03-15-04 Worksession
HOUSING AND REDEVELOPMENT
AUTHORITY AND CITY COUNCIL
MEETING MINUTES
Richfield, Minnesota
Special Concurrent Worksession
Of HRA and City Council
March 15, 2004
The meeting was called to order by Mayor Kirsch at 5:40 p.m.
Council Members
Present:
Martin Kirsch, Mayor; Susan Rosenberg; Gertrude Ulrich; John
Enger; and Sue Sandahl.
HRA Members
Present:
Thomas Harms; Joan Heimberger; Martin Kirsch; Kristal Stokes; and
Dan Linnihan.
Staff Present:
Samantha Orduno, City Manager/Executive Director; Bruce
Palmborg, Community Development Director; Steven Devich, Acting
City Clerk; John Stark, Assistant Community Development Director;
and John Dean, HRA Attorney.
Item #1
City Manager/Executive Director Orduno addressed the concurrent meeting regarding the
status of the development project for the east side of Richfield, including the mitigative area. Ms.
Orduno stated that this evening's discussions will focus on four major items: the potential use of
tax abatement, the updated development plan, the status of any hotel or office development in the
area and the latest proposal by Ryan Companies.
Assistant Community Development Director Stark stated that there is a multi-jurisdiction
program loan available from Hennepin County. He said that it appears that a City tax abatement
will also be necessary.
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March 15, 2004
Mr. Stark stated that there would be a series of public open houses to be held tentatively on
April 21 and May 25 regarding the proposed project.
Mr. Stark said that with respect to a hotel development in the area, it was recommended by
the City's consultant, American Hospitality Management Company, that this was not the opportune
time or place for a hotel. He went on to state that the real estate consultant, McComb Group Ltd.,
recommended that while the area was a good site for an office development, the time was not, due
to thousands of square feet of vacant office space that cl,Jrrently exists. Mr. Stark further stated
that a large retail development project with Ryan Companies featuring a Super Target store is on
the table and would appear to be a desirable project to pursue at this time. He stated that the next
step would be to begin negotiatin~ a developer's agreement.
HRA Attorney Dean stated that several issues remain to be ironed out, including the
amount and timing of the developer subsidies. Mr. Dean stated that the City and HRA must also
look at the potential of moving the City's Cedar liquor store into the new project area.
Commissioner Stokes asked where the new interchange would be located.
Assistant Community Development Director Stark responded that there are many questions
to be addressed before the precise interchange location could be determined.
Chair Harms asked if there was a feeling as to what other types of business or office
development might be attracted to the area in the future.
Mr. Stark responded that staff had not done such a study, but that Target does an extensive
analysis of any area before they commit to development on the site. Target is comfortable that the
area will be successful, and will service the entire south Minneapolis area as well as a large portion
of Richfield and east Bloomington.
Commissioner Linnihan stated that he still has some concerns with this project because the
City of Richfield has facility needs that must be addressed and this takes up valuable limited
space.
Council Member Ulrich stated that she has some of the same concerns and does not
support a tax abatement for the project.
City Manager/Executive Director Orduno stated that the project isn't just servicing South
Minneapolis, but that it will be a significant portion of their market share. She stated that it will be
some time before we will know what other development this project will spawn.
Chair Harms stated that when we first started looking at the area, we were looking for some
retail which might support airport operations or office/warehouse supporting airport operations. Mr.
Harms stated that the only real hole in the development market in Richfield is the retail market. He
questions if the type of office development we wish to have may not ever locate there, and stated
that municipal buildings would not bring collateral business.
Council Member Sandahl spoke to the success of the development in the
Interstate/Lyndale/Nicollet (ILN) and the spin off that we enjoy in the area. Ms. Sandahl said that
she feels the same will happen on the east side with the Target development, and in the long term
we will come out ahead.
There was general discussion regarding the structure and form of the abatement process.
Mr. Harms and Attorney Dean stated that the risk in this project is at least as good as the pay as
you go TIF incentives that have been used by the City and HRA in the past.
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March 15, 2004
Mayor Kirsch stated that for him, time is of the essence, and he stated that we need to
move forward. He added that we need to get the property back on the tax roles and residents that
he has talked to want retail in that area.
Council Member Rosenberg stated that people that she talked to are excited about retail on
the east side, so we need to move forward.
City Manager/Executive Director Orduno stated that this project meets many of the goals
the City has set for that area.
Council Member Enger asked when Ryan would like to know if we are to proceed and
stated that he would have liked for us to do a nationwide RFP for development on the east side.
Chair Harms stated that he didn't think there would be real nationwide interest and that
practically, local developers/builders would be most interested. Mr. Harms also stated that timing
would be a real concern. Mr. Harms stated that he believes that the project would have to be
shelved for about three years if there was a nationwide RFP.
Commissioner Stokes stated that she still has a concern for retaining sound attenuation for
the rest of the homes that remain, but she is generally in favor of proceeding with the project.
Chair Harms urged everyone to keep an open mind on the issue of tax abatement
especially a tax abatement note, which is structured very similarly to a pay as you go tax increment
note.
Council Member Enger stated we will have to consider the height limitations south of 66th
Street due to runway 4-22.
There was general discussion regarding the City's strengths and weaknesses with respect
to the east side development area.
Commissioner Linnihan urged that any development not look the same as every other one
in the area.
There was general consensus with that suggestion.
City Manager/Executive Director Orduno stated that she hears clear direction to continue
negotiations with Ryan Companies for the redevelopment of the east side mitigative area.
The Special Concurrent City Council and Housing d
Worksession was adjourned by unanimous consent at 6' 5 ~
ro ed: May 17,
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