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HomeMy WebLinkAbout2018-06-18 HRA Special Meeting Agenda Packet5146 Eden Avenue - Redevelopment Offer For Discussion June 18, 2018 Project Description • Subdivide into two parcels – North (1.16 acres) and South (2.13 acres) • South Parcel to include o 2.13 acres o 143 residential apartments 10 percent priced at 50% AMI affordable rates o 172 private stalls for residents (1.2 per unit) o 40,000 Sq Ft public green space o Pedestrian bridge #1 across RR tracks o $41.8 million estimated cost • North Parcel to include o 1.16 acres o 160 stalls of District parking 20-30 available to apartment residents o 30,000 Sq Ft future Civic building o Shared street/loading drive/woonerf to edge of RR track o Pedestrian bridge #2 across RR track o $24.2 million estimated cost (includes City & Developer costs) • Constructed in two phases o Phase 1 begins Spring 2019 Completion Summer 2020 Includes residential, private parking, public parking, green space and buildable “pad” for future civic building o Phase 2 begins as early as Spring 2021 Completion 12-14 months later 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 2 Overview of Public / Private Arrangement 1. Sales Transaction • City to sell 3.3 acres • Simultaneously, City would buy back North Parcel (1.16 acres) • Developer to retain right-of-first-refusal on North Parcel o Can buy North Parcel for pre-established price if City does NOT construct future civic building within 3-5 years • Price contingent upon: o TIF to reimburse for public elements (green roof and District parking) o HRA loan to support 10% affordable units 2. Ownership Structure • Developer to own land and Phase 1 infrastructure improvements • City to own “pad” above District parking and air rights to construct future civic building • City to hold public easement on 0.92-acre green roof • City to hold public easement on District parking structure • Developer to have lease rights to 20-30 stalls in District parking 3. Construction Responsibility Residential Building (including private parking) Civic Building District Parking Structure Green Roof (on top of private parking) Developer City Developer Developer 4. Maintenance Responsibility Residential Building (including private parking) Civic Building District Parking Structure Green Roof (on top of private parking) Developer City City with potential support from nearby property owners who benefit Shared – City, Developer & nearby property owners who benefit 5. Operations/Management Responsibility Residential Building (including private parking) Civic Building District Parking Structure Green Roof (on top of private parking) 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 3 Developer City Developer to manage (for fee) City to manage Financial Overview 1. Purchase Price & Term • City to sell 3.3 acres for $4.589 million • Simultaneously, City would buy back North Parcel (1.16 acres) for $1.6 million • $2.989 net proceeds to City o $1.4 million per acre o $20,902 per residential unit • City/HRA would loan $1.2 million toward affordable housing • City/HRA would pledge $10.47 million in TIF revenue to support public elements 2. Anticipated Financial Uses Description Residential Mid-Rise Civic Green Roof District Parking Developer Total* Developer Acquisition & Site 2,989,000 Included Included 2,989,000 (6%) Construction Costs (base building with contingency) 30,039,000 3,700,000 4,725,000 38,464,000 (72%) Soft Costs 3,299,326 Included 669,696 3,969,022 (8%) Finance Costs 1,745,971 Included 240,482 1,986,453 (4%) Total 38,073,297 3,700,000 5,635,178 47,408,475 . Description Future Civic Building Woonerf & Pedestrian Bridge #2 City Total* City / HRA Acquisition & Site 1,600,000 Included 1,600,000 ( 9%) Construction Costs (base building with contingency) 13,502,500 1,250,000 14,752,500 (79%) Soft Costs 1,627,522 Included 1,627,522 ( 9%) Finance Costs 663,903 included 663,903 ( 3%) Total 17,393,925 1,250,000 18,643,925 . * Preliminary estimate only based on currently available information. 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 4 3. Anticipated Financial Sources (Developer only) Description Residential Mid-Rise Civic Green Roof District Parking Developer Total Developer Debt & Equity 35,742,214 Included Included 35,742,214 (75%) Tax Increment Notes 0 4,831,083 5,635,178 10,466,261 (22%) HRA Loan 1,200,000 0 0 1,200,000 ( 3%) Total 36,942,214 4,831,083 5,635,178 47,408,475 . See #6 below for summary of City’s Potential Financial Sources 4. City/HRA Loan for Affordable Housing • $1.2 million loan requested to support land purchase and lost revenue due to affordable housing in project o 15-year term o 1% interest o Interest only payments with balloon • Subordinate to primary lender • Funds would likely come from HRA Affordable Housing Fund (if available) o Also pursue support from Edina Housing Foundation 5. Tax Increment Financing • Incremental taxes could be used to fund public elements o Need to use all incremental taxes generated from two sites – 5146 and 5220 for full 26-year term o $4,831,083 Civic green space o $5,635,179 District parking o TIF Notes sized to deliver this amount, including financing and interest costs HRA requested to be responsible for any shortfall in TIF revenue shortage due to discounted sale of Notes o Ehlers estimates are slightly conservative outcome could be better but unlikely to be worse • Private apartment building would be self-funded • Future civic building would be funded with public debt 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 5 • Will need to defer other public improvements unless other monies identified o Vernon Avenue Intersection Improvements CIP 17-012 $750,000 o Arcadia Avenue Improvements CIP 17-014 $451,000 o New Street from Eden Ave. to Jerrys Foods CIP 17-015 $283,000 6. Funding Strategy for future Civic building • Cost estimated at $18.6 million • Strong potential for philanthropic contributions • Consider Tax Abatement Bond with General Obligation backing o Sized based on need after other pledges secured o 20-year term o Does not require referendum o May impact current AAA credit rating • Revenue sources might include: o Sale of 5146 Eden property $ 2,989,000 (16%) o Sale of existing Art Center $ 1,341,710 ( 7%) o Sale of existing Senior Center $ 2,500,000 (13%) o Philanthropic community support $ 5,000,000 (27%) o City/HRA debt $ 6,813,212 (37%) o Total $18,643,925 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 6 Comparison to Other Alternatives Over the last several months and years, the City has explored different options for redeveloping the vacant site that was formerly occupied by Edina’s Public Works Department. These options have been rooted in the 7 Guiding Principles established in the 2012 Grandview Development Framework. The various options include: • 100% public uses on site • 100% private uses on site • Variety of combinations of public and private uses o Mid-rise residential o High-rise residential o Large-scale civic building o Medium-scale civic building o Large-scale and medium-scale District parking o Medium-scale outdoor public green roof Previously prepared materials are provided in the packet: • Large-scale civic building, May 2016 • Four options, May 2018 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 7 Staff Concerns Over the past six months, City staff has explored several iterations of a mixed-use public/private development on this site with the Frauenshuh team. The City has engaged public finance and legal professionals to help guide the City’s interest. Staff continues to have several concerns regarding the current redevelopment concept. These concerns are summarized below. 1. Allocation of space for public and private elements 2. Adequacy of parking counts to achieve District goal 3. Viability of public/private project with such a firm limitation on size of tax-paying elements 4. Conditions necessary to achieve market-based purchase price 5. Adequacy of TIF revenue to repay TIF Notes if sold at discount 6. Prioritization of District-wide capital improvements with limited TIF revenue 7. City readiness to design, build and operate 30,000 Sq Ft future civic building 8. Risk of owning pad/air rights if certainty of future civic building is unknown 9. Potential impact to City credit rating 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 8 Discussion Topics 1) Does the combination of public and private uses generally satisfy expectations? a. Is 60% public / 40% private split essential as defined in the December PDA? The 2012 framework plan assumed a 34% public / 66% private distribution. b. Does the site plan create a welcoming space for the general public? c. Should the public elements be scaled back to reduce costs? 2) Are the purchase price and terms generally acceptable? a. Higher purchase price achieved only by offsetting contributions in loans 3) Is the City prepared to commit funds for the future civic building? a. The most viable outcome can be achieved if the City/HRA and Developer are equally committed to funding their respective elements. b. The green roof and District parking are most desirable if there is a public facility to attract more visitors to this area. c. The City’s $1.6 million investment in the pad above the District parking is at risk if the future civic building is scuttled. Next Steps 5146 Eden Avenue – Redevelopment Offer – for June 18, 2018 Discussion Page 9 • Decision by the HRA required by June 30, 2018 o Proceed with current scope and prepare Sale and Redevelopment Agreement; or o Pursue a different alternative and terminate Preliminary Development Agreement 952.829.3480 frauenshuh.com 7101 West 78th Street Minneapolis, MN 55439 June 4, 2018 Via email only to: Duram@edinaMN.gov Mr. Don Uram Finance Director City of Edina HRA 4801 W 50th Street Edina, MN 55424 Re: Confidential – Grandview Redevelopment Package 5146 Eden Avenue, Edina, MN The enclosed package provides a response to the questions outlined in your letter of May 25, 2018 in addition to supplemental information related to the current redevelopment plan. As the City of Edina HRA and Frauenshuh, Inc. have continued working in collaboration toward a redevelopment plan for the site, we look forward to finalizing the project approach and terms forming the basis for a formal redevelopment agreement. The enclosed package is the culmination of efforts to achieve multiple public and private redevelopment objectives and outcomes for the project, which include: •Maintaining 60% of the site area for civic programming activities; •Delivering a community/arts/senior civic building of approximately 30,000 sq. ft.; •Incorporating affordably-priced housing meeting the City’s affordable housing policy; •Private redevelopment components that are feasible and serve as an economic catalyst for the project; •Consistency with the 7 Guiding Principles for the Grandview District. As the project has evolved over the past several months, further public objectives have been incorporated as central to the plan’s outcome: •Reducing the financial and development risk to the City and/or HRA through the project’s design, cost and delivery scope; •Aligning the use of TIF and other public sources to achieve feasibility and to underwrite eligible elements of the plan; •Permitting the private development to proceed while allowing the civic building component to be “phased”, providing time for financial and operational commitments for the civic building to be made. The enclosed plan intends to achieve these objectives in a manner that is consistent with the 7 Guiding Principles, recognizes the physical and operational constraints of the site and is market and financially feasible given the public use objectives for the project. We look forward to meeting this week to review this information and moving forward with an exciting public-private redevelopment vision for Grandview! Best Regards, David M. Anderson Allen Hill Senior Vice President Senior Vice President Enclosure The Grandview, EdinaDJRARCHITECTURE INC. 2 Rendering DJRARCHITECTURE INC. The Grandview, Edina3 Floor Plans NLEVEL 1 Scale: NTS NLEVEL 2 Scale: NTS Key Residential Affordable Art Center Common Area BOH/MEP Parking Core The Grandview, EdinaDJRARCHITECTURE INC. 4 NLEVEL 3/TYPICAL FLOOR Scale: 1:NTS Residential Affordable Art Center Key Common Area BOH/MEP Parking Core Floor Plans Redevelopment Schedule and Program Summary* Phase 1 - Private Phase Component Size Start Complete Description Private Residential 143 Units Spring 2019 Summer 2020 •126 market-rate/17 affordable•172 space parking structure•Shared use of 20-30 spaces in public rampCivic Plaza 40,000 sq. ft. (Surface) Spring 2019 Summer 2020 •Design, REA and Operational Agreements perDevelopment Agreement.South Pedestrian Link 60-80 linear feet (bridge and stairs)Spring 2019 Summer 2020 •Link between Jerry’s ramp and civic plaza.•Design/cost confirmation•Agreement with railroadNorth Civic Ramp 160 parking spaces in two level structure Spring 2019 Spring 2020 •District and shared parking facility•Design, REA and Operational Agreements perDevelopment Agreement.Phase 2 - Public Phase Component Size Start Complete Description Civic Building 30,000 sq. ft. (2 or 3 stories) Spring 2021 Spring 2022 •2 stories or 3 stories in design•Expansion potential•160 parking spaces in two-level ramp below, plus 276spaces in Jerry’s rampWoonerf 240 approx. Linear feet Spring 2021 Summer 2022 •Constructed at-grade in sequence with completion ofcivic building.North Pedestrian Link 60-80 linear feet (bridge and stairs)Fall 2021 Spring 2022 •Link between Jerry’s ramp and civicbuilding/woonerf/civic plaza.•Design/cost confirmation•Agreement with railroad*Subject to design, entitlement, permitting lead times and financial commitments to be further defined in the redevelopment agreement. 6/1/2018Residential Apartments District Parking RampResidential Parking 172District Parking Ramp*160Total New Parking 172 160Existing Jerry's Ramp** 0 276Grand Total District Parking 172 436*30 spaces available for residential parking lease**Total Parking Available - 276 spaces (76 spaces - 3 hr parking; 200 spaces unlimited)PROPRIETARY CONFIDENTIAL AND NON-PUBLIC - PRELIMINARY FOR DISCUSSION PURPOSES ONLYGRANDVIEW DISTRICT PARKING COUNT ANALYSISLand UseTotals608276332172160 Grandview Site Area Allocations Residential Mid-Rise Approximately 1.18 acres Civic Green Platform/Plaza Approximately .95 acres Community Center/Civic Plaza Approximately 1.16 acres GRANDVIEW SUBDIVISION AND VERTICAL RIGHTS A – Fee ownership Private (subdivided RLS parcel) B – Fee ownership Private (subdivided RLS parcel) C – Air Rights Option to City D – Easement or CIC subdivision for Civic Plaza/Platform A B C A D prepared 5-23-2018 A.High Rise Luxury Tower $59,175,932.00 Art Center $16,418,499.00 Affordable Lofts $7,962,584.00 Civic Shared & Lease Parking $11,195,706.00 $67,138,516.00 Plaza/Platform/Ped. Elements $8,740,481.00 $36,354,686.00 B.Mid-rise market residential $36,500,000.00 Art Center $16,418,499.00 Affordable Lofts $7,962,584.00 Civic shared parking $4,102,200.00 $44,462,584.00 Plaza/Platform/ Ped. Elements $3,750,000.00 $24,270,699.00 C.N/A Art Center $16,418,499.00 Civic plaza, landscape $1,000,000.00 $17,418,499.00 D.Sale of property for 100% private use(s). Notes:5/4/2018 *Estimates subject to full and final programming, design, value engineering, zoning and building permitting requirements. *Assumes build-ready site; estimates do not include extraordinary site preparation, environmental remediation, soil corrections or major infrastructure modifications (streets, UG/OH utilities, bridges, stormwater mgmt.) GRANDVIEW – SITE DEVELOPMENT SCENARIO ANALYSIS Preliminary Analysis subject to survey, project design, zoning, underwriting and pre-construction site due diligence Assume development density of approximately 250 units or general commercial / office uses in the range of 75-100,000 sq. ft. with structured parking. No public use space included. Estimated Private Development Costs*Estimated Public Development Costs*Scenario Alternative 30,000 sq. ft. community arts/active adult center, structured parking, civic green, green connector, 147-unit residential tower and 27 affordable art lofts. 30,000 sq. ft. community arts/active adult center, surface parking, landscape/sculpture garden. N/A 30,000 sq. ft. community arts/active adult center, structured parking, civic green, 139 unit mid-rise residential building and 27 affordable art lofts. Potential development value range from $30,000,000 - $60,000,000 May 17, 2016 Mayor and City Council Ann Kattreh Parks & Recreation Director Grandview Facility Feasibility & Operational Analysis Final Report Information / Background: The Grandview Facility Feasibility & Operational Analysis Study is complete. Stakeholders groups were interviewed and visioning sessions began in December 2015. The Task Force met six times to review information and provide feedback and direction. The Arts & Culture Commission and Park Board received updates and provided feedback five times prior to this meeting. Community open houses were held on Jan. 21 and on March 10 at which approximately 100 residents attended and provided valuable feedback. The City Council received updates at work sessions in February and March. Based on all input received, staff and the consulting teams prepared a DRAFT space program with a set of “core” facility components and another set of “enhanced” facility components. Any of the “enhanced” facilities were optional additions to the core program individually or as a group. Core programs: Art Center, Active Adult (Senior) programming, fitness/education classes, meeting rooms and restaurant. Enhanced programs: Additional Art Center space, larger lobby, drop-in childcare and indoor play structure, an event/performance venue, video production space for the Edina Communications Department, fitness center with cardio, free weights, circuit training and locker rooms, a gymnasium and leasable space for a wellness partner. STAFF REPORT Page 2 Facility Options At the Feb. 17 City Council Work Session, after reviewing potential facility programs and their associated capital and operating budgets, the City Council provided direction for the task force to move forward studying Option B, Core (Active Adult, Art, Café) plus event space. With that direction, HGA Architecture prepared two design options for how this facility could fit onto the Grandview site with these components. Staff and the task force continued to further refine the facility, capital costs and associated pro formas. With feedback from the task force, Arts & Culture Commission and Park Board, HGA Architecture created a Preferred Option. At the April 19 City Council Work Session, the City Council provided feedback on the Preferred Option massing diagram and site fit model. Pro Forma Staff worked with PROS Consulting and Sutton & Associates on pro formas for the facility. One-year and six-year pro formas are below. Jeff Bransford from PROS Consulting will be present to answer any questions regarding the pro forma. One-Year Pro Forma Six Year Pro Forma STAFF REPORT Page 3 Staff Summary Staff continues to be concerned about the cost of parking at this site. Due to the nature on the structured parking required, the cost of parking is estimated to be $37,500 per stall for a total parking structure cost estimate of $14,250,000. This does not include any transit parking. HGA Architecture and LHB worked together closely to share information from the concurrent Grandview Facility Feasibility & Operational Analysis and the Grandview Transportation Study. Findings from the Transportation Study are included in the final HGA site plan. Another concern is the estimated annual operating deficit of over $650,000. Currently the Art Center operates with an average three-year annual loss of $157,671 and the Senior Center operates with an average three-year annual loss of $54,044. The three-year average total loss of those two facilities is $211,715. If both of these facilities moved operations to the new facility at Grandview, the additional $438,285 subsidy would require re-prioritization of other general fund or enterprise fund facilities and/or programs or additional taxes would be required to cover the operating deficit. The current Art Center is a renovated home that was built in the late1940s. It was purchased in 1976, transformed into an Art Center and opened its doors in 1977. While some describe it as unique and having character, it is an old, awkward facility that does not have adequate storage, office space, parking, gallery or gift shop space and is non-ADA compliant. The Arts & Culture Commission members have been clear that they believe that the Art Center needs either a significant remodel, which would be difficult given ADA requirements, or a new facility. This is also supported by the Sutton + Associates Edina Art Center Analysis that was completed in 2012. Revenues Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Administration $0 $0 $0 $0 $0 $0 Maintenance $0 $0 $0 $0 $0 $0 Custodial $0 $0 $0 $0 $0 $0 Arts $588,671 $606,331 $624,521 $643,257 $662,554 $682,431 Active Adults $107,364 $110,585 $113,902 $117,320 $120,839 $124,464 Fitness Programs $46,800 $48,204 $49,650 $51,140 $52,674 $54,254 Facility Rentals $94,100 $96,923 $99,831 $102,826 $105,910 $109,088 Café $714,400 $735,832 $757,907 $780,644 $804,063 $828,185 Total $1,551,335 $1,597,875 $1,645,811 $1,695,186 $1,746,041 $1,798,422 Expenditures Administration $529,650 $539,797 $550,341 $561,299 $572,685 $584,518 Maintenance $156,405 $158,147 $159,955 $161,832 $163,781 $165,805 Custodial $146,056 $146,472 $146,902 $147,346 $147,805 $148,280 Arts $555,180 $572,842 $591,192 $610,256 $630,064 $650,643 Active Adults $145,000 $149,105 $153,370 $157,800 $162,401 $167,181 Fitness Programs $46,358 $47,550 $48,789 $50,078 $51,417 $52,810 Facility Rentals $24,570 $24,680 $24,794 $24,912 $25,035 $25,163 Café $607,240 $631,530 $656,791 $683,062 $710,385 $738,800 Total $2,210,458 $2,270,122 $2,332,133 $2,396,585 $2,463,574 $2,533,200 Total Cost Recovery 70% 70% 71% 71% 71% 71% STAFF REPORT Page 4 Staff and consultants led a solid public process and completed a thorough and detailed analysis of the site and operations. The City Council, Park Board and Arts & Culture Commission had many opportunities to provide consultation and specific direction. The consulting team was incredibly responsive and carefully considered and included all feedback. The collaboration between the Parks & Recreation Department and Edina Community Education staff was excellent. Task Force Comments Member Jones stated that she thinks this site gives the city a huge opportunity as far as location because it is a centrally located piece of land, which is rare. She wants them to try to hang on to it because it is unusual to have three acres centrally located that could be near transit. She feels strongly that the parks programming has all been south of Hwy. 62 and as a city they should be thinking strategically to invest in programming north of Hwy. 62 for the residents for that half of the city. She feels as a city they do not have very much general indoor recreation space, especially north of Hwy. 62. When she thinks about their programming space and their space needs she thinks geographic equity is very important and access to transit is also very important. The city is pursuing high density residential in this area without considering recreational needs for the new residents. She would consider this either as park land, they are talking about 10 blocks of high density residential without additional park space, and she would suggest that the people that would be moving in should have a park, even just on those two lots alone just Public Works and OLG site is a neighborhood the size of Strachauer Park which in the city planning days they put in a park facility, warming house for those residents. This area will have more residents than that. Strategically they should either leave that as open space or just open park land or a recreational space to serve the needs of future residents. They are creating a new neighborhood. She stated that the framework, she’s been with the process since the initiation, consistently called for a community building. The feedback has been for a community building, a multi-generational community building. She is hoping that council continues to hear that we need a community space and it would be nice to combine both recreation and the arts. She thinks it is really appealing. She thinks that we should be looking at the current programming mix as it is not maximized in this scenario and that limiting their selection of programs really hindered this process. Member Gunness stated that she likes what HGA has done especially in this updated version. She appreciated the flexibility provided for even things about the parking, having two faces to the building so it seems like you built in flexibility for now and in the future. She likes that it acknowledges as best as they can the transportation options into the future. Her favorite part of it is the art and wellness terrace. She loves those together. That encapsulates how inspiring this whole thing could be. She feels like it captures indoor space, outdoor space, it’s flexible in terms of transportation going forward, it’s flexible in terms of the kind of programming that we can be offering, how rooms can be used in more than one way. The event center is STAFF REPORT Page 5 another example of being able to split into two spaces to hold two events at the same time. She thinks the indoor and outdoor spaces are incredible. She knows it must have been a lot of work to reconfigure everything but she thinks the way that they have this event center at the highest point with the multiple views and with the kiln yard, is the most exciting. She loves how HGA was thinking about the collecting point for people whether they come on foot or by car or from the street you are going to have a similar entrance feeling. Member Miller stated that this provides an opportunity to upgrade the present services to expand to new services. She thinks it does it very generously and efficiently. She thinks it’s pretty exciting to have the Art Center in the center of the city with all of these wonderful facilities. She stated some of the language that we used in talking about what the new art center would be “state of the art” and we are a little shy about using that because we don’t want it to immediately say that it would be expensive but the fact is that this kind of a facility would be a state of the art facility and would offer a lot of opportunities for that kind of programming. The only thing that I would add hearing Cheryl’s comments is how happy we are with the fact that HGA kept coming back with drawings that reflected the comments that were made at the different meetings and she thinks that is very admirable that HGA listened and changed things around so you gave the city a lot to work with. The Park Board received the final report and presentation at the May 10, 2016 Park Board Meeting. May 10 Park Board Member Review and Comment Member Miller Member Miller stated as far as the facility itself he thinks they’ve done a great job of the design by taking into account a lot of the requests and what we want to do. He also feels it would be great if this was the beginning of creating a center of gravity for the City of Edina. With that being said, the biggest issue he has is creating a facility that is losing money every year. One thing he doesn’t know is if they understand what is the effect on the total Edina budget because he thinks what they are seeing is a microcosm of the Edina budget that says this specific facility is a $650,000 per year loss. He noted what they’ve heard a little bit tonight is they are pulling this from here and they are pulling that from there and so what they are not seeing is the effect on the overall budget. What he means by that is he doesn’t know if they actually create the $650,000 in loss or if they are just moving things around and it just so happens on this spreadsheet they are reflecting that. STAFF REPORT Page 6 Member Miller also stated that he believes the discussion that they had last month was it’s the City Council’s opinion that getting into the more sophisticated fitness with memberships is over and beyond what the core competency would be and the revenue projections; however, they don’t really know if those are accurate. Member Miller stated in summary for him he thinks the facility space would be the start of something great and it looks like a beautiful facility but he just gets a lot of heartburn on the financial aspects of it. Member Nelson Member Nelson stated that she also agrees with what Member Miller said. She thinks the design is great and it’s a really nice molding of the two options they talked about and would like to echo the design is great. It is concerning that they talked before that the Senior Center and the Art Center are currently a loss, and we are building a building for the loss with more of a loss but hoping that it will grow into something bigger. She thinks there is a need there but it’s a concern that we are building a bigger building to collect the loss together. She understands that the struggle is how we get the City Council in the agreement that maybe we should add more fitness. She does understand that side of council’s reason thinking it’s a struggle but with the financials it’s really hard for her to get her arms around that. It would be great to have a real community center for the community and she doesn’t know that just the arts and the active adults are going to really be that big staple they would like it to be or what she would hope it would be from a visionary perspective. She thinks a lot of great work has gone into this and she thinks it’s deciding what the real goal here is and what they are trying to accomplish. Chair McCormick Chair McCormick stated the committee has done a great job and the new design looks wonderful, beautiful and functional and with the constraints they were given Option B was probably the best design they could come up with and she really applauds everyone for that. However, she doesn’t recommend going forward with this particular option for many of the reasons that have already been said. The first is from a financial perspective; it doesn’t make sense for the city, the parking is too expensive and the site is focused on just a few of their constituents where she was hoping to have something broader than that for a community center. She is also concerned about the traffic because there is a lot of traffic that goes in and out of that area and if there is an event center that might be unmanageable or expensive to manage and that may not have been considered yet. The other thing she is really struggling with is that they aren’t holding themselves to break even on this and do STAFF REPORT Page 7 they really understand what the community wants out of a community center. She thinks they keep calling it a community center and it ends up being something that they are just trying to force fit the Art Center and Senior Center. Both facilities need to be upgraded. They need to do something with the Art Center but they need to put it in the right place and it needs to be economically and financially sound for the city. They also need to really look at what they need to do from a community space and make sure they select the right location, right parking, right structure and space for it. She loves the ideas of having something in this space; some sort of public area but would like to see something that is more financially sound and basically breaks even. Member Good Member Good stated he echoes the thoughts of his fellow board members. Mr. Pechaty and the whole team did great work; it was well presented and well designed for the option they were presented and from the different inputs from the way this has progressed. He really likes what he sees and it looks very interesting. However, from a fiduciary perspective he finds it very difficult to recommend that they take on an additional, even if it’s a net, half a million dollars of subsidy to get an expanded Art Center, new replacement Senior Center/Active Adult and an event center. He doesn’t yet in his mind have a real vision for what it’s going to do and it’s 8 million dollars in capital to bring in $100,000 a year in revenue; an additional burden potentially on the city. He noted with that said they still have a space that they haven’t quite figured out what to do with and they have a couple of assets that they dearly need to figure out how to help and replace, so it remains a challenge; he is just not comfortable that this is the right answer for that challenge. He agrees with what Chair McCormick said as well, that the traffic in that location is already challenging so he can’t even get excited about going to a bigger option because that just makes it even worse. He is just not comfortable that they have found the right set of solutions here to address this as a recommended proposal. Member Meyer Member Meyer stated there have been a lot of great comments made. He would stress the whole traffic thing because they have the traffic off of Hwy. 100 basically dumping into the front door here and he just questions if that really is a long term solution they want here. The traffic is going to be fighting from all directions. The real option is listed but it seems like an appendage that is sort of added on and he doesn’t think it’s been completely thought through. He also has concerns about the ongoing costs of the current Art Center and Senior Center; those aren’t going to go away so those are in addition to these losses they are currently occurring and how is that going to play out. They need to better understand that. Also, what are they STAFF REPORT Page 8 going to do with those facilities if a facility like this is built because he also has concerns about creating a facility where they know on day one they are generating a loss when there are options available that do break even or appear to have the opportunity to turn a profit. Member Dahlien Member Dahlien stated that he is going to try to come up with a creative comment after everyone else has already spoken here. The traffic is probably the biggest thing that is of interest to him especially when you think of the two major constituents of this proposed project. People with art supplies walking in with a bunch of stuff and they are trying to cross over, as Member Good said some pretty tough traffic as it stands today, as well as the seniors/active adults trying to get dropped off and trying to fight that traffic. That to him is the most pressing of the issues with what is proposed here. Fiduciary or financial is also a big thing here so he seconds to all of that. The one thing that he would say is he knows that he is not an artist but he tries to champion the arts and he knows the current situation with the Art Center is of a main concern to the people that use that, especially with the age of the facility and some of things that are limiting there especially with the ADA and stuff like that. He would like to see if there has ever been any thought or research done about an existing space that maybe we already have or a new space that is specifically only to the Art Center. He knows there is not a lot of supply of grass, land and dirt in this city but he thinks taking the Art Center and putting it into a nice new facility is very nice and thoughtful but at the same time they have their own kind of unique place currently in the city and he wants to make sure that they are able to fulfill all of their current programming and also be unique and vibrant to that community as well. He falls in line with everyone else; he is a little concerned with what this space is being used for or proposed to be used for but at the same time he is also not looking forward to another season of barrier storage in the space either. It’s an interesting conundrum we all face. Student Member Lohani Student Member Lohani stated he likes the overall layout of the site and the programs within the building and how they are situated. His concerns are with the traffic and the cost of the parking and how it relates to the total overall cost recovery expected. He is still excited to see what the Metro Transit addition will add to the site in the next couple of years. Student Member Crist STAFF REPORT Page 9 Student Member Crist stated that she thinks it looks beautiful and it could be a really cool new thing, but to her it does still feel like a Senior Center and an Art Center and less of a community center. There is kind of an age gap there so it’s lacking a little bit of a draw. The final Grandview Facility Feasibly and Operational Analysis is attached and is available on the City of Edina website at: http://edinamn.gov/index.php?section=grandview-fpw HGA, Pros Consulting, Sutton + Associates and staff will make the presentation and be available for questions. Action Requested Receive final report and final presentation of the Grandview Facility Feasibility and Operational Analysis and provide direction on study completion. Edina Grandview Community CenterProgram May 9, 2016AREA DESCRIPTIONNOTESNO. OF SPACESNO. OF USERS (MIN)ASF/ USERASF/ ROOMASF TOTAL PARKING$ PER SQUARE FOOTTOTAL $Art CenterArt Center Core Administration 0 0 00$0.00$0Provided in Administration program categoryGallery - Small 1 500 5003$333.64$166,822 Gallery - Large 1 1,700 1,70010$327.58$556,882 Studio - Small 2 400 8005$339.71$271,768Existing area references "Loft" and Lower West PaintStudio Medium 2 600 1,2007$345.78$414,932Existing area references "Nichols Studio"Studio Large 1 1,000 1,0006$351.84$351,843Existing area references "Studio 14"Studio Multipurpose 0 0 00$0.00$0Existing area references "Peggy Kelly Media Studios"Gift Shop 1 400 4002$376.11$150,443Existing area references "Gift Shop"Pottery/Ceramics 0 0 0 0$0.000Existing area references "Main Wheel Room", "Plug Room", "Glaze Room", and Lower West Pottery" Hand Building Studio 1 600 6004$327.58$196,547 Wheel Studio 2 600 1,2007$327.58$393,093 Laundry 1 40 400$333.64$13,346 Storage 1 200 2001$315.45$63,089 Kiln 1 1,100 1,1007$339.71$373,681 Guest Artist Studio 1 200 2001$333.64$66,729 Clay Closet 1 100 1001$315.45$31,545 Spray Booth 1 50 500$363.98$18,199 Locked Cage 1 100 1001$333.64$33,364 Tool Storage 1 100 1001$333.64$33,364 Clay Mixing 1 120 1201$321.51$38,581 Glaze Mixing 1 120 1201$321.51$38,581 Glaze Bay 3 300 9006$321.51$289,360 Metal Arts 1 1,000 1,0006$333.64$333,644 Glass/Jewlry 1 1,000 1,0006$333.64$333,644Existing area references "Red Door Room"Storage 1 1,000 1,0006$315.45$315,445 Lockers 1 65 650$370.04$24,053(115) LockersASF SUBTOTAL 13,49583$334.12$4,508,953PROJECT SOFT COSTS$1,127,238ART CENTER TOTAL$5,636,191REQUIRED SPACE5/9/20161 Edina Grandview Community CenterProgram May 9, 2016AREA DESCRIPTIONNOTESNO. OF SPACESNO. OF USERS (MIN)ASF/ USERASF/ ROOMASF TOTAL PARKING$ PER SQUARE FOOTTOTAL $REQUIRED SPACEActive AdultActive Adult Core Administration 0 0 00$0.00$0Provided in Administration program categoryLobby 0 0 00$0.00$0Provided in Community Gathering program category Commons 1 2,400 2,40015$339.71$815,304Accommodates (60) banquet, (100) lectureMultipurpose Classroom 3 900 2,70017$339.71$917,217Existing area: (4) Classrooms avg. 880 SF/EASeminar Room 1 540 5403$333.64$180,168Game Area 1 950 9506$333.64$316,962 Multipurpose Room 0 0 00$0.00$0Provided in Fitness & Wellness program categoryStorage 1 300 3002$315.45$94,634 ASF SUBTOTAL 6,89042$337.34$2,324,284PROJECT SOFT COSTS$581,071ACTIVE ADULT TOTAL$2,905,355Community GatheringCommons Lobby - Core Program 1 800 8005$394.31$315,445 Reception Desk 1 240 2401$394.31$94,634Coat Room 1 240 2401$321.51$77,163Vending 1 120 1201$321.51$38,581Flexible Meeting Space Multipurpose Classroom 1 900 9006$339.71$305,739Seminar Room 1 540 5403$333.64$180,168Seminar Storage 1 60 600$315.45$18,927Food Service Café Restaurant 1 2,600 2,60016$394.31$1,025,196 Catering Support 1 300 3002$351.84$105,553 Culinary Arts Instruction 1 300 3002$351.84$105,553Event Venue Event Venue 1 4,500 4,50028$454.97$2,047,359Banquet (250 person), lecture, theater, musicLighting and A/V Control 1 200 2001$394.31$78,861Lighting and A/V Storage 1 200 2001$315.45$63,089Table and Chair Storage 1 600 6004$315.45$189,267Collapsible Riser Storage 1 600 6004$321.51$192,907Green Room 1 300 3002$333.64$100,093Dressing Suite - Women's 1 360 3602$339.71$122,296Dressing Suite - Men's 1 360 3602$339.71$122,296ASF SUBTOTAL 13,22081$392.07$5,183,125PROJECT SOFT COSTS$1,295,781COMMUNITY GATHERING TOTAL$6,478,9075/9/20162 Edina Grandview Community CenterProgram May 9, 2016AREA DESCRIPTIONNOTESNO. OF SPACESNO. OF USERS (MIN)ASF/ USERASF/ ROOMASF TOTAL PARKING$ PER SQUARE FOOTTOTAL $REQUIRED SPACEFitness & WellnessStudios Finess & Wellness Studio - Medium 2 1,500 3,00018$333.64$1,000,931 Fitness & Wellness Studio - Large 1 2,000 2,00012$327.58$655,155 Fitness & Wellness Studio Storage 3 150 4503$315.45$141,950ASF SUBTOTAL 5,45034$329.91$1,798,037PROJECT SOFT COSTS$449,509FITNESS & WELLNESS TOTAL$2,247,546AdministrationDirector Office 3 150 4503$327.58$147,410(1) art, (1) senior, (1) facilityStaff Office - Core 6 120 7204$321.51$231,488(2) art, (2) senior, (1) facilityOffice Work Stations - Core Program 8 64 5123$303.31$155,2968'x8' workstations; (6) facilityConference Room 1 300 3002$339.71$101,913(10-12) person, serves facilityWork Room 1 200 2001$327.58$65,516Administration Storage 1 80 800$315.45$25,236ASF SUBTOTAL 2,26214$321.33$726,858PROJECT SOFT COSTS$181,715ADMINISTRATION TOTAL$908,5735/9/20163 Edina Grandview Community CenterProgram May 9, 2016AREA DESCRIPTIONNOTESNO. OF SPACESNO. OF USERS (MIN)ASF/ USERASF/ ROOMASF TOTAL PARKING$ PER SQUARE FOOTTOTAL $REQUIRED SPACEBuilding SupportRestrooms - Core Program 4 250 1,0004$491.37$491,366Restrooms - Family 1 150 1501$491.37$73,705Restrooms - Unisex 2 80 1601$491.37$78,619Receiving / Service Dock 1 400 4002$321.51$128,605Trash / Recycle 1 200 2001$315.45$63,089Building Storage 1 400 4002$315.45$126,178 Laundry 1 240 2401$339.71$81,530 Vending 1 120 1201$327.58$39,309 Building Maintenance Office / Shop 1 400 4002$321.51$128,605 Janitor Closet 4 60 2401$315.45$75,707 Elevator Equipment 1 60 600$315.45$18,927 Electrical Room 2 150 3001$315.45$94,634 Telecom Room 2 120 2401$321.51$77,163Mechanical Room: Boiler / Water Service 1 1,200 1,2005$315.45$378,534ASF SUBTOTAL 5,11023$363.20$1,855,969PROJECT SOFT COSTS$463,992BUILDING SUPPORT TOTAL$2,319,961ASF TOTAL46,427277$441.48$20,496,532Non assignablewalls, corridors, vertical circulation, shafts, etc. (allowance based on 67% efficiency) 22,867$363.98$8,323,027 PROJECT SOFT COSTS$2,080,757NON ASSIGNABLE TOTAL$10,403,784SiteEntry Court 1 1,200 1,200$250.00$300,000Outdoor Seating / Program Aras 0 0 0$0.00$0 Outdoor Kiln Area 1 6,500 6,500$25.00$162,500 Garden 0 0 0$0.00$0 ASF SUBTOTAL 7,700060.06$ $462,500PROJECT SOFT COSTS$115,625SITE TOTAL$578,125GSF TOTAL67 % Efficiency 69,294$454.27$31,478,4415/9/20164 Edina Grandview Community CenterProgram May 9, 2016AREA DESCRIPTIONNOTESNO. OF SPACESNO. OF USERS (MIN)ASF/ USERASF/ ROOMASF TOTAL PARKING$ PER SQUARE FOOTTOTAL $REQUIRED SPACEParkingCore Program 270 270$30,000.00$8,100,000Art Enhanced Program 0 0$30,000.00$0 Drop-in Childcare 0 0$30,000.00$0 Children's Play Structure 0 0$30,000.00$0 Event Venue 80 80$30,000.00$2,400,000Fitness Center 0 0$30,000.00$0Gymnasium 0 0$30,000.00$0Healthcare Partner 0 0$30,000.00$0ASF SUBTOTAL 350030,000.00$ $10,500,000PROJECT SOFT COSTS$1,050,000SITE AMENITIES TOTAL$11,550,0005/9/20165 DJR ARCHITECTURE INC. Scenario B - Grandview Site 06.18.2018 Grandview 5146 Eden Avenue S Edina, MN 55436 The Grandview, EdinaDJR ARCHITECTURE INC. 2 Overall Development Image DJR ARCHITECTURE INC. The Grandview, Edina3 Floor Plans NLEVEL 1 Scale: NTS NLEVEL 2 Scale: NTS Key Residential Affordable Art Center Common Area BOH/MEP Parking Core The Grandview, EdinaDJR ARCHITECTURE INC. 4 NLEVEL 3/TYPICAL FLOOR Scale: 1:NTS Residential Affordable Art Center Key Common Area BOH/MEP Parking Core Floor Plans DJR ARCHITECTURE INC. The Grandview, Edina5 View from Eden Avenue The Grandview, EdinaDJR ARCHITECTURE INC. 6 View from Normandale Road DJR ARCHITECTURE INC. The Grandview, Edina7 Aerial View from Eden Avenue Thank you June 14, 2018 Board of the Edina Housing and Redevelopment Authority Bill Neuendorf, Economic Development Manager Market Street Redevelopment: Construction Mitigation Update Information / Background: The redevelopment of two significant projects on Market Street has been under construction for approximately 6-months. The expansion of the North Parking Ramp and construction of the Nolan Mains apartment/retail building with new Center Ramp began in January. Construction is on pace for the scheduled completion of the North Ramp in September 2018 and completion of the Nolan Mains/Center Ramp in Fall 2019. While initially planned to be constructed sequentially, the construction schedules for both projects were re- arranged to be constructed simultaneously. This was done based on the suggestion from the local business community. A shorter overall schedule was preferred so that the total duration of the construction could be reduced from about 30-months to about 20-months. With the simultaneous construction, only one holiday season would be impacted (instead of 2 or 3). As anticipated, the construction work has impacted some of the businesses located north of 50th Street. It is noted that there are other factors (difficult winter weather, changing demographics and competition) that influence customer traffic that also may have contributed to the business impacts. To date, four businesses have closed and three new businesses are in the process of re-opening locations adjacent to the construction site. • Ala Mode – closed Edina and Wayzata locations • Crisp & Fresh – under construction (replaced Ala Mode) • Dana’s –closing Edina and Bloomington locations • Fringe – closed • Moderna Kouzina – under construction (replaced Mozza Mia) • Room No. 3 – closed • Tooth and Nail – opened (replaced Fringe) STAFF REPORT Page 2 In recent weeks, City staff has heard from three additional businesses who have indicated that their customer traffic is below the expected level and that they have difficulty finding new employees to work in the area. Two of these businesses lease space near the construction site. One of the businesses owns their building. The businesses have adjusted hours and staffing. The tenants have unsuccessfully requested rent concessions from their landlords. These businesses have inquired whether the City can take additional steps to address their declining revenue and challenges in bringing in new staff. The City and developers held numerous listening sessions with local businesses in 2017 to identify concerns and challenges related to the construction activity. Those conversations resulted in the creation of a Construction Mitigation Strategy in December 2017. To date, the City has hired a part-time Communications Liaison, provided expanded valet service for customers and employees, tried an off-site employee shuttle, encouraged employees to park off-site to improve conditions for customers, and provided district-wide advertising. Several businesses have used the construction activity as a message to retain customers. The Business Association has increased marketing efforts during the construction period. At this time, staff recommends that the December 2017 plan be followed and also suggests that the City continue an open dialogue with businesses and landlords to be open to cooperative action.