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HomeMy WebLinkAboutEDA MIN 03-28-06 ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES MARCH 28, 2006 CALL TO ORDER/ROLL CALL President, Murzyn, Jr. called the meeting to order at 7:08 p.m. Present: Don Murzyn Jr., Patricia Jindra, Bobby Williams and Bruce Nawrocki, Tammera Diehm, Gmy L. Peterson and BlUce Kelzenberg PLEDGE OF ALLEGIANCE CONSENT AGENDA Approval of Minutes of January 24. 2006 Financial RepOl't and Pavment of Bills Move to approve Resolution 2006-02, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the financial statements for January and February 2006 m1d approving payment of bills for January and February 2006, Nawrocki stated he was told the Sarna's had one of the principals of Barna, Guzy working for them, and that they wouldn't be working for the EDA, that Kennedy and Graven would be, it looks like a conflict of interest. Streetar stated Kennedy & Graven is doing the Development Agreement and Barna, Guzy is representing Sarna's. Nawrocki stated under Revenue there is approximately $57,000 listed, what is this from. Streetar stated it was for the Industrial Park permits. Motion by Diehm, second by Jindra, to adopt the consent agenda items as listed. All Ayes. Motion Carried, ITEMS FOR CONSIDERATION Preliminary Development Agreement with Pratt Ordwav PI'operties Streetar stated the Preliminary Development Agreement with Pratt Ordway Properties is for the redevelopment of the Apache Theatre parcel. Pratt Ordway Properties has partnered with Comforts of Home Inc. The property closed in September of 2003, the owner of the property, Mr. Herringer entered into an option agreement with Mr. Len Pratt of Pratt Ordway properties in August of 2004. Pratt is the developer of Silver Lake Village in St. Anthony. Pratt Ordway Properties, the developer, and Comforts of Home, the builder, have prepared a redevelopment concept plan, which would include between 45 and 65 assisted living units, with 15 units serving memory care residents and the second with 45 and 65 independent senior units, where residents may purchase assisted living services on an al a carte basis. The PreliminalY Development Agreement, if approved, would address any financial assistance that may be neceSSalY, would run from today through November and that the developer would provide a $5,000 deposit. Mr. Herringer stated he acquired the property that his father purchased back in late 40's, it was originally plotted as 10 properties, built a theatre in February 1969, in 1970 they sold the land Economic Development Authority Meeting Minutes March 28, 2006 Page 2 of6 adjoining, which was a Penny's Supermarket, they ran the theatre untill977 when they sold it to England Theatre's, then Mann Theatre's, who ran it until 2003. Tom Letness and his partner Dave felt they could make the theatre work, so they signed a five-year lease in June of 2002, which lasted until September of 2003. Herringer put up a purchase sign in December of 2003, received 66 inquiries, with 26 from churches or schools, which would be non-taxable, took down the sale sign, then Len Pratt discussed purchasing the property and they agreed to sign an option deal, which was on a month-to-month basis and was extended twice, and will end in August. Brian Winges stated he is the owner of Comforts of Home, and introduced President, Beth Dace, his Partner, Wendy Fritz, Matt Frisbie of Frisbie Architects, Inc., and representing Pratt Ordway, Darrell Gammer. He then played an 8-minute movie on the Comforts of Home facilities. Winges stated his company is community based, stafffocuses on getting to know residents, which allows them to care for residents longer, keeping seniors out of nursing homes for a much longer period of time, they try to keep the resident occupancy to a minimum, stated most assisted living units won't do County contracts, where they tly to workji'om the beginning with the County to provide the best quality care and a more affordable cost to more moderate-income residents. Nawrocki asked if they were just talking about just the theatre property or the shopping center also. Streetar stated they are only interested in the theatre property, the map in the packet identifies other possibilities for the shopping center that another developer is interested in and has had discussions with Mr. Herringer about. Nawrocki asked Streetar about his previous statement that financial assistance may be necessary and wanted to know how much. Streetar stated until the Preliminary Development Agreement is entered into, we won't know what, if any, financing would be needed. Peterson stated we should keep in mind that eventually the board would be asked to sign a development agreement, which would layout the costs associated with this project and we would have the option to vote for or against it. Matt Frisbie, Frisbie Architects, Inc. explained the two concepts: 1) concept A-I shows Hart Blvd coming through with access, the building would have porches, the two buildings wouldface each other, would need some water retention areas; and 2) concept A-2 would close off Hart Blvd. entrance from 37'h for some parking, bike paths, possibly line up the streets with 37'h Place to tie into the local access road. Nawrocki said he had some concerns with Stinson being closed off. Murzyn Jr. stated that is a traffic problem area and maybe it would be a good idea to close it off. Fehst stated the City does have a lot of speeding problems on 37'h Avenue. Peterson stated if we could solve the traffic problem that would be wonderful, has always felt Hart Lake was under utilized, would like to see a little park with benches and trees there, it could be an esthetic coming into the City. Diehm asked if all of the buildings Comforts of Home owns are for seniors or assisted living Economic Development Authority Meeting Minntes March 28, 2006 Page 3 of6 units for seniors and what amount would the senior apartments be listed at. Winges stated they would be market rate senior units, unless the resident requested extra services and that all their buildings are for seniors. Wendy Fritz asked Nawrocki what his thoughts were about this idea. Nawrocki stated in looking at the units, he felt they wouldn't be cheap, but with this kind of unit, they would be the only ones around the area. Jindra stated she goes to a cardiac treatment center and there are a lot of people looking for this type of housing, but are having a hard time finding it. Motion by Peterson, second by Diehm, to Approve the Preliminmy Development Agreement between the Columbia Heights Economic Development Authority and Pratt Ordway Propeliies. All ayes. Motion Carried. Next Steps in the Redevelopment of 39th and Central Streetar stated Mark Moser, one of the owners of the Columbia Heights Rental and Mr. Doug Foss, one of the owners of the Mady 's-Foss Bowling Center, was present. Since 2002, this site was identified by the board as a redevelopment site, staff has completed building inspections, phase one environmental site assessments, started phase two environmental site assessments, which would be complete in August, completed real estate and fixture appraisals, relocation estimates, acquired and demolished the Burger King, toured six other infill redevelopment sites in the area, and with the help of DSU and Sherman & Associates, prepared 4 redevelopment concepts. We are at a point where we need to bring a private developer into the mix. There are two ways to go about this: 1) continue to negotiate with both parties to acquire their property; or 2) partner with a developer to find out what is market feasible for the property. We would like to recommend working with George Sherman of Sherman & Associates as a development partner. They have significant and successful experience in both residential and commercial urban infill redevelopment and have indicated a sincere desire in forming a partnership with the EDA to redevelop this area. Streetar stated ifhe could speakfor Mark and Doug, particularly Mark, they have been waiting since 2002, wondering what and if anything is going to happen with the redevelopment. In talking with Mark and his business partner, if something could be worked out, their preference would be to remain at there site until February 2008 and work on some kind of feasible agreement with the City. Mark Moser, Columbia Heights Rental stated he obviously would like to stay on that corner permanently, but does realize the City wants to clean up areas along Central Avenue. Therefore, they want to stay in the community, and would need a good year to facilitate that kind of process. What Streetar said is true, we have been hearing since 2002 about a plan coming and nothing has happened, we just want a decision to be made, they could be out as early as February of 2008, would like to stay on that corner until that time, would incur three times the expenses over what he is paying at his current location, they would like to move, build a new building, but would like to see the City work with them on changing the current design guidelines to refiect the Economic Development Authority Meeting Minutes March 28, 2006 Page 4 of6 fact that the new building would not be directly on Central Avenue, but behind it and then it would make it more affordable for them to build on the site, Streetar stated their current property is considered non-conforming, as it is a storage facility, with a conditional use permit for up to 12 vehicles to be stored on the site, Mr, Moser realizes that he could stay on the site forever but could never expand. Murzyn Jr, asked if we bring Sherman in, can they do an analysis, some general numbers on what kind of costs they might need out of TIP. Streetar stated yes, the cost to clean up the contamination on the site would be determined. One of the methods of removal is capping, which is where they go down 5 or 6feet, add a layer of clay and backfill with clean soilfor contamination. For the poor soil correction, we could use grant money as we didfor the Industrial Park. Nawrocki stated 1) he felt it was difficult for him to believe that complying to the Design Guidelines would double or triple Moser's costs; 2) in talking about down grading the Design Guidelinesfor his new building, would hope they would consider the residents in that area; and 3) felt the City hasn't been taking care of the sign problems along Central Avenue and should be focused on now, Peterson stated he and Fehst were at a meeting in Little Canada, where the representative from Roseville stated they tried afirstfioor commercial with residential above it and it was afiop, so we certainly don't want to go that route, Murzyn Jr, stated he thought this was a high priority of the City Council and asked if there were any other developers interested in the site, Streetar stated there hasn't been anyone, Murzyn Jr, asked about the developer that wanted to redo the old Bridgeman's restaurant, what happened to him, Schumacher stated they couldn't get things together, Peterson stated we made a decision to move forward, he didn't know how we could stop it, recommended going forth with this project and with Sherman. Williams agreed. Diehm stated they discussed this to go forth in January, and would like to see if there is a plan that would work for the site, Murzyn Jr, directed staff to work with Sherman & Associates and come back to the board with some numbers and ideas for the site, Streetar stated he would contact Sherman and Associates, for presentation at the April 25th meeting. Nawrocki stated he felt the board should talk to another developer also, Peterson stated we can work with Sherman & Associates and ifwe aren't comfortable with them, we can always lookfor someone else, ADMINISTRATIVE REPORTS CDBG Partenheimer stated she attending the CDBG Grant funding meeting at Anoka County today and Economic Development Anthority Meeting Minutes March 28, 2006 Page 5 of6 was pretty positive the City will be receiving its requested grants. Thefinal word should come soon. Heritage Heights Partenlwimer stated another meeting of the group was held on March 8'h at 7p.m. in the Grand Central Lofts party room. The committee members heard a detailed market analysis presentation, which included a summary of current City and neighborhood conditions, reviewed a summmy of their input compiled at the first meeting, listened to DSU staff presentation of the ]3 preliminmy goals and strategies for the redevelopment and renewal of the neighborhood and was able to reword or add goals to the list, reviewedfive land use maps, and during and after the presentation was able to share their comments on what they liked or disliked about each plan and offered suggestions. The committee will be presenting the next step in a joint meeting with the City Council at a work session in the near future. Partenheimer stated her and Cher have been working with the I T. Department and was happy to say that all of the information is available on the City website. Nawrocki asked why the board hasn't received any of the documents she was talking about. Partenheimer stated all the documents are on the City website for review and agreed to print out the documents for him. Industrial Park Nawrocki asked about the quench tanks. Schumacher stated the quench tanks were on the foundry site, which was usedfor cooling the steel, was a hydraulicfluid/oil that was a significant leak, the MPCA said we needed to go down 20 feet and remove all of the oil, it was an L shaped tank with a pipe on it, Ryland is going to go down an additional] 0 feet on a voluntmy clean up, which means they would be paying for this because they want to meet higher standards for single family homes, even though they could fill it with] 0 feet of clay and balance with sand and still meet MPCA standards. Nawrocki asked if he was talking about the Electric Steel property. Schumacher stated he was. Schumacher stated with the linseed oil found on the site wasn't regulated by the MPCA, as it isn't a contaminated substance. Kmart Update Nawrocki asked what is happening with the Kmart site. Streetar stated Mr. Nedegaard made it public that he will be bringing documentation before the board this spring for an Axel's Restaurant on the old Arby 's site. Diehm stated she knows someone that is very involved in redevelopment projects, who asked about the project, stated that another, very prominent developer in the Twin Cities who does condos went out on a tour of new condo projects and called him up to see what was up the project, as he felt it has to be the best value in the Twin Cities, the quality of the product is there, it was a step above the others, he felt that he realizes it is because of the property conditions across the street that sales are slow, and that if the City is really serious about cleaning that area up, it would be some of the best investment anyone could make. Diehm stated this comes from someone that really knows about real estate investment and should encourage the. City to go forward. Economic Development Authority Meeting Minutes March 28, 2006 Page 6 of6 Othcr Busincss Williams asked about the Liquor Store at the LaCaberna site on Central, is there anything happening. Fehst stated the City is looking at putting the new liquor store on the three properties, have currently interviewed Kraus Anderson and Welsh for possible project managers, had appraisals done on some of the properties, would be bringing something to the City Council sometime soon, anticipating using approximately a million dollars of our fund balance and still make the $3-500,000 a year on the liquorfund. Murzyn Jr. stated he wanted to talk to the board about the market value of property going down, they aren't going down anywhere else, it is a scary thing, realized there are a lot of market factors involved in this figure, but it isn't good, evelY day he lives in his house, he is loosing money, we need to do the little things in the City to keep thisji'om happening, and encouraged the board to keep movingforward with redevelopment. Herringer stated the value when down and taxes when up. Streetar statedfor an example, at his house in Minneapolis, compared to the same house in Columbia Heights, his taxes are $600 higher, with the effective tax rate of ].32 and in Columbia Heights it averages .989. Fehst stated the Senate voted on the Eminent Domain bill, which wouldn't allow the City to obtain the property necessmy for redevelopment in our City. Streetar stated he has testifiedfour times and our Building Official, Larry Pepin has testified once. The current definition for blight under Eminent Domain is un-inhabitable, which is too vague. To do something in Heritage Heights, the only thing we could do if the bill passes, would be to put up a public building. ADJOURNMENT Motion by Williams, second by Nawrocki, to adjourn the meeting at 9:01 p.m. All ayes. Motion Carried. Respectfully submitted, ~~ Cheryl Bakken Community Development Secretary H:\ED Aminutes2006\3 -28-2006