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HomeMy WebLinkAbout06/26/1986 - City Council Specialr MINUTES OF A SPECIAL JOINT MEETING OF THE EAGAN CITY COUNCIL AND THE EAGAN ADVISORY PLANNING COMMISSION vnw EAGAN, MINNESOTA JUNE 263 1986 A special joint meeting of the Eagan City Council and Advisory Planning Commission was held on Thursday, June 26, 1986 at 6:30 p.m. at the Eagan Municipal Center. Present were Mayor Blomquist and Councilmembers Smith, Wachter, Egan and Ellison. Also present were APC members McCrea, Wilkins, Voracek, Harrison, and Tryag. Also present were City Administrator Hedges, City Planner Runkle and City Attorney Paul Hauge. In addition, Eagan Economic Development Commission Chair Larry Wenzel and members of the Commission were in the audience. A group of interested residents and business persons were in attendance at the meeting also. At 6:30 p.m., Mayor Bea Blomquist announced the convening of a special meeting of the Eagan Advisory Planning Commission and City Council to review two major issues, including an informational hearing to discuss tax increment financing criteria and guidelines, and also to review land use data, including sites requested for Comprehensive Guide Land Use revisions. TAX INCREMENT FINANCING CRITERIA & GUIDELINES Mayor Blomquist asked City Administrator Tom Hedges to review the background of tax increment financing in the City. Mr. Hedges indicated that during the months of March and April, the Economic Development Commission held several meetings and discussed the merits of using TIF as a business tool available for community development. The Economic Development Commission recommended in the form of a Resolution of the City Council, that it use TIF as a business tool but that applications be considered on a case by case basis. The Council requested that the criteria and guidelines for the use of TIF be established and that a public informational meeting be held to consider such guidelines. Mr. Hedges introduced David Sellergren of the law firm of Larkin, Daly & Hoffman, et al, and indicated that he had been involved as bond counsel in an advisory capacity for the issuance of tax increment financing and other types of public incentive bonds. Mr. Sellergren began his presentation by stating that there had been a great deal of debate about TIF and also submitted a short resume' of the financing and excerpts from -the League of Minnesota Cities and the Minnesota Legislative Auditor's Tax Increment Financing Studies, both dated 1986. He stated that 32 states allow TIF, thirty of which were exclusively for redevelopment and only two, including Minnesota and Iowa, authorizing it for purposes including economic development. He mentioned that much of the activity in Minnesota is due to the loss of federal funds and there are other 1 Joint APC & Council Minutes June 26, 1986 9 financing tools that TIF can use, including special assessments, such as extending the time working with connection char and ark fees, including deferring such payments until es a later time. g p There are two legal bases that were reviewed: 1. The statute including M.S.A. 472A giving legal authority through an HRA authorizing development districts. 2. The tax increment financing statute relating to qualifying the activity. Mr. Sellergren went into some detail concerning the acquisition of land, including sale of bonds to finance the acquisition, and further capturing the value to pay back City expenses. In addition, it is permissible to borrow money from other funds to reduce the expense and allow more innova`ive financing methods. He further speculated that there would be legislation in 19872 noting that primary revisions had taken place in 1979 and further, in 1982. An important element is that the excess tax increment can be used anywhere within the greater district, but it is critical that a finding be made that the development would not occur within the reasonably near future without such assistance. A question was asked whether TIF would result in the reduction of -tax- revenue..for _-other districts such as counties and school districts, and Mr. Sellergren's answer was yes, if the development would have occurred anyway, but if it would not have occurred, that would not be true. In addition, there = was a question as to whether the public needs may b_e greater and there may be a shortage of funds to do so by the creation of a tax development district. Mr. Sellergren suggested that possibly developers should assist in paying for such services such as police and fire and some cities are requiring this. If greater taxes are created than were expected, most communities will keep the excess in the event of future problems. There are three choices, however, for such excess: 1. To retain it in the City treasury. 2. Distribute the excess outright. 3. Use the excess in the greater project area. The school districts and counties affected have the right of review and comment and'the City can revise the plan if there are objections but the City is not bound to do so. A question was asked also about the early history of tax increment and the legal status at the present time. Mr. Sellergren stated there have been four lead cases in the Minnesota Supreme Court and in each case the City Council's decision regarding TIF has been upheld. The legislation requires -that contracts be executed with the developer -or that there be a reasonably strong expectation that development will occur within four years before the TIF bonds can be sold. Joint APC & Council ;Minutes June 26, 1986 P0219,1, In addition, Councilman Smith reminded the members present that the City can reduce the amount of the increment to, for example 50%, based upon what r amount is actually needed to retire the debt. Mr. Sellergren strongly recommended a development contract to include such issues as time frame for development, types of design, site plan and other regulatory and financial control issues. In addition, an assessment agreement covering the expected value after completion is also commonly being entered into. One member of the audience questioned whether approval of a TIF project tends to prefer one party over another and whether a developer whose application for TIF is turned down would prevail in an action claiming discriminatory application. Mr. Sellergren indicated that it was his opinion that the City would prevail provided it follows the statutory procedure. The Supreme Court has generally indicated that the discretion of the City Council will be followed if the criteria are rationally applied and that a City Council has very broad discretion in making such decisions. Other proposed guidelines suggested included the following: 1. Some cities set time limits on TIF. 2. An acceptable debt coverage ratio could be implemented. 3. Equity participation is often required. 4. Interest rate reduction should also be identified. """Tom Hedges reviewed the proposed financial incentive guidelines for T g P P commercial, industrial and housing TIF, industrial revenue bonds, housing revenue bonds and land breakdown proposals that had been recommended by the Eagan Economic Development Commission. Mr. Hedges was asked why the City had allowed TIF for Sperry Corporation, a and he indicated that it was his understanding that the Council's rationale included job retention, expansion of jobs in the City, the fact that Sperry had been a 20 year resident of the City, a good corporate citizen, and also heavy competition from other out-of-state communities for the Sperry facility. A question was asked how the local property owner could be damaged by the use of TIF and Mr. Sellergren's answers included: 1. If general revenue is required to pay for the bonds. - _2. If the Council did not apply the but/for test properly and the development would have incurred anyway. Discussion continued on TIF until 8:00 p.m. 3 Joint APC & Council Minutes June 26, 1986 - z�' COMPREHENSIVE GUIDE - LAND USE REVISIONS At 8:15, after recess, Mayor Blomquist reconvened the joint meeting and it was noted that Charles Hall and John Voss were also present. The Mayor stated that the purpose of the meeting was to allow members of the Planning Commission and Council to review with the planning staff, including John Voss and Dale Runkle, their findings relating to commercial -industrial zoning and development. APC Chairperson McCrea also co-chaired the meeting and it was announced that there would not be adequate time for public comment during the current meeting but that a public hearing would be held later to allow such input. Dale Runkle briefly described the agenda for the evening, including the review of the land use data and reviewed the sites that have been requested for comprehensive guide land use revisions by owners and developers. Meetings were held between planning staff, owners, and representative on June 11 and June 18, 1986 for the purpose of discussing potential revisions to the plan. A written summary of the discussions and the planning concerns and alternatives were submitted and reviewed in some detail by John Voss. COMMERCIAL/INDUSTRIAL ZONING AND DEVELOPMENT SUMMARY Mr. Voss first discussed the December 1985 Commercial/Industrial Zoning _ and Development Summary distributed at an earlier meeting. He stated that the 4;tr current annual rate of development for commercial purposes in Eagan is about 20 acres per year and industrial about 46 acres per year. There are about 5,000 acres zoned for commercial/industrial covering 20% of the City at the present time. He gave examples of other.cities including Eden Prairie at. about 12% and Bloomington at about 11 1/2% and stated that it appeared that Eagan was one of the highest zoned for commercial development in the metro area. He also noted, however, that Eagan has a substantial amount of freeway frontage, good soil and location conducive for commercial/industrial purposes. COMMERCIAL PLANNING STUDY Mr. Voss then detailed 12 locations within the City with uses changed or proposed to be changed to commercial purposes. Area A - Richard Cole property in Section 1. Written summaries of each of the parcels were also submitted and the question had arisen as to whether the area should be designated for Commercial Planned Development use similar to the Laukka-Beck PD-or should other uses be designated. This area abuts Inver Grove Heights consisting of about 200 acres, and sanitary sewer is not in a convenient location at the present time. The area in Inver Grove Heights adjacent to Eagan could possibly be served by Eagan sanitary sewer, and the Cole property may be premature to plan because there is a large amount of r. undeveloped planned development adjacent to it on the west. Member Hall stated that he understood the intent was that it be used for commercial purposes in the entire quadrant, although some residential mixture was also considered. The area is within Noise Zone 4, so residential could be allowed 4 g with some construction modification. Councilman Smith recommended Planned Development mixed use. Mr. Cole and his attorney, Dave Grannis, were present and indicated that the Coles own some adjoining land in Inver Grove Heights. Councilman Egan generally opposed adding an additional 200 acres to the commercial development in the area. Area B - The small parcel on the west side of I-35E, had been designated for park purposes at an earlier time. Area C - The northeast quadrant of I-35E and Yankee Doodle Road O'Neil Lexington Addition property. Mr. Voss recommended that the general area be designated entirely for residential or entirely for commercial type use because of the'ab utting postal service property to the north. If a commercial use is designated, it should not be dominated by retail business, which generates a great deal more traffic than office use. If it is commercial;. limited business and office park uses -should dominate. Public Works Director Tom Colbert had recommended that the Council allocate funding for traffic studies to determine if the roads, as planned, will be adequate for future traffic loads. It was also suggested that Roadside Business could be designated at the southwest corner of the parcel. 15% to 20% building coverage would be feasible and the area would contain about 2 million square feet if used for commercial purposes. A question arose as to the balance of the acreage within the undeveloped Opus project, and it appeared that about 600 acres remain =: undeveloped. Area D - The Park and Ride Site at the southeast intersection of Pilot Knob Road and Yankee Doodle Road is now under construction. Area E - A brief discussion took place regarding the parcel consisting of about 12 acres south of Yankee Square and either Residential or Limited Business is feasible. Area F - North of Deerwood Drive between I-35E and Pilot Knob Road. There is a question as to whether the area should remain Multiple Residential, or be designated for Commercial -uses. It was noted that the CTC project had been proposed and was not developed on a portion of the property, and a letter from the Reid family recommending commercial use on their property adjacent to Pilot Knob Road was reviewed. Mixed Planned Development may be desirable because of the fairly small parcel. The impact of I -35E on the property was reviewed, together with the proximity to very heavily traveled Pilot Knob Road. 5 Joint APC & Council 'Minutes June 26, 1986 Area G - The Northeast quadrant of I-35E and Diffley Road, consisting of approximately 120 acres and the alternatives are for sub -regional center or ` for Multiple Residential with the possibility of commercial adjacent to the interchange. A recent proposal had been made for a sub -regional shopping center with 300,000 to 350,000 square feet in the initial phase to 500,000 to 750,000 square feet eventually. If the area is not developed as a sub - regional shopping center, there should be an alternate. Councilman Wachter recommended retaining the current zoning until the specific proposal is submitted. There were also questions about how many sub -regional centers could be accommodated and Dennis Close, a representative for the,proposed development, was present and explained the expected trade area. Mayor Blomquist requested a definition of sub -regional center and Mr. Close defined it as more of a convenience rather than event related area commercial development. Area H - The area south of Diffley Road and immediately East of I-35E. Area I - The northwest quadrant of Rahn Road and Cliff Road, a 20 acre parcel, owned by Federal Land Company. It was noted that all the undeveloped land along Cliff Road in the general area is designated for commercial use, except Area I. There was a question as to whether the parcel should be designated for Commercial use or remain R-III with a density of 6 to 12 units [/ per acre. Area J - Park and Ride Site at the northeast quadrant of I-35E and Cliff Road currently under construction. Area K - The developer has requested more Limited Business uses on the site at the southeast quadrant of I-35E and Cliff Road. Member McCrea favored retaining the Commercial use designated for the property. Area L - The southeast corner of the City along Trunk Highway #3. There were concerns by Planning Commission and Council members as to whether the property should be zoned or designated for Commercial or Industrial use, and the staff recommended that planning proceed in conjunction with the Inver Grove Heights uses to the east. PILOT KNOB -ROAD & 1-494 - MOTEL PROJECT Mr. Runkle stated that an application had been submitted for hotel/restaurant at the southeast quadrant of I-494 and Pilot Knob Road and that a Comprehensive Guide amendment is being requested. The Advisory Planning Commission had held a public hearing regarding the application. .- 6 Joint APC & Council Minutes June 26, 1986 NEXT JOINT MEETING The next joint meeting of the Advisory Planning Commission and City Council to review the Comprehensive Guide will be July 10, 1986 at 6:30 p.m. to include review of the Capital Improvement proposals and Comprehensive Guide. ADJOURNMENT Upon motion duly made and seconded, the meeting adjourned at 9:35 p.m. PHH CitVaerk Secretary - APC 5