Loading...
EDA 1999 05 20ECONOMIC DEVELOPMENT AUTHORITY MAY 20, 1999 [Note: The audio system was not operational on this evening. Additions/deletions are welcomed.] Vice-Chairman Jim Bohn called the meeting to order at 6:30 p.m. MEMBERS PRESENT: Jim Bohn, Nancy Mancino, Linda Jansen, Steve Labatt, and Mark Senn. MEMBERS ABSENT: Mark Engel and Gary Boyle. STAFF PRESENT: Don Ashworth, Executive Director. APPROVAL OF MINUTES: Labatt moved, Mancino seconded, to approve the minutes of April 15, 1999 and April 20, 1999. All voted in favor except Mark Senn who abstained. Motion carried. VISITOR PRESENTATIONS: No presentations were made. OLD BUSINESS KLINGELHUTZ EASEMENT ACQUISITION: Don Ashworth made the presentation on this item. He noted that generally the commission appeared to favor the recommendation from the last meeting with concerns over the appropriateness of the current signage in the easement area and Mr. Klingelhutz's concern over being able to expand his existing driveway to ensure proper access to the property should it be fully developed. Staff relayed that engineering, planning, and myself had viewed the site with Mr. Klingelhutz and agreed that only a very minor portion of the proposed easement area would need to be encroached upon should a future city council desire a 20 ft. entrance road into the Klingelhutz property. Staff had determined that allowing Mr. Klingelhutz, or his successor, encroach into the northerly six feet of the westerly eight feet of the proposed easement would not harm the existing trees, plantings, or signage as currently exists. Staff noted that Mr. Klingelhutz was in agreement with this recommendation. In regards to planning questions presented at the last meeting, staff noted that this was a perpetual easement allowing current/future planning commissions/city councils to determine appropriate community identification signage. Following discussion, Mancino moved, Labatt seconded approval of the proposed easement acquisition as presented in the staff report of April 15, 1999, with the exception of authorizing Mr. Klingelhutz, or his successors, to encroach upon the northerly six feet of the westerly eight feet of the easement area if such were required by a future city council for access to the Klingelhutz property. All voted in favor and the motion carried. ECONOMIC DEVELOMENT AUTHORITY MINUTES MAY 20, 1999 PAGE 2 NEW BUSINESS CREATION OF ECONOMIC DEVELOMENT DISTRICT, EDEN TRACE CORPORATION: Don Ashworth presented the staff report. Generally the EDA had agreed from the previous meeting that the creation of an Economic Development District was reasonable. The basic premise of the approval was a recognition that the public improvement costs for the road/utilities/etc., abutting the pond, park, and drainage swale areas should be paid for with tax increment versus general obligation of the city. Secondarily, to achieve development of the property in a timely fashion, special assessment reduction agreements should be considered for the individual businesses, not the developer, to ensure success of the district. Finally, the EDA had expressed its strong desire not to allow the district to exist for an extended period of time and would like to see the district closed out within a 3-4 year period of time which staff has projected can be accomplished. The EDA acted to delay further action on this item until the "TIF Plan" was completed. LAKE SUSAN HILLS HOUSING PROJECT: Don Ashworth presented the staff report. Ashworth noted that the proposed project was a part of a larger PUD consisting of St. Hubert's Church, 17 commercial/industrial lots, and the residential development currently under consideration. Ashworth repeated the constraints that had been imposed upon the property by the city, and more specifically, by the state legislature. These restraints effectively prohibited an apartment project consistent with previous approvals of the city. In essence, staff had run out of options as to how the property could be developed consistent with previous approvals and conform to state requirements regarding properties previously classified as "green acres" and meeting "qualified housing district" standards of the state. Ashworth, in essence, stated that the current project did not seem to be feasible. Sheldon Wert, developer, made a presentation in regards to the project. He relayed the importance of a quality project as well as his beliefs that the project would have higher than normal development costs. Wert relayed telephone discussions he had with the city's housing representative Mark Ruff, and that a hybrid alternative may be in the offering. He discussed the alternative financing technique in some detail. Various EDA questions ensued, most of which not being able to be responded to without the expertise of Mr. Ruff. Other questions included: "But For" Test: EDA members could understand how our TIF attorney could find justification in providing economic assistance for the differential between market rate rents and affordable housing rents. However, if the EDA were to go beyond that and provide assistance directly to the "market rate units," how does that meet the "but for" test under Minnesota statute? ECONOMIC DEVELOMENT AUTHORITY MINUTES MAY 20, 1999 PAGE 3 Market Rate Study: During one of the presentations, a statement had been made as to a "market rate study" for Chanhassen. EDA members asked if a copy of such could be received. Staff was unaware of such a study. This item was tabled to allow staff to meet with Mr. Wert to discuss his most current proposal as well as to respond to the questions noted above. APPROVAL OF BILLS: Jansen moved, Mancino seconded, approval of the bills. All voted in favor. ECONOMIC DEVELOPMENT AUTHORITY PRESENTATIONS: Legislative Actions: The state had previously approved a four step program to help Minnesota cities who had tax increment districts which had been harmed because of state tax rate compression. Chanhassen was successful in obtaining legislative help modifying the four step program. We were not successful in getting the district extended--primarily recognizing that the four step program would probably solve Chanhassen's problems for 2001 and 2002, if not for 2003. The four step program and modifications agreed to by the legislature were as follows: - First Step: The first step for any state approved remedy was proving that the TIF problem was created by the state rate compression. Although EDA members were not happy that significant monies were spent with both Springsted and our auditing firm, those dollars will ensure that we have in fact documented that the problems in Chanhassen were solely created by the legislature. - Second Step--Additional Tax on Those Properties Receiving Redevelopment Assistance: This step was eliminated by the state legislature specifically at our request. We properly demonstrated that one business may have received benefits 10 years ago and another current competitor did not. A new tax of upwards of 20-30% against a new owner (probably not the same one who had received the relief 10 years ago) is not reasonable. Additionally, the previous owner did everything that was required of him and that his benefits lasted for solely a 3 year period of time thus ending 7 years ago. A major legal issue could have existed for virtually 50% of our businesses. - Third Step--Pooling from other districts: Although this step previously existed, using Hennepin County TIF dollars to help solve TIF problems in Carver County was highly questionable. Chanhassen was successful in obtaining language allowing pooling between counties. - Fourth Step--Grant Program: $4 million was added to the existing grant program, which will probably bridge the gap in revenue vs. deficits in regards to our major district. Pooling must occur before a grant can be applied for. ECONOMIC DEVELOMENT AUTHORITY MINUTES MAY 20, 1999 PAGE 4 · An updated Report of Projected Revenues and Expenses Associated with Our Primary District will be presented at a future EDA meeting. ADJOURNMENT: Vice-Chair Bohn adjourned the Economic Development Authority meeting at 9:00 p.m. Don Ashworth Economic Development Director