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12/19/1995 - City Council Special MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL Eagan, Minnesota December 19, 1995 A special meeting of the Eagan City Council was held on Tuesday, December 19, 1995 at 5:00 p.m. at the Eagan Municipal Center. Present were Mayor Egan and Counclimembers Awada, Wachter, and Hunter. (Councilmember Masin arrived at 5:30 p.m.) Also present were City Administrator Tom Hedges, Director of Public Works Tom Colbert, Community Development Director Peggy Reichert, Finance Director Gene VanOverbeke, Parks and Recreation Director Vraa and Senior Planner Lisa Freese. LIVABLE COMMUNITIES GOALS UPDATE Community Development Director Reichert gave an overview of the Livable Communities goals, noting the City of Eagan currently has 54% single family detached housing; 15% apartments, and the remainder non-single family detached housing such as duplex, townhome, condominium, etc. Upon looking at the projects approved but not built, the numbers are much higher for townhouses and the single family housing goes down. The projected housing stock is 51% single family, 22% townhome, 2.1% duplex and 23.5% apartment. Senior Planner Freese reviewed the six benchmarks developed by the Metropolitan Council, which are based on a composite index for communities of similar development composition and of similar geographic locations. She noted that each community participating in the Livable Communities Act is required to set housing goals based on those criteria. The first benchmark is for life cycle housing which ensures there is a variety of housing types for residents throughout their entire life cycle. She Indicated that the city's non-single family detached housing is 46% of the total housing supply. The Metropolitan Council's target range is between 35 and 38%, and the city's goal Is to stay within or above the benchmark range. Community Development Director Reichert noted that the Metropolitan Council looked at their preliminary plan and they have Indicated support for it. They indicated that the City of Eagan's plan goes further than other cities in setting out how the city plans to attain its goals. (Councilmember Masin arrived at this time.) She further reviewed the benchmark for owner/renter mix, which is currently 69%/31%. The Metropolitan Council benchmark is between 72-75% owner occupied, and between 25-28% for rental housing. The city's goal is to move toward that benchmark by encouraging the development of additional ownership housing. The city's affordability ownership Index is 62%, which is based on the percentage of the 1994 homesteaded properties valued at $115,000 or less. The benchmark is between 69-70% of all homesteaded properties. The city's goal Is to work toward that benchmark, although it is felt that it will be a challenge to maintain the current Index. The city will continue to support HRA housing rehabilitation programs and improve access to financing for individuals and families interested in purchasing these homes. Councilmember Hunter expressed concern about why 69% of the housing should be affordable. He feels that figure is quite high, especially for a city like Eagan that doesn't have a lot of older homes. Senior Planner Freese added that the indicators are not very realistic for some communities. Senior Planner Freese went on to review the affordable rental housing Index which Is 22% of the total rental housing stock, which Is based on a monthly rent of $500 or less. The benchmark is between 35-40%, and the city's goal is to move towards that; however, the market trends for construction of new rental housing suggest that maintaining the current Index Is a more realistic goal. She noted that the city exceeds the life cycle benchmarks, especially for owner-renter mix, so they will not encourage any more multi-family rental development, but rather will explore rental housing rehabilitation program options and support the use of Section 8 vouchers. EAGAN SPECIAL CITY COUNCIL MINUTES; DECEMBER 19, 1995 PAGE 2 The overall density of single family detached dwellings is 1.8 units/acre. The benchmark In Eagan is 1.9 units/acre, and the goal is to achieve the benchmark on new single family developments. The overall density for multi-family housing Is 9 units/acre, and the benchmark Is 10 units per acre. The city's goal for townhouse units Is to maintain a net density of 5 units/acre, and for apartments, 10 units/acre. She noted that considering current market conditions, it is anticipated that townhouses will be the primary type of multi-family housing constructed, which means that an overall multi-family density of 10 units per acre will be difficult to realize. In summary, Community Development Director Reichert stated she feels this review shows that Eagan has a diverse housing stock and that they will work toward these goals when considering future development. Councilmember Hunter stated he feels the goals have enough flexibility to meet the intent of the Livable Communities Act. FINANCING OPTIONS/PROMENADE DEVELOPMENT PROJECT Director of Public Works Colbert reviewed the background of this issue, the costs associated with this project and possible funding sources, and three options for funding these Improvements. He noted that option 1 assumes no development of the Eagan promenade. Options 2 and 3 correspond to scenarios 2 and 3 previously discussed. He noted that option 2 Is what is currently approved by the Council for participation by Opus. He added that there Isn't much difference between options 1 and 2, but there is a $1.1 million difference with option 3. He reviewed the purpose of the Major Street Fund, noting he feels this is exactly the type of project the fund was Intended for. Councilmember Hunter noted that when the improvements were done for the West Publishing project, they contributed approximately 35% of the total project cost. Opus is asking the city to consider 50% of the costs. He feels that is a fair request. Mayor Egan noted that except for the need by West Publishing, these improvements would not have been done for quite some time. In this case, the improvements are needed now. He feels option 3 is fair. Councilmember Hunter added that with option 3, there would be a three year payback, which is good for the city. Councilmember Awada noted that with the West Publishing improvements, other funds picked up 31 % of the project, special assessments were 27%, and West Publishing paid for 37%. Under option 3, the city pays for 50% of the costs and under option 2, the city pays 30% of the costs. There are no special assessments under this project, so she feels the city should only pay for 30% as In option 2. Councilmember Hunter noted that Opus is proposing a 42%/58% allocation of costs, and the Major Street Fund was set up for this type of project. Mayor Egan noted that under the West Publishing Improvements, there was also a benefit to the local residents. Councilmember Wachter asked whether there has been any consideration of these proposals between Opus and the O'Neils. Michelle Foster, of Opus Corporation, noted that consideration was given two weeks ago when scenario 2 was approved. They decided at that time that $4.9 million was the bottom line they would be able to fund. They are at the maximum that tenants are willing to absorb. Tim Mumane, of Opus Corporation, added that usually, tenants don't pay any special assessments. They have been able to negotiate for 30 cents per square foot to be absorbed by the tenants, and Opus will absorb the rest. Councilmember Wachter asked about the O'Neils, and Michelle Foster responded that $4.9 million Is the combined effort by both Opus and the O'Neils. She added that under the West Publishing Improvements, the Major Street Fund paid for 25% of the project. Under Opus' request, the Major Street Fund would pay only 16% of the project. She feels this project has greater benefit to the community. Councilmember Wachter suggested they come up with a figure between options 2 and 3 that all parties can agree to. Councilmember Awada Indicated she would be willing to split the difference. Opus representatives indicated they will consider that proposal and respond when it is considered at the regular Council meeting. Michelle Foster asked whether they would still have to pay into the Major Street Fund with the road use fees for their building permits. It would have the effect of paying twice. Director of Public Works Colbert noted that building permit fees are standard. It would have to be taken into consideration. Discussion followed concerning whether to waive those fees or lower the Opus number accordingly. Tim Mumane asked whether all right of way figures are included in this EAGAN SPECIAL CITY COUNCIL MINUTES; DECEMBER 19, 1995 PAGE 3 figure. Director of Public Works Colbert recommended the Council establish an amount to be contributed to the city. He feels the Intent Is to Include right-of-way costs. The figure was arrived at $3.357 million as Opus' contribution. The meeting adjourned at 6:15 p.m. DLP December 19, 1995 Date \IJ City Clerk