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HomeMy WebLinkAboutMarch 16, 2004 0 0 C IT Y o F L) NDOVE 1685 CROSSTOWN BOULEVARD N.W.. ANDOVER, MINNESOTA 55304. (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US CITY OF ANDOVER ECONOMIC DEVELOPMENT AUTHORITY MEETING March 16, 2004- 6:00 p.m. CONFERENCE ROOM A AGENDA 1. Call to Order 2. Approve Minutes - March 1, 2004 3. TIF District for Hughs Industrial Park - Finance/Planning 4. Authorize Resolution-Redevelopment Plan/Community Center - Finance ~) 5. Other Business 6. Adjourn 0 Q~~ ~ \Jh,J:;tt¥ì L - ~ -0'-\ 0 ANDOVER ECONOMIC DEVELOPMENT AUTHORITY MEETING MARCH 16,2004 - MINUTES A Meeting of the Andover Economic Development Authority was called to order by Vice President Julie Trude, March 16,2004,6:00 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Present: President Mike Gamache (arrived at 6:02 p.m.), Commissioners Don Jacobson, Mike Knight, Ken Ortte!, Julie Trude; Voting resident member Robert Nowak Absent: Voting resident member Fred Larsen and Non-voting resident member Edward Schultz. Also present: Community Development Director, Will Neumeister City Finance Director, Jim Dickinson -'" Others APPROVAL OF MINUTES March 1,2004: Correct as written. .' "\ \~ Commissioner Jacobson stated on page two the title is spelled incorrectly and should be "Lien" instead of "Lean". MOTION by Nowak, Seconded by Orttel, approval of the Minutes as corrected. Motion carried unanimously. TIF DISTRICT FOR HUGHS INDUSTRIAL PARK Community Development Director Neumeister explained at the February 3, 2004 EDA meeting there was discussion regarding Rick Lindquist's plans for a new industrial building at the southeast corner of Round Lake Boulevard and 162nd Lane. Staffwas asked to review a "pay as you go" Tax Increment Finance (TIF) district on three parcels that Mr. Lindquist is interested in developing further. Staff was also directed to investigate the list of potential qualifying expenses that TIF could be used for. President Gamache arrived at 6:02 p.m. Mr. Dickinson discussed the "pay as you go" process with the Board. / , Commissioner Jacobson asked when doing a project, would they wait until they have enough of "-~ the increment in the bank or would they up front the money and hope it comes in the next seven years. Mr. Dickinson stated they would put in place a note With the developer who can take the note to the bank and get fmancing on the note, knowing that the City has either agreed to a maximum term-or maximum amount. The developer can get financing outside of the City as the (J () ,- \ Andover Economic Development Authority Meeting '-----..) Minutes - March 16, 2004 Page 2 developer pays the taxes, the City will reimburse him for the amount of tax in that district that he did pay. Mr. Nowak asked if it would be reimbursed until he recoups the entire amount or until the set number of years comes about. Mr. Dickinson stated the maximum term in a redevelopment district is twenty-five years and they cannot go beyond that. He stated that in this area, they would not recommend a twenty-five year district. Commissioner Jacobson asked what would happen to the agreement or money if the property is sold. Mr. Dickinson stated it would depend on if the City would agree to assign the note. He stated if the developer were to sell the property and the note was not assigned or the note was gone, they could decertify the district. He stated that if you allow him to assign the agreement to another developer, the terms and everything will go onto the new owner. They will have to give a prove out, receipts for out of pocket costs for the items. Commissioner Trude asked if there were enough eligible items to qualify this for approval. Mr. Dickinson stated there were. , ~) Commissioner Trude asked if it was pretty much limited to inftastructure and prepping the site. \ She asked if it could go for wells or septic systems. Mr. Dickinson stated he did not think that would qualify. Demolition would qualify but building a new building would not qualify. Mr. Dickinson discussed and showed the Board the internal analysis of the project. Commissioner Orttel asked if the County needs to approve this. Mr. Dickinson stated they would run this by the County but it can be done whether they agree or not. Commissioner Jacobson asked what they would be capturing from the school. Mr. Dickinson stated they would not be capturing anything from the school district. Mr. Dickinson stated they made this ten years because septic systems usually last ten to fifteen years and at that time they could add the property to City sewer and water. Commissioner Knight asked if there would be enough in the system to take in a commercial site. Mr. Neumeister thought there could be. Commissioner Orttel asked what the object was to only go ten years or would it make more sense to go longer. Mr. Dickinson stated this becomes an issue of whether they are struggling to pull enough taxes into the operational side and unlike abatement, they cannot levy outside of the levy ~--) limits for the dollar amount. Commissioner Orttel asked if this would reduce the cost. Mr. Dickinson stated it would cost any where from $7,500 to $10,000 to set up. u U '\ Andover Economic Development Authority Meeting '----J Minutes - March 16, 2004 Page 3 Commissioner Trude stated when they set up the district, they do not need to put a time period on it, and the time limit is only for the bond. Mr. Dickinson stated the maximum they can do is twenty-five years. He stated it was highly unlikely this will meet the test in some of the other areas if they bring in more parcels. He stated they are bringing in some of the lower value parcels within that area. Some of the adjacent parcels have taxable values in the $300 to $370 thousand range and when they look at taking that off and what they would be able to put back on, knowing there will have to be septic systems in that area, it will be extremely difficult to make that work. Mr. Nowak stated this is not as positive an image to others in Hughs Park. Mr. Dickinson stated it could be because if they are looking at a façade improvement, they could look at other community development. They could put in place a revolving loan fund that they could loan out money for façade improvements and other building. Commissioner Trude asked if they could use excess TIF to set up a revolving fund because generally there is extra increment that is not dedicated to payoff. Mr. Dickinson stated they will have a very difficult time proving the blight on other parcels. ~..J Commissioner Knight asked about the pieces that are open right now and he wondered if they would be eligible. Mr. Dickinson stated they would recommend to put them in the district because they think that when the building is constructed the other parcel will want to develop. Mr. Nowak stated they are trying to decide why the entire Hughs Industrial Park is not being recommended for the TIF District. Mr. Dickinson stated the time frame will be, they can put all of the parcels in, if activity does not happen, they are all going to fallout and then the operational side is going to be less all ofthe tax revenue. Mr. Neumeister stated if they start the TIF District and there is not any activity, they are wasting what could have been productive years at a later time. If they wait, they will see a much bigger increase in value and they will get much more that will work for you. If they do not see a big increase in value, they could have ten or fifteen years that nothing happens but they burn those years as producing years in the increment and they cannot go back. Mr. Dickinson stated they can be decertified and then they would need to start over again. Commissioner Jacobson asked how easy it is to decertify. Mr. Dickinson stated it is fairly easy to do. Commissioner Trude stated she did not have any problem moving forward with that and they can always change the parameters in the district. Mr. Dickinson stated he would recommend the ,/- '\ entire area as the parameter. Commissioner Orttel suggested they add the additional ten acres to ,,--.-J the project area. Commissioner Orttel thought they should look at the traffic routing in the area and possibly set up a traffic management program in the area. () 0 " Andover Economic Development Authority Meeting ,---j Minutes - March 16, 2004 Page 4 Commissioner Jacobson wondered how much of the district do they use if they go ahead with this. Commissioner Orttel thought they should make the entire area the district. Commissioner Trude thought staff could look at this and come back to them with the area. Mr. Dickinson stated what he understood from discussion was a TIF District looks favorable. They should look at a "pay as you go" concept with Mr. Lindquist on his parcel. The Board wants staff to explore if it makes more sense to put more parcels into the district and have the project area expanded. Commissioner Orttel thought they should move ahead with what was recommended. Motion by Trude, Seconded by Orttel, authorize staff to work with Ehlers Associates and Briggs and Morgan would begin the process of preparing the necessary paperwork to establish the TIF district and to approve establishing two parcels along Round Lake Boulevard as a "pay as you go" TIF District. ~. ) Mr. Dickinson stated he did not need a motion at this time. Motion Dies It was the Board's consensus to have staffwork with Ehlers Associates and Briggs and Morgan to begin the process of preparing the necessary paperwork to establish the TIF District. AUTHORIZE RESOLUTION - REDEVELOPMENT PLAN/COMMUNITY CENTER EDA Treasurer Dickinson explained as.the Andover Community Center Project proceeds to an ultimate decision by the City Council within the month to move forward or not, the EDA will be called upon to provide lease revenue fmancing for the project. Furthermore, if a decision is made to move forward and to achieve the opening date of October 4, 2004 for the ice arena the process for the financing plan needs to start now. Mr. Dickinson discussed the fmancing steps with the Board. Commissioner Jacobson asked if the City Councilor the Planning Commission held the Public Hearing. Mr. Dickinson stated the public hearing would be held by the City Council. Commissioner Orttel asked how they determined the site. Mr. Dickinson stated the site is a draft and the Board needed to approve it before they went forward with it. He stated the question was / 'ì why they would expand the district beyond the particular parcel. The reason is to meet the letter \.../' of the law that what they are putting in there, redevelopment plan, will inevitably spur public/private development within the spill over area. He stated the parcels included are parcels that have been discussed before as potentially being put on a tax abatement program with the County. He stated this is favorable towards a redevelopment plan. Not all of the parcels need to () 0 .' , Andover Economic Development Authority Meeting \ j Minutes - March 16, 2004 Page 5 be in the plan at this time but they need to make it larger than the site. Commissioner Trude asked if this would impact other property owners in any way. Mr. Dickinson stated it did not and they did not have to redevelop; it is a plan in this particular area for development. Commissioner Jacobson stated this did not need to be used for commercial development only. Mr. Dickinson stated this was true. Motion by Trude, Seconded by Orttel, approval of the attached resolution. (Res. R002-04) Commissioner Orttel asked why they need to have a redevelopment plan in order to issue lease revenues. Mr. Dickinson stated this was also done on the Public Works building. President Gamache asked if it made a difference if they moved the plan up to the Grey Oaks area. Mr. Dickinson stated it did not make a difference. Motion carried unanimously. \ 'ì ) OTHER BUSINESS Mr. Neumeister stated there was a question that came up from Ryan Construction that because the Target closing is coming up, they would like to move heavy equipment onto the site before the closing. They wondered if the EDA, would agree to put in writing that they can store the heavy equipment on site before the closing with the indication that there will not be any digging or grading until the closing has happened. Motion by Jacobson, Seconded by Knight to move forward with a hold harmless agreement to allow Ryan Construction to move heavy equipment to the site before closing. Motion carried unanimously. Mr. Neumeister stated Bruggeman will be closing before April 1, 2004 with the balance of the money that was owed and they want to get their first building permit before April 15th . They want to do their own construction of streets and utilities so they are ready to move rapidly once spring is here. Mr. Neumeister updated the Board on Andover Station items. Motion by Jacobson, Seconded by Orttel, to adjourn. Motion carried unanimously. The meeting ( \ adjourned at 6:50 p.m. .. '--_J~ Respectfully submitted, Susan Osbeck, Recording Secretary