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11-27-2023 City Council Work Session MinutesCHANHASSEN CITY COUNCIL WORK SESSION MINUTES NOVEMBER 27, 2023 Mayor Ryan called the work session to order at 5:30 p.m. COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilman McDonald, Councilman von Oven, Councilwoman Schubert, and Councilman Kimber. COUNCIL MEMBERS ABSENT: None. STAFF PRESENT: Laurie Hokkanen, City Manager; Matt Unmacht, Assistant City Manager; Charlie Howley, Public Works Director/City Engineer; Samantha DiMaggio, Economic Development Manager; Jerry Ruegemer, Park and Recreation Director; Rick Rice, IT Manager; Kelly Grinnell, Finance Director; Ari Lyksett, Communications Manager; Joe Seidl, Surface Water Engineer; and Kim Meuwissen, City Clerk. PUBLIC PRESENT: Brandon Bordon, Kimley-Horn Tim Klockziem, Kimley-Horn Nick Anhut, Ehlers Paul Moline, Carver County Andrew Dickhart, Carver County Judy Harder, 541 West 78th Street DOWNTOWN TRAFFIC STUDY Public Works Director/City Engineer Charlie Howley introduced Brandon Bordon from Kimley- Horn, who performed the downtown traffic study. Mr. Bordon provided the project background and identified the project study area, which includes 17 intersections along Market Boulevard, West 78th Street, and Great Plains Boulevard. Mr. Bordon presented slides on levels of service, existing conditions analysis, Highway 5 intersection queuing, other existing conditions observations, future “no-action” analysis, and no-action conditions level of service. Market Boulevard improvement options and findings were presented, including a multi-lane roundabout at Market Boulevard and West 78th Street and three-lane and five-lane options on Market Boulevard. West 78th Street findings and lane reduction level of service were also presented. An analysis of Highway 5 was shared along with slides showing access management recommendation options which included converting the west intersection of West 79th Street to a right-in/right-out only, realigning the west intersection of West 79th Street north to align with the east intersection, or provide a connection between Market Street and West 79th Street and limit access to West 79th Street at Market and Great Plains Boulevards. Mr. Bordon concluded the presentation with recommendations for the Market Boulevard improvement project and long- term improvement recommendations in the area. The City Council asked questions and discussed the options presented. Mr. Howley added that the traffic study was only a draft and would not be finalized until after crash and safety records were studied and the council’s comments were incorporated. The consultant will provide an update at the February 12, 2024, City Council Work Session. City Council Work Session Minutes – November 27, 2023 2 DOWNTOWN REDEVELOPMENT PROJECT TAX INCREMENT FINANCING Economic Development Manager Samantha DiMaggio reviewed the proposed Roers downtown development project, which includes two new mixed-use buildings. The anticipated timeline includes land use applications to be submitted by Roers to the city before December 17, 2023, review by the Economic Development Commission on January 9, 2024, a public hearing at the January 16, 2024, Planning Commission meeting, and City Council review and approval on February 12, 2024. Closing on the property is anticipated to take place in June 2024. Ms. DiMaggio stated the goals for tonight’s discussion are to demonstrate that this redevelopment project has a financial gap and to determine if there are additional conditions that need to be met to gain the City Council's support of the proposal. Ms. DiMaggio introduced Senior Municipal Advisor Nick Anhut of Ehlers to discuss potential tax increment financing for the proposed Roers downtown development in downtown Chanhassen. Mr. Anhut defined Tax Increment Financing (TIF) as a financing tool designed to encourage certain types of development that would not reasonably be expected to occur without public assistance. It is a part of an economic development strategy and solves a financial gap in project funding. Mr. Anhut shared a slide with a chart that provided an overview of how TIF works. TIF depends on the ability to improve the value and tax capacity of the parcels within the TIF district. Mayor Ryan recessed the work session at 6:55 p.m. Mayor Ryan reconvened the work session at 7:20 p.m. Mr. Anhut continued the presentation on the downtown redevelopment project tax increment financing. The site was evaluated and qualifies for a Renovation and Renewal TIF district, which carries a maximum term of 16 years to finance the project. Mr. Anhut reviewed the two active TIF districts in Chanhassen, the Venue Redevelopment and Lakes at Chanhassen Senior Living. Project financing and an analysis of the developer’s project budget were presented, as well as an analysis of the developer’s financing sources and the TIF district. Mr. Anhut reviewed the TIF public process and schedule. Ms. DiMaggio closed the presentation and asked the City Council for their input. The City Council discussed the presentation. Mayor Ryan requested improved communication with the public on this project proposal, along with education on how TIF works and the potential benefit to the community. Mayor Ryan surveyed the City Council, and they all agreed to move forward with providing TIF for the proposed Roers downtown development project. AQUATIC INVASIVE SPECIES (AIS) PROGRAM PRESENTATION Public Works Director/City Engineer Charlie Howley introduced Paul Moline and Andrew Dickhart from Carver County, who presented the AIS presentation along with Water Resources Engineer Joe Seidl. Mr. Dickhart reviewed the agenda of the presentation, which included a definition of AIS (aquatic organisms that invade ecosystems beyond their natural, historical range), the importance of AIS prevention, AIS program history, and Chanhassen AIS status. Mr. Dickhart explained why AIS is so invasive, the biodiversity, economic, and human health impacts, as well as the local impact. He stated the importance of prevention is to avoid expensive and long-term management. A slide of the AIS historical timeline from 2011 to the present was shown. Data and inspection costs for Lotus Lake and Lake Ann were provided, as well as the City Council Work Session Minutes – November 27, 2023 3 status of AIS in Lotus Lake, Lake Ann, and Lake Susan, which included Eurasian Watermilfoil, Brittle Naiad, and Zebra mussels. Invasive species on the watchlist include Starry Stonewort and Hydrilla. Mr. Dickhart reiterated the importance of preventing the spread of AIS because of the ecological, economic, and human health impacts. The final slide presented a snapshot of the 2023 inspection schedule, inspection costs, and cost participation. Mayor Ryan thanked Mr. Moline and Mr. Dickhart for the presentation and the update. FINAL REVIEW OF PROPOSED 2024 LEVY, BUDGETS, AND CIP Finance Director Kelly Grinnell presented a final review of the 2024 preliminary budgets, the preliminary 2024-2028 Capital Improvement Plan (CIP), and the levy payable in 2024. The next step in the budget process is for the City Council to hold the Truth-in-Taxation public hearing and adopt the budgets, CIP, and levy on December 11, 2023. The City Council discussed the proposed budgets, 2024-2028 CIP, and levy amount and agreed to approve a final levy increase of 7.4%, which is the same as the preliminary levy increase set by the City Council on September 25, 2023. CHANHASSEN BLUFFS SPORTS COMPLEX Mayor Ryan reported that, since the October 9 City Council Work Session, no further conversations have taken place with Mr. Bahram Akradi of Life Time Fitness; however, there has been a follow-up conversation with Mark Nordland of Level 7 Development, informing him the city has not yet made any final decisions because the City Council needs to have additional conversations. They also discussed the downside of the local option sales tax and land price negotiations. The City Council is still interested in moving forward, but it would ultimately be decided by the residents. City Manager Laurie Hokkanen spoke with the city’s lobbyist, who advised against not moving forward with the referendum because the City of Bloomington was in a similar situation where they received permission from the legislature for a local option sales tax but chose not to move forward, and it was held against them for 28 years. Also, the legislature approved a three-year moratorium on issuing local option sales tax in 2023, resulting in a further delay. Mayor Ryan asked the City Council for their input on three available options: 1) choose not to move forward; 2) continue to move forward and explore the facility plan the developer initially presented to the city and negotiate financing and other funding options; or 3) start over and involve residents, athletic associations, and commissions, by offering a FlashVote to understand the needs and priorities of the community and determine what the facility should be, with the city incurring the design costs. Ms. Hokkanen stated that if the City Council wanted to move forward with a referendum to approve a local option sales tax, per state statute, a written notice of the election would need to be provided to the county auditor at least 74 days prior to the election, which would be August 23, 2024, for the November 5, 2024, General Election. The City Council discussed the options presented and agreed to continue to move forward with the facility by having conversations with the developer to ask questions and provide feedback. City Council Work Session Minutes – November 27, 2023 4 FUTURE WORK SESSION SCHEDULE December 11, 2023 • Work Session Canceled January 8, 2024 • 2024 City Council Priorities Discussion • 2024 Legislative Priorities • City Council Roundtable January 22, 2024 • Gorra Property Discussion February 12, 2024 • Downtown Traffic Study Update Mayor Ryan adjourned the work session at 10:10 p.m. Submitted by Laurie Hokkanen City Manager Prepared by Kim Meuwissen City Clerk City Council Work Session Minutes – November 27, 2023 5 FUTURE WORK SESSION SCHEDULE December 11, 2023 • Final Review of Proposed 2024 Levy, Budgets, and CIP for all funds (if needed, TBD on November 27) January 8, 2024 • 2024 City Council Priorities Discussion • 2024 Legislative Priorities • City Council Roundtable January 22, 2024 • Gorra Property Discussion The work session adjourned at p.m. Submitted by Laurie Hokkanen City Manager Prepared by Kim Meuwissen City Clerk