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03-28-1994~~~ CITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY. MEETING HELD CONCURRENTLY WITH THE CITY COUNCIL MEETING MARCH 28, 1994 CITY COUNCIL MEMBERS PRESENT: Martin Kirsch, Mayor; Michael Sandahl; Susan Rosenberg; Don Priebe; and Russ Susag. HRA MEMBERS PRESENT: Thomas Harms, Chair; Joan Helmberger; Russ Susag; Vern Luettinger; and Michael Sandahl. STAFF PRESENT: James Prosser, City Manager; Steven Devich, Administrative Services Director; Thomas Ferber, City Clerk; Donald Fondrick, Community Services Director; Byron Wallace, Community Development Director; Jack Erskine, Public Safety Director; William Fillmore, Liquor Operations Director; and John Dean, City Attorney; and Corrine Heine, Assistant City Attorney. A concurrent meeting of the Housing and Redevelopment Authority and the City Council was called to order by Mayor Kirsch and Chair Harms at 7:00 p.m. PRESENTATION OF COLORS AND PLEDGE OF ALLEGIANCE Mayor Kirsch led the audience in the Pledge of Allegiance. Item #1 PRESENTATION FROM RICHFIELD HIGH SCHOOL BAND MEMBERS AND SMALL GROUP FROM AMERICAN LEGION-RICHFIELD POST #435. Representatives of the Richfield High School Band and the Richfield American Legion Concert Band invited the public to their Scholarship Concert to be held at the High School Auditorium on April 5, 1994. The proceeds from ticket sales go to scholarships for Richfield High School Senior Band students. Council Member Sandahl read and presented a proclamation designating April 5, 1994 as Band Booster Day in the City of Richfield to Dan Flom, President of the Richfield Band Boosters. HRA/Council Meeting Minutes -2- March 28, 1994 Item #2 PRESENTATION OF PROCLAMATION HONORING U.S. REPRESENTATIVE MARTIN OLAV SABO FOR ASSISTANCE ON THE CITY OF RICHFIELD 77TH STREET RECONSTRUCTION PROJECT. Mayor Kirsch read and presented a proclamation of appreciation for the assistance of U.S. Representative Martin Olav Sabo to the City of Richfield on the 77th Street Reconstruction Project to Elaine Kienitz, aide to Congressman Sabo. - ITEM CONSIDERED CONCURRENTLY BY CITY COUNCIL AND HRA: Item #1 CONSIDERATION OF CONCEPTUAL ACCEPTANCE OF SHOPS AT LYNDALE REDEVELOPMENT PROPOSAL, ILN. C.L. NO. 90, HRA LETTER NO. 24 r~a~v5LC3 ~.BPl~tYf~ a~Y-1-, ~3 ~aa-rY- T~A~h3.a ~~i. eser`,t i e~1 ~~i ii a C~i~~1 C©x pu'~x ~ ~'~.©~i li concept proposal for a retail redevelopment project in the area bounded by Lyndale Avenue, Emerson Avenue, I-494 and 77th Street. The concept provides for the redevelopment of the area into- 231,000 square feet of retail space in two stages. Phase I would consist of 114,500 square feet of retail between Emerson and Colfax Avenues and related parking. Demolition and construction would begin this summer. Phase II between Colfax and Lyndale Avenues would follow in 1995 and consist of 116,500 square feet of retail and related parking. The anticipated Phase I tenants would be Best Buy, CompUSA, and Sportmart. The anticipated Phase II anchor tenants would ,include a restaurant, Linen'n'Things, and Petsmart. CSM proposes to relocate the Emerson Avenue Congregational Church to part of the Cloverleaf site. The market appears to provide a window of opportunity for this project. However, CSM stated that pay-as-you-go Tax Increment Financing (T.I.F.) assistance is necessary for the project to be feasible. Sid Inman, Publicorp, Inc., reviewed the financial feasibility of the project proposal relating to tax increment financing, fiscal disparities, developer equity, construction costs, rents, management fees, and rate of return on equity. He concluded that the proposal seemed feasible and appropriate. Council Member Priebe questioned the T.I.F. rate relationship to future value changes and the difference from previous T.I.F. projects in receipt of the increment. Mr. Inman reviewed the statute changes which impacted the T.I.F. process. He stated the net impact of increased future value on the increment would be zero. HRA/Council Meeting Minutes -3- March 28, 1994 Community Services Director Fondrick reviewed the public infrastructure issues related to the proposed project. He indicated the need to establish the storm sewer alignment through the site prior to construction. Council Member Priebe asked about the objections of those circulating a petition related to the 77th Street storm sewer connection to Wood Lake. Community Services Director Fondrick stated that all the required approvals had been granted after review by the required jurisdictions. He stated the issues had been raised and discussed during the review process. City Manager Prosser reviewed the impact on funding timing and construction for the 77th Street related storm sewer work resulting from the proposed fast track of development. Dave Phillips, architect for Richfield Mitsubishi, stated concerns that they were planning some improvements to their current building and were not contacted by CSM about the proposed development. ~~ City Manager Prosser indicated CSM had initiated contact with property owners about the project, several newspaper: articles had appeared describing the proposal, and several... meetings had occurred related to the proposal. Gordon Anderson, 7501 Elliot Avenue, suggested that more time for public input and further study is needed before the Council considers this project. Jim Miller, owner of Twin City Tire, spoke in opposition to the project stating ooncerns about the negative impact of displacing the existing businesses, the high rents of the proposed project, and notification about the project. He suggested the project be tabled to allow time to find a way to keep the existing businesses in the area. Ed McMenomy, real estate agent representing Bob Adelman, stated he was Mayor of Rosemount and that Rosemount had relocated several small businesses for the development of a National Guard Armory. He cautioned the Council that the legal and relocation costs for this type of project are very high. Nick Vossberg, 6340 Standish Avenue, spoke in opposition to the proposal calling it a Yuppie Shopping Center and stated concern about losing local tiro and automotive related stores. John Kenneally, 6400 Blaisdell Avenue, representing the Richfield Chamber of Commerce, stated that the Chamber Board of Directors had unanimously passed a resolution in support of the CSM Shops at Lyndale project proposal. HRA/Council Meeting Minutes -4- March••.28, 1994 Gloria Anton, owner of Vivariwn Pets at 6519 Nicallet Avenue, spoke in opposition to the proposal citing concerns about the impact on small independent businesses. Mike MoCann, attorney representing Hob Adelman, spoke in opposition to the proposal suggesting that the existing businesses would like an opportunity to meet with the City and HRA to look at developing their own plan for improving the area. Mary Hrown, 7733 Emerson Avenue, spoke in opposition to the proposal expressing her desire to stay in her reasonably priced apartment and her opposition to being relocated. Kevin Lewis, owner of Ridge Door Sales & Service Inc., 902 West 77 1/2 Street, spoke in opposition to the proposal indicating his desire to stay at his current location. Ann Hultman, 1112 West 78th Street, spoke in opposition to the proposal citing the desire not to relocate from her apartment. David Carlin, CSM, reviewed the contacts with area property own®~s :~~r~foa°%3.rYgi t~ixott some Err the ©G'~e~Z'~i as~:ed CSy mot t© contact the tenants, therefore, some landlords may not have notified tenants about the proposal. Terry Feldmann, owner of the Richfield Mitsubishi property, spoke in opposition to the proposal indicating that when he told the developer he wasn't interested in selling, he was told he then would have to deal with the City. Mr. Feldmann suggested waiting to allow more time to look at what to do in the area.- Mark O'Brien, Richfield Mitsubishi owner, spoke in opposition to the proposal and indicated that Mr. Feldmann had offered to make $125,000 of improvements for Richfield Mitsubishi. Betty Morton and Jean Kramer, 7733 Emerson Avenue , suggested new development be built around the existing businesses so they can remain. HRA Commissioner Luettinger stated that he had been inclined to support the concept proposal but was concerned that some of the business owners and tenants appeared to not have been aware of the proposal until now. Council Member/HRA Commissioner Susag stated that this area was a Tax Increment Finance (T.I.F.) District for which additional development was needed. He stated in his campaigning the community had voiced strong support for increasing the commercial tax base. He said he was stunned at the opposition to the proposal. HRA/Council.Meeting Minutes -5- March 28, 1994 Council Member/HRA Commissioner Sandahl stated that the status quo was not a good option. He stated any redevelopment will have some negative impact on the existing businesses since change will occur. He stated the increase in tax base was important and beneficial to the community as a whole. Therefore, it is important to move forward to redevelop the area. HRA Chair Harms noted that the community endorsed the ILN Redevelopment Plan which envisioned redevelopment of the area. He stated that the area has been waiting ten years for redevelopment. HRA Commissioner Helmberger stated that on balance the project was the best for the City as a whole. M/Harms, S/Sandahl that the HRA supports on a conceptual basis the Shops at Lvndale Redevelopment concept proposed by CSM Corporation. Motion carried 5-0. HRA/City Attorney Dean summarized the relocation process and obligations of the HRA. Council Member Rosenberg stated that this was a difficult decision and that she had concerns about the creditability of CSM in dealing with the businesses and tenants. She stated she could not support the project and believed that in the future better proposals from other developers are likely. _ Council Member Priebe stated concerns about the limited areas with redevelopment potential in the Richfield, therefore there is a need to maximize development on these sites. He stated he felt this site had a great potential for a higher level and value of development than this proposal, therefore he would not support the CSM project. He indicated it would be preferable to develop the Cloverleaf site first and then fill this area in with a compatible development. Council Member Susag spoke in support of the CSM proposal stating this was an appropriate project for redevelopment of the T.I.F. district at this time. Mayor Kirsch reviewed the original opposition to the LHN Redevelopment and the benefit to the community which resulted from that redevelopment. He stated that the. purpose of the 77th Street Reconstruction Project was to stimulate redevelopment along I-494, increase the tax base, and separate the commercial from the residential area. He noted the support of the Richfield Chamber of Commerce for the CSM Project and the opportunity to move forward with the redevelopment of the ILN area. HRA/Couacil Meetiag Miautes -6- March,-~28, 1994 K/Kirsch, 5/Susag that the City Council supports on a conceptual basis the Shops at Lvndale redevelo_pnnent concept groposed by CSM Corporation. Motion carried 3-2. (Rasenb®rg~, Priebe opposed) ITEMS CONSIDERED BY HRA: Item #1 CONSIDERATION OF RESOLUTION APPROVING MODIFICATION TO RICHFIELD REDEVELOPMENT PROJECT PLAN, CONSISTING OF MODIFICATION NO. 4 TO REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLAN FOR INTERSTATE/LYNDALE/NICOLLET REDEVELOPMENT PROJECT; REQUESTING RICHFIELD CITY COUNCIL TO CONDUCT A PUBLIC HEARING RSCO1MIIrlENDING APPROVAL OF THE PLANS. HRA LETTER NO. 25 Executive Director/City Manager Prosser :reviewed HRA Letter No. 25 regarding the proposed modifications to the ILN R®de~el©pme~t and Ta:: Irtncrome:at £~l~ra. M/Susag, S/Luettinger that the following resolution be adopted: that it be spread in the resolution book and that it be made part of these minutes: HRA RESOLUTION NO. 502 APPROVING MODIFICATION TO RICHFIELD REDEVELOPMENT PROJECT PLAN, CONSISTING OF MODIFICATION NO. 4 TO THE REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLAN FOR THE INTERSTATE/LYNDALE/NICOLLET REDEVELOPMENT PROJECT; REQUESTING THE RICHFIELD CITY COUNCIL TO CONDUCT A PUBLIC HEARING THEREON: RECOMMENDING APPROVAL OF THE PLANS Motion carried 5-0. This resolution appears as HRA Resolution No. 502 in Resolution Book No. 4. Item #2 CONSIDERATION OF RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT WITH CSM CORPORATION; ILN REDEVELOPMENT PROJECT. HRA LETTER NO. 26 City/HRA Attorney Dean distributed and reviewed a revised draft, dated March 28, 1994, of a contract for Private Redevelopment with CSM. HRA/Council Meeting Minutes -7- March 28, 1994 HRA Chair Harms stated the need for additional time to review technical language issues related to the contract with the City Attorney and therefore he was not ready to vote on approval of the contract this evening. Chair Harms suggested also that staff independently review and analyze the feasibility and financial impact regarding the potential for hotel/office redevelopment of this site. City Attorney Dean noted the need for an additional two weeks to draft documentation, which would also provide time for that analysis. It was the consensus of the HRA to allow a delay for this purpose. Council Member Priebe asked if the rezoning of the land for this project would require four affirmative votes of the Council. City Attorney Dean stated that the seoond reading and approval of an ordinance to rezone the property did require four affirmative votes of the Council. He stated that the failure to approve the rezoning would halt the process and the project could not proceed. By unanimous consensus, the HRA tabled consideration of a contract for private redevelopment with CSM Corporation; ILN Redevelopment Project until the Special HRA Meeting to be held on April 11, 1994. Item #3 CONSIDERATION OF RESOLtTTION AUTHORIZING CONDEMNATION AND QUICK TAKE OF PHASE I, THE SHOPS AT LYNDALE; ILN REDEVELOPMENT PROJECT. HRA LETTER N0. 27 •By unanimous consensus, the HRA tabled consideration of authorization for the condemnation and quick take of Phase I, the Shops at Lyndale; ILN Redevelopment Project until the Special HRA Meeting to be held on April 11, 1994. Item #4 CONSIDERATION OF TIME AND EVENTS SCHEDULE FOR PROPOSED CSM PROJECT; PHASE I. HRA LETTER NO. 28 This item was presented for information only and the schedule will be modified as required. HRA Commissioner/Council Member Susag stated he will not be present at the April 11, 1994 meeting. IiRA/Council Meeting Minutes HRA ADJOURNMENT The HRA meeting was adjourned by p.m. Date Approved: 4/18/94 Thomas P. Ferber City Clerk -8- March 28, I9g4 consent at 9:40 Marms D. Prosser tive Director L