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HomeMy WebLinkAboutCity Council Minutes 05-02-2000Adopted Minutes Special City Council Meeting Plymouth City Council May 2, 2000 A Special Meeting of the Plymouth City Council was called to order by Deputy Mayor Bildsoe at 7:45 p.m. in the Council Chambers, 3400 Plymouth Boulevard, on May 2, 2000. CITY COUNCIL PRESENT: Deputy Mayor Bildsoe, Councilmembers Johnson, Harstad, Slavik, Black, and Brown. ABSENT: Mayor Tierney. OTHERS PRESENT: Assistant City Manager Ahrens, Public Works Director Moore, Finance Director Hahn, and City Clerk Paulson. Discussion Proposed Redevelopment Projects Community Development Director Hurlburt reported the Council has identified "targeted redevelopment" as one of its top goals and priorities for the coming year. She would be briefing the Council on the status of two projects that are currently in the early stages of City review. She encouraged the Council to ask questions of the general concepts and possible tax increment financing of the proposed developments. She stated the first project is the Continental Property Group (CPG) project which is the redevelopment of property located at 2300 Berkshire Lane. Currently the property is vacant, and the developer proposes to renovate and upgrade the existing 240,000 square foot structure to lease the property to a tenant yet to be determined. In order to accomplish this, the developer would need to invest a substantial amount ($10,100,000) in the building and site improvements. The property has a current taxable market value of $4,209,900, and after the improvement, the estimated market value would be approximately $12,000,000. She reported a major obstacle to completing this project is the ownership of one of the three parcels of land included in the 14.87 -acre site. Part of the property (6.63 acres, on which 85,000 square feet of the building sits) is leased to CPG on a lease that is in effect until 2012. CPG attempted to purchase the property, but the owner initially indicated no interest in selling at any price. Without control of the land, CPG cannot justify a major investment in the property. Therefore, CPG requests the City's assistance to utilize its power of eminent domain condemnation) to acquire the property and re -convey it to CPG. She added CPG is requesting that the City provide tax increment financing assistance equal to 650,000 plus the actual cost of the land acquisition. CPG would finance all of the costs up front, receiving the tax increment financing assistance on a "pay-as-you-go" basis. The City and Adopted City Council Minutes Special Meeting of May 2, 2000 Page 2 of 7 CPG would enter into a loan agreement specifying that CPG would receive funds when and if they demonstrate that they have made the anticipated improvements to the property, and the tax increments projected are realized and collected by the City. The City would not be financing any of the costs through bonds or other financing options. This limits the City's risk should the project not proceed as planned or the increase in values and the resulting tax revenue be not realized. Pat Pelstring, representing CPG, stated because of the dual property ownership, it has made it very difficult to invest significantly in the property. During the last few years, the facility has been utilized for warehouse space. He noted that the parking lot has also deteriorated. In terms of the economics, there are clearly eligible tax increment financing costs that need to be expended on the property. It's an economic issue from the developer's viewpoint. He stated the best use of this building would be an office building, and the current office space needs to be totally reconstructed. The electrical systems also need to be upgraded. He stated it would cost approximately $10.1 million to update the building. He also noted that the building has low ceilings and narrow column spacing. Currently there are three serious tenants for the building which includes a printing company. He illustrated the proposed appearance that would be an improvement over the current aggregate over concrete building finish. He thanked Community Development Director Hurlburt for her efforts in working with the owner of the adjoining property. Councilmember Bildsoe asked why the developer is requesting assistance from the City rather than a commercial real estate lender. Mr. Pelstring replied when a substantial part of the property is under the ownership of another party. In addition, the initial cost of updating the building would require rents similar to what major developers are receiving on new properties. Councilmember Brown asked if there are any circumstances where there would be multiple tenants. Mr. Pelstring replied no. Councilmember Brown stated knowing who the tenant is would be a major consideration for him. Mr. Pelstring stated he would provide a profile of the tenant to the City. He added they understand that the City is seeking businesses that have high quality jobs. Councilmember Brown asked approximately how many employees would be housed at this facility. Mr. Pelstring stated there would be a minimum of 250 employees. Councilmember Johnson stated this property hasn't been updated since the 1960s, and she questioned if there are other properties in the City that are in the same situation. Adopted City Council Minutes Special Meeting of May 2, 2000 Page 3 of 7 Community Development Director Hurlburt stated there probably would be more of these types of projects in the future. However, there have been some commercial buildings that have been remodeled that haven't requested City assistance. She added knowing who the tenant is, is extremely important as there is a different impact regarding traffic and parking needs. She reiterated that the building is on two lots with the parking lot on another lot, and there are two owners of the building. Councilmember Bildsoe asked if the ownership issue would be resolved prior to any involvement by the City. Community Development Director Hurlburt replied possibly no. She stated Mr. Cushman, owner of the other portion of the building, is willing to consider selling, but the sale price is currently undetermined. She stated the City is receiving an appraisal on that portion of the property. She has made it clear to Mr. Cushman that the City isn't purchasing the property. She stated it all depends on whether Mr. Hoyt can purchase Mr. Cushman's property and proceed with the proposed redevelopment. Councilmember Johnson stated she would be willing to consider this redevelopment. Councilmember Black stated she also would be willing to proceed to the next review process, but the Council needs to make a determination in the near future if this project should proceed. She is not particularly interested in utilizing the City's power of eminent domain. Councilmember Bildsoe stated he agrees with Councilmember Black. He feels the three parties should resolve the ownership. His opinion would be for the parties to determine what could be accomplished without the City's involvement. There being no further discussion or questions for Mr. Pelstring or staff, the Council proceeded to discuss the second proposed redevelopment project. Community Development Director Hurlburt reported staff has been working with TOLD Development Company on a proposed redevelopment of the Plymouth Shopping Center and adjacent properties for over one-year. The site is approximately a 25 -acre area site located at the southwest quadrant of the intersection of Highway 55 and County Road 73. She stated the developer has made an application for a tax increment financing redevelopment district to assist in paying for the extraordinary costs of the development including demolition and abatement of existing buildings, soil corrections, and infrastructure costs (primarily the reconstruction of the Highway 55 frontage road and intersection improvements). She stated this area is guided commercial and some of the issues with this area include the frontage road (geometric problems with Medicine Lake Drive and a portion of it floods), improvement to South Shore Drive, and Highway 55. This shopping center has had a real high level of vacancy, as the dimension of the spaces is not what developers are requesting. Adopted City Council Minutes Special Meeting of May 2, 2000 Page 4 of 7 She illustrated some previous development proposals for the site. The challenges of this property are the acquisition of all the properties, improvements to the intersection, incorporating Mr. Gas into the development, the rerouting of County Road 73, construction of the frontage road, and the cost of the project. She stated this would be a difficult site to redevelop no matter what the proposed use would be. She stated staff has been working to incorporate Mr. Gas property into the development which has been fairly successful. She illustrated the current plan, which includes three apartment buildings with underground parking and surface parking, and five commercial uses along the frontage road. She commented that no matter what the final uses would be of the property, the acquisition and demolition costs are going to be the same. There would be the possibility to utilize the City's eminent domain process to acquire any single-family homes where the owners to not sell. Councilmember Bildsoe stated this is a site that the Council has discussed for redevelopment. He stated with the reconstruction of County Road 73, he hopes this redevelopment is taken into consideration and addressed as one package. Councilmember Johnson stated the proposed plans include the acquisition of some homes to the west of this project. She questioned if it was necessary to acquire these homes or is it desirable because of the age of those homes. Community Development Director Hurlburt replied this proposed redevelopment could not occur without the acquisition of those homes. Staff has discussed if the office portion of this project were phased with the residential portion being the last phase. She then illustrated how County Road 73 would be realigned. Gary Drayer, representing TOLD Development Company, stated the proposed plan provides an excellent gateway to the City. They are discussing this development with assisted living developers as well as retailers. They continue to have discussions with Holiday Stationstores, the owner of Mr. Gas, on how to incorporate that business into the development. He stated they have conducted two neighborhood meetings within the last year. He stated Edina Realty has been assisting their company with this portion of the project. TOLD is confident that if they continue with the planning process, there would be five to six purchase offers presented from some of the residential properties. However, there are a few residents who are adamantly opposed to the project. Councilmember Johnson asked if some of the current retail businesses could be incorporated into the project. Mr. Drayer stated they have been conversing with the business owners. Councilmember Johnson stated she is pleased there is a proposed multi -family development as part of this development. She also suggested the possibility of transit hubs being incorporated as well. Adopted City Council Minutes Special Meeting of May 2, 2000 Page 5 of 7 Councilmember Brown stated he is excited to see this area redeveloped. He acknowledged that the eminent domain procedure would be difficult. He prefers the original design which included an office building. He echoed Councilmembers Johnson's comment in trying to include the existing long-term businesses in the redevelopment. Mr. Drayer stated they tried to propose uses that would be successful at this location. He stated from their viewpoint, considering the viability of the district and the uses, the multi -family development in comparison to the office use does not generate as much increment. However, the current plan of the property is better in terms of the layout of the property. Councilmember Black echoed Councilmember Brown's comments. Councilmember Harstad asked about the shopping center development across Highway 55 from this development, and if any developer has considered redeveloping that area. Community Development Director Hurlburt stated there are no specific plans; however, staff maybe recommending to enlarge this tax increment financing district to allow for possible redevelopment of that area in the future. Mr. Drayer stated they would consider redeveloping that area as well if it would be feasible. Status Report on City Center Streetscape Plan Community Development Director Hurlburt reported the street lighting project is currently in progress. The next phase includes the additional landscaping along Plymouth Boulevard as well as furniture and signage. She stated regarding the signage, staff is working with an architect to identify the City Center area. She illustrated the current proposed design of the signage. She stated the signage would be located at Plymouth Boulevard and Highway 55 and at Vicksburg Lane and Highway 55. She stated on the west side of Vicksburg Lane, the costs would be borne by the developer as part of the development approval process. On the east side of the Vicksburg Lane, the adjacent developers would all contribute. With the Plymouth Boulevard intersection, the City would probably fund the costs of that signage. Councilmember Johnson stated she would prefer signage that would allow the flexibility to advertise community events especially at the Plymouth Boulevard intersection. Community Development Director Hurlburt stated staff would be proposing that concept at both intersections. Adopted City Council Minutes Special Meeting of May 2, 2000 Page 6 of 7 Councilmember Black encouraged that the same design concept be utilized for the Vicksburg Lane and County Road 9 and the Plymouth Boulevard and County Road 9 intersections. Councilmember Johnson asked if the signs would be lit. Community Development Director Hurlburt stated it is not proposed for lights to be included on the structures themselves. However, there could be spot lighting. Councilmember Bildsoe suggested the "City Center" wording be larger. A brief discussion was held regarding the possibility of signage at City Hall (corner of 34th Avenue and Plymouth Boulevard). Community Development Director Hurlburt stated staff would utilize a landscape architect for Plymouth Boulevard. Staff suggests the same design of benches be used along Plymouth Boulevard as in the Millennium Garden. Once the style is approved, other property owners located along Plymouth Boulevard could purchase the same design. Councilmember Harstad asked if the medians along Plymouth Boulevard would also be landscaped. Community Development Director Hurlburt replied yes. Council approved the following items as referenced in the staff report: 1. The design and proposed spending plan for City Center signs at Plymouth Boulevard and Vicksburg Lane. Authorized staff to negotiate a cost sharing agreement for the sign on the east side of Vicksburg Lane. 2. The proposed spending plan for additional landscaping along Plymouth Boulevard. 3. The general design for street furniture (benches) for use throughout City Center and authorized staff to seek local sponsors to underwrite the cost of individual benches. Quarterly Report from City Manager Motion was made by Councilmember Bildsoe, and seconded by Councilmember Brown, to table the quarterly discussion with the City Manager until the May 16 Study Session. With all members voting in favor, the motion carried. Adopted City Council Minutes Special Meeting of May 2, 2000 Page 7 of 7 Adjournment Motion was made by Councilmember, and seconded by Councilmember Black, to adjourn the meeting at 8:50 p.m. With all members voting in favor, the motion carried. i Lndra R. Paulson, City Clerk