Loading...
HomeMy WebLinkAbout2022 09-26 EDAM REGULAR SESSION MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION SEPTEMBER 26, 2022 CITY HALL—COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority(EDA) met in a Regular Session called to order by President Mike Elliott at 10:15 p.m. 2. ROLL CALL President Mike Elliott and Commissioners April Graves,Kris Lawrence-Anderson,and Dan Ryan. Also present were Executive Director Reggie Edwards, Community Development Director Meg McMahan, City Clerk/Interim Assistant City Manager Barb Suciu, Communications & Community Engagement Manager/Interim Assistant City Manager Angel Smith, and City Attorney Jason Hill. Commissioner Marquita Butler was absent and excused. 3. APPROVAL OF AGENDA AND CONSENT AGENDA President Elliott moved and Commissioner Graves seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1.August 8, 2022—Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2022-21 APPROVING A TERM SHEET BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER (THE "EDA") AND ALATUS BROOKLYN CENTER MD LLC (THE "DEVELOPER") Executive Director Reggie Edwards introduced the item and invited Ms. McMahan to present the Staff report. He noted it would be Ms. McMahan's last presentation as she will be transitioning to 9/26/22 -1- work with Minneapolis. Dr. Edwards thanked Ms. McMahan for her great work with Brooklyn Center. President Elliott thanked Ms. McMahan for her work and noted she has worked very hard to support the City. She is very knowledgeable and a good problem-solver. Community Development Director Meg McMahan stated she started with the City in 2018. On her first day, the Council received applications from developers for the Opportunity Site and unanimously approved Alatus as the primary developer. The proposed term sheet is based on deep community engagement and intentional choices. Ms. McMahan explained in April 2018, the EDA entered into a Preliminary Development Agreement with the Developer to allow time for exploration of development feasibility within the area generally referred to as the Opportunity Site. The agreement has since been amended and extended as work progressed on the project. In August 2022, the Developer received approval of Planning Commission Application 2022-003 for a re-plat, amendment to the City's Zoning Code, and establishment of a Planned Unit Development to allow for a Phase I redevelopment of the City's Opportunity Site. Ms. McMahan noted the project will also require public assistance for financial feasibility and include a broader array of community benefits commitments. These items will be detailed in a Contract for Private Redevelopment between the EDA and the Developer. Ms. McMahan added City Staff, consultants and the Developer worked over the past several months to outline the contents of a Contract for Private Redevelopment related to the first phase of the project. This outline took the form of a Term Sheet that is prepared for review and consideration by the EDA. The Term Sheet details the primary deal points to be included in the final Contract for Private Redevelopment. Ms. McMahan stated consideration of the Term Sheet is intended to provide an opportunity for discussion and amendment of the primary deal points before the final Contract for Private Redevelopment is brought back to the EDA for final consideration. Dr. Edwards explained Deputy Director of Community Development Jesse Anderson will act as interim Community Development Director and will contract with Jason Aarsvold for several projects. President Elliott asked if Mr. Aarsvold would still be a consultant. Jason Aarsvold, Ehlers representative, stated the firm would serve as a consultant and he would help as a contracted employee. President Elliott asked if there is a written agreement. Dr. Edwards stated a written agreement is underway. President Elliott stated he wants to ensure there is no conflict of interest. Mr. Aarsvold explained the input and information he would provide would be the same whether 9/26/22 -2- he was just a consultant or both contracted and a consultant. President Elliott asked when the contract would begin. Dr. Edwards stated that day is the final day for Ms. McMahan, so Mr. Aarsvold would start the following day. President Elliott asked if Mr. Aarsvold was starting without a written agreement. Dr. Edwards stated there is a drafted written agreement and a verbal agreement. Ms. McMahan stated Ehlers is a public consultant group that only represents public entities. The group has been involved with the Opportunity Site for many years and is the obvious choice to step in and take on additional duties beyond what is in the initial development agreement. President Elliott stated he has concerns that services are beginning without an agreement in place. Dr. Edwards stated the written agreement will be executed the following day. Mr.Aarsvold explained the purpose of the presentation is to review the proposed terms for public assistance to Alatus' Opportunity Site Project, answer questions about the proposed project, and consider approval of a term sheet. Mr. Aarsvold showed a slide with the parcels included in the term sheet. The cost will be about $9.7 million for property acquisition. There is one market-rate and enterprise market building, a conference center, a mixed-income building, and two affordable housing buildings. There are five buildings, and the term sheet includes the start date for developer improvements along with their use descriptions. Mr. Aarsvold showed a slide breaking down the number of units broken down by the percentage of Area Median Income (AMI). The first building will be market-rate. Building 3 will have 21 units available at 80 percent AMI. Building 4 has 30 percent AMI units and 50 percent AMI units for a total of 60 affordable units. Building 5 has 50 percent AMI and 60 percent AMI units, for a total of 70 affordable units. Throughout the site, there will be 613 residential units, 171 of which are considered affordable. Mr. Aarsvold explained that Alatus will construct all public and private infrastructure including Shingle Creek Parkway improvements, construction of the new east/west parkway connecting Shingle Creek Parkway to John Martin Drive, signal and intersection improvements at Shingle Creek, and regional stormwater pond system and associated utilities. Mr. Aarsvold noted the EDA will waive Alatus' stormwater impact fee, a $1.6 million estimate, and reimburse Alatus for a portion of the stormwater pond attributable to future development parcels. There is a per acre fee to repay the future expense. The total infrastructure costs are currently estimated at $14.8 million. Mr.Aarsvold stated there is a detailed Appendix in the term sheet regarding community benefits including contractor goals with local hiring requirements, diverse hiring goals, community enhancements, and sustainability considerations. Ms. McMahan added there is an agreement for the City to use the conference center a certain amount of times each year. 9/26/22 -3- Mr.Aarsvold stated the developer will be responsible for the maintenance of all the private areas and infrastructure around the buildings, which will be specified in a formal agreement. The City will maintain public infrastructure, including parkway and regional stormwater pong. The City can create a storm sewer improvement taxing district. There needs to be a plan for future maintenance and sustainability of the parkway. Ms. McMahan pointed out there is a fee at closing by Alatus for $2 million. The EDA is then responsible for creating a housing trust fund with the money. The point is to create and sustain affordable housing in the community. Many current renters in the City have expressed concerns about how the Opportunity Site will impact them. The housing trust fund is an opportunity to address those concerns and help preserve and improve existing affordable housing. It was a guiding principle for the new project to positively impact existing residents. Mr. Aarsvold stated the EDA would provide up to $30.2 million for qualified costs and public improvements. The funding source is Tax Increment Financing(TIF)District 7. There is separate Pay As You Go TIF notes for each building. Other funding will be sought and can substitute for the TIF. The contract will contain a "look back" provision to ensure the assistance amount is accurate based on actual project costs. Also,Alatus will contribute to the escrow account to cover EDA costs. Mr.Aarsvold added the total assessed value of the proposed project is over$138 million, and total development costs are nearly $251,000,000. The total tax capacity upon completion is estimated at $1.55 million, which represents a nearly five percent increase in the City's total tax capacity. That equates to $885,000 in City taxes if levied at the 2022 tax rates. It is estimated to increase to $2.48 million in 20 years when the TIF district is decertified. That equates to $1.4 million in City taxes if levies at 2022 tax rates. He noted any risk would be on the developer. Commissioner Ryan stated the Pay As You Go TIF alleviates several of his concerns, and he is thrilled with the potential. He thanked Staff and Mr. Aarsvold for their thorough yet decreased presentation. There will be so many positive impacts on the City from the project. Commissioner Graves thanked Staff and Mr.Aarsvold for their work and for staying so late. She added she is sad to see Ms. McMahan go. Commissioner noted she is excited about the project and ready to move forward with it. President Elliott asked how the Community Benefits Agreement compares with the targets set by community engagement efforts. Ms. McMahan stated the report resulted in three guiding principles focusing on sustainable design and the project being fiscally sound and not burdensome to current residents. The stormwater pond is very innovative and will have a positive impact on the water quality of Shingle Creek. There are varying levels of affordable units, some of which are deeply affordable and much needed in the community. Ms. McMahan stated the community has wanted to see an event center or gathering space where they could bring their food, childcare, a splash pad, and a dog park. The project does not include 9/26/22 -4- STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed Secretary of the Economic Development Authority (EDA) of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Regular Session of the Economic Development Authority (EDA) of the City of Brooklyn Center held on September 26, 2022. 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the Economic Development Authority (EDA) adopted said minutes at its October 10, 2022, Regular Session. 0, // esident 9/26/22 -6- a splash pad or dog park, but there is potential for such amenities down the line as there are many acres included on the site. Further community engagement allowed Staff to narrow down the priorities. President Elliott noted the City is contributing $30 million to the project. He asked how that compares to other projects the City has supported. Ms. McMahan stated the contribution is low to average when considering the scale of the project. She noted the project is delivering $15 million of public infrastructure that will be handed over to the City. Also, the entrepreneurship space is a very exciting component of the project that is another$11 million cost. Ultimately,the deliverables will be above and beyond what she has seen in other cities. President Elliott thanked Ms. McMahan for her work with the City. He noted the term sheet is a framework that can be edited later on. Ms. McMahan stated the term sheet is the basis of the agreement that the Staff needs for future negotiations. Commissioner Ryan stated the stormwater buildout will decrease costs for future development. The developer is taking on the risk for a 20-year Pay-As-You-Go TIF, and it is a great deal all around. Commissioner Ryan moved and Commissioner Graves seconded to adopt EDA RESOLUTION NO. 2022-21 approving a Term Sheet between the Economic Development Authority of Brooklyn Center(the "EDA") and Alatus Brooklyn Center MD LLC (the "Developer"). Motion passed unanimously. 5. ADJOURNMENT Commissioner Ryan moved and Commissioner Graves seconded the adjournment of the Economic Development Authority meeting at 11:10 p.m. Motion passed unanimously. 9/26/22 -5-