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HomeMy WebLinkAbout7. Approval of Minutes: December 09, 2003 OFFICIAL PROCEEDINGS OF THE CITY COUNCIL ADJ. REGULAR SESSION SHAKOPEE,MINNESOTA DECEMBER 9, 2003 Mayor Mars called the meeting to order at 7 :00 p.m. with Council members Link, Joos, Lehman and Helkamp present. Also present: Mark McNeill, City Administrator; Judith S. Cox, City Clerk; R. Michael Leek, Community Development Director; Bruce Loney, Public Works Director/City Engineer; Jim Thomson, City Attorney; Paul Snook, Economic Development Coordinator; Mark Themig, Facilities and Recreation Director; Mark McQuillan, Natural Resources Director and Tracy Schaefer, Assistant to the City Administrator. Also Present: Mayor-Elect John Schmitt and Council member-Elect Steve Menden. Helkamp/Link moved to approve the Agenda as written. Motion carried 5-0. Mayor Mars opened the public hearing regarding granting of a property tax abatement for property located generally in the southeast quadrant of County Road 83 and Highway 169 intersection with Ryan Companies US, Inc. being the applicant. Mr. Snook reported on the proposed tax abatement that Ryan Companies had made application for. Mr. Snook noted that the Economic Development Advisory Committee (EDAC) recommended to the Council at their August 21,2003 meeting 1) to hold a public hearing for Business Subsidies and Property Tax Abatement for the proposed Deans Lake project, 2) approve the amended Business Subsidies Application that was submitted by Ryan Companies US, Inc. and 3) to enter into a Master Development Agreement with Ryan Companies for this proposed property tax abatement. Mr. Snook noted that there had been extensive review of this project and that was why this public hearing had not been held earlier. Mr. Snook noted that Ryan Companies submitted the original application for a Business Subsidy in January of 2003 for tax abatement to be used to assist in financing the project. Ryan Companies asked Council at their August 5, 2003 Council meeting for authorization to amend their original Application for Business Subsidies. The amendment to the Business Subsidies plan included changes to the mix of the development and the tax abatement was proposed for only the commercial development. The City would retain part of the City's share of property taxes on the Commercial Property, and use those revenues to help pay for some of the special assessments for public infrastructure for the Business Park serving the Dean Lakes project. The EDNCity Council granted the request to amend the Business Subsidies Application submitted by Ryan Companies. The rationale for the tax abatement was: I) extremely high costs to finance the project because of using the conservation approach [restoration] 2) because of using the conservation approach there was low density and 3) assessments to County Road 16 and County Road 83 because the County did not include this improvement in their funding. Paul Steinman, Springsted Inc. Financial, gave a presentation on the financial aspect of the project. He went over the But For analysis, the deal structure and the impact. Official Proceedings of the December 9, 2003 Shakopee City Council Page -2- Mr. Steinman noted that the But For analysis is used to determine if the project would/could proceed without public dollars. The financial components of the project were measured with the tax abatement and without the tax abatement. He noted the request for the tax abatement was about ~ of what it was originally; the abatement request had been reduced substantially. Mr. Steinman noted that there was no County involvement in the proposed abatement at this time (this was a major change). It was believed that the abatement would allow for pricing alternatives but this pricing was still higher than market value. Future projects could also request a business subsidy on their own merit (Tax Increment Financing [TIF] in the Business Park). Mr. Steinman was of the belief that the project as proposed would not proceed if the requested subsidy were not allowed. Mr. Steinman stated abatement was a tool that was used to encourage development. It was called abatement but really it worked like a rebate. Ryan Companies would still pay the property tax; Ryan Companies would then be rebated in some form to achieve the business subsidy. The proposed use in this case was to reduce the cost of the public infrastructure, specifically to the business park portions of this property. Mr. Steinman noted that the land costs had been reduced since the original proposal. This particular abatement had been capped so the abatement would not exceed more than 25% of the City's total abatement capacity. It was speculated by Springsted Inc. that the abatement would most likely be maximized in about 10 to 12 years. The abatement would begin at about 5% and then maximize up to approximately 16% of the city's abatement capacity and then would move downwards. It was also noted that the annual abatement would not exceed the outstanding assessments of the Business Park property. It was noted that today the subsidy stream was approximately $900,000 and the future value was about $1.98 million. The future market value of the total property in this development with inflation built in was estimated by Springsted Inc. to be $295 million in 2025. Springsted, Inc. felt this was a realistic projection. Mr. Steinman noted that the abatement deal was structured to abate only the City portion of the retail components of this project. This did make the project a bit unique because only the retail components were being abated and those abatements were being used to pay down assessments specifically and only against Business Park property on this project. Mr. Steinman noted that the project was not very likely to proceed 'as is' if there were no abatement; therefore, discussion on the impact discussion was hypothetical. It was pointed out that without the abatement if the project went forward, that on a $300,000 owner occupied residential home there would be a slight decrease in City taxes in the beginning years of the abatement between $4 or $5; in the year 2018 when the abatement would be at its highest, the decrease in City taxes would be about $22.00. This analysis assumed that the City's levy never went up and there was no growth or decline in the City's existing tax base. The tax capacity of the development was discussed. Official Proceedings of the December 9, 2003 Shakopee City Council Page -3- Mayor Mars noted that if this project did not meet certain expectations by certain dates there would be no more abatement. The retail portion of this development needed to generate certain tax dollars in order to receive abatement. Mr. Snook reported on conditions and criteria for the abatement in the Master Development Agreement. He noted that this would be a rolling abatement. Not all properties would come on line at the same time. The times would be staggered, that certain properties would be going on and coming off. Steve Bubul, Kennedy and Graven, Attorney, approached the podium and noted that the abatement would only last until all the special assessments stipulated were paid off. It was noted that the City was protected in the Master Development Agreement. Mr. Snook noted there was proposed to be an increase in the estimated market value for the Business Park of approximately $88 million, there was an estimated $21 million increase for the commercial component. This would improve the economic vitality of the City and would be a high quality development with the creation of many jobs associated with the Business Park. Mayor Mars noted that over a specific period the City was being asked to abate $1.9 million against gaining $17 million in City taxes over the same period. This proposed development alone would generate $4.6 million in net tax capacity and right now the City's total tax capacity was $22 million. This project could represent almost 25% of the City's total net capacity. Harry Weinandt, 1259 Maxine Circle, approached the podium and asked the amount of the abatement percentage that would be used for this development out of the City's total abatement amount allowed the City by State regulations. Mr. Steinman addressed this question. Tom Schneider, 1577 Mike Court, approached the podium and noted he had great concerns over what was happening with this proposed tax abatement. He strongly recommended that this Council not enter into this agreement for tax abatement. He thought this tax abatement robbed the current business owners and taxpayers. He would like the legal department of the City to take a look at the agreement before anything was done. John Schmitt, 1015 South Main, approached the podium with a number of questions. Mr. Steinman answered a question. Mr. Schmitt questioned some of the numbers in the report. Mr. Schmitt noted that the current intersection of County Road 16 and County Road 83 was done so the developer would have a fully signalized intersection for his development. Mr. Schmitt thought that the residential component would be built but he was not sure about the commercial and business park coming through. He had a problem with this tax abatement because it would take the City 20 years to get any money out of the development. Official Proceedings of the December 9, 2003 Shakopee City Council Page -4- Cncl. Joos stated that Mr. Steinman from Springsted, Inc. and Mr. Bubul, Attorney from Kennedy and Graven, were representing the City on this issue. They were watching out for the City's best interest. Kathy Gerlach, 4855 Eagle Creek Boulevard, approached the podium and asked about job creation and individual TIF and individual abatements. Mayor Mars noted the TIF or abatement for individual businesses would be heard on an individual case-by-case basis and the City was not obligated in any form to approve the request for TIF or abatement. It was noted that there would be additional criteria that the individual businesses would have to meet to qualify for TIF or abatement. Ms. Gerlach was of the opinion that the cost of the land was just too high; that was the problem. She thought there was room for negotiation between the buyer and the seller of the land. Mr. Weinandt asked if the abatement were not given would the residential still be built? It was thought the developer should answer this question. Steve Menden approached he podium to give a presentation of this project as he viewed the project. He noted the abatement was being requested for three reasons. Improvements requested by the owner and the owner stated he would pay. for them. The improvements were necessary and they did serve a benefit to the community. Another reason the abatement was being requested was for internal road improvement. These improvements would be needed for any development and would be assessed to the future property owners. The conservation/restoration of the development was a third reason for the request. Mr. Menden noted that there had been give and take on the developer's side and on the City's side. Mr. Menden felt that granting this abatement would set a policy showing that the City would help with development. In the past abatement had been used but it was businesses that received the abatement. He thought if this abatement were granted the door was opened for many applications to come forward for abatement. Mr. Menden thought the Council needed to look beyond the numbers; they needed to look at the policies and precedents that were going to be set. It was because of the policies and the precedents that would be set that he did not agree with the abatement. Mayor Mars called for more public participation. Kent Carlson, Ryan Companies, approached the podium to address some of the questions raised. He noted that Ryan Companies was trying to make the Business Park more competitive in the market place. He noted the Business Park land was different from other retailers. Mr. Carlson noted that the abatement would be used to help offset the public infrastructure costs of the Business Park. The abatement was dedicated to the assessments exclusively. The bulk of the costs of the development was not the land cost but the cost to bring in materials i.e. soils, bringing in the infrastructure and the existing assessments. Mr. Carlson noted it was only the Business Park that needed the financial assistance of the abatement. Mr. Carlson noted the Official Proceedings of the December 9, 2003 Shakopee City Council Page -5- conservation approach really cost the development in two ways. 1) the actual conservation methods and 2) the land area that needed to be given up for this conservation approach to work (density). Cncl. Link addressed the issue of how the taxes in Shakopee would be affected for people on fixed incomes. Mr. Steinman addressed this question referring back to the impact presentation. Cncl. Link thought development in the area would happen with or without the abatement. Joos/Helkamp moved to close the public hearing. Motion carried 5-0. Joos/Lehman offered Resolution No. 5981, A Resolution Approving Property Tax Abatement F or Certain Property In The City Of Shakopee And A Master Development Agreement Between The City And Ryan Companies US, Inc., and moved its adoption. Cncl. Link stated that he thought this was a bad policy for the City of Shakopee. It was not in the best interests of the people of Shakopee. Mayor Mars stated he looked at this abatement as to what the City of Shakopee was giving up and what they were getting. He looked at the City giving a $1.9 million abatement and getting $17 million in City taxes. On the 300 acres right now about $28,000 are paid in taxes. This development would generate significant taxes for the City. Many plans had been looked at for this development and a significant amount of public value had been extracted for the residents in this development plan. He felt County Road 16 and County Road 83 benefited the community as a whole not just the development. The conservation approach was to be commended. The ongoing maintenance was also a consideration (the developer/and his assigns was responsible for the maintenance into perpetuity); the ponding aspect did not use the City's regional ponds to any great extent. He felt the benefits to the community outweighed the requested abatement. Mayor Mars noted when this development was at full build out this development could represent over 25% of the City's tax capacity. LehmanlJoos moved to call the question. Motion carried 4-1 with Cnc1. Link dissenting. The main motion carried 4-1 with Cncl. Link dissenting. A recess was taken at 9:02 p.m. Mayor Mars re-convened the City Council meeting at 9:10 p.m. Mr. Leek, Community Development Director, reported on the Planned Unit Development (PUD), Preliminary Plat, and Conditional Use Permit (CUP) for the property located south of Highway 169, east of County Road 83, north of County Road 16 and west of Dean Lake. Mr. Leek outlined what this project was proposed to be in the context of the PUD application, Official Proceedings of the December 9, 2003 Shakopee City Council Page -6- preliminary plat and the Shoreland CUP. Mr. Leek explained where the land area was for certain uses via the document camera. He stated there was a total of274 acres. Mr. Leek explained the way the single-family development was proposed to be built and the additional condition that the Planning Commission proposed for the single-family development. The residential area was 42 acres. Mr. Leek noted the proposed open space was 84 acres and included the Shoreland Overlay Buffer zone as well as the conservation easement areas. Mr. Leek gave an overview of the Dean Lake Conservation Easement. He noted a portion of the conservation easement was in the Shore1and Overlay buffer zone. He noted the elevation for the first single-family home near the Shoreland was 753 and the building pad was 280 feet from the high water mark. Mr. Leek thought fill would need to be brought in to reach the 753-elevation mark. Mr. Leek noted that an active public park per se was not proposed as part of this project. Mr. Leek spoke about the park dedication that the Park and Recreation Advisory Board (PRAB) reviewed. Tins was a very complex development and there were a number of implementation documents that pertained to this development. Some of these documents were: 1) a trail easement, 2) a conservation easement and 3) a Planned Unit Development (PUD) Agreement for the Dean Lakes Project. Mr. Leek noted there was an ecological stewardship manual that had been developed that explained how the restoration would take place and how the maintenance of the restored areas should occur. Mr. Leek noted the Environmental Advisory Committee (EAC) had reviewed this document (Stewardship manual) and was satisfied. Mr. Leek noted there would be developer's agreements for each of the final plats, the development was proposed to be done in phases. Mr. Leek noted the first phase was basically the residential portion of the project. A second and third phase was in the area of the commercial with part of the third phase also being in the Business Park and the fourth & fifth phase identified areas in the Business Park. Mr. Leek stated that the EAC reviewed this development for storm drainage, open space, restoration issues and other environmental issues; the PRAB reviewed this development, a couple of times, and made recommendations to the Planning Commission and the Planning Commission did recommend approval of the three requests to the City Council. Mr. Leek noted that he had incorporated all of the conditions put for by these reviewing agencies into Resolution Nos. 5986, 5987 and 5988 before the Council tonight. Mr. Leek noted that Resolution No. 5986 was the resolution that created the PUD district. The PUD district number was incorrectly stated in Resolution No. 5986; the correct PUD district number was number 24 not number 19. Mr. Leek noted that the Shoreland Overlay Zone only covered a portion of the site and the Conditional Use Permit (CUP) was for the uses in just that 1000-foot zone created by the Shoreland Overlay Zone. Mr. Leek noted the open space criteria in the Shoreland Ordinance. Mr. Leek noted one change he made to Resolution No. 5986, the resolution pertaining to the PUD of Dean Lakes. This change related to building material. \ I Official Proceedings of the December 9, 2003 Shakopee City Council Page -7- Cnc1. Lehman addressed the median on Bulrush Boulevard regarding setbacks to some of the lots. Mr. Leek addressed this question. Cnc1. Joos questioned the 5.54 upland acres that th(~ PRAB finally decided that park credit should not be given for. It was noted that if the City choose to they could put an improvement on the 5.54 acres as long as it was consistent with the terms of the easement; these terms were fairly restrictive. The conservation easement to the City was a permanent conveyance to the City and would be recorded. Mr. Themig explained what he thought were the PRAB thoughts regarding the reconsideration that no park credit would be given for the 5.54 upland acres; it was deemed that this area needed to be in the conservation easement. Mr. Leek noted what had to be done because a portion of the development was in the Shoreland Overlay Zone. Mr. Leek noted the residential in the Shoreland Overlay Zone was well within the allowable density. Mr. Leek noted that the traffic mitigation plan that was part of the first ADAR was still the plan that pertained to this development (there were several revisions to the ADAR). The traffic needed to be reviewed for the functioning of the intersections as the development proceeded and if the City thought additional analysis was warranted down the road that could be required. The City still had control on the level of traffic service. Kent Carlson, Ryan Companies, reviewed the park dedication and noted that there had been a couple of changes. Mr. Carlson noted that the linear footage of the trails had been increased and there was another connection along Dean's Lake Boulevard leading to the regional trail system. Mr. Carlson noted there was an extensive system of sidewalks within the development, as Mr. Leek noted, linking the Commercial, Business Park and Residential all together. Mr. Carlson noted that he thought some possibilities for special amenities were possible for around the peninsula, the 5.54 acres. Mr. Carlson noted that the residential properties had been moved even further away from the high water mark of Deans Lake and this necessitated the reconfiguration of some of the trails. The increased setback from the high water mark allowed Ryan Companies to preserve and develop the conservation area a little nicer and allowed for a better trail system. Mr. Carlson noted with the additional setback and the 5.54 acres there now was over 8 more acres in the conservation easement and the linear trail footage had been increased. He noted that a commitment had been made to the PRAB that there would be some special amenities along the trails for the public to use. Mr. Carlson pointed out the cost of the private amenities that Ryan Companies would be making for the City and Ryland Homes. Mr. Carlson addressed the "Special Lighting District". He would like to change the word "shall" to "may" in the PUD agreement for flexibility reasons because they wanted to work with their partner, Ryland Homes. They did want some nice lighting. Mr. Loney, Public Works Director/City Engineer, explained the Special Lighting District. Official Proceedings of the December 9, 2003 Shakopee City Council Page -8- Mr. Loney noted that it was only on City designated collector routes where it was required to have a sidewalk on one side and a trail on the other side. These were in all likelihood going to be busy streets but the City had not designated the streets as collector streets. CncI. Lehman noted he was okay with changing the language regarding the Special Lighting District as long as all City requirements were still met; he would like to see the 5.54 acres remain in the conservation easement and he still did not like the medians. Cncl. Joos agreed with Cnc1. Lehman regarding the language for the Special Lighting District; he proposed that Ryan Companies work with City staff regarding the 5.54 acres and Cncl. Joos had no strong feelings regarding the median. Cncl. Link asked about the DNR's response to this development. Mr. Leek addressed this question. Cncl. Helkamp was okay on the lighting change; he stated he liked the medians for separation between housing types and regarding the signage, he preferred that the words "painted block" be deleted. Cncl. Helkamp also had a question regarding condition no. 4c. Mr. Leek addressed this question. He noted that the last sentence of condition 4c needed to be deleted. Cncl. Helkamp went along with the PRAB' s recommendation regarding the 5.54 acres of land. Mayor Mars was fine with the Special Lighting District language change as long as the City's lighting standards were met. Mayor Mars noted the median was fine in the plan and in this circumstance the median did act as a buffer; he too wanted to see the last sentence in condition 4c deleted. Mayor Mars would like to see educational features available down the road for the 5.54 acres. Mr. Thomson noted the City and the developer thought it was important to write certain agreements for aspects of this development because of the uniqueness, phasing and uses in this development. Mr. Thomson noted that these written agreements would be recorded against the property. Mr. Thomson noted some of the items each interested party would receive from these agreements. Mr. Themig noted a discrepancy from what the PRAB reviewed and what was presented to the Councilors in their packet regarding the trail system. Mr. Carlson addressed this issue. Joos/Helkamp offered Resolution No. 5986, A Resolution Of The City Of Shakopee, Minnesota Approving Planned Unit Development (PUD) Overlay District No 24, Dean Lakes, and moved its adoption. Mayor Mars noted there was consensus to keep the median in the plan. The parkland and trail plan from the Park and Recreation Advisory Board (PRAB) was fine with the Council with some possible flexibility in the pull out areas and in the 5.54 acres; the language change "shall" to "may" for the Special Lighting District was okay. There was to be a language change eliminating "painted block" from an option for acceptable material. There was language in 4c that needed to be deleted (credits would be applied as follows:); there was some confusion on the hard surface loop trail, the extra trails going west to County Road 83 and one going south to County Road 16. Two trails on the map before the Council tonight had not been on the map that the PRAB Official Proceedings of the December 9, 2003 Shakopee City Council Page -9- reviewed previously; the small trai1100p in the shoreland area was not on the map before the Council tonight but was on the map reviewed by the PRAB. The Developer agreed that this trail loop would be constructed. Mr. Thomson noted the linear trail footage [under Park Dedication] should be stated in Resolution No.5986 "not less than 17,888 linear feet". It was noted that the park dedication credit would be changed to reflect the correct amount of linear feet of the trail. Cncl. Link stated he would not support this PUD because he thought the City was giving up way to much, he thought the land should remain commercial, and he thought the development looked like the housing was being crowded in and far too many variances had been granted for this development. encl. Link did not think this was a residential area. Mayor Mars stated that he did feel this development brought value to the community. He thought this development was an in-fill development between the Southbridge development and the City. Mayor Mars thought the development offered much towards reconstructing the environment out in that area. He also thought it was very beneficial to the community to be able to go out and enjoy the public areas provided in the park and trail plan for the general public. He also thought this land use was being put to the highest and best use with this diversified use development. The development was also very resident friendly. Motion carried 4-1 with Cncl. Link dissenting. LehmanlHelkamp offered Resolution No. 5988, A Resolution Of The City Of Shako pee, Minnesota Approving The Request For Conditional Use Permit (CUP) To Allow Business Park And Residential Uses, As Well As Trails In The Shoreland Overlay Zone, and moved its adoption. Motion carried 4-1 with Cncl. Link dissenting. Joos/Helkamp offered Resolution No. 5987, A Resolution Of The City Of Shako pee, Minnesota Approving The Preliminary Plat of Dean Lake, and moved its adoption. Cncl. Helkamp noted some changes in the conditions included in Resolution No. 5987. Condition B 1 needed the language changed regarding the Special Lighting District from the word "shall" to the word "may". Also letter M was the same as the first letter H; Cncl. Helkamp suggested that one of the letters be deleted. Motion carried 4-1 with Cncl. Link dissenting. LeIunan/Joos moved to authorize the appropriate City officials to execute the PUD Agreement, conservation easements, and trail easements with the changes as directed by Council. These changes were: There was consensus to keep the median in the plan. The parkland and trail plan Official Proceedings of the December 9, 2003 Shakopee City Council Page -10- from the Park and Recreation Advisory Board (PRAB) was rme with the Council with some possible flexibility in the pull out areas and some flexibility to identify broader amenity areas for the City for educational features for the surrounding habitat; the language change "shall" to "may" for the Special Lighting District was okay. There was to be a signage change requested by Cncl. Helkamp to eliminate "painted block" as an option for acceptable material; there was language in 4c that needed to be deleted (credits would be applied as follows:); the two trails going west to County Road 83, one trail going south to County Road 16 and the small trail loop in the shoreland area would be included equating to a total of 17,888linear feet of trail easements. Mr. Leek noted that if there were any changes that affected the agreements those would be changed accordingly. Motion carried 5-0. Lehman/Helkamp moved to adjourn to Tuesday, December 16,2003, at 7:00 p.m. at City Hall in the Council Chambers. Motion carried unanimously. The meeting adjourned at 10:40 p.m. 'J ef (2 \,\ellctlu ".17 -' .Judith S. Cox City Clerk Carole Hedlund Recording Secretary