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062612completeagenda CITY OF RICHFIELD, MINNESOTA TUESDAY, JUNE 26, 2012 RICHFIELD MUNICIPAL CENTER 6700 PORTLAND AVENUE SPECIAL CITY COUNCIL WORKSESSION COUNCIL CHAMBERS 6:15 P.M. AGENDA Call to order Roll call 1. Discussion regarding Key Financial Strategies Notes: 2. Discussion regarding proposed Fire Station No. 2 remodel (Council Memo No. 75) Notes: Adjournment REGULAR CITY COUNCIL MEETING COUNCIL CHAMBERS 7:00 P.M. AGENDA INTRODUCTORY PROCEEDINGS Call to order Roll call Open forum (15 minutes maximum) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting. Notes: Pledge of Allegiance Approval of minutes of(1) Special City Council Worksession of June 12, 2012 PRESENTATIONS 1. Presentation of Gene and Mary Jacobsen Outstanding Citizen of Year award to Patrick Olson (Council Memo No. 74) 2. Presentation of Certificate of Appreciation to the Richfield Fourth of July Committee COUNCIL DISCUSSION 3. Council discussion • Hats Off to Hometown Hits Notes: AGENDA APPROVAL 4. Council approval of agenda CONSENT CALENDAR 5. Consent Calendar contains several separate items,which are acted upon by the City Council in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further Council action on these items is necessary. However, any Council Member may request that an item be removed from the Consent Calendar and placed on the regular agenda for Council discussion and action. All items listed on the Consent Calendar are recommended for approval. A. Consideration of approval of resolution declaring adoption by the City of the Ten Performance Measures and Performance Measure System as developed by the Legislative Council on Local Results and Innovation S.R. No. 104 B. Consideration of approval of award of contract to Maenke Brothers Outdoor to install landscaping for the final phase of the Honoring All Veterans Memorial in the amount of$30,832 S.R. No. 105 C. Consideration of approval of award of contract to Murphy Granite Carving, Inc. to install remaining granite features for the final phase of the Honoring All Veterans Memorial in the amount of$32,297 S.R. No. 106 D. Consideration of approval of Community Celebration Event license, with a request for a fee waiver, and a Temporary On-Sale Intoxicating Liquor license for the Fourth of July Committee for events scheduled to take place at Veterans Memorial Park, July 1 through July 5, 2012 S.R. No.107 E. Consideration of approval of temporary on-sale 3.2 percent malt liquor license for the Minneapolis-Richfield American Legion Post 435, 6501 Portland Avenue South, for activities scheduled to take place on July 4, 2012 S.R. No. 108 F. Consideration of approval of first reading of an ordinance rezoning the property at 301 —77th Street West (commonly referred to as the "Candlewood Outlot") from Mixed-Use—Community (MU-C) to Planned Mixed Use (PMU) S.R. No. 109 Notes: 6. Consideration of item(s), if any, removed from Consent Calendar Notes: NEW BUSINESS 7. Consideration of request for reconsideration of the Council's June 12, 2012 actions regarding the Purchase Agreement and first reading of an ordinance related to the sale of real property (C-1 and C-2 parcels) to Richfield Properties I, Limited Partnership (dba Ron Clark Construction and Design and Connelly Development) Staff Report No. 110 Notes: PUBLIC HEARING 8. Public hearing and consideration of a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and adopting a Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District (Pillsbury Commons) Staff Report No. 111 Notes: PROPOSED ORDINANCES 9. Consideration of first reading of ordinance rezoning 211 West 76th Street & 7641 Pleasant Avenue from Industrial (I) to Planned Multi-Family Residential (PMR) Staff Report No. 112 Notes: 10.Consideration of second reading of transitory ordinance authorizing sale of real property at 7641 Pleasant Avenue (south portion only, referred to as parcel C-3) to R.E.C., Inc. Staff Report No. 113 Notes: I OTHER BUSINESS, 11.Consideration of final development plan and conditional use permit for planned unit development to include a 70-unit development that includes 18 townhomes and a 52- unit apartment building on 7641 Pleasant Avenue (the former Richfield Public Works Garage property and the former Gleason Mortuary at 211 West 76th Street) by Richfield Properties I, Limited Partnership (dba Ron Clark Construction and Design and Connelly Development) Staff Report No. 114 Notes: 12.Consideration of authorizing staff to hire a consultant 17th perform appraisals�4nd begin acquisition services for 13 residential properties on 17 Avenue between 63 Street and 65th Street needed for construction of Richfield Parkway Staff Report No. 115 Notes: CITY MANAGER'S REPORT 13.City Manager's Report Notes: 14.Claims and payrolls Open forum (additional 15 minutes if more time needed after first Open Forum and by majority vote of the City Council) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting. Notes: 15.Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. richfield: July 2012 Page 1 of 1 City of Richfield Calendar Calendars Net Navigate: 2011 Jan Feb Mar Az May Jun Jul Aug Sep Oct Nov Dec 2013 July 2012 Monday Tuesday Wednesday Thursday Friday 25 I Jun 26 27 28 29 6:OOp Planning 6:OOp Special Joint SATURDAY,JUNE 30 Commission Study Meeting between 9:30 a.m.-10:30 a.m. Session Bloomington, Richfield, Mayor's Hour-Farmer's 7:00p Planning and Edina Advisory Market Commission Boards of Health- Bartholomew Room 6:15p Special City Council Worksession 7:OOp City Council Regular Meeting 2 3 4 5 6 11:30a Tourism 7:OOp Transportation 7:OOp Arts Commission Promotion Board @ Commission- @ 6335 Portland Ave 6601 Lyndale Ave,Suite CANCELED 106 CITY ADMINISTRATIVE 6:30p Human Rights OFFICES CLOSED-- Commission FOURTH OF JULY HOLIDAY 9 10 11 13 13 6:15p Special City Council Worksession 7:OOp City Council Regular Meeting 16 17 18 19 20 6:OOp Special HRA/City 7:OOp Community 7:OOp Friendship City Council/Planning Services Commission @ Commission Commission 7000 Nicollet Ave Worksession 7:OOp Housing and Redevelopment Authority(HRA) 23 24 25 26 27 7:OOp Planning 7:OOp City Council 7:OOp-8:OOp SATURDAY,JULY 28 Commission Regular Meeting Neighborhood Crime 9:30 a.m.-10:30 a.m. Watch Block Captains Mayor's Hour-Farmer's Meeting @ Richfield Market Middle School auditorium,7461 Oliver Ave. 30 31 1 I Aug 2 3 7:OOp Transportation 7:OOp Arts Commission Commission @ 6335 Portland Ave Display: Year Month Week Day Block List Condensed Abs Slide, Calendars: Search Add Events: Daily Duration Periodic Administer: This Calendar All meetings held at City Hall (6700 Portland Avenue) unless indicated otherwise Calendars Net free online interactive web calendars http://www.my.calendars.netlrichfield/dO1/07/2012?display=M&style=B&positioning=A 6/21/2012 CITY OF RICHFIELD, MINNESOTA Office of City Manager June 21, 2012 Council Memorandum No. 75 The Honorable Mayor and Members of the City Council Subject: Fire Station 2 Renovation Project (Worksession Agenda Item No. 2) Council Members: As currently configured, Fire Station 2 does not meet the needs of the Fire Department to deliver effective service to the community. The Fire Department recognized that the current facility has several significant issues: • Lacks facilities (sleeping quarters, bathrooms, locker rooms) to accommodate a gender diverse workforce. • Increasing energy costs to operate the facility due to older, non-energy efficient equipment. • Lack of adequate storage for equipment, linens, personal protective equipment, emergency medical equipment and office space. The City engaged Leo A Daly to perform a preliminary assessment and project scoping exercise to develop a solution to these problems. The assessment reviewed the existing structure and systems, upgrade work that has been completed over the past several years (kitchen remodel, tuck pointing, and roof replacement), and developed a concept plan to renovate the station to meet the city's needs. The Fire Department will be presenting the results of the assessment at the Council work session on Tuesday, June 26, 2012. R ec submitted, / 4W e . Devi City Manager SLD: tjs E-mail: Department Directors Assistant City Manager CITY COUNCIL MINUTES Richfield, Minnesota C/C/ # Special City Council Worksession June 12, 2012 CALL TO ORDER The meeting was called to order by Mayor Goettel at 6:17 p.m. in the Bartholomew Conference Room. ROLL CALL Council Members Debbie Goettel, Mayor; Tom Fitzhenry; Pat Elliott; Fred Wroge; and Sue Present: Sandahl (arrived 6:30 p.m.) Staff Present: Steven L. Devich, City Manager; Mike Eastling, Public Works Director; Jeff Pearson, Transportation Engineer; and Cheryl Krumholz, Executive Coordinator Item #1 DISCUSSION REGARDING ARTERIAL ROAD PRIORITIZATION STUDY (COUNCIL MEMO NO. 69) Public Works Director Eastling and Transportation Engineer Pearson presented the results of the arterial road prioritization study recently completed by the Transportation Commission. The prioritization study examined the ranking of the arterial roads within the City on a variety of categories. Arterial roads examined in the process were: • 66th Street • Penn Avenue • Lyndale Avenue • Nicollet Avenue • Portland Avenue • West 76th Street The results of the study are helpful in the planning process as Hennepin County and the City move forward with reconstruction of many of these streets. Funding issues and scenarios were also discussed. ADJOURNMENT Special Worksession Minutes -2- June 12, 2012 The meeting was adjourned by unanimous consent at 6:55 p.m. Date Approved: June 26, 2012 Debbie Goettel Mayor Cheryl Krumholz Steven L. Devich Executive Coordinator City Manager CITY OF RICHFIELD,MINNESOTA Office of City Manager June 21, 2012 Council Memorandum No. 74 The Honorable Mayor and Members of the City Council Subject: 06/26 Gene& Mary Jacobsen Citizen of the Year for 2012 Presentation (Agenda Item No. 1) Council Members: The Richfield Human Rights Commission has selected a Citizen of the Year award recipient since 1971. The award is given to a family,group, organization, business or individual who lives or works in Richfield and whose actions demonstrate an awareness and commitment to the attitudes and practices that foster human understanding, tolerance and the spirit of human relations. The Human Rights Commission has voted to present the 40th Annual Gene and Mary Jacobsen Outstanding Citizen award to Patrick(Pat)Olson and PRO Music, Pat's DJ Company. Pat and his family have lived in Richfield since 1994, the year his first child was born. His daughter, Hannah, is a senior at Richfield High School, and his son, Bailey, is a freshman at RHS. Pat has been involved in coaching youth sports for over 12 years. He has coached the following: Girls Softball—6 years; Boys Baseball—10 years; he will coach 15 yr. olds baseball this summer; and he is also a board member; Boys Hockey—9 years(floor hockey through 13 yr. olds); Football—6 years; Flag Football through 12 yr. olds. Pat organized Father vs. Son baseball games at the end of the baseball season. He originated the "Team Ball" philosophy with a"Team Ball"for his teams. After every game, a"Player of the Game" is selected and the team signs a ball for the player. He makes sure every player, no matter what skill level, is"Player of the Game"at least once. He provides music by PRO Music, many times on a volunteer basis, for special events such as benefits to raise money for someone who needs help, at Richfield school dances and Richfield Recreation Youth Activities, games, races, pool parties. He provided music for the RHS Senior Graduation overnight. Pat Olson has always found time to support the youth of Richfield. He plays an active role in the community and truly loves the city he lives in. The 40th Annual Gene&Mary Jacobsen Outstanding Citizen Award will be presented to Pat Olson at the Council meeting on June 26, 2012. A 6:30 p.m. reception will be held in the Municipal Cente prior to the award presentation. Res•- , .ly submitted , . :n . Devic . Manager SD:tjs E-mail: Department Directors Assistant City Manager AGENDA SECTION: CONSENT AGENDA ITEM# 5A REPORT# 104 STAFF REPORT Rl(F II ICLU CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: CHRIS REGIS,FINANCE MANAGER NAME,Tins DEPARTMENT DIRECTOR Er ■-- REVIEW: �J sir REVIEWED BY CITY Jii1ii A /' 4 ____- ____ ITEM FOR COUNCIL CONSIDERATION: Consideration of resolution by the City Council of the Ten Performance Measures developed by the Legislative Council on Local Results and Innovation. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution declaring adoption by the City of the Ten Performance Measures and Performance Measure System as developed by the Council on Local Results and Innovation. II. BACKGROUND In 2010, the Legislature created the Council on Local Results and Innovation (the Council). In February 2011, the Council established a set of ten performance measures for counties and ten performance measures for cities. The goal of the establishment of the performance measures will be to aid residents, taxpayers, and state and local elected officials in determining the efficiency of counties and cities in providing services, and measure residents' opinions of those services. In 2012 the Council created a comprehensive performance measurement system for cities and counties to implement in 2012. Participation in the performance measure program by a city or county is voluntary Cities and counties that choose to participate in the program may be eligible for a reimbursement in LGA, not to exceed $25,000, and exemption from levy limits. 062612PerformanceMeasures Cities and counties participating in the program will be required to communicate the results of the measures to their residents the following calendar year. Methods of communication can be through publication, mailings, posting on the City's website, or through a public hearing at which the budget and levy will be discussed. III. BASIS OF RECOMMENDATION A. POLICY • Annual reporting by on the progress of the program will be required by the City to the Office of the State Auditor. • The City will be required to implement a performance measurement system. B. CRITICAL TIMING ISSUES • Adoption of the Performance Measures program by the City Council must be reported to the Office of the State Auditor by July 1, 2012. C. FINANCIAL • The amount of LGA reimbursement for the City of Richfield has received to date is $4,932.00. • Participation in the program will allow the City to be exempt from levy limits for calendar year 2013. • There may be costs incurred by the City in implementing some of the established performance measures. D. LEGAL • N/A E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • The City Council can decide to not participate in the Performance Measure program. If the City does not participate, it will subject to any levy limits adopted by the legislature. V. ATTACHMENTS • Resolution adopting the 10 Performance Measures and Performance System as developed by the Council on Local Results and Innovation. • Performance Measure Survey • Report on Performance Measures Results for the City VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A A- I RESOLUTION NO RESOLUTION ADOPTING AND IMPLEMENTING MODEL PERFORMANCE MEASURES FOR CITIES AS ESTABLISHED BY THE COUNCIL ON LOCAL RESULTS AND INNOVATION, CREATING A COMPREHENSIVE PERFORMANCE MEASUREMENT SYSTEM, REPORTING THE RESULTS OF SUCH REPORT TO THE LOCAL PUBLIC, AUHTORIZING THE SURVEY OF RESIDENTS, AND REPORTING RESULTS TO THE OFFICE OF THE STATE AUDITOR WHEREAS, in 2010, the Legislature created the Council on Local Results and Innovation; and WHEREAS, in February 2011, the Council released a standard set of performance measures for cities that will aid residents, taxpayers, and state and local elected officials in determining the efficacy of cities in providing services, and measure resident's opinions of those services; and WHEREAS, in February 2012, the Council created a comprehensive performance measurement system for cities to implement in 2012; and WHEREAS, cities that choose to participate in the new standards measure program may be eligible for reimbursement in LGA, and exemption from levy limits; and WHEREAS, participation in the standard measures program by a city is voluntary; and WHEREAS, cities that choose to participate in the standard measures program must officially adopt the performance benchmarks developed by the Council, and implement them; and WHEREAS, the following performance measures were adopted; • Percent change in the taxable property market value • Part I and II crime rates • Police response time • Insurance industry rating of fire services • Fire response time • Average city street pavement condition rating • Operation cost per 1,000,000 gallons of water pumped/produced • Number of sanitary sewer back-ups for public sanitary sewer system WHEREAS, the results of the citizen survey conducted were also released and the following areas were reviewed and commented on; • Overall appearance • Overall safety • Fire protection • Overall street conditions • Snowplowing 5A—a • Sanitary seer • Park and recreation • Overall quality of service NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Richfield, Minnesota hereby certifies that; 1. The city had adopted and implemented the performance measures as developed by the Council on Local Results and Innovation; and 2. The city is in the process of implementing a local performance measurement system as developed by the Council on Local Results and Innovation; and 3. The city will report the results of the adopted measures to its residents before the end of the calendar year through publication, direct mail, posting on its website, or through a public hearing at which the budget and levy will be discussed and public input allowed; and 4. The city has surveyed its residents on the services included in the performance benchmarks; and BE IT FURTHER RESOLVED that the actual results of the performance measures adopted by the city for the program in 2011 shall be reported to the Office of the State Auditor by July 1, 2012. Adopted by the City Council of the City of Richfield, Minnesota this 26th day of June, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk Survey : Results Page 1 of 3 RICHFIELD Overall Survey Results: City of Richfield Citizen Survey How would you rate the overall quality of services provided by the City? (choose one) Number of Response Answer 0% 100% Responses Ratio Excellent 170 31.8% Good 304 56.9% Fair 53 9.9% Poor 7 1.3% No Responses 0 0.0% Totals 534 100% *How would you rate the overall appearance of the City? (choose one) Number of Response Answer 0% I 100% Responses do Excellent II 60 11.2% Good 302 56.5% Fair I 148 27.7% Poor 24 4.4% No Responses { 0 0.0% Totals 534 100% * How would you rate the safety of the City? (choose one) Number of Response Answer 0% I 100% Responses Ratio Very Safe 166 31.0% Somewhat Safe 280 52.4% Neither Safe nor 43 8.0% Unsafe Somewhat Unsafe 44 8.2% Very Unsafe http://survey.constantcontact.com/survey/a07e5emupssgvlapetb/results 6/7/2012 Survey : Results Page 2 of 3 511 —LI No Responses ! 0 0.0% Totals 534 100% *How would you rate the quality of the fire protection services in the City? (choose one) Number of Response Answer 0% ! 100% Responses Ratio Excellent i 329 61.6% Good 184 34.4% Fair 18 3.3% Poor 3 <1% � No Responses 0 0.0% Totals 534 100% How would you rate the conditions of the roads in the City (Do not consider Portland Ave., Nicollet Ave., Penn Ave., or 66th Street.These are County Roads) (choose one) Number of Response Answer 0% 100% Responses Ratio Good Condition 220 41.1% Mostly Good 290 54.3% Condition Poor Condition 24 4.4% No Responses i 0 0.0% Totals 534 100% *How would you rate the quality of snowplowing in the City? (choose one) Number of Response Answer 0% 100% Responses Ratio Excellent 270 50.5% Good I 89 35.3% Fair 58 10.8% Poor i 17 3.1% No Responses 0 0.0% Totals 534 100% *How would you rate the quality and dependability of the City water services? (choose one) http://survey.constantcontact.com/survey/a07e5emupssgvlapetb/results 6/7/2012 Survey: Results Page 3 of 3 5A-S Number of Response Answer 0% I 100% Responses Ratio Excellent : 372 69.6% Good 146 27.3% Fair 15 2.8% Poor No Responses 0 0.0% Totals 534 . 100% How would you rate the quality and dependability of the City sanitary sewer services? (choose one) Number of Response Answer 0% I 100%. . Responses. Ratio Excellent 312 58.4% Good 199- 37.2% Fair 20 3.7% Poor 3 <1% — No Responses 0 0.0% Totals 534 100% *How would you rate the quality of City recreational programs and facilities (parks, trails,and park buildings)? (choose one) Number of Response Answer 0% I 100% Responses Ratio Excellent 209 . 39.1% Good 258 48.3% Fair 51 9.5% Poor 16 2.9% No Responses 0 0.0% Totals 534 100% Online Surveys by t ny it REtoday. http://survey.constantcontact.com/survey/a07e5emupssgvlapetb/results 6/7/2012 Model Performance Measures for Cities Results for the City of Richfield General: 1.Rating of the overall quality of services provided by your city (Citizen Survey: excellent, good,fair,poor) 88.70%of respondents rated quality of services as excellent or good. 2. Percent change in the taxable property market value The taxable property market value from 2011 to 2012 decreased by 10.33%. 3. Citizens' rating of the overall appearance of the city (Citizen Survey: excellent, good,fair, poor) 67.7%of residents rated the overall appearance of the City as excellent or good. Police Services: 4.Part I and II crime rates(Submit data as reported by the Minnesota Bureau of Criminal Apprehension. Part I crimes include murder, rape, aggravated assault, burglary, larceny, motor vehicle theft, and arson. Part II crimes include other assaults,forgery/counterfeiting, embezzlement, stolen property, vandalism, weapons,prostitution, other sex offenses, narcotics, gambling,family/children crime, D.U.I., liquor laws, disorderly conduct, and other offenses.) 2011 2012 YTD Part I 949 380 Part II 2,300 567 Citizens' rating of safety in their community (Citizen Survey: very safe, somewhat safe, neither safe nor unsafe, somewhat unsafe, very unsafe) 83.4%rated the safety of the City as very safe or somewhat safe. Output Measure: Police response time (Time it takes on top priority calls from dispatch to the first officer on scene.) Average Police response time in minutes—4.40 Fire Services: 5. Insurance industry rating of fire services (The Insurance Service Office (ISO) issues ratings to Fire Departments throughout the country for the effectiveness of their fire protection services and equipment to protect their community. The ISO rating is a numerical grading system and is one of the primary elements used by the insurance industry to develop premium rates for residential and commercial businesses. ISO analyzes data using a Fire Suppression Rating Schedule (FSRS) and then assigns a Public Protection Classification from 1 to 10. Class 1 generally represents superior property fire protection and Class 10 indicates that the area's fire suppression program does not meet ISO's minimum criteria.) City of Richfield Fire Insurance Industry Rate—4. Citizens' rating of the quality of fire protection services (Citizen Survey: excellent, good,fair, poor) 96.0%rated the quality of fire protection services as excellent or good. Output Measure: Fire response time (Time it takes from dispatch to apparatus on scene for calls that are dispatched as a possible fire). Average Fire response time in minutes—3.00 Streets: 6.Average city street pavement condition rating (Provide average rating and the rating system program/type. Example: 70 rating on the Pavement Condition Index(PCI)) 2010 2011 2012 PCI 82 N/A In process Citizens' rating of the road condition in their city (Citizen Survey: good condition, mostly good condition, many bad spots) 95.4%rated the conditions of city roads being in good condition or mostly good condition. 7. Citizens' rating the quality of snowplowing on city streets (Citizen Survey: excellent, good, fair,poor) 85.8%rated the quality of snowplowing on city streets as excellent or good. Water: 8. Citizens' rating of the dependability and quality of city water supply(centrally-provided system) (Citizen Survey: excellent, good,fair,poor) 96.9%rated the dependability and quality of city water services as excellent or good. Output Measure: Operating cost per 1,000,000 gallons of water pumped/produced (centrally-provided system) (Actual operating expense for water utility/(total gallons pumped/1,000,000)) The operating cost per 1,000,000 gallons of water pumped/produced is $2,716. Sanitary Sewer: 9. Citizens' rating of the dependability and quality of city sanitary sewer service(centrally provided system) (Citizen Survey: excellent, good,fair,poor) 95.6%rate the dependability and quality of city sanitary sewer service as excellent or good. Output Measure: Number of sewer blockages on city system per 100 connections (centrally provided system) (Number of sewer blockages on city system reported by sewer utility/(population/100)) Number of sewer blockages on city system is .0159 per 100 connections. Parks and Recreation: 10. Citizens' rating of the quality of city recreational programs and facilities(parks,trails, park buildings) (Citizen Survey: excellent, good,fair,poor) 87.4%rated the quality of city recreational programs and facilities as excellent or good. AGENDA SECTION: CONSENT AGENDA ITEM# 5B REPORT# 105 STAFF REPORT RICHFIELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: JIM TOPITZHOFER,RECREATION SERVICES DIRECTOR NAME,TITLE DEPARTMENT DIRECTOR REVIEW: Er REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of award of contract to Maenke Brothers Outdoor to install landscaping for the final phase of the Honoring All Veterans Memorial in the amount of$30,832. I. RECOMMENDED ACTION: By Motion: Approve the award of contract to Maenke Brothers Outdoor to install landscaping for the final phase of the Honoring All Veterans Memorial in the amount of $30,832. II. BACKGROUND Members of the Honoring All Veterans Memorial (HAVM) Board presented design drawings and cost estimates for the remaining work of the Monument last year, requesting City Council to consider providing funds for the remaining work. The Council directed staff to complete plans and specifications and to solicit bids and quotes for the following components: • Six concrete columns with granite bands • Granite finish on sculpture pedestal • North concrete trail with lighting • Irrigation • Landscaping and lighted flagpoles Two quotes were received for the remaining granite work of the project which includes the installation of five granite engraving tablets, granite veneer and storyboards on the center pedestal and granite veneer bands on the six columns. 062612 Maenke Brothers Landscaping Contract Maenke Brothers Outdoor $30,832 Dean Bjorkstrand, Inc. $69,625 Maenke Brothers Outdoor was the lowest quote. Maenke Brothers Outdoor has provided landscaping services for the City of Richfield in past years and has performed high quality work. III. BASIS OF RECOMMENDATION A. POLICY • Under the City's Purchasing and Spending Authority Policy, contracts or purchases from $25,000 to $100,000 must be approved by the City Council. • If the amount of the contract is estimated at$25,000 to $100,000, the contact or purchase may be made either upon sealed bids or by obtaining two or more quotations. Two quotes were received and Maenke Brothers Outdoor offered the lowest price. • There are no publication or notification requirements that apply to this action. B. CRITICAL TIMING ISSUES • It is desired to complete the project this summer to help stimulate the sale of engravings which is the source of funds that pays the City back for final construction costs. C. FINANCIAL • The initial cost estimate for the remaining work of the project not including irrigation was $290,000 as reported to Council last fall. Irrigation will be funded through a grant with Minnehaha Watershed District as part of planned storm water improvements at Legion Lake. The monument's irrigation system will utilize storm water from the nearby pond. • The project was separated in four bid packages which were solicited last month. Quotes and bids for all four bid packages were received. The lowest bids received including an estimate for the granite cost are as follows: Concrete $178,354 Electric $24,800 Landscaping, without irrigation $30,832 Granite $32,297 Total Construction Cost $266,283 • Total Project Costs based on the above quotes and bids are: Construction Cost $266,283 Design and Construction Management $16,710 Contingency (10%) $26,628 Total Project Cost $309,621 • Funding for remaining work on the Monument will come from the City's Recreation Fund and then be fully reimbursed over time through the proceeds of engravings sales. D. LEGAL • The City Attorney has reviewed the attached contract and will be available for discussion at the meeting. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • Council may choose to direct staff to seek additional quotes on the granite work of the Monument or abandon the project V. ATTACHMENTS • Maenke Brothers Outdoor Contract VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None 5- I CITY OF RICHFIELD. HENNEPIN COUNTY, MINNESOTA CONTRACT FOR CONSTRUCTION THIS AGREEMENT made on the 26th day of June, 2012, between the City of Richfield, herein called the"Owner" and Maenke Brothers Outdoor herein called the "Contractor,"witnesseth; that the Contractor, in consideration of the payment of the contract price therefor, amounting substantially to Thirty Thousand Eight Hundred and Thirty Two Dollars And Zero Cents ($30,832.00), agrees to furnish all materials (except such as are specified to be furnished by the Owner, if any), all necessary tools and equipment, and to do and perform all the necessary work and labor for the full completion as follows: HONORING ALL VETERANS MEMORIAL CONSTRUCTION PROJECT FINAL PHASE LANDSCAPING IMPROVEMENTS RELATED WORK A. Finish Grading. B. Furnish and install overstory/coniferous trees (26). C. Furnish and install understory trees (11). D. Furnish and install coniferous scrubs (59). E. Furnish and install perennial flowers (188). F. Furnish and install mulch. G. Furnish and install topsoil. H. Furnish and install hydroseeding. J. Furnish and install sodding. as shown in the attached plans, for the price and compensation set forth and specified in the proposal signed by the Contractor, which is hereto attached and hereby made a part of this Agreement, all in accordance with the plans, specifications and special provisions therefor on file in the office of the Owner's representative Jim Topitzhofer, herein call the "Construction Manager", and hereby made a part of this Agreement. This Agreement shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns. The Contractor agrees that the work shall be done and performed in the best and most workmanlike manner; that all materials and labor shall be in strict conformity in every respect with the plans, specifications and special provisions for the improvement, shall be subject to inspection and approval of the Construction Manager, and in case any material or labor supplied shall be rejected by the Construction Manager as defective or unsuitable, then such rejected material shall be removed and replaced with approved material and the rejected labor shall be done anew to the satisfaction and approval of the Construction Manager and at the cost and expense of the Contractor. The contractor SHALL NOTIFY THE Construction Manager in writing of his intentions to commence work at least five (5) days prior to his moving onto the site according to the specifications and will have all work done and the improvement fully completed to the satisfaction and approval of the Owner. It is distinctly understood and agreed that no claims for extra work done or materials furnished by the Contractor will be allowed by the Owner except as provided herein, nor shall the Contractor do any work or furnish any materials not covered by the plans, specifications, special provisions and this Agreement unless such work is first ordered in writing as provided in the specifications. 1 513-4 CITY OF RICHFIELD. HENNEPIN COUNTY, MINNESOTA CONTRACT FOR CONSTRUCTION Any such work or materials which may be done or furnished by the Contractor without such written order first being given shall be at his own risk, cost and expense and he hereby agrees that without such written order he will make no claim for compensation for work or materials so done or furnished. Project is subject to the prevailing wages as established by the Minnesota Department of Labor and Industry. Specifically, all contractors and subcontractors must pay all laborers and mechanics the established prevailing wages for work performed under the contract. The concrete contractor shall submit all prevailing wage reports prior to any payments being approved. Contractor agrees to pay subcontractors within 10 days of receipt of payment from the Owner and to pay interest of 1.5% per month or any part of a month to the subcontractor on any undisputed amount not paid on time. . It is further agreed, anything to the contrary notwithstanding, that the Owner, Construction Manager, City of Richfield, City Council and its agents or employees shall not be personally liable or responsible in any manner to the Contractor, Subcontractors, materialmen, laborers or to any person or persons whomsoever for any claim, demand, damages, actions or causes of action of any kind or character arising out of or by reason of the execution of this Agreement or the performance and completion of the work and improvement provided herein. Dated on the 26th day of June, 2012. Signatures for: Maenke Brothers Outdoor(Contractor) By Its Signatures for: City of Richfield (Owner) Its , Mayor Debbie Goettel By Its Steven Devich, City Manager 2 AGENDA SECTION: CONSENT AGENDA ITEM# SC REPORT# 106 STAFF REPORT RIC_l^IHELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: JIM TOPITZHOFER,RECREATION SERVICES DIRECTOR NAME,TITLE DEPARTMENT DIRECTOR REVIEW: - TO /1Z ' 2 r ,ii,----.-- WY I: A REVIEWED BY CITY MANAGER: FL Avi0 ; / , „Ai ,_ ____,- ITEM FOR COUNCIL CONSIDERATION: Consideration of award of contract to Murphy Granite Carving, Inc. to install remaining granite features for the final phase of the Honoring All Veterans Memorial in the amount of$32,297. I. RECOMMENDED ACTION: By Motion: Approve the award of contract to Murphy Granite Carving, Inc. to install remaining granite features for the final phase of the Honoring All Veterans Memorial in the amount of $32,297. II. BACKGROUND Members of the Honoring All Veterans Memorial (HAVM) Board presented design drawings and cost estimates for the remaining work of the Monument last year, requesting City Council to consider providing funds for the remaining work. The Council directed staff to complete plans and specifications and to solicit bids and quotes for the following components: • Six concrete columns with granite bands • Granite finish on sculpture pedestal • North concrete trail with lighting • Irrigation • Landscaping and lighted flagpoles Two quotes were received for the remaining granite work of the project which includes the installation of five granite engraving tablets, granite veneer and storyboards on the center pedestal and granite veneer bands on the six columns. 062612 Murphy Granite Carving Contract Murphy Granite Carving, Inc. $32,297 Katzman Monument Company, LLC $69,520 Murphy Granite Carving was the lowest quote. Murphy Granite Carving is very familiar with the project as they were awarded a contract for previous granite work on the Monument and have performed high quality work. III. BASIS OF RECOMMENDATION A. POLICY • Under the City's Purchasing and Spending Authority Policy, contracts or purchases from $25,000 to $100,000 must be approved by the City Council. • If the amount of the contract is estimated at $25,000 to $100,000, the contact or purchase may be made either upon sealed bids or by obtaining two or more quotations. Two quotes were received and Murphy Granite Carving offered the lowest price. • There are no publication or notification requirements that apply to this action. B. CRITICAL TIMING ISSUES • It is desired to complete the project this summer to help stimulate the sale of engravings which is the source of funds that pays the City back for final construction costs. C. FINANCIAL • The initial cost estimate for the remaining work of the project not including irrigation was $290,000 as reported to Council last fall. Irrigation will be funded through a grant with Minnehaha Watershed District as part of planned storm water improvements at Legion Lake. The monument's irrigation system will utilize storm water from the nearby pond. • The project was separated in four bid packages which were solicited last month. Quotes and bids for all four bid packages were received. The lowest bids received including an estimate for the granite cost are as follows: Concrete $178,354 Electric $24,800 Landscaping, without irrigation $30,832 Granite $32,297 Total Construction Cost $266,283 • Total Project Costs based on the above quotes and bids are: Construction Cost $266,283 Design and Construction Management $16,710 Contingency (10%) $26,628 Total Project Cost $309,621 • Funding for remaining work on the Monument will come from the City's Recreation Fund and then be fully reimbursed over time through the proceeds of engravings sales. D. LEGAL • The City Attorney has reviewed the attached contract and will be available for discussion at the meeting. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • Council may choose to direct staff to seek additional quotes on the granite work of the Monument or abandon the project V. ATTACHMENTS • Murphy Granite Carving Contract VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None 5e- I CITY OF RICHFIELD. HENNEPIN COUNTY, MINNESOTA CONTRACT FOR CONSTRUCTION THIS AGREEMENT made on the 26th day of June, 2012, between the City of Richfield, herein called the"Owner" and Murphy Granite Carving, Inc. herein called the "Contractor,"witnesseth; that the Contractor, in consideration of the payment of the contract price therefor, amounting substantially to Thirty Two Thousand Two Hundred and Ninety Seven Dollars And Zero Cents ($32,297.00), agrees to furnish all materials (except such as are specified to be furnished by the Owner, if any), all necessary tools and equipment, and to do and perform all the necessary work and labor for the full completion as follows: HONORING ALL VETERANS MEMORIAL CONSTRUCTION PROJECT FINAL PHASE GRANITE IMPROVEMENTS RELATED WORK A. Install granite name tablets. B. Furnish and install granite description panels. C. Furnish and install etched granite veneer around concrete columns. D. Furnish and install granite veneer on centerpiece (sixteen pieces). E. Furnish and install granite bench. as shown in the attached plans, for the price and compensation set forth and specified in the proposal signed by the Contractor, which is hereto attached and hereby made a part of this Agreement, all in accordance with the plans, specifications and special provisions therefor on file in the office of the Owner's representative Jim Topitzhofer, herein call the "Construction Manager", and hereby made a part of this Agreement. This Agreement shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns. The Contractor agrees that the work shall be done and performed in the best and most workmanlike manner; that all materials and labor shall be in strict conformity in every respect with the plans, specifications and special provisions for the improvement, shall be subject to inspection and approval of the Construction Manager, and in case any material or labor supplied shall be rejected by the Construction Manager as defective or unsuitable, then such rejected material shall be removed and replaced with approved material and the rejected labor shall be done anew to the satisfaction and approval of the Construction Manager and at the cost and expense of the Contractor. The contractor SHALL NOTIFY THE Construction Manager in writing of his intentions to commence work at least five (5) days prior to his moving onto the site according to the specifications and will have all work done and the improvement fully completed to the satisfaction and approval of the Owner. It is distinctly understood and agreed that no claims for extra work done or materials furnished by the Contractor will be allowed by the Owner except as provided herein, nor shall the Contractor do any work or furnish any materials not covered by the plans, specifications, special provisions and this Agreement unless such work is first ordered in writing as provided in the specifications. Any such work or materials which may be done or furnished by the Contractor without such written order first being given shall be at his own risk, cost and expense and he hereby agrees that without such written order he will make no claim for compensation for work or materials so done or furnished. 1 5C-a CITY OF RICHFIELD. HENNEPIN COUNTY, MINNESOTA CONTRACT FOR CONSTRUCTION Project is subject to the prevailing wages as established by the Minnesota Department of Labor and Industry. Specifically, all contractors and subcontractors must pay all laborers and mechanics the established prevailing wages for work performed under the contract. The concrete contractor shall submit all prevailing wage reports prior to any payments being approved. Contractor agrees to pay subcontractors within 10 days of receipt of payment from the Owner and to pay interest of 1.5% per month or any part of a month to the subcontractor on any undisputed amount not paid on time. . It is further agreed, anything to the contrary notwithstanding, that the Owner, Construction Manager, City of Richfield, City Council and its agents or employees shall not be personally liable or responsible in any manner to the Contractor, Subcontractors, materialmen, laborers or to any person or persons whomsoever for any claim, demand, damages, actions or causes of action of any kind or character arising out of or by reason of the execution of this Agreement or the performance and completion of the work and improvement provided herein. Dated on the 26th day of June, 2012. Signatures for: Murphy Granite Carving, Inc. (Contractor) By Its Signatures for: City of Richfield (Owner) Its , Mayor Debbie Goettel By Its Steven Devich, City Manager 2 AGENDA SECTION: CONSENT AGENDA ITEM# 5D REPORT# 107 STAFF REPORT RICHFIELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: BETSY OSBORN, SUPPORT SERVICES MANAGER NAME,TITLE DEPARTMENT DIRECTOR r f / it REVIEW: AJ,allr/" J— - ;. .1 . 4 REVIEWED BY CITY ow MANAGER: ir / � 1 _l" Y ITEM FOR COUNCIL CONSIDERATION: Consideration of an annual request for a Community Celebration Event license, with a request for a fee waiver, and a Temporary On-Sale Intoxicating Liquor license for the Fourth of July Committee for events scheduled to take place at Veteran Memorial Park, July 1 through July 5, 2012. I. RECOMMENDED ACTION: By Motion: Approve a Community Celebration Event License, with a fee waiver, and a Temporary On-Sale Intoxicating Liquor license for the Fourth of July Committee for the annual events scheduled to take place July 1 through 5, 2012. II. BACKGROUND Each year the Fourth of July Committee makes application for a Community Celebration event license and requests that the licensing fee of$5,000 be waived for the activities that take place throughout the City for this celebration. In the past, the Committee has included a request for a temporary on-sale 3.2 percent malt liquor license. This year they are, instead, requesting a temporary on- sale intoxicating liquor license which would allow them to sell strong beer and wine coolers only, rather than just 3.2 percent malt liquor as they have done in the past. They plan to sell strong beer and wine coolers on July 3rd only, between the hours of 1:00 p.m. and 11:30 p.m. to coincide with certain celebration activities. The 062612 Fourth of July Committee Celebration Licenses Committee is not requesting a fee waiver of the temporary on-sale intoxicating liquor license. The food concessions will be staffed by members of various organizations, most of which have been with the committee since the celebration began. The applicant has satisfied the following requirements for issuance of these licenses: • The required licensing fee has been paid for the temporary on-sale intoxicating liquor license allowing them to sell strong beer and wine coolers only. • All fees for each professional concession have been received. • Proof of liquor liability insurance has been submitted showing Founders Insurance Company affording the coverage. • A detailed activity plan of the days' events is currently on file. • The applicant, as well as each professional concession, has contacted food sanitarians from the City of Bloomington to ensure that proper food handling practices are followed. • Public Safety Police Officers have been hired by the 4th of July Committee to patrol the area for this event. III. BASIS OF RECOMMENDATION A. POLICY • Richfield City Code Section 1202.05 requires all applicants to comply with all the provisions of this code, as well as the provisions of Minnesota Statute chapter 340A. B. CRITICAL TIMING ISSUES • The temporary on-sale intoxicating liquor license, allowing for the sale of strong beer and wine coolers only, is valid for July 3rd only. C. FINANCIAL • The required liquor licensing fees have been received. • A request for a fee waiver for the celebration event license has been submitted by the 4th of July Committee. D. LEGAL • N/A E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATIONS) • The Council could decide to deny the request for a community celebration event license and a temporary on-sale intoxicating liquor license. This would result in the applicant not being able to conduct activities, especially those concerning food preparation and temporary on-sale intoxicating liquor sales. V. ATTACHMENTS • None VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Richard Jabs and Katherine Robison of the Fourth of July Committee have been notified of the date for Council consideration of this request. AGENDA SECTION: CONSENT AGENDA ITEM# SE REPORT# 108 STAFF REPORT RICHFIELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: BETSY OSBORN, SUPPORT SERVICES DIVISION MANAGER NAME,TITLE DEPARTMENT DIRECTOR / REVIEW. AU-Li REVIEWED BY CITY 1:i R: MANAGE fog� ITEM FOR COUNCIL CONSIDERATION: Consideration of an annual request for a temporary on-sale 3.2 percent malt liquor license for activities scheduled to take place July 4, 2012 for the Minneapolis-Richfield American Legion Post 435, 6501 Portland Avenue South. I. RECOMMENDED ACTION: By Motion: Approve a temporary on-sale 3.2 percent malt liquor license for the Minneapolis-Richfield American Legion Post 435, 6501 Portland Avenue South, for activities scheduled to take place on July 4, 2012. II. BACKGROUND On June 4, 2012, the Minneapolis-Richfield American Legion Post 435 submitted their annual request for a temporary license to serve on-sale 3.2 percent malt liquor for the 4th of July activities. This request is in conjunction with the Richfield Fourth of July Celebration and has been organized by the Fourth of July Committee. Their plans are to have an open house and a band for entertainment outside on their property, and they would like to serve refreshments, including 3.2 percent malt liquor. The band will provide music from 1:30 p.m. to 7:30 p.m. They would serve 3.2 percent malt liquor outside from Noon to 10:00 p.m. 062612 American Legion Fourth of July Liquor License Licensing requirements for the preparation and service of food for this event is covered under the Minneapolis-Richfield American Legion's annual food license. The applicant has satisfied the following requirements for issuance of a license: • The required licensing fees have been paid. • Proof of liquor liability insurance to cover the exterior of their property has been received showing Integrity Mutual Insurance Company affording the coverage. • The applicant has contacted food sanitarians from the City of Bloomington to ensure that proper food handling practices are followed. • The applicant has spoken with Richfield Public Safety staff to address Public Safety issues and concerns. • A professional security organization has been hired by the applicant to oversee this event. III. BASIS OF RECOMMENDATION A. POLICY • Richfield City Code Section 1202.05 requires all applicants to comply with all of the provisions of this code, as well as the provisions of Minnesota Statutes Chapter 340A. B. CRITICAL TIMING ISSUES • The sale of 3.2 percent malt liquor must cease no later than midnight. • The applicant must adhere to the traffic and parking conditions set by the Public Safety Department. C. FINANCIAL • The required licensing fees have been received. D. LEGAL • N/A I E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • The Council could decide to deny the requested license, which would mean that the applicant would not be able to obtain a temporary on-sale 3.2 malt liquor license. V. ATTACHMENTS • Summary of traffic and parking conditions set by the Public Safety Department. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Roger Wysong, Legion Manager, has been notified of the date for Council consideration of this request. 5E- SUMMARY OF TRAFFIC AND PARKING CONDITIONS FOR MINNEAPOLIS-RICHFIELD AMERICAN LEGION POST 435 Richfield Public Safety staff have spoken with management from the American Legion to address some specific Public Safety issues and concerns. As a condition of the approval of their license, it was decided that Portland Avenue will be closed from 8:30 p.m. to 12:00 Midnight. In addition, 66th Street will also be shut down between the hours of 8:30 p.m. to 11:30 p.m. No through traffic will be allowed on 66th Street and Portland Avenue and all traffic will be routed away from the event. American Legion patrons will be allowed to enter the Legion parking lot until approximately 8:30 p.m. when Portland Avenue closes. Patrons will not be allowed to leave the Legion parking lot after 8:30 p.m. All patrons parked in the lot at 8:30 p.m. will be required to remain in the lot until 11:15 p.m. when all pedestrian traffic is clear on Portland Avenue. ONLY cabs and limos that are contracted with the Legion to provide sober cab services will be allowed to access the site from Portland after 8:30 p.m. These vehicles will have placards provided to them by the American Legion to identify their right to enter. • At 11:15 p.m. when patrons are allowed to exit the American Legion lot, they will be routed southbound on Portland Avenue and westbound on 66th Street. Also, vehicles that are parked at the ice arena will be instructed that they need to remain in place until 11:15 p.m. All residents living on 66th Street and Portland Avenue will be allowed entrance onto these streets. AGENDA SECTION: CONSENT AGENDA ITEM# 5F REPORT# 109 midi" STAFF REPORT RICHFIELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: MELISSA POEHLMAN, CITY PLANNE NAME TITLE DEPARTMENT DIRECTOR REVIEW: eA�-r REVIEWED BY CITY MANAGER: �` I"1'EM FOR COUNCIL CONSIDERATION: Conduct a first reading of an ordinance rezoning the property at 301 77th Street West (commonly referred to as the "Candlewood Outlot") from Mixed Use— Community (MU-C) to Planned Mixed Use (PMU). I. RECOMMENDED ACTION: By Motion: Approve a first reading of an ordinance amending Appendix 1 of the Richfield City Code rezoning 301 77th Street West from Mixed User Community (MU-C to Planned Mixed Use (PMU). II. BACKGROUND In 1992, the City purchased the property at 301 77th Street West, along with the property that is currently occupied by the Candlewood Hotel. In 1998, the City sold a portion of the property for construction of the Hotel and sold the remaining 1.13 acres to the Housing and Redevelopment Authority (HRA). The HRA and the Candlewood Hotel negotiated a cross-access agreement that would allow ingress and egress to the Hotel through the drive aisle on the HRA parcel. It has been determined that the existing entrance/exit drive aisle cannot be moved to the east because that would result in left turners stacking on the railroad tracks and that it cannot be moved further east because of the placement of the Candlewood Hotel structure. The cross access agreement also allowed both the Candlewood Hotel and the future user of the vacant lot to utilize up to 25 parking spaces on one- another's property in an effort to promote shared parking. 062612 - 301 77th St W- 1st Reading RZN Since 1998, the HRA-owned portion of the site has remained vacant. In 2002, staff requested reassurance from the HRA that the desired use of the site was for a restaurant, or in special circumstances, a Richfield business that is being displaced due to redevelopment. The HRA agreed that this was still their intent. In 2009, Accessible Space Inc. (ASI) and Twin City Christian Homes (TCCH) proposed the development of an accessible, affordable 51-unit housing project for low-income seniors at this site. The City Council approved both Comprehensive Plan and Zoning Amendments related to this request; however funding for the project fell through and the project did not move forward. Richfield Bloomington Honda (RBH) is interested in expanding their dealership in Richfield. In order to do so, RBH has proposed to purchase land currently owned by LaMettry Properties LLC (LaMettry) and partially occupied by LaMettry Collision. LaMettry is willing to sell provided that a new location for their business can be found within the immediate area. On June 18th the HRA granted LaMettry permission to submit an application for the redevelopment of the property at 301 77th Street West. The actual sale of the property will be considered in July and this permission does not obligate the HRA to sell the land. III. BASIS OF RECOMMENDATION A. POLICY • In 2005 the City of Richfield completed a corridor study for the properties on 1-494 between Cedar Avenue and I-35W. The final I- 494 Plan (Plan) envisioned the area as a complete community that is compact, walkable and transit-friendly. In order to achieve this, the plan recommends areas of higher density residential and commercial development to be interspersed throughout the corridor, allowing for a mutually beneficial relationship. • The property at 301 77th Street West was initially designated as Regional Commercial/Office in the Comprehensive Plan, but was re- guided for High-Density Residential use when the ASI residential project was proposed. • This site is in a transitional area between an area that is guided for commercial use and one that is guided for residential use. Either a commercial or a residential designation could be appropriate for the site. The more appropriate question is how any particular use will impact adjacent properties. The impact on current users and on potential redevelopment in the area should be taken into consideration. • A public hearing to consider the rezoning, Comprehensive Plan amendment and Planned Unit Development proposal was held before the Planning Commission on June 25, 2012. • A second reading of the proposed rezoning and consideration of the related Comprehensive Plan amendment and Planned Unit Development proposal is scheduled for Council consideration on July 10, 2012. B. CRITICAL TIMING ISSUES • N/A C. FINANCIAL • The required application processing fee has been paid. D. LEGAL • 60-DAY RULE: The 60-day clock 'started' when a complete application was received on May 14, 2012. A decision is required by July 13, 2012 OR the Council must notify the applicant that it is extending the deadline (up to a maximum of 60 additional days or 120 days total) for issuing a decision. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • None V. ATTACHMENTS • Proposed site plan • Planning & Zoning maps VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representative(s) of LaMettry Properties LLC 5F - PROJECT NUMBER. 0 p� 0 = ! I L4METTRYS AUTO BODY 2016 �� 11�/_L11�� I II pp I •- Il 30 h y- ) � - City of Richfield o=a los o " ' Hennepin County, Minnesota "111\1"F- 1 / 1F- Ft el /1 cs�>aa�'� 1 °. ri� °ammaaemaeffimeaa®.O44..CI ma I /-. y L1.1 L_J -2o - L-J NM In e i f° J SITE DATA: a o zoning U- (Mixed Use Community) sp =a- -a� � = s==a=�__ -- Current onn sa ommu y f -'. a rr 4-ate--:-, ♦\ %�"' - Cu t z g M C ed nit - -�._; 1 __� ■ ■ �_ I 1 -- (:i ce • s Ng i- \♦/ ^- .:.-.4 e .1 , 1 , , 1 , ,.r I _ / 1 s 4 4 Proposed zoning No Change e v a m v P e e m,4>+ _a o o b-�m a .r-s- s>.a,�>.f P Q a m ql,-3. 9-- - !` ° = J q If `�" L 1 J 4 p v SQ. FT.± ACRES S <4 4 " 9. ° 44 ° 4a 4 b , y.. .4. a-a9 4 4 4 °c', s 4*4 4 , <q 'a4 • 4 4< s ° % N 4 a` -e ° 4 4 ,. o� , E -• 4 4� Tot&Site Area 49°187 1.129 r - ,•• ,_. G'4 •` ,.4 a -a \4 • 5 , a • 4 G ° G' 4 a4'a 4 • GGa 4 , a 4.;• 4 4 4 a� SaG _� ♦ .\ "q1. `a G4 .. Right-of-Way Area v 0 0 W rn iT 4<< ;ST Y.' a Sj . ''S `5T° - ST c << 4 4 4 4 .. - ' 4• 4� a I `♦/ 4 Net Area a 49.187 1.129 . i o•• ` 4 i .4, ti 'a • °4 °' ,sr,; < t< ST, "<, $T-, • `SOT--4..4 4*T. - F' --' �`--a o V.4 4,. - 4 4 •44 •4 4 , - a G - 44 4 4 a ` • .4 k, .4 4 a <` + ti,T , - 9 ad `G + q° q 4 Not impervious Surface 39.325 0.90 80.07 p,•4 'M. 'Ga9 4. 0. .,•. , '4 $ a 4a < . .... I 49 IP�/ � 49 4 4 4 ` 4 .4, 4 6 9 '4-'< g5§ r U °a.4. , 9 ' 4'e 4 < . , °+ n •4 • � G'�4 I$ v (Total Impervious Surface 39,458) a.a. 4 'a '-• ° �4G a $ ° l4, 4 4 ; 1--'^� • ° 4a ng - ' .IG< ` (Encroaching Impervious Surface 132) 0 7 @,o" e ma° . e°a 1�-4 c a o , a 1 'Ti 4-�- _a: - ^ • 'I 4 4 a .- - Proposed Parking Spaces = 34 b ..�s z h.,`` r>r>-,-J 1 - •,a` • •;.4 4< !15:°T: N_ a 'a( Stalls 2) u$a a s; q , SETBACK REQUIREMENTS: n1.a d tigl a . a - q b %•�4 , q• x 4 p 4 _ 4` Ev.,° A' G' G'" K 44' ' ,,$'. -`° 4 a °d " a 9 4 `° -c Setbacks to be determined at the time of plan submission. 6T b a i .4 4 G a 4a 4 a a 4. fa 44 .,G 44 •4 M1. • Q' 4 4 4.. 4 ` 4 4C B ,. 4 • 4 a4 4 4< A< 44 <<44.<.4-q.a O da ' < - !4 •�4' 4, S4" R +. ` ' ' 4a .044< 4< < "�4I4 t`tI �_ I4 .<," �4 • 4 4 q •le* a •G • Si$ < - •°,4 4, .. .as t 4 ?4.,.G, ,W 4.4 , • - '9°4" 44 • 4` G tl a a4 4 ° G O4 • 4. <t 4 • 'pY WIHW$ -"wTmG$" Meat m < G }, • 4 4• •• . a• 4 4 4 4 a '4' • 4 4 < 4' i G F:_+L =as G J r I 4 ,y :__ CQQ`? "4 - . • wrsas. !• n" G r q , - `-5 1 o • a, , - 4 � � M Y 1 I F 3 1 f 6• L$�._ - a °' c 305.00 N89°53'29°E d ,4 44 54871 G SI E",LK "4' a _ 4 - =a 4 ,, .4 -4=4 $n-g• { raps 6 o o� Denotes 57 n ��-_ . : .m e w .' $ t -$ �tit3 �° J e Open Space .f=�'s U �\ �® 4 Bicycle o - Requirement __ �\ Denote II Bike Rack 1I w of 2,460 sq.ft. _ Pervious i i `, t• .50 a ( $...ma g °i k%tliR 1. \ Pavers s Denote r-.`,° + 1 I il 1 '- r, _ -_ __% ,1 1 Pervious ,•a\._, .--2.3 = Ili -1 -.an' f.-__ • -,-�`- -ez7e♦srn- D 2•Sign- ; Pavers ;-,4 • _ If i l w SITE- k rn �� J One Way _ / - _ a� 3 N rn m Only ° _ w n ■, 9.0 9.0 `; J �1, 1: . . 2.3 - 9.0 / \, / 1 132.0 � L , i Ifi I o (T1.•) III" r ZE{l h E '(a wwvtI 61.+09 41 i -4- vj MI (.1: r.:: 'II SAM 1 . - ftt 0 - 9-D ■ 905R9q I+J 'I O �� ll r o % (TYP) / 24.0 , wmn9 i 6a 9 M .1 ._; d Pr op/ k = = o CATION = "��"°'6t °G R 4>bttr r g l -°� d t d Shipp/1v r opse A Oho a p Scale '�' -- 4,,,,..t....4 •'` ,-, `. 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F o C Cl) c IA3 IT W 0 O c m m m "...4 y I 0 M —I = m m m Co Co Co = rn 0 C7 CD CD a D * m (� m 3 N 55 Q m o - -' c m CD Io z C 1 v w m N C C Na), pCO N O o, to A y o PILLSBURY AVENUE _ m y W O 1 V ? 0 I- N O C CD I N O_ N 3 Q X AGENDA SECTION: NEW BUSINESS AGENDA ITEM# 7 REPORT# 110 mad" STAFF REPORT RICHFIELD CITY COUNCIL MEETING JUNE 26, 2Q12 REPORT PREPARED BY: CORRINE HEINE, CITY ATTORNEY NAME,TITLE DEPARTMENT DIRECTOR PEI / REVIEW: Alt / i / `, SIGNA _'RE REVIEWED BY CITY 4 MANAGER: • ��ICj.a ITEM FOR COUNCIL of CONSIDERATION:land sale Consideration of request for reconsideration . I. RECOMMENDED ACTION: By motion: Either (1) Deny the request for reconsideration, for the reasons stated in the staff report or, in the alternative; (2) move to reconsider the Council's June 12, 2012 actions regarding the Purchase Agreement and first reading of an ordinance related to the sale of Parcels C-1 and C-2, and schedule those matters for the July 10, 2012 Council meeting. II. BACKGROUND On May 8, 2012 Richfield Properties Limited I, Limited Partnership (Ron Clark) submitted a Purchase Agreement for the purchase of the northerly portion of 7641 Pleasant Avenue (referenced as Parcel C-1) and a small City-owned property in the northwest corner of the same block (Parcel C-2). On June 12, 2012, the City Council rejected (vote 4 to 1) Ron Clark's offer to purchase the two parcels. In a letter sent by his attorney (attached), James Susag, dated June 15, 2012 Mr. Clark requested that the City Council reconsider its decision. :. 062612—Reconsideration of Land Sale_Pillsbury Commons.doc The City Council is permitted to reconsider prior decisions in most circumstances. If the Council wishes to reconsider the matter, that can be accomplished by the approval of a motion to reconsider. Under the Sturgis Code of Conduct, any member of the Council may make that motion; the moving Council member is not required to have voted on the prevailing side of the prior decision. The Council might reconsider a prior decision if new facts or policy considerations have come to light so that the Council believes that its prior decision requires further discussion or possible reversal. Ron Clark has asserted several bases for his request, which are listed below, followed by the City Attorney's comments: • Clark's Assertion: By rejecting the offers to purchase, the City Council has rejected the land use applications without following the process required by the City Zoning Ordinance. City Attorney Response: The procedures in the City's Zoning.Ordinance do not apply to the sale of land. The City followed the required procedure under its City Charter for the proposed sale of land. • Clark's Assertion: The City violated the Preliminary Agreement between the HRA and Ron Clark by rejecting the offer to purchase the properties. City Attorney Response: The City was not a party to the Preliminary Agreement and cannot breach an agreement to which it was not a party. To the contrary, R.E.C, Inc. and the HRA entered into a Right of Entry and Standstill Agreement with the City, dated May 16, 2011, which allowed R.E.C., Inc. to enter the City property to perform land surveys and geotechnical testing. That agreement explicitly provided: "Nothing herein shall be construed: (i) as obligating the City to subsequently agree to sell the City Property to the HRA or Ron Clark; (ii) as agreeing to any of the terms of any sale; or (iii) as agreeing to any potential use or development of the City Property in the a cnt of sale." • Clark's Assertion.. The offer is consistent with the Comprehensive Plan, and the City is therefore mandated to approve the offers. City Attorney Response: The Comprehensive Plan does include goals and policies about promoting affordable housing in the City, but the Comprehensive Plan does not address desirable densities of affordable housing or the appropriate mix of affordable and market rate housing within developments or neighborhoods. Moreover, the City Council is not under any legal mandate to sell City-owned property simply because a proposed use is consistent with the Comprehensive Plan. The Council identified several reasons for not selling the property that did not relate to land use. • Clark's Assertion: Ron Clark has the right to purchase and develop the C-3 parcel alone, and that stand-alone development may make development of C-I and C-2 more difficult. City Attorney Response: This is not a legal issue. • Clark's Assertion: The Council's decision not to sell will send a negative message to developers. City Attorney Response: This is not a legal issue. • Clark's Assertion: The Council violated rules under Sturgis by allowing residents to speak at open forum in opposition to the Pillsbury Commons development. City Attorney Response: The City allows persons to speak at open forum on•items that are not on the agenda. The only item on the agenda was the land sale. The proposed rezoning and final development _ r plan were not on the agenda, and the speakers were within the rules by speaking on those items. In any event, the Council has the ability to modify its rules, and unanimously agreed to allow the citizens to speak on the different topics. Therefore, the Council did not violate the rules but strictly adhered to the rules. III. BASIS OF RECOMMENDATION A. POLICY • The City Council holds public land as a steward of the public, and its decision to hold or sell public land should be made in the public interest. • The City Council may reconsider a previous decision not to sell land. B. CRITICAL TIMING ISSUES • If the Council desires to reconsider the sale of the properties, it will be necessary to schedule a first and second reading on the proposed sales. C. FINANCIAL • The financial considerations are the same as those before the Council on June 12, 2012. D. LEGAL • The City Council has discretion to refuse reconsideration or to reconsider its previous decision. • In order to reconsider its prior decision, the Council must approve a motion to reconsider. Any Council member may make the motion; the motion is iaot required to be made by a member from the prevailing side. • The City Attorney prepared this staff report and has addressed other legal issues in the background. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATIONS) • Alternative 1: By motion: refuse Ron Clark's request for reconsideration, for the reasons stated in the;staff report. • Alternative 2: By motion: Move to reconsider the Council's prior actions related to the Purchase Agreement and first reading of the ordinance for the sale of Parcels C-1 and C-2,And schedule those items for Council action at the July 10 meeting of the City Council. V. ATTACHMENTS • June 15, 2012 letter from James Susag • Map of parcel VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representative(s) of Ron Clark Construction and Design • Larkin lloffinari Larkin Hoffman Daly&Lindgren Ltd. ATTORNEYS 1500 Wells Fargo Plaza 7900 Xerxes Avenue South Minneapolis,Minnesota 55431-1194 GENERAL. 952-835-3800 FAX 951896-3333 we e: wwwlarkinhofftnan.corn June 15,2012 Mayor Debbie Goettel Sent Via Email and U.S.Mall City Councilniembers Pat Elliott,Tom Fitzhenry, Suzanne Sandahl,and Fred Wroge City of Richfield 6700 Portland Ave South Richfield,MN 55423 Chairperson.Suzanne Sandahl Housing and Redevelopment Authority Members Steve Quam, Doris Rubenstein, Mayor Debbie Goettel and David Gepner City of Richfield 6700 Portland Ave South Richfield,MN 55423 Re: Offer to purchase the two parcels described as C-1 and C-2 and intended for development by Ron Clark Design and Construction("Ron Clark") as Pillsbury Commons/Offer to Purchase the parcel described as H-1 from the HRA.and intended for development by Ron Clark as Pillsbury Commons Honorable Mayor,Councilmembers and Commissioners: The City Council's decision to reject the offer by Ron Clark's related entity, Richfield Properties I,Limited Partnership,to purchase the two parcels described as Parcels C-1 and C-21 and intended for development as Pillsbury Commons causes Ron Clark significant disappointment and is completely at odds with the past decisions of both the City Council and Housing and Redevelopment Authority("HRA"). Ron Clark requests that the City Council reconsider its decision,place this reconsideration request on the City Council meeting agenda at its next scheduled meeting on June 26,2012, approve Ron Clark's offers to purchase Parcels C-1 and C-2,and permit a public discourse on the Pillsbury Commons project. As the City Council is well aware,Ron Clark's April 30,2012 land use application for rezoning, PUT)approval,and preliminary plat approval to develop Pillsbury Commons requires the consent of the property owner. The City's resolution to reject the offers,therefore,rejects the land use applications without first allowing for the deliberate and thorough input and I A color map identifying and labeling the parcels as identified herein is attached as an exhibit to this letter. ri Mayor Debbie Goettel and City Councilmembers June 15,2012 Page 2 consideration process set forth in tlie City's Zoning Ordinance. Moreover,the City's resolution violates its obligations pursuant to the agreements it has already entered with Ron Clark and is unsupportable.2 Just one year ago,the HRA.entered a preliminary agreement with Ron Clark concerning all of the City-and MA-owned land subject to the Pillsbury Commons proposal. The preliminary agreement acknowledged that Ron Clark"will expend substantial time and effort,and incur substantial expense in pursuing the"Pillsbury Commons development See Preliminary Agreement, p. 1. It further specified that Ron Clark"is willing to undertake the activities described in this Agreement only with the reasonable assurance from the HRA that it will support and cooperate with CLARK in its efforts." Id The BRA agreed with Ron Clark that ". .the parties will attempt in good faith to negotiate the terms of a contract for private development(the"Contract")which will provide for the acquisition of the necessary property." Id., p. 2, § 1(c). The HRA then bound itself to"cooperate with CLARK in CLARK's undertakings"and to"use its best efforts""to accomplish the activities described in paragraph 1 above,"including Ron Clark's efforts to acquire the property. Id., p. 3, § 3. The City and the HRA3 violated the preliminary agreement when the City Council decided to reject Ron Clark's offer. The HRA consists of five members,two of whom acted on June 12, • 2012 as part of the City Council in its decision to reject Ron Clark's offer. One of the five HRA members voted with the City Council to reject Ron Clark's offer. "Best efforts"requires something more than nominal efforts. Walser Auto Sales, Inc. v. City of Richfield, 635 N.W2d 391,401 (Minn.App.2001)affirmed 644 N.W.2d 42:5 (Minn. 2002). "Best' is defined as "surpassing all others in excellence, achievement, or quality:most excellent" Id (quoting The American Heritage Dictionary 178(3rd ed. 1996))(holding that"best efforts"required more than City's nominal efforts). 2 One,if not the primary,reason provided by the City Council in rejecting the land sale, is the claimed lack of"a formal policy(or even informal consensus)on appropriate mix of affordable housing for the City of Richfield." How can the City and HRA have entered into the preliminary agreement with Ron Clark in,May 2011,provided a unanimous resolution supporting 70 units of 100%affordable housing on the C-3 parcel alone in June 2011,and then entered into a binding option agreement extending into 2013 for the C-3 parcel (again in June 2011)without having an understanding of the City's affordable housing goals? The City Council's rejection of the C-1 and C-2 land sales is entirely inconsistent with these three very considered and public actions taken only one year ago. 3 The has not yet held its public hearing,scheduled for June 18,2012,on the sale of the HRA property. But,from discussions with City staff,it appears that the recommendation to the HRA.will be to reject the sale,because of the City Council's refusal to sell C-I and C-2 to Ron Clark. Conditioning the MA's decision-making on that of the City Council is in violation of the requirements of the preliminary agreement. Mayor Debbie Goettel and City Councilmembers. June_15,2012 Page 3 Ron Clark's offer is consistent with the appraised value for Parcels C-1.and C-2,as the report of City staff,prepared by the City attorney,indicated. Furthermore,Ron Clark's offer to purchase the property and its plan to develop Pillsbury Commons is consistent with the City's formal policy,endorsed by the Metropolitan Council, and adopted just three years ago in the Comprehensive Plan. The Comprehensive Plan sets forth the City's formal goals and policies• for affordable housing,and its plan to rely on the private sector for identification of the appropriate product mix: Goal:. "Ensure sufficient diversity in the housing stock to provide fora range of household sizes,income levels and needs." Policies.: "Promote the development,management,and maintenance of affordable housing in the City through assistance programs;alternative funding sources and the creation of partnership s whose mission is to promote low to moderate income housing." Implementation: "As a fully-developed community, any significant expansion of the housing supply will involve redevelopment. Significant redevelopment is primarily targeted . . . along Interstate 494. . . . Redevelopment of these areas will rely on the private market so both the timing and the product mix is unknown." Comprehensive Plan,pp. 5-10,5-11 (emphasis added). The City has not amended the 2009 Comprehensive Plan to change these goals and policies. They are,therefore,the legal guide governing the City's decisions. Minn. Stat. § 462.355. These duly and recently enacted policies mandate the propriety of Ron Clark's offer to purchase the C-1 and C-2 parcels for use in the Pillsbury Commons development. The current Pillsbury Commons proposal seeks to develop a.mixture of both apartments and tovwnhomes. That plan was formulated using the expertise of Ron Clark's team members to develop a proposal that is consistent with the Comprehensive Plan,responsive to City and resident concerns,and rests. upon their extensive knowledge of the market and feasibility. No one has ever identified any evidence-based problems with the mixture of the types of units to be built at Pillsbury Commons. No one has ever identified any evidence suggesting that waiting to develop the property will cause market-rate units to become feasible despite the plethora of evidence Ron Clark has acquired and provided showing that market-rate units are not feasible on this particular site The City chose,in its Comprehensive Plan:controlling its decisions into the foreseeable future,to rely on the private market to identify the appropriate product mix:. Ron Clark has done so and the City cannot reasonably now claim either that it requires additional policies regarding the product mix or that the Pillsbury Commons proposal is inconsistent with the Comprehensive Plan. - Mayor Debbie Goettel and City Councilmembers June 15,201.2 Page 4 Furthermore,as it stands,Ron Clark has a binding option agreement on the C-3 parcel,the largest parcel of the property subject to the current Pillsbury Commons proposal. On that site, Ron Clark can develop,as a matter of right,a 40-unit building under the currently permitted MR-3 zoning classification allowing 24 units per acre. If such a building is developed,the remainder of the site-where the majority of the contaminants are present and require significant and costly remediation-will be difficult to develop for any use,much less a market-rate development given that the site studies already prove that market-rate units will not be successful at this location. Given these facts,waiting to sell the parcels will not cause an appreciation in their value and,instead,a delay will cause their value to decrease. The existence of the binding option agreement that the City agreed to only one year ago also points to the inconsistency of the City Council's decision not to sell Parcels C-1 and C-2 to Ron Clark. Simply put,given Ron Clark's option to purchase and then develop C-3,the issue is not whether a development will occur at the site. Rather,the question,is what the size and scope of that project will be,and whether the City will reap any benefits from a reduced-scale project. Wanting to wait for the property value to appreciate on the HRA property and Parcels C-1 and C-2 or until other housing models are more feasible may sound like laudable goals in the abstract,but such goals will not materialize if C-3 is developed,and the other parcels remain unsold and undeveloped. Any project built on C-3 will dictate the land use options for the remaining parcels. It will also impact the value of such properties,and the price the City will obtain if the parcels are sold. Any development utilizing only the H-I,C-1 and C-2 parcels will not be able to obtain the economies of scale that a larger project will obtain,in terms of environmental remediation,number of units and the amenities and features. Simply put,given the relatively small size of the parcels,even when combined,projects utilizing the remaining parcels will necessarily be limited in size and scope, and will likely still need assistance such as TIF financing when developed. The City's decision to reject Ron Clark's offer to purchase the properties also sends a strong message to developers. The City identified a goal,as mandated by Metropolitan Council,of adding 765 new affordable housing units before 2020. Comprehensive Plan,p. 5-9. The City acknowledged that it must"rely on the private market"to meet this goal. Id.,p. 5-11. After Ron Clark indicated that it required assurances from the City before investing substantial amounts into the Pillsbury Commons proposal,the City has provided Ron Clark with numerous such assurances Beginning in May 2009 and even as recently as June 2011,the City has assured Ron Clark that it wants high-density workforce housing at this location. The City Council considered.Resolution No. 10520 Consenting To The Process For The Creation Of A Housing Tax Increment Finance District In Support Of The Proposed Pillsbury Commons Multifamily Housing Project on June 14,2011. This resolution noted the use: WHEREAS, a proposal have been made by R.E.C., Inc. d/b/a Ron Clark Construction and Design(the`Developer")to construct TO units of multifamily housing at 211 West 76th Street near Pillsbury Avenue in the City of Richfield, which project is to be Mayor Debbie Goettel and - City Councilmembers June 15,2012 Page 5 known as Pillsbury Commons and 100%of the units will be affordable to persons with incomes at 60%of the area median income. Resolution Nor 10520(emphasis added).. The City Council, including all of the current councilmembers,voted unanimously to approve the resolution. Now,after Ron Clark has devoted years of time and energy,and invested hundreds of thousands of dollars into developing a plan and revising it over and over again to respond to feedback from the City and from residents,the City has suddenly reversed course. Developers clearly cannot rely on City Council resolutions,much less unanimously-approved resolutions. Without an ability to rely on the City Council,developers will not be inclined to assist the City in satisfying its policies and goals for affordable housing. The City will be,hard-pressed to meet those:goals on its own. Lastly, after receiving backlash from City residents for exercising its right to discuss items with the City's elected officials,Ron Clark must express its dismay at the Mayor's comments and conduct at the June 12,2012 meeting. The Mayor thanked the residents for hosting her visits to their homes to discuss the Pillsbury Commons proposal 4 On information and belief,the Mayor and City Council members also violated the Sturgis Standard Code of Parliamentary Procedure, adopted as the City's rules of order in City Ordinance 205.13,subd. 3,by permitting residents to testify in opposition to the Pillsbury Commons proposal during the open forum portion of the meeting despite that the sale was on the agenda and was not scheduled for a public hearings Ron Clark seriously questions impartiality when these sorts of events occur. Ron Clark is presently evaluating the financial feasibility of developing a 40-unit building on the C-3 parcel and a second 18-unit building on the HRA property because we believe the HRA has an obligation to sell the H-1 parcel to Ron Clark. Such a development may eliminate the townhome units and require a reduction of the amenities presently planned for Pillsbury Commons to be economically feasible and,therefore,much work remains to be completed on such a revised proposal.. Therefore,Ron Clark plans to continue advancing the current Pillsbury Commons proposal through the City's decision-making processes. 4 This is in contrast to the numerous negative comments(as chronicled in the Richfield Sun and at City Council and Planning Commission meetings)that were leveled at Ron Clark(a Richfield property owner)for exercising free speech rights to contact members of the City Council,HRA and Planning Commission to discuss the project. 5 This is in addition to the Planning Commission restricting Ron Clark's presentation before it at its May 29,2012 meeting to 20 minutes,in violation of its own bylaws. Those bylaws do limit the length of collective and individual public comments, but only after the public hearing is opened,which according to the bylaws is only after the applicant is allowed to present. Two members of the public questioned Ron Clark's presentation as rushed and hurried(it was). The press covering the hearing called it"breezy." Mayor DebtiefiOetteLatull 3— (0 .City Counoihnembors June .15,2412 Paged In thontoantiroa,iton Clark:requests thatthe City Council reconskler its.decision to'reject Ron.Clark's offers to purchase::Parcels Cl and C-2 at its next mooning on June 26,2012. „ .. .,,,,P°6'2 ...: ,.,,, :_. 4t,'";,..,',.- ,:, :..:- .,.,,g4-',.=7!;'!'''''''''''. :-,/. --, ,. -:...i, , 4, - - kv Pr.;.... .ilr / Larkin,-: ..;kri-l-baiy 4.Lindgren Ltd. Direct:Dial: 952-394-1$12 Direct Fax: 952-84247457 Email: jausagaluidalwffitanzoin . -cc: CorrincA.Being;.Esq. Julie Ecklingion,:Fag! 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' ir 1-rr#0.1104.1.,.. -,-,, - -.2.- _litalik,-. -;--. • - " I. 1 i , -7-Aler. ^A ".1, ■1.". ,-- ..- r - I. , i 062612—Reconsideration of Land Sale_Pillsbury Commons.doc • AGENDA SECTION: PUB.HEARING AGENDA ITEM# 8 REPORT# 111 STAFF REPORT RICHFIELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: CORRINE HEINE, CITY ATTORNEY NAME,TITLE DEPARTMENT DIRECTOR �V / REVIEW: -111W /4/9/A.011 . REVIEWED BY CITY (.� i N MANAGER: ITEM FOR COUNCIL CONSIDERATION: Conduct a public hearing and consider a Resolution for a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and adopting a Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District (Pillsbury Commons). I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: Adopt a Resolution Denying Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and rejecting a Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District (Pillsbury Commons). II. BACKGROUND The Richfield Properties I, Limited Partnership and Ron Clark Construction and Design along with Connelly Development LLC (which is a wholly-owned entity of Ron Clark) (Developer) have proposed to acquire and redevelop the former north half of the Public Works garage site located at 7641 Pleasant Avenue, along with the adjacent parcel at 211 West 76th Street (former Gleason Mortuary parcel) and an additional City-owned parcel at the corner of 76th Street and the railroad tracks. The proposed development includes a 70 unit affordable housing development that includes a 52-unit apartment building and 18 townhomes. 062612 - PH Pillsbury Commons TIF plan.doc The Developer has submitted a request for tax increment assistance for the proposed development in the amount of$530,082 (see attached letter), and on March 27, 2012 the City Council adopted a Resolution calling for a public hearing regarding the Establishment of a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area; and the proposed establishment of the Pillsbury Commons Tax Increment Financing (TIF) District relating to the proposed development. The Housing and Redevelopment Authority's (HRA) financial consultants, Ehlers and Associates, have drafted the attached Modification to Richfield's Redevelopment Plan for the Establishment of the 2012-1 Housing TIF District. The costs of preparing this document were borne by the Developer; however, all work was directed by the HRA staff in the best interests of the HRA. This document identifies the boundaries of the proposed TIF District, states the legal authority for establishment of such a District and makes findings associated with this proposed District, including a finding that this project could not occur"But-for" the use of TIF. As drafted, the TIF District includes the City-owned parcels and the HRA-owned parcel described above. At its June 18, 2012 meeting, the HRA denied the TIF Plan modification and denied approval of the proposed Development Agreement. The HRA also rejected the Developer's offer to purchase HRA property for the development. The City Council previously refused the Developer's offers to purchase two City parcels for the development. As a result, the Developer lacks the necessary property to complete the housing development as currently contemplated in the TIF Plan. Staff recommends denying the Modification of the Redevelopment Plan and the TIF Plan because the development contemplated in the TIF Plan is no longer feasible. III. BASIS OF RECOMMENDATION A. POLICY • The Developer's award of Low Income Housing Tax Credits from the Minnesota Housing Finance Agency (MHFA) is contingent upon their receipt of$531,082 in TIF as was indicated on Ron Clark's Tax Credit application. • The Developer has indicated, and the HRA's financial consultant has concurred, that it would not be feasible to develop the proposed affordable rental housing development without the assistance of Tax Increment Financing. B. CRITICAL TIMING ISSUES • None C. FINANCIAL 406452v1 CAH RC145-609 • Due to the estimated cost of the acquisition, site improvements and other redevelopment costs, the Developer has identified a need for public assistance. • The public assistance that the Developer has identified includes a $530,082 tax increment financing note from the HRA. • The HRA's financial analyst, Ehlers and Associates drafted the proposed TIF Plan. D. LEGAL • Ehlers and Associates drafted the proposed TIF Plan in cooperation with staff, the Developer and the Developer's legal counsel. • The proposed TIF plan modification cannot occur without HRA approval. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATIONS) • N/A V. ATTACHMENTS • Resolution • Developer's Letter requesting TIF assistance • 2012-1 Housing Tax Increment Financing District Plan (Pillsbury Commons) VI. PRINCIPAL PARTIES EXPECTED AT MEETING • HRA Financial Analyst (Ehlers and Associates) • City Legal Counsel • Representative(s) of Ron Clark Construction and Design 406452v1 CAH RC145-609 RESOLUTION NO. RESOLUTION DENYING APPROVAL OF A MODIFICATION TO THE REDEVELOPMENT PLAN FOR RICHFIELD REDEVELOPMENT PROJECT AREA AND ESTABLISHMENT OF 2012-1 HOUSING TAX INCREMENT FINANCING DISTRICT (PILLSBURY COMMONS) AND A TAX INCREMENT FINANCING PLAN THEREFOR WHEREAS, Richfield Properties I, Limited Partnership, a Minnesota limited partnership (the "Developer") has proposed to acquire and redevelop three parcels of land owned by the City of Richfield (the "City") and one parcel of land owned by the Housing and Redevelopment Authority in and for the City of Richfield (the "Authority") into a 70-unit affordable housing development that includes a 52-unit apartment building and 18 townhomes; and WHEREAS, on June 12, 2012, the City Council of the City rejected the Developer's offer to purchase two of its parcels of land proposed to be redeveloped; and WHEREAS, on June 18, 2012, the Board of the Authority rejected the Developer's request to purchase the parcel owned by the Authority and proposed to be redeveloped; and WHEREAS, it has been proposed that the City adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for Richfield Redevelopment Project Area (the "Project Area") and establish the 2012-1 Housing Tax Increment Financing District (Pillsbury Commons) (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor; all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act"); and WHEREAS, on June 18, 2012, the Board of the Authority denied approval of the Redevelopment Plan Modification and the TIF Plan; and WHEREAS, on the date hereof, the City Council of the City held a duly noticed public hearing regarding the adoption of the TIF Plan pursuant to Minnesota Statutes, Section 469.175, subd. 3; and NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Richfield, Minnesota as follows: 1. Approval of the Redevelopment Plan Modification and the TIF Plan are hereby denied because (i) the Authority has previously denied approval of the Modification to the Redevelopment Plan and the TIF Plan; and (ii) the Developer lacks the necessary property to complete the housing development as currently contemplated in the TIF Plan, and therefore, the development contemplated in the TIF Plan is no longer feasible. Adopted by the City Council of the City of Richfield, Minnesota this 26th day of June, 2012. Debbie Goettel, Mayor 406452v1 CAH RC145-609 ATTEST: Nancy Gibbs, City Clerk 406452v1 CAH RC145-609 S -5 n Clark ERaConstruction &Design 7500 West 76th Street Edina,MN 55439 (952)947,3000 fox(95)947-3030 Monday,April 30,2012 Mr.Steven L.Deg Executive Director City of Richfield Housing&Redevelopment Authority 6700 Portland Ave South Richfield, MN 66426 Re: Pillsbury Commons Subject: Request for Tax Increment Financing(Exhibit D) Dear Mr. Devich: From our initial financial modeling that was done prior to submitting our application to Minnesota Housing Finance Agency(MHFA)it was determined that the cost of the project would exceed available funding,e.g.there would be afinanclal gap. Because of this gap, prior to making our application to MI WA we came to the city and requested Tax Increment FinancIng(TIF)10 make the project feasible. The TIF will be used to pay forte costs involved in the demolition, environmental clean-up of the site,site improvements, and other TIF eligible costs and will be needed to make the project financially feasible. To justify the-need for TIF we will support this request in the future with documentation that these are all TIF eligible costs. It is important to knew that we will incur and pay for those costs up front and then request reimbursement from "pay as you go TIP over an extended period of time. In this manner the reimbursement will be paid from the new,higher real estate taxes paid by our project,and not from other city sources. This letter is Intended to define the amount of TIF needed to make the project financlaliyfeastble and to request the city complete the process of approving the TIF district simultaneously with the Land USta-approval of our Project. Due to the lengthy time frame to get to this point in the development process,we think it would be helpful to give a brief "bulletpeint"history of the tax Increment financing element involved In our development:to date: • City Council meeting on 4112/11:the City Council was made aware of our intent to submit an application to Minnesota Housing Finance Agency(MHFA)for a 70-unit 100% affordable housing project on the former City Maintenance Facility property to be called "Pillsbury Commons".(This was also restated In an HRA memorandum dated 10/27/2011 to the City Council.) • City Council meeting on 6/14/11:the City Council approved Resolution 10620,The Resolution states that"the City wishes to support the Project and directs staff to work With the Developer to take steps necessary to create a tax increment financing district for the Project".The"Project"is described in the Resolution to be"70 units of multifamily housing"and"is to be known as Pillsbury Commons and 100%of the units will be affordable to persons with incomes at 80%of the area-median income".We submitted our application to MHFA immediately after receiving the City Council's Resolution to support TIF for our project. te, Liconsn 1220 &OM&- alki wwwllonClarkcom z000seaptent MA" iRonClark Construction &1)esign 7500 West 78th Soca Ed*1VIN 55439 (952)947,3000 fic.(952)947-3030 • In our epplicatIonto MHFA for financing for this project we used the approved city TIF Resolution as a key component of our application in order to demonstrate TIE support by the city Which awarded us additional points for a higher score against our competition. • On 1111712011 MI4F-A allocated federal tax credits to the Pillsbury Commons project through its competitive process A requirement of this approval is a pay as you go TIF note of$530.,082.00 from The-City. On February 21,2012 Ron Clark Construction-(POnnelly Development, LL.C)made formal applicatiOn to the city of Richfield for Our Pillsbury Commons project.Our project has remained Unchanged in its overall concept for 70 units of 100%affordable rental housing since our meeting on this concept back on 04/1212011 noted above. Based on the above noted City approved Resolution,our MHFA application included Tax Increment Financing(TIF)as an integral financial component for project KitoR TO_WINFA Application The original TIF amount used in our MHFA application for sources of funds for proof of development financial feasibility was$530,082.00,which was based on the original site plan exiting-oritoPiliSbury Ave. Attached please find otirProject Sources&Uses"showing the financial gap in our sources of funds necessary to pay for project costs.This continues to be theamount of our TIE request even though the-costs of the project have increased due the additional land area that will berequired to be purchased to accommodate the addition of 18 Townhomes(and-thus reducing the size.of the apartment building to 52 units)tospread the density of the project and more actively use the entire sitearea.This additional Land purchase•and Townhome costs will be funded with an additional Developer equity contribution.This will increase the Developer Equity required:for the project from the original amount of$437,581100 to the:current Developer Equity required of$1.,14spa.00(See attached Sources and Uses schedule) I.Tax Increment:FinancintReqtiested$530,082.00 Tax Benefits to the City Upon the closing of the land sale this fall,the area included in-the TIF District will come.back onto the tax rolls at the fair market value of the land-included in the district based on the Appraisal done by the city in 2011.The.current TIF analysis done by Ehlers for the City shows the.base taxes on the site will be about$3,900.00 per year. The estimated total property taxes produced over the 26 years by the project are.expected to be about;$2,000,000:00. We look forward to the upcoming City meetings to to be able to preseritand discuss the variations in our project and come up with the best solution for all Involved. soorely, Ronald E.;Clark CEO Ron,Clark.ConstencOonAVesfon Connelly Development,tie RECOne. 83% ( / ... ct Builtiorticense# URFA 1.220. wwwAnoaarkeom loos necipktot "'"4 S5 ).- - 'Q O C 'V ro I» U t1 .O O N •Z1 0 G) F- G X 0 0. L C 4� 'V .Q 8 �a 3 Q.C • H v 2 N o c CU '0 x • < CO'• O C a N- C ` t0 a w C W L O O to U• 0 V O B 0 ') t F a H tG ° c . c w O oa y- a `° a °e C E 2 io a0 • N co a LL .d w V C 3 co i7 Q) 'o W. 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C 0- . _;.; ,a. f :1-: o: I- F- sL�cf:.1) vi > 8=1 INNEN As of June 11, 2012 Draft for Public Hearing Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the Tax Increment Financing Plan for the establishment of the 2012-1 Housing Tax Increment Financing District (Pillsbury Commons) (a housing district) within the Richfield Redevelopment Project Area Richfield Housing and Redevelopment Authority City of Richfield Hennepin County State of Minnesota Public Hearing:June 26,2012 Adopted: 0 EHLERS Prepared by: EHLERS&ASSOCIATES, INC. 306 Drive, Roseville, 5651 697 8500 fx: 651697i855 .eh es inc com S -g Table of Contents (for reference purposes only) Section 1-Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area Foreword 1-1 Section 2-Tax Increment Financing Plan for the 2011-1 Housing Tax Increment Financing District Subsection 2-1. Foreword 2-1 Subsection 2-2. Statutory Authority 2-1 Subsection 2-3. Statement of Objectives 2-1 Subsection 2-4. Redevelopment Plan Overview 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired 2-2 Subsection 2-6. Classification of the District 2-2 Subsection 2-7. Duration and First Year of Tax Increment of the District 2-3 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements 2-4 Subsection 2-9. Sources of Revenue/Bonds to be Issued 2-5 Subsection 2-10. Uses of Funds 2-6 Subsection 2-11. Fiscal Disparities Election 2-6 Subsection 2-12. Business Subsidies 2-7 Subsection 2-13. County Road Costs 2-8 Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions 2-8 Subsection 2-15. Supporting Documentation 2-10 Subsection 2-16. Definition of Tax Increment Revenues 2-10 Subsection 2-17. Modifications to the District 2-10 Subsection 2-18. Administrative Expenses 2-11 Subsection 2-19. Limitation of Increment 2-12 Subsection 2-20. Use of Tax Increment 2-12 Subsection 2-21. Excess Increments 2-13 Subsection 2-22. Requirements for Agreements with the Developer 2-13 Subsection 2-23. Assessment Agreements 2-14 Subsection 2-24. Administration of the District 2-14 Subsection 2-25. Annual Disclosure Requirements 2-14 Subsection 2-26. Reasonable Expectations 2-14 Subsection 2-27. Other Limitations on the Use of Tax Increment 2-14 Subsection 2-28. Summary 2-15 Appendix A Project Description A-1 Appendix B Map of the Richfield Redevelopment Project Area and the District B-1 Appendix C Description of Property to be Included in the District C-1 Appendix D Estimated Cash Flow for the District D-1 Appendix E Housing Qualifications for the District E-1 Appendix F Findings for the District F-1 Appendix G Prior Improvements G-1 Section 1-Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area Foreword The following text represents a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Richfield Redevelopment Project Area. Generally, the substantive changes include the establishment of the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons). For further information,a review of the Redevelopment Plan for the Richfield Redevelopment Project Area, is recommended. It is available from the Community Development Director at the City of Richfield. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Richfield Redevelopment Project Area. Richfield Housing and Redevelopment Authority Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area 1-1 Section 2- Tax Increment Financing Plan for the 2011-1 Housing Tax Increment Financing District(Pillsbury Commons) Subsection 2-1. Foreword The Richfield Housing and Redevelopment Authority(the"HRA"),the City of Richfield(the"City"),staff and consultants have prepared the following information to expedite the establishment of the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons)(the"District"),a housing tax increment financing district, located in the Richfield Redevelopment Project Area. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end,the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("MS.'), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to 469.1799, inclusive, as amended(the "Tax Increment Financing Act" or"TIF Act"),to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan(the "TIF Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area. Subsection 2-3. Statement of Objectives The District currently consists of three parcels of land and adjacent and internal rights-of-way. The District is being created to facilitate the construction of a 70 unit affordable housing development in the City consisting of 52 units of affordable, multi-family rental apartments and 18 units of affordable, rental townhomes. Please see Appendix A for further District information. The HRA intends to enter into an agreement with Ron Clark as the developer. Development is expected to begin in 2012. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Richfield Redevelopment Project Area. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Richfield Redevelopment Project Area and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired-The HRA or City currently owns three parcels of property within the District. The remaining property located within the District may be acquired by the HRA or City and is further described in this TIF Plan. 2. Relocation- Relocation services, to the extent required by law, are available pursuant to MS., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements,the HRA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The HRA or City may perform or provide for some or all necessary acquisition,construction, relocation,demolition,and required utilities and public street work within the District. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The HRA currently owns one of the parcels,and the City currently owns two of the parcels to be included in the District. The HRA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the HRA or City only in order to accomplish one or more ofthe following:storm sewer improvements;provide land for needed public streets,utilities and facilities;carry out land acquisition,site improvements,clearance and/or development to accomplish the uses and objectives set forth in this plan. The HRA or City may acquire property by gift, dedication,condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District The HRA and City,in determining the need to create a tax increment financing district in accordance with MS.,Sections 469.174 to 469.1799 as amended,inclusive,find that the District to be established is a housing district pursuant to MS.,Section 469.174, Subd. 11 and M.S., Section 469.1761 as defined below: M.S., Section 469.174, Subd 11: "Housing district"means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing4ct of 1937, as amended, Title Vof the Housing Act of 1949, as amended, any other similar present or future federal,state, or municipal legislation, or the regulations promulgated under any of those acts, and that satisfies the requirements of M.S., Section 469.1761. Housing project mea ns a project, or portion of a project, that meets all the qualifications of a housing district under this subdivision, whether or not actually established as a housing district. M.S., Section 469.1761: Subd. 1. Requirement imposed. (a) In order for a tax increment financing district to qualify as a housing district: (1) the income limitations provided in this section must be satisfied;and (2) no more than 20 percent of the square footage of buildings that receive assistance from tax increments may consist of commercial, retail, or other nonresidential uses. (b) The requirements imposed by this section apply to property receiving assistance financed with tax increments, including interest reduction, land transfers at less than the Authority's cost of acquisition, utility service or connections, roads, parking facilities, or other subsidies. The provisions of this section do not apply to districts located within a targeted area as defined in Section 462C.02 Subd 9, clause(e). Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-2 3- 13 (c)For purposes of the requirements of paragraph (a), the authority may elect to treat an addition to an existing structure as a separate building if (1) construction of the addition begins more t han three years after construction of the existing structure was completed;and (2) for an addition that does not meet the requirements of paragraph(a), clause(2),if it is treated as a separate building, the addition was not contemplated by the tax increment financing plan which includes the existing structure. Subd. 2. Owner occupied housing. For owner occupied residential property, 95 percent of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 1430 of the Internal Revenue Code. Subd. 3. Rental property. For residential rental property, the property mu st satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. The requirements of this subdivisi on apply for the duration of the tax increment financing district. Subd. 4. Noncompliance; enforcement. Failure to comply with the requirements of this section is subject to M.S., Section 469.1771. In meeting the statutory criteria the HRA and City rely on the following facts and fmdings: • The District consists of three parcels. • The development will consist of 52 units of affordable,multi-family rental apartments and 18 units of affordable,rental townhomes. • A minimum of 40% of the units will be occupied by person with incomes less than 60% of median income,per Minnesota Statutes.However, it is anticipated that 100%of the units will be affordable. Pursuant to M.S., Section 469.176, Subd. 7,the District does not contain any parcel or part of a parcel that qualified under the provisions of M.S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration and First Year of Tax Increment of the District Pursuant to M.S., Section 469.175,Subd. 1, and Section 469.176, Subd. 1,the duration and first year of tax increment of the District must be indicated within the TIF Plan. Pursuant to M.S.,Section 469.176, Subd l b., the duration of the District will be 25 years after receipt of the first increment by the BRA or City(a total of 26 years of tax increment). The HRA or City elects to receive the first tax increment in 2015,which is no later than four years following the year of approval of the District. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes,would terminate after 2040,or when the TIF Plan is satisfied. The HRA or City reserves the right to decertify the District prior to the legally required date. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-3 Subsection 2-8. Original Tax Capacity,Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to M.S.,Section 469.174,Subd. 7 and 1121.,Section 469.177,Subd.1,the Original Net Tax Capacity (ONTC)as certified for the District will be based on the market values placed on the property by the assessor in 2011 for taxes payable 2012. Pursuant to M.S.,Section 469.177, Subds. 1 and2,the County Auditor shall certify in each year(beginning in the payment year 2015)the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments,negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates;or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity(NTC)value of the District declines below the ONTC,no value will be captured and no tax increment will be payable to the HRA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2012, assuming the request for certification is made before June 30,2012. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4 , the estimated Captured Net Tax Capacity(CTC)of the District,within the Richfield Redevelopment Project Area,upon completion of the projects within the District,will annually approximate tax increment revenues as shown in the table below. The HRA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures,beginning in the tax year payable 2015. The Project Tax Capacity (PTC) listed is an estimate of the captured tax capacity of the District in the final year of collection of tax increment(year 26 of the District). Project Estimated Tax Capacity upon Completion(PTC) $103,374 Original Estimated Net Tax Capacity(ONTC) $3,894 Estimated Captured Tax Capacity(CTC) $99,480 Original Local Tax Rate 1.49211 Pay 2012 Estimated Annual Tax Increment(CTC x Local Tax Rate) $148,435 Percent Retained by the HRA 100% Tax capacity includes a 3.0%inflation factor for the duration of the District. The tax capacity included in this chart is the estimated tax capacity of the District in year 26. The tax capacity of the District in year one is estimated to be$49,372. Pursuant to M.S., Section 469.177, Subd. 4,the HRA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4,with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen(18)months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S.,Section 469.175,Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-4 - 15 The City has reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. Subsection 2-9. Sources of Revenue/Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The HRA or City reserves the right to issue bonds or incur other indebtedness as a result of the T11-,Plan. As presently proposed,the projects within the District will be financed by one or more pay-as-you- go notes. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $2,679,383 Interest $267.938 TOTAL $2,947,321 The HRA or City may issue bonds(as defined in the TIF Act)secured in whole or in part with tax increments from the District in a maximum principal amount of$1,947,321. Such bonds may be in the form of pay-as- you-go notes, revenue bonds or notes,general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the construction of a 70 unit affordable housing development in the City,consisting of 52 units affordable,multi-family rental apartments and 18 units of affordable, rental townhomes. The HRA and City have determined that it will be necessary to provide assistance to the project for certain District costs,as described. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District,this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-5 USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $531,000 Site Improvements/Preparation $0 Utilities $0 Other Qualifying Improvements $1,148,383 Administrative Costs(up to 10%) $267,938 PROJECT COST TOTAL $1,947,321 Interest $1.000,000 PROJECT AND INTEREST COSTS TOTAL $2,947,321 The total project cost,including financing costs(interest)listed in the table above does not exceed the total sources of funds. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification,the budget above pursuant to the applicable statutory requirements. The HRA may expend funds for qualified housing activities outside of the District boundaries. Subsection 2-11. Fiscal Disparities Election Pursuant to MS., Section 469.177, Subd. 3 , the City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S.,Section 469.177, Subd. 3, clause b,(inside the District)are followed,the following method of computation shall apply: (1) The original net tax capacity and the current ne t tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. Where the original net tax capacity is equal to or greater than thecurrent net tax capacity, there is no captured neitax capacity and no tax increment determination. Where the original net tax capacity is less than the current net tax capacity, the difference between the original net tax capacity and the current net tax capacity is thecaptured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditor shall exclude the retainedcaptured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the nettax capacity ofthe local taxing districts. The tax generated by the extension of the lesser of(A)the local taxing district tax rates or(B)the original local tax rate to the retained capture d net tax capacity of the authority is the tax increment of the authority. The City will choose to calculate fiscal disparities by clause b. It is not anticipated that the District will contain commercial/industrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-6 According to M.S.,Section 469.177,Subd. 3: (c) The method of computation of tax increment applied to a district pursuant to paragraph(a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph(b). Subsection 2-12.Business Subsidies Pursuant to M.S., Section 116J.993, Subd. 3,the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than$150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business,size,location,or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S.,Section 116J..552, Subd.3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts,provided that the assistance is equal to or less than 50%of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement,including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers'compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A,bonds issued to refund outstanding bonds,and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986,as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of$150,000 or less; (22) Federal loan funds provided through the United States Department of Commerce,Economic Development Administration;and (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules,chapter 8100. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-7 The HRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2-13.County Road Costs Pursuant to MS.,Section 469.175, Subd la,the county board may require the HRA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will,in the judgment of the county,substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads,it must notify the HRA or City within forty- five days of receipt of this TIF Plan. In the opinion of the HRA and City and their consultants,the proposed development outlined in this TIF Plan will have little or no impact upon county roads,therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The HRA and City are aware that the county could claim that tax increment should be used for county roads,even after the public hearing. Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However,the HRA or City has determined that such development or redevelopment would not occur"but for" tax increment financing and that,therefore,the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the"but for"test was not met: IMPACT ON TAX BASE 2011/Pay 2012 Estimated Captured Total Net Tax Capacity(CTC) Percent of CTC Tax Capacity Upon Completion to Entity Total Hennepin County 1,251,745,096 99,480 0.0079% City of Richfield 22,626,954 99,480 0.4397% Richfield ISD No.280 29,274,944 99,480 0.3398% IMPACT ON TAX RATES Pay 2012 Percent Potential Extension Rates of Total CTC Taxes Hennepin County 0.482310 32.32% 99,480 47,980 City of Richfield 0.625630 41.93% 99,480 62,238 Richfield ISD No.280 0.288940 19.36% 99,480 28,744 Other 0.095230 6.38% 99.480 9,473, Total 1.492110 100.00% 148,435 Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-8 The estimates listed above display the captured tax capacity in year 26 of the District. The tax rate used for calculations is the actual Pay 2012 rate. The total net capacity for the entities listed above are based on actual Pay 2012 figures. The District will be certified under the actual Pay 2012 rates.. Pursuant to MS. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is$2,679,383; (2) Probable impact of the District on city provided services and ability to issue debt. The probable impact of the District on police protection is not expected to be significant.With any addition of new residents or businesses,police calls for service will be increased.The City does not expect that the proposed development, in and of itself, will necessitate new capital investment in vehicles or facilities. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The City may have a slight increase in medical related calls;however,the development is not expected to require an increase in capital investment in vehicles or facilities. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area.The current infrastructure for sanitary sewer,storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans,there are no additional costs associated with street maintenance, sweeping,plowing,lighting and sidewalks. The development in the District will pay to the City sanitary sewer(SAC)connection fees. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same,is$518,729 (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies,assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same,is$865,977 (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-9 Subsection 2-15.Supporting Documentation Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the HRA and City's findings: • Project Sources and Uses and Project Pro forma provided by Ron Clark. • Site Plans provided by Ron Clark. • Minnesota Housing Finance Agency Tax Credit Application prepared by Ron Clark and submitted to MHFA. Subsection 2-16. Definition of Tax Increment Revenues Pursuant to M.S.,Section 469.174, Subd. 25,tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity,but excluding any excess taxes,as computed under MS., Section 469.177; 2. The proceeds from the sale or lease of property,tangible or intangible,to the extent the property was purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the Authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993;and 6. The market value homestead credit paid to the Authority under M.S.,Section 273.1384. Subsection 2-17.Modifications to the District In accordance with MS., Section 469.175,Subd. 4,any: 1. Reduction or enlargement of the geographic area of the District,if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City; 5. Increase in the estimate of the cost of the District,including administrative expenses,that will be paid or fmanced with tax increment from the District;or 6. Designation of additional property to be acquired by the HRA or City, shall be approved upon the notice and after the discussion,public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S.Section 469.175 Subd. 4(f),the geographic area of the District may be reduced,but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 11 must be documented. The requirements of this paragraph do not apply if(1)the only modification is elimination of parcel(s)from the District and(2)(A)the current net tax capacity of the parcel(s)eliminated from the District equals or exceeds the net tax capacity of those parcel(s)in the District's original net tax capacity or(B)the HRA agrees that, notwithstanding MS.,Section 469.177,Subd.1,the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s)eliminated from the District. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-10 The HRA or City must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2-18.Administrative Expenses In accordance with M.S.,Section 469.174, Subd. 14,administrative expenses means all expenditures of the HRA or City,other than: • 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services,including architectural and engineering services,directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District;or 4. Amounts used to pay principal or interest on,fund a reserve for,or sell at a discount bonds issued pursuant to M.S., Section 469.178;or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses(1)to(3). For districts for which the request for certification were made before August 1, 1979,or after June 30, 1982, and before August 1,2001,administrative expenses also include amounts paid for services provided by bond counsel,fiscal consultants,and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments,as defined by M.S.,Section 469.174, Subd. 25, clause (1),from the District,whichever is less. For districts for which certification was requested after July 31,2001,no tax increment may be used to pay any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments,as defined in M.S.,Section 469.174, Subd 25, clause (1),from the District,whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits of M.S.,Section 469.176,Subd. 3. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11,the County Treasurer shall deduct an amount(currently .36 percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-11 Pursuant to MS., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax incrementfinancing district pursuant to M.S., Section 469.177, no demolition, rehabMtion or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or wa ter systems,has been commenced on a parcellocated within a tax increment fi financingdistrict by the authority or by the owner of the parcein accordance with tl's tax increment financing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel sha 11 be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovationor other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, theauthority shall certj to the county auditor that the activity has commenced and the county auditor sh all certibi the net tax capacity thereof as most recently certified by the commissioner of revenue and addit to the original net tax capacity ofthe tax increment financing district. The coui3tauditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in th e district. The evidence for a parcel must be submitted by February 1 of the fifth year follwving the year inwhich the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to(1) construction or opening of a new street, (2)relocation of a street, and(3)substantial reconstruction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by approximately June 2016 and report such actions to the County Auditor. Subsection 2-20. Use of Tax Increment The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to fmance a project; 2. to fmance,or otherwise pay public redevelopment costs of the the Richfield Redevelopment Project Area pursuant to M.S.,Sections 469.001 to 469.047; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance,or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans,advances or other payments made to or on behalf of the HRA or City or for the benefit of the Richfield Redevelopment Project Area by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C.M.S., Sections 469.152 through 469.165,and/or MS.,Sections 469.178;and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to MS., Chapter 462C,M.S., Sections 469.152 through 469.165,and/or M.S., Sections 469.178. Revenues derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in M.S.,Sections 469.174,Subd 11 and 469.1761. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the HRA or City may be included in the cost of a housing project. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-12 These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S.,Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment Fund of said District. The HRA or City will pay to the developer(s)annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements,demolition and relocation and site preparation. Remaining increment funds will be used for HRA or City administration(up to 10 percent)and for the costs of public improvement activities outside the District. Subsection 2-21. Excess Increments Excess increments,as defined in M.S.,Section 469.176, Subd. 2,shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds;or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The HRA or City must spend or return the excess increments under paragraph(c)within nine months after the end of the year. In addition,the HRA or City may,subject to the limitations set forth herein,choose to modify the TIF Plan in order to finance additional public costs in the Richfield Redevelopment Project Area or the District. Subsection 2-22. Requirements for Agreements with the Developer The HRA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings,landscaping plan,grading and storm drainage plan,signage system plan,and any other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the development with City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development. Pursuant to MS., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S.,Section 469.178 to which tax increments from property acquired is pledged,unless prior to acquisition in excess of 10 percent of the acreage,the HRA or City concluded an agreement for the development of the property acquired and which provides recourse for the HRA or City should the development not be completed. Subsection 2-23.Assessment Agreements Pursuant to MS.,Section 469.177, Subd. 8,the HRA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed,review the market value previously assigned to the land upon which the improvements are Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-13 '4P q to be constructed and,so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Subsection 2-24.Administration of the District Administration of the District will be handled by the Community Development Director. Subsection 2-25.Annual Disclosure Requirements Pursuant to MS., Section 469.175,Subds. 5, 6, and 6b the HRA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor,County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175,Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S.,Section 469.175 Subd 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26.Reasonable Expectations As required by the TIF Act,in establishing the District,the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness of the feasibility of developing the project site(s)within the District. Subsection 2-27.Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to fmance, or otherwise pay public redevelopment costs of the the Richfield Redevelopment Project Area pursuant to M.S.,Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction,renovation,operation,or maintenance of a building to be used primarily and regularly for conducting the business of a municipality,county,school district,or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Housing District Exceptions to Restriction on Pooling; Five Year Limit. Pursuant to MS., Section 469.1763, (1)At least 80%of the tax increment derived from the District must be expended on Public Costs incurred within said district,and up to 20%of said tax increments may be spent on Public Costs incurred outside of the District but within the Richfield Redevelopment Project Area;provided that in the case of a housing district,a housing project,as defined in M.S.,Section 469.174, Subd 11,is deemed to be an activity in the District,even if the expenditure occurred after five years. Subsection 2-28. Summary The Richfield Housing and Redevelopment Authority is establishing the District to provide an impetus for residential development and provide safe and decent life cycle housing in the City. The TIF Plan for the District was prepared by Ehlers&Associates,Inc.,3060 Centre Pointe Drive,Roseville,Minnesota 55113- 1105,telephone(651)697-8500. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for the 2012-1 Housing Tax Increment Financing District(Pillsbury Commons) 2-14 Appendix A Project Description The 2012-1 Housing Tax Increment Financing District(Pillsbury Commons)is being established to facilitate the construction of a 70 unit affordable housing development in the City consisting of 52 units of affordable, multi-family rental apartments and 18 units of affordable,rental townhomes. Minnesota Statutes require that a minimum of 40%of the units will be affordable to persons at or below 60% of median income or 20%of the units will be affordable to persons at or below 50%of median income for a housing district.However,the developer is proposing that 100%of the units be affordable. The TIF District consists of three parcels plus the adjacent right of way as shown on the map.Currently,the City of Richfield and the Richfield HRA own the three parcels.The developer intends to purchase the three City and HRA owned parcels.Appraisals on these parcels have been completed. The developer has received approval from the Minnesota Housing Finance Agency for tax credits to assist with the financing of the development.MHFA will underwrite the project using a rate of 5.25%.The HRA anticipates issuing a Pay-as-you-go Note to reimburse the developer for costs including acquisition, demolition and other site improvements and qualified costs. The developer has requested assistance of $530,082.The HRA will retain 10 percent of the tax increment generated from the TIF District for the costs of administering the TIF District,which is the maximum allowed by Minnesota Statutes.The balance of the increment may be used for other low and moderate income housing projects as allowed by Minnesota Statutes,or the district may be decertified after obligations have been met.At the time of the consideration of the TIF Plan,other projects have not been identified. 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Parcel Numbers Address Owner 34-028-24-34-0072 Address Pending,per Hennepin County City of Richfield To be assigned:The West 30 Address Pending,per Hennepin County City of Richfield feet of Lot 1,Block 4,"R.C. Soens Addition" 34-028-24-34-0070 211 76th Street West Richfield HRA Appendix C-1 J 2q Appendix D Estimated Cash Flow for the District Appendix D-1 -3D i a d F NN_N N N :r411 NNN� aa i .E*PA* a elgt,.z g!gg $a�$ a pM 8 s88NrN N W zziOg t7 cV c. .-Or LE.Z.��no F S d4 i t4_ ga W SAIEEEEE Mil 1 gill ,raM3333 o ZZ p pN 4 N N N gi.ri C� Q 5Z �N?N N NNN wj Wii1 "1 9 0° p1 m I 0 ° Fm dq E : c a z ° 0 e3b-o i. UJI �� ;qq z z m x88888 �, me r C 2 S Q p a II = m a z A 70 1 r` Em O Q m> ' t W -, = V O p L 6 6�° d a .-c.100,,- 0 Z S g R O S4 E :� ' a w >V1 8. '_ o 0 a a a V J 1-t W C' s S. > m 0 7 w J. a wmm� b`.V-'N.2N m oe Q m ' N 1 RRR 9a*. 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X Z'• V 0) Q z c F- .0 'y e e e e e e e e e e e e e e e e e e e e e e e e e e e H o g N Cl N N N N N N N N N N N N N N N N N N N N ei F. = 3331- a v 4T 4 4 $7 o 4 o o v o 4 444 % 4444444 10 C 3 0 2 8 o N- g saf g g l g r g g g g g g g g dg- g s3 g S St y tWp• d 1+1 (O M ce 19 +d1 M l9 l+1 M O1 M M (9 (9 M CO M l+) co" W 49 1D of p1 ;} !C f- 6 2 0 8� r O/ W N V r n r , , O o 4 g .s F3 m G; g s & 3 �8 g ,9 n i P. m g g g m o`3 of g g : e e e e e e y am, e e g;, e e a a e g am, a g am, e o e e e v0 8 `8 3 8 8 3 8 8 8 8 3 8 8 8 O 8 S 8 8 8 0 8 8 8 8 - Ig N I - 33 Appendix E Housing Qualifications for the District Mom E:RESTRICTIONS-AD' �'STED FOR FAMILY SIZE (HOUSING DISTRICT) JIEEPIN tOuNTY HENI IEPIN COUNTY MEDIAN INCOME;CO's$83,900 No.of Persons 50%of Median Income 60%of Median Income 1-person $29,400 $35,280 2-person $33,600 $40,320 3-person $37,800 $45,360 4-person $41,950 $50,400 Source: Department of Housing and Urban Development and Minnesota Housing Finance Agency The two options for income limits on a standard housing district are 20%of the units at 50%of median income or 40%of the units at 60%of median income. There are no rent restrictions for a housing district. ***PLEASE NOTE: THESE NUMBERS ARE ADJUSTED ANNUALLY. ALL INCOME FIGURES REPORTED ON THIS PAGE ARE FOR 2012. Appendix E-1 3 -5 14 Appendix F Findings for the District Appendix F-1 - 35 AI Memo To: Richfield City Council From: Rebecca Kurtz, Ehlers Date: June 8, 2012 Subject: But For Analysis for Proposed Pillsbury Commons Development Background The City and HRA received a request from Ron Clark on behalf of Richfield Properties I,LLC(the "Developer") for tax increment assistance for a 70 unit, affordable housing development, which includes 52 units of apartments and 18 units of townhomes. It is proposed that the City and the HRA create the 2012-1 Housing Tax Increment Financing("TIF")District(Pillsbury Commons) on three parcels and adjacent right of way on the 7600 block of Pillsbury Ave.(This includes the north portion of the former City public works site.) In order to qualify as a housing TIF district,the development will need to have either 40 percent of the units available for persons at or below 60 percent of median income or 20 percent of the units for persons at or below 50 percent of median income. For 2012, 60 percent of median income ranged between $35,280 and $50,400 for a family of one to four persons, respectively. Fifty percent of median income ranged between$29,400 and$42,000. The former City garage site is currently owned by the City and has been vacant since the new facility was constructed in 2007.The City and the HRA own the remaining two parcels.The City and HRA have completed appraisals on their three parcels, and it is proposed that the Developer purchase these parcels for fair market value. It is proposed that tax increment from the development be provided in the form of a Pay-as-you-go Note to the developer to reimburse for land acquisition,site improvements,and other TIF qualifying improvements. Process for But For Test The City and HRA have asked Ehlers to review the Developer's feasibility analysis for the project to determine if the level of financial assistance requested is needed to make the project financially feasible. But For Test Under current market conditions,the proposed developments may not reasonably be expected to occur solely through private investment within the reasonably near future. The proposed development described in the tax increment plan is a housing development that meets the City's wvwi oh1e -inC,Corn 0 EHLERS Minnesota phone 651-i*7-8500 3060 Centre Pointe Drive moms IN PUBLIC FINANCE Offices also In Wisconsin and Illinois fax 861-607-8555 Roseville,MN 551118-1122 toll free 800-552-1171 objectives for development and redevelopment. The cost of land acquisition and site improvements makes an affordable housing development infeasible without City assistance. Due to the high cost of building new housing in the City, this project is feasible only through assistance,in part,from tax increment financing. As part of the But For Analysis, Ehlers has reviewed budgetary figures and cost estimates submitted by the Developer. Based on the information provided,the analysis shows that in order to promote the development of affordable housing in the City, financial assistance is needed to reduce the costs of acquiring the land for the developments and improving the site. The construction of the proposed housing development is cost prohibitive without the use of Tax Increment, due to several factors, including (1) the difficulty in obtaining sufficient low cost financing in the current economic market; (2) the additional costs of building the proposed housing development in an area which is already established as a residential area, including the increased costs for land acquisition; (3) potentially significant costs related to remediating hazardous substances on two or the three parcels; and (4) affordable housing does not generate sufficient revenues to offset these increased start up costs. The Developer has requested $530,082 in assistance in the form of a pay-as-you-go note. After review of the financial information it is determined that there is a financing gap, and the request for assistance is reasonable to move the project forward but not unduly compensate the Developer. Providing assistance in the amount of$530,082 would provide a fair market return based on the market for tax credit projects and meets the guidelines for financing and for returns as provided by Minnesota Housing Finance Agency. In order to make the proposed housing development economically feasible, the Developer has obtained low-interest loans from the Minnesota Housing Finance Agency. These types of loans are limited, and eligibility is determined by an application to the Minnesota Housing Finance Agency and a point or rating system. The Developer received a high rating,and therefore a lower interest loan,based on the City and HRA's support of the project and willingness to consider tax increment as a financing tool for the project. Historically, site development costs in this location have made development infeasible without tax increment assistance. The former garage site has been marketed for at least 6 years without success. Under current market conditions, it is anticipated that no other development of similar scope would occur in the foreseeable future on these sites without some type of similar financial assistance being provided to the developments. Additional Factors to Consider as Part of the But For Test In addition to the financial analysis, there are several factors that provide support to the But For Analysis and the need for public assistance. Although it is a developed community, Richfield is expected to grow over the coming decades. Bordered by four major transportation corridors and located just minutes from both downtowns, the community will continue to be a desirable place to live.Projections indicate a growth of 4,427 households between 2000 and 2030, or about 150 new households per year. Richfield is required to plan for its fair share of the regional need for housing, including newly-constructed workforce housing units.Additional units are required because there are projected to be a greater number of low-wage jobs (paying less than $41,950) within ten miles of the center of Richfield than there are currently affordable housing opportunities. The Metropolitan Council has identified a need of 765 affordable housing units for Richfield between 2011 and 2020, to which this project would contribute 70 units,or about 9%of the overall goal. The Developer has provided a Market Study completed by Joe Urban Inc. Per the Study, the trends indicate relatively strong demand for affordable, rental housing, and there are a significant number of households(approximately 1,700)in the area qualified to rent under HUD's affordable requirements. The site is located near significant area retail and recreation options, and the demographic trends favor additional affordable housing in the area.The Study goes on to say that the strongest aspect of the site is its overall proximity to several employment centers, with good transportation and transit options.The affordable housing market in this area of Richfield and east Bloomington is healthy, but lacking in new options. A large number of apartments building primarily in the 1960s offer rents that are competitive with those proposed for the project. According to a 2006 Metropolitan Council report, the City of Richfield has a 1.93 ratio of low wage jobs paying less than $41,000 to housing units that are affordable at those wages. In addition, based on median wage information provided by the Department of Employment and Economic Development and analyzed by Joe Urban, full-time employees earning$6.15 per hour (minimum wage)to$21.80 per hour could afford to live in the proposed units. Conclusion In conclusion, we have determined that the proposed development meets the But For Test as defined by Minnesota Statues. I will be at the HRA meeting and the Council meeting to address any questions.In the meantime,if you have questions,please do not hesitate to contact me. AGENDA SECTION: ORDINANCES AGENDA ITEM# 9 REPORT# 112 maga STAFF REPORT áIIILLD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: CORRINE HEINE, CITY ATTORNEY NAME,TITLE DEPARTMENT DIRECTOR REVIEW: ..(A � REVIEWED BY CITY r , o ;, MANAGER: i�.: ,- ITEM FOR COUNCIL CONSIDERATION: Conduct a first reading of an ordinance rezoning 211 West 76th Street and 7641 Pleasant Avenue. i I. RECOMMENDED ACTION: By Motion: Deny first reading of the attached ordinance rezoning 211 West 76th Street and 7641 Pleasant Avenue from Industrial (I) to Planned Multi-Family Residential (PMR). II. BACKGROUND The proposed rezoning contemplated a development of three City-owned parcels and one Housing and Redevelopment Authority (HRA)-owned property, all in the block between 76th and 77th Streets, the railroad tracks and Pillsbury Avenue. That development is no longer feasible due to recent actions taken by the City Council and HRA, and because of the Council's concern over a lack of reasonable policy guidelines to address the appropriate mix of market rate and affordable housing throughout the community for infill construction and multi-family housing projects. On June 25th the Planning Commission will consider the following actions: • Consideration of rezoning to designate 7641 Pleasant Avenue and 211 West 76th Street as Planned Multi-Family Residential (PMR) from Industrial (I); • Consideration of whether the proposed Tax Increment Finance (TIF) Plan and related documents are consistent with the Comprehensive Plan, and 062612 1st Rdg Rezoning, Pillsbury Commons • Consideration of whether the proposed sale of publicly-owned parcels for inclusion in the development is consistent with the Comprehensive Plan. Staff has recommended to the Planning Commission that they deny the actions due to the City Council and HRA's earlier actions to reject the proposals from the Developer to sell the publicly-owned land where the development is proposed. As a result, the Developer lacks the necessary consent of the property owners (City and HRA) to process a land use application for the proposed development. Staff recommends denying approval of the Zoning Ordinance amendment since the project is no longer feasible. At the June 12th meeting Council members expressed concerns about the City's lack of a policy related to the concentration of affordable housing. Council members' comments echoed similar comments that have been made by HRA members and Planning Commission members. The staff concurs that, although the City's Comprehensive Plan identifies the provision of affordable housing as a goal, the Comprehensive Plan does not adequately address the manner in which that goal should be achieved, or the appropriate densities or mix of affordable and market-rate housing within neighborhoods. Although the City's Comprehensive Plan was approved by the Metropolitan Council, the Metropolitan Council has not addressed the issue of concentration of affordable housing in Richfield as it has in other metropolitan areas such as the City of Minneapolis. Staff proposes to undertake a study and working with the HRA, develop a formal housing policy that addresses those and other issues. Staff anticipates a process that will afford opportunity for input from City officials, the public and interested parties. Upon final adoption of the housing policy, staff will request the Planning Commission's consideration of appropriate amendments to the City's Comprehensive Plan. III. BASIS OF RECOMMENDATION A. POLICY • The City Council and HRA rejected the Developers proposal to purchase the publicly-owned land; therefore they lack the necessary consent of the property owners (City and HRA) to process a land use application for the proposed development. • The City Council is concerned that other than the City's senior high- rises, the Project proposes a significant density (24 dwelling units per acre) of only affordable housing on one block in the City. Given the City's currently identified concentration of affordable units in the City and the resulting concentration of families who meet the income requirements for affordable housing, the issue has arisen of whether the concentration of affordable housing proposed by the Developer is reasonable. • In addition, the Council is concerned that the absence of guidelines to assist the City as to what is an appropriate mix of market rate and affordable housing to meet the City's housing goals and to maintain the viability of the City and its existing residential neighborhoods should be addressed before the City makes an irrevocable decision to rezone the land necessary for Pillsbury Commons. • The City and its HRA need to study further the recently released Stantec Report in light of the housing requirements in the 2020 Comprehensive Plan to determine the appropriate mix of market rate and affordable housing for these targeted areas, including the Site and throughout the City. If the Met Council is correct and the City's population does grow at least 10% over the next decade, it is critical that the City develop reasonable standards to address the following important policy issues: a. The appropriate mix generally of market rate and affordable housing throughout the City in light of the current level of affordability; b. The appropriate mix of market rate and affordable housing for the identified sites for medium to high density housing in the Comp Plan; c. The use of incentives, e.g., government financing tools such as TIF, bonuses in the zoning code, to provide for a mix of housing types and price ranges; d. The appropriate mix of market rate and affordable housing to address the creation of a disproportionate share of concentrated low-income housing in already poor segregated residential neighborhoods. e. The appropriate mix generally of market rate and affordable housing to address unintended negative impacts on adjacent single family residential property and neighborhoods. B. CRITICAL TIMING ISSUES • 60-DAY RULE: The 60-day clock 'started' when a complete application was received on May 14, 2012. A decision is required by July 13, 2012 OR the Council must notify the applicant must be notified that the deadline for a decision has been extended up to a maximum of 60 additional days (or 120 days total) for good cause. C. FINANCIAL • The required application processing fee has been received. D. LEGAL • A public hearing was held before the Planning Commission on May 29, 2012. The Planning Commission voted 8 to 0 to continue the motion for consideration of rezoning and the PUD to their June 25, 2012 meeting. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ADDITIONAL RECOMMENDATION(S) • Recommend that a study of the Stantec Report and the Comprehensive Plan be undertaken to develop guidelines to enable the Council and the HRA to address the appropriate mix of market rate and affordable housing throughout the community for infill construction and multi-family housing projects. V. ATTACHMENTS • Pillsbury Commons Three-Ring Binder (provided to you earlier) VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representative(s) of Ron Clark Construction and Design BILL NO. 2012 - AMENDMENT TO APPENDIX 1 OF THE CODE OF THE CITY OF RICHFIELD (Pillsbury Commons Planned Unit Development Plan and Rezoning) THE CITY OF RICHFIELD DOES ORDAIN: Section 1. Appendix 1 of the Zoning Ordinance code of the City of Richfield entitled "Richfield Zoning Code: Boundaries of Zoning Districts" is hereby amended: A. Section 1, Paragraph (5) is repealed. B. A new Section 9 titled Planned Multiple Residential (PMR) is added as follows, and by now renumbering all following sections accordingly. (1) M-16 That area lying between the center lines of the Soo Line Railway right-of-way and Pillsbury Avenue and between the center line of 77th Street extended and 76th Street. Section 2. This amendment constitutes a rezoning of 7641 Pleasant Avenue and 211 West 76th Street. Section 3. This Ordinance is effective in accordance with Section 3.09 of the Richfield City Charter, 2012. Passed by the City Council of the City of Richfield, Minnesota this 26th day of June, ATTEST: Nancy Gibbs, City Clerk Debbie Goettel, Mayor rI AGENDA SECTION: ORDINANCES AGENDA ITEM# 10 REPORT# 113 =All STAFF REPORT RICHFIELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: CORRINE HEINE, CITY ATTORNEY • NAME,TITLE DEPARTMENT DIRECTOR REVIEW: /�� '/- 1 4.. / / REVIEWED BY CITY MANAGER: / /_.1�i� , ITEM FOR COUNCIL CONSIDERATION: Consideration of a second reading authorizing the sale of real property at 7641 Pleasant Avenue (south portion only, referred to as Parcel C-3) to R.E.C., Inc. I. RECOMMENDED ACTION: By Motion: Approve the attached Transitory Ordinance authorizing the sale of real property at 7641 Pleasant Avenue (south portion only, referred to as Parcel C-3) to R.E.C., Inc. II. BACKGROUND On June 14, 2011 the City Council approved, and entered into, an Option Agreement for the sale of a portion of the former City Garage site to R.E.C. Inc. (DBA Ron Clark Design and Construction) (referenced as C-3 or"Option Property"). The Option Agreement offers a purchase price of$415,936 for parcel C-3. In December 2011, R.E.C., Inc. provided notice to the City that it was exercising its option. The Option Agreement contemplates that closing will occur by June 30, 2012, but allows the buyer to extend the closing until October 31, 2012 by written notice and by making an additional option deposit of$5,000.00. The Option Property is part of a larger parcel, and closing on the sale of the Option Property will require subdivision approval. At this time, the Developer has not made application for the subdivision approval. 062612 - 2nd Rdg Sale of C-3 Parcel_Pillsbury Commons.doc III. BASIS OF RECOMMENDATION A. POLICY • On June 12, 2012 the first reading of an ordinance was considered and approved by the Council with a 5 to 0 vote. • In accordance with the City Charter, the conveyance of City-owned land requires two readings of an ordinance for the sale of the land. B. CRITICAL TIMING ISSUES • The Option Agreement contemplates a closing by June 30, 2012 unless extended by the buyer. • Because subdivision approval is required, the buyer will need to extend the Option Agreement and apply for the subdivision approval prior to closing. C. FINANCIAL • A market value appraisal completed on June 8, 2011 valued the C-3 parcel at approximately $416,888. • Ron Clark offered to purchase parcel C-3 for$415,936. • Ron Clark made an initial deposit of$2,000 which will be applied as credit on the purchase price. D. LEGAL • The City Attorney will be at the meeting to answer questions. • The City is obligated by the Option Agreement to approve the sale of the C-3 parcel. E. ENVIRONMENTAL CONSIDERATIONS • Under the terms of the Option Agreement, all environmental costs and actions associated with the site would be Ron Clark's responsibility. IV. ALTERNATIVE RECOMMENDATIONS) • There is no alternative recommendation with respect to the ordinance approving the sale of the Option Property, parcel C-3. V. ATTACHMENTS • Ordinance approving sale of parcel C-3 • Map • Exercise of Option Agreement • Option Agreement VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representative(s) of Ron Clark Construction and Design Io - I BILL NO. AN ORDINANCE PROVIDING FOR THE SALE OF CERTAIN REAL PROPERTY OF THE CITY THE CITY OF RICHFIELD DOES ORDAIN: Section 1. The following property of the City is hereby authorized to be sold to R.E.C., Inc., dba Ron Clark Construction and Design such other entity as R.E.C., Inc. may designate in writing. Parcel C-3 Lot 3, except the north 75 feet thereof, Lot 4 and Lot 5, except the south 39.00 feet thereof, all in Block 4, R. C. Soens Addition, according to the recorded plat thereof on file or of record in the office of the Registrar of Titles, Hennepin County, Minnesota Except the following: The South 32 feet of the North 107 feet of Lot 3, Block 4, R. C. Soens Addition, Hennepin County, Minnesota and The West 123.41 feet of that part of said Lot 3 lying south of the North 107 feet thereof, and; The North 31.63 feet of the West 123.41 feet of Lot 4, in said Block 4. Sec. 2 The Mayor and City Manager are authorized and directed to sign all documents necessary to affect the sale contemplated by this Ordinance, in accordance with the terms and conditions of the Purchase Agreement as approved by the City Council. Sec. 3. This Ordinance will be effective in accordance with Section 3.09 of the City Charter. Adopted this 26th day of June, 2012. By: Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk MAP OF PARCEL LOCATIONS IL I t V 4 .....-. '."?..,..t. '-,i-1 - ' ','. . n-ill .. .0,„..,. ..1.4' - . .., it 1 i . H N - _ t -,. Efi .. iaI. 0 114 .. - - -iJ i. ' 4' _ I -� � '''City { A l� I 'C C-2 N I G Ill� > , , , 4 i _ k I i I, 1 1 J. .c iy ) - . , , , 6., , "i . I I,. fr'• . II - 1 , .- 4- -t" - :3 1 i- 1i3, 12,/ f - 1- I_ '"- • 1b- 3 IJOR1GThIAL 12/20/11 EXERCISE of OPTION AGREEMENT THIS NOTICE, is given pursuant to the Option Agreement entered into June 15,2011,by and between City of Richfield, Minnesota, a Minnesota municipal corporation (hereinafter called "Seller"), and R.E.C., Inc. a Minnesota Corporation DBA Ron Clark Construction and Design(hereinafter called "Purchaser"). Purchaser hereby gives written notice to the Seller pursuant to Paragraph 6 of the Option Agreement,that it is exercising their Option. The notice is being personally delivered to Seller pursuant to Paragraph 20 of the Option agreement as shown below: To Seller: City of Richfield, Minnesota Attention: Mr. John Stark Director of Community Development 6700 Portland Avenue Richfield,Minnesota 55423-2599 Fax: (612) 861-8974 PURCHASER: R.E.C., Inc., a Minnesota co s• ation Bye_.. 4 aii■ DEC 2 7 2011 Drafted by Connelly Development OPTION AGREEMENT THIS AGREEMENT, made and entered into this I S't- day of ,one,.2011, by and between City of Richfield, Minnesota, a Minnesota municipal corporation (hereinafter called "Seller"), and R.E.C.,Inc. a Minnesota Corporation DBA Ron Clark Construction and Design (hereinafter called "Purchaser"). 1. Seller hereby irrevocably grants and conveys unto Purchaser the exclusive right and option from the date of this Agreement and continuing until December 31, 2011 (the"Option Period"), to purchase that certain land situated in the County of Hennepin, State of Minnesota, as generally described in Exhibit "A" attached hereto (the "Subject Property"). In consideration of the granting of this option, Purchaser shall, with its execution of this Agreement, deposit with Seller, an initial option money payment (the "Initial Option Deposit") in the amount of Two Thousand Dollars ($2,000). In the event this option is exercised, and closed, the Initial Option Deposit shall be applied as a credit on the purchase price hereinafter provided. If the option is not exercised, or if once exercised, the matter does not close, the Initial Payment will be returned after first deducting amounts equal to the City's costs incurred in connection with this transaction. 2. The consideration for the purchase of the Subject Property shall be the total sum of Four Hundred Fifteen Thousand Nine Hundred Thirty Six Dollars ($415,936), which includes the Initial Option Deposit. 3. [Blank]. 386665v5 JBD RC125-292 1 ®-5 4. At any time, and from time to time during the Option Period, and between the exercise of this option and the closing, Purchaser shall have, and Seller hereby gives and grants unto Purchaser, the right of Purchaser, Purchaser's employees, agents, and representatives to enter upon the Subject Property, or any part thereof, with workmen, tools, materials, and equipment, and to make such examination, surveys, and tests, by drilling or otherwise, of said lands as Purchaser may deem desirable to determine the suitability of said premises for Purchaser's purposes. Prior to entry, Purchaser shall give Seller at least 24-hour advance notice of its intention to do so. Such notice will also, if requested by Seller, be given to anyone named by Seller as being in occupation or possession of the Subject Property at the time of the entry. In the event this option is not exercised, or is exercised but not closed, Purchaser shall be obligated to restore the lands to its prior condition, repair and restore all fences damaged as a result of such operations, and compensate Seller for any actual damages done to the lands resulting from the operations provided for in this paragraph. Purchaser shall indemnify and hold Seller harmless from any costs or expenses (including reasonable attorney fees) which Seller could incur as a result of Purchaser exercising its rights to go upon the Subject Property. In the event this option is exercised and closed, Purchaser shall not be liable for any damage done to said lands or to fences resulting from such operations. 5. In the event the option is not exercised, of if not closed following exercise the Initial Payment, except as limited in Section 1, shall be returned to Purchaser, the Additional Option Deposit shall be paid to the Seller, and neither party shall have any further claim against the other, except as provided in Section 4. 6. The option hereby granted may be exercised by Purchaser by written notice to Seller given at any time before the expiration of the Option Period. Such notice shall be deemed 386665v5 JBD RC125-292 2 Ib - � sufficiently given if and when it is addressed to Seller as provided in Section 20 below and either (a) delivered personally to Seller, (b) deposited in the United States mail, registered or certified, with postage prepaid, (c) deposited with an overnight delivery service for next day delivery, or (d)telecopied. 7. Notwithstanding any title commitment that Purchaser may have received previously, Seller shall cause to be delivered to Purchaser, within thirty (30) days of the date this Agreement is fully executed, a current ALTA form commitment for title insurance, in an amount equal to the purchase price, covering the Subject Property, setting forth all exceptions from the title insurance coverage, and enclosing copies of all documents of record recited in such commitment. Purchaser shall have thirty(30) business days from receipt of: (i) said commitment for title insurance, and (ii) an ALTA survey which the Purchaser may at its own cost order not later than five (5) days after exercise of the option, to examine the commitment and survey and, in its sole discretion, provide written notice to Seller that it: (a) objects to the title and conditions its purchase of the property upon the removal of specified exceptions ("Purchaser's Title Objections"), (b) objects to matters disclosed in the survey, or (c) rejects the same. In the event Seller is unwilling or is unable to cure any matters set forth in Purchaser's Title Objections, Seller shall, within 15 business days of receipt of Purchaser's Title Objections, notify Purchaser in writing of the matters that Seller is unwilling or unable to cure, it being understood and agreed that any outstanding mortgages, liens or other instruments identifying financial obligations must be satisfied by Seller either prior to closing or with proceeds provided at closing. Purchaser may then either waive such objections or terminate and cancel this agreement by delivering written notice to Seller, specifying the unacceptable exceptions, and Purchaser shall be entitled to a refund of the amount paid to Seller. Exceptions to title not timely objected to or later waived by 386665v5 JBD RC125-292 3 Purchaser in writing are herein referred to as "Permitted Exceptions." Title to the Subject Property shall be conveyed by Seller by Quitclaim Deed free and clear of all liens, encumbrances, restrictions, and easements, except for the "Permitted Exceptions." As soon as is possible following the closing, Seller shall cause the title company to furnish, at Purchaser's sole expense, an ALTA Extended Coverage Form policy of title insurance, dated as of closing date, insuring title to the Subject Property vested in Purchaser, free from all encumbrances except "Permitted Exceptions." 8. Closing of title shall take place by June 30, 2012 or upon fifteen (15) days prior written notice to Seller from Purchaser, given at any time after Purchaser has exercised the option and has notified Seller in writing that title is acceptable to Purchaser (the "Closing Date"). Purchaser shall have the further right, in its sole discretion, and assuming Purchaser is not in default of any of its obligations hereunder, to extend the Closing Date to not later than October 31, 2012 by notifying Seller in writing of such election, and depositing with escrow agent an additional option deposit of Five Thousand Dollars ($5,000) (the Additional Option Deposit"). Such election and deposit must be made not later than June 30, 2012. If Purchaser extends the Closing Date, and if on or before October 31, 2012, Purchaser provides Seller with evidence that it has received approval from MHFA for financing the proposed housing development, the last date for Closing will be automatically extended to not later than June 30, 2013. The Additional Option Deposit will be applied as a credit on the purchase price at closing, provided that if the matter does not close,the Additional Option Deposit will be paid to the Seller. 9. The Seller agrees to pay the real estate taxes and assessments payable in the year prior to the year of closing, and all prior years' taxes. Real estate taxes payable in the year of closing shall be prorated to the closing effective as of the closing date. Seller shall pay on or 386665v5 JBD RC 125-292 4 before closing all special assessments levied or pending as of the date of closing. 10. Seller warrants there will not be at closing any contracts relating to the Subject Property. 11. This Option Agreement is specifically contingent upon, among other things, the following conditions being completed or satisfied in Purchaser's sole discretion: (a) Soils encountered after subsurface investigation are compatible with the proposed development and no adverse environmental problems exist or are discovered, (b) The parties have agreed: (i) to an allocation of the costs of demolishing structures and abating any contamination on the Subject Property to a level required for the proposed use, (ii) the timing and nature of any grants or other funds available to pay costs related to any required abatement, and (iii) whether any required abatement or demolition would take place before or after closing. (c) Purchaser shall have obtained satisfactory financing for the proposed housing development, (d) Purchaser shall have obtained all necessary governmental approvals, including, without limitation, any required comprehensive plan amendments and any rezoning and land use approvals, and (e) If required by a lender, an appraisal equal to or greater than the purchase price of the Subject Property. (1) Purchaser has determined, in its sole discretion, that its proposed development of the Subject Property is economically feasible. If these contingencies are not satisfied, or if the closing does not occur for any reason, the Initial Option Deposit, the Additional Option Deposit and the Part Payment, except as limited in 386665v5 JBD RC125-292 5 Section 1,will be returned to Purchaser. In the event that Purchaser determines that any contingency is not capable of being satisfied or otherwise waived or released by Purchaser before the Closing Date, Purchaser shall, within 30 days following making such a determination, notify the Seller whereupon this Agreement will be null and void, except as provided in Section 5. The parties acknowledge the Subject Property is being purchased in an open market and Seller does not know of any condemnation or eminent domain proceedings involving the Subject Property. 12. [Blank] 13. [Blank] 14. Possession of the Subject Property shall be delivered by Seller to Purchaser at the time of the closing. 15. The terms "Seller" and "Purchaser" as used herein shall include the heirs, successors, and assigns of the parties hereto, respectively. It is acknowledged that this agreement may be assigned by Purchaser to an entity formed by Purchaser to acquire the Subject Property. Such assignment does not relieve Purchaser of its indemnification obligation under Section 4 unless the Seller determines that the assignee is capable of such indemnification. 16. [Blank] 17. Each party shall be responsible for paying the fees or commissions of any broker retained by that party. 18. Time is of the essence of this agreement. 19. Each party shall, at the request of the other, and subject to the exercise of its legislative judgment, execute acknowledge (if appropriate), and deliver whatever additional 386665v5 JBD RC125-292 6 lb-10 documents, and do such other acts, as may be reasonably required in order to accomplish the intent and purposes of this agreement. 20. All communications, notices, and demands of any kind which either party may be required or may desire to give to or serve upon the other shall be made in writing, and such notice shall be deemed sufficiently given if and when it is addressed to then other party as provided below and either (a) delivered personally, (b) deposited in the United States mail, registered or certified, with postage prepaid, (c) deposited with an overnight delivery service for next day delivery, or(d)telecopied: To Seller: City of Richfield,Minnesota Attention: Mr. John Stark, AICP, Director of Community Development 6700 Portland Avenue Richfield, Minnesota 55423-2599 Fax: (612) 861-8974 To Purchaser: Ron Clark Ron Clark Construction and Design • 7500 West 78th Street Edina, Minnesota 55439 Fax: 952.947.3030 21. Seller represents that it is the actual owner, in fee simple, of the Subject Property, and that no other party holds any actual or beneficial ownership interest in the Subject Property. 22. Seller represents that the Subject Property has legal access to a fully-improved public right of way. 24. This agreement and the transaction herein contemplated shall be construed in accordance with, and governed by,the laws of the State of Minnesota. 386665v5 JBD RC125-292 7 lb— II IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year first above written. SELL City ' field B Ail = . De ich Its: City anager By: # �1�►. Debbie Goettel Its: Mayor PURCHASER: By: Ron Clark 386665v4 JBD RC 125-292 8 EXHIBIT "A" SUBJECT PROPERTY This option agreement covers the following property: Lot 3, except the north 75.00 feet thereof, Lot 4, and Lot 5, except the south 39.00 feet thereof, all in Block 4, C. S. SOENS ADDITION according to the recorded plat thereof on file or of record in the office of the Registrar of Titles,Hennepin County, Minnesota. Except the following: The South 32 feet of the North 107 feet of Lot 3, Block 4, R.C. Soens Addition, Hennepin County, Minnesota, and; The West 123.41 feet of that part of said Lot 3 lying south of the North 107 feet thereof, and; The North 31.63 feet of the West 123.41 feet of Lot 4, in said Block 4. Note: Conveyance will be subject to compliance with all applicable platting, subdivision regulations, and all requirements of the Registrar of Title. 386665v5 JBD RC125-292 A-1 AGENDA SECTION: OTHER BUS. AGENDA ITEM# 11 REPORT# 114 STAFF REPORT RICI-ECLD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: CORRINE HEINE, CITY ATTORNEY NAME,TITLE DEPARTMENT DIRECTOR REVIEW: / • Afi/ SIGNA • REVIEWED BY CITY 13" /► o MANAGER: f�t . �:. ITEM FOR COUNCIL CONSIDERATION: Consideration of a final development plan and conditional use permit for a planned unit development to include a 70-unit development that includes 18 townhomes and a 52-unit apartment building on 7641 Pleasant Avenue (the former Richfield Public Works Garage property and the former Gleason Mortuary at 211 W. 76th Street) by Richfield Properties I, Limited Partnership (dba Ron Clark Construction and Design and Connelly Development). I. RECOMMENDED ACTION: By Motion: Deny the consideration of a final development plan and conditional use permit for a planned unit development to include a 70-unit development that includes 18 townhomes and a 52-unit apartment building on 7641 Pleasant Avenue (the former Richfield Public Works Garage property and the former Gleason Mortuary at 211 W. 76th Street) by Richfield Properties I, Limited Partnership (dba Ron Clark Construction and Design and Connelly Development). II. BACKGROUND The proposed rezoning contemplated a development of three City-owned parcels and one HRA-owned property, all in the block between 76th and 77th Streets, the railroad tracks and Pillsbury Avenue. That development is no longer feasible due to recent actions taken by the City Council and Housing and Redevelopment Authority (HRA), and because of the Council's concern over a lack of reasonable policy 062612 -7641 Pleasant FDP_CUP Pillsbury Commons.doc guidelines to address the appropriate mix of market rate and affordable housing throughout the community for infill construction and multi-family housing projects. Staff has recommended denial of this action because the City Council and HRA earlier action to reject the proposals from the Developer to sell the publicly-owned land where the development is proposed. As a result, the Developer lacks the necessary consent of the property owners (City and HRA) to process a land use application for the proposed development. Staff recommends denying approval of the final development plan and conditional use permit for a planned unit development since the project is no longer feasible. At the June 12 meeting, Council members expressed concerns about the City's lack of a policy related to the concentration of affordable housing. The Council members' comments echoed similar comments that have been made by HRA members and Planning Commission members. The staff concurs that, although the City's Comprehensive Plan identifies the provision of affordable housing as a goal, the Comprehensive Plan does not adequately address the manner in which that goal should be achieved, or the appropriate densities or mix of affordable and market-rate housing within neighborhoods. Although the City's Comprehensive Plan was approved by the Metropolitan Council, the Metropolitan Council has not addressed the issue of concentration of affordable housing in Richfield as it has in other metropolitan areas such as the City of Minneapolis. The staff proposes to undertake a study and working with the HRA, develop a formal housing policy that addresses those and other issues. Staff anticipates a process that will afford opportunity for input from City officials, the public and interested parties. Upon final adoption of the housing policy, staff will request the Planning Commission's consideration of appropriate amendments to the City's Comprehensive Plan. III. BASIS OF RECOIVIlVIENDATION A. POLICY • The City Council and HRA rejected the Developer's proposal to purchase the publicly-owned land; therefore they lack the necessary consent of the property owners (City and HRA) to process a land use application for the proposed development. • The City Council is concerned that other than the City's senior high- rises, the Project proposes a significant density (24 dwelling units per acre) of only affordable housing on one block in the City. Given the City's currently identified concentration of affordable units in the City and the resulting concentration of families who meet the income requirements for affordable housing, the issue has arisen of whether the concentration of affordable housing proposed by the Developer is reasonable. • In addition, the Council is concerned that the absence of guidelines to assist the City as to what is an appropriate mix of market rate and affordable housing to meet the City's housing goals and to maintain the viability of the City and its existing residential neighborhoods should be addressed before the City and makes an irrevocable decision to rezone the land and grant the requested zoning approvals necessary for Pillsbury Commons. • The City and its HRA need to study further the recently released Stantec Report in light of the housing requirements in the 2020 Comprehensive Plan to determine the appropriate mix of market rate and affordable housing for these targeted areas, including the Site and throughout the City. If the Met Council is correct and the City's population does grow at least 10% over the next decade, it is critical that the City develop reasonable standards to address the following important policy issues: a. The appropriate mix generally of market rate and affordable housing throughout the City in light of the current level of affordability; b. The appropriate mix of market rate and affordable housing for the identified sites for medium to high density housing in the Comp Plan; c. The use of incentives, e.g., government financing tools such as TIF, bonuses in the zoning code, to provide for a mix of housing types and price ranges; d. The appropriate mix of market rate and affordable housing to address the creation of a disproportionate share of concentrated low-income housing in already poor segregated residential neighborhoods. e. The appropriate mix generally of market rate and affordable housing to address unintended negative impacts on adjacent single family residential property and neighborhoods. B. CRITICAL TIMING ISSUES • The Planning Commission allowed additional written comments to be submitted by June 15th. No comments were received from the applicant or the public. • 60-DAY RULE: The 60-day clock 'started' when a complete application was received on May 14, 2012. A decision is required by July 13, 2012 OR the Council must notify the applicant must be notified that the deadline for a decision has been extended up to a maximum of 60 additional days (or 120 days total) for good cause. C. FINANCIAL • The required application fee has been paid. D. LEGAL • A public hearing was held before the Planning Commission on May 29, 2012, and continued to their June 25th meeting. • Notice of the Planning Commission public hearing was published in the Sun Current Newspaper. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ADDITIONAL RECOMMENDATIONS) • Recommend that a study of the Stantec Report and the Comprehensive Plan be undertaken to develop guidelines to enable the Council and the HRA to address the appropriate mix of market rate and affordable housing throughout the community for infill construction and multi-family housing projects. V. ATTACHMENTS • Resolution • Property Map • Pillsbury Commons Three-Ring Binder (provided to you earlier) VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representative(s) of Ron Clark Construction and Design H - RESOLUTION NO. RESOLUTION DENYING REQUEST FOR REZONING, FINAL DEVELOPMENT PLAN AND CONDITIONAL USE PERMIT FOR PILLSBURY COMMONS WHEREAS, Connelly Development ("Developer") has submitted an application for rezoning as a planned unit development, along with applications for final development and conditional use permit approval (the "Project") , to the City of Richfield for the real property located at 7641 Pleasant Avenue and 211 West 76th Street, legally described on the attached Exhibit A and depicted on the map attached as Exhibit B (collectively, "the Property"); and WHEREAS, The Project is the second proposed development for the Property, the Developer having previously proposed in 2011 a seventy-unit apartment building on the south end of the current Site which would have resulted in more than twenty-four units per acre of high-density of one hundred percent "affordable" housing. The Applicant withdrew this earlier project in April of 2012 in favor of the current Project. WHEREAS, the Developer proposes rezoning the Property from "I" Industrial to "PMR" Planned Multi-Residential and proposes the development of the Property with a 100 percent affordable, 70-unit housing development, including 18 townhomes and a 52- unit, four-story apartment building with a density of twenty-four units per acre; and WHEREAS, the Planning Commission held a public hearing on the proposed rezoning, request for a final development plan and conditional use permit on May 29, 2011; and WHEREAS, notice of the public hearing was published in the Sun-Current and mailed to residents and property owners within 500 feet of the subject property on May 17th, 2012 and; WHEREAS, on June 25, 2012, the Planning Commission recommended denial of the applications by a vote of to ; and WHEREAS, the City Council considered the applications for rezoning, final development plan and conditional use permit approval on June 26, 2012; and WHEREAS, the location and density of the Project has raised important questions concerning the City's ability to reasonably absorb additional affordable housing units, as well as the appropriate mix of market rate and affordable units. An "affordable housing unit" is a housing unit priced at or below thirty percent of gross income of a household earning sixty percent of the Twin Cities median family income ($50,340 in 2012 for a family of four); and WHEREAS, the City recently received the "Richfield Rental Housing Inventory and NEET Assessment" prepared by Stantec Consulting Services, Inc. ("Stantec Report," or Stantec"). The Stantec Report concluded that presently, forty-five percent of Richfield's renter households have incomes below$35,000 and spend more than thirty percent of their income towards housing, thereby coming within the definition of"affordable housing." 1 1 - a This statistic is higher than the metropolitan area rate and one of the highest rates among Richfield's peer communities in terms of accommodating "affordable housing."; and WHEREAS, the Metropolitan Council and the Stantec Report concluded that there is a need in the City for multifamily affordable housing. The Stantec Report also concluded that while the present rental stock is comprised of a significant amount of one-bedroom detached or attached units (724), the vast majority of Richfield's rental housing is already located in buildings with five or more units (4,440). As a result, the City is already home to a significant number of families presently living in affordable, multi-family housing; and WHEREAS, other than the City's senior high-rises, the Project proposes a significant density (24 dwelling units per acre) of only affordable housing on one block in the City. Given the City's currently identified concentration of affordable units in the City and the resulting concentration of families who meet the income requirements for affordable housing, the issue has arisen of whether the concentration of affordable housing proposed by the Project on the Site is reasonable; and WHEREAS, the Council is concerned that while the City's 2020 Comprehensive Plan targets a number of areas for medium-to high-density residential housing, the Comp Plan does not provide any guidance as to the appropriate target percentages of market rate housing versus affordable housing to guide zoning activities and future development; and WHEREAS, the City has not studied the issue of concentration of affordable housing to determine whether the proposed location of the Project and its concentration of affordable housing is reasonable. In addition, although the City's 2020 Comprehensive Plan was recently approved by the Met Council, the Met Council has not addressed the issue of concentration of affordable housing in Richfield as it has in other metropolitan areas such as the City of Minneapolis, where the Met Council participated in the de- concentration of affordable housing as a result of the federal district court Holtman decision; and WHEREAS, the Council is concerned that while the City's 2020 Comprehensive Plan targets a number of areas for medium-to high-density residential housing, the Comp Plan does not provide any guidance as to the appropriate target percentages of market rate housing versus affordable housing to guide zoning activities and future development; and WHEREAS, while the Council recognizes that one of the significant goals of the 2020 Comprehensive Plan is to maintain a diversity of housing types and price ranges, pursuant to information in the Stantec Report, the Project would likely add even more affordable housing concentrated in a one block area in a community that is already considered to be nearly 100 percent affordable by metropolitan housing standards; and WHEREAS, the absence of guidelines to assist the City as to what is an appropriate mix of market rate and affordable housing to meet the City's housing goals and to maintain the viability of the City and its existing residential neighborhoods should be addressed before the City and the HRA make an irrevocable decision to approve the Project. l-1H3 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RICHFIELD HEREBY RESOLVES AS FOLLOWS: 1. Findings of Fact. The City Council hereby incorporates the foregoing recitals as findings of fact and makes the following additional findings of fact: A. The City's zoning ordinance establishes zoning classifications for individual property. The properties located at 7641 Pleasant Avenue and 211 West 76th Street are zoned I (Industrial). B. Connelly Development has submitted an application to the City for a planned unit development plan [the "PUD plan"] for 7641 Pleasant Avenue and 211 West 76th Street. The PUD plan proposes to construct a 70 unit development that includes 18 townhomes and a 52-unit apartment building. C. The PUD plan requires the Developer to have control over all of the property in the proposed PUD development. D. The Developer does not control all of the property necessary for the proposed development. E. The City and its HRA need to study further the recently released Stantec Report in light of the housing requirements in the 2020 Comprehensive Plan to determine the appropriate mix of market rate and affordable housing for these targeted areas, including the Site and throughout the City. If the Met Council is correct and the City's population does grow at least 10% over the next decade, it is critical that the City develop reasonable standards to address the following important policy issues: a. The appropriate mix generally of market rate and affordable housing throughout the City in light of the current level of affordability; b. The appropriate mix of market rate and affordable housing for the identified sites for medium to high density housing in the Comp Plan; c. The use of incentives, e.g., government financing tools such as TIF, bonuses in the zoning code, to provide for a mix of housing types and price ranges; d. The appropriate mix of market rate and affordable housing to address the creation of a disproportionate share of concentrated low- income housing in already poor segregated residential neighborhoods. e. The appropriate mix generally of market rate and affordable housing to address unintended negative impacts on adjacent single family residential property and neighborhoods. 2. On the basis of the foregoing findings, the applications for rezoning, final development plan approval and conditional use permit approval are denied. ►- � 3. The City Council directs the City Manager, City staff and staff of the HRA to review the Stantec Report, the City's 2020 Comprehensive Plan, develop facts as to the appropriate mix of market rate and affordable housing and make recommendations to the City and the HRA as to whether the respective bodies should consider reasonable guidelines for market rate and affordable housing for high-density projects in the City. Staff is directed to return with such recommendations not later than , 2012. Adopted by the City Council of the City of Richfield, Minnesota this 26th day of June, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk 11 _ 6 EXHIBIT A Legal Description of Properties Parcel C-1 The West 30 feet of Lot 1, Block 4, R.C. Soen's Addition, according to the duly recorded plat thereof on file and of record in the Office of the Register of Deeds in and for said County of Hennepin, State of Minnesota Parcel C-2 The South 32 feet of the North 107 feet of Lot 3, Block 4, R. C. Soens Addition, Hennepin County, Minnesota and The West 123.41 feet of that part of said Lot 3 lying south of the North 107 feet thereof, and; The North 31.63 feet of the West 123.41 feet of Lot 4, in said Block 4. Parcel C-3 Lot 3, except the north 75 feet thereof, Lot 4 and Lot 5, except the south 39.00 feet thereof, all in Block 4, R. C. Soens Addition, according to the recorded plat thereof on file or of record in the office of the Registrar of Titles, Hennepin County, Minnesota Except the following: The South 32 feet of the North 107 feet of Lot 3, Block 4, R. C. Soens Addition, Hennepin County, Minnesota and The West 123.41 feet of that part of said Lot 3 lying south of the North 107 feet thereof, and; The North 31.63 feet of the West 123.41 feet of Lot 4, in said Block 4. EXHIBIT B The Property • Milliji I+ . ? J .I . Kit 'J . . . .4..... 4;•.:_ e$4, I:II , . __ . 14., . wy ;* 4, E► 1 ,tie, ,„._.• H f't, . 1 r i Ai,' ---. : 1? :' ' .. I -t i •lty ' .}* p s y., y , - i • `t ffE t a ■ I i ,. „if: {{ e' i a :it '1,,,,-..,,,,,,,/,,,t, a ...- _:t ' - . r► Yf y ''r -._! _ - _ .wei= T _ MN iMpaallakaallabfaillillindlaillIMAIIIMataillegibill1111%., r ligglit4 AGENDA SECTION: OTHER BUS. AGENDA ITEM# 12 REPORT# 115 STAFF REPORT RIO-WIELD CITY COUNCIL MEETING JUNE 26, 2012 REPORT PREPARED BY: JEFF PEARSON,TRANSPORTATION ENGINEER ,TITLE DEPARTMENT DIRECTOR Aor REVIEW. P./fir .a t✓%/i r t REVIEWED BY CITY LA MANAGER: T ITEM FOR COUNCIL CONSIDERATION: Consideration to hire a consultant to perform appraisals and preliminary acquisition services for 13 residential properties along 17th Avenue from 63rd Street to 65th Street. I. RECOMMENDED ACTION: By Motion: Authorize staff to hire a consultant to perform appraisal and begin acquisition services for the 13 residential properties on 17th Avenue between 63rd Street and 65th Street needed for the construction of Richfield Parkway. II. BACKGROUND Consistent with City Council discussion at the May 8, 2012 worksession, staff is working towards the acquisition of the residential parcels needed for construction of Richfield Parkway between 65th Street and 63rd Street in conjunction with the Richfield Parkway North Connection. The connection is included with the Taft Lake Regional Water Quality Improvement Project which is expected to begin in 2013. Acquisition Process Acquisition of the thirteen residential parcels is proposed to be completed in part through a Special Assessment Bond. It is anticipated that draft purchase agreements would be negotiated contingent on a commitment from the residents to sign a petition in support of the project, resulting in City Council action to order the project. If the City Council does not order the project, the City would not purchase the homes. 06262012RichParkAppraisals Staff is asking for permission to hire a consultant to complete the initial phases of the acquisitions, including obtaining appraisals and negotiating purchase agreements. Relocation services will not be included in this phase and will be brought back to the City Council for consideration if the project is ordered for construction. Public Information Meeting A neighborhood meeting was held on May 24, 2012 to review the proposed process with residents. There was general consensus among the 17th Avenue homeowners present at the meeting to continue with the proposed process. Homeowners not present at the meeting have been contacted about the proposed project and process. Current Schedule July/August 2012 • Selection of consultant. • Obtain appraisals September/October 2012 • Obtain Petitions and Order Project • Execute Purchase Agreements • Resolution— Public Hearing October/November 2012 • Hold Public Hearing • Begin Purchasing Homes • Begin Condemnation Process Fall/Winter 2012 • Final Design 2013 • Award Construction Contract/ Begin Work III. BASIS OF RECOMMENDATION A. POLICY • The replacement of Cedar Avenue with Richfield Parkway is identified in the City's Comprehensive Plan (Transportation). B. CRITICAL TIMING ISSUES • The project must be ordered this fall to allow for 2013 construction. C. FINANCIAL • The anticipated scope of work is not expected to exceed $50,000. • If the project is ordered, the consultant services would be paid for using the special assessment bond proceeds. • In the event the project does not move forward, the proposed work would be funded using other City Funds. D. LEGAL • The City Attorney will be available to answer questions. E. ENVIRONMENTAL CONSIDERATIONS • None IV. ALTERNATIVE RECOMMENDATION(S) • The Council may choose not to authorize the services of a consultant at this time and direct staff on how to proceed. V. ATTACHMENTS • May 8, 2012 City Council Worksession Presentation. • Enlarged Project Area Map VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Neighborhood residents. 9 I City Council Worksession May 8, 2012 1 . Taft — Legion Project Update 2. Richfield Parkway Phase II (63rd to 65th) 3. Three Rivers Park District Intercity Regional Trail Master Plan ,neodty J Rkhlley. PUBLIC WORKS Legion Lake Elements • Grit Chambers , "P","7.91"1 • Storm Water Reuse — Irrigation — Infiltration • Wetland Buffers •Fro,idb J Rkhfleld• PUBLIC WORKS 1 Taft Lake Elements • ',:5J,4'3ti'ct'4»"xi'it _:±A[Y3'-._4,.<=Yy.Y-o M;ei • Flocculation Treatment System 2 • Storm Water Reuse — Infiltration l • PW Storage Area s • Frontage Road Removal , Richfield Parkway North ,.4 Connection x.J .pttwdy Serving Richfield. ti 17;:1, PUBLIC WORKS Taft-Legion Project Timeline • April 26th - Minnehaha Creek Watershed District (MCWD) Completed Plan Amendment Process • Summer 2012 • Approval of Cooperative Agreement • Order Final Design of Project • Purchase 3 homes at 63rd/Bloomington • Winter 2012 — Advertise Project • Spring 2013 — Construction Begins .proudly Serving Rkhfleid• PUBLIC WORKS 2 Ia '3 Saturday Morning Tour Who: MCWD Board of Managers What: Taft Lake Tour Review of Project Features When: 10:20 a.m. Saturday, May 12th Where: Meet in the Parking Lot off of Bloomington Avenue The tour should last about I/2 hour. .P,auay Jam,• PUBLIC WORKS Taft — Legion Project Estimated Uses: Taft Lake Storm Water Elements 51.800,000 North Connection ROW $600,000 North Connection Road Construction $900,000 ROW Services $20,000 Engineering,'Legal/Admin $225,000 Contingency 20% $300,000 Total Uses $3,845,000 Estimated Sources: City(Municipal State Aid) $1,145,000 Minnehaha Creek WD $2,700,000 Total Sources $3,845,000 Funding Gap $0 ,proudy swam wamew J PUBLIC WORKS 3 la - LI Richfield Parkway — Phase North Connection • 2010 Technical Advisory Committee • City— Public Works, Community Development, Recreation • Hennepin County • Metro Transit • Three Rivers Park District • WSB &Associates • Open Houses — 11/17/10 & 1/19/11 • March 2, 2011 Transportation Commission Final Recommendation • March 10, 2011 Open House • March 22, 2011 Council Approval , „dty Serving Richfield- rid - PUBLIC WORKS Richfield Parkway North Connection d r . TT' / F VIN' 7.60 ADT 7666 ADt 2500 A ' sac � t i F .�,A lit 5- 1Fi -§ " ,4,---":4 f,w "'. yam' . °""_ t �' _ i- -14.-93'1 w i`` �' .h.-1-'- �" 1 +2000ADT - 4 It ) Richfield Parkway — Phase II _! (63rd Street to 65th Street) i,, - .. 1 4 i z.•i� 'g • 14 homes needed a° ;"^' •HRA purchased 6420 17th d ' I' r 1 , . I I`• it -_ ."�1 L I • ; ' ' . r r. - l 1.. Si I .! •proudb Serving Rkhgela• 1 L.1.. r k ii IIM s (. t ct WORKS 4 ,'h k-'� y PUBLIC Phase II Estimated Phase Status Estimated Uses: 17th Avenue ROW $1,950,000 ROW Services $100,000 Parkway Construction(63rd-65th) $400,000 TRPD Path $100,000 Engineering/Legal/Admin $125,000 Contingency 20% $490,000 Total Uses $3,165,000 Estimated Sources: TRPD Capital $120,000 TRPD Right of Way $200,000 Hennepin County Community Works $627,000 Total Sources $947,000 Funding Gap 82,218.000 ,ppudly salving Richfield. PUBLIC WORKS 5 Proposed Special Assessment Bond Est. Bond Sale (to cover gap): $2,283,000 HRA Assessment: $600,000 (-25% of Gap) HRA Annual Payment: $45,330 Citywide Debt: $1,658,000 Estimated Annual Property Tax Increase EMV $125k: $5.40 EMV $200k: $9.86 EMV $150k: $6.89 EMV $275k: $14.32 .wry ► . FusL Special Assessment Options Opt 1 : Council Driven Opt 2: Resident Driven • Council ordered • Residents petition (35%) • 4/5 vote • 3/5 vote • Negotiate after the • Advance negotiation project is ordered • Higher condemnation • Costs identified before potential project is ordered • Limited condemnation potential . ry • PUBLIC WOgKS 6 2012 Project Timeline May/June Resolution — Feasibility Study Open House Obtain Appraisals July/August Obtain Petitions / Order Project Execute Purchase Agreements Resolution — Public Hearing September Hold Public Hearing Begin Purchasing Homes Begin Condemnation Process Winter 2012 Advertise for Bids Spring 2013 Award Construction Contract/ Begin Work •proudly semn9 RidrtleM• J II l4zI Policy Direction 1 . Does the Council want to move forward with Richfield Parkway Phase II ? 2. If so, should staff proceed with Special Assessment Bond funding scenario? *Proud), Rkfle • gift 7 e Intercity Regional Trail Master Plan • Three Rivers Park District • Kelly Grissman, Senior Manager of Planning • Stephen Shurson, Landscape Architect nue oa Intercity Regional Trail Master Plan • Transportation Commission recommended approval of the Master Plan • City Council consideration on May 22nd .qty ,. J ei 8 I °I EFt'_ �t �jS U a �+r .• . y�•ki', .II. is �- i i�14. i -I? ,� '). '' � tL- 1 f �, q.' i F; ; p tl�a � ,rte '�• . 1 � - • ' • t � � ' Q ��K4. , fir . t _■ e � �. i,. . 70 t j t + i t� - ii.. .41,1 1 1.. ' ,� ,auk ' 21'•C"nliFt3 CI'"'"117 q ,....�_ co i■cp SrY W• 2 i , , ( t , L -s �- ' =,- = ....1 —0 R — \V n' s ' � p �If• . 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