HomeMy WebLinkAbout2011-08-03 PACKET 4.B.City of
Cotta Grove
Minnesota
To: Council /Planning /EDA
From: Ryan R. Schroeder, City Administrator
Date: July 26, 2011
Subject: Work Plan Priority Setting
Enclosed within packet materials is a draft work plan for EDA discussion at their next
meeting(s). That work plan is structured to be responsive to the Council Vision and goal
related to commercial and industrial (C /1) development. While the EDA role is not intended to
stray too far afield from C/i responsibilities it is understood that Community Development and
community building needs to be an integrated system and process. Hence, it is relevant for
the EDA to at least monitor activity /progress in housing, transportation, public facilities and
other Council goal areas. At times, for instance with mixed use projects, it is appropriate for
the EDA to take a lead role.
It would be helpful to the EDA to have some discussion regarding effort targeting. Certainly,
the top priority for the EDA would be in business attraction and retention for those businesses
with the greatest taxable market values and job and wage metrics (i.e. Business Park).
Beyond that we would anticipate the next most important role of the EDA would be to
redevelop or reposition notable opportunity areas (Home Depot, CottageView, perhaps
followed by Norris Marketplace). It would be important to know if Council and others agree
that these two areas (business park and redevelopment opportunities) would appropriately be
considered the highest priority areas on which the EDA should focus.
If there is agreement on the above it seems a given that retail attraction would be the next
strategic focus of the EDA. However, given that we are in an atypical economy, and given that
rooftop development is required to build our retail footprint and given the above redevelopment
needs it would seem that the development leaders of the community (Council, Planning, EDA)
might wish to consider an increased focus on market housing development for a period of time.
Maintenance and construction of public facilities (buildings) would not typically be noted as a
high priority of the EDA (subject to Council direction to the contrary). Establishment of Work
Force Housing (moderate- income) would also not typically be considered among the highest
priorities of the EDA except in economies within which access to labor has become a difficulty.
That does not currently seem to be the case.
Staff is looking for feedback from the group regarding the above to assist us in completion of
the work plan.
Upon receipt of direction regarding the above there are a couple specific discussion topics that
seem appropriate. These are:
1. Community Center/YMCA vs. Home Depot Development
The City Council formed a Community Center Task Force in 2009. The task force was
charged with conducting a needs analysis and ultimately a citizens survey was
conducted which supported City participation in a joint venture with the YMCA. Over
the past few months we have been in discussions with the Y toward development of an
approximate 52,767 square foot facility on approximately 6 acres adjacent to the PSCH
project. This compares to the task force recommendation of a building size range of
59,236- 71,154 square feet. The task force had projected Gym space at twice the Y
proposal and allocated up to 6,000 SF for track space which does not appear within the
Y space planning document. Otherwise the spaces are similar.
The City is estimating development costs for the Y project at $13.7 million with a
projected City investment suggested in the $6 million range. The City would own the
building and the Y would be a 30 year tenant with the opportunity for lease extensions
beyond the initial term. Any investments from the City would become a general
obligation of the City in some fashion through issuance of a debt instrument.
Concurrent with recent discussions with the Y the City staff has been embedded in
negotiations with a private developer toward redevelopment of the Home Depot.
Current space planning for that redevelopment includes an approximate 45,000 square
foot privately owned and managed fitness facility. Such a facility would be anticipated
as geared primarily but not exclusively toward the adult community. The City is being
asked to invest in the redevelopment of the Home Depot property (not the fitness facility
specifically). An investment to reposition the 10 acre Home Depot parcel would range
between $1 million and $2 million through paygo investments between now and 2025.
Any investment from the City would be from residual tax increments, future project
related tax increments and /or ED Trust Fund investments.
The Community Center Task force met on July 26, 2011. The task force opined the
following:
1. The City should not feel compelled to rush decisions regarding Community
Center /Fitness projects only to meet a November 8 referendum date
2. The Y facility as currently configured may not meet citizen beliefs as to what
comprises a community center absent potential space planning changes to place
community rooms /playgrounds and the like in a location within the building so that
these spaces could be accessed without a Y membership
3. The City could consider a multi -phase effort to meet our community and recreational
needs
4. The City might consider constructing a portion of those needs in an early phase with
the Y portion of those needs in a later phase
5. The City should complete its' negotiations on the Home Depot redevelopment before
proceeding with a Y or Community Center development
The City Council is currently scheduled to determine a path at their August 10, 2011 meeting.
2. Work Force Rental Housing
It has been suggested that the City should consider encouraging moderate income
rental housing within the community. I've enclosed a brochure from a recent affordable
product completed within the City of Elk River. This project is a tax credit deal for
households generally between $35,000 and $50,000 (or thereabouts). Rents range
from $640 for a 796 SF one bedroom up to $850 for a 1,332 SF three bedroom unit. In
order to qualify for tax credits through a competitive process the developer would be
requesting fee waivers and perhaps various other development assistance. The project
cost estimate for this 53 unit building is $160,000 /unit. It is only due to the tax credit
mechanism that development of this project would even be bankable. The tax credit
competition occurs each June for a project start in the subsequent year with a 9 month
build out.
It is worth noting that in order to qualify for a $100,000 mortgage @ 5 %/30 years an
income requirement would be estimated at $25,000 to $31,000 (depending upon other
consumer debt). The PITI obligation would be estimated at $777 /month which would be
comparable to a two bedroom within the tax credit rental project.
We would be looking for direction on if encouraging a project similar to the Elk River
example is something we should be pursuing.
Consensus Opportunities:
1. Provide comments on general EDA work plan priorities
2. Provide comments on future Community Center/ Fitness direction
3. Provide comments on work force housing
Aug 3 Work Plan Priorities 072611
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RENTAL INFORMATION: SUBJECT TO AVAILABILITY
1 bedroom 796 sq it $640
2 bedroom 1,097 —1,134 sq It $750
3 bedroom 1,309 —1,332 sq ft $850
Income guidelines apply to all of the homes. See below for details.
UTILITIES: Management Pam Resident Pays:
• Water /Sewer * Electricity
• Garbage /Recycling * Telephone
• Heat * Cable /Internet
LEASE TERMS: One year with two month's written notice to vacate.
FEES/DEPOSITS: Application fee is $45 per adult, due at time of application.
Security Deposit is equal to one month's rent, ih due at
application.
ADDITIONAL DATA: * SMOKING ALLOWED ONLY IN SELECT HOMES
(ask about details) * Guest Suite
• Underground Parking Included * Playground
• W/D in Each Home * Exercise Facility
• Dishwasher & Disposal * Community Room
• Controlled Access * 1 3 /4 Baths in Most Homes
• One Block to Northstar Commuter Rail
OCCUPANCY: Only those listed on the lease will be allowed to live in the unit.
• Maximum number of occupants in a one bedroom: 2
• Maximum number of occupants in a two bedroom:
• Maximum number of occupants in a three bedroom: 6
PETS: No Pets Allowed.
In order to qualify for an income eligible home, the gross income of the household cannot exceed
the following income guidelines: See site manager for details.
1 Person Household $35,280
2 Person Household $40,320
3 Person Household $45,360
4 Person Household $50,400
5 Person Household $54,480
6 Person Household $58,500