than the value of the special assessment being financed. Conncilmernber Grant asked for the cost of each option. Ms. Kvilvang, replied the TIF bonds would be at the market rate, special assessment bonds ranged anywhere between 4-5.5 percent depending on the market. Councilmelnber Grant noted the general obligation was less expensive than the TIF. Ms. Kvilvang repliedthat was correct. Councilmember Larson asked what the process was that the County Assessor used in assessing the land. . \\Earth \Admin \ConncillMinntes \ W orksession \2005\3 -28-05 .doc ARDEN HILLS CITY COUNCIL WORKSESSION MINUTES MARCH 28, 2005 PAGE 2 OF 5 . Ms. Kvilvang noted the County Assessor would review where the final purchase price was, land values of similar types of property, as well as what the future use was going to be. Councilmember Larson asked if they dropped the value because of the clean-up. Ms. Kvilvang stated that was a possibility. She then stated that Ehlers would review this. Conncilmember Holden asked how the present school levy would impact this. Ms. Kv.ilvang asked which school levies she was referring to. Councilmember Larson stated he believed right now they had one operational and one capital school levy. Councilmember Larson stated at the public hearing there was a question about Falcon Heights. He asked if staff had found out any further information. Ms. Wolfe stated they had a TIF district established in the 1990's where the developer went bankrupt and another developer took over the development. She noted this did not create difficulties because another developer took over the agreement. She indicated the developer that had taken over the project requested the City decertify the district, which the City did not want to do and this went to Court in which the developer lost. Bruce Kunkel, Economic Development Commission Chair, requested Ms. Kvilvang get back to the Council regarding Councilmember Holden's question regarding the school levy. . Councilmember Larson asked if there would be a series ofTIF Agreements. Mr. Barr replied that was correct and each sequential phase of development could have separate a TIF. Councilmember Grant asked if this was approved, how would CRR plaImed to use it. Mr. Barr replied it meant the Council was facing the reality that for a property of this scale and nature, it will require some amount ofTIF and for different cities, TIF could be an issue and that was why they wanted to bring this to the table at this time. He indicated it was important to know if Council was or was not in favor of TIF because that decision would change the development. He noted it was clearly better to get a State and/or Federal grant as opposed to a TIF note or a special assessment. Councilmember Grant asked how CRR would use this document. Mr. Barr replied having this public financing policy in place would assist them in obtaining third-party financing. Councilmember Holden asked if the County could use some of this money for improvement of County roads. Ms. Kvilvang stated there was a provision requiring notification of the County it there was going to be an impact to County roads in which the County could require the improvemer,t of the roads be used with this money. Mr. Barr stated it was his experience that this could be negotiated in advance with the County. Mr. Clark noted this was something they would be looking at with the County. . 2 ARDEN HILLS CITY COUNCIL WORKSESSION MINUTES MARCH 28, 2005 PAGE 3 OF 5 . Councilmember Holden asked if there was anything else that could eat away at the TIF. Ms. Kvilvang replied she believed County Roads was the only thing that she could think of unless the State Auditors changed their figures for some reason. Mayor Aplikowski asked how the Council felt about the affordable housing requirements. She noted this could playa part in the public financing also. Councilmember Larson noted there were creative ways to incorporate affordable housing. He stated he would support a broader mix of housing. Councilmember Grant stated he wanted to see this be a first class development and affordable housing, while it had a place, did not pull in as much TIF as other housing types. He stated ifhe had to take a side, he would want a high scale development. Ms. Kvilvang noted apartments being built today had affordable units in them, but you could not tell which they were and therefore, the appraiser did not differentiate this. She noted the biggest disparity was in the single-family homes, so most of the affordable housing, if any, could probably be in the higher density areas. Councilmember Larson noted other funding authorities might be more willing to assist with funding if there is affordable housing. Former Mayor Dennis Probst also noted there were life cycle developments which should also . be looked at. He indicated seniors had no choice but to leave the community when they sold their singe-family homes and the kids who lived in the community could not afford to buy within the community once they were out of school. He noted the school district attendance was declining at an alarming rate because young families could not afford to live within the commtmity and this was something they needed to take into consideration. Mayor Aplikowski noted work force housing was important to her and she recommended they have some of this type of housing. Mr. Clark asked if Council wanted to consider the policy at their April II th Council meeting. Councilmember Larson responded he did. Conncilmember Grant responded his inclination was to say yes. He asked where they were on the timeline. Mr. Barr replied they were a little behind on the timeline, but it was important the Council was in agreement with this and it be a unanimous agreement. He noted they were under tight timeframes with the Army and GSA. Conncilmember Grant stated he would like the residents to understand more about this financing, but he realized that could take a long time. He suggested they get the residents to understand this better. He noted by renaming this development from TCAAP to something else, he believed this would raise the awareness of the development with the residents. . Councilmember Holden stated it was fine with her to put this on the April II th agenda. 3 ARDEN HILLS CITY COUNCIL WORKSESSION MINUTES MARCH 28, 2005 PAGE 4 OF 5 . Mr. Barr stated he wanted to make sure they were doing this right and were achieving the goals the City wanted, as well as not exposing the City to unacceptable levels of risk. He asked if the City was committed to using up to 70 Million in TIF for this project, or was there a value judgment Councilmembers held in the back of their mind. Councilmember Grant stated he wanted a quality development, but he was not sure they all had the same vision as to what quality was. He indicated the water feature was an important feature for him. He stated he wanted to shoot for something high and not low. Mayor Aplikowski agreed with Councilmember Grant's comments. She also believed the water feature was important. She noted whatever they did, it needed to be done in a quality way incorporating work force housing. Ms. Wolfe noted an important point to keep in mind was Council could revise the plan if they were not comfortable with the amount ofTIF financing. Councilmember Holden stated she did not have any questions. Mayor Aplikowski stated they had to stop saying this was not going to cost the current residents of Arden Hills any money ever. She noted this would not be a separate City and there would be . opportunities that would benefit everybody. She indicated the development cost would not be carried by the existing residents, but the operating cost to the City could bear some future burden to all residents in the City. Councilmember Larson stated he was comfortable with the goal of not burdening the existing taxpayers with the cost of the development. However, he noted every decision Council made was not limited to the people who benefit from it and that was how this City developed. He indicated they needed to recognize that in the future there would probably be a windfall once the TIF period ended because of this proj ect. Therefore, the best goal would be to limit levy increases to the rate of inflation. Mr. Kunkel stated the EDC was struggling with the aging connnunity and there are a lot of people living on fixed incomes and they needed to be aware of those things as they moved forward. He stated it was the desire of the EDC that those taxpayers are not burdened. He indicated they needed to put their best effort forward in trying to achieve that. Councilmember Grant believed Councilmember Larson's comments were good if this TIF district was five years or less, but this was being proposed as a 26 year TIF district. Councilmember Larson stated he wanted a high quality development and if they expected this high quality, they would need to pay for that value. . 4 ARDEN HILLS CITY COUNCIL WORKSESSION MINUTES MARCH 28, 2005 PAGE 5 OF 5 . TCAAP INTERIM AGREEMENT #2 Mr. Clark presented the original Interim Agreement (Draft #10) and the Interim Agreement Amendment #1 - Extension of Term for Council's comments. He also presented the TCAAP expense tracking spreadsheets for Phase I (original Interim Agreement) and Phase II (Amendment #1). The Council asked various questions regarding the spreadsheets. Mayor Aplikowski requested any emails sent with questions/answers to the developer, consultant, or staff, be emailed to every Councilmember to keep everyone informed. Councilmember Grant noted they needed to be aware that that Council should not be emailing each other as a way to conduct discussions outside of official meetings. The meeting adjourned at 10:05 p.m. ~ . ,M~~ .. ,-~ .. ~h~-N~' BeVerl~liki.i Michelle Wolfe Mayor City Administrator . . 5