Loading...
HomeMy WebLinkAbout2023 07.24 CCM STUDY SESSION7/24/23 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY SESSION JULY 24, 2023 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Study Session called to order by Mayor April Graves at 6:04 p.m. ROLL CALL Mayor April Graves and Councilmembers Marquita Butler, Kris Lawrence-Anderson, Dan Jerzak, and Teneshia Kragness. Also present were City Manager Reggie Edwards, Community Development Director Jesse Anderson, Assistant City Manager/City Clerk Barb Suciu, and City Attorney Jason Hill. CITY COUNCIL DISCUSSION OF AGENDA ITEMS AND QUESTIONS Councilmember Lawrence-Anderson stated there was an issue in the minutes where a comment made by Councilmember Butler was incorrectly attributed to Mayor Graves. She read the comment in question. Mayor Graves and Councilmember Butler stated the minutes were correct. MISCELLANEOUS Councilmember Lawrence-Anderson noted the State of Minnesota came out with a more comprehensive tenant protection ordinance. She asked if the Housing Commission should review the new rules and alter the Brooklyn Center tenant protection ordinance to be in compliance with the State’s updates. Mayor Graves stated the Housing Commission can review the new rules, but the Brooklyn Center ordinance is likely more stringent. Councilmember Jerzak stated he would like the Housing Commission to review the Statute at least as a consideration. Councilmember Lawrence-Anderson added the Council received an email from the Fire Chief about the broken Crest elevator. She asked for an update from the Fire Chief on the issue. Councilmember Lawrence-Anderson noted she received another email from Patty K. about the parks again. She explained to the writer that the park's concern would be addressed at that evening’s Council meeting and encouraged her to watch the discussion. 7/24/23 -2- DRAFT Mayor Graves asked if the Fire Chief can give an update on the elevator, whether by email or the weekly update. City Manager Reggie Edwards confirmed he would confer with the Fire Chief to fulfill the request. Dr. Edwards stated if Councilmembers are interested in ride-alongs, they should reach out to staff to coordinate it. Dr. Edwards stated he received an email from the Equity and Human Resources Director Jim Langemo suggesting City Council start the process to review the City Manager’s performance. They also have the results of the employee survey to share with the Council. He asked for availability from the Council for two separate meetings. Councilmembers Lawrence-Anderson and Jerzak confirmed they were available at 5:00 p.m. before the next few Council meetings. Councilmember Butler stated she was available depending on the date. Mayor Graves asked for each of the next two Council meetings to begin at 5:00 p.m. to review the topics. Councilmembers Lawrence-Anderson, Jerzak, and Kragness stated they would like to participate in ride-alongs for Night to Unite. Councilmember Butler stated she would have to arrange childcare and then will email Dr. Edwards. Mayor Graves stated she is undecided as she has received a few invitations for Night to Unite. Dr. Edwards added that the Palm Grove Event Center, formerly Jammin Wings, is looking to host an event on August 12, 2023. There are some uncompleted permits and site plan issues that must be resolved. Also, they cannot get a liquor license until they get a food license from the County. The Council would need to approve the liquor license, but they don’t have another meeting until August 14, 2023. He asked if the Council would be interested in a quick special meeting, should the other requirements be completed, to address the liquor license before August 12. Councilmember Jerzak asked if the certificate of occupancy has been issued. Dr. Edwards stated it has not been issued. Councilmember Jerzak stated various entities must weigh in on the certificate of occupancy. He hesitates to set a precedent to circumvent normal processes. If the event permits, food license, certificate of occupancy, and all other items are in compliance, then he would be amenable to attending a special session due to the extraordinary circumstances. Councilmember Lawrence-Anderson stated she cannot commit to a special meeting without a date. Councilmember Kragness noted it is odd for an event to be advertised without the necessary licenses and permits in place. It places the burden on other parties to ensure the event happens. City Clerk Barb Suciu pointed out that once the City approves a liquor license, it must also be 7/24/23 -3- DRAFT approved by the State. The length of that process is out of Brooklyn Center’s control. Councilmember Jerzak added there needs to be a collaboration with law enforcement and fire, depending on the security requirements for the event. Those efforts cannot be done at the last minute. Mayor Graves stated she is open to a special meeting, though it should not become a normal occurrence. Mayor Graves pointed out there has been online chatter regarding a local home business. Some have mentioned the City is going after the business and a hearing on Thursday. She stated she doesn’t know anything about the business or the hearing. Mayor Graves added she has received various emails about other issues such as commercial vehicles at a home address. She suggested there be community education about the rules for home businesses. Dr. Edwards stated staff would put together a memo regarding the small business and distribute it to the Council. Councilmember Jerzak explained he is well-versed in the ordinance, and that he has received similar emails. The staff does attempt to work with and support small businesses. When the new zoning was adopted, it was an extremely large document that couldn’t possibly cover every circumstance. He suggested the ordinances be reviewed. Councilmember Kragness stated she would be unavailable to attend the August 19, 2023 meeting. Mayor Graves asked how many more Saturday meetings are scheduled. Dr. Edwards stated there is only one more Saturday meeting scheduled. It was planned this way to alleviate Monday meetings. Staff will ask for feedback from the Council after budget season. DISCUSSION OF WORK SESSION AGENDA ITEMS AS TIME PERMITS SCANNELL TAX INCREMENT FINANCING REQUEST – FORMER SEARS PROPERTY City Manager Reggie Edwards introduced the item and invited Community Development Director Jesse Anderson to continue the presentation. Mr. Anderson explained the City received an application for Tax Increment Financing (TIF) assistance from Scannell Properties related to the former Sears Buildings located at 1297 Shingle Creek Crossing. Scannell Properties proposes to redevelop the site by demolishing the two existing buildings and rebuilding two class-A office/warehouse buildings totaling 230,000 square feet. Mr. Anderson stated on August 8, 2022, the project received its land use approvals as outlined 7/24/23 -4- DRAFT under Planning Commission Application No. 2022-004 and as approved by City Council under City Council Resolution No. 2022-76 with the intent to proceed. In addition, the City secured a Tax Base Revitalization Account (TBRA) grant from the Met Council in the amount of $863,400 to help cover the cost of asbestos abatement in the existing buildings. Since that time, however, cost and interest rate increases have made the project financially infeasible and unable to move forward. After discussions with City Staff about potential options, Scannell determined that a request for TIF may help the project proceed. Mr. Anderson noted the development site will likely qualify as a Redevelopment TIF District with up to 26 years of potential TIF collections. Scannell’s initial request was for up to $4 million in pay-as-you-go (PAYGO) TIF. Jason Aarsvold, EDA Project Management with Ehlers, explained TIF is the ability to capture and use most of the increased local property tax revenues from new development within a defined geographic area for a defined period of time without the approval of the other taxing jurisdictions. He showed a graph with a visual example of TIF. Mr. Aarsvold pointed out that proper use of TIF has a required finding that the development would not be possible but for the use of tax increment. This is primarily established through an analysis of the developer’s pro forma. The increased market value must be greater than alternatives and the likelihood of similar developments in the foreseeable future without assistance is considered. Captured tax revenues would not exist if TIF was not used to assist the project, and an elected body must make this finding. Mr. Aarsvold noted that based on an initial estimate by Ehlers, the project will likely only generate about $3 million in present value increment over the full 26-year duration of a new TIF district. Ehlers also reviewed the developer’s pro forma for the project to determine what minimum level of assistance is necessary for financial feasibility. Based on this analysis, the project should be financially feasible with approximately $2 to $2.3 million in total assistance which is a projected 12 to 15 years of total payments. This level of assistance would help the project proceed without needing to tie up the tax base for 26 years. Councilmember Kragness stated she is interested in the return on investments number. Developers want to see a return on cost is seven to eight percent. The projection shows that the level is reached at the 12 to 15 years mark. If the Council wishes to proceed, staff will begin working with the developer to draft a term sheet that will outline the specific amount and conditions for any TIF assistance. If the term sheet is approved, the process to create a new TIF district and draft a TIF assistance agreement would begin. The TIF District and TIF Assistance Agreement would both require formal approval by the City Council and the EDA. Councilmember Kragness asked if the first 11 years would be operating at a deficit. \ Mr. Aarsvold stated it would not be a deficit, but it would be below market value. Councilmember Jerzak noted the option seems like the lesser of two evils. He doesn’t want to kill 7/24/23 -5- DRAFT the project. A little over a year ago, there was no ask of the City. At that time, Councilmember Jerzak expected the developer to return with an ask. He asked if the project is going to proceed and if TIF is required to make it feasible. One year is a short amount of time to change so drastically. Mr. Aarsvold stated the project wasn’t proceeding, so the staff was proactive and reached out to the developer to determine what would be needed to get the project moving. The proposed TIF was the result of that conversation. TIF can be helpful to get a development unstuck. The current request of the Council is if they want staff to provide further analysis rather than a commitment to the TIF. Councilmember Jerzak stated the site has been available since 2018, and something needs to be done. He asked what assurances are in place that the developer not ask for more and more money from the City. He doesn’t want the project to die, but there needs to be careful analysis to protect the City and its future financial commitments. Councilmember Kragness asked for information about the $3 million piece. Mr. Aarsvold explained the ask was for $4 million in TIF. However, Ehlers’ estimates show the project would only generate about $3 million over the life of the district. The increment would have to pay back the $2 to $2.3 million on the loan. If the City were to provide a note of $3 million, it would take 26 years based on the annual revenues coming into the district. However, the recommendation by staff is to provide a TIF note of $2 to $2.3 million instead. Councilmember Kragness asked if the development could survive with the $2 to $2.3 million note. Mr. Aarsvold stated the initial response is yes. However, there needs to be further analysis and discussion. Councilmember Lawrence-Anderson asked if the County would do a proper assessment if the Council wishes to proceed. Mr. Aarsvold stated the request has been sent to the County, so the assessment is already underway. Councilmember Lawrence-Anderson stated she would be willing to proceed with the recommendation of staff. Councilmember Jerzak asked if the proposed use is the best and highest use of the site or if there is potential for other developments. Mr. Anderson confirmed the proposed use is the best and highest use of the site that has been made. Councilmember Jerzak asked if the pollution issues and the like has been reviewed. Mr. Anderson stated the building cannot be demolished until there is a blight study. If there was a blight study, a TIF district would have to be started within three years. Councilmember Jerzak asked if staff could develop a side-by-side comparison showing the benefits and drawbacks for the City and its residents. Mr. Anderson confirmed the additional research for the project would show the benefits and drawbacks. Councilmember Jerzak stated options are more palatable for the Council. 7/24/23 -6- DRAFT Mayor Graves noted her agreement with Councilmember Jerzak. There is room to think outside of the box, and they must consider the bigger picture of the site and its surroundings. She added she would like an update on the status of other TIF sites. UPCOMING ITEMS  Memorial Policy  Special Assessment Policy/Franchise Fees (referred to Financial Commission)  Beautification and Public Art Commission  Liquor Store 2  Organizational Chart-Budget work sessions  New and Repeat Type IV Rental License Review (referred to Housing Commission)  Food Truck Ordinance/License  Emerald Ash Borer Policy Review (referred to Park & Rec Commission November)  Opioid Settlement  ARPA Funds  Police Labor Study  Grants: Revenues & Expenses  Purchasing Policy  Commercial Vacant Building Fees  Interveners Impact  Revisit Resolution 2021-73 ADJOURNMENT Mayor Graves adjourned the Study Session at 6:47 p.m.