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HomeMy WebLinkAbout2018 11-26 CCM Work Session11/26/18 -1- 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 NOVEMBER 26, 2018 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 7:35 p.m. ROLL CALL Mayor/President Tim Willson and Councilmembers/Commissioners Marquita Butler, April Graves, and Dan Ryan. Councilmember/Commissioner Kris Lawrence-Anderson was absent and excused. Also present were City Manager Curt Boganey, Deputy City Manager Reggie Edwards, Community Development Director Meg Beekman, and Mary Mullen, TimeSaver Off Site Secretarial, Inc. BROOKLYN BOULEVARD DEVELOPMENT CONCEPT PROPOSAL Community Development Director Meg Beekman reviewed a potential development opportunity at Brooklyn Boulevard and 61st Avenue N. She noted the developer was present at the meeting, as well as Stacie Kvilvang, from Ehlers, Inc. The development concept review pertains to three properties on the northwest corner of 61st Avenue and Brooklyn Boulevard, currently vacant and owned by the Economic Development Authority (EDA). Ms. Beekman stated the properties are in TIF District #6. TIF district was created to facilitate the nearby development of The Sanctuary. She added a concept was submitted for a four-story multi-family development that would be affordable to people within 60-80% area median income. She noted, however, the development is not considered legally binding affordable housing. Mayor/President Willson asked whether housing can be both affordable and market rate. Ms. Beekman stated the current average market rate in Brooklyn Center for multi-family housing is affordable to renters with 40-50% of the area median income. She added rental buildings in Brooklyn Center are generally old, and naturally rent for less, while new developments would have higher rent levels. She added the quality of materials is the same as other new construction projects, but units are slightly smaller and some amenities are not included. 11/26/18 -2- Ms. Beekman stated the rents are anticipated to be in the $2 per square foot range. She added the proposed development would qualify for Tax Increment Financing (TIF) as the studio units meet the Metropolitan Council’s affordability requirement of 60% of the Area Median Income (AMI). Mayor/President Willson stated a studio apartment may be affordable, but it is not a family apartment. Ms. Beekman agreed, adding a studio apartment would be appropriate for an individual. She added the proposed development’s 3-bedroom unitS would be appropriate for a family of four. She stated the affordability criteria adjusts based on family size. Ms. Beekman stated project costs will be evaluated as the review moves forward. She added there is a gap of $2.6 million, including $1.6 million for underground parking. The development project does not need to meet the same infrastructure eligible costs as a redevelopment TIF district as there is a lower threshold for housing TIF districts. Mayor/President Willson stated the TIF district is generally 10 years, which is not enough time to pay back $2.6 million, with estimated taxes at $234,000. Ms. Beekman stated the developer will apply for public subsidy, which will include a review by the EDA’s public finance consultant. She added a housing TIF district can go up to 26 years, which would create more increment. Councilmember/Commissioner Ryan stated, according to the City’s Community Development Director, new multi-family housing construction generally warrants government assistance. Ms. Beekman agreed, adding many factors contribute to the high cost of new multi-family development, including construction costs, land value and demand. Councilmember/Commissioner Ryan stated the developer could try to use as much surface parking as possible, to minimize the cost of structureD parking. He added the City Council visited the Alatus housing development in New Hope that day, and underground parking is the most expensive type of parking. Ms. Beekman agreed, adding parking at that facility is $40,000 per stall. Mayor/President Willson asked what liability the City would have if there is a natural disaster and the building no longer generates funds to pay off the TIF district. Stacie Kvilvang, Ehlers, Inc., Roseville, stated, in answer to Mayor/President Willson’s question, TIF is only generated with a pay as you go note and the City would have no obligation to make payments in the event of natural disaster. She added it is the risk of the developer who guarantees repayment to the bank. The tax increment payment off the tax basis is the City’s only obligation. Ms. Beekman stated, based on this evening’s discussion, there are 3 potential components to an application to proceed with the development. The developer will submit a public subsidy request, which will include a review by the City’s consultant, the City and the Economic 11/26/18 -3- Development Authority (EDA). The developer will present their plans to Planning Commission to confirm that their proposal is in line with the Comprehensive Plan, and then the plans will be presented to the City Council and EDA. Ms. Beekman stated the EDA-owned property sale would move forward with a preliminary development agreement, so the developer would have the property under contract. She added this must be approved by the EDA, and a public hearing is required to finalize the sale of the property. She noted there is the possibility of a Comprehensive Plan amendment, although she is unsure how an amendment request would be handled, as the Metropolitan Council stops taking amendment requests at the end of this year. Ms. Beekman stated the draft 2040 Plan has been submitted to the Metropolitan Council for preliminary review and includes guidelines for multi-family development. She added, however, this proposed development would require an amendment that is more in line with the future Comprehensive Plan. Mayor/President Willson stated the Metropolitan Council will have to consider Comprehensive Plan draft changes up until April 2019. Ms. Beekman stated the three parcels in question are within the Brooklyn Boulevard Reconstruction Area, the City is actively engaged in acquiring single-family properties identified for high-intensity use. She added this area also falls within the Brooklyn Boulevard Overlay District. Mayor/President Willson stated the Overlay District should be reviewed by the Planning Commission so that this type of development is allowed along Brooklyn Boulevard. Patrick Cruikshank, and Jackson Cruikshank, THOR Living, 1256 Penn Avenue, Minneapolis, stated THOR Living is a minority-owned construction design and development firm focused on housing, with a micro-focus on attainable housing. He added this development is market rate housing, but it is also referred to as attainable, or workforce housing. Mayor/President Willson asked whether a wage scale is available for the development’s employees. Mr. Cruikshank stated the property management will be responsible for the wage scale. Mayor/President Willson requested that the wage scale, when it is determined, should be included in the developer agreement when it is negotiated. City Manager Curt Boganey stated certain projects are required to have a subsidy agreement with the City to identify the number of jobs and wage rates. He added, at a recent Work Session, the City Council/EDA had discussed the importance of upgrading the subsidy policy’s wage section. 11/26/18 -4- He added this represents an opportunity to change the minimum wage requirement. He noted qualifying developers would be obligated to meet those standards. Councilmember/Commissioner Ryan asked, regarding density, whether the number of units could be increased to provide a more favorable cost per unit. He asked whether more than 80 units is a possibility. Mr. Cruikshank stated the density is limited by parking. He added it would be difficult to add more surface parking. He noted an underground parking stall is estimated to cost $30,000 to build. Mayor/President Willson stated there would be an opportunity for more underground parking if the building was longer. Mr. Cruikshank stated the proposed surface parking would be lost, which would raise the price of construction. He added the current balance works but they are willing to look at different options. He presented a variety of concept drawings for the City Council/EDA’s review and discussion. Mayor/President Willson asked whether there will be screening on the west edge of the parking area. Mr. Cruikshank agreed to review that issue. Mayor/President Willson stated he appreciates that THOR Living is interested in developing this property, and he thanked the development company for their efforts in helping the City improve and grow this area. Mayor/President Willson stated the development project sounds feasible, there is a need for it, and he would like to see it move forward. Councilmember/Commissioner Ryan stated he believes there would be push-back about a 5- story development. He added there is only so much room for service parking. He noted he is pleased to see this plan, and he would like to see it move forward to become a more specific proposal. Councilmember/Commissioner Ryan stated he is hopeful that Opportunity Zone legislation will create incentives for developers. Councilmember/Commissioner Graves expressed concern that “attainable” housing is still expensive. She asked how the development meets “affordability” standards when only the 1- person studio units fall below the 60% AMI requirement. Mr. Cruikshank stated most units are between 60-80% AMI, which qualifies them for affordable housing. He added 40% of units need to fall under the 60% AMI threshold, and none of the units are above 80% AMI. 11/26/18 -5- Councilmember/Commissioner Graves stated she lives across the street from the proposed development, and watched the Sanctuary being built. She added she realizes how long the process takes. She noted an apartment building on her block has high rents and it is an older building. She expressed her support of more attainable housing, and she is impressed by the work of THOR Living. Councilmember/Commissioner Ryan stated the City Council has discussed this development as “workforce” housing, which identifies the concept and price range. Mr. Cruikshank agreed. Councilmember/Commissioner Butler stated there was discussion about residents of the Sanctuary crossing Brooklyn Boulevard on foot to get to the gas station. She asked whether there are any concerns about pedestrian traffic, and whether the City has plans to do something at this intersection. Ms. Beekman stated a traffic study would be completed as part of the project, which would include access points. She added Public Works Department is aware of the intersection and have commented on the site plan. She noted the planned roadway improvements will create much safer access. Mayor/President Willson stated the City Council/EDA may wish to consider a pedestrian overpass at this location. He added he would not support a stop light at the intersection. He noted Hennepin County or the State of Minnesota may be willing to work with the City on a solution. Councilmember/Commissioner Graves stated she thought there were center medians in the concept plan. Mayor/President Willson stated there are medians in the plan, however, they only get pedestrians halfway across Brooklyn Boulevard. Mr. Boganey stated the creation of pedestrian safe zones is a goal of this project. The majority consensus of the City Council/EDA was to instruct City Staff to move forward with the proposed project and provide the City Council/EDA with detailed plans throughout the process. ADJOURNMENT Councilmember/Commissioner Ryan moved and Councilmember/Commissioner Butler seconded adjournment of the City Council/Economic Development Authority Work Session at 8:30 p.m. Motion passed unanimously. STATE OF MINNESOTA) COUNTY OF HENNEPIN) CITY OF BROOKLYN CENTER) ss. Certification of Minutes 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 Work Session of the City Council of the City of Brooklyn Center held on November 26, 2018. 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 December 3, 2018, Regular Session. 11/26/18 -6-