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HomeMy WebLinkAboutSP April 10, 1986 CITY of ANDOVER SPECIAL CITY COUNCIL ~EETING - APRIL 10, 1986 MINUTES A Special Meeting of the Andover City Council was called to order by Mayor Jerry Windschit1 on April 10, 1986, 7:30 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmen present: Elling, Knight (arrived at 8:45 p.m.), Lachinski, Orttel Councilmen absent: None Also present: City Administrator/Engineer, James Schrantz TAX INCREMENT FINANCING DISCUSSION Charles LeFevere from the 1awfirm of LeFevere, Lefler, Kennedy, O'Brien & Drawz met with the Council regarding tax increment financing in two specific areas of the city -- the shopping center on the corner of Bunker Lake and Round Lake Boulevards and the Good Value Homes development of Hidden Creek south of Bunker Lake and Crosstown Boulevards. Council informed Mr. LeFevere of Boisc1aire's request for the City to declare their shopping center site as a tax increment district. One concern was that the City be protected regarding the assessment, asking if a bank would subordinate the first mortgage to the City's assessments. Mr. LeFevere reviewed the laws regarding tax increment financing, noting the taxes paid by the developer are on the fully developed assessed valuation. The tax generated on the extra amount goes back to the city to pay for the bonds the city floats to put in the public improvements, etc. In theory, the tax increment is to be used by cities to encourage development where it might not otherwise occur. At this point, the Council was concerned with Boisclaire's proposal, though no position was taken, prefer- ring to wait until representatives from Boisc1aire can make their poposa1 to the Council. Mayor Windschit1 then reviewed a proposal to include the Hidden Creek plat in the tax increment financing district and to use the tax increment to buyout, clean up, and develop some of the junkyards along Bunker Lake Boulevard. He said Good Value Homes has agreed to this if it is something the City wants to proceed with. It was estimated when the entire plat is done, the tax increment generated would be about $220,000 per year. I Mr. LeFevere stated if the tax increment is used as it is generated, there would be no need to sell bonds. However, a one-time bond could be sold initially; and the tax increment then used to pay it off. He felt the use of residential districts for tax increment financing will be allowable until September 1. After that, no'one knows what will happen. I Councilman Orttel expressed a concern that by the City using the tax generated from this large development, the county and school district would not have the tax revenues need to provide the services required as a result of the additional population. He asked how that is justified. Mr. LeFevere stated the school district and county would review and comment on the City's proposal to include that area in the tax increment financing district; and they do not have to give their approval. The City also elects how to use the fiscal disparities for commercial and industrial development only, either contributing that which would have gone to fiscal disparities from the project out of the tax increment or take the· fiscal disparities contribution from the City's ad valorem. Also, the City doesn't have to pledge all of the tax increment. Special City Council Meeting April 10, 1986 - Minutes Page 2 (Tax Increment Financing Discussion, Continued) Councilman Ortte1 was also concerned that the increment generated from the Hidden Creek development would not really go very far in clearing up that junkyard area. Plus it is not the most attractive place for businesses to be locating because it is not near a major highway or railroad. Mayor Windschit1 felt the availability of sewer and water is a positive factor. Councilman Elling was concerned with what may have to be done in the way of soils corrections through that area given the hazardous waste problem in that vicinity. Mr. LeFevere stated he would check as to whether straight residential housing can be placed in a tax increment financing district. He will send a checklist of procedures to follow in establishing a tax increment financing district. Discussion returned to the Boisclair proposal to include the shopping center in a TIF district. A Council concern was that it would be done to benefit a single developer. Suggestions were the TIF district could be expanded to include the Carlson property of Woodland Terrace to insure the bonds could be paid off, or to tie that development in with the other TIF district in the eastern portion of the City (Hidden Creek development, Bunker Lake Boulevard General Business area). Mr. LeFevere also stated if the bond is guaranteed more than 25 percent, it is considered an IRB and therefo~e taxable. Council wanted protection that the assessments would be paid. Mr. LeFevere f1et some combination could be worked with the tax increment used to pay the special assessments. He also felt the City could set a cap on the amount of increment taken out for the project. (Councilman Knight arrived at this time.) Council briefly discussed the Boisclaire proposal, what has taken place so far in the shopping center development, noting they have asked to meet with the Council on April 22. APPROVAL OF CLAIM MOTION by Orttel, Seconded by Elling, that we approve Claim 10909, a $50 check to the Postmaster; and also Check 10910 in the amount of $144. Motion carried unanimously. MAYOR'S REPORT Mayor Windschitl reported he has been approached about the possibility of rezoning the property east of Hanson Boulevard and north of Bunker Lake Boulevards into residential lots. The developers have proposed developing residential housing around a golf course and have asked if the City would be willing to consider taking over that golf course once it is constructed. Council discussed some advantages for having that area of the city develop as residential housing and agreed to hear the proposal for a municipal golf course. Mayor Windschitl also noted the owner of the property directly across the street from the City Hall has stated he would like the City to own that property. It nets 68 acres, and he felt the land could be purchased under reasonable terms. He asked if the Council felt this is something that should be pursued. Council felt it is wortb discussing, suggesting it may be advantageous to the property owner if the City acquired it through a friendly condemnation. Council agreed to add this item to the May 6 agenda for further discussion. Special City Council Meeting April 10, 1986 - Minutes Page 3 (Mayor's Report, Continued) There was also a brief discussion on the procedure for acquiring Mom's Salvage yard, the Council agreeing it may be best to take an option on the property at this time. MOTION by Ortte1, Seconded by 1achinski, to adjourn. Motion carried unanimously. Meeting adjourned at 9:40 p.m. Respectfully submitted, ~. ~A~~~~ Marce 1a A. Peach Recordl Secretary