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HomeMy WebLinkAbout2010 06-28 CCM Study 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 STUDY SESSION JUNE 28, 2010 CITY HALL — COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Study Session called to order by Mayor Tim Willson at 6:00 p.m. ROLL CALL Mayor Tim Willson and Councilmembers Dan Ryan and Mark Yelich. Absent and excused at roll call were Councilmembers Kay Lasman and Tim Roche. Also present were City Manager Curt Boganey, Director of Fiscal and Support Services Dan Jordet, Public Works Director /City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, and Carla Wirth, Timesaver Off Site Secretarial, Inc. CITY COUNCIL DISCUSSION OF AGENDA ITEMS AND QUESTIONS Councilmember Ryan requested discussion on consent agenda item 6d, Change Order No. 2 for Project No. 2009 -21, 2009 Capital Maintenance Building Plan, specifically that unit prices within change orders most often cost more than if included in the original bid. City Manager Curt Boganey advised that most of the work included in the plan was a result of a consulting engineer's analysis. er Councilmemb Yelich requested discussion on item lOg, Resolution Approving a Fourth Amendment to a Development Agreement, and requested a more detailed explanation. Mr. Boganey reviewed the terms of the development agreement. He explained that the City has a binding agreement with a developer for Phase II and unless the City changes that development agreement, they retain that right to the property. The City cannot remove that right short of what is being proposed this evening. Councilmember Yelich noted that as a result of this amendment, the EDA gets control of the Phase II property and becomes responsible to build the link structure, with the hotel sharing in 50 percent of link maintenance costs into perpetuity. The hotel also agrees to reimburse the City $72,000 for the lease lost in the D -Barn for 10 years. Mr. Boganey concurred and noted it is guaranteed by the tax abatement. With regard to the tax obligation of $289,000, Mr. Boganey noted that is only the City's share of the taxes. He explained that the value of the hotel at the time the assessment was during a depressed market. The value on the hotel is $7.3 million, which is low for a hotel of that size, but when the market improves the abatements will also improve. 06/28/10 -1- Councilmember Yelich questioned the hotel's incentive to honor the agreement since the abatement does not quite offset the obligation estimated at $20,000 for annual link maintenance costs and $73,000 for the lease. Mr. Boganey noted the contract can be enforced through legal recourse. Mayor Willson referenced the wording in the document and noted that items 15 and 16 address that issue. Mr. Boganey stated that is correct and in addition they would be responsible to a the City's legal costs. p Y Y g Mr. Boganey advised that the Hurlbut -Zeppa Charitable Trust, has agreed to subordinate their interest to these changes. He noted that Hurlbut -Zeppa Charitable Trust made a substantial loan to the developer and the tax abatement is to be the source of repayment. Mr. Boganey explained the lease revision relates to the proper square footage and clarifies the area available for use. With regard to funding construction of the link, Mr. Boganey indicated staff is already identifying financing mechanisms which will go before the EDA in the near future. If resources can be identified, it is possible to start construction in 2010 and complete construction in 2011. Mayor Willson asked staff to present this information to the Financial Commission so they can determine how it can be budgeted. Councilmember Ryan stated he has been asked why the City is negotiating a fourth amendment to the agreement with Oliver Companies since they are currently in default and failed to complete the minimum requirement to build the link. However, the City would get the rights for Phase II, retain ten years of the tax abatement for the site, and renegotiate a new lease on the D- Bam. Mr. Boganey noted that under the previous agreement, the City would pay 95 percent of the link's maintenance costs and under the new agreement the City would pay 50 percent of the links maintenance costs. In addition, the City ould receive an upfront payment of $72,000 due Y P pY to what happened with the D -Barn lease. With regard to construction of the link, Mr. Boganey explained that under the current development agreement, the developer has the obligation to build the link. As long as the City is holding them in default, the City cannot build the link without relieving them of their obligation. The Council agreed the link is a good amenity for the Earle Brown Heritage Center and should be built sooner rather than later. Mr. Boganey advised that Prudential, the banker of the hotel, has indicated its intent to sign the subordination agreement. The developer has been in discussion with Prudential's lawyer who assured the developer it would subordinate its interest to these agreements. Councilmember Yelich questioned the impact should the hotel transfer ownership. Mr. Boganey advised some elements of the agreement go with the hotel, like the license obligations. Director of Business and Development Gary Eitel stated the hotel is responsible for the lease during the term and if transferred from one party to another, the rights against the tax abatement remain. Mr. Boganey advised that the City would have to agree to any new licensee and selling to a new owner does not impact the City's lease or the tax abatement. 06/28/10 -2- Mr. Boganey recommended the Council remove Consent Agenda Item 6g, Resolution Ordering the Abatement of Certain Nuisance Conditions Existing at 5337 Lyndale Avenue N., Brooklyn Center, Minnesota, from the agenda. He advised that the inspector went to the property and found all garbage has been removed from the premises so there is no longer a need for an abatement. The Council agreed with this agenda revision. MISCELLANEOUS Mayor Willson asked for an update on the Police Chief search. Mr. Boganey advised there are two finalists, one internal candidate and one outside candidate. He reviewed the anticipated schedule to complete thorough background checks, which are currently being conducted, and complete interviews. He indicated the Council may receive a final determination the third week of July. Councilmember Yelich asked about the timing of the FBI building. Mr. Eitel advised they will break ground in August but the official ceremony may not occur until September. The Council reviewed the ending list for future work sessions. Mayor Willson stated his priority preferences are: 57 and Logan Update, 2011 Brooklyn Center Celebration Update, and Brookdale Mall Update. Councilmember Ryan stated he would also prioritize Strategic Outcome Reports. Mayor Willson asked whether the prosecutor services contract dovetails with the referendum vote. Mr. Boganey explained the City is required to periodically review service contracts. This year the City is to review the prosecutor services contract. The Council decided to not go forward with an RFP and tasked staff to develop a contract to amend/extend the current prosecutor's contract. Councilmember Ryan questioned the status of the old dry cleaning site. Mr. Boganey stated he thinks the site is currently under PCA jurisdiction but will check with the PCA and provide an update on the status of that corner. DISCUSSION OF WORK SESSION AGENDA ITEMS AS TIME PERMITS None. ADJOURNMENT Councilmember Ryan moved and Councilmember Yelich seconded to close the Study Session at 6:45 p.m. Motion passed unanimously. 06/28/10 -3- STATE OF MINNESOTA) COUNTY 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: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Study Session of the City Council of the City of Brooklyn Center held on June 28, 2010. 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 July 12, 2010, Regular Session. h c- City Clerk Mayor 06/28/10 -4-