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CC 1995 04 24CHANHASSEN CITY COUNCIL REGULAR MEETING APRIL 24, 1995 Mayor Chmiel called the meeting to order at 7:30 p.m. The meeting was opened with the Pledge to the Flag. COUNCILMEMBERS PRESENT: Mayor Chmiel, Councilman Berquist, Councilwoman Dockendorf, Councilman Mason, and Councilman Senn STAFF PRESENT: Don Ashworth, Roger Knutson, Todd Gerhardt, Charles Folch, Kate Aanenson, Bob Generous, and Diane Desotelle APPROVAL OF AGENDA: Councilwoman Dockendorf moved, Councilman Mason seconded to approve the agenda as presented. All voted in favor and the motion carried. PUBLIC ANNOUNCEMENTS: PROCLAMATION DECLARING APRIL 28 AS ARBOR DAY AND MAY AS ARBOR MONTI-L Mayor Chmiel: We have a public announcement, and this is proclamation establishing April 28th as Arbor Day and the month of May as Arbor Month. It reads, Whereas Minnesota's forest treasures were a significant attraction to early settlers because of their usefulness and beautiful environment they provided; and Whereas, trees are an increasingly vital resource in Minnesota today, enriching our lives by purifying air and water, helping conserve soil and energy, creating jobs through a large forest products industry, serving as recreational settings, providing habitat for wildlife of all kinds, and making our cities more liveable; and Whereas, human activities such as construction damage and pollution, as well as disease and insects, threaten our trees, creating the need for concerted action to ensure the future of urban and rural forests in our state, country, and world; and Whereas, each year on the last Friday of April, Arbor Day, the people of Minnesota pay special attention to the wonderful treasure that our trees represent and dedicate themselves to the continued health of our state's stock of trees. Now therefore, be it resolved that the City Council of the City of Chanhassen hereby proclaim April 28th as Arbor Day and the month of May to be Arbor Month. Further, to urge all citizens become more aware of the importance of trees to their well being, to participate in tree planting programs that will ensure a green Minnesota in decades to come, and to plant, nurture, protect and wisely use Minnesota's greatest treasure of trees. Passed and adopted by the Chanhassen City Council this day of 1995. Is there a motion to adopt the proclamation? Resolution #95-45: Councilman Berquist moved, Councilman Mason seconded to adopt the Resolution proclaiming April 28, 1995 as Arbor Day and the month of May as Arbor Month. All voted in favor and the motion carried unanimously. PROCLAMATION DECLARING MAY 6~ 1995 AS NATIONAL SCRAPBOOK DAY. Mayor Chmiel: The second item is also another proclamation declaring May 6, 1995 as National Scrapbook Day. And it reads, Whereas, the first annual National Scrapbook Day will be held on May 6, 1995 in locations throughout the United States and Canada, and Whereas, National Scrapbook Day encourages the safe preservation of photographs and family stories through hands-on education, instruction and motivation; and Whereas, National Scrapbook Day is an event which enlightens people to the benefits of organizing and displaying their photographs and stories in a safe, meaningful and creative way; and Whereas, National Scrapbook Day offers people the opportunity to preserve their past, enrich their present and inspire hope for their future. Now therefore be it resolved that I, Donald J. Chmiel do hereby set aside the proclamation the first Saturday of May each year to be National Scrapbook Day. Is there a motion.9 City Council Meeting - April 24, 1995 Resolution #95-46: Councilman Mason moved, Councilman Bentuist seconded to adopt the Resolution proclaiming Ma)' 6, 1995 as National Scrapbook Da)'. All voted in favor and the motion carded unanimously. CONSENT AGENDA: Councilwoman Dockendorf moved, Councilman Mason seconded to approve the following Consent Agenda items pursuant to the City Manager's recommendations: Resolution #95-47: Approve Contract Amendment No. 1 to TH 5 (Powers Boulevard/County Road 17 to TH 41) Design Contract with MnDot, Agreement No. 67724, Project No. 90-17. e. Approval of Bills. City Council Minutes dated April 10, 1995 Planning Commission Minutes dated April 5, 1995 Park and Recreation Commission Minutes dated March 28, 1995 Public Safety Commission Minutes dated April 13, 1995 g. Preliminary and Final Plat to Subdivide 1.14 Acres into 2 Lots, 2220 Melody Hill Road, Golmen Hoff Golmen Addition. Resolution #95-48: Fifth Amendment to the Joint Powers Agreement Establishing the Southwest Area Transit Commission to Approve the Purchase of Real Estate by the Commission for Wetland Mitigation. All voted in favor and the motion carded unanimously. Mayor Chmiel: We'll move item (h) to, being item 12 is deleted, we'll put that right there. VISITOR PRESENTATIONS: None. A. CHANHASSEN BUSINESS CENTER 2ND ADDITION~ ENGELHARDT & ASSOCIATES. · Charles Folch: Just a quick and brief correction. You should have all received tonight corrected pages to item 3(a)(1) and (2). Basically the first page is taken from the conditions of final plat. Page 12, item number 9. The first sentence should be corrected to read, a building permit for Lot 1, Block 1 can be issued when the final plat has been recorded. And then the second sentence shall read, including permits may also be issued for Lot 4 and Lot 7 of Block 1 conditioned on the platting of access roads acceptable to the City Fire Marshal. With that correction, that also carries through to the next phase of...just before the development contract, item (i) with that section and again that same language would carry through as a condition of approval. Just a correction of adding Lot 7 to the lots that are buildable with a building permit. Mayor Chmiel: Alright. I thought you wanted this pulled completely from the agenda. Charles Folch: I'm sorry. It was pulled for staff correction. Mayor Chmiel: Okay, good. So with procedural, as we're going through, we'll move back to accept item 3(a)(1) and item 3(a)(2), unless there are specific questions in regard to that. If not, can I have a motion to approve those two items. City Council Meeting - April 24, 1995 Councilwoman Dockendorf moved, Councilman Mason seconded to approve the Final Plat, Development Contract and Construction Plans and Specifications for Project 95-6, Chanhassen Business Center Second Addition with Engelhanlt and Associates, as amended by the City Engineer. All voted in favor and the motion carried unanimously. PUBLIC I-WARING: BONDING, SENIOR HOUSING: A.~. CONSIDER USING THE FULL FArlI-I AND CREDIT OF THE CITY OF CHANHASSEN TO ISSUE g. $4,131,542.00 IN HOUSING DEVELOPMENT BONDS FOR A SENIOR HOUSING PROJECt IN CHANIIASSEN. ESTABLISH A TRUST FUND TO GUARANTEE A FUND BALANCE FOR THE SENIOR HOUSING PROJECT AS A THIRD LINE OF GUARANTEE. Don Ash~vorth: Thank you Mr. Mayor. Yes, there are two items that the city needs to look at if we're going to have a senior housing. I think that we did try to look at the possibility of providing that type of houSing as private funding but there just simply is not dollars out there available .for that type of function. Primary area is the change in the tax codes which really make it not very feasible for private individuals to be able to construct that type of housing. There are some programs but they fall very close to the funding that was available for the apartment complex off of Chan View, and I think that almost all HRA members and many City Council members were very disappointed that the 20% of the units that were supposed to be subsidized as a part of that facility, in fact are not occupied by senior individuals. I think the past 5 years you've maybe had one, maybe two seniors over there in that entire timeframe. To be able to sell essential purpose bonds, which is the form of bond issue that xvould occur, and that would then be sold by the County. So in the sale of that bond, the bond issue by the County, it would actually go against the County's credit rating. It would go against the County's rating as far as Moody's is concerned but in that whole process, the County would also look back to the City of Chanhassen to pledge it's full faith in credit should for some reason the revenues generated from rents be insufficient to pay the cost associated with operating the facility and paying debL We are seeing the City's full faith and credit applied to virtually any bond issue you sold in the last 20 years~ Whether it be a tax increment issue, a revenue issue, special assessment bond or just a general obligation bond issue. I think what makes this a little different than some of those other types. There's an interceding party who will first guarantee that payment. So for example on a special assessment type of a debt, the homeowner himself is the one who becomes you might say the first line of defense. The first one responsible. Under Minnesota Statute, the mortgage that that individual may have with whatever bank, financial institution, actually takes a subsidiary type of a role to the special assessment by the city. So when you, again your full faith and credit really has never come into play. In a project like this, what you are doing is putting your trust in the financial advisors that the numbers that they have given you are in fact correct and that the projected revenue that they have come up with will in fact pay for this type of a project. So again the first issue that the Council must deal with is whether or not you would be willing to offer the City's full faith and credit behind that bond issue. The second part of that is recognition that as an essential purpose bonds, to protect the bond holders, there's actually a third line of defense for those creditors purchasing those bonds. Specifically their first form of revenue is really the rents from the project. Second is the City's full faith and credit, and finally third, you must deposit as a part of, well you must deposit with a third party, an amount equal to approximately $350,000.00. Now they will continue to pay interest on the monies you've deposited. And so from that standpoint, it's almost like making an investment and many of our investments right now we're not really looking to selling. So hypothetically you could take one of those investments and say here is our pledge. The problem xvith that is if the financial advisors are incorrect, and if monies are needed and if the city has not levied in accordance with the deficiency agreement City Council Meeting - April 24, 1995 using our full faith and credit, the creditors do have the right to take any portion of that $350,000.00 that would be necessary to pay off operating and debt costs in any one year. So your investment is not a totally safe investment. There's risks associated with it that again, if these projections are wrong, those monies can be grabbed onto them. Through the Council again I mentioned the investment scenario. There is another possibility and that is you do have several trust funds. Trust fund by it's very nature says you're not going to spend down the principal associated with that trust fund but you basically will be letting off of the interest associated with it. A good example is the historic trust which really takes care of all the maintenance associated with the downtown. And so that principal balance, the only thing we use is the interest off of that to pay operating costs associated with maintaining downtown. So again that would be a very logical source of where the city could find $350,000.00 to invest, you might say, in this project. I think that both of these issues are ones that I'm sure the City Council is going to grapple with but in my own mind, essential purpose bonds are there to ensure that xvhen we need to take care of elements of the community, and the first thought I had was, the few group of homes that are on 96th Street that basically exist kind of off of mound sewer system.' We sold bonds to actually carry that out and it's assessments back to those properties but, or the sewer system that exists over on Dogwood and that again is a community type of a sewer system. It's not hooked into the Metropolitan Sewer System. But again the City sold basically essential purpose bonds in both of those instances. The conclusion I reached ,,vas that I feel that there is an essential purpose !n providing senior housing within a community and I ~vould strongly recommend that the City Council approve the two resolutions that are included in your packet. Mayor Chmiel: Okay, thank you Don. As I mentioned before, this is a public hearing. Is there anyone wishing to address this at this time? If you would come forward. Please state your name, address and the microphone is your's. Anyone wishing to address this? Seeing none, can I have a motion to close the public hearing? Councilman Mason moved, Councilman Berquist seconded to close the public hearing. All voted in favor and the motion carried. The public hearing was closed. Mayor Chmiel: Okay, Steve. Do you have any concerns with any of the things that Don has brought forth? Councilman Berquist: Well I have some, yeah I do have some concerns. My primary concern is that again, we seem to be putting the cart before the horse. The meeting prior to this we were asked to look at approving expenditures for something that we really didn't 'know what it was going to consist of regarding the expansion of City Hall. And we had a work session that dealt with the expansion of City Hall. There's still some questions that need to be ironed out. The last Council meeting we also talked about the senior housing, and there was some, the adjacent piece of land that was changed, the density change that took place. We considered that and looked at the 2 acres that makes up the balance of the land to put senior housing on to a man. I think along the Council we had some real reservations as to the size and the type of the project that was going up there. And now we're being asked to approve $4.1 million for a project that in essence I don't think any of us really completely agree with. So I think we're putting the cart before the horse. Mayor Chmiel: What would be your suggestion? Councilman Berquist: I understand all the work that's been done up until now. I understand the time elements. The constraints regarding it. I think it's, what is it, May l st? The construction contract is guaranteed through, or May 30th. My suggestion would be to try and, what is it? Mayor Chmiel: June 1. City Council Meeting - April 24, 1995 Don Ashxvorth: Yeah, end of May, first of June. Councilman Berquist: I'd really like to see us xvork towards, the developer work towards resolving the issues that are contingent on that property being used for senior housing and satisfy the Council and the neighborhoods surrounding it that they've got a project that is viable for that piece of land that's more in keeping with the 2 acres that's there. Don Ashworth: I don't know if you're aware but they have had to reduce the number of units, so 7 units have been knocked off of the facility and that's to meet some setback requirements. Councilman Berquist: So they're down to 53 now? Or 63. Don Ashworth: 63. I see Julie Frick is in the audience. Carver County HRA. Is that you Sid as well? Maybe not. But as I understand, what we're doing here is, and again you're right. There's a number of things that are going on. And if the units do not end up being approved by the City Council, these resolutions will have no affect. The bonds won't be sold. If zoning isn't given to the site, it won't go through. You know if, if, if, if. There's any one of 10 things that potentially can stop this prior to the .time the bonds would actually be sold and the City on the line for them. On the other side of the coin, if while you're going through those other approval processes, we can be actually obtaining the bids and getting in place. Or let me put it this way. The contractor will not do one thing associated with the construction of this facility unless the bond proceeds are in hand. So literally following Planning Commission, City Council approval of density, zoning, configuration, etc, that are proposed during the course of this next month. If we have not started and have the bonding process well along, we're also going to end up, that also will end up literally killing the project. And Julie, would you like to speak in regards to the statements I just made, or maybe if you would rather have Sid Inman do it~ Julie Frick: Good evening members of Council. Sid can certainly jump in and help me. We're, at this point in time right now working on the numbers again trying to make them work with the cut in units that we had to take to meet all the setback requirements. That's really I can say at this point in time. Councilman Berquist: The 7 units was strictly a setback issue? Julie Frick: Right. Councilman Berquist: What floor did 7 units come off of 2. Julie Frick: Right in the middle. Don Ashworth: But there's an issue associated. Kate Aanenson: It wasn't a height issue. It was the setback from the street. Councilman Berquist: So you narrowed them. Don Ashworth: There was an issue associated with the bonds and the money, etc. and I'm not accurately portraying xvhat we had discussed from 2-3 weeks ago. I've forgotten part of that conversation. Could you re- remind me? City Council Meeting - April 24, 1995 Jutie Frick: The contractor, I can't enter a contract until I know I've got my financing in place because I don't have money to pay the contractor if he starts prior to me having the financing in order. And I can't get the financing until I get, I mean this is part of the financing package and I have a construction contract right now that will, the price xvill expire as of May 31st and that will add another $200,000.00 onto my construction price, even with the cuts that xve've made on the size of the project. So you 'know I 'know when you're saying you're putting the cart before the horse but that's kind of the way of the world. I have to have my financing in place and I had to have a contract up front so I knew the prices that I xvas dealing with to put my financing in place. Don Ashworth: But this is similar to a home in that, you can do your initial xvork associated with gaining the financing but that isn't going to come in place until the day you literally sit down and close and it's that point in time ~vhere you become responsible for that loan. So I mean if something happens during the next 30 days and the Council doesn't like the zoning, the location, the number of units, how it's been prepared, none of this happens. Julie Frick: Right. Don Ashworth: I mean xve xvill have gone through some bonding cos[s, ~vhich I'm assuming are going to be minor. $200.00-$300.00 for maybe what we see in front of us. But as far as actually making a commitment and saying, okay. These bonds are going to be issued whether this things is built or not. That's not the case. Julie Frick: No. We don't have any other site. Councilman Berquist: Do you want to go on... Mayor Chmiel: Alright, Colleen. Councilwoman Dockendorf: Well, I tend to be risk adverse and I'm really concerned about, I'm trying to understand the relationship where the County is selling the bonds but we're putting our full faith and credit and how that cannot affect our rating, but I'll take your word for it. But I'm concerned about the revenue projections, particularly since no~v we're cutting 7 units. Hoxv much faith and how many people have looked at the numbers and is it a good bet, for lack of a better word, that we can cover our costs, our operating costs with rents? Don Ashworth: Well you've had at least 4 different parties, including Julie who's currently running 2 or 3 different similar type of projects. Have gone through similar type projections for our particular area. And of course Gary Fields xvho has, who does this for a living. This is all he does. Councilwoman Dockendorf: And have they looked at it with the cut in 7 units? Don Ashworth: Well that's what Julie was referring to. That's what they're kind of scrambling. Once they found out that there's the 7, now how does that change the performa, but I think. Julie Frick: It doesn't reduce our cost. Our construction cost as much as it reduces our income. Councilwoman Dockendorf: Yeah, that's my concern. City Council Meeting - April 24, 1995 Julie Frick: And so what that did is make the County's portion, so far, go up from what we had projected as a yearly contribution. We pledged, the HRA, County HRA, pledged to put a certain amount of dollars into the project to make a cash flow up front every year, and that amount has since gone up. Councilwoman Dockendorf: So it hasn't affected the city's portion of it? Julie Frick: It will affect the City but not your GO backing, because that's a fixed amount based on your assessed value. Councilwoman Dockendorf: Okay. I guess that's it for now. Mayor Chmiel' Okay, Michael. Councilman Mason: Just to comment a little bit on what Steve said. I have reservations about just about every project that comes through here but that doesn't necessarily mean I'm for or against it. And I thought the tone there was kind of sounding like Council was really renascent to do this. I'm only speaking for myself on this but I've advocated senior housing for quite some time and as near as I, can tell, this is the only spot, the only game in town for it. I see a need for it and I think it needs to go there. And yes, I do understand neighborhood concerns. I also understand who owns'the property and who doesn't and I think those are some issues that we'll be tackling down the road. My understanding of letter A, the full faith and credit. This whole thing, you've got to make sure you've got the funds before you can build a house and Don, am I not correct in saying that's essentially what the deal is here. I feel comfortable if we need to pull the plug on this later, this falls through. Clearly there are some issues that xve'll have to address down the road but I also see the importance of letting the contractor and Carver County HRA 'know that yeah, the money is there. And Don, tell me if I'm wrong but my understanding is also that, and your opinion and certainly Gary Fields' opinion, who I don't think has steered the City wrong yet. This all looks okay~ Don Ashxvorth: Correct. Councilman Mason: I would be interested in some more opinions on how things change with 7 less units. But assuming what I'm hearing here, we need this if we're going to do the project and I'm very strongly in favor of some type of senior housing going in that area. Mayor Chmiel: Okay, thank you Mike. Mark. Councilman Senn: Don, didn't the last projections we get show...I mean I thought the last set of projections that we went through in that meeting showed that the city had to subsidize it. Don Ashworth: Yes. Councilman Senn: See the connection I've made here is, I've seen nothing change the fact that we need a subsidy. We're just now changing the name of it to a trust fund but now we're 7 units less and that appears to be a much greater subsidy. Don Ashworth: The meeting you were referring to xvas a joint HRA/City Council meeting. For the project to become a reality, two things. Two requirements were being put back onto the HRA or two requests were being made back to the HRA and two requests were being made back to the City Council. The txvo requests to the City Council Meeting - April 24, 1995 HRA, one was the donation of land to the project, which the HRA has since closed on that piece so they are in a position to provide the title to the property. To the project itself. The second would be a subsidy. An amount that you're talking about. Councilman Senn: A rent subsidy. Don Ashworth: A rent, well a project subsidy. Councilman Senn: Well the projections showed us two things. They showed us a project subsidy and a rent subsidy and that's xvhat started to make the project work. Don Ashworth: Well not really. The rent subsidy wasn't necessary. What it would have done is it would have allowed the city to have a local subsidy program and to be able to subsidize upwards of 15 to 20, maybe even 25% of the units. Since, following that Council meeting we received all kinds of phone calls where people who had put their name on a xvaiting list were really very offended that the City would be considering taking that particular project and labeling it as a subsidized housing project. They just did not want to see that happen. On the other side of the coin they came back saying, you know we do 'know that there's individuals out there who need help in our community and we're not against the HRA coming ub with a local subsidy program. But have it made available to all units in Chanhassen. Not just this particular one. And if you do that, do it as a part of just an ordinary program that you run. You make up the rules. You decide who it's going to be and we don't really want to knoxv if the person living next door has received a subsidy or not. So at that point in time we changed the entire emphasis of the construction. We took out the word subsidy from all of the materials. Hopefully at some point in time that will come back to the HRA. They'll consider a subsidy program that might be in effect city wide, but at least for this project that, and I believe it was around $70,000.00, is not being proposed to be included as a part of this budget. The $22,000.00, which was for project subsidy. Not rent subsidy. Project subsidy, was approved the other night by the HRA. So the two areas, the two requests being made back to the HRA have now been fulfilled. And of course the two being asked of the City Council, the one being putting the city's full faith and credit behind the bonds and establishing of the trust fund with the investment money, are before you tonight. Councilman Senn: I mean the way the trust fund is worded here, it sounds like the trust fund is there in case it's needed to balance the budget. Don Ashxvorth: Correct. Although the, I'll call it second line of defense is supposed to the City's full faith and credit and I don't know how in the world you could ever get to that $350,000.00 if you're putting up first your full faith and credit. Julie Frick: The $350,000.00 is for operating benefits. Councilman Senn: Yeah xvhich is, that's xvhat I'm trying to understand. They're txvo separate issues. Julie Frick: Right. That $350,000.00 is different from your backing of. Councilman Senn: Not a third line. It's a first line. Julie Frick: No, it's all... City Council Meeting - April 24, 1995 Councilman Senn: So more or less, if we run into an operating shortage here saying we will go back against the full faith and credit to the city first before xve go to the fund? To balance that operating money. Julie Frick: Well I don't think it xvill ever get that far. I'm not sure. I've never had a project do that so I can't honestly say because I've never been, it's never been an issue for me. At the end of the year they do three different caps on your bonds. If you've made your debt service payment and you're...and haven't had a default on anything, that's where they would hit your full faith and credit. Is when we go into default and they're looking for somebody, these bond holders want their money. They're going to come to the city. The opera/ling is only for the developer, or the development. The protection of the development. Those operating costs are based on revenues that come in and our budget that we approve. And should there be...well it did happen once where all the hot xvater heaters went out in one year and we had to replace them. It hit my operating...and we had to replenish that because we didn't want to...debt service. Councilman Senn: But to replenish that you go to the trust fund. You don't go to the full faith and credit of the city? Julie Frick: Right. Councilman Senn: So from a terminology standpoint, this is not a third line of defense because it's simply another second line of, or first line or whatever you want to call it. Depending on operating versus debt service. Don Ashworth: Yes, I totally agree. I guess the only reason I put the third in there is in going through this xvith Gary and xvhat not, they got this first thing set up and then the second and it happened this was down in the third category so I made the assumption it's the third line but. I think your clarification is a good one. Councilman Senn: In terms of the bond. I'm a little uncomfortable with the fact that we aren't bonding for this project for a reason, and that is really we can't afford to bond for it without affecting our credit rating, as I understood it. Now the County's bonding for that and that's a solution, but somehow this kind of creates a full circle because if we're providing the guarantees like the one in the first place, we couldn't afford it...doing nothing more than guaranteeing what in effect the County is stepping in the middle to do for us and act solely as a middle man and I mean, we've created this whole circle where we're doing exactly what we were hearing we shouldn't do. I mean I can't believe the financial markets are that blind to effectively looking at your debt structure. I mean if we have a full faith and credit guaranteed by it, I mean part of the industry would look at that as part of our debt structure. Don Ashworth: Well, first of all if there were not a $10 million cap as to the number of bonds that we could sell, we could be selling them, the city, in looking at the performa they'd look at it the same way that they'd look if the County were selling it. So I don't have any question that we would be able to sell. We would probably sell at approximately the same interest rate. Moody's doesn't really care if it's named the City of Chanhassen or Carver County or if it's a joint agency thing~ At issue is the $10 million cap issue. I mean the underlying structure of the bond issue, I mean Moody's is going to look through that performa in the same way and make a decision as to whether or not to provide the funds, whether it said city or county, in exactly the same fashion. Again, our only problem was for 1995 we already, we will be at the $10 million cap without this project. The second part of the issue is really one of, I think that the County's got a lot of expertise in this whole area. I like the idea of having another set of eyes looking at what's going on. To literally be the agency to step in and say, yeah. I'll help control this management company. I 'know the things to watch out for when you enter into these type of agreements and I feel that Julie has gone through the process of telling management City Council Meeting - April 24, 1995 firms what they need to provide her. For me, I'd be learning a whole new process and I think it's fair to say that you feel comfortable in your ability to insure that they're providing you xvith the records that you need. That you know what it is you're looking at and that you've gone through this before. Correct? Councilman Senn: Well I'm not questioning that, and I'm sorry that wasn't my question so...to address that one way or the other. I guess from my perspective I'm...ready to jump to the bonding decision, and that's maybe from my perspective. I think we need to spend more time discussing what I'm going to label as the project. I sat in months and months of meetings on this looking at wonderful slides of one and two story buildings and quite honestly I sympathize with the neighborhood and was taken back myself by the fact that all of a sudden xve have a 4 to 5 story building sitting up on the hill, which we learned about in the meeting on the balance of the parcel. It seems to me that there's some issues that need to be addressed there on the project. I think the orientation of the building needs to be addressed. I think the size of the building needs to be addressed. Maybe we cut back in some of the common spaces and reduce the size of the building or the number of floors. I don't -know. I think those are a number of issues. I guess given xvhat I've seen in the last couple of weeks on this, I can't categorically say that I think this is the best site for senior housing, even though I firmly believe we need senior housing in Chanhassen, and xve need it quickly. It's becoming a little bit of a situation xvhere all of a sudden it seems like we're trying to take out the candles or make this .thing fit. I guess I'd just like to be reassured that it really should fit there versus being made to fit there. I guess something as important as this, and also something carrying the dollar amounts that this one does, I think it should really make sense for us to take the time to look at that before we run off and approve $4 million on a bond issue. Mayor Chmiel: Okay. Colleen. Councilxvoman Dockendorf: Well, I share Mark's concerns. However, what I've heard is that in order to take those next steps and look at the project and those are our next steps. This is the first step so xve can get things in place, and if we decide that it's not the right site or a four story building isn't going to xvork or something, we can stop the project at that point and hoxv much would xve be out, besides time and effort and a lot of headache? Don Ashworth: Very, very little. Whatever the cost of the two resolutions that you saw in front of you. To the best of my knowledge, we would not be, any additional work that might be done, do you think that Gary Fields might have some additional costs in there? What their position is if the issue is never sold, we're not charged. Julie Frick: At this point in time, that's all we have. Councilwoman Dockendorf: So really this is not authorization for the project. It's not authorization really for anything. I mean it needs to come in and there are several steps we need to go. Don Ashxvorth: I guess I would liken it to an application that you've just made with the bank to construct your new home. They'll start doing all of the checking and everything else and when you get into a closing and you sign when that house is done, you've made the commitment but up until then, you can walk. Or they can walk. Councilman Senn: So we are not committing to use the full faith and credit as a second line, or create a trust fund to fund the operating deficit? 10 City Council Meeting - April 24, 1995 Don Ashxvorth: If the project would never happen, these resolutions would never take effect. But yes, you are passing a resolution tonight saying that if the project is approved, and if the zoning is approved, da da da, you are putting up the full faith and credit. Councilman Senn: So we're committing, you're asking us to commit to that tonight? Don Ashworth: You could hold off to your May 8th meeting. That will also be the time that you consider the senior housing project itself. I don't know if that's going to make it more confusing for people in the audience or if that's going to add more to that agenda than you want adde& The Council will have to make that decision. Mayor Chmiel: Okay. I think that. Councilman Senn: Just one quick question if I could. Do we need to, I guess I'm trying to understand this. Do we need to do this to resolve the issues on the project? I mean why can't we resolve the issues on the project itself before we decide to go to bonding? I mean ! don't, I'm missing something there in the timing. I mean if it means a contractor or somebody we're working with doesn't want to do it for free, I mean that can be solved through a consulting contract versus committing to sell $4 million wor, th of bonds and putting full faith and credit behind it. Don Ash~vorth: What if the actual motion ~vas one that would either be the tentative approval or conditional approval. That you are approving the two resolutions on condition that the City Council during the next 30, 60, whatever number of days, does in fact approve a project, which would mean zoning, specific site plan, and whatever else. So if you wanted to give it as a conditional approval, that would be fine. Councilman Senn: Well, one of the things I have to resolve in my mind is, I look at bonds as being debt. I look at this guarantee as being debt, and I'm having real trouble with that because I don't see the fact that we're changing the name of it from bonds to a guarantee, that we've erased the debt. And we don't bond because bonding will get us into trouble if we can assume the debt and assuming the debt isn't going to get us into trouble. Don Ashworth: But that's the part. Again it's only because of the $10 million cap that we're not, what I'll call just going through the front door and selling this ourselves. Moody's is going to look at it in exactly the same fashion if it said City of Chanhassen versus Carver County. By having Carver County I think we also have the benefit though of having an additional partner in the project in terms of helping us make sure the project does stay viable. Mayor Chmiel: Michael. Councilman Mason: I'd like to make a motion. Mayor Chmiel: Okay. I would accept that motion...the only thing I was going to say is I'm in agreement with what you're saying and that it is just the same process of going through and buying your own home. You don't have the dollars there to do it, you can't close on that particular house. And this is the same process that we're going through and Colleen mentioned also. And I think that if we were to even put the conditional onto it, as Don has mentioned, that gives me that assurance as well and I feel a little more comfortable in knowing exactly where that's going to go and I think that with the expertise that Carver County has had within this, and Don looking at the crunching numbers that are necessary, I still think that it's a viable projects 11 City Council Meeting - April 24, 1995 Councilman Mason: I would move then, assuming Council approval on senior housing project, that we will consider using Full faith and credit and establish a trust fund to guarantee fund balance for the senior housing project. Mayor Chmiel: Okay, is there a second? Councilwoman Dockendorf: I will second it. Mayor Chmiel: Okay. A motions on the floor with a second. Is there any additional discussion? Councilman Senn: Point of clarification. You just said consider using. Councilman Mason: Well that's how it states. It says consider using full faith and credit of the City of Chanhassen, yeah. Councilman Senn: Okay, so we are agreeing in effect tonight to do that? We're just going to say we're going to consider it. Mayor Chmiel: That's what it says. Councilman Mason: That's what you need for this, right? Julie Frick: We want to make sure that the city's on board with the project... Councilman Mason: Right, and that's. Julie Frick: If it's going to work financially, I need to knoxv that. What happens is the GO backing of the bond gives me a better rate, which reduces my debt service... Councilman Mason: City Attorney, should consider be in there or not? Roger Knutson: That's not xvhat the Resolution is saying. I don't 'know what you intend but I'm telling you that the resolution you have in front of you, by approving it, using the full faith and credit and approving the trust fund. Councilxvoman Dockendorf: Conditional on approving site plan, etc, etc. Roger Knutson: Insert the term considering, that means that issue of whether you will use the full faith has to come back to you. That issue. Councilman Mason: Well, then strike consider from that motion. Mayor Chmiel: Using full faith and credit? Councilman Mason: Yes. Mayor Chmiel: Thank you. 12 City Council Meeting - April 24, 1995 Roger Knutson: Subject to approval of the project. Councilman Mason: Correct. You're okay ~vith that Colleen? Councilwoman Dockendorf: Yeah. Councilman Mason: Okay. Second still stands then I believe. Resolution #95-49: Councilman Mason moved, Councilwoman Dockendorf seconded to approve the resolution using full faith and credit of the City of Chanhassen to issue $4,131,542.00 in Housing Development Bonds for a Senior Housing Project in Chanhassen, and establishing a Tmst Fund to guarantee a fund balance for the Senior Housing Project conditioned upon site plan and zoning approvals of the Senior Housing Project. All voted in favor, except Councilman Berquist who opposed and Councilman Senn who abstained, and the motion carried. Mayor Chmiel: Do you want to state your concerns with that Steve? Councilman Berquist: No, I think I pretty much already have. There;s just too many questions. Mayor Chmiel: Okay, thank you. AWARD OF BIDS: GALPIN BOULEVARD RECONSTRUCTION, CONSTRUCTION OF MCGLYNN DRIVE FROM GALPIN BOUI,EVARD TO 1600 FEET EAST AND THE INSTALLATION OF A TRAI~'I~'IC SIGNAL ON TH 5, PROJECT 93-26A. Charles Folch: Tonight xve have the Project Engineer, Mr. James Unruh from Barton-Aschman here to provide you with the presentation of the bids that were received last Thursday and the results of the bidding and recommendation to award the contract. James Unruh: Did everyone get a copy of the...? ...this graphic you've seen before. This is the project. We have right here the Bluff Creek Elementary School. The dark blue shaded area, that's existing roadway. Trunk Highway 5. Galpin Boulevard. Timberwood Drive and here's new McGlynn Drive. Then the colored areas are either new construction or re-construction and in your packet there are, as Charles said, we had the bid opening last Thursday and we xveren't able to get everything to you to include in the packet that you have. But if you want to look at just the Sheet 3 in there for bid tabulation, and I have an overhead over here so everyone can see. We did get very favorable bids. Can anyone see that at all? Okay. Anyway, the estimate that I had come up ~vith was about $1.3 million and our bids ranged, we had three bids in the $1.1 million range and then one bid right at a million dollars and I guess I'm here tonight to recommend award of the bid to S.M. Hentges and Sons Contracting for the bid that we see there of $999,503.39. And I want to just, I covered it in the letter but just a couple of comments. The signal is actually a separate project that will be bid just a bit later. We did not get reviews in a timely manner from MnDot for the actual signal at Galpin Boulevard and Trunk Highway 5 so we pulled that out of the project and we'll have a separate contract for that. That will not affect the overall timing and the roadway will in fact be open for the opening of the school year. But you may wonder why the low bid is, or why all the bids are quite a bit lower than my estimate. Initially we had assumed that closing Galpin Boulevard and keeping the timeframe of that closure to a minimum would cause some increased costs of the project and it's a cost to have a road closed so xve felt comfortable with paying that cost. I base that on preliminary plans I sent to contractors. As it turned out, when I talked to the contractors preparing their final 13 City Council Meeting - April 24, 1995 bid, they were not concerned xvith the timeframe. They xvere comfortable with the timeframe of starting around June 1 and having the project open and completed by the time school starts, or several weeks before that actually. But they xvere comfortable with that and that's mostly the reason for the bids that are quite a bit lower than what my estimate was. Hentges, by the way, has done quite a bit of work on the school site already. They've installed several utilities in Galpin Boulevard and in McGlynn Drive so they ,know the site very well. They 'know the road conditions, or the conditions there very well and they have some of their equipment on site so obviously they have a loxver mobilization costs and that's true. The rest of the unit prices were very similar to all of the other contractors but as each item was just a little bit lower on the S.M. Hentges bid. Other cities have also had Hentges do some similar work in the last couple of years. The cities of Shakopee and Brooklyn Center and they were comfortable with the work that Hentges did and with that, I guess I would recommend that the Council award the bid and the contract to S.M. Hentges contingent on the concurrence of Carver County and MnDot. They do have to concur in the award. And the only other thing that I would say about...at $1.5 million, I would be somewhat uncomfortable but fortunately the one that supposedly 'knows the conditions better than anyone else is quite low. So that's basically the xvay the project shook out as a construction project and I guess to me that's very positive. Positive in the financial aspect of it. But I guess you'll be considering that recommendation. But there is another element I just wanted to very briefly mention. About a year ago we prepared the feasibility study for all of these projects, all these roadwa, ys associated xvith the school site and I went back and checked just how our actual costs are coming up compared with the very initial, conceptual study ~ve did a year ago and this graphic, or this table is the very last sheet of your packet there. I went back and compared what we estimated a year ago to actually what the costs xvere. For McGlynn Drive we did scale it back from the original construction but I've sort of extracted that from the original cost. And from what we are constructing noxv, the original cost is about $640,000.00. The original construction cost. We had some, we had a retaining wall in there. We had moderate soil corrections but we did not include a drainage pond. Actual costs came out to be, and like utilities were already installed. Those are included in this. And it includes the construction costs that xvill be coming up with the roadway construction. But we did, as we mentioned at the Council meeting before, by redesigning the road somewhat, we did eliminate $150,000.00 for the retaining ~vall. We have provided no~v a permanent drainage pond and we did include the lift station and the sanitary server forcemain and watermain that ~vere installed last fall. The only thing that this $456,000.00 does not include is a soils correction. I need to get that number from John Gockel and he did not have that readily available. So we have realized a substantial savings just by some redesign and some modifications from the original design. Then for Galpin Boulevard, we came out, it was like $80.00 difference is what it boiled down to from what we said in the feasibility study to what we ended up with no~v. And actually in the feasibility study we did not think xve'd have to do much work on the north side of Highway 5. As it turned out in the final design, we ended up with about $60,000.00 worth of work on the north side of TH 5, but the low bids basically covered that extra costs. So we're getting essentially more for the same price. And it was very similar with Trunk Highway 5. We had estimated $160,000.00 for the roadway work and the signal and right noxv we're at $158,000.00 for the roadway work and the signal. The signal again, bids will be taken probably in the next month or so. And I did just a very brief summary at the bottom of that sheet. The total project costs from the feasibility study xvere about $1.4 million and we actually ended up at about $1.2 million. And then I, as we've gone through the ~vhole process, one of the guidelines or one of the things we're trying to achieve was to minimize Chanhassen's costs in this. So we allocated or utilized State Aid funding for several measures and what xve ended up with was the original feasibility study showed $900,000.00 was the city's cost and by utilizing State Aid funding and by modifying the design, we gotten the city's cost down to $236,000.00, roughly. We'll have to include soils correction work back in there. But I think to me that's good news and I trust this to the City Council and appreciate your patience as we kind of stuck our necks out and how we packaged these together. I just will mention a couple of reasons too that we did reduce the costs, and one of them is that in the feasibility study we looked at these as three separate projects. McGlynn Drive would be constructed by one 14 City Council Meeting - April 24, 1995 contractor potentially and at one time Galpin Boulevard would have to be constructed at another time by another contractor and Trunk Highway 5 improvements would have to be constructed by a third contractor. That's the way the timing looked a 3,ear ago. And things have xvorked out so we can combine them into one contract and several contractors did mention that the economy of scale really did save us some significant construction dollars. So with that, all of what I've said is in that letter that you can peruse. So with that, Charles did I leave anything out? Charles Folch: No, I think that... Mayor Chmiel: Okay, thank you. Is there anyone wishing to address this particular issue? Okay. Steve. Councilman Berquist: I'll move approval that we award the contract. Councilman Mason: I'll second it. Mayor Chmiel: Any other discussion? Councilxvoman Dockendorf: I have miscellaneous and sundry questions. Councilman Mason: I bet she asks about the stop light. Councilwoman Dockendorf: No, I xvant to 'know how long the road will be closed. It starts June 1 and you're expecting until the middle of August? James Unruh: August, that's correct. And we've given leeway to the contractor to close the road during that period. Councilxvoman Dockendorf: Okay. Where will all of the current works park that are now up and do~vn Galpin every day? Have you talked to the school contractor as to? James Unruh: I guess one of the benefits of having S.M. Hentges actually be the contractor is that they are already parking on the school site actually. Now there are some locations that they could park. I imagine along the road or perhaps down in this area would be another... Councilwoman Dockendorf: But if the road's closed. Well, it's something that needs to be worked out. Charles Folch: Actually I can clarify that to a certain extent. With the bid package that was put out, in the specifications, the contractor was made aware that they need to maintain construction access for the school site and so the construction workers will be able to get to the school site and I would also anticipate as the weather starts to be more favorable and the soil conditions dry up, that one of the first things that the school contractor is going to do is build his westerly parking lot to get people off the road so, the two should work together. Councilwoman Dockendorf: Okay. And James, with your estimation of the savings on Galpin Boulevard, because we took out the retaining wall, we also encroached on some of the trees and have you considered in your pricing the fact that the Council did resolve that we do some extra landscaping there? 15 City Council Meeting - April 24, 1995 James Unruh: Yes, and actually I've got that graphic here and we looked at it last time. And that price is actually included in the whole total bid price. That was included in the total bid price. Councilwoman Dockendorf: Alright, that's all I need to know. And do we have any consideration or is this part of this project, when the sewer main was put up along the easterly portion of Oalpin, it created a large sink hole within the first 25 feet of Timberwood. Will that be part of this project to correct it or will that be a separate project? Charles Folch: That actually will be corrected on the project that did the work, under warranty work. Councilwoman Dockendorf: Okay, so the first 50 to 75 feet of Timberwood will be fixed. Okay. So those are the additional trees there? Charles Folch: we didn't have the nice things Yeah, those were the additional trees that we were planting to replace the ones we took out so to build the retaining wall but the costs for those trees are included in the overall costs. One of about doing that utility work last year was that you got those sink holes and stuff settled. Councilxvoman Dockendorf: So we 'know where they are. Charles Folch: We know where they're at. Now you come in and build the road and that's going to be fairly stable. So that xvas actually a purposeful sequence of events. Councilwoman Dockendorf: Atright, thank you. Councilman Senn: Charles, one question if I could. Hentges, didn't, I mean if memory serves me right..xve've axvarded several fairly good size contracts to them. Were those all just school projects related? Charles Folch: No, actually they did the Upper Bluff Creek Phase liB project which was done the early part of last Fall. And they also xvere I believe the grading contractor for the school site. But those are the two projects that they've been involved in basically. Councilman Senn: Didn't we just award a bid for them in the last couple of months? James Unruh: I guess I could point out one other cost element that may, that is still pending. Just today I got the number from MnDot of the percentage of the storm sewer that they actually participated in and they paid like 94% of the storm sewer and I would assume that MnDot pays 100% of the storm sewer in here. But that's going to be a minor cost. I think it's the Chanhassen, I'm not even sure who pays the difference. I just got that information today so I could not incorporated it into here but anyway this just gives you a rough idea of total project costs in preparing for xvhat we predicted... Councilman Mason: I would also like to say job well done by Barton-Aschman and James Unruh. I mean I know you're blowing your horn a little bit there but good for you. I mean it worked out well I think. James Unruh: Well hopefully it will work out too as well with the actual construction. But thank you. Appreciate it. Mayor Chmiel: Long time coming. Okay. Motion's on the floor with a second. Any other discussion? 16 City Council Meeting - April 24, 1995 Resolution #95-50: Councilman Berquist moved, Councilman Mason seconded to asvard the bid to S.NL Hentges and Sons Contracting in the amount of $999,503.39 for Project 93-26A, the Galpin Boulevard reconstruction, construction of McGlynn Drive from Galpin Boulevard to 1600 feet east and the installation of a traffic signal on Highway 5. All voted in favor and the motion carded unanimously. REQUEST FOR RECONSIDERATION OF AN ON-SALE INTOXICATING LIQUOR LICENSE~ GUY'S GRILL~ MARKET SQUARE SHOPPING CENTER~ GUY PETERSON. Don Ashxvorth: Karen Engelhardt has been handling this item. Mr. Peterson is requesting that the City Council reconsider his request for an intoxicating liquor license. The Council procedures state that if the Council does wish to reconsider, and would vote on that tonight. By the way, a person making the motion must have been on the prevailing side the last time that this issue came before the City Council. But if that were to occur, the Council would not be considering the item itself tonight. We would publish it. We would notify parties required under the original notification and it would then be considered at a subsequent meeting for final action. So again tonight's action is xvhether or not the City Council wishes to reconsider or not. Mayor Chmiel: Okay, thank you. As Don mentioned, the prevailing s, ide, which was 4 to 1. Any one person on that voting would be able to take this for a reconsideration. Is there anyone wishing to make this as a reconsideration? Oh maybe, Guy do you have anything you'd like to say at this particular time? Guy Peterson: Nothing more than you got in the packet. Of if you've got any questions from anybody. Mayor Chmiel: Okay. Is there a motion to reconsider? It's moot. As it appears, there's no reconsideration for this respective proposal. If this were to go back, I think you'd have an opportunity, is it 6 months to come back and re-apply? Don Ashworth: He cannot do it before the end of a 6 month period. Mayor Chmiel: Okay. That's where it's at right now so you would have the additional 6 months to come back in and re-apply. So with that, it appears that there's, Roger is there any requirement that we have to do if there is no voiced opinion? It just is dead. Roger Knutson: It's dead. Mayor Chmiel: Alright. Just wanted to make sure~ Okay, thanks. SITE PLAN REVIEW FOR A 12~166 SQ. Fr. TWO STORY BU1LDING~ LOT 1~ BLOCK 3~ BURDICK PARK ADDmONi RICI-W[E~ BANK & TRUST. Bob Generous: Thank you Mr. Mayor, Council members. The Richfield State Agency is requesting site plan approval for a two story, approximately 12,000 square foot bank office building. This property is located kitty comer from City Hall here, adjacent to the Target center. This development not only had to comply with city code but with the PUD standards established as part of the Target site as well as the Highway 5 development guidelines. The property will be approximately 8 feet lower than West 78th Street so that the parking area located on the north side will be partially obscured from view when you're on West 78th Street. The applicant is providing pedestrian access from the comer of Kerber and West 78th Street into the project. This will go around their monument which they're designing as part of a fountain complex that ~vill include some benches for 17 City Council Meeting - April 24, 1995 people to sit on during the day. The applicant has agreed to revise the driveway. Access on the south part of the project to eliminate the joint driveway. Staff is recommending approval of this site plan based on, subject to the conditions in our staff report. I just would like to say that the applicant has worked extensively with staff in creating a project that ~ve believe will enhance the doxvntown area. Mayor Chmiel: Thanks Bob. Is the applicant here? Jan Susee: My name is Jan Susee, 6625 Lyndale Avenue South, Richfield. I represent Richfield State Agency Inc. Also here with me is Steve Kirchner, the Chief Operating Officer. Jon Thorstenson and Jeff Pflipsen who are from HTG Architects. We have consented to all of the conditions that were placed on the property. The only one that we would like to consider is that regarding the linden trees, which I think is item 17. The landscape architect, who I think is well thought of to the city, thinks that the linden trees should stay and I guess I xvould ask that maybe that be deleted or subject to the acceptance of the planning department at a future date. But we'll put in whatever they finally request but we think that the landscape architect may have a point that could be left in. We're attempting to design something that's going to be a credit to the city. With the fountain we tried to make a focal point on the site, and we are... And the architect is available for any questions or any questions you xvould have in the future. Thank you. · Mayor Chmiel: Okay, thank you. Does the Council have any questions in regard to what's being proposed2 Not at this time? Okay. What is the cherry mahogany color that is being basically proposed for this? Jeff Pflipsen: I'm Jeff Pflipsen with HTG Architects and the mahogany color banding here? Mayor Chmiel: Yes. Jeff Pflipsen: It would be two bands. One on top of this silver band and then one right at the parapet flashing at this point. Just two accent bandings to help compliment the brick along and the metal banding that we have xvith the roof, around the face of the building and also... Mayor Chmiel: That's sort of like a racing stripe. Jeff Pflipsen: Well, I don't 'know if that's the case but. Councilman Mason: They move fast. Jeff Pflipsen: We could put a number one on the side of the building. , Mayor Chmiel: Well you probably could but you'll have to keep Valvoline out of there. And that's no plug. Okay. Is there any other questions by Council? Councilman Senn: Move approval. Mayor Chmiel: Okay, is there a second? Councilman Berquist: I'll second. Councilwoman Dockendorf: I'd like to make a friendly amendment. 18 City Council Meeting - April 24, 1995 Mayor Chmiel: Okay. Motion is on the floor with a second. Is there, or friendly amendment. Colleen. Councilwoman Dockendorf: Did you have a comment? Councilman Mason: I just wanted to talk about the linden trees. I don't understand that. Councilwoman Dockendorf: Yeah. Figure out. On condition 17, figure out what you want to do there. Kate Aanenson: Yeah the intent was, as Bob indicated in the report, is to create a variety as we had our forester look at those and caliper and sizes and shapes so that's the intent and we certainly can work with them and try to develop something. Councilwoman Dockendorf: Okay. Councilman Senn: I assume by the way the report was made up here that staff was going to resolve that with... Kate Aanenson: We had modified that and made the recommendation, in there. Which was the oaks but we certainly can, again the intent is to have some variety of species and not all the linden. If they're willing to do that, sure. We can work with them. Councilman Mason: Well, that's not going to kill the project one way or the other. Kate Aanenson: Right. Councilwoman Dockendorf: My well worded friendly amendment is figured out. Mayor Chmiel: Very well put. Motion's on the floor with a second. Any other discussion? Councilman Senn moved, Councilman Berquist seconded to approve Site Plan #95-4 for Richfield Bank and Trust as shown on the plan stamped March 6, 1995 prepared by Hickey, Thorstenson, Graver, Ltd for a 12,166 square foot t~vo story office building on property zoned PUD, located on Lot 1, Block 3, Burdick Park Addifion~ subject to the following conditions: . . The access to the bank Off Kerber Boulevard is unacceptable. The current design is such that responding fire apparatus would have to travel in the opposing lane on Kerber in order to negotiate the turn. Submit further options to the Fire Marshal for review and approval. Install one (1) additional fire hydrant at entrance to bank parking lot off Kerber Boulevard. Contact Fire Marshal for exact location. A 10 foot clear space must be maintained around fire hydrants pursuant to City Ordinance 9-1. The driveway access from Kerber Drive shall be revised per staff's recommendations as shown on Attachment 1. Sanitary sewer and water service for the building shall be from Kerber Drive. 19 City Council Meeting - April 24, 1995 10. 11. 12. 13. 141 15. 16. 17. 18. The applicant's engineer shall provide the City with storm drainage calculations for a 10 year storm event. The applicant will be responsible for relocating all existing landscape plant materials that will be in conflict xvith the site grading. The applicant will be responsible for adjustment of all city manholes and gate valves that are affected by the result of site grading. The City's Building Inspection Department will perform the inspections for all utility connections. The applicant will need to apply for and obtain the appropriate permits through the City's Building Department. The applicant shall install a one-way traffic control sign on Target's employee parking lot island directly west of the proposed access to Target's parking lot. Erosion control fence and rock construction entrances need to be included on the grading plan. Rock construction entrances shall be employed and maintained at all .access points. Construction access to the site shall be limited to Kerber Drive. A revised grading plan shall be submitted to staff for review and approval prior to issuance of a building permit. The applicant shall install a six foot sidewalk from West 78th Street to the southern property line within the Kerber Boulevard right-of-way. Light poles shall be neutral colors. All light fixtures shall be shielded high pressure sodium fixtures. Light level for site lighting shall be no more than 1/2 candle at the property line. Lights shall be on a photoelectric cell to turn them on and off automatically as activated by yearly conditions. Light poles shall be Corten, shoe box light standards. The applicant shall provide a bench or other seating system as part of the fountain area to create a sense of public space. The applicant shall install aeration/irrigation tubing in each peninsular or island type landscape area less than 10 feet in width. The applicant shall supply the city with $22,500.00 financial guarantee (letter of credit or cash escrow) to guarantee landscaping for the project. Revise the landscaping plan substituting a variety of white oak for the two Greenspire lindens located on either side of the sidewalk in the northeast comer of the site and replace the northern most crabapple on the peninsula landscape area at the northwest comer of the bank with either a Patmore Ash, Imperial Locust, or any other tree from the city's primary or secondary deciduous tree list. Remove one of the three Scotch pines on the north side of the site. Staff will consult with the applicant's landscape architect in making decisions regarding conditions 17 and 18. 20 City Council Meeting - April 24, 1995 19. The developer shall enter into a site development contract with the City and provide the necessary financial security to guarantee compliance with the terms of approval. Ali voted in favor and the motion carried unanimously. POWER SYSTEMS~ LOT 4~ BLOCK 1~ CHANHASSEN BUSINESS CENTER 2ND ADDITION: A. SITE PLAN REVIEW FOR A 27~750 SQ. Fr. OFFICE/WAREHOUSE BUILDING. B. CONSIDER APPROVAL OF A PRIVATE REDEVELOPMENT AGREEMENT WITH BENSON-ORTH ASSOCIATES~ INC. Bob Generous: Mr. Mayor, Councilmembers. The applicant, Benson-Orth is requesting site plan approval for approximately a 28,000 square foot office/warehouse building. This is within the Chanhassen Business Center 2nd Addition which received final plat approval tonight. This building is located adjacent to the railroad corridor and to the north of this is the NSP transmission corridor. This development had to comply with the city ordinances and also with the PUD standards established as part of the Chanhassen Business Center. This is the third building within the development. The first one was the National Weather Service building and the other one was the Kingdom Hall. Staff has worked extensively with the applicant's architect to provide a plan that xve believe will enhance the development of this business park. We are recommending approval of the site plan subject to the conditions contained in the staff report. If you have any questions, I'd be happy to answer them. Mayor Chmiel: Okay, just one specific one that I had. Or two that I have Bob in regard to the lighting. And supposedly it's going to be the decorative shoe box fixtures. That is going to keep the light subdued so it doesn't spill over? Bob Generous: Right. Well they're required, they can only have a half foot candle at the property line maximum. Mayor Chmiel: Okay, that was one. Good. And the other one was in regards to the ash trees that they're looking at. He indicated that they're putting an ash tree but they didn't indicate that those Marshal Seedless Ash. Bob Generous: I ,,vas unable to reach them today. Mayor Chmiel: Okay. My suggestion would be that those kinds of trees be planted rather than just the plain ash tree only because of the fact that they do spew seeds that float all over and they're a little more durable as well. Okay. Any other discussion? Is the applicant... Kate Aanenson: We do have material samples here that, I don't know how you'd like us to display them. We can set them up there or put down here but we do have material samples. Mayor Chmiel: Okay. Why don't xve just... Any other questions? If not, the developer is here. Would you like to make a presentation? Would you please just state your name and your address. Gary Berger: My name is Gary Berger and I'm President of Powers Systems. I reside at 8892...Drive in Eden Prairie and I'm here this evening to just let you know how happy and excited we are about moving into 21 City Council Meeting ~ April 24, 1995 Chanhassen. We're a distributor of industrial components, primarily...and looked at several locations in Chanhassen...for our operation and for our employees as well so we're looking forward to moving here. The representatives of both the architect and the contractor here this evening to ansxver any questions. Mayor Chmiel: Welcome to Chanhassen. Gar5' Berger: Thank you. Mayor Chmiel: Would the architect like to show the proposal. Bernard Herman: My name is Bernard Herman from Bernard Herman Architects. Also it was mentioned that representatives are here from Benson-Orth, the contractor. Both Mark Steingas, President and Mike Monson are here and they can also answer any questions that you may have regarding the project. I know that we've worked so closely with staff in developing a landscape plan and site development of the project. I don't know if xve can present anything now that is going to be greater information than what you already have in your report. We've taken care on the site plan to develop a landscape plan that really meets the City's expectations and requirements. We have extensive boulevard plantings and overstory tr, ees, 30 feet on center, xvhich is indicated in this area. We bring the overstory trees around this corner for both screening of the loading dock area... provided for this side .... provided on both sides. We have a group of informal plantings and clusters on both sides of the office building and different species of trees xvith different colorations and so on. We've basically built them...and we think we have a very interesting and well developed landscape plan. So without spending a great deal of detail than that, I think that's all I'll get into now as far as the landscaping is concerned. This is a view of the exterior elevations of the building. The top elevation is colored...the materials and colors of the building. This is basically a white building. We have solar tinted glass windoxvs. We have pre-finished metal trim. We have clear anodized aluminum frames and as a matter of fact, all of our material samples are on the table right here...discussed previously. The main entrance is an arched recess. That's approximately 4 feet of recess set into the structure and it's framed with a...stucco type of a frame system' that goes around the perimeter like a picture frame and then it's led into the recess as well, and that creates kind of a nice soft accentuation of the main entrance. Beyond that the project really doesn't seem to have any controversial issues that we can tell from a planning standpoint. It's pretty basic and it's going to...so at this point I'd just ask for any questions that you may have and I will attempt to answer those. Mayor Chmiel: Very good. Are there any questions? Councilman Berquist: I don't really have any questions except to say that entry sure looks a lot better than the first one. That was on the old plan. Bernard Herman: I can't tell you how many entrances we've had on this building. Mayor Chmiel: Any other questions? If not, thank you. Any discussion? Steve. Councilman Berquist: Well I had some questions. Some of them were answered during the two presentations that just took place. Gary, you mentioned in the documents you said there's about 30 employees. Do you expect to have about 30 employees? 22 City Council Meeting - April 24, 1995 Gary Berger: Currently we have 28 employees in our Eden Prairie facility. We also have a branch office in Des Moines and Sioux Falls. We anticipate that within the first year that we're here, we'll probably add 3 people to that total. Councilman Berquist: The document said valve controls? Gary Berger: Well we're a, as I mentioned, a distributor of various types of hydraulic components. Hydraulic pumps...valves, cylinders... We sell primarily to manufacturers of agricultural construction equipment. As part of selling hydraulic components, one of the things we do is we design and assemble and test integrated circuit blocks and the blocks can be made of aluminum or steel and has a variety of cartridge valves that have been assembled in that. And so that does take additional space as opposed to selling just air components. Because of the additional...that's one of the reasons we're running out of space. Councilman Berquist: That's the clean room? Gary Berger: Ah yes. Councilman Berquist: Okay. Average age? Not of you. Gary Berger: Getting older all the time. The average age of our employees would probably be early to middle 30's. 35 would be a good number I guess. Councilman Berquist: 35. Salary ranges? Gary Berger: I would say the average salary of our employees is probably $35,000.00 to $45,000.00. It's a relatively highly paid work force. All our sales people are technical in nature and their salaries reflect that. Councilwoman Dockendorf: Hiring any metallurgical engineers? Never mind. Councilman Mason: What, do you 'know one? Gary Berger: We have a relatively young work force I would say but their longevity. We have quite a few people that work for us that are, have been with us a long time that are still relatively young. I'm the oldest employee. I'm 49. We have a lot of people that have been with us 15 to 20 years that never worked anyplace else. Came to us right out of vocational school or, most of our employees come from vocational school background rather than college. Mayor Chmiel: I would never have guessed over 35 Gary° Gary Berger: Well obviously you're a politician. But I appreciate the comment anyway~ Mayor Chmiel: Okay, Colleen. Councilwoman Dockendorf: No, no questions. Mayor Chmiel: Mike. 23 City Council Meeting - April 24, 1995 Councilman Mason: None. Mayor Chmiel' Mark. Councilman Senn: No. Mayor Chmiel: Okay. With that. Councilman Senn: I move approval. Councilman Mason: Second. Councilman Senn moved, Councilman Mason seconded to approve the Private Redevelopment Agreement with Benson-Orth Development and their request for $85,000.00 in city assistance; and approval of Site Plan #95-5 dated 3/1/95 and revised 3/28/95, prepared by Bernard Herman Arehitects, Inc. for a 27,750 square foot office/warehouse building on Lot 4, Block 1, Chanhassen Business Center 2nd Addition, subject to the following conditions: · 1. Indicate location of PIV (Post Indicator Valve). 2. The Fire Department fire sprinkler connection shall be on the south side of the building. The applicant incorporate an additional curb cut in the front side of the building for all visitor parking area off of Commerce Drive at the time of future expansion. The site plan shall be revised to be compatible with or similar to the grading and drainage plan with regards to parking stalls, islands, and driveway access points. Staff suggests increasing the pavement section for the loading dock to a minimum of 12 inches of modified Class V and 4 inches of bituminous, or an alternative based on recommendations contained in a soil report prepared by a soil engineer. All drivexvay access points shall incorporate the City's Industrial Driveway Design Detail (Plate No. 5207 - attached). No building permits or grading may commence on the site until after the final plat has been approved and recorded and the developer of Chanhassen Business Center had executed the development contract. . Temporary access to the site prior to the street being constructed may be permitted as long as the City Fire Marshal's conditions and concerns are fully met. The applicant shall pay full park fees as specified by city ordinance. There are no trail fees required of this project. 10. The applicant shall revise the parking lot plans to provide a minimum of 49 parking spaces. 24 City Council Meeting - April 24, 1995 11. Revise the landscaping plan to incorporate an overstory tree from the "Approved Tree List" specified as suitable for boulevard and parking lots within each of the parking lot peninsulas and at the comers of the parking lot. Staff also recommends that two more hackberries be planted in the northeast comer of the site maintaining the spacing established by the four hackberries already shown. In addition, these trees shall be located between the gas easement and drainage and utility easement located to the north of the building. 12. A separate permit will be required for signage. 13. Lighting for the interior of the business center should be consistent throughout the development. 14. A decorative, shoe box fixture (high pressure sodium vapor lamps) with a square ornamental pole shall be used throughout the development area for area lighting. 15. 16. Lighting equipment similar to what is mounted in the public street right-of-ways shall be used in the private areas. All light fixtures shall be shielded. Light level for site lighting'shall be no more than 1/2 foot candle at the property line. This does not apply to street lighting. 17. All free standing signs be limited to monument signs. The sign shall not exceed eight (80) square feet in sign display area nor be greater than eight (8) feet in height. The sign treatment is an element of the architecture and thus should reflect with the quality of the development. The signs should be consistent in color, size, and material throughout the development. The applicant should submit a sign package for staff review. 18. Each property shall be allowed one monument sign located near the driveway into the private site. Ali signs require a separate permit. 19. The signage will have consistency throughout the development. A common theme will be introduced at the development's entrance monument and will be used throughout. Consistency in signage shall relate to color, size, materials, and heights. 20. Staff and the applicant will work together regarding the parking lot requirements pursuant to Section 20- 1124(6) of the City Code. 21. The developer shall enter into a site development contract with the City and provide the necessary financial security to guarantee compliance with the terms of approval. Ali voted in favor and the motion carried unanimously~ UPDATE ON FINANCIAL INFORMATION FOR TAX INCREMENT DISTRICT NO. 4o Todd Gerhardt: At our last meeting staff was asked to bring back financial information regarding TIF District No. 4. Attached are a variety of different attachments that show the estimated project cost and Tax Increment goals and the projects. Tonight I've invited Sid Inman, who has done the tax increment runs and also the cashflow and the payment... At this time I would like Sid can either give a presentation or he can answer 25 City Council Meeting - April 24,. 1995 questions that you might have regarding cashfloxvs or you have oxvners, developers and partners that are part of the project to answer any questions and time tables. Whatever you xvish is. Mayor Chmiel: Okay, alright. Well maybe what we could do is just go through a short dissertation to it and if there are specific questions, Council can ask those at the time so Sid, if you would do that. Sid Inman: Thank you Mayor, members of the Council. My name is Sid Inman. I'm with...What you have before you is a maximum cashflow created under current law for a new redevelopment district. I say maximum in that the nexv laxv allows to take up 25 years of tax increment from receipt of the first increment. Again as you're aware, you can give none or all or anything inbetween. This document design shows the outside limits. There are four pages to the document. The first page is what's referred to as project information indicating the base value and the project value. Those are the numbers that are used to calculate the actual tax increment. We're estimating a final project with a market value of approximately $5.9 million. The second page is the actual linear cashflow which takes the original tax capacity showed in the fourth column as what we refer to as the frozen value. The project tax capacity, which is the new value once completed and payable. The third line, which is the difference or to capture and then the next column over and where we threw in the semi-annual, because again we pay taxes twice a year, generating approximately $2,03,000.00 a year in gross tax increment. Minus your administrative giving you a net tax increment of approximately $91,000.00 every 6 months. Your next two columns over are referred to as the LGA or the LGA packet. The LGA amount commonly is the actual amount of...LGA loss that you would have in your general fund if you did not devise a method to stop that...from happening which is proposed in this document. You'll note that our redevelopment district, if you look at the top, it's about a 27% loss right under where the LGA and then that's factored in at 6 1/4% a year starting in the sixth year and that's still a current law and encouraged to stay that way based on the current legislation there's no change. The third page which is entitled...revenue is an attempt to express the dollars in today's dollars using the discount rate of 9%. Simply saying if you allowed the district to go the full length that we were able to finance...9%. That has a value of $1.516 million in today's dollars. The fourth page, probably the most important, is xvhat you refer to as the LGA cashflow. Under current law there are two methods to avoid the LGA...penalty. The first is what's called the offset method, which was referred to in the memo, where you simply tie general fund costs in the project area that you would expect in the general fund...tax increment which offsets the general fund loss. It's a little more complicated and it takes a broader project area, and it also reduces the available tax increment to the development because you're spending it on general fund costs. The other method which is probably used in most cases, the LGA cashflow method, is you simply take your administrative fee. Put it in the back and invest it. Start drawing off that and the first year that you experience...loss so you don't have any loss. If you look at the chart, you actually could run this district 20 years before you would actually have a loss. And I think the present value of this district, in 20 years you'd find it not less than, not much less than a million...So basically when you see these districts develop, they're usually prepared 20 to 21 years and then they're shut down so the cities experience no LGA... In any event, if the law, there's current movement to remove the hacket LGA penalty from true redevelopment districts, which of course this xvould be. If that was removed, then this would go away. Otherwise there is a method to cover you so that you would not experience any of the loss from the general fund. Again the document before you says that if you wanted the full 25 years, that you could create about $1 1/2 million of tax increment money at the present time. Just say that in terms of are these district's being created. Yes they are. There's a significant amount of these types, what I call site specific, redevelopment districts being created in traditionally older do'~vntown areas throughout the State of Minnesota so this is not an unusual transaction. With that I will shut up and stand ready to answer questions. Mayor Chmiel: Okay, thank you. Are there any questions Council may have at this particular time? Colleen. 26 City Council Meeting - April 24, 1995 Councilwoman Dockendorf: To paraphrase what Steve has said some time in the past, ! could be quiet in my ignorance or open my mouth and let everyone 'know it. No offense Mr. Inman. Todd, could you please explain what we're doing here in Colleen terms. Todd Gerhardt: What you're doing here is you've got a project of basically $5 million in redevelopment that will occur in the bowling center, hotel expansion area. Off of that project you will produce about $203,000.00 in new taxes. What you would be doing is pledging $181,000.00 back to those property owners to help offset their up front costs of developing a facade similar to this. Not exactly, and more of...in terms of landscaping. So they are upfronting the costs to put the facade on. Put the sidewalk boardwalk in and do all the parking lots and landscaping and over the next 25 years, you are going to abate the taxes back to those individuals to the tune of $181,000.00 per year. And the reason we're at that number is that over that period, they are also receiving 9% interest on their monies. We're upfronting those costs, roughly about $1.5 million. Councilwoman Dockendorf: Thank you. Mayor Chmiel: Okay, Mark. Councilman Senn: Well Todd in your attachment//2, what are the co~nponents of the project? Under project value portion. Todd Gerhardt: The components are facade improvements that are shown on Attachment, I think maybe like 4. About a year ago I think Brad presented some concepts to the city on how the city could be redeveloped. He came in with like an older downtown theme showing different facades along that south wall of the bowling center and the old...portion of the building and taking off that...concrete panel, similar to the one that's laying on the desk over here. Taking that off. Because of the grade change in that area, you'd be building a boardwalk system for handicap accessibility also is in there. And more like a street...type where you could sit outside on tables and chairs but walk along there because of that grade change. So like I'd say anywhere from 5 to 6 feet difference...the bowling center and at the rear of their entrance you have a walkout...just to get to the level, ground level of the bowling center. So to make some retail elements and movie theatre and bowling center and Pauly's viable in that area, they've got to have access to that south wall for people to get into the building. So the boardwalk theme lends itself to that. And also it adds an element of architectural statement and a downtown theme sidewalk. So the facade improvement are estimated at approximately $690,000.00. The boardwalk element in front of the bowling center and movie theater and then over where the dance studio used to be~ Where you see all the moving trucks now, that's also included as a part of the facade improvements and boardwalk improvements. About $470,000.00. And then the parking lot improvements would be to reorient some of the parking in front of the bowling center and also where all the moving vans are, to build a new parking lot over there, and that estimate is approximately $300,000.00. Councilman Senn: Okay .... can't pay for the facade improvements, then how is the land deal being structured then to compensate? Todd Gerhardt: It would similar to like a land write down. You would purchase a section of land over the parking lot to make it go and then transfer title back and forth where he would dedicate back to them $690,000.00 over time to pay for that land in a purchase, re-purchase. 27 City Council Meeting - April 24, 1995 Councilman Senn: Under your project evaluation...I don't know what page it is. What are the parts and assumptions related to your evaluation and direction? What are the parts of this project and the assumptions of the improvements? Todd Gerhardt: ...information on the projected value? Councilman Senn: On the projected value information. Todd Gerhardt: Oh, okay. Let's go with $400,000.00. That would be for the new conference rooms that would be connected to the hotel. Right now they have a present value of $114,000.00. They would increase that with the improvements up to $400,000.00. The 18, we'll owe 20 for $1.2 million. That would be the expansion of the 35 additional rooms to Country Suites. And right now that has a current value of $35,782.00. The 13000700, 1.4 would be the redevelopment of the Frontier Center into I think right now they're talking about retail for that element. Where the moving vans are. And then the $2 million xvith the 1950020, has current value of $1,200,000.00. That's the bowling center as it is today...upgrading the, xvhat is the Filly's portion. Adding a portion of retail to the facility to bring that value up $800,000.00 to $2 million. Then 1950030 is where right noxv it was the old portion of the Instant Webb building, j,ust to the east of the boxvling center. You may or may not 'know but the bowling center did not occupy that entire building. There's a party wall that separates the two. From that party xvall east is where the developers are proposing to put the six bay movie theater. And that value increase would take it from $91,000.00 up to $900,000.00. Councilman Senn: Are we requiring that all of the components of this project be there in place and secured prior to proceeding on it? Todd Gerhardt: The xvay this deal is structured is that a new promissory note. You only get the money from what you generate. If they don't generate $181,000.00 in increment, that you've giving here, they don't get $181,000.00. They're going to have to offset their expenses by... Councilman Senn: So it's purely pay as you, I mean it's basically a pay as you go and effectively if the taxes aren't paid, then they don't get it. Todd Gerhardt: Correct. It's the same type of contract that you just approved with Powers Systems. The developer is upfronting all the money. You will not have to sell bonds for parking lots. Councilman Senn: Are we requiring that all the current taxes be brought up to date before we proceed on this? Todd Gerhardt: Yeah. I think right noxv the bowling center is fairly close to doing that. I don't 'know. They are current xvith their loan to the HRA. Councilman Senn: I think they're still behind in property taxes. Councilman Berquist: So that's a yes. We can as a condition mandate payment in full? Todd Gerhardt: Or the payments that would go to them... 28 City Council Meeting - April 24, 1995 Councilman Senn: Help me understand the timing if you would in terms of, I mean are all these components of the project ready to go now? So I mean xvhen this is done or upfronted, it will be done all at one time? Or is it going to be done at different stages? Todd Gerhardt: It's going to be done in different stages. You've got, I should let those guys speak but from our last meeting there was talk of staging the project which will then affect these numbers. This is all, our numbers are based on all the improvements being done this year. It's not realistic to think the Frontier Center building like the moving company xvill be completed this year. And it would be an effort, I would think to get all the boardwalks and facade treatments done yet this year. They feel that a lot of it can be done and the parking lot east of the Frontier Building was also a question... But between this year and next year they've said they hope to have everything. Councilman Senn: But xve xvouldn't be transferring any of the land until each one of the components was locked in... Okay. Mayor Chmiel: Okay, any other questions? Councilman Senn: Well just on the pay as you go. I've never heard ~f paying an interest rate on pay as you go before. Is that something that's started to happen or something? Sid's anxious to stand up behind you. Sid Inman: It's been done a couple of times. I'd say primarily the...yes. 99% of the transactions we work on they pay an interest...they're borrowing the money for you so you need not only to replace the principal but their cost incurred. Todd Gerhardt: The other alternative that I think Sid would propose is if you wanted to sell bonds to do the parking lot and build the facades but after the housing discussion tonight, I didn't think we could put that on. Mayor Chmiel: Very good. Michael. Councilman Mason: No comments. It looks fine. Mayor Chmiel: Colleen. Councilwoman Dockendorf: No questions. Mayor Chmiel: Steve. Councilman Berquist: Well the next step tonight is to see what we're going to be looking at for proposed improvements within the buildings themselves and within the area? Or is this premature? Todd Gerhardt: Tonight the condition of your approval of the resolution calling for the public hearing at your last meeting, you placed the condition that you wanted to see the financial figures prior to that public hearing so tonight was to give you preliminary numbers on the project. I think it's May 22nd is the public hearing date so you xvill go through this one more time at that meeting to present these numbers. Tonight was to give you a sneak preview of what was in the plan. And also to get feedback from you...for you to mull it over until it comes back in. If you want to see a project like this and dedicate these dollars over a 25 year period. 29 City Council Meeting - April 24, 1995 Councilman Berquist: Well this is one of the few TIF Districts that I've seen that actually follows the but for stipulation. But for the TIF it wouldn't happen so. Councilman Senn: Is there any possibility at all that we could get some, prior to the public hearing, and I talked with Vernelle about this earlier. I'd like to, at least in my mind, it'd be nice to see some commitments from the components of this project other than just kind of creating a TIF District to do something with Filly's and the boxvling alley. Because I mean we've really seen nothing on that and as part of that public hearing process, I think it would be nice to see some commitments in terms of the theater and the hotel and stuff. Todd Gerhardt: Formal commitments will come in similar to the last one where you have the private redevelopment agreement. We're going to enter into minimum market values and specify times for payments and...tax increment district is our legislators do not 'know what they're going to do with, on these tax increment districts so xve want to keep the deadline to July 1 in establishing the district. I xvould think over the next two months we're going to probably be negotiating with the bowling center and the movie theater people. I think xve've come to terms with the hotel people already. They've committed. The movie theater people want to move ahead fairly quickly and...So I would be leaning back or it will go to the HRA where...So that would be used as we enter into those agreements. You should get those packets; That's xvhere a lot of the meat will be there to make sure that they fulfill their side of the bargain. Mayor Chmiel: Okay. Is there a motion? Councilxvoman Dockendorf: I don't think we need a motion. Mayor Chmiel: None actually? Roger Knutson: Just discussion. Mayor Chmiel: Okay. Strictly a discussionary item. This will come back to us on May 22nd, is what you said. Okay. Okay, let's go to item (h), Mark. 3(H). PROPOSED AMENDMENT TO THE STATEMENT OF PROJECT USE OF FUNDS FOR TH-F, URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM~ FUNDED UNDER TITLE I OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974 AS AMENDED. Councilman Senn: As I understand it, several xveeks back we effectively approved an allocation of the '96 CDBG funds. Roughly 20, what...equipment for the ADA structure and $2,500.00 was for South Shore and the balance was...staff position in the senior center. Now we're effectively being told that those type of program activities are not xvhat they xvant to see so they want us to do something else with the money. Could you please explain to me what constitutes the definition of, the definition or I don't know, the word...public service. Can you tell me what's happening. I mean why is building an ADA accessible park structure a public service and putting some kitchen improvement into this building. Kate Aanenson: There's two separate issues there. The park structure, let me back track. First of all the reason that we have to re-do this is as I indicated in your administrative packet last time is that we always tend to be over the 15% cap on public services. Okay. It just so happens that when you shake up all of Hennepin County, it balances out. Well this year it didn't. Everybody was significantly over and I showed you in the last report a comparison. Some of them xvere significantly over so the averages didn't work. So they came back and said all 30 City Council Meeting - April 24, 1995 of the cities have to re-submit. The public services is what they're looking at as far as administrative costs. When we pay someone's salary to run a program. That's public services. The problem with the park issue is the fact that they're taking a narrower view on their interpretation that they have in the past and saying, if you're going to replace something for ADA, you can only replace that piece of equipment. You can't add to it. What we were doing in that situation is, we were making an investment based on the use of that park. Replacing with an ADA qualified structure. Their interpretation is narrower than they have been in the past and they're saying, you can only replace what was there. So if there was 3 swings and a slide, that's what you can replace, so they're taking a much narrower view. So what's Todd done is he's put together a package and he's just narrowed down the size of the structure itself. He has carry over money from two previous years and the city will be putting in some of their own money for site preparation with approximately $60,000.00 going towards the project and xve were looking at before, closer to $80,000.00 to $100,000.00 so he scaled down the size of the project. Councilman Senn: I mean is he. Kate Aanenson: There's money in his budget. Councilman Senn: The greatest portion of that money was coming o~t of '96. I mean what has been accumulated... Kate Aanenson: Well no, actually I think there was 47 from previous years and this year we were looking at 27 so, yeah. Approximately another $30,000.00. There was a significant but again it's their interpretation...just to replace what's there. Not to embellish it or make it, so it's not a public service issue. It's their interpretation and again, they're taking a narrower perspective so. There will be a play structure replaced at the site. It will not be as Todd would liked to have seen it. Again to meet the needs on what we believe was a service area meeting ADA but their interpretation is, you have to meet those standards anyway so you should just replace it with those dollars. Councilman Senn: So the park structure is still going to happen, it's just going to be paid for by other funds. Kate Aanenson: Correct. Still Block Grant funds from ~evious years but it's not as large as it was originally. Councilman Senn: And some nexv city funds outside of CDBG to make up the difference? Kate Aanenson: Well money that Todd has already put in the park budget, yes. Councilman Senn: And the South Shore money, what? Bites the dust? Kate Aanenson: Correct. We're not putting any into public service at all and a lot of other communities, South Shore is looking for a whole different revenue stream that they've been working with because a lot of other communities, such as Tonka Bay, Greenwood, they're all in the same situation because basically they were dedicating all of their money towards public service so there's a big issue there as how they're actually even going to run South Shore and Shorewood looking at some other financing alternatives. Completely different. Maybe they're HRA. Completely different revenue streams to make that function. We looked at a number of sources of what we could use this money for and again, trying to leverage it and staying away from Federal Labor Standard Act and those sort of things. We looked at this provides the most flexibility in allowing us to put that in the Senior Center and give us some opportunities when we see what the actual needs are. It gave us 31 City Council Meeting - April 24, 1995 the flexibility to separate that contract from the building construction contract and it gave us some, like I said, the flexibility. Right now we're thinking possibly a stove and cabinetry and we can break that out separately in a contract and not get into the...so I think that's probably the best way to go. And again these dollars aren't allocated until July 1st. We're ready to possibly begin grading and if we can't pay ourselves back, that's another requirement...so there is quite a few strings and we don't want to leverage $50,000.00 on a $5 million project either. So I think this gives us the most flexibility. And again, we're under a short window of what we can use this money for because, and spending time looking at projects because we'd have to do that again through Hennepin County~ Councilman Senn: Is the staff position that was being funded will now be funded from another source? Kate Aanenson: Correct. And as you recall we went through the budget process last year. Because we have to pay Dawn's salary, that Hennepin County reimburses us. Dawn's salary, that 50% is already covered in the Park and Rec budget so there is a salary. We're not going to have to try to find another source for that. Her salary is in the budget. The Block Grant `,vas just reimbursing the city's cost for that so. Councilman Senn: So rather than just taking the $50,000.00 and building it into the City Hall, or the proposed I should say City Hall expansion, I mean how difficult would it be to pit together a list of potential project uses of that money that xve could look at? Kate Aanenson: I'm sorry. I could have put together a list. I spent hours on this trying to come up with some creative ways to do this and believe me, the amount of money that we get and the red tape attached to it, it's very difficult to try to again leverage those monies and what it does as far as encumbering other dollars. Again at this point, based on the short timeframe we had, I thought this gave the city the most flexibility. There is always the option of putting some back towards public service but I really think this did give us really the best use of the dollars. I told you one, we looked at senior housing. We looked at, maybe you can help me Don. Some of the things that we talked about. Don Ashworth: We talked about the physical construction, the library type of thing. That brought it back in the... Kate Aanenson: We explored a whole host of options with Hennepin County. Again you've got to look at those benefitting loxv mods. You've got to show 51% benefit to loxv mod and it really starts narrowing what you can use those dollars for. In ADA, again they're taking a much narrower perspective those so they're replacement projects. Replacement of just that only. Not embellishing it. Don Ashworth: We looked at the land costs. We looked at. Kate Aanenson: Yeah, purchasing land. Sewer and water, SAC charges. We tried to hit everything. Again, we're running against a time frame that these dollars aren't allocated until July 1 and reimbursing us back. Sewer and water hook-ups. We tried to be as creative as we could and I'm sorry, I didn't put a list of those that we looked at in here so you could see the process that we ,,vent through. Councilman Senn: Well I guess, is there any xvay at all to tie it into some affordable housing issues? Kate Aanenson: Yeah, xve even looked at doing that. We looked at doing this on the project but these are again, we talked to Julie about that. We'd have to show 51% being rented to low mod and then, what they 32 City Council Meeting - April 24, 1995 really get you the money for is for financing but most of these are rentals. They would help you xvith securing your loan. Processing fees. Those sorts of things. You could use it for that. Again, these are going to be rentals so it didn't, so the rental program didn't match up on this one so, we looked at that option too. Don Ashworth: Potentially in future years you might be able to do some type of a subsidy program but to actually get something like that set up, I mean we're talking, if you set that as a goal for now, potentially a year from today we might have something for you to look at. Because I really do see it as very time consuming and lots of red tape. Councilman Senn: Well what I'm thinking of is, I mean these funds we're looking out to July of '96. We do have some affordable housing issues we have to deal with. I mean is there a way to use this in conjunction with purchase of affordable housing. I mean are there ways that we could use this money to pay for elements such as sewer and water or whatever going into that housing to reduce the price of the housing... Kate Aanenson: I agree with what you're saying Mark and that's the tactic we tried to take. The problem is you have to have a specific project in mind and justify that on the project. Whatever dollars you're leveraging. What I'm saying, that's where the window is too short. I've got to hav, e this back in and to make a project go on to make sure something's going to go, if you don't use it for those dollars, you've lost them so you've got to make sure you've got a project that you're going to be able to use them for. Councilman Senn: So what if we proposed City Hall expansion..°? Councilwoman Dockendorf: Then we lose it. Councilman Senn: We lose the funds? Kate Aanenson: Right. Except that we have allocated, I think they would still like, there is a big demand for Meals on Wheels. We looked originally at doing a larger scaled kitchen in the facility because this area is not being serviced by that. Chaska will not come up here. The closest is Shakopee. That's still I think something that we would like to work on is trying to work something in that kitchen where we can provide that service. Councilwoman Dockendorf: So if we didn't do City Hall expansion, we could do some remodeling in the current facility? Kate Aanenson: I think so. I think that's something we'd like to see to be able to provide that service. Mayor Chmiel: Okay. Any other questions? Is there a motion? .. Councilwoman Dockendorf: I would move approval of the 1995 CDBG allocation. Councilman Mason: Second. Mayor Chmiel: Moved and seconded. Any other discussion? Resolution #95-51: Councilwoman Dockendorf moved, Councilman Mason seconded to approve the resolution allocating $50,196.00 for the Chanhassen Senior Center Remodeling. All voted in favor and the motion carded unanimously. 33 City Council Meeting - April 24, 1995 ADMINISTRATIVE PRESENTATIONS: A. BLUFF CREEK WATERSHED PLAN UPDATE & STEERING COMM1TrEE~ WATER RESOURCES COORDINATOR. Diane Desotelle: Thank you Mr. Mayor and Council members. I'm here today just to update you on where we're at with the Bluff Creek Watershed plan and then to get your opinion on our next step for creating a steering committee. Task force. As you're aware, we've been working with the DNR and the Watershed District in gathering funds and I'm pleased to say we not only got $10,000.00 from the DNR, we're up to $12,500.00 from the DNR so, and we're working on finalizing a joint agreement with the Watershed District. It's getting a little political but, as Mike 'knows. There's one line that Ray Haik put in the agreement and it's asking us that if for some reason this plan didn't go through and we didn't petition for a project, that we would not only reimburse them the $20,000.00, which we didn't see a problem xvith, but that we would also buy the land that they purchased about a year ago for $75,000.00 as an entranceway into the Bluff Creek Watershed District. And I don't know if you know some of the story behind it and I told them that I ~vanted them to eliminate that from this joint agreement so. Councilman Mason: I was at that meeting. Don't get me started on tl~at. Diane Desotelle: So I'm trying to get them to eliminate that. I'm still confident it's going to go through so. We are going to be walking the Bluff Creek corridor on May 3rd. The morning of May 3rd if, you're all invited to come. If you can make it. What it will be is, it's a Wednesday morning, yeah. It's going to be the technical group, which ;ve've met once and this technical group is basically professionals in all the natural resource fields. We're working on gathering all the data and David Hartley is working with us to get it on the GIS so that's moving along real good. The next step is by the end of May, first of June we want to have our first meeting xvith the steering committee and the steering committee will be composed of the citizens. I'm getting a couple of developer names from the Builders Association. We also got a gal from the Pillsbury Corporation to sit down and start trying to put this plan together. On your list here on page 2 of this item, there's 7 individuals ;vho have expressed an interest in being on this committee and I have not put an article in the Villager. We put an article in the city newsletter and then also just by word of mouth. These are either landowners associated ;vith the creek. There's a couple of people that are private citizens that live in Minneapolis but have been a part of the creek for many years and know it well and ;vant to be a part of it and then of course Dottie Shea with McOlynn's Commercial Rep. We've also had a couple of people, Don Sitter, Susan or Ladd Conrad, Tim Erhart, Scott Boynton as possibility names that were thrown out from people. I guess at this point I want some direction as to how you would like to see this steering committee formed. If you want to see further advertisement or if we can go with the group of people who have expressed interest. I don't think by any means this is too many people. I think this is a good number. I'd rather start out with a larger number because in the end you really get strong commitment from usually a half, I'm hoping for a half dozen. Mayor Chmiel: You haven't run the ad in the paper? Diane Desotelle: No, I haven't run an ad in the Villager yet. We did it in the city newsletter and just through word of mouth. So that's ;vhere, I guess I'm seeking for direction as to, if you want me to do anything else. If you want me to go with this list. If we need to pick just a couple. 34 City Council Meeting - April 24, 1995 Mayor Chmiel: I think maybe xve should make it well 'known so if there are any other interest in it. I don't see any problems with some of the people that are here on this. This Erik Roth and Dean Perry, were those the ones that had slides of Bluff Creek? Diane Desotelle: Yes. And I'm sure those two xvill be very active. Mayor Chmiel: Alright. Councilman Mason: And I've worked with on SWMP committees or whatever else with Don Sitter, Susan and Ladd Conrad and Tim Erhart. Diane Desotelle: Now I haven't specifically asked those individuals. Those individuals names were given to me but I didn't know if you wanted me to pursue seeing if they wanted to joint too. Councilman Mason: I 'know their commitment to the city and to Bluff Creek, which they feel very strongly about both of them so I'm certainly fine with that. Mayor Chmiel: Okay. What direction ~vould you like to see? Would' you like to see her advertise this in the newspaper? Councilwoman Dockendorf: Yes. Mayor Chmiel: Okay. Let's advertise it and see what happens. See how many you have. Diane Desotelle: Okay. Mayor Chmiel: What are your feelings on the balance of the people that are already listed as to what she's indicated other than the ones that she's not talked to? Such as the Sitters and Conrads and Erharts. Councilman Berquist: I think I'd like to see you contact them and see if they'd be interested in serving. Diane Desotelle: I could do that, sure. Councilman Senn: I'm just curious. I mean basically when we look at Bluff Creek we primarily look at Bluff Creek as being a, I'll call it a natural park and open space amenity or whatever. I mean has any thought been given to just utilizing the park. Diane Desotelle: Commission? Councilman Senn: Commission as your committee rather than creating a new one? Or one with a life of it's own or whatever. Diane Desotelle: I think it's important to have a new one because I think it's very important that ~ve get input from the developing community as well as citizens in the area because this is not only a park and recreation aspect. This is to preserve the natural resources and the water quality of the area. It's looking at, not only xvhere the trail and corridor would go but where xve'd want to restore our wetland. What we want to do for 35 City Council Meeting - April 24, 1995 educational purposes. Do we want to do any reforestation? How wide of a buffer do we need to protect it? Things like that. Mayor Chmiel: Okay. You sold me. Diane Desotelle: So there's a lot of other issues. Councilman Mason: Yeah. This is a, if you people haven't taken that hike down Bluff Creek, I strongly recommend it. It's, I don't think there's anything quite like it within hoxv many miles? A lot. And it needs all the input it can get. Mayor Chmiel: It's probably the most pristine area within the 7 county metro area. Councilman Mason: It very well could be. Diane Desotelle: And if you can't come on May 3rd, we'll be doing more of these so maybe we can plan a Saturday too to do this. Councilman Berquist: What time on May 3rd? Diane Desotelle: We're meeting here at 9:00. It will probably take the morning. Councilman Mason: It would be nice to get there when the trilliums are blooming. Diane Desotelle: Yeah. I don't know if they'll be quite up yet or not. Okay, so I'll put an ad in the newspaper and then. Mayor Chmiel: Okay, yo.u have direction. Diane Desotelle: Yeah. There's one more thing I just wanted to share with you. I've been working with the City of Minneapolis on developing a lawn care brochure. I have 250 of them and I'm really pleased because I was able to tie in ~vith the project that's already happening. And in fact I'm already working with some of the lake groups and I'm going to be using these too. Inside is all kinds of great information on lawn care practices and hoxv it relates to water quality and the watershed division. What it means and why it's so important. And I put an article too in the quarterly city newsletter. I've worked with the University of Minnesota Extension, the Master Gardeners. A lot of top quality people, that are already working on a water quality project in Minneapolis and I kind of tied in with that and they were more than, they just said, yeah come on in. Join us. Give us your input and I was able to help them put these together and get them to change the sticker and put Chanhassen on them instead of Minneapolis so I have these available for you and I'll be using them as part of our educational program. Councilman Mason: Good job. Councilxvoman Dockendorf: Looks nice. Mayor Chmiel: Okay, thank you. 36 City Council Meeting - April 24, 1995 B. MARKET/GREAT PLAINS BOULEVARD GEOMETRICS~ CITY MANAGER. Don Ashworth: That's really just kind of an update report and I guess the HRA did approve carrying out those two projects and I see it as safety issues. Both of those roadways, if you've noticed, have abrupt lane endings and you find yourself heading south on Great Plains and all of a sudden you and the guy next to you are both trying to fight for the one lane in front of you. These corrections take care of that problem and again, I just wanted the Council to be aware of it. Mayor Chmiel: Okay. Any questions? If not, is there a motion for adjournment? Councilman Mason moved, Councilman Berquist seconded to adjourn the meeting. All voted in favor and the motion carded. The meeting was adjourned at 9:45 p.m. Submitted by Don Ashworth City Manager Prepared by Nann Opheim 37