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10/19/1981 - 00013094<- �„_ � �^ � THE MINUTES OF THE PUBLIC HEARING MEETING OF THE FRIDLEY CITY COUPJCIL OF OCTOBER 19, 1981 The Public Hearing Meeting of the Fridley City Council was called to order at 7:35 p. m, by Mayor Nee. PLEDGE OF ALLEGIANCE: Mayor Nee led the Council and audience in the Pledge of Allegiance to the Flag. ROLL CALL MEMBERS PRESENT MEMBERS ABSENT ADOPTION OF AGENDA: Mayor Nee, Councilman Barnette, Councilman Schneider, Councilwoman Moses-Martin, and Councilman Fitzpatrick None MOTION by Councilman Schneider to adopt the agenda as submitted. Seconded by Counctlwoman Moses-Martin. Upon a voice vote, all voting aye, Mayor Nee declared the mot�on carried unanimously. OPEN FORUM, VISITORS: Mr. Vern Moen presented a check for $19,000 to the City, on behalf of the Springbrook Nature Foundat�on. He stated the City had helped them finance additional space and made it possible to use a solar heat saving roof when the nature center was constructed. He explatned this would save them money in the future and will be a good tnvestment. Councilwoman Moses-Martin stated this is a good showing that the public can get behind and donate money to a worthwhile cause and hoped this was the beginning of a wonderful facility. Mayor Nee and the Council members extended their thanks to Mr. Moen for the presentation of the check. PUBLIC HEARINGS: � PUaLIC HEARING ON REZONING REQUEST, ZOA #81-04 TO REZONE FROM M-2 FlfID C-2 TG ALLOW CONSTRUCTION OF A COMMERCIAL OFFICE BUILDING, 350 - 73RD AVENUE, MARK �10TION by Councilman Barnette to waive the reading of the public hearing notice and open the public hearing. Seconded by Councilwoman Moses-Martin. L!pon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously and the publ�c hearing opened at 7 40 p. m. P1r. Flora, Puhlic Works D�rector, stated the property requested to be rezoned is the area east of Untversity and south of 73rd Avenue. He stated this triangular corner property is currently zoned P4-2 and the request is to rezone to C-2 to allow construction of a commerctal offi ce buildtng. P1r. Flora stated, at th�s time, Mr. Haggerty didn't wish to disclose who the tenant would be for th�s building, but had a proposal from a bank for occupancy as well as his law fi rm. Mr. Flora stated staff has no problem with the re'1.oning, however, there was discussion at the Planning Commission regarding the entrances and exits, and �i one-way traffic scheme was proposed. He pointed out the intersection at University and 73rd is scheduled to be improved and there will be additional turning lanes rnto this area. 1 ' , � ' ��, � PUBLIC HEARING MEETING OF OCTOBER 19, 1981 PAGE 2 Mr. F1ora stated the Planning Commission recommended approval of the rezoning, with the stipulation that the rezoning not be approved until the building permit is taken out for construction of this office building, and that the traff�c flow be worked out as per Mr. Haggerty's building plan, with the northerly driveway to be an entrance only and the southerly driveway to be an exit only. He stated, if this was not possible, then the Planning Commission recommended that staff's proposal should be worked out. Councilwoman Moses-Mart�n stated she was not so concerned with the frontage road, but if there would be stacking room for cars at the stoplight on Un�ver•sity and 73rd. Mr. Flora stated it shouldn't be a problem because they have about 200 feet of stacking room for vehicles. Mr. Haggerty stated the biggest problem when you have a banktng institution is the tremendous amount of space taken for the dr�ve-in facility. He felt if they could have another exit on the south, they could live w�th it; however, he would prefer it would be a drive both for ingress and egress. Mr. Haggerty stated he felt they would have to stay w�th a two-story building in order to meet the parking requirements, Mr. Mike Larson, 6390 Starlite Blvd., asked what would be the co�� of construction of th�s building. Mr. Haggerty stated it be about $1,600,000. Mr. Larson questioned �f it would be financed through a con�entional mortgage. Mr. Haggerty stated he 7s looking at a tax exempt mortgage and would come back to the City to request fi nancing under the industrial revenue bond statute. Mr. Larson felt the f�nancing should be decided at the time the rezo m ng is discussed, M'r. Qureshi, City Manager, stated the question whether financing through industr�al revenue bonds would be available would not change if the rezoning was left as it is now or changed to commercial. No other persons in the audience spoke regarding this rezoning request. MOTION by Councilwoman Moses-Martin to close the public hearing. Seconded by Councilman Schneider. Upon a voice vote,all��oting aye, Mayor Nee declared the motioncarried unanimously and the public hearing closed at 7:55 p. m. IC HEARING ON vACATION REQUEST, SAV #81-03 BY PETITION N0. 9- MOTION by Councilman Schneider to waive the reading of the public hearing notice and open the public heartng. Seconded by Councilwoman Moses-Martin. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously and the public hearing opened at 7:56 p. m. Mr Flora, Pu61ic Works Director, stated the area in quest�on is �ust east of Highway 65 and north of Mississippi Street. He stated the City has a right-of-way for 66th Avenue wM ch would connect Pierce to Lucia Lane, but it has not been constructed. Mr. Flora stated Mr. Scherven came in for a variance �n order to construct a house and garage on his property, and also requested vacation of the easement. , -� �� . , PUBLIC HEARING PIEETING OF OCTOBER 19, 1981 PAGE 3 Mr. Flora stated it was found that the utility companies require retainment of a 10 foot easement and the City requires an easement for drainage. He stated the Planning Commiss�on has recommended approval of the vacation, with the stipulation that utility and drainage easements 6e retained. P4r.Schveren stated all the ne�ghbors have signed for the vacation and stated they want to use this area for a garden. P1r. Schveren stated if a street were to go through, he would have to sell his house as the garage encumbers on the easenent. Mr. Qureshi, City Manager, stated the staff's position ts, essentially, they are against vacating any roadways because, in the past, the City had to go back and acquire right-of-way that had been vacated. He pointed out there are sizable lots in this area and depending on any future development to the north, it would dictate whether or not this road would be constructed. It was pointed out Mr. as he has obtained the vacation request. Schveren could proceed with his construction plans, variance, regardless of what action is taken on the fJo other person in the audience spoke regarding this request for vacation. MOTION by Councilman Barnette to close the public hearing. Seconded by Councilman Schneider. Ilpon a voice vote, all voting aye, P1ayor Nee declared the motion carried unan7mously ;,;��the public hearing closed at 8:10 p. m. � PUI3LIC HEARING ON PROPDSED PROJECT FORISSUANCE OF $1,975,000 INDUSTRIAL `"? DEVELOPMENT REVENUE BONDS TO FEHLING, I'EHLING, AND NYBO UNDER THE PIINNESOTA MUNdCIPAL IfJDUSTRIAL DEVELOPPIENT ACT, PIINNESOTA STATUTES, CHAPTER 474. MOTION by Councilman Schneider to waive the reading of the�,public hearing notice and open the publichearing. Seconded by Councilman Barnette. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously and the pu6lic hearing opened at 8:10 p. m. Mr. Inman, City Clerk, stated this is a request for the issuance of $1,975,D00 in industrial revenue bonds for construction of a three-story off�ce building located on the property at 921 and 941 Hillwind Road. He stated part of the property is in a tax increment district and there are plans to remove an existing structure for construction of this new office building. Mr. Flora, Public Works Director, stated the area in question is east of Highway 65 and north of I-694 and involves two parcels 6eing developed into commercial property. Councilman Schneider stated he didn't have any reservations on using this type of financing, since it is betng done for office buildings, and other cities are us�ng this means in order to remain competitive for a tax 6ase. Councilman Schneider stated he did have a concern on the height and size of the building. Mr. Qureshi, City Manager, stated this is the maximum height which can be built, however, he stated they do meet all the zoning requirements. Councilwoman Moses-Martin stated she had a concern about the traffic funneling into the ad,7acent neighborhood. Councilman Barnette stated his concern would 6e the neighborhood reaction to th�s commercial build�ng in their area. Mayor Nee stated the question of the rezoning is now being considered to rezone this property from R-3 to CR-1. He stated a public hearing was previously held, but action was tabled on the rezoning request, therefore, �•esidents were sent out a notice that th�s question would again`�be hefore the Council this evening. 1 1 1 � PUBLIC HEARING MEETING OF OCTOBER 19, 1981 PAGE 4 Mayor Nee stated another question, if the rezoning is approved, is whether industrial revenue 6onds should be used for constructton of the office building. Mr Richard Nordlund, Investment Banker - First Corporate Services, appeared before the Council regarding the question of �ndustrial revenue bonds to finance the construction of this office building. Mr. Nordlund stated he felt this would be a good pro�ect and addition to � the City and would increase the tax base, and anticipated construction costs somewhere between $1,500,000 to $1,700,000. He stated they would have about 40 tenants, with an average salary of $15,OD0 a year. Mr. Nordlund stated the tnterest rates for a conventional mortgage are 6etween 16-1/4% to 17-1/4% and felt the interest rate for a tax exempt mortgage would be a6out 13%. He stated it would be feasible to proceed with construction at an �nterest rate of 13%, but not at rates 16-1/4% to 17-1/4%. Mr. Nordlund stated he doesn't handle the leasing for the bu�ldin9, but was told by Ms. Nybo that they had a number of inquiries and a number of persons interested in moving into this building. Mr. Nordlund stated they will go out and find a lender and obtain a letter of committal for the mortgage. He stated instead of selling bonds, only one financial institution would be involved and the developer wauld have to put in part of the cost. Councilman Schnetder questioned the amount the developer would have to pay in order to obtain a mortgage. Mr. Nordlund stated it would be a substantial amount, probably 10% or more. Mr. Mike Larson, 6390 Starl�te Blvd., questioned the length of the mortgage, and Mr. Nordlund stated it would 6e 20 to 25 years. � Mr. Larson stated the difference in interest between a conventional mortgage and a tax exempt mortgage is about 5% and on this basis, for a 20 year mortga9e, the savings in interest would be about $1,733,520. He pointed out that thts ts interest savtngs to the bus�ness of roughly 88% of the original maximum mortgage, which is substant�al. Mr. Larson felt industrial revenue bonds have their place when you are talking about adding �obs, however, th�s facility would not create the ,7obs a manufac- tur�ng expansion would generate. Mr. Larson stated in 1971 in Minnesota, financing through industrial revenue bonds was $17,OOO,D00 and that figure has risen to $641,000,000 in 1979. Mr. Larson stated the Reagan admim stration is lookrng at doing away with industrtal revenue bonds, basically, because of the revenue loss. He stated it is a problem that is really starttng to hurt and �f everything is being financed with industrial revenue bonds, the deficit would be much larger. Mr. Larson stated heartngs on industrial revenue bonds are being held on the State level and steps being taken to prohibit their flagrant use. Mr, Larson felt this type of ftnancing, in the long run, is really detrimental to the tax payer. He pointed out, with the ±remendous supply of industrial revenue bonds, the interest costs to the City for general obligation bonds for � improvements will 6e 2 to 2-1/2% higher. Mr. Larson stated he could more easily support industrial revenue bonds for the expansion of large businesses, instead of something of this nature. ` I PUBLIC HEARING MEETING OF OCTOBER 19, 1981 PAGE 5 Mr. Quresh�, City P4anager, stated the City did deny ind�strial revenue bond financing in the past, however, the issues Mr. Larson raises are good. He felt it is a policy matter that should be considered at the Federal and State levels, and if this means of financing is stopped, all cities are going to be treated equally. He stated the problem they have if they want any development now, this is probably the only method left to f�nance any industrial or commercial construction. He stated the thrust has been to help existing industries tn Fridley, however, more and more communities are using this means to obtain industry and the C�ty has to remain competitive. Mr. Larson stated he is concerned a6out the fact that this pro�ect is do or die depending on whether they approve industrial revenue financing. He felt �ust because everyone else was using this means, the City didn't have to stay in there to get their share and that thts had to be looked at from the taxpayer's viewpoint. Mr. Qureshi pointed out he was also a taxpayer and felt this should be brought to the attention of their representatives in Congress as some of the arguments made were good. Mayor Nee stated he would ltke to have this process eltminated by the Federal government. He stated he felt the Council was uneasy with using this means of financing, but it comes down to the question if they don't offer this means and other cities do, they have lost some development. He stated it then gets into the question of regretable alternatives, He felt there are better ways to help along development, however, it is the setting today and what they have to deal wtth. P1ayor Nee stated he would agree it is bad, but puts the City i�n a position where, if they want to remain competttive, they are almost required to do it. Councilman Qarnette stated the idealistic situation is not to have this means of ftnancing, however, if they don't prov�de this tool, developers would go some�rrhere else and the Council would then have denied Fridley this development. Mr. Larson stated he didn't think Fridley got where tt is today with the issuance of tndustrial revenue bonds and his hunch ts, in the next year, the conversation w�ll be meaningless because somethtng will be done. Councilman Schneider asked if it was fair to the local taxpayers to not take advantage of something that is legal and, from the City's vtewpotnt, risk-free. He stated all the surrounding communities are, in fact, providtng this means of financing so whether they issue industrial revenue bonds here or whether they are issued in a neighboring community, it is the same cost on the State and Federal levels. Mr. Larson stated the taxpayer can't attribute the cost to his pocketbook. He po�nted out it is the same with grants. The money ts taken from one pocket and put rnto another, however, it is still the taxpayer who is paying. Mr. Larson stated the Council agrees with all the facts, but because you want to have a new build�ng, you will probably approve it anyway. Mayor Nee stated he would stgn a letter with Mr. Larson to send to the Congress to repeal the use of industrial revenue financing, but unt�l this is done, he has another problem. Mr. Nordlund stated the State Commissioner of Taxation testified at hear�ngs in the State of Minnesota that industrial revenue 6onds had no sign�ficant effect, as far as the State revenue was concerned. Mr Nordlund stated Minnesota issues quite a few industrial revenue bonds, however, the Northern states are los�ng bus�nesses to the Southern areas. �.� , 1 PUBLIC HEARING OF OCTOBER 19, 1981 PAGE 6 Mr. Nordlund felt anythtng a city can do to increase its tax base helps �n selling bonds. Mr. Moen, 7154 Riverview Terrace, stated he felt, in the begimm �g, industrial revenue bonds were intended for construction of hospitals and inst�tutions and tends to agree with Mr. Larson's comments that it would be overstepping the bounds in issuing tax free revenue bonds in this case, as there is no doubt it does remove revenues from the State and Federal 9overnments. , Mr. Dave Harris,470 Rice Creek boulevard, stated he is involved in a residential housing pro�ect in Coon Rapids and the housing industry is the lowest s�nce the 1950's. Mr. Harris stated he had nine builders in this pro�ect and is now down to two bu�lders, and many of the workers had to go on unemployment and welfare. He felt this was a bigger tax bite compared to the loss of income the State does not get from the issuance of industrial revenue bonds. No other persons in the audience spoke regarding this proposed pro�ect for the issuance of industrial revenue bonds. MOTION by Councilman Fttzpatrick to close the public hearing. Seconded by Councilman Schneider. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously and the publ�c hearing closed at 9:15 p, m. LD BUSINESS: L�� CONSIDERATION OF REZONING .�. EST. ZOA #80-02 TO CR-1 Mayor Nee stated the Council has had the hearing on this rezoning request and tabled the deciston on the rezoning. He stated neighboring residents have been nottfied that the Council wtll be considering the item this evening. � Mr. Flora, Public Works �irector, stated the request is to rezone the property from R-3 to CR-1. He stated when the public hearing was held on the rezom ng request, several stipulations were recommended, one being that the existing structure was to be removed and another was to provide screening. He stated, at the time of the hearing, Mr. Burandt was developing a package, but was not too interested in tearing down the existtng structure. He stated, since this time, parties have gotten together with the plan for construction of an office building 1 Counctlman Schneider stated he believed it makes sense for commercial use of the property. He stated the traffic question that has come up before is a real problem, however, he is not convinced it would make a lot of difference in the traffic, whether the property is used for multiples or commercial development. Councilwoman Moses-Martin stated she couldn't believe the neighboring residents weren't present this evening, as they raised many questions at the time nf the public hearing. Councilman Schneider stated he has talked with Carol Fassett several times and, generally, it was her feeling, and she wasn't speaking for her neighbors, that she would prefer commercial development rather than more multiple units. Mr. Qureshi, City Manager, stated access to the office building would be essentially through Hillwind Road, with traffic exiting to Hackman through Polk Street. No persons in the audience spoke for or against this proposed rezoning request, and the following item was considered. �a � PUBLIC HEARING OF OCTOBER 19, 1981 PAGE 7 /_'._ C01'SIDERATION OF FIRST READIPlG OF AN ORDINANCE TO AMEND THE CITY CODE DF THE �° � � f�' �: i � �;� VISION N0. 25 R-3 TO CR-1: MOTION by Counclilman Schneider to waive the reading of the above ordinance and approve the ordinance upon first reading. Seconded by Councilman Barnette. Upon a vo�ce vote, all vot�nq aye, Mayor Nee declared the motion carried unanimously. NANCE N0. 741 REPEALING ITY CODE IN ITS MOTION by Councilman Schneider to waive the reading of Ordinance Plo. 714 and adopt it on the second reading and order publication. Seconded by Councilwoman Moses-Martin. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously. NEW BUSINESS: CONSIDERATION OF A SIGN PERMIT APPLICATIOM, UNITED METHOQIST CHURCH, 666 MISSISSIPPI STREET: Mr. Flora, Public Works Director, stated the Untted Methodist Church has requested a second free standing sign identify�ng their day care center to be placed on hionroe Street off of Mississippt. Mr. Flora stated United Methodist Church came to the Council in 1980 for some variances and the Counc�l requirad some screening, a landscape plan, and deferred the requirement for curbing in the parking lot until 1983. He stated they have been assured the improvements would be completed as requested 6y the Council last year. MOTION by Councilman Schneider to grant the sign permit to UniY.ed P1ethodist Church fora sQC9n�, Free standing sign identifying their day care center. Seconded 6y Councilman Barnette. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously. Y TY BIKEWAY MOTION by Councilwoman Moses-Mart�n to adopt Resolution Plo. 119-1981. Seconded by Councilman Fitzpatrick. Upon a voice vote, all voti.ng aye, Mayor Nee declared the motion carried unanimously. "�,' RESOLUTION N0. 120-1981 CALLING FOR A PUBLIC HEARIPdG ON FINANCING INDUSTRIAL c; - - -- - — -- -- — - — — — - - --- --- -- — -- --- — — — -- LaMAUR, IfJC.: MOTION by Councilman Fitzpatrick to adopt Resolutton No. 120-1981 setting the pu6lic hearing for November 9, 1981. Seconded by Councilwoman Moses-Martin. f�Ir.Wallace Johnson, Vice-President of Finance for LaMaur, Inc., stated their company has been in Fridley since 1970 arVd they manufacture hatr care products. He stated they employed 370 persons in 1970 and presently employ 50� and that their sales have increased from $20,0OO,ODO in 1970 to $65,000,000. 1 � Mr. �ohnson stated there is a need to expand their facilities and they are ' in the preliminary staaes of identifying the type of expanston needed, and the cost will 6e about $3,000,000. He stated they have elected to come to the Council and ask for financing through industrial revenue bonds. They were advised the public hearing on their request will be on November 9, 1981. I�PON A VOICE VOTE TAI<EN ON THE ABOVE MOTION, all voted aye, and Mayor Nee declared the motion carried unanimously. �� , �� �� , � PUBLIC HEARING MEETING OF OCTOBER 19, 1981 ITING PAGE 8 FOR A COMMERCIAL FACILITIES Z ION Councilman Schneider stated he would feel more coinfortable having the developers here to dtscuss their plans. He stated he didn't have a problem regarding the financing, but concern on the traffic flow. S�nce Ms. Nybo was on vacation, it was `elt it probably would be better to wait another week before action is taken on this resolution so the Council could discuss any concerns they had with her. MOTION by Councilman Schneider co table action on this resolution for one week �nttl one of the principals i� present. Seconded by Councilwoman P1oses-Martin. Upon a voice vote, all voting aye, Mayor Nee declared the mot�on carried unanimously. CLAIMS: MOTION by Councilman Fitzpatrick to authorize payment of Claims No. 266530 through 299W26. Seconded by Councilman Schneider. Upon a voice vote, all voting aye, Mayor Nee declared the mot�on carried unan�mously. LICENSES: MOTION by Councilman Schneider to approve the licenses as submitted and as on ftle in the License Clerk's Office. Seconded by Councilman Barnette. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unam mously. � � ESTIMATES: MOTION by Counctlman Fitzpatrick to approve the estimates as submitted. Herrick & Newman, P.A. 6279 University Avenue N.E. Fridley, MN 55432 For legal services rendered as City Attorney far the month of September, 1981 Smith, Juster, Feikema, Malmon & Halv�tz 1250 Builders Exchange Building Minneapolis, MN 55402 For legal services rendered as City Prosecutor for the month of September, 1981 TKDA, Inc. 2500 American National St. Paul, MN 551D1 Bank Buildin9 Infiltration/Inflow Analysis for August, 1981 Walhunt Construction Company 1640 - 177th Avenue N.W. Cedar, MN 55011 $1,855.85 �,3,787.50 $6,069.83 FINAL Est. #3 - S& W Pro,7ect No. 133 $4,343.01 �� � � �� , �,� PUBLIC HEARING OF OCTOBER 19, 1981 Estimates Continued: E.A. Hickok and Associates Inc. 545 Indian Mound Wayzata, MN 55391 Professional Services - Moore Lake Restoration Pro�ect (September, 1981) PAGE 9 $3,598.50 Seconded by Councilman Schneider. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unantmously. PROPOSAL ON APARTMENT COMPLEX - DAVE HARRIS; 470 Rice Creek Blvd.: Mr. Dav�d Harris appeared before the Council regarding a proposal for an apartment complex at 83rd and University. Mr. Harris stated he and Mr. Schroer had soil samples taken �n the area and because of the peat, it is not feasilbe to develop this property as tndustrial, and will be submitting a request for rezoning for multiple use. Mr. Harris stated he would like reaction from the Counc�l �f this use would be compatible with the City's plan for development in this area. Mr. Harris stated there would be a series of internal roads into the 360 unit apartment comple�., usrng 83rd Avenue as the main Tngress and egress. He stated he �s looking to proceed with this project using an industrial revenue bond and would ask t'ne Council to participate in some corrective action on the soil to allow this development to take place. Mr. Harris estimated the cost of the pro,7ect to 6e �11,000,000• Mr. Harris stated it is planned that 20% of the units will be reserved for low and moderate income housing and feels it is the 6asis to create a tax increment district. It was the general concensus of the Council that this use would be consistent with the City's plan for this area. AD�OURNMENT: MOTIGP� by Counctlman Barnette to ad,7ourn the meeting. Seconded b,y Councilman Schneider. Upon a voice vote, all vottng aye, Mayor Nee declared the Public Near�ng Meet�ng of the Fridley City Counc�l of October 19, 1!�81 ad,7ourned at 10•16 p. m. Respectfully submitted, � ��� .�.�- Carole Haddad Secy. to the City Council Approved November 9, 1981 ��� � � � � � � William . Nee Mayor , , ,