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HomeMy WebLinkAboutSeptember 3, 1996ECONOMIC DEVELOPMENT AUTHORITY MEETING September 3, 1996 5:30 P.M. Fire Station City Council Chambers I. Call to Order ................................................................... 5:30 p.m. II. Pledge of Allegiance III.Approval of minutes for July 1, 1996 Meeting IV. Old Business: A. Presentation from County Regarding Annexation. B. Status Report on Park Nicollet Project. Consider Recommendation to City Council to conduct Public Hearing to Modify Tax Increment Financing District Boundaries. V. New Business: A. Mid-Year EDA Status Report VI.Other Business. ... 7:00 p.m. VII.Adjourn ........ 16200 E~l~6C.]~ve. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER MINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 NE$o ECONOMIC DEVELOPMENT AUTHORITY MEETING September 3, 1996 5:30 P.M. Fire Station City Council Chambers I. Call to Order: President Mader called the meeting of the Economic Development Authority to order at 5:30 p.m.. Present were President Mader, Commissioners Andren, Greenfield, Kedrowski and Schenck, City Manager Boyles, Assistant City Manager Tremere, Planning Director Rye, Assistant City Engineer Wingard, County Engineer Brad Larson, and County Planner Kathy Bongard. II. Pledge of Allegiance President Mader led the Pledge of Allegiance and welcomed everyone to the meeting. III.Approval of July 3, 1996 Meeting The minutes were amended as follows: Page 3 B, first paragraph should read "City Manager Boyles reviewed the agenda item, which is a revised concept plan." Page 3B, first paragraph, fourth line should read, "He stated that the Council had expressed a desire to review industrial architecture," rather than "renew." MOTION BY KEDROWSKI SECONDED BY SCHENCK TO APPROVE THE JULY 1, 1996 EDA MEETING MINUTES AS AMENDED. Upon a vote, ayes Andren, Greenfield, Kedrowski, Mader, and Schenck, the motion carried. IV. Old Business: .4, Presentation from County Regarding Annexation. City Manager Boyles introduced this item. He said the impetus for a decision on annexation is growing more immediate. The reasons are varied, including individual property holders in Spring Lake and Credit River Townships who are interested in knowing as development moves forward the extent to which they will be able to develop their property, and whether that property will have urban services. 16200 ~~e. S.E., Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 44.7-4245 AN EQUAL OPPORTUNF1-Y EMPLOYER MINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 The second impetus is the townships themselves are putting together their own 2010 Comprehensive Plan which includes a zoning map that shows over time how their properties will be used in the townships. There are transition elements to those plans which raise the question of whether urban services will be extended to those areas and if by annexation, at what time in the future. The third element is City Council, which desires to deal with this issue On a conclusive basis. City Manager Boyles said he was contacted by Brad Larsen and Kathy Bongard of the County, who are, in response to at least one petition for rezoning out in the township, asking that the City appoint one member to the 3 person-Board as called for by the annexation agreement. The Board consists of I member appointed by the County, 1 member appointed by the township, and i member appointed by the City. That body makes zoning decisions based upon petitions it receives. City Manager Boyles said because this matter is becoming more complex, greater information on taxes or on various scenarios may be needed. City Manager Boyles said he would like to have the City Council form a subcommittee to deal with this on a more aggressive and in-depth basis, and come back and make a final recommendation to the City Council, the EDA, or both. Brad Larson, Associate Administrator of Public Works and Lands in Scott County spoke on the history of the annexation issue. In 1972 an agreement was made between Spring Lake Township and the Village of Prior Lake to enter into an orderly annexation agreement for several of the sections of Spring Lake Township bordering the southern part of Prior Lake and a part on the western side. The agreement has been in effect for 24 years. The agreement set up an Orderly Annexation Board consisting of three members. The original members were planning director from the Village/City of Prior Lake, the planning director from Scott County and a township official. They had the authority to rule on issues involving variances, zoning, etc. in the sections contained within the orderly annexation area. The three governing bodies decided they would rather have that board be a recommending board rather than Scott County Board of Adjustment, which is also the Planning commission. That is how the Board of Annexation has acted with all of its issues from 1972 to the present. One of the concerns is that the informal agreement was never amended into the Orderly Annexation Agreement. The concern came in 1994 when an issue went through the process. The Orderly Annexation Board made a recommendation to the Board of Adjustment of Scott County. The Board of Adjustment denied the request. The E9396.DOC 2 MINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 applicant's attorney took to court the issue that the Board of Adjustment is not the regulatory authority. The court found that the Orderly Annexation Board is the only Board who can make the final decisions on issues per the agreement. In 1996, there now is another request which went through the same process, and again the Board of Adjustment denied it. The attorney has said the Orderly Annexation Board should make the decision according to the decision in 1994. They have requested a hearing before the Orderly Annexation Board. The statutory time limits provide 60 days for the Board to act with a 60 day extension possible. The 120 day period will expire on November 10. Consequently the City needs to appoint its representatives to the three person board. The other issue is the "mini-comp" plans for each of the townships. Scott County has had its Comprehensive Plan approved by the Metropolitan Council last November, but a condition of that approval was that each township also has to have a map approved from the County Board outlining their zoning, highways, and other issues before they would be allowed to enact and move on with development. Until they have this, there is a moratorium for development. The question the Metropolitan Council asks is this still a valid orderly annexation area and how is the City of Prior Lake and Spring Lake viewing this as far as density and other zoning issues. Spring Lake cannot move ahead with its Comp Plan and map approval until these questions are answered. Commissioner Kedrowski questioned the time line. Mr. Larsen said there was no time line, but if the townships never adopted a map, the moratorium would not be lifted. The guideline was all townships would have their maps in for common approval within a year. The areas around the townships bordered by Shakopee, Prior Lake and Savage were encouraged to get their maps approved earlier, whereas the southern townships don't have as big an issue for zoning. 8 of 11 townships have their Comp Plan and township maps approved. Spring Lake, Credit River, and New Market Township are the three remaining. City Manager Boyles said he has met with two representatives of Credit River township board and they are interested in seeing if the City has a decision one way or the other with annexation of certain areas within Credit River. Commissioner Schenck questioned Mr. Larsen about the court's determination of the Orderly Annexation Board as a Regulatory body when it was used as a recommending board. Mr. Larsen said it was set up as a regulatory board, but he thought the three members decided they E9396.DOC 3 MINUTES OF THE PRIOR ~ EDA OF SEPTEMBER 3, 1996 would act as a recommending board and use the Scott County planning process. Nothing was ever amended in the orderly annexation agreement to make that change of making the Board of Adjustment of Scott County the regulatory agency. It was not until the court case that the informal agreement was challenged. The court determined that based on the way the orderly annexation agreement is written, the Orderly Annexation Board is the regulatory body, and the Board of Adjustment of Scott County cannot be viewed as having the final say. Commissioner Schenck questioned the make-up of the board, whether it should include a Planning Director. Mr. Larsen said each body was to appoint a representative. Commissioner Andren asked for further clarification on whether they wanted Prior Lake to appoint someone to the three-member board. Mr. Larsen said yes, and the bigger issue is does the City want to continue to look at the area for possible annexation, if so, do they want to have some kind of input on the type of zoning and growth of the area. One option is Prior Lake is not interested in annexing this area now or in future, and could abolish or dissolve the annexation agreement. That would require further study of the ramifications. Scott County has received a petition that they want the Orderly Annexation Board to rule on an issue that is in the area of the orderly annexation agreement. City Manager Boyles asked about the issue the Board was to rule on. Kathy Bongard explained that it was a 4 acre lot of record, and the developers were asking for a setback for one 4 acre tract. She said there were two other developers, one wanted a conditional use permit, one wanted industrial area. One issue is by formal application, other two are pending. Commissioner Andren asked whether they were requesting an additional sixty days from September 10th to make a decision on the issue. Mr. Larsen said yes, for the short term, they needed the Annexation Board appointed and additional sixty days time extension. President Mader questioned whether the three entities should continue with this kind of a board. If the board envisions that it is for the purpose of recommendations only, and the court is interprering it as having final authority, it seems that there is a potentially serious situation. There may be major decisions being made through the court process that were never intended by these three entities, so that may suggest there should be restructuring, elimination, or replacement of the Board. E9396.DOC 4 MINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 Mr. Larsen said as long as each body had equal representation, the board could be restructured according to statute. There is a provision included in the orderly annexation agreement that says if both the township and the county would waive all responsibility for zoning in the area, then it would be assumed by the Planning Commission of the City with the addition of two members from the township. In 1972, this was not agreed to, so the three member board was used. It was not the courts telling the board, it was all along the official duty of the board to make the decisions. They chose informally to use another process, which was not challenged. Commissioner Kedrowski said it seems there is a time sensitive temporary issue. He noted that the agreement in 1972 that involved the Village of Prior Lake may have to be restructured to fit the City of Prior Lake 1996. He thought City Planner or EDA should be involved directly in annexation process. Commissioner Andren thought suggestion by staff of two member subcommittee for short term and also look into long term annexation issue that we will be faced with is a very worthy idea. MOTION ANDREN SECOND SCHENCK THAT COMMISSIONER KEDROWS~ AND LAKE ADVISORY COMMITTEE MEMBER DOUG LARSON FORM A TWO-PERSON SUBCOMMITTEE AND PROVIDE A RECOMMENDATION FOR THE ANNEXATION ISSUE. Upon a vote, ayes Andren, Greenfield, Kedrowski, Mader and Schenck, the motion carried. Commissioner Andren discussed the urgency of forming a subcommittee if there is only sixty days and the EDA meets once per month. The subcommittee should also work with the City Attorney and with the Planner to provide guidance to the staff long term. Commissioner Greenfield expressed concern with the validity of the 1972 Annexation document: Prior Lake was a village then. City Manager Boyles said he had an executed version of the Joint Resolution, which offers two options. One is the Planning Commission plus two township board members. The other option is the three-person board. He asked if these options were still available, because of the court case. E9396.DOC 5 MINUTES OF THE PRIOR LAKE EDA OF SEPTE1V[BER 3, 1996 Mr. Larsen said the County and the township would have to waive their rights for jurisdiction in the area if they agreed to go with the second option. The document is old and it should be reviewed to bring it up to date. The City may decide they don't need the agreement, or modernize so it addresses the City's concerns. Commissioner Greenfield questioned how the court would recognize the ~ Board's authority to operate. President Mader said he thought the charge to the subcommittee was clear in terms of addressing the immediate issues and the issue of assignment of someone to this board, and also looking at the structure in terms of whether we want to continue with this. City Manager Boyles said the first meeting is the first Monday in October, and asked whether that would work with the time line. Mr. Larsen said that it would work. He thought the subcommittee might want to just look at interim to handle this particular part now and take more than 60 days to look at overall issue of annexation. Commissioner Schenck said recognizing the County's position on this matter, he thought the EDA should take action tonight to provide them with a member. Commissioner Andren said she prefers not to have to act immediately. Though the EDA has talked about annexation issues, it has not given this a lot of thought because it wasn't high priority. Councilmember Kedrowski and Doug Larsen need to get a real good look at annexation issues from now and in the past. Commissioner Schenck said he doesn't think this is an immediate reaction and should have had someone appointed already. Now EDA is putting County in bind. Commissioner Andren suggested that Planning Director Rye can work with the committee as well. Commissioner Schenck said the main concern was getting the three member board to get the current rezoning request handled. President Mader said it would not be disruptive to appoint someone on an interim basis until such time that the EDA receives recommendations from the subcommittee. E9396.DOC 6 NLINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3. 1996 MOTION KEDROWSKI SECOND MAI)ER TO APPOINT PLANNING DIRECTOR RYE TO THE SUBCOMMITTEE. Planning Director Rye said the Statute was amended in the 80's that deals with regulatory structure. The Original 1972 agreement says a representative from each organization without specificity. It was amended to read the representation from a member of governing bodies of each organization. Commissioner Kedrowski withdrew the motion and Commissioner Mader withdrew the second based on staff recommendation. MOTION BY ANDREN SECONDED BY SCHENCK TO APPOINT COMMISSIONER KEDROWSKI TO THE THREE MEMBER BOARD. Upon a vote, ayes Andren, Greenfield, Kedrowski, Mader and Schenck, the motion carried. Bm Status Report on Park Nicollet Project. Consider Reco~nmendation to City Council to conduct Public Hearing to Modify Tax Increment Financing District Boundaries. City Manager Boyles has outlined in a report to EDA the current situation with that development. It would be useful for the EDA to recommend to the City Council that a Public Hearing be held in accordance with State statute to modify the existing tax increment financing districts. As a question, the City Council should determine whether or not the Park Nicollet Clinic itself should be placed in a tax increment financing district in order that the increments from that project could be available as assets for the City and the EDA to use to encourage development. President Mader commented that setting up tax increment districts creates opportunity to capture revenue otherwise lost to the City. If we don't have a well-defined project and those things don't happen, what is the down-side? Roger Guenette referred to a memo sent by the City Manager on TIF. They have a maximum duration of twenty-five years from the date of receipt of the first increment. Those three districts are generating $64,000 annually in TIF revenues. The 1984 and 1988 Districts represent $30,000 of the $64,000 annual increment. These revenues were pledged to retirement of General Obligation Bonds for those districts. If there is no additional redevelopment activity, the County Auditor can request E9396.DOC 7 MINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 that the City decertify the district. If the City of Prior Lake believes that redevelopment issues still exist in the general area in which the districts were first set up, and wants to redefine what the redevelopment activities are and establish a budget that may take time to implement, the City could retain the ability to generate the increment revenues and use them at the appropriate time. If we do not have a use for the funds, the County or State auditor will require the City to decertify the districts. If the district is decertified, the dollars that are currently flowing into the City from the tax increment will be distributed between the City, County, and State. The schedule from Juran and Moody shows the potential for the funds that are being generated from the 1984 district, the 1988 district, and the 1994 district. It also includes an estimated increment from the proposed Park Nicollet clinic project The three districts were all established for the redevelopment activity. There is additional redevelopment the City would like to see happen. The issue is when is it likely to happen, and what wi]] be the City's role in promoting the redevelopment. President Mader said it sounds like there is no penalty for setting up the district and later not developing. The penalty would be losing the revenues that the City planned to obtain. It appears there is no down- side financially. Roger Guenette said there is no penalty for setting up tax increment district, no cost except monitoring and administering. He mentioned the memo about the potential to act, expand to include the site of the proposed clinic as well as the Priordale Mall and the other 10 acres. The legislature may make it more difficult to create the TIF redevelopment districts. If Park Nicollet develops before a district is in place, there will be no tax increment revenues generated off that. The tax increment district has to be in place before the building permit is issued. If redevelopment is a priority, and the City wants the potential for future available resources, the Council should maintain the existing districts and consider expanding one of the districts to include additional acreage and property in that area. This does not obligate the Council to spend money, but to maintain or enhance the potential of increment generation for redevelopment, the City should hold a hearing and develop a plan and budget that would identify why the City would maintain income stream and what they would do with it. There was discussion regarding risks and consequences of the various possible approaches the City could take. E9396.DOC 8 MINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 President Mader said if it is a legitimate effort toward redevelopment or an appropriate use of tax increment funds, and for some reason it doesn't happen, the County still has the ability to reclaim those revenues that they are otherwise losing. Roger Guenette said if Park Nicollet intends to adhere to timeline of developing by the end of 1996, Prior Lake will have to request from the County and the school a waiver of the 30-day review period on the action to create a tax increment district. The County and the school have by statute 30 days to review the economic implications of the tax increment districts. The County Administrator, Assistant Administrator, and a Commissioner have been briefed on this. Ten days must be provided for Public Hearing notice. The City must also have a redevelopment plan available to discuss. Commissioner Kedrowski asked about Velishek Auto and TJ Towing Company, and whether the EDA should discuss. Roger Guenette said the potential acquisition of Velishek Auto or TJ Towing as it relates to the Park Nicollet project are separate issues. There is no action that could happen quickly enough in regard to these properties that would change or influence Park Nicollet's activity here. Potential activities and costs that may go into the revised plan would be acquisition of ex/sting properties, demolition, potential remediation of contaminated soil. Commissioner Schenck asked if there was a technical difference between a development and redevelopment TIF district. Roger Guenette explained there were five types of development: economic development, maximum duration of 11 years; redevelopment, maximum duration of 25 years; housing, maximum duration of 25 years; hazardous substance districts; renewal and regeneration 15 year duration. Commissioner Schenck asked if relocating businesses would be a springboard for additional redevelopment TIF requests. President Mader said the EDA should conduct a public hearing as origin-lly proposed. Roger Guenette stated that in the last year state agencies have required special reports to monitor tax increment. E9396.DOC 9 MINUTES OF THE PRIOR LAKE EDA OF SEPTEIV[BER 3, 1996 MOTION BY ANDREN SECONDED BY KEDROWSKI TO RECOMMEND THAT THE CITY COUNCIL SCHEDULE A PUBLIC HEARING TO CONSIDER MODIFICATION OF EXISTING TAX INCREMENT FINANCING DISTRICT ON OCTOBER 7, 1996 SUBJECT TO RULES AND REGULATIONS OF STATE STATUTE AND THE WAIVER BY THE COUNTY AND SCHOOL DISTRICT FOR TAX INCREMENT DISTRICT APPROVAL. Upon a vote, ayes Andren, Greenfield, Kedrowski, Mader and Schenck, motion carried. V. New Business: A. Mid-Year EDA Status Report President Mader said the EDA is not operating in accordance with the bylaws. He questioned whether the EDA has any authority or served a purpose that the City Council did not serve. He questioned whether the City should have an EDA. · Commissioner Kedrowski said it is not within the authority of the EDA Commissioners to discontinue the body. Commissioner Andren recalled the history of the EDA and its purpose. It originally was promoted by businessmen in the community because of a lack of business opportunity and lack of business within Prior Lake. They became an organization that has put the plans for the Business Park together. The reason was diversification of tax base and business development were high priority. The EDC evolved into the Business Development Committee (BDC) after they had put together the business office park. The BDC felt after those many years they had full, lied their mission, but one thing City Council told them is that the City would maintain a committee with additional power over and above the BDC so this momentum and priority could continue. The BDC disbanded with the understanding that the EDA would be revitalized. The EDA is not here for short term, and it has tremendous powers. Someday it will not be just members of the City Council who constitute this committee. Down the road, the EDA will be composed of businesspeople as well. Commissioner Andren said she would oppose abolishing the EDA. There are members of the business community that belong on the EDA even more than some of the Councilmembers because of their business acumen. The City has started to diversify, and encourage business development, but the objective has not yet been acheived. The City should have tools to use like EDA. E9396.DOC 10 MINUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 Commissioner Kedrowski said the City wants business here. The EDA is a tool that citizens want to get business here and to have tax diversification. Commissioner Andren commented on the bylaws; they are used as guidelines for operation of the EDA; they are not rigid statutes. The EDA does not have to disband because some by-law is not followed. Look at the spirit instead of the letter of the law. Commissioner Greenfield said he views the EDA as a subcommittee of City Council. He felt there was every reason for the EDA to continue. Addressing the concern of complying with bylaws, he said the Bylaws are here for the EDA to work with. It is within the Council's authority to change the bylaws if they feel they are inappropriate or unnecessary. Commissioner Schenck said it was frustrating to recommend to "ourselves". He said perhaps Commissioner Andren is right and it is time for the EDA to consist of business leaders of the community so that the Council receives recommendations from a different perspective. Commissioner Andren said she would be willing to amend the bylaws so that the EDA does not consist exclusively of Councilmembers. She would recommend two members of the City Council and three business people on it. President Mader said he was pointing out that the EDA does not meet regularly, and it appears that every authority that the EDA has, the Council has. This is redundant. That is not a good reflection of effective operation if we are not following bylaws. There should be discussion of restructuring the EDA. He said he was in favor of bringing in businesspeople who can make a contribution. If the long term plan is to continue, as the EDA is now structured, it is just making work. EDA members should give this further consideration for discussion at another meeting. MOTION BY ANDREN SECONDED BY KEDROWSKI TO RECOMMEND THAT, IN ACCORDANCE WITH MINNESOTA STATUTE 469.09, SUB.2B, A FIVE MEMBER ECONOMIC DEVELOPMENT AUTHORITY CONSISTING OF TWO MEMBERS OF THE CITY COUNCIL AND THREE MEMBERS FROM THE BUSINESS COMMUNITY, BE APPOINTED BY THE MAYOR SUBJECT TO COUNCIL APPROVAL. There was discussion on the statute as related to the makeup of the EDA_ E9396.DOC 11 M/NUTES OF THE PRIOR LAKE EDA OF SEPTEMBER 3, 1996 The Mayor read from Minnesota Statute 469.095 subdivision 2b, referring to makeup of EDA, the commissioners constituting a five- member authority, two of whom must be members of the City Council, shall be appointed by Mayor. Upon a vote, ayes Andren, Greenfield, Kedrowski, Mader, and Schenck, the motion carried. VI. Other Business. There was no other business. VII.Adjourn ................................................................................ 7:15 p.m_ MOTION BY KEDROWSKI SECOND BY MAI)ER TO ADJOURN. Upon a vote, ayes Andre~ Greenfield, Kedrowski, Schenck, and Mader, the motion carried. /~/' Th~eetin~~ourn~t~/'at 7:15 p.m. City. ~. na~ / Recording Secretary E9396.DOC 12