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HomeMy WebLinkAbout08-10-09-TCAAP WS ��N HTLLS Approved: August 31, 2009 CITY OF ARDEN HILLS, MINNESOTA TCAAP WORK SESSION MEETING AUGUST 10, 2009 5:00 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 City Council Work Session meeting at 5:00 p.m. Present: Mayor Stan Harpstead; Council Members David Grant (arrived at 5:34 p.m.), Brenda Holden, Fran Holmes, and Dave McClung. Absent: None. Also present: City Administrator Ron Moorse; Finance Director Susan Iverson; Community Development Director James Lehnhoff; Attorney Steve Bubul; and Attorney Jerry Filla. 1. AGENDA ITEMS A. TCAAP —Reimbursable Expenses/Escrow Agreement City Administrator Moorse presented the City Council with additional information on the TCAAP reimbursable expenses and escrow agreement related to the unpaid expenses with the Developer. He noted this issue was discussed in detail at the last meeting and that staff would like to address the Council's comments and concerns regarding the escrow agreement. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 2 City Administrator Moorse reviewed additional information with the Council regarding the escrow agreement and asked that additional questions be directed to the City's Attorney. Mayor Harpstead commented on the addition to Section 23, Survivor of the PDA and asked if conversations were held with Ryan Companies regarding this issue. Attorney Steve Bubul explained he did speak with Ryan Companies but that he did not hear back from their in house lawyer. He indicated that the view in the past was that this did survive and if both parties were not able to resolve this informally the next step would be to go through mediation as described in Section 23 of the PDA. Mayor Harpstead questioned if the information provided was sufficient for this item to come before the Council on a future agenda. Councilmember Holmes asked that Attorney Filla review his letter dated July 24, 2009 regarding the escrow agreement. Attorney Jerry Filla reviewed the letter in detail with the Council describing the consequence of terminating the PDA. (He explained the PDA anticipated that additional steps would be needed if the developer's agreement were terminated.) Attorney Filla stated that in his opinion, based on the documents, Ryan Companies should receive the earnest money and the two parties were to work out the reimbursable costs separately. He indicated a neutral party could hang onto the disputed amount of the reimbursable costs, which directed the funds elsewhere pursuant to the terms of the escrow agreement until the City and Ryan Companies have reached an agreement. Attorney Filla clarified a paragraph within the letter noting that on Page 2, the second to last paragraph, he explained that Section 23 does not survive unless the parties specifically agree to do that. He noted that the party's next step would be to go through a non-binding mediation process or to court. Attorney Filla felt the City's exposure was that the PDA says if Ryan Companies has to commence litigation or incur cost to collect the earnest money held by the City. The costs associated could be the responsibility of the City, which was the reason to enter into an escrow agreement. AR-DEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 3 Councilmember Holmes questioned why Section 23 does not survive this situation. Attorney Filla noted there was a section in the PDA that specifically says which sections survive and which do not. He indicated there was a paragraph stating which sections survive and they could argue that the dispute resolution process or non-binding mediation is not one of those provisions. Attorney Bubul stated he did not agree with this opinion as there was language in Section 12 that names the sections that survive termination and Section 23 was not one of them, however, one that is named is Section 5 which deals with reimbursements and refers back to Section 23. He indicated that Ryan Companies is not disputing the survivorship of Section 23. Attorney Bubul noted the escrow agreement was not intended to supersede the PDA in any way. It was a voluntary action taken by both parties as there were disagreements acknowledging there was an offset and that the money should be set aside until the issues were resolved. Councilmember Holden asked if staff has met with Ryan Companies to begin discussions on these numbers. City Administrator Moorse noted that he has exchanged voicemails with Eric Anderson regarding scheduling a meeting, but that a date and time has not been set. Attorney Bubul explained that the parties would only begin arbitration or if the City agrees to these measures as there were no provisions within the PDA for these measures. Councilmember Holden questioned if a timeline should be drafted considering that Ryan Companies was not responding to staff s requests for a meeting. Attorney Filla stated that he did raise this concern with Ryan Companies and that if an end date were set, it may create additional concerns in rushing to a resolution. He was hopeful that the City could resolve these issues without hiring a mediator. City Administrator Moorse noted the City could set a timeline on the informal process and the timeframe by which, if it were not resolved that both parties would agree to start the mediation process. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 4 Councilmember Holden expressed concern on the lack of information on the payments which were and were not made. Finance Director Iverson reviewed the items within the handouts which were paid and outlined which were still being disputed, over budget and unpaid. Attorney Filla stated Section 23 says that if there is a dispute either party can give notice and complete the process within 30 days. However, at the end of 30 days if the issues have not been worked out, the parties were free to do something else. Councilmember Holden expressed concern about the escrow agreement as Ryan Companies was not responding to the City's requests for a meeting. She indicated she would not be in favor of the escrow account until she knew they were willing to support it, due to the 30-day time limit. Mayor Harpstead questioned if the escrow agreement would strengthen the City's position or weaken it. Attorney Bubul stated it would strengthen the City's position as it would ensure that the City can appropriately hang onto this money and not return it until both parties reach a resolution. He explained that if the City moves towards mediation, the escrow agreement would assist in this process by having a neutral party handle the funds. Mayor Harpstead indicated the escrow agreement would show the City's best efforts to resolve this dispute. Councilmember McClung stated he was concerned the City was not hearing back from Ryan Companies and that he was in favor of putting the funds into escrow as it put the City into the strongest position possible. He questioned how the City should proceed to move this along quickly. Attorney Filla explained that he could make contact with Ryan Companies but that there would be costs associated. City Administrator Moorse indicated he has discussed with Ryan the advantages of beginning with an informal resolution process. Further discussion ensued regarding the next steps that should be taken by the Council with Ryan Companies. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 5 Mayor Harpstead was encouraged by the Council's direction to resolve the dispute quickly, informally and as expeditiously as possible. He noted that a lack of cooperation from Ryan Companies could then trigger Section 23 at a future work session meeting. Councilmember Grant read from the PDA, Section 5, Item E stating City reimbursable costs are also payable as an offset against the returned earnest money, and developer reimbursable costs are described in Section 12B3. Attorney Bubul encouraged the Council to approve the escrow agreement as it would be in the City's best interests. Councilmember Grant questioned if the developer set up an escrow account which they were placing money into as noted within the PDA; and if not what steps could be taken due to the fact Ryan Companies did not follow the agreement. Finance Director Iverson stated she was not aware of this type of an account. Councilmember Grant asked if the City has been at fault within the PDA for not promptly submitting bills to Ryan Companies in a timely manner, and if so it should have triggered $50,000 increments of funds to be placed into an escrow account by RLLD. City Administrator Moorse indicated bills were withheld from January 1 to March 23, 2009. Finance Director Iverson explained that bills were sent to Ryan Companies quarterly. She stated that she was in contact with Eric Anderson to resolve past problems with billing concerns. Councilmember Grant stated the City should have followed their part of the PDA so as not to be in fault at this time and questioned what happened at a staff level. City Administrator Moorse indicated the escrow agreement never got set up, no funds were put into it and the City began billing Ryan Companies who began paying the bills. Councilmember Holmes expressed concern that the Council was not informed that Ryan Companies had not been paying their bills for almost an entire year. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 6 Mayor Harpstead indicated this was discussed at a closed session meeting and that the Council understands this is a problem. He suggested the Council now seek a resolution within this area of the PDA. Attorney Filla stated this will now have to be resolved over the credit category. He indicated that putting this money into escrow would lead to discussions between the two parties, which should lead to resolutions. Mayor Harpstead suggested the two parties continue to whittle down the amount in dispute by omitting the non-disputed portions. If this was not favorable than the City would need to exercise Section 23. Councilmember McClung indicated there were two items that needed to be addressed by Council on this, first is this escrow agreement going forward on tonight's agenda to be voted on and secondly, how did this happen and what should happen. Councilmember Holden added that the Council should determine, from the financial items in dispute, which are the responsibility of the City and which are Ryan Companies. Mayor Harpstead noted he would like to have a discussion beyond just the list and suggested it be held off to another work session. Councilmember Holden agreed. Councilmember Holmes noted she was in favor of the escrow agreement at this time. Councilmember Grant agreed stating he would like to see Section 23 added into the language. Mayor Harpstead and Councilmember McClung agreed. It was the consensus of the City Council to proceed with the escrow agreement. B. TCAAP —Reuse Plannin /Implementation Process City Administrator Moorse presented the City Council with information on the dual process for the TCAAP reuse planning. He noted the parks and open spaces concept would need special legislation which required a number of action steps. The other option was the public sale process, which the GSA was proceeding with. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 7 City Administrator Moorse reviewed that he and James Lehnhoff met with Commissioner Bennett this morning to see if the County would be interested in controlling the TCAAP land if it was to be parks and open space. He stated Commissioner Bennett indicated he was supportive of the county obtaining the land if the land were free and cleaned but that they had no funds available to build trails or parks on the land at this time. Councilmember Holden explained that she met with several other County Board members and that three other members were more than happy to take the land and believe that this site could be made a priority. City Administrator Moorse questioned if the full Council would like to meet with the full County Board to talk through this. Councilmember Holmes stated she felt this was a great suggestion and added that Greg Mack should be included in this meeting. Councilmember Grant indicated that he would be in favor of the County developing this site and not just taking it for free and letting it sit as open space. He explained that he would be interested to hear from the County on what they would do with the space and would commit to in the future. Mayor Harpstead suggested that staff request time with the County Board at their next work session meeting. Councilmember Holmes indicated the regional park would need approval by the Metropolitan Council. At this time they are concerned about the lack of affordable housing. She questioned what the City needed to do at this time to reduce this concern. Community Development Director Lehnhoff explained that each city has a housing goal assigned through a formula the Met Council created based on surrounding demographics, available land, and other factors. He stated he could pass this information onto the Council. Councilmember Grant asked how much affordable housing the City.had at this time. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 8 Community Development Director Lehnhoff indicated that part of the formula did look at the number of existing affordable units in the City. He didn't have the numbers in front of him at this time, but that the new number did define the number of units needed through 2020. Councilmember Holden questioned if this formula and these numbers were based on TCAAP being fully developed. Community Development Director Lehnhoff stated this was the case and that there were variables that would change. He indicated a new number would be calculated if the land uses changed as part of a comp plan amendment for TCAAP. Mayor Harpstead indicated that the market conditions are not supposed to increase the supply of affordable housing. Discussion ensued regarding the current level of affordable housing in the City. Mayor Harpstead questioned if any additional information was gathered about the environmental conditions on the site. City Administrator Moorse stated he and James Lehnhoff met with Mike Fix and that information regarding this meeting was provided in the Administrator's Update. He explained they went through an environmental site assessment, and looked at the site maps, looking at where they had done soil borings. City Administrator Moorse mentioned that Mr. Fix discussed the various standards for land use indicating the Tier 3 recreational use standard allowed for a site specific assessment, and could allow for a different standard for the cleanup. Community Development Director Lehnhoff noted that he contacted Dagmar Ramano with the MPCA. He heard back from the office and that they were working to set up a meeting with several other people from the MPCA and gather additional information about the Tier 3 recreational use review, and to gather information and knowledge on the cleanup of this site. Mayor Harpstead asked that staff keep the Council informed on when this meeting gets scheduled. Councilmember Holmes stated she would like to see the City continue to gather information from Carmen Netten and others after meeting with Dagmar. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 9 Mayor Harpstead asked if the City was looking for grant opportunities to assist in paying for Mike Comodeca. City Administrator Moorse stated this agenda item should be moved to H and I and was not a subset under Mike Comodeca. He indicated that the City was - pursuing grant opportunities to fund the planning activities for the parks and open space use, as well as addressing the land use and zoning options for the site under each scenario. Councilmember Holmes stated she got a call back from the McKnight foundation stating they were considering our request for a planning grant. She noted that the TCAAP site was categorized as one of the Twin City metro areas treasures through the Embrace Open Space. Mayor Harpstead reviewed the goals of the McKnight Foundation with the Council stating their number one priority at this time, given the economic climate was to poverty initiatives and education. Councilmember Holmes responded that the McKnight Foundation's priorities also included protecting and restoring open space. She also suggested staff look at the legacy heritage information when pursuing planning grants. Mayor Harpstead asked how Item I would proceed. City Administrator Moorse stated the City had current guiding land use plans for the TCAAP site within its 2030 Comprehensive Plan. He noted it could remain as is or be amended for the parks and open space option. City Administrator Moorse explained the Council would need to act on this quickly if the GSA's public land sale were to continue, as the City would want something in place by the time the land was to be transferred. Mayor Harpstead suggested staff begin working on a plan for the site, along with a timeline or schedule and report back to Council. Councilmember Holden stated she would be in favor of the Council discussing the land use at a work session level before opening up this item up for public comment. ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 10 Mayor Harpstead commented on the email forwarded from Kevin Legare. He asked if staff had held any conference calls with the GSA. City Administrator Moorse stated no conference calls had been held to date, and asked who the City representatives should be on the conference calls. Mayor Harpstead indicated only two Councilmembers could be present at a conference call stating he would be available by phone during the day. Councilmember McClung indicated that he would be interested in being a part of these calls. It was discussed that each Councilmember could listen in on these meetings, if so desired, as they would not be decision making. The meetings would be posted and open to the public. Mayor Harpstead questioned if contact had been made with MnDOT regarding the traffic concerns. Councilmember Holden stated she had not made contact but that Community Development Director Lehnhoff could make the call. Mayor Harpstead questioned if any other items needed to be addressed in a timely manner. Councilmember Holden stated she was concerned with the public sale of the land and if the City would have all of their information gathered in time. She questioned if the City could require a certain amount of park land in a residential area if sold through public auction. Community Development Director Lehnhoff stated this was defined through the city's park dedication requirement. Councilmember Grant indicated he would like to see the City avoid a delay on the public sale due to the City not moving forward fast enough on the information gathering process, as this would appear the City was stalling while pursing the parks and open space. He encouraged staff to work in tandem on both options. The Council reviewed the steps that needed to take place and assigned tasks within the work list to staff accordingly. ARDEN HILLS CITY COUNCIL WORK SESSION-AUGUST 10, 2009 11 2. COUNCIL COMMENTS AND REQUESTS There was nothing at this time. Mayor Har stead adj urned the ity Council Work Sessio 'ti ga t 6:38 p.m. z 000e "00,00 .ZS-tdn Harpgfead Ronald J. orse Mayor City Administrator