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HomeMy WebLinkAbout04/11/2013 EDA Meeting000 000 000 00 00 City of Apple Valley NOTICE: The Apple Valley Economic Development Authority will hold a special informal meeting at the Municipal Center, on Thursday, April 11, 2013, at 4:30 p.m. to consider the items listed in the following agenda: 1. Call to Order. ECONOMIC DEVELOPMENT AUTHORITY INFORMAL MEETING TENTATIVE AGENDA APRIL 11, 2013-4:30 P.M. 2. Central Village West: a. Principals for an Agreement with Dakota County CDA to Acquire Land. b. Development Concept Discussion. 3. Economic Development Updates in the City. 4. Other Items. 5 Adjourn. (Agendas are also available on the City's Internet Web Site http://vvww.cityofapplevalley.org) City of Apple„ Valley TO: President, Board Members and Executive Director FROM: Bruce Nordquist, Community Development Director, AICP MEETING DATE: April 11, 2013 SUBJECT: Central Village West: Principals for an Agreement with Dakota County CDA to Acquire Land Development Concept Discussion MEMO Community Development The materials attached to this cover memo provide the background for discussion related to the Central Village West area: 1) The vacant parcels both north and south of 153rd Street and west of Galaxie Avenue have become owned by the State due to tax forfeiture. The City/EDA and Dakota County CDA staffs have been discussing development opportunities and priorities based on the attached materials. At the March 28, 2013, informal EDA meeting, feedback from EDA members sought more information related to process and price for the tax forfeit parcels and the timing of CDA market rate rental housing development that will not interfere with the development of the Parkside Village apartments. 2) The parcels north and west of Grandstay Hotel have been identified as a location for office and supporting parking development. Financial assistance for the development is being sought from multiple sources including: • Special Legislation which extends "jobs bill" tax increment financing. • Reprogramming of an $866,000 Livable Communities TOD grant already received by the City. Staff presented a well-received introduction on this request at an April 1 Metropolitan Council Community Development Committee presentation. • MN DEED "Minnesota Investment Fund" resources for business equipment. The attached maps identify the office and supporting structured parking development area. Staff plans to update the EDA on recent meetings with the proposed builder/owner and office user and further discuss interim and permanent parking solutions for the Apple Valley Transit Station and the office user. TO: FROM: MEETING DATE: SUBJECT: 60 000 City of Apple, Val e responsive manner. President, Board Members and Executive Director Bruce Nordquist, Community Development Director, AICP March 28, 2013 Development Strategy for Central Village West MEMO Community Development Background: On March 18, the Dakota County CDA sent a letter to Tom Lawell outlining a collaborative approach with the City/EDA to the development of the six parcels north, west, and south of Grandstay Hotel in the Central Village. The parcels are vacant and owned by the State due to tax forfeiture and managed by Dakota County until conveyed. In the absence of being acquired by a governmental agency the parcels will be available for auction later this spring. Last fall both the City and CDA submitted a letter to Dakota County expressing a period of time to evaluate interim ownership interest and future development strategies. That period of time expires May 2, 2013, and the CDA has prepared a letter that reflects the collective discussion of City and CDA staff and requests consideration of certain terms and conditions between the agencies. City/EDA objectives include: • Development consistent with Central Village plans on 4 parcels. • Payment for levied special assessments. • Transit oriented features; higher intensity development with job creation and housing choices. • Securing sufficient site control that allows these listed items to be addressed in a timely market The CDA objectives include: • Market rate housing with some affordability. • Support from the City should the CDA consider using tax increment financing. • Land banking of two parcels for future housing development. (Waiting until after Parkside Village is completed and occupied before proceeding with development). • A payment of some, but not all special assessments attributed to the two parcels. After much staff discussion, a recommendation is proposed by staff that the City/EDA consider the acquisition of four parcels (parcels A, B, C, D on the attached map). The CDA wishes to acquire parcels E and F. Next Steps: • A discussion about value is underway with the City Attorney and Dakota County. The position being taken is that the property has little value beyond the special assessment payments outstanding that the City is allowed to re-levy after the property is conveyed. • The terms outlined by the CDA require further discussion as it relates to payment for special assessments and development expectations. The following table summarizes unpaid special assessments and future assessments: Proposed Ownership EDA Parcel EDA Parcel EDA Parcel Triangle (EDA) CDA Parcel CDA Parcels Map key PID A 01 81750 010 03 B 01 81750 020 03 01 81750 010 02 D 01 81750 010 01 E 01 81750 011 00 F 01 03400 020 28 2008 to 2013 - Total Previously 12-31-2013 Spread S/A Unspread (Prin & Interest) S/A Balance $ 189,558.60 $ 203,056.00 225,487.00 242,134.70 187,526.30 200,825.35 602,571.90 646,016.05 1,134,552.82 1,321,817.05 894,162.81 1,093,223.21 119,536.97 166,260.15 1,013,699.78 1,259,483.36 2,750,824.49 3,227,316.46 total Potential Re- Levy $ 392,614.60 467,621.70 388,351.65 1,248,587.95 2,456,369.87 1,987,386.02 285,797.12 2,273,183.14 5,978,140.95 • Staff will continue working with the CDA during April to finalize terms for a "memorandum of understanding" between the EDA and the CDA. 0-2SIMNI March 18 20 Dakota County Gommunity Development Agency Tom awe City of Apple Valley 7100 147 Street W Apple Valley, MN 55124-9016 E: Tax Forfeit Parcels in Apple Valley Founders Circle area o Cent al Village) Dear Tom, The purpose of this letter is to sunimarize the Dakota County Community Develowient Agency's (CDA's) (11 IC diligence and recommended actions regarding the tax forfeit parcels in the Founders Circle area* The CDA Board of Commissioners adopted a resolution on October 16, 2012 requesting the conveyance of the six tax forfeit parcels in the Founders Circle area (PINs: 01-81750-03-010, 01-81750-03-00; 01-- 1750-02-010; 01-81750-01-010; 01-81750-00-011; and 01-03400-28-024 Prior to this Board action, CDA staff net with City staff to discuss the CDA' s interest in acquiring a housing site and options for the CDA a id City to work together to facilitate future development consistent with City goals and objectives. To this end, the CDA SU bitted its request for conveyance to the County, The City subsequently sent a letter, dated November 2, 2012, to the County Property Taxation & Records Department, stating the City's and/or it Economic Development Authority's (ECM's) interest in the same six parcels. The City reqtJested the withholding of these parcels from conveyance or sale to other parties for six months, The letter stated that that City and EDA desire to work closely with the CO• in evaluating the potential for the parcels, The intended outcome is a collaborative master plan and the attrciction and initiation of development achieving the public purposes of the entities involved,' Over the last several months, (J )A staff has worked with County staff to clarify the method, process and timeline for the conveyance of these parcels to the CDA, City, and/or the EDA, CDA and City staff have met to discuss the City's expectations and options for the development of these parcels, and the CDA has evaluated the parcels and narrowed its interest to two parcels that are best suited for a housing site* The result of this due diligence over the last several months is described in greater detail below. Method Process nd Timeline for Conve nce to CDA Cit and or EDA Through discussions with Dakota County taxation staff, the CDA has received the fIiovn dan - The end of the City-requested six month withholding period is May 2, 2013, 1228 Town Oeqtre Live .1 Eagan, MN 55123 PtiQN1F._ (351-675 •em( 711 ., ,k-wv4dakortacda,prq , e: •-• If the City does not purchase or requ st purchase of the parcels by iMay 2, Oi3 he City m st not make a second request to withhold the parcels from sale or lease within 18 months of the previous request (May 2, 2014). After May 2, OH, the County may act on the CDA's previous request, entertain requests from cyther public agencies, or proceed with the inclusion of the parcels in the ptiblic sale of tax forfeit properties. Unless the City or CDA take action before or shortly after May 2 the parcels may be included 11 the public auction. The City's FDA's andfor CDA's request to ptirchase the parcels must include "its specific plans for correcting the blighted condns or developing affordable housing„ and the specific law or laws that empower it to acquire real property in furtherance of the plans" (IVIinnesota Statutes Section 282.01 Subd. la. (d) (2)), County staff will complete the Department of Revenue Applications for State Deed for Tax Forfeit Land based on the request(s) made by the City/EDA and/or CDA. Acquisition costs are expected to be t-)'mat: Minnesota Statutes Section 282,01 (d) (1) states that the County may sell tax forfeited property to a governmental stthdivision of the state for less than market value if "the county board determines that a sale at a reduced price is in the public interest because a reduced price is necessary to provide an incentive to correct the blighted conditions that make the lands undesirable in the open market, or the reduced pr will lead to the development of affordable housing." The excessive special assessments on the property have created a blighted condition, making the properties undesirable in the open market, The minimum price that could be established under statute is $100. (It CDA Potent al Collaborative Master Plan City and CDA staff have worked together to evalua e the potential for the tax forfeit parcels, resulting in a proposed master plan including the components listed in Table A below and the attached Map A. Table A includes the recommended entity to acquire each parcel based an the public purpose c the entities involved. 01-81750-03-020 01-81750-02-010 01-81750-01-010 01-81750-00-011 & 01-03400-28-020 nty Table A: Proposed M Parcel Label and Description • Parcel A: 1,67 acres Parcel B: 2.03 acres arcel C: L64 acres Parcel D: 3.65 acres Parcet E & F: 4.8 acres r In Parcel Identification No. - 6 - 11-81750-03. 7 6.6' CDA and t_it Ex oectation and Conditions Commercial/Office Development Commercial/Office Development Future Structured Parking_ andrnark Cornet': future mixed- use with place-making feature(s) Housing ter Plan Use En rty to Acquire City/EDA City/EDA City/EDA City/EDA Dakota Co CDA The CDA's interest in the housing site is subject to certain conditions required to ensure feasibility. Likewise, the City has certain expectations regarding the future development of these parcels. The CDA believes that it would be beneficial to both parties to establish expectations and conditions related to a future housing development, and document them in a memorandum of understanding (NAOU) prior to the CDA's acquisition of the parcels. Attached are proposed terms of an MOU for further discussion and consideration. If the or terms of the MOU are acceptable to the City, CDA staff will bring them to the CDA Board of Commissioners for discussion at its April le meeting. CDA staff will also request CDA Board approval to amend the CDA Board resolution requesting conveyance of the tax forfeit parcels, to limit the request to the two parcels noted in Table A. Since the CDA's enabling law gives the CDA priority for tax forfeited parcels over cities, a revision to the resolution will allow the City to proceed with the requested conveyance of the remaining parcels. Benefits to th The COA's proposed acquisition of the two parcels described in Table A provides many benefits to he City, as follows: The CDA has expertise and demonstrated success in developing or partnering with the private sector to finance the developrrient of high quality, market rate and affordable housing, and mixed use developments. This site has been previously appr•ed by the City for a 240-unit rental development, with 40% of the units affordable to households with incomes at or below 609- of the area median income (A.M1), The CDA is best suited and uniquely qualified to oversee this development in the future. The City may be able to leverage the CDA's acquisition of the housing site to retain the Met Council LC DA grant ($167,000) and build the trail. The City could use the MOU to demonstrate that the CDA will fulfill the affordable housing requirement of 40% of the units affordable to hotkseholds at or I3elow 60% AMP, and report that the CDA's acquisition of tax forfeit parcels is aithorized by statute for purpose of developing affordable housing. The CDA will hold property for future development Until the market has absorbed the City- assisted 322 market rate and affordable housing units west and north of Kelley Park scheduled for construction in 2013 if sold at auction to a private entity, the City would not be able to control the timing of the development. The CDA is willing to pay a portion of the assessments upfront, s opposed to waiting three or more years until the property is ready for development. endation s Next S Reco if the City/EDA wishes to pursue the acquisition of the tax forfeit parcels in furtherance of the proposed rnaster development plan outlined in Table A, CDA staff recommends notification of this intent to the County on or near the May 2, 2012 end of withholding [Jerk:Id. To proceed along these lines, the CDA requires the City's approval of MOU terms acceptable to the CDA Board, along with an amended conveyance resolution of the CDA Board. We appreciate the opportunity to work collaboratively with the City to help facilitate the development of the tax forfeit parcels consistent with City goals and objectives for the Central Village area and the CDA's mission to improve the lives of Dakota County residents through affordable housing and community development. •••.,,-•••••••• - •. '• , -• Please feel free to contact - ne at 651-675-4432 or via email at mu fers tdakotacda.5tate,mn.us, or At Brennan at 651-675-4464 or via email at abrennaniDdakotacda.statenn.us to discuss this proposal in more detail. Si cere y, A\4, Mark Ulfers Executive Director, Dakota County CDA Encl: Proposed MOU Terms Map A cc: Andrea Brennan, Dakota County CDA 13ruce Nordquist, City of Apple Valley osed MOU Ter p Housing Development Project: The CDA will endeavor to either develop„ or enter into a development agreement with a private pleveloper to dvelop, a mixe,c1 income, high quality„ Clss -A apartment building on PINS 01- 81750-00-01 & 01-03400-28-02 (Parcels E&F on attached Map A). The successful development of this site will depend on market conditions, unknown site conditions, a d financing availability. The majority of units be market rate. income - and rent reStriCtiOnS will be limited to approximately 40% of the units, if they are affordable to households with incomes at or below 60% of the area median ncorn ($40,300 for a household size of 2 in 2012), OR 20% of the units, if they are affordable to households with incomes at or below 50% of the area median income ($33,600 for a household size of 2. in 2012), The development will rneet City design standards for the Central Village area The CDA will hold property for future development until the market has absorbed the City - assistd 322 market rate and affordable housing units west and north of Kelley Park scheduled for construction in 2013, The CDA may consider developing workforce housin on the southern narrow portion of the site, depending on financing availability and market conditions, Assess ents: CDA vi l pay approximately $1,500,000 within 60 days of obtaining clear title to the property - City will waive interest and penalties, and the balance of principal assessments levied, pending and/or yet to be spread. Tax Increment financi City supports the CDA 's establishmen t of a housing tax increment financing district, if necessary to develop the housing project Acquisition Cost CDA commitment is contingent on the Dakota County Board of Commissioner's approVat of the sale of Parcels E & F on the attached map at a cost of $100 or less per parcel. CDA commitment is contingent on obtaining free and marketable title, not subject to deed restrictions or reversionary requirements, to the Parcels E & F on the attached map. LCDA Grant or other trail funds: CDA commitment is contingent on LCDA Grant availability to construct Station, or other funding available for the project. it to 155 Transit 1 �7i 4�i • ' w .'T N: e 153RD ST VV 1111,11;:, u �: te: ' 152ND ST t .AR aa4RLY �.. ��aa••�� �.:pK.3:� i.s i+ 4b 'vrio+ xi. ,x�.b,:i.. ,: :F A� t1x: 7 ti,s.. �::.:. H:. :>.: ..4�' •/�'� J:.L.. Y . J•::L:'.''' :;::r...:;•<b?,A,- a::..� :: i..:.;.' �',.' a:.::,.' :::,:;.t'::.;:,.,.:: >;: >.. >.,:. ,. ,?�xx: ,.:s�:..>...r' -.. d�4 Nen;'a^ , ...s:'•�a✓a�r& z.��.s✓d:,$nz!�Y.:f��r��x�d8a �r�. ds., CENTRAL VILLAGE WEST PARCEL DATA �s}i. r,arr.h�wa�� arrwM�1: L r y� ,a ... 4: ' ! r J 0 Z 0 9 `"' fr o o 1 : � i z �5.- ;oz. ° & x ao'e k A , :w _ _.rw�b. A'e�PR d?e b i A...00yv as oo�. m �: ;t�� oy:�q -Y2a • .. n:'P. �.