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HomeMy WebLinkAbout2024.02.12 CCM EDA/WORK SESSION2/12/24 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA WORK SESSION FEBRUARY 12, 2024 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council/Economic Development Authority (EDA) met in a Work Session called to order by Mayor/President Pro Tem Lawrence-Anderson at 8:10 p.m. ROLL CALL Acting Mayor/President Pro Tem Kris Lawrence-Anderson and Councilmembers/Commissioners Marquita Butler, Dan Jerzak, and Teneshia Kragness. Mayor/President April Graves was absent and excused. Also present were City Manager Reggie Edwards, Director of Fiscal & Support Services Angela Holm, Liquor Store Manager Tom Agnes, and Assistant City Manager/City Clerk Barb Suciu. ACTIVE DISCUSSION ITEMS NEW LIQUOR STORE #2 PROJECT UPDATE City Manager Reggie Edwards introduced the item and invited Liquor Store Manager Tom Agnes to continue the Staff presentation. Liquor Store Manager Tom Agnes stated before 2000, Brooklyn Center operated three stores. In 2000, the city scaled back operations to one store and added a second store in 2003. The city signed a 10-year lease for Store #2 with an option to extend it for another 10 years. In 2013, the city exercised the lease extension option. In 2023, the city negotiated another lease extension for 18 months. Mr. Agnes explained Boulevard Market is the current location of Store #2. In 2003, Johnco LLC opened the complex and started the city’s lease. Ownership was turned over to the bank for a period. In 2008, Nabee LLC bought the property. In 2021, Allied Property Management LLC bought the property. The renegotiation in 2023 was with Allied. Mr. A gnes stated that in 2003, the city paid $7,78 for rent on units two through six. In 2022, Allied asked the city to pay base rent plus a Common Area Maintenance (CAM) of $6,622 for $14,402 monthly. The additional expense was not in the lease language and was not paid. In 2023, the City 2/12/24 -2- DRAFT Council/EDA approved a lease extension for 18 months with the same base rent and an additional $2,075 for CAM and some utilities. Mr. Agnes pointed out that in 2018, the city hired Shenehon to do a feasibility study to see if the city should own and operate the facilities and potentially add a third store. Staff decided to wait until the leases expired on the current locations before moving forward with securing new locations. Store #1 was completed in 2020. Options for Store #2 are being evaluated, and options for Store #3 will be evaluated in future years. Mr. Agnes noted the study suggested Store #2 remains in the northwest trade sector. Staff narrowed down viable locations to five options. There is an EDA-owned property at 70th and Brooklyn Boulevard. Staff suggested a Liquor Store with office condos. This option lost viability for various reasons, such as the County denying access from Brooklyn Boulevard and being unable to reach an agreement with the neighboring church property for access and property separation. Mr. Agnes stated the extended lease agreement will expire in June 2025. Lease provisions stated that rent would double for subsequent lease extensions. Staff anticipates that CAM will continue to increase. Capital improvements would also likely be needed. One of the other five properties remains a viable option and fits with the recommendations from the study. Mr. Agnes added there are three options before the City Council/EDA. The city could remain in the current location and continue the lease beyond June 2025, continue shopping for land and construct a new building, or look for existing properties to purchase and use as a store. Staff recommended the third option. Councilmember/Commissioner Butler asked if the Staff has considered closing Store #2. Mr. Agnes stated it is an option. It is important to note Store #2 is increasing in sales faster than Store #1 is. Store #2 does compete with Brooklyn Park locations, however. Closing Store #2 would result in a significant loss. Councilmember/Commissioner Jerzak asked if the legalization of edibles would impact liquor sales. He added he has concerns about building too soon until they see the impact of edibles and the like. The stores haven’t contributed well to enterprise funds in recent years. Mr. Agnes agreed some studies have shown edibles have decreased alcohol sales. That hasn’t been the case at Liquor Store #2 so far, but that could change with new regulations in 2025. Councilmember/Commissioner Jerzak asked if sales will be impacted by pending legislation regarding more liquor sales in grocery stores. Mr. Agnes stated he doesn’t believe the item will see a hearing, so it is not of concern. Councilmember/Commissioner Jerzak asked if Staff would present potential sites for retrofitting a store. He doesn’t want to discourage their effort, but they should move forward slowly. The purpose of enterprise funds is to reduce taxes, which hasn’t happened in recent years. 2/12/24 -3- DRAFT Councilmember/Commissioner Kragness stated it isn’t financially reasonable to pay double the rent, as suggested in the first option. A last resort would be closing the store until a viable location was found. Dr. Edwards noted a viable opportunity, but they legally cannot share specifics. However, if the City Council/EDA allows Staff to move forward with the analysis of the potential site, they could present the details to the City Council/EDA at a future meeting. Mayor/President Pro Tem Lawrence-Anderson agreed paying double the rent is not a reasonable option. Her preference would be to use land currently owned by the EDA. She asked if other EDA- owned sites have been considered. She would like Staff to move forward with finding a location and to keep the City Council/EDA informed. Councilmember/Commissioner Jerzak noted his support of the Staff’s recommendation and trust in their expertise. He agreed paying double the rent by extending the lease is not reasonable. Mayor/President Pro Tem Lawrence-Anderson stated the third option is her favorite. She noted any condo option must be for-profit. The consensus of the City Council/EDA supported the option recommended by Staff, which is for Staff to look for existing properties to purchase and use as a store. PENDING LIST FOR FUTURE WORK SESSIONS UPCOMING ITEMS • Memorial Policy • Special Assessment Policy/Franchise Fees (referred to Financial Commission) • Beautification and Public Art Commission • 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 • Grants: Revenues & Expenses • Purchasing Policy • Interveners Impact • Revisit Resolution 2021-73 • Planning Application Process ADJOURNMENT Councilmember/Commissioner Kragness moved and Councilmember/Commissioner Jerzak seconded the adjournment of the City Council/Economic Development Authority Work Session at 8:28 p.m.