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HomeMy WebLinkAbout2012 10-08 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 OCTOBER 8, 2012 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 Carol Kleven, Kay Lasman, Lin Myszkowski, and Dan Ryan. Also present were City Manager Curt Boganey, 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 City Manager Curt Boganey suggested staff provide a summary of EDA Item 4a, Resolution Approving First Amendment to Purchase Agreement and First Amendment to Development Agreement (Shingle Creek Crossing), in particular the time extensions being requested by Gatlin Development. Director of Business and Development Gary Eitel stated the request is to extend the time frame for minimum improvements as identified in the TIF agreement. He explained when the TIF agreement was put together, the 750,000 sq. ft. Brookdale Center existed. The developer said they would demolish the site and asked for $2.4 million up front in addition to a pay-as-you-go note. The City wanted securities to assure the project proceeded as planned and a threshold to assure the City received more than just a Walmart store. The agreement provided for a December 31,2012, completion date for minimum improvements (all infrastructure leading up to the Walmart site, the internal street system, the storm water ponding, and partial day lighting of Shingle Creek). It also required the reskinning of the Food Court building. Mr. Eitel stated the developer has identified tenants for the Walmart (eastern) side of the Food Court but the challenge is finding tenants for the Sears (western) side of the Food Court. That has caused the delay in reskinning the Food Court building. Mayor Willson noted the developer wants to include signage at the time of reskinning. Mr. Eitel stated the Food Court exterior will have a Barnes &Noble concept and each tenant will have an entry. 10/08/12 -1- Mr. Eitel explained the City had a $1.4 million note that was secured by the five acres of land along the Creek. The thought process was if the building is demolished and the developer leaves the project, the City can do what it wants with that five acres. He advised the demolition was completed so the $1.4 million note will be canceled. In lieu of that security, the City will have tax increment from the project. In addition, there is a pay-as-you-go note so if the developer defaults, the City will stop paying them and if the default continues, the City can cancel the pay- as-you-go note. Councilmember Ryan stated he understood Phase 2 was contingent upon a certain amount of buildout/value over a certain period of time; however, the amendment puts some of the Food Court into Phase 2. Mr. Eitel explained it has always been 239,000 sq. ft. but an error occurred when the Food Court legal description was not included. If they build less than 239,000 sq. ft., that lower square footage portion will have to be paid back from the $1 million note. Mr. Eitel explained there will be 15 building sites in excess of 239,000 sq. ft. because the uses are coming in larger than estimated. He noted the EDA still owns the Ground Round site and the purchase agreement allows five years to submit a plan with a minimum of 4,000 dine-in restaurant or a minimum 8,000 sq. ft. retail building. After the fifth year, the developer has one year to build the site and if not built, the revertor gives the land back to the EDA. Mr. Eitel advised the developer has satisfied the financial commitments on this site. Councilmember Ryan stated he appreciates this clarification and assumes there are incentives for the developer to complete the other building pads. Mr. Eitel stated this project is so large in how much it cost to acquire and demolish that business subsidy reports were not required. Mayor Willson noted that overall, the perspective for site redevelopment is good, new businesses are coming in, and Walmart is doing exceptionally well so he is willing to wait for the five years and see what is developed on the Ground Round site. Mr. Boganey explained the City does not want to place so much financial pressure that the developer feels he has no choice but to accept any tenant that comes in. It will be to the City's benefit to allow enough time to find the quality use the City wants, which will also serve the developer's interests. Councilmember Lasman stated she noticed people's perception has gone from an expectation that nothing can happen in this area to realizing it is getting better. Now, with the synergy created by new businesses, investors are looking at Brooklyn Center in a positive way. Councilmember Lasman stated she knows residents are more excited about Brooklyn Center and it is being included in positive press coverage. Councilmember Myszkowski agreed and stated it was interesting to receive a comprehensive staff report on Shingle Creek Crossing. She complimented staff for its work on this project and noted the public now trusts what the City is doing with this redevelopment. She stated she is excited about the anchor and agrees this project is bringing new people into Brooklyn Center. Mr. Boganey stated he is excited about conducting a resident survey and would be surprised if citizens are negative. He found there is a sense in the community of rising expectations. 10/08/12 -2- Councilmember Ryan stated while going door-to-door, he has received resident comments of frustration about Humboldt Square. However, one thing that needs to be emphasized is that because Walmart was constructed first, it has drawn other retail and restaurants due to the traffic it generates. In addition, Walmart generates income to provide momentum and cash flow the project, a great building foundation going forward. Councilmember Kleven stated she has also been going door-to-door and residents have expressed their excitement about the project. Councilmember Lasman requested discussion on Work Session Item 1, Direction Regarding Offer to Purchase 5331 Morgan Avenue North (Tax Forfeited.Property), in particular the request by Mr. Sikora to use the garage for storage. She asked if there is a stipulation on the use of the garage should Mr. Sikora default getting cash for the property, Mr. Boganey clarified there is no agreement with Mr. Sikora at this time. Mr. Boganey stated he does not support the request to lease property through the winter because there is not enough to be gained by either party. Councilmember Kleven noted after the house is demolished at the City's expense, the lot should be worth more than $15,000. Mr. Boganey stated staff will respond to that question during the Work Session. Councilmember Ryan requested discussion on Consent Agenda Item 6c, Resolution Rejecting Bids, Improvement Project No. 2012-10, Earle Brown and Opportunity Area Street Lighting Replacement, in particular the rejection of the bid for replacement of lighting poles. He asked whether the City Council would consider placing this item on the regular agenda so comment can be offered on the excellent job of the City Engineering Department relating to due diligence. Councilmember Lasman pointed out that the recommendation to reject bids is a reason in itself, and includes rationale for staff's recommendation. She noted if this item remains on the Consent Agenda, the names of the companies whose bids are being rejected would not be publicly stated, which may be construed to be in a negative light. Councilmember Ryan concurred and suggested mention of the City Engineering Department's due diligence be held until the matter is back on the agenda for award of bid. MISCELLANEOUS Councilmember Kleven asked where the home adjacent to Northport Elementary School was moved. Mr. Eitel indicated it was moved to the community of Ogilvie. Councilmember Lasman questioned the location of the baseball diamond that was being converted for other uses. Mr. Boganey described its location in Central Park. Councilmember Lasman noted the canvass meeting on November 13 is scheduled at 5:45 p.m. 10/08/12 -3- but typically, this meeting has started at 5:00 p.m. Following a brief discussion, it was the consensus of the City Council to leave the canvas meeting as scheduled. Councilmember Myszkowski stated she found the Centennial Park garden fence to be incredibly attractive in its construction of natural wood and that it fit nicely with the landscape. She asked when the community gardens will be tilled and if the garden property will be ready in the spring. Mr. Eitel indicated the gardens are leased to October 31, 2012. Mr. Boganey confirmed the gardens will be ready in the spring. DISCUSSION OF WORK SESSION AGENDA ITEMS AS TIME PERMITS DIRECTION REGARDING OFFER TO PURCHASE 5331 MORGAN AVENUE N. (TAX FORFEITED PROPERTY) Mr. Eitel introduced the item, explaining this is a tax-forfeited property with a blighted house structure. He presented the offer of Jacie and Maciej Sikora to acquire this lot for $15,000 to accommodate a future house addition. The existing home on the tax-forfeited property is scheduled to be demolished within the nekt six weeks. Mr. Eitel explained the property has an appraisal of$17,000 (with the house demolished); however, Mr. Sikora has indicated the value of his property would not increase by that amount if this lot were combined with his lot. Mr. Eitel noted if this property is not used for an addition, the potential remains for Mr. Sikora to divide and sell the lots. He stated the City owns other properties that would be great for infill development but there is not a market for building new houses at this time. He advised there are several other foreclosed properties in this area. If the purchase agreement is approved, this property would then be maintained by Mr. Sikora. Mr. Eitel explained the City gave permission for Mr. Sikora to park in the driveway so it would appear to be occupied. Councilmember Ryan noted there are still rental properties going into foreclosure in Brooklyn Center. He stated the offer may be worth considering except for allowing the use of the garage over the winter months. Mr. Eitel asked if the EDA would like to entertain the $15,000 offer by the Sikoras and if so, should the EDA retain the building right and require this lot to be combined with the Sikora's current property as one tax parcel. Mayor Willson pointed out the City has already invested $34,000 into this property when including the demolition. He noted the offer is $15,000 for the property and if approved, the property could then be re-subdivided and one lot sold for $20,000. That issue, coupled with the tax dollars already invested, lends him to not support the purchase offer. Councilmember Kleven agreed that $15,000 is a low offer and asked if the Sikoras would be willing to offer a higher amount. 10/08/12 -4- Mayor Willson stated he is also concerned with precedence set and potential that future purchase agreements will also be at one-half the value invested in tax dollars. He asked how the sale of this property would benefit the City. Mr. Eitel advised the City's costs are in the $37,000 range with acquisition, demolition, and other costs. He raised the option of negotiating for a $15,000 payment now and $20,000 later ($35,000 total). Discussion on this item continued and reached conclusion at the October 8, 2012, Work Session. ADJOURNMENT Councilmember Lasman moved and Councilmember Myszkowski seconded to close the Study Session at 6:51 p.m. Motion passed unanimously. 10/08/12 -5- 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/Work Session of the City Council of the City of Brooklyn Center held on October 8, 2012. 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 October 22, 2012, Regular Session. A itfi// - City Clerk Mayor 10/08/12 -6-