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06-24-02 Worksession I I I CITY COUNCIL MINUTES Richfield, Minnesota Special Worksession June 24, 2002 The meeting was called to order by Mayor Kirsch at 5:38 p.m. Members Present: Martin Kirsch, Mayor; Susan Rosenberg; Gertrude Ulrich; John Enger; and Sue Sandahl. Staff Present: Samantha Orduno, City Manager; Steven Devich, Administrative Services Director; Jim Topitzhofer, Recreation Services Director; Kevin McGinty, Fire Services Director; Bill Fillmore, Liquor Operations Director; Dan Scott, Public Safety Director; Bruce Nordquist, Acting Community Development Director; John Stark, Community Development Manager; Tom Foley, Acting Public Works Director; Randy Hughes, Operations Superintendent; Ray Wroblewski; Forestry Inspector; and Cheryl Krumholz, Recording Secretary. Item #IA City Manager Samantha Orduno said that because of the 3-2 City Council vote on establishing the City Bella Redevelopment District, it may be prudent for the City Council to discuss the direction of future development in the City. She said future development projects include Lyndale Gateway West, possibly Lyndale Garden Center and the east side of Richfield. Acting Community Development Director Nordquist, discussed the following: . Executive Summary released April 2002 of "Valuing America's First Suburbs - A Policy Agenda for Older Suburbs in the Midwest" from the Brookings Institute - Center on Urban and Metropolitan Policy . Urban Land Development Cycle . Dealing with Decline and Uncertainty . The Redevelopment Process . Census 2000 Fact Sheet . Memorandum from James B. McComb, McComb Group, Ltd., regarding "Why Redevelopment Assistance is Necessary" . Looking at Richfield - Over 50 Years of Change and Challenge . Primary Reasons Richfield Redevelops . Cumulative 2001 Abstract of Tax Lists Tax Increment Finance Supplement . Present Value TIF/Private Investment Council Member Ulrich said cities with a population under 50,000 are at a disadvantage for participation in federal and state policies, programs and grants. Special Worksession Minutes -2- June 24, 2002 Council Member Enger said state and federal representatives need to be encouraged to change guidelines and lower population requirements. Council Member Ulrich said the Association of Metropolitan Municipalities and the League of Minnesota Cities are in place to provide for more equal representation among cities. Mr. Nordquist said the 50,000 population guideline is a federal regulation used nationally and it is unlikely to change. He said community revitalization is the emphasis at the state level. Council Member Rosenberg said the high cumulative number of original TIF parcels includes Richfield Rediscovered properties and makes Richfield unique. She said this high number of parcels will be misunderstood by the general public because they do not understand TIF. Mr. Nordquist said presentations regarding Richfield Rediscovered have been made to many other cities. He explained the Richfield project area and TIF District boundaries within the redevelopment plan. Mr. Nordquist explained the cumulative TIF retained captured value as the net tax increment less fiscal disparities. Ms. Orduno suggested a more detailed explanation be scheduled for a future City Council meeting so it can be televised for the public. She said the discussion tonight is related to the general direction of projects and the adoption of a TIF policy. She asked for Council direction on how to proceed with projects to ensure staff is moving in the correct direction. Mr. Nordquist said each project is determined independently for TIF so there is no concern of using all the TIF for other projects and not leaving enough for development of the east side of Richfield. He said funds are not returned to the school district if the TIF District is retired quicker because the formula has changed. Ms. Orduno said there are pros and cons to using TIF but if it wasn't used, Richfield could lose its revitalization opportunities. Council Member Sandahl asked what other tools are available. Ms. Orduno said tax abatement of only the City's portion of taxes is another tool. She said the concept to just let the market handle development and it will happen is not true. She said TIF has been used for so long that without it, inner-ring suburbs cannot compete with outer ring suburbs. Council Member Enger said it was more prudent to not grant a 25-year TIF District length and not give the developer the total amount requested. He said residents may then be appeased with the uses of TIF. He said developments result in an increase for cost of services, which requires taxes be raised. Ms. Orduno explained that the cost of services increases because of labor and equipment, not because of development. She said new developments do not require the same level of service as single-family or business areas. Council Member Enger asked if TIF District taxes increase annually like residential and business. Ms. Orduno said yes, but the property value in the TIF District does not increase. Council Member Enger asked if Best Buy will pay less in taxes now because of the tax law changes. He asked who pays for increased cost of services. Ms. Orduno explained the shifting tax rates. She said everyone pays for increased services because it is part of the general levy. Council Member Enger said the City and County gain tax money when a TIF District expires which is the reason the district should have a shorter length. I I I I~ I I I Special Worksession Minutes -3- June 24, 2002 Ms. Orduno explained that a shorter district duration may not have the financial payback a developer wants -- if the numbers do not work out, a developer will go somewhere else. Mayor Kirsch said the City reviews the TIF length of every project. Mr. Nordquist said most cities use 25-year TIF Districts. Council Member Sandahl said it appeared the alternative funding for developers is TIF, tax abatement or limited Community Development Black Grants. Council Member Ulrich said that if the City owns the property, the City has control over the type of development. Community Development Manager Stark said the Best Buy Campus would not be in Richfield if not for TIF. Council Member Enger said Best Buy would want the Richfield site even without TIF. He said all they care about is traffic not a central location for their employees. Ms. Orduno said Richfield was not Best Buy's preferred location site. Council Member Sandahl commented on the HRA message to the City Council regarding redevelopment efforts in Richfield. She said she believes the City should continue moving forward because no one will want to live here otherwise. She said it appeared obvious to her that development will not happen in Richfield without some help from the City. Mayor Kirsch said TIF was a new tool for the City in 1975 and there is ample evidence in Richfield indicating how it can successfully be used. He said if TIF is discontinued now, the City may not be able to sustain itself in the future. Ms. Orduno said Richfield is a model for many communities. Council Member Sandahl said TIF can spur development adjacent to the district without that development using TIF. Ms. Orduno clarified the City Council's direction to the staff including: Move forward with current projects as proposed; where ever possible, shorten the duration of the TIF District; and continue to use TIF on a case-by case basis. She asked if TIF should be discontinued as part of the Lakes at Lyndale project. Council Member Ulrich said not to discontinue TIF; it needs to be used as a tool. Council Member Enger said its use depended upon the location. Ms. Orduno said previous HRA and City Council direction was not to consider TIF use along 1- 494. She said developers had contacted her about property along 1-494, but when she mentioned TIF was not an option, she did not hear from them again. Council Member Enger said TIF use should be limited but not ruled out. Council Member Sandahl asked Council Member Enger if he would support a 25-year TIF District if it was needed for development on the east side of Richfield. Council Member Enger said yes, otherwise there would be decay. He said sometimes TIF must be used. Ms. Orduno said it has been Richfield's philosophy to develop key commercial corridors to retain and preserve single-family residential areas. Council Member Rosenberg said there is considerable inaccurate information regarding TIF out in the community and there must be communication to residents that their property will not be taken next. Special Worksession Minutes -4- June 24, 2002 Ms. Orduno said in Richfield's history of all development, only one single-family home has been condemned and that was due to a water problem. She said condemnation is used sparingly. Item #18 Council Member Enger said the City has a tremendous problem with the residential parking of cars, boats, RVs in front and side yards that has created a real eyesore that needs to be controlled. He said there needs to be a limitation of the number of cars parked in front of a house; driveways should not be expanded to allow additional parking; and commercial vehicles, boats and motor homes should not be parked in the front or side yard. He said he is not opposed to backyard storage. He said if someone is able to afford a motor home, they should be able to afford storage. He requested the current ordinance be changed to address these issues. Ms. Orduno said if the ordinance is changed, current and existing situations would need to be grandfathered into the ordinance. She explained parking option of other cities. She said Richfield wants to encourage families to the community which could result in more drivers. Council Member Ulrich said she supported Council Member Enger's comments. She said a past City Council did consider restricting motor home parking but, due to the considerable public response in opposition to the proposed changes, the City Council did not approve the ordinance. She said it is the City Council's responsibility to make difficult decisions, even if the public does not agree. Mayor Kirsch asked how current problems could be handled. Ms. Orduno said current situations could be grandfathered for a period of time but if the property sold, changes would need to be made to meet the current ordinance requirements. Council Member Enger said changes should be made if the property changes hands because there are ways to get around being sold. Council Member Ulrich said some cities do not permit overnight parking on residential streets. Council Member Enger proposed prohibiting on-street parking from 12:00 a.m. to 6:00 a.m. He said this is one tool to prevent so many people from living in one house and parking their vehicles on the street. Council Member Rosenberg said she would not support prohibiting parking in front of your house. Ms. Orduno said the character of a single-family neighborhood is altered if there is parking up and down the street and the vehicles are all from one home because multiple families live there. Council Member Enger proposed limiting the number of cars parked in front of a house and not on a permanent driveway. Ms. Orduno said staff will conduct a survey of similar metro cities and cities from other states related to parking. Council Member Ulrich said the amount of property that can be made into a permanent surface in front of the house should also be researched. Mayor Kirsch said to also include grandfather clause limitations. Item #IC City Manager Orduno said it has been some time since an overall costs and overhead analysis has been completed on the fees the City charges for licenses and permits. She said staff I I I I I I Special Worksession Minutes -5- June 24, 2002 does not have the resources or expertise to conduct this analysis, so direction is needed on hiring an outside firm to perform a comprehensive analysis at a cost of approximately $10-15,000. Council Member Ulrich said staff should move forward with an outside firm conducting an analysis. Item #1 D City Manager Orduno said staff is seeking direction regarding pursuing the establishment of a mandatory percentage of affordable housing or to continue with the City's and HRA's current programs and projects that respond to Richfield's multiple housing needs. Mr. Nordquist discussed the following: . Metropolitan Livable Communities Act Housing Principles and Goals Agreement . Excerpt from Richfield 2020 Report from Housing and Neighborhoods Team . Minnesota Affordable Housing Statistics . Income Limits Effective January 30, 2002 . 2001 Estimated Market Values and Value Comparison . Monitoring Richfield Housing Sales . Summary of Lakes at Lyndale Area Housing Options . Goal Projection - Replacement Housing Goal . Senior Ownership Housing Choices near 66th Street and Lyndale Avenue . Richfield Senior Options - Ownership and Rental Mayor Kirsch asked about the occupancy rate at The Pines, Gramercy and Oaks on Pleasant. Mr. Nordquist said there is an average 7-11 % annual turnover. Council Member Enger asked about the turnover percentage for owner-occupied single-family property. Mr. Nordquist said 5%. Council Member Enger asked why coop units are not assessed at their fully funded rate. Mr. Nordquist explained the assessment process. Ms. Orduno said town homes, coops and single-family homes are all assessed the same. Mr. Nordquist said Richfield is always responsive to affordable housing needs and higher value housing is needed to sustain vitality in the community. He said the Metropolitan Council supports integrated affordable housing. Council Member Enger said Richfield does not have higher-end businesses to sustain higher value property owners. Ms. Orduno said he is making an assumption that people who live in Richfield will not want to do business here. She said higher value property owners may spur the development of different businesses. Council Member Sandahl said she believed Richfield already provided affordable housing and the City is on the right track. Council Member Ulrich said she supported affordable housing goals but not establishing a percentage requirement. Council Member Enger said he is not pleased with the cost of housing in City Bella and wants to see more affordable housing for seniors when they retire. He said every time more expensive housing is built, the percentage of affordable housing is lowered. He said developments need to provide affordable housing. Special Worksession Minutes -6- June 24, 2002 Mr. Nordquist said that is why the first HRA redevelopment project in the City Bella quadrant, Lake Shore Drive Condominiums, has 179 units of affordable senior housing. The estimated market value of the Lake Shore Drive Condominiums and other adjacent multi-unit projects was then reviewed. Ms. Orduno said condominiums, formerly apartments, are being considered for City Bella. She said the City provides housing choices but doesn't necessarily want to be a community of additional senior housing because there are other groups needed to make a community. She said Richfield has more senior housing than any other metro community. Ms. Orduno clarified that City Council direction is not to establish a percentage of affordable housing by policy, but continue with best efforts. Item #IE City Manager Orduno said the discussion tonight includes a review of the City's policy of sidewalk and curb repair as it relates to damage caused by tree roots and a review of tree planting along County roads. Operations Superintendent Randy Hughes distributed the Community Services Commission's tree removal policy minutes. He said each tree is evaluated for removal on a case-by-case basis. Council Member Enger suggested that the sidewalk, curb and gutter be repaired once when damaged by a boulevard tree. If damaged again from the tree, the homeowner should be given the option of having no tree or having the City plant a new replacement tree on their property in the front yard which becomes the homeowner's responsibility to maintain. He said this should appease most homeowners, and maintain green space. Mr. Hughes said the Community Services Commission's current policy agrees with the tree removal option but did not include a replacement tree. He said tree planting costs approximately $250 per tree. Forestry Inspector Wroblewski said as boulevard trees are removed, a tree is replanted further back from the boulevard. Council Member Sandahl said a tree should not be removed if the homeowner objects. She stated agreement with repairing the sidewalk/curb/gutter once but then, if the homeowner wants to keep the tree, assessing the homeowner for that repair work if there is damage from the tree again. Council Member Enger stated support for the assessing of boulevard repair work. Council Member Sandahl said a homeowner who desires a replacement tree does not move ahead of those waiting to get a tree. Council Member Sandahl asked about planting trees along County roadways and east/west streets in Richfield. Mr. Hughes said traditionally Hennepin County doesn't want trees on their boulevards and right-of-way is limited on some streets. He said a permit from the County could be obtained in the 100-foot right-of-way. Council Member Sandahl said the homeowner may be willing to have a tree on their private property along a County road. Mr. Hughes asked if trees should be taken from the residential program for planting along the County roads. Mayor Kirsch said the forestry budget may need adjustment. I I I I I I Special Worksession Minutes -7- June 24, 2002 Council Member Enger said the priority should remain with the replacement tree before a new tree along a County road. He said he is not opposed to increasing the forestry budget. Mr. Wroblewski said the current annual allotment for the purchase of trees is $12,000. Mayor Kirsch said the boulevard tree replacement option should be returned to the Community Services Commission for their review and recommendation. He said the forestry budget should be adjusted and again reviewed during the upcoming budget meetings. Council Member Sandahl suggested concentrating on tree planting along the July 4 parade route. Item #IF Council Member Rosenberg withdrew her request to have this item discussed. Item #IG Council Member Rosenberg withdrew her request to have this item discussed. City Manager Orduno said a Council Memo would be prepared to report on information obtained from Bloomington on cat control. Item #IH City Manager Orduno requested the City Council to contact her with any concerns or comments on activities/goals/direction. The meeting was adjourned by unanimous consent at 9:22 p.m. Date Approved: July 9. 2002 M~~(jU M ~ J Ii. ~~, I~ Cheryl Kr mholz Recording Secretary