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Home My WebLink About2009 07-27 CCM Work Session 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 JULY 27, 2009 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 Tim Willson at 7:49 p.m. ROLL CALL Mayor/President Tim Willson and Councilmembers/Commissioners Kay Lasman, Dan Ryan, and Mark Yelich. Councilmember/Commissioner Tim Roche was absent and excused. Also present were City Manager Curt Boganey, Public Works Director/City Engineer Steve Lillehaug, Director of Business Development Gary Eitel, Assistant City Manager/Director of Building Community Standards Vickie Schleuning, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. BASS LAKE ROAD REGIONAL TRAIL STREETSCAPE PROJECT UPDATE, IMPROVEMENT PROJECT NO. 2009-18, CONTRACT 2009-I The discussion continued on the Bass Lake Road project. With regard to the access point to the Kohl's parking lot, Public Works Director/City Engineer Lillehaug explained that some accesses will be modified but removing access points was not part of the project. Councilmember/Commissioner Yelich suggested the configuration of the access point be reviewed to assure safety, perhaps being configured similar to the access across the street. It was the majority consensus of the City Council to support the project and alternate elements; however, some concern was expressed with regard to funding the entire project. Mr. Boganey advised it is expected that the bulk, if not all, of the City's share of this project will come from the EDA bonds sold a few years ago specifically for this purpose. If those bonds are not used by 2011 the funds will not be available for another use. Thus, it would be more difficult to do the alternate elements later since a new source of funding would be needed. Mr. Lillehaug advised of staff's work with Hennepin County to obtain funding. It is expected staff will know shortly about that level of participation and the Council will be kept up to date. City Manager Boganey commended Public Works Director/City Engineer Lillehaug for his efforts and creativity on this project. EBHC LINK AND LEASE AGREEMENT REQUEST OF OLIVER COMPANIES Seth Oliver, Oliver Companies, reviewed the history of their hotel project, loss of TIF since the district expired, use of tax abatement, and issues related to the spa and link. He presented 07/27/09 -1- information about the declining net operating income forecast for the entire hotel industry and that as of today, the hotel is operating at net loss, as expected for this year and most of next year. Mr. Oliver explained that because the original timelines were delayed, they did not open until April 2009, resulting in a default in the development agreement that they are trying to resolve. Mr. Oliver stated they were going to build a day spa catering towards wedding parties; however, when the economy went down that type of business went down as well. He noted the connection link is pivotal to make the spa work. They had expected the link would be designed in September or October and under construction to open early in 2009. That link was not constructed. Mr. Oliver reviewed that on February 9, 2009, Oliver Companies had asked for deferments to find a way to build the link and lease space at a later date since they need to use other financing vehicles. The City has brought up the option to swap vacant Parcel 2 in exchange for the City building the connection link and in concept, Oliver Companies agrees to that option. Mr. Oliver reviewed agreements needed to give the hotel the right to access the connection link, perhaps with a license agreement instead of a perpetual easement lease agreement. In addition, discussion is needed on a second license agreement from the developer to the City or future owner of Parcel2 to address shared access. Mr. Boganey stated he met with Mr. Oliver last week and some of the details presented are common points reached on Thursday. They had also discussed the security for the lease payment and staff will provide language on that point. Mr. Boganey stated staff and Oliver Companies are very close to working out the final details as Mr. Oliver has indicated. With regard to the security component, Mr. Oliver stated they are internally discussing the City's desire to raise funds to build the link and whether there is ability for the hotel development group to present an option to the City to discount the rent in exchange for an upfront payment. With that option, the City has raised funds so the need for security is less important if the lease payments are lower. It was noted this agreement will be presented for the Council's consideration as soon as negotiations are concluded. Mr. Oliver explained why Oliver Companies believed Brooklyn Center was geographically the perfect location far their hotel. He assured the Council that Oliver Companies wants to work with the City to bring this business, they have invested a lot into this property, and it is their largest single hotel. Mr. Oliver stated their desire to foster a cordial and positive relationship with the City, noting Oliver Companies are involved in sectors beyond hospitality including office, retail, and housing. Discussion ensued regarding the benefit of working with the Visitor's Bureau and Earle Brown Heritage Center to book overnight conventions with multi-night stays. Mayor/President Willson stated he has great faith in City staff to complete negotiations. He invited Mr. Oliver to return when the agreement is presented for the Council's consideration. The Council agreed that the long-term goal desired by the Oliver Companies and the City is the same, a successful hotel and relationship with the Earle Brown Heritage Center. Mr. Boganey 07/27/09 -2- stated that while there may be some "growing pains" the mission of the EDA and hotel are completely compatible. He stated staff is committed to work with Oliver Companies to refine its working relationship to maximize value to the customers and residents. ADJOURNMENT Councilmember/Commissioner Lasman moved and Councilmember/Commissioner Ryan seconded adjournment of the City Council/Economic Development Authority Work Session at 8:31 p.m. Motion passed unanimously. i 07/27/09 -3- STATE OF MINNESOTA) COLTNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: L That attached hereto is a full, true, and complete transcript of the minutes of a Work Session of the City Council of the City of Brooklyn Center held on July 27, 2009. 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 City Council adopted said minutes at its August 10, 2009, Regular Session. �LU/� �'t ��.1� L-Co��l/��..�.r� City Clerk Mayor 07/27/09 -4-