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HomeMy WebLinkAbout5.1 80th and Hemingway, LLC TO: Economic Development Authority FROM: Christine Costello, Economic Development Director DATE: March 3, 2020 RE: 80th & Hemingway, LLC Public Hearing Sale of 7516 80th Street South and Development Agreement Background In June 2011 it was determined that a new Public Safety/City Hall building would be built, and research was conducted to determine a viable reuse of the former city hall building. The decision was to repurpose the building to house a business incubator, known as the Business Enterprise Center (BEC). The intent of the BEC was to help grow small businesses in Cottage Grove, and with their success those businesses would then relocate into the City’s Business Park. Location Map The BEC remained open until the summer of 2016, and at its closing none of the businesses that started in the BEC remained in the community. The building became vacant for approximately six months and then it became the temporary home for Fire Station #2 for Economic Development Authority th PH Sale of 7516 80 St. and Development Agreement March 10, 2020 Page 2 of 8 approximately one year as a new Central Fire Station was being constructed at the previous location of Station #2. The Central Fire Station opened in July 2018, and again the former city hall site became vacant. In 2017, City staff and Washington County staff had discussions on a combined development of the former City Hall site and the Park Grove Library. The Library has been in need of repairs and updates estimated in the millions of dollars. City staff also learned that the needs of library patrons and the essential functions of a library have changed over the years as well. City staff and Washington County staff discussed the potential of combining sites for the development of multi-story development with housing and a library, but the needs for each use could not be accommodated on the sites without going vertical on both sites. Washington County chose not to move forward because multi-level libraries are difficult to operate, so the County is reevaluating the needs of the Park Grove Library. In Fall 2018, work began on the demolition of the former city hall building. The building no longer retained any value for reuse due to the number of additions, lack of handicap accessibility, and environmental concerns such as mold. To improve the marketability of the site, the rooftop solar panels were relocated to the Central Fire Station, and the building was demolished by the end of 2019. Also in 2018, the City began working with the Developer for the redevelopment of the former city hall site into a market rate multi-family development. The EDA and City Council has had a Letter of Intent (LOI) with the Developer for the redevelopment of the site since 2018. Land Use and Zoning The property is currently zoned B-1, Limited Business, and the Developer is requesting that it be rezoned to M-U, Mixed Use. Multi-family housing is an allowed use in the M-U District. As part of the application, the Developer is also requesting that the site be a Planned Unit Development (PUD). A PUD allows for flexibility in land redevelopment by providing high quality design that is compatible with surrounding land uses both planned and existing, as well as being consistent with the Compre- hensive Plan. The City’s 2040 Comprehensive Plan guides the site for Mixed Use; therefore, the rezoning and PUD are in accordance with the community’s future land use goals. The density of the proposed development is 38 units per acre. The density range for the Mixed-Use Land Use is 20 to 40 dwelling units per acre. The Developer, 80th and Hemingway LLC, is proposing a four-story 120-unit market rate apartment building with many of the amenities being sought in today’s market rate apartment search and that are currently unavailable in existing apartment buildings in the community. The building will include 94 underground parking spaces and 116 surface parking spaces. Economic Development Authority th PH Sale of 7516 80 St. and Development Agreement March 10, 2020 Page 3 of 8 Proposed Site Layout City’s 2040 Future Land Use Map Economic Development Authority th PH Sale of 7516 80 St. and Development Agreement March 10, 2020 Page 4 of 8 Transportation Access to the main entrance of the proposed development is at Hemingway Avenue north of 80th Street. An alternative access to the development will be from Hinton Avenue via 79th Street and then south on Hemingway Avenue. Tenants of the building will have the option for surface parking or underground parking for an additional fee. Underground parking will be accessible from the existing curb cut on 80th Street into the underground garage. Ingress and egress from the underground garage will be from this same access location. The access aisle to the underground garage is curved slightly to allow vehicles the ability to stack in the driveway before making turning movements east or west onto 80th Street. Landscaping Currently there is minimal landscaping on the site. The Developer is proposing to meet the City’s Zoning Ordinance for landscaping within all the required yards of the site. The zoning ordinance requires that a minimum 8 percent of parking lot interiors be landscaped; the Developer is landscap- ing 9 percent of the parking lot interior. The Developer is also landscaping the building foundation, maintaining the appropriate open space as transitional buffering along property lines, and proposing two new benches to be placed within the landscaped area along 80th Street creating a sense of place for the development in relation to the community. Proposed Landscaping Plan Park Grove Library The former city hall site and Park Grove Library had a shared driveway that was used to enter and exit both sites. During the land surveying process, it was discovered that the shared entrance is located entirely on the City parcel, and there is no recorded cross access easement agreement with Economic Development Authority th PH Sale of 7516 80 St. and Development Agreement March 10, 2020 Page 5 of 8 Washington County. When the former City Hall building was demolished, City staff informed the County of the demolition and future redevelopment of the site. Barriers were installed as a temporary measure during the demolition of the site so that individuals would not enter the former City Hall site. With the Developer now purchasing and developing the former City Hall site, the shared access will no longer be available for library patrons. The Developer will be responsible to complete improve- ments to the library parking lot to ensure circulation. Former Shared Driveway Architecture The proposed building will have a mix of units including 31 studio units, 47 one-bedroom units, 38 two-bedroom units, and four three-bedroom units. The building will also include a resident community room, outdoor community deck, resident storage, mail and package room, dog run, dog wash, and bike storage. All the units will include a deck or patio and in-unit washer and dryer. South Elevation – Facing 80th Street Economic Development Authority th PH Sale of 7516 80 St. and Development Agreement March 10, 2020 Page 6 of 8 North Elevation – Facing Park Grove Library The Developer reviewed the surrounding commercial and residential developments in context to the proposed site and felt that the building should have a contemporary design that will include a flat roof design to provide an upscale urban feel that relates to the neighboring commercial buildings. The building design will also include repetitive bump-out bay elements on all sides of the façade. The repetitive bump-out will assist in reducing the scale of the building, but more importantly create a visual interest through the pattern of building materials proposed as well as with light and shadow. The building will include prefabricated suspended decks that will continue the building layers for more depth and visual interest. The southwest corner of the building will feature an architectural ‘crown’ and building signage. The southwest corner will also include features such as brick, additional glaz- ing, and accent lighting to give an asymmetrical design on the 80th Street façade. Illustrative Site Design The exterior building incorporates such materials as brick, glass, burnished rock face block, fiber cement board panels and fiber cement horizontal lap siding. The Developer is also providing other elements that are not required by the zoning ordinance but elevate the project. These elements Economic Development Authority th PH Sale of 7516 80 St. and Development Agreement March 10, 2020 Page 7 of 8 include the use of accent lighting on the southwest corner of the building and additional resident amenities that are currently lacking in Cottage Grove’s market-rate apartment rentals. Neighborhood Meeting The Developer held a neighborhood meeting on November 21,2019. The Developer mailed notices of the neighborhood meeting to property owners within 500 feet of the proposed development. Two commercial property owners attended the meeting and inquired about the overall look of the devel- opment and potential tax impact on their property. Planning Commission Meeting At the February 24th Planning Commission meeting 80th and Hemingway LLC requested consideration of a zoning amendment from B-1, Limited Business, to M-U, Mixed Use, with a Planned Unit Development (PUD), and site plan review of the former city hall site. The Planning Commission approved the consideration with a vote of 7 to 0. The City Council will consider their zoning/land use application and the development agreement and sale of the land to the applicant at their March 18th Council meeting. Sale of Land to 80th and Hemingway LLC The purchase price of the 3.18 acre or 138,521 square feet site and was appraised for approximately $600,000. During negotiations on the sale of the property to 80th and Hemingway LLC, a final sale price of $400,000 was agreed too by both parties. Though this is a reduction in the appraised price of the land, the opportunity to have this 3.18-acre parcel return to the tax roll and no longer the responsibly of the City of Cottage Grove to maintain. Also, the developer has not asked for any other financing assistance for the project other than assistance in applying for a South Washington Watershed District Grant for an underground stormwater infiltration/detention system installed below the parking lot. Development Agreement The purpose of the development agreement for the proposed project is to ensure the City of Cottage Grove and the Developer, 80th and Hemingway, LLC details the obligations of both parties and specify the standards and conditions that will govern development of the property. The development agreement also details the process if either party were to break the agreement. The obligations that are required of both parties includes:  Sale and Purchase of 7516 80th Street for $400,000,  Deposit $20,000 in Earnest Money (which has been completed),  Completion of City Approvals, and  Developer Payment of Developer Fees, listed in Exhibit E. The development agreement was drafted and reviewed by the City’s legal counsel and the Developer’s attorney has also reviewed the development agreement. Both parties have agreed to the terms and conditions in the agreement. Requested Action: By motion: Economic Development Authority th PH Sale of 7516 80 St. and Development Agreement March 10, 2020 Page 8 of 8 A. Authorize the contract for private development by and between the Cottage Grove Economic Development Authority and 80th and Hemingway LLC subject to minor modifications by City Attorney. B. Approve a resolution approving the sale of property from Cottage Grove Economic Development Authority to 80th and Hemingway, LLC for development purposes subject to minor modifications by City Attorney. Attachments  Development Agreement  Resolution COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. 2020-001 A RESOLUTION APPROVING THE SALE OF PROPERTY FROM COTTAGE GROVE ECONOMIC DEVELOMENT AUTHORITY TO 80TH AND HEMINGWAY, LLC FOR DEVELOPMENT PURPOSES Whereas, the Cottage Grove Economic Development Authority (“EDA”) desires to sell approximately 3.18 acres of property for the purpose of development for certain real property legally described as: That part of the Southeast Quarter (SE ¼) of Section Eight (8), Township Twenty-seven (27), Range Twenty-one (21), Washington County, Minnesota, described as beginning at a point on the South line of said Southeast Quarter (SE ¼) distant 2,216 feet west from the Southeast corner of said Southeast Quarter; thence North, perpendicular to said South line, 330 feet; thence at right angles West to the West line of said Southeast Quarter; thence South along said West line to the Southwest corner of said Southeast Quarter; thence East along the South line of said Southeast Quarter to the point of beginning. (“Property”); and Whereas, 80th and Hemingway, LLC (“Developer”) desires to purchase the Property for the purpose of development of a four story 120-unit market rate multifamily building; and Whereas, on March 10, 2020, the EDA held a public public hearing on the sale of the Property, and the EDA considered all of the information presented at the public hearing. NOW THEREFORE BE IT RESOLVED by the Board of Commissioners of the Cottage Grove Economic Development Authority as follows: 1. The sale of the Property to the Developer is in the public interest of the City and its people, furthers its general plan of economic development and furthers the aims and purposes of Minn. Stat. Sections 469.090 to 469.108; and the appropriate officials are authorized to take such action so as to effectuate such sale. 2. The plans and specifications for the development of the Property are hereby approved. th Passed this 10 day of March 2020. Myron Bailey, President Attest: Jennifer Levitt, Executive Director