09/24/2012 - City Council Finance Committee411� City of Eap to
TO: FINANCE COMMITTEE
FROM: CITY ADMINISTRATOR HEDGES
DATE: SEPTEMBER 21, 2012
SUBJECT: FINANCE COMMITTEE MEETING / MONDAY, SEPTEMBER 24,12PM,
EAGAN ROOM
A Finance Committee meeting is scheduled for Monday, September 24 at noon in the Eagan
Room. As a reminder, in keeping with past practice, no plans are being made to provide lunch on
the 24th, so if you could, please plan to bring a "brown bag" lunch or eat before /after the meeting.
Enclosed on pages A through _ are the agenda and background memos to be discussed
at the September 24 mt eeting. Also enclosed on pages (0 through 11 are the meeting notes
from the July 2, 2012 Finance Committee meeting.
Please feel free to contact me if you have any questions in advance of the committee meeting.
/s /Thomas L. Hedges
City Administrator
FINANCE COMMITTEE MEETING
SEPTEMBER 24, 2012
NOON -2:00 PM
EAGAN ROOM
AGENDA
I. AGENDA ADOPTION
II. CEDAR GROVE REDEVELOPMENT UPDATE
III. REVIEW OF COMMERCIAL DEVELOPMENT STANDARDS
IV. OTHER BUSINESS
V. ADJOURNMENT
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Agenda Information Memo
Finance Committee Meeting
September 24, 2012
II. CEDAR GROVE REDEVELOPMENT OPTIONS
ACTION TO BE CONSIDERED:
To provide direction to staff regarding financial aspects of potential redevelopment
options.
FACTS:
• The Finance Committee has been designated by the City Council to review and
provide recommendations to the Council regarding matters pertaining to the
Cedar Grove Redevelopment District.
• Since the Committee last met, progress has been made with respect to the EDA
approval of the Paragon Outlets preliminary concept plan, preliminary
redevelopment agreement and purchase agreement. The developer has submitted
its subdivision and rezoning applications in anticipation of the October APC
meeting and a November City Council meeting.
• A number of issues affecting the timing of EDA expenditures arise out of the
basic plan and its details.
• The preliminary concept plan and the proposed redevelopment presume the
relocation of Cedar Grove Boulevard and the Xcel Energy gas pipeline within that
ROW. Because of the long lead time to accomplish the pipeline relocation,
certain steps that will ultimately be the responsibility of the developer need to be
taken in advance of the development application consideration. It is staff's
perception that this work would provide value to the development in any case, but
is essential to take a parallel approach rather than a sequential one in order to
position the project for its development.
• Likewise, in order to complete the parking structure at the same time as the
Paragon project is projected to be completed, certain aspects of design and site
preparation will need to occur in advance of a Paragon ground breaking. Staff
will overview the current status of the parking ramp concept design, its
relationship to the uses planned along Cedar Grove Parkway and its relationship
to the preliminary Paragon schedule.
• Another issue related to the Paragon subdivision is the ultimate location of the
extension of Rahn Road between Cedar Grove Parkway and Cedar Grove
Boulevard. A proposed straightening of Rahn to square off the Paragon site
would move the road closer to the credit union building and further diminish that
site's viability for reuse. The building has not attracted qualified reuse proposals
to date and Doron Jensen has expressed interest in the site, minus the building to
provide additional parking adjacent to the front door of the Supper Club. While
the EDA has not relied on substantial revenue from the reuse of the site in the
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past, this potential option will bear on the operations of the existing business and,
thereby, on its value within the district.
• Direction with respect to each of these items will assist staff in clarifying both
project schedules and implementation steps.
ATTACHMENTS: Information will be distributed and reviewed at the Committee
meeting.
H
Agenda Information Memo
Finance Committee Meeting
September 24, 2012
III. REVIEW OF COMMERCIAL DEVELOPMENT STANDARDS
ACTION TO BE CONSIDERED:
To provide direction to staff regarding potential commercial development standards in
the Central Area.
FACTS:
At the Council listening session on September 4, 2012, brief discussion was held
regarding commercial development standards that might be considered in the
Central Commons special area. The matter was referred to the Finance
Committee to identify the issues that may need to be addressed and any process
steps in that regard and to provide information to the Council about both at a
future date.
ATTACHMENTS: Information will be distributed and reviewed at the Committee
meeting.
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FINANCE COMMITTEE MEETING NOTES
July 2, 2012
11:30 -12:30 PM
EAGAN ROOM
Committee members present: Mayor Maguire and Councilmember Bakken
City staff present: City Administrator Hedges, Assistant City Administrator VanOverbeke,
Chief Financial Officer Pepper, GIS /Community Development Specialist Slettedahl and
Community Development Director Hohenstein. Also present was City Attorney Dougherty.
The agenda was adopted as presented.
Cedar Grove Redevelopment Update
Director Hohenstein introduced the item and presented an overview of the status of Paragon
Purchase Agreement focusing on the following areas:
Policy Issues:
Director Hohenstein explained the policy matters including Type of Deed, Specific Performance,
and Environmental Remediation as outlined in a memo from Assistant City Attorney Bob Bauer.
The Finance Committee concurred with the proposed positions, which include slight deviations
from the City's standard practices, is appropriate due to the unique circumstance of this
redevelopment. These deviations can be accommodated with only minimal risk to the EDA
while providing assurances necessary and insisted upon by the buyer of the property.
General Issues:
The proposed process by which Paragon would buy approximately three acres of parkland
(south of the parkway) from the EDA and donate it to the City to meet its Park Dedication
requirement was explained by Director Hohenstein. The Finance Committee concurred with this
process.
Director Hohenstein outlined a process by which the EDA/City would build and own a parking
structure of 1,400 -1,600 stalls and provide for approximately 1,036 stalls for Paragon's use.
Paragon has tentatively agreed to make a $4,225,800 payment toward construction of the
structure. The importance of maintaining flexibility and options for parking and development
into the future was stressed by the Finance Committee and staff. Paragon will be required to
provide assurance that its surface lots will be optimized thereby limiting the Outlet Mall impact
on the parking structure to only what is provided for in the agreement.
Financial Issues:
Assistant City Administrator VanOverbeke covered contemplated cost sharing for the road
relocation, pipeline relocation and construction of the parking structure along with a proposed
land purchase price for Paragon. The impact of the City's cost participation in this project was
projected in the financial status of the TIF Fund with its current term and with a possible term
extension. To continue taking a conservative approach, the Finance Committee directed that
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July 2, 2012 Finance Committee Meeting Notes
Page 2
future projections should not include a term extension and there is no expectation of a
repayment of the trunk fund advance.
Director Hohenstein noted expression of more interest for uses other than neighborhood retail
along the Parkway and the impact that might have on development timing and parking
requirements. Other potential development interest regarding hospitality and possible uses for
the two retained outlots was discussed. The benefit of building the parking structure in a
manner that would provide for a future addition of a third deck was noted.
The Finance Committee has no preference on how the Paragon payment is divided between
land purchase and parking structure payment or if some of the Paragon payment to the City
addresses other infrastructure obligations as long as the total obligations remain consistent with
the intent of this tentative purchase agreement.
City Attorney
City Attorney Dougherty provided an analysis of the differences between the City's positions and
the purchaser's positions in the purchase agreement as it now is written. Some of those
differences were outlined earlier as policy issues and direction given by the Finance Committee.
The challenge in completing the agreement is for the attorney's to develop language that is
satisfactory to both parties and allows the process to proceed to a mutually beneficial
conclusion.
Recommendation:
The Finance Committee noted that they are generally in agreement with the draft agreement
and are recommending that it be considered acceptable by the EDA for formal consideration at
the public hearing to be scheduled for July 17, 2012.
The meeting was adjourned at 12:43 PM.
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