04/20/2004 - City Council Finance CommitteeTLI}
AGENDA
FINANCE COMMITTEE MEETING
TUESDAY
APRIL 20, 2004
5:00 P.M.
CONFERENCE ROOMS 2A & AB
I. ROLL CALL AND AGENDA ADOPTION
H. REVIEW CEDAR GROVE TIF FINANCING
III. OTHER BUSINESS
IV. ADJOURNMENT
TO:
FROM:
DATE:
MEMO
City of Eagan
HONORABLE MAYOR GEAGAN AND COUNCILMEMBER
CARLSON
CITY ADMINISTRATOR HEDGES
APRIL 16, 2004
SUBJECT: FINANCE COMMITTEE MEETING / APRIL 20, 2004
Per the direction of the finance committee at their April 15 meeting, a finance committee
meeting has been scheduled for Tuesday, April 20 at 5 p.m. in Conference Rooms 2A&B.
The following item of business is scheduled for discussion.
REVIEW CEDAR GROVE TIF FINANCING
At the March 9, 2004 City Council workshop, the City Council directed that the
discussion regarding the Cedar Grove TIF Financing be directed to theCit Council's
Finance Committee for further review. Enclosed on pages _V_ through' are the
minutes from the March 9, 2004 City Council workshop, along with the packet material
that was sent out in advance of the March 9 meeting.
Per the request of Councilmember Carlson, enclosed on pages,lthrough4Z are the
minutes and the packet material from the March 12, 2002 City Council meeting, at which
time the City Council reviewed the financing options for the Cedar Grove
Redevelopment Area.
City Administrator Hedges, Director of Administrative Services VanOverbeke, and
Director of Community Development Hohenstein will be present at the April 20
committee meeting to further discuss and review the Cedar Grove TIF Financing with the
Committee.
/s/Thomas L. Hedges
City Administrator
MINUTES
SPECIAL CITY COUNCIL MEETING
MARCH 9, 2004
5:30 P.M.
EAGAN ROOM — EAGAN MUNICIPAL CENTER
City Councilmembers present: Mayor Geagan, Councilmembers Carlson, Fields, Maguire
and Tilley.
City staff present: City Administrator Hedges, Assistant to the City Administrator Lord,
Director of Administrative Services VanOverbeke, City Planner Ridley, Director of Community
Development Hohenstein, Director of Communications Garrison and Chief Financial Officer
Pepper.
I. ROLL CALL & AGENDA ADOPTION
The City Council discussed the meeting date for the first meeting in April.
Councilmember Tilley moved; Councilmember Fields seconded a motion to change the first
meeting in April to Wednesday, April 7. Aye: 5 Nay: 0
City Administrator Hedges distributed correspondence from the CEO of EcoLab Inc. which.
made known the move of EcoLab's Research, Development, and Engineering division to Eagan.
Councilmember Maguire moved; Councilmember Tilley seconded a motion to adopt the
agenda. Aye: 5 Nay: 0
II. VISITORS TO BE HEARD
There were no visitors to be heard.
III. BECT 5 -YEAR PLAN & CIP
City Administrator Hedges introduced the item stating that Burnsville/Eagan Community
Television (BECT) has been supplying community programming since 1984. Hedges noted that the
Burnsville City Council asked for a 5 -year BECT financial plan including a first ever Capital
Improvement Plan modeled after the way both cities do their CIP's. Hedges added that the Finance
and Communication staff from both cities have met for the past several months to develop the plan
in consultation with a technical expert and H.R. staff. City Administrator Hedges introduced Mark
Hotchkiss, Community Programming Specialist, Will Craig of Ehlers & Associates, and Jim Skelly,
Communications Director for the City of Burnsville. Together with Communications Director
Garrison, a presentation was provided on BECT's four main areas of responsibility: 1.) government
Special City Council Minutes
March 9, 2004
Page 2 of 5
meetings, 2.) public access, 3.) community news and events, and 4.) operations. Will Craig of
Ehlers & Associates provided a presentation on the findings of the study regarding equipment
replacement needs at BECT, including the need for digital technology in a cost effective manner.
The City Council discussed revenue opportunities and the need for equipment replacement at
BECT. There was City Council consensus that the equipment needs to be replaced in order to
maintain volunteers and a level of service currently being provided to both Burnsville and Eagan.
The City Council provided direction that the BECT budget should be adjusted downward to 8.0
FTE to keep the positive fund balance and address critical equipment replacement needs. The
Council requested that staff and a plan be put in place for the Council's review. The Council also
noted that they are comfortable with more aggressively pursuing sponsorships and revenue
opportunities. Lastly, the Council asked that the Telecommunications Commission and staff
prepare recommendations on a policy regarding what type of commercial messages the City will
accept. The Council asked that the policy be brought back for the City Council's review. The City
Council requested that when the Operating Budget and Capital Plan are brought back to the City
Council, that the information also include the effects of the staffing reductions. The City Council
asked that the Operating Budget not be placed on the Consent Agenda until the Council has had the
opportunity to review it.
IV. DEVELOPMENT PERFORMANCE STANDARDS
City Administrator Hedges introduced the item noting that at the January 22, 2004 Council
Retreat, the City Council directed that Development Performance Standards be placed on a future
workshop agenda for further discussion. At that time, Hedges added, the Council discussed the
concept of being a "Community of Choice".
Director of Community Development Hohenstein lead a discussion with the City Council on
the following performance standards: l.) finish material and architectural standards; 2.) closer
controls on general signage, temporary signage, and window signage; 3.) required roof -top
mechanical screening; 4.) site lighting standards; 5.) other performance standards as directed by the
City Council. Community Development Hohenstein noted that per the Council's direction, the APC
is currently addressing window signage. The City Council agreed with staff's recommendation to
require roof -top mechanical screening and site lighting standards.
The City Council discussed the Performance Standards and noted that staff should work with
the business community to address the issues. It was also noted that the City has trails/sidewalks
that do not connect well and backs of parking lots are often empty. The Council asked for ways in
which pedestrian traffic could be more easily moved. The Council also discussed use of
landscaping that results in more textured landscaping with higher filtration. The Council
encouraged more creative parking layouts.
The City Council directed staff to explore the performance standards that are applied in other
demand communities for possible consideration in the future. The Council also added that they
have a concern about excessive signage and painted window signage.
FA
Special City Council Minutes
March 9, 2004
Page 3 of 5
V. PERFORMANCE ZONING CONCEPTS
City Administrator Hedges introduced the item noting that at the City Council Retreat on
January 22, 2004, the Council asked staff to research performance zoning concepts, including
density bonuses, as a means of encouraging high quality, higher density developments or other
desirable development characteristics without shifting the market for all properties by simply
rezoning to higher densities or reducing other standards or requirements. Hedges noted that staff is
looking for direction with respect to further investigation of additional performance zoning concepts
to encourage innovative and desirable development alternatives for build out, in -fill and
redevelopment within the community. 11
Community Development Director Hohenstein and City Planner Ridley provided definitions of
performance zoning, noting that under performance zoning, land development and use is regulated
by a series of performance standards that mitigate undesirable specific impacts of any proposed
development. It was noted that due to its complexity, labor intensiveness and the question of
control, the appeal of performance zoning is somewhat waning. However, elements of performance
zoning can be blended with traditional zoning.
The City Council discussed the benefits and consequences of performance zoning concepts,
including its relationship to plan developments. The City Council also noted that better control is
needed, such as what types of specific criteria the Council would want to target (housing type,
amenities, housing value, etc.) and what standards would the Council be willing to consider
adjusting for those criteria.
The City Council directed staff to bring back a list of desirable features that could be available
to developers for further discussion by the City Council.
VI. CEDAR GROVE REDEVELOPMENT DISTRICT FUNDING DISCUSSION
City Administrator Hedges introduced the item, noting that the City Council previously gave
direction to staff to prepare a summary of the financial information associated with the Cedar Grove
Redevelopment District.
Community Development Director Hohenstein provided the City Council with a presentation
on the background of the Cedar Grove Redevelopment Area financing. Hohenstein added that the
current development finance model for the Cedar Grove area projects the tax increment may be able
to support about $3 million of the public improvement costs, and added that it will be necessary to
find other sources to fund the balance of the project costs. Hohenstein then provided a list of
options that the City Council may wish to consider, including: 1.) improvement bonds, 2.) major
street fund, 3.) tax increment, and 4.) tax increment bonds.
The City Council discussed the options and noted that they had some questions on the
assessments. Council provided direction to refer the discussion on the Cedar Grove financing to the
Finance Committee.
The City Council recessed at 7:25 p.m.
Special City Council Minutes
March 9, 2004
Page 4 of 5
VII. RECOMMENDATIONS / FINDINGS FROM THE PUBLIC WORKS COMMITTEE
RE: ALUM DOSING
City Administrator Hedges introduced the item noting that per the direction of the City Council
at the December 8, 2003 Council Workshop, the Public Works Committee, consisting of
Councilmember Fields and Maguire, met on two occasions (January 27, 2004 and February 10,
2004) to review research and costs associated with alum as well as review alternatives and a
proposed implementation timeline for the use of alum on Fish Lake. Hedges added that the Council
is asked to consider the short and long-term recommendations of the Public Works Committee,
including: 1.) the reintroduction of alum dosing at Fish Lake; 2.) the formation of a water quality
task force; and 3.) determine whether to formulate a public information process to formally consider
whether to resume alum dosing at Fish Lake. City Administrator Hedges thanked the Public Works
Committee for all of their work on this issue and noted that in the audience was Eric Macbeth,
Water Resources Coordinator, and Jay Riggs, Urban Conservationist from Dakota County.
The City Council discussed the recommendations of the Public Works Committee including
short-term and long-term options and the potential need for a water quality task force.
Councilmember Maguire provided an overview of the information and recommendations that
came out of the Public Works Committee. It was also noted that 159 residents were noticed about
the March 9 workshop, at which time alum dosing would be discussed.
Water Resources Coordinator Macbeth, at the request of the Public Works Committee,
provided a Power Point presentation showing alternatives to alum.
Following the presentation, Councilmember Maguire noted that staff has done a commendable
job in acquiring information about alternatives to alum. It was noted that while alum dosing is not
necessarily a good long-term strategy, it is an effective short-term strategy.
The City Council discussed the need for a task force to look at the long-term water quality
needs of the community.
The City Council discussed the need for JP -47.2, the settlement basis that would be used for
alum dosing. The Council discussed the access options on to Mr. McCarthy's property should the
project proceed a head. The City Council directed the City Attorney to continue working with Mr.
McCarthy's attorney in order to get a comfort level with Mr. McCarthy regarding potential
easements and the need for a construction road. At the recommendation of the Public Works
Committee, the Council directed that a public hearing be scheduled at an upcoming regular City
Council meeting to consider the reintroduction of alum dosing at Fish Lake and the formation of a
water quality task force.
The City Council thanked Water Resources Coordinator Macbeth and Jay Riggs of Dakota
County, as well as Councilmember Fields and Maguire who spent a considerable amount of time as
a Committee on this issue.
Special City Council Minutes
March 9, 2004
Page 5 of 5
VIII. OTHER BUSINESS
City Administrator Hedges noted that Director Garrison returned from his meeting with
Burnsville, and the City of Burnsville endorsed the same recommendations as the Eagan City
Council in regard to the BECT 5 -year plan and CIP.
IX. ADJOURNMENT
The City Council meeting adjourned at 8:30 p.m.
0
►11
SPECIAL CITY COUNCIL MEETING
MARCH 9, 2004
5:30 PM
EAGAN ROOM-EAGAN MUNICIPAL CENTER
I. ROLL CALL AND AGENDA ADOPTION
II.
VISITORS TO BE HEARD
III.
BECT 5 -YEAR PLAN & CIP
IV.
DEVELOPMENT PERFORMANCE STANDARDS
tO� V.
PERFORMANCE ZONING CONCEPTS
u() 50 VI.
CEDAR GROVE REDEVELOPMENT DISTRICT FUNDING PLAN
7:30 P.M.
VII. RECOMMENDATIONS / FINDINGS FROM THE PUBLIC WORKS
COMMITTEE RE: ALUM DOSING
VIII. ADJOURNMENT
11
Agenda Memo
March 9, 2004 Special City Council Meeting
VI. CEDAR GROVE REDEVELOPMENT DISTRICT FUNDING DISCUSSION
DIRECTION TO BE CONSIDERED: To provide staff direction with respect to the
preparation of a permanent funding plan for the Cedar Grove Redevelopment District
using one of the ALTERNATIVES outlined below.
FACTS:
•
The City Council previously gave direction to staff to prepare a summary of the
financial information associated with the Cedar Grove Redevelopment District.
The purpose of this discussion item is to provide a discussion of the current
financial status of the district and long term financing alternatives. The long term
o
financing question involves confirmation of a funding plan for expenditures made
�®
to date to establish a base line for moving forward with additional property
acquisition and redevelopment negotiations with prospective developers.
p`4 •
The Cedar Grove Redevelopment Project is the culmination of discussions and
planning activities that date back many years. In order to facilitate the
redevelopment, the City of Eagan has taken two significant steps that are at
critical points and should be addressed before additional redevelopment activity
can be undertaken.
•
The first step was the implementation of a series of road and right of way
improvements to increase traffic capacity, ease access to and through the area,
provide for storm water management and treatment and enhance the appearance
of the streetscape in the area. Certain funding sources were identified as a part of
the feasibility study process for these projects, but an ultimate funding plan was
not finalized. The improvement projects are now at the point at which final
funding would ordinarily be addressed by the City Council.
•
The second step was to create a tax increment financing district to permit new
development in the area to offset costs of certain improvements and the
acquisition and assembly of certain properties for redevelopment purposes. From
the outset, it was noted that the tax increment district could only generate a
portion of the funds necessary to support the improvement and redevelopment
activities and that the generation of funds was contingent upon certain
assumptions regarding the timing and intensity of development and the actual
costs of acquisition, demolition, land preparation, land write down and return on
investment for private development partners. The original requests for proposal
and property owner negotiations resulted in the project's first two developments,
Keystone and Nicols Ridge, which are tracking with the original development
timelines. It also resulted in a development relationship with United Properties
for the Class A'project on the north side of Hwy 13. The next phase of
redevelopment activity through the second RFP process will determine the extent
to which TIF funds will be generated and required for implementation.
r7
Agenda Memo
March 9, 2004 Special City Council Meeting
Cedar Grove Financing
-2-
The primary project financing issue relates to the cost of public improvement
within this area including Project 800 and 759R. The original cost of public
improvements was estimated at $3 - $4 million. The current estimated cost is
approximately $12 million including property acquisition. A number of factors
have increased the costs including:
❑ In order to avoid duplicating the cost of acquiring land for redevelopment the
City has acquired entire parcels required for roadway development even if
only portions of the parcels were needed and the property owner was
agreeable to the acquisition - $4.7 million (Amount also includes other
properties acquired for redevelopment purposes only).
❑ Streetscape elements have been added to the original project - $1.6 million.
❑ Additional improvements have been added to increase capacity at the
intersection of Highway 13 and Beau d'Reau Drive - $1 million.
❑ Fly Ash Removal and Other — $1.7 million.
• The issue to be resolved is how this project will be financed in the long term.
el 0`11 Initially, the plan was to assess a portion of the public improvement cost for the
new development. If available, tax increment would also be_used to pay a portion
of this cost. The current development finance model for this area projects that tax
increment may be able to support about, $3 million of the public improvement
cost. It will be necessary to find other sources to fund the balance of project
costs. It is also possible that new developments will demand more assistance than
• the assumptions have identified. Options that have been considered include:
t
1. Improvement Bonds. This option was presented to the City Council at a
meeting in February of 2002. At that time the recommendation was to assess
about $2 million of project cost to the development and finance the balance as
part of an improvement bond debt levy that would be paid from the City as a
whole. At that time the Council chose not to proceed with this option.
Subsequent to this discussion, the City Council also determined that current
property owners within this area should not be assessed through the normal
Chapter 429 process. Since an improvement bond requires at least 20% of a
project to be assessed, this option is no longer viable .
2. Major Street Fund. Allowing for projects approved in the current caprt
improvement program, the Major Street Fund has a projected) T \f N�
approximately $ 7.4 million at December 31, 2004. The Fund was established
early in Eagan's high growth period to assist in funding street reconstruction
projects and assist with selected new roadway projects, primarily by financing
oversizing and collector costs. This fund could pay for a greater portion of the
Cedar Grove improvements if the Council were to apply it to other project
costs. Use of
Agenda Memo
March 9, 2004 Special City Council Meeting
Cedar Grove Financing
-3-
these funds without a predictable repayment plan and schedule would
jeopardize currently scheduled or potential future city roadway projects.
3. Tax Increment. The EDA has established a tax increment district for the
Cedar Grove area. Public improvements are a qualified tax increment
expense. Therefore, the City could use tax increment to pay for the public
improvements. The City has previously directed Ehlers to prepare a
projection of financial performance for this project. This projection indicates
that the development will be able to support a maximum of about $3 million
in public improvement costs. The balance of revenue from increment and
developer land payment will be needed to pay for land assembly (land costs,
relocation, demolition and environmental remediation). Until these funds
would be collected, it would be necessary to continue to temporarily finance
costs to date, until new development results in the creation of increment
revenues.
4. Tax Increment Bonds. State statutes permit the issuance of tax increment
bonds if at least 20% of the debt service will be paid from increment. The
balance of the debt service may be paid from the City's debt levy (from the
City's entire tax base). Given current projections, tax increment bonds could
be issued to cover the project costs, however it is projected that some portion
of the bonds would need to be supported by the City's general debt levy. To
the extent that increment was not needed for direct assistance to
redevelopment projects, it could be applied to reduce the debt levy.
• Resolving the long term funding issue is important for two reasons. First, the
method of paying for public improvements impacts redevelopment financing.
Developers will want this information when preparing development proposals.
Second, the City continues to express interest in purchasing land within the
redevelopment area to assist with redevelopment and business relocation.
• In addition to addressing the long-term project funding issues, the Council
directed staff to analyze the potential cost for acquiring the remaining private
mobertv within the redeve onment area an to nrenare an uwated proiect tune
anmterested developers.
• Without doing professional appraisals of the properties, an estimate of acquisition
cost is extremely speculative. As a surrogate, staff developed a methodology
under which two known values were compared — the total cost of acquisition for
individual properties to date and their market value for tax purposes. By
extrapolating that multiplier to the market values of other properties, a very rough
estimate can be generated. The actual cost of future acquisitions will depend on a
variety of factors, including the actual costs of relocation of the occupant
businesses, which depend upon the nature of the business, the scale and ease of
im
6)
Agenda Memo
March 9, 2004 Special City Council Meeting
Cedar Grove Financing
-4-
relocation of their equipment and other business specific factors. Therefore the
assumptions from this type of analysis must be heavily qualified.
The original project timelines developed as part of the Cedar/13 Study anticipated
redevelopment in five-year blocks over a period of twenty years. An updated
timeline will depend upon the responses of proposing development firms as to
their perceptions of the market, their capacity to meet it and the willingness of the
City to adhere to or adjust its vision in response to the market perceptions.
Therefore, staff is providing a timeline through the negotiation of updated pre -
development agreements with the selected developer(s), with the understanding
that the redevelopment timeline from that point forward will be dependent upon
the developer selection process.
ISSUES:
• The scope of the public improvements and associated property acquisitions to
improve access to and through the area and to enhance the streetscape in the area
was expanded beyond the original assumptions for the project. While the City has
pursued additional funding sources including CDBG and State Cooperative
Agreement, the other potential revenue sources, including projected TIF proceeds
have remained flat and the collectability of assessments have been limited. While
active redevelopment has begun and momentum appears to be building to begin
the redevelopment of the retail core of the area, updated TIF projections indicate
that approximately $3 million in TIF proceeds may be available for public
improvement costs to date.
• A number of alternatives are outlined below to permanently finance the project
balance. To the extent that an alternative is selected that diminishes the reliance
on TIF revenues to cover expenditures to date, the City will be better positioned
to actively pursue additional property acquisitions. The City will be in a better
position to negotiate redevelopment agreements with prospective developers and
pursue higher quality projects, if a large proportion of the tax increment they may
generate can be committed to acquisition, relocation, demolition and other means
of controlling land costs.
• A fixed timeline is available for the sale of TIF bonds for the expenditures to date.
If this alternative is to be pursued, it will be important to take steps in that
direction in the near future.
• As a part of the Council's direction, staff is to develop a revised project timeline.
In addition, the Council has authorized the preparation of new requests for
proposal to permit consideration of updated proposals for the sub -districts and,
hopefully, attract a master developer who will be able to coordinate and phase
redevelopment of the entire area. These two directions are closely linked in that
the schedules included in the proposals will define the timeline from the RFP
process forward. While we had hoped to have the draft RFP available as a part of
967
Agenda Memo
March 9, 2004 Special City Council Meeting
Cedar Grove Financing
-5-
the background for this meeting, other priorities have prevented staff from
completing that item. The attachments include an outline of a timeline for the
approval and distribution of the RFP, evaluation of the proposals and
implementation of new predevelopment agreements with a developer or
developers.
ALTERNATIVES:
To date the expenditures associated with the Cedar Grove Redevelopment District and
the related public improvement projects have been financed internally through the City's
investment fund. This is roughly equivalent to the interim financing that is used during a
construction project. The essential question is how can the Cedar Grove Redevelopment
District be funded in the long term in a way that best serves the community's interests
and preserves the City's options for financing and funding other projects in the future?
The following alternatives have been identified as possible means of permanently
financing or funding these expenditures:
• Confirm Existiniz Dedicated Fundinia Sources and Finance the Remainder throuah
TIF — Dedicated funding sources to date totaling $3,756,679 come from CDBG,
redevelopment land sales,, the Major Street Fund (at levels identified in feasibility
studies) and State Cooperative Agreement Funding. If no other funding sources
are identified, the remaining $9,041,891 would need to funded by tax increment
financing proceeds. In the hearings regarding the road improvement projects,
adjustments to the preliminary assessment rolls were adjusted down to $3,857,732
and the Council committed to the assessments only being collected,from new
development, not from existing property owners. To date, the primary source for
the collecting the assessments in redevelopment projects has been through the TIF
development agreements (Under the Nicols Ridge Development Agreement,
$1,065,986 of the assessment total is being paid from tax increment proceeds).
Therefore, while they can be shown as two separate line items, TIF assistance on
a project -by -project basis is the most likely source of payment of the remaining
assessments. As a consequence the two numbers have been combined to simplify
this alternative: For this approach to be viable, it will require future
redevelopment projects to generate at least $6 million more increment than is
currently projected for the district and that TIF assistance to the individual
projects break even on any revenues above that amount.
• Confirm Existing Dedicated Funding Sources and Make an Additional
Contribution from the Major Street Fund or Other City Revenue Sources — The
City could reallocate funds to cover the $9 million difference and permit TIF
revenues to be committed to redevelopment project assistance. This would place
the Cedar Grove project on a positive financial footing, but would substantially
reduce or require additional borrowing to support the number of major road
Agenda Memo
March 9, 2004 Special City Council Meeting
Cedar Grove Financing
-6-
projects or other capital improvement that the City could undertake in the years
ahead.
• Confirm Existing Dedicated Funding Sources and Sell a Tax Increment Bond in
the Range of $9-10 Million — The TIF bond would become a part of the City's
bonded indebtedness, primarily funded through the City's annual debt service.
The debt service for the bond would be reduced by available tax increment and all
other funding sources that may be secured in the future including increment in
excess of projections, proceeds from land sales for property already acquired,
eligible CDBG allocations and redevelopment grants. This alternative would
insure the permanent funding of the balance through the debt levy, but would
permit the maximum levy to be reduced to the extent that the redevelopment out-
performs projections or additional funding sources are secured. While it spreads
the cost of debt service over the entire City's tax base, it appears to offer the most
flexibility of the alternatives identified.
• Some Combination of the Above — Aspects of each alternative could be blended
to reduce the reliance on any one of them. For example a higher contribution
from City funding sources could permit the issuance of a smaller TIF bond. This
may present a more diverse approach to the situation, but would still be
accompanied by the qualifications associated with each. This option also remains
if the Council determines to sell the maximum possible bond at this time, and later
concludes that the debt should be served by other means, including a higher
contribution from other City funds. -
• Other — While this list frames the range alternatives that appears to be available' to
address the permanent funding issue, Council discussion may identify further
alternatives or variations that may be viable as well.
ATTACHMENTS:
• Project Cost Summary to date on page
• City Attorney brief regarding assessment collections on pages 61— too
• Potential property acquisition cost summary on pages
• Redevelopmeiat project timeline on page
• Analysis of cost of potential bond issue on pages o
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SEVERSON, SHELDON, DOUGHERTY
& MOLENDA, P.A.
TO: Jon Hohenstein, Community Development Director
FROM: Michael G. Dougherty, City Attorney
DATE: February 19, 2004
RE: Assessments in Connection with Cedar Grove Redevelopment Area
The potential with regard to the issues surrounding the Cedar Grove Redevelopment Area assessments
and financing for the installed public improvements continue to dominate the discussion regarding the
funding of the Cedar Grove Redevelopment Area's improvements. The following is an attempt to
address the issue of assessments and to place the discussion in a historical context. It is my
understanding that there are four City projects that comprise the Cedar Grove Redevelopment
improvements with an aggregate cost of approximately $6,824,072 excluding right of way acquisition.
These improvements have now been completed and following completion the City could act to levy any
assessments against the benefited property owners and certify the same to the County for collection.
A. Project 800R and Project 866
On April 2, 2002, the City Council, following a public hearing, approved project 800R, which included
local streets and utilities and streetscaping (the streetscaping improvements are those that were ordered
and approved with Project 866); but delete the six -lane expansion and the dual left turn lanes on
Highway 13. The Feasibility Report estimated the cost for Project 800R, including the streetscaping
now under Project 866, to be $10,080,400 with the deletion of the six -lane expansion and dual left turn
lanes on Highway 13, the estimated cost of the improvements was reduced by $2,520,400 to a total
estimated cost of $7,560,000. The total cost of Project 800R was intended to be spread as assessments
against the properties within the area depicted in the Feasibility Report prepared by SRF Consulting
Group, Inc. dated March 25, 2002. Following the public hearing, the Council noted that the pending
assessment roll should be reduced to $3,428,267. The pending assessment roll was reduced by the
Council on May 7, 2002, to reflect an assessable amount of $3,428,267.
Following the completion of the improvements under Project 80OR and Project 866, the estimated cost
for the improvements is $3,568,310 and $1,566,523 respectively for a total of $5,134,833.
On March 20, 2001, the City held an informational neighborhood meeting with respect to Project 800R.
During the meeting, staff was asked how long the pending assessments would be attached to the parcels
and how would the project get paid for if redevelopment does not occur. City staff responded that it is
unknown how long the assessment roll could be pending and that there was no plan to hold an
assessment hearing. Further, staff stated that the Council plans to reimburse street improvement costs
with development agreements as redevelopers submit plans. Staff suggested that the property owners
might ask the Council to reduce or remove the pending assessments if their property is not expected to
be redeveloped.
On page 14 of the Feasibility Report, it is noted that the preliminary assessments for Project 800R have
been developed for properties within the project area. "However, it is recommended that the proposed
assessments be collected as a Traffic Mitigation Improvement Fee with each development agreement
approved by the City as impacted properties are redeveloped." Similarly, on page 15 of the Feasibility
Report, it is stated that:
IV. Revenue Sources
It is anticipated that funds to cover the cost of City Project No. 800R would be provided
by the City of Eagan Major Street Fund. City staff has concerns about the impact that the
significant cost of the project may have on the major street fund. Due to the nature of the
improvements being primarily for the redevelopment of the area, consideration should be
given to the reimbursement of the Major Street Fund by funds collected through a Traffic
Mitigation Improvement Fee established within the redevelopment area.
As development agreements are prepared for new developments within the Cedar Grove
Redevelopment Area, the preliminary assessment of the impacted parcels could be
included as Traffic Mitigation Improvement Fees. Payment of such fees should directly
reimburse the Major Street Fund.
Since the timing of any redevelopment of the area is difficult to predict, as is the ability
of the City to substantiate full benefit of the Traffic Mitigation Improvement Fees, the
collection of less than fifteen percent (15%) of the related project costs over the next ten
years may be a realistic expectation.
The language cited above is consistent with the discussion by the City Council at the April 2, 2002
meeting. In response to concerns raised by affected property owners, individual Council members,
though not including their sentiments in a motion, indicated that the existing property owners would not
be assessed, but rather the assessments would be collected from the redevelopers.
B: Project 759R — Beau d' Rue Drive Street Improvements
On December 11, 2001, following a public hearing, the City Council approved Project 759R consisting
of street reclamation, median construction, concrete curb and gutter repairs, storm sewer improvements,
sanitary sewer improvements and a bituminous trail as set forth in the Feasibility Report prepared by
SEH dated November 8, 2001. The Council's motion for approval included that a trailway be included
along the entire length of Beau d' Rue Drive, that the name of Beau d' Rue Drive be changed to Cedar
Grove Parkway, and that the median be shortened. The anticipated cost of the project was $901,500.00.
Property owners within the area of Beau d' Rue Drive as shown in the Feasibility Report were included
in the assessment area. The Feasibility Report noted that only the street reclamation and median
construction would be assessed against benefited property owners with a preliminary assessment roll
totaling $429,465. As noted on pages 158 through 161 of the Feasibility Report, properties would be
assessed different rates based on land use. It is my understanding that the cost estimated for the Cedar
Grove Parkway improvements totals $829,639. From the information provided, it is unknown as to how
much of cost relates to the street reclamation and median construction, the items that were anticipated to
be assessed.
15
C. Project 880 — Trunk Highway 13 Turn banes
On February 6, 2001, the Council approved Project 800R; however, due to a lack of approved State
funding for the addition of dual left turn lanes on north and south bound Trunk Highway 13 at Silver
Bell Road, that portion of the originally proposed improvements were deleted. On August 4, 2003, the
City Council approved a cooperative agreement with the Minnesota Department of Transportation that
would direct the City of Eagan as the lead agency in the reconfiguration of the intersection of Silver Bell
Road and Highway 13. The cooperative agreement provided for cost participation in the amount of
$540,000 from MNDoT for the proposed improvement. No notices were sent to adjacent property
owners indicating that the City intended to specially assess any portion of the costs for the
improvements. It is our understanding that the estimated cost of the improvement is $859,600, of which
no portion may be assessed against any benefiting properties.
In summary:
Project 880 - is not assessable
Project 759R — additional information is needed to identify the cost of the items that were anticipated to
be assessed, pursuant to the Feasibility Report. Secondarily, a benefit analysis would need to be done to
determine whether the anticipated assessments can be sustained.
Project 800R and Project 866 — it appears that the Council, at the time that it ordered the Project, did not
intend to certify the assessments against the existing property owners, but rather expressed an intent to
collect the potential assessments with redevelopment. While the term "assessments" is used in the
Feasibility Report and in the discussion in connection with the projects, it appears that the Council did
not intend the term to represent the type of assessments associated with Chapter 429 projects. That
would include public hearings regarding assessment rolls and the certification to the ,County for
collection. If this expression matches the Council's current direction, the Council may wish to establish
a policy that when tax increment financing is being made available in connection with the
redevelopment of the Cedar Grove area that a portion of the increment or the first dollars available from
the increment, be made available to the City for reimbursement of the cost associated with these
projects. As necessary, the policy can be varied or amended based upon the particulars of the proposed
redevelopment.
MGD/j It
Agenda Memo
March 9, 2004 Special City Council Meeting
Cedar Grove Financing
-2-
The primary project financing issue relates to the cost of public improvement
within this area including Project 800 and 759R. The original cost of public
improvements was estimated at $3 - $4 million. The current estimated cost is
approximately $12 million including property acquisition. A number of factors
have increased the costs including:
❑ In order to avoid duplicating the cost of acquiring land for redevelopment the
City has acquired entire parcels required for roadway development even if
only portions of the parcels were needed and the property owner was
agreeable to the acquisition - $3 million (Amount also includes other
properties acquired for redevelopment purposes only).
❑ Streetscape elements have been added to the original project - $1 million.
❑ Additional improvements have been added to increase capacity at the
intersection of Highway 13 and Beau d'Reau Drive - $1 million.
❑ Fly Ash Removal and Other — $4 million.
• The issue to be resolved is how this project will be financed in the long term.
Initially, the plan was to assess a portion of the public improvement cost for the
new development. If available, tax increment would also be used to pay a portion
of this cost. The current development finance model for this area projects that tax
increment may be able to support about $3 million of the public improvement
cost. It will be necessary to find other sources to fund the balance of project
costs. It is also possible that new developments will demand more assistance than
the assumptions have identified. Options that have been considered include:
1. Improvement Bonds. This option was presented to the City Council at a
meeting in February of 2002. At that time the recommendation was to assess
about $2 million of project cost to the development and finance the balance as
part of an improvement bond debt levy that would be paid from the City as a
whole. At that time the Council chose not to proceed with this option.
Subsequent to this discussion, the City Council also determined that current
property owners within this area should not be assessed through the normal
Chapter 429 process. Since an improvement bond requires at least 20% of a
project to be assessed, this option is no longer viable
2. Major Street Fund. Allowing for projects approved in the current capital
improvement program, the Major Street Fund has a current balance of about $
million. The Fund was established early in Eagan's high growth
period to assist in funding street reconstruction projects and assist with
selected new roadway projects, primarily by financing oversizing and
collector costs. This fund could pay for a greater portion of the Cedar Grove
improvements if the Council were to apply it to other project costs. Use of
113-
77
® city of eagan
TO: TOM HEDGES, CITY ADMINISTRATOR
MEMO
FROM: JON HOHENSTEIN, COMMUNITY DEVELOPMENT DIRECTOR
DATE: MARCH 5, 2004
SUBJECT: CEDAR GROVE REDEVELOPMENT LAND ACQUISITION COST
STUDY
The following information regarding potential acquisition costs for the remaining Cedar
Grove Redevelopment District properties was previously distribute in the summer of 2003.
Director of Administrative Services VanOverbeke, has completed the assembly of costs
incurred to date to acquire the 13 properties by the City and projected that information to the
other parcels in the TIF district.
The attachments include: 1) a map identifying the TIF district and each of the individual
parcels, 2) a spreadsheet illustrating the actual costs to date on the 13 parcels that had been
purchased by the City at that time, 3) a spreadsheet illustrating the potential projected costs
for the 62 parcels that are in the district under private ownership that are presumably to be
acquired for redevelopment at some future time (those costs are projected at both 2.0 and 2.5
times the Payable 2004 Estimated Market Value to establish a likely range of costs), 4) a
summary parcels previously owned by the City, under the ownership of the developer, or
not expected to be acquired, 5) combined information for all 83 parcels that cai be
aggregated as desired and 6) a summary of the projected potential cost of acquisition for the
properties between Nicols Road and Rahn Road.
This information is based on projections from the costs of properties already acquired.
Ultimate actual acquisition costs will depend upon the appraised value of each property at
the time of purchase and the actual costs of relocation of private property, which varies
dramatically on a property by prgperty basis.
W4
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EHLERS
& ASSOCIATES INC
To:
Jon Hohenstein, City of Eagan
®C From:
Jim Prosser, Ehlers & Associates
MRebecca
April 8 or 13, 2004
W
Kurtz, Ehlers & Associates
Date:
March 5, 2004
Subject:
Timeline for RFP Process for Cedar Grove Redevelopment
Per your request, the following is a tentative timeline for the RFP Process for the Cedar Grove
Redevelopment Area. This timeline estimates the process through signing a pre -development
agreement with the master developer. The master developer will provide the timeline for the
development of the area.
FActa♦1 r
Draft Request for Proposals due for distribution
to City Council
April 1, 2004
City Council reviews RFP and authorizes
distribution
April 8 or 13, 2004
Revisions made to RFP and RFP is issued
Aril 15, 2004
Developer Information Session
A ril 27, 2004
RFP Due to City
May 21, 2004
Evaluation and Summary of Responses due for
City Council packets
June 24, 2004
EDA/City Developer Review
June 29, 2004
EDA/City selectfirms to interview
July 6, 2004
EDA/City interviews with selected firms
July 26, 2004
Approval of Master Developer
August 17, 2004
Sign pre -Development Agreement
September 21, 2004
LEADERS IN PUBLIC FINANCE
3060 Centre Pointe Drive
Roseville, MN 55113-1105
one: 651-691-8500 Fax: 651-697-8555
$10,000,000
City of Eagan, Minnesota
General Obligation Tax Increment Bonds, Series 2004
Sources & Uses
Dated 08/01/2004 i Delivered 08/01/2004
Sources Of Funds
ParAmount of Bonds......................................................................................................................................................... $10,000,000.00
TotalSources................................................................................................................................................................... $10,000,000.00
Uses Of Funds
Depositto Construction Fund............................................................................................................................................. 9,643,625.00
Total Underwriter's Discount (1.300%)............................................................................................................................. 130,000.00
Costsof Issuance .............. :............................................................................................................................................... 26,375.00
TotalUses........................................................................................................................................................................ $10,000,000.00
Series 2004 GO TIF Bonds I SINGLE PURPOSE 1 21182004 1 8:31 AM
Page 1
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N
MINUTES OF A
SPECIAL CITY COUNCIL WORKSHOP OF THE EAGAN CITY COUNCIL
MARCH 12, 2002
FIRE ADMINISTRATION BUILDING
5:00 P.M.
Present: Mayor Awada, Councilmembers Bakken, Carlson, Fields and Tilley, City
Administrator Hedges, Director of Administrative Services VanOverbeke, Parks
and Recreation Director Vraa, Superintendent of Recreation Asfahl,
Superintendent of Parks Olson, Public Works Director Colbert, City Engineer
Matthys, Assistant City Administrator Verbrugge, Senior Planner Ridley, and
Intern to the City Administrator Lord.
I. ROLL CALL AND AGENDA ADOPTION
Councilmember Fields moved, Councilmember Bakken seconded a motion to approve
the agenda as amended to include an item in regard to the celebration of Natalie Darwitz
and Jenny Potter. Aye: 3 Nay 0 (Councilmembers Bakken and Tilley were not yet
present)
II. DARWITZ/POTTER DAY
Councilmember Carlson announced that a celebration will be taking place Saturday,
March 16, to honor Eagan Olympians Natalie Darwitz and Jenny Potter. A parade will
take place at 1 PM, followed by a recognition ceremony at 2PM and an opportunity to
skate with the Olympians at 2:30PM. The event is free to the public.
Mayor Awada moved, Councilmember Fields seconded a motion to approve a
proclamation to proclaim Saturday, March 16, 2002 as Natalie Darwitz and Jenny Potter
Day in the City of Eagan, and to approve the costs of the gifts to be presented to the
Olympians, including a plaque and a City water bottle. Aye: 3 Nay: 0
III. POST OFFICE
Due to the many citizens that have voiced their concerns, the Council directed staff to
send a letter to the Eagan Post Office, on behalf of the Council, asking that the Post
Office consider extending their hours in order to meet the high demand.
IV. COMPREHENSIVE GUIDE PLAN AMENDMENT PROCEDURES
The City Council discussed their policy that was created in the mid -1990's, whereby any
Guide Plan Amendment request that would change the property from commercial to
residential, or vice -versa, had to proceed as a stand-alone application. Senior Planner
Ridley discussed with the Council the level of detail needed from potential developers
when they are considered for a comprehensive guide amendment or rezoning request.
ZG(
3/12/02 Special Council Minutes
Page 2
It was the consensus of the Council to provide both developers and staff with clear
direction as to their opinion of a given proposal, and the expectations the Council has for
a developer before approving either comprehensive guide amendments or rezoning
requests, in order that the developer does not have unnecessary expenses on a proposal
that may not be approved.
V. DISCUSS LANGUAGE FOR ACCESSORY BUILDINGS IN
RESIDENTIAL ZONING DISTRICTS
Following a deliberation on Conditional Use Permit applications at the March 4, 2002
City Council meeting, there was direction by the Council to discuss the process and
dimensional standards for accessory buildings in residential zoning districts at the March
12 Council workshop. The Council discussed the current accessory standards, which
allow for two accessories not exceeding 1,100 square feet.
Per the direction of the Council, Senior Planner Ridley will prepare specific
measurements requirement suggestions for the Council's review, including: 1) 500 square
feet per house accessory limit; 2) specified maximum wall heights; and 3) specified roof
pitch requirements.
VI. DISCUSS STORM MITIGATION OPTIONS
The Council discussed the storm mitigation contracts awarded to date, the costs incurred
for home acquisitions and modifications, and the appropriate funding sources for these
improvements. Public Works Director Colbert stated that $3.5 million in storm mitigation
costs will need a funding source. The Mayor noted that additional State funding is
unlikely this year due to budget shortfalls.
The Council directed Public Works Director Colbert to prepare the final contract bills for
Project 844 (Gibraltar Trail), Project 843 (Beecher Drive), Project 844 (Forssa Way), and
Project 842 (Beacon Hill Road). Once the final contract bills have been prepared, the
Council's Finance subcommittee will consider the costs and explore funding options.
Once the subcommittee has reviewed the bills, the four projects will be brought back to
the Council this June for Council consideration.
VII. REVIEW CIP FOR 2002 STREET CONSTRUCTION
The Council discussed the street projects that are scheduled under the current CIP for
construction in 2002 and discussed the feasibility of adding any additional street projects
for consideration.
30
3/12/02 Special Council Minutes
Page 3
The Council directed that a survey be sent to property owners in the Cherrywood Knoll
neighborhood to gauge whether residents would be in favor of pushing construction
ahead to 2002, rather than waiting to 2003. It was the consensus of the Council that the
surveys must demonstrate that 60% of the property owners are in favor of 2002
construction before the Council will approve 2002 construction.
The Council discussed the Northwood Drive Overpass and determined that since the
Council will review the C.I.P. in May, they will make a determination at that time as to
when they want to proceed ahead on the project.
The Council discussed plans for extending Lone Oak Road into Inver Grove Heights.
Inver Grove Heights has the extension programmed in their 2005 C.I.P. and the County
has the project programmed in 2006. Due to the involvement of Inver Grove Heights and
Dakota County, and recognizing their plans for the extension, the Council directed staff
to extend utilities on Lone Oak Road prior to extending the roadway.
VIII. DISCUSS MINNEOSTA VALLEY TRANSIT AUTHORITY—
APPOINTMENT OF AN AT -LARGE COMMISSIONER AND ALTERNATE,
AND UPDATE ON PROPOSED LEGISLATION
The Council, at the request of Councilmember Tilley, discussed whether the at -large
MVTA commissioner should be appointed by all five commissioners representing cities
that are members of the MVTA, or whether the at -large commissioner should be
appointed by the commissioners from Burnsville, Eagan, and Apple Valley, which is the
current provision in the Joint powers Agreement. It was the consensus of the Council to
have the at -large commissioner be appointed by all five commissioners representing
cities that are members of the MVTA.
Councilmember Tilley provided an update to the Council on the State lobbying efforts
currently underway by MVTA. The Council encouraged Councilmember Tilley to speak
of the City's support of the MVTA lobbying for new buses rather than refurbishing 12 -
year old buses.
IX. PRESENTATION OF 2002-2007 PARKS C.I.P. BY APrC
The Advisory Parks and Recreation Commission (APrC) was present to discuss the 2002-
2007 proposed Parks C.I.P. Parks and Recreation Director Vraa and Superintendent of
Parks Olson presented the C.I.P. document and were available for any questions of the
Council.
Following the discussion of the C.I.P. that was presented, Mayor Awada asked that the
APrC look at the revenues that will be coming in 2002 from park dedication fees.
3/12/02 Special Council Minutes
Page 4
Awada also challenged the APrC to give serious thought to the future, when parks
dedication revenue ceases, taking into consideration the need for renewal and
replacement.
APrC member Margo Danner, asked the Council to involve the senior citizen community
in the decision-making regarding programming, components, and layout of the future
senior center at the Community Center. The Council directed that the seniors meet with
the Council's Community Center operations subcommittee and appropriate City staff to
discuss the uses for the Senior Center. On behalf of the seniors that attend the City's
weekly senior gatherings, she thanked City staff for taking the time to attend the senior
meetings in order to explain the workings of each of the City departments.
X. DISCUSS SCOPE OF SERVICES FOR STREET
SCAPING/ENTRANCE MONUMENTS
The Council discussed the Scope of Services prepared by the consulting firm of SRF. It
was the consensus of the Council that the costs for the entrance monuments were too
high. It was the direction of the ,Council for staff to contact cities that have entrance
monuments in order to determine a more appropriate cost. Once staff has a better idea of
an appropriate cost, staff can work with SRF to appropriately scale back costs of the
entrance monuments should they find that the proposed entrance monuments are not in
line with other cities' spending.
The Council discussed the street scaping proposals put forth by SRF and asked Public
Works Director Colbert to contact other contractors in order to gauge whether the costs
are accurate. If staff finds that the costs are accurate, the Council directed staff to proceed
ahead with the RFP process for street scaping.
XI. REVIEW FINANCING OPTIONS FOR CEDAR GROVE
REDEVELOPMENT
The City Council, staff, and Jim Prosser, of Ehler's and Associates, discussed land use
options within Cedar Grove, anticipated TIF revenues, and options for the financing of
the redevelopment, including the possible use of improvement bonds. Prosser presented
maximum versus reduced development scenarios based on reduced traffic generation
requirements.
The Council directed that market -rate senior housing be considered for Sub -Area 313. The
Council also directed staff to move expeditiously with the Delta proposal. Lastly, the
Council directed that the Council Cedar Grove design subcommittee meet to look at
design standards for the Cedar Grove area.
52-
3/12/02 Special Council Minutes
Page 5
XII. ADJOURNMENT
The meeting adjourned at 10:30 PM.
Date
City Clerk
If you need these minutes in an alternative form such as large print, Braille, audio tapes, etc., please contact the City of
Eagan, 3830 Pilot Knob Road, Eagan, MN 55122, 651-681-4600, (TDD phone: 651-454-8535).
The City of Eagan is committed to the policy that all persons have equal access to its programs, services, activities,
facilities and employment without regard to race, color, creed, religion, national origin, sex, disability, age, sexual
orientation, marital status or status with regard to public assistance.
AGENDA
SPECIAL CITY COUNCIL MEETING
TUESDAY, MARCH 12, 2002
5:00 P.M.
FIRE ADMINISTRATION BUILDING
I. ROLL CALL AND AGENDA ADOPTION
`lII. COMPREHENSIVE GUIDE PLAN AMENDMENT PROCEDURES
✓III. DISCUSS NEW LANGUAGE FOR ACCESSORY BUILDINGS IN
RESIDENTIAL ZONING DISTRICTS
-SIV. DISCUSS STORM MITIGATION FUNDING OPTIONS
V.� DISCUSS SCOPE OF SERVICES FOR STREET SCAPING / ENTRANCE
MONUMENTS.
VVI. PRESENTATION OF 2002-2007 PARKS C.I.P. BY APrC
VII. REVIEW FINANCING OPTIONS FOR CEDAR GROVE
REDEVELOPMENT
VIII. REVIEW CIP FOR 2002 STREET CONSTRUCTION
G/ IX. DISCUSS MINNESOTA VALLEY TRANSIT AUTHORITY -
APPOINTMENT OF AT -LARGE COMMISSIONER AND ALTERNATE
AND UPDATE ON PROPOSED LEGISLATION
X. OTHER BUSINESS
XI. ADJOURNMENT
3y
FROM: CITY ADMINISTRATOR HEDGES
DATE: . MARCH 4, 2002
SUBJECT: SPECIAL CITY COUNCIL MEETING/TUESDAY, MARCH 12
A Special City Council meeting is scheduled for Tuesday, March 12 at 5:00 p.m. at the Fire
Administration Building. The meeting will be taped delayed for cable broadcasting.
COMPREHENSIVE GUIDE PLAN AMENDMENT PROCEDURES
Recently, a Comprehensive Guide Plan Amendment request was submitted and recommended for
denial by the APC and, ultimately, withdrawn from Council consideration. This instance highlighted a
recurring, issue with "stand alone" amendments or rezoning requests where the City Council (and APC)
has denied an amendment or rezoning because of a "lack of information" on what the ultimate
development would provide.
In the mid -1990's, the City Council established a policy whereby any Guide Plan Amendment request
that would change the property from commercial to residential, or vice -versa, had to proceed as a stand
alone; application. As I recall, the purpose was to allow the Land Use question to be asked/answered
before the developer was required to expend a significant amount of money on engineering, site design,
natural resource inventory, etc. As you can imagine; particularly with in -fill development, providing
the level of detail necessary for a rezoning and/or subdivision can easily result in an expense in the
$30,000-50,000 range.
It is understandable that the Council and APC desire a certain amount of detail on the finished product
before a decision is made on a Comprehensive Plan Amendment or Rezoning. A policy discussion by
the City Council would be very helpful as Planning staff deals with "level of detail" issues with
potential developers considering Comp Guide Amendment and/or Rezoning requests.
ACTION TO BE CONSIDERED:
To provide staff policy direction regarding the level of detail and the process for Comprehensive Plan
Amendments and/or Rezoning requests.
DISCUSS NEW LANGUAGE FOR ACCESSORY BUILDINGS IN RESIDENTIAL ZONING
DISTRICTS
At the regular City Council meeting held on March 4, 2002, two (2) agenda items pertaining to a
Conditional Use Permit to allow accessory building(s) that exceeded 1100 square feet on residentially
zoned property were considered. Both of the requests were denied by the Advisory Planning
Commission and City Council. w
Following a deliberation on each of the Conditional Use Permit applications, there was drrectrori by the T
City Council to discuss process and dimensional standards for accessory building(s) in residential., ,
r'..
zoning districts at the March 12 work session.
ACTION TO BE CONSIDERED:
d' C' code Chan es to the rocess `and
To provide direction to City staff and City Attorney regar mg any rty g p
dimensional standards of accessory building(s) in residential zoning districts.
DISCUSS STORM MITIGATION FUNDING OPTIONS
Now that the Storm Mitigation Improvements are well under way addressing the Super Storm event"bf
July 2000, the Council needs to define the appropriate funding sources for these improvements.
Enclosed on pages _ through is a memo from Public Works Director Colbert:summanzmg
the costs and funding options for Council's consideration.
ACTION TO BE CONSIDERED: m`
To provide staff direction regarding funding options for the balance of storm mitigatori improvements
that were authorized following the July 2000 storm.
SCOPE OF SERVICES / S
TREETSCAPTING AND ENTRANCE MONUMENTSM
City staff has been working with the City Council Streetscaping & Gateway Signage subcommittee 1
(Awada & Fields) and the consulting firm of SRF. Staff is providing this information as an up,date to
the full City Council. Based on discussion and direction provided by the subbommittee at the February
12, 2002, Special Council meeting, SRF has prepared a separate Scope of Service document for both.
Beau D' Rue Streetscaping and Central Parkway. A Scope of Service for the Phase H Gateway Sign kx
project was also included as an alternate. An update memo that provides a summary of the Scope of
Service proposals, associated timelines, and current status of these projects is enclosed on page'.' "
yh .
ACTION TO BE CONSIDERED:
To provide staff with "next step" direction for Streetscaping and Gateway Signage.
PRESENTATION OF 2002-2007 PARKS C.I.P. BY APrC
The Parks and Recreation Commission has completed work on their five (5) year C.I.P. (2003-2007).
The APrC will be present at the meeting at 6:30PM to discuss the five-year plan, as well as
improvements proposed for 2002. The APrC has held numerous meetings and done a"great deal of h
work in preparation of the C.I.P. They look forward to discussing the proposed plan further 2` ?,`
ACTION TO BE CONSIDERED:
To provide direction to the APrC regarding improvement projects proposed for the remainder of 2002
and projects proposed for 2003-2007.
REVIEW FINANCING OPTIONS FOR CEDAR GROVE REDEVELOPMENT
Since the Special City Council Workshop held in late January, City staff and consultants have held
several meetings to 1) determine a revised project scope/final assessment roll for Project 800; 2) review
the Parranto Development Agreement; 3) consider cost alteimatives for the Project 759R Beau D'Rue
proposed improvements; and 4) review estimated streetscaping costs and Qther related aesthetic
improvement costs. In addition various financing options relating to both the infrastructure
improvements and the Cedar Grove Redevelopment have been reviewed with particular emphasis on
an improvement bond sale per the City Council direction.
Enclosed on pages �� through is a memo from Director of Administrative Services
VanOverbeke summarizing construction projects, financing options and public policy issues for City
Council consideration.
ACTION.TO BE CONSIDERED:
To provide staff direction regarding the scope and financing of street and streetscaping improvements
for the Cedar Grove Redevelopment Area.
REVIEW CIP FOR 2002 STREET CONSTRUCTION
Mayor Awada has asked that this item be placed on the agenda to review the. street projects that are scheduled
under the current CIP for construction in 2002 and discuss the feasibility of adding any.a ditional street
projects, such as the Northwood Drive overpass for consideration. Enclosed on page is a memo from
Public Works Director Colbert providing some options for the Council's consideration.
ACTION TO BE CONSIDERED:
To provide direction to City staff regarding any modifications the City Council may desire to the 2002 street
construction CIP.
DISCUSS MINNESOTA VALLEY TRANSIT AUTHORITY — APPOINTMENT OF AT -
LARGE COMMISSIONER AND ALTERNATE AND UPDATE ON PROPOSED
LEGISLATION
The Minnesota Valley Transit Authority (MVTA) membership has been working for some time to
amend the Joint Powers Agreement and Bylaws for the MVTA. It appears that all items have been
resolved except the process of appointing the at -large commissioner and alternate. The appointment
issue is whether the at -large commissioner should be appointed by all five commissioners representing
cities that are members of the MVTA, or whether the at -large commissioner should be appointed by the
commissioners from Burnsville, Eagan and Apple Valley, which is the current provision in the Joint
Powers Agreement.
Enclosed on pages through is a copy of a letter from Barbara Ross, the MVTA
3p
attorney, which outlines this issue as well as the other proposed changes to the Joint Powers Agreement
and Bylaws.
}' 3�
Based upon the direction from the City Council, consideration of the Joint Powers Agreement and
Bylaws will be placed on a regular City Council Agenda for. formal action.
Councilmember Tilley, the City's MVTA Commissioner, would also like to update the. City -Council on
information from the transit lobbyist regarding proposed legislation requiring the refurbishment of
busses rather than the purchase of new busses.
Enclosed on pages through g2 is a copy of the material provided by Councilmember
Tilley as background information for this update.
OTHER BUSINESS
/s/ Thomas L. Hedges
City Administrator
nn
TO:
FROM:
DATE:
SUBJECT:
MEMO
city of eagan--
A
City Administrator Hedges
Director of Administrative Services VanOverbeke
March 7, 2002
Financing Options For Cedar Grove Redevelopment
As a follow up to the Special City Council meeting of January 17, 2002, staff has been
working with Ehlers & Associates, Inc. and the consulting engineers to more definitively
determine potential costs and a financing plan related primarily to the first construction
phase of the Cedar Grove redevelopment. The scope of the infrastructure improvements
has expanded significantly from the earliest plans and it is important from a public policy
perspective that it is on course with the City Council vision and expectations for the area.
Also, staff has been working to quantify the relationship between the proposed
infrastructure improvements and the resulting gain in traffic capacity as a way of providing
for a cost benefit analysis of this construction, especially as it relates to the increasing
costs. Traffic considerations resulting from potential Blue Cross/Blue Shield development
are also a factor and are being incorporated into the planning. For the purpose of
developing a financing plan for the Cedar Grove Redevelopment, the first phase is
considered to be the street infrastructure projects. The scope ofthese projects and
resulting funding requirements raise certain significant public policy issues for the City
Council as noted at the end of this memo.
Phase I, Infrastructure Proiects Completed In Advance of New TIF Generated
Revenues
There are several public improvements that are either required to accommodate or desired
to promote the proposed redevelopment of the Cedar Grove area. They are as follows: '
Project 800 (Silver Bell Rd. Access Reconfi
ration)
• Roadway Impr.
$6,704,750
(Includes $3,454,050 for Property -
Acquisition)
• Add'1 Impvmnt*
1,800,000*
(Expanding Hwy 13 to 6lanes)*
• Streetscaping
987,700
(Fountain, Fencing, Median Entry Sign,
Pavers, Landscaping, etc. for Project 759R
& 800 areas)
• Monument Sign
157,000
(Gateway Monument Signage)
Subtotal
$9,649,450
*This significant additional capacity improvement is necessary to maintain an acceptable
congestion Level of Service (LOS) to accommodate the original proposed redevelopment
31'.
R
build -out scenario. If not constructed, a "traffic budget" will have to be imposed on each
parcel, thereby limiting development potential to a trip generation level that can be
handled by the remainder of the improvements proposed under Project 800. A summary
of this trip reduction impact analysis will be distributed at the meeting.
Project 759R (Beau D' Rue Street Rehab and Redevelopment Upgrade)
• Street Rehab $ 448,500 (Remove, Recycle and Re -Pave Street
Surface)
• Redev. Upgrade 453,000 (Center Median and Pedestrian Trail)
• Streetscaping -0- (Included under Project 800)
• Street Lights 300,000 (Decorative Street and'Pedestrian Lighting)
• Overhead Power 485.000 (Bury Existing Overhead Power Lines)
Subtotal $1,686,500
Grand Total $11,335,950
Although the upfront total cost of these projects could be reduced by a City Council
decision7to defer some project elements or to reduce the scope of the overall
improvements, the financing recommendation consists of two components as follows:
1. Sell 20 year improvement bonds to finance the construction. To sell
improvement bonds requires that at least 20% of the project cost be assessed
($2,267,190). The amount of the improvement bond sale could be reduced by a
cash transfer from the Major Street Fund. However, any significant payments
from the Major Street Fund will delay other priority projects within the City,
would necessitate a tax increase to maintain the resources to complete other
projects or require some combination of those two alternatives. Major Street Fund
pro -formas will be provided at the meeting on Tuesday.
2. Make debt service payments from:
a) Special assessment collections:
By development agreement. Provides some flexibility as the City
is not required to prove benefit although, the developer will
typically factor the agreement into a request for TIF assistance.
Through the assessment hearing process. Requires the City to
prove that there is an increase in market value at least as great as
the assessment.
b) Traffic mitigation fees collected from developers. May allow for
additional resources to provide for future traffic mitigation improvements.
From a developer's prospective, traffic mitigation fees may be seen as
simply doubling up with the above referenced assessment agreements.
c) Tax increment collections resulting from new development. This money
may be required primarily for phase two funding as described below.
d) .Ad valorem tax levy. Will be responsible for all debt service not covered
by any other- defined source and could be as high as the 80% of the debt
q0
service that is not assessed. The potential community wide tax impact is
shown on the attachment to this memo. ,
e) Land sale proceeds. May more appropriately be dedicated to phase two::
redevelopment costs outlined below.
fl State Grants. The City applied for but did not receive funding for the
current year. It is unlikely that any State money will be available oto assist`
with funding these projects as they are currently proposed.
Note:
This funding scenario for Project 800 (Access Improvements), Project 759 (Beau d' Rue)
and the Streetscaping Project does not incorporate dollars for any other redevelopment
activities such as property acquisition that is not related specifically to these three projects.
All other Cedar Grove redevelopment is contemplated to be financed independently from
these projects and will probably compete for the same tax increment revenue, if any of that. .
funding source is used to retire the debt.
Phase H. Cedar Grove Redevelopment Activities
The Cedar Grove redevelopment costs primarily including land write down resulting from
land assembly, relocation, and demolition related to the second phase of actual Cedar.
Grove redevelopment is contemplated to be financed as follows:
1. Financed up front by the developers with "Pay As You Go" Notes to. them. This
option will require some borrowing (probably internally) to carry the projects prior
to development and a resulting tax increment stream.
2. Tax Increment Bonds sold by the City with debt service paid by .increment and
backed by the City's general taxing authority.
ote:
There will be competition between how the tax increment is shared or used. The City will
desire to cover its obligations and the developers will request incentives to make
development more financially feasible.
Public Policy Issues:
Do these projects as currently contemplated provide the current and future level of
improvements necessary to facilitate the City Council's vision for redevelopment? Issues
relate to both traffic flow and capacity and aesthetics perspectives.
What, if any, amount of this construction should be paid for by the Major Street Fund?
Is it acceptable to provide debt service on the improvement bonds primarily from a tax
levy? Is there enough benefit to the broader community to support this level of ad
valorem tax levy for the debt service required by this redevelopment effort?
Dir&* of Administrative Services
r1114v rif Fanan_ MN
Analysis of Tax Impact for Potential Borrowing
March 8, 2002
Bond Issue Size
$11,735,000
Type of Debt
G.O. Bonds
Est. Tax Capacity Rates (debt only)
Net Tax Capacity Value (Pay 2002)
52,452,658.00
Annual l=evy Increase
768,000.00
Tax Rate For Debt Levy
1.464177%
ClArease
Taxable
Estimated Increase in Taxes
Estimated Per Add'I
Type of Pro
Market Value
for Debt Service Only
$1,000,000 Debt LeXy
100,000
$15
1.30
125,000
$18
1.63
Residential
150,000
$22
1.95
Homestead
175,000
$26
2.28
200,000
$29
2.60
225,000
$33
2.93
260,000
$37
3.25
500,000
$135
12.04
Commercial/
750,000
$209
18.54
Industrial
1,000,000
$282
25.05
1,500,000
$428
38.06
2,000,000
$575
1 51.07
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Prepared by Ehlers & Associates, Inc. 3/6/2002