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HomeMy WebLinkAboutEDA MIN 05-04-15 ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF MAY 4, 2015 IN CONFERENCE ROOM 1 The meeting was called to order at 6:30 pm by Chair Peterson. Members Present: Bruce Nawrocki, Donna Schmitt, Gary Peterson, John Murzyn, Marlaine Szurek, Gerry Herringer, and Bobby Williams. Staff Present: Walt Fehst, Joseph Hogeboom, Loren Wickham, and Shelley Hanson. PLEDGE OF ALLEGIANCE- RECITED 1.CONSENT ITEMS 1.Approve the Minutes from March 2, 2015and April 6, 2015. 2.Approve the Financial Report and Payment of Bills for March 2015 on Resolution 2015-06. Questions by Members: There were no questions. Motion by Nawrocki, seconded by Szurek, to waive the reading of Resolution 2015-06, there being an ample amount of copies available to the public. All ayes. MOTION PASSED. Motion by Nawrocki, seconded by Szurek, to approve Resolution 2015-06 Approving the Financial Statement and Payment of Bills for March 2015. All ayes. MOTION PASSED. EDA RESOLUTION 2015-06 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH 2015 AND PAYMENT OF BILLS FOR THE MONTH OF MARCH 2015. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and EDA MINUTES Page 2 May 4, 2015 WHEREAS, the financial statement for the month of March 2015 has been reviewed by the EDA Commission; and WHEREAS, the EDA has examined the financial statements and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and WHEREAS, financials statements are held by the City’s Finance Department in a method outlined by the State of Minnesota’s Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the referenced financial statements including the check history, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the check history as presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 4th day of May, 2015 MOTION BY: Nawrocki SECONDED BY: Szurek AYES: All ayes __________________________________ President Attest By: ______________________ Secretary NEW BUSINESS 1.Grand Central Properties-Development Proposal Wickham introduced Bruce Bahneman, of the C. Chase Company, in collaboration with Fe Equus (a Milwaukee-based development firm), who is approaching the EDA to amend the Grand Central Properties’ Contract for Private Development to construct two proposed rental apartment buildings at 4729 Grand Avenue NE and 1069 Grandview Way. Bahneman also introduced Tim Dixon of Fe Equus and Aaron Roseth from ESG Architects. EDA Minutes Page 3 May 4, 2015 The Contract for Private Development currently has a requirement that all developed housing units must be owner occupied. The plans currently reflect two condominium buildings on the site. A similar proposal for apartment buildings was brought to the EDA in 2011. That proposal was ultimately denied. If the EDA supports this proposal, the following sequence of events must occur: 1.EDA approval of an amendment to the Contract for Private Development. 2.Planning and Zoning Commission approval of Site Plan and Design Criteria. 3.Staff approval of Building, Stormwater Management and other plans. Mr. Bahneman was present to gauge the community’s interest in developing rental housing at this location and determine if he should proceed with his proposal. Mr. Bahneman provided more detailed information about his proposal to the members. Presentation: Dixon stated he has built a lot of commercial properties including hotels, restaurants, apartments, mixed use buildings, and multi retail buildings. He proposes constructing the two buildings with about 100 units in each building. Dixon told members that due to a MN State Statute that places a 10 year liability on developers of condo buildings, no one is constructing them as lawsuits typically are filed by the Associations for construction issues prior to the 10 year limit expiring. He has personally gone through the lawsuit process, and as a result, no longer builds condo buildings. Developers of rental apartments are not affected by that 10 year liability, therefore the market trend is to construct rental buildings. Hogeboom told members that he met with Mr. Biernat, the President of the Condo HOA, who expressed concerne on how the whole development would be maintained and how they would incorporate the rental buildings into the existing associations. Mr. Biernat was not in favor of the last proposal for rental buildings back in 2011. At that time, based on the feedback of the condo owners, the EDA Board decided to give the project more time to see if a developer would come forward to construct the condo buildings as was originally planned for that site since the real estate market was just beginning to improve. However, to date, there has been no interest in moving forward with that concept. Fehst said the density is the same since both concepts are for multi-unit buildings. He told members that some of the condo units are being rented now so he doesn’t see that it would be a drastic change for the development as a whole. Fehst went on to say that the development agreement has been amended once already to allow the detached townhomes currently under construction, rather than the attached style townhouses that were constructed initially. He feels the biggest challenge would be coordinating the different Home Owner Associations with management of the rental buildings to maintain the private neighborhood. Dixon stated that many younger people don’t want to own property. Their priorities are to work, travel, and go out socially. They only want a place to sleep and many don’t have money for down payments for ownership. He went on to say that many of the baby boomers also are moving out of their homes. They want a nice place to live but would rather be able to lock the doors and go south for the winter or come and go as they please without the maintenance that home ownership brings with it. Dixon told the EDA Minutes Page 4 May 4, 2015 members that these buildings would blend with the appearance of the condo building. The quality of construction would be equal to or better than the present condo building. He would also include amenities such as a pool, fitness room, and community room once a market study is done to determine the targeted age group and what would make them attractive and marketable to that age group. Dixon told members that utilities would be separate and the buildings could always be condo’d at a later time. The only thing that would be necessary is to change the documentation with the County. Questions from Members: Szurek asked if they would be market rate apartments. Dixon said they would be. Szurek stated she thought it would be good to finish the project and she likes the concept. Schmitt said she would be open to the idea if they were high quality construction. She suggested giving the condo residents passes to the apartment buildings amenities to win them over and make it more of a “community”. Peterson said he thinks Columbia Heights should open their minds to the changing market trends and he understands that this is the type of housing that people want now. He admitted that he changed his mind at the last proposal and voted against it after listening to the condo owners concerns. But he feels the City has given the project enough time and that it would be better for the city as a whole to get the area developed. Williams agreed with Peterson and thinks we should consider the proposal. Nawrocki asked what is meant by market rate. He wanted reassurance that this would not be subsidized housing in any way. Roseth stated that market rate prices range from $1.65 - $3.00/sq. ft. per month. If one bedroom units were 700 sf, the rent would range from $1,155-$2,100 per month and two bedroom units that were 1,000 sf would range from $1,650-$3,000 per month. Murzyn stated he would reserve comment at this time and wanted to look into it further. He is definitely against Section 8 rental or low income, subsidized housing being constructed at this site. Herringer stated he was opposed to the last proposal and didn’t want to turn his back on the condo owners. He is surprised at the 10 year statute of limitations and understands if that is true how it would affect the market. He is not opposed to this proposal if they are high quality and market rate. Hogeboom told members that he has worked with Roseth when he was in Golden Valley on a similar project and suggested organizing a tour for the board so they can see firsthand what kind of construction is being proposed. Roseth stated he will arrange for them to see the Arkada in Golden Valley and some at West End that are now finished. He said the vacancy rate of these projects is less than 3%. Nawrocki would like staff to have the City Attorney verify the 10 year Statute of Limitation the developer spoke about. EDA Minutes Page 5 May 4, 2015 2.Request to Allow K-12 Schools in Commercial Zoning Districts Hogeboom stated that Robert Grootwassink, president of Grootwassink Real Estate, currently owns th the Columbia Heights Shopping Center located at the northeast corner of 40 and Central Avenues. Global Academy, an elementary and middle charter school, is located within the shopping center. The site is located in the Central Business District, and does not permit K-12 schools. The school is considered a non-conforming use and cannot expand in its current location or relocate to another property within the commercially-zoned areas of the City. Mr. Grootwassink has indicated that Global Academy has an extensive waiting list of students, and would like to expand its size. Mr. Grootwassink would like to relocate the school to the Central Valu Center in portions of the former Rainbow Foods and Slumberland Clearance Center stores. In order to accomplish this proposal, the City would have to amend the General and Central Business Zoning District requirements to allow K-12 schools. The districts do currently permit trade schools and training centers. The Planning and Zoning Commission discussed allowing K-12 schools within the commercial zoning districts in 2014, and ultimately determined not to recommend the change to the City Council. The Commission felt at that time that allowing the use would interfere with the retail and business marketability of districts. This decision was supported by the business owners who participated in a survey regarding an amendment to the Ordinance to allow schools in that zoning district. Mr. Grootwassink feels that his plan to relocate Global Academy to the Central Valu Center and bring in a new charter school to the existing school location is viable, and he has requested an audience with the Economic Development Authority to discuss his plans. If the EDA would like to allow a charter school to be located in the Central Valu Center, then a change must be made to the Zoning Code to permit K-12 schools within the commercial zoning districts in the City. If the EDA were to consider the allowing K-12 schools in commercial areas, staff recommends doing so by use of the Conditional Use Permit process. He said he has been contacted by numerous real estate developers who have inquired about other sites for the purpose of adding other Charter Schools also. If the zoning code is amended to allow schools in a commercial area we could end up with numerous schools along Central Avenue which would diminish commercial/retail space available in the City. He reminded members that schools are allowed in other zoning districts so they do have options to locate within the City. Staff seeks direction from the EDA regarding whether or not to initiate the zoning amendment process. Questions/comments from members: Williams said he got a lot of feedback from business owners last year when this was discussed. He said everyone who contacted him about it were against it. He said they did not feel it is a good use of commercial/business space. EDA Minutes Page 6 May 4, 2015 Herringer asked what would go in the space that currently holds Global Academy. Hogeboom said the owner plans on placing another Charter School in that space which if the Zoning Code is amended would also require a Conditional Use Permit before he could put another school in there. Peterson stated he is not in favor of amending the Zoning Ordinance to allow schools in this district. We need to keep what little Commercial space we have for business use. Nawrocki, Szurek, and Schmitt all agreed with Peterson. 3.Scattered Site Housing Program Update- Wickham stated the Scattered Site Housing Program was initially approved in 2013, and therefore has been underway for two years now. The program consists of 3 components: 1. Master Listing Agreement: ReMax –Pete Heryla & John Rockwell Master. This document is an agreement with the EDA and Pete Heryla and John Rockwell to list and market the lots for sale. An updated list with proposed lot prices will be available at the meeting. 2.Purchase and Redevelopment Agreement. This document is an agreement with the EDA and a licensed builder. A Purchase and Redevelopment Agreement that is required for the sale of each lot. This agreement determines the sales price, the house plan and completion date. Model Homes. 3.We are recommending a set of design requirements to replace the models. Staff is recommending the following changes to the Scattered Site Housing Program:  Staff recommends that we continue to utilize ReMax-Pete Heryla & John Rockwell as the listing agents for the program.  Staff recommends the revised listing prices for lots in the program.  Staff recommends adopting the design requirements instead of 1 or 2 models and authorizing staff to approve house plans submitted.  Staff recommends more flexibility for buyers to bring their own builder as long as they can meet the design requirements.  Staff recommends continuing to require buyers to enter into a purchase and redevelopment agreement.  Staff recommends buyer to construct owner occupied single family housing and for buyers to sign a 10 year deed restriction agreeing to that.  Staff recommends keeping the 15% payment in excess of $160,000 home sale. It is the EDA’s discretion to leave in or not. We have not received any premium funding on the lots sold thus far. Since some of the lot prices are increasing, we could take this requirement out. Questions/comments from members: Members asked if there was a clause in the original agreement that the City has the right to take the lots back if construction doesn’t start within 6 months of the sale to Timbercraft. Wickham said there was. Peterson questioned whether we could invoke that right on the Reservoir Blvd. property. John and Pete told members how there have been three different parties interested in that site and that they EDA Minutes Page 7 May 4, 2015 all fell through for one reason or another. They now have someone who is interested again and they should know shortly if it will go through. Peterson stated if it doesn’t, he wants to take action to take it back. Wickham then explained that staff is not recommending adding any lots into the program. We have another 10 or so, but we can market them separately. Herringer asked if the requirement of ownership for 10 years has been a stumbling block. John and Pete said no, it hasn’t. Quality and design has been more of an issue as it increases the price points. People inquire about a simpler style and less costly finishing options. He said they also get a lot of calls from Investors looking for low priced homes to rent out. When they find out about the ownership requirement it eliminates them from pursuing a purchase. Nawrocki wanted the differences clarified between the old program requirements and the new ones recommended. Schmitt wanted to know which document had the language change about opening the program up to other builders. Wickham told her it was part of the Purchase and Redevelopment Agreement. Pete Heryla told members they would like to keep the exclusive builder language as it gives more control over the finished product. The quality of construction between builders can vary a lot. Instead he suggested putting stronger language in the agreement to keep a consistent model in production so people have something to view. He thinks if the houses are built on spec, they will sell. Heryla stated the city owns other lots not in this program that could be sold to other builders. Hogeboom said we could stay with one builder if he agrees to build another house on spec as soon as the other one is finished and sold. He suggested putting a time frame that construction must begin in the agreement. Schmitt stated she would like to stay with Timbercraft as there are only 5 lots left in the program and that consideration should be made of possibly combining the two Tyler St lots for construction of a larger home. Jeff Mandicks, from My Home Detail Construction Co. asked how many lots were in the program to start with. He was told there were 12 lots and that 6-7 have sold. Motion by Szurek, seconded by Schmitt, to enter into new Master Listing Agreement with ReMax. All ayes. MOTION PASSED. Motion by Szurek, seconded by Schmitt, to adopt Design Requirements for Scattered Sites Housing Program with language changes regarding minimum foundation size to minimum finished space. All ayes. MOTION PASSED. EDA Minutes Page 8 May 4, 2015 Motion by Szurek, seconded by Schmitt, to adopt changes to Purchase and Redevelopment Agreement for Scattered Sites Housing Program but changing language to stay with exclusive builder and to add language requiring building additional houses on spec within 45-60 days of completion of the previously built one. All ayes. MOTION PASSED. Motion by Szurek, seconded by Schmitt, to adopt changes to Addendum B to Exclusive Right to Sell Listing Contract for Scattered Sites Housing Program, but remove language for 15% premium pricing. All ayes. MOTION PASSED. 4. North Metro Community Home and Garden Show Hogeboom told members that the City of Columbia Heights has been invited to participate in the North Metro Community Home and Garden Show which takes place in Blaine. The Show is currently sponsored by the cities of Blaine, Fridley and Mounds View. It is designed to benefit both the citizens and businesses who participate, while helping inspire, encourage and support homeowners who want to improve their homes and yards. Attendees of the Show are able to meet with and learn from experienced professionals who offer the latest product information. They will also have the opportunity to learn from experts at seminars scheduled throughout the Show hours. Each participating city has a booth at the Show where residents can interface directly with staff. The City of New Brighton has also been invited to join the Show. Participation in the Show requires a one-time payment of $2,000 to the Fridley Housing and Redevelopment Authority. The payment is meant to cover operational and advertising costs. There is a coordinator that handles reservations, set up, and marketing. If the Board approves participation, the funds would be taken from fund 420. Questions/comments from members: Szurek went to the last one and was disappointed as there were hardly any vendors participating. She said they were able to walk through the show in about 10 minutes. Hogeboom agreed it was smaller than others he has participated in (West Metro). He said New Brighton is joining and Spring Lake Park is considering it. He hopes with the additional cities participating that the interest level from the contractors would also increase. Hogeboom stated that the one this year was scheduled the same day as the larger one held in downtown Minneapolis so many contractors opted for the Minneapolis show. Next year they have changed the date to ensure this isn’t case. Nawrocki questioned the value of staff time it would take and whether it was really worth it. Hogeboom explained that since they have a coordinator to oversee the show, it would take a minimal amount of staff time. EDA Minutes Page 9 May 4, 2015 Motion by Herringer, seconded by Schmitt, to authorize the EDA President and Executive Director to execute and agreement with the Fridley Housing and Redevelopment Authority (HRA) designating Columbia Heights as a co-sponsor of the North Metro Home and Garden Show and allocating a one- time payment of $2,000 to the Fridley HRA for operational costs. Roll Call: Ayes-Herringer, Williams, Schmitt, Szurek, Murzyn, Peterson Nays-Nawrocki MOTION PASSED. 5Community Farmer’s Market Discussion . Several members of the community have expressed interest in starting a farmer’s market. While some local farmer’s markets are managed by businesses or non-profit organizations, some farmer’s markets are operated and subsidized by local governments. Management of government-initiated farmer’s markets is typically done through park and recreation departments. In this case, cities must offer financial assistance to subsidize the cost of running the event. If the City were to initiate a city operated or sponsored farmer’s market, it may be advantageous to discuss doing so in coordination with the development of the new municipal Library. The Community Development Department could assist in the process by doing research into set-up requirements. Anoka County will be applying for State Health Improvement Program grant funds later this year that could be used for farmer’s market planning and implementation. The City Council/Economic Development Authority would need to consider whether a government- sponsored farmer’s market is a priority of the City, and if so, whether or not additional long term funding for the Recreation Department would be acceptable in order for the city to operate a farmer’s market. The Community Development Department seeks further direction from the EDA to better understand its role in the planning process for a possible government-sponsored/subsidized farmer’s market. Questions/comments from members: Schmitt thought it was interesting that newspapers have recently had articles regarding the different Farmer’s Markets now operating. She feels Maple Grove’s is one of the best. She said it is City sponsored and they have 2 part time staff people who run it. She passed out information on how it started. She said it is like a mini fair every week for families to enjoy. Szurek said something of this caliber would require a large area and wondered where she thought this would work in Columbia Heights. Schmitt said she originally thought the Rainbow Mall site, a Park, or the Library Parking Lot would be good spots. EDA Minutes Page 10 May 4, 2015 Nawrocki says he knows Minneapolis has one that is very successful. He stated that Immaculate Conception used to host one, but over the years there was less and less participation. He questions if it would be successful long term. Szurek stated the lack of space they were allotted in Immaculate’s parking lot and the location was the problem with that one. Jennifer Laine-a local resident-felt that it would be very successful. She said there is one in NE Minneapolis also that is very busy. She said they offer chair massages, artists display their work, crafts are sold, food and mini donuts are sold, and often times musicians play. People make a point of attending since it is held only once a week for a couple hours. She thinks it should be well planned and marketing could be done over the next year so that it could open next year. Ms. Donnelly-a member of Community Methodist Church-suggested holding it in the church parking lot starting later this summer and then possibly moving it to the new Library parking lot once it is finished. She said it has to go before the Church Board for approval. She feels she could get volunteers from the Church to help organize it. Peterson asked what they think the City’s role should be? He doesn’t think staff should have to spend a lot of time with this. He said he thinks appropriate City support would include promoting it on the City’s website, bulletin board, newsletter, on cable television and announcements at the City Council meetings. Schmitt thinks a trial run this summer at the Methodist Church would be a good idea and then move to the Library Parking lot next year. She said vendors bring their own tables and do their own set ups. Nawrocki stated if the church and volunteers want to run one, that is good, and the City’s only role should be to support it. Williams doesn’t think the City should be involved in running one. He also questioned if held on City property if liability insurance would be required. Hogeboom told members that Anoka County may have funding available under a new “SHIP Program” to promote healthy living choices. Funding for projects such as a local Farmer’s Market will be considered in July and would be awarded in the fall for use in 2016. This project could be a candidate for the funding. He will keep the two attendees and Councilmember Schmitt apprised of information regarding this Program so they can make application for the funds if they are interested. Fehst said the area behind the Library along the east side of the property could be used temporarily until a permanent development project is decided on. Fehst said he doesn’t think staff should run it or be involved in organizing it. He thinks volunteers need to do this. He said the issue of Insurance would need looking into. Ms Donnelly said that vendors could be required to carry their own insurance and provide a Certificate to the City. EDA Minutes Page 11 May 4, 2015 OTHER BUSINESS Negotiation for Purchase of Duplex at 4641-43 Polk St. Wickham explained that ACCAP is interested in selling the duplex they own at 4641-43 Polk St. They purchased the property in 1997 for $55,250. The Estimated Market Value for 2015 is $151,500. Staff recently did an inspection of the property and said it is in satisfactory condition to be used as rental property. However, if the City purchased the property we would demolish it to clear additional property on this block for future redevelopment of single family homes. Wickham told members he initially offered ACCAP $50,600 (the current land value), which ACCAP turned down. He then made an offer for $75,000 and ACCAP countered with $100,000. Staff is looking to the Board for direction on whether they wish to purchase this or not. Members agreed that they are not against obtaining the property, but they are not willing to pay that much for it. They felt $75,000 was the most they are willing to offer, especially since demolition expenses will also be incurred if we purchase it. Proposal from Developer to Purchase City Owned Property at 4631 Pierce St. Wickham explained that Jeff from My Home Detail Construction Company approached staff with the desire to purchase 4631 Pierce Street in order to build a new home for a client who is interested in the site. This developer recently built new homes along University Avenue in Fridley, and this house would be similar in style to those. Wickham said if the Board is interested in selling this piece a price needs to be established. Pete and Jon from ReMax looked at the site and feel a value of $25,000 is a fair market value for the 60 ft wide lot. It is not a premium site as it has a retaining wall in the rear that is in questionable condition. Fehst said we should check with the attorney to see if it can be added to the Scattered Site TIF District Program. If it can be added to the District and there is a tax advantage, it could affect the price set by the Board. Nawrocki asked what the County’s estimated market value on the lot was. Staff did not have the exact figure. After some discussion, the members generally agreed that a fair value would be in the $20,000 to $25,000 range. They asked the developer what he had paid for the Fridley lots. He told them he paid $25,000-$30,000 for those lots and they were similar in size. th This matter will be brought to the City Council on Monday, May 11 so that more information can be obtained and provided to the Council. EDA Minutes Page 12 May 4, 2015 The next regular EDA meeting will be Monday, June 1, 2015 at City Hall at 6:30 pm. The meeting was adjourned at 9:18 pm. Respectfully submitted, Shelley Hanson Secretary