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HomeMy WebLinkAbout2003-04-08 EDA MinutesCITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES April 8, 2003 Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was held at City Hall, 7516 80th Street South, Cottage Grove, Minnesota on the 8th day of April 2003. CALL TO ORDER The meeting was called to order at 7:30 a.m. by EDA President Wolcott. Members Present: Jim Wolcott, EDA President Sandy Shiely, EDA Vice - President Gerry Weingartner, Authority Member Glen Kleven, Authority Member Dick Pederson, Authority Member Members Absent: Mike Wennen, Authority Member Others Present: Ryan Schroeder, City Administrator Michelle Wolfe, Assistant City Administrator Nancy Hanzlik, City Engineer Kim Lindquist, Community Development Director Ed Flaherty, Lariat Development Scott Johnson, Management Analyst APPROVAL OF MINUTES Authority Member Glen Kleven moved to approve the March 11, 2003 EDA Minutes. Gerry Weingartner seconded the motion and the Motion carried unanimously. ED FLAHERTY'S PRESENTATION ON OAKWOOD PARKS COMMERCIAL Ryan Schroeder informed the EDA that Lariat Development is interested in a project at the Oakwood Park commercial site. Mr. Schroeder recently completed a rough draft br a Economic Development Authority - Minutes April 8, 2003 Page 2 purchase agreement for this parcel. He introduced Ed Flaherty. Mr. Flaherty has been active in development since the mid 1980s. He was part owner of Rapid Oil Change and has developed and owned a number of other projects in the Twin Cities area. He believes his company and city leaders have a congruent interest in developing an 18,000 — 20,000 sf center with a sit down restaurant with a liquor license as the anchor tenant. Mr. Flaherty has done a search of national /regional multi- tenant restaurants and found a limited scope to draw on. He has developed eight similar projects in Eden Prairie. This site may need to provide incentives to restaurants to attract the type of restaurant they would like to see. Mr. Flaherty said the secret to a good project is the business mix. Each business needs to bring a different dimension to the project. The project will not attract many national chain stores, but will bring in stable local owners. The project will probably attract 55% local owners and 45% national /regional chain stores. The key is finding tenants with a vision of what this development will be in the future. It will be impossible to determine what businesses will go in the center at first. Mayor Sandy Shiely asked Mr. Flaherty if waiting for the Kohls project to be completed would be the best course for the City. He responded that any project that goes in that space should wait perhaps six months after Kohls opens before opening. Most tenants want to see the finished product before making a decision. Mr. Flaherty predicts that it will take one year to fill all of the tenant openings after the project opens. He said the anchor restaurant needs to be open at the beginning. Jim Wolcott wanted to know what size restaurant could work on the property. Mr. Flaherty thought any restaurant ranging from 4,000 to 20,000 sf could work on the space. Mr. Wolcott then asked about the parking situation with a large sit down restaurant. Mr. Flaherty commented that 18,000 sf of retail and a 150 seat restaurant needs cross access parking to work. The retail component would need to be reduced for a larger restaurant. Mayor Shiely asked how the demographics for Cottage Grove compared to other Twin Cities suburbs. He thought the city had average demographics based on income and density. The Mayor also asked if Applebee's recent success would help the city find another sit down restaurant. Mr. Flaherty said the success will help, but Cottage Grove is still an emerging market and the restaurant business is risk adverse. He told the EDA that they should not be disappointed with a good locally operated restaurant. He said Eden Prairie was in the same situation as Cottage Grove in 1990. Glen Kleven also mentioned that the Kohls and Home Depot projects will help bring other development to the area. Mr. Flaherty also said the highway improvements will help Cottage Grove out in the near future. Dick Pederson asked if Champs would be a possibility for the site. Mr. Flaherty thought it would be a wonderful choice and the project does have enough land for this type of project. Mr. Schroeder asked about the parking situation. Mr. Flaherty said that Champs would need to pay for the parking. Jim Wolcott asked if an Outback Steakhouse would work on the site. Mr. Flaherty thought this would be a great restaurant, but it is closed for lunch. He believes the City needs a magnet restaurant to attract the traffic on Highway 10/61. Mayor Shiely explained to Mr. Flaherty that there are not many sites that can accommodate a large restaurant. The City needs to attract a large restaurant to this spot and it does not need any more strip malls at this time. Mr. Flaherty understood her concern, but said the market 10 years from now will be viable and the city may need to start with a smaller restaurant. The market is currently underserved and the first priority for this project is to attract a large sit down restaurant with a liquor license. Ryan also mentioned that a Economic Development Authority - Minutes April 8, 2003 Page 3 developer cannot close under the purchase agreement without an approved restaurant. Mr. Schroeder further explained that three restaurants are currently interested in Cottage Grove. Mr. Flaherty also mentioned that the City will have redevelopment opportunities for projects in the future. PROJECT UPDATES Michelle Wolfe informed the EDA that there have been three new inquiries. One is for a restaurant; another is for a 90,000 sf industrial project, and a 50,000 sf industrial project. GATEWAY NORTH Ryan Schroeder informed the EDA about a new stipulation agreement on the Jensen property. Approving the stipulation will cost the EDA more for the property than originally expected, but the city will probably save money by not going through the hearing process. Gerry Weingartner made a motion to approve the agreement. Dick Pederson seconded the agreement and the motion passed unanimously. Mr. Schroeder also discussed the 1501 Partnership agreement. The EDA needed to re- ratify the changes to the agreement. The changes included: 1. City is responsible for lot combination of 1501 parent parcel with Outlot D and any required subdivision of severed 1501 parcel 2. City pays up to $2,000 for title commitment 3. City pays up to $2,000 for limited Alta Survey 4. City represents that no further improvements are scheduled in 5 year CIP on 80 ", Hardwood Ave. or Hardwood Court. 5. Dec. 1, 2003 Closing with interim temporary easement and immediate right of access to the property 6. Conveyance of access rights to the City for old driveway after phase 1 improvements are completed 7. City must complete all site work by June 30, 2004 unless unavoidable delays outside control of City, then can extend no later than Oct. 31, 04. If not complete, City is in default and is responsible for all 1501 costs incurred resulting from default with retail interest expense burden. 8. 1501 has right to change site plan. If the plan is materially changed, 1501 is responsible for any improvement costs exceeding $2,000 (any and all). 9. Two -way access for existing drive entrance maintained until full access is provided from Hardwood Court 10. City or its contractor must maintain $1 million in liability coverage. Mr. Kleven asked why the city agreed to pay up to $2,000 for site changes. Ryan Schroeder said it was a minor detail compared to the other issues involved with the contract. Glen Kleven made a motion to accept the agreement. Dick Pederson seconded the motion and the motion carried unanimously. OAKWOOD COMMERCIAL TEMPLATE Ryan Schroeder said all the "mays" and "shoulds" in the addendums were changed to 44 must" and "shall." Mr. Schroeder also wanted EDA members to go through the permitted Economic Development Authority - Minutes April 8, 2003 Page 4 use exemptions and delete what uses are not wanted on the site. Next, Kim Lindquist discussed Item D of the agreement. This item has to do with the uniform look of the project. She would like to include 360 degree architecture to the guidelines. This would basically stipulate that the back and sides of the project will look similar to the front. This will call more detail to the materials and the details of the project. Ms. Lindquist told the EDA that there is currently a moratorium on free standing signs in the City. Setting a standard size and color for a project will be difficult to enforce because many signs are up before the permit is approved. Variances are usually requested because it is the businesses identity. She suggests that the city allow some flexibility with uniformity and have the signs in designated areas. She also would not recommend having signs facing the park. Glen Kleven wanted to know the rationale behind addendum F. Mr. Schroeder said that it is standard language on real estate commissions. Mr. Kleven mentioned that he liked the template and that it could be flexible. Mr. Schroeder said that the developer needs relative certainty with the agreement. Mayor Shiely asked what would happen if restaurants contacted the city directly about sites. Will the City wait for a developer or deal directly with the restaurant. Mr. Schroeder thought it would be a better idea to work with the developer or else the site may be difficult to work with for future projects. In addition, most restaurant chains work with a broker or developer. Gerry Weingartner agreed with Mr. Schroeder about finding a quality developer to put together a development. Mayor Shiely thought the chances for a better development would occur after Kohls has been built. She thought the City needed to explore other options. Mr. Schroeder mentioned that the EDA is proceeding in slow steps to get the type of development that is desired. Jim Wolcott agreed with Mr. Weingartner because the City can use the purchase agreement to guide the development. Mr. Schroeder requested the EDA's feedback on the purchase agreement. Mayor Shiely commented that she does not want to lose the opportunity to bring another sit down restaurant with a liquor license to Cottage Grove. Mr. Schroeder mentioned that the site will not be ready for a few months. Kim Lindquist reassured Mayor Shiely that staff would not just have restaurants contact the developer and she mentioned that other developers are also interested in the property. STORM WATER Ryan Schroeder informed the EDA about the opportunity to buy property on the west side of Highway 61 for storm water ponding. There are currently two owners of the property. One owner is Eller Media who owns a low land parcel and a parcel on the opposite side of the railroad tracks. The market value is $162,000 on this property. The second property is owned by Joe -Bob properties out of Hastings. City Engineer Nancy Hanzlik informed the EDA that there is currently no ponding for the Hardwood Corridor or a project on the Frattalone property. Mr. Schroeder told the EDA that buying these two properties would allow the City to put in ponding and a lift station that has been planned since 1997. Dick Pederson made a motion to obtain appraisals on the property. Mayor Shiely seconded the motion and the motion carried unanimously. Economic Development Authority - Minutes April 8, 2003 Page 5 US BANK AGREEMENT Ryan Schroeder informed the EDA about the changes to the US Bank agreement, which were not substantial. Mayor Shiely made a motion to accept the agreement. Dick Pederson seconded the motion and the motion carried unanimously. FRATTALONE PROJECT Ryan Schroeder showed the EDA a preliminary drawing of an 113,000 sf potential development on the Frattalone property. To add more property, a land swap with the Aspen Grove LLC property may be a possibility. The proposal included three medium box retailers and a strip center. The historic home on that site would be moved to another Cottage Grove location. He stressed to the EDA that it is a concept plan at this point. Mayor Shiely asked what happened to the European look that would fit into the hillside. Mr. Schroeder said the project as it is currently designed does not fit that concept. Mayor Shiely also mentioned that she did not like the look of the larger box retailers on the site. Michelle Wolfe explained that the map is not to scale and the medium box retailers look bigger than they actually would be after they are built. Kim Lindquist explained to the EDA that the whole site would be graded and only the Aspen Grove property would be spared from the grading for this project. The property is not currently guided for commercial usage. Mayor Shiely expressed some concerns about the grading and tree issues for the project. Dick Pederson mentioned that he likes the project and would like to see more businesses along Highway 10/61. Mayor Shiely would like to change the proposed medium box retailers so people see a hill when they enter the City instead of businesses. Jim Wolcott asked about traffic issues with this project. Kim Lindquist explained that there will be modifications to the Hardwood Corridor and the curve at Point Douglas with a possible land swap. Ryan Schroeder said that the project would need to be built on a dramatic hill and it will be tough to grade the site. Glen Kleven thought the medium box retailers were a good idea on this site because having them close at 9:00 PM would allow for parking at a larger restaurant on the site. The EDA overall liked the plan, but the grading of the hill would need to be softened, tree preservation is a concern, and the slope would need to be landscaped properly. ASBESTOS ABATEMENT For the asbestos abatement for three commercial buildings on the Kohls site the low bid was from Dennis Environmental at $18,000.00 for the total abatement. Mayor Shiely made a motion to approve the bid for asbestos abatement for the Kohls site. Dick Pederson seconded the motion and the motion carried unanimously. RIVER OAKS JOINT VENTURE Economic Development Authority - Minutes April 8, 2003 Page 6 Michelle Wolfe spoke about the 2003 Growth Partners luncheon to kick off the River Oaks /EDA joint venture to bring more business to the course from the industrial park. The event went well and staff would like to expand this concept to other groups in the City. The luncheon allows businesses a great networking opportunity and it gave staff the opportunity to tell businesses about new developments in the city. Mayor Shiely thought this was a good idea. Jim Wolcott thought it would be a great opportunity to show that the City cares about what happens with their business. This will be discussed further at the next EDA meeting. ENABLING RESOLUTION Staff will update the enabling resolution for the EDA. The EDA will need to ratify the new language at a future meeting. A public hearing will be held at a future Council meeting on the changes. Mayor Shiely made a motion to ratify the proposed language change, direct staff to prepare the appropriate amendment to the resolution, set the public hearing date, and proceed with the public notice process. Glen Kleven seconded the motion and the motion carried unanimously. BUSINESS SUBSIDIES Cottage Grove business subsidies criteria needs to be updated by May 1, 2003 before any other business subsidies can be approved. The EDA and the City Council need to approve the changes to the business subsidies because both entities could become "grantors" for future projects (depending on the funding source(s) used). The EDA public hearing will be held at the May 13 meeting. Glen Kleven made a motion to hold a hearing on the business subsidies and direct staff to prepare the necessary resolution. Dick Pederson seconded the motion and the motion carried unanimously. HAMLET PARK Ryan Schroeder unveiled a concept drawing of an expanded Hamlet Park with new townhomes built on land that is currently zoned industrial. Staff is currently working on creating a buffer between the Industrial Park and the single family homes in the area. Nancy Hanzlik mentioned that there would be some storm water issues that would need to be addressed before a project like this could move forward. Ryan Schroeder asked the EDA if they would be interested in this type of project. Mayor Shiely said she has received a number of concerns about future development east of Pine Hill from home owners. Kim Lindquist mentioned that a major problem with any project is that there is no way to screen the Industrial Park because of the differences in land elevation. Mayor Shiely mentioned that the buffer could be a community center, flume, or a park. Jim Wolcott said that the home owners will still see the industrial park and it does not make sense to give up any of the city's supply of industrial land for this project. Mr. Schroeder also asked about the cul de sac extension on the project that could provide an opportunity for more storm water holding and housing. Mayor Shiely liked the idea of expanding single family housing to this site. Jim Wolcott thought patio homes may be an option because of the rocky soil. ASSISTED LIVING PROPOSAL Staff has received a plan to build a mixed senior housing /retail project in the City. The Economic Development Authority - Minutes April 8, 2003 Page 7 project would to be built in phases. The EDA thought it would be a good project for the City. Mr. Schroeder informed the EDA that the project currently lacks the funds to move forward. Awnl1RN The EDA adjourned at 10:20 a.m. Respectfully submitted, Scott Johnson Management Analyst