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HomeMy WebLinkAbout2004 03-01 CCM Work Session MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA CITY COUNCIL WORK SESSION MARCH 1, 2004 CITY HALL - COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Work Session and was called to order by Mayor Kragness at 6:00 p.m. ROLL CALL Mayor Myrna Kragness, Councilmembers Kathleen Carmody, Kay Lasman, Diane Niesen, and Bob Peppe. Also present: City Manager Michael McCauley, Assistant City Manager/Director of Operations Curt Boganey, Community Development Director Brad Hoffman, Fiscal and Support Services Director Dan Jordet, and City Clerk Sharon Knutson. TAX INCREMENT FINANCING City Manager Michael McCauley displayed a PowerPoint presentation to provide an overview of Tax Increment Financing (TIF) and its uses and general requirements and the TIF districts within Brooklyn Center. He explained that the purpose of the meeting was for the Council to review TIF and TIF districts, to discuss a broad picture of potential projects and identify any other potential projects, to develop a focus and direction for economic development in TIF District #3, and to provide staff with a more specific range of potential projects to be considered so that funding options and ballpark cost scenarios can be compiled for review at the April 12 Council Work Session. Mr. McCauley outlined what staff has been working on, including accounting for TIF and projecting budget scenarios, working with bond counsel to review plans, budgets, and potential options for projects, and working with Dan Vang in the Northbrook area and potential Little Asia site. He said Planning and Zoning Specialist Ron Warren is reviewing uses in the Opportunity Site and working on developing a Central Business District zone. Mr. McCauley explained what TIF does, in that it uses increased taxes from redevelopment to fund activities necessary to facilitate that redevelopment. He noted that Regal Theaters, Holiday Commissary, and the Cub Foods development were not TIF projects, however, they are in TIF districts and the increment is captured in the TIF district. He reviewed the four TIF districts in Brooklyn Center and discussed the projects completed within each of the districts as follows: 03/01/04 -1- TIF #1 ■ Housing along Lilac Drive TIF #2 ■ Redevelop Earle Brown Heritage Center and surrounding area and create housing Mr. McCauley noted that laws have changed since the projects in TIF District #2 were completed, and some of the work that was done would not be allowed under the new laws. He discussed the potential hotel development and the use of TIF to assist, whether it is generated from TIF #2 or TIF #3 as part of the 25% out of district allowance. There was discussion about making the connection from the hotel to the Earle Brown Heritage Center and that portion would not be eligible for TIF. TIF # 3 • Country Inn & Suites utility line relocation • Sunlite Warehouse soil correction • Global Showroom warehouse soil correction • 69th and Brooklyn Boulevard • Brookdale development agreement with Talisman; pay as you go note • TH 252 removal of motel, apartments, replaced with housing development • Joslyn Phase III (outside TIF District #3) Councilmember Niesen inquired if the number of districts in Brooklyn Center is three or four, since TIF #1 merged with TIF #2. Community Development Director Brad Hoffman explained there are four, but no activities are planned in TIF #1, however it continues to capture increment until 2006 when it would be closed. TIF #4 ■ Joslyn soils district; Mr. McCauley noted that $1 Million from TIF #3 was used in Phase III. There was discussion regarding the budget for TIF districts and how it is established. Mr. McCauley explained that a public hearing is held to establish or amend TIF districts, including compiling a spending plan which is based on how much increment the development will capture. Mr. Hoffman explained that TIF #3 is a very large district, the length is longer, and it was created to address the large redevelopment needs of the future, which is now. He said there are some areas in TIF #3 that don't have a qualifying improvement/activity and those areas will drop from the district. He explained that 25% can be used outside of the district and it does not have to be in a TIF district, but TIF #3 would not receive any increment from that 25 %. Mr. McCauley discussed some of the basic issues with TIF #3, the first of which is the current deadline for qualified expenditures in early 2005; however, the City is seeking special legislation for a three -year extension. He also discussed development requirements, whether to wait for a development or proceed to clear a site for redevelopment without a development plan in hand. 03/01/04 -2- I There was discussion regarding developers who want to develop without using TIF and its impacts. Mr. McCauley explained that if a developer builds a project in a TIF district and does not use TIF funds, the increment is still captured on the improvement. There was discussion regarding acquiring properties for redevelopment and removing them from the tax rolls and its effect on property taxes. Mr. McCauley reviewed the uses of tax increment in TIF #3, which include acquisition of property, demolition of structures, soil corrections, utility work or construction, road construction, sidewalks, parking facilities, and administration. Mr. McCauley then reviewed the prohibited uses of tax increment in TIF 43, which include government buildings; primarily aesthetic or decorative construction; common areas used as a public park, social, recreational, or conference facilities (doesn't apply to privately owned conference); and property acquisitions in excess of 25% of acreage in the district without a recourse development agreement. He said some streetscape can be done using TIF, however, you cannot do more aesthetic improvements than 100% more than the cost of usual materials or designs. Mr. McCauley reviewed a list of potential projects in the TIF districts as follows: ■ Acquisition and demolition of Northbrook r ■ Acquisition of properties across from Northbrook ■ Acquisition of Brookdale Ford ■ NW quadrant of 69th and Brooklyn Boulevard ■ Additional improvements at Brookdale ■ Improvement of Xerxes from Hwy. 100 to Summerchase ■ St. Alphonsus housing Mr. McCauley noted that another potential project could be the acquisition and demolition of Summerchase Apartments. He said the legal opinion is that if we condemn the property, then the tax credits will go away. Mr. McCauley provided rough acquisition points for the potential projects within TIF #3, as well as Brookdale Square and the K -Mart site, which are outside the district. He said the current budget for TIF #3 is $31,900,000, and discussed the rough increment ranges, including cash available with Brookdale and without. He explained the rough gross increments are based on assumptions that there will be no change in valuation, no change in class rates, and no change in tax rates below certification year. He reviewed the situation with TIF #2 in which the class rate dropped from 4% to 2% creating a deficit in TIF #2. There was discussion regarding the maximum amount that can be spent in TIF #3 and whether or not any of the money should be reserved. Mr. McCauley outlined the Opportunity Site and reviewed the illustrative plans drawn by Calthorpe Associates. He discussed a potential amendment of the Comprehensive Plan to allow housing. He explained that certain definitions for permissible types of housing could be included, such as size requirements, parking requirements (i.e., underground), market -rate with some low- to moderate - income scattered housing, along with zoning regulations. 03/01/04 -3- He aased out a more generic overview p g iew of two areas prepared by Calthorpe. He explained the broad plan focuses more on types of uses in larger areas without breaking each area down into small sections. There was discussion regarding the Town Center concept, the importance of creating a synergy between the Brookdale area and the area north of Bass Lake Road and east along Shingle Creek Parkway, avoiding creating a disjointed type of development such as it is now, and the percent of affordable housing necessary to comply with livable communities requirements. Councilmember Carmody noted that she is not in favor of acquiring and demolishing Summerchase if it means that low- income housing will need to be replaced into the area east of Shingle Creek Parkway, which is in the Brooklyn Center School District. There was Council consensus to proceed with the Town Center and Retail Center concept in the Opportunity Site. Council discussed the potential projects, noting the following comments: The following projects are all located within the Opportunity Site and efforts should be concentrated on these areas without a development plan: • Acquisition and demolition of Northbrook • Acquisition of properties across from Northbrook • Acquisition of Brookdale Ford • Additional improvements at Brookdale • Improvement of Xerxes from Hwy. 100 to Summerchase The following projects can be put on hold, unless a developer approaches the City with a plan: • NW quadrant of 69th and Brooklyn Boulevard • 70th and Brooklyn Boulevard acquisition of houses • St. Alphonsus housing Council discussed acquisition of Summerchase and agreed to include it in the list of potential projects to concentrate efforts. Councilmember Niesen raised the issue of daylighting Shingle Creek through the Brookdale parking lot, including parking lot improvements. Mr. McCauley discussed that the concept would need to be compatible with the owner of Brookdale, as it would remove the necessary parking requirements for Brookdale and an alternative plan for replacement parking would need to be designed. It was Council consensus that for the April 12th Work Session the project area for staff to develop rough fiscal scenarios regarding capacities to be considered for prioritization, along with developing a range of funding options, be the corridor from Xerxes Avenue east along Bass Lake Road to Northbrook, including Summerchase. There was a brief discussion regarding the option of closing a TIF district and creating a new one. 03/01/04 -4- Mr. McCauley explained creating a new TIF district would be an expensive process and the City would need to identify findings and qualified activities /improvements. ADJOURNMENT A motion by Councilmember Lasman, seconded by Councilmember Carmody to adjourn the Work Session at 8:31 p.m. passed unanimously. 4 "A� A-W,� ��I City Clerk Mayor 4 I i I i 03/01/04 -5-