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HomeMy WebLinkAbout1999-06-01 HRA Regular Meeting • MINUTES OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY HELD AT EDINA CITY HALL JUNE 1, 1999 - 7:00 P.M. ROLLCALL Answering rollcall were Commissioners Faust, Hovland, Kelly and Vice Chair Maetzold. CONSENT AGENDA ITEMS APPROVED Motion made by Commissioner Hovland and seconded by Commissioner Faust approving the Consent Agenda as presented. Rollcall: Ayes: Faust, Hovland, Kelly, Maetzold Motion carried. *MINUTES OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY OF MAY 17, 1999. APPROVED Motion made by Commissioner Hovland and seconded by Commissioner Faust approving the Minutes of the Housing and Redevelopment Authority of May 17, 1999. Motion carried on rollcall vote - four ayes. WMEP UPDATE PRESENTED Executive Director Hughes reported on May 17, 1999, • the Legislature concluded its 1999 session. On the final day of the session, the Legislature passed an emergency bonding bill which, among other things, allocated $4 million for the Southwest magnet school with a 'commitment' by House and Senate conferees to fund the remaining $10 million needed for construction during the 2000 session. Even though Governor Ventura vetoed a number of line items in the bonding bill, we are advised that the $4 million WMEP allocation remained intact. In 1998, the Legislature funded $3.8 million for land acquisition and related costs. Therefore, a total of$7.8 million has been funded with $10 million remaining unfunded. The Legislature also imposed new restrictions on the use of tax increment financing with respect to "social, cultural and recreational" facilities. Under the new law, TIF cannot be used to finance such facilities after January 1, 2000, unless done so pursuant to binding contracts or a letter of intent with a developer or contractor entered into before this date. In staffs view, libraries, senior centers and community centers are likely affected by these new restrictions. On April 12, 1999, the HRA issued a non-binding letter of intent with respect to a project involving the WMEP magnet school along with a public library, bus garage, senior center, as well as private redevelopment north of Eden Avenue. This letter of intent provided that the project was contingent upon WMEP obtaining from the Minnesota State Legislature at its 1999 Session all necessary funding approvals for construction of its portion of the Project." The action by the 1999 Legislature allows partial, but not total . compliance with this contingency. 1 • The HRA appears to have four alternatives at this time: Alternative 1: The HRA need not take any action at this time. It could instead choose to wait until the next legislative session to determine if funding is approved. This alternative, 1) prolongs the HRA's holding period and increases its attendant costs, 2) reduces the time period available to receive tax increments from related private development, 3) extends the uncertainty regarding the use of the property, and 4) may jeopardize the ability to use TIF for the library and senior center due to new TIF restrictions. Alternative 2: The HRA could sell the Kunz Oil/Lewis Engineering properties to WMEP at an agreed upon price but retain a reversionary right that would be triggered by, 1) the failure of the 2000 Legislature to fund the balance of the WMEP related costs, or 2) the inability to obtain rezoning, conditional use or redevelopment agreement approval from the City and HRA. This sale could also be conditioned upon WMEP committing to, 1) the immediate demolition of the Kunz Oil Building, 2) the clean up of any on-site contamination (staff does not believe there are significant clean up costs based upon past studies), 3) the completion of rezoning and conditional use approvals and redevelopment agreements, and 4) completion of construction drawings for the school and its related facilities. Were the property to revert, the HRA would re-acquire the property for the net price paid by WMEP. • This alternative, 1) eliminates the HRA's carry cost during the period of uncertainty, 2) allows project planning and negotiations to proceed during the interim, and 3) improves the property for development even if it reverts to the HRA, but it also 4) extends the uncertainty regarding the use of the property, 5) potentially reduces the time period available to receive tax increments were the project to fail, and 6) may jeopardize the use of TIF for the library and senior center unless a satisfactory letter of intent can be concluded which complies with the new TIF law. (From a preliminary standpoint, we believe such a letter of intent could be entered into before the end of the year.) The WMEP proposal is also based upon the need to acquire additional properties adjoining Kunz Oil and Lewis Engineering. The HRA would need to decide if it should proceed to acquire these parcels in light of legislative uncertainty. Alternative 3: The HRA could reject the WMEP proposal and direct staff to solicit "final" proposals for the private development of the Kunz Oil and Lewis Engineering properties and potentially some adjacent properties. Proposals could be solicited from a selected number of developers who submitted preliminary proposals last year or the HRA could issue a new RFP and thereby obtain a new set of proposals. In either case, the HRA could request that proposals include a new library and senior center. This alternative, 1) does not rely on future legislative actions, 2) may result in commitments prior to the end of the year so as to safeguard TIF use for the public facilities, 3) provides a taxable development, but it also, 4) eliminates the gymnasium and theater as State funded facilities, and 5) may eliminate the opportunity to redevelop 2 the existing bus garage site with taxable uses. With respect to safeguarding TIF for the community facilities, the HRA should understand that time is of the essence in order to select a developer and enter into a letter by the end of the year. Alternative 4: The HRA could direct the staff to develop plans for a redevelopment of the Kunz Oil and Lewis Engineering properties exclusively with public uses. Components of such a development could include a library and senior center as well as gymnasiums and other public uses. This alternative, 1) uses the properties to provide needed public facilities, 2) does not necessitate the submission of private proposals, 3) may not need the acquisition of additional properties, but it 4) requires the development of new taxable development within the TIF district if the HRA wishes to finance such facilities with TIF. Vice Chair Maetzold indicated two approaches could be exercised since this is of significant concern, 1) an in-depth discussions held at this meeting or 2) a special Council meeting be scheduled. Commissioner Kelly stated he does not believe a special meeting is necessary but he would be willing to attend if one is scheduled. • Commissioner Faust believes the Council is aware of issues pertaining to WMEP as well as the obvious alternatives. It is time to make a decision that the lot will be lost if a decision is not made soon. Commissioner Hovland said he would like to make a decision fairly soon. The problem is complex and the partial funding by the legislature has put the City in an awkward position. He suggested a special meeting be scheduled within the next week to think through everything before a decision is made. Commissioner Hovland made a motion setting a Special Council meeting for June 8, 1999, at 7:00 P.M. to address issues involved with the WMEP proposal and that the proposal be the sole agenda item. Vice Chair Maetzold seconded the motion. Peggy Kelly, 22 Circle West, stated she has attended all the meetings pertaining to WMEP and believes the material provided to the Council be made available to the public. Ayes: Hovland, Kelly, Maetzold Nays: Faust Motion carried. SCHOOL DISTRICT REQUEST FOR TAX INCREMENT FINANCING REBATE Executive Director Hughes reported on September 8, 1998, the HRA considered a • request for rebate of excess tax increments to the Edina School District for 1997 and 1998, from the Grandview tax increment financing district. On that occasion, the HRA 3 approved the requested rebate conditioned upon funds being rebated, "following approval by the Edina School District to study and possibly restructure sidewalks adjacent to schools". Based upon this provision, funds have not as yet been rebated to the School District. The School District adopted a resolution at its May 24, 1999, meeting renewing the request for 1997, 1998 and has added 1999, in the amount of $20,000 for each year. The resolution provides that rebated tax increments will be used to pay the District's assessment with respect to the sidewalks in the Cornelia School area, and the Countryside School area as well as the paving assessment in the vicinity of Highlands School. The referenced sidewalk projects are scheduled for public hearing on the June 1, 1999, Council Agenda. The School District noted that any excess funds will be used for projects that benefit the community. Last autumn, the School District suggested that these funds will be used to resurface tennis courts at the high school, remodel the concession stand at the Community Center, and install a handicap access door at Valley View. Staff believes the HRA should authorize the rebates for 1997, 1998, and 1999. Future rebates will be considered on a year-by-year basis. Commissioner Faust made a motion approving the rebate of excess tax • increments to the Edina School District from the Grandview tax increment financing district .for $20,000 for 1997, $20,000 for 1998, and $20,000 for 1999. Commissioner Hovland seconded the motion. Commissioner Hovland commented last year we were concerned that the School District #273 would participate in the sidewalk project near the schools. The School Board has solved that predicament by way of a resolution for funding their share of the sidewalks. He believes the City should tender the School District their rebate. Ayes: Faust, Hovland, Kelly, Maetzold Motion carried. CLAIMS PAID Commissioner Kelly made a motion approving payment of the following claims as shown in detail on the Check Register dated May 26, 1999, and consisting of one page totaling $2,851.65. Commissioner Faust seconded the motion. Rolicall: Ayes: Faust, Hovland, Kelly, Maetzold Motion carried. There being no further business on the HRA Agenda, Vice Chair ae d:declared the meeting adjourned. Executive Director • 4