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EDA 1998 03 19CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY REGULAR MEETING MARCH 19, 1998 Chairman Boyle called the meeting to order 6~30 p.m. MEMBERS PRESENT: Steve Berquist, Jim Bohn, Mike Mason, Mark Senn, Nancy Mancino and Gary Boyle MEMBERS ABSENT: Mark Engel VISITOR PRESENTATIONS: None. CONSIDER PAYMENT OF SECOND HALF OF 1997 TIF PAYMENT TO DEAN JOHNSON. Todd Gerhardt presented the staff report on this item. Boyle: ... question on whether we should or shouldn't? Bohn: There's a court case on that. How'd that come out? Senn: Come out? It hasn't even gone to... delaying it as much as possible. Gerhardt: Neither one I think wants to go to court. They're trying to see what they can get out of the insurance companies on the deal and from what ! get from people, it can take anywhere from a year to... for that to settle out. And so there has not, there still is code violations over there. As a matter of fact, their permits have run out so he would have to come back in and renew those but you know, homeowners don't want Mr. Johnson in correcting the code violations. And homeowners don't want to pay to have them corrected until they get their money from him. So we're in limbo here and until people can negotiate. Boyle: Is there any leverage.., payment in your opinion? Gerhardt: No. ! think if we withhold payment, then Mr. Johnson is going to go ahead and file his court proceedings against us. And like Roger said last time, you know we can go through those and you know odds are we probably will lose and... Boyle: In other words, nothing has changed since the last time we went through this? Gerhardt: No. Bohn: He's still building over there isn't he? Economic Development Authority Meeting - March 19, 1998 Gerhardt: Yes. He has that right to. Boyle: Nancy? Mancino: I have no questions. Boyle: Steve. Berquist: I'm a little surprised Todd that the only feedback we're getting...Mr. Johnson himself regarding the insurance company. You haven't been in touch with the association.., new association president. The old association president... Gerhardt: No, as a matter of fact the gentleman that came to the City Council meeting, I don't want to call him the older gentleman but, he works for us. He says they're just waiting too on the insurance and, he admits that there is fault on both sides and I agreed with him on that and. Boyle: What are both sides? Gerhardt: Dean Johnson, the townhomes and the City. In this. That we missed kind of the code violations that existed out there you know. They should have been buyer beware when they came in and purchased the home. Inspections done and things like that .... Johnson not complying and overseeing his project better. Berquist: Any idea how many units have been resold from the initial purchase? Gerhardt: No. When we did the analysis and at the last meeting and there was no valuation decrease shown on any of the properties. I can update that. This year I should be getting a TIF report from Carver County, or from the auditor's office here within the next two weeks and I can update that report with, for taxes payable in '98 so those are the values as of the end of '97. Well end of '96. They always have the one year delay in valuation in calculating taxes so. Do you remember the report I showed you on the '94-95 valuations for taxes payable in '96 and '97? Where I did a comparison of values and I gave percentage increases. Mark had asked for that back in, I think it was September. Berquist: I thought it was predicated on assessed values and didn't include any.., nor did it include any resale information. One of the big bones of contention from some of the owners was the properties were virtually unsellable. Gerhardt: Well this next one I think will show you how that turned out. Senn: Then why don't we delay this until we see that? Mancino: I don't think it will have a bearing on it. 2 Economic Development Authority Meeting - March 19, 1998 Berquist: It may not but I just have a very difficult time acquiescing and saying well fine. Here's your money, you know...we're saying that no problems exist any longer and... Senn: What are the conditions of the original TIF agreement? Gerhardt: Basically the TIF agreement was to reimburse him for the road and if he built the units and it generated, you know we capped how much increment would be created each year and he would get to that amount and if he did build the units and didn't create that much increment, he only got what he created. It's a pay as you go. And ! don't see him getting the full notes here. ! mean those units should have been done 2 years ago so for him to accomplish the entire 691, ! don't see that happening. Mancino: But ! think... Senn: But that's not the angle ! was going on. The angle ! was going on was to, we never asked the question before though, what is the substantive conditions of the TIF agreement? Not trying to connect it to the court case. More or less, what's his obligations under the TIF agreement, okay? Can we, you know ! mean depending on what those are and what our obligations are, can we simply decertify the district? Okay, ! don't know. Those questions weren't asked last time. ! mean all I'm saying is maybe we should look at a different angle to this than we looked at last time because yes, ! agree. Last time we looked at it and we couldn't find an angle that worked. Mancino: ... Gerhardt: Well what that would do is that, you would lose roughly $262,000.00 a year in increment out to the year 2003. Mancino: Again, what...you would have to, if you decertified it, it'd have to be on...you'd have to meet certain stipulations obviously. Boyle: We'd put it back to the middle of 1997 anyway. ! mean they say 2000. Even if we did. Gerhardt: Well the soonest you could do it would be tax year in... And that's, if you can legally do it and you know. Berquist: And how long does he get payments? Gerhardt: He gets payments in '99 for just Phase II. And the total amount, high estimate for that are $139,740.00. ! still don't believe it will be that much. Berquist: Well if in fact the direction that we're heading in is to delay this only.., it's an interesting question. Whether or not it has any basis in legality, I'd be interested in learning the answer to that question. What the implications are to us as well as what the implications would be to him. ! think.., tremendous amount of effort on your part. Economic Development Authority Meeting - March 19, 1998 Gerhardt: No. I can ask the attorney that. Boyle: Are you talking Steve in regards to the current '97, the second half of '97 or... ? Berquist: If he comes to the conclusion that this is. Gerhardt: What's the soonest you can do it. Berquist: Soonest that we can do it and what's the benefit of doing it. Mancino: The pros and cons. Senn: Which comes down to, well what it comes down to is what are the conditions of the original TIF agreement and wherever you can hang your hat on that, whether it's '97 or '99 is. Boyle: Immaterial, if it's hasn't been complied with. Senn: Well, I don't know if it's immaterial but I'm sure the answer to that question would say whether it is or isn't. We just never really specifically looked at that issue. Berquist: The other question I had, ifI may change the subject slightly, is that I was reading an old letter from Kennedy and Gravens back to when they were talking about.., legal opinion as to our ability to withhold tax payments. At one point they had said, they were talking about the total TIF generated, total payments back to them. It was for roads. You know the whole deal was for roads. But if they did not spend this however many thousands of dollars.., still entitled to the $400,000.00. If in fact they spend $320, they still go the $400 back. Gerhardt: Well we verified it was, he submitted all his receipts for the road and it was more than the $400. I mean that's, it was a difficult road to build too. To go through there too so. Berquist: Well what I was saying was, it doesn't sound difficult to do, ifI have a relationship with the dirt guy. Is that common practice? To make an agreement such as that that says if we...we're going to give you what you spent plus the dollars... Gerhardt: I don't remember, I've always believed that the agreement was one that you had to provide receipt of all expenses. I don't remember anything in there that said if you didn't provide those, then why did we even ask to provide the receipts. Berquist: I don't know but that's what the letter said. I was struck by it. I meant to bring it and evidently... Mancino: land. Berquist: Well that would be good just to check. I mean on that one, how was it. What was the Then at least at this point I'll move to table. 4 Economic Development Authority Meeting - March 19, 1998 Mancino: ...tickler files so that every 2 or 3 months you know, how the lawsuit is going. Take an interest and just show an interest.., association there. Checking with them to say, see how their lawsuit is going.., find out some of those things like are they.., mark on our city that ! would like to know.., etc. because ! for one, and ! think we all do,.., about what's gone on and what the.., so ! would like to get some updates on what's happening there. And you know, ! like knowing what happens when we have shady builders... Boyle: Steve, your motion is to table this action and the purpose is to, for further investigation to see if there's any proprieties in the TIF agreement. Is that right? Berquist: Yes, that's correct. Boyle: Senn: All right, ! just want to make it clear as to why we're doing this. ... review the values. Berquist: Absolutely. All of those. Boyle: Okay. ! wasn't quite sure. All right. Bohn: Second. Boyle: Discussion. Berquist moved, Bohn seconded that the Economic Development Authority table action to consider payment of the second half payment of the 1997 TIF payment to Dean Johnson for further investigation. All voted in favor and the motion carried. Senn: What's a full page ad in the Star and Tribune cost, do you know? Do you have any idea at all? Mancino: $1,200.00. Senn: Is it $1,200.007 Mancino: Yes. Senn: Okay. I make a motion that we appropriate $1,200.00 to the neighborhood association to help them make efforts towards resolving their problems. Mancino: So how does the ad read? Senn: We are not buying an ad. We are giving money to the neighborhood association to aid them in process of solving their problems. They can do with the $1,200.00 whatever they want. Economic Development Authority Meeting - March 19, 1998 Gerhardt: The City tried that. You know they put a sign out and. Senn: ! know, but that's not what I'm talking about. ! think we should... $1,200.00 towards solving their problem. Make repairs or whatever they deem necessary. Berquist: I would not second that. I would prefer to put off discussion until such time as we have the information back. Boyle: Thank you Steve. Thank you Steve for that comment. ! think before this goes further we're going to go right onto number 2. Todd you're going to give us an update on the entertainment project. Senn: Todd, when you bring the info back, find out what an ad costs too, will you? For a full page in the Star Trib... ! don't know, give me both. Boyle: Or the Pioneer Press. Senn: Whatever would make the pictures look better. UPDATE ON ENTERTAINMENT PROJECT. Gerhardt: Mr. Chairman, EDA members. ! think some of the Council members have already been aware of Bob Copeland's intent in trying to purchase the bowling center for a future expansion of eight more theaters to their existing theaters. ! was going to make copies for you but yesterday ! received Mr. Dahlin's official plan for reorganization for his bankruptcy and in there he references as one of the items is that he has a purchase agreement for his building and that the revenues derived from that sale of that building was going to assist him in getting out of bankruptcy. Boyle: Todd excuse me. Berquist: I'm sorry. Go ahead. Boyle: Todd ! didn't hear. You say he has a purchase agreement? Did ! understand you correct? Gerhardt: The business plan says there is a signed, oh not a business plan but a reorganizational plan says there is a purchase agreement. ! don't think they went as far as to say signed. But that the courts were evaluating that so ! took that as if they want to see a signed purchase agreement and what the terms are and that they would then consider that a successful reconstruction plan or not based on their review of that is my interpretation of what their letter said. Boyle: Do you know who submitted the purchase agreement? Gerhardt: It was Copeland. Economic Development Authority Meeting - March 19, 1998 Boyle: Okay, proceed. Gerhardt: And with that, we had preliminarily met with Bob when Bob was considering purchasing this and he wanted to get staff' s thoughts on the idea of expanding the theaters. And you know would the incentives still be available for theaters and that he would also keep the concept of a restaurant with it. He felt that a restaurant and the theaters could be accommodated with the redevelopment of the bowling alley. And our pressing concern was of course parking being the issue over there so we had asked Fred Hoisington to come in and update his parking analysis based on 8 theaters and a restaurant. Right now staff is over there counting cars at different periodic times during the day.., that evaluation. Senn: During the day? Gerhardt: Day and night. Because we wanted to get a count on the park and ride also. Senn: Are our parking improvements complete down there? Are our parking improvements complete down there? Gerhardt: No. There still needs, it is for the movie theater portion but if you remember the plan also called for islands and reconfiguration from what you see out there to the west. Senn: The hard surface area is all there, correct? Gerhardt: Well it gets, the road gets taken out up to where the bus stop is and that gets reconfigured in that area. Senn: Oh, okay. Gerhardt: So there is some additional parking that needs to go in there. So until Fred can finish his analysis, staff, you know we encouraged him. We wanted to see the building redeveloped is what we said. You know we don't like what we see today and that once he had a plan that was acceptable to both the Planning Commission and City Council, that we felt that a presentation to the EDA would be warranted and we may have a preliminary meeting with you prior to that also to show you the concept that they are proposing. And so ! would expect him to be back in the next couple of months with that presentation. Moving on to the next item is, we've also received interest in redeveloping what is the old ice arena and the cabinet shop. Those two out buildings behind the Dinner Theater for a proposed 100,000 square foot office building. And right now they've narrowed it down to two sites. One in Eden Prairie and this site in Chanhassen. And they probably won't be making a decision for the next 5 to 8 weeks. Nancy has provided a letter and I've written a letter saying that we are interested in redeveloping this area and that we'd want to see a quality office development for this site and that we would look at providing incentives if we did see a quality development for this area for redevelopment. And so once we get a firmer grip, if they are that interested, ! didn't lock us in on anything and wait and see. You know let's say they're interested and they like being in the downtown. They like the retail support. They're in... Economic Development Authority Meeting - March 19, 1998 similar situation right now with that kind of arrangement. Their biggest concern at their current site is they don't have adequate parking or convenient parking. Senn: How are you going to deal with that here? Are they going to put a ramp in? Gerhardt: Yes. They're proposing a two story ramp. And then using part of the Dinner Theater parking lot and then building additional parking where the two buildings sit to blend in with the parking that, the new parking that was built. The next thing is their hours of operation don't conflict with the movie theater ....close their building at 5:00, Monday through Friday and weekends so. Senn: Are they willing to show proof of, or commit to furnishing additional parking in the future if the Dinner Theater ever changes uses? Gerhardt: You could request that. Berquist: Say that again. Senn: Well the issue with joint use on parking is you need to protect yourself in the future as it relates to changing use. The Dinner Theater which is predominantly a weekend and evening type functioning business, let's say the Dinner Theater goes down the tubes or gets sold and moves out, whatever, that building's logical re-use is probably retail. Well if the logical re-use is retail, that's vacant. Now you're in conflict with your joint parking agreement or meeting the parking requirements which were established on a shared parking basis. And usually the one who ends up holding the bag in that situation is the city because unless you have it locked in, you know what's there to stop.., doing anything about it one way or the other. So you just need to be real careful on how you structure the shared parking. Berquist: ...some contingency plan. Senn: Yeah, well it's common knowledge you have to show what's called basically proof of future parking, which means you're effectively signing a contract that says if it becomes necessary to furnish additional parking in the future, how does that.., cooperative parking and then here' s how you're going to do it. Maybe by adding additional levels to a ramp you know, it'd be taking up some green space that's not really required to be green space and converting in the stalls, you know that sort of thing but basically we'd probably be additional decks on a ramp. That sounds like what they're trying to do up front is build a parking deck which is two levels which is a fairly inexpensive structure compared to a ramp, about half the cost per stall. But the problem is there's absolutely no ability to expand it. Issues like that you've got to make sure you work through. Gerhardt: You might have some control over the adaptive re-use if the Dinner Theater should move out too, you know. If they've got a high traffic generator, you know, you might have some controls over allowing that use because odds are they're going to have to come in and retrofit the building. I'm sure they're going to want to have some type of permanent easement over you Economic Development Authority Meeting - March 19, 1998 know some type of agreement you know that they're going to... parking with the Dinner Theater that they got it now and into the future. Senn: The reality is or the odds are if the live theater goes out of business, you're not going to replace it with another live theater. And with zoning and everything else being the way it is, ! think you're, you know ! think we're kidding ourselves if... Gerhardt: I'm not saying that we shouldn't do it. ! mean ! think we should look into the future like that. Mancino: ! don't know. I'll go down and try to get the June 1 to come down... Gerhardt: My point was, they don't want to be in the boat they're in right now. Boyle: They don't want what? Gerhardt: They don't want to be in the boat they're in right now, you know. You know having to move out of their building because they are losing some parking and. Mancino: Well ! mean obviously the best... (There was a tape change at this point in the discussion.) Gerhardt: ! don't expect the parking study to be, you know depending on how many meetings Fred has to attend but you know it should be somewhere around $1,000.00-$1,500.00 because we're doing most of the work. We're out counting cars. Senn: Yeah but again, we're doing it kind of the cart before the horse because we don't have an application generating the need. We're kind of guessing that one's coming so we're going to do a parking study. Gerhardt: Well if this applicant doesn't come in, you know if this user doesn't come in, you know Brad's going to go out and try to find somebody else so ! don't think it's going to be for naught. This is one user, you know. We may try to go... that might be interested in being into a downtown area. Mancino: ...that much square footage.., as far as parking spaces. Gerhardt: One of the.., right now is that Ridgeview is doing an analysis to see what their future is in Chanhassen. They need to have more of a presence you know and they don't know if Medical Arts ! and I! is their future either so this site could be a potential for that too. There's a variety of different people and ! don't think it would be naught Mark. ! think it kind of helps us you know to market the site for other users. Senn: Well ! understand but it's a privately owned site. It's not ours, right? Economic Development Authority Meeting - March 19, 1998 Gerhardt: Well, we're working together in redeveloping that area, you know. Senn: ! understand that but most places in the world that ! work, if! do that ! have to generate my own parking study. The government doesn't volunteer to pay for it and give it to me. Why do we do that? Gerhardt: I'd rather believe our parking study than a private sector coming in. ! mean he's going to do whatever it takes. You know he's going to tell somebody, give me whatever ! need for parking that does this. You know for this ! think we can feel comfortable that it's going to work. You know it meets all the things that we're going to be looking for, for that area. Boyle: Okay, you also commented, or would you like to comment a little bit more about what Bloomberg, I'm not quite ! understand where you're coming from here. Gerhardt: The Frontier Center seems to be an issue. When the plans were submitted for the entertainment center, as a part of those plans there was a facade treatment shown of how the Frontier Center would be redeveloped. And Clayton Johnson feels that Truman Howell, who presented those plans, was not hired by him and that that was not the concept. Boyle: Where'd it come from? Gerhardt: It came from Truman and Truman tried to put a facade on there that he felt blended with the rest of the entertainment complex, the bowling center and movie theater. And Clayton, he never paid Truman anything and had no contractual obligations. It was a concept of what it could look like and Clayton feels as if he told everybody that the design was one that couldn't be determined until he had tenants in place to see what their needs were. And because, you know you get different types of users. You get one user. You get three users and they all may need different signage or different doorways or whatever. So he strongly believes that that concept was not the one that they were proposing. So with that aside, he wants to have a facade that blends with the rest of the theater front facade that is Millie's dining area and the Maytag area. Kind of the mansard cedar shingle type effect. And Sharmin and ! had a long discussion with him on ! think it was Monday... went around and around and told him you know what we felt would be acceptable and what wouldn't and he said he was going to do it his way and then he came in Tuesday and said he would accept some of our ideas so you're going to see a new concept, a new rendering, for that facade that shows a mansard and a new walkway between the movie theater and the Frontier building and leave it up to you to decide if it's acceptable or not. First it's going to go to Planning Commission. Then it's going to go to City Council and then ! told him that it would come back to the EDA for your approval for assistance or not. So I'm looking at it, it's like a fresh application and starting over. Senn: That's what you've inferred back to him? Gerhardt: We told him that the concept that people feel that has been approved is the one that was shown on the first rendition and he gets very upset when we tell him that. 10 Economic Development Authority Meeting - March 19, 1998 Senn: Why don't you just send him the meeting Minutes that say that it was. Gerhardt: ! sent him a letter which is in your packet that details, with Minutes, of what was approved in '96 when we broke it into phases. Senn: And he still feels that that's not what it was? Gerhardt: Right. And so you know, do we move on or don't we, you know? And ! said, make your application. Let's get it in front of him and see how they react and. Senn: Well and you just said something too about added assistance. What's that about? ! mean when we did this original deal down there it was based on redevelopment of the Frontier, the bowling alley and the other building that the theater's in. Now what do they want to do, pull that out and say this is a separate project to get some additional assistance over what we've already given them down there? Gerhardt: Well, when we tell him he's got to cover up the metal, he would come back and tell me ! need additional assistance but they're not asking for anything different than what was approved before. He will probably make comments if we ask for some brick or you know different alternatives to what he's proposing, he may come back to the EDA and said, you know after going through Planning Commission and City Council, you know they've taken what is supposed to be a $218,000.00 facade and turned it into a half million dollar facade and you know would the EDA be willing to assist more in that program. He's going to ask that or not. He says that the staff, you know off the cuff type thing, but right now as far as ! know, it's the same program incentives that were presented at the last EDA meeting. Boyle: ! don't think he would be bashful to ask for it. Senn: Not that group. Berquist: I'm going through the Minutes here that you included, and the Planning Commission from January 3, 1996 and the City Council from August 22, 1994 and the City Council January 22, 1996. He wasn't present. At least he never said anything .... Planning Commission meeting and ! don't see any evidence of him having said anything at either of the City Council meetings. And what's interesting is... very specific request regarding changing of the facade and what that building was going to... Gerhardt: Correct. Mancino: How'd you know there wasn't something like this? Senn: I don't know. Berquist: We decertify and recertify and then the Frontier couldn't... 11 Economic Development Authority Meeting - March 19, 1998 Gerhardt: ! think he saw what Bob Copeland went through and. Senn: Mr. Copeland isn't done yet ! hope he knows too. Gerhardt: Right. And he doesn't want to go down that same road. And secondly, I'm getting, you know ! think, you're absolutely right. He was not at the meetings. He hired you know Vernelle was kind of coordinating that and did he specifically tell Vernelle to say this is not the facade we're going to build or not build. Vernelle's answer is that you know...what was on the drawings. Berquist: You know ! go right back to when we were talking about the sign.., and we each had our own vision of the area. As how it would smell and taste when we were walking through it. ! still know what mine was. The smell and the taste and the feel for what the finished product would look like. Every time it seems as though every days, 45 days we're getting something before us that's... Mancino: ... ! have requested... TIF funding on and what we did approve... Truman was the one who designed it. Mason: Well I understand that, that we approved that. Mancino: ...what we approved... Boyle: It might be nice to have Clayton Johnson there also. Mancino: ... no, ! just mean at our work session or something. ! mean ! just would like us to see what it is... Senn: ! think we need to do that both in relationship to what's been completed as well as what is going forward because we haven't even got what we bought on what we have, so to speak. Mancino: Exactly, and that's... Senn: ! don't know if! said that right but. Mason: Well you didn't but ! know what you meant. Gerhardt: And Clayton Johnson says he will bring Truman in and swear on a Bible that he did not hire him to present any concepts on his building. Bohn: Why was he here then? 12 Economic Development Authority Meeting - March 19, 1998 Senn: We don't care who, I mean with that group it's immaterial who hired who. They came in and presented a concept for the entire thing. You buy off on it on the entire thing. What are we even having this discussion for?... Gerhardt: The bottom line in this, what I think Clayton is trying to do is to you know pacify Herb. Herb designs his own building. Senn: I would love to impose the design standards of the downtown area and the metropolitan area that is developing or redeveloping at this point, and ! tell you what, every project they've done would fail the standards. Some of, we have some beautiful buildings in this town but none of them relate to that group and time and time again they're looking for nothing other than a different set of standards. Berquist: Can ! ask one question before we move on. This is relative to Pauly's. ! mean we took the building down... Anything going on with Pauly, Americana Bar or whatever establishment that he was attempting to create? Gerhardt: Well, with Copeland's... Bohn: That's the old Chaska Bell. Senn: Yeah, that's what ! heard. Bohn: He's already been in for the last couple months remodeling. Berquist: ... Gerhardt: No, he wanted to get compensated because he had a lease and it was recorded and Mr. Dahlin didn't perform so he got compensated from Mr. Dahlin. Berquist: ! agree. And then the only other thing.., proposed office complex. ! mean it's exciting but it' s also... Chanhassen in any given time during a weekday.., sites and additional services. Boyle: That's exciting though. Berquist: It is exciting. It also... Senn: It's going to be interesting. Of course we do have some new ones coming right away too. You know where most of the pressure's going to fall. Most of the pressure's going to fall for us to change our rules, regulations and standards for Village on the Ponds so they can make everything fit theirs.., to accommodate it. That's exactly what's going to happen because it's going to be very difficult to retrofit it into the downtown area at this point. Unless you build, rip down all those brand new buildings you know to do it. You've got Dave's coming in now across the way. You've got, we're going to see an application on Houlihan's. 13 Economic Development Authority Meeting - March 19, 1998 Berquist: What's the other one you mentioned? Senn: Famous Dave's is already coming in, yeah. And Houlihan's will be right next to there or wants to be right next to the Americlnn. Mancino: ...request to go the other way but... Senn: We just need to figure out a better way to do it though. Berquist: If in fact this, we're in favor of this type of a structure coming to fruition, we would need to sit down and.., envisioning how it would evolve. Fundamental change. The same type of change if the Dinner Theater were to go out and... Senn: Well it's going to create a new density standard for downtown Chanhassen. Which is a density standard we have not accepted in the past. Now that's not to say that's good or bad. I'm just saying that hasn't been accepted in the past... Gerhardt: This area is zoned CBD you know so that means you can put buildings right up next to buildings. You know none of the setbacks where you look at Market Square, Byerly's or Target, you've got setbacks and things like that so you know this was going to be our you know, your traditional little downtown type area. Boyle: That's right. His point's well made. Why don't we move onto Colonial update on that please Todd. UPDATE ON COLONIAL CENTER. Gerhardt: Colonial Center. Right now Mr. Ken Tally owns Phase ! and I! of the Medical Arts buildings and to keep Waconia Ridgeview together, they need some additional space and you know his option is for him to move out of the building or build some new space so what they're looking at now is buying the Colonial Center, the old Kenny's building and retrofitting office retail, medical type uses. And there seems to be an issue, if you remember back, we building a parking lot in that area, we needed to own the land so the Kenny's people dedicated the parking lot to us so we could go ahead and make those improvements on that property. You have a uniform parking lot throughout that area and lighting and landscaping so with that we entered into an agreement that said we would maintain it and assess the cost back to them and if for any reason we are not maintaining it properly, that you would then you know deed it back to them. Since that time Mr. Tally is requesting an easement over the top of this property for parking for his building and staff has taken the opinion that we're not going to give you an easement. If you want the parking lot, take it back. And if not, then you know we gave him Roger's letter that says it's a parking lot. A public parking lot and so with that, you know ! don't know where it's going to come from here. They're trying to close here next week sometime so. Boyle: That close? 14 Economic Development Authority Meeting - March 19, 1998 Gerhardt: Yeah. Senn: So they're going to buy it? Gerhardt: Yes. Senn: Without even having approval on what they want to do? Gerhardt: They are just buying the building and renovating it for office. Boyle: Oh the existing building? Gerhardt: Yeah. They're not going to tear it down. They're keeping the structure. Senn: And the building requires no reviews for changing it to office? Not that I'm aware of. They've got office next door. But the title company is, I'm sorry ! was out... The title company is unwilling to Gerhardt: Berquist: accept... Gerhardt: We're not, they didn't say they would or would not accept it. That's what we presented to them. They would like similar rights that the Phase ! and I! Medical Arts have. That they can just have cross access and that they can park there. Not a permanent easement. Not, just something that says that they can park there and they can't designate stalls or anything of that sort. Just that they can park there and have access through there. Berquist: Which that requires an act of the City Council, of the EDA? Gerhardt: ! think the City Council would have to act on granting that easement. Senn: Why don't they want to buy it? I'm just curious. Why don't they just buy the parking lot back? Gerhardt: Because they like the City owning that parking lot and maintaining it. Senn: And spreading the cost of maintenance to everybody other than them, right? They love that. Berquist: Well, if you think of the history of the site. Gerhardt: ! was pushing for the other option. Berquist: If you look at the history of the site and, the history of the site was better suited by the city owning it but that's not the... Don't say no. ! mean that's an awfully quick no. We had 15 Economic Development Authority Meeting - March 19, 1998 Pauly's. We had public houses across the street there. We had the tacket facility next door. Prior to that it was a gas station. And then we had the users in the Kenny's building. Arguably, it made.., happen on the site across the road. As to whether or not it's going to remain open space for the community... Boyle: Oh, I'm in that camp myself right now. Time being until we find out more of what's going on. We hold onto it because it's the only thing that gives us some control of what's going to happen... Berquist: If that's true... Gerhardt: That he may not buy the site and ! think, ! kind of wanted to see him buy the site and hope that the medical people would go in there so we wouldn't have to go in there and buy and then control it. Kind of the discussion we had back when we heard it was available .... ! mean it's just another option Mark. Berquist: There's a roadway behind, in effect the alley way behind that between County Clean and that building. Is that a public roadway? Gerhardt: No. That goes with their property. Berquist: It does? When ! cut from old St. Hubert's behind that building and go all the way over to Laredo, I'm not on any public thru ways whatsoever? Gerhardt: No, that's just the back of the building is there you know. We own everything from the edge of the, where the windows are in the building south and then they own the building and the alley. What would be transferred in title. Berquist: They own the building and the alley? Boyle: Does Don still own the cleaners? Gerhardt: As far as I know. I know there was site plan approval and a tentative purchase agreement with Joe Scott to redevelop the site and I do not know why that has not moved ahead. Bohn: Joe said there was a repair shop in there at one time. Senn: Ground perc's one of the worst things there is, which is what the dry cleaning is. It's one of the most hazardous. Gerhardt: They're expensive to relocate too. That's why the HRA never went in and tried to buy them. Boyle: But we're going to hear more as ! see if your memo here about... 16 Economic Development Authority Meeting - March 19, 1998 Gerhardt: Yeah, Sharmin and Kate and Cindy have done an excellent job of doing a visioning study in the old town area. Concepts of what it would look like and meeting.., getting some feedback from them of how this site should be developed, along with the old town area, St. Hubert's and Kenny's and then the Schlenk property. Bohn: Is the old St. Hubert's still owned by St. Hubert's or have they sold it? Gerhardt: When you say old St. Hubert's, the old parochial school? Bohn: Yeah, the parochial school. Gerhardt: They own it. They have a purchase agreement with Chapel Hill. ! always want to say Mt. Calvary but it's Chapel Hill. Senn: But there's a number of contingencies in the purchase agreement. That have to be met, which we'll also be seeing something on pretty soon because one of the things to them buying it is they need to be able to expand. Berquist: So does the visioning process for old town adversely affect the potential transfer of that... Are there time constraints on the... Gerhardt: Well Ridgeview is not involved at all. Tally. Berquist: Tally. Boyle: I'm confused now. Tally's not part of the Medical Arts or this. Gerhardt: He owns... Boyle: Oh, he is the. Gerhardt: And leases the building to Ridgeview. And Ridgeview's doing an analysis right now of what their future is in Chanhassen. They're doing an internal analysis. Not so much how much space they need. Senn: From a service delivery standpoint? Gerhardt: Correct. Senn: Where are we going to deliver services and to what extent? What facilities then do you need to back them up, etc. Gerhardt: And you know they built this thing over in Chaska. How much of that should be supporting Chanhassen? And then I'm sure there's an economic side of it too. How many doctors they should have. Right now they just haven't put any real effort into the Chanhassen 17 Economic Development Authority Meeting - March 19, 1998 area at all and a lot of their funding is predicated on the city of Waconia also. The City of Waconia's bonding authority to sell bonds. To make improvements and things like that so that's their funding source. Taping of the meeting ended at this point in the discussion. APPROVAL OF BILLS: Bohn moved, Mason seconded to approve the EDA bills. All voted in favor and the motion carried. Bohn moved, Mason seconded to adjourn the meeting. All voted in favor and the motion carried. The meeting was adjourned. Submitted by Todd Gerhardt Assistant Executive Director Prepared by Nann Opheim 18