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HomeMy WebLinkAbout1987-06-15 HRA Regular Meeting MINUTES OF THE JOINT MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY/CITY COUNCIL JUNE 15, 1987 A joint meeting of the Edina Housing and Redevelopment Authority and the City Council was convened to consider concurrently an amendment to the Southeast Edina Redevelopment Plan. Action was taken by the HRA and the Council individually as required. Answering rollcall were Commissioners/Members Kelly, Richards, Smith, Turner and Courtney. MINUTES of the H.R.A. Meeting of June 1, 1987 were approved as submitted by motion of Commissioner Kelly, seconded by Commissioner Turner. Ayes: Kelly, Richards, Smith, Turner, Courtney Motion carried. PUBLIC HEARING HELD ON AMENDMENTS TO SOUTHEAST EDINA REDEVELOPMENT PLAN: AMENDMENTS APPROVED. Gordon Hughes, Executive Director of the HRA, recalled that on April 6, 1987 staff provided the Council with an update on the Hedberg property. At that time the Council took action that instructed and directed staff to: 1) initiate the Environmental Impact Statement (EIS) for the site, 2) initiate an amendment to the Southeast Edina Redevelopment Plan to include the vacant land in southeast Edina not presently in the tax increment district, and 3) initiate studies to create a new tax increment district. Mr. Hughes said that the EIS process has commenced and that the preparation work has been done. The amendments to the Southeast Edina Redevelopment Plan have been prepared for the Council's consideration and notice was published that this would be a public hearing to take testimony on the amendments in order to include the rest of the vacant land in that area. Mr. Hughes presented a schematic of the southeast Edina area showing the land currently within the tax increment redevelopment plan and the land that is proposed to be added. Considerable discussion followed summarized as follows. Member Kelly commented that when the Council took the action in April she had stated that she felt the Council should have a philosophic discussion as to how the proposed development of the Hedberg property would affect Edina and whether it meets the City's mission statement. Since then the Council has seen a presentation of the proposed development and now are considering an amendment to the Southeast Edina Redevelopment Plan which in the introduction, Section A, is very specific as to what is to happen to this piece of property. She said she felt this has preempted the discussion that she felt the Council should have, that she could not approve the amendment because of the specific language as to how it should be developed. Member Turner suggested that this is the time for the Council to talk through the issues and to see if the objectives in the original plan are still valid for this piece of property. She then asked if the action required would simply add property to the Southeast Edina Redevelopment Plan or if it would also include approving a financing method. Mr. Hughes explained that the action required would increase the sphere of influence of the HRA in southeast Edina. The law provides that the HRA would have to enter into redevelopment contracts covering at least 50% of the land prior to establishing a tax increment district, so the establishment of the district actually would occur if and when the City reaches an agreement with the developers. Continuing, Member Kelly pointed out that the Statement of Need says we need affordable housing for the elderly and persons of low and moderate income and that the HRA is desirous of promoting the development of housing for the elderly and other persons in the City. She said she felt that statement deserves a lot of debate; that we really have met our needs for subsidized housing for low and moderate income people. She added that the Edinborough project has not stood the test of time, that Edina has met these needs better than other communities in the metropolitan area and that she did not think this is the direction Edina should take now. She stated that HRA/Council Minutes of 6/15/87 Page Two she has not been convinced by the community that they want her, as a Council Member representing them, to approve another subsidized project. Member Smith commented that this is the last commercial area in Edina. He said he felt the property will be developed regardless and that the question is should the City get control over the area and is this the way to do it. Manager Rosland submitted that this 100 acres is the last remaining property in Edina of any size and scope and that the suggested process will enable the City to get a handle on the project and develop it other than in five or six acre parcels. He said that if the project is patterned after Edinborough there will be a subsidy for the housing part of the project. Attorney Erickson explained that there are tools available to control development and that this is another tool but it is not available until certain steps are taken, one of which is to add the property to the Southeast Edina Redevelopment Plan. There are other steps that must be taken and which the Council and the HRA must act upon before any aid is given. That would be: 1) creation of the tax increment district, and 2) approval of the redevelopment contract. He said those would be the difficult ones. Member Kelly reiterated that she has difficulty in agreeing to the amendment because of the Statement of Need. Member Smith asked if the multiple land use, i.e. housing, retail and office, is needed to create a tax increment district and whether the housing or the park could be left out. Member Richards commented that that is one alternative but that unless there is some benefit to the public the City and the HRA does not need to get involved at all in the development of this property. In reference to tax increment financing, Member Smith asked if there are delinquent tax payments, which are financing the bonds, who suffers the detriment of that cash flow. Member Richards commented that tax increment financing does not increase taxes but simply captures taxes and applies them to a different mechanism by which the proceeds are used to pay off the bonds. He said you would have to look at the agreements to see what type of security there is for repayment of the bonds. Attorney Erickson explained that there are many sources to fund whatever development occurs in the project; there are special assessments, State Aid funds and bond funds. To the extent that bonds would be sold on a general obligation basis by the City and the money loaned to the HRA for the development, if there were a shortfall that money would have to come from an increased mill rate. How great a risk that would be depends on how the redevelopment contract is framed. Presumably, the project would be phased and for Phase I the Council and the HRA would have to decide a number of issues, i.e. how much would the first phase cost, how would that be paid for, what would be required of the developer to help create the increment to pay for those bonds, what kind of guaranties would the developer have to put up (letters of credit and securities) , etc. Mr. Erickson said that the reason it is proposed to add to the district is that the tax increments from both the regional district and from the new district can be.put into a pot to pay the bills on both projects, the old increment area and the new increment area, and hopefully, because of the Edinborough development there will be a surplus in the old area to help pay for any deficits that may occur in the new area. Member Kelly asked, if this property goes into a tax increment district, who pays for the additional services that would be needed until the bonds are paid off. Manager Rosland said that the City would pay for the services, and that it is suggested that the redevelopment agreement would put aside certain operational funds for those services. He said that alternative ways to fund those services have been discussed with the developer and the various City departments who would provide the services. Member Richards commented that he strongly felt that the need for low and moderate income housing is there as evidenced by the Edinborough project housing being developed and sold out in two years; that there there was no subsidy for the Edinborough project but rather that it was a smart, innovative use of increased taxes to pay for the public infrastructure; and that this mechanism is working for Edina. He said that the City would never have received a public asset like Edinborough Park for the entire community that basically is being financed and paid for by that project as well as user's fees without the tax increment financing. He concluded that the Council would be remiss in not taking advantage HRA/Council Minutes of 6/15/87 Page Three of another great opportunity to do the same thing with the Hedberg property. Member Turner commented that she shared a little hesitancy about the Statement of Need but that she thought by amending the Southeast Edina Redevelopment Plan the Council is not obligating itself to any particular kind of housing at this stage of the game. She added that the overwhelming reasons in her mind for the City being involved were: 1) the opportunity to develop the parcel as a mixed use project as a whole, 2) the opportunity to control traffic in the area, 3) the opportunity to encourage types of affordable housing to attract young people to the community, 4) the opportunity to accomplish a park for that area as designated in the Comprehensive Plan, and 5) that the proposed plan will give the City the opportunity to do something that is more unique and meets the needs of the community in a way that would not be possible otherwise. Following the discussion, with no comment or objection being heard from the public, Commissioner Richards introduced the following resolution and moved its adoption: RESOLUTION APPROVING THE 1987 AMENDMENT TO THE SOUTHEAST EDINA REDEVELOPMENT PLAN BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority of Edina, Minnesota (the "HRA") , as follows: 1. The HRA and the Edina City Council having previously approved a redevelopment plan, as defined in Minnesota Statutes, Section 462.421, subdivision 15, designated as the Southeast Edina Redevelopment Plan (the "Plan") , which also constitutes a redevelopment project, as defined in Minnesota Statutes, Section 445.421, subdivision 13. It has been proposed that the HRA approve amendments to the Plan, designated as the 1987 Amendment to the Southeast Edina Redevelopment Plan (the "1987 Amendment") , which among other things, enlarges the Plan Area. 2. The 1987 Amendment is described in the document entitled "1987 Amendment to the Southeast Edina Redevelopment Plan" which has been presented to this Board, and the 1987 Amendment as so described is hereby approved, and the Executive Director of the HRA and the attorney for the HRA are hereby authorized and directed to proceed with the implementation of the 1987 Amendment. Dated this 15th day of J e 1987. L�)L.C- Attest: Mayor / Execu e Di ector Mb�tion for adoption f the resolution was seconded by Commissioner Smith. Rollcall: Ayes: Richards, Smith, Turner, Courtney Nays: Kelly Member Richards then introduced the following resolution and moved its adoption: RESOLUTION APPROVING THE 1987 AMENDMENT TO THE SOUTHEAST EDINA REDEVELOPMENT PLAN BE IT RESOLVED by the City Council of the City of Edina, Minnesota, as follows: 1. Recitals. This Council and the Housing and Redevelopment Authority of Edina, Minnesota (the "HRA") have previously approved a redevelopment plan and redevelopment project, under Minnesota Statutes, Section 462.411, et. seg. , designated as the Southeast Edina Redevelopment Plan (the "Plan") . The HRA has approved amendments to the Plan designated as the 1987 Amendment to the Southeast Edina Redevelopment Plan (the "1987 Amendment") , which among other things, enlarges the Plan Area, and has requested that this Council approve the 1987 Amendment. This Council held a public hearing on the 1987 Amendment on June 15, 1987, at which time all persons desiring to be heard on the subject were given an opportunity with respect thereto. 2. Approval The 1987 Amendment is hereby approved. 3. Findings Under the Municipal Housing and Redevelopment Act. Pursuant to Minnesota Statutes, Section 462.521, it is hereby found that: (A) The land located within the 1987 Project Area, as defined in the 1987 HRA/Council Minutes of 6/15/87 Page Four Amendment would not be made available for redevelopment without financial aid sought; (B) The redevelopment plans for the 1987 Project Area as set forth in the 1987 Amendment will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the redevelopment of the 1987 Project Area by private enterprise; and (c) The 1987 Amendment conforms to the general plan for the development of the City as a whole. Passed by the Council this 15th day of June, 1987. Attest: Atyor 1 City Clerk Motion for adoption of the resolution was seconded by Member Smith. Rollcall: Ayes: Richards, Smith, Turner, Courtney Nays: Kelly Resolution adopted. ' There being no further business to be conducted by the HRA, motion of Commissioner Kelly was seconded by Commissioner Smith for adjournment. Ayes: Kelly, Richards, Smith, Turner, Courtney , Motion carried, HRA adjourned. xecutive Di or