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1990 04 19HOUSING AND REDEVELOPMENT AUTHORITY REGULAR MEETING APRIL 19, 1990 Chairman Whitehill called the meeting to order at 7:30 p.m.. MEMBERS PRESENT: Cliff Whitehill, Charlie Robbins, Clark Horn and Jim Bohn ! MEMBERS ABSENT: Tom Workman sTAFF PRESENT: Don Ashworth, Executive Director and Todd Gerhardt, Asst. Executive Director APPROVAL OF MINUTES: Horn moved, Robbins seconded to approve the Minutes of the Housing and Redevelopment Authority meeting dated March 1, 1990 as presented. All voted in favor and the motion carried. VISITOR PRESENTATION: Whitehill: Since we're starting on time, which means almost early, perhaps we'll skip for the moment Visitor Presentation. Gerhardt: Brad had mentioned that he would like to say a few words. Whitehill: I thought he would so let's skip that item. CONSIDERATION OF SERVICES FOR DESIGNING A FOUNTAIN. Whitehill: Are you an artist Todd? Gerhardt: I'm not an artist but. Robbins: Did anybody read the Villager today? Gerhardt: I haven't seen it. Whitehill: No, what's the deal? Robbins: A little article in there about the HRA funding. Whitehill: Maybe it will come up under the next item or so. Gerhardt: I'll update cliff a little bit. At our last HRA meeting we had a gentleman by the name of 3erry 8alley from Arteka present a scheme to design a fountain which would be in front of the courtyard conference room in the atrium is what we call it. He had come up with, I have a drawing here this evening, going off of the City logo of a sugar maple. He had named the sculpture "Descent" in regards to leaves falling off the tree in a fall picture. This was based off of information we had received from EOS architects who designed the atrium area and had worked with 3erry in the past and 3erry gave an excellent presentation to the HRA. The HRA then directed staff to solicit input from the City Council on what they may be interested in doing in that area or their approval of the "Descent" sculpture. They didn't talk about it a lot at the City Council level. Very briefly. They had expressed that maybe we should solicit monies from local businessmen or private individuals within the community. They also mentioned maybe replacing the plants in there and going in with flowers and Housing and Redevelopment Authority April 19, 1990 - Page 2 · having local residents planting flowers and turning that into a flower bed area were the two comments. They wanted to see more of the citizenry and businessmen get involved in this area than to spend money on a sculpture. Basically that was it. Whitehill: Is that site where it would be plumbed with water or would that be an addition? Horn: There's water already in. Gerhardt: It would be circulating pump so you would, it would just reuse the water. In this picture you have the water that would pump it from the basin, the supply, up to the top and then it would trickle down the rocks. The leaves would be made out of Corten Steel and basically what some of the light fixtures as you see on Kerber would turn into almost a rust brown color after a while and would be used I think he said with copper wire and not like fishing string. It would give a mobile effect. Whitehill: Any cost estimate on it? Gerhardt: Yeah. $4,600.00 and that would be for them to design it, construct it and give a unveiling presentation of it which we had estimated sometime around 3uly 4th as a part of the 4th of 3uly festival was one of the ideas I suggested. They were open to other suggestions. Staff felt that just with.the fountain out there right now is just inappropriate for that area. It was designed for something in a yard or a single family dwelling. It wasn't designed to be a monument for an atrium area like that. It takes away from the area and I had mentioned to Clark that we are going to take it out of there. It didn't cost us anything. It was included as a part of the design of that area with the plants that the floral shop in town have designed for us. Basically I would suggest that they take it out and thank them for their efforts but it's inappropriate for that area. Whitehill: I gather what you were told once before is it a proper expenditure for the HRA if we wanted to do something? Gerhardt: Pardon me? Whitehill: I think we were advised that it was an appropriate expenditure for the HRA if we wanted to do it. Gerhardt: Yes. You have the monies available to spend that. The HRA wanted to solicit ideas from the Council is why I went back to them. There are monies. There's approximately $5,000.00 available. HRA's monies were used to construct the atrium and the conference room area. Those were monies that could be used for tax increment. Construction or corridors are a part of the funding process for that. Whitehill: Who was the artist that did this? Gerhardt: Jerry Bailey. I don't think I included it but he has done a variety, he's Arteka. Have you heard of that? Charlie is familiar with some of his works. He has done many, many residential home landscape Housing and Redevelopment Authority April 19, 1990 - Page 3 designs. I can't think of the building he owns over in Minnetonka right now. Horn: On the lake? Gerhardt: Yeah. Horn: Didn't he do Butcher Block? RobbinG: Yeah, it did Butcher Block. Gerhardt: Butcher Block. He's done Waterfront Development over in Mendota Heights. The fountains as you come off of 494. RobbinG: He did Northwestern Airlines. Gerhardt: 494 as you head down towards Rochester. There's an industrial park there. There's a beautifully landscaped fountain in front of their office park. As you drive by there, it's just beautiful and it just really makes the entrance as you go in there. He designed that. He had a whole list of individuals that he had done work. Whitehill: Where does he live? Gerhardt: Where does he live? Minnetonka. That's where his offices are. He's got 4 or 5 artists that work through his office. He would give this as one of the projects to one of those artists. Horn: Wasn't his office in Eden Prairie? Bo h n: No he' s i n M i n neto n ka. RobbinG: I believe he's on Baker Road. Gerhardt: Yeah, I think he.owns the office building. If you'd like I could run upstairs and grab the pile of data that had a description of some of the people he had worked for. Robbins: I've got it here. Horn: It says in here it's an Eden Prairie design and development firm. Whitehill: I have a screwball suggestion. That we announce a design contest open to all citizens of Chanhassen to design an appropriate fountain and with the winner or whoever designs the best fountain for approval gets $500.00 or something. Then we go out like a lot of these type fountains you can get constructed by some sort. Gerhardt: Jerry's firm could do that. I mean he sat down and thought this up on his own but I mean if you wanted to have somebody else design it. Whitehill: Get some interest of the people of Chanhassen what we're trying to do and then dedicate the fountain to all of the merchants, staff, etc. Housing and Redevelopment Authority April 19, 1990 - Page 4 who have contributed to the success of the HRA. Horn: That's a good idea. Whitehill: I think we can get something like that in the newspaper even. Gerhardt: Sure. Horn: We've got a lot of local talent. Gerhardt: We have money set aside to advertise these things in the paper and sure, get some press on it. Whitehill: What do you think $500.00 or more? Horn: Would that attract people to do it? Gerhardt: Oh yes. I know when the Ttmberwolves designed the logo for their wolf, that was $1,000.00. Whitehill: They get the money plus a little bit of notoriety and recognition to get the fountain done. Gerhardt: There are a lot of artists in Chanhassen that would. Whitehill: I'll move it. Robbins: Second. Whitehill: Discussion. Horn: Would we then get them to construct it? Whitehill: No we can put it out for bids. I know some firms. For instance, we have a beautiful fountain, at least I think it is and everybody else does too, in our atrium at General Mills and I know it was designed by one person and just put out for contract bids. It's three series of kind of columns that go up and the water then falls down with successively larger plates. Very nice effect. It's a receipicating type. Horn: What if we get something that costs over $5,000.00 to construct? Gerhardt: That would fall into the materials you were going to use for that area. I mean it's a very concentrated area. I have a hard time believing that something would go over the $4,600.00 mark for that area. Horn: Should we stipulate that the thing has to come in at a construction cost with it? Robbins: Or would just fit in the area. Whitehill: That would be part of the consideration when we figure out who's going to be the winner. Housing and Redevelopment Authority April 19, 1990 - Page S Gerhardt: Once you go to the bidding process for this, I mean the design, once you've got the design, the construction of it, it's almost, it. shouldn't be that bad. To get firms like Jerry's. The only question I would have is do you want to keep this local? That only Chanhassen residents can participate in this? Whitehill: I thought about maybe extending it to Carver County but I'd still like to kind of keep it, of course Chanhassen covers part of Minnetonka. Gerhardt: Well Minnetonka School District. Horn: Minnetonka School District and Chaska School District too. Gerhardt: Extend it to Chanhassen residents and/or if you work in Chanhassen. RobbinG: Live or work in Chanhasse~. Gerhardt: I guess I would send it out to the businesses then and be up to them. Whitehill: Do you think we can get something in the newspaper? Alrightiy, any other comments? Whitehill moved, Robbing seconded to direct staff to initiate a contest for people who live or work in Chanhassen to design a fountain.for the atrium at Chanhassen City Hall with a prize of $500.00 for the best design. Ail voted in favor and the motion carried. TAX INCREMENT FINANCING, LEGISLATIVE UPDATE. Gerhardt: Included in your packet you'll find a letter addressed to Don Ashworth from Ron Beatty. Basically it's a little bit out of date. Updating Don on what the legislation is doing with the Tax Increment bill and I highlight a little bit on that in the Redevelopment Plan Modification No. 10 update also. Right now the Senate does not have a bill in on tax increment. They've taken it off but the House of Representatives do have a bill and it is a very restrictive bill that limits almost anything that you can do in a redevelopment district. Basically they would take away every right that we have right now and Don would probably suggest if the bill was to be approved today, that we would close the district out early and we just can't do anything. The way it is right now. Whitehill: It would only affect new projects though right? Gerhardt: Right. We would finish out everything that we've got. I mean if the legislature wanted to end and the bill passed today as it's written and we didn't approve the modification tonight, we would not be able to acquire lands for public improvements regarding potential Target development. Redmond site. The Ready Mix and some of the other projects Housing and Redevelopment Authority April 19, 1990 - Page 6 highlighted in there. West 79th Street. It's just that it's so restrictive and even to create a new district, it's unbelieveable. I went to a tax increment seminar put on by Holmes and Graven and Mr. Holmes who assist the State in writing some of these laws, these guys were baffled in trying to do an example of a redevelopment plan. What you could do and what you could not do. What you could not do is to come up it's just, even the experts are baffled by it. It's just limited. Very limited. And basically that's about it. After talking to Ron today, he feels that we may have one more year. That the House bill will not be included and that they won't do anything for another year. Horn: So is the objective of State government to kill all incentives for business in this State? It appears that's what they're doing. Gerhardt: Their main objective is to limit the abuses of it. Horn: What's the substitute? Gerhardt: There isn't a substitute. Whitehill: They'll put the billboards back up, come to Virginia. Not Virginia, Minnesota. Gerhardt: I don't know if you read in the local paper but Minneapolis is even getting out of the development picture. They're looking more to the social aspect of the community and trying to work with a lot of the different neighborhoods and that again reflects back to the use of tax increment. You're limited, I mean communities can't get into the development picture. You take this tool away, there isn't anything else. You won't qualify for any of the grants through trade and economic development. We've tried. We don't have enough low and moderate income people. You can't compete with the outstate cities. The loan process, you can get SBA loans but those are 1~ below prime. Whitehill: Well thank goodness, you know. Usually you can't say we were ahead of the game but at least this time it appears that we are. Thank God. Gerhardt: Well you know Victoria is a perfect example. They've got plans of trying to redevelop their downtown and they specifically wanted to use tax increment for the public improvements and they're just, it's not even there for that. Brad 3ohnson: That's not something that's in the past? Gerhardt: No. But I mean if it was, the bill that's in right now and if it was passed today, they would not be able to do that. Whitehill: Alright thank you. This obviously is the background for item number 4. Housing and Redevelopment Authority April 19, 1990 - Page 7 CONSIDERATION OF APPROVAL OF MODIFICATION NO. 10 TO THE REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLAN. Gerhardt: Number 4 was presented to the Planning Commission last night for consideration of approval of Modification No. 10. The Planning Commission reviews the redevelopment plan as to it's consistency with the Comprehensive Plan and zoning. The proposed projects are consistent with the Comprehensive Plan and do meet all zoning requirements. However, I'll hand out some changes that they had suggested on page 4. They felt that the highlighting and description of Hardee's sort of had bind them to approving a Hardee's if they were to come in. So they suggested that we change the name Hardee's and replace it with retail space. Horn: Can we do that? Gerhardt: Yes. I talked to Ron Beatty and he said it doesn't matter. He said he would prefer to have it a little more broad, generic. Horn: Sounds like a good idea. Gerhardt: He had no problem that there were some of these like Chanhassen Shop and West Chanhassen Shopping Center. Large retail anchor was 130,000 square feet. The latest plan was 140,'000 square feet so we placed in approximately in those areas where there weren't. Horn: Would it be appropriate to put a minimum? Gerhardt: No, he thought approximately would cover it. You could go either way so minimum they may cut back. Example, Redmond has pulled their plans off. They're up at 387,000 square feet and they may cut that back. I have to meet with their Chief Executive Officer. They've hired a new Chief Executive Officer so they're updating him is why they've pulled that off the agenda. Horn: So they wanted to come in with 500,000, would we be able to handle it with approximately 370,0007 Gerhardt: Yeah. Horn: I just don't want to put a cap on it. Gerhardt: Ron said that either or. Even having it at exactly 370 it won't jeopardize the project. The intent is there. Whitehill: I think those are excellent suggestions and I think there's one more that I would approve along that same line of making this as generic as possible. Is do we want to use the word Amoco rather than service station because who knows tomorrow what Amoco may be? Gerhardt: I had a question regarding that. I didn't know what we were doing with Amoco with the exception of buying a piece of their property. Housing and Redevelopment Authority April 19, 1990 - Page 8 Whitehill: It also says, and Amoco 1,000 square feet plus, that's where one thing is when you're acquiring it that's identifying it but then when we talk about the redevelopment, we use the word Amoco again. Horn: That's a good idea too I think. Gerhardt: Okay. Amoco in this regard is, it shouldn't be used as Amoco. It should, you're right. Amoco is Brown. Whitehill: Yeah, or whatever. Gerhardt: And I'm sure he's not going to call his service/car wash Amoco. It's going to be Brown's Service Station or Brown's Car Wash or something on that line so I would say... Horn: Yeah, but as I see it, this allows 4 different areas so that Amoco here means Brown's building? Gerhardt: Amoco in this case would mean the auto repair business that Brown would want. Horn: Then let's 3ust call it auto repair then. Or auto service. Gerhardt: Auto Service Center. And that would cover anything, if he was to do radiator repair down to tire repair and I think he's going to get into the tire service aspect of the business. We included, Ghat may be a surprise to you in reading the old bank site. Over a period of time of trying to work with businesses in the downtown, potentially trying to put people in certain areas for a time being, we always looked at the old bank site and the lands to the west of there as a possible redevelopment area. Basically this is going to, not knowing what the tax increment laws are going to be, it will be the day after we do this plan that somebody's going to come in and want to put some type of office building to the west of there and ask the HRA if they would raise the buidling so we included that as acquisition/demolition cost for a future pro3ect. We do not have anything in the works right now. We 3ust included it as a future item. Robbins: The City might need that for additional office space too. Horn: Why don't we have the Pauly/Pony/Pryzmus in here? Whitehill: It's already included. Horn: Where's that? Whitehill: 3ust in existing plans. This is the add on. Isn't it? Horn: Is that already an existing plan? Gerhardt: I think Pauly/Pony/Pryzmus talks about a library to be constructed there. Horn: Yeah, but should that be in here? Hous£ng and Redevelopment Authority ApT i 1 19, 1990 - Page 9 Gerhardt: Somewhere within the plan it does highlight library construction as a part of the redevelopment of that area. It was included in the Modification No. 9. Horn: Oh, so we don't need it here? Gerhardt: Right. Horn: Okay. Gerhardt: In Modification No. 9. Is the maps in here? Horn: No. Gerhardt: You're right it isn't. The maps upstairs show that as an acquisition and location for the library. In the cross numbers on page 7, it included a price of $900,000.00 on the library. Whitehill: The information that you're looking at item 4, there is a recommended resolution to be adopted. I'll move it. Horn: I'll seco nd it. Whitehill: Comments? Bohn: A comment. Do we need to have a second motion because it says in the memo, HRA must also request the City to hold a public hearing. Would that be part of the same motion? Gerhardt: You've done that already. They've established the public hearing. It's just we included it as a one resolution thing but staff has taken it back to the City Council and requested them to establish a public hearing. There's a 30 day process inbetween the establishing of the public hearing and having a public hearing for school district and County to comment and review the proposed plan. And Don has gone down and talked to the County regarding that. And letters have been sent to both agencies on the public hearing which is set for this Monday. Whitehill moved, Horn seconded that the HRA adopt Resolution No. 2 approving Modification No. 10 to the Redevelopment Plan and Tax Increment Financing Plan for the Chanhassen Downtown Redevelopment Project. All voted in favor and the motion carried. TRANSPORTATION STUDY REPORT FOR THE CHANHASSEN CENTRAL BUSINESS DISTRICT. Gerhardt: You'll notice that Paul Krauss, the Planning Director, had written this report and Paul and Gary had gone through and met with several consulting engineers to provide services in doing a transportation study, traffic study, throughout the downtown area. That would include West 78th Street design and West 79th Street as it would connect with TH lO1 and Market Blvd. also. In this we would look at if a major retailer was to come into the community, what kind of counts would we see. What type of Housing and Redevelopment Authority April 19, 1990 - Page 10 road construction would be needed to service that type of traffic. And look at the redesign of West 78th Street as it goes through the downtown. Basically see if what we have is appropriate or not. This .is something the HRA has been asking for and is also included as a part of your goals and objectives for the year. Staff would recommend that we spend up to $27,790.00 for SRF, Consulting Engineers to provide the services. Horn: I missed the completion date here. (There was a tape change at this point in the discussion.) Nhitehill moved, Horn seconded that the HRA authorize the expenditure of up to $27,790.00 so that the City can retain Strgar-Roscoe-Fausch to undertake a comprehensive traffic study of the Chanhassen Central Business District. All voted in favor and the motion carried. ESTABLISH A JOINT CITY COUNCIL/HRA PUBLIC HEARING DATE TO DISCUSS TAX INCREMENT FINANCING, DOWNTOWN DEVELOPMENT, ETC. Robbins moved, Bohn seconded to set Monday, May 7, 1990 at 7:30 p.m. as the special meeting date for a 3oint City Council/HRA public hearing. All voted in favor and the motion carried. APPROVAL OF MARCH AND APRIL BILLS. Robbins moved, Horn seconded to approve the HRA Accounts Payable for March and April, 1990 with the exception of Check #040230 in the amount of $3,117.43 to BRW, Inc. and Check ~040234 in the amount of $11,093.00 to Northern States Power. Staff was directed to review these two payables and to bring them back at the next meetings. All voted in favor and the motion carried. VISITOR PRESENTATION: Brad Johnson: ...because they want to open the clinic May 1st. I think the green thing has survived, what's that building called? Gerhardt: Modene-Hendric kson. Brad Johnson: The Modene-Hendrickson building has survived the winter and they're really concerned about the traffic flow into there because you really can't see where that parking lot will even be from the main street because of the buildings and it will help to get the green building out. The contractor's supposed to be in there to do the paving and the rest of the work on May 1st. I believe that would be a good time. Otherwise, he'll be held up like he was last year. He could not complete the parking over by that end, the west end of the building. I just see a real mess in there and a lot of phone calls mainly to Todd if things aren't taken care of. Whitehill: Are you going to tell us where Chanhassen Lawn and Furniture. Brad Johnson: No, I'm just talking about the green building. That's Housing and Redevelopment Authority April 19, 1990 - Page 11 supposed to come down. Gerhardt: As soon as the road restrictions come off, the contractor can come in and we'll still have extended services with the demolition crew that took down Loren Anderson's. RobbinG: When is Bernie going to be out of there? Gerhardt: Well that's the question. I had conversation with Bernie about 2 months ago and he expressed interest in keeping that space for a period of time again. Through the summer. I mean last fall it was snowmobiles. Now this spring it's lawnmowers. Horn: How can there be road restrictions when it's this dry? I mean that's usually for soft roads. There's no moisture. Gerhardt: That's the State. Whitehill: On the calendar. Bohn: It's like the fishing opener. Brad Johnson: Well I think he's going to need a little help if you can give him some moral support. I do think we're going to have in the neighborhood of hundreds of cars in and out of there and it's going to be quite confusing. Whitehill: Is that green building going to be demolished? Gerhardt: Yes. Brad Johnson: And that is really in the way of all the current plans so I think it would help. Gerhardt: The problem I have is that we acquired that building in haste from Modene-Hendrickson, two individuals that weren't really ready to move. You know they were very good in selling us that building. We did not have to go through condemnation. They settled before we had to go to court. We're in condemnation with them but they were very, very easy to work with during the negotiations of that building. Relocation monies were very minimal but they were somewhat relunctant in moving out of there and then once they move out and then we let Bernie use it? I can't believe that they haven't called me and expressed concern in that area. RobbinG: Todd just one quick question with regarding to the medical. Will there be a cut put in the median to allow for left turns from 78th because right now there is nothing there and if you've got an emergency vehicle coming from the west, how will it get into the back? Horn: By the Riv. Brad Johnson: That's one of the reasons you need to put a little better temporary road in because you can't see that at all. Housing and Redevelopment Authority April 19, 1990 - Page 12 Gerhardt: The location of the curb cut to service the Medical Arts is right in front of Bernie's building. Once Bernie's building's out of there, then the construction will be, the curb cut will be made there. RobbinG: I'm talking about making a left turn. You're still going to cut across the F~iv's or whoever's parking space there? Brad 3ohnson: Yes. Robbins: That could be messy if it's an emergency...traffic there. Horn: Will there be emergency vehicles coming to this clinic? Brad 3ohnson: More or less if somebody had a problem at the clinic which can happen. Gerhardt: I thought they were holding 24 hour emergency care there too. Brad 3ohnson: Extended emergency care but not the kind that you'd have a vehicle. It's more like when you fall off your ladder or something like that. Broken arm. I just wanted to bring that up. Whitehill: I was just curious, you said Todd about the possibility of Bernie using the building. I was thinking of something and the reason I asked about demolishing is whether or not the building could be easily moved or not. I don't know. Gerhardt: It's a cinder block building. Whitehill: Is it cinder block? I thought it was wood. Gerhardt: It's all cinder. Whitehill: You don't move that. Gerhardt: No. Whitehill: I'm not talking about Bernie's building. I'm talking about the green building. Gerhardt: Bernie's building is a metal building with metal truss. I've got phone calls that want that building. They want the metal frame. Whitehill: Well to leave it there and let Bernie use it, there's... Gerhardt: Pardon me. ~Jhitehill: To let Bernie use it in it's present location, the green building, there isn't really adequate space. That couldn't really be accommodated. Gerhardt: No. I mean that building needs to come down to finish off some Housing and Redevelopment Authority April 19, 1990 - Page 13 of the public improvements. The parking lot, storm sewer in that area. It's given Bernie an additional 6 months to use the space and I think it's almost a slap in the face to Modene-Hendrickson in not giving them the option to stay there for an additional & monthm. Whitehill: Well what will be now the date of demolotion then? Gerhardt: The date of demolition? Whitehill: As soon as the road restrictions are off? Gerhardt: Yep. As soon as they can move their machinery in. Whitehill: That's what you wanted to hear wasn't it? Brad 3ohnson: That's what I was trying to accomplish, yeah. We'll see. I'd like to get on now and, I've got 3 things to talk about. The second one is more or less an update. I was reading the letter I sent but to you on Monday about all the things we were going to cover this evening and then right after the letter was typed and ready to go we got a call from Target saying it would be another 2 weeks before they could talk publically concerning, to any public official concerning their plans for any of their areas including Chanhassen because the bottom line is they haven't got the decision done as of yet. He promised me that it'd be as of May 1st and hopefully we'll get there. Remembering that this is the thing and one of the concerns was from the very beginning is that if there was a Target store in Chanhassen, how would that affect the grocery store assuming that we were not going to be built upon. In other words, wouldn't be able to put a grocery store in this particular center and I just want to remind you that this grocery store is expandable to about 40,000 square feet the way the center is currently, and we'll get back to that in a minute. We also then did a relayout of what the project might look like if in fact, and I sent this out to you. I think you all received it in the mail. Some received it in the mail. This is sort of how it would lay out and I think this is the first time we've actually seen the amount of parking that this particular store requires. The building is sitting on top of the Chaska Machine Company down there and this is the reason they have selected this site. That's the only place that the depth from here to here in the whole community is enough. To put enough parking out in front of the store. In fact I guess, according to Kelly 3ames, it would fit over here facing this way but they don't want to do that and it could maybe fit on different kinds of sites in town but this is in general what has been holding us up. What we did then was basically took Market Square and moved it to the far west end of the community to see if we could lay that in. We don't think that site would be as it is there totally acceptable to a supermarket because it's not laid out correctly for them and it's not acceptable, we just think, this is our first run so it would not be acceptable for the drug store. It's a very difficult site with the size of the building that we have in there to work on it there. It's a 38 acre site by the way that we would be dealing with and there would be 4 important land acquisitions. We'd have to do the Bloomberg site, the Burdick site, the 3ames site and the Hanson building that's located, the Chaska building right here. What it does is create a lot of ou~lots along Market Blvd. which is quite a bit Housing and Redevelopment Authority April 19, 1990 - Page 14 different than our original plan. We'd like to put more outlots in but once again the store is so big, it's hard to predict how much retail we'd actually generate because we have a Target store here because you can go around and see a lot of stand alone Target stores and it's back to our own demographics as to what it will do. That total package would be 380,000 square feet of retail space without anything happening on 3ames' spot during that period of time and he can take another 150,000 square feet. That's a lot of retail, especially since we've been in a leasing business and working hard to get it at 1,200 square feet at a time so it's a little hard to believe that all this will actually happening. One of our major concerns then was, as we go through our own process, trying to figure out where do we stand after our last meeting, was how big a grocery store can we actually accommodate in Chanhassen and so Super Value redid the run and we got the report today and maybe Gary, do you want to tell them what it is. It was kind of interesting. Gary Cooper: I guess they looked at a bunch of different scenarios and I guess what they looked at was even more complicated, from their perspective was an even more complicated decision than I even envisioned it to be. They basically did 7 different projections. Each one of them assumes that the new Cub will go up in Eden Prairie because they're telling me that's going to happen. I think they did some of these projections with a new 30,000 foot store where Driskill'.s store is in Shorewood and that they added I guess because they have some information that I don't have. They just felt they have pretty strong feelings that that's going to happen and so they felt that I should have the information to look at. The runs of different size stores with that, without that. With Target and without that. Basically so the results they have, I guess I ranked them and the way I ranked them is probably the best measure of how successful this facility might be in year 3, year 4, year 5 is to look at the sales per square foot that they projected out to year number 3. The 22,500 square foot, they projected the highest sales per square foot without a new Driskill's store in Shorewood and they projected out at near $6.22 per square foot. The next highest was without a new Driskill's store, 25,000 foot store and they projected out at $5.90 a square foot. Anyway, the interesting thing is, some of the comparisons they made was with the new Driskill's store and with the Target in Chanhassen and basically, for instance on a 25,000 foot store, they projected less than $2,000.00 more sales with the Target and grocery store than without it. So that surprised me and basically in every one of their projections, as far as grocery sales, the impact of the Target store was very minimal. 1~ or 2~ increase. The thing that I thought was very interesting from my perspective the placing of a new Driskill's store in Shorewood would have probably 3 or 4 times the negative impact than a new Target would have in Chanhassen. Whitehill: On a grocery store? Gary Cooper: On a grocery store. And when we first came here and we talked about this, because one of the things we talked about was that the whole rationale for the force to get a grocery store in the community was if all the stores keep upgrading in the perimeter, everytime they do one of these market studies, it can make it more difficult to locate one in the center of that hub. I guess I think, I don't know how serious Ed Driskill is about doing it. I know for maybe 10 years he's been talking about that Housing and Redevelopment Authority April 19, 1990 - Page 15 and he hasn't done it. I know he's seriously considering it again. I think one of the reasons is probably because he sees the nice new store in Chanhassen is a threat to his business. I'm sure that's part of his rationale. But I was very, very surprised that a new Target, I was thinking that gee maybe we'd get 25~ increase in traffic and it would make the operation of the store significantly easier to have a bigger store and all this. For instance, they did a projection on 35,000 foot store with a Target and they projected in the third year $180,000.00 worth of business which would be $5.15 and I'm sure that to break even, that store's got to be in the mid $7.00 per square foot so it would just be a terrible stretch if you had a store that large. If they know what they're doing at Super Value for projecting these things out. Whitehill: Where's the proposed Cub? I haven't heard about that. Gary Cooper: I believe, from the information I get it's going to go on the back side of Eden Prairie Center. Horn: That would affect this last, wouldn't the Rainbow buffer that pretty well from us? Gary Cooper: One of the things that they didn't do and it was kind of, I think it was kind of political. When they did the survey, they showed me what. When they did the survey, they did it without the Cub there. They wouldn't give me that. They didn't want me to have that information. When I sat down, they didn't have this typed up or anything so I went to the home office and I went over this so I got the hand written memo that talks about that but the gentleman that gives me this information, jerked that out before he give it to me and I'm sure what that would have probably have showed us is that we could maybe have a bigger store or the success of the smaller store would have been much more eminent without that new Cub at Eden Prairie Center but they chose not to share that information. Whitehill: I guess if they've got the volume that they do on a Cub store, you know their radius of draw has to be pretty. Gary Cooper: It's big. In fact this here would affect us in Chaska but I think it's manageable. I don't think because of that Cub there, you can't do this project. What I told Brad today is based on these numbers, the project as we originally conceived it does look, to me, just solely looking at it selfishly and personally, the originally conceived project would be a very good project. I'm sure Target could be very meaningful to the total community in terms of tax revenue and all that stuff but it doesn't look to me like that means a lot for the success of the supermarket. Gerhardt: Gary, do they go off a traffic counts that MnDot provides them? Gary Cooper: I don't really think they've looked. Clayton 3ohnson: Part of it is don't you think that part of the Target shoppers are not necessarily a grocery shopper. In other words, the g¥ocery market is going to still be drawing from that 3 mile radius or whatever it is and Target is definitely... They may draw people from a Housin9 and Redevelopment Authority April 19, 1990 - Page 16 long ways but that isn't... Gary Cooper: What I thought and it's just a guesstimate when I got this information. The explanation that I gave myself was that it increases your traffic so it increases your customer count but at the same time it does that, Target provides direct competition for you so I think it tends to lower your average sale. So for instance, all those items that Target, you're in direct competition with Target, you're going to sell less of those. $o like let's say it increases your traffic count 10~ and it decreases your average purchase 8~ so you only net a small, small gain. I think as I thought about it, that's probably what happened. Brad Johnson: Another thing is that, all the studies I've ever seen and we've talked about, there just isn't that much grocery business out here and they normally figure that there's so many square feet of grocery stores and Waconia's got what, probably 20-25-30,000 square feet of grocery store so are you going to take business away from Waconia and there's really nothing between here and there. There's only maybe 2,000 people in Victoria on TH 5. Horn: What about Chaska? Brad 3ohnson: Chaska, what they pull up here, it's a real question. So far they haven't shopped here. They tend to go down to, he captures about 50~-60~ of the total business in Chaska and the rest go to the Rainbows and the Cubs for price. Horn: Wouldn't people from Waconia go to Chaska before they'd come here? Brad Johnson: No, they'd come on TH 5 from Waconia. It's a lot longer to go to Chaska. Gary Cooper: I think you draw people from those communities for the grocery customer for kinds of combinations of reasons. Like Chaska's the County Seat so you do, being the County Seat does provide a certain amount of draw. The other thing is, Chanhassen is a direct route to the Twin Cities. I think you would pick up some Waconia business based on ease, commuter traffic. There would be some good reasons why Chan would have some advantages over Chaska but then Chaska has a couple of advantages over Chan but I think basically what they do on these studies is they look at the business within 1 mile to 2 mile radius because in the grocery business that's the blood and guts of your business. Gerhardt: I mean there can't be a rhyme or reason of why they put a Cub next to a Lund's and a Lund's next to a Rainbow. Gary Cooper: The Lund's, I don't even think they consider the Lund's an issue. Gerhardt: That's why it's for sale. I mean Lund's is not even going to be surviving. There was no study done for Lund's to locate there or I'm sure they did one but I mean, they're directly competing for the same dollar. Cub is going to compete for Rainbow's dollar and I mean, if you were to go Housing and Redevelopment Authority April 19, 1990 - Page 17 in and do a study to show that this is the location that a Cub should go, baloney. They're competing for the business that Rainbow has and it's done all over the State. It's done in Fairmont, Minnesota. They've built 3 grocery stores in a town of ~0,000 people. They've got close to 80,000 square feet of grocery in that town. They call compete. Nobody's making a profit. High V is battling with Super Value. Super Value is battling with Gunther. I mean there's no market study. Gary Cooper: When you get out away from the metro area, they do draw, they go have bigger areas and so you look at Alexandria. I mean Alexandria's probably got a similar population to Chanhassen. They've got a ton of supermarkets that are doing well but that's a different market. Gerhardt: But now when you've ~ot 3 of them in that community where they all come and shop. I mean they're drawing but nobody's making any money. Brad 3ohnson: I guess then one of the things that was significant in our decision to sort of support the Target, not that we don't but is that we now could build in theory that center. Because Gary came to us originally after he heard about the Target thing and said well we've got to do something. I got to be able to expand my store to 60,000 square feet if in fact that's what the numbers show. So we ordered the study at that time and now we have a study that says it doesn't affect that particular situation. The practical part of this then is I think hopefully if Target has got a decision by the first of May, as corporations go, we're not so sure how committed they are. From the leasing agents point of view, I am now starting to lose tenants simply because of the delays that we're having and the publicity that this has which then could put the other project in jeopardy. That's just what could happen and if we don't have the other tenants, we don't have a grocery store. We've gone through that before. Secondly if, these are just questions, if we build the other project. If we don't build the other project, and Target builds on this site, we then have a whole new ballgame and a whole new development agreement and the subsidy that was existing for a grocery store which he needs or to even build, based on those numbers, the 22,000 to 25,000 square foot store disappears and it becomes kind of a catch-22 from Gary's point of view, right? If we pulled the subsidy from you, see originally he said I may be able to build someplace else in the community because the volume will go up. Now we're back to where the volume was before if these numbers are correct and you just have to add up the number of people and they start to make sense. There's only so many people in our trade area. We in fact have 80,000 people in our trade area within 5 miles but probably 90~ of them are north of TH 5 and there's plenty of places to shop for groceries. You know you've got Cub stores over there and you've got a Rainbow and a Cub in that 5 mile radius right now. And those are in the heart of that market place so you're not going to pull that grocery market over here but they may be able to pull the Target business. Horn: So those studies only include households or do they also include employees and businesses? Brad Johnson: Individuals. I don't know how they do it. Housing and Redevelopment Authority April 19, 1990 - Page 18 Gary Cooper: They look at the businesses in the area and they look at the, and I think they look at all that stuff. This is the biggest, this is the largest food wholesaler in the world. They are not, I can't say that I understand exactly how they approach it but I would like to believe that what they ~4ere saying, my intuition said that this was not going to come this way but I just have to believe that they know what they're doing. Horn: Well when you start looking at this thing, Rosemount wasn't even there. Gary Cooper: This is as of 4-19. This just came off the press. Horn: No, I'm not talking about this study. I'm talking about when we first started this project. Rosemount wasn't even there. Look at the ton of people that are working over there. Clayton 3ohnson: Clark, I raised that question at Super Value. I asked the question at Super Value that day and they basically, their answer was, they didn't have a specific answer about Rosemount but their real answer was, again that the grocery market, the amount of groceries that would be purchased by people coming to and from work, is not a significant portion. Again they go back to, I think the predominant number that they're working with is the households within that market area. Horn: They don't think a housewife after work stops and picks up groceries? Clayton 3ohnson: No, they acknowledge that but that was the answer that they gave me anyway. Brad Johnson: It'd be the same kind of thing as then you should have the biggest grocery store possible in downtown Minneapolis because that's where everybody works and there isn't one at all. Horn: No, they're closer to home. Clayton Johnson: That's exactly what they were telling me I think. Bohn: I know a lot of people that go on Saturday morning and Sunday. They go to Target. On the way home from Target they stop at a grocery store. They do to Target store first and then they go, they make one trip and after they leave the Target store, or the Dayton's Southdale or Ridgedale, they stop at a grocery store on the way home after they leave there. Brad Johnson: That could be. Just remember that in our trade area we already got a Cub and a Rainbow eating that up so they could come to a Target in Chanhassen and stop at a Rainbow someplace else or a Cub store. 9ohn: Well if it's on the way home. They'd have to go out of the way then. Brad Johnson: There aren't that many people this way. See we're really short on... Housing and Redevelopment Authority April i9, 1990 - page 19 Horn: Most of the people our place come from the west. A lot of the businesses in this town draw people from the west. Brad 3ohnson: Oh sure. Horn: ...near their hometown, they'll shop here. Brad 3ohnson: We're really in a dilemma and we're probably going to stay in that for another week but as of this morning then, one of our diiemma probIems was how big the grocery store shouId be and if the grocery store had to be bigger, if there was a perspective Target somepiace in the community, we wouid have to vacate this site. At the present time then, if Target couid find other pIace to come in the community, we wouid not have to vacate this site. It aIso turns out that if we moved up here and buiit what we were going to do, this is the best Iocation in town for a neighborhood shopping center because of the traffic fiow. So the minute you move away from this, you give up something from this. From the center's occupants, they're going to be farther away from the primary market in this town which is north and western Eden Prairie. No matter how you Iook at it, and I met with a bunch of retaiiers this morning and they said the market in this town for them, 66~ of the McDonaid's business is Eden Prairie. Okay, so the farther you move any kind of retaii this way, and he's mapped it out and he's expiained it to us, this way, the farther we get away from our base business because there just isn't the popuIation to the west to support it and a lot of our popuiat£on to the north uses the TH 7 corridor. I think we've got a diiemma. I think we're going to hear from it. I guess the Mayor's supposed to meet with Target on the 4th and I think we have our iittie batties back and forth on how they handie this even emotionaIiy because each day is a new worid you know. We don't know, we think we've got the report from Target and then we don't and now we know that the grocery store is, so theoreticaIly we have probably a 60,,000 or 70,000 square foot center that we can build in Chanhassen. Probably within a reasonable amount of time if we can hang onto some of the leases that we have. That would include the grocery store and include possibly Bernie, the hardware store and a drug store. But if we can't build it on this site, we're kind of up in the air and I guess we're all kind of sitting there saying well, let's find out how sure this thing is. But it's a matter of how long we should put that off and it's a lot of changes then that would have to happen. New development agreements done and stuff like that if we did make that change and even if we should move way out there. Maybe we should go to the James site right across the street and just idle away there why whatever is happening so there's, it's not easy. And we've got a number of people who have worked on this project both financially and then you've got people like Kent who is coming to me and saying, hey I've got to move. I mean 2 years ago he wasn't saying that. He's run out of space. ~hitehill: Well Brad this is kind of a repeat of the meeting that we... Brad Johnson: Well it's an update. I guess it's an update. Housing and Redevelopment Authority April 19, 1990 - Page 20 Whitehill: I still fail to see on the basis of pure speculation, reason ~-~ There's an t,%au some sort of self imposed dilemma keeps occurring. approved plan. I've heard no human cry that you know that Target even would want to come in and make a commitment. That it's something that the city necessarily wants. A lot of other considerations start happening. That could close... Brad 3ohnson: I guess what we're trying to be is open minded and community like and maybe at our own risk at this point. I think from now on, now we know that Gary's report is out. It is at our own risk. Up until that point we weren't sure because if a Target located on 3ames property or someplace out in the community and did generate this huge amount of business, then we were concern that if he didn"t have a big enough store in our center or the ability to expand to meet it, he'd find himself faced with another major competitor in town. Ne do know that and I guess we heard you very well last week but we still couldn't answer his question. NoN we can answer his question. Whitehill: Which is consistent with what I said last time. Srad 3ohnson: Yeah, and I think the next question then is, what's next from our own point of view. I think what's happened, maybe Clayton you want to address your feelings toward this based upon what... (There was a tape change at this point in the discussion.) Brad 3ohnson: ...my agreement with the Planning Commission or at least the Planning Department after basically your comments about the Hanus quadrant, we'll call it, is that I would come in with a plan that was architecturally complete so you know what the darn thing was going to look like. Generally I'm still working with the problems of land acquisition, tenants and positioning and as of today we're in the position now to start the architectural drawings for what will be that Hardee's area and the Amoco site and so forth. Ne all, if you want to page through that and mainly what I wanted to discuss tonight was that there's a page in there that lays out. the various tracts of land that are involved in this project. It's probably about their fifth page in and it's just reduced. See that where it's got tract one, tract two? And then you can refer to the first page. Our current situation over there is as follows. Ne own the Kurver's property. The Hanus we have under a lease option to purchase by the end of the year and we're in the process of financing that lease option. Then we have a contract for deed on tract 1 and tract 4 which runs from us to Darlene Hanus and from Darlene Hanus to the IRS. What I'm not getting pressure on from two areas is to close on that contract for deed and the two areas are one, from the lawyer for Darlene and two, from the practical side of trying to deal with the current condition of that site with all the equipment stored out in the back when in fact the land technically is not owned. Ne own it but there's a contract for there and the Hanu$' want us to pay it off. Okay? Now my proposal is, that's one thing. Second thing, if you go one page past, 3 pages past there, if we in fact do end up with a Rernie Hanson dilemma about November or let's say about July-August. What is currently the Hanus portion of that building and then another portion of that building and I put cross x's in there. See that? This is the Housing and Redevelopment Authority Apr il 19, 1990 - Page 21 facility that we could house Bernie. It's probably in my own recollection, the only vacant piece of property in this part of town that can do it. I guess my first page proposal then would be to help me, and it's hard for me to do that from a practical point of view when I'm trying to deal with Hat, us on the land site. So my proposal would be that the HRA, and this is not a formal request but in concept and Don and I have talked about it, is that you would come in and purchase the interest there that amounts to shout $2.25 a square foot. Then we have agreed to re-enter in the purchase agreement to buy it back at $2.75 or something like that and just get them in TYact 4 which won't be developed for a long time but is part of any kind of plan to do anything with the Apple Valley site. And we would just continue to hold...for later development. In real life we'll just help out that particular situation... We have purchase agreements from Hardee's and Brown to pu¥chase the...retail office behind the Hanus building which is shown on right here. $o something like that on the back but you could build in behind the Hanus building.., and they're interested in starting construction about August. And so we're going to come to you with a complete PUD with an upgraded look. This is not, by the way, how it's 9oing to look when it's done. We're trying to meet some of your objections that you brought up at the first'meeting. We really haven't .... the architects with the elevations. This little building. This would be like a... Brown's trying to move his building closer to the original building. Robbins: With Bernie in that building, where would he store his snowmobiles and all of this other chainsaws and all that. He'd be inside? Brad 3ohnson: He could put a little wall here or he could do something. ...but this is no worse than... He's still on TH 5 and he's still... He hasn't seen the idea. I'm just saying, Don asked me about it a month ago after he saw this delay happening and could I think of anything to make this work. I said this is... '~hitehill: So this is, on the proposed concept plan Brad, that's with all the service then in from Great Plains? Brad Johnson: Only from Great Plains. Whitehill: Those crazy little service roads, they got rid of that? Brad Johnson: They're still screwing around with it but it probably is gone. Unless somebody decides it's a good idea later on. Whitehill: You heard I said crazy little service road. I indicated to... Brad 3ohnson: So right now it's just an entrance there. I've got some people that would not be high level retail but they'd want as high traffic as they could get. There's a real shortage in town of anything with highway visibility because everything is either non-subdivided or big parcels of land or whatever. So a couple guys have come to us and said they would build on that site so I'm going to propose that as part of the PUD. And then I'm working with the Paul Krauss to make it look good. Hire an architectural group. We just got our topos done today and all the stuff necessary so I'd say in about, the next HRA meeting I would probably come F{ous~'.n9 and Redevelopment Authority April 19, 1990 - Page 22 in with a visual of what this would look like. It's probably look pretty good. 8town's going to invest about a million bucks...so I think we'd end up with something that's a plus...So that was my, I need some kind of feedback on that concept... Whitehill: Well obviously we want to see that site developed. 8tad 3ohnson: My proposal is, I've entered in a formal kind of proposal to you over the next week or two and we just go through the normal process and have the staff review it. As I said, I went over it with Don and he thought I should just run it by you guys to see what you thought since it was a meeting without a lot of stuff in it tonight. Whitehill: Other comments? Brad Johnson: I'm assuming that everybody would like to see that area redeveloped and I'm assuming nobody wants to see that land go back to Hanus. Is that okay? So that's my two concerns. Robbins: We don't want to see buses parking up there either. Brad 3ohnson: No. I think we got it and we're holding it in the right entity because we're just trying to do something with it to clean I up. Okay, I appreciate that. Thank you. Whitehill: Any other matters? Horn moved, Bohn seconded to adjourn the meeting. All voted in favor and the motion carried. The men, ting was adjourned. Submitted by Don Ashworth Executive Director prepared by Nann Opheim