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HomeMy WebLinkAbout2020 06-22 EDAM06/22/20 -1- MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION JUNE 22, 2020 1. CALL TO ORDER Mayor Elliott called the Economic Development Authority (EDA) meeting to order at 6:14 p.m. City Clerk Suciu requested clarification regarding the meeting. Mayor Elliott stated the Economic Development Authority (EDA) meeting is starting and requested that the City Clerk take the Roll Call. 2. ROLL CALL President Mike Elliott and Commissioners Marquita Butler, April Graves, Kris Lawrence- Anderson, and Dan Ryan. Also present were Executive Director Curt Boganey, Community Development Director Meg Beekman, City Clerk Barb Suciu and City Attorney Troy Gilchrist. Mayor Elliott stated this is regarding a preliminary agreement with C-Alan Homes. Mr. Boganey stated a vote is required to approve the Consent Agenda. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Ryan moved and Commissioner Butler seconded to approve the Agenda and Consent Agenda, and the following items were approved: 3a. APPROVAL OF MINUTES 1. May 11, 2020 EDA Meeting 2. June 8, 2020 EDA Meeting Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2020-08 APPROVING A PRELIMINARY DEVELOPMENT AGREEMENT WITH C-ALAN HOMES LLC City Manager Curt Boganey stated EDA Meeting Agenda Item 4a is related to a proposed Resolution to approve a Preliminary Development Agreement (PDA) with C-Alan Homes. He added the developer came before the EDA about a month ago to discuss preliminary thoughts and plans regarding redevelopment of 06/22/20 -2- two sites on Brooklyn Boulevard. He noted, at that time, the City Council expressed an interest in having a PDA, which is being presented to the City Council this evening. Community Development Director Meg Beekman stated the developers have not yet joined the meeting as the EDA Agenda is usually scheduled for later in the evening. She added she is sending them a text to let them know the item is being discussed, as they were planning on joining the meeting later. Ms. Beekman reviewed a request for a Preliminary Development Agreement (PDA) with the EDA from C-Alan Homes, for 8 parcels referred to collectively as 2 sites. She added the 2 sites would be addressed under one PDA but handled as two separate land use applications. She noted the two sites are located at the 6000 and 6900 blocks of Brooklyn Boulevard, which were previously residential properties that are now vacant land. Ms. Beekman the developers from C-Alan Homes joined the May 11, 2020 Work Session to present their background as developers, and their history with the City of Brooklyn Center. She added both developers are from Brooklyn Center, and talked about their vision for the site and why they have selected Brooklyn Center for this development concept, which is a departure from their typical development projects. She noted, at that meeting, the EDA directed City Staff to negotiate a PDA and review concept plans for four EDA-owned parcels totaling 1.5 acres at the 6000 block of Brooklyn Boulevard, and four EDA-owned parcels totaling approximately 1 acre at the 6900 block of Brooklyn Boulevard. Ms. Beekman stated C-Alan Homes’ proposal is to develop both sites with triplex buildings, each with three 3-bedroom units, for a total of 39 units on both sites. She added the 6000 block site can accommodate parking of 2.14 stalls per unit, and the 6900 block site can accommodate 1.7 stalls per unit. She noted each proposed building would have the look and feel of a large, high-quality single-family home that would have 3 separate units with shared and private on-site amenities, including porches, patios, outdoor green space and shared gardens. Ms. Beekman stated the 6000 block site would have primary access from 61st Avenue and secondary access from Brooklyn Boulevard that would be right in, right out only. She added this would allow for some traffic to Brooklyn Boulevard if needed, but primarily traffic would be directed onto 61st Avenue. Ms. Beekman stated a similar traffic flow pattern would be used for the 6900 block site, with full access from Lee Avenue. She added the goal is to reduce access points to Brooklyn Boulevard as much as possible, with a secondary outlet only, and additional parking off Lee Street. Ms. Beekman stated City Staff have reviewed the plans and provided comments to developer, including an engineering review to ensure that construction will not conflict with the Brooklyn Boulevard reconstruction project. She added proposed access from Brooklyn Boulevard has been reviewed, as well as screening from adjacent properties and stormwater management plans. She noted the plans have been forwarded to Hennepin County for review which can take several weeks. Ms. Beekman stated the developers have indicated a desire to do two different designs on the two sites to differentiate them – a traditional style on one site and a modern design on the other site. 06/22/20 -3- She showed depictions of homes that the developer is building in Edina that have the same construction finishes and designs that will be used in this development. She added the developers see this project as a high-quality, high value development. Ms. Beekman stated the developers will not require any public subsidy as part of this development, and the units would be considered market rate, or un-subsidized, attainable housing. She added this type of market rate housing is known as the “missing middle”, or 60-100% Area Median Income (AMI), a product type that is not being built and for which there is a large gap in the market. Ms. Beekman stated the developer has submitted a planning application which is under review by City Staff and includes preliminary and final plat for both sites. She added the developers are seeking to replat the 8 lots into 13 lots across the two sites. She noted, as required by the Zoning Code, the properties would be rezoned to accommodate medium-density residential development. Ms. Beekman stated the planning case will be reviewed by the Planning Commission at their July 9, 2020 meeting, with a public hearing required as part of the rezoning process. She added a second reading and public hearing will be required at the City Council level, which would take place in early August. She noted the developers would enter a purchase agreement with the EDA to purchase the property, and a public hearing will be required prior to executing the agreement. Ms. Beekman stated the EDA has been acquiring single family parcels along the corridor for decades to consolidate access points and facilitate redevelopment. She added this area is guided for medium density residential use in the 2040 Comprehensive Plan. She noted a land use study and market analysis were completed on this corridor which indicates that high-intensity uses are appropriate near the intersections with medium or lower intensity uses at areas between intersections, with consideration given to transitions with adjacent single-family properties. Ms. Beekman stated this unique land use request would produce sustainable mid-level but high- quality housing along the Brooklyn Boulevard corridor. She added this use is in line with the goals of the Comprehensive Plan and EDA and would put tax-exempt vacant land back on the City’s tax rolls, at a value that is dramatically higher than previous land uses. She noted revenue generated from the sale of these properties will be returned to the TIF #3 fund, from which the lots were purchased. Ms. Beekman stated the developers are not requesting public subsidy, which is unusual for a multi- family development project. She added the increased availability of funds for supporting and preserving affordable housing is one of the City’s goals. She added funds from the sale of these properties could be used to support other affordable housing goals and projects elsewhere in the City. Ms. Beekman stated the PDA expires at the end of 2020, after which the EDA would have the opportunity to extend it. She added the PDA gives the developer rights to the site to conduct due diligence and pre-development work. She noted there is a termination clause that allows the EDA to terminate the agreement if the developer is not progressing in their due diligence. 06/22/20 -4- Ms. Beekman stated City Staff recommends City Council approval of the Resolution adopting the preliminary development agreement with C-Alan Homes. She added she is unsure whether the developers have joined the meeting, and are available. Mayor Elliott stated his initial reaction to this proposal is that unemployment is at 13.3%, which is higher than when unemployment was at its worst in 2008, at 13.2%. He added he thinks the City Council needs to step back and evaluate how the City uses the land that it owns. He added these properties have been acquired with taxpayer dollars, and the City Council needs to make sure the land is developed collectively in an equitable way. Mayor Elliott stressed the importance of considering what the community needs when deciding to sell the land. Mayor Elliott requested that Ms. Beekman go back to the information regarding rents on the project. He asked whether anticipated rent is $1650-2200 for a 3-bedroom unit. Ms. Beekman stated the developer is proposing that all the units are 3-bedroom units. Mayor Elliott asked what the median income level is for these apartments. Ms. Beekman stated the units would not be income qualified. Mayor Elliott asked what the income amount is that the 30% AMI is based on. Ms. Beekman stated that is roughly between 60-100% AMI, or $60,000- 100,000 annual income for a family of four. Mayor Elliott stated he likes to see an affordable component in all development projects. He added he is quite certain he cannot support a project that does not have an affordable component. He noted families who are mixed in a development, with different incomes lifts them up, as opposed to concentrating people with poverty on their own in separate buildings. Mayor Elliott stated, for him to support this project, he feels very strongly that there should be an affordability component, since the City owns the land, and would be the City Council would be doing themselves and resident a great disservice if they do not insist on an affordable component. Commissioner Butler asked whether there will be parking in the rear of the buildings. Ms. Beekman stated primary access and all parking will be in the back, with units facing Brooklyn Boulevard. She added there will be no driveways onto Brooklyn Boulevard. Commissioner Ryan stated he is in favor of the project because of all the reasons outlined by the Development Director. He added TIF #3 funding generated by the sale of these properties will be able to be put to good use, and there will be a significant increase in the tax value of the properties when they are developed. Commissioner Ryan stressed the importance of evaluating the best possible use of EDA-owned properties. He added these sites are challenged because of their side and depth, as noted by Ms. Beekman, and it would be difficult if not unfeasible to develop the properties for commercial use. He noted the proposed development would give nice variation in housing styles and price points, which has been demonstrated to be a good strong approach for the kind of mixed housing that will promote strong neighborhoods in the future. 06/22/20 -5- Commissioner Ryan stated he is in favor of the proposal, and it would be a mistake for the City Council to turn its back on it. RECESS AND RECONVENE The Brooklyn Center Economic Development Authority (EDA) recessed at 6:45 p.m. and reconvened at 7:38 p.m. The meeting was conducted via Webex. 4a. RESOLUTION NO. 2020-08 APPROVING A PRELIMINARY DEVELOPMENT AGREEMENT WITH C-ALAN HOMES LLC (CONTINUED) Commissioner Ryan stated the Mayor had talked about including an affordable component in the proposed development. He added this is commonly referred to as inclusive housing, where a certain percentage of units in a multi-family development are affordable or low-income targeted, and also there are market rate units. He asked City Staff whether this type of affordability model is more challenging to apply to a small-scale development such as the proposed development, which would have 39 units. Ms. Beekman stated that depends upon the level of affordability, how many units, and what type of subsidy would be used to leverage affordability. She added the developers’ financial model is similar to that of a single-family development. She noted a TIF district probably would not make sense for a 39-unit development, but if there were another mechanism to subsidize, City Staff would have to take a look. She agreed it would certainly complicate things. Mr. Robertson stated their goal has been to fill a need in the City of Brooklyn Center. He added most cities have a high need for 3-bedroom units, and even 4-bedroom units, although 4-bedroom units are not a part of their model. He noted he grew up in Brooklyn Center, and his partner Curt, who is also on the meeting, also grew up in Brooklyn Center, and they both have special ties to the City. Mr. Robertson stated they can take their business model to any city and do quite well financially. He added 95% of their development work is in Edina, that some of the Commissioners have visited, and their other developments are far more lucrative, but Brooklyn Center is a place that is special to them. He noted they want to do their part for the City they grew up in, and their goal is to provide a high-quality product that is not currently available in Brooklyn Center. Mr. Robertson stated the Brooklyn Center units will emulate the same product that has been done in Edina, with the exception of the higher appliance and lighting packages, but everything else will be the same sustainable product. He added it is difficult to get into affordability for the 3-bedroom units, but they are trying to get there. He noted he believes $1657 for a 3-bedroom unit is an affordable rate in Minneapolis, and the rates in Brooklyn Center will not be much more than that. Mr. Robertson stated he and his development partners hope to make their mark and run the pilot program in Brooklyn Center, committed to 15-year hold on all units, bringing value to the City and creating beautiful enhanced housing and amenities along the Brooklyn Boulevard corridor. 06/22/20 -6- He added this will create tax dollars for the City along with a high-end product that will attract renters to come and live in Brooklyn Center. He noted there is not a lot of incentive for a developer to come to any city asking for nothing but giving every concession that is asked of them. President Elliott stated he values the developers’ long history in Brooklyn Center, and connection to the City. He added the City owns the land, and has leverage, and an interest here. He added, in the current economic crisis, there are higher unemployment rates than during the 2008 financial crisis. He noted the City has the opportunity to explore legally binding affordable components. President Elliott stated he would like the developer to work with City Staff, if the City Council is willing, to see if there is some way to creatively and collectively work on the affordable component of this proposed development. Commissioner Ryan stated City Staff has indicated, and the City Council has previously discussed, that there is a gap in housing in Brooklyn Center, and a range of housing choices and price points is needed. He added the developer wants to put a high-quality product on Brooklyn Boulevard where there is currently empty space, that would fill a niche in that area. He noted this development will boost the image of the City. Commissioner Ryan stated he has voted for every affordable housing project that has come before the EDA and the City Council, and he will vote again to support affordable housing projects, especially in places where they work. He added Ms. Beekman has indicated that a TIF district would not work because the scale to cost ratio does not work. He noted it is important to follow the market, and not be locked into doing just one thing. He expressed his support of the development agreement and urged the EDA to approve it. Commissioner Ryan moved to adopt RESOLUTION NO. 2020-08 approving a Preliminary Development Agreement between the Economic Development Authority of Brooklyn Center and C-Alan Homes LLC. Commissioner Graves stated her first reaction was that the proposed rent is on the higher side, although she knows the apartment units behind the BP station are about $1300 per month for a 2- bedroom unit. She added she lives on Brooklyn Boulevard, so these new units will be across the street. She noted she feels positive about the quality and standards of the homes that would be built. She asked about building entrances, and how the units would be accessed. She asked whether attempts will be made to preserve old growth trees on the sites and incorporate them into the design. City Attorney Troy Gilchrist stated a motion has already been made. He recommended a second to the motion be made before further discussion. President Elliott stated he would like to make an amendment to the motion. Mr. Gilchrist stated the motion will be open to amendment if there is a second. 06/22/20 -7- President Elliott seconded the motion. President Elliott moved to amend the motion to approve the project tonight and ask that the developer and City Staff explore an affordable component, and to see how the City can partner with the developer to include affordability. President Elliott added he believes the range for the rent is a wide range. He asked the developer how many units would be at $1600 and how many at $2200. Commissioner Ryan asked whether he has discretion to accept or deny the amendment. Mr. Gilchrist stated the President’s motion to amend the original motion is before the body and requires a second and a vote on the amendment. Mr. Boganey stated, for purposes of clarification, a motion for amendment was made but there was no second. President Elliott called for a second on the motion to amend. Commissioner Butler asked President Elliott to restate the amendment. President Elliott stated he is asking that the City Council approve the proposal but ask City Staff to work with the developer to explore ways to include affordable units in the development. He added his rationale is that $1600 on the low end, although lower than $2200 on the high end, is still high, and could fluctuate. He noted the City should act to create legally binding affordable units, as research shows that a mix of income in a development project benefit everybody. Commissioner Butler stated she agrees with a lot of the Commissioner’s comments on this subject. She added she has spoken often about the need to diversity the City’s housing stock and provide options for residents who want to move out of their smaller homes into something bigger but stay in Brooklyn Center. She noted the proposed development would attract families that are looking for 3-bedroom apartments. Commissioner Butler stated she agrees with the President that it is necessary to be realistic about where the economy is now. She added she does not think there is any harm in looking at all the options so the City Council can make the decision about how to move forward. Commissioner Butler seconded the motion to amend. Mr. Robertson stated he would like the Board to understand that they are developers, but also builders, and they are fortunate to have a margin that most developers do not have. He added the end result would be sustainable, high quality homes, similar to what they are doing in Edina. He noted they have done their homework in Minneapolis, where a 2-bedroom government subsidized unit rents for $1300 month, and a 3-bedroom unit rents for approximately $1600 per month. He noted they are trying to get to that number. 06/22/20 -8- Mr. Robertson stated it is important to note that renters in Minneapolis are paying rent for apartments in old homes that are not good quality and pay additional out-of-pocket expenses, and the total is closer to $1937 per month. He added, as a person of color who grew up in Brooklyn Center, who grew up with nothing, he feels there is an opportunity to do good things for the residents of Brooklyn Center. He noted he would not want to have to abandon this proposed development that means so much to him simply because there is more money to be made elsewhere, and they are trying to do their best, and doing everything they can to get there. Mr. Robertson asked that the Commissioners be aware of what he and his partners are trying to accomplish in Brooklyn Center, by creating a model for other cities to emulate. He stated Brooklyn Center is where they want this to happen. He added he and his partners feel very strongly about doing their part in the community and he hopes the Commission will consider this request. President Elliott stated he appreciates Mr. Robertson’s comments. He added he is in favor of moving forward with the project and applauds the developers for the steps they are taking to bring this level of quality housing to Brooklyn Center, and making it as affordable as possible. He noted he is asking that the City partner with the developer to help figure out affordability, and it is not his intent to make the project less favorable or to undercut the developer. President Elliott stated he would like to see what investments can be made to help the developer with the affordability question and explore options with City Staff. Mr. Robertson agreed, adding he can give City Staff and the Board his word that they will work diligently and closely with City Staff to review affordability options that would be acceptable to the Commission. President Elliott stated he would like to commend Mr. Robertson for what he is doing in Brooklyn Center. He added he appreciates Mr. Robertson’s efforts and work, and he supports a partnership with Mr. Robertson. Commissioner Ryan called for a vote to resolve the amendment to the original motion. President Elliott moved and Commissioner Butler seconded to amend the original motion to approve the project but request that City Staff work with the developer to explore ways to include affordable components. He added the developer has indicated his willingness to do so. Commissioner Ryan voted against the same and Commissioner Lawrence-Anderson did not respond. Motion passed. Commissioner Ryan moved and President Elliott seconded to adopt RESOLUTION NO. 2020-08 approving a Preliminary Development Agreement between the Economic Development Authority of Brooklyn Center and C-Alan Homes LLC, as amended. Motion passed 4-0. Commissioner Lawrence-Anderson did not respond. Commissioner Graves asked whether she could get answers to her questions regarding entrances to the units and preservation of old growth trees on the sites. 06/22/20 -9- Curt Brekke stated the front porch would be the entrance to the main floor units, while the entrances to the lower level and 2nd floor units are on the north side of the buildings. He added there are a few trees that have been identified to be saved, but some trees will have to come down. He noted another assessment will be completed, and they always try to save as many trees as possible. 5.ADJOURNMENT Commissioner Ryan moved and Commissioner Graves seconded adjournment of the Economic Development Authority meeting at 8:22 p.m. Motion passed 4-0. Commissioner Lawrence-Anderson did not respond. STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed Secretary of the Economic Development Authority (EDA) of the City of Brooklyn Center, Minnesota, certifies: 1.That attached hereto is a full, true, and complete transcript of the minutes of a Regular Session of the Economic Development Authority (EDA) of the City of Brooklyn Center held on June 22, 2020. 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 Economic Development Authority (EDA) adopted said minutes at its July 14, 2020, Regular Session. President