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04/04/2000 - City Council Special 00090 MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL EAGAN, MINNESOTA April 4, 2000 A Special City Council meeting was held on Tuesday, April 4, 2000 in the City Council Chambers of the Eagan Municipal Center Building. The meeting was called to order at 5:07 p.m. and those present were Mayor Awada and City Councilmembers Bakken, Carlson and Masin. Councilmember Blomquist joined the meeting at 5:10 p.m. Also present were Assistant City Administrator Verbrugge, Senior Planner Ridley, Director of Public Works Colbert, Director of Finance VanOverbeke, and City Administrator Hedges. AGENDA ADOPTION The agenda was approved as presented. VISITORS TO BE HEARD There were no visitors wishing to address the City Council for items not on the agenda. KOLLOFSKI ADDITION PROPERTY DISPOSAL City Administrator Hedges introduced the Kollofski Addition Property Disposal item and asked that Senior Planner Ridley provide additional background covering the issues before the City Council. Mr. Ridley noted that the primary issue was how the City intended to dispose of the property it had acquired and is still holding in the Kollofski Addition. He explained the two exhibits in the City Council packet showing the Tax Increment Financing (TIF) District and the location of parcels owned by the City, Wisp ark and the lImes specifically on the west side of the tip of the pond. Mr. Ridley noted that Wispark is interested in acquiring the City property as well as the Imre property to continue the development of the Grand Oaks Business Park. Mayor Awada acknowledged that representatives of both Wispark and the lImes were in the audience and asked them to share their perspectives on the issues before the City Council. Mr. Greg Miller, Regional Director for Wisp ark, stated that his firm has a strong interest in acquiring both the City land and the lIme holdings west of the tip of the pond to allow completion of their development in that area. He also stated that there have been numerous discussions about acquiring the Imre property east of the tip ofthe pond. Wispark has an interest in seeing the quadrant cleaned up and both they and the Imres want the TIF options preserved on the east side as well. Mr. Brent Brunn of the Real Estate Company, CRESA, spoke representing the Imres. He stated that their position is in line with Wispark's and that they understand that it is in their best interest to enter into discussions with developers; the only question being the timeline. He stated that the Imres are looking for a site to relocate TMI Coatings. Mayor Awada inquired of Mr. Brunn, if the Imres have concluded that they do not want to be in the development business. Councilmember Masin asked how long that conclusion might have been in place. Mr. Brunn responded that for the last couple of months they have been working on a site selection. Councilmember Masin also asked whether or not anything has happened in the past year and Mr. Brunn stated that definitive action has been taken to find a new site. Councilmember Blomquist inquired about what is precipitating the potential move. Mr. Brunn said that the Imres have been 00091 holding the land for expansion but that they probably were not going to be able to do that at that location. Councilmember Carlson suggested that there are really two independent actions and that one can move without the other. The tip of the pond separates the areas into East and West components for all practical purposes. Mayor Awada noted that the issues included the City's ownership of five parcels and that they should be sold to Wisp ark or the lImes. A second issue is how to deal with the parcels that the lImes own in that area on the west side of the pond, if the City parcels are sold to Wisp ark. Finally, what are the TIF issues on the east side and what can we do to accrue the benefit from keeping those parcels in the TIF. Mr. Ridley and Mr. Verbrugge described the TIF constraints regarding both four-year and five-year limitations in the TIF law. Mr. Miller volunteered that Wispark will discuss the east side options with the Imres. Councilmember Masin inquired of Mr. Brunn as to whether or not the Imres had any action plan to keep the east side parcels in the TIF. He responded that he was not aware of anything. Councilmember Carlson again suggested that the discussion be focused on the west area. Mayor Awada suggested that the City Council follow the recommendations of the Advisory Planning Commission to sell the City parcels to Wisp ark and allow for private negotiations between the Imres and Wispark for Wisp ark to acquire the Imre holdings on that side of the pond with the City assisting in assembling the parcels by using condemnation, if necessary. Councilmember Carlson suggested that the negotiations have been going on for a year and only two additional weeks should be allowed prior to the City becoming involved. Mr. Brunn stated that 30 days would be a more reasonable time for the negotiations and that the City should hold off on the disposal of its property for that period of time also. Councilmember Masin inquired about what the City would need to do in this process. Mr. Verbrugge responded that the City would need to assist through condemnation, if the parties could not negotiate an agreement. Councilmember Blomquist asked what the problem is with leaving the Imres building and business as it is at this time. Mr. Verbrugge responded that there are none, if that is the desire of the City Council. He noted that that the property was used in the test for setting up the TIF District. Councilmember Carlson inquired about whether or not the Triangle Building was "blighted" and also met the test. Mr. Miller responded that the outside industrial storage is the problem in the area, not the Triangle Building. He noted that, if Wisp ark were able to acquire the site, they would try to keep that building. Mayor A wada again requested that the discussion be focused on the property on the west side of the tip of the pond. Councilmember Masin noted a potential problem, ifthe negotiations have not been successfully completed in the 30-day period. Mayor Awada moved to sell the City parcels to Wispark at fair market value and to allow the Imres and Wisp ark 30 days to negotiate a sale of the Imre holdings on that side of the pond to Wispark. Ifno deal is struck in that time period, the City staff is to begin condemnation action. Councilmember Carlson seconded the motion noting that this provided for an orderly process in which to deal with this situation. Councilmember Blomquist noted the trouble with this action is are we forcing the Imres out of this location. Mr. Brunn responded that it is not their wish to leave but that they see that their time is limited and that they need to take some action now. Mr. Miller pointed out that this action is not forcing the Imres to leave, as it does not impact their operations on the east side. Councilmember Masin asked whether or not the Imres have made any attempt to contact the City or the City Council in an attempt to bring a resolution to these issues. No one was aware of any attempts to make contact with either the City or the City Council. Councilmember Carlson noted that she had called Mr. Miller and determined that one company had spent a lot of time and 00092 money and that this thing must move forward as it is already one year later. The motion was approved on a 4-1 vote with Councilmember Blomquist voting against the motion. Discussion continued about what, if anything, could be done on the east side to maintain TIF eligibility. Mr. Verbrugge noted that he had discussed with bond Counsel what activities needed to be undertaken to prevent the four-year TIF limitation from beginning. He reported that the requirement was for substantial work that basically means moving dirt. Councilmember Masin inquired about whether or not assembling parcels would keep them in the TIF. Mr. Verbrugge responded that it would not. Councilmember Carlson asked what the City is going to lose, if those parcels are not kept in the TIF. Mr. Verbrugge explained that the potential loss had to do with an adjustment to the base value and would affect the amount of increment that could potentially be gained from development. Councilmember Blomquist stated that TMI Coatings has been a taxpayer for many years and the City should look out for their interest and look to see what can be done to clean up the land. Councilmember Carlson noted that the City should exhaust all possibilities and that to have this area fallout of the TIP was not good. She stated that the City must get creative. Councilmember Masin expressed two concerns in that she doesn't want to force the lImes out and that we cannot go back and create a new district so we need to maximize the return on what we have at this time. She commented that the Imres have made no effort to get this resolved and the City must get what we can now. Mayor Awada moved and Councilmember Bakken seconded a motion that staffbe directed to come back in one week with options about how to address TIP issues on the east side of the pond. The motion was approved 5-0. OTHER BUSINESS There was no other business. ADJOURNMENT The meeting adjourned at 6:00 p.m. EJV April 4. 2000 Date 1Y1~ ~ City Clerk