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HomeMy WebLinkAbout05/28/1998ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota May 28, 1998 Minutes of the special meeting of the Economic Development Authority of Apple Valley, Dakota County, Minnesota; held May 28th, 1998, at 7:15 o’clock p.m., at Apple Valley City Hall. PRESENT: President Severson; Commissioners Edgeton, Erickson, Goodwin, Grendahl, Humphrey, and Sterling. ABSENT: None. Staff members present were: Executive Director Gretz, Secretary Mueller, City Attorney Dougherty, City Engineer Gordon, Assistant to the City Administrator Grawe, Community Development Director Kelley, Public Works Director Miranowski, and Police Chief Willow. President Severson called the meeting to order at 7:15 p.m. APPROVAL OF AGENDA MOTION: of Erickson, seconde d by Grendahl, approving the agenda for tonight’s meeting as amended. Ayes - 7 - Nays - 0. MINUTES MOTION: of Goodwin, seconded by Humphrey, approving the minutes of the special meeting of March 12th, 1998, as written. Ayes - 6 - Nays - 0 (Sterling Abstained). SCHOOL DISTRICT 196 STADIUM FINANCING Mr. Gretz reported on the status of School District 196’s request for stadium financing at Apple Valley and Eastview High Schools. An Environmental Assessment Worksheet (EAW) was prepared on the stadium project at Apple Valley High School. The 30-day public response time on the EAW is now completed. Westwood Engineering was hired, as an independent consultant, by the EDA to review the report and is in the process of completing that review. The matter can be scheduled for consideration by the EDA at its next meeting. MOTION: of Erickson, seconded by Goodwin, setting a special Economic Development Authority Board meeting on June 10, 1998, at 7:00 p.m. Ayes - 7 - Nays - 0. Commissioners Sterling and Edgeton asked for clarification of recent action taken by the School Board on proceeding with bonding for the stadiums. Jim O’Meara, the EDA’s bond counsel, said he prepared a resolution for the School Board in compliance with Federal tax requirements. Since it was proceeding with construction of the stadium at Eastview High School, separately from the one at Apple Valley High School , the resolution was required to allow reimbursement of the costs from bond proceeds. ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota May 28, 1998 Page 2 COUNTY VISITOR INFORMATION SIGNAGE Resolution No. EDA-98-4 MOTION: of Grendahl, seconded by Goodwin, adopting requesting establishment of a roadside directional signage program by Dakota County for visitor oriented facilities as recommended in the City Administrator’s memo dated May 11, 1998. Ayes - 7 - Nays - 0. FISCHER MARKET PLACE Mr. Miranowski reviewed the location of the proposed Fischer Market Place development, north of County Road 42 and east of Galaxie Avenue. He described the concepts being used in drafting a tax increment financing agreement as described in his memo dated May 26, 1998. Mr. O’Meara described the two pieces of the project’s costs; public improvement costs and private development costs. The public improvement costs, for utilities and streets, include approximately $3,600,000 of atypical costs which would be specially assessed. The private development costs are on-site improvements needed for users such as Menards. Fischer Development is requesting a maximum of $4,600,000 of tax increment financing as a reimbursement mechanism to recover those costs. The terms of the agreement would require the owner to post a letter of credit to assure payment of special assessments. Once those are assured, the developer would be looking at tax increment financing for additional funds. The limitation is that it cannot exceed 10 years of tax increment. Tony Gleekel, representing Fischer Development, was present and commented on the purpose of requesting assistance. The housing portion of the reclaimed gravel mining site developed quickly. They have attempted to market the commercial portion of the site since 1996 and have been unsuccessful. Menards is interested in building there, but the cost of site development is a difficulty in the relocation plans. They are negotiating for a bank to locate on the site and they have two potential other large users. They will need tax increment financing to complete the development. Commissioner Erickson asked what comprises the $4,600,000 request? He was advised it is grading and site development costs. Commissioner Humphrey commented on the need for a major user or users to promote a site and the initial cost of bringing in that user. Typically more costs can be recovered later when smaller lots are developed, such as those along County Road 42. Commissioner Sterling said she could support tax increment financing for major improvements such as Galaxie Avenue, turn lanes, and street connections, but is concerned about assisting more than one user. ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota May 28, 1998 Page 3 Commissioner Goodwin said he is concerned about the use of tax increment financing beyond assisting with atypical costs. It is desirable to extend 147th Street at Galaxie Avenue and he understands the need to reclaim the gravel pit. He can support assisting an initial user, but is concerned about more than that. Commissioner Humphrey said the question is how much is needed to begin development and attract users. He believes the agreement could be structured so the EDA can look at each individual user as it comes up. Commissioner Erickson noted this is pay-as-you-go financing so the EDA should be able to be assured of the funding. Mr. Gleekel said they already have an agreement with Menards, but other users coming in will have to pay all the costs of land, assessments, etc. They also have a limited time to start this development to qualify. Commissioner Edgeton asked what assurances they have of development? Mr. Gleekel said beyond Menards and a potential bank, they have letters of understanding and letters of intent on eight-acre and three-acre sites. Mr. O’Meara said they will have to prove costs before they can be added to the $4,600,000 reimbursement. Those costs must occur within a 12 to 13-month period to be eligible. The agreement would have to identify and define eligible projects. Commissioner Sterling said she is concerned about meeting a “but for” test on other projects such as a bank. She can agree with retaining Menards, but questions providing assistance for other proposals discussed. Commissioner Humphrey asked Mr. O’Meara if the tax increment financing agreement will be able to satisfy the “but for” test for the State Auditor? Mr. O’Meara said that is what they will be very careful to attempt to answer and comply with. Commissioner Erickson asked what assistance Target and Cub received? Mr. Miranowski said $1,500,000 was in the Ryan Construction contract for development costs. Sid Inman, of Ehlers & Associates, the developer’s consultant, said this project will meet the “but for” test. If this proposal were presented five years ago, they would not be asking for assistance. Now the time for qualifying is compressed and that is the difference. MOTION: of Humphrey, seconded by Edgeton, approving the tax increment financing proposal for Fischer Market Place in concept and directing Staff to prepare a Tax Increment Financing Agreement for Redevelopment District No. 13, as described in the Public Works Director’s memo dated May 26, 1998, taking into account the concerns expressed by the EDA and “but for” test compliance. ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota May 28, 1998 Page 4 Commissioner Goodwin asked what amount will be used in the agreement? Mr. Miranowski said they will take the discussion into account and use $4,600,000 of on-site costs and $3,600,000 of public improvement costs in preparing the draft agreement for further consideration by the EDA. Vote was taken on the motion. Ayes - 7 - Nays - 0. MOTION: of Grendahl, seconded by Sterling, to adjourn. Ayes - 7 - Nays - 0. The meeting was adjourned at 8:13 o’clock p.m.