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01/11/2005 - City Council Special1 ~,. AGENDA SPECIAL CITY COUNCIL MEETING . TUESDAY JANUARY 11, 2005 5:30 P.M. EAGAN ROOM ~ EAGAN MUNICIPAL CENTER I. ROLL CALL AND AGENDA ADOPTION II. VISITORS TO BE HEARD P. C III. OFF-SALE LIQUOR LICENSE STUDY ~, jl. IV. EAGAN TECHNOLOGY TASK FORCE FINAL REPORT P j'7 V. CEDAR GROVE REDEVELOPMENT AREA DISCUSSION P. ~P VI. OTHER BUSINESS VII. ADJOURNMENT Agenda Information Memo January 11, 2005, Eagan City Council Workshop III. OFF-SALE LIQUOR LICENSE STUDY ACTION TO BE CONSIDERED: To provide direction to staff regarding the staff report on the study ofoff--sale liquor licenses. FACTS: • The City Council at its meeting on October 4, 2004 directed staff to review City regulations with respect to liquor operations to include regulations used by other Cities. The Council also expressed its desire that no additional permit or license involving off-sale liquor operations be approved or issued pending staff's review of the regulations and directed the City Attorney's Office to prepare an interim use ordinance (a moratorium) on the issuance of permits and licenses for off-sale liquor operations throughout the City. • The City Council at its meeting on October 19, 2004 approved an ordinance effectively placing a moratorium on the issuance of off-sale liquor licenses for a period ending October 15, 2005 or such sooner time as the City Council may determine. • Notification has been sent to the 14 existing license holders and to one additional individual who has expressed an interest in a license informing them that this item is on the agenda for this meeting. ATTACHMENTS: • Enclosed on pages oZ through _ ~ is a copy of a memo from Director of Administrative Services VanOverbeke containing survey data, historical information on past Eagan policies/ordinances/City Code changes, Police Department information, and a map of current off-sale liquor license locations. • Enclosed on page / ~ is a copy of the letter notifying license holders of the meeting. c ., _ e ~'=L~~~- MEMO city of eagan TO: City Administrator Hedges FROM: Director of Administrative Services VanOverbeke DATE: December 28, 2004 SUBJECT: Off -Sale Liquor License Study At your direction and with the assistance of Deputy City Clerk McGarvey I have completed the research and am submitting this report as contemplated in the City Council's action to approve a moratorium on the issuance of off-sale liquor licenses. It is my understanding that the City Council desired survey information from other communities, historical information on Eagan's experience, and the location of current license holders within Eagan. The research has been limited to only off-sale liquor licenses and therefore does not include locations or history on non-intoxicating beer licenses. Although not specifically requested by the City Council, I have included a memo from Police Chief Therkelsen regarding liquor license enforcement issues from the Police Department perspective. The memo is intended to provide additional background information for the City Council deliberation. Survey Attached is a table of survey information as gathered by Mira. Staff requested information from 13 metro cities that are of similar size as Eagan. They are the same 13 cities used previously in the review of liquor license rates to provide consistency in providing background survey information. In general, four of the 13 cities have municipal off-sale liquor stores so they are not germane to our survey and the sample size is reduced to the nine remaining cities. Of those nine, four reported a limitation on the number of off-sale licenses that may be issued. One (Brooklyn Park) reported a hard limit but could not explain how or why it came about; one (Blaine) has a limit based on population; and the other two reported limits that appear to be based only on geography and spacing or separation. Various other city by city nuances can be observed by a quick review of the table. Eagan Experience It is not possible to tell from the surrey data whether or not other cities have followed the same path to get to today's limits or elimination thereof. Eagan over the years has had both numerical and geographical limits. In August of 1986 the geographical (other than zoning) limit was removed with the remaining numerical limit based first on households (August 1986 to June 1990) and subsequently on population (June 1990 to January 1994). All numerical limits were removed in December of 1993 (Ordinance published and effective on January 13, 1994). Assuming compliance with zoning and the minimal Code requirements, a basic free market approach has been in place since the 1994 change. dL. The following is a very brief chronology of activities in Eagan over the years. Most City Council actions resulted from market forces colliding with the number limit and/or the geographical limits. Those limits obviously resulted in off-sale liquor licenses in and of themselves having an undefined economic value even though they technically could not be directly sold or transferred. Consideration of code amendments to change/remove/redefine the limits have generally been opposed by individuals holding licenses, whether or not they have been in use, at any particular time and supported by individuals desiring to enter the marketplace at that time. Chronology: The following references in the Ordinance/Code language are all to off- sale intoxicating liquor licenses and unless otherwise mentioned refer to the number of licenses available by the Ordinance or Code, although not necessarily issued and in use. The dated references are to Ordinance/Policy/City Code changes. Dates of meetings and activities resulting from licenses being approved but not used and requests for location changes are not included in this summary. The bold (#'s) at the end of each section are the number of licenses with approval and the number that appears to have been in use at the end of that particular time, respectively. The second number is the limiting number that along with location typically generated the requests from an applicant or applicants for change. February 22, 1973: Two licenses, one in the general western area of the Village (near Cedar Avenue and Highway 13) and one in the general north-eastern area of the Village. Approved (2) In Use (2) December 18, 1979: A third license was added in a central location. Approved (3) In Use (2) February 3, 1981: No more than four (4) off-sale licenses may be issued. They must be geographically spaced so that two are in the general western area (near Cedar Avenue and Highway 13), one in the general northeastern area, and one in the general south-central area. The Council reserved the right to determine specific compliance with this subdivision. Approved (4) In Use (3) July 16, 1985 Approved /February 6, 1986 Published: The City Code was amended to read: No more than four (4) off-sale licenses may be issued. They must be geographically spaced so that one license shall be located in the north area (southerly boundary shall be Silver Bell Road -Wescott Road excluding Silver Bell Shopping Center); one in the southeast area; and two in the southwest area with the easterly boundary located along Interstate I-35E right of way. The Silver Bell Shopping Center shall be included in the southwest area. The Council reserves the right to determine specific compliance with this subdivision. Approved (4) In Use (4) May 5, 1986: The City Council authorized a fifth license in the northerly portion of the city, generally in the Town Centre area. The City Council also directed that a public hearing be held in June to consider removing the restrictions or revising the number of licenses. Approved (5) In Use (4) August 19,1986 Approved /September 4, 1986 Published: The City Code was amended to read: No more that one (1) off-sale license may be issued for each 2,000 households in the City of Eagan as determined by the Metropolitan Council as of April 1 of each year. The sixth off-sale license shall not be approved prior to July 1, 1987. One additional off-sale license may be approved each year thereafter. However, no license shall be approved prior to the 1St day of August of each year commencing in 1988. Applications will not be accepted unless a license is available as determined by the household count. Each applicant shall display to the City's satisfaction that it has at least an option on a specific site for the location of the off-sale store. The council reserves the right to determine specific compliance with this subdivision. Available (8) In Use (6) April 26, 1990 Directed /June 5, 1990 Approved /Published July 26, 1990: The City Code was amended to read: One (1) new off-sale license may be authorized for each 5000 population increase in the city, over a base of 40,000, as determined by the annual Metropolitan Council Population Estimates of April 1. Applications for new licenses will be received through August 31. If there is insufficient population to support another off-sale license, the applications will be returned. New license applications will be reviewed by the Police Department through November 30 with Council consideration at the first meeting in December. New licenses will be approved with an effective date of the following January 1. Any license not activated by the following August 31 will be rescinded and the available license will be part of the next application process. The new license application process provides for the issuance of one (1) new license per calendar year. An off-sale license which becomes available when an existing liquor store is sold will be considered independent from the "new license" process outlined above. License renewals, change in ownership and relocation are addressed elsewhere in Chapter 5. A set of criteria will be included in the review process to aid in the selection of the best qualified applicant. Such criteria may include residency, financial structure, overall operation, proposed location, traffic implications, previous experience and ownership restrictions. Each applicant shall display to the City's satisfaction that it has at least an option on a specific site for the location of the off-sale store. The council reserves the right to determine specific compliance with this subdivision. Available (10) In Use (6) December 7, 1993 /January 13, 1994: The City Code was amended to read: Off-sale license applications will be reviewed by the Police Department. If an off-sale license is not issued within nine months after Council approval, the approval shall automatically lapse. Each applicant shall display to the City's satisfaction that it has at least an option on a specific site for the location of an off-sale store and such other information as the City may require. The council reserves the right to determine specific compliance with this subdivision. All off-sale licenses shall run from the date of issuance until December 31 of that year. Fees shall be prorated if any off-sale license is issued for less than a full calendar year. This is the Code that is currently in place. Available (No Limit) In Use (14) Conclusion State law provides that in cities other than cities of the first class the limit of off-sale intoxication liquor licenses shall be determined by the governing body of the city. Cities of the first class have a limit of not more than one off-sale license for each 5,000 population. Over the years there have also been numerous discussions and City Code changes regarding ownership issues which are not included in this information. Attached without page number is a map showing the location of the 14 off-sale liquor licenses that are currently authorized and in service. Please advise, if you would like anything else or if you think this information could be provided in some other fashion in response to the City Council direction. Director Administrative Services VanOverbeke cc: City Clerk Petersen Deputy City Clerk McGarvey H a a~ W a w a a r-~ a w a LzM w H ~. ~, U ~' `~ F'r ~ W w w ~ , ~ o z ~.Y ~, . ~ ~ aV~ ~ ~ ~ ~ ~ ~ ~ y ~ Q ,.. Z aaa a~ ~ ~ ~ ~ ~ a~ ~ o ~b ~ a~ ~ ~ ~ ~ ~b a~ ~ a~ ~ o z ~ ~, o 0 0 z ~ ~ o S ~ o z .~ ~ o o ~ U ~ ' ~ ~ ~ ~ ~ 0 w d ~ ~ ~ ~ °' :~ ... E.., W r~ a ~ 'r'' ~ ~ -O a~ w o a~ w ~ ~ ~ :tj ~ ~ o ..., ~" a~ +: t ., ~ o~ N o h °~ o ~ °~ ~~ ~ ~ 0 Nw 0 N 0 0 z ° o z oaa ~ . z ~ z o ~~ ~~ a ~ a¢i °' c'bd w F4 F. °~~ ~Aa ~ o o z o z ~ o ~ o O z o z 0 z 0 z 0 z ° ° ~ A W W v~ ; y ~ ~ ~OW ~~ ~ • ~ ~ ~ ~ z ~+ ~" ~ Z z z z z z 0 Q W ~ z W N ~ N ~~ M ~ M ~--~ M O ~ O O 7 M ~ N ~ ~t Pr W a l~ ~ ~ ~ ~ ~ ~ ~ ~ ~ H ~ ~ ~ ~ ~ w w ti z o 0 o a z v `~ ~ "' ° ia ~ N ~ ~ o, ~ a a a a z ~ ~ ~ o w w w w F, O O O O a O D a a ¢. Q. ~ a N O O ° O ° t~ ~ O O rh N ~t ~ U U a v o ~ o ~ ~ o v o O ~ ~ ~ ~ a v ~ ~ ~ ~ ~ ~ ~-, o ~ ~ ~ ~ ~ WA o ~ -d o ~ ~ ~ ~, cn a U ~ as m ~ ~ cv W ~ ~ a v~ ¢ w w a MEMORANDUM EAGAN POLICE DEPARTMENT 3830 Pilot Knob Road Eagan, MN 55122 651-675-5700 651-675-5707 FAX DATE: December 27, 2004 TO: Gene VanOverbeke, Director of A,,dyyministrative Services FROM: Kent Therkelsen, Chief of Policel~~ SUBJECT: OFF-SALE LIQUOR QUESTIONS As you requested, I am providing information on the impact of off-sale liquor licenses on public safety in Eagan, specifically regarding the number of available licenses. Crime and Safety Impacts Generally speaking, the presence of off-sale liquor has limited impact on crime or safety issues in our city. Off-sale liquor stores do generate police calls, but in the same sense as most retail establishments. All retail businesses are susceptible to thefts, burglaries, bad-checks and customer disputes. Liquor stores are considered more vulnerable to robberies and crimes related to their product, such as underage or intoxicated persons attempting to purchase alcohol. Our history does not reflect undue police responses to off-sale liquor establishments or their immediate proximity. I have attached a map showing current off-sale liquor establishments in Eagan. The map does not include grocery store/gas-station 3.2 off-sale licenses. Police Department Impacts The police department is responsible for background investigations of applicants for liquor licensing and periodic compliance checks to assure legal operation of the business. Background Investigation Lt. Jeff Johnson advises that background checks for off-sale liquor license applicants normally consume 2 to 4 hours of investigative time, and less than 15 minutes of dispatch time to query data bases. An out- of-state applicant would require additional time and travel expense to properly investigate. Assuming an in-state applicant, police costs are estimated at $200 per application. Compliance Checks The department strives to conduct at least three compliance checks at each on-sale, off-sale and beer & wine establishment per year. Staff time is affected by the performance of the establishment. We estimate 20 minutes per establishment that passes and 40 minutes (not included subsequent court or admitistrative hearing) for establishments that fail. For 2005, the average hourly rate (wages and benefits) for the officers conducting these checks is $43.00. Off-Sale Liquor December 27, 2004 Page Two I do not believe additional liquor licenses will have an adverse impact on public safety in Eagan. Hopefully, additional expenses associated with background investigations and compliance checks can be recouped from license fees. Please let me know if you have any questions. Thank you. C/ Deputy Chief McDonald Lieutenants Johnson, Johnson and Pike g ~ ~ Q m C ~ Q W ~ x N ~ c J Y v t0 C ~ L O a C c ~ O ro c aE p m a~ O p m ~ o Q c ~ p M a~u L e ` jJ a0 C~ Yl a J ; Q~ tq O CA E M J~ ,C ~ C~ J 0. 0 0 Y ! M'"~ i V a.N ~ ~ aNe ~ m aN Eo °~ m~ ~a J~ O M U L i+ L ~ _ J 0 C ~ ~o ~ ~ Rf ~ W ° 8 0 m OY 7 C ~} J W ~ ~ ~ ~ 9 ~ ~ 9 m O Q ~' Y M ed ~ O _Cp Jr p ~J ~ R' ~ O > c-M r -~ ~ C Y v ~ ~0 ~ fl- ~ (A~ 0 ~ 1 ~.~ ~ S f"1 ` pp Ym ~ C~ m m U V m~ O N V A ~ 0 m ~ M L N Oo m~ d F- ~o o~ m '"~ R city of eegen PAT GEAGAN Mayor PEGGY CARLSON January 6, 2005 CYNDEE FIELDS MIKE MAGUIRE MEG TILLEY To All Off-Sale Liquor Licensees: Council Members This letter is to inform you about an action taken by the Eagan City Council on October 19, 2004 whereby a moratorium was placed on the issuance of off-sale liquor licenses for THOMAS HEDGES a period ending October 15, 2005, or earlier if so determined by the Council. This action City Administraror was taken for the purpose of evaluating whether to place new conditions or restrictions on the issuance of permits and licenses for off-sale liquor operations. During the past few months, City staff has been compiling information related to this Muniapal center: matter and the results will be discussed by the City Council at a Special City Council 3830 Pilot Knob Road meeting which you aze invited to attend. The meeting is scheduled for January 11, 2005 and will begin at 5:30 p.m. with this item scheduled for discun ion early in the meeting. Eagan, MN 55122-1897 a The meeting will be held in the Eagan Room located on the 2 floor of the Eagan Phone: 651.675.5000 Municipal Center at 3830 Pilot Knob Road. Fax: 651.675.5012 TDD: 651.454.8535 If you have any questions in advance of the meeting, please feel free to contact me at (651) b75-5034. Maintenance Facility: Slncerely, 3501 Coachman Poinr ~ / / Eagan, MN 55122 1 ~~[ ~ ~I ` /"'"-r' Phone: 651.675.5300 Maria Petersen Fax: 651.675.5360 City Clerk/Administrative Services Coordinator TDD: 65].454.8535 c: Mayor and City Council City Administrator Tom Hedges www.ciryofeagan.com Daniel Tesfamariam and Helen Tesfay THE LONE OAK TREE The symbol of srrengrh and growth in our community l D Agenda Information Memo January 1 1, 2005 Eagan City Council Workshop IV. EAGAN TECHNOLOGY TASK FORCE FINAL REPORT ACTIONS TO BE CONSIDERED: • To determine whether the City of Eagan needs to form an ongoing technology advisory body to ensure Eagan remains technologically competitive. • If yes, give direction to staff to come back with plans of how such a committee should be comprised to include specific technology expertise, the frequency of its meetings, necessary staff support, etc. • To determine whether there is a need, as recommended, for the City of Eagan to issue a Request for Information to technology providers to fill existing gaps in Eagan and possibly provide citywide wireless coverage. • If yes, give direction to staff to come back with an analysis of how much staff time and/or consultant dollars would be necessary to prepare, issue and analyze proposals received from potential providers. • To give direction to staff to continue to monitor and maintain dialog with Qwest regarding a full deployment of DSL within Eagan. • To direct the Planning Commission in consultation with Engineering and Community Development to review over the course of the next year existing city ordinances to determine what changes, if any, might be necessary to encourage technology deployment and approval conditions that facilitate future deployment. NOTE: Communications Director Garrison, the Task Force consultant and Chair, and Mr. Rick King, Chief Technology Officer of Thomson West, will be available for questions and make a brief and simplified presentation of the final report that will provide the City Council with the appropriate background for it to make public policy recommendations. FACTS: • On March 16, 2004 the Eagan City Council approved the creation of a Technology Task Force and the hiring of a wireless broadband consultant to assist the work of the Task Force in completing its charge. • A task force was formed including Chamber representatives, representatives from the Economic Development and Telecommunications Advisory Commissions, and the chief technology officers of Northwest Airlines, Thomson West, and Blue Cross Blue Shield. • Work of the Task Force and consulting firm Community Technology Advisors included 1) creating a methodology to inventory and afirst-ever map of the city's technology assets/infrastructure, 2) conducting interviews, surveys or focus groups, with key business officials, residents, Internet Service Providers and others to help shape recommendations City's technology plan. • Among the findings of the Task Force: - Cable modem service is available to virtually every home in Eagan. - However, residents have concerns about price and a lack of competing Internet service providers. - While large businesses and certain segments of Eagan enjoy afiber- rich environment that would be the envy of other cities, some businesses have no affordable high-speed Internet options and only about 50% of residents and businesses have access to digital subscriber lines (DSL) through Qwest and other providers. - In addition to working with existing providers to extend their services, Wireless solutions may well be appropriate to filling some of these gaps or creating a citywide wireless network and the Task Force recommends exploring these options through a formal request for information (RFI). • The Task Force recommends several connectivity goals including a minimum of one high speed Internet provider for each address (business or residential) working toward a higher goal of multiple providers for each address, offering a choice of price, service, redundancy and reliability. ATTACHMENTS: The copy of the full spiral-bound Task Force Report was provided to the City Council previously in the Additional Memo on Monday, January 3. A copy of the recommended actions, both immediate and longer term, is included from pages 16-17 of the final report enclosed on pages~~: A copy of suggested connectivity goals for cell phone, wired and wireless Internet services is included from pages 7-8 of the final report and enclosed on pages ~rj- ja Recommended City Actions Immediate • Discuss and adopt the recommendations of the technology task force as appropriate. • Formalize the Technology Task Force as an ongoing body. Review membership and consider representatives from the education and health care industries. Any appointed task force members should have a strong technology background and represent key community segments, such as business, education and health care. • Develop and issue a Request for Information to prospective wireless providers. • Maintain close contact with Qwest to ensure DSL deployment and promote other market opportunities. Short Term • Post Telecommunications Provider Inventory and Wi Fi locations on the city's web site. • Open discussions with Comcast to deliver services to unserved commercial sites • Encourage competitive providers to pursue opportunities to serve Eagan businesses aggressively. • Consider a requirement for new construction projects that telecom conduit be required in parking ]ot construction Intermediate Term • Design and issue a RFP to prospective wireless providers for the delivery of Wi- Max services. • Survey all or a statistically valid sample of Eagan residents regarding telecommunications issues • Include telecommunications and technology issues in Business Retention visits. • Convene at Ieast quarterly meetings of the Technology Task Force • Investigate the Intelligent Community Awards (www.intelli~entcommunity.org/1 and other community technology recognition programs and determine if Eagan should apply for recognition City of Eagan Technology Initiative Report Community Technology Advisors Corp. Page 16 of 17 j ?J • Bring the issue of restrictions of fiber on bridge crossings to the attention of the MN Department of Transportation, the Metro Council, and Homeland Security. Involve the Dakota County and the Eagan legislative delegations. • Consider changes in municipal rights of way ordinances to ensure proper management and that telecom provider investment is not discouraged. City of Eagan Technology Initiative Report Community Technology Advisors Corp. Page 17 of 17 1 ~- Policy framework The City should establish and maintain an environment to encourage and provide state of the art and diverse telecommunications infrastructures to assist in the recruitment and retention of residents, organizations and businesses of all sizes. Recognizing that telecommunications is central to economic development and quality of life, the City needs to maintain an ongoing effort to ensure that Eagan stays competitive in this important area by adopting the following goals: Connectivity goals -Wired broadband services • There should be a minimum of one provider for each address, whether serving Business, Residential or Public agencies. The City should work towards a higher goal of multiple providers for each address, offering a choice of price, service, redundancy and reliability. • In areas where there is a monopoly service provider, the City should encourage competition, and monitor and publicize service availability and quality of service. • The City should maintain a role in promoting ongoing communication between stakeholders, including telecommunications providers, local government, business, education and residents. Connectivity goals -Wireless broadband services • For Wi-Fi services, the City of Eagan should encourage deployment of "hotspot" wireless connections as an amenity in public locations (both publicly and privately owned). Any publicly owned "hot-spots" should maintain a commitment to ongoing technology updates. Maintain and publish a map of hotspots/coverage area of wireless services. For fixed Wireless services, the City of Eagan should encourage private sector deployment of unlicensed fixed wireless broadband services, including: o Encourage deployment through flexible tower rental arrangements o Consider tower rental options that reward quality service and eliminates poor service providers o Include network security as a criterion in vendor selection o Enlist the aid of the community technology expertise, including private businesses, in the evaluation process The City should maximize utilization of water towers and reservoirs by implementing an RFI process to determine the range of technical, partnership and pricing options to meet the some or all of the following considerations: o Provide coverage to (all of or a significant portion) of the community o Enhance revenues to the City o Enhance the competitive environment for Internet services City of Eagan Technology Initiative Report Page 7 of 17 Community Technology Advisors Corp. ~S Connectivity Goals -Cell phone While the examination of cellular telephone coverage was outside the scope of the task force charge, advances in mobile data communications, including messaging, Internet and business communications caused the task force to discuss this important telecommunications service. Telecommunications staff at Thomson West provided an analysis of cellular coverage in Eagan that shows generally high levels of service within the community. • There should be high quality citywide cellular coverage from multiple providers where dropped calls are minimized and cellular data services are possible. • Work with providers to understand and fill service gaps City of Eagan Technology Initiative Report Page 8 of 17 Community Technology Advisors Corp. / Agenda Information Memo January 11, 2005 Eagan City Council Workshop V. CEDAR GROVE REDEVELOPMENT AREA DISCUSSION DIRECTION TO BE CONSIDERED: To receive a presentation by the Ryland-Schafer Richardson development group regarding the refined conceptual redevelopment plan and development program for the Cedar Grove Redevelopment District and provide the staff and developer with direction regarding: 1. Recognition of Schafer Richardson as the lead in the Master Developer partnership with Ryland Homes. 2. Preliminary approval of the refined conceptual redevelopment plan and development program -including general land uses, layout and building types. (Final approval of development plans will occur with future specific development approvals.) 3. Confirmation of the role of the Council Finance Committee as liaison to staff for negotiation of development agreement. 4. Issues to be resolved in the negotiation of a draft development agreement: • Specific phasing expectations, unit numbers, square footages and types. • Responsibilities related to relocation of existing businesses and securing receiver sites. • Responsibilities for property acquisition and assembly and City assurance of developer purchase, if City takes the lead in property assembly. • Relationship of phasing to financial assistance. • Means of assuring delivery of specific development elements -uses, building products, etc. • Means of assuring completion of entire project. • Other issues identified by the City Council. 5. Authorize staff to proceed with negotiation of the development agreement. FACTS: • Substantial progress has been made on the Cedar Grove Redevelopment project. The project has reached the point at which the redevelopment of the core area will begin to occur. To accomplish that, decisions and direction regarding the development plan and roles and responsibilities will need to be provided by the City Council. • Since the City Council Workshop on November 9, 2004, several steps have occurred to provide background to those decisions: • Council, staff and developers participated in a tour of development and redevelopment projects, including those constructed by the development partnership. ~7 Agenda Information Memo Page 2 January 11, 2005 Eagan City Council Workshop Item V. • Council Finance Committee met to discuss issues regarding project financing, development agreement deal points, business relocation and site assembly. If acceptable to the Council as a whole, the Committee can act as its liaison to staff in its development agreement negotiations with the developer. The Finance Committee is expected to meet prior to the next Council workshop on January 25 to address these matters further. • Council Communications Committee met to discuss reactivating the Cedar Grove Communications plan including updating the website, mailed distributions, regular project updates, continued direct communications and open houses. The Communications Committee is also expected to meet prior to the 25th • The development partnership has designated Schafer Richardson as the Master Developer. Ryland will continue to function as a development partner for the residential portions of the project. • Staff and the developers continued to meet to respond to issues raised on the tour and by the Committees and to direct preparation of further refinements of the refined development plan. In addition to the graphics of existing building types the Council has seen before, the developers have directed their architect to prepare renderings of certain product types requested by the City Council. • Staff has met with SRF Consultants to direct preparation of an update of the traffic portion of the AUAR, which is underway. • In considering approval of the refined conceptual redevelopment plan, the Council will want to consider: • Consistency of the refined development plan with their goals and vision for the area. • Consistency of the plan and building types with the City's Cedar Grove Design Framework. Are there any housing types among those presented that the Council does not find consistent with the design framework -single family detached, twin home, row home, etc.? • Consistency of the plan with the City's expectations for transit-oriented and pedestrian-oriented design. • Consistency of the plan with the City's expectations for horizontal and vertical mixed uses. • Acceptability of strategy for short and long term location of transit station. • Availability of opportunity within the plan to provide mixed value housing, particularly scattered site or mixed value affordable housing. • In considering general direction regarding the deal points for the development agreement, the Finance Committee and City Council expressed willingness to consider a modification of past practice such that the City may act as the assembler of parcels to be redeveloped, provided that the developer minimizes the City's exposure to costs beyond TIF and other project related resources and meets other needs outlined in the direction item above. The Council is asked to provide direction with respect to these issues as part of the discussion at the workshop. ~~ Agenda Information Memo Page 3 January 11, 2005 Eagan City Council Workshop Item V. ATTACHMENTS: • Refined ,conceptual redevelopment plan and building elevations on pages (Color versions of the plan and elevations will be presented at Tuesday's meeting.) • Project Accomplishments to Date and Timeline on pag o~-- • Notes from December 11, 2004 Council Tour onpage - • Ehelers and Associates memo regarding the relationship between acquisition responsibilities and other aspects of the development agreement on pages • Picture book from Council Tour will be available at Tuesday's meeting. ~q ~ C i_ C VLF ' M C I ~ - . - ~ .. I L-- T O i -x ' _ O O 00 ,, \ I, L • i- vii ,~,~ i% ~ ~ ~ ! 2 ~ ~ ~ , i ~ _ ~ ~~ .~ \ ~ I r c ' ~ ~ ~ ~ I ' i d ~ . ~ y ..i .v i I I ,.~ I .. = C d ^ -d-.+ - _ .. x O C; ~ d p i '~ ~ ,., d ~ M ;v -gyp __ i v/ - _ -jam __ - ~- _ O ~` L p '~ 1 i; c ~, y '3 W M I I ~ ~_ ~~r iL i _ { F' _ _ Q~ A- 1 1 ~ III ~ ~ ~ h l l ~ ~~ i I I ~?1L1~t11-1 '~"I~' ~~~i LL .11 .~ ~W/ I , I 'i ~ ~ C .tee W I ' ~ .a T ~~ I ~.. A 1 C c3 ~ _ i _ i r- - ^^,, d C - _- ~ I d ~ - ~. - \.M1 ~ I - .G C ~- v~ rt~ f . I ~ C ~ z ~ , -C L ^C gdr~ t "` 7 / _ - -9 ~* w ~~ V __.-._- ~~ Main Street a~. 0 ~.n J, •~ i.n H '~ ~.7, ~a ~..s 0 ~~~ .~ .~r • r.w h ~F•~ ... h ~'° 3 i.^ '~ ri •r.a CEDAR GROVE REDEVELOPMENT AREA VISION, GOALS AND ACCOMPLISHMENTS Updated 12/04 Cedar Grove Project Vision - To once again make the Cedar Grove area a strong, vibrant gateway to the City of Eagan by creating a viable, mixed-use area that utilizes the area's highway visibility and accessibility, while maintaining compatible land use relationships with surrounding uses. The following goals for the Cedar Grove Project are summarized from the work of the Cedar/13 Redevelopment Study: Goals 1. Revitalize Cedar Grove Area as a Gateway/Landmark of the Community 2. Improve Traffic Access and Circulation To and Through the Area 3. Encourage a Mixture of Market-Supportable Land Uses Compatible with One Another and with the Surrounding Area 4. Incorporate New Urban Development Expectations by Incorporating a Pedestrian Focus, Transit Opportunities, Mixed Residential and Commercial Uses, Uniform and Cohesive Design Elements, Structured Parking and Public Green Space. 5. Protect Long Term Vitality of Residential Areas Adjacent to Commercial Area and Consider the Needs of Existing Businesses in Redevelopment or Relocation Efforts Proiect Accomplishments to Date • Initial Market Study Completed • Village Plaza and Revised Plan Developed • Area Designated as Cedar Grove Redevelopment District • Initial RFP Distributed and Proposals Received and Selected • Comprehensive Guide Plan Amended to Incorporate Vision and Policies • CGD Zoning District Adopted • CGD Design Guidelines and Streetscape Standards Adopted • Environmental Review (AUAR) Completed • AUAR Traffic Budget Used to Guide Development Densities • Cedar Grove Tax Increment District Created • Initial Roadway and Streetscape Improvements Constructed • Land Acquisition Initiated • Council-EDC-APC Brainstorming Session - 4/04 • Keystone Communities Senior Housing Project Approved • Nicols Ridge Townhome/Condominium Project Approved • United Properties Marketing Corporate Office Site -Ongoing • Updated Market Study Completed - 10/03? • New Request for Proposal Distributed, Proposals Received and Master Developer Selected - 4/04-8/04 • Staff and Developer Refine Development Plan, Financial Analysis, Market Analysis - 6/04-Present ~~ • Staff and Developer Negotiate Preliminary Development Agreement and Identify Policy Issues for Council Consideration - 8/04 to Present • United Properties Development Agreement Amendment Approved - 10/04 • Refined Development Plan Presented to Council - 11/04 • Keystone Project Completed - 12/04 • Nicols Ridge Model Home Permits Issued - 12/04 • Council Discussion of Project Implementation -Refined P1anNision, Communications Plan Update, Development Strategy - 11/04-Present ~~ Cedar Grove Redevelopment Timeline Based on 2004 RFP Schedule Updated January 2005 1. Affirm development goals - Fa112003 2. Prepare/affirm development concept (design standards and uses) -Winter 2004 3. Pre-market development concept -Spring 2004 4. Re-affirm goals and development concept -Spring 2004 5. Develop phasing plan for redevelopment (with Master Developer) - TBD 6. Prepare RFP -Spring 2004 7. Identify target developers -Spring 2004 8. Review/analyze development proposals -Summer 2004 9. Prepare developer analysis -Summer 2004 10. City Council/EDA review of developer analysis and selection for interviews - Not applicable because only one proposal was received. 11. Interview and select developer -August 2004 12. Preliminary development phase -Beginning November 2004 1. Approve refined site plan -January 2005 • Reactivate Communications Plan including neighborhood business open houses -January/February 2005 2. Refine development and phasing program -January 2005 3. Define development agreement issues -January 2005 4. Refine financial feasibility 5. Affirm marketability 13. Draft final agreement for City Council consideration. 14. Final agreement phase. 1. Secure financing 2. Secure land use/regulatory approvals 3. Secure land 15. Initiate Construction a7 Meeting Notes City Council Development Bus Tour Cedar Grove Master Developer Projects December 11, 2004 Draft Attendance: Mayor Geagan, Councilmembers Carlson, Tilley, Maguire and Fields, City Administrator Hedges, Director of Community Development Hohenstein, Director of Administrative Services VanOverbeke, Director of Public Works Colbert and City Planner Ridley. Parts of the tour were attended by David Frank of Schafer-Richardson and Chris Enger and Brian Sullivan of Ryland Homes. Tour Notes The City representatives and developer representatives participated in a tour of development sites in Minneapolis, St. Louis Park, Hopkins and Eden Prairie. • At the Bassett Creek Condominium project in Minneapolis, Frank explained how new construction can be made to reflect the loft appearance accomplished in older warehouses. He also discussed the ways in which the Schafer Richardson product could include commercial uses on the first floor. • At Excelsior and Grand site in St. Louis Park, the developer pointed out that the finish and design guidelines for that project differed somewhat from the Cedar Grove District design guidelines and asked that the City consider some modification of the CGD standards if a quality product of similar design were presented by the development group. The Council discussed the need for uniform design themes, including lighting, streetscaping and other features. The fountain and public art were also highlighted as features that set the area apart. They also discussed the value of quality destination restaurants as a key factor in the retail mix. At the Ryland residential project in Hopkins, the developer discussed the design relationship of the different types of homes they are proposing for the Cedar Grove project. At the Ryland Offices, the developer presented a revised conceptual redevelopment plan that incorporated comments made by the City Councilmembers at the November 9 Workshop meeting and subsequent discussions. • The developer also shared pictures/design concepts were shared about the Villages of Blaine located at 35W and Lexington. • The Council discussed public v. private streets with an understanding that public streets are preferred; however, alleys would remain private. At Ryland's Hennepin Village project in Eden Prairie, the Council toured housing products including single family detached, row homes and twin homes that are proposed to be incorporated in the Cedar Grove Redevelopment. City Council Bus Tour December 11, 2004 Page 2 • The developer discussed the ways in which the combination of density, housing types, building relationships, side walks, common green space and site amenities allowed a combination of lifestyles, housing values and personal contacts that they believe reinforce the sense of neighborhood for the area. Southwest Station -The Council drove through the Southwest Station transit facility in Eden Prairie in which the transit station is surrounded by restaurants that have complementary parking peaks to share parking spaces efficiently. The Council expressed interest in seeing this use pattern reflected in the Cedar Grove plan. During the trip back to City Hall, the City Council asked that the following be addressed as the project moves forward. Land Use and Site Plan • The developer has made progress in reflecting the City's vision for Cedar Grove in the revised concept plan presented. In particular, the Council noted: • The location of the short and medium term transit station in the east district of the project is desirable. The preservation of the long term transit station option on the west end of the district is important. • The inclusion of vertically mixed commercial and residential buildings, like Excelsior Grand, in a portion of the development is important. • The inclusion of diverse horizontal mixed commercial and residential along the pedestrian-oriented street between the east district and the central green area is important. • The need for a significant vertical land use in the west district is important as a highly visible landmark for the area. For this purpose, the inclusion of a multi-story, full-service hotel (banquet-entertainment-water park) in the west district is important. The Council needs to hear and learn more about the CSM/Ryland meeting about the hotel/conference center. In addition, the Council wants to know what the developer has in mind for placeholders for certain uses within the development plan. • Elevation is an important consideration especially for the future development at the Cedarvale Shopping Center site which is located across the street and in the direct view of the Nicols Ridge neighborhood. • The general housing types are acceptable for Cedar Grove, provided that they fit into the overall mixed use plan rather than driving the development plan. • The Council indicated that it wants to be certain that the developers are committed to a strong commercial aspect for the Cedar Grove project. • Residential development patterns, maintenance standards, covenants, etc. will need to be specific to insure that the intended uses are viable and maintained in the long run. ~Q City Council Bus Tour December 11, 2004 Page 3 Provision should be made for affordable housing within the development of the area. The Council would prefer this to be on a scattered site or mixed value approach. Additional detail is necessary to insure that components of the City vision that are Council priorities are incorporated in a plan to be presented for formal approval. Additional Information The Council also requested additional information pertaining to the implementation of a refined plan. • Partnership Roles -Require the development team to resolve and define their roles as development partners. As the largest property owner and the part of the development team with retail and mixed use/commercial experience, it is essential that Schafer Richardson play a key role in the entity with whom the City executes the development agreement. • Market Supportability -Provide information regarding the scale of retail commercial use that was anticipated to be supportable from the Village Plaza and Maxfield Studies. Consider a limited update of the Maxfield Study if necessary. How do these numbers compare to the proposal? • Traffic Feasibility -Provide information regarding the level of traffic that can be supported through an update of the traffic section of the AUAR. Can the proposed uses be supported? Could an increased density of uses be supported? • Relocation Expectations -The developer, staff and consultants need to define a specific relocation plan and receiver locations for all businesses, but also a specific plan regarding key businesses that are expected to remain within the area -barbershop, shoe repair, tailor, frame shop, etc. • Land Acquisition and Assembly -Mayor Geagan asked that staff speak with the City of Hopkins on the pros and cons for the City's involvement for doing the land assembly • Horizontal Mixed Use -Councilmember Maguire asked to have additional input and discussion about Grand Avenue in St. Paul and how the type of development in the area around Victoria Crossing could relate to the Cedar Grove Redevelopment. Other Business In a motion by City Councilmember Maguire, seconded by Councilmember Fields with all members voting in favor, the Wednesday, December 15 Special City Council meeting was cancelled. City Council Bus Tour December 11, 2004 Page 4 In a motion by City Councilmember Tilley, seconded by Councilmember Fields with all members voting in favor, a Special City Council meeting to consider a presentation by the consultant on Northeast Eagan was scheduled for Monday, December 13 at 5:00 p.m. The tour concluded at 3:30 p.m. ~I FREERS 6 ASSQCiATES INC O To: Jon Hohenstein, City of Eagan From: Jim Prosser & Sid Inman, Ehlers Associates Subject: RSR Financing Structure for Public Assistance W Date: October ] 0, 2004 Ehlers met with RSR development team on September 22, 2004 at our offices to discuss the structure for financing the public assistance that may be required for this project. We were focused on addressing two basic questions: 1. What specific mechanisms will be used to determine the level of public assistance required to snake the project financially feasible? 2. How will the assistance be "financed"? This question refers to which party will take the risk that the projected increment will be generated. This memo summarizes the issues discussed and the suggested answers to these questions. It is important to note that the purpose of these discussions was to develop a framework for negotiating a development agreement for consideration by the City of Eagan. It was not represented as final development agreement negotiations. Level of Public Assistance Ehlers typically recommends that the level of public assistance to be provided to a developer be based on objectively verifiable indicators such as independent review of development pro forma. Assistance is based on the amount of assistance required to fill the "gap" necessary to provide the developer a reasonable rate. The appropriate rate of return is based on an assessment of development risk assessment and market expectations for return on equity. RSR is comprised of Ryland Homes, a publicly traded company and Schafer Richardson. RSR expects that the development will be completed in phases with development partners assuming responsibility for individual components within each phase. Ryland ,!. Jim Prosser, CIPFA (651) 697-8503 Fax: (651) 697-8555 Executive Vice President/Director jim@ehlers-inc.com 3060 Centre Pointe Drive http://www.ehlers-inc.com Roseville, MN 55113-1105 ~a Homes represented the pro forma review methodology for determining the level of Public assistance would not be feasible for two reasons. First, Ryland does not collect financial data on a project basis. Financial data is gathered only on a "divisional" basis, in this case the division in Ryland Minnesota. The second was Ryland corporate philosophy that is generally inconsistent with a rate of return limitation. A potential approach that may address these issues includes the following elements: 1. RSR and the EDA agree on a land assembly budget for separate phases within the project area. The budget to include all cost necessary to make site "construction ready" including land acquisition cost, relocation, site prep, public improvements and assessments. The value for developer owned property (Cedarvale Shopping Center) would be independently determined. 2. RSR prepares a site plan including defined development components (i.e. 110 units of town home style A projected sale value $275,000, etc.) within each phase. 3. RSR will determine the amount that the developer should pay for the "construction ready" land for each project phase (developer land payment). The developer land payment represents what the payment the market supports for the type of proposed development. The City will independently review and verify the amount established for the developer land payment. Ehlers recommends that this payment be verified and documented using a market research firm (Maxfield Research). Both parties will need to agree upon this payment. 4. Ehlers would prepare estimates of the tax increment to be generated by each development phase. 5. The EDA would establish the public assistance based the difference between the land assembly budget for each phase (as described in 1) and the developer land payment but no more than the projected tax increment for each phase. A simplified example of this approach would include the following: Phase Land Assembly Bud et Developer Land Pa ment Difference Projected Increment Maximum Assistance One $5,000,000 $3,000,000 $2,000,000 $2,500,000 $2,000,000 Two $4,000,000 $3,750,000 $250,000 $1,750,000 $250,000 Three $3,000,000 $1,000,000 $2,000,000 $1,000,000 $1,000,000 This example has been specifically constructed to illustrate the need to address the likelihood of shortages and overages in assistance needed and increment available between project phases. This could be addressed within a final development agreement. Jim Prosser, CIPFA Executive Vice President/Director Ehlers & Associates Phone 651.697.8503 Fax ' 651.697.8555 E-mail jim@ehlers-inc.com Assistance Financing Assistance financing refers to when the developer is paid the assistance and in what form is payment paid. There is an infinite range of options available for assistance repayment. The range options are best illustrated by two examples. First is payment "up-front" in cash of the full amount of projected increment at the time the development agreement is closed. This payment is made from cash borrowed by the City to be repaid from the projected project increment. This option transfers the risk to the City. If the developer does not construct, the values supporting the projected increment are not produced, the tax rate is reduced by the legislature or other changes occur the City may not have the increment to repay itself. The second example is pay-as-you-go. Under this option the developer is given a "note" from the City. The note is a legal document that conveys the income stream from the increment generated by the project to the developer. The maximum amount of the note, interest rate and term of payment are all specified within the note. Under this option the developer is assuming the risks identified under the prior example. R$R is proposing a combination of these two basic approaches. Their proposal would provide that RSR would be paid the agreed upon amount of assistance for each phase after completion of each phase. Under this option the developer assumes a significant short-term risk that the development will be constructed at the projected values. The developer will "up-front" the cost to acquire property, prepare the site and construct the project. The developer will be repaid the agreed upon gap amount only after the project (phase) is constructed. The City assumes the long-teen risk that the development will continue to produce sufficient increment to repay the loan used to pay the development assistance. Because of the inherent difficulty in financing pay-as-you-go notes for owner occupied housing, some communities have assumed this long-term risk by financing the tax increment once the development is completed. Ehlers recommends a thorough analysis and discussion of these risks by policy-makers prior to approval of this approach. Findings 1. The structures proposed to determine the level of public assistance and to finance the assistance are not unique, although they have not been specifically used by the City of Eagan to date. 2. The developer would need to complete additional analysis prior to completing an analysis of the workability of these concepts. This structure would permit Ehlers to prepare the required "but-for" findings that the development would or would not be able to proceed without public assistance. ~. Jim Prosser, CIPFA Executive Vice PresidendDirector Ehlers & Associates Phone 651.697.8503 Fax 65].697.8555 E-mail jim@ehlers-inc.com 3~- 4. Adequate information would be available to complete an analysis of the risk to the City of long-term financing of the developer assistance. The proposed structure provides that the developer will be assuming a significant short term risk related to land assembly and construction prior to receiving any assistance. The City will be assuming long-term risk but will have the security of a completed project (phase). The City risk is limited to the potential of legislative changes in tax rates or that the property values decline over the during the debt repayment period. 6. The developer land payment and land assembly budget should be agreed upon prior to drafting final development issues. Next Steps These issues should be reviewed by the EDA and a determination made regarding their general acceptance prior to proceeding to future preliminary development steps. Jim Prosser, CIPFA Executive Vice President/Director Ehlers & Associates Phone 651.697.8503 Fax 651.697.8555 E-mail jim@ehlers-inc.com Agenda Information Memo January 11, 2005 VI. OTHER BUSINESS ACTION TO BE CONSIDERED: No formal action is required. This item is for informational purposes only. FACTS: • As the Council prepares for the year ahead, the following is a brief summary of the workshop items that are tentatively scheduled for the months ahead. The following items are tentatively scheduled for the January 25, 2005 Council workshop: o Installation of Signs at Temporary Cul-de-sacs to Note Site of Future Through Street o Rosemount JPA for the Extension of Utilities o Continued Density Designation Discussion o Summit Pass Traffic Calming o NE Eagan Update Other workshop items that are anticipated to be brought to the Council in the coming months include: o State of the County Presentation o Joint meeting with the Historical Society o Joint meeting with the EDC and APC on general issues o Urban Wildlife Issues o Cascade Bay--$1 Million balloon repayment options and discussion regarding competing priorities at Cascade Bay o Community-wide Survey Topics (2005) o Agricultural Zoning Discussion