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04-15-2024 City Council Regular Meeting MinutesCHANHASSEN CITY COUNCIL REGULAR MEETING MINUTES APRIL 15, 2024 Mayor Ryan called the meeting to order at 7:00 p.m. The meeting was opened with the Pledge of Allegiance. COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilman McDonald, Councilwoman Schubert, Councilman von Oven (arrived at 7:35 p.m.), and Councilman Kimber. COUNCIL MEMBERS ABSENT: None. STAFF PRESENT: Laurie Hokkanen, City Manager; Eric Maass, Community Development Director; Charlie Howley, Public Works Director/City Engineer; Jerry Ruegemer, Parks and Recreation Director; Andrea McDowell-Poehler, City Attorney. PUBLIC PRESENT: Nick Anhut, Senior Municipal Advisor with Ehlers & Associates Linda Paulson, 7603 Frontier Trail Jeff Omen, property manager at Marketplace Station Connie Hatton, 8018 Erie Avenue PUBLIC ANNOUNCEMENTS: None. CONSENT AGENDA: Councilman McDonald moved, Councilman Kimber seconded that the City Council approve the following consent agenda items 1 through 18 pursuant to the City Manager’s recommendations: 1. Approve City Council Special Meeting Work Session Minutes dated March 25, 2024 2. Approve City Council Minutes dated March 18, 2024 3. Approve City Council Minutes dated March 11, 2024 4. Receive Planning Commission Minutes dated March 4, 2024 5. Receive Park and Recreation Minutes dated February 28, 2024 6. Receive Commission on Aging Minutes dated February 16, 2024 7. Approve Claims Paid dated April 15, 2024 8. Approve 2024 Chanhassen Farmers’ Market Agreement City Council Minutes – April 15, 2024 2 9. Accept Proposal and Award Professional Service Agreement for the 2024 Annual Pavement Inspection and Condition Rating Services 10. Approve Acquisition of a permanent Drainage and Utility Easement over a portion of Lot 1, Block 4, Hidden Valley, which has a property address of 8080 Marsh Drive. 11. Resolution 2024-17: Call for Assessment Hearing for the 2024 City Pavement Rehabilitation Project No. 24-01 12. Resolution 2024-18: Cooperative Construction Agreement between MnDOT and Chanhassen for the 2024 TH101 Resurfacing Project 13. Resolution 2024-19: Approve Well Rehabilitation Contracts 14. Resolution 2024-20: Approve Fund Transfers and Budget Amendments for Fiscal Year 2023 15. Resolution 2024-21: Approve Interfund Loans for the Fiscal Year 2023 16. Resolution 2024-22: Authorize condemnation of land associated with Galpin Blvd Improvement project 17. Resolution 2024-23: Approving Membership into the Hennepin County Fire Chiefs Association 18. Ordinance 723: Amending Lawn Maintenance Standards in the A-2, RR, and RSF Zoning Districts All voted in favor, and the motion carried unanimously with a vote of 4 to 0. VISITOR PRESENTATIONS. None. PUBLIC HEARINGS. 1. Approve On-Sale Beer & Wine Liquor License for Moe’s of Chanhassen, LLC doing business at Moe’s Char House located at 560 West 78th Street City Manager Hokkanen presented the request for an on-sale beer and wine liquor license from Moe’s of Chanhassen, LLC. The restaurant will occupy the old Axel’s Restaurant at 560 West 78th Street. She presented the floor plans for the restaurant and the application process. Mayor Ryan opened the public hearing. There were no public comments. Mayor Ryan closed the public hearing. City Council Minutes – April 15, 2024 3 Jeff Moritko, owner of Moe’s Char House, introduced general manager Rosemary Moritko and stated he is excited to open in Chanhassen. Councilman McDonald asked how much the menu would change at Moe’s Char House. Mr. Moritko answered that the menu will accommodate food for families while still offering steak and other items. Councilwoman Schubert moved, Councilman Kimber seconded that the City Council approve the request for an On-Sale Beer & Wine Liquor License for Moe’s of Chanhassen, LLC, doing business at Moe’s Char House located at 560 West 78th Street. All voted in favor, and the motion carried unanimously with a vote of 4 to 0. GENERAL BUSINESS. 1. Consider Preliminary Plat and Site Plan request for Market Street Addition; Redevelopment of the Chanhassen Cinema and Hotel. (Planning Case 24-01) Mayor Ryan outlined the process for the general business, stating item one and two will be presented at the same time, but voted on separately. Both items were discussed on the March 11, 2024, meeting. Community Development Director Maass presented information regarding planning case #2024- 01. He outlined public engagement regarding the project since the March 11th City Council meeting. He explained the site plan updates since the April 11th meeting, including bike racks, surface parking areas, and pet exercise area. He reviewed the parking space availability for residential and commercial usage. He discussed the potentials with a new Prince mural. He reviewed the building materials and architecture for the east and west building by displaying the renderings and videos. He explained how tax increment financing works at a basic level, including the benefits of utilizing tax increment financing for this project. He explained that tax increment financing does not take away funding capacity currently provided to the county, city, or school districts. Nick Anhut, Senior Municipal Advisor with Ehlers & Associates, provided an overview to tax increment financing, including the funding options and tax capacity. He explained the process to date for tax increment financing district 13, the project qualification, and the tax increment financing plan. He stated the analysis for the tax capacity following redevelopment, with an increase from $104,761 to $970,309 and a suggested funding capacity for up to $9.88 million in qualified costs. The applicant projected a $124.3 million total development budget. Mr. Anhut explained the ‘but for” finding to demonstrate the funding shortfall. He provided comparison tax increment financing uses on various other projects. He responded to concerns stated in the public hearing comments and how they can be addressed. City Council Minutes – April 15, 2024 4 Councilman McDonald stated his previous concerns regarding parking for this project. He commented that the presentation addressed the need for adequate parking. He voiced support for this project. Councilman Kimber asked for follow-up regarding another development that had easement requirements for parking. Attorney McDowell-Poehler answered that the previous concerns with the other development would not apply to this project. The easements would be allowed to be utilized in this project. Councilmember Kimber questioned if the goal was to have residents park in specific residential parking spots and to have retail with separate parking spots. Mr. Maass responded that the residential parking spots would meet residential demand. Residents could park in a retail space, but it is not encouraged. Retail property owners could limit overnight parking if necessary. This is not a staff recommendation, but there should be adequate residential parking. Mayor Ryan stated a consistent theme from residents regarding traffic congestion. She requested discussion regarding Laredo Drive going through and being connected to Market Boulevard to help with the traffic congestion. Public Works Director Howley displayed an ariel map from Kimley Horn to showcase a quick concept to see if the extension of Laredo Drive would be feasible and the impacts to private property. He stated if Laredo Drive were connected to Market Boulevard, it could meet city guidelines and specifications regarding grade, provide parking, and tie into existing parking lots. The connection would not impact Marketplace Station. The engineers with Kimley Horn estimated that the connection would cost approximately $1 million dollars. The city would have additional costs to obtain the property in the right-of-way and the estimate would be $1.5 million to design, obtain the right-of-way, and construct the roadway. Councilman McDonald stated with the new plans for Market Boulevard and Great Plains, there would be benefits to alleviate traffic on West 78th Street and Market Boulevard. He requested that staff consider the possibility of allowing access to Jimmy John’s parking lot off Laredo Drive so as to not create a cul-de-sac for the parking lot. Councilman Kimber voiced a surprise with the space allowed in the planned road for Laredo Drive. He questioned if Laredo Drive went all the way through if it would change the entrances to the parking ramps in the proposed development. Mr. Maass responded that he did not know if a similar easement existed in order to move the parking entrance. He stated that the parking coming out of the east building to Market Street would not create a significant gain to alleviate traffic. He commented that the west building City Council Minutes – April 15, 2024 5 would allow traffic to go south which would impact traffic. He stated that the concept is feasible but would need to be refined. Councilman Kimber asked if the developer would desire an entrance to the parking lot at the west side of the building. Mr. Maass answered that they would need to acquire an easement access to allow this to happen. Councilman Kimber stated that he liked the potential with extending Laredo Drive and wanted to make sure the developer had the knowledge to provide the best design. Councilwoman Schubert stated the road connection would help alleviate traffic. She commented that this extension would help promote a more walkable downtown, which would help eliminate traffic congestion. She remarked that this road extension is an integral piece to this development continuing. Councilman von Oven asked who would pay the $1.5 million to help promote the Laredo Drive connection. Mayor Bain answered that there was no discussion to this question. She stated that this cost would be a part of the tax increment financing project. The developer of the road would need to be determined later. Mr. Maass stated that the roadway would be tax increment financing eligible expenses. This potential was discussed with Roers at a high-level and there would be a collaborative partner in continuing this discussion. Councilman Kimber clarified that this discussion does not fundamentally change what is being approved tonight, but the Economic Development Authority would further discuss this project. Mayor Bain answered that if the City Council determined this road should be constructed as a part of the project, the City Council would provide direction tonight to grant tax increment financing. She restated that the City Council would reiterate that they want Laredo Drive to be a part of the tax increment financing discussion and there would be follow up with Economic Development Authority to provide the framework for tax increment financing. There would need to be another meeting later to determine the details. Mr. Anhut explained that the approval tonight would allow tax increment financing to be utilized and to what capacity. He commented that there would need to be more details determined to see the project move forward. Mayor Bain asked Mr. Maass about adding the fair labor practices and look-back provision to the tax increment financing plan should be discussed as the Economic Development Authority. City Council Minutes – April 15, 2024 6 Mr. Maass answered that if the City Council desires to see this in a redevelopment contract approved by the Economic Development Authority, it would be helpful to discuss so staff knows to include it in a draft. Mayor Bain asked if the recommendation should be made now or during the Economic Authority Meeting. Mr. Maass answered it would be discussed in a future Economic Development Authority meeting when the redevelopment contract is formed, it would be in this contract. Mayor Bain asked whether there was support from City Council to include these requirements in the contract. Councilwoman Schubert voiced agreement to include this in the redevelopment contract. Mayor Bain acknowledged the great work to address design elements, features, and color palettes. She also acknowledged the extra work to create a better final product. She invited residents to come forward and offer public comments. Linda Paulson, 7603 Frontier Trail, encouraged individuals to look up 11 14th West Carroll Street in Chicago to see an example of a public library. ESG created this building and the Bauer in Edina. She stated that the Chanhassen City Council improved the building for the Roers development, but she wondered what other potentials there could have been. Ms. Paulson provided information about parking spaces in other cities to represent parking deficiencies. She read comments from others regarding feedback from others regarding Roers. She thanked the city for writing a letter to stop the housing bill in the State Legislature. She commented that insurance companies are leaving California due to population density. She stated that all this information connected to previous plans is from the Obama administration regarding housing. Jeff Omen, property manager at Marketplace Station, commented that the City Council has communicated information well. He stated from a Krause Anderson perspective, they are at a stage 1 out of 10 when considering the Laredo Drive project. Connie Hatton, 8018 Erie Avenue, requested clarification if the facility was senior residential and whether there would be parking restrictions in front of the mural. She questioned if delivery trucks would be allowed to be in the front or back of the building when unloading supplies. She asked if there would be restrictions on the width and height of the buildings. She commented that Chanhassen has been considered the best for many years because of the small and friendly community. Mayor Bain asked Mr. Maass to address the questions regarding the parking for deliveries. City Council Minutes – April 15, 2024 7 Mr. Maass stated that the delivery dock is at the southwest corner for the west building near the mural, but the wall face is 26 feet tall. Incremental parking would block the mural at times, but it would not be completely blocked from view. He displayed the renderings for the west building to provide an example of the height of the wall face. The applicant commented that there is a delivery space on the south side of the east building. The delivery spaces are not designed to look like a delivery space, while still allowing deliveries to take place a few times throughout the month. Mr. Maass stated that both buildings adhere to city code and are below the maximum height. He stated that there are no minimum or maximum setbacks, but there are required build-to zones to encourage a walkable downtown environment. Mayor Bain commented that the building is open market-rate apartments and not a senior living zone. She asked how the representatives from Roers would determine what wall would have the Prince mural. The applicant stated that the western location is more visible and agreed with staff recommendation. Mayor Bain voiced appreciation for the comments from Krause Anderson. She commented that the City Council had not voiced additional concerns regarding parking. She stated that the City Council continues to address the potential bill discussed in the State Legislature. She said that the bill has continued to have revisions, but the city’s biggest concern is the elimination of public hearing and the city’s ability to utilize the planning documents for multiple projects. She has voiced direct opposition to the bill. She commented that the city has discussed density in downtown. Density in downtown allows continued development and growth to create a walkable community to attract individuals. She clarified that the City Council will need to work with Krause Anderson to determine the potential of the connection of Laredo Drive. Councilwoman Schubert stated that she became interested in serving with City Council when the venue was constructed due to the seemingly rushed project. She commented that this project provided an opportunity for feedback regarding the design. There are citizens in town still opposed to this project. She stated that she could not vote for this project to represent those citizens’ voices. Councilman von Oven agreed with Councilman McDonald’s previous comments. He noted this is the beginning of continued growth in Chanhassen, while still allowing what is good in Chanhassen. Councilman von Oven voiced respect for residents’ voices and thanked city staff for continued transparency in the steps of this process. Councilman Kimber commented that the City Council and developer have continued to work together throughout the process to generate ideas. He stated that residents still have concerns City Council Minutes – April 15, 2024 8 regarding the height of the building, but the design changes allow for the building to look nice. He stated that there should be ample parking for the retail locations to continue moving forward with the project. He commented that if Roers charges for parking, the parking ratio is not applicable. This matter is determined by Roers. He voiced support for the connection with Laredo Drive to allow for cars to flow in both directions. He appreciated the enhanced landscaping plans. Mayor Bain voiced support for this proposal and thanked the City Council for the time invested in this project. She also thanked residents for providing feedback regarding this project, whether they were for or against the development, and encouraged continued engagement from residents. She stated that the City Council and city staff want to get this project right, which is why there have been changes and discussions. She commented that there was transparency throughout this project and questions and concerns were addressed. The city staff and City Council did not hide how they were moving throughout the process. The City Council continues to evaluate communication to ensure it is effective. She stated that residents’ feedback allows projects and the city to continue to improve. She encouraged the City Council to consider looking at projects holistically to ensure they are doing the right thing. She stated there were not code or ordinance changes for this project and explained the lengthy process to make such changes. There will be significant changes in the downtown with the Roers project and the Civic Campus, and the vision allows for Chanhassen to become a place for residents to work and play. Councilman Kimber moved, Councilman von Oven seconded that the Chanhassen City Council approve the requested preliminary plat and site plan contingent on compliance with the city staff review memo and adopt the findings of fact and decision. All voted in favor, and the motion carried with a vote of 4 to 1. Councilwoman Schubert voted nay. 2. Consider Resolution 2024-24: Approving a modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and Approve a Tax Increment Financing Plan for Tax Increment Financing District No. 13 Councilman von Oven moved, Councilman McDonald seconded that the Chanhassen City Council adopt the resolution approving a modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and approve the Tax Increment Financing Plan for Tax Increment Financing District No. 13. All voted in favor, and the motion carried with a vote of 4 to 1. Councilwoman Schubert voted nay. 3. Ordinance 724: Consider Preliminary Plat, Site Plan, and Rezoning for Chanhassen Civic Campus Community Development Director Maass reviewed the preliminary plat, site plan, and rezoning for the Chanhassen Civic Campus. He highlighted the improvements, including the renovated staircases, interconnecting sidewalks, and additional parking lots. He stated that the city is adhering to the proper ordinances for parking. He explained the architecture, building height, and City Council Minutes – April 15, 2024 9 building materials. He reviewed the design plans for the park pavilion. He showed the renderings for the City Hall, performance stage, and community space. Mayor Bain voiced excitement for this project and thanked the design team for the intentional design. She stated that residents helped provide feedback for the design. The City Council values gathering spaces, which this site accommodates. Councilman von Oven moved, Councilman McDonald seconded that the Chanhassen City Council approve the requested preliminary plat; site plan review; and ordinance rezoning the property from Office Institutional District to Planned Unit Development – Central Business District, PUD subject to the conditions of the Staff Report and adopted the findings of fact and decision. All voted in favor, and the motion carried unanimously with a vote of 5 to 0. COUNCIL PRESENTATIONS. None. ADMINISTRATIVE PRESENTATIONS. 1. Receive the 2023 Planning Annual Report and 2024 Work Plan Mayor Bain encouraged individuals to read the annual report and work plans and acknowledged the work it took to develop these plans. Community Development Director Maass stated that staffing in the planning department is entirely new with retirement from previous staff. He voiced his excitement for the new staffing within the department. He explained the work completed with the planning department in 2023 and the future projects for 2024. 2. Receive 2023 Park and Recreation Department Annual Report Parks and Recreation Director Ruegemer highlighted the continued growth within the parks and recreation department. He voiced excitement for the new City Hall and senior center space. He stated the continued development of infrastructure for the parks and recreation department and the growth of parks and recreation programming. He highlighted the community partnerships with the parks and recreation department. Mayor Bain thanked Mr. Ruegemer for the highlights and voiced appreciation for the excellent work that the parks and recreation department does within the community. She encouraged individuals to read both reports. CORRESPONDENCE DISCUSSION. None. ADJOURNMENT. City Council Minutes – April 15, 2024 10 Councilwoman Schubert moved, Councilman Kimber seconded to adjourn the meeting. All voted in favor, and the motion carried unanimously with a vote of 5 to 0. The City Council meeting was adjourned at 9:39 p.m. Submitted by Laurie Hokkanen City Manager Prepared by Kim Meuwissen City Clerk