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HomeMy WebLinkAbout04-23-07-WS Approved: 5/29/07 CITY COUNCIL WORK SESSION APRIL 23, 2007; 6:35 P.M. ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Stan Harpstead called to order the work 1 session at 6:35 p.m. Present: Mayor Stan Harpstead, Councilmembers David Grant, Brenda Holden, Fran Holmes and David McClung. Absent: None Also present were Michelle Wolfe, City Administrator; Karen Barton, Community Development Director; Stacie Kvilvang, Elhers; Steven Bubal, Kennedy and Graven. 1. APPROVAL OF MEETING AGENDA MOTION: Councilmember Grant moved and Mayor Harpstead seconded a motion to approve the meeting agenda as presented. The motion carried unanimously (5-0). 2. MASTER DEVELOPMENT AGREEMENT i. Purpose of the MDA Mr. Bubul introduced himself and stated that he was a plarrner before attending law school and now primarily practiced law in the areas of redevelopment, real estate, land use and finance. Mr. Bubul stated that there was no such thing as a standard master development agreement (MDA) because every transaction was different and the role of master developer could vary significantly. The general purpose of the MDA was to layout what was to be done with the property, who was to do it and who was to pay for it. Included in the packet was a list of documents that were grouped into several categories. Mr. Bubul reviewed with the Council the different categories. ii. Compoueuts of the MDA Transfer of Property Many of the real estate aspects were already handled in the offer to purchase (OTP). This would be a simultaneous transaction. CITY COUNCIL WORKSESSION- APRIL 23, 2007 Ms. K vilvang stated a future discussion point was whether or not to have a right of reverter. Since the MDA would layout the schedule of activities, the City should have remedies in place should the developer fail to follow through. Remedies could be a right of reverter or financial consequences. A right of reverter would allow for the land to revert back to the City should certain elements fail to be completed. Financial consequences help ensure that the developer's interest would be for the long term by holding back developer fees until the start of the next phase. The most common remedy was to revoke the developer's right to work on a particular piece of property and another party would then be found to complete the job. Land Use Provisions The City could require, by contract, the kind of uses it wanted on the property. The uses could include things that would be required or permitted and provisions for future revisions. Design Standard The City would set the design standard up front that the developer would have to meet. The only way the developer or subsequent developers could deviate from the design standard would be ifthey came back to the City. Public/Private Infrastructure This would be where financing needed to be figured out and would usually include some type of bond financing. It would be important to get bonding on a tax exempt basis. Doing so would be cheaper for the City and those paying the assessment. Mr. Bubul stated that there were some federal rules that could affect the City's eligibility. The MDA would include provisions that allow the city to review the developers proposed financing. Ms. K vilvang stated that typically the developer would release their financial information at their office, Elhers and Associates, or the attorney's office. The review would be done with as much confidentially as possible. A summary would then be drafted stating the condition ofthe developer's finances and whether they were able to meet the needs of the city. Ifthere was a need for Tax Increment Financing (TlF) or abatement, it would also be in this contract. Pay-as-you go tax increment could be used as a form of subsidizing the cost of the infrastructure where the developers would pay for some of the cost and the City would reimburse them from tax increment over time. Councihnember Grant asked if it was possible to assess and TlF the same area. Mr. Bubal stated that assessment and TlF could not be used to pay for the same thing but, if it was determined that having the developer pay the assessment would make it unfeasible to market that property, TlF could be used to buy down the assessment. Mayor Harpstead asked ifthe same was true for tax abatement. Ms. Kvilvang stated that it was not permitted to have abatement in a TlF district, although a parcel could be taken out ofthe TlF district and abated. 2 CITY COUNCIL WORKSESSION- APRIL 23, 2007 Enviromnental RemediationlClean-Up/Securitv Most of the actual subsistent covenants of what has to be done on a remediation are not going to be on the MDA, but rather on other documents (the Memorandum of Agreement and RAA) that come out ofthe OTP. Included in the MDA would be areas considered to have a potential for continued liability for the City, i.e. insurance requirements. City reimbursable costs would be dealt with in the MDA as well. The developer most often would be willing to pay development costs up front with the expectation that the City or another party would ultimately reimburse those costs if the City contracts with another developer. Depending upon their final profit in the end, the developer may be able to carry a portion of the costs. The threshold of profitability expectation would be established up front and would depend on what the typical industry standard was for that type of development. Elhers would conduct the profitability analysis and outline what the typical result would be. Ms. Kvilvang stated that the reimbursable developer cost for Medtronic was $700,000.00 and for St. Anthony Village was 1.2 million dollars. Councilmember Hohnes asked if the land would still be transferred in October, 2007. Ms. Wolfe stated that it was not likely with the delay ofthe PDA. The AUAR, which is typically a nine to ten month process, was not yet started. Councilmember Grant asked what would happen if the MDA was not completed by the closing date. Mr. Bubul stated the City had the option to stop the closing, but he thought it was highly unlikely to have gone through all the required documents without being able to get a completed MDA. Ms. Kvilvang stated that on Monday, ApriI30'h, the Council would be walked through the process of coming up with deal points (what you want to see, land uses, public improvements, financing or other expectations). Deal points would be where the MDA negotiations start. Mr. Bubul stated that deal point meetings would not be closed meetings. Under law the basis to close meetings was to develop an offer or real estate price. Although a real estate transaction, since these were terms and conditions of the sale, this was a much broader project. He stated that the City would be vulnerable to a law suit ifthe City tried to close meetings on the MDA. Ms. Barton stated that Damon Faber was the landscape architect and they would take the lead on setting the design standards. They would bring suggestions on design ideas to the Council for approval. Once TCAAP design standards were accepted, the Council could then pick and choose what they wanted to incorporate from those same standards into the rest of Arden Hills. Councihnember Holden asked for clarification as to why the developer would set design standards high when it would translate into greater costs that they would incur. Ms. Wolfe 3 CITY COUNCIL WORKSESSION- APRIL 23, 2007 stated there would be trade offs and that the developer would benefit to an extent because the end result would be a higher value project. iii. Roles of Consultants in the MDA Process Ms. Wolfe stated that the four parties representing the City's interest were Mr. Bubul, the lead attorney and author of the MDA; Mr. Filla, city attorney, who would receive drafts to review; Mr. Comodeca, enviromnental attorney, who would be more intimately involved with sections of the MDA; and Elhers and Associates, who would provide financial and negotiation expertise. Mayor Harpstead asked when the first set of proforma financials could be expected. Mr. Bubul stated that according to the PDA, a proforma was required 30 days after the final enviromnental credit was determined, but it would probably be requested earlier. Ms. Kvilvang suggested having a project specific website that Council, staff and consultants could access that was password protected. The site would include a document directory that lists current documents and links to view PDFs of those documents. Those given access to the site would be notified when a document has been updated. There would also be the ability to view previous documents as well. Mr. Bubul provided sample MDAs ofthe Excelsior/Grand and St. Anthony projects for the purpose of understanding how MDAs were organized and what type of information was included. Council requested to see samples ofMDAs containing language regarding contamination sites. Ms. Wolfe stated that she received a call from All Parks Alliance for Change (AP AC) a manufactured home advocacy group. The representative indicated they may be interested in setting up a meeting with the City. Council Comments Councihnember Holden stated that they met with MnDOT on April 18th regarding Trunk Highway 10. With the support ofthe federal government, MnDOT was committed to making TH 10 a "shortcut" through 35W. MnDOT representatives reviewed the appeal process should a municipality disagree, but stated that the Commissioner of Transportation had the final say. It was mentioned that if a city wanted to make a significant change to the system and the other city did not, then the City making that change would sustain the impact. In projects that impact businesses or homes, it was preferred to extend only onto one side and usually the side causing the least amount of impact. Mayor Harpstead stated that the volume of vehicles at the ramp at west bound 694 to north bound 35W was 800 vehicles per hour. A one lane ramp could normally handle 1,800 vehicles per hour. IfTH 10 was downgraded or eliminated the volume during peak hours would increase to 2,000 vehicles per hours. The 2030 projections would increase to 3,700 vehicles per hour and would require a three lane ramp. In this scenario, a retaining wall would be put in on the east side of Round Lake Road. The weave that would allow 4 CITY COUNCIL WORKSESSION- APRIL 23, 2007 vehicles north bound on 35W and off at CR 96 would automatically eliminate the 96/10 intersection. A large portion of the manufactured home site would also be taken. Ms. Wolfe stated that the County desires that the City make a decision in regards to a preferred option for Highway 96. The County would manage the project and acquire the land. Ms. Wolfe stated that as with the Lexington Avenue project, the County policy was typically to manage right-of way acquisition, but bill the City for its portion of the project. Councihnember Holden stated that at the Blue Cross Blue Shield seminar, it was mentioned that our trails did not line up. She asked how that was concluded based upon the concept plans that were shown. Ms. Wolfe replied that it was probably a comment on the City as a whole. The overall project that received the grant was for the City's comprehensive plan update. Mayor Harpstead showed a drawing of the 10/96 interchange that he drew. He stated that it incorporated the loop back to a frontage road. There was some discussion on the possibilities. Mayor Harpstead asked for a work session to further discuss this topic. It should be timed to allow for the MnDOT letter and perhaps SEH's report. Mayor Harpstead stated that he had dinner with Senator Satveer Chaudhary. Senator Chaudhary wanted to see a place-holder bill for the 2008 bonding bill to improve an Arden Hills library. He wanted to figure out a transition for something bigger and better. The deadline for submitting the bill was May 19th. Ms. Wolfe stated that Commissioner Bennett wanted to see a library on TCAAP near County Road H, adjacent to the Rice Creek Corridor that would have an enviromnental learning center attached to it. Councilmember Holmes volunteered to meet with Susan Nemitz, Ramsey County Library Director, to get her perspective on the Arden Hills library. Mayor Harpstead adjourned the meeting at 9:45 p.m. ~f'~~~ 5