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HomeMy WebLinkAboutDecember 15, 1997 PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY MEETING MONDAY, DECEMBER 15TH, 1997 5:30 p.m.-FIRE STATION COUNCIL CHAMBERS . . . , Call to Order: President Barsness called the meeting to order at 5:30 p.m. Present were: President Barsness, Commissioners Gresser, Kedrowski, Schenck, and Underferth, Executive Director Boyles, City Attorney Pace, Planning Director Rye, Consultant Guenette, and Recording Secretary Oden. Pledge of Allegiance: President Barsness led the Pledge of Allegiance and welcomed everyone to the meeting. Approval of Minutes a) November 18, 1997 MOTION BY KEDROWSKI SECOND BY SCHENCK TO APPROVE THE MINUTES OF THE NOVEMBER 18, 1997 MEETING. Upon a vote, ayes by Barsness, Gresser, Kedrowski, Schenck and Underferth, the motion carried. Consent Agenda a) Consider Approval of TIF Policy MOTION BY KEDROWSKI SECOND BY SCHENCK TO APPROVE THE TIF POLICY. Commissioner Gresser referred to number six of the TIF Policy. He said "diversity" is an ethnic related term and another word could be used. It was agreed that "economic" should be inserted before "diversity". Commissioner Kedrowski and Commissioner Schenck agreed to incorporate this language as a friendly amendment. Upon a vote, ayes by Barsness, Gresser, Kedrowski, Schenck and Underferth, the motion carried. 5. Presentations a) None 6. Public Hearings a) None 7. Old Business Minnesota 55372-1714 / Ph. (612)447-4230 / Fax (612)447-4245 AN EQUAL OPPORTUNITY EMPLOYER 1 a) Update on Mondo Management, Keyland Homes, and NBC Products. Consultant Guenette of Advance Resources said relating to the three transactions in the industrial park, the purchase price terms remain the same. The 4.5 acre property has a pond that needs to be mitigated. The parcel needed to be able to support the proposed 55,000 square foot building. The cost the engineering department gave was approximately $25,000-$30,000 to mitigate. Mr. Wallis said his company would be responsible for the mitigation for a $35,000 reduction in the purchase price. The City would make an allowance for the expense. The developer's perception is they may have some economy by having the equipment available, and they could better control the time frame. While the City has costs it would incur, including management costs if it were to undertake the mitigation. Consultant Guenette said on the Keyland Homes site a new survey identifies less square footage as compared to the initial survey. This reduces the purchase price by $3,000. Consultant Guenette said all three parties are willing to execute the purchase agreements prior to December 31st. He asked if there were any questions. Commissioner Gresser asked what Roberts Foods was and the number of jobs it would create. Jeff Wallis, the developer, said it would create approximately 20 jobs. It is not a lease- back, it will be their building. Consultant Guenette said Roberts Foods will pursue a Department of Trade and Economic Development grant. He said they had done it before with EM products, and the more jobs that are created, the larger the grant they can apply for. The City receives the grant, they make a loan to the companies, and the companies repay the funds into the City's revolving loan ftmd. The ftmds once repaid are available for City Economic Development use. · Commissioner Gresser asked about Roberts' history. · Consultant Guenette provided history about Roberts Foods. Commissioner Underferth said last time they spoke of the Wetland Mitigation they talked about $20,000 to $30,000. Consultant Guenette said he had since spoken with Greg Ilkka, who gave a range of $25,000 to $35,000. City Engineer Ilkka said as an Engineer he would certainly not want to give a low estimate. · Commissioner Underferth said so the figure is on the high side. .R:\COUNCI I.\EDA\MI NUTES\97\l 21597. DOC 5~ City Engineer Ilkka agreed. Commissioner Schenck said so its conceivable it could be done for less than $35,000? City Engineer Ilkka said yes. Commissioner Schenck asked is there a willingness to make the value of the mitigation $30,0007 Mr. Wallis showed some new plans. He said they were only doing the mitigation from a timing standpoint, and that is where the economy came in. They felt the number was low. Without knowing exact elevations, they do not know how much fill will be needed. President Barsness asked him to explain the timing. Mr. Wallis said it would require soil borings, and if City does it they would have to do their own testing. The developer did not have any particulars about who did the mitigation, but wanted to speed up the process. President Barsness asked did we have a specific dollar cap? Mr. Wallis said there is a cap now, and he agrees it should not be open-ended. Commissioner Schenck said the number proposed is $35,000. He asked if Mr. Wallis would be willing to go down to $30,000. Mr.Wallis said if they want to go lower than $35,000, then the City could do it. Executive Director Boyles said if there were documented expenses, the City would reimburse up to a pre-set maximum. Mr. Wallis said they won't have an idea of actual costs until they get the borings. Consultant Guenette said the purchase agreements have been prepared, where the buyer will be given $35,000 credit, and the second version indicates the seller will reimburse buyer in amount not to exceed. This could be discussed any number of ways. The possibility exists that costs are in excess of $35,000, which is unlikely. Mr. Wallis said up to would be fine. Consultant Guenette said that allows it to happen in an expeditious manner. Commissioner Gresser said the cost to AMCON is lower than cost to City. AMCON will be preparing the site, and will have equipment on site. He said if the City contracts to have it mitigated with a third party, there could be a liability. That is something the City should consider. .R:\COUNCI L\EDA\MINUTES\97\l 21597. DO(? 0 President Barsness said the stipulation is up to $35,000. Commissioner Gresser said the cost can be broken out, and it could be $34,999. Mr. Wallis said that is the way to do it. President Barsness said the contract could be changed to reimburse up to $35,000 based upon the documented expenses of the contractor. Consultant Guenette said once the borings are done, there is a set method for developing an estimate. He said he anticipated it would go that direction. President Barsness asked if there was any other discussion. MOTION BY KEDROWSKI SECOND BY SCHENCK TO APPROVE THE PURCHASE AGREEMENTS WITH AMENDMENTS AS SET FORTH ABOVE. Upon a vote, ayes by Barsness, Gresser, Kedrowski, Schenck, and Underferth. New Business a) TH 13 Corridor Discussion. Executive Director Boyles said this was referred to the EDA for discussion. This study has been done using the staff representatives of County, State, the City of Prior Lake and the City of Savage, in 1995-1996. The purpose was to determine which roadways would receive accesses, and which would not. The goal of the transportation department is to minimize the number of accesses. The purpose is to balance needs for accesses and having an effective roadway. This is very likely a four-lane roadway. The state does not have the money to accomplish it as an overall project. City Engineer Ilkka said the City Council referred it to the EDA, particularly the intersection at Commerce/Boudin and 13. He said MNDOT still has not issued a final report on the corridor study, and they wanted the Council to approve the report. The Council did not because they held differing opinions regarding the Franklin Trail intersections. Commissioner Kedrowski said the intent would be insight. This is to facilitate upgrades that are necessary, especially Boudin's and Commerce Avenue; they should be restructured as soon as possible. City Engineer Ilkka said Boudin/Commerce could be combined to form a frontage road and common signal light intersection. He said the City talked to the church generally at the time of the study but has not talked specifically since the study. Commissioner Schenck stated that for clarification, emergency vehicles north bound on Highway 13 would not have a direct access onto Boudin's because of an island. If it R:\COUNCI L\EDA\MIN UTES\97\I 21597. DOC 4 were a little more inconvenient to take shortcuts, and the City brought Boudin around to join Commerce, part of the Timothy Avenue problems will be resolved. Commissioner Underferth said Commerce as currently shown is signalized. How reasonable is it for a frontage road along there? Is there Space? He said he thought it would have to go behind the church. City Engineer Ilkka said there were a number of alternatives from a space perspective, such as bringing Commerce south and bringing Boudins closer to 13. There is a storm water treatment pond. Executive Director Boyles said that the Commerce / TH 13 intersection was the same type of issue as Timothy/CSAH 42. MnDot said they could not approve a full access intersection that close to another full access intersection. In the process, they will get rid of one and have one full access. Commissioner Underferth asked how would this affect Timothy? Commissioner Schenck said people using Timothy for a shortcut through TH 13 will have another stoplight. Executive Director Boyles said he spoke with City Engineer Ilkka who talked with Savage and the County about Timothy and Rutgers. In the long run, it is understood that Rutgers is most likely to be full access and that Timothy will be restricted in some way. Commissioner Underferth said the EDA will support that type of intersection. It doesn't make sense to have it sit for a year and a half with no progress. Commissioner Schenck said the purpose of bringing the item to the EDA was to get the problem resolved. Executive Director Boyles said traffic going south on 13 cannot turn onto Franklin next to Norex. The southerly Franklin intersection prohibits traffic from Franklin turning southbound onto 13. Commissioner Schenck said it was to avoid the crossover traffic. Executive Director Boyles said MnDOT wanted agreement on the corridor study findings. The Council agreed except that both Franklin intersections needed to be full access intersections rather than restricted as originally recommended. President Barsness said if there is an intersection on Rutgers and closed on Timothy, will there be an access to Commerce through Rutgers? R:\COUNCI L\EDA\MINUTES\97\ 121597. DO(? 15 City Engineer Ilkka said the City wouldn't cut off Timothy right away. Longer term, a service road could be extended from Timothy to Rutgers to connect Commerce. Five homes would be affected. Commissioner Schenck asked about a Commerce connection before CSAH 42. President Barsness said traffic needs to be able to turn south off 42 onto Commerce. He said the Commerce area business is already there. Commissioner Schenck said at 42 and Commerce there are no proposed changes. City Engineer Ilkka said that would be part of a meeting with the County and Savage. Rainbow Foods is pushing for a left-in. Executive Director Boyles said the City Council wanted an EDA opinion. He suggested the City needed to contact residents who use those accesses to ask for their testimony to the EDA. The County and Savage will pressure the City; there is a significant tax base there which is not TIF. Commissioner Kedrowski said if the City was looking at the possibility of a frontage road, he doesn't know what the viability is. City Attorney Pace said one thing that needs to be recognized is that there are legal imphcations to access closings. Commissioner Kedrowski said the EDA won't know without exploring. It needs to develop a position. President Barsness said the Council has already heard from residents. Basically, the City has some agreement with them. Commissioner Kedrowski said if they want us to deal with the North end of County Road 42, then the EDA needs to understand the costs and options. Executive Director Boyles asked to what extent the EDA should try to unravel this? Commissioner Kedrowski said the EDA could get it off the ground. Commissioner Underferth said there was no problem with Commerce, but with Franklin, he thought all was a go, but Franklin Trail access came up and he was not there. He said he would not say yes or no without hearing from the people. Unless the EDA wanted to start all over with the people, it doesn't make sense. Commissioner Kedrowski said they need to resolve the issue, and make an effort to speak with residents. The EDA could schedule the meeting with two Franklin Trail issues. R:\COUNCI L\EDA\M] N UTES\97\ 121597. DO(? 6 Commissioner Schenck said it was his understanding that the City Council objected to the state's proposal at Franklin Trail. Commissioner Kedrowski said from a Council perspective, someone objected to the aligrunent, and the Council needs to talk to the businesses. If they ignore the issue, the state will not move forward with it and nothing will happen. Commissioner Schenck said can we come to an agreement on 13 with Commerce and Boudin? Commissioner Kedrowski said we can come to an agreement on goals, but still need to talk to people and formulate a plan and bring it back to Council. President Barsness asked is that feasible? Executive Director Boyles said yes. Council wanted them to work with other parties. The question on Timothy and Rutgers is different. Commissioner Kedrowski asked what type of timeline will there be to resolve that? Executive Director Boyles said there will be a new Council in January, which adds to the timeline. If they can get some of this done, and get it to the Council quickly it would help. Commissioner Kedrowski asked about the intent of the EDA President Barsness said it was so staff and EDA could sit down with residents and business owners for discussion on the intersections. Executive Director Boyles said the EDA can send invitations soliciting public input. President Barsness asked if that meant holding public hearings? Executive Director Boyles said it would be informational meetings. Commissioner Kedrowski said they could do it tonight. He said a focus on Commerce/Boudins is good, but it is the other half they need direction on. He said hopefully it will resolve something to go forward to State to get some funding. President Barsness asked if there were any more comments. There were no more comments. The EDA by consensus agreed to hold a work session to further discuss the alternatives at the Franklin Trail intersection with input from the City's Engineering department. Following this meeting, an informational meeting could be scheduled. R:\COUNCI L\EDA\MIN UTES\97\ 121597. DO(? 9. Other Business The development of the three parcels discussed earlier in the agenda will complete the business park. Consultant Guenette has prepared a report which will show the economic performance of this development. Consultant Guenette went over the report he would give to the Council. It assumes several things such as build-out in 1998 and it assumes that the TIF revenues continue to be generated, with the last in 2009. It also assumes that they have the receipt of $200,000 in grant proceeds in department of trade. This is a proforma document. He said Roberts Foods is ready to order steel for early spring construction, as is Tony Shanks. He said they tried to list out relative costs, revenue sources, case by case on cash flow. The summary overview revisits original o~ectives. The City originally called for 90% reimbursement of costs. The development will be complete in less than five years. The economic impact will be just under 200,000 square feet at build out and will grow. Real Estate taxes generated per year is estimated to be $315,000. Jobs will be 177 and will increase. The estimated annual payroll is $4.5 million dollars. The bottom line return on investment is $883,000 in excess of original investment. From any perspective this is a very positive development. This is the type of investment any community would like to see materialize. This is the result of work done by the BDC to look at development options, and where should that type of venture be. They spent a lot of time with analysis. Ultimately, the Council approved the transaction. After substantial excavation fill and grading, it ended up with property that started marketing immediately. When this is finished, the City's debt will be paid off, and the EDA will have, including grant proceeds, $883,000 to work with future development. This is from land sale and proceeds. The EDA position in terms of assets five years ago was nothing. He said they exceeded original expectations by a substantial amount. Commissioner Kedrowski said they should develop a plan now on how to use the excess TIF. Consultant Guenette said it does not hurt to think about how, when and to what extent the TIF is flowing in. The City will have its own income to handle payments and at some point the City could reimburse the EDA and the EDA will accumulate a cash balance. The EDA could wait or could look at development options. It could talk about priorities of Commercial/industrial, Redevelopment Downtown, and Credit River Business Park. Commissioner Kedrowski said the reason he was asking is there are a lot of options and the EDA should develop a framework on where it wants to go. Commissioner Underferth said the EDA should talk about how those funds might be available. President Barsness asked Commissioner Underferth for a report on downtown redevelopment. R:\COUNCI I..\EDA\MIN UTES\97\ 121597. DO(' 8 10. 11. Commissioner Underferth said Brad Johnson spoke to the Downtown Redevelopment Steering Committee about setting long term visions about what downtown might look like. One thing he did bring up was a housing component would be a fairly good idea. At the last meeting, there was a good exchange of pictures of property currently there, and discussion of integration with the library, along with the Chanhassen experience. The Committee has charged staff with coming back at the next meeting with a concept plan layout for downtown. He said there are only ideas at this point. Commissioner Gresser said hopefully there will be gathering places. He asked about a theme. Commissioner Underferth said a streetscape is what staff is charged with coming back with, and how it will be pulled together, the parks, downtown, and Priordale Mall area. Commissioner Underferth mentioned entry monuments. Commissioner Schenck said it was part of Council direction to install entry monuments. Commissioner Barsness said making it happen and moving forward was a focal point for the community. Commissioner Gresser asked if the EDA can use TIF for downtown redevelopment or site improvement. Consultant Guenette said 20% of revenues are used for downtown redevelopment. President Barsness asked for a cash flow report at the next meeting. President Barsness said the Executive Director and EDA should work out a meeting process and location for the work session. Announcements or Correspondence. President Barsness said the next meeting would be the 20th of January. Adjournment MOTION BY SCHENCK SECOND BY UNDERFERTH TO ADJOURN. Upon a vote, ayes by Barsness, Gresser, Kedrowski, Underferth and Schenck, the motion carried. The meeting adjourned at 7:00 p.m. Executive Director Recording Secretary R:\COUNCI L\EDA\MlNUTES\97\ 121597. DOC,