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HomeMy WebLinkAbout2024.04.22 CCM EDA/WORKSESSION4/22/24 -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 APRIL 22, 2024 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council/Economic Development Authority (EDA) met in Work Session called to order by Mayor/President April Graves at 7:50 p.m. ROLL CALL Mayor/President April Graves and Councilmembers/Commissioners Marquita Butler, Kris Lawrence-Anderson, Dan Jerzak, and Teneshia Kragness. Also present were City Manager Reggie Edwards, Community Development Director Jesse Anderson, and Assistant City Manager and City Clerk Barb Suciu. ALTERNATIVE EXPANDED RESPONSE PILOT City Manager Reggie Edwards explained a few speakers had yet to arrive to address the item. He suggested they address the Opportunity Site Phase 1 Infrastructure Financing item first. Mayor/President Graves agreed to the suggestion. This item was addressed after Opportunity Site Phase 1 Infrastructure Financing. COMMUNITY DEVELOPMENT BLOCK GRANT DOWN PAYMENT FUNDING REALLOCATION DISCUSSION This item was addressed during the Worksession. OPPORUTNITY SITE PHASE 1 INFRASTRUCTURE FINANCING Dr. Edwards introduced the item and invited Community Development Director Jesse Anderson to continue the Staff presentation. Mr. Anderson showed a rendering of the Phase 1 project. The two larger buildings on the left belong to Alatus. The building in the back belongs to Resurrecting Faith World Ministries which includes an event center, an around-the-clock daycare center, some commercial space, and more. The building toward the front is an affordable housing opportunity offered by Project for Pride in Living (PPL). The building on the right does not have a current plan. There is also some infrastructure throughout the site. 4/22/24 -2- DRAFT Mr. Anderson showed a table breaking down the sites by name and details of the buildings. Mr. Anderson explained the approved term sheet with Alatus for the development of Phase 1 within the Opportunity Site and contemplated Alatus would complete the infrastructure build-out within the site. This infrastructure was planned to serve the Alatus buildings but would also serve the entire Phase 1 site. As discussed previously with Council/EDA, Alatus is unable to proceed at this time with the project in the current financing climate. This means the timing for build-out of the infrastructure is unknown. Mr. Anderson noted PPL and Resurrecting Faith, however, are ready to proceed with their projects. For these projects to proceed, much of the infrastructure within Phase 1 would need to be built. Since Alatus is stalled, and PPL and Resurrecting Faith cannot finance the infrastructure cost, options are limited. PPL received an allocation of tax credits through MN Housing’s competitive process in 2023. In order to keep that tax credit allocation, PPL needs to begin construction as soon as possible. In addition, Resurrecting Faith indicates its financing is in place and they are ready to move forward. Mr. Anderson added Staff committed to working with the development team to bring forward an option for Council/EDA consideration that involves the City constructing and paying for infrastructure now, rather than waiting for Alatus to move forward. Mr. Anderson noted Staff worked with Bolton & Menk to evaluate what a “minimum build” scenario would look like for infrastructure on the site. This would include enough infrastructure investment to allow both PPL and Resurrecting Faith to proceed. In addition, it would ready the sites around the Alatus projects so those would eventually have an easier time moving forward. The current estimated cost of this scenario is approximately $6.5 million. Staff worked to identify options for covering this cost. Mr. Anderson showed a table detailing the funding sources that could be committed to the project. As shown in the table, there is a gap in funding for the project of between $0 and $3.45 million, depending on the outcome of grant applications currently under consideration and the potential for a state bonding allocation. There is $430,000 available from Tax Increment Financing (TIF) District 7, $500,000 in grant funding from TEDI for infrastructure, and a $400,000 Transit - Oriented Development (TOD) grant from the County, another potential $500,000 TOD grant from the County. Mr. Anderson explained there was a recent sales tax passed, and the City is slotted to receive $300,000 in 2024 to put toward affordable housing. The anticipated 2025 amount from the sales tax is $500,000. He added there is $1.2 million left in the TIF District 3 fund that also must go toward affordable housing. Mr. Anderson stated in partnership with Representative Vang, the City is seeking $3,000,000 in State bonding. The Bill is sitting in the Senate and the House, and they don’t know the result of the request. Lastly, the City is seeking a Livable Communities Demonstration Account Transit- 4/22/24 -3- DRAFT Oriented Development (LCDA-TOD) grant which would provide an additional $1.5 million. Mayor Graves asked why the TIF District 3 funds are reduced from $1.2 million to $300,000 in the scenario with housing funds and State bonding. Mr. Anderson explained he didn’t believe they would need to use all of the TIF District 3 funds in that scenario. Mr. Anderson stated Community Development, Public Works, and Finance Staff considered several options to fund this gap. The first option was to secure enough additional outside funding to cover all the project costs. The outcome of all this funding will be known later this year. Another idea was to replace another CIP project in the City’s existing plans with this infrastructure project. There is not a project to replace, however, until 2026, which would be too late for PPL and Resurrecting Faith. Staff also considered using the existing City fund balance to internally finance the gap and assume repayment from a combination of the City’s annual affordable housing sales tax revenues and tax increment financing from the project. Staff determined the City’s fund balances aren’t sufficient to finance this cost internally. Mr. Anderson concluded the last viable option to fund the gap is the issuance of a General Obligation (G.O.) bond. In this scenario, the annual debt service would need to be repaid from some annual revenue other than a new tax levy. This would involve a combination of the City’s annual affordable housing sales tax revenues, potential special assessments, and tax increment financing from the project. Mr. Anderson stated that based on the current project status, Staff is seeking direction from the Council/EDA about proceeding with infrastructure for the project. The most significant policy question is whether or not there is a desire to proceed with a City-financed infrastructure project before Alatus can move forward. If the answer to that question is yes, then Staff needs to know under what conditions would the Council/EDA proceed. Mr. Anderson noted the first option is to proceed with a project only if it involves no additional debt from the City. The second option is to use debt for the project if necessary but only if debt service can be repaid from a non-tax levy source. The third option is to use debt for the project and consider using a tax levy to support debt service. Mr. Anderson pointed out there are a couple of positive aspects of infrastructure financing. First, it would allow two buildings within Phase 1 to proceed. The infrastructure investment is necessary at some point, and completion now will cost less than completion later on due to inflation. The financing would increase site readiness for the two primary multi-family buildings. Plus, it may help push other phases forward, though it is not guaranteed. Additionally, less subsidy would be needed for future projects. Mr. Anderson noted there are also negative aspects of infrastructure funding. First, G.O. borrowing adds risk to the City. Planned repayment sources may be insufficient and there could be a potential need to repay the bonds from another source. The infrastructure financing would deplete some of the City’s redevelopment and housing funding sources. Lastly, there is no guarantee that the construction of the infrastructure will spur the development of the remaining Phase 1 buildings. 4/22/24 -4- DRAFT Mr. Anderson stated with the second and third options, Staff would continue to pursue additional funding sources in hopes that no debt is required. However, these options would allow Staff to pursue a plan to begin construction in 2025. With the first option, it is less likely that plans can be in order for construction to begin in 2025. Ultimately, Staff believes the second option would be the most viable and doable option for the City. Mr. Anderson added Resurrecting Faith World Ministries and Project for Pride and Living have approximately 4-6 months of design work needed before construction can begin. They are awaiting, an approved plan for the infrastructure before they proceed with the full design phase of the project. Mr. Anderson pointed out that if the Council/EDA does decide to proceed with a project, Staff will work to prepare a more formal and detailed financing plan and enter into agreements with the various parties. This detailed financing plan as well as those agreements will need to be brought back for City Council/EDA approval in the coming months. Construction would commence early in 2025. Resurrecting Faith World Ministries and Project for Pride and Living have approximately 4-6 months of design work needed before construction can begin. They are awaiting, an approved plan for the infrastructure before they proceed with the full design phase of the project. Councilmember/Commissioner Jerzak stated that Alatus was initially supposed to fund the infrastructure. To help with that, Brooklyn Center wrote down the land to $1. He asked what role Alatus would have going forward. If the City finances the infrastructure, there is no guarantee for more than the two buildings with PPL and Resurrecting Faith World Ministries. A prime portion of the lot would remain unused. Councilmember/Commissioner Jerzak asked if there would be any market-rate housing. Mr. Anderson stated PPL’s project is affordable housing. Alatus’ projects would be market-rate housing. Councilmember/Commissioner Jerzak asked if the City has any guarantees. There is a chance to use some leverage at the state level to ensure Alatus builds the next portion. Mr. Anderson agreed there isn’t a guarantee with Alatus. If the rest of the funding lined up, Staff would work with Alatus to move the project forward. Mr. Anderson pointed out the land wasn’t written down to $1. It was actually set up as a deferred payment for $4 million. In the proposed scenario with special legislation, the agreement would have to be altered. It is likely the City could still collect on TIF with Alatus’ building to pay the City back for their expenses. Councilmember/Commissioner Jerzak explained it is ultimately the role of the Council/EDA to decide if the City should abandon the vision of the Opportunity Site altogether. At this time, the long-term plan has already been abandoned due to a variety of issues. 4/22/24 -5- DRAFT Mr. Anderson stated it is the same plan, but the options at hand would move forward a smaller portion of the project. If Alatus couldn’t continue with development, the parcels would be attractive to other potential developers. Councilmember/Commissioner Lawrence-Anderson stated she thought the beginning of the project was intended to be market-rate housing. She asked when it was decided the first buildings would be affordable housing. Mr. Anderson stated that Alatus’ projects would be market-rate, but their financing isn’t ready. PPL and Resurrecting Faith have their finances in line to move forward on their respective buildings. Mayor/President Graves pointed out she testified to the House and the Senate twice to request an extended timeline for TIF. She doesn’t want to overly subsidize a large developer. The City should be open to other opportunities and look to make the site more attractive for development. At the same time, she doesn’t want to make the site too specific and limit development prospects. Councilmember/Commissioner Jerzak stated he would like some sort of commitment from Alatus in order to vote in favor of building the infrastructure. The City has responsibly responded to the changes in the market. It would be problematic if the project were too different from its original intentions. Mr. Anderson stated he would work with Alatus to obtain some sort of commitment to future development. Also, Staff will continue looking into financing options without considering debt. ALTERNATIVE EXPANDED RESPONSE PILOT City Manager Reggie Edwards introduced the item and explained on Monday, March 25, 2024, the Council/EDA received a presentation on the Alternative Expanded Response Pilot. The Council/EDA was able to ask questions following the presentation. However, the Council/EDA requested additional time at a later date for further questions. Dr. Edwards explained on May 15, 2021, Resolution No. 2021-73: The Daunte Wright and Kobe Dimock-Heisler Community Safety and Violence Prevention Act, called for the creation of the Department of Community Response. The Department would consist of trained medical and mental health professionals, social workers, or other staff and volunteers, and a dispatch system routing appropriate calls to the Community Response Department rather than the Police Department. At the time of its adoption, the City didn’t have the capacity to fully implement the programming and sought out a pilot opportunity. Dr. Edwards stated in October 2021, the Hennepin County Sheriff’s Department and Dispatch Center presented the start of a pilot Alternative Response Program which was initiated with a grant in Brooklyn Park. In October 2022, Margretta Getaweh, FUSE Engagement Manager, presented community engagement findings on Reimagining Public Safety to the City Council/EDA. Dr. Edwards noted from there, in December 2022, the Council/EDA approved a two-year, grant- funded pilot program to address mental health emergency calls with community responders. Data 4/22/24 -6- DRAFT analysis and communication were initiated via the 2023 budget. Additional modest resources were approved by the Council/EDA in December 2023 via the 2025 budget. Dr. Edwards stated on March 28, 2023, the Implementation Committee presented their recommendations to the Council/EDA on the Response Engagement and Crisis Help (REACH) Team Model. In August 2023, Staff presented “Enhancing Public Safety Through Prevention- Focused Strategies” which included an alternative response model. Dr. Edwards explained the intended outcomes of the pilot project include broadening the skills of 911 responders, improved service effectiveness through the reduction of 911 calls, improved service cost efficiency through a lower-cost service provider, rerouting of costly services, and reduced repeated services. Dr. Edwards showed a graphic detailing a comprehensive approach, which was previously presented to the Council/EDA. The approach consists of prevention, intervention, response, and recovery. He noted Director of Community Prevention, Health and Safety LaToya Turk also previously presented a number of benefits of alternative response teams such as reduction in use of force incidents, decreased criminalization of mental illness, improved mental health outcomes, enhanced community trust, increased community well-being, cost savings, preventative impact, better allocation of resources, a holistic approach, and reduced stigma associated with mental health. Dr. Edwards noted FUSE Engagement Manager Margretta Getaweh oversaw community engagement efforts during her time with Brooklyn Center. She conducted interviews, established partnerships within the community, organized and co-facilitated four community conversations, provided ongoing support to the Implementation Committee, and conducted a survey. Dr. Edwards showed a chart reflecting mental problems and welfare check calls by hour and day over a two-year period. The information guided the development of the project. Dr. Edwards provided an overview of the pilot program. It would be a two-year program with a staggered start. The first team would start in May and the second in August. 87 percent of the program is funded by grants and the remaining portion is from the General Fund. The two teams would cover 14 hours of the day. There has been a concern about the timing of the services, but Dr. Edwards believes the 14 hours of service will meet the needs of the community. The first team will work from 10:00 a.m. to 6:30 p.m. during weekdays while the other team will work evenings on Monday, Thursday, Friday, Saturday, and Sunday. The first team consists of pairs of social workers and paramedics and the second team would consist of pairs of mental health workers. Dr. Edwards stated the County’s Alternative Response Team in Brooklyn Center will be comprised of a social worker and a community paramedic. The team would be dispatched by the County’s dispatch center. The team drives an unmarked County vehicle and responds to 911 calls that do not require emergency response by law enforcement, fire personnel, or emergency medical services. The team will operate Monday through Friday from 10:00 a.m. to 6:30 p.m. and is housed out of the Brooklyn Park Police Department. 4/22/24 -7- DRAFT Dr. Edwards pointed out that the Alternative Response Team is already in place in Brooklyn Park. In 2023, the program received 670 referrals. The Team made contact in 99 percent of the calls they were dispatched to and 759 service referrals were made. Over 65 percent of people served identify as people of color and approximately 251 hours of police officer time was saved thanks to the alternative response. Dr. Edwards pointed out that from December 2021 to March 2024, Minneapolis BCR has expanded the public safety infrastructure by becoming Minneapolis’ newest first responder alongside Fire, EMS, and Police and has responded to over 20,000 calls via 911. 80 percent of the calls were handled without backup and there were no injuries to service recipients. He added the program received a contract extension and budget increase to continue nonstop service delivery. Dr. Edwards stated that BCR provides trauma-informed emotional support, crisis de-escalation, psychoeducation for the recipient and their support systems, risk assessments, safety planning, service connection including voluntary transport as appropriate for warm hand-offs, skills training, and additional brief interventions as needed. Dr. Edwards asked if there are certain measurements or data points the Council/EDA would like to receive regular reports on regarding the alternative response effort. He also asked the Council/EDA if there is a consensus by the Council/EDA regarding the proposed program. Councilmember/Commissioner Kragness noted there are far more than monetary benefits to the programs. She stated she would like to know the amount of money saved with the programs to ensure the pilot is paying for itself. Mayor/President Graves noted her agreement with Councilmember/Commissioner Kragness. Councilmember/Commissioner Jerzak asked how often the Council/EDA would receive updates. Also, the service providers seem to be flexible. He asked how the responders can adapt to trends. Taylor Crouch-Dodson, Director of External Affairs with Canopy Roots, stated they presented to the Council/EDA on a quarterly basis. It seemed to be a good frequency. Outside of that, there were weekly meetings with key responders and monthly with leadership. He stated they are flexible and open to other options. Adesola Oni, a representative of Hennepin County Behavioral Health, stated they had been offering quarterly reports of aggregate data. There are also bi-weekly planning meetings with internal staff. Also, they regularly reconsider the meeting timing based on consistency and flow. There are still frequent check-ins with Brooklyn Park and reviews of the data. Councilmember/Commissioner Jerzak asked if data by location could be tracked. He explained he would like to see a reduction in calls to certain areas or facilities. Tony Martin, Director of Emergency Communications with the Hennepin County Sheriff’s Office, stated the dispatch system is based on geography. As for the specific calls, they are primarily name-driven, but they may also be location-driven. 4/22/24 -8- DRAFT Councilmember/Commissioner Kragness asked for an update on the liability portion of the contract. City Attorney Jason Hill stated any agreement would include indemnification language. Councilmember/Commissioner Kragness stated, for example, that the responders have the ability to transport. If something were to happen in transport, she asked if the City, the client, or the program would be sued. Mr. Hill stated the person could sue the City, but if there is a contractual agreement of indemnification, then the program provider would have to defend the City. The programs have their own levels of defense through insurance requirements such as car insurance. Councilmember/Commissioner Butler requested the service providers be amenable to potential requests for additional data collection. Dr. Edwards pointed out it is positive that the programs have already been operating in other areas and have likely considered additional data points to collect. Councilmember/Commissioner Lawrence-Anderson asked what the operating hours are for the program in Brooklyn Park. Ms. Oni explained the team would be comprised of a social worker and a community paramedic. The team will be Monday through Friday from 10:00 a.m. to 6:30 p.m. Councilmember/Commissioner Lawrence-Anderson noted she is worried the City is overcommitting themselves. She stated she is sold on the County’s model, but she is hesitant about the other one. Dr. Edwards stated there is no greater burden on the City to do both projects. Each team is already operating elsewhere and would merely expand their service areas. The programs have different service times. Also, the Brooklyn Park program is expanding to a second team to add even more hours. Councilmember/Commissioner Lawrence-Anderson stated she has concerns about funding the programs once the grants expire. Dr. Edwards stated the funding for both programs relies on grants. Staff would not recommend implementing programs the City could not afford, and they plan to build capacity to support the programs beyond the life of the grants. They won’t know the need or the cost-savings of the programs without piloting them first. Councilmember/Commissioner Kragness stated she looks at the programs as a two-for-one option as they offer resources at different times. It is an opportunity to maximize the use of the grants and determine the best option for the City. He doesn’t anticipate a need for twenty-four-seven service in Brooklyn Center, and the pilot programs will provide more insight into the timing needs of the City. Councilmember/Commissioner Butler noted her appreciation for the two-pronged approach. Brooklyn Center is taking the opportunity to try something that may work better for their community by combining programs from different cities. Councilmember/Commissioner Jerzak pointed out he had a long discussion with Dr. Edwards 4/22/24 -9- DRAFT about the program previously. He noted all of the calls are still reactive, and he would like there to be more proactive efforts to address mental health and repeat calls. Councilmember/Commissioner Jerzak stated mental health problems are an issue that needs to be addressed, whether or not there is grant funding available to address it. It is concerning to set up a service the community relies upon that doesn’t have a clear funding path, but the programming is needed. Mayor/President Graves noted her excitement for the programs. There is more and more funding being made available at all levels of government. She pointed out the importance of offering the services at the times they are most needed. Mayor/President Graves asked if the County plans to expand their hours. Ms. Oni stated there isn’t a current plan to expand the hours, but it ultimately depends on the needs revealed by the data. Mayor/President Graves explained she appreciates the location tracking opportunity and the data that will show the cost-savings to the City. She noted her appreciation of ongoing meetings and updates, as well as the flexibility of the programs. Mayor/President Graves asked how calls for service that don’t require a mental health worker or a police officer might be handled. It is important to consider the spectrum of response options. She asked if other types of teams have been considered. Candace Hanson, Executive Director of Canopy Roots, agreed there are a number of calls that could use a different type of responder. She explained some programs are being rolled out throughout the Country with community responders. The community responders tend to have a background in mental health work and are regularly trained in de-escalation and other first responder skills. She stated she is working on a proposal for a response program that isn’t a mental health professional but also isn’t a police officer. Mr. Martin stated the 911 system is only as good as the information provided by the caller. Dispatchers have to be consistent across the board with the number of calls and various teams they dispatch. Part of the service they offer the County is listening. Some calls are transferred to more appropriate parties such as COPE before sending out a responder. Ms. Oni added they are trying to create layers of response. Most people know to call 911 in case of emergency, and they are trying to put people in that space. They are also trying to do outreach, promote prevention strategies, and build relationships throughout the community. Mayor/President Graves noted she is aware of some outreach programs, due in part to her full- time career. Councilmember/Commissioner Kragness thanked Staff for obtaining the grants for the programs. Mayor/President Graves noted her agreement with Councilmember/Commissioner Kragness and thanked the Implementation Committee for their input as well. 4/22/24 -10- DRAFT It was the consensus of the City Council/EDA to move forward with the proposed pilot programs. UPCOMING ITEMS • Memorial Policy • Special Assessment Policy/Franchise Fees (referred to Financial Commission) • Emerald Ash Borer Policy Review (referred to Park & Rec Commission November) • Opioid Settlement • ARPA Funds • Grants: Revenues & Expenses • Purchasing Policy • Revisit Resolution 2021-73 • Planning Application Process • Fences • Off-Street Parking of Commercial Vehicles ADJOURNMENT Councilmember/Commissioner Jerzak moved and Councilmember/Commissioner Kragness seconded adjournment of the City Council/Economic Development Authority Work Session at 8:52 p.m. Motion passed unanimously.