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HomeMy WebLinkAbout10-27-25-WS Approved: November 24, 2025 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION OCTOBER 27, 2025 IMMEDIATELY FOLLOWING THE EDA MEETING- ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Grant called to order the City Council Work Session at 5:45 p.m. Present: Mayor David Grant; Councilmembers Brenda Holden, Tena Monson, Emily Rousseau and Kurt Weber Absent: None Also present: City Administrator Jessica Jagoe, Public Works Director/City Engineer David Swearingen, Community Development Director Jake Reilly and Assistant to the City Administrator/City Clerk Julie Hanson 1. PUBLIC INQUIRIES/INFORMATIONAL None. 2. RESPONSE TO PUBLIC INQUIRIES None. 3. AGENDA ITEMS A. Cannabis Distribution Concept Plan Community Development Director Reilly introduced the applicant Brandon Champeau with Hempel Real Estate and Chuck Button with Portal Warehousing. Community Development Director Reilly said the land use application is a concept plan review to use approximately half of the building that houses Portal Warehousing and implement a similar model with individual spaces for wholesalers or warehousers. This would be a new use in Minnesota relating to recreational adult use cannabis. This would serve as a wholesaling site for up to two cannabis wholesalers. It is a business to business model where already packaged ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 2 cannabis products would be distributed to retailers. He noted that the Office of Cannabis Management (OCM) have been through several iterations of operations. All cannabis uses in Arden Hills are subject to a Conditional Use Permit (CUP). The proposal is for Council to determine if this use is of interest. If the concept plan were to move forward, it would take a half- under-utilized building and make it fully useful building. Council interest will inform the applicants if they should proceed with a full CUP application. The goal would be to have the existing condition of not more than 90% of the space dedicated to warehousing remain the same. Offices would make up the other 10% of the building. Brandon Champeau introduced himself. He said his company acquired the building in January of 2025. It is a strategic partnership with Portal Warehousing. He outlined a previous tenant had a similar business model, but that business was operating at about 30% occupancy in the entire building. When his company acquired the building, that old business left, Portal Warehousing, took half of the building to continue the same type of operations. They have approximately 61,000 feet. They lease to about 60 companies. Portal’s business model is to lease small warehouse spaces to companies of all sizes. They support a lot of entrepreneurs and growing companies that can’t afford to take out a huge warehouse lease. Portal has been getting inquiries from cannabis tenants who are interested in leasing portions of the building to store product before distributing to retailers. This is new for him. There are banking restrictions at play. He is seeking feedback from Council about if the request is suitable for Arden Hills and he would come back with a formal application after receiving feedback. There will be no production or retail in the space. It is pre-packaged product that will be distributed to retailers. Mayor Grant asked if they are requesting to grow cannabis. Mr. Champeau said no. There would be no production of any kind; only warehousing. This would be already packaged product being stored until it is distributed to retailers. Councilmember Rousseau is in favor of this business, pending the traffic study. She thinks this is in line with other warehousing businesses. Councilmember Holden asked how high the ceilings are in that building. Chuck Button replied that the ceilings are 22 and 20 feet. The walls go up to 10 feet. Councilmember Holden asked how many employees would be employed. Mr. Button said it is believed that each member that comes in will bring in 5-15 staff per company for a warehouse space ranging from 250-2,000 square feet. Employees will need a fob to access the space. It is secured access. Councilmember Holden sought clarification. She thought Mr. Champeau had prepackaged items and Mr. Button has warehouse space. She asked if this is several companies renting small portals with office space and they take what is place in their space. Mr. Champeau said the reason they are asking for up to 50% of the building is that Portal occupies 61,000 square feet today. Within those 61,000 square feet, they lease to smaller companies. They believe they could fill 6,000-10,000 square feet with smaller companies. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 3 Councilmember Holden wanted to understand the cannabis portion of this business model. She asked if they want to use 61,000 square feet for cannabis storage. Mr. Champeau said they are requesting up to 57,000 square feet. Councilmember Holden asked what will happen in those 57,000 square feet. Mr. Champeau said it will be strictly for warehousing wholesale products. Councilmember Holden asked if it will be wrapped product stacked floor to ceiling. Mr. Champeau confirmed, with an office component for a larger company. Councilmember Holden wanted to know how many people will be employed by users of that 57,000 square feet of cannabis warehousing. Mr. Champeau said his company would act as the landlord and won’t have any employees. Councilmember Holden said if we don’t know how many total employees there are, it can’t be determined how many parking spaces will be needed or if there will be traffic issues. Mr. Champeau said it would be in line with the rest of the building’s use of about 90% warehouse and 10% office. Community Development Director Reilly said there would be a requirement for a traffic study based on the final CUP application. That will have a low estimate based on five employees per business entity operating in the warehouse. The traffic study can look at what traffic will be if there are five employees or two entities with five employees each or two entities with 15 employees each. Because there is no end user in mind yet, the specific number of employees is unknown. The proposed maximum number of employees is 30. If Council would like the applicant to consider having three or five users, the maximum would go up by that number. That is one of the items the applicant is hoping to hear from Council. Is there a maximum? Councilmember Holden understands all of that but she is trying to figure out if there is a better use for that area. We want high paying jobs. We want good jobs. If it’s a cannabis warehouse, maybe they’ll employ 30 people. Community Development Director Reilly confirmed. He said Council can let the applicant know what employment base they are hoping for in this area. Mr. Champeau said they won’t propose anything that exceeds what existing parking allows. If a company came to them and said they want to take all 57,000 feet and they have 200 employees, they couldn’t do that. The parking would not allow that. Councilmember Weber said he doesn’t think this will take up the one sales license that Arden Hills is allowing. He assumes there will be some kind of licensing but it won’t allow for the sale of product from this location. He supports this use. He asked how long this 57,000 square feet has sat empty. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 4 Mr. Champeau said it’s been about a year since the previous business left. That business was leasing the space but they weren’t able to get occupants to fill the space. Councilmember Weber said that business moved in about three years ago. He believes the space was mostly vacant the entire time. He thinks this would be an excellent use for this space, regardless of the number of employees. It is a corner of the market that will need to be filled. He thinks it’s an excellent concept, pending the traffic study. Mayor Grant wants to understand the proposal better. He stated someone will grow and package the product. That product is warehoused here. Then retailers would order product from the warehousers to have the product shipped to their retail stores. This is simply warehousing. Mr. Champeau confirmed. Mayor Grant asked what kind of security would be in place at the facility. Mr. Button said there are multiple layers of security. They have key fob access. Each fob is registered to an employee so they know who enters and leaves the facility at all times. Mayor Grant said the State will determine what security is required and the tenants here will have to comply with that. Councilmember Rousseau asked Staff how many employees are in the Boston Scientific warehouse that is next to this location. City Administrator Jagoe does not know how many employees work at that location. She could reach out to them to find out. Councilmember Rousseau said there is also a pool company in that area. She would like to know how many employees are there. City Administrator Jagoe can find that out. She said warehousing is an allowed use in the Gateway Business District. Councilmember Monson said she supports this. She hopes they will do what ever they have to. She doesn’t know what the right number is for number of employees. She doesn’t like parking minimums. She asked if that can be remedied by a variance request. Community Development Director Reilly said that is an option. Councilmember Monson noted language in the packet. She wondered if they have to submit 8 land use applications. Community Development Director Reilly said that was his attempt to replicate what has been seen in the past for similar applications. Based on what has been submitted, the only thing they would need to apply for is a CUP. Other applications may be identified, through due diligence. He said this site is existing, non-conforming. That is the reason for the limit of office space vs. warehouse space. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 5 Councilmember Monson said any job is a good job. She wouldn’t expect warehousing to have a huge number of people working there. She is in support of this concept. Councilmember Holden asked if the building is being marketed to cannabis only. Mr. Champeau said there is about 52,000 square feet that they are wanting to fill with a more traditional tenant. Councilmember Holden asked if they anticipate an increase in semi-truck traffic, or would this be smaller vehicles. Mr. Button said he would anticipate sprinter vans and box trucks. There are multiple docks at the location. He said he is from Salt Lake City. The distributing companies there are hiring college educated employees and they pay out at that level. Councilmember Holden would like there to be more than 30 employees. Mr. Button said that estimate is for the cannabis side, there are other companies with more employees. Councilmember Holden said when the former business was in there, they were 90% filled. When the commercial market dropped, a lot of businesses could afford their own space. Councilmember Weber asked if there is local delivery. Mr. Button assumes the members will be delivering to the retail points in the Minneapolis area. Mayor Grant asked if there is a master distributor servicing other businesses in the building. Or is this multiple cannabis distributors in the building. Mr. Champeau said they would be seeking multiple distributors. Mayor Grant said this sounds like a traditional warehouse. He said we won’t discriminate against a business based on the product. Mr. Champeau said the reason they are requesting up to 50% is because they don’t know how many companies will want to move in here. He wouldn’t want to have to keep updating the CUP. Mayor Grant said he remembered the former business was open on the top. That can’t be allowed with this type of product. Mr. Button said they have discussed that. Some other facilities have a fence secured across the top so the fire suppression above it still works. That suffices for the State in other cities. They would follow whatever the State guidance is. They will make all necessary improvements to the units to ensure they are secure. Mayor Grant asked if they have done cannabis before. Mr. Button said not cannabis. This is new. They do have some THC products in Orlando. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 6 Mayor Grant said the businesses coming in will need to follow regulations. They may need to work with tenants to meet state codes. Mr. Button said they will make sure any business is compliant. Councilmember Monson asked if the applicant would need a CUP update every time they change tenants. Community Development Director Reilly said no. Right now they are saying they can have up to two. If they wanted to have three or four or five, they would have to come back to change that condition. Discussion ensued regarding a CUP doesn’t restrict the ability to place tenants of any kind. It was clarified that this pertains to the cannabis tenants only. Mr. Champeau wanted to clarify they are not limiting their concept to only two users. They are seeking to allow 57,000 square feet to be allowed for warehousing cannabis. That may be two tenants, it could be eight. Community Development Director Reilly asked Council if they have a number in mind about how many individual business enterprises in that amount of space is too many. Councilmember Weber said there are guidelines. The rules are the rules, no matter how many tenants are in there. The State’s intent with the OCM is to normalize cannabis, which will reduce the likelihood of black-market sales and gets rid of the stigma. It shouldn’t be treated as a different use because it’s cannabis. It is a warehousing use. He wants to see the space used. Councilmember Holden said there was staff at the previous business who accepted packages. Will there be anyone accepting packages for this new use. Mr. Button said the property manager is there to accept packages and deliveries, except when it is something like this. The property manager would contact the employee or owner and have that person come to the receiving area to sign for the delivery. Councilmember Holden asked if the 30 employees discussed earlier would be new employees working in this 57,000 square feet. Mr. Button confirmed. Councilmember Holden said they aren’t assuming there will be just one or two. Mr. Button confirmed. He said a big operation like this would be a team of 5-15, factoring in different shifts. Mayor Grant said he understands growers may package their product but don’t want to store it. This could be a grower’s own distribution warehouse. The grower will have its own customer base. This is a warehousing service. He assumes a grower wouldn’t want to grow and store the final product on the same site. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 7 Councilmember Monson thinks this business is here to adapt to the market and should allow the user to be there in the space size that they need. She doesn’t think that is anything the Council can determine. She doesn’t have a job target because this is a warehouse. She asked what the applicant needs. Community Development Director Reilly said that the feedback she just provided is exactly what he was looking for. Councilmember Rousseau said she is fine with the free market making the decision on the number of tenants. Councilmember Holden said the traffic study will be based on the number of people coming and going. There will be semi-traffic. She doesn’t believe growers are going to be delivering this product in pick up trucks. The number of people will matter when it comes to parking and traffic. There are other businesses around the area that could be approached for a shared parking agreement. Mayor Grant anticipates the deliveries will be small vehicles but with frequent trips. There are probably security requirements for vehicles. He said other states track these deliveries. There are rules about how the product is stored in the vehicle, it must be locked. He doesn’t think Council can prescribe the amount of people for this warehouse function. It’s permitted in this district. He asked if the applicants got all the information they were seeking. Mr. Champeau said he doesn’t have questions. They will provide more detail in the formal application. His intent is to move quickly. There are already groups who are interested in this space. Community Development Director Reilly said Staff will work with the applicant to right-size the traffic study to get accurate information. Mr. Champeau asked if a traffic study will be required as part of this process. He didn’t think that would be required if they were storing pens. Community Development Director Reilly confirmed. That is in the City Code. Mayor Grant asked if they would expect to run 24 hours a day, 7 days a week. Mr. Button said they don’t do that now on the occupied side. They usually are done by 9:00. Sometimes people may be there as late as 10:00 and they message the property manager in those cases. Mr. Chapeau said on the vacant side, it will depend on what the tenant needs. B. Affordable Housing Policy Community Development Director Reilly said he is hoping to answer some of the questions Council had at the last work session. He said he has received some additional questions since then and those answers will be built into this conversation, as well. He will provide bigger context and discuss the various tools available. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 8 Community Development Director Reilly said when mortgage bankers talk about affordable housing, it means they are looking for anyone to pay no more than 30% of their income. That includes all fees, property taxes, insurance, mortgage insurance, HOA fees and parking fees. Fixed expenses that don’t change. Councilmember Holden asked if utilities were included. Community Development Director Reilly said the mortgage companies don’t put that in there because you can change how much energy you use. Affordable housing does not generally include utilities. That is different than subsidized housing where someone is getting help paying, then utilities are typically included. Affordable housing is always tied to an area median income (AMI) that includes earned income. The median income in the Twin Cities area is just under $100,000 per year. Arden Hills median income is just under $ 130,000 per year. That is a household income. It doesn’t matter if there is one adult or three adults with ten kids. Councilmember Holden said the AMI can be counted differently, sometimes its 7-counties, sometimes it 10-counties. She asked what is being used to calculate this AMI. Community Development Director Reilly said the Arden Hills calculation is just counting Arden Hills. The Twin Cities area calculation is using the 7-county. HUD breaks everything down into affordability ranges. Someone is considered a qualified owner if they make at least 100% of the AMI. That doesn't mean someone can afford a home, but they would qualify. To qualify as true affordable housing, is that housing costs are 30% of the AMI. Community Development Director Reilly said there is potential for Habitat to come into Rice Creek Commons and build a bunch of single-family homes, they would be subsidizing that with several mortgage products, all the way down to something that is affordable. Their focus is only on deeply affordable, so people making 30% of the AMI or below. Community Development Director Reilly said the Shoreview rental, modern 2-bedroom apartment has subsidized affordable units in both of those brand-new buildings. Community Development Director Reilly said there is naturally occurring affordable housing. It’s affordable through age or the fact that someone has paid off the mortgage and is only paying property taxes. Community Development Director Reilly said there is a national housing context in crisis. We stopped building homes for too long. Now there are not enough places for people to live. More than 30% of homes are occupied by adults living alone or pairs. No one is building starter homes. Wages haven’t kept pace with the cost of inflation or the cost of constructing anything new. Difficulty finding a home that meets the income is an issue nationwide. Community Development Director Reilly said the missing middle products aren’t built anymore. These are 4-, 6- and 8-plexes. He provided some information from the Federal Reserve Bank that shows how housing production has ebbed and flowed over time. There was a decline in construction during the crash and we haven’t gotten back there yet. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 9 Community Development Director Reilly provided the projected supply of new homes from Metropolitan Council showing what is required to house the people who already live here. The region is short 120,000 units to meet the goal of 2030. We are currently looking at 2040. Councilmember Monson said this data shows we need more units, but per the presentation, no one is building the type of inventory that we need. Is the City even able to close that gap? We can make policies, but is that enough to incentivize the missing middle development? Community Development Director Reilly said there will be another conversation for this and he will bring answers to that question to the next discussion. The information will be based on the Federal Reserve Bank’s evaluation of the Minneapolis 2040 plan and how eliminating single family housing, as a choice for each individual lot for a builder to build on has increased supply. If the supply increases, everyone else’s cost goes down. The fundamental answer to the question is yes. There are a lot of things the City can do that don’t cost us any money and will generate more supply. Councilmember Monson understands the desire for more units but not everyone wants to live in a large apartment complex. Community Development Director Reilly said if the goal is more supply then we know we can open up options. It may mean some leg work by City Staff to solicit what we need from the people who can provide that product. Community Development Director Reilly shared a graphic showing the housing inventory based on the 2024 American Community Survey 5-year numbers. These are the numbers that are in the System Statement that was issued to the City of Arden Hills from the Mertropolian Council. He said there is a housing study that is associated with Rice Creek Commons. That identifies most of the homes as being greater than 1,500 square feet, meaning they are move-up homes or second homes. Councilmember Monson asked for confirmation that Rice Creek Commons will be mostly move-up homes. Community Development Director Reilly said no. There is a study associated with TCAAP from 2015. That identifies what is in the surrounding area of Arden Hills. Community Development Director Reilly shared graphics that show the affordable homes available as of 2018 in the 2030 Comprehensive Plan. He shared a graphic that identifies what is a starter home, what’s an apartment and what’s aging in place vs. aging in community. There isn’t a lot of places to downsize and there is a limited supply of single-level, single-family homes. The smaller homes would be of interest to young families. The school district relies on those families to be successful. He said these are all of the things that are free, other than Staff and consultant time, to help increase the supply of homes. It doesn’t matter how affordable the homes are. Just having more places to live makes everyone pay less overall. Community Development Director Reilly shared some of the things we can do that have some potential cost to taxpayers. Staff could go out and talk to people about how to make our existing and new housing stock more affordable. Surrounding communities are using some of these. Land trusts help ensure that people can stay in homes longer or that houses stay affordable longer by ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 10 taking out the land price. Minnesota has the largest number of land trusts in the country. There are also housing cooperatives. They tend to be geared toward seniors. There are a handful of new entities offering new senior housing cooperatives. They are pre-purchased, up to 75% of the units, within six to eight months. So there is interest in these types of housing. Community Development Director Reilly said we can establish a rental licensing program. That would cut down on staff time spent dealing with nuisance properties and would be at least revenue neutral and possibly revenue generating. He understands that is a bigger conversation. Community Development Director Reilly offered that we can also work directly with employers who can support new home development that is affordable for their workers, should they choose to live in town. Community Development Director Reilly said the most expensive option is to offer financial incentives. There would be a lot of work to do before we are to that point. Community Development Director Reilly explained the home ownership opportunities and rental opportunities. He also showed what surrounding communities are doing to bring affordable housing. Rental licensing can improve the inventory of available housing. The Met Council gives each city a target goal allotment. Our allotment is associated with what happens at Rice Creek Commons. Our Zoning Code update will do a lot. Councilmember Rousseau wonders if seeking relationships with the builders is part of the conversation regarding City-owned land like the old City Hall location and if we can find a partner we could contract with to get the affordable housing units we want. She noted a housing type that she has seen is to have a basement level with a family living on the main level with another housing unit in a third level. She wondered if that is plausible here if an elevator function could be installed. Community Development Director Reilly said that housing type is an option. It would be more of an accessory dwelling component. He knows of a builder that has designed a lift that is a walk in closet that can be converted to a lift. Councilmember Holden said we have so much housing that is for seniors. What will happen when seniors die off and those senior apartments need to transition to regular apartments. Community Development Director said people are living a lot longer than they used to. The reality is senior housing isn’t going away. The senior coops tend to start at age 55. He said builders are going away from assisted living and memory care. There is a large population of people who are 55 and older who want to sell their home. That’s where a cooperative model fits in. Councilmember Holden is concerned with the lack of ownership. Companies are buying up the inventory and renting them out at unaffordable rates. She said before we can talk about the old City Hall space we need to remember we will need space to store equipment for TCAAP. We don’t have any other piece of land to house all the new equipment. She said the affordability tends to be concentrated to the Arden Manor and south of TCAAP and the townhouses. That’s a concern. We want kids on the school bus hanging out with kids who have money. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 11 Councilmember Weber said this is a well written report. The most important aspect is creating policy that can effectively get the affordable housing we want. North Heights was an excellent opportunity to get some affordable units. We missed that chance. Council recessed the Work Session at 6:58 pm. Council reconvened the Work Session at 7:33 pm. Mayor Grant asked if there is any further Council discussion on the Affordable Housing topic. Councilmember Weber asked if Community Development Director Reilly needed any specific discussion from Council before moving forward. Community Development Director Reilly wanted to speak to Councilmember Holden’s point. He said research shows that mixed income communities are the most successful. Concentrations of poverty or lower income aren’t inherently bad but if there is a way to solve for that, he wondered what that would look like. His other question is “What’s a neighborhood?”. Councilmember Holden said the first TCAAP plan, had high value homes, medium value homes and lower income homes. We didn’t want the same kids playing together. In the ideal model, all of the neighbors would interact and so we made sure that all of the areas were different and would have a variety of people. Mayor Grant echoed that. He said we had The Hill, The Creek and The Town Center for a reason. Councilmember Monson said Rice Creek Commons continues to have these discussions. The JDA is aligned with having those mixed income communities. We are facing constrictions of financing affordable housing and the best way to finance is LIHTC (Low-Income Housing Tax Credits). She said this is a reality which we must live with which means there may be buildings that are all just low income and affordable. She said however, affordable housing isn’t necessarily low income. We just talked through affordable housing and it is 30% of your household income. Affordable housing depends on what you make and do you have housing for that. She said she hasn’t heard anything indicating that all affordable housing we would ever want to do will be 30% and below. She doesn’t want that vibe and finds everyone is using the term affordable housing differently. She said having life cycle housing available can fill the gaps for that missing middle. LIHTC is a tool that could be used. She said we are tackling a lot of the options through the Zoning changes. We’re still too far away to be talking about the HRA and levy impacts. If the goal is to allow for a mix of incomes, then our Zoning Code needs to allow for these mixes of uses. Councilmember Weber said it is important to recognize the level of affordability doesn’t necessarily mean deeply affordable or low income. He thinks Accessory Dwelling Units (ADUs) will go a long way in addressing the mix of housing affordability in different areas with different income levels. We need to free up some of the single-family housing so younger families can move into them. The seniors in our City want to stay here but don’t have anywhere to go that doesn’t cost $5,000 a month. Mayor Grant asked about LIGTC. He thought that was a 50% or 60% for fifteen or thirty years. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 12 Community Development Director Reilly said low income tax credits come in two different percentages. It is hard to get the credits. They tend to be affordable to people at 50% or below of the AMI and often include subsidized units in the deeply affordable level that are often dedicated to people with disabilities. Working with developers who understand how LIHTC projects work is helpful. LIHTC credits come with less than a 1% risk to the municipality. Mayor Grant isn’t wild about 30% AMI housing. He thinks it will pose some financial constraints that may be hard to overcome. LIHTC could have some units dedicated but when someone constructs a new building they aren’t going to make half the units LIHTC. Councilmember Rousseau is generally in favor of the options in the memo. She would have questions regarding the local religious institutions and the sacred settlements. She thought it could be addressed with ADUs, assuming there are no regulatory concerns. She liked the initiatives that Shoreview is implementing with density bonuses, net gain unit requirements, lot reductions, developer fee deferments and inclusionary housing. Discussion ensued regarding the number of owner occupied parcels. Owner occupied would include single family homes and owned manufactured homes. Apartment homes, age-restricted properties, non-single family homes and manufactured homes that are rented could be a mix of owned or rented. Community Development Director Reilly will update the table in the agenda information for the next meeting. Councilmember Holden said she asked how often people in the buildings were asked to submit their income for LIHTC units. She was told they never provide income information after they move in. She would like to know what the rules are for those credits. Community Development Director Reilly said he has never heard of any place that doesn’t require recertification of people living in affordable homes. However, just because a person’s income increases does not mean they will be asked to leave. The share of what they are paying will increase. Councilmember Holden said you could have a LIHTC building where 50% of the residents are paying market rate. Community Development Director Reilly confirmed. The purpose of affordable housing is to focus on housing stability first. Residents have a safe place to live and their income can increase until they can pay what the market rate is. That’s why HUD’s subsidy levels and fair market rents are directly connected. Councilmember Holden asked how successful are inclusionary housing policies or ADUs with reducing affordable housing needs. It wasn’t successful in Minneapolis. Community Development Director Reilly said it depends. Are ADUs being produced because they are allowed or is there enough flexibility in the market that people can produce more housing units? He isn’t aware of any examples where large expensive homes have been demolished to develop 3, 4, 6 or 8-unit buildings. Minneapolis has changed their review process after some issues. ADUs are still expensive. Just because they are allowed, doesn’t mean they’ll be produced. It’s possible but the homeowners that are interested in them can’t afford the mortgage or can’t get a home equity loan to get the construction capital. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 13 Discussion ensued about how common it is for people to purchase a home for their college age kids and their roommates to live in. One of the best ways to manage that is by having a rental licensing program. That way you can limit the number of corporate entities who own homes. Councilmember Weber said the rental licensing discussion should happen at the same time we discuss ADUs. It’s all linked, in his mind, to minimize the number of corporate landlords. We want to keep the homes in Arden Hills owner occupied, as much as possible. Councilmember Monson asked Staff how we narrow this down into next steps. Community Development Director Reilly said if we have a list of ten things and there are options on the list that are non-starters, it would be helpful to know that now. He asked Council how they feel about factory-built vs. site-built when talking about single family homes. Council agreed they are okay with factory-built or modular homes as long as they use high quality materials and that they don’t all look the same. Councilmember Holden asked how much vacant buildable land is in Arden Hills, not including TCAAP. Being in a land trust is a lot of work. If we don’t have ten acres for someone to build on, there doesn’t seem to be enough pay back for the amount of Staff time it would take to manage a land trust. Councilmember Monson supports items 1-7 on the list. Mayor Grant said that ADUs may not find widespread adoption in Arden Hills. Councilmember Holden asked what “reduce or eliminate minimum parking” meant and for whom? There is no bus service here so to reduce parking when we know people will have to get to work doesn’t work for her. Community Development Director Reilly said eliminating minimum parking requirements allow business owners and developers to determine what is needed. The professionals building structures know their market the best. Requiring parking that is not needed inflates the cost for the builder. Discussion ensued regarding alternative modes of transportation and how a lot of younger people just don’t own cars anymore. Mayor Grant said he could support some of the things Mounds View is doing. It would behoove us to maintain the quality of the affordable units we currently have. Community Development Director Reilly said that is an example where a land trust could buy it and rehab it. City Administrator Jagoe said the next topic Community Development Director Reilly will bring forward is ADUs. She asked if Council had any specific direction on density bonus ordinance work. That won’t be included in the zoning updates being done by the consultants. She asked if they want to discuss that before starting the ADU discussion. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 14 Mayor Grant said it is important to gain an understanding of what is available. It is difficult to offer a density bonus without locations to build density. It doesn’t make sense to talk about things that we can’t do. Councilmember Holden thought there was a list of things other than density bonuses. She would like to see all of the affordable housing options so Council can choose what is best for Arden Hills. Councilmember Weber said regardless of what else we do, having density bonuses gives teeth to the action. It’s not something we are required to do. To not do something because we know it’s not an option now is incredibly short-sighted. There are a lot of tax-exempt lots that could be available in the future. Councilmember Monson would like density bonuses to be included. She would like to better understand the structure. Developers are opportunistic. They will find the land. Community Development Director Reilly summarized that we need an evaluation of un-utilized land and where things might go, if the market allows. Then once we know that, we want to have a menu of things to choose from, including density bonuses, reduction in park dedication fees or park requirements. That will give us tools to get the best development possible and have it not seem arbitrary. C. Lake Johanna Fire Department Strategic Plan Follow-Up Discussion City Administrator Jagoe said this is a follow up to the presentation the Lake Johanna Fire Department (LJFD) made at the last work session. The fire department provided some supplemental information based on the Council feedback at that discussion. They shared response times for calls when Station 1 is browned out. Discussion ensued regarding how many calls were being tracked. Is it a high or an average? The longest responses were the most extreme cases and the smallest percentage. The numbers accounting for the median and the mean calls was more useful information. Councilmember Holden said she didn’t think they provided a lot of the information that Councilmember Monson requested. She was disappointed with that. She said chances are this will pass. She wanted Council direction if Arden Hills should vote in favor or not. Councilmember Monson asked what Councilmember Holden’s message has been so far with discussions at the Fire Board. Councilmember Holden said her answer has been no, she wouldn’t vote for it. It’s an astronomical amount of money. We aren’t approving new Public Works positions and we are losing Safer Grants in 2027. We don’t have another $1 million for the six additional full time employees (FTEs) they are requesting. We are going to end up taxing residents out of their home and she doesn’t want to do that. Discussion ensued regarding how some of the other Cities are in support and the others are still deciding. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 15 Councilmember Monson said it’s challenging because the data presented is very limited. If it’s going to pass anyway maybe we ask for a third party to look at it next time. We may be too little, too late to prevent anything this time around. Councilmember Weber said we should ask for an independent audit, anyway. Statistics can look however the presenter wants them to. We were provided some statistics but it didn’t answer the questions we wanted to know. He isn’t challenging the integrity of what they provided, it just didn’t answer our questions. It is worth asking if we can have an independent audit before this decision is made. He would also support saying no. Councilmember Rousseau is in favor of voting yes. However, she thinks they gave us data that tells the story they want to tell. She would have a hard time with them coming back with the same story next year when asking for additional FTEs. Mayor Grant said he requested industry standards and asked if LJFD is meeting those standards. Councilmember Weber remembered seeing something in the information regarding industry standards. They were unachievable. Mayor Grant is leaning towards voting no. He doesn’t like to take that position. He thinks this will probably pass anyway, but they are asking for a lot. Maybe we need to make a statement and vote no. He asked Councilmember Holden if she had everything she needed to make that vote. Councilmember Holden confirmed. D. 9 Cities Meeting Update Mayor Grant said the Mayors and City Administrators get together every other month. They discussed how the League of MN Cities does not support the Missing Middle Housing Bill. We will get together with legislators to tell them why. He won’t be presenting but wanted Council to know what was happening. E. 75th Anniversary Budget Councilmember Weber said he doesn’t like the date selected. He would prefer the event take place on a Saturday, rather than a Friday. Councilmember Holden said the committee all agreed. Councilmember Monson said the committee discussed a lot of options, in depth. We considered multiple days, Friday vs. Saturday, dealing with competing events in neighboring cities, attendance and how we set ourselves apart. The Penny Carnival draws over 400 people. We landed where we needed to land, based on those committee discussions. No date is going to be perfect for everyone. This seems like a nice narrowed approach that the entire committee agreed on. Council agreed to discuss the budget for the event after the next committee meeting. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 16 F. EDA Membership City Administrator Jagoe said this item was discussed in 2023, regarding a request to look into the Economic Development Authority (EDA) membership. Per our ordinance the EDA is made up of the mayor and councilmembers. The State Statute language allows for a seven member authority. The 2023 discussion asked if there should be a Planning Commission or Economic Development Commission (EDC) member on the EDA. This was tabled previously and was put back on to our Agenda Planning. Staff is seeking direction if there should be any changes to the EDA membership. Councilmember Holden is in favor of an EDC member being on the EDA. This authority is fundamentally looking at funding and money. She said the Planning Commission doesn’t seem to fit but believes an EDC member is appropriate. Councilmember Weber agrees. He would like to see two additional members and he thinks it should be two EDC members. Councilmember Rousseau also wants two additional members. She is okay with it being two EDC members. Mayor Grant said the EDC advises the City Council. He is okay with it remaining the way it is. He’s open to adding one EDC member. We would be changing the structure and it may require separate meetings rather than meeting prior to a work session, as we did today. Councilmember Holden said there is turnover on the EDC. She asked how long people stay on that committee. Councilmember Rousseau said, not counting the youth commissioners, there have been three commission members turnover, over the last three years. Council all agreed the EDC youth commissioners would not be eligible to be members of the EDA. City Administrator Jagoe said the authority membership numbers are either three, five or seven. If we are talking about adding only one, would someone from the current authority be removed? Or do we add two, that would get us to seven members. Councilmember Weber thinks letting two members of the EDC serve on the EDA would probably go a long way in reducing any perceived or real turnover. Councilmember Monson wants to add two. She agrees it may lessen turn over and help people get more engaged. Having seven members pushes us into a more organized state of the EDA that has been very light-touch over the past couple of years. City Administrator Jagoe wondered if an EDA member can be an Arden Hills business owner who is a non-resident. The EDC membership allows for a business representative who isn’t a resident to serve on that commission. She would have to verify with State Statute. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 17 Community Development Director Reilly doesn’t believe it is restricted to only resident members. Councilmember Rousseau said Council has requested Finance Director Yang to explore how EDA funds can be utilized. So it is possible that a Planning Commissioner may be a good fit. Councilmember Holden said she is for one EDC member. She wants to change it from five to six. Staff stated that it is defined in State Statute as three, five or seven members and can’t be changed at the City level. Mayor Grant said we have to go to seven members unless two Councilmember want to drop off. Councilmember Monson thinks we change it to seven. It’s approval by the Council. Councilmember Weber said to the earlier comment about meeting times. We can still put it right before the work session. The other authority members can make it in person or digitally. He doesn’t see that as a problem. Mayor Grant will look at the EDC membership and come up with two EDA members, subject to Council approval. City Administrator Jagoe said Staff will have to bring forth the ordinance change first. City Code outlines the composition of our commissions and committees. Today it states the EDA is the five City Council members. We’ll need to change the ordinance before we can appoint two EDC members. Discussion ensued about the timing when the ordinance language will be brought back. Community Development Director Reilly said he confirmed there is no residential requirement for an EDA. It’s all based on what the City’s ordinance says. Councilmember Holden wondered why we should change the ordinance. She would prefer it to be Arden Hills residents. Mayor Grant asked if we want a business representative, even if they don’t live in the city. Councilmember Weber does question the value of that, somewhat. However, they want their business to thrive. Discussion ensued if the language should outline the membership is two EDC members with a maximum of up to one non-resident. Councilmember Monson said we don’t need to be so prescriptive. Let the ordinance say seven members. Can’t we just say it’s the five Councilmembers plus two EDC members? Mayor Grant can have the authority to pick who he thinks is the best fit, with some flexibility. ARDEN HILLS CITY COUNCIL WORK SESSION – OCTOBER 27, 2025 18 Mayor Grant said if this Council thinks it’s important to have a business member, then we’d have to write it in. Councilmember Monson said that is a good point. She would like to see us have a business representative. She just doesn’t want us to box ourselves in. G. Cannabis Discussion Not Discussed. H. Rice Creek Commons/TCAAP Discussion Not Discussed. I. Agenda Planning City Administrator Jagoe said the next agenda will have Affordable Housing and Cannabis. Between those two items, it will take most of the time. She is leaving the second November meeting for final budget discussion, fee schedule discussion. 4. COUNCIL/STAFF COMMENTS None. ADJOURN Mayor Grant adjourned the City Council Work Session at 8:52 p.m. __________________________ __________________________ Jen Estling David Grant Deputy Clerk Mayor