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CC 2004 08 09CHANHASSEN CITY COUNCIL REGULAR MEETING AUGUST 9, 2004 COUNCIL MEMBERS PRESENT: Mayor Furlong, Councilman Ayotte, Councilman Lundquist, Councilman Peterson and Councilman Labatt STAFF PRESENT: Todd Gerhardt, Justin Miller, Roger Knutson, Paul Oehme and Kate Aanenson. PUBLIC PRESENT FOR ALL ITEMS: Debbie Lloyd Marcia Crist Mike Crist Joshua Burrington Eric Fitts Mitchell Ford Jacob Simmer Steve Thorpe 7305 Laredo Drive 6501 Wesley Court 6501 Wesley Court 6869 Yuma Drive 375 College Avenue, Excelsior 1711 E. Koehnen Circle 5735 Echo Road, Excelsior 8896 Lake Place, Eden Prairie Mayor Furlong: Thank you and good evening to everyone who is here this evening. We have some Boy Scouts here from Troop 409 that will be observing us tonight. Welcome. They are working on their citizenship and community badge and we hope you learn something. I'd also like to welcome everybody watching at home as well. ! appreciate you joining us in the comfort of your living room. At this time ! would ask if there are any changes or modifications to the agenda. We may change the order of No. 2 and push that back because some of the people participating in that have been delayed. If no objection to that, the agenda will stand as published. PUBLIC ANNOUNCEMENTS: Mayor Furlong: I would like to extend an invitation to all residents and their families and friends to join me and other members of the Council and commissions at Chanhassen Day at the Minnesota Landscape Arboretum. That's on Thursday, August 26, and admission to the Arboretum will be free throughout the day for all Chanhassen residents. The first 500 visitors will receive a free watering wand and a copy of the Chanhassen Centennial History book. At 10 a.m. there will be a short presentation and welcome message. ! will be there as well as members of our Environmental Commission and Park & Recreation Commission. It's a great opportunity to come out and see the Arboretum and some of the events that are taking place. They have a treehouse exhibit this year, which is really fun for the children. There are lots to see and do out there. ! would encourage everyone to come out and use this as an opportunity to come out. It's close and in our backyard and so often we don't get there when it is that close. Hopefully this will encourage some of us to get there. ! look forward to that and would like to thank the staff, Mr. Gerhardt and others for arranging that. City Council Meeting - August 9, 2004 CONSENT AGENDA: Councilman Labatt moved, Councilman Lundquist seconded to approve the following consent agenda items pursuant to the City Manager's recommendations: Approval of Minutes: -City Council Work Session Minutes dated July 26, 2004 -City Council Verbatim & Summary Minutes dated July 26, 2004 Receive Commission Minutes: - Planning Commission Summary & Verbatim Minutes dated July 20, 2004 2004 Elections: - Resolution 2004-50: Appointment of Election Judges for the Primary and General Elections and Establishing their Rates of Pay. - Approval of Joint Powe3rs Agreement with Carver County for Absentee Ballot Services. c. Approve Joint & Cooperative Agreement with Suburban Rate Authority, PW 416. d. Approve Invoices Associated with 2003 Lake Vegetation Monitoring. e. Resolution 2004-51: Approval of Change Order for Well No. 9, Project 03-02. Resolution 2004-52: Approval of Change Order No. 1, MSA Street Rehabilitation Project 04-02. Resolution 2004-53: Resolution Approving Limited Use Permit, Highway 41 Trail Connection Project. All voted in favor and the motion carried. VISITOR PRESENTATIONS: None Mayor Furlong: As mentioned earlier, I would like to defer Item 2 to a later point in our agenda this evening and move forward with Item 3. PBULIC HEARING TO CONSIDER VACATION OF DRAINAGE & UTILITY EASEMENT~ 501 BIG WOODS BOULEVARD~ FILE 04-05: Matt Saam: Thank you Mr. Mayor and Council members. Staff has received an easement vacation request from the property owner at 501 Big Woods Drive, Mr. David Igel. The property owner has a creek which goes across the southeast corner of his parcel. During the development of the parcel (see map), staff required a 50 ft. drainage and utility easement to be granted to the city from over the centerline of the easement. When the plat was filed, the developer had granted a 70 ft. easement. Now the property 2 City Council Meeting - August 9, 2004 owner, who is also the developer, is looking to put a pool within the easement area and to encroach into the city's easement. The property owner is asking us to vacate basically the difference between the 70 ft. easement that he granted and the 50 ft. easement city staff had required. Staff sees no objection to this since the 50 ft. is what was described in the development contract to begin with. So we are recommending approval and I'd be happy to take any questions. Councilman Lundquist: Matt, why was it done 70 ft. to start with? Just an administrative over sight? Matt Saam: Yes, an applicant is here. He said his surveyor made a mistake. Since it satisfied our requirements, we did not flag it. Mayor Furlong: This is a public hearing and at this time I would like to open up the public hearing. Individuals may come forward to the podium and comment on this issue. If there is no one interested in commenting on this issue, I will go ahead and close the public hearing and bring it back to Council for discussion. Is there any discussion on the matter? It seems pretty straightforward. Is there a motion to approve the request? Resolution 2004-54: Councilman Peterson moved, seconded by Councilman Labatt to approve the Resolution vacating a portion of existing public drainage utility easement for 501 Big Woods Drive, David Igel as described in the staff report. All voted in favor and the motion carried. PUBLIC HEARING, CONSIDER VACATION OF DRAINAGE & UTILITY EASEMENT, 1450/1460 KNOB HILL LANE, FILE 04-04: Public Present John Knoblauch 1450 Knob Hill Lane Matt Saam: Thank you Mr. Mayor and Council members. Staff has again received a request from the property owner at both 1450 and 1460 Knob Hill Lane. Mr. John Knoblauch owns both properties. Mr. Knoblauch is asking us to vacate a typical side lot line easement, which is the north property line of the smallest lot. Mr. Knoblauch actually lives right now at 1450 Knob Hill Lane. Mr. Knoblauch is looking to put a retaining wall in the area of the existing property line. He is currently working with city staff to move that property line, something that can be administratively approved. But once the property line is moved, we will still have the side lot line easements still in place, so he is asking us to vacate those with the condition that he will grant additional easements once the lot line is moved. Again, staff sees no problem with this. We just have the one condition that we get the new easements when the old ones are vacated. With that, we are recommending approval and I would be happy to take any questions. Councilman Lundquist: Matt, we're going to vacate the easement and then in conjunction we're going to do the property line move as well? City Council Meeting - August 9, 2004 Matt Saam: Correct. We won't record this vacation until the new easements are granted and the property line is moved. Councilman Lundquist: So that way if the property line doesn't get moved, he still can't put the retaining wall in and all that other... Matt Saam: He can't put it right on the property line. Councilman Lundquist: OK. Mayor Furlong: One of the issues that was addressed in the report, but this property line movement, and we've talked about this for other issues, it doesn't create any non- conforming issues with either lot. Is that correct? Matt Saam: That's a great point. No, we verified that the new lot will still meet the minimum 15,000 sq. ft. requirement and the minimum depth and width requirements. it will still conform. So Mayor Furlong: Ok. Thank you. Any other questions for staff?. If not, we'll open the public hearing and invite individuals to come forward and address the council on this matter. Seeing no one interested in speaking on the matter, we'll go ahead a close the public hearing and bring it back to council for discussion. Any issues on this one? Resolution 2004-55: Councilman Peterson moved, seconded by Councilman Lundquist to approve the Resolution vacating the existing public drainage and utility easement for 1450/1460 Knob Hill Lane as defined in the staff report subject to the following condition: Six-foot wide public drainage and utility easements must be granted along each side of the revised property line between Lots 4 & 5, Block 1, Knob Hill. All voted in favor and the motion carried. PUBLIC HEARING TO CONSIDER AUTHORIZING THE SALE OF HOUSING DEVELOPMENT REFUNDING BONDS~ SERIES 2004~ CITY OF CHANHASSEN GENERAL OBLIGATION~ CENTENNIAL HILLS PROJECT: Public Present: Julie Frick Kathy Aho Carver County Housing & Redevelopment Authority Springsted, Inc. Mayor Furlong: This is item No. 2 in our packets. At this point, we have Julie Frick with the Carver County Housing & Redevelopment Authority and Kathy Aho with Springsted and ! would invite them to come forward. 4 City Council Meeting - August 9, 2004 Todd Gerhardt: Mayor and Council members, Kathy Aho from Springsted has a PowerPoint presentation that she would like to present on the refunding. Kathy Aho: Thank you. I just wanted to go over a little background information regarding the request from the Carver County HRA. In 1995, the City and County HRA joined together to finance the Centennial Hills project and at this time we would request that the City of Chanhassen provide credit enhancement by using its general obligation pledge for up to $5 million in bonds. The bonds would be used to refund the bonds that were previously issued to construct the 65 units of housing that comprises the Centennial Hills project. The project is currently owned and managed by the Carver County HRA and the financing would not change that arrangement. The original transactions included two bond issues, one a general obligation bond of $4,130,000 and the other was a revenue bond issue of $705,000. The County HRA at the time pledged to contribute $31,000 annually to support the project. They also built and continued to manage the project and the financing that is outstanding. At the time that the project was constructed, the City and the City HRA contributed $372,310 that was deposited into a debt service reserve fund. They also pledged to contribute $32,000 annually in support of the project and pledged to contribute its portion of the project payment in lieu of taxes; that in addition to securing the $4,130,000 of general obligation bonds. What's being proposed with this refinancing, because interest rates have dropped, is to refinance the debt to accomplish debt service savings. The city has been looking for a way to reduce its involvement in the project and interest at this time will enable us to do that. What the financing would do would be release the city's $327,000 back to them, and also release the city from the $32,000 pledge and the pledge of the pilot payment. There would be an increase in the outstanding general obligation pledge because the bonds have been paid down to $3,595,000. The refinancing would require about $4,625,000 and ! say "about" that much. That number will not be known until competitive bids on the bonds are actually taken. The financing itself would include a funded debt service reserve of approximately $176,000 and it would also feature a continued pledge of the County HRA to make an annual payment in the amount of approximately $31,000. This chart summarizes the obligation. On the top it summarizes the overall obligation that the city had at the time of the first financing, which is basically the general obligation bond plus the amount that is posted for the debt service reserve fund for a total of just over $4.5 million. Down on the bottom of this chart you can see the estimated amount of refunding bonds. A portion of that bond issue would be used for debt service reserve funds to actually cushion the obligation of this city should that ever come up, for a total net exposure of $4,449,000. There are some statutory requirements for this type of financing. The revenues have to provide debt service coverage of at least 110%. The proceeds have to be used for qualified housing development projects, which means that it is either for seniors or for tenants with incomes of 80% of median or less. No operating changes are anticipated, so the project meets the qualifying housing development project definition and it will continue to qualify after the refinancing. Both the City and County HRA are required to have a hearing in order to use general obligation bonds in this fashion. The Carver County HRA's hearing is set for a little later this week. The city must also be within an overall debt limit for this type of housing bond that is equal to a half percent of its taxable market value. The next chart gives you an idea of just where you are against that overall City Council Meeting - August 9, 2004 limit. The city's taxable market value at this time is just over $2.2 billion. The gross GO housing limit, that is a half percent of that, or just over $11 million. If this issue is $4,625,000, that leaves the city with just under $6.4 million that would be available for other projects of this type if it would choose to go ahead with those. This type of debt doesn't count against the city's general debt limit, so it shouldn't interfere with other city projects that need to be undertaken and it is expected that it will continue to be self- supporting from the project revenues themselves. The benefit that we are hoping to achieve is to consolidate borrowing under one issue which will result in lower costs of issuance and lower administrative costs. Also, the general obligation feature will result in lower annual debt service because of the lower interest rates that can be achieved. That will reduce any need for capitalized interest and we don't expect any in this particular project. It also reduces the debt service reserve requirement. There will be a release of the cash deposit back to the city and again a release of the ongoing pledges that the city has made. The last slide is an estimate of the financing component. As you can see, we expect the bond issue to be roughly $4,625,000. There is the debt service reserve fund that is currently held by the trustee of $372,000. The trustee is also holding certain cash that has been put on deposit for debt service payments; roughly $144,000, and then the underwriter, who eventually purchases the bonds, will need to post accrued interest from the date of the bonds to the date of closing, which is estimated at about $11,750. On the uses side, most of the money will go into an escrow account. The income off of that escrow account will be used to pay the old bond issues--both the general obligation bond and the revenue bond issues and we will be able to set the issue up to be called on its first call date, which is February 1, 2006. At that time both of the old issues will be paid off in full. There will be a return of cash to the city, the establishment of a debt service reserve fund, and the costs of the transaction will be paid and the accrued interest plus any miscellaneous amounts remaining would be deposited into your debt service fund for the new transaction. That's a brief overview of what is proposed at this time. Julie Frick, the Executive Director of the County HRA is here also and we'd be happy to answer any questions that you might have. Mayor Furlong: Thank you. Questions? I guess for a point of clarification, as part of the city being asked to provide its general obligation for $5 million; when this was originally done, did the city originally when this was done have general obligation of $4.8 million, so approximately the same amount? Am ! looking at those numbers correctly? We provided bonding authority when this was first done. We're just re-providing that at almost the same level--is that correct? Kathy Aho: Mr. Mayor and members of the City Council. From a technical perspective, the general obligation bonds issued initially were $4,130,000. That same half percent limit that is generating the $11 million of capacity for the city at this time was your taxable market value at that time and was not large enough to cover the entire project. So the city provided the general obligation pledge and they also provided the cash to fund the debt service reserve fund to limit the amount of borrowing. Mayor Furlong: Ok, thank you. Other questions? Discussion on this? Ok, thank you. This is a public hearing, so at this time ! will open up the public hearing and invite City Council Meeting - August 9, 2004 individuals to come forward and address the council on this matter. No wishes to address the council and ! will close the public hearing and bring it back to council for discussion. Councilman Peterson: Mr. Mayor, ! think that opportunity doesn't knock this loudly all that often and ! think we should seize the opportunity and move ahead. Mayor Furlong: Very well stated. Resolution 2004-56: Councilman Peterson moved, seconded by Councilman Lundquist to approve a Resolution Approving the Issuance by the Carver County Housing and Redevelopment Authority of its Housing Development Refunding Bonds (City of Chanhassen, Minnesota unlimited Tax General Obligation- Chanhassen Apartments Project), Series 2004 in an Aggregate Principal amount not to exceed $5 million and the Pledge of the Full Faith and Credit of the City of Chanhassen thereto, and Authorizing the Execution and Delivery of Related Documents. All voted in favor and the motion carried. LIFE TIME FITNESS, REQUEST FOR AN AMENDMENT TO THE ARBORETUM BUSINESS PARK PUD TO PERMIT A HEALTH CLUB; SITE PLAN APPROVAL FOR SAID HEALTH CLUB AND CORPORATE OFFICES WITH A VARIANCE FOR PARKING; FINAL PLAT APPROVAL; AND APPROVAL OF DEVELOPMENT CONTRACT AND CONSTRUCTION PLANS AND SPECIFICATIONS; ARBORETUM BUSINESS PARK 4TM ADDITION; ALLIANT ENGINEERING & GATEWAY PARTNERS LIMITED, Public Present: JeffMelby Jeff Sandberg Mark Zaebst Parham Jabaheri, Dave DeCon Tracey Rust Ben Wikstrom Life Time Fitness, 6442 City West Parkway, Eden Prairie Life Time Fitness, 6442 City West Parkway, Eden Prairie Life Time Fitness, 2325 Hunter Drive, Chanhassen Alliant Engineering, 233 Park Ave. South #200, Minneapolis 2540 Christian Drive, Chaska, MN 55318 Life Time Fitness, 6442 City West Parkway, Eden Prairie Life Time Fitness, 6442 City West Parkway, Eden Prairie Kate Aanenson: Thank you, Mayor and members of the Council. This is a request for Life Time Fitness and there are several actions involved. First and foremost is a request to amend the PUD for the Arboretum Business Park. The site is located on Highways 5 & 41. This is the last remaining large piece of approximately 22 acres. When this project came in as a PUD, staff worked carefully with the underlying developers and looked at some support commercial and saw this as an opportunity to provide a premier office or corporate user site. When Life Time approached, it wasn't identified in the PUD that a health club could be located in a traditional industrial park. At first we said that we wouldn't support just Life Time Fitness itself and working with the applicants, they advanced the idea of moving their corporate headquarters, which is what our goal was. With that, it seemed to make sense to support the PUD concept. So with that, the first issue under the PUD is to amend that to allow health clubs as a permitted use. Now, City Council Meeting - August 9, 2004 with that PUD it led to some concern about what if Life Time never builds the corporate offices. Right now under the PUD there are three separate uses. Our feeling is that based on the fact that it conforms with that level of parking, if Life Time was to build that and put some other use in there, that's fine, our goals was to get some office there. But it is our belief that this is their intention and they will speak to that too. We aren't concerned if they sublease in the future as our goal is to get the offices built. If they were to do any changes to that and were to sell off a piece, that would require them to come back before the Planning Commission and request a subdivision and then you would also have to approve any subdivision of land to create separate lots they could sell. Otherwise, this is all under one parcel, which gives them the control over that. So that's the first issue before you. The second one would be the site plan itself. There are three things happening on this lot--Life Time Fitness itself which is a two-story building with a pool which is approximately 109,000 sq. ft.; and then the two office buildings on Highway 5 which are both three-stories and 100,000 sq. ft. of office. Parking is shown and meets the needs of all the users and there is underground parking with both offices, approximately 50 spaces with each use. With the site plan itself, there were some requests for variances. Most specifically for parking out front and staff, working hard with the Highway 5 standards, did not want parking out there and recommended that that be eliminated. They do meet the parking standards with that. They wanted it as an option. Our position is that if they need that in the future that they could come back and request that if merit warrants. The goal is not to hide a building, but to put berming and landscaping in that would screen the parking lot lights and cars, but not screen the building. They are both three-story buildings so we believe there is adequate visibility on both those buildings. The other variance that they were looking at was for some up-lighting and the Planning Commission felt, as does staff, that you're on a corner with the Arboretum with two intersections. We don't have much lighting on the other corner with the church and with the residential across the street. It seemed excessive at 40 ft. high to light up the buildings. There can be backlit signs at that height that should adequately address that. Also, the parking lot lighting can only be 20 ft. high. So felt that there was adequate lighting. There is a large parking lot already giving quite a glow to that area and so we felt that was a little excessive. The site plan has been modified since it went to the Planning Commission. This plan doesn't reflect it too much, but the plans that you have in black and white is easier to see on TV, but ! quickly go through some of those changes. ! think we were up to 51 conditions and now we're down to 15. One of the issues was circulation of this round-about, which was a traffic point to control access, which we think worked good. This access going into the building was moved. A sidewalk was added to give better access which was a concern. Again, a lot of minor stuff. One of the other issues was on the building itself. Adding more architectural detail on the building and ! have the material samples here. Again, those were all modified for the backs of the buildings, additional columns were added especially on those longer span that were facing Highway 41 that they would have a better presence, specifically the fitness building itself. So the conditions have been modified since it went to Planning Commission and again we're working with them in good faith that that's all taking place. Some of the issues that did come up with the Planning Commission--there was a traffic City Council Meeting - August 9, 2004 study done by a consultant to review their data independently, coming off there is a light at Century. There is a light a Century with turn movements and the biggest concern was peak hours--how is that going to work for circulation. I know the Planning Commission struggled with if we need something in the future. In talking with the City Engineer, if there needed to be something done that it could be determined that if it was at a service level failing that an assessable project could be accomplished to get traffic signals. It appears based on the study that that shouldn't be the case based on trip generation. Again, the offices that they are proposing will be used for training for themselves and their employees and a lot of their employees will be using two-shared parking. We don't believe that will be a problem. There is a mechanism to solve something down the road at the developers or benefiting property's expense. I think that addresses most of the bigger issues that the Planning Commission. The third component with this would also be that the applicants want a temporary sales trailer. The Planning Commission didn't spend too much time on this, but we have done this in the past so they can get out there and get their presence known. Again, that is a conditional use, which we did support, and there are conditions of approval for that. So there are three separate motions. With that, we are recommending approval with the conditions of recommended in the staff report and I'd be happy to take any questions. Mayor Furlong: Thank you. Questions? Councilman Peterson: As I look at the parking lot, it seems like a lot more islands than are typical. Am I seeing more islands than normal? Did we do it intentionally or are they requesting it? Kate Aanenson: If you look at the landscaping standards, because there is so much impervious surface, that meets the minimum to encompass that. It is a large parking lot. Councilman Peterson: That's my point. Kate Aanenson: I think the other issue when you've got that large of a parking lot on that corner, you're going to have a lot of wind and that also provides a break for people walking across. There is a sidewalk which does provide a good visual and protective barrier for that. We're putting in some nice trails in that area and there is an opportunity to come out of Life Time and get onto our trails in the nice preserve that we have there. ! think it makes a lot of sense the way it's laid out. Councilman Peterson: The parking ratio itself from a square footage standpoint to usage. Are we over-parked or under-parking? Kate Aanenson: With taking out the front, they are slightly above. Again, some of that has to do with the fact that Life Time is probably going to take up more of the office space at night when the peak is, so it works just how we've looked at those other ratios. In the morning, the office people aren't there yet so you've got that overflow. City Council Meeting - August 9, 2004 Councilman Peterson: So you really see parking as a non-issue because of that off usage. Kate Aanenson: Correct. Mayor Furlong: With one entrance to the site as opposed to two or multiple, is there any concern about traffic or congestion on in and out. Kate Aanenson: The consultant is here and he may want to give a brief response to the overall traffic. The Planning Commission did spend a lot of time reviewing that. Ed Terhaar: Good evening. We performed the traffic study that you have a copy of and looked at the proposal or the development as it was proposed with just one access point-- both the weekday morning and afternoon. Assuming full development of the area, the intersection worked adequately at both the morning and afternoon. We are confident that it will work in an acceptable manner. Kate Aanenson: ! would like to point out one thing on the traffic, too. We already know that taking a left at TH 5 & 41 is already below function level due to the fact that Highway 41 has not been upgraded. Ultimately with this project we see another connection onto Highway 41, so that is not working right now. This isn't making it better or worse, but that system is already inadequate. Ed Terhaar: There are long-term plans to expand Highway 41. In the short-term there are issues, but the development does not really make it a whole lot worse. Mayor Furlong: It's bad, but the development doesn't make it worse. Ed Terhaar: Right. Mayor Furlong: When Highway 41 is upgraded, ! don't think there is any schedule for that at this point. But to your point then, there could be an additional entrance. Kate Aanenson: Yes, to avoid coming up to Highway 41, you can come up on West 82nd Street, which is another way to get in. Or ultimately, Watertower Place will have an access onto Highway 41 when it gets widened and actually that street will drop and there will be better access there. Mayor Furlong: Ok. So there might not be a direct access into this site from Highway 41, but there will be better access to the entire development. Very good. Thank you. ! know there is a representative from Life Time Fitness here, would you like to address the Council on any issues? Mark Zaebst: ! am the Senior Vice-President of Real Estate for Life Time Fitness. ! live at 2325 Hunter Drive here in Chanhassen. Thank you for having us this evening. It's nice to be here. I've heard that you folks did get a chance to watch the tape from the Planning Commission, so I'll give the CNN version and won't go on for 5 hours about 10 City Council Meeting - August 9, 2004 the company and the project. I would like to say a few words about the company and the project and then I'll answer any questions that you might have. Life Time Fitness headquarters are presently located in Eden Prairie and we've been in business for 12 years. We have over 40 locations, either open or under construction, in eight different states and over a quarter of a million members and over 7,000 employees. We're growing quickly, we were listed on the New York Stock Exchange last month and we're proud about that and proud about the growth that's going on in the company around the company. We've been very blessed in the 12 years that we've been doing this in that we have worked very diligently on creating a concept that we found through research was really somewhat lacking within our industry around the country. And that is that we really didn't see large-scale high-quality facilities that were available that really met an entire community's fitness and recreation needs--everyone from young children up to senior citizens, families, and everyone in between. There are great operators throughout the country with great fitness facilities or medical rehabilitation facilities or just recreation facilities, and our goal was to design an extremely high quality experience where anyone within a community would be able to feel welcome and again have all their physical fitness and recreation needs met. We started with that concept that we were going to make our first impression when someone drives on the lot. We put a lot of time and effort into our site planning, our landscape architecture, our building architecture, as I'm sure you've seen through the building elevations, all of our buildings are brick and stone on all four sides. We want to make sure when people drive onto the property and look at the buildings, the first thing they notice is high quality, even before they walk in the front door. Once you come in the front door, people are amazed at the size and scope and quality of the facilities. It is granite countertops, cherry wood lockers, slate-lined hallways, the absolute best of the best. In order to keep these things affordable, we've designed our company where we've brought all of our disciplines in-house. So we have an in-house real estate development team, in-house engineering, in-house architecture, we own our own construction company, we have our own marketing, and our own operating company. By doing that, we are able to build these large magnificent buildings and save a considerable amount of money over having to go out to third parties in order to accomplish all that. We're then able to pass that savings on to the consumer and we're known in the industry as the group that really builds the highest quality facilities and brings them in at kind of a mid-level, extremely value-oriented pricing. That's really been the key to our success. They are absolutely spectacular and magnificent, but also extremely affordable for the community. We have also through our research looked at what people didn't like about health club experiences. Obviously we put a lot of time and effort into the physical plant, but people don't like contracts, they don't like being tied down to commitments with health clubs, so we have a 30-day money back guarantee. You can come in and try it out and if you don't like it after 30 days, just let us know and all your money comes back to you. Beyond that, there is no long term contract, it's just a month to month. So the onus is on me and my company to make sure that this facility stays impeccably clean. We have a very large intensive capital improvement budget, so a lot of money is put back into these facilities every year because we have to keep our customer service at the highest level, our physical plant at the highest level, keep our prices competitive because if we don't, our members can vote with their feet. We've looked at it like a restaurant--if we don't do a good job, people should be able to leave. 11 City Council Meeting - August 9, 2004 Not bragging, but we have the lowest attrition rate, the drop-out rate, of any commercial health club organization in the country. So we really try to do an extremely good job of making sure that our members are well taken care of. We also want to make it extremely convenient so the facility has incredible components in it, but it's also open 7 days a week, 24 hours a day. We've found throughout the country that members absolutely love that. We get hospital workers, folks that work on fire crews, police officers, folks over at Byerly's that get off at 2 a.m. and it's nice to have that facility available for people any time that they want. We're very excited to come to the community. ! failed to mention that we also have an extremely large in-house research team that does all of our demographics and GIS research around the country in identifying geographical trait areas where we feel that the right types of families are located there and the right quantities and research has definitely shown us that there is a need. ! know that well. I've lived here for 7 years and we know that there is a need for this type of facility and we're very excited to bring it to the City of Chanhassen. I'd be glad to answer any questions now. Mayor Furlong: Thank you. Questions? Councilman Lundquist: The two issues other than the traffic thing that went through the Planning Commission, the up-lighting and the second row of parking. Kate talked about the second row of parking could always come back since your plans are a couple of years down the road. You guys are ok with that? Mark Zaebst: Yes. Councilman Lundquist: Then the up-lighting thing. What's Life Time's stance on the staff report that recommends denial of that up-lighting. Mark Zaebst: ! have a plan, would you like me to put it on the overhead? We took some photographs of the outside of one of our buildings. The reason ! wanted to show you the picture was so that everyone didn't think we had these gigantic spotlight shining up into the air. It's more landscape lighting as you can see on the picture. It's extremely low level, pointed low at the buildings. It just gives the building a nice glow. So it's not really there to gather a great deal of attention from the street or anything like that. It's just to beautify the building. ! somewhat equate it to when you see a nice home with some landscape lighting shining up through the bushes. It's just a landscaping type of lighting and feature. That's why we feel it's important. Again, only because we've built so many of these it's just absolutely beautiful at night. It's extremely low level and just washes the under part of the building. Councilman Labatt: Without getting overly technical, do you have any idea what the wattage is? Is it low voltage lighting. Mark Zaebst: I don't, but I brought the gentleman who does. This is our in-house architect Bill Doer and he can answer that question for you. 12 City Council Meeting - August 9, 2004 Bill Doer: Hi, ! live at 2355 East Medicine Lake Boulevard in Plymouth. ! am the Director of Architecture at Life Time Fitness. This is a wall section, it may be a little hard to read. The lights are aimed at the building. There is a very tight cone of light sent, it is a 50 watt low voltage fixture, so there isn't a lot of light level. As you see in the photos, most of the heavier light, the higher foot candles, in this case 30 ft. candles, is right at the center and occurs about 10 ft. up on the building. This diagram shows that by the top of the building at 42 ft., there is a .07 foot candle level, which is under 1 ft. candle acceptable level at property lines for down-lighting, so the cone of light is aimed at the building and isn't aimed straight up at the sky. We feel it enhances the building, it occurs in the rhythm of the architecture in the front of the building, and it doesn't emit light off of the building, it just accents it, so we've had it with and without and since we've added it we like what we've found. We think it's an architectural feature and we understand that it doesn't meet ordinance per se, if it were shining in the sky but we feel it doesn't and that it's low level light. We'd like an opportunity to have it as a part of this project. Councilman Peterson: So you said that it's 50 watt spot. Kate Aanenson: Can ! just address another concern. When this went before the Planning Commission, it was noticed in the paper with one variance for the parking. It was never noticed for light. There were two lighting issues--one the original project had 40 ft. tall parking lot posts which are in violation of the ordinance which is 20 ft. So we just said fix that. When they appeared before the Planning Commission, they requested that, we were looking if there was a way through photo-metrics or through cut-offs if we could still meet the intent of the ordinance, but technically and legally it was never noticed for a lighting variance. ! just wanted to clarify that point and ! believe that if we're not going to meet the intent of it, we'd have to go back and notice that as an issue. Councilman Peterson: What's the ordinance Kate? ! can't remember the specifics. Kate Aanenson: What is says is no up-lighting. There are exemptions for that like a flag and we have given a variance for the cinema, but that was noticed. So what we were thinking was if there are other ways to get the intent of the ordinance through cut-off, which would be a lower height. Because even at the half-foot candle, there is still a pretty big glow when you're looking at three buildings of that size with all that parking lot lighting. It's hard for us to measure that just looking at this type of picture. What you're not seeing is all the additional parking lot lighting with it. It's going to be well-lit. There's nothing else at that corner. Councilman Peterson: How far spaced are the lights going to be? Bill Doer: They are approximately 20 feet and they are more frequent on each end. They are occurring between each window along this portion of the building and then this portion. Mark Zaebst: Mr. Mayor, may I also submit another picture? This is from a distance and you can see the facility from the street and the parking lot lighting. 13 City Council Meeting - August 9, 2004 Mayor Furlong: As he's doing that, from an architectural standpoint, our ordinance does provide down-lighting within certain requirements. Can you achieve the same effect with down-lighting Bill Doer: Yes and, not in this photo, but we actually have a series of down-lights and they light more the upper half of the building and we have some accent medallions that you'll see on the elevation and we accent them with those as well. There is some light that comes off the parking lot and it does light the building, but its very monotone and not a lot of accept to it, so these just provide a little texture and follow the rhythm of the building. It's a real subtle detail. We feel that it isn't going to light the sky or go against what the ordinance was intended for, but we still think it's an asset. We have a ledge- stone base on this with some varying elevations of materials as they project and it creates a nice shadow line. It has a really nice effect and we're trying to keep our current proto- type. Councilman Lundquist: Kate, help me understand this. If we decide to allow the up- lighting, while in fact we can't allow the up-lighting tonight, we'd have to go back through. Kate Aanenson: Correct. Councilman Lundquist: What does that make our... ! guess we can talk about it when it comes back. Todd Gerhardt: You could approve the site plan this evening and direct staff to take the applicant through the variance process for the up-lighting. Just separate the issue. Councilman Lundquist: Ok, so we could approve all three motions as is and they can come back and file for a variance on the lighting piece later? Kate Aanenson: That's correct. Councilman Lundquist: Ok, because even if we decided tonight, we can't approve it. Kate Aanenson: You have another option to give them some direction as to whether or not you're leaning toward granting that. The Planning Commission was .... technically it wasn't noticed in the public hearing. There might have been other comments from other people on that. Mayor Furlong: Since we're on this issue, I'll ask the question. We allowed up-lighting at the Cinema, but have there been other requests for up-lighting along Highway 5? Councilman Lundquist: How about Prince's building? How does he do that purple stuff on his building? 14 City Council Meeting - August 9, 2004 Kate Aanenson: I'm not aware of any purple stuff on his building. We do get requests and staff points out what the ordinance says. We've had very few attempts for variances on that. Again, we did support the Cinema one because we decided that it was an exciting place and we wanted that. Looking at this one we felt like that there is lighting in between all those windows, there's a lot of window breaks, and parking lot lighting. It just seems like a lot of extra. Mayor Furlong: Any other questions? If not, gentlemen, thank you. Todd Gerhardt: Mr. Mayor ! do have one question. Mark, can you talk about a construction schedule on this? Mark Zaebst: Not putting the cart before the horse, but if we are approved this evening, our intent would be to start on the first phase of construction earliest by the end of this month or early September. We'd like to get things moving quickly here. Mayor Furlong: Is the first phase the health club? Mark Zaebst: Yes. Mayor Furlong: When would you anticipate opening if you followed that schedule? Mark Zaebst: It will take us approximately 12 months to complete from the time we break ground. Hopefully 11, we'd like to hit half the pool season. We never seem to get that extra month break in Minnesota. Mayor Furlong: Especially with the weather we've had this August. Mark Zaebst: Yes, it might snow tonight. Mayor Furlong: What about the second and third phase from a construction schedule standpoint? Mark Zaebst: Right now our intent is that we are already bursting at the seams at our corporate headquarters. Our intent would be to open the first office building towards the end of 2007. Mayor Furlong: Thank you. I'll bring it back to Council for discussion. Councilman Lundquist: I'll use a line from Mr. Peterson before and say that an opportunity doesn't knock too often. Here's something that we've been after for a long time and explored many different ways and we have a company before us that is willing to fund it with their money and isn't asking us to chip in, so ! think it' s a well thought out plan and it looks like there's been a lot of work put into it. 15 City Council Meeting - August 9, 2004 Councilman Peterson: I agree. I think it's an opportunity that we've for a long time and ! did watch the Planning Commission go through it in detail and ! think it was really a favorable conversation with the Planning Commission. I'd like to complement the staff and the applicant for a good product. ! think the parking issue is kind of resolved tonight and I'd be interested in driving by one of the properties to view the lighting at night. I've got 75 watt low voltage at my house every 20 feet. ! know it doesn't light the neighborhood, but ! don't have parking lot lights or lights from the inside of the building coming out either. I'm not adverse to it, but it's a little bit of a dichotomy in that we approved it for the cinema primarily because it was kind of a boring building. So now we're not approving it because we have an exciting building that this will kind of accent. It's not the only reason we up-lit the cinema, but it was part of it. It was a big wall with nothing there. So I'm not adverse to having the lighting, but I'd like to drive by a property to get a better sense. Hopefully there is one in town and not out-state so ! can do that. Let's get her done. Councilman Ayotte: I don't want the light issue to slow down getting a fitness facility in this city. Let's go. Councilman Labatt: I would agree. Getting hung up on the lights is not where we should be going. ! think we all believe this will be a wonderful addition to this corner and to our city and we talked that the lights accent the building and we have a lit building that the owner puts purple lens over clear lights and makes his building purple and some other colors at times. We can't do anything about it, and he could add down-lighting without a problem, but he wants up-lighting and we can't because of our ordinance. ! think our ordinance stinks to tell you the truth. If they can put it down, why can't they put it up? ! think what we need to do is send a message to the applicant and staff and say that if we could we'd give you the variance for lighting tonight. Obviously we can't because our hands are tied, but come back at your earliest convenience so you can get your variance and since maybe it was a technicality on the city's part, let's waive the variance fee and make this as quick as possible for the applicant. This is going to be a great addition to our city like everyone said. Mayor Furlong: Thank you. It's interesting when we start talking about up-lighting or down-lighting when we're talking about the magnitude of this project and how long we've been looking for this asset. In addition, not only the health club which schedule is coming sooner, but also corporate headquarters at this site. A little patience has seemed to paid off. On the issue of the lighting, I'm not going to take any more time. I know with the cinema there was concern about shielding and making sure there wasn't spillover. You know, that's a valid issue, but let's not worry any more about that tonight. Let's take a look at some other examples they have and make sure we are being consistent. If we need to review our ordinance, let's review our ordinance not for a particular applicant, but for the city in its entirety. We've done that before to make sure we're looking at the whole city and not just a particular site or application. All the residents I've spoken to on this issue have the greeted the prospects of Life Time coming here with nothing but excitement. I think that will bode well for your membership drive and I think it will clearly be one of the assets of our city in the long-term We do have a 16 City Council Meeting - August 9, 2004 number of motions we need to pass. The first one is one page 10. Not that I'm anticipating any issues, but since it does require more than a simple majority vote I'd like to deal with that one separately. Councilman Lundquist moved and Councilman Labatt seconded to approve the amendment to the Arboretum Business Park Development Design Standards, PUD #92-6, Permitted Uses to permit health clubs on Lot 5, Block 4, Arboretum Business Park PUD Plan (Outlot A, Arboretum Business Park 4th Addition to be platted as Lot 1, Block 1, Life Time Fitness). All voted in favor and the motion carried. Councilman Lundquist moved and Councilman Peterson seconded that the City Council approve Site Plan Planning Case #04-22 for a two-story, 109,000 square- foot health club with a pool and two three-story, 100,000 square-feet office buildings, and the temporary use of a sales/membership trailer, plans prepared by Alliant Engineering, Inc., dated 6/18/04, revised 7/28/04, based on the findings of fact attached to the staff report and subject to the following conditions: 1. The developer shall enter into a site plan agreement with the City and provide the security required by it. 2. The developer shall final plat Outlot A, Arboretum Business Park 4th Addition, prior to issuance of any building permits. The temporary sales trailer may be located in the southeast corner of the site. The temporary sales trailer shall comply with the standards used for sales trailers for residential developments. The temporary sales trailer shall be removed within 10 business days of the issuance of a certificate of occupancy for the fitness center. 4. Wall-mounted light fixtures shall be shielded with a total cutoff angle equal to or less than 90 degrees. Lighting shall not be directed skyward. 5. All signs shall require a separate sign permit. 6. Applicant shall install undulating berms along northwest property line. 7. The parking directly adjacent to Highway 5 must be deleted and additional berming provided in the location where the parking was deleted. 8. The buildings must be protected with automatic fire sprinkler systems. 9. The building plans must be prepared and signed by design professionals licensed in the State of Minnesota. 10. If the property will be re-platted into separate lots, consideration must be given to the location of the property lines in relation to the proposed buildings. 17 City Council Meeting - August 9, 2004 11. Complete utility plans need to be submitted for review and approval by the engineering and building inspection staff prior to issuance of the building permit. 12. The plans were reviewed for general building code compliance. Detailed building plans need to be submitted for review and approval by city staff. 13. The applicant is responsible to obtain and comply with all regularity agency permits including but not limited to MnDOT, Watershed District, MPCA, etc. 14. A professional civil engineer registered in the state of Minnesota must sign all plans. 15. Installation of the private utilities for the site will require permits and inspections through the City's Building Department 16. If importing or exporting material for development of the site is necessary, the applicant will be required to supply the City with a detailed haul route and traffic control plan. 17. All disturbed areas must be sodded and/or seeded and mulched within two weeks of grading completion. At the completion of Phase i, seeding or sod shall be placed on the sites of Phase ii and iii. 18. Sanitary sewer and water hookup charges will be applicable for the new lot. The 2004 trunk hookup charge is $1,458.00 per unit for sanitary sewer, $2,814.00 per unit for watermain and the SAC fee is $1,425 per unit. All of these charges are based on the number of SAC units assigned by the Metropolitan Council. Sanitary sewer and watermain hookup fees may be specially assessed against the parcel at the time of building permit issuance. And that the Chanhassen City Council denies the parking variance to permit two rows of parking between Office Building 1 and Highway 5 based on the findings of fact attached to the staff report. All voted in favor and the motion carried. Mayor Furlong: At this point then, that completes item 5a on our agenda and we'll move to item 5b. Is there a staff report or are there questions? Staff is available for questions. Are there any thoughts or comments on 5b or 5c, these are simply the final plat approval consistent with the site plan that we just approved. Councilman Peterson moved, Councilman Labatt seconded to approve the final plat for Life Time Fitness creating one lot and associated right-of-way for Corporate Place (plans prepared by Schoell & Madsen, Inc.) subject to the following conditions: 18 City Council Meeting - August 9, 2004 1. The total SWMP fees are $223,841.00 and are due payable to the City at the time of final plat recording. The developer shall be required to enter into a PUD Agreement/Development Contract with the City and provide a financial security in the form of a letter of credit or cash escrow to guarantee site improvements. Type HI erosion control fencing will be required adjacent to wetland areas. Additional erosion control fence may be necessary at the toe of steep slope areas and adjacent to storm water ponds after the grading has been completed. All areas disturbed as a result of construction activities shall be immediately restored with seed and disc-mulched or wood fiber blanket or sod after completion of each activity in accordance with the City's Best Management Practice Handbook. Wetland buffer areas shall be surveyed and staked in accordance with the City's wetland ordinance. The City will install wetland buffer edge signs before construction begins and will charge the applicant $20 per sign. The applicant shall apply for and obtain permits from the appropriate regulatory agencies, i.e. Carver County, Watershed District, Metropolitan Waste Control Commission, Health Department, Minnesota Pollution control Agency, Minnesota Department of Natural Resources, Army Corps of Engineers and Minnesota Department of Transportation and comply with their conditions of approval. 7. The lowest floor or opening elevation of all buildings shall be a minimum of 2 feet above the 100-year high water level. The applicant shall report to the City Engineer the location of any drain tiles found during construction and shall relocate or abandon the drain tile as directed by the City Engineer. 9. The development shall comply with the development design standards for Arboretum Business Park. 10. Full trail fees shall be collected per city ordinance for Life Time Fitness. 11. A professional civil engineer registered in the state of Minnesota must sign all plans. 12. Sanitary sewer and water hookup charges will be applicable for the new lot. The 2004 trunk hookup charge is $1,458.00 per unit for sanitary sewer, $2,814.00 per unit for watermain and the SAC fee is $1,425 per unit. All of these charges are based on the number of SAC units assigned by the Metropolitan Council. Sanitary sewer and 19 City Council Meeting - August 9, 2004 watermain hookup fees may be specially assessed against the parcel at the time of building permit issuance. 13. The underlying property has been previously assessed for sewer, water and street improvements. The remaining assessment due payable to the City is $308,807.60. This assessment is due at the time of final plat recording. 14. The applicant is required to upgrade the cul-de-sac to current City standards with a 60- foot right-of-way radius, a 48-foot pavement radius, and B-618 concrete curb and gutter. Because of the substandard street section, the existing cul-de-sac pavement will have to be removed and the street will need to be repaved per City Detail Plate No. 5201. 15. The cul-de-sac center island in Corporate Place will be allowed but an encroachment agreement will be required for the placement of the island within the right-of-way and for maintenance of the island. And further, that the construction plans and specifications dated July 28, 2004, prepared by Alliant Engineering, Inc. and the development contract dated August 9, 2004 be approved conditioned upon the following: The applicant shall enter into the development contract and supply the city with a cash escrow or letter of credit in the amount of $127,312 and pay an administration fee of $279,878. 2. The applicant's engineer shall work with city staff in revising the construction plans to meet city standards. All voted in favor and the motion carried. COUNCIL PRESENTATIONS Mayor Furlong: That completes the items on our agenda this evening. Are there any council presentations? Councilman Ayotte: I just want to comment on our work session tonight for those people at home. A couple of milestones tonight. Regarding public safety, some analyses will be going on to identify our needs and to see if we're going down the right path. ! can't say much more than that because the council has to act as a whole, but I'd like to make the comments since I'm coming to the arise of my term here, ! have a few more months, that public safety is finally getting more focus and attention and ! think it's coming full circle and I'm very excited about the potential outcome. Thanks. Mayor Furlong: Other Council presentations? I guess just a couple of comments following up on the safety theme. Over the last week to ten days there were two events regarding safety. Last Tuesday was National Night Out. ! know ! was able to ride along with the Sheriff' s Department and attended some neighborhood meetings. ! believe some 20 City Council Meeting - August 9, 2004 of my fellow council members did as well and it was nice to see residents come out and, if nothing else, get to know one another and talk about safety issues or other issues. It was very positive. ! also had a chance to stop by the Safety Camp put on a week ago Thursday. Beth Hoiseth our Crime Prevention Specialist, this was her 8th or 9th year of this event. ! think she said 9th. There were 120 third graders there. If you have a third grader next year, or a fourth grader that has never attended, make a note and try and get them out there next year. Space fills up quickly, but it's a great program and very well done and good participation by our city staff. Beth also coordinates the National Night Out. ! think there were 29 parties this year. It was interesting; ! saw in our paper that Chanhassen is the only city in Carver County that participates in National Night Out. ! think that is a credit to us and that we have 29 neighborhoods that gather to do this. Good program. Any other council presentations? Councilman Labatt: As we look at our budgeting process, ! think we should order a heart defibrillator for our CSO vehicle. Presently there is none in there and he does respond to medical emergencies and ! was informed about one that occurred a few weeks ago that he showed on his good grace to assist and didn't have one. As an initial first responder, ! think we need to have one in that vehicle. So as we look at our 2005 budget, or maybe there's some yearend money, we should purchase one. Councilman Peterson: Those are only $500 bucks or something, aren't they? Councilman Labatt: Yes. Todd Gerhardt: We'll look into that. Mayor Furlong: With training? Todd Gerhardt: Oh yes. Councilman Labatt: ! just wanted to bring that up the Council. Maybe we can purchase that in the next month or so if there's money left over. ADMINISTRATIVE PRESENTATIONS: Todd Gerhardt: ! don't know if you noticed the activity occurring at the Bowling Alley right now? The building is about half demolished and they have started the party wall between the cinema and the existing bowling alley. Once that's completed, the rest of the building will come down. We also are working with the Chamber on a joint effort to remodel the Old Village Hall. If you drive over there you'll see a couple of windows that are ready to fall out and the front door is in disrepair also. We're working together and they are sharing their resources along with ours to fix the building up. That's a great project and you may hear more about that in the future. Other than that, that's all ! have. Any questions for me? Mayor Furlong: No. Thank you. 21 City Council Meeting - August 9, 2004 CORRESPONDENCE PACKET. None. We will be continuing our work session items. We recessed on Item B. We'll pick up both Items B & C and we'll stay right here in the Council Chambers following this meeting. Councilman Lundquist moved, Councilman Labatt seconded to adjourn the meeting. All voted in favor and the motion carried. The City Council meeting was adjourned at 8:30 p.m. Submitted by Todd Gerhardt City Manager Prepared by Karen Engelhardt 22