06-27-2022 City Council Work Session MinutesCHANHASSEN CITY COUNCIL
WORK SESSION
MINUTES
JUNE 27, 2022
Mayor Ryan called the work session to order at 5:30 p.m.
COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilman McDonald, Councilman
Campion, Councilwoman Rehm, and Councilwoman Schubert.
COUNCIL MEMBERS ABSENT: Councilman McDonald.
STAFF PRESENT: Laurie Hokkanen, City Manager; Matt Unmacht, Assistant City Manager;
Kate Aanenson, Community Development Director; Charlie Howley, City Engineer/Public
Works Director; Don Johnson, Fire Chief; Jerry Ruegemer, Park & Recreation Director; Ari
Lyksett, Communications Manager; Danielle Washburn, Interim Finance Director; and Kim
Meuwissen, City Clerk.
PUBLIC PRESENT:
Dave Mol, Redpath and Company
Mark Nordland, Level 7 Development, LLC
Kendra Lindahl, Level 7 Development, LLC
Josh Kimber, Park Referendum Task Force Member
Mayor Ryan called the Work Session to order at 5:30 p.m.
PRESENTATION AND REVIEW OF 2021 AUDIT
Dave Mol from Redpath and Company presented the results of the 2021 audit. The goal was to
plan and perform the audit to provide reasonable assurance that financial statements are free of
material misstatement and presented in accordance with accounting standards. The City has
participated in the National Government Finance Officers Association Excellence in Financial
Reporting for 29 consecutive years. Mr. Mol reported on the internal control and found that
reconciliation of financial investments wasn’t occurring on a regular basis but ultimately all the
investments reconciled. Mr. Mol presented the next report on Minnesota Legal Compliance. One
item noted that the payment of invoices were not being processed in a timely manner (within 35
days). Ms. Hokkanen reported that each instance was reviewed and identified that they all came
from the same area. Generally, staff is well aware of this requirement and this is not an issue we
expect to have moving forward. The last report was on communication with those charged with
governance, which are certain things that are not covered in other reports. There were no
difficulties encountered in performing the audit before the June 30 deadline. A new requirement
in 2022 is how leases are reported. In conclusion, really good results were found with no overly
negative findings. Mayor Ryan asked how this year’s report compared to years past. Mr. Mol
reported that the City’s fund balance increased driven by the permit revenue so financially things
look good.
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Mayor Ryan expressed her appreciation of the work Interim Finance Director Danielle Washburn
has done in assisting with the 2021 audit and performing Finance Director duties in the interim.
AVIENDA PRESENTATION
Mark Nordland of Level 7 Development, LLC provided a construction update, development plan
progression, and proposed PUD amendments on the Avienda project. He is looking to answer
Council’s questions and obtain their feedback and thoughts.
Mr. Nordland provided an aerial view of what the property looked like a year ago and also when
the project was demobilized in December. They remobilized in May and are nearly done with
mass grading on the site with the exception of the corner at Lyman and Powers Boulevards,
where the elevation will be lowered to match the elevation to the south. Water is substantially
installed along with quite a bit of sanitary sewer. They are waiting for the final plan approval on
specifics for Bluff Creek Boulevard before they can starting laying utilities underneath the street.
Supply chain is their biggest issue at the moment. Mass grading will be completed and they are
hoping to get approvals within the next week or so then they can order the materials and get them
installed by the end of October.
Mr. Nordland presented a site plan showing a total of 8 larger homes and 32 single-family villa
homes. Bluff Creek Boulevard will need to be completed before the final plat can be approved
and construction can be started. They would like to be able to pull permits for these homes this
fall. Concerning the PUD amendments, they have a senior housing developer that wants to take
the original two senior projects and combine them into one larger project. They have also made
some modifications in the layout in the center of the village including a public plaza surrounded
by retail. Mr. Nordland next presented the approved plan and revised proposed plan. They have
added 53 row homes in groups of four to be constructed by Cudd. They are also showing a five-
story 400-unit apartment project in the center of the site developed and owned by Bahram
Akradi. It will include one level of below-grade parking and it would all be built in one phase.
Courtyards would be constructed in the center of the apartment buildings. The first level will
contain retail space will full storefront glass along the front of the building. The inner perimeter
of the plaza area would be surrounded by retail. They are also looking at some kind of open
container area so that people can walk around the plaza area with their beverage. There is a
35,000 square-foot grocery store proposed on the north portion of the site along with some junior
box space which would include stores like Ulta Beauty, DSW Shoe Store, Nordstrom Rack, a pet
food store, etc. They are still showing two feature restaurants at the front of the project. There are
currently no office users but there is interest in a hotel. Once retail sites are constructed there will
be more interest in the office portion. As far as the senior housing, the original plan had a 55+
building of 150 units and a senior facility with services of another 150 units. The developer is
proposing one facility of 270 units overlooking the wetland and woods. Mayor Ryan asked how
much retail was lost by adding the housing. Mr. Nordland replied that they took out the movie
theater and added more retail. Mayor Ryan expressed concerns by residents that this area would
become more housing than entertainment. Mr. Nordland responded that the new plaza area
would be significant in size. Ms. Aanenson commented that the PUD is very complex and that
the City has clear expectations on the desired uses and wants to be transparent with any changes
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moving forward. Ms. Hokkanen asked about the possibilities of a public/private partnership for a
facility in the southern corner of the site. Mr. Nordland said they are open to the idea and would
like to start the discussion with the City. Mayor Ryan provided some resident concerns regarding
environmental issues, landscaping, water reuse, and the entertainment component. Mr. Nordland
replied the Watershed District approved construction of a full rainwater reuse program to be used
for irrigation.
Mayor Ryan invited comments from the Council regarding tonight’s presentation.
Councilmember Rehm asked if our existing sewer and water infrastructure would be sufficient
for the development. Mr. Howley responded that yes, the City was prepared and able to handle
the additional impact on the infrastructure.
Mayor Ryan recessed the Work Session at 6:50 p.m.
Mayor Ryan resumed the Work Session at 8:00 p.m.
PARK REFERENDUM UPDATE
Park and Recreation Director Jerry Ruegemer reviewed Council’s discussion from the previous
work session regarding all of the options to be included in the referendum. Staff has since pared
down the options to focus energies on completing amenities within Lake Ann and Bandimere
Parks. Mayor Ryan and Councilmember Schubert attended the June 20 Referendum Task Force
meeting to share Council’s feedback. Ms. Hokkanen also presented the City Hall concepts which
include a civic campus or plaza. There was also conversation regarding a possible public
partnership with the Avienda project. Based on the presentations, the Task Force felt
overwhelmed and rushed to move forward. The Consultant, WSB, created a FlashVote survey
for Task Force members to complete individually the next day to determine if they should move
forward with the referendum as well as include reasons why or why not. The questions included
whether or not a referendum should be held in November and, if so, what amount of money
would you be comfortable asking for? Which projects would they be in favor of including in the
referendum? Mr. Ruegemer presented the survey results and 9 out of 12 members wanted to
move forward with a referendum in November for a variety of reasons. Some of the reasons
included concern about the economy and high inflation as well as the City Hall project that may
compete with the referendum. The Task Force desires to see the referendum through and
indicated they would be comfortable with a $10-$15M range of project costs. The top five
priorities of the Task Force were Lake Ann Preserve, lights at Lake Ann Park, trail gaps,
permanent bathrooms at the Klingelhutz Pavilion and at the ballfields in Lake Ann Park.
Mayor Ryan stated that Lake Ann Preserve was at the top of everyone’s list. Councilmember
Schubert added there was a lot of discussion about how much should we ask for now and should
we ask for an additional amount for an ice rink a year or two later. Ms. Hokkanen also added that
she thought the Task Force was very excited about moving forward with the referendum;
however, they understand that this might not be the year to move forward and she doesn’t think
this should be a mandate for the City Council. Ms. Hokkanen provided deadlines for the
referendum and asked for Council priorities and how the Task Force should move forward.
Mayor Ryan listed possible priorities to be considered are building a new City Hall/Civic Plaza,
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a referendum, and trying to do a component of both. Councilmember Schubert asked about
competition between Avienda plaza and Civic Campus. Councilmember Campion said he could
see the overlap between the two and expressed concern about needing more time to review and
plan before moving forward. He thought the pared down list was more palatable; however, he
had concerns about required upcoming maintenance needs with the Rec Center. Mr. Ruegemer
said we are dealing with rooftop condensers, windows, and some cosmetic items.
Councilmember Campion thought whatever happens to the Rec Center would hinge largely on
potential sheets of ice or a fieldhouse in Avienda. Ms. Hokkanen responded that the Avienda
Plaza will be privately owned and programmed and the City has not been asked or has any
intention of moving our programming there. Mr. Ruegemer added that competition is healthy
and if our program is of high quality it will get the numbers and if not, we would reassess. Mr.
Howley interjected that the Rec Center future maintenance included replacing exterior
pavements for the parking lot and skating rinks and replacing skating rink lighting as well as
refurbishing the locker rooms and the gym floor. Councilmember Schubert talked about helping
fund the potential partnership with Avienda for an ice rink with the local sales tax option outside
of the referendum. Ms. Hokkanen explained that the City could impose a one-half of one percent
local option sales tax for a regionally significant project for a term of 20 years. The Legislature
would have to authorize the City to ask residents via referendum for permission to create the
sales tax. The first opportunity that could happen would be in 2023 and we think that we could
generate $38-$45M over 20 years. If Council would like to learn more about this process, the
City would need to request the University of Minnesota Extension Office perform a study at a
cost of approximately $3,500 that would project how much could be generated and who would
pay it. Councilmember Rehm suggested that the City could delay the referendum for a year and
use bonding for the Lake Ann Preserve and the permanent bathrooms. Mayor Ryan thought the
priority would be to decide what to do with City Hall before the referendum. Ms. Hokkanen
provided feedback from Councilmember McDonald that City Hall and a Civic Campus would be
his main priority. Councilmember Campion asked why it is one versus the other. Ms. Hokkanen
responded that providing city services is the core responsibility of the City rather than the want-
to-have of the parks referendum. There is also a lot of concern about Avienda drawing people
away from the downtown and that transforming the City Hall space will revitalize downtown and
promote additional development. Councilmember Campion asked about the time schedule for the
City Hall project. Ms. Hokkanen responded that if that was the direction Council wanted to go, a
request for proposals (RFP) would need to be done in early 2023, bidding and issuing the bonds
in 2024, with first bond payments in 2026. Construction of the Lake Ann project probably would
also occur in 2024. Mayor Ryan commented that with that information if the referendum was
held now but the City Hall project would not occur until 2024 that it no longer seems to be an
either/or situation. Councilmember Schubert ask how much of the referendum would be able to
start in the spring of 2023. Mr. Ruegemer responded that there are some components such as the
field lighting that could be initiated in the spring; however, the Lake Ann Preserve would need to
be approached in stages starting this upcoming winter when the wetlands are frozen. It also will
take some time to get through the permitting process with other agencies. Boardwalk completion
would likely occur in the spring or early summer of 2024. Mayor Ryan reiterated that she would
prefer to bring new life into the downtown by constructing a Civic Campus which includes a new
City Hall and delaying the referendum until next year after we obtain more information from
Avienda on a possible partnership. Councilmember Campion commented that the Civic Campus
seems to be the bigger priority; however, the referendum projects would start sooner.
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Councilmember Rehm commented that if the Council decides not to move forward with the
referendum this year, the Lake Ann Preserve project should move forward with bonding,
depending on the numbers. Councilman Campion commented that a referendum in an amount up
to $20M seems palatable. Councilmember Schubert asked if the City would be able to bond a
smaller amount of $6M and if it would adversely affect future bonding and the City’s credit
rating. Ms. Hokkanen responded that yes, the City can bond for the smaller amount. If Council
direction is to move ahead with the Lake Ann Preserve project Staff can provide funding options
such as bonding, using cash on hand, and levying. Councilmember Schubert commented that she
feels the referendum is being rushed as far as the dollar amount along with the uncertainty in the
economy. The Council discussed the option to ask the athletic associations to fund raise for the
permanent bathrooms and a concession stand at the Lake Ann Park ballfields. Mr. Howley
suggested a referendum could include the Lake Ann Preserve and the remaining trail gaps in the
City where the entire community can benefit. Mayor Ryan’s biggest concern is if a referendum is
authorized this year, and then next year Avienda presents a partnership opportunity requiring a
second referendum. She requested Staff create funding scenarios and timelines for Council to
review at the next work session. Councilmember Rehm asked for more information on
incorporating a labyrinth and nature play at Lake Ann Park. Ms. Hokkanen surmised that
Council is looking to see additional planning and public input before Lake Ann Park is
completely built out.
FUTURE WORK SESSION SCHEDULE
July 11: 2023 Preliminary Budget Financial Plan Discussion
July 25: Traffic Safety Committee Presentation
Short-Term Rentals
August 8: 2023 Budget Overview and Initial CIP Discussion
September 12: Preliminary Levy Discussion
October 24: General Fund & Property Supported Funds Discussion
November 14: CIP, Debt & Utility Rate Study Discussion
The work session adjourned at 9:10 p.m.
Submitted by Laurie Hokkanen
City Manager
Prepared by Kim Meuwissen
City Clerk