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1982 02 18 I . . L_ MINUTES CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY Special Joint Meeting with Chanhassen City Council February 18, 1982 Call to Order Chairman Gullickson called the meeting to order at 7:30 p.m. Present were Commissioner's Gullickson, Bohn, and Horn. Russell arrived at 7:40 p.m. Absent was Commissioner Whitehill. Mayor Hamilton and Councilperson Swenson were also present. Executive Director Martin, City Manager Ashworth, and Attorney's Larson and Mertz were also in attendance. Carol Watson, Planning Commission representative was also present. Approval of Minutes Bohn moved, seconded by Horn, to approve the minutes of the December 3rd and December 17th, 1981 meetings as presented. All voted in favor and the motion carried. Downtown Project Status Report Bill McRostie of Bloomberg Companies and Dennis Spalla of Kraus- Anderson Development Corp. presented an update of the current status of their respective downtown redevelopment plans. Dennis Spalla stated that it is unlikely that Kraus-Anderson will construct any improvements in the Downtown area within the next year, and it is even more unlikely that any financial commitments will be made by Kraus-Anderson prior to the expiration date of May 27, 1982 for their development agreement with the HRA. Spalla cited the current high interest rates, the poor national economy, and the lack of any prime tenant for the project as being the primary reasons for the delay in proceeding with their portion of the overall downtown project. Bill McRostie echoed the comments of Spalla, and added that alternative plans should be considered during the next several months in order to keep the general plan concepts alive. Spalla also felt that alternatives to the adopted plan should be considered which provide for phasing and downsizing of the project. He added that Kraus-Anderson will probably not ask for an extension of the existing development agreement prior to its expiration date. Chairman Gullickson felt that the current national economic situation is not permanent and that the City should not abandon the Downtown Project at this time due to temporary economic problems. He suggested that the project be temporarily "shelved" until the economy improves and the project is once again economically feasible. Mayor Hamilton agreed that the project should be shelved until the economy improves, but added that he still supports the overall Downtown Plan and wants to see redevelopment of downtown and general growth in Chanhassen. He also suggested that alternatives to the current plan be considered, and pointed out the fact that the developer agreements remain in effect until the end of May, 1982. I . . L MINUTES CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY February 18, 1982 Page 2 McRostie suggested constructing the project in several phases, while still retaining the overall adopted plan as the ultimate goal for down town. Hamilton stated that new proposals for downtown cannot be considered until after expiration of the two developer's agreements, but following their expiration, the Council and HRA would be likely to consider such proposals. Gullickson asked the Developers to begin looking at plan alternatives during the next few months if still interested in working with the HRA in, the future. Commissioner Horn stated that the HRA is prepared to proceed with the Downtown Project once it becomes feasible for all parties. Councilperson Swenson felt that the City should not be willing to accept less than what the adopted downtown redevelopment plan calls for, in terms of the design and extent of public and private improve- ments, simply because of a temporary delay in the project's construction schedule. Special Assessment Reduction Program Scott Martin presented an historical overview of past HRA discussions concerning the proposed Special Assessment Reduction Program for Chanhassen Lakes Business Park and Park Two. He noted that the Commissioners had originally agreed to the program's concepts nearly two years ago, but that various legal issues delayed final consideration since that time~ Don Ashworth added that special assessments within the project area were greater than normal compared to similar developments, primarily because the full cost of trunk sewer and water mains and a new well house was included in the overall project. He also pointed out the fact that design standards applied to the project's public improvements were greater than normal, in keeping with the goals and objectives of the adopted Redevelopment Project Plan. Ed Dunn, Business Park Developer, advised the HRA that he has sold his development interests to Rauenhorst Corp., but that he still urges adoption of the special assessment reduction program in order to spur the growth and development of Chanhassen. He felt that the program is more critical than ever to the future of the City in light of recent downtown project setbacks. Commissioner Russell stated that he supports the program as a positive step towards quality development and the addition of new jobs in the City. The Commissioners all agreed that the program should provide the HRA with the option of assuming special assessment installment payments as a means of repaying special assessments in order to reduce the potential of cash flow problems in the future. The attorney was instructed to revise the programs' legal documents accordingly. I . . MINUTES CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY February 18, 1982 Page 3 Gullickson requested more specific input from Rauenhorst Corp. before final adoption of the proposed program, and noted the support of the program from Rauenhorst in a letter from Robert Worthington, Rauenhorst's Director of Planning and Governmental Affairs (dated February 18, 1982). Jerome Carlson, developer of Park Two and representative of United Mailing, Inc., urged the HRA to reach a decision immediately to establish the program so that he can decide whether or not to construct a new United Mailing, Inc. facility in Park Two under the special assessment reduction program. The Commissioners reviewed the proposed site development plan for United Mailing, but explained that final action on establishment of the program could not occur prior to the March 18th meeting. The Commissioners agreed that the program should be established in order to induce development and the creation of new jobs in the Business Park and Park Two, but felt that modifications to program legal documents should be completed prior to final action. Russell moved, seconded by Bohn, to instruct the attorney and staff to finalize,with modifications, all necessary legal documents for establishment of the Business Park/Park Two Special Assessment Reduction Program for final review and adoption at the March 18th HRA meeting. Hamilton suggested that revisions to the documents distributed in the packet desired by any HRA or Council member be passed on to the Attorney.s office within the next week. Swenson said that she supports the program as long as it can be adequately funded by the HRA. Bohn and Horn also expressed their general support for the program. Jay Bennett, attorney representing Fluoroware, Inc. stated that the HR~.s promise of the so-called 7% development incentive program retroactively for Fluoroware was the principle reason why Fluoroware decided to build their plant in Chanhassen rather than in some other City. Following the above discussion, all voted in favor of the motion, and the motion carried. Huber Property Acquisition (Parcel #26) Martin and Larson presented a brief update on the status of acquisition negotiations with the owner of Parcel #26. Horn moved, seconded by Russell, to order the attorney to immediately suspend negotiations for acquisition of Parcel #26 until such time as the timetable for construction of the Downtown Redevelopment Project is better defined and the HRA orders acquisitions to proceed. All voted in favor and the motion carried. I . . MINUTES CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY February 18, 1982 Page 4 HRA Policy: Improvements to Existing Businesses within Downtown Core Area Martin suggested that the HRA est:ablish a policy concerning whether or not private improvements should be permitted to existing businesses within the Downtown Core Area in light of the recent delay in the downtown redevelopment construction timetable. He recommended that such a policy permit improvements to existing businesses to the extent permitted by the City Zoning Ordinance. Gullickson asked the Attorney if private improvements can legally be permitted during the period remaining in the development agreements for Downtown. Larson responded that there was currently no building moratorium in effect in the Project Area, so improvements could not be stopped by the City by denial of a building permit. Gullickson felt that private improvement plans which are consistent with the adopted Downtown Plan should be considered favorably by the City. Russell asked if the City could establish a "limited moratorium" designed to prohibit only certain types of improvements. Larson said that this concept would require additional study before a firm opinion could be rendered. Horn moved, seconded by Bohn, to establish a formal HRA policy permit- ting private improvements to existing downtown core area businesses (buildings) to the extent permitted by the City Zoning Ordinance, as recommended by the Executive Director. This policy is subject to change based on a definitive downtown project construction timetable in the future. All voted in favor and the motion carried. Community Development Block Grant .Program Martin presented an overview of the City's participation in the Urban Hennepin County Community Development Block Grant Program (CDBG), and introduced Larry Blackstad, Hennepin County's staff representative to Chanhassen. Mr. Blackstad presented an overview of the CDBG program in terms of eligible activities, program requirements, and use of CDBG funds by other participating cities in Hennepin County. He also discussed the current status of federal housing programs and housing program options available to Chanhassen during the next few years. Gullickson suggested returning the grant funds to the Federal Government rather than spending the money locally. Blackstad explained that all funds not used by the City would have to be returned to Hennepin County for reallocation to other cities within the same planning area as Chanhassen. No funds would be returned to the Federal government. c <> . MINUTES CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY February 18, 1982 Page 5 Gullickson then suggested using a portion of the CDBG monies to fund a housing needs assessment, as recommended by the Executive Director, in order to determine the actual need for new senior citizen housing in Chanhassen. He felt that such a study could be beneficial to the City in attracting a private housing developer to the City for future construction of senior housing. He added that any remaining funds should be placed in reserve for future senior citizen housing site acquis{tion or housing rehabilitation grants for low and moderate income homeowners. B1ackstad pointed out that several cities are using housing need assessments as planning and marketing tools to attract private housing developers to their communities. Horn felt that the housing market study should be done by a private developer, not by the HRA, since most developers would be likely to conduct their own study in any case. Gullickson added that he didn't want the HRA operating a housing rehabilitation grant program, but that he wouldn't be concerned if the City did. Russell moved, seconded by Horn, to recommend that CDBG monies be utilized for the study and promotion of senior citizen housing if the City Council wishes to have these funds administered by the HRA. All voted in favor and the motion carried. HRA Accounting System Horn moved, seconded by Bohn, to direct the attorney to prepare a joint powers agreement between the City and HRA which formally establishes a joint HRA accounting system with the City utilizing the services of the City Treasurer to handle all HRA funds. All voted in favor and the motion carried. Resolution #82-1 Confirming Past HRA Expenditures Russell moved, seconded by Bohn, to adopt HRA Resolution #82-1 approving past disbursements/expenditures of all tax increment revenues received by the HRA since establishment of Tax Increment District No.1. Voting in favor of the motion were Russell, Bohn, Horn, and Gullickson. No one voted against the motion. Whitehill was absent. The motion carried and the resolution was adopted. Approval of Bills Horn moved, seconded by Russell, to approve the bills for the months of December, 1981 and January, 1982 as presented. All voted in favor and the motion carried. . Adjournment Horn moved, seconded by Russell, to adjourn the meeting at 11:10 p.m. All voted in favor and the motion carried. ... <>-