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04-10-12 CC/HRA/PC Worksession CITY COUNCIL MINUTES Richfield, Minnesota ge41(4:CedSpecial City Council/HRA/Planning Commission Worksession April 10, 2012 The convening of the worksession was delayed because staff was asked to confirm the required meeting notifications were made in accordance with State Open Meeting Law. CALL TO ORDER The meeting was called to order by Mayor Goettel at 5:51 p.m. in the Council Chambers. ROLL CALL Council Members Debbie Goettel, Mayor; Pat Elliott; Sue Sandahl; Fred Wroge; and Tom Present: Fitzhenry HRA Members Sue Sandahl, Chair; Doris Rubenstein; Steven J. Quam, David Gepner; and Present: Debbie Goettel Planning Members Rick Jabs, Chair; Josh Root; Robert Hall; Maureen Scaglia; Daniel Kitzberger; Tom Rublein; and Gordon Vizecky Planning Member Dennis Schuller Absent: Staff Present: Steven L. Devich, City Manager/HRA Executive Director; John Stark, Community Development Director; Christine Costello, Community Development Coordinator; Corrine Heine, City Attorney; Julie Eddington, HRA Attorney; and Cheryl Krumholz, Executive Coordinator. Item #1 PRESENTATION BY RON CLARK CONSTRUCTION REGARDING REVISED PROPOSAL FOR PILLSBURY COMMONS (COUNCIL MEMO NO. 41) Community Development Director Stark stated that the City had received a revised application from Ron Clark Construction. The staff believed that a study session was appropriate in order to inform the three bodies and the public about the recent changes. Ron Clark stated that his team had changed its proposal based on comments previously made by policymakers and the community. He introduced Mike Roebuck and Mike Waldo from Ron Clark Construction, site planner Kendra Lindahl from Landform, Dan Pellinen from architectural firm Special Worksession Minutes -2- April 10, 2012 Tushie Montgomery, Barb Halverson from Steven Scott Management, and land use attorney Jim Susag from the Larkin Hoffman law firm. Ms. Lindahl presented the Pillsbury Commons project history, beginning in 2009. She said the developer submitted a reduced plan in 2011. She stated that the developer would not have proceeded without support from the HRA and City and that it had invested significant time and money in the development. Ms. Lindahl indicated that there had been significant community feedback before making a formal application. The developer submitted an application in March 2012, then revised it in April based on comments at the March HRA meeting. Ms. Lindahl stated that the land use application was a simple application for a plat and a planned unit development. Ms. Lindahl stated the revised proposal is consistent with the Comprehensive Plan and City Code. The new application does not require a change to the Comprehensive Plan. She also pointed out that the existing industrial zoning is not consistent with the Comprehensive Plan but that the new zoning would be. She said that the apartment concept had not changed since March 2012, but the revised proposal would include one for-sale single family home and more than a half-acre of open space. She said that discussions with staff about the open space had left open the concept of City ownership or private ownership of the open space. Ms. Lindahl described the parking for the property, the style of architecture and the amenities for the apartment building. The revised plan would require purchase of additional land for the planned unit development (PUD). She indicated that the developer was interested in having a discussion about how the open space would be used. Ms. Lindahl stated that the "pay-as-you-go" tax increment financing (TIF) request has not increased since June 2011. She requested continued City support through the process. In response to a question from Mayor/HRA Commissioner Goettel, Community Development Director Stark stated that the revised proposal requires the purchase of the additional properties in order to meet the medium-high density classification of the Comprehensive Plan. The rezoning of this site was not included when the overall Comprehensive Plan review was conducted because potential redevelopment plans were in place and staff believed it appropriate to wait. Council Member Elliott stated he was somewhat offended by the presentation because it sounded like an opening statement in a trial. He wanted to hear the details of the revised proposal, but it sounded like the presentation was setting the stage for another purpose, and he did not think that was appropriate. Mayor/HRA Commissioner Goettel agreed with Council Member Elliott. Council Member Wroge also agreed with Council Member Elliott. He discussed the housing changes that have been made to the proposed development from the original plans to now. He said the property had been tied up for three years. He said the developer was now proposing to buy land that it didn't want just so its building would meet density and then give it back. But he said that would destroy the ability to do make that land as nice as the other half, because there would be a road through it. He said the City didn't need another park, and it was obvious to him the developer was only buying the land to build the apartment building and didn't care what happened to the land. Council Member Wroge said that there had been so many changes it was hard to keep up. He felt the developer's presentation was to set things up for a court process and he didn't appreciate it. He asked Ms. Lindahl if the developer was saying that the Council did not have the right to change its mind but the developer could change its mind at any time in the process. Ms. Lindahl responded no. Special Worksession Minutes -3- April 10, 2012 Council Member/HRA Chair Sandahl asked about the developer's intent to purchase the additional land and remove the mortuary and cleanup the mortuary site before returning it to the City. Ms. Lindahl said yes it would be cleaned up. She also said that Ron Clark wanted to have a discussion with the City about the land. If the City did not wish to take back the land, Ron Clark would retain ownership to keep it as open space. Council Member Fitzhenry agreed with Council Members Wroge and Elliott and believed the City was backed in a corner. He expressed concerns regarding density because it tends to cause problems. Single family homes were a "go" for him, but now it has changed from medium density to high density apartments. If apartments had been presented originally, there may have been different actions taken. HRA Commissioner Rubenstein seconded comments of Council Members Wroge and Fitzhenry. She said she recognized the need for affordable housing and the mix of incomes, but their development does not appear to have a mix of incomes. Ms. Lindahl responded that the project is 100% workforce housing. HRA Commissioner Quam questioned whether the HRA was required to sell the HRA land. Community Development Director Stark indicated that there was a preliminary agreement between the HRA and Ron Clark Construction. City Attorney Heine confirmed that there is not an option agreement or right to purchase agreement. HRA Commissioner Quam stated he is not inclined to sell the property because it would be so underutilized but if it were going to be sold the base should be increased so that the developer would pay taxes on it. Ms. Lindahl said that the proposal had the developer owning the land but that the developer wanted to have a discussion about other possible uses, including dedication to the City. Planning Commission Member Root asked the developer to provide staff with the positive feedback that it had received and that Ms. Lindahl had referenced in her presentation. Planning Commission Member Hall stated there appears to be a discrepancy in the number of units for density requirements. Community Development Director Stark explained that land is guided medium to high density, which would be 12 to 24 units per acre. He said it was zoned industrial and that the reason that it had not yet been rezoned to conform to the Comprehensive Plan because when staff was processing other zoning amendments, it made sense to wait for this development proposal so that there wouldn't be a need to rezone twice. Planning Commission Member Hall also said that he didn't see the rationale for destroying land value to buy land and donate it to the City rather than spreading townhomes throughout the property. Mayor/HRA Commissioner Goettel asked whether the developer would look for other Brownfield funds to clean up the site and to what standard. Ms. Lindahl said that they would use the TIF funds and that the standard for residential and park use are the same. Special Worksession Minutes -4- April 10, 2012 Community Director Stark said that there was a Phase I for the property but that the extent of contamination is not known. Mayor/HRA Commissioner Goettel stated that she wished the developer had sought community input before changing the proposal from the townhomes that residents had heard about to the high density apartments. Council Member Wroge read from a document and quoted comments made by Colleen Carey, Cornerstone. Her letter said that projects that incorporate a reasonable amount of affordable housing into the project rather than concentrate affordable housing into a 100% affordable project. He said he had always thought that a mix of affordable and market rate was preferable. He said the City Council had never voted to do anything but let him move through the process but that the Council had never had an application to make a decision. He said he was very unhappy with the proposed use of the HRA land. Community Development Director Stark explained if the developer is unable to purchase the additional property they are confined to the land on which the developer has an option, that would exceed the units per acre permitted in the Comprehensive Plan. They would need to apply for Comprehensive Plan and zoning changes to higher density. Council Member Wroge questioned the right of the City to deny TIF and land use. He said he did not like the use of TIF and was being consistent. City Attorney Heine responded that it is the City Council's discretion to decide whether it wants to use TIF and that decision would come to the Council in May. The City Council is not legally bound to change the Comprehensive Plan, but that is not part of the revised proposal. In response to a question by Planning Commission Member Rublein, City Attorney Heine stated that without the HRA parcel and second City piece of property, the proposed development does not conform to the Comprehensive Plan guide and the developer would need to apply for an amendment. The revised plan would be one PUD for the site which would limit development of the mortuary site. HRA Commissioner Quam questioned the timing of exploring the selling of the HRA property and the appraisal of the land. Community Development Director Stark explained the HRA could have a special meeting to consider the land sale. He also explained the two appraisals, including the highest and best use of the property and the assigned value. Planning Commission Member Scaglia questioned why the Planning Commission would consider the project before they even knew if the HRA would sell the land. Planning Commission Member Hall agreed with that comment. Community Development Director Stark stated any Planning Commission and City Council action would have to be contingent upon the HRA selling the land to the developer. Council Member Wroge questioned the valuation and said that the land values were too low and that the City was giving the land away, not selling it. Council Member Elliott stated he was not likely to approve an application based on a contingency about ownership of the land. Special Worksession Minutes -5- April 10, 2012 Council Member/HRA Chair Sandahl stated other projects have been approved on contingency. She said the developer has made several changes to respond to concerns raised by residents. ADJOURNMENT The meeting was adjourned by unanimous consent at 6:31 p.m. Date Approved: May 8, 2012 A el ( Ar,i Cheryl Krumho z even L. Dev' Executive Coordinator City Manager