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HomeMy WebLinkAbout1997-10-06 HRA Regular Meetingr MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY HELD AT CITY HALL OCTOBER 6, 1997 - 7:00 P.M. ROLLCALL Answering rollcall were Commissioners Faust, Hovland, Kelly, Maetzold and Chairman Smith. CONSENT AGENDA ITEMS APPROVED Motion made by Commissioner Maetzold and seconded by Commissioner Hovland to approve and adopt the HRA Consent Agenda as presented with the exception of item HRA II, Award of Bid, Lewis Engineering Building Demolition. Rollcall: Ayes: Faust, Hovland, Kelly, Maetzold, Smith Motion carried. *MINUTES OF THE HRA MEETING OF SEPTEMBER 15, 1997,APPROVED Motion made by Commissioner Maetzold and seconded by Commissioner Hovland approving the Minutes of the HRA Meeting of September 15, 1997. Motion carried on rollcall vote -five ayes. • BID AWARDED FOR DEMOLITION AND REMOVAL OF THE LEWIS ENGINEERING BUILDING Commissioner Faust explained she had asked this item be removed from the Consent Agenda to inquire when the demolition and removal of the Lewis Engineering Building would be completed and what the site would look like after the demolition. Executive Director Hughes explained the demolition would take approximately two weeks and the ground smoothed over with no contours. Commissioner Faust made a motion for award of bid for the demolition and removal of the Lewis Engineering Building to recommended low bidder, Veit and Company, at $46,913.00. Commissioner Maetzold seconded the motion. Ayes: Faust, Hovland, Kelly, Maetzold, Smith Bid awarded. LEWIS ENGINEERING/KUNZ OIL PROPERTY USE BY SCHOOL DISTRICT DISCUSSED Executive Director Hughes reminded that the HRA on August 18, 1997, concluded the purchase of the Lewis Engineering property at 5229 Eden Avenue. On September 16, 1997, the HRA completed the purchase of the Kunz Oil/Parts Plus property at 5200 Eden Circle. The Lewis Engineering property is vacant. The Kunz Oil/Parts Plus occupies the 5200 Eden Circle property and may continue to do so until March 31, 1998. Bids are presently being solicited for demolition of the Lewis Engineering building in order to prepare the site for subsequent resale and . development. Staff has previously recommended the HRA issue a request for proposal for the purpose of selecting a developer of these properties. Such an RFP has not yet been drafted for the HRA's consideration. 1 Resolutions From The Board Of Education Executive Director Hughes said on September 23, 1997, resolutions were received from the Edina Board of Education requesting, 1) designation of the Lewis Engineering/Kunz Oil properties as a possible site for a "Magnet School" which is contemplated by the West Metro Education Program and 2) the City and School District pursue plans for the relocation of the school districts bus garage presently located at 5220 Eden Avenue. A Magnet School Application describing features of a Magnet School was also received. In essence, the resolutions submitted by the School District requested the City delay issuance of an RFP for the development of the properties and instead work with the School District to determine if a public school use of the property is feasible and desirable. Propedy Tax Issues Director Hughes noted that questions had been raised relating to property tax issues with respect to the redevelopment of these properties with a Magnet School and/or a school bus garage as compared to other potential uses. For comparison purposes, Director Hughes provided a preliminary analysis of the tax issues. Director Hughes pointed out this property is located within the Grandview Tax Increment Financing District. Therefore, all new taxes generated by this development would be captured by the HRA until the TIF district expires in 2010. Such captured taxes must be used only for eligible public redevelopment costs within the Grandview District. After expiration of the TIF district, the City would then receive its normal share • of the property tax bill, (i.e. 13.4% if current property tax law were still in effect in 2011). Director Hughes recommended the Council direct staff to enter into discussions with the School district staff for the purpose of formulating draft purchase agreements with respect to the District's purchase of the Kunz Oil/Lewis Engineering properties and the HRA's purchase of the school bus garage. It is anticipated that such agreements will be contingent upon the District or WMEP receiving funding for the project and the issuance by the Council of conditional use permit for the project. Director Hughes recommended the HRA allow 45-60 days for the respective staffs to prepare recommendations for Council's consideration. Director Hughes noted that if the recommendation were approved, the action would not commit the HRA to sell or the District to purchase any property. HRA COMMENTS/CONCERNS Commissioner Kelly asked what the City paid for the property. Director Hughes said $7.75 per square foot. Commissioner Kelly said he would like reassurance that for land purchased at $7.75 per square foot should not be sold at $5.50 per square foot. Director Hughes said $7.75 is the price per square foot of the land and the $5.50 is estimated taxes per square foot of floor area if Laurent Park had completed their contemplated building. The $5.50 is tax paid on a building value of perhaps $100 per square foot. Commissioner Maetzold continued if Laurent Park had built on the ro ert , new taxes • p p Y realized would have been approximately $547,000 assuming no dollars were captured 2 by tax increment financing and would be an increase in the tax base. Director Hughes • explained the maximum levy limits are now being levied under state law and if$547,000 were added to the tax base the tax rate would be reduced and lessen taxes in Edina by approximately a $.40 reduction on the tax bill based on a $180,000 homesteaded home. Commissioner Hovland added this is one of the last pieces of property within the 1-494 ring and it should have a development that is most beneficial to the City. He inquired whether the School would require the resolution to get state funding. Commissioner Hovland asked how long an RFP process could take and how negative the 120 days might be on the School District. Director Hughes said an RFP could ask for full plans from prospective developers or be just a statement of qualifications. A schematic drawing would be desirable and 120 days may be necessary. An RFP would give a panorama of uses for the site. Developers might be hesitant to develop an expensive proposal for the site if they were aware a public agency has an inside track. Chair Smith said the School District needs to make its interests known but he does not agree with their resolutions. He reiterated the City's business is done in public and believes the issue should be publicly debated. Commissioner Hovland asked if the bus garage and the Kunz/Lewis site are bound together. Director Hughes said he believes the sites should be bound together. Chair Smith explained WMEP is the site purchaser for the school building while the Edina School district the purchaser for the bus garage. Director Hughes reiterated this discussion has been held between the City and School since creation of the tax increment district in 1984. The City has been interested in the site since 1984 but the School has perpetually had funding difficulties with it. This opportunity seemed like a way to link the two and resolve some City interests at the same time. Commissioner Hovland inquired what would happen to captured, accumulated and q PP P , unused revenues in the TIF district when it expires by 2010. Director Hughes answered unspent increments at the end of the district are returned in a proportionate basis to the tax jurisdictions. Some districts are pooled but the Grandview District is not one of them. Attorney Gilligan said he believes that possibility exists that Grandview District could be pooled but would study the law governing the issue. Commissioner Faust indicated she was elected to help citizens and to attempt keeping taxes within limits. She feels policy decisions have been made without Council input and the School District is more aware of what is happening with the site than the Council. This, in her estimation is an inappropriate policy decision made with no knowledge of the full Council. She said she found out more about what is going on at • the site in the Sun Current than from any briefing. The resolution states the City of Edina considers a Magnet School an appropriate use of the land. She would never vote for this without further discussion. Commissioner Faust said she is not opposed to a Magnet School, she is an educator but the process this is taking she disagrees with. 3 Chair Smith noted the resolution was brought forward from the School District. At a • previous meeting, Manager Rosland was directed to explore the issue with the School District. He asked staff to locate information on the previous discussion. Manager Rosland explained the School District came to the City with the proposal. He explained to the School District their official body had to ask the City's official body to examine the site as a possible site for a Magnet School. This is why the resolution is on the agenda and it seeks our opinion on whether this is a feasible proposal. Commissioner Kelly observed we do not have enough information to make an educated decision. Meetings and discussions have been held prior to drafting the resolution and the HRA should have been kept apprised of them. He inquired at the last meeting if anything was happening on the site, and was told no. He remains concerned about the numbers, the formula and that an RFP has not been developed, even in skeletal form. The City has held the property for a while and a lot of interest has been generated yet nothing has been done. A significant stream of revenue would be lost if the School District were allowed to build on the site and this decision should be made in an open Council meeting. Chair Smith said the Council does not approve resolutions generated by anyone else. The primary issue is that staff has identified a use for the site and would the Council give approval to continue negotiations for 45-60 days. Until VV,MEP, a potential buyer, • comes forward with a serious proposal, nothing should be done. Commissioner Faust voiced concern with, 1) use of the site for a Magnet School, 2) the impact on Edina citizens, tax wise, if the School District proposal were to be approved, and 2) the impact of pooling of the TIF money. Commissioner Hovland would like information from the School District regarding their need for a site location designation in order to obtain State funds. He would vote to reject the recommendation of staff and redirect them not to enter into discussions with the School District. He believes potential buyers would be scared off if a draft purchase agreement were accepted. Commissioner Hovland said a draft RFP should be developed also for Council's consideration. He also believes in the policy that public business is done in public. Commissioner Maetzold commented that these things would have been accomplished within discussions between City staff and the School District staff within the next 120 days to decide if this site were appropriate for a Magnet School. The recommendation from the School District addresses most of the issues. This is an excellent opportunity to participate with other districts throughout the City and he is disappointed in the discussion that has ensued. Manager Rosland said staff would begin work on a draft RFP for Council consideration. . He reiterated the intent of the recommendation was, as presented; "The School District's resolutions, in essence, request that the City delay the issuance of an RFP for 4 the development of the properties and instead work with the School District to determine if a public school use of the property is feasible and desirable." Chair Smith asked if the School District could be invited to make a presentation of the proposed Magnet School at the October 201h Council meeting and explain what the benefits it would be to the community. At the same meeting, information must be provided on, 1) what impact Edina citizens would feel with their taxes if the site is used for a school, 2) what the impact of pooling TIF funds in 2010 would be, and 3) that staff develop a draft RFP for consideration by the Council . Commissioner Maetzold wished the record to show he disagrees with moving ahead with an RFP at this time. Even though we know this property could be used for retail, office, or office warehouse, the focus should be on a Magnet School, which would benefit the community in general. Commissioner Hovland noted he is in favor of a Magnet School located in Edina, but he does not know where it should be located because of the loss of potential tax revenue. Commissioner Faust commented during discussions of the best use of the land, she believed the focus to be what would be the best use for the citizens of Edina, tax wise. She does not recollect any discussion previously for use of the site for a school. • No further Council action was taken. CLAIMS PAID Commissioner Hovland made a motion approving payment of HRA Claims as shown in detail on the Check Register dated October 1, 1997 and consisting of two pages totaling $59,321.40. Commissioner Maetzold seconded the motion. Rollcall: Ayes: Faust, Hovland, Kelly, Maetzold, Smith Motion carried. There being no further business on the HRA Agenda, Chairman th declared the meeting adjourned. Executive Director 5