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HomeMy WebLinkAbout2020-03-11 CC Minutes - Approved CITY OF CENTERVILLE COUNCIL MEETING Wednesday, March 11, 2020 6:30 p.m. Pursuant to due call and notice thereof, the City of Centerville held a regularly scheduled City Council Work Session & Meeting on March 11, 2020 at City Hall, 1880 Main Street. COUNCIL MEETING I. CALL TO ORDER Mayor Paar called the meeting to order at 6:30 p.m. ROLL CALL PRESENT: Mayor Jeff Paar Council Member Russ Koski Council Member Michelle Lakso Council Member Matt Montain Council Member D. Love ABSENT: None STAFF: City Administrator Mark Statz City Attorney Kurt Glaser II. PLEDGE OF ALLEGIANCE III. APPROVAL OF AGENDA Mayor Paar provided an opportunity for others to add or delete items. Council Member Montain noted that there was a problem with page numbering. Mayor Paar stated that he desired to add Item #4, under New Business – Interim Group Living Uses. Motion by Council Member Love, seconded by Council Member Montain to Approve the Agenda with the Above Stated Modification. All in favor. Motion carried. IV. APPOINTMENTS/PRESENTATIONS 1. None. V. PUBLIC HEARINGS 1. None. VI. APPROVAL OF THE MINUTES City of Centerville Council Meeting Minutes March 11, 2020 1. None. VII. CONSENT AGENDA 1. City of Centerville through March 6, 2020 Claims (Check #33328-33361) &(1489E-1492E) 2. Centennial Lake Police Department Claims through February 28, 2020 (Check #13089-13102 EFT#2020004-2020006) 3. Centennial Fire District Claims thru March 10, 2020 (Check #8748-8776) 4. Temporary Gambling and Alcohol Permit - Lions Cadillac Dinner 5. Utility Easement – CenterPoint Energy Mayor Paar provided an opportunity for Council to add or remove any item(s) to the consent agenda. Motion by Council Member Koski, seconded by Council Member Montain to Approve the Consent Agenda as presented. All in favor. Motion carried. VIII. OLD BUSINESS None. IX. NEW BUSINESS 1. Purchase Agreement – Trident Development – Block 7 Properties Administrator Statz stated that the City has a proposed development for Block 7 with a purchase agreement from Trident Development. Mayor Paar stated that they are going to allow the public to speak in regards to this item for 5 minutes each. Mayor Paar stated if you don’t want speak but want it on the record that you opposed or agree to put it on a piece of paper and give to council. This will allow it to be entered into the record. Administrator Statz read the policy and procedures for public hearings. Mayor Paar stated the land purchase is the first part of the processes. Once that happens, it is platted, a developer agreement is drafted and agreed upon, designs, and final approval are completed. Mayor Paar stated that this item will be tabled this evening. Mayor Paar stated effective as of the March 25 City Council meeting, he will be resigning as Mayor due to personal reasons. He and his wife are going through a divorce and he is currently not residing in Centerville. He stated that this part of the meeting is informational only. Mayor Paar stated that Administrator Statz would review key items of the development. Administrator Statz reviewed the Block 7 development project and gave a brief the history of the downtown improvement plan dating back to the 1990s identifying the downtown area as mixed use. In 2006, the downtown Master Plan and Development Guidelines were developed. In 2007, the Beard Group had a plan to develop the whole downtown area. This came to a stop when the economy crashed in 2008. Block 7 was platted in 1857 and was bounded by Heritage Street, Page 2 of 18 City of Centerville Council Meeting Minutes March 11, 2020 Goiffon Road, Sorel Street and Centerville Road. This property was the former home of the County Public Works garage, then City Public Works garage and skating rink. At one time the parcels contained 4 single-family homes. In 2001, the City vacated its facility. In 2005, the City used CDBG funds to purchase one home and demolish it. In 2007, the City used CDBG funds to purchase and demolish the second home on the same block. The property has been vacant since 2007 with no serious development proposals. Administrator Statz stated that in 2019 the City was approached by two developers, Trident Development and Apollo Development. Trident Development was chosen after each developer presented their proposal to a joint committee of the City Council and Planning and Zoning Commission. They proposed a three story, 53-unit apartment building with 80% of the units at market rate rent and 20% at affordable rent (50% of AMI) with a small retail space available on the ground floor. This project also proposed to have underground parking which was subsequently determined to be infeasible due to the water table. Administrator Statz stated that the total cost of this project would be $10 million, with a financial gap of $1.35 million which Trident Development requested TIF (tax increment financing) to fill the gap for 16 years. He explained tax increment financing would allow the developer (owner) to pay their property taxes (city, county, school) and the City refunds 97.5% of the taxes back to the developer. He stated that this continues until the 16 year period is reached or the $1.35 million has been reached. Whichever comes first. Administrator Statz stated there are two basic questions: 1. Should the city use tax increment financing as a tool to incentivize the development of a 53 unit apartment building? 2. Should an apartment building be constructed on Block 7? He stated that there are other correlating questions also. If an apartment is the desired development for Block 7, are there other incentives that should be considered? If no incentives are used, how long should the City wait for development? If not an apartment building, what is an appropriate development and the relationship of the Comprehensive Plan and the Downtown Master Plan to it? Administrator Statz stated that there are other things to consider other than TIF or not to TIF: Northland Securities was hired by the EDA to evaluate the developer’s proposal, on the City’s behalf. They have found the developer’s financial summary to be valid which shows a gap in the project funding for which without TIF assistance, it would not be viable. He noted, again, that Northland is working for the City, not the developer and if the City wishes to have an apartment built on the site, this TIF proposal is the best way to do. This advice comes after evaluating other ways to make-up the financial gap, including non-TIF scenarios. If the City moves forward with the development, on day one, the city will receive $350,000 for the land which would go to the general fund, with $162,000 going into the park dedication fund which would pay down debt to the sewer fund. He also stated that $124,200 would be paid in water connection fees, $3,623 would be paid in storm water fees and $54,500 would be paid in building permits. This amounts to roughly $794,000. This money is only refunded to the developer through taxes that we are not currently collecting. Also, there would be an additional $4,500 per year of non- TIF reimbursable taxes, estimated $7,000 per year in water fund revenue, estimated 10,000 per year in sewer fund revenue, estimated $10,000 per year in storm sewer fund revenue, and estimated $2,500 per year in franchise fee revenue – a $34,000 total estimated annual revenue from day one of the project. Administrator Statz stated that the additional burden on general government needs, without taxes to offset such costs for the first 16 years could affect the fire/police, elections/ IT services and other population based contracts. Things that would not be affected would be building Page 3 of 18 City of Centerville Council Meeting Minutes March 11, 2020 costs, debt services and mowing. Additional items that could also be considered would be the impact on the school system, unofficial precedence and the possible impact on county government. Administrator Statz stated the apartments and townhomes fit the current zoning. If the population increases to 5,000 the City would be eligible to receive road assistance that is not currently possible. The other things to consider would be major infrastructure improvements that would have to be made to accommodate the downtown redevelopment with roughly $400,000 in CDBG funds which would need to be repaid if the affordable component is not met (this includes the property sitting vacant). Administrator Statz showed several examples of Trident Development’s projects that they had completed and provided several scenarios of the use of TIF or not using TIF and how it may impact the City. Mayor Paar stated that this would likely bring in more businesses, which would bring in more tax base. He also stated that the City does not desire a “cookie cutter”, box building for that area. He stated that Council desired that the construction in the area to spur additional development and commercial businesses. Mayor Paar opened the floor for discussion. Mr. Chris Loomis, 7248 LaValle Drive, questioned the TIF processes and stated it looks like the money that is going back to the developer is actually coming from the developer and there is no new tax being applied to the homeowner. Administrator Statz stated that is correct and stated that the city would not ask the existing tax payer to cover a payment to them. He explained that it is a pay-as-you-go system. Mr. Loomis thanked the Mayor for his service. Mr. David Kilian, 1690 Sorel Street, stated he has lived in Centerville for over 30 years. When he and his wife first moved, there was a bar across the street, City Hall and Fire Department on Sorel Street which was the downtown. He stated currently their southern view is a nice open lot. He stated that the bar remains across the street, and they would prefer not to have a 3-story building to look at. He stated when he was on Planning and Zoning they changed the height of the building to 2-story and desired to know when modifications were made that would allow a 3-story building. He asked about the trails that are on the property. Administrator Statz stated with the rerouting of the trail they would most likely go to the western edge. Mr. Kilian asked whether the street width and his property as currently there was about 3 feet from the northern curb. He asked if that was going to go further north or south. Administrator Statz stated that it was going to be more towards the south side but they were going to try to center it more. Mr. Kilian stated he desires not to have an apartment building be constructed on the parcels. Mr. Ed Szulim, 1721 Heritage Street, stated one of his concerns was answered previously about paying more taxes, if so, he would be opposed due to being assessed for the street project. He asked council if the new development would be paying any of the costs of the road reconstruction? Mayor Paar asked Administrator Statz if this could be added to part of the agreement with the developer? Administrator Statz stated that the City does collect an escrow for damages so if damages caused by them occur, they would be held liable. He also stated the streets are designed to handle 9 tons which is a very robust road. Mr. Szulim asked if they were going to install in stoplights on Centerville Road and Main Street. Administrator Statz stated there could be a traffic light or a roundabout put in at some point but there would have to be a traffic study completed and at this time there are no plans for that. Page 4 of 18 City of Centerville Council Meeting Minutes March 11, 2020 Mr. Brian Beert, 1829 Houle Circle, stated that he has lived in Centerville since 1993. Asked what is the population of Centerville? Administrator Statz stated about 4,000. He questioned about the TIF 80% and 20% is that a lock at the 20% or can they go above. Administrator Statz stated that there would be no incentive to go above 20%. This is different than Section 8 housing and is not a voucher type program. They have to demonstrate that they are offering this in these apartment at a discounted rate. A one bedroom apartment is approximately $1,600 a month and the affordable rate would be approximately $900 a month. The developer would have to document to the State because the State runs the TIF program that they offer those at a reduced rate. Mr. Beert asked if the taxpayer is paying the difference. Administrator Statz replied that the developer is paying the difference. Mr. Beert asked if they checked with other cities to see if they have complete TIF projects and how their reaction has been to it. Administrator Statz stated that the City of Lexington completed a project with the use of TIF and they have other developments in town that are not using TIF. He stated roughly half of the apartment buildings constructed in the past 10 years in this area have used TIF. Mayor Paar added that the City of Lino Lakes utilized TIF funding for several developments (ex. Kohls – Target area). Administrator Statz stated that currently the city does not have any active TIF districts and the last district was Northern Forest Products. Mr. Beert stated that he had received an email from Rep. Linda Runbeck mentioning blight and do we have to prove blight? Administrator Statz stated that there are multiple types of TIF districts and one type of TIF funding is for blighted areas. He stated that the City reviewed this type of TIF for the area and determined that it did not qualify/would not be eligible due to the parcels being vacant. He also stated that the alternative was this housing district which required the 20% affordable housing component. Mr. Beert questioned that the project would cost $10 million and the developer was short $1.34 million and the shortage is causing the discussion for TIF as an avenue to keep the development viable? Administrator Statz answered correct. Mr. Beert asked if the City did not desire to provide TIF would the development be smaller. Mayor Paar stated when Trident originally came to the City requesting TIF and Council asked if they could construct without TIF. Trident Development felt that if the TIF was secured a lender would be more apt to consider borrowing them the remainder of the funding. Some members of Council felt that TIF would be a viable option for the developer. Mayor Paar stated that Council discussed options for providing the developer with alternative concessions (waiving of fees, etc.) which would offset the shortfall of the developer. Council has reviewed numerous options along with the Finance Director completing an analysis that showed that TIF was the best funding source for the developer and less risk for the City. Mayor Paar stated that there are smaller project that could be completed with or without TIF. He stated that the Beard Group years ago had proposed townhomes surrounding the core of downtown but the economic downturn caused that developer not to redevelop the area. He also stated that Trident Development completed a study that showed that there is a demand for apartments for seniors, single individuals and millennials. He stated that Council liked the proposal and chose to go with Trident as the developer. The TIF was the gap that they needed to make the project work. Mayor Paar stated that Page 5 of 18 City of Centerville Council Meeting Minutes March 11, 2020 council did not try to hide this project from the public and have had numerous meetings. He also stated that Council is being transparent. Mr. Beert asked if Council would consider assisted living or senior housing if Council decided not to go with the apartment complex and whether it could be built to be one or two levels. Administrator Statz stated they did have some conversation with Trident about a 55 plus complex not necessarily a memory care facility. He stated the reason why they chose Trident is because they did a very detailed study of the market and their study showed the apartments would be the best market for the area. Ms. Wendy Brilowski, 7124 Main Street, stated that she is concerned about using TIF money. When she calculated the $34,000 a year in fees over the 16 year period it was almost break even. She felt that the developer should be paying for this. Ms. Brilowski stated that it seemed as though the City was hiding things associated with this development. She did state that she was happy that the City was holding this informational meeting because she felt she wasn’t receiving enough information. She stated that in the original plan for the downtown area, there were proposed to be low to medium density homes and not an apartment building. She mentioned that she had heard that there were a couple of businesses that were coming into the downtown area but they were turned down because they didn’t meet the redevelopment design. She stated that she wants development to come into the downtown area, but she felt that something smaller would fit better than a 3-story apartment building. Ms. Brilowski suggested starting smaller instead of doing the whole area at once. She stated she has forwarded a letter and now feels that she has learned a lot more as to what is going on in the downtown area. Mayor Paar stated that the Beard Group proposal was a grand plan and everyone who lives in the downtown area was very contentious that they were going to lose your homes. That was a grand plan with a lot of medium density townhomes which now has gone by the wayside. He stated the townhome market is slowly coming back but people are not buying townhomes new as they were 20 years ago. He stated that that market is making a comeback. He stated when the Beard Group plan fell though, Council scaled back their thinking for the area. He stated that the City did have some people interest in the lots north of Main Street, but there was not enough space for parking and the surrounding homeowners could not agree on a sale price for their property that was advantages to the developer(s). He addressed that the only development that Council turned down that he could remember was a slaughter house or those that needed to purchase additional abutting properties. Ms. Stacy Brickner, 1580 Sorel Street, asked if anyone lives adjacent to Block 7. Mayor Paar stated he lives/lived, depending on what happens, off of Meadow Lane within walking distance. She stated that at the last meeting the downtown residents got hit with a huge assessment for the water hook-up and street project. She stated that she was opposed to the construction of this project. She stated that vehicle traffic on Sorel Street during school dropoff or pickup time is extremely congested and the additional traffic of an apartment building would exacerbate that issue. She thanked Council Member Koski for getting the interest rate lowered for the water hook- up and street project for individuals that may need to secure a loan. Mayor Paar again stated if you do not wish to speak at the meeting but would like your opinion known, to write your name, address, comment and give it to the City Administrator and he add the information to the public record. Page 6 of 18 City of Centerville Council Meeting Minutes March 11, 2020 rd Ms. Sherry Cerra, 1975 - 73 Street, questioned why Council was tabling the vote and when the community would know when it was going for a vote? Mayor Paar stated truthfully they do not know when it will be brought back for a vote. He stated that at the March 25 meeting he will officially resign his seat. Administrator Statz stated that Council will want to fill the vacant position as soon as possible. He stated that he felt that the end of April would be the soonest they would probably bring the development back to Council for consideration. Administrator Statz provided the website as a tool for residents to located agenda packets and upcoming meeting topics. Ms. Cerra stated so the community will be informed about a vote on the project through the web site or newspaper? Mayor Paar stated the council packets are available the Friday prior to the meeting. He stated that the City is attempting to inform the public through other social media venues like Twitter and Facebook also. Mayor Paar recessed the meeting for a brief break. Mayor Paar called the meeting back to order at 8:17 p.m. Ms. Melissa Mills, 1654 Hunters Ridge Lane, asked how the design for the building was conceived by the developer, the Council, the Comprehensive Plan or a subcommittee. She stated that the design of the building that she has seen in the newsletter of both proposed buildings does not look similar to building in Hugo’s business area. She stated that if she had a potential coffee shop business to put in the downtown area, she would think twice because of the surrounding buildings in the area look to need cosmetic/aesthetic repairs. She stated she received this information on Block 7 in the City’s newsletter and realizes that one of the buildings is a concept plan and wondered if they could make the buildings look similar. She felt that it would bring in more businesses due to the fact that it was more attractive. Mayor Paar stated the City along with the EDA have provided programs to local businesses allowing for grant funding and matching low interest loans for façade type renovations and other renovations. He stated that meetings have been organized and held with these business owners. Mayor Paar stated that new attracts new and old attracts nothing. Mayor Paar stated that Council utilizes its Comprehensive Plan as a tool for development and it is revised over time through required updates and trending. He stated that they City previously completed a study with the Damon Farber Group who suggested that the City recognize and embrace the City’s French-Canadian heritage through facades, and building aesthetics. He also stated that it is the City’s goal to bring some type of business to the downtown area rather than a massive redevelopment due to the economy and City owned property being available. Mayor Paar stated the City had enacted an EDA to assist with attracting businesses to the area. Council Member Love stated that the EDA was requested to give a “mock up” plan on the design of the building on what could go at 1737 Main Street and what it could possibly look like. He stated this is not a final plan but rather a concept plan. He stated its Council is attempting to adequately provide the community with avenues for attracting businesses. Ms. Katie DuFault, 7045 Centerville Road, asked Council why they are not voting on the item this evening. She stated that Council has five (5) acting members, the item was on the agenda, and many individuals are here expressing their concerns? Mayor Paar explained that due to his resignation and residing outside of the community he is uncomfortable casting his vote for the Page 7 of 18 City of Centerville Council Meeting Minutes March 11, 2020 project. He did state that he is in favor of the project. Ms. DuFault stated that she felt that residents were concerned about their property taxes and how this development would affect them. She felt that additional development (similar to this project, in this area) would not net the population to levels that resident would receive tax relief and it should not be associated with an apartment building when existing residents do not desire one. Ms. DuFault requested that Council consider the desires of the residents and the tax base. She stated that it will take 16 years before the building generates any tax amounts and she felt that was a ridiculous amount of time. She stated that someone from the audience asked the average length of TIF that other communities provide and she believes that it is not for more than 10 years. She asked how long the construction period would take and stated that if there was a 16 year TIF and it took three (3) years to construct it would be a total of 19 years before taxes were paid. She stated that she had concerns of the ramifications to the school with additional children and strains on public safety due to the addition of the building and its residents during the 16 year period of the TIF. Mayor Paar stated he is having a hard time understanding where there is only 100 people that gets us towards the 1000 but yet those 100 people are going to cause the City to hire more staff, police and fire. The taxes is the biggest thing he gets complaints about and raising taxes as inflation goes up, he stated that he’s not sure that this is a valid point. Again, we can disagree on that issue. The effect on the school was addressed at the beginning of the meeting, Lino Lakes is constructing 250 homes where children from them will be utilizing Centerville Elementary, with the 75 homes that Centerville will be constructing they will also be utilizing Centerville Elementary. He stated that if this project doesn’t go, we may still have to hire more staff, police and fire, regardless, because we have 75 more homes being built in town that could be 4 people living in verses 1 or 2. There are a lot of what ifs and this could be a good thing by bringing in more businesses like Dunkin Donuts and coffee shops. He stated that new businesses east of town are now going to be on the tax base for Centerville and this is a good thing. He stated when the City bought property, they got a lot of heat for doing that, but we had control of what would be constructed on it. As a Council Member you make a lot of gambles based on what is best for the City. Mr. Jon Brickner, 1580 Sorel Street, several questions regarding financing and costs of construction that he has concerns about. He questioned Council about the $10 million total cost for the project but then the valuation was $6 million and how that was derived and what it meant? Administrator Statz stated the valuation of the apartment building is different than the valuation of a single family residence, it is not what the building will sell for, it is about what income it can produce. Finance Director DeJong explained for purposes of valuing commercial properties, they look at resale, construction costs and they look at income generated. Because there are restriction on this requiring subsidized portion for some of those units it will not be valued at same level as complete market rate apartment. Mr. Brickner asked does that mean the tax rate is based off of the $6,000,000? Finance Director DeJong concurred. It is generally at a reduced price for valuation purposes. What you can sell your property for is generally not what you are being tax on. Mr. Brickner stated the long term plan is pretty aggressive. Most of us that moved to Centerville did so because of the small town feel without apartments everywhere. Mr. Brickner stated the area that is being referred to as downtown he felt was not downtown and that along Main Street was downtown. He stated that everyone should be concerned if there is a vacant lot in their neighborhood, that an apartment building could be constructed there. He stated no one wants an apartment building in their front yard. He stated that people in the downtown Page 8 of 18 City of Centerville Council Meeting Minutes March 11, 2020 area are being hit pretty hard because of the street and water projects. He stated that with an apartment building being proposed they may feel that their property values will decrease. As far as the TIF, that is a lot of money we are giving this corporation. He stated that he thinks Council would be better off if the façades of the existing buildings were updated. He stated that the City should be helping out our local community verses some company from St. Cloud. Mayor Paar stated we have already discussed this and put into play. Mr. Clayton Nicks, 7029 Centerville Road, stated that he is confused that he has not heard a single business plan on how Council is going to bring businesses to the downtown area. He stated 53 apartments does not bring in a business neither does not having proper access. Every business he knows is it is location, location, location. He felt that Centerville Road was not a location and that freeway access was location. He questioned why this property was slated for apartments and why the developer chose the site. He felt that businesses would not come to an apartment building in the middle of nowhere. The other part he stated he had issues with, this is a small town, and it has that feel. He heard someone mention that Stillwater had a small town feel also. It has the area for that. Centerville does not. If you put up apartment complexes and try to bring in Dunkin Donuts, we don’t have a small town. He stated that he is from Ely, MN and his town was lost because of corporations. He also stated that the community needs small town local businesses. He stated that Council is considering an apartment complex with one (1) retail space anticipating other businesses will come due to the population increase. He stated that the City cannot fill retail spaces currently and what is the City’s plan. Mayor Paar stated that the City is attempting to market itself with the EDA and other avenues. It has been primarily for a data center and small businesses. He stated purchases of property other than City owned is between a developer and the property owner. He stated that Council understands the requirements/necessities of parking for businesses and all development. He also stated that real estate agents/brokers are affirming that rooftops will drive commercial business location. Mayor Paar stated that the amount of traffic on Centerville Road is astronomical and that will just continue to grow with the growth of communities that surround Centerville. Mr. Nicks stated that the traffic study was completed when I35E was shut down and once they opened that roadway the traffic lessened through Centerville. Mayor Paar stated that the Centerville road project was a county project and the City had very little to do with it. Administrator Statz stated this is the latest traffic counts in Anoka County two way traffic 12,339. He stated most retail businesses will not consider an area of less than 15,000 vehicles. Administrator Statz stated that Mr. Nicks is correct in that it will be difficult to secure retail businesses along Centerville Road. Mr. Nicks spoke of Ms. DuFault’s concern for a vote. He stated that not once did the Mayor mention what Centerville wanted but it was what he wanted. Mr. Nicks stated that the problem he believes is that the Mayor does not want to do what Centerville residents want him to do. He stated that the Mayor has a personal issue and will not step up and deal with the issue while he is on Council. Mayor Paar stated that he desired not to vote on the issue as his residency was in question and he did not deem it to be fair to the residents of Centerville. Mr. Nicks felt that if the Mayor cared about Centerville and Council cared about Centerville and its residents a vote should be taken this evening. Mayor Paar stated that in order to generate business interest additional residents were needed. He stated that the properties in the downtown area were rezoned to allow for zero lot line for future sales of property to businesses if desired. He also stated that Council is Page 9 of 18 City of Centerville Council Meeting Minutes March 11, 2020 attempting to make Centerville more business friendly and marketing the community to gain business growth. rd Ms. Pam Kennedy, 1983 - 73 Street, stated that this has been mentioned several times and the apartments would be a great place for the seniors to move to. She stated that she knows no senior citizen that could afford $1,600 for rent. She stated Council stated that the project would bring in $800,000 immediately for fees and revenue, etc. Part of that was $50,000 in building permits fees and of that amount how much will the offset of the Inspector’s wage be of that for this project? She stated that Council has provided that $800,000 would be received in revenue but you are not showing expenditures that would be involved to take on this project. She requested that Council discuss expenditures by the City associated with the project and the proposed revenue gained by the development upon construction. Administrator Statz addressed the building permit revenue and how the City’s two (2) inspectors would handle inspections versus other communities of Centerville’s size contract for services and stated that basically these funds would be a pass through. Ms. Kennedy asked whether additional staff would need to be hired to offset other duties that these positions complete while providing inspection services to this project? Administrator Statz stated that this is very difficult to judge whether with a project of this size is hiring additional staff needed but he did not believe that the answer was yes. Administrator Statz stated that an audience member questioned the capacity of the city’s infrastructure. He stated that the systems are built to their capacity with one (1) water town, two (2) wells and four (4) lift stations. He stated that the City incurred expenditures for all of this previously and would be currently paying itself back. Administrator Statz stated that connection charges repay funds that were previously expended and the City is in a good financial position which these funds. Ms. Kennedy asked how long construction would last and Administrator Statz responded within roughly one construction season. Ms. Julie Lindsay, 1687 Sorel Street, stated that the apartment building would be directly across the street from her home and that she would desire not to be sitting on her front deck looking at a 3-story apartment building with its associated vehicle traffic. She questioned if the proposed development was best for Centerville and its residents? She stated that Council Members and City Staff have received emails from residents and how many of those residents said “I just love the idea of a 3-story apartment building located here”. She stated that she bet zero. Ms. Lindsay asked why not something less invasive like townhomes on the parcel. Ms. Melanie Nicks, 7029 Centerville Road, stated that she moved into the downtown area and did not realize it was considered the downtown and does not understand why it is called that. She also stated that if there was a 1-story apartment building or a few townhomes she felt that it was a better fit in the area and she was fine with that. She felt that the building was too large for the parcel and it was not a good fit for the area. She stated that she would rather have it remain vacant but knows that that will not happen. She again stated that a smaller development would be easier to digest for residents of the area and retain the small town feel. She felt that the Mayor’s concern for his residency was not a good reason not to vote at this time as the Council Chambers were packed with residents in opposition. Ms. Nicks stated that Council’s goal is to bring businesses to downtown and there is only one retail space within the apartment complex. She questioned where new businesses were going to go in the downtown area without buying owned property. She stated that she believed the Main Street was where downtown should be. She questioned the City’s plan for businesses. Mayor Paar referred back to the Comprehensive Plan and how it laid out the Page 10 of 18 City of Centerville Council Meeting Minutes March 11, 2020 downtown area. Ms. Nicks stated that she does not feel that this parcel is the right location for a 3-story apartment building, if she would have known that this was what was proposed for the location she and her husband would never have purchased their home where they did. She stated that she is very opposed to the building and the use of TIF. Mr. Steve King, 1724 Sorel Street, stated that he agrees with the audience and stated that he will again run for office in November. He stated two (2) weeks ago Council was speaking of a new irrigation system in the downtown area. He also stated that he remembers when the Centerville Road project was being constructed the City spent roughly $340,000 for storm water drainage which was to curtail downtown drainage and now the City desires to expand that system with spending an additional $168,000 with placement on properties other than that owned by the City. He had concern for placing infrastructure on privately owned property that could be sold in the future. He asked if the City would lose credits if this occurred. City Administrator Statz explained that the City utilizes water from the pond in the area to irrigate the ballfields and parts of LaMotte Park. The City received credits that were utilized to offset the necessity to construct ponds or rain gardens with the Centerville Road project. He also stated that these same credits have been used elsewhere with other street projects within town. Administrator Statz stated that when completing the 2009 Street Project the City did not have stormwater credits and raingardens were a requirement. He stated that the expansion is due to the redevelop of the area and separate agreements would be entered into with the private property owners which would protect the City’s interests. Mr. King felt that this was a hidden cost to the project. Lengthy discussion ensued. Ms. Julie Lindsay, 1687 Sorel Street, stated that the City had purchase property for approximately $200,000 she was under the impression that it was purchased for housing a stormwater pond. She stated that with this development that is where the intended parking lot would be. City Administrator Statz stated that there was a pond design for the property. Ms. Mary Beth Wasiloski, 1688 Heritage Street, stated that she also resides directly across from the proposed development and that she has fond memories of ice skating on the parcel along with the fire station being located there. She also stated that she believed that the downtown area was along Main Street. She felt that she does not see space for retail in the area unless private homes are purchased. She felt that several buildings in the area could use remodeling or updating already. She felt that the rent level would be difficult to achieve if economic times became difficult, felt that Council should concentrate on Main Street as the downtown area and she commended the attendees of the meeting for their participation. Ms. Wasiloski stated that residents are not in favor of the development and they believe they will lose their sense of community due to it. She asked the process for the Mayor’s seat fulfillment. Attorney Glaser stated in the short term a new mayor will be appointed by the remaining members of the council to fill out the rest of the Mayor’s term. Ms. Wasiloski questioned when this would happen. Mr. Glaser explained the process by stating if a Council Member is chosen to be Mayor, then that seat is filled by the remain years left of the running position. If two (2) years remain it would be appointed but if more than two (2) year remain there would be a special election. Ms. Wasiloski asked about a vote and when that process could take place. She stated that a new Mayor and Council Member will be appointed then the item will come back to Council for Page 11 of 18 City of Centerville Council Meeting Minutes March 11, 2020 consideration. Mayor Paar concurred. She stated that it is not appropriate for our current Mayor th who will be resigning on the 25 to speak for the people of Centerville. In her opinion she did not believe what he had to say mattered. Ms. Wasiloski stated that she also had concerns about her front yard. Mayor Paar attempted to explain the voting structure and the required votes needed for this project to proceed and with a vacant seat it would only be four (4) members voting, he felt that it was a large issue. Ms. Wasiloski stated that she desired for many residents to be present when the item went for a vote at an upcoming meeting. Administrator Statz stated that information will be provided in resident’s newsletter. Ms. Carol Schjei, 7059 Dupre Road. She stated that she is not a long time Centerville resident and only has resided here for six (6) years. She stated that she does not have the emotional attachment but she understands it. She stated that she is from a small town, been through a divorce and it is difficult. She felt that there needed to be compromise. She reported that she reads the newsletter and has not seen that a 3-story building was to be constructed. She stated that she is attempting to gather information in an attempt to understand but in her mind a $900 one (1) bedroom apartment or $1,600 for a two (2) bedroom apartment was not high-end. Mayor Paar stated that was incorrect and there was some confusion. City Administrator Statz stated that the $900 rate was the affordable component. She stated Centerville is growing and we are going to have to add retail, schools, more staff, etc. She felt that the small town could not remain a small town but the feel could. She also stated that she felt that the property could remain vacant until something that was desirable to all could be placed there. Ms. Schjei felt that the funds that EDA is providing for façade type renovations is not enough. She also felt that a low interest loan for $20,000 was not very much to make renovations. She stated that she would rather that the City spend more money on these types of things that would clean up the area. She would like to hear from the rest of Council regarding their feelings for the TIF project. Mr. Jon Brickner, 1580 Sorel Street, asked about the other two (2) proposed apartment buildings in the newsletter and whether they too were requesting TIF? He stated the property located near the Centerville Elementary School, 1737 Main Street and Main Street. Administrator Statz stated that neither have been proposed for TIF. He stated that the real estate broker drafted a concept for the site allowing for a potential buyer to purchase and have an idea of rent for the apartments on the upper level and the ability to rent lower level retail space. This would assist in cash flow calculations for a pending buyer. Administrator Statz stated that the proposed Memory Care Facility on Main Street near Apple Academy and CenterMart is also not requesting incentives. Mr. Brickner stated that waiting for a developer for a desired project may be the way to go as he stated that at some point it would develop on his own. Ms. Katie DeFault, 7045 Centerville Road, stated part of the communication here people said they didn’t know. When are agendas determined? She was told in February that the vote was happening this evening. She stated it sounded like Mayor Paar said this had been discussed to keep the agenda the same. Can there be something somewhere indicating that there is a change or an update on the agenda? Mayor Paar stated that he and the City Administrator decided to leave it as is because they wanted people to come and provide input. He stated that they desired to have input from the public. Administrator Statz stated that items on the agenda do not change very often and when they do it is usually at a meeting when Council makes that decision. Mr. Statz stated the agenda packets and minutes are on our website. Page 12 of 18 City of Centerville Council Meeting Minutes March 11, 2020 Mr. Brian Beert, 1829 Houle Circle, stated the he has been asked where Centerville is and that it is an island surrounded by Lino Lakes. He stated that years ago an annex attempt failed for the property along the border of 35E in Lino Lakes. He said that it is now developing. He reported that when he moved to Centerville there was one (1) lane west and one (1) lane east on the freeway and the rest were farm fields. He questioned whether the City received more money from taxes on homes or businesses? He also stated that the City is limited on available space. Administrator Statz stated that businesses are taxed roughly double the rate of a home. Finance Director DeJong stated that businesses are roughly taxed at 2% on the amounts over $150,000 and residential is 1% on up to $500,000 and 1.25% after that. Administrator Statz stated market rate apartments are at 1.25 times, low income apartment are 0.75 times. He also stated that it is important to have businesses in town because they pay more taxes than residential properties. Mr. Beert stated that Forest Lake is seven (7) miles away, White Bear Lake is seven (7) miles away, Hugo across the freeway and Lino Lakes, and Circle Pines. He felt that if the City waited they could chose the type of development that was desired because available space will become scarce. He asked much of the undeveloped area is available in Centerville for businesses? Administrator Statz stated that there is very little remaining for development. He presented the audience with a map showing the location of the Memory Care Facility and pointed out the 22 th acres east of 20 Avenue along with several other parcels. Administrator Statz stated that they have turned down a number of proposals for housing in these areas. He also pointed out land available along Commerce Drive near Gateway Circle that is zoned commercial/industrial. He stated that these parcels would be taxes similar to businesses. He reported that the City had 22 acres of commercial and 55 acres of industrial. He stated that the property along Centerville which is 110 acres is zoned residential. Ms. DuFault asked council if there was another night during the week that council could hold their meetings rather than Wednesday evenings as it is a church night and it may be difficult for others to attend. Mayor Paar stated that there have been discussions multiple times regarding this and it has been determined that Wednesdays are the dates. He stated due to the fact that the Fire Steering Committee, Police Governing Board and all the other committees and commissions meet on dates other than Wednesdays it makes it difficult to schedule on those same evenings. Administrator Statz explained that there are many different meetings that happen during the week and change is hard but could again be considered. Mayor Paar noted the time (10:00 p.m.) and that he would close the open forum. Council Member Lakso stated one of the best things was to hear everyone speak. At first it sounded like the audience desired for the lot to remain vacant but residents are willing to work with the City in regards to it development but not a 3-story apartment building or TIF financing. She feels that the vacant property is a disservice to the residents of the City because there is no tax base being obtained from it. She looks at the property with so much potential and there is room for discussion for what gets developed there. The Comprehensive Plan is where there is little wiggle room because the plan opens the door to developers. The Plan states what can be built and she is glad to have received the input from this meeting and has had time to process because this is a difficult decision to make. She does like the idea of having a diversity in homes. She stated that the challenge that Council will face is that the site is valuable and that the City makes a profit to offset the general fund. Page 13 of 18 City of Centerville Council Meeting Minutes March 11, 2020 Council Member Love stated that he would not feel comfortable with Mayor Paar voting on this matter due to his residency. He stated that Mayor Paar made the decision on his own not to vote, to resign from council and that he stands behind him. Council Member Love stated that he received a lot of emails and text messages in regards this project and that even Representative Runbeck contacted him with her opinion. He stated that he felt that he was not on the fence, that it needed to move forward and was good for Centerville. He also stated that he had received a lot of feedback on the issue from people who live all over the city. He reported that one of the main things that he heard was the desire not for an apartment building and that residents did not desire to grow the community and the use of TIF. He stated that he is struggling with the use of TIF for the project. Council Member Love stated he understands what the people in the downtown area are going through because he has a path the runs along his property and there is mini-storage facility that is being constructed behind him. He stated that he did not vote for that and the rest of the Council is making decisions that are best for our City. He stated that the Council is attempting to bring businesses to town. He stated the biggest message he heard from the residents is they should not get any financial assistance from the City and that a developer should financial complete development on their own. He agrees with Council Member Lakso with following the Comprehensive Plan for growth. He stated that the area is zoning mixed use per the Plan and that the Plan has been in place for a long period of time. Council Member Koski addressed Mayor Paar’s unexpected news of resignation and stated that he has done a lot for the community for many years. He commended him for being respectful, being honest and open on not desiring to cast his vote. He thanked Mayor Paar. He also thanked the people that came to the meeting and for getting involved. Council Member Koski stated that he has heard that some residents feel that the City is attempting to sneak this project through and that is not the case. He stated that may be residents are getting that perception by the way it has been communicated through different avenues and maybe door knocking would have been better. Council Member Koski stated that he is not a big fan of TIF and if they can put up a $10 million apartment building, they should be able to do it on their own. He stated in the beginning he was for this project but the more he researched it and changed his opinion. He stated that he does not believe that everyone should pay for this and that if the developer can’t make it work without it, then it is not a viable project. He stated that he is not against commercial development and making our City a more vibrant place to live and adding senior living. It needs to be the right thing for the City. He stated that if the 5,000 population is a goal of the City and he stated that Council needed to be careful on how to get there. It needs to be beneficial to the City. There was a discussion about how much open land the City had available. If this was all built out, he stated he does not know if the City will get to the 5,000 population mark. He stated that he is concerned that putting up an apartment building would not increase the population and thinks that the developer can make this work if they desired to with the interest rates. Council Member Montain stated that he echo’s Council Member Love’s statement in regards to Mayor Paar. He stated that he is opposed to the residential TIF and City owned property. He was happy to hear from the residents and he hopes that more people attend meeting in the future. He stated that the Council is not trying to rush things through and has had several meeting that discussed this item. He stated that items are not just added to the agenda and for instance, last minute checks are no longer placed on the agenda the evening of the meeting. He stated things do Page 14 of 18 City of Centerville Council Meeting Minutes March 11, 2020 take a while to get going. He thanked Administrator Statz for the presentation and explained his reasons for being against TIF for residential property because residents are paying for it. He understands the benefit to the City. He stated he echoes Council Member Koski, that they developer should pay for it. He stated the viability of the project should not be based on if they can get free funding. He stated that some apartments are bad but that is not the case and times are changing. There have been studies completed and they show that millennials want apartments. Things that he has seen over the years, is that some rental properties, people do not always take pride in renting and they can become run down. He stated he does not want this project to go through as presented, with TIF. He stated the 5,000 population is one of the strides that Council would like to get to and it is difficult to say if that will happen. He stated that it scares him that if one census we have says a population of 5,005 and the next census the City is at 4,995, the City would lose $250,000 that would need to be cut out of their budget. He feels, in the right spot, TIF for commercial and shorter terms would be good if used wisely. He stated that he could never vote for a residential TIF. Mayor Paar thanked the residents for coming to the meeting and reviewed what was said by the residents and Council. Motion by Council Member Montain, seconded by Council Member Love to table the vote on Purchase Agreement with Trident Development for Block 7 Properties. All in favor. Motion carried. nd 2. Old Mill Estates 2 Addition – Final Plat Approval Administrator Statz stated the developer of Old Mill Estates has requested approval for Old Mill nd Estates, 2 Addition, consisting of 18 single family lots in the R-2A district. The proposed final nd plat for the 2 Addition is largely in keeping with the approved Preliminary Plat, therefore, no public hearing is required. Planning Commission reviewed the Final Plat and recommends approval. Administrator Statz stated that we would need a motion to approve the Final Plat for Old Mill nd Estates, 2 Addition, contingent upon approval and execution of a developer’s agreement amendment adding Phase II. Council Member Montain questioned Administrator Statz about lot 18 and whether it is to be taxed the same as a home. Administrator Statz stated the property will be taxed the same rate as the other parcels. He also stated that all of the lots in Phase 1 have been sold. Council Member Love asked whether the street be punched through in Phase II. Administrator Statz said yes. He pointed out the new street name is Laramee Lane. A discussion ensued. Motion by Council Member Montain, seconded by Council Member Koski to the approve nd the Final Plat for Old Mill Estates 2 Addition Contingent upon Approval and Execution of the Developer’s Agreement, All in favor. Motion carried. 3. Adoption of New City Logo and Rebranding Action Plan Mayor Paar asked to table the adoption of a New City Logo and Rebranding Action Plan. Page 15 of 18 City of Centerville Council Meeting Minutes March 11, 2020 Motion by Council Member Love, seconded by Council Member Montain to table the adoption of the New City Logo and Rebranding Action Plan, All in favor. Motion carried. 4. Interim Ordinance Group Living Uses Attorney Glaser explained the Interim Ordinance Group Living Uses. He stated this would freeze future applications for any group living that would include nursing homes, senior living, group homes, family daycare, etc. This will give the City time to study this question. For the next time a nursing home or a similar facility, we can build criteria or a CUP or IUP. What this does is by law allow us to freeze and not approve any future applications for a period up to a year or for how long that study period goes. You cannot arbitrarily put a moratorium in place you have to have a reason to do so. The reason is we don’t have criteria in our code that strictly governs these types of facilities. He stated for right now we are not stopping anyone who has a current application or any current business from expanding. All we are saying if a new business comes into town, we would say no until the study period is done. A lengthy discussion ensued. Council Member Koski made a motion to approve the Interim Ordinance Group Living Uses. He asked what else was needed to add to this because at this time our city code does not cover this. Attorney Glaser stated that there is a State Statute that asks cities to have two (2) meetings on ordinances but there is no penalty for not obeying that, but if you were to obey that you would not take a vote tonight. Council Member Love seconded for discussion. Council Member Love asked if they could put a shorter moratorium just to allow the Planning and Zoning to dig deeper into this and actually build something into our code that we feel comfortable with. Mr. Glaser stated yes. The moratorium law only allows you to have a moratorium up to a year or you can set for a period as long as a study is in place. Council Member Love stated he would feel more comfortable to have the Planning and Zoning Commission study this. He stated he doesn’t know that Atlas gave them that crystal that we need to study in a larger facility that may come in anyways. Mayor Paar asked how long? He answered 3 months. He felt this should be plenty to time for the Planning and Zoning Commission to study it. He stated that this is a reasonable compromise. Mayor Paar asked Council Member Koski if he agrees to a 90 day amendment to the motion. Council Member Lakso stated that we are not reinventing anything. She stated that they need the time to do it right. She would take that as an amendment. Council Member Koski asked about nine (9) months instead of three (3) months. He feels that three (3) months goes by too fast being that Planning and Zoning Commission only meets once a month. He thinks we will need more time. Page 16 of 18 City of Centerville Council Meeting Minutes March 11, 2020 Mayor Paar repeated Council Member Koski’s original motion was for a year, then it went to a discussion, Council Member Koski amended his motion from 1 year to 9 months. Then went to discussion. Council Member Love withdraw his second because it was for the one (1) year timeframe and not nine (9) months. Went into discussion. Mayor Paar seconded the motion. He said the motion was for the moratorium for nine (9) months. Mayor Paar seconds for discussion. At first it caught him off guard, so we are taking a vote on this then we are done with this. He stated the second reading is a moot point. All in favor. Motion Failed. Koski and Paar Yeah, Lakso, Love and Montain, Nay. Council Member Love asked Attorney Glaser if Council was able to make a secondary motion on the issue. Attorney Glaser stated yes. Council Member Love suggested a motion that we have a moratorium for three (3) months to allow the Planning and Zoning Commission the ability to complete their due diligence to attempt to update the code in reference to these particular items. Motion by Council Member Love, seconded by Council Member Lakso to adopt the Interim Ordinance, with the Change to Have the Duration be for three (3) months. All in favor. Council Member Montain Opposed. Motion carried. X. COUNCIL/ADMINISTRATOR ANNOUNCEMENTS 1. Administrator’s Report Administrator Statz stated that they have a plan for the flu pandemic Covid19. He stated Public Works Director Palzer is updating this plan from 2009 when it was the H1N1. Police and Fire are updating their plans. He wanted everyone to know that they are actively monitoring the situation. There could come a time where the meetings could be called off because of those issues. He stated there are multiple stages and we are currently at stage 1, because we only have 1 case in the area and the individual is quarantined. If there were more cases we would do more extreme measures such as working from home, staggering shifts or longer shifts, one (1) person in the office and avoid community gatherings. He stated our infrastructure is very self-reliant. Public Work does test the water on a daily basis and check our lift stations. He is very confident in our infrastructure. Mayor Paar stated that he and Mr. Statz are going to get some insight and training on webinars. Mr. Statz stated that he will be in Duluth for a conference for MN Festival and Events Association. Council Member Lakso stated that Council received this in your City about Park and Rec focusing on what they are calling Main Street Market right before the Water Ski Show. They have someone who is coordinating that. Administrator Statz stated he wanted to thank Ms. Kris Sweeney for filling in for our City Clerk while she is out on a family emergency. She not just doing her job but also the City Clerk’s. Ms. Page 17 of 18 City of Centerville Council Meeting Minutes March 11, 2020 Sweeney also stepped in and did an election. Thank you to Ms. Suzanne Seeley and all the other election judges. You did a fantastic job. Council Member Koski stated Planning and Zoning had some discussion on nuisance lighting issue, the street project around Southern Rail and Sorel Street and parking when the project starts. They discussed the Old Mill Estates which was approved tonight and a discussion on the moratorium issue. Council Member Montain stated that the North Metro is clarifying and cleaning up the joint powers agreement. Making sure that is gets updated. He stated they are still working with the FCC on franchise fees. Mayor Paar thanked Council for their composure during discussions this evening and stated that it was a heated meeting. He stated Administrator Statz did a ton of work with the presentation and it was awesome. He stated he appreciates everyone for being respectful and their opinions. He stated we have to learn something from this and not everything is set in stone. Motion by Council Member Montain, seconded by Council Member Lakso to Adjourn the March 11, 2020 City Council Meeting at 11:23 p.m. All in favor. Motion carried. Respectfully submitted by Kris Sweeney, Sr. Account Clerk. Page 18 of 18