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HomeMy WebLinkAbout03-27-01-01 Economic Development Commission ' ' Meeting Minutes March 27, 2001 City of Lakeville Economic Development Commission Meeting Minutes March 27, 2001 6:00 p.m. City Council Chambers Members Present: Emond, Miller, Tushie, Pogatchnik, Brantly, Matasosky, Schubert, alternate member Erickson, ex-officio member Bornhauser. Members Absent: Vogel, excused. Comm. Vogel was being honored with a Community Service Award at St. Thomas University. Others Present: Robert Erickson, City Administrator; Arlyn Grossing, Community & Economic Development Director; Finance Director Dennis Feller; Ann Fiad, Economic Development Coordinator. Visitors: Mark Ulfers, Dakota County Community Development Agency; Sara Wildt, Dakota County Community Development Agency; Dan Rogness, Dakota County Community Development Agency; Dave Sellegren, The Avalon Group, David Licht, City Consultant. 1. Call Meeting to Order. Vice-Chair Matasosky called the meeting to order at 6:05 p.m. in the City Council Chambers of Lakeville City Hall. • 2. Approval of February 27, 2001 Meeting Minutes. Motion 01.10 Comms. Emond/Erickson moved to approve the February 27, 2001 Meeting Minutes. Motion carried unanimously. 3. Proposed TIF Amendments City Finance Director Dennis Feller as present to discuss proposed amendments to Lakeville TIF Districts 9 and 10. The amendments are being proposed in order to avoid any possible limitations imposed by pending legislation. Mr. Feller indicated that TIF District 9 includes Argonne Plaza and was created in May 1998. The amendment would allow the captured revenues to be used for the acquisition of parcel 22-11850-220-00 for a future right-of-way at 175th Street and Junelle Path. This is part of the Comprehensive Transportation Plan's planned improvements to the CSAH 50 and I-35 interchange. Comm. Tushie questioned how the portion of the parcel not dedicated to the right-of- waywould be used. Mr. Feller indicated that a use for the remaining land had not yet been determined. Comm. Erickson inquired about the cost to acquire the parcel. Mr. Feller indicated that • the cost had not yet been determined. 1 G:V1FIad1ECONDEVSEDC\2001mtgs13March\032701 minutes.doc Economic Development Commission ' Meeting Minutes Mamh 27, 2001 Motion 01.11 Comms. Tushie/Emond moved to approve the amendment to Tax Increment Financing District # 9 to allow the appropriation of the tax increment revenues for the acquisition of parcel 22- 11850-220-00. Motion carried unanimously. Mr. Feller indicated that TIF District 10 includes Fairfield Business Campus and was created in April 1989. The increments from the Fairfield Business Campus TIF are pledged to the payment of the 19956 and 1998D General Obligation Bonds. The amendment would allow the tax increment revenues, to the extent that such revenues are available after payment of existing debt and fiscal disparities, for improvements to I-35 and County Road 70 Intersection-Dakota County Project 70-06. The proposed project will eliminate unsafe conditions and reduce traffic hazards. Assuming no significant legislative changes affecting property classification rates, taxation or tax increment financing occur, the properties in this district are projected to generate approximately $6,119,119 of tax increment revenues after payment of existing debt and fiscal disparities. This figure is based on a 6% appreciation rate. Springsted is recommending issuance of approximately $2,675,430 of General Obligation Tax Increment Bond Series 2001 (Capital Appreciation Bonds.) The bonds will generate approximately $2.6 million for the County Road 70/I-35 construction project after payment of issuance costs and bond discount. Motion 01.12 Comms. Tushie/Schubert moved to approve the amendment to Tax Increment Financing District # 10 to allow the appropriation of the tax increment revenues for the payment of General • Obligation Tax Increment Finance Bonds issued to support improvements to the County Road 70-/I-35 Interchange. Motion carried unanimously. 4. Progress on Strategic Plan Items a.) Strategic Plan Item: to develop a proactive approach to the development of affordable housing. Mark Ulfers, Executive Director of Dakota County Community Development Agency, was present to speak on the CDA's potential roles in expanding the supply of affordable housing. Comm. Matasosky thanked Mr. Ulfers and the CDA for the quality projects they have developed in Lakeville, and indicated the EDC's interest in working with the CDA to develop additional affordable housing. Mr. Ulfers presented information on the Dakota County housing market showing that low vacancy rates, increased population, increased rental rates, and increased cost of home ownership have created a great need for affordable housing in the county and in Lakeville. He also indicated that rents must be at 30% of the Metropolitan Area Median Income of $68,600 in order to be "affordable." Houses selling at no more than 95% of the area median purchase price of $158,000 are considered affordable. • The CDA's developments provide housing to people working for modest wages, families, and seniors. The Family Housing Partnership Program provides quality townhomes with many amenities for rent between $470 and $575 to those with a household income of $28,500 or less. Page 2 of 9 . Economic Development Commission Meeting Minutes March 27, 2001 The CDA's Winsor Plaza senior housing development in Lakeville was highlighted, as well as the new mixed-use senior development under construction in downtown • Lakeville. The CDA also offers a Homebuyer Assistance Program and a Downpayment Assistance Program. The CDA assists the private sector in developing multi-family affordable housing by using the Housing Tax Credit Program, and accesses the Minnesota Housing Finance Agency, the Federal Home Loan Bank, CDBG/HOME, CDA Financing, and the McKnight Foundation for gap financing. Comm. Tushie indicated that many of the EDC's questions had been answered by Mr. Ulfer's presentation. Comm. Tushie also indicated that it would be helpful to know how many affordable units Lakeville has, and what the projected need is, in order to keep pace with the growing demand. Mr. Ulfers suggested the CDA undertake a study with the City to examine the need for affordable housing and to identify methods the agency can assist in attracting developers and financing affordable housing projects. b.) Strategic Plan Item: Identify Resources to Meet Employers' Recruitment and Retention Needs -Labor Force Quarterly Update. Ms. Flad presented the Labor Force Quarterly Update. Per the EDC's request, the Labor Force Subcommittee has held three meetings in Airlake Park in order to encourage businesses to take a leadership role in implementing joint labor force • recruitment strategies. The businesses chose to work under the structure of the Chamber of Commerce's HR Committee. At the March 22, 2001 meeting, the members concluded they would first explore the development of a web site and advertisement on a billboard along the I-35 Corridor in Lakeville to recruit labor to Airlake businesses. The next meeting will be held on April 12, 2001 at 7:30 a.m. at Ryt-Way Industries. c.) Strategic Plan Items: research and identify fiber-optics and other emerging technologies; encourage additional office park development; attract and retain employers that will utilize the skills of residents -High Tech Subcommittee Update. Ms. Flad reported that the High Tech Subcommittee would meet April 3, 2001 to review a draft survey designed to determine businesses' existing telecommunications uses and projected needs. d.) Strategic Plan item: Review business incentives and recommend strategies - Incentive Subcommittee Update. Mr. Grassing reported that the Incentives Subcommittee has completed interviews with fourteen businesses in Airlake Park in order to determine their reasons for locating or expanding in Airlake and to identify what they believe would encourage other businesses to locate there. The Incentive Subcommittee met on March 27, . 2001 to review the preliminary results. The subcommittee will meet again on April 10, 2001 to finalize the results and incorporate them with Springsted's information. A full report will be presented to the EDC in April. Page 3 of 9 Economic Development Commission Meeting Minutes March 27, 2007 Comm. Matasosky called for a break at 6:52 p.m. The EDC reconvened at 7:12 p.m. 4. Request by the Avalon Group to Amend the Comprehensive Plan for the • TimberCrest at Lakeville proposed project. Comm. Matasosky indicated that the Avalon Group has submitted a request to amend the Comprehensive Plan from Office Park/Business Campus to General Commercial. The EDC members have received a copy of the application and of the Planning Report and are therefore familiar with the request of Avalon Real Estate Group to construct a 550,000 sq. ft. retail, service, restaurant and office development on approximately 96 acres at the northeast quadrant of I-35 and CSAH 60 (185th St.) The EDC is requested to provide a recommendation to the City Council on the Comprehensive Plan Amendment requested by Avalon. The City Council will review the recommendations made by the EDC, EAC, and Planning Commission at their April 2, 2001 meeting. Comm. Matasosky emphasized that the commission should evaluate the proposed Comprehensive Plan amendment in light of the goals outlined in the EDC's Strategic Plan for Economic Development. Comm. Matasosky then introduced Mr. David Sellegren, Land Use Attorney representing the Avalon Group. Mr. Sellegren provided a brief overview of the proposed project and process, emphasizing that the Avalon Group has requested an amendment to the Comprehensive Plan. If the Comprehensive Plan is changed per the request, Avalon will submit a rezoning application at a later date to change the zoning from Corporate Campus to General Commercial. A detailed project plan would follow. Mr. Sellegren added that although the Avalon Group's Comprehensive Plan Application submission • does not specifically highlight economic development as a separate consideration, however economic development matters are included in the sections "City Wide Issues" and "Growth Management." Comm. Matasosky introduced Mr. David Licht, consultant to the City of Lakeville from Northwest Administration Corporation, and indicated Mr. Licht had reviewed the Avalon proposal and prepared a Planning Report for City Advisory Groups and the Council's review. Mr. Licht indicated that the Comprehensive Plan is an evolving document that is to be updated periodically in light of community growth, change, and unanticipated developments. Mr. Licht indicated that the site has undergone a number of changes responding to the needs of the community, the physical capabilities of the area, and the opportunities which have been presented. The site was identified as industrial until 1968. Mr. Licht noted that the 1968 plan changed the designation to high density residential. The 1988 Comprehensive Plan changed the use of the site to low and medium residential. The 1999 Comprehensive Plan significantly modified the intended use of the site from residential to office park/business campus. Mr. Licht indicated that there is a precedent for changing the intended land use of this site in the Comprehensive Plan, and that the proposed change is minor compared to significant changes in the past. Mr. Robert Erickson also sited other changes to the Comprehensive Plan, including the land use designation for the southeast quadrant of • CSAH 50 and Cedar Avenue from industrial to commercial designation. Mr. Licht indicated that other sites fora 550,000 sq. ft. retail, service, restaurant and office development were explored. Sites at I-35/CSAH 70, I-35/CSAH 50, I-35/CSAH Page 4 of 9 , Economic Development Commission Meeting Minutes March 27, 2001 46, and Heritage Commons were examined. As the Planning Report states, however, no site was identified large enough to accommodate Avalon's proposed development. . Mr. Licht also indicated that the proposed request is consistent with the EDC's goals identified in the Strategic Plan for Economic Development. At the present time, Lakeville has a limited amount of commercial/industrial base. In order to maintain a reasonable tax on residential property, the EDC had identified the need to expand the non-residential sector of the City. The proposed project is anticipated to generate approximately $3.8 million in taxes, $2.2 million of which would be directed to the school district, $820,000 for the County, $667,000 for the City, and approximately $76,000 for other taxing authorities. The project would thus reduce the property taxes on a homestead residential property in IDS 194 valued at $175,000 by $101 per year. The Strategic Plan for Economic Development also has the goal of supporting developments that would be a regional draw to attract purchasing power from neighboring communities. Much of the purchasing power of Lakeville residents is currently siphoned off into neighboring cities. Specifically, the EDC identified an increase in availability of convenience goods including groceries and family restaurants in order to counter the present situation. According to Mr. Licht, the availability of these goods and services would also increase community identity and residents' satisfaction with their quality of life. Comm. Pogatchnik inquired as to the status of the land use designation if the project does not come to fruition. Mr. Licht responded that once the land use designation is changed in the Comprehensive Plan it remains as designated until the site is • developed or a change in designation is requested. Mr. Robert Erickson indicated that the Planning Commission motion to support the Comprehensive Plan amendment includes support for maintaining open space on the site. A total of 30% of open space is also proposed in the TimberCrest Proposal which is the same amount of open space that would be maintained if the site was to be developed as an office park. Comm. Emond asked whether a commercial use was considered for the site when the Comprehensive Plan was updated in 1999. Mr. Licht indicated that a commercial use was considered, and that the City was required to be specific in identifying the nature of the commercial use. In order to ensure the specificity does not inhibit the best interests of the community, the City Council mandated a review of the Comprehensive Plan periodically, with the next review scheduled in the spring of 2002. Comm. Pogatchnik inquired about the City's financial obligation up front. Mr. Licht responded that there is no financial obligation to the City as a result of this project. The utilities infrastructure is already to the site, and the developer would be responsible for the improvements internal to the site. Additionally, the Wastewater Treatment Plant was designed to accommodate residential development at that site which would have resulted in approximately 190,000 to 250,000 gal./day, while a 550,000 sq. ft. retail development is estimated to generate approximately 95,000gaI/day. Street improvements, including a frontage road and ramps at the interchange, were identified for improvement by the City regardless of Avalon's • proposed development. Thus the proposed project would not impose any additional financial obligation for the City. Page 5 of 9 Economic Development Commission Meefing Minutes March 27, 2001 Comm. Brantly asked Mr. Sellegren for a timeline for the project. Mr. Sellegren responded that if the application to amend the Comprehensive Plan were successful, The Avalon Group would immediately submit an application for rezoning and begin the • subdivision process. Construction would begin after those processes are complete. The applicant anticipates that construction could begin in early summer. Mr. Robert Erickson noted that Dakota County has the most two-wage-earner families of any metro county. Although new sales average $200,000, this number does not represent what people originally paid for their homes. There are a large number of Lakeville residents with modest incomes who would have opportunities to work in Lakeville rather than travel to neighboring communities. Mr. Erickson also noted that many volunteer firefighters and police reserves are two income families that may take advantage of additional retail, service, grocery and office employment opportunities. Comm. Matasosky asked Mr. Bornhauser, Executive Director of the Lakeville Area Chamber of Commerce, to provide the EDC with an indication of their business member's support for the proposed project. Mr. Bornhauser indicated that the Chamber's Public Affairs Committee prepared a policy statement supporting the Avalon proposal. This statement was faxed to the Chamber's members and 88% responded in favor of the statement and of the Avalon proposal. The Chamber Board then unanimously adopted a position supporting the Avalon proposal. Mr. Steve Stokes of 18308 Wood Ridge Drive requested to be recognized. Comm. Matasosky invited the gentleman to speak. Mr. Stokes provided charts and indicated that while office development provides more impact to the community, it also provides • more revenue. The gentleman also indicated that he believes that a commercial development would be a determent to existing commercial/retail establishments in the area. Comm. Tushie indicated that development will inevitably occur on the site in question. With the population projected to double in Lakeville over the next twenty years, the community must be able to provide goods and services to those residents. He also stated that the proposed project meets goals and objectives outlined in the Strategic Plan for Economic Development, including the goal to attract more retail development and concise, cohesive development of larger sites. The proposed plan also meets the goals of providing a regional draw and encouraging economic growth and diversification of the tax base. Motion 01.13 Comms. Tushie/Miller moved to recommend the City Council approve the request for a Comprehensive Plan Amendment for Avalon Real Estate Group to change the Northeast quadrant of I-35 and CSAH 60, containing 96 acres, from Office Park/Business Campus to Commercial as it is consistent with the 2000-2001 Strategic Plan and is beneficial to the City of Lakeville and the region. Motion carried unanimously. Mr. Robert Erickson noted that he and Mr. Bornhauser, as ex-officio members of the EDC, do not vote on any motions made. • 5. CosUBenefit Analysis of providing financial assistance to Mr. Glenna's proposed airplane hanger facility at Airlake Airport. Page 6 of 9 Economic development Commission Meetlng Minutes March 27, 2001 Mr. Grussing stated that staff received preliminary cost estimates from Mr. Glenna for the development of an airplane hanger that would include atie-down, restrooms and a lounge for other Lakeville businesses to use. The Dakota County Assessor's Office • has estimated the value of the building at $350,000, and as a commercially classified property, this would generate approximately $1,500/yr in taxes to the City. MAC personnel have informed Mr. Grussing that a site within the City of Lakeville could be leased to Mr. Glenna on which to build his hanger, although no financial assistance would be forthcoming. Mr. Grussing also indicated that the Fixed Based Operator may be interested in selling his business and a new owner may upgrade or rebuild the FBO facilities. Mr. Grussing outlined three alternatives for the EDC to consider: 1. Wait for more information in order to complete acost/benefit analysis 2. Offer Mr. Glenna tax abatement 3. Provide a loan or grant through Lakeville's Revolving Loan Fund (RLF) Comm. Matasosky suggested the EDC should provide Mr. Glenna with a decision as soon as possible, because Mr. Glenna will probably move forward with a plan to construct a hanger for his own use if assistance is not available for the construction of a hanger that would accommodate other businesses. Comm. Tushie questioned how a loan would be secured. MAC would own the land. MAC would also retain rights on transferring any ownership of the building. It was suggested that Mr. Glenna personally secure a loan. • Comm. Tushie questioned whether it would be possible for the City to own the FBO and therefore ensure the facilities were adequate and maintained for businesses. Mr. Robert Erickson informed the Commission that MAC recently told a prospective buyer of the FBO that there would be little return on their investment because the runway is not long enough to accommodate corporate jets. Mr. Erickson also indicated that while MAC has asked the City to provide utilities to the portion of the airport in Eureka Township in order to accommodate additional hangers, they have not been aggressive in addressing the businesses and City's concerns about the existing facilities. Mr. Erickson suggested that the Mayor and the Economic Development Commission might approach the MAC Board and ask for assistance in developing a plan to lengthen the runway. The upgrade of Cedar Avenue will be taking place this summer, and Mr. Erickson has been informed by MNDOT that any rerouting of Cedar Avenue would have to be done at that time. Creating an eastern curve in Cedar Avenue would create room for the extension of the Airlake runway. Motion 01.14 Comms. Schubert /Emond moved to request the Mayor write a letter to the Metropolitan Airports Commission Chair and Executive Director requesting direction on accessing the $150,000 in the MAC budget designated for bathrooms and a lounge at Airlake Airport. Motion carried unanimously Motion 01.15 Comms. Tushie/Erickson moved to approach the Metropolitan Airports Commission requesting the development of a long range plan for extending • the runway to accommodate corporate aircraft, and requesting that this be considered prior to the planned upgrade of Cedar Avenue. Motion carried unanimously 6. Discussion on Strategic Plan Update. Page 7 of 9 , Economic Development Commission Meeting Minutes March 27, 2001 Ms. Flad requested the EDC set their April 24, 2001 meeting date to begin earlier in order to allow adequate time to discuss the update of the Strategic Plan for Economic Development. The meeting will be held at 5:00 on April 24, 2001 and will be scheduled • for three hours. Comm. Tushie requested that staff research the following items: a.) If the City Council approves amending the Comprehensive Plan consistent with the Avalon request, where can additional corporate office/business campus be located in the City in order to maintain a balance of land uses? b.) How will the TimberCrest development affect the value of adjacent retail areas, ie: Southfork. c.) How many jobs are projected, and how will they accelerate the need for affordable housing in the community? d.) Explore the desirability of creating a Tax Increment Financing District to finance the CSAH 60 bridge at I-35. 7. Adjourn. The meeting was adjourned at 9:10 p.m. • Respectfully submitted by: Attested to: Ann Flad, Recording Secretary . Brantly, Secretary • Page 8 of 9