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HomeMy WebLinkAboutJune 26, 2001 r" 0 u ~ ~ CITY OF ANDOVER ~ tò/d{ð I /-, \~.J 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100 FAX (763) 755-8923 . WWW.CLANDOVER.MN.US Economic Development Authority Meeting - Tuesday, June 26, 2001 Call to Order -7:30 PM Approval of Minutes Discussion Items 1. Rescind Resolution No. EDA002-01 Amending the By-Laws Expanding the EDA 2. Consider Concept Plans - Andover Station 3. Consider PurchaselDevelopment Agreement - Andover Station r-\ 4. Approve Association Documents - Andover Station v 5. Discuss Development Plans South ofWDE Site 6. Discuss Plantings - Andover Station . Other Business . Adjournment 0 0 () ~ w ~ /Ö/õt.j 61 CJ CITY of ANDOVER ANDOVER ECONOMIC DEVELOPMENTAUTHORITY MEETING JUNE 26, 2001 - MINUTES A Meeting of the Andover Economic Development Authority was called to order by Mayor Mike Gamache on June 26, 2001, 7:32 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Present: Councilmembers Don Jacobson, Mike Knight, Ken Orttel, Julie Trude Resident members Terri Hokanson, Robert Nowak Absent: None Honorary members: Fred Larsen III, Ed Schultz Also present: City Attorney, William G. Hawkins Community Development Director, Dave Carlberg City Administrator, John Erar Consultant, Mike Mulrooney 0 Others APPROVAL OF MINUTES April 19, 2001, EDA Meeting Minutes: Correct as written. Motion by Jacobson, Seconded by Orttel, approval of the Minutes as presented. Motion carried on a 4-Yes, I-Present (Nowak), 2-Absent (Hokanson, Trude) vote. RESCIND RESOLUTION NO. EDA 002-01 AMENDING THE BY-LA WS EXPANDING mE EDA Mr. Carlberg explained since the EDA amended the by-laws to expand the EDA from a seven- member board to a nine-member board, Staff has reviewed the State Statute and discovered the maximum number of board members allowed by law is seven. Therefore, the last two resident members appointed cannot legally be members of the board but may serve as non-voting honorary members. As terms expire of other resident members, they may be considered and appointed to fulfill these vacancies if the EDA desires. The two honorary resident members would be Edward Schultz and Fred Larsen III. 0 Motion by Knight, Seconded by Jacobson, to rescind Resolution EDA 002-01 amending the by-laws of the EDA. (See Resolution EDA 003-01). Motion carried on a 5-Yes, 2-Absent (Hokanson, Trude) vote. (Councilmember Trude and Ms. Hokanson arrived at this time) 0 ü 0 Andover Economic Development Authority Meeting Minutes -July 26,2001 Page 2 CONSIDER CONCEPT PLANS - ANDOVER STATION Those making presentations were Bruce Carlson, Vice President of Retail Development for United Properties; Larry Guthres, attorney for United Properties; Hans Hagen of Hans Hagen Homes, developer ofthe resident portion of the project; and Kathy Anderson, KKE Architects. Mr. Carlson stated they have been working with a potential grocery anchor for the site, but they have not been able to enter into a formal agreement because United Properties does not have a , development agreement. Their approach has been to solicit an up-scale grocer for the site, and they will continue to do so. There have been no commitments from anyone. As a standard practice, United Properties retained an industry expert to model for volumes, users, square footage and projected revenues for grocers. They want to be sure the grocer will be successful. His confidence level for signing with a grocer is high. The only way United Properties will market is to the corporation, because they want a corporate guarantee for any lease as a safety net. Mr. Erar asked at what point would they look at grocers that are not on the high end. Mr. Carlson hoped they would be able to choose from several firms who want to build on this site. 0 The type of grocer and operation is dictated by the land size, arterial roads and design covenants. He felt the path they are taking is a good design for an upscale grocery anchor. He felt the grocery chains know they are looking for a full-service grocery with a wide selection, and he felt this site works well for those types of users. Mr. Erar suggested Mr. Carlson's level of comfort should suggest to the EDA that they are close to an agreement with a grocer. Councilmember Knight raised the concern of so many grocery stores within short distances of each other and of this one putting the other one in another TIF district out of business. Mr. Carlson stated that is one of the reasons they do grocery studies and market for that. He felt this grocery would probably not affect the other store in town. The demographics indicate the City of Andover is probably undeserved at this time. Mr. Erar noted studies suggest that there is a market for this level of grocery store. There is a defined market area and a defined customer base. Ms. Anderson reviewed the concept plans for Andover Station. From the feedback of the grocery chains, the preference is for the grocery store to face Bunker Lake Boulevard. That allows for a strip of small shops on the comer of Bunker Lake Boulevard and Thrush Street. The grocery store would be 40,000 square feet with the ability to expand, plus some smaller attached shops. A small restaurant and retail stores would be grouped on a plaza that would overlook the pond, with parking , I close to Commercial Boulevard. United Properties is looking to phase in the west side first. A drug , store building is being proposed on the west side of Martin at the intersection of Bunker Lake Boulevard. She also reviewed the proposed architecture to create a downtown feel, with tower features on the comers and canopies. The architecture is similar to what was proposed by Dennis ! C) Grebner when the brochures for Andover Station were designed. They are trying to achieve a I timeless urban character. Mr. Hagen reviewed the proposed residential component of the project, which would be south of Commercial Boulevard. The original concept was for high density, but he understood the EDA did () ü 0 Andover Economic Development Authority Meeting Minutes -July 26,2001 Page 3 (Consider Concept Plans - Andover Station, Continued) not want a rental project. There are some problems with developing condominiums, plus there is no demand for them in the Twin Cities. The proposal is to develop town homes for which there is a high demand. The fronts would face Commercial Boulevard. There would be 14 buildings with six units per building, for a total of 84 units. All units are two stories with attached two-car garages and are slab-on-grade. The structural design in the units meets standards for high wind to provide protection for severe weather. The concept is for very narrow front yards, but with sidewalks to allow people to walk to the retail areas and back. The buildings are situated so there is an alley going around the inside. The brown stone brick buildings are designed with four units on the inside. The residents to the south would look at the front of the buildings. All of the units have two bedrooms, lofts, fireplaces, air conditioning walk-in closets and good storage. He felt the market is for empty nesters or the younger market of25 to 35. Mr. Hagen anticipated the cost per unit to be between $145,000 to $190,000. He'd like to complete and sell out the project in less than two years. Later in the discussion he also discussed the extensive landscaping his company does, including monuments and mailboxes. Councilmember Trude had some concern with safety of children walking across the alleys. Mr. CJ Hagen stated it has been his experience that the market would be mostly younger families with no children. He also noted that the concept is based on using Commercial Boulevard for parking. Even without that, he felt there would be sufficient parking. Mr. Carlberg did not know if parking could be accommodated on Commercial Boulevard, but that can be evaluated. The parking issues will be i ¡ reviewed by Staff when the plans are submitted. Councilmember Knight stated the original concept was to have a boardwalk all around the pond. Ms. Anderson stated the thought is definitely to put the pedestrian aspect in place on the pond as a first start. Now there isn't a market for retail office along that area. Possibly there could be some fast food. She talked about the concept of a shared patio area by several restaurants. It is their intention to start on the west end with some outdoor facilities off the east side of Quinn. The water is a great amenity and provides a buffer of the road noise. They definitely want to see a trail around the pond, though it wasn't shown on the plan. Councilmember Jacobson asked about snow removal, as he did not want to see a third ofthe parking lot blocked with piles of snow. Mr. Carlson noted most shopping centers have the snow shipped out. They don't have the luxury of a lot of land, so parking spaces are a premium. The tenants would share the costs of maintaining the common areas. In response to a question on the three-story bank building that was in the original concept, Mr. Carlson stated he didn't think it is feasible. The building on the west side of Quinn at Bunker Lake ! Boulevard will probably be one story with architecture for a taller appearance but still respect the '~ visibility of the tenants behind it. The bank wants to operate the entire building themselves and won't be renting out any top office space. United Properties' long-term goals on the shopping center is to not sell it. They are not merchant developers. They plan to own this for the long term as part of their owned portfolio. He understands that they are putting in Quinn Street. Attorney Hawkins noted Quinn Street will be a private road that is a part of the site plan. 0 Ü íj Andover Economic Development Authority Meeting "-- Minutes -July 26,2001 i Page 4 (Consider Concept Plans - Andover Station, Continued) Mr. Carlberg noted there is some departure in this concept plan from the one that was approved by the EDA. Anoka County will need to review the right-in, right-out just west of Quinn, but he understands ultimately that entrance is the City' decision. The county was also aware that Quinn and Bunker Lake Boulevard was to eventually be signalized. Councilmember Orttel wondered if the northwest comer of Commercial Boulevard and Martin would be a good location for additional housing. Ms. Anderson thought it would be a great housing site. Overall the EDA felt the housing concept seemed to be of high quality at a reasonable price, They were also very pleased with the concept plan that was presented for Andover Station. CONSIDER PURCHASEIDEVELOPMENT AGREEMENT - ANDOVER STAITON Attorney Hawkins explained the Development Agreement presents the requirements regarding the construction of the commercial and residential phase of Andover Station. There are time periods for 0 the submission of plans. Exhibit B sets out the terms for the conveyance of the land to United Properties. Exhibit C gives them the option to purchase the remaining property until January, 2002. Exhibit D is the restrictive covenant agreement where the EDA agrees not to allow a grocery use on the property it now owns north of Bunker Lake Boulevard and west of Hanson Boulevard for 30 years. The philosophy is United Properties is making a considerable investment in the grocery store in Andover Station, and they want to make sure the EDA will not be in competition with that use just several hundred feet away. It binds the EDA and provides the protection United Properties is seeking. It was his opinion that as long as the agreement being made is a reasonable commercial transaction, that the EDA has the authority to make that long-term commitment. Attorney Hawkins advised the Development Agreement provides that United Properties must submit plans that are sufficient for review by March 1 and start construction by May 1,2002. If they don't, the EDA has the right to give the money back and keep $50,000. In that time line, United Properties does not have the right to sell the property, plus the City has the right to buy it at different trigger points. The property can be bought back at the same price less the $50,000 if the March 1 deadline is not met for the submission of plans. In reviewing the Development Agreement, the EDA made the following comments and recommendations: Exhibit B, B2: Attorney Hàwkins advised the amount does not reflect the purchase price but is a number for title insurance purposes. C) Page 18, Article 9.1(b): Attorney Hawkins advised if the cost of local improvements to the property is so prohibitive that they cannot proceed, United Properties has the option to terminate the project : within the 180 day period. The costs to bring services to this property are not known at this time. r-') / ' \.. () / ) Andover Economic Development Authority Meeting '--' Minutes -July 26,2001 Page 5 (Consider Purchase/Development Agreement - Andover Station, Continued) Page 16, Section 7.3: Attorney Hawkins explained the EDA cannot claim default against the residential portion if there is a default in the commercial area. United Properties has the right to sell the property. Hans Hagen will be assigned the property for the residential area, and they will have to comply with the terms of the agreement. The City has the right to approve the plans. The types of businesses will be spelled out in the restrictive covenants, which have not been completed. All these issues will be worked on between now and the closing date of January 4,2002. They must submit plans for the commercial area by March 1, 2002, and begin construction by May 1. The timetable is the commercial area is to be completed by 2003 and the residential portion by 2005. Councilmember Jacobson asked about the financial implications of those timetables. Attorney Hawkins stated the bonds that were sold were not based on the development of this project. Mr. Carlberg noted once the Development Agreement is signed, the City will disclose the information. Ms. Hokanson asked why there hasn't been any appreciation for the property given the time of the transaction. Attorney Hawkins explained the process and time lines noting much of this has been CJ negotiated. Councilmember Knight was concerned that there is nothing in the agreement to cover the possibility of an empty box. Attorney Hawkins stated when it is sold, there are covenants in place; but he didn't think the EDA could place covenants on economic factors. They have tried to get the best developer and good strong covenants to make sure it remains a vital commercial area. Councilmember Orttel felt the best guarantee is the fact that United Properties will own the project, expecting they will do everything they can to keep it occupied. Motion by Jacobson, Seconded by Orttel, approve the Development Agreement, authorizing the President and Executive Director to sign it (by and between the Andover Economic Development Authority and United Properties Investment LLC) DISCUSSION: Attorney Hawkins advised there will be some minor changes made, but nothing of substance. He will also make sure the language is in the Agreement that the construction plans will comply with the Andover Station concept plan presented this evening, referencing the KKE drawing. Motion carried unanimously. APPROVE ASSOCIATION DOCUMENTS -ANDOVER STATION Mr. Carlberg asked that this item be tabled. They are still working with United Properties on some of the issues they have raised in the covenants. Staff believes they have some valid comments. Attorney Hawkins stated they also need to revise the documents to separate the commercial and the ~ residential components. That will be worked on during the 180-day period. Once the property is sold, the EDA will no longer be involved with the project except as a non-voting member at the board meetings. The City will also have the right to enforce some provisions in the covenants. i 0 () í-) Andover Economic Development Authority Meeting "--- Minutes - July 26, 2001 Page 6 (Association Documents - Andover Station, Continued) Mr. Carlberg explained the association for Andover Station will also include the theater and office warehouse area. Those things need to be worked through. He agreed it would be appropriate to have a separate association for the housing component. The EDA agreed to table the item. , ì ! ¡ DISCUSS DEVELOPMENT PLANS SOUTH OF WDE SITE Mr. Mulrooney stated one of the Fortune 500 companies is looking for a place in which to relocate, and they are very interested in Andover. They are planning to construct an 85,000 square-foot facility during phase one and an additional 75,000 square feet in phase two. The company currently employs 130 people; worth 30 of them being office staff and the remaining in the manufacturing process. Their timetable is to begin construction this fall with occupancy in May, 2002. The company is consolidating three facilities into one divisional headquarters. There would be some outside storage. 0 They usually operate one shift, but sometimes will go to two depending on volume. Mr. Carlberg stated in order to accommodate the approximately 11 acres needed for this manufacturing business, the conceptual plan for this area would need to be modified. The residential portion cannot be eliminated because it is part of the Comprehensive Plan. The utilities are in Jay Street, so it would be better to have this business close to where the utilities are located. If placed just north of the 15t Regions Bank, a lot of retail space would be given up. Financially, the EDA ì cannot do anything on the development of this site until receiving the money from the sale of I ! , Andover Station to United Properties. That does not fit with the timetable of this company. He asked ; if the EDA would like to pursue this even though it is a departure from the original concept. EDA comments were that it is unlikely they could accommodate the time table of this company, that it may be a good business to place between the power station and Jay Street, that getting industry in the area would help the retail businesses succeed and help the restaurants in Andover Station, that light manufacturing would bring people into the community that are working here, that light industry requires less police involvement than retail for the amount of property tax paid, and that the only viable place to locate it would be behind the bank building, possibly in an L-shaped building adjacent to the power substation. Mr. Mulrooney recommended it would be important for the EDA to make a determination on pricing of this property and to get a plan in place to be able to move on the improvements as soon as the money is available. He is aware of developers that may be interested in developing on the site. ,', , 'J Even though there is the issue of timing, the EDA asked that Staff look at the possibility of accommodating the company that was mentioned by Mr. Mulrooney. 0 ü ; i /,-. Andover Economic Development Authority Meeting ( ) '-- J , Minutes-July 26,2001 Page 7 DISCUSS PLANTINGS -ANDOVER STATION Mr. Carlberg explained quotes were received for the annual plantings on the boulevard areas of Jay Street, Martin Street and Bunker Lake Boulevard. The lowest quote is from Bleeker's Nursery for $2,837. He expected this will be the last year the City will need to do this. In the future it will be done by the Andover Station association. Several members were concerned with the cost, especially this late in the season. It was also suggested that perennials be planted instead. Counter arguments were that annuals add more color, that the best image should be projected because of the marketing being done for tenants in Andover Station, and because image is important for the many activities at the Courtyards of Andover. Motion by Orttel, Seconded by Trude, to award the bid to Bleeker's Nursery for $2,837.00. Motion carried on a 5-Yes, 2-No (Jacobson, Nowak) vote. OTHER BUSINESS i .~ ') ¡st Regions Bank Grand Opening - Mr. Carlberg noted the invitations to the grand opening of 1 st \- ) Regions Bank on July 17. He will schedule a ribbon-cutting ceremony that same afternoon. Promotion of Andover - Ms. Hokanson stated she was at a Metro North Chamber networking show in the Courtyards of Andover. The City of Ramsey was there promoting their office park, but there was nothing promoting Andover. She felt the City should have a presence at these functions and offered to set up a booth to promote it. The EDA agreed. RFP for cable company studio - Councilmember Jacobson reviewed the plans ofthe cable company to construct a new studio, which was discussed at a Council meeting. The RFP is out. Mr. Carlberg questioned whether the EDA would want to offer a parcel in the TIP district for a building that would not generate taxes. There are other City-owned properties outside the TIF district that can be ; considered. It is on the City Council agenda for July 3. The consensus of the EDA was they were ! not interested in responding to the RFP. Motion by Jacobson, Seconded by Knight, to adjourn. Motion carried unanimously. The meeting adjourned at 10:01 p.m. ,'--, Re::Z:~ \._J ~lla A. Peach, Recording Secretary