Loading...
HRA 04/04/2013 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION APRIL 4, 2013 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:00 p.m. ROLL CALL: MEMBERS PRESENT: Pat Gabel Stephen Eggert William Holm MEMBERS ABSENT: Larry Commers Gordon Backlund OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Julie Jones, City Planner Scott Hickok, Community Development Director Darin Nelson, Interim City Manager Becky Kiernan, Accountant Jim Casserly, Development Consultant Greg Johnson, Development Consultant Tom Bydalek, Industrial Equities ACTION ITEMS: 1.Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 2.Approval of March 7, 2013 Meeting Minutes MOTION by Commissioner Eggert to approve the minutes as presented. Seconded by Commissioner Holm. Chairperson Pro Tem Gabel asked for the following corrections to be made to the minutes: us Page 4, first paragraph should read …in addition to allowing to create this district. This allowed HRA the city to pool… State Page 4, fifth paragraph, second sentence should read… school district, County, and Stat HRA Meeting of April 4, 2013 2 Gabel Page 4, sixth paragraph should read Commissioner Backlund UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MINUTES APPROVED AS AMENDED 3.Public Hearing and Consideration of Resolution Authorizing Sale of 561 Ironton Street NE MOTION by Commissioner Eggert to open the Public Hearing. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OPENED AT 7:07 P.M. Paul Bolin, HRA Assistant Executive Director, stated that Novak-Fleck has offered to purchase this property for $30,000. This property was acquired by the HRA in December of 2011, for $46,000. The home was full of mold and rot and the HRA demolished the building in February. Novak-Fleck has a buyer for this property and it will be the fifth home built since last summer. The home meets or exceeds all standards for the HRP program. Staff recommends the sale of 561 Ironton Street to Novak-Fleck builders. Commissioner Eggert said the home looked to be larger in square footage and asked what the market price was of the home. Mr. Bolin replied that there is more square footage and the fourth level will be unfinished. The home is in the $210,000 range. Commissioner Holm asked if the home was east or west of East River Road. Mr. Bolin replied it is ½ block west of East River Road towards the river. MOTION by Commissioner Holm to close the public hearing. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 7:11 P.M. MOTION by Commissioner Holm to adopt the resolution authorizing sale of 561 Ironton Street NE. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 4.Consideration of a Motion Approving TOD Master Plan for 5601 East River Road HRA Meeting of April 4, 2013 3 Julie Jones, City Planner, stated that the petitioner, John Allen of Industrial Equities LLP, is requesting a TOD Master Plan for the property located at 5601 East River Road. This property is zoned C-3, General Shopping; however, because it is within the TOD Overlay District, a TOD Master Plan is required. The TOD Master Plans must be reviewed by the Planning Commission (public hearing) and by the Fridley HRA. This requirement is similar to S-2 Master Plan reviews, and was made part of the procedure since the HRA has a vested interest in parts of the TOD overlay zoning district for tax increment reasons. Ms. Jones stated that the petitioner is proposing a phased project: Phase 1: Construction of a 1- level industrial building on east side along the BNSF railroad tracks. Additional phases include two 5-level office buildings with underground parking, a 2-level common core connected to a parking structure; and a 120 unit multi-family/senior housing development with underground parking. The TOD overlay zoning allows for a mixed use development without requiring a rezoning. Ms. Jones stated that the property is located on the NE corner of I-694 and East River Road. It was zoned M-2, Heavy Industrial from the late 1950’s until 2009. The property was home to LaMaur Inc. until 1999 when Tiro Industries located there, and Tiro sold it to the JLT Group in 2005. The JLT Group applied for a rezoning from M-2, Heavy Industrial to C-3, General Shopping. JLT did not have an identified commercial user, so the rezoning was delayed to allow them time to market the site. Ms. Jones stated that in 2009, JLT still had no user, but Council approved a Master Plan as part of the rezoning to C-3, with the understanding that if plans changed by more than 10%, then a Master Plan Amendment would be required. JLT Group filed for bankruptcy and the property became bank-owned. The bank recently sold the property to Industrial Equities, which is owned by John Allen. Industrial Equities is requesting approval of a TOD Master Plan. Since this project is the largest piece of undeveloped land in the area approved by the legislature for a special transit tax increment district, it is key to the district’s future. Ms. Jones stated that the Proposed Project was designed to incorporate the City’s desire to extend th 57 Ave from Main St through the subject property to E River Rd. In order to allow for the 57th Ave extension, 68,921 sq. ft. of land will need to be dedicated as right-of-way easement from this th property. This sq. ft. doesn’t include the land area for the 57 Avenue extension that is owned by Kapstone Container Corp, north of the subject property. Ms. Jones said that the petitioner envisions the property developing with 3 main development areas. The first area that will be developed is along the BNSF railroad tracks on the east side of the property. It would include the construction of a 134,192 sq. ft. one-story speculative office/ warehouse building. The front of the building will face the newly constructed “development parkway.” The service yard for deliveries will face the RR tracks and a landscape buffer will be installed between the RR tracks and building to provide screening. The petitioner believes that placing a high quality industrial building between the RR tracks and the rest of the development area will attract a corporate office center and a upscale residential complex. Ms. Jones stated that there are 2 remaining “schematically planned” development areas, which would include a professional office development and a multi-family/senior residential housing project. For the purpose of this application, the petitioner has submitted a site plan showing what HRA Meeting of April 4, 2013 4 the potential could be for the site west of the newly constructed parkway. The petitioner desires to begin construction on the industrial building this year, while searching for potential users for the future phased development as proposed. Ms. Jones said that if the future phases of development don’t occur as proposed in the submitted site plan, the petitioner is required to come back before the Planning Commission, HRA and City Council for a TOD Master Plan Amendment. Further review will be triggered by a 10% change in the total building’s footprint square footage or a change of use. The office building development is proposed to include two 5-level, 150,000 sq. ft. office buildings with underground parking and a 2- story common core that connects the two office buildings. The buildings will be positioned to align with the south-western edge of the property which abuts the I-694 off-ramp. This building will also be connected to a 4-level parking structure with a total of 1,311 parking stalls. Ms. Jones stated that the other part of the phased development is proposed to include a 3-4 story, 120 unit multi-family or senior housing development with underground parking for 112 stalls and at grade parking for another 88 stalls. The building design will be of a high quality finish to comfortably co-exist with the professional office buildings adjacent to it. This building will be th positioned to align with the corner of East River Road and the future 57 Avenue extension. th Ms. Jones said that the petitioner envisions this development occurring whether or not 57 Ave is th extended from Main St to East River Road. He wanted to design the development showing the 57 Avenue extension; however, he has stated that he doesn’t feel that it’s needed to make this development a success. The site has also been analyzed by staff and the petitioner’s consultant to th ensure that traffic flow will work on this site with or without the 57 Avenue extension and that the “development parkway” will connect to the extension when it’s constructed. Ms. Jones said that the proposed development is the City’s 2nd TOD Master Plan request. As a result, the project needs to comply with the TOD standards that were designed to enhance the pedestrian scale and safety of any particular development. The TOD Overlay allows for flexibility when designing a redevelopment project that encourages dense, mixed use, pedestrian-friendly developments. It was also created to minimize the use of the automobile by reducing the parking requirements, if certain conditions can be met and sidewalks are constructed. Ms. Jones said that the proposed project will include the construction of several new buildings that will offer a mix of uses. The petitioner has incorporated sidewalk connections throughout the proposed development as required in the TOD standards which will provide better access to public transportation opportunities in the area. Ms. Jones noted that in your packet is a list of all of the performance standards the petitioner is required to meet on a TOD project. Those standards are related to lot coverage, setbacks, height, façade articulation, building face, parking, landscaping, sidewalks, and lighting. Overall the petitioner has designed the project to comply with the TOD standards and those standards that staff still has questions on, are addressed through stipulations. Ms. Jones said that the amount of building square footage on this site will require the petitioner to complete an Environmental Assessment Worksheet (EAW) as required by the Environmental Quality Board. The petitioner’s consultants are working on completing that document now, that will include a traffic analysis, which MnDOT has recommended, due to the volume of new trips to HRA Meeting of April 4, 2013 5 this location and the proximity of the I-694/East River Road interchange. The petitioner will need to complete the EAW before the City Council can take formal action on the TOD master plan. Ms. Jones said that an extremely important aspect to what develops on this site has to do with the Northstar Transit Tax Increment Finance District; that the Minnesota Legislature has allowed the City of Fridley the Authority to create. This development will be within that district and would be the first project to produce increment for infrastructure improvements in the Transit TIF District, once created. The City Council will hold a public hearing on May 6, 2013, regarding the creation of that district. Planning Commission held a public hearing on March 20, 2013. The Commission approved the Master Plan for TOD #13-01 unanimously. Ms. Jones said that City Staff recommends approval of the TOD Master Plan Amendment, with 24 stipulations. Note that stipulation 14 in your report should be removed. Proper wording is in stipulation 13. This development meets the intent of the TOD Overlay District and is guided for redevelopment in the 2030 Comprehensive Plan. Chairperson Pro Tem Gabel recalled that as soon as this is approved the clock starts ticking. She asked if each development had their own time. Jim Casserly , Development Consultant, replied that the tax increment would be set up for deferral for four years and staff is anticipating more projects to start in the next five years. If the development doesn’t occur within a given period of time there are ways to decertify those areas. The reason all parcels are included in this district is because they are all grandfathered in through the statute. Commissioner Eggert was unable to attend the earlier meeting on this project and asked about the existing signal where this road will be; would this intersection be retimed and reworked. Ms. Jones replied that discussions have not been held with the County on this intersection. The County is aware of the intersection and future discussions will take place about a solution to this area. Scott Hickok , Community Development Director, added that this could be the result of the traffic study that is required. This intersection was set up quite well to take on a number of cars and this new development could have similar traffic patterns. Commissioner Eggert asked if there was a stipulation in place as to what the project should look like during the different phases. Ms. Jones replied that stipulation 19 requires the developer to maintain the remainder of site with sod, seed and mowing. Commissioner Holm asked if the warehouse building would have access to the railroad for shipping and receiving or if it would be truck related. Mr. Hickok replied that there will be no access to the rail. Trucks are the primary and only use of the building. HRA Meeting of April 4, 2013 6 Commissioner Holm asked why screening landscape is needed as a buffer between the warehouse and railroad tracks. Ms. Jones replied that the rail has eyes now because of the commuter rail. Screening landscape is a requirement for all new development along the railroad. th Chairperson Pro Tem Gabel asked if the extension of 57 Avenue was going to be an over or under pass. Ms. Jones replied that staff consulted with engineers and at this point it’s looking like it will be an under pass because of the short distance and slopes required. Staff wants this to be a user friendly connection and for people to be comfortable biking, walking and riding in this area. Chairperson Pro Tem Gabel asked if staff had any kind of time frame for going into the second and third phase. Tom Bydalek, Industrial Equities, replied no. They are looking at different uses and developers and trying to figure out if they will construct themselves or hire it out. Chairperson Pro Tem Gabel asked what color the building would be. Mr. Bydalek said that there will be prefab panels in two colors; the entrance is a grey stone finish and the rest will be Mankato stone – a lighter brown. Mr. Hickok said that Medtronic has a lot of Mankato stone on it. Chairperson Pro Tem Gabel asked about the fence and what type would be installed. Mr. Hickok said that staff has talked about a vinyl coated black chain link fence. MOTION by Commissioner Eggert to approve the TOD Master Plan for 5601 East River Road. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY MOTION by Commissioner Holm to add to the Agenda a Motion to Approve Purchase of 5895 University Avenue. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 5.Motion to Approve Purchase of 5895 University Avenue Paul Bolin, HRA Assistant Executive Director, said that staff has spent the past 7 years discussing the purchase of the Fridley Animal Hospital. The Authority owns all the other property along that block. Late this afternoon staff and Dr. Lemay came to an agreement on this property. Dr. Lemay would like to close on May 30 and lease back the building from the Authority through August 31 HRA Meeting of April 4, 2013 7 of this year at $1 per month. The total amount of the purchase is $525,000; $400,000 for building and $125,000 for the land payment in lieu of relocation and moving costs. This is a site that is about 6/10 of an acre and would allow staff to find a developer for the entire site. It will allow for a continuous 6.5 acres working with future development efforts. Commissioner Eggert agreed the Authority has talked about this for a long time and it is in line with the other purchases that have been made in that corridor. Commissioner Holm agreed that continuous development would improve the overall development. MOTION by Commissioner Holm to approve the purchase of 5895 University Avenue. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY INFORMATIONAL ITEMS: 1.Northstar Transit TIF District – TIF Plan Paul Bolin, HRA Assistant Executive Director, stated that the 2007 and 2008 Legislative Sessions gave the City the ability to create a special TIF district to fund public improvements around the Northstar Station area. The HRA discussed district creation in 2009 but the economic conditions were not right for district creation. The vacant land at 5601 East River Road (JLT Site) is expected to be a TIF generator and plans are now in place for development of the JLT Site. The Key Dates ndth are as follows: May 2 – HRA Acts on TIF Plan and May 6 – City Council Public Hearing. Tonight the Authority will get an early look at the TIF Plan and projected increment from the District. Jim Casserly and Greg Johnson went through the tax increment analysis to review the detail of this TIF district. Mr. Casserly noted thatbecause of the difficulty of this site the legislation has allowed all properties to be included in this district. st Mr. Johnson said that 2018 would be the 1 year to expect to collect tax increment. The Phases are all two years apart and any increment to be accrued will be deferred for the first four years. This is done so the highest increment could be collected for a total of 25 years. Mr. Casserly noted that usually cash flow analysis isn’t done in this type of detail and wanted the Authority to know that this information is speculative but is the best information available at this time. Information related to tax rates and values will be pretty close but what is speculative is how the infrastructure costs and improvements will come in over the next 10 years. Mr. Johnson said this is the opportune time to create this district because the values are low and tax rates are going up. HRA Meeting of April 4, 2013 8 Mr. Casserly added that as values went down the tax rates went up. The Tax Increment Act has a provision in it that says the tax rate is frozen in the year the district was certified. Those districts started 5-6 years ago and are struggling because values have dropped but tax rates in the city have went up. Valuations are as low as they will be for some time. Commissioner Holm asked on page 7 where there is a four year time frame no tax increment is received; he asked if this is delayed to collect the larger increment for the 25 years. Mr. Johnson replied that 4 years is the maximum to delay increment and the first building that is developed will be a large tax increment builder. Commissioner Holm asked how many rental/owner occupied will be built or is that information not known right now. Mr. Johnson replied that a number was put in to reflect the number of units per acre; they just used a ratio that would fit. The actual number is unknown at this time. Commissioner Holm thought the estimate for Zone C was a fairly conservative estimate given the potential area that may be included. Mr. Johnson noted that area has set back issues. Chairperson Pro Tem Gabel asked if this is the best case scenario. Mr. Casserly replied it is a reasonable case scenario. They are still looking at some potential development on the JLT site. Mr. Johnson added that they had hoped to have more density out there. Commissioner Holm said that this is a big project for the HRA. There may be extra road ways to put in, a lot of infrastructure, buildings and land to purchase. Mr. Johnson said that hopefully the Authority won’t have to pay for those things until the increment starts to come in. Mr. Casserly reminded the Authority that they have the ability to transfer funds from other projects. Mr. Johnson said that the legislature allowed Districts 11, 12 and 13 to be used. Chairperson Pro Tem Gabel asked if they should use some of their bonds ? Mr. Casserly said it would depend on the scope of the project. They will be back next month to review this information in more detail. HRA Meeting of April 4, 2013 9 2.Gateway Northeast Paul Bolin, HRA Assistant Executive Director, said that Mr. McNutt has interest in 6071 University and is trying to market this property to regional and national retailers. They would rather be on the southbound side and would like to wait until Cub finishes up their development so the area is more attractive. Mr. McNutt has 25 days left to find a user for the site. Mr. Bolin stated that the Lyons/Trident Development group out of St. Cloud is talking about putting in over 100 units on this site with a mix of upscale rentals for older and younger professionals plus another mix of market rate and specialized senior housing. They are laying out design options, what utilities need to be moved onsite, etc. Commissioner Eggert asked if the land goes back on the market the end of April if Mr. McNutt doesn’t find a user for the site. Mr. Bolin replied yes. 3.Housing Loan Program Update nd Paul Bolin, HRA Assistant Executive Director, said that the purchase of 4656 2 Street closing has been postponed twice and has been rescheduled to April 12. There have been issues to clean up the title work. Mr. Bolin distributed copies of the delinquent loans to the Authority. Three loans have been on the list for a number of years now and are all in various states where in one case the person who owes the money died and the family is trying to get things straight in court. Another loan hasn’t received a payment since 2005 and the person has had bankruptcies, foreclosures etc. there is now a lien against the property. Last one the person has been granted discharge through bankruptcy and there is a lien on the property. Out of 700 active loans, those three are really behind on payments. Mr. Bolin stated that the Monthly Housing Report has not has much action lately. There were zero loans closed and only one remodeling advisor visit. ADJOURNMENT: MOTION by Commissioner Eggert to Adjourn. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 8:34 P.M. Respectfully submitted, Krista Peterson Recording Secretary