06/23/2014 - City Council Finance CommitteeFINANCE COMMITTEE MEETING
MONDAY, JUNE 23, 2014
11:00 A.M.
CONFERENCE ROOMS 2 A &B
AGENDA
I. AGENDA ADOPTION
II. CEDAR GROVE REDEVELOPMENT DISTRICT - PURCHASE OFFER -TRIANGLE AND
GOLD TRAIL PARCELS
III. PUBLIC FINANCING ASSISTANCE - CSM REQUEST REGARDING FORMER LOCKHEED
MARTIN PROPERTY- CENTRAL PARK COMMONS
IV. FIRE RELIEF ASSOCIATION PENSION CONTRIBUTION AGREEMENT
V. OTHER BUSINESS
VI. ADJOURNMENT
Agenda Information Memo
Finance Committee Meeting
June 23, 2014
II. CEDAR GROVE REDEVELOPMENT DISTRICT— PURCHASE OFFER —TRIANGLE
AND GOLD TRAIL PARCELS
DIRECTION TO BE CONSIDERED:
To make a recommendation to the EDA regarding two purchase offers for the triangle
and Gold Trail parcels in the Cedar Grove Redevelopment area.
FACTS:
In consideration of the confidential nature of certain marketing and prospect
discussions, the Finance Committee has been assigned the responsibility of
monitoring the redevelopment area marketing activities of the master
developer /broker team on behalf of the EDA and City Council.
Staff and the Cedar Grove developer have received two letters of intent on both the
triangle and Gold Trail parcels.
• The Committee will be asked to either provide additional direction for further
negotiation or to make a recommendation to the EDA to consider approval of one of
the two concept plans and direction to prepare a purchase agreement for the
property.
ATTACHMENTS: None — Information to be provided at meeting.
Agenda Information Memo
Finance Committee Meeting
June 23, 2014
III. PUBLIC FINANCING ASSISTANCE — CSM REQUEST REGARDING FORMER
LOCKHEED MARTIN PROPERTY — CENTRAL PARK COMMONS
DIRECTION TO BE CONSIDERED:
To make a recommendation to the City Council to approve or deny a request by CSM for
public financing assistance for potential enhancements of the Central Park Commons
development proposal.
FACTS:
Background
When Lockheed Martin indicated an intention to pursue a non - contingent sale of its
Eagan property, the City communicated to the company that prospective buyers
should base their purchase decisions on the fact that re- guiding and rezoning of the
property should not be assumed before the fact and that the property's sale price
would need to support any prospective reuse of the property. It should be assumed
that public financing assistance would not be available and that any reuse would
need to be market driven.
At its Workshop meeting of February, 2013, staff asked the City Council if it would
consider public financing assistance if the developer were to propose enhancements
to a market driven plan that were desirable for the community, but beyond the
capacity of the market to finance them. The Council indicated a conditional
willingness to consider such for a project at the site, depending upon what
enhancements or improved features of the development could be achieved if it
were available.
CSM's initial response was that it would be interested in considering enhancements
of a development plan for the property and made a formal request to the City
Council to authorize staff to explore the possibilities in that regard. Staff researched
whether the property would meet the criteria for a redevelopment TIF district and
found that the building would not meet the substandard test to qualify.
• Staff has consulted with Ehlers and Associates and determined the project as
presented does not meet the requirements for any of the forms of tax increment
financing districts typically available. The only property based financing tool that
J
could be applied would be tax abatement. A memo from Ehlers describing tax
abatement and the potential revenue that could be captured using the tool is
attached.
• At its workshop of January 14, 2014, the City Council received a presentation from
CSM representatives regarding a range of potential plans for the site. These
included: 1) the plan that was before the Advisory Planning Commission in late
2013, 2) a revised base site plan that incorporated features discussed at the City
Council consideration of a Comprehensive Guide Plan Amendment for the property
and during the review of the small area planning study performed for the City by
Hoisington Koegler in February 2013 and 3) an "enhanced" plan that proposes
additional green space and gathering space as well as additional building square
footage that is to be served by a two level parking garage (base plus one deck).
• On the basis of the discussion at that meeting, the City Council indicated it would be
open to reviewing a public financing application and financing analysis related to the
revised base plan and enhanced plan.
Financing Request and Format for Committee /EDA Review
In follow up to the January Workshop, CSM has submitted a preliminary business
financing application dated April 22, 2014 based on a comparison of a base
development plan an "enhanced plan" for consideration by the Finance Committee
and City Council. The developer is asking the Committee to consider whether the
enhancement(s) would meet the expectations previously suggested by the Council
of features that might justify public financing assistance through the EDA.
• The market driven base plan assumes surface parking for all proposed uses. In
CSM's financing application, it is proposing an enhanced site plan within which it
would install a parking structure that would add between 300 and 400 stalls in the
northeast area of the site and related landscape and plaza upgrades, intended to
incorporate additional overall site density, public functions and amenities. A more
complete description of the structure and amenities is included in CSM's cover letter
to the business financing application, which is attached.
When the City reviews public financing assistance applications, it typically is focused
on business expansion or location resulting in the creation of head of household
jobs. That said, the City's Business Financing Assistance Policy also permits
consideration of financing assistance if "other measureable, specific, tangible goals"
are established. "Examples of tangible goals may include redevelopment, or
pollution or soil remediation." In the case of the proposed development of the CSM
property, the applicant is suggesting that it the project can be characterized as a
redevelopment and other tangible goals can be met if public financing assistance is
provided.
While the former Lockheed Martin property has not been defined as a
redevelopment area by the City to this point, CSM's proposed development of the
site involves the demolition of the current building and a repurposing of the
property for another use. The Finance Committee and EDA has the latitude to
determine whether this would constitute a redevelopment for purposes of the
policy
The City Attorney has advised that it would be an option for the City's EDA to
consider a comparison of the base plan and an enhanced plan to make a
determination in that regard, much as the EDA reviews concept plans in its
redevelopment districts to determine whether there is a basis for the Company to
proceed with a formal request for financing assistance. The Finance Committee of
the City Council has been delegated the responsibility of doing the preliminary
review of such applications and making a recommendation to the EDA in their
regard.
• Representatives of CSM will be present at Monday's meeting to make a brief
presentation and respond to questions regarding their request for financing
assistance in support of implementation of the enhanced development plan.
Financing Option
• As noted above, staff and the City's fiscal consultant have not identified funding
sources for public assistance other than tax abatement.
At its meeting of June 17, 2014, the City Council amended the City's Public Financing
Assistance Policy to permit consideration of tax abatement for redevelopment and
reuse projects under certain circumstances. The nature of those circumstances was
not defined and the Committee and Council have the latitude to recommend and
determine whether a specific property and /or project's circumstances create a
justification for use of the tool.
The updated policy provides for abatement of the incremental City tax revenue only.
For information purposes, Ehlers was asked to prepare an analysis of the impact of
abating the base as well. The relative difference was small and CSM understands
that option is not contemplated in the analysis presented to the Committee at this
time.
As a part of the determination to abate taxes, the City has the option of collecting
the fiscal disparities contribution from the property before determining the
abatement or spreading it against other properties in the City and not collecting it
from the subject property. The former option in this case is estimated to generate a
15
present value of $3.4 million and the latter option is estimated to generate $5.5
million. The option of whether to consider payment of fiscal disparities outside a
property subject to abatement has not been discussed by the Committee or Council
to date. An analysis of the relative impact of that option is included in the
attachments below.
ISSUES FOR CONSIDERATION:
• In consideration of the original expectations defined for Lockheed Martin and
prospective purchasers of the property, is there a basis for the City to consider
public financing assistance at this time for any of the base costs of development of
the site?
• Are there aspects of the CSM enhanced plan that would justify public financing
assistance? If so, what would they be?
• If some level of public financing assistance is determined to be justified, are the
circumstances sufficient to justify collecting fiscal disparities from outside the
Central Park Commons property?
• If public financing assistance were to be considered for any aspect of the project,
what conditions or expectations should the City place on the assistance relative to or
in addition to the site layout enhancements?
ATTACHMENTS:
• CSM Business Financing Assistance Preliminary Application on pages through
• Email from CSM listing observations following meeting with Staff regarding project
assumptions and revenue analysis on pages Ko through t9
• CSM presentation outline and elevation /perspective graphics on pages
through ,X;
• Proposed Base Central Park Commons Site Plan on page
• Proposed Enhanced Site Plan on page CY
• January 14, 2014 City Council Workshop Meeting minutes on page J?)
• February 12, 2013 City Council Workshop Meeting minutes on pages (,q through
M
• Memo from Ehlers and Associates regarding projections of tax abatement revenue
on pages 31 through
• Ehlers and Associates spreadsheet regarding tax impacts on other properties if Fiscal
Disparities were collected outside the CSM property on page
• Memo from City Attorney regarding the review of business financing applications on
pages
• Letter from the City to Lockheed Martin regarding business financing for prospective
buyers on pages -';!5 through ?)I
City of Eagan
c/o Jon Hohenstein, Community Development Director
3830 Pilot Knob Road
Eagan, MN 55122-1897
RE- Application for Business Assistance Financing
Dear Mr. Hohenstein:
CSM Corporation is excited about its plans for development of Central Park Commons on the
former Lockheed Martin site. We believe that in partnership with the City of Eagan we can
make the development very special, beyond the retail-commercial component. We believe there
is an opportunity to provide direct corm-nunity benefit from the project, including space for
public gatherings and related infrastructure. To do so will require financial assistance from the
City. We are pleased to present you with an application for business assistance financing, a
proposal that we believe will meet both GSM's objectives and the broader community objectives
for the City.
Overview
This application represents the culmination of more than 30 months of discussion between CSM
and the City of Eagan for the redevelopment of the Site. Its location and size make the Site one
of the prime redevelopment opportunities in the region, Using the Central Commons Area
Planning as a framework, we have explored a variety of land use and site design alternatives
through prior applications, the small area study (January 2013), and finally the concept plan
work session with the Council (January 2014). We have gained a clear understanding of the
public objectives while conveying market and financial factors that will influence the project.
This process has put us fi-i a unique position of being ready to propose a market-driven project
that we believe can meet the objectives of all stakeholders, but also allowing us to submit a plan
that achieves even loftier goals, but requires business assistance.
These efforts have led to the proposed development plan and the related application for
business assistance financing. We believe there is an opportunity to provide direct community
benefit from this entim-tced. project. The purpose of this letter is to describe the need for this
assistance and the related public benefit. It is designed to facilitate review by City Staff and its
consultants. We are in the process of preparing additional materials to be used in discussions
500 Washington Avenue South, Suite , V)
3000 Minneapolis, Minnesot a 5 4,15
Telephone: (610 395-7000 Fax: (612) 395.7001 www.csincorp,net
001
Central Park Commons
Business Assistance Financing Application
April 22, 2014
Page 2
with the City Council. We anticipate preparing supporting information related to the assistance
request based on initial discussions with Staff.
Central Park Commons Development Scenarios
To assist the City with evaluation of our request, the application presents information for two
different scenarios. The scenarios frame the rationale for public financial assistance for this
project. For each of the two scenarios, we provide project costs and source of funding, rental
information, and estimated net income and return on equity.
Scenario A - Market BasedlNo Assistance
Scenario A represents the market based development plan. CSM is ready to proceed with the
construction of this project without financial assistance from the City, Scenario A will result in
the highest quality, most -unique, commercial destination in this trade area. It is an attractive,
trend - setting design that addresses the majority of the City's development goals for the Site. We
do not want our request for assistance with Scenario B to overshadow the fact that we are ready
to move forward with Scenario A
Scenario A is a high quality commercial center consisting of 434,400 square feet of retail, office
and restaurant uses. The development plan incorporates feedback received from the City and
strives to meet community development objectives:
• Mixture of new businesses and goods/services for Eagan residence.
• High quality building and site design that will enhance the area.
• Site design that promotes pedestrian movement within the development, external
connections with transit and trails, and connections to Central Park and the surrounding
area.
• Advanced stormwater management features that also serve as site amenities.
• Distribution of uses to encourage shared parking.
® Public gathering places integrated into the site design encouraging longer site visits.
Scenario B - Proposed DevelopmentIPublic-Private Partnership
Scenario B reflects the desire of both CSM and the City of Eagan to create the best possible
development on the Site. The key difference between Scenario A and Scenario B is the
construction of structured parking for approximately 400 spaces and enhanced public plaza
space. Scenario B effectively replaces industry-standard quantities of surface parking with
below grade ramp parking and allows greater development density on the Site, keeping with
I
Central Park Commons
Business Assistance Financing Application
April 22, 2014
Page 3
the City of Eagan's guiding documents. This creates a more urbanized, unique design that
further enhances the sense of "place" and creates public gathering opportunities amongst
closely grouped buildings. These outcomes are not possible by relying solely on surface
parking.
The addition of structured parking and plaza space allows the project to transform from a high
quality commercial area into a distinct destination with greater benefits for the community.
Among the enhancements that are possible with the replacement of surface parking are:
• More intense use of this critical development site. Scenario B provides 50,200 square feet
of additional development producing more businesses, jobs and tax base.
0 Structured parking reduces surface seas of parking and creates a more cohesive
character due to higher densities,
• Creates more street-lined buildings and urban realms, additional landscaping, better
building orientation, more connecting public places and addition of plaza area.
• Enhanced restaurant "district" that strengthen the identity of the project as a destination
and distinguish it from other commercial areas.
• Superior pedestrian movement within the site. Parking opportunities are closer to
storefronts,
Overall, Scenario B succeeds in. achieving the majority of development principles set forth in the
Central Commons Area Plan, Small Area Study and Council work session. TI-lese characteristics
are more clearly illustrated with the development graphics that are being created and will be
provided to the City in the near future.
The ability to achieve these benefits is constrained by financial realities. The additional
development does not produce sufficient income to offset the 23% (approximately $19.7 million)
in additional project costs. Scenario B is not financially feasible without financial assistance from
the City.
This situation is comparable to the experience of the City with the Cedar Grove redevelopment,
Structured parking was needed to achieve similar development objectives, At Cedar Grove, the
City issued bonds and financed construction of the City-owned district parking facility, which
included a developer contribution. Our request does not seek a City-financed/City-owned
parking structure with the related risk. Instead, we seek financial assistance needed to offset the
additional project expense at a level needed to make the project financially feasible.
P
Central Park Commons
Business Assistance Financing Application
April 22, 2014
Page 4
Requested Assistance
We request for financial assistance in the amount of $10,000,000 (present value), This amount
represents the additional funding needed to create a return on equity equivalent to the market
based development plan in Scenario A. We believe this assistance can be generated through the
use of tax abatement from the City's portion of property taxes from the project on a pay-as-you-
go basis over a 20 year period. CSM assumes all risk in this approach. We will make the
additional up-front investment and receive reimbursement only if the project produces
sufficient property value to support the projected tax abatement. We would welcome a
discussion of other strategies the City has for achieving this result.
Attachments to this letter contain the pro forma and supporting materials for both Scenario A
and Scenario B and demonstrate the need for the requested financial assistance.
Summary
We appreciate the City's interest in this project and your willingness to consider this request.
We view this request as a public/private partnership, rather than financial assistance. CSM is
ready and willing to build the project described in Scenario A. The financial partnership with
the City will allow the project to produce greater benefits for the community. We look forward
to continued discussions on how to use this investment to achieve the greatest possible public
benefit from the redevelopment of the Site.
We believe the next step should be a meeting with City Staff (and its consultants as -needed) to
discuss their initial review of this request. It is important to understand and address Staff
concerns before proceeding to the City Council consideration process. Please contact John
Johannson or Drew Johnson to schedule a meeting or to request any additional information
needed to facilitate the review.
With regards,
CSM Eagan, L.L.C.
John Johannson
Manager
Central Park Commons
Business Assistance Financing Application
April 22, 2014
Page 5
Attachments:
A. City application form
B. Preliminary plans and drawing of project
C. Estimated Return on Equity, Scenario A and Scenario B
D. Consolidated Construct Cost Schedule, Scenario A and Scenario B
E. Scenario A Pro Forma Income Statement
F. Scenario B Pro Forma Income Statement
G, Scenario A Projected Annual Net Rent by Tenant
H. Scenario B Projected Annual Net Rent by Tenant
ID'
CITY OF EAGAN
APPLICATION
BUSINESS ASSISTANCE FINANCING
GENERAL INFORMATION.
Business Name: CSM Properties _ - -� x V Date: t ri122, 2014
Address: 500 Washington Avenue S., Ste 3000, Minneapolis, MN 55415
Type (partnership, etc,): Corporation
Authorized Representative: John Johannson Phone: 612 -395 -7055
Description of Business: heal estate development.
Legal Counsel: CSM General Council, Attorney: Joel Reitz
Address: 500 Washington Ave. S., #3000, Phone: 612- 395 -7162
Minneaolis, MN 55415
FINANCIAL BACKGROUND
1, Have you ever filed for bankruptcy? No
2. Have you ever defaulted on a loan commitment? No
3. Have you filed for conventional financing for this project? No
4.. List financial references:
a) * pr iect will be 100 % equity and private financed, References provided as necessai W„
b) ._,. . ........ ............... ........ .__.._.. ,.._ ..._ ...... .... ... .............. ................ --. M. ....... _._ m_.._.......... �......................_..�..._ .�._......._..........-
C) ....................................................._.......................... .................._.__...__..._ __._....._...... _ . __ .... _.... .__._..._..................__.� __ ......._................ .............._................ ...,_ .._
5. Have you ever used Business. Assistance Financing before? n/a
If yes, what, where and when? n/a
PROJECT INFORMATION
1. Location of proposed project: Yankee Doodle and Pilot Knob, Parcel 10- 79951 -01 -029
2. Amount of business assistance requested: $10,000,000
3. Need for business assistance: See explanation in acco letter
4, Present ownership of site: Owned b „applicant
5. Number of permanent jobs created as a result of project: 1500 -1700, 400 construction jobs
6. Estimated annual sales: Present: n/a
Future: n/a
7. Market value of project following completion: $60,750,000 (estimated taxable market value)
8. Anticipated start date:
FINANCIAL INFORMATION
2014
Completion date: _O end fa112016
1.
Estimated project related costs:
a)
Hand acquisition
$17,1116,000
b)
Site development
$24,234,501
c)
Building cost
$46,697,600
d)
Equipment
$0
e)
Architectural /engineering fee
$2,320,000
f)
Legal fees
$600,000
g)
Off -site development costs
$13,551,995 includes all other costs not included above)
'T'O'TAL:
$104,520,096
M,
2. Source of financing:
oJ Private financing institution
h) Requested public assistant funds
o) Other public funds
d) Developer equity $94,
TOTAL: $104,520,096
lanm submitting the business financing assistance application and related support documentation for the
purposes of requesting consideration of public financial support nfmy project. l understand that the
application fee ia non-refundable and that the escrow deposit vviU ba used for City staff and consultant
costs associated with the review uf this application. The balance of the escrow may hc returned ifthe
costs of review are less than the original deposit. T'ba escrow may he partially refundable 1y the request
for assistance is withdrawn, Refunds will be made at the discretion of the City Council and be based on
the costs incurred by the City prior to the withdrawal of the request for assistance. If the initial application
wyunovv is insufficient 0n cover all City costs of review, l will bc responsible for additional deposits.
SIGNATURE
Applicant's
PLEASE INCLUDE:
I. Preliminary financial commitment from bank.
l Plans and drawing of project.
3. Background material ofcompany.
4. Pro Forma muu1ymim
5. Financial statements.
6. Statement of property ownership 'orcontrol,
7. Payment of application fee o[$l,O8O
A. Escrow payment $lU\O0V and Escrow Agreement
)c5
Jon Hohenstein
From: Johannson, John <John.Johannson @colliers.com>
Sent: Wednesday, June 04, 2014 5:09 PM
To: Jon Hohenstein
Cc: Drew Johnson (djohnson @csmcorp.net); Dave Osberg; Tom Pepper; Rusty Fifield
( rfifield @northlandsecurities.com); Tammy Omdal (tomdal @north land securities.com); Coyle,
Peter J.
Subject: Finance Committee Meeting
Jon,
I have had a chance to gather comments and ideas from our team as to your inquiry regarding the
observations you have outlined below.
While our initial goal has been to have the hearing, and listen to the policy findings of the Committee, we
obviously recognize the challenges and limitations that face the City and Committee. it is evident that we are
not going to find a way to close the roughly $10 million gap. Reality is setting in -- and we know it is time to
consider all options.
Our thoughts, as of now:
1. All parties now agree and recognize that the tax abatement tools cannot on their own close the
gap. The various levels of tax abatement capture result in widely varied assistance. The only path to a hopeful
compromise will be some sharing of the effort by capturing some additional tax basis and some changes to the
plan /request.
2. We have been looking into changes that could retain the special features of the project, and retain the
unique design and ambience, but result in cost savings. We believe we could reduce the size of the parking
structure, slightly change the tenant mix in the center (not as many high parking demand users in the Village,
fewer or different food users, reducing the size of the sit -down restaurants along Pilot Knob Road, limiting
certain higher parking demand users in the proposed multi -story office /service building, etc.). While these
steps could reduce cost, they can also act to reduce or limit rent — so it is a careful trade -off for us. The
enhanced plan needs to meet a critical mass.
3. We have analyzed the parking structure costs, and we have found that there is a close to direct
correlation between total cost and a reduction in the size of the structure. Many times, a reduction in the size
of a structure does not correlate directly to an equivalent reduction in cost. In this case, with the high
excavation and soil export cost, and the high structural cost, there is a nearly direct cost relationship, As such,
if we were to reduce the size of the parking structure by 20 %, we could also reduce the cost by roughly
20%. We believe that a reduction in the range of 20% could still allow us to retain the unique nature of the
project and design -- while delivering a meaningful reduction in the size of the economic gap. The challenge
we would then tackle is to retain rental income upon the reduction in the size of the parking structure.
4. The desirable features of the enhanced plan come from the large and continuous public spaces, unique
site plan design, shared parking structure available for public events, and urbanized layout and close proximity
of the Village and adjoining buildings. As such, we believe that in order to preserve these features, we need to
find a way to construct and accommodate all the structures shown on the plan. Taking away leasable area in
the Village will only enlarge the gap and impact the unique characteristics of the plan. This goal will present a
bit of a leasing challenge for us that we are trying to analyze now.
As such, in general, there are some adjustments that we are willing to pursue. If, following the Finance
Committee meeting and our analysis of their recommendation, we are able to more closely identify the size of
the gap, then we will have a clear understanding of the size of the challenge and we can then determine what
changes to the plan would be necessary. If it results in a plan that is still financially feasible, then we would
i
MCP
proceed with a revised version of the enhanced plan to Plan Commission and City Council. Alternatively, if we
cannot find a feasible path, then we would proceed to Plan Commission and City Council with a plan without a
parking structure. Without pre - judging the response from the Finance Committee, I believe we are unlikely to
head to Plan Commission and City Council with a request that does not meet the recommendation of the
Finance Committee.
We are hopeful that this process is heading down the path of a true working partnership — where the
developer wants to deliver a unique and attractive project that provides atypical public benefit, and the City
can find value in the non - traditional features of the project. To that end, we will keep trying to come up with
some alternatives to close the gap W.. and we would ask that the City also consider any and all other options
that could help close the gap. I think our intentions are mutually supportive.
Please let us know your thoughts.
Thanks.
JJJ
John J.Johannson
Welsh Companies/Colliers International
4350 Baker Road, Suite 400
Minnetonka, MN 55343
952- 897 -7750 — phone
952 - 842 -7750 — fax
John.Johannson @colliers.com
JJohannson @welshco.com
From: Jon Hohenstein [ mailto :JHohenstein @cityofeagan.com]
Sent: Friday, May 30, 2014 2:02 PM
To: Johannson, John
Cc: Drew Johnson (djohnson @csmcorp.net); Dave Osberg; Tom Pepper
Subject: Finance Committee Meeting
John,
Thanks for the call this morning and the chance to visit. I shared the schedule challenges next week and the week
following with Dave and he and I exchanged emails and realized the Mayor, Council and some staff have conflicts most
of that week, too. With the qualification we'd work together to get the complete packet together so we'd be ready to
go during the week of the 23rd, what days that week would work for you? Please let us know.
To clarify another point, since you indicate that you understand that abatement of the base is unlikely, but want the
chance to discuss the merits of the enhanced project in the context of an abatement district where fiscal disparities is
collected outside the district, is it fair to infer from that CSM would be able to proceed with the enhanced development
plan if the public financing assistance were in the $5.5m -$6m range as outlined by the Ehlers analysis of the various
assumptions? Please let us know that, too. Thanks.
Jon
Jon Hohenstein I Director of Community Development I City of Eagan
City Hall 13830 Pilot Knob Road I Eagan, MN 55122 1651- 675 -5653 1651-676-5694 (Fax) I jhohenstein ).cityofeagan.com City of Eap
THIS COMMUNICATION MAY CONTAIN CONFIDENTIAL AND /OR OTHERWISE PROPRIETARY MATERIAL. and is thus for use only by the intended recipient.
2
l9
Central Park Commons
Public Finance Committee Meeting
June 23, 2014
Applicant's Discussion Outline
1. Outline of Proposed Development Project
A. "Market" site plan.
B. "Enhanced" site plan.
C. Colored project renderings.
2. Public Benefit and Enhancements with "Enhanced" Plan
A. Public spaces.
B. Pedestrian, bike, and path interconnectivity
C. Connectivity of public and special places.
D. Urbanized Village in a typically suburban design trade area. Increased density can only
happen with structured parking.
E. Unique spaces for themed holiday improvements and decorations.
F. Increased density, sense of place, benches, a place to linger, etc.
G. Public access to parking —structure and surface. 4th of JUly, special events, nearby
Community activities.
H. Welcoming to art shows, groups, music, holiday vendors, etc.
I. Improved synergy and unique appeal to unusual tenants /operators.
J. Dynamic sign opportunities — public announcement, etc.
3. Satisfaction of Key Elements of Small Area Study
A. Both plans address bulk of goals contained in the Central Commons Area Plan.
B. Comparison chart — grading both site plans.
4. Developer's Application /Request
A. Will do Market Plan without any financial assistance from City.
B. Enhanced Plan is not financially feasible without City assistance - $10M gap to achieve yield
as market plan.
C. Maximum possible assistance using Tax Abatement is not sufficient to eliminate gap.
D. Consultants for the City and Developer agree on methodology, calculations, and findings.
E. Potential adjustments to Enhanced Plan by Developer can narrow gap, but will still need Tax
Abatement assistance that includes the Fiscal Disparities contribution.
TAI
A
Jon Hohenstein
From: Johannson, John <John.Johannson @colliers.com>
Sent: Thursday, June 19, 2014 7:32 PM
To: Jon Hohenstein
Cc: djohnson @csmcorp.net; Rusty Fifield ( rfifield @northlandsecurities.com); Tammy Omdal
( tomdal @northlandsecurities.com); Coyle, Peter J.; Natina James
(Natina. Jam es @rsparch.com); Bob Lucius (bob.lucius @rsparch.com); Bill Wittrock
(bill.wittrock @rsparch.com); mkronbeck @alliant- inc.com
Subject: Central Park Commons - Color Renderings - for Finance Committee Meeting, June 23, 2014.
Attachments: 140619 — CPC — finance renderings only.pdf
Jon,
Here is a set of 6 colored renderings depicting the proposed Central Park Commons development.
Please not that there are two new ones that we have not presented previously;
1. The first one depicts the streetscape side of the proposed grocery anchor. We think it is important to depict
that there is no loading or drive lane proposed behind the building at this prominent intersection — and we
have endeavored to create a desirable and welcoming pedestrian entry into the property from the
intersection.
2. The second new one depicts the corner of Yankee Doodle and Pilot Knob. Given the grade change on the site,
and the necessity to place the floor level of these buildings substantially below the grade of the adjoining
streets, we have been careful to make sure that there are no views onto the roof of these buildings from the
adjoining roads — and we also have prepared a design that extends the parapet walls of this corner building
substantially higher than is typical. Our rendering depicts our effort to not have it look merely like a high
parapet stem wall, but rather an attractive and dynamic elevation that appears as an at- grade, human scale
structure. We can quickly describe it in more detail next week.
Finally, I believe that from these renderings, we can describe what we be different between the two
alternative site plans. Without the parking structure, several of these renderings would not change at all —
and that is our goal. We want the council to find it to be attractive whether we move forward with the Market
plan or the Enhanced plan......
Let me know if you have any suggestions or questions.
I will bring multiple several sets of colored 11x17 copies to the meeting as well.
We will also have colored site plans, and a couple of other items for you tomorrow.
Thanks.
JJJ
John J. Johennson
Welsh Companies /Colliers International
4350 Baker Road, Suite 400
Minnetonka, MN 55343
952- 897 -7750 — phone
952 -842 -7750 — fax
John.Johannson@colliers.com
JJohannson@welshco.com
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09
Special City Council Minutes
January 14, 2014
Page 2
Mayor Maguire thanked the legislative delegation for attending the meeting and thanked them for their
service to the community.
V. CENTRAL PARK COMMONS APPLICATION
City Administrator Osberg introduced the item noting the applications were scheduled to be heard by
the City Council at its meeting of November 19, 2013. At that time, the developer's representative
submitted a letter requesting a continuance of the item to a Council workshop meeting to permit
discussion of the proposed development outside the context of formal actions on the applications. The
Council accepted the request and the matter is being discussed at the January 14, 2014 workshop.
Osberg noted no action is expected at this time; rather, the matter is being presented for discussion and
direction. City Attorney Dougherty overviewed the parameters for the discussion in consideration of the
fact that a development application is in process.
CSM representatives Peter Coyle and John Johannson provided a presentation on the base plan that had
been reviewed by the Advisory Planning Commission (APC) and two plans that represented possible
responses to the comments by the APC for the Council to review and provide feedback. Bob Lucius with
RSP provide a presentation on some of the details of the third plan that further addresses the needs of
creating a gathering space, pedestrian linkage and enhancing the shopping experience in a "village"
form. Mr. Lucius noted the plan includes an outdoor events area within the village with additional
outdoor patio seating for the restaurant areas in the northeast corner of the development.
The Council discussed the plans and provided feedback. The Council was in agreement that Plans 2 and
3 have potential and are closer to the Council's vision. Councilmembers expressed interest in the
revised internal road and pedestrian layout as means of providing better connections within the
elements of the site. Councilmember Hansen encouraged the developer to explore transit options for
the site with the Minnesota Valley Transit Authority. Councilmember Tilley and Hansen agreed it was
Important to see more green space. The Council was in agreement they would be open to having a
conversation on public financing and public assistance to this project. The Council agreed the potential
interaction with the northeast corner and the city park across the street was important. The Council
discussed the possibility of residential uses on this site and it was noted that there is already a
substantial amount of residential development in the surrounding area. Mayor Maguire also noted the
possibility to see options of what the site could look like over the next 20, 25 or 40 years.
Councilmember Bakken noted that a project will need to address a range of issues to justify a
Comprehensive Guide Amendment. Mayor Maguire added that the key themes from the February 2013
workshop were the importance of a project being distinctive as compared to other retail developments,
particularly as it pertains to pedestrian improvements and walkability.
Mayor Maguire summarized the discussion by noting that the second plan, which would not require
public financing assistance, could be an option for the site. He reiterated that the City could also be
open to exploring the possibility of public financing through the financing assistance application process
as it could pertain to the third, more intense, development plan.
The Council took a 10 minute break.
�M
MINUTES
SPECIAL CITY COUNCIL MEETING
TUESDAY, FEBRUARY 12, 2013
5:30 P.M.
EAGAN ROOM — EAGAN MUNICIPAL CENTER
City Council members present: Mayor Maguire, Councilmembers Fields and Tilley. Councilmember
Bakken and Hansen were absent.
City Staff present: Assistant City Administrator Miller, Director of Community Development Hohenstein,
and City Attorney Dougherty.
1. ROLL CALL AND ADOPTION OF THE AGENDA
Councilmember Tilley moved, Councilmember Fields seconded a motion to adopt the agenda as
presented. Aye:3 Nay:0
II. VISITORS TO BE HEARD
There were no visitors to be heard.
III. CENTRAL COMMONS AREA SMALL AREA STUDY — LOCKHEED MARTIN PROPERTY
Director of Community Development Hohenstein introduced the item noting on December 4, 2012, the
Council authorized Hoisington Koegler Group (HKG) to prepare a Small Area Study to determine the best
future uses for the site. As part of its preparation, HKG prepared of the City's Comprehensive Guide
Plan update, HKG prepared several concept examples of ways in which existing developments within the
area might be intensified or modified if the opportunity arose. No plan was prepared for the Lockheed
Martin parcel as part of the update, because there was no expectation at the time that the company
would sell the property.
Hohenstein noted in preparing the Small Area study, HKG considered not only the City's Comprehensive
Guide Plan Central Commons Area Special Area Plan, but also background from the analysis of the
original application by the owner, CSM, for the redevelopment of the property. Hohenstein also noted
one of the assumptions that HKG used in all of their concept scenarios is a single Pilot Knob access to the
property on the west as was identified in the County Pilot Knob Road Corridor study.
Bryan Harjes with Hoisington Koegler Group gave a presentation on the Small Area Planning Study —
Lockheed Martin site, presenting a number of alternative site concepts to help identify priorities for the
property.
CMS Corporation Representative Tom Palmquist, addressed the Council noting he appreciated their
feedback. Palmquist noted CSM is committed to moving forward with developing the property and
responded to the different concepts presented.
Director of Community Development Hohenstein noted the list of questions in the Council packet are
based on the policies listed in the comprehensive guide are intended to guide the Councils discussion.
Special City Council Minutes
February 12, 2013
Page 2
The Council responded to the questions noting their preference for a development of the site to be
pedestrian friendly and with a mix of uses that is well integrated with the surrounding community.
Councilmembers Fields and Tilley also agreed it was important to avoid a sea of asphalt, and cultivate a
diversity of forms on the property by including buildings of varying heights. The Council said they place
a high priority on the human scale policies including pedestrian orientation and public gathering spaces.
Council had no expectation as to the maximum size /footprint of individual buildings including single
story and multi- story, leaving that up to the developer, although it was noted that there would be
concern if there were more than one large individual anchor business. The Council agreed that inclusion
of one or more public streets within the development would be desirable and feel it is important to
appropriately screen service and loading areas from major roadways. The Council was also in favor of
structured or underground parking as a means of reducing the parking fields (of asphalt) in the
development.
There was no other business to be heard.
IV. OTHER BUSINESS
VI. ADJOURNMENT
Councilmember Tilley moved, Councilmember Fields seconded a motion to adjourn at 7:45 p.m.
Aye:3 Nay:O
Date
Mayor
Clerk
WR
Memo
To: Jon Hohenstein, City of Eagan
From: Rebecca Kurtz and Mark Ruff, Ehlers
Date: June 19, 2014
Subject: Abatement Summary and Options for Central Park Commons
In response to CSM's application for business assistance for redeveloping the former Lockeed
Martin site, we have provided a summary of tax abatement and updated three scenarios for
providing abatement assistance for the Central Park Commons project.
Tax Abatement
Tax abatement is a financing tool that allows individual taxing entities to capture and use all or a
portion of its local property tax revenues within a defined geographic area to finance a specified
project or improvement. It allows each major taxing jurisdiction (city, county and school district)
to choose to contribute its share of the taxes and limit the abatement in any manner it determines
appropriate. In practice it is a rebate rather than an exemption from paying taxes.
Many communities use abatement in a way similar to tax increment, so the property continues to
pay its taxes in full; the community continues to receive the taxes currently generated; and, the
increase in taxes after development is directed to a specific project.
Tax abatement is a more flexible tool than tax increment and can be used to finance development
and redevelopment projects, public infrastructure, and public facilities. In addition, while not
widely used, entities have the ability to abate existing taxes.
Term and Limits
If all three taxing entities participate in abatement, the maximum term is 15 years. However, if
only one or two entities participate, the term is a maximum of 20 years. In any one year the
TOTAL amount an entity may abate may not exceed the greater of 10 percent of the entity's net
tax capacity or $200,000. The 2014 net tax capacity for Eagan is 66,384,787; therefore, the City
may abate up to $6,638,478, less the assistance provided to DataBank, annually.
Abatements are special tax levies. The amount of the abatement must be added to the total levy
for the current year, and must be included in the proposed levy for Truth in Taxation as well as
the certified levy.
Em -84
EHLERS
nW LEADERS IN PUBLIC NNANeg
Minnesota.
Offices also in Wis,,00nsin and Illinois
�
,
phone 651-697-8600
fax 661 -691 -8555
tall troo € 00- 559, 1171
wir .ehler -ilk ,COCK
3060 Gantre Pointe Drive
Roseville, MN 66113 -1192
Process to Establish Abatement
After identifying the details of the abatement -- including the amount of assistance, term and the
parcels for abatement -- a public hearing with at least a 10 day published notice must be held by
each entity granting the abatement. The entity is then required to adopt a resolution approving
the abatement. The adopting resolution must include the following: (1) Term of the abatement;
(2) Statement of public benefit expected to result from the abatement; (3) Required findings; and
(4) Schedule of repayment of deferred taxes (if applicable).
Abatement Options
Based on CSM's application and discussions with the City, we have drafted three scenarios for
abatement assistance: (1) Fiscal disparities from within the district; (2) Fiscal disparities from
outside the district; and (3) Abatement of the increase in value of the enhanced project. With
each of the scenarios we have used the following assumptions:
■ Tax abatement district established in 2014
• Development completed in one phase in 2015 (18 months after establishment of the
district)
• Completed market value of $72,690,000, ($150 /SF) based on discussions with the Dakota
County Commercial Assessor on May 13, 2014.
• City only abatement of the increase in taxes
• Term of 20 years
• No inflation
• Present value rate of 5.5%
The following chart outlines the estimated abatement:
We will be at the meeting on June 23 to address any questions. Thanks.
Annual
Total
Present Value of
Assistance
Assistance
Assistance
Fiscal Disparities within District
$298,218
$5,964,352
$3,400,649
Fiscal Disparities outside of District
$487,043
$9,740,867
$5,553,876
Abatement of the difference between the base
$35,096
$701,914
$400,205
proposal and enhanced development
We will be at the meeting on June 23 to address any questions. Thanks.
Issuance ce Services
L -1 I.. ..... E J ............. ........................... ............................... .. ............................... ...............................
Number of Years
Average Interest Rate
Estimated Bond Rating
City of Eagan, Minnesota
Estimated Tax Impact
June 19, 2014
Excludes Fiscal Disparities Ratio
0
0.00%
mULum net iax ,apauny - ruyaum tvm 00,089,101
Debt Levy @ 105% - Average 1645554
Estimated Tax Capacity Rate:
Payable - 2014 Without Proposed Bonds 38.250%
Payable - 2014 With Proposed Bonds 38.537%
Estimated Tax Rate Increase 0.287%
With FD out
Tax Capacity
65, 891,125
Levy New Rate
25, 392,181 38.537%
The figures In the table are based on taxes for new bonded debt only, and do not include tax levies for other purposes. Tax increases shown above are gross
increases, not including the impact of the state Property Tax Refund ( "Circuit Breaker') program. Many owners of homestead property will qualify for a refund,
based on their income and total property taxes. This will decrease the net tax effect of the bond issue for many property owners.
Prepared by Ehlers 6/19/2014
r�
is EHLERS
LEADERS IN PUBLIC FINANCE
TAX
IMPACT ANALYSIS
„ ;
Estimated ; :.
; Market Value
Taxable
Net Tax .-
Current
Proposed ' -
Proposed
Type of Pro a
Market Value. _
.' Exclusion
Market Value .
:Capacity, , -, -
- City Taw
Taz Increase *.%
City Taz:-
$ 50,000
$ 20,000
$ 30,000
$ 300
$ 114.75
$ 0.86
$ 115.61
75,000
30;000
45,000
450
172.13
1.29
173.41
100,000
28,240
71,760
718
274.48
2.06
276.54
125,000
25,990
99,010
990
378.71
2.84
381.55
Residential
150,000
23,740
126,260
1,263
482.94
3.62
486.56
Homestead
175,000
21,490
153,510
1,535
587.18
4.40
591.57
200,000
19,240
180,760
1,808
691.41
5.18
696.59
225,000
16,990
208,010
2,080
795.64
5.96
801.60
250,000
14,740
235,260
2,353
899.87
6.74
906.61
300,000
10,240
289,760
2,898
1,108.33
8.30
1,116.64
$ 100,000
$ -
$ 100,000
$ 1,500
$ 573.75
$ 4.30
$ 578.05
200,000
200,000
3,250
1,243.13
9.31
1,252.44
Commercial /Industrial
300,000
300,000
5,250
2,008.13
15.05
2,023.17
400,000
400,000
7,250
2,773.13
20.78
2,793.90
500,000
500,000
9,250
3,538.13
26.51
3,564.63
1,000,000
1,000,000
19,250
7,363.13
55.17
7,418.29
Apartments
$ 200,000
$
$ 200,000
$ 2,500
$ 956.25
$ 7.16
$ 963.41
(4 or more units)
300,000
300,000
3,750
1;434.38
10.75
1,445.12
500,000
500,000
6,250
2,390.63
17.91
2,408.54
$ 150,000
$ 23,740
$ 126,260
$ 1,381
$ 528.35
$ 3.96
$ 532.31
400,000
23,740
376,260
2,631
1,006.47
7.54
1,014.01
Agricultural
500,000
23,740
476,260
3,131
1,197.72'
8.97
1,206.70
Homestead *"
600,000
23,740
576,260
3,631
1,388.97
10.41
1,399.38
800,000
23,740
776,260
4,631
1,771.47
13.27
1,784.74
1,000,000
23,740
976,260
5,631
.2,153.97
16.14
2,170.11
Agricultural
$ 1,500
$ -
$ 1,500
$ 15
$ 5.74
$ 0.04
$ 5.78
Non - Homestead
2,000
2,000
20
7.65
0.06
7.71
(dollars per acre)
2,500
2,500
25
9.56
0.07
9.63
$ 100,000
$
$ 100,000
$ 1,000
$ 382.50
$ 2.87
$ 385.37
Seasonal /Recreation
200,000
200,000
2,000
765.00
5.73
770.73
Residential
300,000
300,000
3,000
1,147.50
8.60
1,156.10
400,000
400,000
4,000
1,530.00
11.46
1,541.46
The figures In the table are based on taxes for new bonded debt only, and do not include tax levies for other purposes. Tax increases shown above are gross
increases, not including the impact of the state Property Tax Refund ( "Circuit Breaker') program. Many owners of homestead property will qualify for a refund,
based on their income and total property taxes. This will decrease the net tax effect of the bond issue for many property owners.
Prepared by Ehlers 6/19/2014
r�
is EHLERS
LEADERS IN PUBLIC FINANCE
D Dougherty, Molenda, Solfest, Hills & Bauer P.A.
OUGHERTY MOLENDA
ate. Attorneys I Advisors
MEMORANDUM
To: Jon Hohenstein, Community Development Director
From: Mike Dougherty
Date: 10/31/2013
Re: Finance Committee Discussion
7300 West 1.47th Street
Suite 600
Apple Valley, MN 55124
(952) 432 -3136 Phone
(952) 432 -3780 Fax
www.dmshb.com
This Memo is in response to your inquiry regarding the extent that the members of the Finance
Committee may have discussions with CSM in light of the pending applications submitted by
CSM for land use approvals. The Finance Committee is charged with conducting a preliminary
review of CSM's request for public financing assistance in the redevelopment of the Lockheed
Martin site.
As in any review or comment on a land use proposal or application that may come before the
City Council or the Economic Development Authority, the members of the Finance Committee
cannot state how the member may vote on the issue prior to the matter being heard by the full
body. This caution stems from the fact that the court has found that often times the City Council
acts in a quasi-judicial manner when making decisions affecting an applicants' property rights.
Due process requires that a fair and impartial public hearing be held.
Unlike its land use requests, CSM's application for public financing (i.e. tax abatement) does not
affect its property rights. CSM's application involves a purely legislative function of the City
and in such role, the members of the Council may seek out and /or comment upon any
information that is related to the legislative function (whether to grant tax abatement).
While the line is not necessarily bright, it is our opinion that the members of the Finance
Committee may inquire about or comment upon any aspect of CSM's applications that may be
directly or indirectly affected as a result of potential tax abatement. Such statements may include
comments on the public policy of tax abatement in general and to what degree of public benefit
is derived by its use in connection with CSM's proposal. The overall caveat being that the
members of the Finance Committee continue to refrain from articulating how they would vote on
the pending land use applications.
If you have any questions, please give me a call. Otherwise, I will be attending the Finance
Committee meeting and will be able to answer any questions.
cc: Dave Osberg
3q
Mike Maguire
February 10, 2011
Mayor
Paul Bakken
Tom Green and Mary Pat Barr
Cyndee Fields
Lockheed Martin
Gary Hansen
100 S. Charles Street, Suite 1400
Meg Tilley
Baltimore, MD 21201
Council Members
Dear Tom and Mary Pat,
Thomas Hedges
City Administrator
Thank you again for the telephone update regarding Lockheed Martin's revised approach to
receiving and considering proposals for the sale and reuse of the company's property at the
intersection of Pilot Knob and Yankee Doodle Roads in Eagan. It is exciting to know that
the property has attracted so much interest so soon, When we first spoke, we had
understood you intended to list the property with a broker to test the market in the property's
current configuration. Prospective buyers could then approach the City to discuss or
Municipal Center
propose reuse and /or redevelopment alternatives prior to making formal offers to purchase,
3830 Pilot Knob Road
Our current understanding is that you are receiving multiple offers for direct purchase and
Cagan, MN 55122 -1810
that you expect that the sale Gould occur prior to the submittal of requests for zoning or
651.675.5000 phone
development changes, even though the prospective buyer may be basing its offer on those
651,675.5012 fax
assumptions.
651.454.8535 TDD
We have shared that it has been our experience that most prospective owners and developers
Maintenance Facility
who intend to propose changes requiring City approvals make contingent purchase offers.
3501 Coachman Point
You have shared that it would be your preference to complete the sale without
Eagan, MN 55122
contingencies, so the company will not be involved in any entitlement considerations,
651.675,5300 phone
Understanding that, we need to put in writing the expectations we discussed last week and
651.675,5360 fax
refer to the City's Comprehensive Guide Plan policies for the Central Commons Area and
651.4.54.8535 TDD
ask that you forward this information to the prospective buyers, so they do not make
proposals on the basis of inaccurate or mistaken perceptions,
www.oltyofeagan.com
. The Lockheed Martin property is currently guided Major Office and zoned Research
and Development. The City of Eagan and State of Minnesota have valued the
presence of high quality, primary sector jobs at this location for forty -five years and
we will work closely and cooperatively with an owner, business or businesses who
would continue to use the site in the same way, For that reason, a buyer who intends
The Lone Oak Tree
to reuse or market the property as a corporate facility or campus within those
The symbol of
parameters would be able to do so provided any modifications to the site conform to
strength and growth
the related zoning, subdivision and land use standards,
In our community.
• A buyer who intends to propose other uses of the property would need to apply for
both a Comprehensive Guide Plan Amendment and a rezoning of the site, neither of
which may be assumed to be approved prior to the submittal and consideration of a
formal application, In order to be successful, such an application would not only
need to conform to the City Council's vision for the area, but substantially exceed
ordinary expectations for form and function of new development,
Lockheed Martin has indicated its desire not to be part of such an entitlement
process, If the company were to modify that intention, the City may be open to an
alternative concept plan review preceding the submittal of formal applications, but
that option would not be available to a subsequent owner individually,
• While infill or redevelopment of the Lockheed Martin site would require a Plan
Amendment and rezoning noted above, the Comprehensive Plan does define policies
for infill and redevelopment within the City's Central Commons Area, For a plan
for redevelopment or infill other than office uses to be part of an amendment and
rezoning application that the City might consider, it will need to;
• "Support dense, mixed -use development with a range of retail, office,
services, medium /high - density residential, employment and public spaces."
While the 50 acre Lockheed Martin site may not be large enough to
incorporate all of those elements, it is large enough to support the kind of
mixed use development contemplated by the Comprehensive Plan and a
proposal that would only provide for one or two of those elements would not
be consistent with the Comprehensive Plan,
• "Require high - quality design of sites and buildings that creates a cohesive
identity for the Central Commons Area and offers flexibility that can respond
to change in uses over time, Strive for pedestrian -scale buildings that are
two to four stories in height," The Comprehensive Plan creates an
expectation for vertical development throughout the Central Commons Area,
Nowhere would the need to meet that expectation be greater than at its major
intersection,
• "Strategically place buildings toward the street with parking behind to help
create clearly defined streets and the public realm," and "Utilize a shared or
district parking approach to minimize the amount of spaces and size of
parking lots, Where possible use structured or underground parking," The
property is uniquely situated along two major roadways and Central
Parkway, The fifty acre site would permit such a design scheme in either an
infill or redevelopment approach. The current building already has an
underground parking element,
j�Q
• "Capitalize on opportunities to create and enhance pedestrian connections,"
The Comprehensive Plan is supportive of strong integration of pedestrian and
transit connectedness, particularly in the context of the MVTA Transit
Station, Central Park, the Ring Road and the City's roadside transportation
trail system, The Comprehensive Plan is not supportive of relying only on
traditional, suburban single use plans or design schemes,
• Address other Comprehensive Plan policies for the Central Commons Area,
• The Pilot Knob and Yankee Doodle Road intersection is one of the most highly
traveled, highest visibility locations within the community and the City understands
its attractiveness to prospective buyers who may have a number of different visions
for it. Because the site is being made available as a result of a company decision to
close the facility and relocate operations outside of Eagan, it would not be
appropriate for the City to provide public financing assistance for the redevelopment
of the property, That would unfairly subsidize the relocation at the expense of the
City's remaining taxpayers. The price of the property will need to be appropriate to
permit the buyer to reuse the property in a way that will be acceptable to the City as
well as economically feasible for the new owner,
This information is being provided, not to diminish the process you are pursuing, but to
provide clarity and transparency to the process for the company and the prospective buyers,
Please forward this information to them or provide us with a list of proposer contacts, so we
can forward it directly to them,
Working together, we are confident we can help Lockheed Martin and a future owner of the
property position it for the future to continue to be the strong, positive anchor it has been for
the community to date, Please contact me if you have any questions regarding this
information or our request to distribute it further,
Sincerely,
Jon Hohenstein
Director of Community Development
Cc: Tom Hedges, City Administrator
Agenda Memo
June 23, 2014 Finance Committee Meeting
IV. Fire Relief Association Pension Contribution Agreement
ACTION TO BE CONSIDERED:
➢ Provide direction on terms of a proposed agreement for 2015 -2019.
BACKGROUND:
➢ The City contributes a fixed amount per year per volunteer firefighter toward their
pensions under a defined contribution pension plan. An additional contribution is made
annually to cover the Relief Association's administrative expenses (e.g., annual audit,
board member salaries).
➢ Historically, the City has entered into five -year contribution agreements with the Relief
Association.
➢ The current five -year agreement expires at the end of 2014, and included 3% increases
annually in the amount per firefighter, and 2% increases annually in the administrative
expenses contribution.
In April 2014, the City received a proposal from the Relief Association's Pension
Committee for a 2015 -2019 agreement. City Administrator Osberg and Finance Director
Pepper have met twice with representatives of the Pension Committee to discuss.
➢ After those discussions, and a subsequent meeting of the Pension Committee, the
Pension Committee is agreeable to the City Administrator's suggestion to present a
proposal to the Finance Committee that would mirror the current agreement: 3%
annual increase per firefighter, and 2 % annual increase for administrative expenses.
ATTACHMENTS:
➢ Existing agreement covering the period 2010 -2014 on pages through
GONTRII UTION'. AGREEMENT
T141S AGREEMENT is made and effectivc as of this — day of September, 2009, by
and between The City of.I✓agan, Minnesota (the "City "), and the Eagan Firefighters Relief
Association (the "Association "), hercinafter the "Parties,"
RECITALS
1, Dofinitipns, As used herclo, the following terms shall have the meanings set forth
below, and where sold meanings arc Intended, the terms shalt be capitalized.
1.1, "Plan Year" shall mean the annual period from January 1 to December 31.
1,2. "Contribution Amoant" shall mean the contribtttionto the hund, as
detoini ned In Paragraph 4 of this Agreenlont, which includes any money
the City receives from the State of Minnesota or its subdivisions as well as
money from. City tax revenues,
1.3, "Fire State Aid" shall paean any amounts received or receivable during a °
Plan Year by the City from the State of Minnesota pursuant to Chapter 69
of the. Minnesota Statutes,
9 4 "Fund" shall mean the Association's "Special Fund" as dewed by statute,
2. Term and Effective pate. This agreement is effective as of January 1, 2010, and
shall remain effective for five (5) consecutive Plan Years, until December 31,
2014,
3. e'er Contribution. A I
2010 $6,330
l Fr16
20X1 vkki rCrvl VL6 t I-C ��ia -o,
2012 $6,716
2013 $$,917 J f
2014 $7,125 ,
4, ft i1 eztt pates, The City will pay tho Contribution Amount to tho Fund for each
plan year in three payments, On July 15, the City shall make the first payment of
the contribution amount which shall be an amount equal to the allocation of
contributions to Association members' accounts calculated for June 30 of the Plan
Year under the Association's bylaws, reduced by 50% of a reasonable estimate of
the Fire State Aid that will be received for tlae Plan Year. The second payment
skull consist of fluids received by the City pursuant to State Statute, The balance
awed of the contribution amount, shall be made by the City on January 15
following the egad of'tile, Plan Year,
t2
S, Year
Ex e�nses,
2010.
ttAdministrative
,'p� $29,050
j
2011
, $29,631 Y
2012
$30,223
2013
�� $30,828
2014
$31,444
6, Miaa.ellanoc�us,
6.1. Governing Law, Venue, This Agreement and the rights of the fatties
shall be governod by and construed and enforced in accordance with the
laws of the State of Minnesota without reference to the choice of law
doctrine of such state, Each of the Parties hereto consents to venue of any
suit or action wider or with regard to this Agreement in an appropriate
court with jurisdiction. in Dakota County, Minnesota,
6.2. Cons cti og; So orgbil' , Wherovor possible each provision of this
Agrc=ezkt is to b4 interproted in such a manner as will be effective and
valid under applicable law, but if any provision of this Agreement is
p;robibited by or invalid under applicable law, such provision will be
ineffeetive only to the extent of such. prohibition or invalidity, without
invalidating the rornainder of such provision or the rotnaining provisions
of this Agreement.
6.3. Further Assuxances, The Parties hereby agree to execute any inatrutnent
and to perform any acts that pray be necessary or proper to Garry out the
purposes of this Agreement, including specifically,the execution by the
Association of shah receipts of payment as the City rn.ay request,
6,4. Amendment, This Agreement may be amended or modified only by a
writing executed by all of the Parties hereto,
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above,
THE CITY OF EAGAN, MINNESOTA
By:
Mike Magnure, Mayor
And by;
Maria. Petersen, Cleric
q0
EAGAN FIREFIGHTERS
RELIEF ASSOICI TI
By,
Title;—,�—j &