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HomeMy WebLinkAbout2013-09-17 CC MINter ITN;Pa AVF S ALE 6f MIMN E!..2, A CITY COUNCIL REGULAR MEETING MINUTES September 17, 2013 REGULAR MEETING Mayor Harycki called the meeting to order at 7:05 p.m. 7:00 P.M. Present: Councilmembers Menikheim, Kozlowski, Weidner, Polehna, and Mayor Harycki Absent: None Staff present: City Attorney Magnuson City Administrator Hansen Deputy Fire Chief Ballis Police Chief Gannaway Public Works Director Sanders Finance Director Harrison Community Development Director Turnblad City Clerk Ward PLEDGE OF ALLEGIANCE Mayor Harycki led the Council and audience in the Pledge of Allegiance. APPROVAL OF MINUTES Possible approval of August 27 2013 Special Meeting and September 3 2013 regular, recessed and executive session meeting minutes Motion by Councilmember Polehna, seconded by Councilmember Kozlowski, to approve the August 27, 2013 special meeting, and September 3, 2013 regular, recessed and executive session meeting minutes. All in favor. OPEN FORUM There were no public comments. STAFF REPORTS Community Development Director Turnblad reported that a combined trash enclosure has been proposed for the Water Street Inn and the Gulf gas station. If the Council agrees with the location, Mr. Dougherty will submit design plans to the Heritage Preservation Commission for review. Councilmembers Menikheim, Polehna and Mayor Harycki voiced support; City Council Meeting September 17, 2013 Councilmember Weidner stated he is opposed because the location is not where the developers' agreement stated it should be. It will be brought to the Heritage Preservation Commission. Community Development Director Turnblad requested volunteers for a selection committee to review proposals for a summer festival, which are due September 25; Councilmembers Menikheim & Kozlowski volunteered. For possible event coordinators, Mayor Harycki suggested Russ Corbula of New Richmond, and Councilmember Weidner suggested the coordinator of the Iron Man Bike Race. Public Works Director Sanders updated the Council on Downtown projects. The Corps is done with most of the work on the parking lots; it will probably be completed in mid - October. He also discussed possible impacts of increasing the assessment percentages on street improvement projects. The City has been using a 50% assessment rate for all street projects in the City, except the Industrial Park which is 100 %. Projects from the last three years were analyzed, using the residential unit rate for full reconstruction and for mill and overlay projects as the basis. More information will be brought back to the Council at a future meeting. CONSENT AGENDA Resolution 2013 -153, directing payment of bills Resolution 2013 -154, amending Resolution 2013 -111, amending Section 10 -5 Family Care Leave of City of Stillwater Personnel Policy Possible approval of placement of Fire Prevention signs — Fire Department Resolution 2013 -155, approving special event and contract for Fall Jazz and Art Festival Resolution 2013 -156, approving increase to railroad lease payment Resolution 2013 -158, approving Agreement between the City of Stillwater and St. Croix Catering, Inc. for Management of the St. Croix Sports Complex and Lily Lake Arena Resolution 2013 -159, approving assignment agreement with the Veterans' Memorial Committee for 2014 Possible approval of quote from Roof Tech to repair roof on Blizzard Rink — Recreation Center Resolution 2013 -160, approving 2012 -2014 labor agreement with Minnesota Teamsters Public and Law Enforcement Employees' Union, Local 320 representing Stillwater Public Managers' Association Resolution 2013 -161, approving appointments to Library Board Councilmember Menikheim requested discuss Resolution 2013 -155, approving special event and contract for Fall Jazz and Art Festival, regarding the location. City Engineer Sanders clarified that when the original permit application was submitted to use the south end of Lowell Park, he was uncertain what the status of construction would be at that time, and recommended the Chamber consider alternate locations. About two weeks ago, the determination was made that the south end of Lowell Park would work for the event. Todd Streeter of the Stillwater Chamber stated he was informed by the Parking Commission that they prefer the event use the north end of Lot 9 and that the Council might consider waiving the fee. Lot 9 does not have adequate power for the event, but Lot 7 would serve adequately, Page 2 of 7 City Council Meeting September 17, 2013 which Mr. Streeter conveyed to Community Development Director Turnblad, asking if the Council could waive the fee. Public Works Director Sanders stated that some construction would be taking place on the west side of Lot 7 and asked Mr. Streeter to provide a layout that would not inhibit the construction. Mr. Streeter stated that he could move the booths to the east and requested that Water Street from Myrtle to Mulberry be closed for the Art Fair. City Clerk Ward stated that the contract will need to be changed to reflect the changes and reminded Mr. Streeter that the revised drawing should be submitted as soon as possible as the application is part of the contract. Motion by Councilmember Menikheim, seconded by Councilmember Polehna, to adopt the Consent Agenda with the changes discussed granting the Fall Jazz and Art Festival. Ayes: Councilmembers Menikheim, Kozlowski, Weidner, Polehna, and Mayor Harycki Nays: None PUBLIC HEARINGS There were no public hearings. UNFINISHED BUSINESS Request by Corey Burstad on behalf of Stillwater Caves LLC for TIF assistance to redevelop Joseph Wolf Block at and around 402 South Main Street Community Development Director Turnblad reviewed that Stillwater Caves, LLC has submitted an application for $1.15 million in TIF assistance to redevelop the historic Joseph Wolf Block into a 37 room boutique hotel, a 60 -80 seat restaurant, and up to 4,000 square feet of retail space. A TIF district would have to be created in order for the City to capture the increment for repayment purposes. Proformas were received, indicating that without TIF, the project is not economically feasible. The market analysis states that with increased exposure over time the project would be financially successful with the contribution of TIF. Staff recommends conceptual approval of the TIF assistance request and authorization to initiate the establishment of TIF District #11. Mayor Harycki expressed concern about the $475,000 up front funding, saying it removes the economic incentive for the project to succeed. He feels the forecasted 11% growth rate is unrealistic and taxpayer dollars should not be tied up in a very risky project. Councilmember Weidner inquired why not use pay -as- you -go TIF to reduce the risk to the City, but still accomplish work on the fagades, and Troy Hoekstra, representing the owner, responded that $477,000 represents part of the fee, dollars that are staying in the project. Because the building is collapsing in certain areas, it is not investable or bankable without getting it to a break -even status, which would not work with pay -as- you -go financing. The four buildings are the doorstep to the city; if something is not done to repair the buildings in the next two years they are going to cave in. When it rains, the water runs through the building. $1.15 million on the front end gets the project to the point where it can move forward. Page 3 of 7 City Council Meeting September 17, 2013 Councilmember Menikheim asked what the risk to the City is, and Mr. Hoekstra responded that from a financing standpoint, the risk is defined by the bankability of the project and the investors who stand behind the investment. He reiterated that without TIF, the project will not work. No one is walking away from a closing with any dollars on the project. City Attorney Magnuson explained that the pay -as- you -go method was used for the Lofts, Terra Springs, and 95% of all the projects that have been created over the years. A pledge of the increment is taken to the bank and a bond is sold that is supported by the flow of increment. The bonds are all privately placed, supported by the pay -as- you -go increment. Thus the full faith and credit of the City is not pledged and the developer takes the credit risk, not the City. Mr. Hoekstra remarked that part of the problem is adhering to the historical building requirements. Common sense would be to bulldoze it and start over, but instead, developers have the burden of restoring parts of the building that are in disrepair. There is an additional $250,000 that must be spent to make the building structurally stable. On a question by Councilmember Weidner about additional costs because of the HPC and City requirements, and Corey Burstad, developer, replied that developers have had to forego the state and federal tax credits available because they would not have a functioning operation if they adhered to the standards, such as maintaining a staircase that went nowhere. It would have taken another year to a year and a half just to get through that process. He welcomed the Councilmembers to tour the buildings. Mr. Hoekstra added that he estimated about $2 million in additional costs would result from meeting the HPC and City requirements. Total construction costs will be $6.2 million. Councilmember Weidner added that he supports the use of TIF funds to bring the building up to the historical standards of City. Councilmember Kozlowski asked, what would be the worst case scenario that could cause the City to not get the funds back, and City Attorney Magnuson responded if the project is built, it will generate taxes. Even if the bank forecloses, the bank would own the property and would pay taxes. If taxes are not paid, then the City would not receive the increment. Councilmember Kozlowski agreed that the building is a door to Main Street and he would hate to see it collapse - that would not help the City in any way. Councilmember Menikheim stated he understands there are risks, but feels there is benefit in moving forward with the project. Mayor Harycki expressed that he is reluctant to invest taxpayer dollars in the project, even if it is TIF. He worries that everyone on Main Street will want TIF. He could see sharing in some of the special costs for building repairs, perhaps as a forgivable loan as in fagade programs that the City has coordinated. Mr. Hoekstra stated there are probably 20 categories in the report, like the growth rate, that need to be explained in detail. There is a lot more to it than a pie -in- the -sky number -- it is a science. Page 4 of 7 City Council Meeting September 17, 2013 Mayor Harycki reiterated that he is not a fan of spending taxpayer dollars and is not ready to vote in favor of conceptual approval. Councilmember Menikheim reminded the Council that this building could be an anchor for the City and if the City invests TIF, there will still be some way for it to be returned. City Attorney Magnuson stated cities that have gotten in trouble are those that front -end these types of projects by selling a bond to obtain the cash to make available to developers. The risk with that is if the project falls flat, the City is obligated to pay the general obligation bond with taxes. Stillwater is very fortunate to have some funds that can be used for this; however the risk is that there would be no taxes paid. Councilmember Kozlowski stated he feels the project seems appropriate for TIF and felt that the details can be flushed out in the development agreement. Councilmember Polehna questioned the estimate for tuck - pointing and the need for exterior rehabilitation - the front of the building is beautiful. He is nervous about up- fronting the money. Mr. Burstad and Mr. Hoekstra stated they would arrange a date for the Council to tour the buildings, which City Clerk Ward will notice as a special meeting. PETITIONS, INDIVIDUALS, DELEGATIONS & COMMENDATIONS Harvest Fest Special Event and Contract and gpproval of temporary liquor license associated with event held by Stillwater Oak Park Heights CVB — Cory Buettner Cory Buettner, applicant, explained that the only change from last year is the request for permission to sell alcohol on Sunday from noon until 6 p.m. The event will be in south Lowell Park. Motion by Councilmember Kozlowski, seconded by Councilmember Polehna, to adopt Resolution 2013 -157, approving the 2013 Harvest Festival Special Event and Contract. Ayes: Councilmembers Menikheim, Kozlowski, Weidner, Polehna, and Mayor Harycki Nays: None UNFINISHED BUSINESS CONTINUED Discussion on Economic Development Advisory Committee Mayor Harycki stated that downtown business people asked to table the discussion for further input. Motion by Mayor Harycki, seconded by Councilmember Menikheim, to table establishment of an Economic Development Advisory Committee. All in favor. Update on Downtown Lighting Community Development Director Turnblad reviewed the City's existing ordinances and design guidelines to determine the process for permitting the lighting suggested by the Downtown Revitalization Committee's subcommittee on ambience. Any permanent lighting downtown must meet some basic standards about shielding the source of light, not creating glare, and not Page 5 of 7 City Council Meeting September 17, 2013 beaming like a spotlight. Private property owners that meet certain parameters may obtain an electrical permit based on value. Properties on or contributing to the National Register require a design permit from the Heritage Preservation Commission. Possible approval of resolution relating to Community Beautification Fund City Administrator Hansen presented revisions to the Downtown Beautification Fund language making it community -wide. Councilmember Polehna clarified that his goal is not to take $15,000 from downtown area. He still believes the City needs to contribute the $15,000 to the downtown, but he wants to also accommodate future donations that might be intended to apply to the whole City. Councilmember Menikheim indicated that at the moment, the most important focus should be on the downtown area because the fund was set up for that purpose. Councilmember Polehna recognized Councilmember Menikheim's statement, however he felt that the resolution should provide the opportunity to individuals to donate to the fund to clean up and beautify the entire City not just Downtown. Councilmember Menikheim replied that he feels the Downtown is the big picture for Stillwater. City Administrator Hansen suggested amending the language to state that the City will put $15,000 annually into a Downtown Beautification Fund and leave the other language changes. Motion by Councilmember Kozlowski, seconded by Councilmember Polehna, to adopt Resolution 2013 -162, establishing policies related to Community Beautification, as amended. Ayes: Councilmembers Menikheim, Kozlowski, Weidner, Polehna, and Mayor Harycki Nays: None NEW BUSINESS There was no new business. COUNCIL REQUEST ITEMS Beyond the Yellow Ribbon Update Councilmember Polehna informed the Council that $20,000 has been raised to host the October 19 pheasant hunt for the troops. 80+ troops are signed up. Councilmember Weidner referred to the minutes from the budget meeting regarding the library, and indicated that he would like to discuss with the Library Board the issues of whether or not the County should operate the library, and whether the County would be interested operating it. Councilmember Polehna stated he met with Public Works Directors Sanders and Superintendent Moore to look at the amphitheater with the high school theater teacher who provided some ideas. Page 6 of 7 City Council Meeting ADJOURNMENT September 17, 2013 Motion by Councilmember Menikheim, seconded by Councilmember Kozlowski, to adjourn the meeting at 8:44 p.m. All in favor. ATTEST: Diane F. Ward, City Clerk Resolution 2013 -153, directing payment of bills Resolution 2013 -154, amending Resolution 2013 -111, amending Section 10 -5 Family Care Leave of City of Stillwater Personnel Policy Resolution 2013 -155, approving special event and contract for Fall Jazz and Art Festival Resolution 2013 -156, approving increase to railroad lease payment Resolution 2013 -157, approving the 2013 Harvest Festival Special Event and Contract Resolution 2013 -158, approving Agreement between the City of Stillwater and St. Croix Catering, Inc. for Management of the St. Croix Sports Complex and Lily Lake Arena Resolution 2013 -159, approving assignment agreement with the Veterans' Memorial Committee for 2014 Possible approval of quote from Roof Tech to repair roof on Blizzard Rink — Recreation Center Resolution 2013 -160, approving 2012 -2014 labor agreement with Minnesota Teamsters Public and Law Enforcement Employee's Union, Local 320 representing Stillwater Public Manager's Association Resolution 2013 -161, approving appointments to Library Board Resolution 2013 -162, establishing policies related to Community Beautification Page 7 of 7