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HomeMy WebLinkAbout2021-06-10 HRA Regular Meeting PacketAgenda Edina Housing and Redevelopment Authority City of Edina, Minnesota V IRTU AL M EETIN G Thursday, June 10, 2021 7:30 AM Watch the meeting on cable TV or at EdinaMN.gov/LiveMeetings or Facebook.com/EdinaMN. To participate in Community Comment: Call 800-374-0221. Enter Conference ID 8567822. Give the operator your name, street address and telephone number. Press *1 on your telephone keypad when you would like to get in the queue to speak. A City sta: member will introduce you when it is your turn. I.Call to Order II.Roll Call III.Pledge of Allegiance IV.Approval of Meeting Agenda V.Community Comment During "Community Comment," the Edina Housing and Redevelopment Authority (HRA) will invite residents to share new issues or concerns that haven't been considered in the past 30 days by the HRA or which aren't slated for future consideration. Individuals must limit their comments to three minutes. The Chair may limit the number of speakers on the same issue in the interest of time and topic. Generally speaking, items that are elsewhere on today's agenda may not be addressed during Community Comment. Individuals should not expect the Chair or Commissioners to respond to their comments today. Instead the Commissioners might refer the matter to sta. for consideration at a future meeting. VI.Adoption of Consent Agenda All agenda items listed on the consent agenda are considered routine and will be enacted by one motion. There will be no separate discussion of such items unless requested to be removed from the Consent Agenda by a Commissioner of the HRA. In such cases the item will be removed from the Consent Agenda and considered immediately following the adoption of the Consent Agenda. (Favorable rollcall vote of majority of Commissioners present to approve.) A.Draft Minutes of Special Work Session May 6, 2021 B.Draft Minutes of Regular Meeting May 27, 2021 C.Resolution 2021-04: Requesting Public Hearing for August 4, 2021, for 4040 W. 70th St. Tax Increment Financing District VII.Reports/Recommendations: (Favorable vote of majority of Commissioners present to approve except where noted) A.5146 Eden Avenue - Redevelopment Planning VIII.HRA Commissioners' Comments IX.Executive Director's Comments A.4917 Eden Ave - Project Update B.Pentagon Village - May 2021 Update X.Adjournment The Edina Housing and Redevelopment Authority wants all participants to be comfortable being part of the public process. If you need a ssista nce in the way of hearing ampliAcation, an interpreter, large-print documents or something else, please call 952-927-8861 72 hours in advance of the meeting. Date: June 10, 2021 Agenda Item #: VI.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: Minutes F rom:Liz O ls on, Administrative S upport S pecialist Item Activity: Subject:Draft Minutes of S pecial Work S ession May 6, 2021 Action Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the special work session minutes of May 6, 2021. I N TR O D U C TI O N: S ee attached meeting minutes of May 6, 2021. AT TAC HME N T S: Description Draft Minutes of Special Work Session May 6, 2021 Page 1 MINUTES OF THE WORK SESSION OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY MAY 6, 2021 5:30 P.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 5:30 p.m. and noted the meeting was being held virtually to comply with the Governor’s Stay at Home Order due to the COVID-19 pandemic. II. ROLLCALL Answering rollcall were Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland. Staff in attendance: Scott Neal, City Manager/Executive Director; Don Uram, Finance Director; Andrea Rich, Financial Analyst/Accountant; Stephanie Hawkinson, Affordable Housing Manager; Liz Olson, Administrative Support Specialist; Bill Neuendorf, Economic Development Manager; Chad Millner, Engineering Director; Risi Karim, City Management Fellow; Cary Teague, Community Development Director. III. 5146 EDEN AVENUE – DISCUSSION OF PREFERRED OUTCOMES Executive Director Neal said this item pertained to the future re-use and redevelopment of the vacate site at 5146 Eden Avenue. He said over the past 10 years, the City and HRA have explored several different concepts for this site and conducted sketch plan level reviews of the preliminary concept and site plans and that based on comments and concerns expressed, it would be appropriate for the HRA to discuss its goals for this property and potential paths to return the vacant property to a productive use. Economic Development Manager Neuendorf shared background information in order to provide a platform to discuss preferred outcomes for the site at 5146 Eden Avenue. He shared questions to consider, a summary of past efforts, the current memorandum of understanding (MOU) and recent concepts, land valuation, and use of funds then asked for an HRA discussion of the priorities, preferences, and a path forward. He reviewed past plans, the seven guiding principles that should be included in any plan that came forward, then spoke about work to determine the highest land value versus fair market value then reviewed allowable use of HRA proceeds. The Commission shared the importance of not just redeveloping the site but the entire area that would create a destination area and neighborhood center and the need to decide on an overall plan in a structured fashion over time within current constraints that included cost. The discussed how the site did not have to be publicly owned and operated but could be done privately then spoke about the need to maximize land value while creating a project the City could be proud of that included open space with elements such as a band shell, outdoor theater, and other activity areas. They discussed the importance of creating a vibrant, connected district but that a community center would likely not work here as the public realm element was overarching. The Commission liked the senior coop element and envisioned a development similar to the curling center/town hall concept in Chaska and asked if they could sell a portion of the site and use the proceeds to create a plaza. They spoke about a grand vision in conjunction with the difficulty of approving one-off proposals and the importance of a destination venue created close to the parking facility. They stressed the importance of an affordability component being more than 10-20% of the units based on the affordability housing study and how that could be achieved through increased density or height and how an ownership concept created a neighborhood. The Commission spoke about the plaza to the north and the need to use the parking garage to the north when the lot was used during the day as an asset they could tie to the public parking and shared they did not want to see the City enter into an operating situation for a new facility in regard to Jerry’s Enterprises. The Commission Minutes/HRA Worksession/May 6, 2021 Page 2 suggested creating a building vision concept via a model similar to Nolan Mains and said they would like to see the south side used for a senior coop and the north side for a destination/public realm benefit and hospitality venue. They said this concept would require design assistance on what could occur that included the financial component then talked about a developer doing the entire site while selling a small portion of the site to get enough value. The Commission discussed a build/operate/lease option that included selling half to a private developer then conclude options for the north side. Consensus was to consider the feasibility of selling the south half of the site for a residential housing project and retain the funds to create a public development on the north half that would energize and engage both sides of the site and create a housing type and price point consistent with the Housing Task Force report. They stressed the importance of providing transitional housing to encourage current residents to remain with the assumption that both sides did not have to be the same developer and could be leased back to the City. The Commission agreed to retain ownership of the north half and lease back while retaining control for future roads and include a private/public component such as a restaurant partnership. Mr. Neuendorf said staff would connect with Fransheuh and United Properties to discuss the expiring MOU and noted with the change in scope they would likely request the City to begin paying development costs for the northern portion. Engineering Director Millner shared the proposed concept for the pedestrian bridge that would be awarded in June and provide future easement access from Brookside. IV. ADJOURNMENT Chair Hovland adjourned the meeting at 7:24 p.m. Respectfully submitted, Scott Neal, Executive Director Date: June 10, 2021 Agenda Item #: VI.B. To:C hair & C ommis s ioners of the Edina HR A Item Type: Minutes F rom:Liz O ls on, Administrative S upport S pecialist Item Activity: Subject:Draft Minutes of R egular Meeting May 27, 2021 Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the regular minutes of M ay 27, 2021. I N TR O D U C TI O N: S ee attached meeting minutes of May 27, 2021. AT TAC HME N T S: Description HRA May 27, 2021 Draft Meeting Minutes Page 1 MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY MAY 27, 2021 7:30 A.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 7:33 a.m. and noted the meeting was being held virtually to comply with the Governor’s Stay at Home Order due to the COVID-19 pandemic then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland. Absent: None. III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED - AS PRESENTED Motion by Commissioner Anderson, seconded by Commissioner Staunton, approving the meeting agenda as presented. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. V. COMMUNITY COMMENT No one appeared. VI. CONSENT AGENDA ADOPTED - AS AMENDED Member Staunton made a motion, seconded by Member Jackson, approving the consent agenda as amended, removing Item VI.B: VI.A. Approve minutes of the Regular Meeting of April 22, 2021 VI.B. Approve request for purchase; awarding the bid to the recommended low bidder, Grandview District Public Improvements; various vendors, $6,379,048.31 VI.C. Adopt Resolution No. 2021-03; Authorizing Execution of Tax Increment Pledge Agreement VI.D. Extension of 4d Program Affordability Period for Edina York Villas Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. ITEMS REMOVED FROM THE CONSENT AGENDA VI.B. APPROVE REQUEST FOR PURCHASE; GRANDVIEW DISTRICT PUBLIC IMPROVEMENTS; VARIOUS VENDORS, $6,379,048.31 - APPROVED Engineering Director Millner shared an overview of the project and highlighted sidewalk connections, lighting improvements, overhead power lines, and the roundabout that would improve traffic operations and pedestrian improvements as well as provide for a potential pedestrian bridge in the future. The Commission confirmed surface reconditioning was included with this project and sidewalks created on both sides of Eden Avenue then asked about working with property owners regarding roundabout concerns and confirmed the closure of the slip ramp as it was a major traffic and crash Minutes/HRA/May 27, 2021 Page 2 concern. They commented about work of the public advisory group to select the engineering consultant then confirmed buses would be able to navigate roundabouts easily and not affect traffic operations. Mr. Millner said discussions continue with the northeast corner property owners on the need for easements then noted the railroad tracks were the break point for the entire two-year project. He spoke about signal timing with Vernon Avenue to help address traffic impacts and the plan to wait until 2024 for bridge completion. Member Staunton made a motion, seconded by Member Jackson, approving request for purchase; awarding the bid to the recommended low bidder, Grandview District Public Improvements; various vendors, $6,379,048.31 and to close southbound Highway 100 on-ramp from Eden Avenue. Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VII. REPORTS/RECOMMENDATIONS VII.A. METRO HRA FAMILY AFFORDABLE HOUSING PROGRAM PARTNERSHIP AGREEMENTS – APPROVED AS AMENDED Affordable Housing Manager Hawkinson shared in November 12, 2020; the HRA approved $2,000,000 to expand the Metro HRA’s Family Affordable Housing Program. Staff requested a change to the program on March 11, 2021 so that rather than the HRA directly acquiring the houses and leasing to the Metro HRA, the HRA would lend the money for the Metro HRA to directly acquire the houses. She reviewed the revised program points that included how the HRA would lend Metro HRA $2,000,000 to acquire, maintain and manage the houses and make available to families who qualify for their program, and that a loan agreement between the HRA and Metro HRA would be forgiven if program requirements remained in place for 25 years. She said a Declaration of Restrictive Covenants would be placed on the houses to keep them affordable and would extend beyond the term of the loan agreement and that Edina HRA had first rights of offer if the Metro HRA elected to sell the homes. Ms. Hawkinson said the Metro HRA had secured financing from HUD for on-going rental assistance and had a robust tenant selection plan then outlined the process, income of households served, and next steps. The Commission shared concerns about restrictive covenants and clarified this request would provide rental housing opportunities by loaning funding to the Metro HRA to purchase homes for rent and how at the end of 25 years the loan would be forgiven. Attorney Selke stated the restrictive covenant was a separate document that once homes were identified would have a covenant recorded against the property then explained the process in more detail that included a right of first option to purchase. The Commission asked if a renter wished to acquire a property then asked more about loan terms and keeping the agreement open ended to keep the asset in the community. They confirmed the HRA would have the right of first refusal and rights as a lender if they were not pleased with the professional property management and how the concern could be addressed through lease default. They shared concerns about getting another mechanism to address in order to protect a neighborhood’s integrity and if a mortgage was ever done to protect the lender. Mr. Selke noted there would be a significant remedy included that did not include foreclosure but had a default interest and other consequences the HRA that could be enforced should Metro HRA not perform accordingly. Metro HRA Representative Smith explained when a renter’s income exceeded the rent amount they could remain on the property but at the market rate then said they were researching partnerships to help families move into home ownership. She said this program included no mortgages and was the first partnership of this type added to their portfolio. Minutes/HRA/May 27, 2021 Page 3 The Commission spoke about how they would not like to see foreclosure occur but there was a need to provide a fail-safe protection in the event property maintenance concerns occurred. They spoke about how they relied on homeowners throughout the City to maintain properties accordingly and how the Metro HRA would be held accountable in a similar fashion. Mr. Selke said he was comfortable with the level of protection included in the agreements and if property maintenance was a concern suggested a shorter cure period to ensure the Metro HRA addressed any concerns. Ms. Hawkinson suggested approving the agreement contingent upon review by the attorneys then noted the Metro HRA has had eight properties in the City since the 1990s and that no concerns had occurred regarding property management. Member Staunton made a motion, seconded by Member Pierce, approving the Loan Documents with the Metro HRA for the Family Affordable Housing Program and authorize the execution of the documents, including additional enforceability remedies as outlined in Section 3.2. Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VII.B. 7001 FRANCE AVENUE – PRELIMINARY RECOMMENDATION REGARDING TAX INCREMENT FINANCING - REVIEWED Executive Director Neal shared background on this important project and how the developer was at a milestone in the planning and was looking for input on project support before additional work was performed. Economic Development Manager Neuendorf shared this item pertained to the potential use of tax increment financing (TIF) to promote redevelopment of the underutilized site at 7001 France Avenue. The developer had the property under contract and secured preliminary approvals to re- zone the site to replace the existing office and bank buildings with four new buildings constructed on four separate pads. The developer had requested the HRA consider the creation of new TIF Districts and a pledge of TIF support upon completion of the projects. He reviewed the request that fully embraced the Southdale design experience guidelines to create a walkable and drivable project then reviewed the need for key financing input that surrounded structured parking. Mr. Neuendorf explained the total project cost of $234 million, how the developer would bear all upfront costs and financial risk if the HRA would reimburse using TIF notes, and outlined the TIF request of $25.5 million. He said most parking would be public and would assist the City’s need and that staff recommended approval of up to $22 million in TIF notes to provide the additional support needed for the mixed-income housing in the future. He said a TIF term sheet would be prepared to document terms and conditions of a future TIF redevelopment agreement and that many costs would be eligible for reimbursement through TIF. Mr. Neuendorf said they would incorporate permanent public easements on most outdoor and public parking space and outlined remedies should the public project not occur then added staff recommended no funding be provided for private parking, building costs, design and other soft costs, and any costs for the single-story bank. He explained how the funding must satisfy the but-for test and how this project would not be feasible without TIF and the importance of the entire project being completed based on the strategic location of the public parking and overall degree of public benefit. The Commission asked about public plaza access and if the $22 million included Parcel C. They said they were pleased with the payoff time of 15 years and the need to understand how parking fit into the Southdale plan overall and the need to ensure the affordable housing would be built. Mr. Neuendorf outlined the process and when the TIF agreement was created it would be for market rate units for a 15-year renewal district and how the housing would be 20 years with the condition that Parcel C be deed restricted for affordable housing. Minutes/HRA/May 27, 2021 Page 4 The Commission spoke about how the project would be transformational and set a new standard of excellence then asked about interest rates for the total project cost. They spoke of how TIF would be required for any project with the goal of 1,800 units. They discussed the public benefit of the overall project, especially the district parking, and felt the vast majority of parking would be more for the tenants of the high rise and commercial site and stressed the importance of the design guidelines for this or any project. Nick Anhut, Ehlers and Associates, explained the proposed 4.25% rate for the TIF note that would total $7-8 million over the life of the note. Mr. Neuendorf commented about actual parking costs for the 600 stalls and the TIF contribution would be approximately $28,000 per stall and how the developer’s cost was double that cost and would not cover it all. Ted Carlson, Carlson Partners, confirmed the project would include 1,000 total stalls throughout and if the parking was not needed in the future the project could be converted to something else in the future as the floor plates were flat. Mr. Neuendorf commented on the need for a permanent easement and if parking was not needed the developer would want to change and the need to identify public/private stalls, district and shared parking details. The Commission stressed the need for a metric to distinguish between public and private stalls and location and suggested guidance be obtained from the Nolan Mains project then asked more about the proposed partner, PPL. Brent Webb, Mortenson, explained their informal RFP process that identified PPL and how they were comfortable in working with this partner to create a ready site to bring this project to completion. The Commission shared comments about the need for parking definition and long term plans should parking change in the future and to quantify the public benefits and assurance that Parcel C developed in the future. They shared support for adherence to the design experience guidelines and the importance of public perception and the need to balance projects in the future. They noted the $22 million request equated to 8% of the total project cost which was in line with past projects and if the City wanted developers to embrace the design experience guidelines assistance would be needed and that they supported further work continue on the proposed project. VII.C. HOUSING IMPROVEMENT AREA POLICY - APPROVED Ms. Hawkinson shared the City had been approached by representatives of condominium associations seeking financial assistance for common area improvements. Some of the buildings were aging and in need of improvements and one tool used was the creation of a Housing Improvement Area whereby the City financed the improvements and was paid back through assessments. This would be considered a financing option of last resort and required authorization by a majority of the owners in the association. She said in order for Edina to consider utilizing this source of financing, the HRA must first approve a policy. She reviewed the process, defined potential improvements such as windows, siding, roofing, and elevators and said the area would be established by ordinance after a public hearing process. Ms. Hawkinson confirmed items not eligible would include ongoing maintenance issues and would require a reserve study and 70% of the membership would have to the sign petition before imposing a financing agreement for each project. The Commission asked about bonding as significant funding source and the potential risk to the City’s bond rating then confirmed there would be no need for additional staffing and need to protect the City such as liens. Mr. Anhut said any debt issuance included some level of risk and the City could instead issue a loan to the HIA but would want assurances in place such as guarantees and securing property if needed. Minutes/HRA/May 27, 2021 Page 5 Member Jackson made a motion, seconded by Member Anderson, approving the Housing Improvement Area Policy as presented. Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VIII. HRA COMMISSIONERS’ COMMENTS – Received The Commission suggested a tutorial be created to assist the Commission and public to best understand TIF district creation as more projects were presented. IX. EXECUTIVE DIRECTOR’S COMMENTS – Received Mr. Neal shared about the grand opening event on June 24 for the Amundson Flats project. X. ADJOURNMENT Motion made by Commissioner Jackson, seconded by Commissioner Pierce, to adjourn the meeting at 10:00 a.m. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. Respectfully submitted, Scott Neal, Executive Director Date: June 10, 2021 Agenda Item #: VI.C . To:C hair & C ommis s ioners of the Edina HR A Item Type: O ther F rom:S tephanie Hawkinson, Affordable Housing Development Manager Item Activity: Subject:R es olution 2021-04: R eques ting P ublic Hearing for August 4, 2021, for 4040 W. 70th S t. Tax Increment F inancing Dis tric t Action Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: M otion approving R esolution 2021-04, recommending that a public hearing be scheduled for the August 4, 2021, C ity C ouncil meeting to consider a new Tax I ncrement Financing District for 4040 W. 70th S t. I N TR O D U C TI O N: T his item pertains to the consideration of a new Tax Increment F inancing D istrict in order to use S outhdale 2 T I F pooling under the special legislation for the acquisition of 4040 W. 70th S treet and to capture new increment in support of the development of 118 units of age restricted affordable housing. R elated to this request is a modification to the budget in the Southdale 2 Tax I ncrement Financing P lan. T his resolution requests that the C ity C ouncil schedule a public hearing for August 4, 2021, to consider these actions. S taff recommends approval of Resolution N o. 2021-04. AT TAC HME N T S: Description HRA Resolution 2021-04 RESOLUTION NO. 2021-04 REQUESTING THE CITY COUNCIL OF THE CITY OF EDINA CALL FOR A PUBLIC HEARING ON THE PROPOSED MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE SOUTHEAST EDINA REDEVELOPMENT PROJECT AREA AND ESTABLISHMENT OF THE 4040 W. 70th ST. TAX INCREMENT FINANCING DISTRICT (A SPECIAL HOUSING DISTRICT) WHEREAS, the Board of Commissioners (the “Board”) of the Edina Housing and Redevelopment Authority (the “HRA”) and City Council ("Council") of the City of Edina, Minnesota ("City") previously established the Southeast Edina Redevelopment Project Area pursuant to Minnesota Statutes, Sections 469.001 through 469.047, inclusive, as amended, in an effort to encourage the development and redevelopment of certain designated areas within the City; and WHEREAS, the HRA is proposing the modification to the Redevelopment Plan for the Southeast Edina Redevelopment Project Area (“Redevelopment Plan Modification”) to include the establishment of the 4040 W. 70th St. Tax Increment Financing District and adoption of a Tax Increment Financing Plan therefor (the Redevelopment Plan Modification and 4040 W. 70th St. Tax Increment Financing Plan are referred to collectively herein as the "Plans"), all pursuant to and in accordance with Minnesota Statutes, Sections 469.174 through 469.1794 and Sections 469.001 to 469.047, and Minnesota Session Laws 2014, Chapter 308, Article 6, Section 8, inclusive, as amended; and NOW, THEREFORE BE IT RESOLVED by the Board as follows: 1. The HRA hereby requests that the City Council call for a public hearing on August 4, 2021, to consider the proposed Plans and cause notice of said public hearing to be given as required by law. 2. The HRA directs the Executive Director to transmit copies of the Plans to the Planning Commission of the City and requests the Planning Commission's written opinion indicating whether the proposed Plans are in accordance with the Comprehensive Plan of the City, prior to the date of the public hearing. 3. The Executive Director of the HRA is hereby directed to submit a copy of the Plans to the Council for its approval. 4. The HRA affirms the transmission of the Plans to Hennepin County and Independent School District No. 273 in which the Southeast Edina Redevelopment Project Area is located no later than July 2, 2021. 5. Staff and consultants are authorized and directed to take all steps necessary to prepare the Plans and related documents and to undertake other actions necessary to bring the Plans before the Council. Approved by the Board on June 10, 2021. ATTEST: _______________________________ James B. Hovland, Chair _______________________________ James Pierce, Secretary STATE OF MINNESOTA) COUNTY OF HENNEPIN) SS CITY OF EDINA ) CERTIFICATE OF EXECUTIVE DIRECTOR I, the undersigned duly appointed and acting Executive Director for the Edina Housing and Redevelopment Authority do hereby certify that the attached and foregoing Resolution is a true and correct copy of the Resolution duly adopted by the Edina Housing and Redevelopment Authority at its Regular Meeting of June 10, 2021, and as recorded in the Minutes of said Regular Meeting. WITNESS my hand and seal of said City this ______________ day of ___________________, 2021. Executive Director Date: June 10, 2021 Agenda Item #: VI I.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:5146 Eden Avenue - R edevelopment P lanning Disc ussion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: No action required; for discussion purposes only. I N TR O D U C TI O N: T his item pertains to the redevelopment of the vacant property owned by the Edina H ousing and Redevelopment Authority that is located at 5146 E den Avenue. S taff will recap the preferred outcomes for the site as suggested at the M ay 6th Work S ession and provide examples of various processes to be used to achieve the full vision for the site. S taff seeks confirmation about the desired outcomes and additional guidance regarding the preferred process to be implemented. AT TAC HME N T S: Description 5146 Eden - staff report 6-10-2021 Frauens huh United Prop letter 6-8-2021 Pres entation June 10, 2021 Chair and Commissioners of Edina Housing & Redevelopment Authority Bill Neuendorf, Economic Development Manager 5146 Eden Avenue – Redevelopment Planning Information / Background: In January 2021, the Edina HRA executed a Memorandum of Understanding (MOU) with Frauenshuh Companies and United Properties, a pair of developers with expertise in commercial and residential development in the Twin Cities and across the U.S. Frauenshuh had previously been selected as the preferred development partner using a competitive selection process in 2014. The current MOU provided the developers exclusive rights to explore a redevelopment project at the vacant site for a period of four months. The MOU is now expired. The developers have abided by the terms of the MOU. They prepared concept plans showing a residential element, commercial element and public green space on the site as previously required. They are open to scaling back the level of commercial use on the site, based on suggestions received by the Planning Commission, City Council and HRA Board. They are both interested in continuing the relationship to create a realistic vision and deliver two outstanding projects on the site. The general vision for the site was discussed at length during the May 6th Work Session with the HRA Board. A summary of that discussion is attached (see page 2). Possible ways to implement that vision are also attached for discussion purposes (see pages 3 & 4). Requested Action: Staff seeks confirmation and clarification of the desired outcomes (page 2) and direction on the preferred process to achieve the full vision for this site (pages 3 & 4). Housing and Redevelopment Authority Established 1974 STAFF REPORT – 5146 Eden Ave. Redevelopment Planning (June 10, 2021) Page 2 REDEVELOPMENT VISION FOR THE 3-ACRE SITE Staff seeks confirmation or clarification on the preferred redevelopment vision for this HRA property asset. Based on the clarification provided, staff is prepared to incorporate this vision into an action plan so that the preferred outcomes can be achieved in the next 2-4 years. A) Split into two parcels – North and South B) Construct pedestrian bridge at northern edge to provide convenient route for customers, employees and general public C) Widen Arcadia Ave. to provide adequate room for vehicles, pedestrians and cyclists D) Apply the 7 Guiding Principles to the extent practical PREFERENCES FOR SOUTH PARCEL E) Multi-family ownership housing (prefer senior co-operative) F) Sell land to private developer at market price G) No more than 2.0 acres H) Approx. 80 to 140 units I) 5-6 stories maximum with comfortable setbacks, neighborly massing, lasting architectural design and quality materials J) Internal parking for residents and some guests K) Shared curb cut on Arcadia Ave. L) Shared surface parking for guests and essential services required at North Parcel PREFERENCES FOR NORTH PARCEL M) Restaurant or similar food/beverage operation with indoor/outdoor public activity generator N) Seek private operator for new facility O) Will consider sale if no viable leasing options P) Approx. 1,000 to 10,000 square feet structure Q) Approx 1 acre site R) Outdoor space designed to seamless connect to the new pedestrian route and the senior co-op S) Site plan to embrace the elevation change and create terraced levels with different feel or activities on various levels T) Utilize parking capacity in adjacent Grandview Ramp U) Outdoor maintenance assessed to Maintenance District presuming that all neighbors have access to a portion of the outdoor space V) Edina Park & Recreation could provide outdoor programming, but not mandatory STAFF REPORT – 5146 Eden Ave. Redevelopment Planning (June 10, 2021) Page 3 NEEDS OF THE HRA TO ACHIEVE THIS VISION In order to achieve the HRA’s vision for the property, the HRA can use the City staff and City attorney as a resource to manage and prepare most contracts. Outside expertise should be considered to coordinate the redevelopment of the North Parcel. Key tasks and needs are summarized below: • Purchase Agreement with senior co-operative developer (City staff and attorney recommended) • Development Coordinator for North Parcel (Outside consultant recommended) o Site engineer o Landscape Architect & Site Planner o Leasing broker o Design Coordination o Construction Management • Modify parking agreement with Jerrys Enterprises (City staff and attorney recommended) • Maintenance budget for shared expenses (Outside consultant recommended) POTENTIAL PROCESSES TO CONSIDER This is a valuable and sought after property. Over the years, several different parties have expressed interest in the site. In order to achieve the HRA’s vision, a process must be selected to identify the developers and operators best suited for the project. Typical approaches are summarized below. Staff seeks input and guidance on which method is preferred. Based on the guidance provided, staff is prepared to implement the process in summer 2021. 1) Continue with Frauenshuh Companies and United Properties – These parties understand the site well and continue to be interested in pursuing opportunities at this site. The MOU could be revised and extended to allow both parties to apply their expertise and secure a feasible plan for the site that also delivers value to the HRA. United Properties could prepare a full proposal to develop the senior co-operative. Frauenshuh could assist with development and leasing of a future restaurant concept. 2) Request for Qualifications or Request for Proposal (RFQ or RFP) – staff had previously recommended this approach. This remains a viable method that is frequently used for disposition of publicly owned assets. 3) Direct outreach to qualified developers & operators - In addition to Frauenshuh Companies and United Properties, there are several successful developers that provide high quality multi-family ownership housing and commercial redevelopment. There are also several skilled businesses in the Twin Cities and nationally that operate successful restaurants that incorporate indoor/outdoor entertainment. If desired, staff could reach out to operators directly to gage interest and secure a proposal from interested parties. STAFF REPORT – 5146 Eden Ave. Redevelopment Planning (June 10, 2021) Page 4 4) Engage third party to vet qualified developers and operators – Staff has limited time and has fewer relations with restaurant operators than private real estate professionals. A third party such as Frauenshuh Companies or other experienced real estate company could be engaged to vet qualified parties and deliver a short list of possible users to the HRA Board for consideration. The final selection of users and financial terms will remain at the discretion of the HRA Board. This third-party service would be paid a fixed fee for their services to help coordinate the redevelopment of this site. 5) Sale to highest bidder – this approach is not recommended due to the HRA’s strong preference to see the property redeveloped in a particular fashion. It is noted that the combination of two uses described on the previous page may not maximize the land value, but addresses many of the community goals expressed in the 2012 Grandview Development Framework. 6) Combination of options – any combination of the above options could be applied provided that the process is clear, transparent and designed to implement the HRA’s vision for the asset in a timely fashion. END June 8, 2021 Via email delivery Bill Neuendorf Economic Development Manager City of Edina 4801 W 50th St. Edina, MN 55424 RE: 5146 Eden Avenue Redevelopment Dear Bill, This letter briefly recaps the current status and evolution of the potential redevelopment scope for the property at 5146 Eden Avenue, and recent discussions regarding potential paths forward. As noted in the HRA’s May 6th, 2021 meeting discussion, the development team of Frauenshuh and United Properties remains committed to continuing with a plan concept consisting of senior ownership cooperatives (90-100+ units) and a larger, programmable green/open space activated by a combination of hospitality, dining, entertainment and amenity uses and activities. Eliminating the health/wellness/medical office use component is acceptable, however, we believe these services will remain critical to maintain in the Grandview District. Similar to the site being among a short- list of potential sites identified by the City for a future fire station, other site alternatives for these uses can be found. Previous development concepts for this site explored 100% public ownership/use; 60% public/40% private ownership/use, and the most recent combination of private and public uses. This new direction would return to a shared ownership concept with approximately 40-50% of the site remaining public or quasi-public ownership/use and 50-60% of the site ultimately owned privately by the senior cooperative. An important element of this model will be determining the options, cost and feasibility of the public or quasi-public component noted above. Frauenshuh will continue to engage with the HRA working side-by- side in an advisory/consulting capacity with City staff in defining, soliciting and evaluating potential operators and use concepts that would activate the green/open space to complement the overall vision for the site. Frauenshuh and United Properties, along with its project partners including Confluence and Musicant Group, bring in-depth expertise and resources and numerous notable projects including LaSalle Plaza/State Theatre, Infor Commons/Rice Park, Frauenshuh Cancer Center/Sandy’s Garden, Centennial Lakes and RBC Gateway and plaza, currently under development in downtown Minneapolis. The team remains excited and prepared to make these adjustments and continue its collaboration with the HRA to advance a viable and dynamic vision for this important site in the Grandview District. Best Regards, Dean Williamson David M. Anderson Alex Hall President Senior Vice President Senior Vice President Frauenshuh, Inc. Frauenshuh, Inc. United Properties The CITY ofEDINA 5146 Eden Avenue Redevelopment Planning Preferred Outcomes and Implementation Approach Housing and Redevelopment Authority Discussion Item -June 10, 2021 The CITY ofEDINA 1)Recap of Preferred Outcomes 2)Implementation Needs 3)Implementation Process Outline for Today’s Discussion HRA Board Discussion 6-10-2021 2 The CITY ofEDINA Staff seeks direction from the Edina HRA, as owner of this vacant property. •Confirmation and clarification of desired outcomes •Direction on the preferred process to achieve the full vision for this site Today’s Discussion HRA Board Discussion 6-10-2021 3 The CITY ofEDINA 1)Subdivide Site into North and South parcels 2)Construct pedestrian bridge & sidewalk along north edge 3)Widen Arcadia Ave. for vehicles, pedestrians & cyclists 4)Apply 7 Guiding Principles Preferred Outcomes – General HRA Board Discussion 6-10-2021 4 The CITY ofEDINA 1)Multi-family ownership –senior co-operative housing 1)-Sell up to 2.0 acres 2)-80 to 140 units 3)-5 to 6 stories max. with reasonable setbacks and massing & high quality architecture and materials 2)Internal parking 3)Shared access drive and parking for North Parcel Preferred Outcomes – South Parcel HRA Board Discussion 6-10-2021 5 The CITY ofEDINA 1)Restaurant with indoor/outdoor public activity 1)-Privately operated 2)-Approx 1k to 10k SF 2)May consider sale, if no valid lease options 3)Seamless outdoor connection between pedestrian bridge and senior co-operative 1)-portions available for public & private use 2)-Edina Parks & Rec could program, but not mandatory 4)Utilize parking in adjacent Grandview Ramp 5)Apply Maintenance District for shared expenses Preferred Outcomes – North Parcel HRA Board Discussion 6-10-2021 6 The CITY ofEDINA 1)Purchase Agreement with senior co-operative 2)Developer Coordinator –consultant recommended 1)-engineer 2)-landscape architect 3)-leasing 4)-design coordination 5)-financial advisor 6)-construction management 3)Modify Parking Agreement 4)Prepare Maintenance Budget –consultant recommended Needs of the HRA to Achieve Vision HRA Board Discussion 6-10-2021 7 The CITY ofEDINA 1)Continue with Frauenshuh & United Properties 2)RFQ or RFP 3)Direct outreach by City 4)Outreach by third party to vet prospects 5)Sale to Highest Bidder 6)Combination Potential Processes to Select Prospects HRA Board Discussion 6-10-2021 8 The CITY ofEDINA Staff seeks direction from the Edina HRA, as owner of this vacant property. •Confirmation and clarification of desired outcomes •Direction on the preferred process to achieve the full vision for this site Today’s Discussion HRA Board Discussion 6-10-2021 9 The CITY ofEDINA Discussion HRA Board Discussion 6-10-2021 10 Date: June 10, 2021 Agenda Item #: VI I I.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:4917 Eden Ave - P rojec t Update Information Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: F or informational purpose only; no action required I N TR O D U C TI O N: R euter Walton, the developer considering redevelopment of the P erkins site at 4917 E den Avenue has requested that the City and H R A consider the use of tax increment financing on the site. W hile they have not yet submitted a formal application, they have provided funds to be held in escrow for exploratory work related to the potential use of T I F. S tantec Consulting has been engaged to evaluate the site for compliance with the M innesota statutes that govern the use of T I F. T he site has been inspected and has been found to meet the eligibility requirements of Minnesota T I F S tatutes. T he Stantec report indicates that the site could qualify as either a Redevelopment T I F D istrict (26-years) or a R enewal & Renovation T I F D istrict (15-years). I n the weeks ahead, C ity staff intends to engage engineering consultants and financial advisors to explore potential multi-modal transportation improvements along nearby portions of Eden, Willson, Grange and W. 50th S t. Later this summer, staff intends to deliver a report that identifies meaningful transportation improvements that could be built by the C ity in the future and funded with incremental property taxes generated by the redevelopment project at 4917 E den Ave. No action is required by the Edina H R A at this time. Date: June 10, 2021 Agenda Item #: VI I I.B. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:P entagon Village - May 2021 Update Information Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: No action required; for information purposes only. I N TR O D U C TI O N: I n 2018, the Edina H R A executed a T I F redevelopment Agreement with the developers to provide financial support so that the obsolete site could be redeveloped bringing far in excess of $100 million of new commercial investment to the site. With site work and infrastructure completed, three T I F N otes were issued in 2019. R eimbursement will begin when the developer achieves the required milestones and begins at least one of the larger commercial elements intended for the site. T he developer is currently exploring the possible replacement of one hotel with an apartment project. While changes in land uses are allowed, the impact of such changes to the T I F Agreement will need to be explored. P ossible impacts are identified in the attached staff report for informational purposes. No action is required at this time. AT TAC HME N T S: Description Staff report - Pentagon Village May 2021 May 27, 2021 Chair and Commissioners of Edina Housing & Redevelopment Authority Bill Neuendorf, Economic Development Manager Pentagon Village TIF Agreement – Potential Change in Constructed Elements Information / Background: Solomon Real Estate and Hillcrest Development are exploring a possible change in the redevelopment strategy for the 12-acre property at 77th Street and Computer Avenue commonly known as Pentagon Village. This redevelopment site was rezoned in 2018-2019 using Edina’s Planned Unit Development (PUD) zoning provisions. The approved site plan includes five (5) pads for new retail, new hotels and new offices. Each of these new uses surround a 1-acre public plaza in the middle of the site. In 2018, the City and HRA entered into a TIF Redevelopment Agreement with the developer to provide tax increment financing (TIF) to support wholesale redevelopment of the property. The TIF Agreement pledged TIF Notes to reimburse the developer for part of the infrastructure costs when particular milestones are achieved. These TIF Notes were issued in July 2019. While not explicitly stated, the general intention was to support investment that created new jobs and other commercial opportunities in a manner that contributed to the high quality of life in Edina. In Fall 2020, the deadlines in the TIF Agreement were extended (from 2019 to 2023) to recognize the impact of the COVID-19 pandemic on the hospitality industry. Rise Development recently submitted a concept to replace the anticipated extended stay hotel with new apartments. The TIF Agreement refers to this parcel as “Phase 1C” and “Hotel Element 2”. This new concept was submitted to obtain preliminary comments from neighbors, Planning Commission and City Council regarding potential changes to the Planned Unit Development (PUD) Ordinance that establishes zoning regulations for this site. While a change in use is allowed by Section 3.2 of the TIF Agreement, the impact of such a change to the development pro forma on which the TIF Agreement was based will need to be evaluated. Housing and Redevelopment Authority Established 1974 STAFF REPORT Page 2 If the PUD Ordinance that governs the site is modified to replace Hotel 2 with apartments, several aspects of the TIF Agreement and other grant Agreements will need to be evaluated and possibly modified. Potential issues include: 1) Confirmation that new apartment project satisfies the minimum square footage requirements of the anticipated Hotel Element 2 per Section 6.1 as amended in 2020 2) Elimination of lodging taxes anticipated to be generated by Hotel 2 3) Confirmation that the TIF “but for” test remains valid with a potential change in the rate and pace of TIF increment generated from the site 4) Lookback and potential clawback by the sale of the parcel per Section 7.4 5) Transfer of development obligations to new developer per Section 12.2 6) HRA approval of hotel developer of Lot 3 other than Hawkeye & Waterwalk per Section 12.3 7) Consideration of developer’s request for exclusive use of 85 parking stalls in the public parking garage; Section 3.4(a) of 8-5-2020 Parking Easement restricts & limits private use of the parking stalls included in the public easement 8) Potential collection of monthly park maintenance fees based on the total number of new residential units per Section 4.7 of TIF Agreement 9) Ability to satisfy the job creation goals identified in grant agreements with Metropolitan Council and Minnesota Department of Employment and Economic Development. These potential conflicts are identified to alert the HRA of the potential need to modify the terms of the TIF Agreement and related public easements. No action is required at this time.