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HomeMy WebLinkAboutCC 11-28-1983 . Minutes of Regular Council Meeting Village of Arden Hills. Monday, November 28, 1983 - 7:30 p.m. Village Hall Call to Order Pursuant to due call and notice thereof 'Mayor Woodburn called the meeting to order at 7:30 p.m. . Roll Call Present - Mayor Robert Woodburn, Councilmen Michael Ch ris tiansen, Dale Hicks, Diane McAllister, Thomas Mulcahy. . Absent - None Also Present - Bond Counsel Thomas De ans , Clerk Administrator Charlotte McNiesh, Deputy Clerk Dorothy Zehm. App roval of Minutes Christiansen moved, seconded by McAllister, that the Minutes of the Regular Council Meeting of November 14, 1983 be approved as SUbmitted. Motion earriee unan.imously. (5 -0) Business from the Floor None Public Hearings - Industrial Revenue Bonds, Arden Hi lIs Business Center, Woodbridge Properties, Inc. Phase I Mayor Woodburn opened the Public Hearing at 7:33 p.m. C Ie rk Administrator McNiesh verified publication of Notice of Hearing in the New Brighton Bulletin on November 3, 1983 and the St. Paul Pioneer Press/Dispatch on November 9, 1983. Mayor Woodburn said that he thinks all in attendance tonight are qui te cognizant of the project, and we probably won't have to go into much detail, e xcep t for questions we may have. Woodburn noted that Phase I, Phase II and Phase III have to be treated as separate issues. Woodburn noted that ~he City has a, grea t deal of' record about the project from the Planning Commission and previous Council actions and discussions. Bond Counsel Thomss Deans re fe rred to his preliminary statement for Phase I, including his commen ts and rectllllmendations, advised that the project is for 48,000 square fa e to t of fi ce and show- room space; construction period is anticipated to be from December 1, 1983 to January 1, 1985 ; noted approximately 250 new jobs will be created by the project; project is in the amoun t of $5,650,000 and thst a public offering of the tax exempt revenue financing guaranteed 100% by a credit enhancer, is contemplated. De ans reported that Mr. Weir has supplied the $5,000.00 preliminary non-refundable deposit to the Ci ty for each of the three phases, and the $10,000 cash deposit (covering all three phases) for administrative and consulting costs, any balance of which is to be refunded after all costs are paid. Deans said he has analyzed the . guidelines for a number of cities provided by Mr. Russell Prince '(Juran and Moody), and referred Cpuncil to a chart which shows the application fee, the me thod of determining the administrative fee for the several cities. Desnll ssid Bond Counsel recolll1llends that the ci ty Coun cil require a credit enhancer, re commends thllt . a legal opinion relating to the ti tIe of the property be supplied prior to clolling; recommends a review by City Clerk, City Engineer and Administration to determine whether anys i gnifi can t City expenditures will be required for any sewer, utility, street or other improvements; recommends that all costs of the City and its agents etc. be paid at the time of closing, including the City Administrative fee, in an amount to be determined by Council. Deans said that based on the comments and observations noted in the BQn~ Consultant's Comments and Recommendations submitted, IlPproval -. L " Minutes of Regular Council Meeting Monday, November 28, 1983 P age Two of the preliminary resolution and completion of the application to the Commissioner of Energy and Economic Development are recommended. Mayor Woodburn asked if any written statements have been received relative to the Industrial Revenue Bonds, Arden Hills Business Center. McNiesh reported that a Resolution was to be submitted . tonight, supporting the IRBs, from the North Oaks, Arden Hills, Shoreview Chamber of Commerce; noted that a representative in- tended to be present tonight to submit the resolution to Council, . but due to weather is unable to be present. McNiesh s'aid a let!ter has been received from the Pizza Hut, Arden Plaza, supporting the proposel additional office space (letter was read aloud). Woodburn noted that it's his understanding that six Chamber of Commerce members were present at the meeting when the resolution was app rove d. David Weir, Woodbridge Properties, Inc., thanked Council for considering Woodbridge Properties tonight and introduced the following people in the audience, Mr. and ~rs. Patrick Flaherty Mr. and Mrs. Richard Flaherty Mr. Larry Buegler, Chairman of Board of Norwest Bank, and resident of Arden Hills (1549 Edgewater Avenue) Renee Boar, Pizza Hut Corporation (Pizza Huts of the Northwest) Mr. Russell Prince, Financial Advisor with Juran & Moody Scott de Lambert and Eric Nessetwith Woodbridge Properties. Mr. Weir said that, at the Mayor's request, we'll limit our comments to a reaffirmation of the City's financial advisor's recommendations; we ask you,r support of the project; not'ed that they have talked about various benefits to the community, the absence of detriments to the community, and will answer any questions whicb may arise. Comments from the Audience Larry Buegler said that as Norwest Bank views the property which it owns, and the economic growth of the Village and the growth of the bank, which is a fairly fast growing detached facility, we have recognized certain impediments for this growth, and that is the development of the area immediately around the bank. Buegler said they believe the highest and best use of the property is not a driving range; have had a lot of complaints over the years; have been lawsuits as the result of golf balls. Buegler said they feel the best use of the property is some sort of multiple-office type use; have reviewed Mr. Weir's plans and have endorsed them as a project that would be suitable for the Village to enhance the attraction of new customers to the bank and to the shopping center, and to the total area. Buegler said he reviewed the financial statements; his analysis indicates that the Woodbridge proposal is appropriate based on the financials. Buegler said he believes Mr. Weir can do what he says he can do; and if granted approval, . project will go forward without any problems from the financial senae. Council Questions Hicks asked what affect shortening the bond issue to 20 years . would have on the proj e ct, ins te ad of 30 years. Weir said it would be significant; can't give the mathematical impact, but it would be decreased by 33 1/3% over what is proposed; part of the value of IRB financing is not only the lower interest rate but the terms under which the financing and the eosts are absorbed over a long period of time that gives the property owner the ability to offer a rent that is affordable by the tenants; the terms are as significant as the " ,~ Minutes of Regular Council Meeting Monday, November 28, 1983 Page Three in te res t rate. The 30 years proposed is most eusto~ary. Weir said that in some ins tances, after a 10-year pe riod, the credit enhancing device is reviewed, and perhaps renegotiat~d with the borrow,ing party, and causes the project to be reevaluated and refinanced in some fashion. Hicks noted that, in the August summary of IRBs issued by the State . Department of Energy, only about 1/3 were for 30 years - many we re for 15 years. . Weir said in some large corporations, building manufacturing plan ts , the term is as 11 t t Ie as 7 years; the circumstances are di ff e ren t f rom ours in terms of the financial consequence to the tenant. as opposed to ourselves as owner of the prope rty. Hicks asked Mr. Buegler if his analysis of the financial package indicates the project is "reaso,nable" only with IRB's or is it reasonable with conventional financing? Buegler said that at the present time, new office projects coming on strea~ are those co~peting with pro,1ects built in years past, in a different' construction environment; today the viable projects he sees are those that have subsidy in the form of LR.B. financing. In order to build something today to give a developer an incen ti ve to build, you almost have to have tax-exempt financing. That is quite c us t OJlla ry at the moment; estimated about 50% of office projects today have this type of financin g. A letter from Northland Mortgage Company was distributed to Council which was written at the request of Woodbridge Properties, Inc. informing Council of its efforts in pursuing ~ong term, permanent financing for the three office building ~rojects in Arden H~lls; noting they have been unable to secure permanent financing on te rms that would make the proje~t feasible (13%~13~% interest) . The letter noted that the public sale of revenue bonds may result in an effective interest ra te which will permit the owner to charge lower rent to tenan ts . It stated that, as, mortgage bankers, they are most concerned about the overall project feasibility; they see no way that long term, permanent financing is available to t'his proj e ct today on an affordable basis without IRBs. Hicks asked Mr. Buegler if projects today need IRBs to m.ake them feasible; will we be facing a similar problem in five years or so? What will make those developments economically comparable and competitive with projects financed: with IRBs today? Buegler explained that changing conditions are bound to occur. I t depends on the business cycle, vacancy rates of off i ce buildings; said many things come into play; noted tha t today in St. Paul the . audit enhancer is tax increment financing, as oppose'd to IRBs. Various types of proj e c ts today need something to get them going. Buegler said, as we get the urban sprawl, Arden Hills ma.y have to look at tax increment financing. Mulcahy asked Buegler to expand on the credit worthiness of Woodbridge . Properties, Inc. I note d the Counci I wan ts a project that will survive; asked if the project is as good as we are goin.g to find in the fo reseab Ie future? Buegler said he would not be here in support of the applicant if he had any doubt that he eould do what he proposes to do. Buegler aaid it has been several months since he reviewed the Woodbridge financial statement; things do change; stated that, ~n his mind, the project is doable. Minutes 9f Regular Council Meeting Monday, November 28, 1983 Page Four Mr. Deans was asked when the closing .is anticipated. Deans said, the closing is unclear at this point; noted it depends 9n whether all the financing can be gotten together this year; noted that if the closing does not occur this year. it may be at risk; explained that the bond legis lat 10'11 is a matter which has not been resolved to date~ stated that the closing will take place when financing is completed. . Christiansen asked Mr. Prince (Juran and Moody) when he anticipates closing. Prince said Phase I can be done this year; stated that . the proposed January 1, 1984 cut-off date, he fee ls, will very likely be moved up to JulY,or possibly be extended a year or. two. Mr. Weir was asked what he considers as an alternative, if IRB financing will not be available. Weir said he has no feasible alternative at this point; feels it is highly unlikely tha t the legislature will have a cut-off of January 1st, has been advised that it is possible to close all funding immediately, but he unde rs tands the re is a st~tionary period of up to 36 months before all b9nds have to be dispe rse d. Weir said it isn't their preference to do it this way, but we are sincere about making the pro j e c t a reality; we want to minimize the risk; we are confident in the advice we are receiving from Washington that it is a manageable risk and IRBs are not like ly to be cut off January 1st. Weir said they stand ready to take risks; the fact that we have X amount of dollars invested today is far less se rious to walk away from then to have something that is going to con tinue to eat you alive at the tune of ~ million dollars or more a year on something that does not make economic sense. We want every project to stand on its own two feet sO that our ten an ts can afford to be the re. Christiansen asked the status of Woodbridge obtaining a Letter of Credit or other credit enhancer. Weir said, because they have been awaiting the Public Hearing, they have not obtained a Letter of Credit; said their financial condition is such that they should be able to ob tain a Letter of ere di t or some sort of corporate guarantee from a financial institution; explained they need the Resolut~on before they can request it. Christiansen noted that park dedication has not been discussed; aske d Mr. Weir if he is familiar with the requi remen t. Weir said he is aware of the park dedication; has not reached a determination as yet; it's an item that is at the Council's dis cre tion, before wege t an Occupancy Permit. Christianaen noted that anothe r item, discussed at the last Council meeting is the maintenance of the on- site Sewer and water services. McNiesh reported that Attorney Lynden called and said he had word that the plan is to describe the easemen ts in the Declaration of Covenants, and a Surve~ showing the location of all the easemen ts, which the developer will then take care of; reported that Mr. Lynden has not looked at the package, but this would be a way of handling the maintenance of these utilites. Weir said they have prepared easements to provide . for utilites to the Phase I property; have to make a run of 800 t to the south of their property over an existing easement, which the City has, in order to ge t se rvi ces ; noted that even though sewer and Water are in County Road E, the sewer is not available to the project because the sewer elevation is too high on County . Road E. Hicks asked Mr. Weir what will happen to the project if he is successful with closing on Phase I , and le gis lati on changes such that IRB financing is not a possibility for Phase II and Ill? Weir said it is his expectation to be able to ~ l. Have a Resolution or clear indication that we will not have to fund all 3 phases at one time, or --_.--~ Minutell of Regular Council Meeting Monday, November 28, 1983 Page Five 2. To, hope fully, fund all three at one time and th~llholcl the funds in the trustee aecount until such time all they can be dispersed, because that would fall within our sequencing schedule. Hi cks asked Mr. Weir if he is !>aying that the project is not economically feasible with IRB financing on ~hase I and not on . Phases II and III. Weir said, that is cP,rrect" not at this time: they have been unable to make the numbers work. . Hick!> asked Mr. Weir if he intends to persue funding all th ree phases now, rather than waiting to see what happens to the pending Ie g18 Ill. tion. Weir said "Yes, we like to proceed with a lot of care and caution; are not eager to stick our necks ~ut and create something that the City, our investors and ourselves are not happy wi th." McAllister asked Mr. De ans why Congress is considering this Ie gis,- lat ion; asked what effect the IRBs are having .on the national budget; why is it in Con gress at all? Deans answered that when the re is a tax deduct ,mortgage, there is a loss to the federal treasury. McAllis te r said this is what she thought, the tax payers are helping to finance these projects. Deans said there are arguments on both sides; there are counter balances. McAllister asked Mr. Weir why he doesn't wait until the 1st of the year, or when Congress gets the dates established, and then go fo rward. Weir explained that the myriad of details, and the multit..de of people involved, and the tremendous c os t s that are in vol ve d (front end fees) all take a lot of time. If it we re just an agreement we cou'1d execute" it would be great, we can' t go to a financial institution for a Letter of Credit until we have the support of the Council. Weir said the re are two str'Ong sides to the issue of whether the re is a loss of money to the federal 'treasury; explained that it is true the in te res t on the bonds is exempt from income -- tax, but the legal fees, underwriting discounts, contruction payrolls, permanent payrolls are all taxab Ie; noted that pension funds hold a lot of home owne rs · mortgages and are taken as a personal deduction on income tax. McAllister said she also does not believe the project will create new jobs; feels they will be moved from somewhe re else. McAllister asked Mr. Prince why he fee ls January 1, 1984 will not be the cut-off date. Prince .aid administration would be difficult to put in place for all the states by January 1st; seems unlikely in an ehction year Mulcahy asked Mr. Weir, if he feels he can begin digging right away, if he gets Council approval. Weir said they are in the . position to )pull the Building Permit tomorrow morning; with all the snow it is up in the air whether we'll be on the site within the week; noted that the snow does protect the ground from frost we do intend to start promptly. . Woodburn asked Mr. Deans to enlighten Council on the te rm of the bond - 20 years - 30 years; noted that the maximum we give for City bonds is 15 years for things as permanent as this. Deans said this is bas ically a marketing question, an un de r- writer determination; investors will look in to this and determine what they can sell. Deans said with a 1001 enhancer there would be no possibility of default. ~'~" Minutes of Regula:r Council Meeting Monday, Novembe:r 28, 1983 Page Six Deans add the inveate:rs will be looking at this. Woodbu:rn noted that pa:rk dedicatio~ depending on the cos t of th41 ~and, can bea significant figure; asked ~f this shoUld be 1. th. Woodbridge p-rospect\.ls? , Weir said he is very 1l1uch 8wa:re of iI;, but has not spent any time on it to ~ate; is not prepared to rellPond to it tonight. McAllister said she feels it should be dete:rmined . now; does not want it to be a stumbling block after the project gets going. . Woodburn explained that the park dedication ia 10% of the value of the land; 1\0 te d that if land is $1 million, park dedication is $100,000. Wei:r said he is not prepa:rec;! tonight to respond; notec;! that A:rden Hilla is one of two cities in the Metro Area that . ha,s not amended its a ub di vision .ordinance to comply with the 1981 statuto ry ,change whi,cn saya pa:rk dedication fees must bear some reasonable proximity to the nature of the deve lopment and its impact on the park system. McAllister noted new joba will impact the park a,..tem. Woodburn said it's his understa,nding that there w~li be no pay~off on the bonds the first 10 years. Weir said that is correct. Woodburn asked if it isn't customary to $4111 an item like this in 7 to 10 years? Weir said it is not their objective to sell in 7 to 10 years, but some people dq. Mr. Weir re fe rre d Counci I to his Ie t te r relative to suggested alternative to Administrative fee (11-17-83) . In discussion, it was explained that the resolution establishing application req ui remen ts for consideriing innustrial revenue bonds financing for this project states the administrative fee to be 1% of the amoun t finsnced, subject to arbitrage re'gulations. Administrative fee is in addi tion to the $10,000 cash deposit which is for out of pocket cos ts of the City and re fun dab Ie. Mr. Deans said he reviewed'the book provided by'Mr. Prince containing guidelines of 73 cities; referred Council to a fee chart he prepared indicating fee req ui remen ts of several cities in the Metro Area. Weir said the nature of the Administrive Fee at the 1% leve I , is for a bond . Paul Port Authority, which agen cy, s\.lch as th 41 St. provides credit to the recipient of the bond proceeds, which is not the case here; suggested that Mr. Deans explain the services the City will have to provide in conjunction with this is sue. We feel that the City does not want to charge us any more than a reasonab 141 fee for the services the City's providing in connection with this. Woodburn asked Mr. Prince to explain the fee struct\.lre. Prince pointed out that Minneapolis and St. Paul each charge a rather substantial administrative fee; the reason for this is that they . p rovi de an on-going benefit to the borrower; in both cases they p rovi de a con tinuin g bond rating; they initially help the bonds ge t sold and it keeps the ratings up on those bonds; explained that they administer the loans by keeping track of how the ldanis progressing etc. and keep a relatively large staff. Administrative fee is charged to borrowers who utilize their program. Prince . exp lained that other cities don't have this elaborate system, but have economic development commissions, which are generally un- paid but help the cities in reviewing IRE applications; noted that these cities char ge some administrative fee to off-set the administrative cos t of the people on the payroll, other than the, volunteer, committee people. Prince noted that there are only 6 other cities on the list that cha rgeany administrative fee and all of these are ~ or less than that which has been proposed for the City of Arden Hills, with the exception of Roseville and Vadnais Heights, both of which have the same type of fee as Arden Hills. Prince said, if the City were providing a rating and some on- going benefit to the developer to help see that the bonds are sold, the re might be some justification for an ~dministration fee. :' , Minutes of Regular Council Meeting Monday, November 28, 1983 Page Seven . Hicks asked if the cities listed "non .pacified" on the chal't, 1..n fact, do not have an Administl'ative Fee, or did they just not specify what it is? Prince said the' infol'mation was supplied' by each of the cities' guidelines; if not specified, they do not charge the fee. Deans said his analysis did not go beyond the guidelines; did not call the val'ious cities. . Mulcahy asked if the relatively high Roseville and Vadnais ,Height. administrative fees have ever been imposed. Deans replied that Roseville has clos,ed on one issue; was not able to get the full . amount. Vadnais Heights has received the fee, or a portion of the fee, on approximately 8 issues ; a number of those issues wel'e undel' a million dollars. Mulcahy said he wonders if the 1% fee in Roseville and Vadnais Hei,ghts may be a little "show", and isn' t really the way the world operates. when you have a development that you really want. Mulcahy says he feels it is exhorbitant and improper; feels the fee should relate to actual expenses; does not feel Arden Hills should impose a fee which has to be compromised later. It was explained by Deans that Woodbridge will be obligated to pay the City's expenses up through the date of issue (City's bond counsel, Briggs and Morgan, all publications etc.); these costs will be paid in any case; the 1% administrative fee does not go for these expenses. Weir suggested that a fee based on the percentage of the bonds seems preposterous; in many cases, the size of the issue has little to do with the complexity of the administration; said thst in many cases it is easier to handle a 5-10 million dollar credit-enhanced package than a 1 million dollar privately placed mortgage. In answer to why Roseville and Vadnais Heights did not get their 1% Administrative Fee, Deans explsined that there are arbitrage limitations, which will be determined by Briggs 'and Morgan. The Public Hearing was closed at 9:00 p.m. In Council discussion, McAllister referred to a newspaper editorial which she read, in part, relative to restrictions on IRBs; expressed her concern about abuse of these bonds; stated that the Woodbridge project is nice, but feels it is not necessary to Arden Hills; noted that the applicant is already obje~ting to the park dedication requirement and the administrative fee. McAllister said she feels these two fees should be settled before approval of the Preliminary Application. Deans explained that approval of the Preliminary Application authorizes the applicant's completion of the application form for review by the Department of Energy Planning and Development; gives the City's blessing of the project; explained that final appl'oval by the City will be requested at a later date; feels some deter- . mination should be made re the administrative fee and park dedication before final approval; noted that it would be preferable if these can be settled tonight, if possible, because a business judgement must be made by the developer. Weir said he would like the administrative fee determined tonight. '. . Mulcahy moved, seconded by Hicks that Council adopt Resolution No. 83-65, RESOLUTION RECITING A PROPOSAL FOR AtOMMERCIAL FACILITIES DEVELOPMENT PROJECT GIVING PRELIMINARY APPROVAL TO THE PROJECT PURSUANT TO THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT AUTHORIZING THE SUIlMISSION OF AN APPLICATION FOR APPROVAL OF SAID PROJECT TO THE COMMISSIONER OF ENERGY, PLANNING AND DEVELOPMENT OF THE STATE OF MINNESOTA AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH SAID PROJECT. (Phase I) . . '. Minutes of Regulsr Council Meeting Monday, November 28, 1983 Page Eight Motion carried (Mulcahy, Christiansen. Hicks voting in favor of the motion; McAllister and Woodburn voting in opposition) (3-~) Phase II Mayor Woodburn opened the Public Hearing at 9: 15 p.m. and Cbrk Administrstor McNiuh verified the publication of Notice of Hearini . in the New Brighton Bulletin on }lovember 3rd and in the St. Paul Pioneer P'ress/Dispatch on November 9th, 1983. . Bond Consultant Deans stated that the comments and recommendationll, previously made for Phase I alii 0 app ly to Phase II, except the Phase II project ill to construct and to equip a three-II tory glass and brick building to contain approximately 50,000 square feet of ofUce and showroom space; the ,conlltruct,ion period is estimated to be from July 1,1984 to July 1,1985; the project is estimated to create approximately 255 new jobs, the pr9ject ~ost is $5,015,250. Commen ts snd Questions from the 'F loor None Woodburn Stated that all comUlents and observations that applied to Phase I alao apply to Phase II. The Public Hearing was closed at 9:16 p.m. Christianllen moved, seconded by Hicks that Council adopt Resolution No. 83-66, RESOLUTION RECITING A PROPOSAL FOR A COMMERCIAL FACILITIES DEVELOPMENT PROJECT GIVING PRELIMINARY APPROVAL TO THE PROJECT PURSUANT TO THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT AUTHO!iIZING THE SUBMISSION OF AN APPLICATION FOR APPROVAL OF SAID PROJECT TO THE COMMISSIONER OF ENERGY, PLANNING AND DEVELOPMENT OF THE STATE OF MINNESOTA AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIAL IN CONNECTION WITH SAID PROJECT. (Phase II). -- -, '.'0--'-." _. -.--",-."-- - ._.'.n._ .-- ---- Motion carried (Mulcahy, Chriatiansen, Hicks voting in favor of sp'posi t1on) (3-2) d__ , the motion, McAllister and Woodburn voting in , i i Phase III I I Mayor Woodburn opened the Public Hearing at 9:17 p.m. C Ie rk I Administrator McNiesh verified publication of Notice of Rearing in i the New Bri~hton Bulletin on November 3rd and ,the St. Paul Pioneer, I Press/Disoatch on November 9th, 1983. Deans stated that the comments and recommendations previously made for Phase I also apply to Phase III, except the Phase III project is to construct and to equip a three-story glass and brick building which will contain approximately 50,000 squ are feet of office and showroo~ space; period of! construction is anticipated to be from September 1st, 1985 to September 1, 1986 ; an estimated 255 new jobs will be created by the project; cost of project is $5,015,250. Comments and Questions, from the Floor . None Woodburn stated that all comments and observations that applied to Phase I also apply to Phase III. The Public hearing was closed at 9:18 p.m. . Mulcshy moved, seconded by Hicks, that Council adopt Resolution No. 83-67, RESOLUTION RECITING A PROPOSAL FOR A COMMERCIAL FACILITES DEVELOPMENT PROJECT GIVING PRELIMINARY APPROVAL TO THE PROJECT PURSUANT TO THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR APPROVAL OF SAID PROJECT TO THE COMMISSIONER OF ENERGY, PLANNING AND DEVELOPEMENT OF THE STATE OF MINNESOTA AND AUTHORIZING TilE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH SAID PROJECT. (Phase III) Motion carried (Mulcahy, Hicks, Christiansen voting in favor of the motion; McAllis tel', and Woodburn voting in opposition). (3-2) .-1-': , .'~ ,-- . Minutes of Regular Council Meeting Monday, November 28, 1983 Page Nine Council resumed discussion re the Administration Fee. Hicks said the 1% fee was a substantial factor influencing him to approve the scheduling of tonight's public hearings. Christiansen said that an important factor in our discussion of IRB financing was the viability of the 1% Administrative Fee. Christiansen said he is also concerned about the fees that are being paid, or will be paid, when you look at the Administrative Fee and Park Dedication; asked . the exact value of the land. Weir replied $1,150,000. Christiansen said if we assume 10% park dedication ($115,000) and 1% , m'i nus arbitrage, Administrative Fee ($150,000+) we're looking . at a $265,000 expenditure on the part of the developer; said this seems like a very heavy hit for a project he would like to see become a reality. Christiansen noted that there is at remendoua nee d by t.he Ci ty to raise some money in the next few yea rs to cover coata of some very large projects; no te d this is a handy way to do it, but said he'd be open t~ look at some arrange men t be tWeen an Adminis traUve Fee, so we can use that money for ourp urposes, by making an adj us tment to the 1.0% .park dedication. Woodburn noted one argument for adjuating the park dedication fee has already been given in that some expense has already gone for water control on the project; noted that this water control is for draining water from parking lots on the project that was not the re before. Woodburn noted that on some occasions the re has been some adjustment of the park dedication fee, mostly when the control was needed for water running through the si te from some other source. Woodburn said he, also, has not thought about the park dedication Dr this project; noted the re may be some justification for park dedication adjustment for the on-site water control. Weir explained that part of the reason that the Chamber of Commerce presented the Resolution fo r tonights meeting is that there is a significant populatio~ that all of you are representing as Council membe rs , many of whom do not vote, but they pay in excess of 50% of the total tax revenue paid into the City of Arden IIi lis; this can be looked at as a subsidy to the resi den tial 'p rope rty tax p aye r. This is extremely unfair to the commercial tax payer if you compare it to the level of the services provided by the Ci ty. Weir said the City Council is in a ve ry powerful position; it can kill the p ro j e c t , or can make it a reality. Financial feasibility is -something th a t we are concerned ab out as much as the Council; noted that what you don't want is a partially built project. Weir said he would like this fee to be reasonable; Woodbridge Properties is here aa friends of the City of Arden Hills; we wan t to be here; we hope you'll want to encourage us to be here. You can't add $100 here and another $100 there, without having it start to add up. I t wi 11 affect the economic viability. Weir asked Council to re-evaluate all of its earlier positions and to consider our application proposal that the fee be limited to $5,000 and that the non-refundable fee be applied to it; if you feel this is insufficient, move it up to ~ of 1%, but 1% simply is an onerous level to withstand when you add all the other elements on top of it; asked that Council look at it on behalf of the commercial tax- . payers that are paying half of the revenue. Weir said an alternative he has offered is to pay off the spe ci al assessments on the property. Hicks reminded Weir that Council talked ab ou t these fees four weeks ago; said he feels strongly about the 1% Adminis trati ve Fee. ,. Mulcahy said that the $15,000,000 development will benefit Arden Hills by real est~te taxes; feels our City should be careful to not ove rload the f ron t-end cos ts . Woodburn noted that a large po,rtion of this tax goes to the Metro Cities as the result of the fiscal dispari ties act; noted that it may be a net advantage to the school district,; noted that fire and police cos ts are high. - . Minutes of Regular Council Meeting Monday, November 28, 1983 Page Ten Hicks move d, seconded by McAllister, that Council approve an Administrative Fee for Woodbridge Properties, Inc. at 1% of total issue fo rail th ree phases, subject to arbitrage limi ts. In further discussion, Chris~iansen said th a t he could buy setting the administrative fee at 1%, and holding to tha t; feels the exercises we have gone th rough the las t 6 month could be futile; feels . it didn't do any good to hold these public hearings and vote for the resolutions to go to the State and then come back with the 1% fee without an adj us tmen t somewhe.re along the line. McAllister . asked if he really fee Is that on a 15 million dollar project, a fee of $150,000 is going to make it or break it? Christiansen said, yes, with the added park dedication; noted we have $15,000 in our pocket now; if we want to look at reasonable fees, and we say that 1% is reasonable, then the $5,000 application fee is not really reasonable per phase, compared to the lis t of 24 cities. Pat Flaherty said that the way he sees ,it postured righttlow, Council is giving with one hand, and taking .way wit~ the other. Flaherty noted that t~e property has been for sale fo r 4 or 5 years; this is the first really quality situation we have had before us. I can't understand why the Council is no~ welcoming this development with open arms; feels t.hatby charging a $ 150 ,000 Administrative Fee, the City is really losing a quality development; said he doesn't understand this kind of government; feels business is entitled to a break frOm all the fees they are charged; no te d tha't Flaherty's Arden Bowl paid $75,000 in taxes t~is year, assessments on County Road E of $52,000 and $9,000 in license fees to Arden Hills; said Flaherty's might have been able to do some- thing with its gas station if this financing went through. Mr. Buegler noted that in the City of St. Paul recently, taxes were abated for 5 years, and Port Authority agreed to give the comp any the land valued at about 1 million dollars and to approve IRB financing to entice a company to stay in t~e city. Buegler said these projects don't happen every day; noted that you can kill a project with an enormous front-end fee; noted that other municipalities are willing to give a great deal to keep business. Hicks explained that Arden Hills has welcomed this project; no te d that the only problems are financing; explained that the plans have been approved; Council previously f ai le,d to set a public .hearing for IRB financing; but the developer said he couldn,ot afford the, project without IRBs and now he can1t aft' ord the Administrative Fee of 1% . The motion carried (Hi cks , McAllister, Woodburn voting in favor of the motion; Christiansen, Mulcahy voting in opposition). (3-2) . . REPORT OF VILLAGE ENGINEER DONALD CHRISTOFFERSEN Bid Award - Water Impr. 83-4 McNiesh reported that no bids we rere cei ve d by the Ci ty, P robab ly be cause of the heavy snow storm and the closing of the New Brighton . Post Office because of the storm and a fire near the post office. McAllister moved, seconded by Hicks, that Council adopt Resolution No. 83-68, RESOLUTION POSTPONING OPENING OF BIDS ON IMPROVEMENT NO. W-83-4. Motion carried unanimously. (5-0) (Bid opening to be at 2:00 p.m. on Wednesday, Nove mbe r 30, 1983 a t the Village Hall.) ! "".,. ------- ------- ------ . '. , Minutes of Regular Council Meeting Monday, November 28,. 1983 Page Eleven December Council Meeting Schedule Council Concurred to schedule thei following December Council Meetings: - Special Council Meeting on December 1, 1983 at 5:15 p.m. at the Village Hall. - Regular Council Meetings at 7:30 p.m. at the Village Hall on Monday, December 12th and Tuesday, December . 27th, 1983. . REPORT OF VILLAGE TREASURER DONALD LAMB (absent) Investment McNiesh reported that an investment was made on November 18, 1983 by Treasurer Lamb in the amount of $711,328.79 at Twin City Federal at 9.81%, interest, to mature 11-19-84. Hicks moved to ratify the Treasurer's ,investme~t. Motion was seconded by McAllister and carried unanimously. (5-0) Ordinance No. 231, Regulating the Installation of Sump Pump Systems';" Final Reading Chris tiansen moved, se conded by McAllis te r, that Counci I dispense with the final reading and adopt Ordinance No. 231, AN ORDINA,NCJi: AMENDING SECTION 28-11Ha) OF THE ARDEN HILLS CODE TO CHANGE ERRONEOUS RE1ERENCES THEREIN AND ADDING A NEW SECTION 28-114 TO DIVISION 3 OF ARTICLE III OF CHAPTER 28 OF THE ARDEN HILLS CODE REGULATING THE INSTALLATION OF SUMP PUMP SYSTEMS. Motion carried unanimously. (5-0) Ordinance No. 232 , Changinl': Dates Penalties Are Applied for Delinquent Utilities - Final Reading .' Hicks moved, seconded by McAllister, that. Council dispense with the final reading and adopt Ordinance No 232, AN ORDINANCE AMENDING THE SCHEDULES IN SECTION 28-58(a) AND 28-128(a) of the ARDEN HILLS CODE TO CHANGE THE DELINQUENCY DATES THEREIN. Motion carried ' unanimously. (5-0) Approval of 1984 On and Off Sale Liquor Licenses Council was referred to list of 1984 Liqu'or License Applications. McNiesh reported that the Fire and Police Inspections have been made; advised that, some corrective wiring has been requested at the Bi& Ten Supper Club by Fire Chief Koch before his approval; othe~- wise all liquor establishments were approved. McNie'sh said a routine police check is being conducted by Ramsey County Sheriff relative to new managemen't personnel at McGuires. McNiesh reported that Attorney Lynden has reviewed the applications and recommends approval subject to minor application and bond corrections. Hicks moved, secondedby Christiansen, that Council appr.ove the 1~84 On-Sale -anCI.'Off-Sale:.liquor license as listed, subject to . required electrical corrections at the Big Ten Supper Club and the routine police check at McGuires and application and bond corrections. Motion carried unanimously. (5-0) Landscape Inspection Report - A. McDonald's Restaurant . B. W.W. Grainger Co. C. Northwestern College Deferred to the next regular Council Meeting Informal Bids - Installing Electric Heater at Warming Houses Council was referred to Buckley's memO of 11-23-83. <lr' --~ . - . " Minutes of Regular Council Meeting Monday, November 28, 1983 Page Twelve Hicks moved, seconded by Mulcahy, that Council award the bid to Linehan Electric, White Bear Lake, MN. in the amount of $1,359.00, the apparent low bidder, as per memo. Motion carried unanimously. (5-0) LeaRue of Minnesota Cities - Workmen's Compensation CoveraRe for 1984 . Mulcahy moved, seconded by McAllister, that Council authorize McNiesh to execute the document on behalf of Arden Hills. Motion carried unanimously. (5-0) . Discussion of 6-Hour Parking Regulation Council was referred to McNiesh's memO of 11-18-83; reported that Pascal Avenue is apparently one problem street; one resident does not have a driveway or a garage; some residents, have too many cars to accomodate on their driveway etc,; note d that Pascal is a narrow street; on-street parking makes it especially difficult for snow plowing. McNiesh reported tha t Ramsey County She riff has recently issued many warning tickets, relative to the 6-hour rule. Other Business Councilman Hicks said he would be out of town) un ab Ie to attend Planning Commission Meeting and December 12th Council Meeting. Councilman Mulcahy will also be out of town, unable to attend Human Rights Commission Meeting. REPORT OF CLERK ADMINISTRATOR CHARLOTTE McNIESH Claims and Payroll McNiesh l"efe rred Co unci I to:,list of 4 manual checks and t:oa transfer check, in addi tion to Payroll. Christiansen moved, seconded by Hicks, that Coun cil app rove the Payroll and additional che cks as submit:ted. Motion carried unanimously. (5-0) Adjournment Mulcahy moved, seconded by McAllister that the meeting adjourn at 10:45 p.m. Motion carried unanimously. (5-0) L~PIJ~~ ~~~~ Charlotte McNiesh Robert L. Woodburn '. Clerk Administrator Mayor Not ice of Meetinl!:s - A Special Council Meeting will be held at 5:15 p.m. on . Thursday, December Is tat the Village Hall. - The next Regular Councii Meeting will beheld at 7:30 p.m. on Monday, December 12 th at the Village Hall. . ,'" ;, ,. "