02-10-09 Worksession
CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
February 10, 2009
CALL TO ORDER
The meeting was called to order by Mayor Goettel at 5:30 p.m.
ROLL CALL
Members Present: Debbie Goettel, Mayor; Pat Elliott; Fred Wroge; Tom Fitzhenry; and Sue
Sandahl.
Staff Present: Steven Devich, City Manager; John Stark, Community Development Director;
Karen Barton, Community Development Manager; and Cheryl Krumholz,
Recording Secretary.
Item # I DISCUSSION REGARDING PROPOSED CEDAR POINT PHASE II PUBLIC
FINANCING (COUNCIL MEMO NO. 21)
City Manager Devich provided the background related to the proposed financing. The HRA
has only considered the financing package merits and requested it be forwarded to the City Council
for their consideration.
City Manager Devich explained property acquisition is between the developer and property
owner, not the City and/or the HRA. The City and HRA determine what public financing assistance
is provided, if any.
City Manager Devich stated it is a public policy decision of the City Council to balance the
project’s merits and provide direction to staff on how to proceed.
Community Development Director Stark reviewed the proposed financing, including 429
bonds, tax increment financing, and Fannie Mae loans.
Community Development Director Stark stated the Phase II design includes the vision staff
understood as the direction to proceed, however, the City Council could make amendments.
Council Member Fitzhenry questioned the Richfield Parkway project being done without the
rest of the development.
Community Development Director Stark explained the cost differences when the developer
versus the City acquires and demolishes the right of way for the parkway. Appraisals could be
performed after the City Council and HRA direction is received on how to proceed with the project.
Council Member Sandahl stated that if the parkway is done, it should include bikeways and
improve traffic flow.
Special Worksession Minutes -2February 10, 2009
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Community Development Director Stark explained the City is subordinate to the Fannie Mae
loan but discussion with the bank could occur to attempt a settlement agreement or position sharing.
Council Member Wroge discussed his concerns with right of way acquisition to build the
parkway. He asked about the annual 10% administrative cost received by the HRA.
Rebecca Kurtz, Ehlers and Associates, stated the estimate would be $19,000 per year in
administrative costs.
Council Member Wroge stated he had been cautioned regarding meeting with all 29
homeowners in the area and expressed concern on the financial limits on acquisition and market
values.
Community Development Director Stark stated limits could be included in the development
agreement.
Council Member Elliott said he was not willing to take this financial risk for the City and that
more information was needed on the working relationship with the developer and bank.
Council Member Fitzhenry said the development is not a new concept because the developer
has a track record in the City.
Council Member Sandahl expressed support to move forward because the project is a benefit
to the community and homeowners in that area, with alternative housing and resolving airport noise
as well as addressing single family properties abutting commercial properties. She acknowledged
there are questions to be answered before an agreement could be finalized.
Council Member Wroge agreed with Council Member Sandahl about not stopping the project
but that the developer has responsibilities to address. He expressed concern regarding occupancy
rates in current buildings.
Council Member Elliott stated he supported moving forward cautiously due to commercial
lenders warnings in the current economic situation.
Mayor Goettel expressed agreement with Council Member Wroge and Council Member
Elliott.
City Manager Devich requested clarification regarding the City Council direction on spending
funds in conducting appraisals and providing information on subordination impacts.
Community Development Director Stark stated City discussions with homeowners could
create an interpretation of relocation expectations from the City when the City or HRA have no plans
to acquire homes.
Frank Lange, Lange Nelson, developer, requested permission to prepare a development
agreement for consideration to define issues, including financing.
The City Council consensus was to move forward with additional financing information and to
obtain an estimate of the cost of the property appraisals.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 6:30 p.m.
Special Worksession Minutes
Date Approved: February 24. 2009
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Chery Kr mho
Recording Secretary
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