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HomeMy WebLinkAbout1998 08-31 CCM Special Work Session i i MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL WORK SESSION AUGUST 31, 1998 CITY HALL CONFERENCE ROOM B CALL TO ORDER The Brooklyn Center City Council met for a Work Session at Brooklyn Center City Hall and was called to order by Mayor Myrna Kragness at 7:04 p.m. ROLL CALL Mayor Myrna Kragness, Councilmembers Kathleen Carmody, Debra Hilstrom, and Kay Lasman. Councilmember Peppe was absent and excused. Also present: City Manager Michael J. McCauley, Assistant City Manager /HR Director Jane Chambers, Public Works Director Diane Spector, Community Development Director Brad Hoffman, Financial Consultant Michael Mulrooney, Bob Thistle, Chuck Lenthe, and Recording Secretary Maria Carlson. DISCUSSION OF DEVELOPMENT ISSUES City Manager Mike McCauley explained the Brookdale Center proposal was still underway and Mr. Schlesinger is targeting the same as outlined previously, however, without a new Dayton's store. Mr. McCauley informed the Council he had met with Mr. Schlesinger to discuss financing, and then shared some breakdowns regarding the redevelopment budget. He said Mr. Schlesinger initially proposed a project costing approximately $122.6 million and is now indicating a total redevelopment budget of $92,469,528. In Mr. Schlesinger's initial request, he was requesting $15 million in TIF, and is now requesting $7 million which would bring the net redevelopment costs to $85,469,528. Mr. McCauley suggested a range for negotiating with a pay -as- you -go plan. Mayor Kragness asked for more details with pay -as- you -go financing. Mr. McCauley explained if the City were to enter into an agreement to pay Mr. Schlesinger, the money would come from net tax income, as opposed to bonds. Councilmember Hilstrom believed the pay -as- you -go financing was better for this project. 08/31/98 -1- Councilmember Hilstrom raised the question of how many years the pay -as- you -go financing would be and if it would start now. Mr. McCauley replied approximately five years and that the Council would need to target the amount, and then set the date. Mr. Mulrooney discussed he had reviewed the proposal from Talisman and wanted to review with the Council the latest proposal. The latest project proposed by Talisman includes a redevelopment budget between $60 million to $65 million plus the initial acquisition price. The redevelopment costs would result in the following improvements to Brookdale: ► Renovation by Dayton's of its existing facility. ► Total renovations to the existing mall areas and new mall areas totaling 184,776 SF. ► Construction of a 20 screen theater which will occupy 89,000 SF of Brookdale area. ► Construction of a 20,000 SF, 450 seat West Court Amphitheater area. The budget previously proposed totaled $122,666,077 and with this new project proposal the total is $92,469,528, with a variance of ($30,196,549). The new project proposal promotes a significant reduction in expenditures, and the reduction is heavily pronounced in the hard costs associated with the project. The reduction in project costs is impacted by a reduction in the overall size of the project. The previous proposal had a final project size of 1,288,395 SF. The new proposal states the project will be 1,200,813 SF. This is a reduction of 87,582 SF, and the final cost would be $77 per foot or a reduction of $18 per foot. Mr. Mulrooney explained the cash on cash return breakdown and that the cash flow return with cash on cash would be at 22.34 percent, and that this is reasonable for most real estate projects. Without the City's participation, Talisman would be required to invest additional equity in the project assuming the project costs are held constant and the bank loan is maximized for the project. Mr. Mulrooney stated that it is important to note that the information previously supplied by Talisman annualized the cash flow from Brookdale as the mall is currently configured at $1,853,052, and if Talisman undertakes the revitalization effort, the new proposal projects the net cash flow to be $1,675,765. Further explanation is needed by Talisman to identify why a substantial investment is being made which would result in a net decrease in cash flow. Mayor Kragness stated she would like to see the financing pay as you go, but that some assurance is needed on the development that would occur. Mr. McCauley discussed that the language could be worked out and that there needs to be a site plan in the near future. He suggested a few dates be set for deadlines to help the project process. Councilmember Hilstrom raised the question about Target being in Mr. Schlesinger's plan. She did not want to bankrupt other stores at a later date if stores were to open later with Talisman's development. 08/31/98 -2- Mr. McCauley suggested he would recommend negotiation with Mr. Schlesinger and then make a report to the Council. The Council recessed at 8:30 p.m., and reconvened at 8:35 p.m. MISCELLANEOUS Mr. McCauley requested discussion of the miscellaneous items now and then move on to the discussion of the draft Capital Improvement Plan (CIP). Random Acts of Kindness letters will be going out soon and Mr. McCauley requested Council help with recruiting people for recognition. There has been an oversight in the Code Enforcement process with regard to the compliance letter and this will be taken care of by September 4, 1998. DISCUSSION OF DRAFT CAPITAL IMPROVEMENT PLAN Mr. McCauley discussed this draft CIP for streets is at a funding level of five years and that the plan is now a 25 year plan instead of a 20 year plan for completion of all streets. He suggested that Ms. Spector discuss the street improvements, parks, and miscellaneous projects. The utilities section will be discussed with the Rate Study at an Enterprise Work Session which will be set at a later date. Ms. Spector stated that the City spent time looking at different neighborhoods to determine the best way to fund these improvements and that City staff had designed this plan, which she believes makes the CIP have a better outcome. In this five year plan it is proposed to complete two State Aid Street projects, the mill and overlay of Earle Brown Drive from John Martin Drive north to the new Earle Brown Heritage Center parking lot; and reconstruct 73rd Avenue from Humboldt to Camden. T A question was raised as to where this money comes from. Ms. Spector responded this project would be eligible for State Aid Funding, and that streets that were included in this draft plan are available for State Aid Funding. Fifty percent of State Aid is based on population and the other 50 percent is on need of what has not been constructed in the last 20 years. In the next five years, neighborhoods with substantial drainage improvements would be dealt with and it is proposed to then move to the Garden City area and have this completed in three years. Councilmember Lasman raised the question about sidewalks being repaired. Ms. Spector responded that sidewalks will be worked on south of 694 next year, and that the final five year plan would include finishing the Southeast neighborhood and the Tangle town area. 08/31/98 -3- Under the Parks, Public Facilities, and Capital Equipment section, the playgrounds are as planned with no further changes. There is an issue that was highlighted that is not in the plan. The Lions Club is looking to donate the cost of a shelter at Lions Park. This would put some pressure on the Golf Course and CARS Director Jim Glasoe is looking into this issue and will address the Council before accepting any donation. Last year all improvements were identified and a seven/eight year plan was developed. Over the past year there have been more accurate costs and these amounts are different than was planned for 1999. The lighting cost is one that is highlighted in this section due to cheaper costs being used. Ms. Spector noted these lights are for public safety. Councilmember Lasman raised a question about the Central Park parking lot and if it is in this five year plan. Mr. McCauley responded that depending on the plan for this area, he would like to wait and do all reconstruction at one time. Councilmember Lasman suggested having the parking lot maintained until the construction does take place. The wading pool at the Community Center was discussed and Mr. McCauley suggested to wait until the year 2000 to do anything major with this area. ADJOURNMENT Councilmember Carmody made a motion to adjourn the meeting at 10:10 p.m., seconded by Councilmember Lasman. Motion passed unanimously. j n,aMV� City Clerk O Mayor 08/31/98 -4-