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06-29-2000 Special' ~~~ CITY COUNCIL AND HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Special Joint Study Session June 29, 2000 CALL TO t7-RDER The meeting was called to order by Mayor Kirsch and HRA Chair Harms at 6:00 p.m. ROLL CALL Council Members Presenfi HRA Members Present: Martin Kirsch, Mayor; Sue Sandahl; Susan Rosenberg (arrived at 6:04 p.m.); Kristal Stokes; and Russ Susag. Thomas Harms, Joan Helmberger; Dan Linnihan (arrived at 6:05 p.m.); Kristal Stokes; and Michael Sandahl. Staff Present: Samantha Orduno, City Manager/Executive Director; Thomas Ferber, City Clerk; Mike Eastling, Public Works Director; Bruce Palmborg, Community Development Director; Perry Thorvig, Community Development Specialist; Pam Dmytrenko, Assistant to City Manager; Randy Hughes, Operations Coordinator; Ray Wroblewski, Forester; and John Dean, HRA Attorney Special Study Session Minutes -2- June 29, 2000 Item # I DISCUSSION OF CURRENT AND FUTURE REDEVELOPMENT STRATEGIES S. R. NO. 13 Community Development Director Palmborg reviewed Staff Report No. 13 regarding the status of current redevelopment and Tax Increment Financing (TIF) including: • HRA decision to drop pursuit of redevelopment strategies in the Penn and Sixty- Sixth Street (PASSS) area • Redevelopment Projects under construction: • Gramercy Co-op • Woodlake Centre • Mainstreet Village • Phase .I • Phase II • Castille Place Townhomes • Redevelopment Projects under contract not yet in construction: • Lyndale Gateway CSM • Best Buy • Redevelopment concepts being evaluated under"Exclusive Rights" Agreements approved by HRA • 76th Street and Lyndale Avenue (northeast corner) • I-494/77th Street Corridor • Existing City Garage Block • Multi-Year Projects • Mitigative Area • Tax Increment Financing • Available in accordance with State law through application of the "but for" test HRA Chair Harms stated that it was important not to forget the long-term strategy to address multi-family rental housing issues. Council Member Rosenberg stated there has been much discussion in the community about redevelopment.- She stated it was important to reassess, catch our breath and finish what is underway. She stated that a former Mayor noted that a moratorium is not necessarily the answer because it would have a chilling affect on future development. She stated that it was important to discuss future directions for the community. 1 1 Special Study Session Minutes -3- June 29, 2000 HRA Commissioner Mike Sandahl stated that the HRA and City had worked very hard to attract development during the lean economic times and all of a sudden the economy boomed as did development. He stated this was both good and bad. He stated many good developments occurred, but this stretched staff's ability to deal with them and raised concerns from citizens that all we cared about was development. He stated that prioritizing would help what should be done next and where to spend limited time and funds. HRA Chair Harms reviewed the history and market issues which resulted in the City's position. He stated the City was lucky to be in the position to take advantage of the good economic times. He stated he wanted the City to remain a place that is responsive when developers request information and want to discuss potential projects, in addition to prioritizing. Council Member Susag stated there should be an emphasis of commercial redevelopment in the 77th Street/I-494 Corridor particularly for MAC displaced businesses. He stated an inventory of businesses and housing in the area should be done. Council Member Stokes stated that the perception that every area of the City is being redeveloped and who will be next has been harmful. She stated the need to focus on the areas not being redeveloped which is a large percentage of the community. Council Member Rosenberg stated the need to address residents concerns, fear and anger regarding redevelopment issues. HRA Commissioner Helmberger stated that the City need not recruit developers but should be open to respond to proposals and circumstances that come before it. Council Member Sue Sandahl stated agreement with Council Member Rosenberg about the fears of some residents that the City will come and buy their house. She stated that a map showing where commercial redevelopment will not occur with the neighborhoods protected would be helpful. She noted that the Richfield Rediscovered Program would still be the key housing program in the non-commercial areas. Mayor Kirsch stated he agreed that it was a good idea to have a map showing the areas which are not in a redevelopment area so people know they should not fear losing their home. HRA Chair Harms stated that maintaining the housing stock and keeping commercial areas vital is important to the future of the City. HRA Commissioner Linnihan discussed the following: • Sale of City maintenance garage site for housing redevelopment and use of proceeds for construction of new maintenance facility • Discretionary use of TIF and "but for" test • If a hotel displaced by the MAC desires to relocate to Richfield, MAC should be responsible for all the costs and no TIF should be used • The utilization and need for TIF in different areas i.e. I-494/Cedar vs. 66th Street/Penn Avenue Special Study Session Minutes -4- June 29, 2000 • Redevelopment to solve residential/commercial land use compatibility • Concentrate on housing and housing choices for those who are displaced • Investigate ways for existing businesses to upgrade Council Member Stokes discussed the importance of replacement housing and housing programs noting that timing and control are issues. She stated that the 1- 494/Cedar Avenue area redevelopment would be important. Mayor Kirsch stated that an inventory and vision for the 1-494/Cedar Avenue corridor is important. Council Member Susag discussed relationships with businesses in the Lyndale Gateway area and questioned why the map depicted the area north of 76th Street on Lyndale Avenue for redevelopment. Community Development Director Palmborg stated that it was part of the planning area and that discussions had been conducted about parking and other issues. He stated it is not proposed for redevelopment. 1=-II~A Commissioner Linnihan discussed opportunities to work with and partner with existing businesses. HRA Chair Harms stated that the HRA and City haven't explained TIF very well. He stated that it has become a much more visible issue due to the large projects but the percentage is no more than past projects. He stated the next challenge is to address rental housing. HRA Commissioner Linnihan stated a key issue about TIF is to communicate that it is not an abatement of taxes. Council Member Susag discussed communication issues related to TIF and possibly looked historically at past projects. HRA Chair Harms stated that Penn Avenue is an example of where market forces did not create any improvements as compared to Lyndale Avenue where TIF was used. Council Member Sue Sandahl discussed the deterioration of Lake Street where her office is located as another example of what could happen when nothing is done. She stated Minneapolis is now trying a grant program for businesses to fix up their properties. It was consensus of the HRA and City Council that this type of discussion should occur every six months. City Manager Orduno summarized the discussion as follows: • Continue to respond to redevelopment opportunities as they arise • Focus on creating/maintaining variety of housing choices • I-494/Cedar corridor needs focus and quality development consistent with its visibility/location assets Special. Study Session Minutes -5- June 29, 2000 • Focus on mitigation area, keeping businesses and family multi-housing replacement • Establish opportunities for stakeholder businesses to expand and stay • Focus public relations on areas not under redevelopment • Reassure people they are not going to be bought out • Need to better explain TIF as a vehicle for quality development • Process by which we prioritize our projects and future development • Scattered site development should continue, also Richfield Rediscovered program and focus should be expanded • The MAC be responsible for costs for hotels that have to relocate • Develop a map showing areas not subject to redevelopment Council Member Rosenberg stated that the City needed to find a way to address the fears and concerns of residents. Item # II ©ISCUSSION Of AIRPORT LEGISLATION AND USE OF $5 MILLION LEGISLATIVE GRANT S. R, NO. 14 ; Community Development Specialist Thorvig reviewed Staff Report No. 14 regarding a draft plan for spending a $5 million legislative grant in the airport noise mitigation area describing the four acquisition policies as follows: 1. Purchase homes in the 87dB low frequency noise contour 2. Concentrate acquisition in the area most affected by noise north of 66th Street 3. Purchase single family homes first 4. Avoid a voluntary buyout program He stated the plan provides that the homes will be purchased, cleared and the lots seeded. He stated no other site preparation is contemplated. There is not enough money to remove streets or trees in the area. Based on the first funding amount, the draft plan does not propose any specific future redevelopment plan. However, if a developer is interested in purchasing the land after it is cleared, the land would be appraised and sold at fair market rates for non-residential development. This would occur only after all the properties in the 87d6 area north of 66th Street are acquired. District 40 State Senator Dave Johnson reviewed the history of various airport mitigation legislative proposals and the $5 million grant authorized by the 2000 Minnesota Legislative. He stated he looked on this action as setting a precedent for future legislative action to address airport mitigation. He stated that the $5 million grant is viewed by several Legislators as the test case funding and if Richfield uses it only to acquire homes and move people out of the area it would set the stage for future funding. He stated it is prudent for the City to follow the intent of the legislature and clearly demonstrate that the need exists for additional funding to complete the task of acquiring the most impacted properties prior to the opening of the new runway. He recommended that the City proceed with their plan for buying homes, quickly use all of the grant money and set up a process to show the deficiency in funding by having appraisals and applications to show the Special Study Session Minutes -6- June 29, 2000 additional acquisition costs. He recommended coordinating with a federal strategy and pursuit of funding through the low frequency noise agreement. District 40A State Representative Dan Larson stated that it was apparent that TIF was not a funding solution acceptable to some in the legislature. He recommended that the City proceed with the process to spend the $5 million grant and then to further demonstrate what the overall cost of mitigation will be through a good objective process for the next legislative session. City Manager Orduno acknowledged the work of Senator Johnson and Representative Larson related to airport mitigation on behalf of Richfield residents. ADJOURNMENT This concluded the concurrent portion of the Special City Council and HRA Meeting. The HRA Meeting was adjourned by unanimlai,~ consent at 7:44 p.m. Date Approved: July ~~, 2000 h s E. Harms it Thomas P. Ferber Samant a rduno City Clerk .xec ' e Director 1