1993 04 22CHANHASSEN HOUSING ~
REDEVELOPMENT AUTHORITY
REGULAR MEETING
APRIL 22, 1993
Chairman Bohn called the meeting to order at 7:30 p.m.
MEMBERS PRESENT: Don Chmiel, Mike Mason, Jim Bohn, Charlie Robbins, and
Gary Boyle
STAFF PRESENT: Don Ashworth, Executive Director; Todd Gerhardt, Asst.
Executive Director; Paul Krauss, Planning Dire6tor
APPROVAL OF MINUTES: Chmiel moved, Robbins seconded to approve the
Minutes of the Housing and Redevelopment Authority meeting dated March 18,
1993 as presented. Ail voted in favor and the motion carried.
UPDATE ON THE CH~NHRSSEN CONFERENCE/COMMUNiTY CENTER.
Gerhardt: At our last HRA meeting it'was scheduled to have another
meeting approximately 2 weeks after that meeting. We held that meeting.
Several things were discussed. No conclusion Nas made. Jim was in
attendance at that meeting. I think the only thing that we concluded from
the meeting is that we would have another meeting, and that was scheduled
for May 3rd. From previous discussions it sounds that May 3rd may have
conflicts with HRA members. ! can solicit City Council to see if there is
other possible dates if you cannot be at attendance. It's almost, it'd be
almost essential to have both HRA and Council together at this meeting so
we can give some direction if we're going to go ahead or not go ahead on
this item. Staff is anticipating to put a report together and lay out
several options to the HRA and Council for us to proceed-with.
Chmiel: What are the other dates?
Boyle: lOth, 17th and 24th. I'm not available the 24th but I'm available
the 10th and 17th.
Bohn: Council has a meeting on the lOth. So the 17th.
Boyle: That leaves only the 17th.
Chmiel: If we can't line it up for May, maybe Ne could shoot for June
then. Just move it up a month. That first Monday and see if Council's
available.
Gerhardt: Does that work better for you Gary?
Mason: That's my birthday.
Chmiel: Well we'll bring a cake.
CONSIDERATION OF SPECIAL ASSESSMENT REDUCTION ASSISTR~[ FOR OAK PONDS.
Gerhardt: Mr. Chairman, HRA members. At our last HRA meeting we had
Julia Frick from Carver County HRA to give you an overview of a market
Housing and Redevelopment Authority
April 22, 1993 - Page 2
study that was completed for Carver County. 3ulte, in her study, showed
there was a dramatic need for market rate housing in Chanhassen. She went
on to say that any type of multi-family housing in Chanhassen, or Carver
County, is greatly needed. In lieu of. that, we discussed several options,
or potential options of trying to provide special assessment assistance
over to the Oak Ponds townhouse development. Through these discussions
staff was directed to go back and work out several options for the HRA to
consider and looking at providing assistance to the Oak Pond Townhouse
development. Included in your packet was a letter from Ron Batty
outlining three options and the pitfalls that would go along with each one
of those options. I wrote a small synopsis of the financial assistance
options and that under Option No. I it would be the standard special
assessment reduction program similar to what is on your agenda tonight for
Industrial Technical Sales. Basically the 3 years worth.of taxes
generated from the site would write down the specials or road construction
against the...Option No. 2 is to basically again, giving the development
the entire amount of increment generated from the project in lieu of
writing rents down by $100.00 over a 4 to 5 year period of time. I
highlighted in there, showing what the market rents would be for this
development and then showing the assisted rents of basically writing those
down by $100.00 a month over the 4 to 5 year period of time. The third
option is a little more lengthy and a little more dramatic. That.would
provides more of an assistance over a longer period of time for the
development to occur. Under the third option you would create a new
housing tax increment district. This district would last for 25 years and
under the example that I laid out, 50~-of the units would be subsidized.
And for a family of 4 with an income of $39,200.00 or less, would have to
qualify to live in this unit. To live in 50~ of the units.
Chmiel: How much was that you said?
Gerhardt: $39,200.00 is the maximum to qualify for rental assistance in
50~ of the units. The other 50~ of the units would be at market rate rent
and those units again would run in the range of $650.00 to $710.00 and the
3 bedrooms would run in the range Of $770.00 to $820.00. With the
townhouse development that the Oak Ponds is proposing, there are no 1
bedroom apartments so they are all 2 and 3 bedrooms. And those rent
assistance would come down to $580.00 to $610.00 and $670.00 to $700.00 a
month in rental assistance. That basically brings you down to a range of
$5,800.00 to I'm going to say $8,400.00 a year in rent. This is an item
that staff, some of the business community over the last 4 to 5 years have
been trying to bring to the attention of both the HRA and City Council.
That there is need for low to moderate income housing in the community.
At the last meeting Julie again, you know stated through her market study
that there is a dramatic need for these kind of housing opportunities in
Chanhassen. For both the business community and commercial base. I guess
that's all I have to say. I'll open it up for discussion. Can I answer
any questions?
Bohn: Mike.
Mason: I guess I'd like to hear some, first of all I'm really pleased to
see that HRA and the City Council are looking to low to moderate income
housing in this city. I guess it's about time isn't the right phrase but
Housing and Redevelopment Authority
April 22, 1993 - Page 3
I'm glad to see we're exploring those possibilities. I'd like to see
something happen here. I guess I'd like to have a discussion with the
rest of the Housing and Redevelopment Authority about what options, if in
fact we choose to do this, which option to go with· As I read the
memorandum from the HRA's attorney, it sounds to me like Option 3 is
pretty dramatic and it would seem to me like we'd stand to lose some TIF
money if we did that. Yes, no, maybe so?
Gerhardt: Well, depending on what option you go with. You would have to
lose out in what is the redevelopment district but if you went with
scenario 2, you're giving all the increment back to the development that
would be created anyway· So you're not going to benefit from the taxes
generated from the site.
Mason: In either one.
Gerhardt: Well, you would benefit from I would say maybe 1 to 2 years on
this scenario 1 and then under scenario 2, the HRA would, you wouldn't
benefit at all.
Mason: In scenario 3, the City wouldn't really benefit at all in anything
would they?
Gerhardt: The only benefit under scenario 3 would be that you could
provide a longer term of assistance to the housing project. And you have
basically 25 years of increment from that district to spend however you
wish to spend within that district. So you could basically limit the
assistance to Brad's project for 12 years and that would give you 13 years
to use increment.
Mason: What about the different limitations and statutory requirements
that would be put on it because we're establishing this district at this
time?
Gerhardt: There aren't any. I think he talks about loss of local
government aid in his letter. And Don and I are estimating that that
would be approximately $8,000.00 to $10,000.00 here.
Mason: So, for how many years?
Gerhardt: For the life of the district. It could be 25. You could close
out the district whenever you feel appropriate. So depending on how, if
you went with the housing district, if you wanted to go 12 years and close
the district after the 12 years to get your local government aid back. If
you go 25 years, if you're going to go with 25 years without local
government ·
Mason: Okay.
Bohn: Gary.
Boyle: Todd, there's one statement on 3 that talks about State law and
that penalizes cities for establishing a new tax increment district by
reducing their age. Could you expound on that a little bit? Paragraph 3,
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April 22, 1993 - Page 4
it's on the back page. Second paragraph.
Chmiel: Second paragraph towards the bottom.
Boyle: It says the exact amount depends on the statutory formula. The
formula treats housing TIF districts relatively well but still results in
reduction of state aid to the city.
Gerhardt: Yeah, that's that $8,000.00 to $10,000.00 I was talking about.
Boyle: That you were referring to.
Gerhardt: That's called local government aid or HACA. We do not get any
local government aid but we do receive HACA payments.
Mason: And what does HACA stand for?
Gerhardt: Homestead Agricultural Credit Assistance.
Boyle: I still don't know how to weigh that I guess.
Gerhardt: This site would create $8,000.00 to $10,000.00 in credits back
to the city. We get approximately $800,000.00 a year in HACA from the
state so of that we get approximately $8,000.00 to $10,000.00 from this
site. When fully developed.
Mason: When fully developed?
Gerhardt: When fully developed. If we didn't create a housing district.
Chmiel: In looking over today's paper, it looks like some of the concerns
that we had with low housing, which is part of also Representative
Orfield's proposal, it looks like the Governor won't sign that into law.
He's changing his mind completely because he's feeling that there's too
much problems that are put back onto other cities. I don't know if
anybody had an opportunity to see that. But that was one of my concerns
because of some of the things that they were shooting at with that
·
proposal as to, and Chanhassen wasn't the only one. Ail the other
communities in the area were the ones that were really get shot at with
that as well. But one of the, as I was reading this, staff would
recommend HRA openly discuss this issue among ourselves and the option
you'd like to see staff pursue. And I put "if any". And is this the best
location to put this within the downtown area. Are we considering maybe
another given area for this kind of proposal to go through and come up
with some consideration of special assessments in other areas. I too
would like to see that carried, if this were to go through. I too would
like to see it carried a lot further than 4 to 5 years as far as reduction·
within the rents. To me that's not long enough and you mentioned the fact
that we could take it up to 12 years, correct?
Gerhardt: It could be 25 years if you wish. If you create a housing
district.
Housing and Redevelopment Authority
April 22, 1993 - Page 5
Chmiel: Right. Okay, that was the other part of the thing that I had a
question on. I don't see where option 3 would be anything for the city to
even get involved in. It's just another idea to look at but as I see the
other two, it's always a potential within there but I too am just reserve
judgment on any position that I would take right now.
Bohn: Charlie.
Robbins: Just as a matter of precedent, it appears we did what, Heritage
Park using option, it looks like it was a combination of 1 and 2 when we
did Heritage because that was in the TIF district now. $o it would appear
that Option 3 may not be the easiest way to do it and it's to do either
Option 1 or Option 2 and just leaning on those state assistance. $o we
don't have a precedent here. Because if we make this another tax district
and then another one is created in another part of Chanhassen, again
another area, then what do we have to do? It might be easier to do 1 or
2.
Mason: How does that address the length issue?
Robbins: Pardon me?
Mason: How did that address the length issue? If we want to go on for 4
or 5 years. We can or can't do it if we choose option 1 or 2.
Boyle: What is the maximum length of time? Let's take option 2. What is
the maximum length of time? Could we go 12 years on Option 2?
Gerhardt: No. You could only go 5.
Boyle: 5 would be the maximum time unless we create a new district, is
that correct?
Gerhardt: Yeah. And I don't know if 5's even realistic. I mean Brad is
here tonight but I think Brad has got a pretty progressive construction
schedule. He'll stand in front of us and say he will meet that schedule
but I've seen too many other things get in the way to delay projects and
if Brad does not get in the ground this year, you're looking at the 4 year
option. 4 to 3.
Boyle: It sounds to me that nobody's really comfortable with out Option 3
which I think we probably need to discuss that over amongst ourselves
further. That's my opinion.
Gerhardt: Well Option 3, under the example that I laid out, showed kind
of the units, I used under Phase 1 which is 64 units. I-n that phase, 32
of the units would be for low to moderate income individualsI Now that's
a family of 4 making close to $40,000.00 a year and of that, you know
you're going to have roughly $8,000.00 of that going to. rent. And you
know these are pretty surprising numbers when I found out what low to
moderate is. I mean these guys are not going to be paying cheap rent. I
mean $700.00 a month in rent is not cheap. I mean my house payment is in
that area and this is fairly, you know there is another tier below this as
low income. We're not suggesting that. We're suggesting low to moderate.
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April 22, 1993 - Page 6
Under the scenario that I laid out, you're only going with 50~ of the
units. In some cases, the way the law's written, you could go up to a
maximum of 80~ of the units could be for low to moderate income. Now
going under that scenario, you decrease the income for that type of
development. You go down to 20~ of the median income. So and that's
roughly about $30,000.00 would be the income qualifier for that option.
So I think this is, if you were to go towards a program, I do not think
you're going to find a program with less restrictions than what you have
tonight and there are other locations in the community that we could
consider to build other multi-family developments with and creating a
district. I think that's just the best way to go if you're going to
provide the assistance over a period of time. This is a quality project.
This is one of the reasons why staff and HRA at our last meeting discussed
this is that it was such a quality project. To have a project of this
magnitude and to point at it and say, this is assisted rental housing in
Chanhassen, I think everybody would be very proud of it. I know there's
some neighborhood people here tonight. I don't think they're all opposed
to the project. I think they're here tonight Just to find out what we're
considering. I'd like to hear some of their comments and see what they
think about providing rental assistance to a project like this across the
house from them.
Chmiel: That's a good point. 'I'd also like to find out too how this
might affect 8tad as well. People who have already optioned some sites
knowing that this is going to transpire. Would this affect any of those
as well.
Krauss: Mayor, Mr. Chairman, just to reiterate one point though.-This in
no way will effect the approved site plan so I just want to put people at,
to reassure them that the documents that they worked hard on and we worked
on has not changed one iota. I also want them to know that this is a
relatively recent development. If this was anticipated all along, we
would have told you that. It was really rather recent that we started
talking along these lines. And the last point is, is that the owner-
rental mix isn't being changed by this. That's still the .same as it was
when you saw it when it was approved. The assisted units are going to be
a percentage of the rental units that were in the approved project.
Everything else would be, the ones for sale would be sold at the same
price they were going to be sold. And the non-assisted ones would be at
the full market rent. So we're talking about what's the total percentage
of the total units we're talking about. Do you know off hand?
Gerhardt: That's one of the things you can go up to the maximum, I think
you have 100 units 8tad rental total? these would go up to a maximum of
50 under the scenario I'd laid out. If you went with Phase l, it would be
32. I would suggest you try to link them together with phases but I mean
if you want to go in there and provide 50~ of 16 units, you could do that.
And if you want to provide 8 units in Chanhassen with rental assistance, I
don't know if it's worth creating a district just for 8 units. I don't
know if it's worth it to do 32. 8ut I think this is an opportunity to
provide, you know it's a quality project and to Write rents down by
$100.00 a month, or $150.00 a month, I just think we would be wrong if we
didn't look at the option. And I'd chime in with Paul. We're not, we
weren't trying to get this by the neighborhood. I was talking with one of
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April 22, 1993 - Page 7
the residents in the neighborhood and keeping him abreast of-what was
going on. If you did decide to go ahead with this item, I would have
recommended that we hold a public hearing and mail out notices to all the
affected property owners in the area.
Mason: I'd like to point out that with my family of 4, if ! was the only
one working, I would qualify for that. I think that's $39,000.00, I mean
I think that's something for all of us.
Gerhardt: I was surprised you know when we first calculated it out. I
was surprised to know that the median income in the Twin City area is
$51,000.00...I'd kind of like to see what the public has to say and see
what their thoughts are on this too because they're the ones that are
living next to it.
Bohn: Brad, do you have something to say?
Brad $ohnson: Yeah. Mr. Chairman, members of the...group I guess
tonight. The history on this is that we originally didn't plan on any
assistance to any of the units. And then we were approached by the Chaska
HRA at one time stating that there was going to be a need of about 1,000
units of assisted housing in the Carver County area over the next $ years.
By assisted it means ! think she was thinking in many cases Section 8 type
housing which is a buy down or rented down to a fourth of their income
that they can afford. ! said to her at the time that we had not planned
anything like this for the project but if there was a will from the HRA,
or the City Council or whatever they have, assisted housing to bring it
down into the affordable range which we figured out that the average
person working in Chanhassen probably makes hardly $50,000.00. It's more
in the $24,000.00 to, working in the city. And that's been~proven out
because most of the city staff does not live in the city. They can't
afford it. Most of the people who work in our retail area don't live in
the city because they can't afford it and sooner or later that affects the
city because you have the people that are actually here everyday working
in the area cannot afford to live in the community. ! think we've solved
p~rt of the problem just by simply having this project available because I
think the qualifying rent, or for the for sale units I think are actually
less than our rents across the street. The payments will be about $650.00
to $750.00 per month in those and ! know a number of the city staff and
then some people over here in the shopping center, primarily single
ladies, professionals making $24,000.00 to $30,000.00, probably no kids,
are very interested in you know just living here rather than driving over
here from, because Eden P~airie necessarily a good buffer for this type of
thing. I think Paul would agree that prices are higher there. Minnetonka
is a little bit the same so they end up living either far out or in the
city. I think I want to point out is that after you leave item l, that is
not assistance to the project. That's just assistance to the people
living there. ~ just want to make that point. Ne would like to have...so
item i is the only one that gives assistance directly to the developer
itself and there is no rental assistance from then on, other than we can
bring the project in on cost and charge normal rents for out here and make
the thing work. The other two are just creative ideas and I think you're
going through the thought process of whether or not this is something that
you should be involved in or not and I think also as Don said, that during
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April 22, 1993 - Page 8
this thought process, the state was, legislature was looking at penalties
to the, I noticed they did pass the one today. Tonight. Penalizing cities
that did not ultimately, and I guess the Governor's going to override it
but that just kind of shows you, that will show up every, year for a while
now and so you have to be a little bit concerned about it because there
may be more people and more voters in those communities than are out here
in Chanhassen or Edina or Eden Prairie. So I think it's just ~oing to
keep coming up and up and up, especially with the problems they're having
in Brooklyn Park and some of the closer in' suburbs currently because
that's the only place people can move and live. $o my point only is we
would, we deeply need number 1, and that's assistance to us to get the
deal done. The other two are just for discussion and maybe the neighbors
have some feelings about it. It was more of my creative thought at the
request of Chaska or the Carver County HRA and I think Mike, you mentioned
that you were kind of pro, trying to figure out how to do this if we could
do it. Talking to Jerome Carlson, who-is one of our major employers here,
of his concerns that his people can't live here in town. They have to
live someplace else. Whether this is the right time. I think as Todd
said, item 3 I think, to make that decision you would probably say hey, we
really need a housing district in this community to provide housing.
There'd be a big uproar about doing that and then you'd create the
district with some thought. 8ut between Todd and myself and your
attorneys, just we're looking at different alternatives. I do this for a
lot of other cities and so I kind of know how to do it I said but I don't
know if the will is there or the interest at this time. The second one is
just a way of doing some assistance without any major changes in the
rules. The state is tightening up, and the government, is tightening up
regulations where you use TIF fo~ any type of public assistance and
they're tightening it to the point that it makes it somewhat difficult to
do it. You can use the new TIF district and it's still fairly liberal but
if we were to go for tax credits for example as a way of assisting, like
Sterling Ponds is or like Heritage Park, you cannot do that anymore
Charlie. It just, we can't do it that way anymore. It's too restrictive.
We could not have anything but families, you know 3 bedroom units and they
would all have to be probably 50~ families versus say, by families I mean
lots of kids and they're very targeted to single parent families. When
you get into other ways of assisting, and you end up then with the whole
project that way. Our goal was to set aside 10~ to 20~ of the units and
then mix them within the, so you never knew they were there. 3ust like it
is over at Heritage. You just don't know they exist. And the management
says you can do that so, that's just the philosophical. We're interested
in one. After that it's more if you perceive a need or not. If this is
not the time to do that, it doesn't hurt us at all. T~ey still like one
to get passed here and then we can go on. As I said, we are fulfilling a
need, especially on the for sale side because that's now providing, those
are going to be sold primarily to people who work here. We're getting
calls all the time now. I'm sure the city-staff is getting calls on that.
We've done that part. .On the rental side, we're still up there a little
bit and I know that for example Waconia just opened up 200 units like this
that are truly low income assisted and I think the maximum income there on
that project is $21,700.00 for a household. $o that's what you'd call a
truly low income type of housing. And you'd look at it because the
quality is not there that we have in this one. I mean just the rents are
down in the $400.00 to $500.00 range so. Any questions of me? It's a
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April 22, 1993 - Page 9
philosophical, partly philosophical discussion that we were kind of hoping
you would have to set direction either for this project or some other
future thins that we're trying to do here in town.
Mason: So Brad you're saying you need number 1 to.
Brad 3ohnson: Well, we assume number 1 because that's kind of a standard
thing.
Mason: Right, right. For the market rents that we're talking about.
Brad Johnson: Yeah. That's just to cover some of the costs that we're
going through. Number 2 was just a simple way of'experimenting with write
down for about a 5 year period. You could lump that money and make it 10
units for 20, 10 years. See we said like 25 units for 5 years. But if we
took the current value of that write down and said okay, we could set
aside 12 units for 10 years. It's just you have a certain amount of money
that you're making available to us and we'd then set up a way of doing it.
But as I said, that's a philosophical kind of a decision and what happens
is everytime you lower the rents by $100.00, you lower the monthly take
home pay required for that person to afford that by $300.00. So if a
person to live there needed to have $1,800.00 to live there, just to
legitimately afford it, that would lower the monthly income to $1,400.00.
or if it was $2,200.00 to qualify, which is probably closer to what is
really needed in this project, that would lower it down to $1,800.00. So
for every $100.00 that assistance would be given to any project, that
lowers it by $300.00 to be specific. A third of an individual income is
normally the rent qualifier the management would use to see if somebody
would qualify to live there, just from a credit point of view. Any
questions?
Bohn: Anybody else? Sir.
Dave Callister: My name is Dave Callister and I live at 7540 Canyon
Curve. I guess I'm not, I don't disagree that Chanhassen needs to look at
housing for low and moderate type individuals. I just think that this
project is not the right project and I also think that the process
involved in the development of this whole project from day one is really a
concern at this point. A number of you are aware that we went through
numerous public hearings with this development. We went through Planning
Commission meetings. City Council meetings. Meetings with the developer.
Meetings with the staff. Neighborhood meetings. Spent a lot of time on
this project. Many of these people who are out here and many that aren't
here, spent a lot of time working with this project. Working with the
developer. Working with the city trying to get a project we could all
live with. We thought we had that project'in December when the
preliminary plans were approved. We thought we had a project that we
could live with. Everybody kind of relaxed and said, well it's over with.
We can live with it. And now sudde'nly, because of factors, one being the
State, or not the State Legislature but Representative Orfield's Bill,
which as the Mayor eluded to earlier, does not have a strong possibility
of passing right now. Because of that we are throwing a whole new light
into this project at the last minute. It's been through, as I mentioned
before, a number of hearings. A lot of discussions and a lot of
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April 22, 1993 - Page ~0
negotiations involved and to change a project at this point, I guess I
don't feel is appropriate. Many times during that process we asked the
developer, and I can certainly, I know we can find it in the Minutes
because it was asked many times, is this, are these apartments going to be
subsidized. The answer was no. And there was no comments. No further
discussion on that at all. The answer was no, because that was one of the
concerns of the neighborhood at that time. So I guess the question needs
to be asked, why are you changing this project at this time? And I
realize that the physical part of it, the buildings and the locations and
that sort of thing are not changing but the overall project, the subsidy
issue, is changing the project. Wouldn't it make sense to take a look at
a project from the beginning. Work with that project. Offer these type
of subsidies from a new project and work with it through the process. I'm
sure this isn't the last housing project that's going to be proposed in
the city of Chanhassen. The options I guess before us, %hose 3 options
that were outlined, I guess I would be opposed to options 2 and 3. I
guess option 1 is pretty much a standard policy of the city to offer tax
increment for 3 years for the development and that in itself is a subsidy
because if the developer didn't have that subsidy, you know they may not
be able to do the project. Or they might have to have the rents even
higher. So I guess I look at that as a subsidy as well. I guess I'd just
like the HRA to consider the appropriateness of taking this on at this
point in this project. There are going to be other projects in the city
and I guess I'd like to have you take that into consideration. Thanks.
Boyle: Dave, can I ask you one question?
Dave Callister: Sure.
Boyle: Is your major concern that if this, part of this property is
subsidized, that it might affect the value of.your property?
Dave Callister: It might.
Boyle: That's what your major concern would be?
Dave Callister: Yeah, and it was something that we, like I say we wanted
to make sure all along that it was not subsidized in the public hearing
process and we were told it was not. But that is a major concern, yes.
Boyle: Thank you.
Bohn: Thank you. Anybody else?
Tim Anderson: Hi. My name is Tim Anderson. I live at 7550 Canyon Curve
and I'm just up here to reiterate basically what Dave said. I am all for
rental assistance where appropriate but I believe this project, because of
in this late stage of approval, it probably is not an adequate project to
do and also because of it's high rents already and the effectiveness of
the rental assistance at that site. And also the, I believe in the
approval process, going through the Planning Commission and Council that
there would have been some consideration if we had known that this would
be a subsidized development, or partially subsidized. Thank you.
Housing and Redevelopment Authority'
April 22, 1993 - Page 11
Bohn: Thank you. Anyone else'like to address us?
Mike Henke: Mr. Chairman, my name is Mike Henke. Z guess I don't need to
step up to repeat what everyone else has said. I'd just wanted to ask you
to please give this...consideration and take our thoughts into mind when
you go on this.
Bohn: Thank you. I think we should defer this to discuss this and not
make a decision tonight. Brad?
Brad Johnson: I guess I'd ask you. You have one philosophical one and
there's one practical one. We're in the final phases of financing the
rental side and we do need a decision on the, and prefer the number 1.
Just a decision on that portion of it. The standard 3 years for write
down of the road and stuff like that. I mean I don't, personally I don't
see, that's just everybody in the district has always received that. We
.just got caught up into this because simultaneously when we made that
application, I believe Julie from Carver was here. Came in at the same
time and so the staff said, can we look at the rest or somehow we started
talking about it and we did. 8ut we do need a decision in that area
because that affects whether we can do the project at ail.
Jack Thien: My name is Jack Thien and I live at 7570 Canyon Curve and I
wish I had more details and I wish I knew more about what this was really
about and how it's going to affect, not only my home'but perhaps the homes
that are adjacent to mine also. But one thing I would like to point out
is, I don't remember who mentioned it but I don't think it-would be fair
if this was not opened up to public hearing. You know if a decision's
made here tonight, it would not be fair. I didn't even know about what
was going on at ali until last night. If it hadn't been for Dave you know
coming by and mentioning it, I wouldn't be here tonight and I'd like to
know more about it. And to be honest with you I think, honestly I think
if this continues to go forward for this particular project, I think you
will have a fight on your hands. Because I do believe that a lot of the
people that live in my neighborhood won't be for this if they find out,
unless there's things about this that, you'know like I'm saying I'm not
for it right now because I don't maybe understand it enough. But I'd like
to know more about it because I do feel that it will affect me. I pay
$1,400.00 a month for my home so take that into consideration also.
Bohn: Thank you.
Chmiel: I think if we were to proceed to approve this beyond 1 it would
entail public hearings for it, no question in my mind. .It's the only way
we really operate here. And as I even look at this now, it almost looks
like it's an after the fact again and like the city is trying to pull
something over somebody else, but it's not that particular case. Only
because of the fact that if it wasn't for Carver County coming in and
suggesting this to us without us even thinking about it, consideration
probably wouldn't be there. And any question in regard to some of this, l
would make a motion that the HRA provide the financial assistance options
as we have in the past to other developments within the city to fall under
item number 1 for the assistance on that and using the worth of new taxes
over 3 years. HRA of course would not be providing direct assistance in
Housing and Redevelopment Authority
April 22, 1993 - Page 12
write down on rents but I think this is something we have to look at. I
know we have to look at this because I think we have to provide the types
of housing that's really needed within the community. There's no
question. Whether this is the right project, I question yeah. But I
would like to make that as a motion in regard to the option as I had
indicated for it.
Boyle: Second.
Chmiel moved, Boyle seconded'that the Housing and Redevelopment Authority
provide the standard "Special Assessment Reduction Program", 3 years worth
of taxes, for Oak Ponds development. The H~A ~ould not be providing
direct assistance in writing down rents. All voted in favor and the
motion carried.
Mason: I'm a little concerned about some of this stuff I'm hearing from
your folks. I was essentially just told that you don't want me in your
neighborhood. And I'm a professional person with 2 kids, the age of many
of the children in your neighborhood. And because I make less than
$39,000.00 a year you're saying you don't want me living across the pond
from you.
Resident: No sir, I don't think we're saying that at all. If you look
back at the Minutes and the opposition that was there, it was the
buffering. It all started out from single family going to, should this be
private property or owner occupied. Should this be rental. It all
started from there. I'm in no way saying I do not want you living in my
neighborhood.
Mason: I understand the concerns and I understand that this did come up
at the last minute. Some of us on Council and HRA are saying, we need to
look at low/moderate income housing in Chanhassen. This in fact may not
be the place for it but, and if it turns out that way I don't have any
trouble with that. But I heard, well we need low and moderate income
housing in Chanhassen but not next to me.
Chmiel: It's not the NIMB syndrome I don't think.
Resident: I'm sorry, but I think we all would say that if that's the
impression you got, we gave you. exactly the wrong impression. I think the
whole thing is, it boils down to I think, Don or somebody mentioned. It
.just seems like this was slide in here at the last moment on us. We went
through a lot of meetings. A lot of opposition to this and then all of a
sudden here at the end it just comes, in here you know, and now let's
decide on this here and now tonight.
Mason: And if that's the case, no problem. No problem and clearly, if we
were to go with Option 2 or 3, I agree with Don. We'd have to have public
hearings on it. That's fine and if that's the only issue, I'm okay with
that. But I think it is important to know that there are, it would be
interesting, I know one of the people on staff has done a study of how far
people are driving to come to work in Chanhassen. There are people
driving from Wisconsin to work here. They can't afford to live in
Chanhassen, and that's a real problem. I see that as one of the biggest
Housin.q and Redevelopment Authority
April 22, 1993 - Page 13
mroblems facing this city right now. Is there-are people working in. this
city that can't live within 50 miles of it. And if that's where you folks
are coming from, I completely hear what you're saying and I hope that's
what it is.
Resident: That's what it is sir. We're just saying, please. Look at all
your options...
Richard Wing: My name is Richard Wing and I've sat in on all, I'm with
the City Council. I've sat in on a lot of these hearings and the meetings
and this project was up front, clear cut and a done deal. And as I sit
behind, I heard the people say, what happened to the done deal. If we
want to discuss low income, moderate income, subsidized housing, I think
there's a time and a place and I think there's a location for it but I
think let's start that way, as was suggested. Let's be up front. Let's
deal with that issue specifically. Let's provide that service and I don't
think we have any fault. But this.was not a subsidized, low income, TIF
situation to begin with. I thought it was a done deal as the neighbors
did and I was a little stunned to sit here tonight behind them and say,
what's going on and where do these decisions come from. $o I don't agree
with the motion. I think it was inappropriate and it should have had more
public input. I think Mr. Mayor, your motion is appropriate and it's not
going to'effect us in any way but I certainly, sitting behind these people
had heard them say much differently than you heard Mike and I think
they're defending the fact that this kind of got sprung on them. And I
think it was decided that this was not going to be low income, subsidized
housing in this area. And we start putting densities like this in, I
think there's a lot of factors we have to look at in terms of public
safety and traffic and so on and so forth. Frankly, as I've seen this all
of a sudden come up tonight, I'm saying why are we encouraging this type
of density in downtown without a little more thought and I'm surprised
we're subsidizing at all with any tax increment. I thought it was just a
private project going in and I'm very surprised the city's involved at
all. Thank you.
Bohn: Thank you. Todd, you had something to say?
Gerhardt: The reason this was on the agenda tonight were to look at
options. There are three options that you were going to look at. I mean,
and there was no recommendation to you to approve anyone of those three.
Tonight was a discussion item. I kept the neighborhood, or one individual
in the neighborhood appraised of what we would be considering tonight. I
think I started my comments off, if you were to look at either Option 2 or
3, that we would probably go through a series of public meetings. I think
whenever we have a housing project that comes in, I think we ought to
consider it any time, the assistance. The HRA never saw Oak Ponds until
last month. You had no idea that the housing project was underway, with
the exception of Mike Mason and Don Chmiel. And so I think this was a
good opportunity. I think the H in your name is to review options like
this. I don't think we're out of line here and I think this is something
that you should look at. I agree with the neighborhood that it shouldn't
come in the middle. I think it should come in the very beginning and I
think their comments are correct. We should have probably took action as
soon as they made application with the city and considered it at that
Housing and Redevelopment Authority
April 22, 1993 - Page 14
time. And I thlnk we did get the cart before the horse on thts one but I
think that you can discuss these at any time and we will, as we have in
the past, held public hearings and continued public hearings and continued
public hearings. So we're not trying to ram anything down anybody's
throat on this. I think we're a sincere group and I think everybody i'n
this room is in agreement that Chanhassen needs low to moderate income
housing and I think it's, if there's direction tonight to staff, Paul and
I that we would look at other opportunities and start soliciting those.
But it is going to be a battle. There will be other people in saying, not
in my backyard and I hope this group comes in and supports the HRA when
they consider a project someplace else in the community because there are
people traveling many miles to work at all our businesses and I think it's
our responsibility because you're the ones that brought those businesses
into the community. I think you're the group that's to provide them with
the services to live and work here too.
Robbins: Well said Todd.
Mason: Mr. Chairman, if I can make two more quick comments. Then I'll be
quiet, I promise. The number 1 option, just I think so everyone in the
audience knows, is pretty standard. They're in a TIF district and they
.q. et tax breaks because of the TIF district. That would be many
businesses, well.
Robbins: I was going to say Mike, along that same. Because they're in
'the tax district, they would receive a similar situation if they were
doing a strip mall or any type of a business. We're not changing the
rules there. The same type of a, if you want to call it a rebate or write
down or assessment, or whatever on roads. Whatever it is. It has nothing
to do with the fact that it happens to be housing. If it was a strip mali
or whatever, it would be a similar type of situatio~ here on that one. So
it just appears we've got more than one issue here. Obviously the one is
the building, because it's in a tax district and maybe, you know we start
out with Brad saying that he assumed that he was going to get it. Well,
maybe we should have been more clear on exactly what the word' assumption
means to have received that. Secondly, on the low income housing,
moderate, call it what you will, we all believe we want it but we also all
believe we don't want it next to us. And we needs someplace, etc. but I
think that's another issue to review and to come up with what is the best
plan to fit the neighborhoods for all of us. That is true.
Brad 3ohnson: Can I say one thing? You can ask Paul...process to review
your plan, whatever plan that is, and look at your housing. You don't
have any housing objectives at all in any of your declarations so far. As
far as. even when it came to senior housing I think you'll find that you
don't have anything in your plan that would authorize that. The planning
process within the HRA...public process. That would be normally how you
would go about doing it. It would be about like this. Am I right Paul?
...our plans has nothing to do with housing.
i<rauss: Well, our comprehensive plan does have a housing section. It's
not a very involved one because there has been no dollars to support
housing, or very few tools for the last 15 years. So there really isn't
much to write about. We do support, or the city has taken a position of
Housing and Redevelopment Authority
April 22, 199~ - Pege 15
supporting providing a range of housing options. And we've all seen it.
I mean you know the Mayor has kids that have a tough time finding housing
in this town and we have employees, most the employees for the city are in
under the moderate income guidelines. Brad's right to the extent that we
don't have, we've not designated any sites ahead of time for
consideration. This one just kind of popped up because it came along and
it was in the TIF district and we became aware of some new tools. That's
all there was to that. As for how we bring the HRA along, dealing with
this issue concurrently with reviewing a site, well that's always a
~roblem. If you remember 3-4 years ago, the Planning Commission was angry
because the HRA was defining projects before they ever saw them and we
switched that around and had the Planning Commission deal with all the
design issues and work with the residents a~d work out all the details...
(There was a tape change at this point in the discussion.)
Brad Johnson: ...running at about 1 1/2...you can go there anytime during
the evening I think you'll find there's quite a bit.
Chmiel: On this one, because of the fact of cost of $650.00 to $750.00
~er month, I can see a lot of people that can't afford that period. If
we're going to go into the subsidized kind of housing, those figures are
~oing to have to come down considerably to afford for those people to
really have that kind of housing.
Krauss: Mayor, I don't deny that. I mean clearly there are different
~roups in seeking housing. The proposal you're seeing tonight is the
most modest kind of a proposal. It's basically for middle income working
people who .lust aren't making enough to get by and afford the incredible
costs that housing is these days. I'm not-sure that we can meet, locally
~e can meet all the needs. I mean it's very hard to make the free market
system do that. And if this one's tough, what's one that's for people who
are making $15,000.00 a year? That will be that much tougher. $o I mean
I think we should consider, and we'll sure bring you all the options but
I'm not sure that it's possible to provide much more than that at this
point.
Mason: I was just going to say. With the people that are employed in
this community, maybe the first step we need to take a look at is just
what kind of subsidized housing we need. Because it seems to me we're
perhaps in the right ballpark looking at these moderate income figures
now. And I just want to take one step back and I, if I were you folks and
I felt like I was getting blind sided, I would have been here too. And I
respect you for showing up and doing that so. But I think maybe that's
one thing that Don, you and I need to go back to City Council with and
I think the HRA needs to talk about, is just what kind of.
chmiel: Yeah. I'd like to also involve some of the businesses within the
community to sit down with.
Mason: Didn't Sharmin do quite the study?
Krauss: Well Sharmin's done a study for reverse commute where people are
coming from for the businesses. Of course, from time to time Jerome
Housing and Redevelopment Authority
April 22, 1993 - Page 16
Carlson has spoken quite vocally on the need for that kind of housing.
One other thing, I mean we do have other projects coming together. For
example, there's one being brought in right now, mixed townhomes, single
family project on the land that Betty O'Shaughnessy owns. The 85 acres at
Galpin and TH 5, west of the new school site. Maybe we should broach the
idea to that developer of starting an early conversation with you before
they come to the Planning Commission about a housing district around some
of those townhome units or some such alternative. You know I think we're
r~oir.~ to have to be real proactive if this is going to happen.
Mason: Agreed.
Chmiel: And it's not the most popular thing to bring up but it has to be
brought up. No question.
~ohn: Okay.
C'~miel: Thanks for coming.
Resident: Thanks for listening.
UPDATE ON WEST 78TH STREET NAME CHANGE.
Mason: You know, I guess my beef with this is that, some of the comments
for the people who voted no.
Chmiel: I got a suggestion. Let's leave it at 78th Street.
8oyle: I would sure second that suggestion.
Chmiel: When I look at, and the only reason I say that is when I looked
at some of the comments that were in here, and some of the ones that have
indicated that it's going to cost them roughly about $2,500.00 to redo all
their forms and letterheads and that's an expense that you normally don't
have to have.
8ohn: You don't still have to have it.
Mason: That seems a little steep to me.
Chmiel: To a point but depending upon where they're at. They may have an
abundance of a supply.
Mason: And like somebody said, just give me 2 or 3 years time before you
.change it so I can run my inventory down and then when I change over so.
8c. hn: But they don't realize that the city, that the names on the street
signs can have two different names. Galpin Lake Road. CR 117.
Chanhassen Road is TH 101. Running north of town.
Chmiel: Why don't we just call it Main Street and 7$th Street?
8ohn: That's what I was getting at. You can have both.
Housing and Redevelopment Authority
April 22, 1993 - Page 17
Krauss: Well I think you know, actually you have an ability' to name most
of the street because most of the street hasn't been built yet if we build
it out to TH 41.
Bohn: That's right. See most the street doesn't have a name.
Krauss: 8ut I've ~ot to tell you when I was making my reservations for my
vacation for my last trip, the ladies who own Chanhassen Travel were just
real sweet ladies and very helpful. I walked in the door once and they
said, what do you know about this street change. I said what are you
talking about. And my reservations got lost for this trip.
Bohn: They couldn't find 78th Street.
Mason: Well I'm not willing, after the results of this, I'm not willing
to vote for a name change, I'll tell you that.
grad Johnson: The practical part of that is that nobody, you can't use
your address in town. It's all postal.
Chmiel: It's all at the post office.
Brad Johnson: I dare you to find the address on any of...
8ohn: There's only 4 houses on that street that have mail delivered to
them. Over by Schlenk's house. Just those 4 houses. The rest of them is
all P.O. boxes.
Chmiel: I've been trying to get a hold of a couple different people...
Gerhardt: ...letterheads.
Bohn: Letterheads. But they can still have West 78th Street and you can
have another name up there like they do with TH 101 and Chanhassen Road.
You come out of Colonial Grove, or wherever Bloomberg's addition is, and
all those additions, Kurvers Point, the sign says Chanhassen Road. It
does not say TH 101, which is what it is.
Brad Johnson: TH 41 is what?
Bohn: Hazeltine Drive...Galpin Lake Road. TH 101 going south is.
grad Johnson: Maybe you should have a task force to address all those
names. I don't know.
Mason: I'm not going to be on it.
Chmiel: Nor am I.
Brad Johnson: CR 17 changes 3 times as you leave Excelsior.
Bohn: Yeah, Mill Road, Mill Street.
Housing and Redevelopment Authority
April 22, 1993 - Page 18
Gerhardt: Well I was hesitant to take this one on because I don't think
the scars have healed yet from the Zip Code change.
Boyle: The one very pertinent comment though that I ~eally liked here. It
depends on the length of the street. I think that's pretty important.
Bohn: It's going to go to TH 41. The street is going to go to TH 41.
It's going to go all the'way to TH 41.
Gerhardt: The longest Main Street around.
Mason: West 78th Street from here to TH 41. Tacky.
Bohn: And it's not going to be parallel. Not going to run parallel.
Chmiel: I mean what's the difference? I guess I don't, and I don't
disagree with some of your thoughts 3im but.
Bohn: Nell I think it should be brought up at the Chamber. I think the
Chamber should look at it.
Chmiel: I think that'd be a good one to push it off to.
Mason: There you go. Let's have the Chamber take a look at it. That's
my vote.
Bohn: I think the Chamber should look at it. They're the business people
in town.
Robbins: And also, why would the HRA care about a name change?
Gerhardt: Jim does.
Bohn: I do.
Chmiel: There's one guy sitting here.
Mason: I think it's a man on a mission or something.
Bohn: Nell, new businesses are coming to town and they're going to be
built on whatever street it's called.
Chmiel: 78th Street.
Mason: Either that or Bohn Boulevard.
RobbinG: Thanks for sharing that Jim.
SPECIAL ASSESSMENT ASSIST/~NC~ FOR ];NDUSTRI~_ T[CHNICAt. S~LES. ]:;NC.
Gerhardt: I think this has been discussed a couple of times tonight
already on what our policy is. And you're correct. I mean for Gary, to
bring him up to date. I don't know if he sat through one of these yet but
Housing and Redevelopment Authority
April 22, 1993 - Page 19
the HRA's policy is to provide 3 yeats worth of full taxes back to a
business that is looking to locate in Chanhassen. It's a pay as you go
program. There's no cash up front. The property owner has to pay his
property taxes for him to get those rebated back to him and he has to
provide me with proof that he's paid them, either through a cancelled
check or some type of official notice from Carver County saying that taxes
have been paid. This pTogTam is one that has been taken by most of the
businesses that exist in an industrial park. The mini storage building
qualified and took advantage of it. Rosemount qualified and took
advantage of it and most of the downtown businesses have taken advantage
of it. I think it's been a successful program of the HRA's. Almost too
successful. It's one that in the redevelopment area we're almost out of
land for industrial. Mr. Collings has acquired the last piece of vacant
land in the Chanhassen Lakes Business Park.5th Addition and he saw this as
an opportunity that looked good for his business and he decided to locate
in Chanhassen. Moving from Eden Prairie. Mr. Col'lings is in the
manufacturing assembly business. He's proposing to build a 16,410 square
foot office/warehouse facility. The site, from the help of Mr.
Coilings, I wrote the wrong special amount in. We missed a card and it
should have read, $21,000.00 in special assessments instead of
$o he will receive a lower amount of land write down. So that shows that
he was checking up on me and took money out of his pocket. We would have
caught that before we would have sent payments anyway. I can say that now
right. But Mr. Coilings, even though he probably doesn't like this
number, he will be paying approximately $27,000.00 a year. $28,176.00 a
year in taxes. In that he will qualify for $70,633.97 worth of land write
down and $21,000.00 in specials. Staff would recommend approval of the
agreement. The contract for private redevelopment. Mr. Collings is here
tonight to make a presentation to the HRA on his facility and talk a
little bit about the history of the company and how he chose Chanhassen.
Mr. Coilings.
Ray Coilings: Good evening Mr. Chairman. Gentlemen. Ny name is Ray
Coilings. I'm the founder and owner of Technical Industrial Sales. The
company was founded in 1976 in a spare upstairs bedroom of my Burnsville
home and has subsequently grown into a multi million dollar, corporation
employing 15 people with 3 locations throughout Minnesota. We are
currently under construction out at the job site and hope to receive our
CO sometime in July. We appreciate Todd's help and of course the
assistance, financial assistance that we hope to attain from the HRA in
helping us complete the building of our new home, so to speak. Ne
selected Chanhassen, or the Chanhassen area for several reasons. It was
primarily, it was one of the, what we felt was one of the better western
suburbs. In addition to the fact that four of key employees live in the
Eden Prairie/Chanhassen/Lake Minnetonka area and we felt that as a
business we were more than welcome here and Todd made us feel very
comfortable in locating here. Are there any questions that any of you
have for me at this time?
Bohn: I have one. How many people do you employ?
Ray Coilings: We currently employ 14 and we're in the process of hiring
another one so we'll have 15 by the time we move into this facility.
Housing and Redevelopment Authority
April 22, 1993 - Page 20
Boyle: You mentioned before you have 2 other facilities. This will make
your third?
Ray Coilings: Yes. We have a small facility in Duluth and a small
facility in Fargo, North Dakota.
Chmiel: There's only one thing I'd like to add to it. Welcome.
Ray Coilings: Thank you.
Chmiel: We're more than happy to have you locate here. I think you're
going to find we're, you're going to enjoy the community probably as much
as we do as well. At least we hope so.
Ray Coilings: Well, thank you very much. And once again, thank you for
the HRA assistance in helping this project become a reality for us.
Robbins: I would move that we accept the memo as stated for the
recommendation to provide assistance to TSI. TIS, I'm sorry.
Bohn: Is there a second?
Boyle: I'll second it.
Bohn: Any discussion?
Robbins moved, Boyle seconded that the Housing and Redevelopment ~uthority
approve the Private Redevelopment Agreement with Technical Zndustrial
Sales, Inc. and their request for ~84,529.00 in special a~e~sment and
land ~rite down assistance. Rll voted in favor and the motion carried.
Boyle: Do we need to make the change from the 137
Gerhardt: The motion, the total dollar amount that would go back to TIS,
in my motion I said assistance of $84,529.00. That is the total amount he
qualifies for so that amount will not change. It's in the agreement where
I will modify that and the payments that would go back to Mr. Coilings.
REQUEST FOR ISTEA APPLICATIONS SUBMISSION ASSISTANCE.
Krauss: Thank you Mr. Chairman. First let me say that the title that's
in the agenda is a little misleading. We have gotten a couple of things
going here. What's before you tonight is I've got a contract proposal to
retain a project manager for a joint use facility. And that's the staff
report that was in there. It's just the title on the agenda was wrong.
And then as I was looking through my staff report tonight., my staff report
was correct but I see they stuck the wrong contract in here.
Mason: You know, sign things, I thought wait.
Chmiel: And it was dated the 24th of March of '93. That was going to be
my next question.
Housing and Redevelopment Authority
April 22, 1993 - Page 21
Krauss: Well anyway. It is Professional Secretary's Week after ali.
Some of you, in fact quite a few, 3 of you I think, saw a presentation at
the Highway 5 Task Force that I think a lot of people found intriguing.
This kind of thing started when I sat down with a representative Jim Lash
who is here tonight from Southwest Metro Transit. Southwest Metro, as you
know, is looking at a park and ride site out at the DataServ parcel for a
lot of reasons that seem not to be going well at the time and ultimately
it has fallen through. There may be some other opportunities for it but
we sat down over breakfast and started looking at some other alternatives.
They express a desire, or preference if they could to be closer to
downtown. Closer to the industrial parks for reverse commute and
distributive services and some other things. At the same time, I had
already spoken to representatives at the' Legion. George Bennick and Gene
8org who related to me a desire to see the facility revised in terms of
what their offerings were and relocated either on the site Or off the
site, and of course we knew that Target had made a proposal as one of
the, I think the 5 sites they were looking at. To buy the Legion and of
course that rang up the cash registers in everybody's mind over there. We
felt it was a little bit sad because you know, and Todd and I counseled
them several times during that process that we felt, I don't know if I
want to say they were being used but they were part of an overall strategy
to get the best price for Target, and it's understandable that that would
happen. Anyway, we know that they have a desire to get a new and improved
facility. George and Gene feel that the facility is likely to be more of
a rental hall with a service bar type of thing. .That there's some desire
to possibly end the restaurant business. They would need to have some
discussions with their membership to resolve that. Some other things were
added into the mix. Todd's been contacted on a couple of occasions by
various motel/hotel establishments, chains who think this is a pretty good
corner for them. Or possibly a good corner. For a hotel/motel with a
restuarant. Throw another thing into the mix. This is an area where
we've been contemplating a pedestrian overpass for some lO years. We have
2 very large residential neighborhoods that are basically separated from
the rest of the city by the highway and I know I can personally attest
that when I drive to work at 7:30 iD the morning, I see kids in
St. Hubert's uniforms running across the TH lO1 intersection because
that's the way they get to school and it's kind of a scarey thing to see.
And as downtown becomes more vibrant and offers more things and more
reasons for people to be here more of the time, the desire to get here,
people of all ages, whether they can drive or not is only going to
increase. Last thing to throw into the mix was we have a very tough site
over there. I've met with Mortenson a couple of times. As I said, I met
with the Legion a couple of times. It's zoned neighborhood business. I
don't know that the establishments that are there already are doing
particularly well. From time to time I get a call from the fellow that
owns the Dominoes gas station.
Gerhardt: ...Investments.
Krauss: Right. I think the daycare center might be doing okay but the
world is kind of passing it by with the relocation of TH lO1. That whole
area is zoned neighborhood business and we have a very.sensitive
residential neighborhood Just beyond. There's a lot of things that might,
one might contemplate that could go on this site. A lot of them aren't
Housing and Redevelopment Authority'
April 22, 1993 - Page 22
very'good. I mean the scenarios aren't real pretty and the. Council's been
agonizing over the Goodyear/Abra type of issue on a much more established
commercial neighborhood just to the east and this is one where we think
we'd sure like to come up with lot more creative solutions. Anyway, over
breakfast and kind of the back of a napkin type sketches, we came up with
a few ideas and that's basically where it's at for a while. Now at the
same time we have the Highway 5 Task Force hopefully proceeding at a real
good clip at laying out land uses in the entire corridor. Barton-Aschman
is our primary consultant on the project. We.also have kept Bill Morrish
and his staff involved and one of the things we did, because this area is
somewhat unique, is we asked Bill and his students to break out the area
between Dakota and Great Plains and do an assessment of it. Both sides of
the highway because we have Apple Valley Red-E-Mix. The relocated TH 101
intersection. We own Taco. I think we own most of Hanus if not all of
Hanus at the time. We probably will own AVR shortly. We know Mortenson'
owns half the land across the street. We know that the Legion owns the
rest. I worked with them to come up and kind of solidify the concept.
And that was taken to our Highway 5 Task Force a month and a half ago.
Something like that and this was the model that was developed. I think a
lot of people found the model intriguing. Well a lot of lay people, and a
lot of professional people find it a whole lot easier to visualize a'model
than a 2 dimensional plan. This is very conceptual but basically the
Legion sits over here right now. Here's Amoco. ' The Hanus building.
Apple Valley Red-E-Mix is kind of right here. The existing Taco is
probably right where the road is going to be. McDonald's. What you have
over here is a really unique feature. The land is very high on either
side of Highway 5. It allows you to do a pedestrian overpass there
basically without the ramps and stairs. Well you can't do stairs without
the ramps that are so common and make it somewhat inhospitable because it
scissors back and forth to get up you know. This is a straight shot
across and what they had laid out is a fairly significant green space on
the AVR site. And this fits in with the-landscaping theme that the
University has been talking about in all the publically owned spaces
throughout the corridor. Where you know you're in Chanhassen because the
vegetation, not because of a sign or fountain that says Chanhassen... One
of the nifty things about what happens in here is it's a particularly
efficient use of land. You're basically building one parking lot that
serves 3 different uses. 2 or 3 different uses, depending on what you do.
And we've thrown ideas into the mix like Southwest Metro builds a very
high end looking bus stop, and this would be a fairly large one. Very
attractive looking with roofing and what not and we're hoping, in fact if
you saw we may put in an ISTEA grant application for this bridge. That it
has architectural features. It has a metal standing seam roof and we
would elaborate on that. It's something that gives some presence. We
were talking about shedding over some of the parking in the parking lot so
we have the same kind of architectural features so that on a weekend you
can hold farmers markets in there. I mean make it a real kind of nifty
space. Being very sensitive to this neighborhood. This neighborhood
needs to be...but basically you're building, you have' the potential of
building one, maybe 300 car parking lot for 3 uses instead of three 200
car parking lots that are vacant most of the time and a real focus...
Okay, so we took this to the Highway 5 Task Force. They liked it. I mean
it's going to be incorporated into the plan. At the same time, the
federal dollars, the first round of the federal dollars and the second
Housing and Redevelopment Authority
April 22, 1993 - Page 23
round, one of the early rounds for the ISTEA funding came down to, they
had an early April deadline to get things filed. And we made a decision
that we would go for some funding. The funding program frankly is pretty
screwy. We don't think MnDot really has their act together on it. And a
lot of people are going for the dollars. $o what we did is we broke out
the bridge. We didn't go for the whole 9 yards at this point but we had
Barton-Aschman put together a proposal for u~ that broke out the bridge
section alone. And what we envision is a project that's going to cost
from $300,000.00 to $400,000.00. we said that we anticipated the HRA
being willing to kick in about 30~ of that with the rest being Federal
dollars. I'm not sure what our chances are. I mean I think when you look
at the big project here, it's a beautiful project. Great fit for ISTEA
but since their program's not so-well clapped out, we wanted to get our
name in the hopper more than anything else. Alright, that brings us up to
where we are now, Whether or not the grant gets approved this year is one
thing but what we have is a situation where, you have a very complicated
project. You have a lot of actors involved. You have the Legion. They
need to figure out exactly what their needs are. Exactly where they want
to go. Do they want to be on this site? Do they want to move someplace
else? Work out what kind of financial arrangement's acceptable to them.
We need to work with a motel or commercial user. It's been clear to us
from the start that this is not going to be, in all likelihood, a
traditional sort of an HRA project where the city puts a pile of cash on
the table, goes and builds everything and doesn't expect renumeration
back. I mean I think we've tried to think of this in terms of the city
being an instigator for this to happen. The city being an actor in it but
it needed some commercial user to help drive it and pay for it and that
commercial user right now is shown as this hotel and restaurant with very
strict architectural guidelines being established. It could be something
else but that's what we're thinking of right now. We need to work with
Southwest Metro Transit. Southwest Metro, it should be made clear.
Southwest Metro hasn't bought into this any more or less than anybody
else. I think they're interested in this but they want to finish the
study and look at what all their options are on the corridor for park and
ride. They also have a potential for bringing a significant amount of
cash into the project because they have funding that they have access to
through the RTB to build this thing. Or to build their share of the thing.
So they help make the project go. MnDot needs to be involved. MnDot
needs to be involved because of the ISTEA situation. Because of the
bridge situation. Because Southwest Metro needs probably a slip on or
slip off or both type of a situation for the buses to function properly.
One of the primary things is the neighborhood needs to be worked with. We
want to be very up front with the neighborhood. We want to have, be able
to examine their options. We want to make sure all their issues are
addressed. I think that this can be a really ideal project for this
neighborhood. It's going to have an awful lot of green .space. You go out
there now, it's a bunch of weeds you know. It really isn't offering them
anything. I think this is a way to bring them back into the fold of this
community and really improve their landscaping. Improve their views. You
know those homes are set back quite a ways from Lake Drive and they have a
wooden fence. It must be 30 feet back from the street. I mean it's an
ideal place to do a lot of landscaping...plus landscaping.across the
street. What this all comes down to is I felt, and I talked it over with
the City Manager. We felt that we needed somebody to act as the, if you
Housing and Redevelopment Authority
April 22, 1993 - Page 24
will, the project coordinator on the thing. Somebody who could meet with
all these people any number of times. Somebody who can be an arbritor.
Run back and forth and try to massage the plans to make things work. And
basically do that and it's a very involved process. I'm kind of enamored
with this project. I guess I'd like to do it myself if I had the time to
do it but I'm afraid that if I tried to do that with my schedule the way
it is...project coordinator. Fred's been very good in the past in this
role. He would be in a position to bring back the information as it
develops to you, on the HRA. I want you to be in a position to
say, I mean if things don't seem to pan out, I mean right now it seems
like everything has a good potential to work but if things don't pan out a
month from now or major moneky wretches come up, I think you want to be in
the position of saying, drop it. It's just not worth it anymore. Look at
something else. So I asked Fred to put together a contract. Unfortunately
you can't see it tonight because we gave you the wrong contract but
basically what it says is, to work on this project, I mean to work to
modify plans. To meet with all the actors, to bring people together, and
to work with the neighborhood. Prepare for public meetings. Hold public
meetings in the neighborhood. And he proposed to do it on an hourly basis
with a, and it's kind of hard to know how much you're going to get into
until you really dive into this. And Fred proposed a range from ~ think
$12,000.00 to $17,000.00 on an hourly basis. I'm recommending that you go
with that. It seemed fair. With the proviso that you be, and I'll make
sure the language is written into that, that you be able to terminate it'
at any time if it really doesn't seem like it's going to pay off. And
we've done that, I think we did it with the last contract we wrote. We
put in a rider like that that we could stop-it. So with that we are
recommending that you approve that co6tract so that we can get to work and
start meeting with everybody. Thanks.
Gerhardt: Mr. Chairman, if I could just add a couple of things. Over the
years 3im has talked to me about trying to work out an arrangement to get
a link underneath Highway 5. He always felt and I think I've always
agreed with him but the one point that always bugged me was of trying to
get a link underneath Highway 5 along the railroad tracks. The thing that
bothered me was always putting a trail next to railroad tracks and you
always hear those horror stories where the kids are playing on the
railroad tracks. I think this is an opportunity, because of the grades
over in that area of providing a better and safe access across Highway 5
and putting it on the trail in the downtown area at a controlled lighted
intersection across Great Plains or West 78th Street in the downtown area.
I think this is, if you're going to have a pedestrian overpass, I think
this is an area that really works. It really feeds to the two
neighborhoods on the south side of Highway 5 and it would connect to the
trail system through Rosemount when future Lake Drive between old TH 101
and new TH 101 is built. And I think it's a great project.
Bohn: Gary.
Boyle: I agree.
Bohn: Mike.
Housing and Redevelopment Authority
April 22, 1993 - Page 25
Mason: I was on the Task Force and it was, boy if-it wasn't unanimous, it
was pretty doggone close that everybody wanted to take a look at this.
Getting a bridge across, it looks good to me.
Boyle: I think the key thing is the fact, as Paul brought out, that this
is, it's complex and as complex as it is, we need somebody to come in here
and 9ive us, so I'd like to make a motion that we accept the proposal as
read...
Chmiel: Yeah, I like what's here, and as far as ISTEA is concerned, .and
of course I sit on the Transportation Advisory Board. One of the
conditions contained in there is the elimination of S02 emissions which is
one of their primary concerns in alleviating any of this within, the city.
But one of the main concerns is the amount that they can correct with this
by having more of our residents be able to park here and get onto buses
and transport into the city of Minneapolis. That's one of the major
factors that they're looking at and that's what they'd consider it on.
And I gave Todd Hoffman a copy of that, of which the application was taken
from because I brought that in real quick like because of knowing what's
taking place here. And that's one of their main concerns. The other ones
that there's going to have to be some concerns to address is the mass
exodus of cars flowing in and out of this particular area. Where are they
.going to go and.what directions are they going to go. TH 101 is fairly,
or will be, the old TH 101, will eventually have that accessibility going
in either an easterly or westerly direction. As well as probably some of
the concerns. What's going to happen with Lake Drive East coming onto
Dakota Avenue out onto Highway 5. And what the problems might be with
stacking and whether any additional lights might be needed on Dakota.
Stop and go lights. Some of these other things that I think we should
take into consideration. Hopefully Hoisington will come through with some
of that. How many total spaces did you say they'd have for parking?
Krauss: We honestly don't know Mayor. Jim, what was the Southwest Metro
looking at?
Jim Lash: About 250.
Krauss: And then you had the hotel was another you know, 125 and again
there is a lot of joint use.
Chmiel: What happens with our other site that we have on. the other end
across the highway? Do we continue to use that as well?
Krauss: Well anything's possible. I mean Southwest Metro is undertaking
a study right now of their options. I think given the location of the
existing area, you look a little bit down the road and you've got to
think, the availability of that may change. On the other hand, Southwest
Metro is doing an incredible joblof increasing ridership and they just may
need all of it.
Chmiel: Yeah. The other part I'm concerned with is cost per square
footage and I know what the Legion has been looking at and that's a little
high and they know it's inflated as well.
Housing and Redevelopment Authority
April 22, 1993 - Page 26
Krauss: Yeah, when you sit down with Gene and you go over that, he kind
of gives you the wink and the nod type of thing.
Chmiel: Because I've had discussions with those two you're talking 'with
now, as you're well aware. But yeah, that's true.
Gerhardt: Because you have to look at both of the sites. The Mortenson
and the Legion and they will balance each other out.
Chmiel: That's right. All that has to be combined into one. Because if
you don't, it's not going to make it. You just can't have one without the
other. And then the amount of public meetings was the other thing that I
would have concern with is making sure that we're talking to all the folks
within the area and showing them what can be done and what can't be done.
I think the plan looks, I like the plan. And I like the idea of being
able to have that accessibility from the south side of the highway back
over to the north side where the main business area is. Not only for the
kids but also for the adults to intermingle because highways always cut
off cities as far as I'm concerned. I think, I like it. It looks good.
Bohn: Charlie?
Robbins: It's all been Said. I like it too because I know we've talked
before in the last few years almost about having access onto TH 5. Or
having access to walk or use a bicycle to cross it and this does it so.
8ohn: Do we have a motion?
Boyle: I make a motion that we approve the recommendation is is.
Robbins: Second.
Boyle moved, Robbins seconded that the Housing and Redevelopment Authority
direct staff to enter into the attached contract with the Hoisington
Koegler Group for consulting services related to the Transit/Hub/Legion/
Hotel/Pedestrian access project. All voted in favor and the motion
carried.
CONSIDER SALE OF LANE TO DOU6 HANSEN, LOT 3, BLOCK 2, BURDICK PARK
ADDITION.
Gerhardt: Mr. Chairman. Included in your packet is a staff report that
outlines consideration of selling Lot 3, Block 2, Burdick.Park Addition to
Doug Hansen. Mr. Hansen is here tonight and is prepared to show you his
proposed development for this lot. Just a brief history on this property.
The HRA acquired this property approximately 6 months ago along with the
Target acquisition. Mr. Burdick made it a package deal. A no, or all or
nothing deal when acquiring Lots I thru 5 which is basically Outlot B in
the Target site and the condition of what is Lot 3, Block 2, Burdick Park
Addition. At that time that was a good decision of the HRA to acquire
that parcel. It controls what kind of use could.go down on that site and
down there so close to the highway, you could almost see anything. Tonight
I think Mr. Hansen has got a development that is appropriate for the area
Housing and Redevelopment Authority
April 22, 1993 - Page 27
and I think will meet the long range plans of what the HRA was considering
when they did acquire this parcel. Included in your packet is an offer of
$1.50 a square foot to acquire the parcel. Staff feels that the market
value is approximately $3.00 a square foot. Similar to Mr. Collings
tonight, Mr. Hansen could come in and ask for a special assessment
reduction and he would create an additional $20,000.00 worth of increment
or taxes on this parcel. And over a 9 year period, would calculate it out
to $60,000.00. That would, in conjunction with the $1.50 would bring that
to the $3.00 a square foot figure. And I leave it open if you have
questions of me or if you prefer to hear Mr. Hansen's presentation. I'll
leave it up to the Chairman and HRA.
8ohn: I think we should listen to Mr. Hansen's presentation and then
discuss it.
Doug Hansen: Good evening. The main use, let me explain this first. You
probably know this but this is the existing building right here. The
existing lot...two lots the building is built on. This is Lot 3 right
here and part of this is cut off by the highway... This is the railroad
tracks here and this is back of the Market Square shopping center. This
is the back. The road comes through here and a cul-de-sac here and this
is all basically back in the Market Square shopping center. This is the
respective of the addition, total addition on there right now. This would
be built. This portion right here would be built right now for the future
expansion area of 5,400 square feet. We would be eliminating, right now
this is all parking lot with a driveway coming through here. That would
be changed. The main use of the proposed addition of 12,700 square feet
is to accommodate the expansion space needed for Chaska Machine and Tool
of about 10,700 square feet. The additional space of about 2,000 square
feet would be tentatively shared by Hansen Home Tech Incorporated, which
is our remodeling firm. Minnetonka and Steinkraus Plumbing of Chanhassen
is office warehouse space. The site plan provides for this future
expansion to the building of 5,400 square feet. 60 x 90 as shown on the
southeast end. A little bit about Chaska Machine and Tool. It's a short
run metal stamping company serving primarily the Minnesota and Iowa
business area. Their present employment is 40. 10 people on the night
shift and 30 on the day shift. And this expansion will add approximately
10 additional employees. Chaska Machine and Tool started in '72 in Chaska
and moved to Chan in '79. The management of the business is 3tm Lund,
President and his son, Dan Lund, Manager from Hopkins, and Ronald Kahler,
Plant Supervisor from Chanhassen. Our firm, Hansen Home Tech is a
building remodeling firm consisting of myself and my two sons, Steve and
Gary and we're building mainly in the southwest area. Metro area. We've
been in business since '82 when Hansen and Klingelhutz split up. Tom
and I. We have a total of 5 employees including ourself. Steinkraus
Plumbing of Chanhassen has 6 employees and has tentative plans to share
this office/warehouse space with us. The advantages of the project would
enable Chaska Machine and Tool to remain here. They're a solid company
and got a good reputation in the area. The lot is available and would be
put to good use and the n~w addition will increase your tax revenue.
Existing hard cover on Lots 4 and 5 is reduced from 80~ to 73~ overall.
I just realized that. That I am over the requirement by the city Planning
Commission and Council. Or the City Planning Commission wants 70~ but the
actual expansion area it will be 69.5~ from where the addition adds to it.
Housing and Redevelopment Authority
April 22, 1993 - Page 28
On Lot 3 alone it will only be 63.4 so it's due to the pre-existing
condition that I'm having a hard time meeting that requirement. The
building and landscaping will enhance the area and the building layout
wraps the cul-de-sac so it hides the parking and the main size of the
building. The green space in front will be enlarged, eliminating the
present driveway and parking area and shifting the drive towards the back
o{ the shoppin@ center along the east side of the lot. We plan to follow
the decorative block style of the existing building and hand split
canopies over the entrance areas. The front windows will be enlarged to
enhance appearance and to line up with the decorative block of the
existing building. I believe this addition is planned with a lasting
benefit to the city. Do you have any questions that I can answer?
Mason: Have you ever thought of changing your name to Chanhassen?
Doug Hansen: You know you were talking about street names. This street
was Mandan and then Moneterey and now it's Kerber. So it's 3 times with
this one.
Chmiel: Three times and you're out.
Doug Hansen: Yeah, I'm one of the owners. There is another owner, Bob
Nine who was part of the initial construction of this building. Excavator
and he's done a lot of work around here. He's from Chaska.
Robbins: You were saying that the, and maybe I can see it now, that part
of the parking would be removed and the parking then would be in the
back? And I think I can see that now. I'm just more curious about, where
the new parking would be if you're going to add employees. But I can see
that now. Now you've got lines in the back.
Doug Hansen: Here's 8 parking spaces here and then the rest is in back
and this is all existing. We're getting rid of, we're losin8 10 spaces
from what we have now. The whole thing...because the building is built on
a parking lot now. We're losing that and we're losing this driveway here
so that's.
Chmiel: Total parking spaces are how many?
Doug Hansen: 57.
Chmiel: 57. And you have approximately 40 nishttime employees and 30
daytime employees. Is that the entirety of the complete complex?
Doug Hansen: 40 plus 10. We probably have 50 at night and the day...
They have 30 now so they probably would have 40 with the addition. Total
employees and we would have about, in our office maybe 2 people. And
Steinkraus might have 2 people. We'd have some people coming and going
there. But I'd like to get my office out of my house.
Chmiel: That's always sort of nice.
8ohn: Does this involve removing a lot of trees?
Housing and Redevelopment Authority
April 22, 1993 - Page 29
Doug Hansen: No. The trees are pretty mdch scrub trees.. There is one
huge cottonwood tree that could remain if you want. It's right on the lot
line.
Chmiel: I think that's the one that makes downtown Chanhassen look like
the winter on the 4th of Suly.
Krauss: When we started working with the owner on this, one of the first
things we did is went out and walked the site because we had just finished
the Target project where we went to great lengths to save that same stand
of trees. There are virtually no trees on this property so it fits in
very well.
Chmiel: I drove around it the other day.
Bohn: This staff recommends?
Gerhardt: We recommend approval of the purchase agreement. With that we
would have to go for a public hearing and publish it in the paper and go
through the necessary process. This would be back on a future agenda as a
public hearing item.
Brad Johnson: I was telling him earlier we have a parking problem over in
the back of Merlins and one of the things we were thinking about is
purchasing this lot for parking...We could have a real problem back there.
An alternative would be...so maybe we could talk. I just mentioned to him
before because we do have a little concern about the parking...going
through the process of what the center needs from a practical point of
view...
Chmiel: You're right. It's got to be out of there.
8rad Johnson: Yeah, but I don't know where to put it... Down behind you
don't see anything. You don't have U-Haul telling me...
Chmiel: 169.
Brad Johnson: That's too far. I think a lot of you are forgetting that.
Chmiel: I think a U-Haul business to me is, within the downtown area, it
.just shouldn't be where all those businesses are. My own personal opinion.
Brad Johnson: Eden Prairie's sort.of like that. That's where Menard's is
and so on. They have to be where people can find them.
Chmiel: That's right.
Brad Yohnson: I was just saying, I think this is a good idea and it
certainly would create a use there...I think it's a good idea. We'd like
to talk about the parking problem we have. Whether it's U-Haul or
whatever.
Chmiel: I just don't see U-Haul in the city but that's alright. Or right
within downtown. I've stated it once. Do we need a motion?
Flousing and Redevelopment Authority
April 22, 1993 - Page 30
Gerhardt: You do not need to make a motion. You can authorize staff to
go ahead with the public hearing and during the public hearing you can
approve the purchase agreement at that time.
Chmiel: I would so move that.
Gerhardt: If there's any questions on how start: prepared this report or
questions regarding the price that Mr. Hansen is offering, that's the kind
of discussion I think we were looking for tonight.
Robbins: Second.
Mason: The only thing I don't, and I sat on City Council and conceptual.
I have no problem. I don't quite understand how. we go from buying
something for $4.00 a square foot and then turn around and sell it for a
$1.50. I mean, and we chatted just a little bit about it. 8ut and I just
think I'm not rejecting something like that out of hand but I don't, my
understanding, assuming that Mr. Hansen would get this special assessment
and .just about everyone who has requested it gets it, that then, I don't
understand how that brings the purchase price up to $3.00 a square foot
because we're, he's buying it for $1.50. We're still, we've giving him
money back because of the special assessment but that raises the price to
$3.00 a square foot? I don't get .it.
Gerhardt: You basically have a dollar. If you took the square footage of
the lot and divided it into 60,000, it's roughly $1.50-$1.75. When you
combine the $1.50 that Mr. Hansen's paying and combine those two, it's
$3.00. $3.25. So over a 3 year period he'll be paying taxes of
$20,000.00 a year that you will be getting through the increment generated
from this. Now if you sell to Brad for $3.00 a square foot to put in a
parking lot, you're not going to get $20,000.00 a year. You're going to
set.
Brad Johnson: We'll pay $4.00. 5.
Gerhardt: But you won't get the $20,000.00 a year in taxes and potential
other $5,000.00.
Brad Johnson: You can look at it a different way. You could be paying
$3.05 a square foot. That'd be the offer and...
Mason: I think you and I will have to spend an afternoon chatting Brad.
Brad 3ohnson: And what you have to kind of think about is you're trying
to create long term taxes.
Mason: Right.
Chmiel: That's exactly where you come out on that issue.
Brad 3ohnson: If you don't come out on the long term taxes, the .short
term doesn't work.
Mason: Yeah, okay. There was a little glimmer there for just a minute.
Housing and Redevelopment Authority
April 22, 1993 - Page 31
Chmiel: In other words, if you were not, if no one were to build, you
would not be receiving those amount of dollars.
Brad Johnson: And every year, you've only got 5 years left in the
..~
· ~istrict so...
Chmiel: So in essence what I'm hearing is you suck it up for 2 years
because in 10 years it's all going to.
8tad 3ohnson: Heck of a deal...
Bohn: You don't need any motion on that?
Gerhardt: The motion was one to go ahead and call for a public hearing.
%we'll put the notices in the paper.
APPROVAL OF BILLS. Chmiel moved, Mason seconded to approve the bills for
the Housing and Redevelopment Authority as presented. All voted in favor
and the motion carried.
HRA PRESENTATION:
Gerhardt: Again, this is a new item on the agenda. I've placed it on
there. I'm difficult to get a hold of at times. Paul's difficult to get
a hold of at times. Don is. You people are busy too. Sometimes we can't
~et together and I thought if there was something that hits you when
you're walking down the street or something that if you 3ot it down on a
miece of paper and bring it to the next HRA meeting, we could place it
under an HRA presentation and you guys could verbally discuss whatever you
feel like discussing. $o City Council's done this in the past and it
really worked well for them. They really like the program...agenda out a
little longer but I think it's good to keep the open communication...
Chmiel moved, Mason seconded to ad3ourn the meeting.
and the motion carried. The meeting was ad3ourned.
All voted in favor
Submitted by Don Ashworth
Executive Director
prepared by Nann Opheim