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1997-05-20 Council minutesPage No. 1 May 20, 1997 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, May 20, 1997 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, Minnesota was held at 8:00 o'clock p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. Mayor Mertensotto called the meeting to order at 8:00 o'clock P.M. The following members were present: Mayor Mertensotto, Councilmembers Huber, Koch, Krebsbach and Smith. AGENDA ADOPTION Councilmember Koch moved adoption of the revised agenda for the meeting, amended to move items 7a, Sweeney, and 7c, old fire hall site, to the beginning of the agenda. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 APPROVAL OF MINUTES Councilmember Krebsbach moved approval of the minutes of the April 19, 1997 joint Council/Planning Commission meeting. Councilmember Koch seconded the motion. Ayes: 4 Nays: 0 Abstain: Huber Councilmember Krebsbach moved approval of the minutes of the May 6, 1997, as amended. Councilmember Smith seconded the motion. Ayes: 4 Nays: 0 Abstain: Koch CONSENT CALENDAR Councilmember Krebsbach moved approval of the consent calendar for the meeting, revised to move item n, land donation, to the regular agenda, along with authorization for execution of any necessary documents contained therein. a. Acknowledgment of the minutes of the May 14, 1997 Airport Relations Commission meeting. b. Acknowledgment of the May 13, 1997 Parks and Recreation Commission meeting. Page No. 2 May 20, 1997 c. Acknowledgment of the Treasurer's monthly report for April. d. Acknowledgment of the Fire Department monthly report for April. e. Authorization to change the hours of operation at the Public Works garage. f. Authorization to contribute $500 from the 1997 budget to contribute to the cost of a welcoming reception for the 27th annual NOISE conference. g. Approval of a modified CAO site plan for Mr. & Mrs. Jay Schmitt (CAO No. 97 -01), to allow construction of a detached deck at 788 Sibley Memorial Highway, along with approval to waive the CAO site plan review application fee. h. Acknowledgement of an update on plan review and inspection costs related to the septic system ordinance. i. Approval of a transfer of $25,000 to the Equipment Reserve Fund for 1997 and an additional $50,000 for 1996. Authorization for staff to solicit bids for expansion space improvements to the City Hall lower level expansion space. k. Acknowledgment of the 1998 budget schedule. 1. Acknowledgment of a summary from the Dakota County Assessor's Office regarding the annual Review Board meeting. m. Approval of an Amendment to Agreements and Estoppel Certificate between the city, the St. Paul Water Utility and Cray Research, along with authorization for execution of the document by the Mayor and City Clerk. n. Adoption of Resolution No. 97 -22, "A RESOLUTION REQUESTING A CHANGE IN THE DEPARTURE PROCEDURES FOR THE MENDOTA HEIGHTS -EAGAN o. Acknowledgment of receipt of information from Dakota County regarding site selection for the new Northern Dakota County service center. Page No. 3 May 20, 1997 p. Approval of the List of contractor licenses dated May 20, 1997 and attached hereto. q. Approval of the List of Claims dated May 20, 1997 and totaling $412,440.72. r. Authorization to issue a purchase order to the Crabtree Company for the purchase of a Hewlett- Packard LaserJet SSiNX printer for its low bid of $3,268 plus tax. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 PROPERTY DONATION Council acknowledged a memo from Assistant Hollister regarding an 810 RIDGE PLACE offer from Mr. John Doyle, 810 Ridge Place, to donate a portion of his property to the city for park purposes. Mayor Mertensotto stated that he is not sure that accepting the property would be a liability to the city since there is a city trail to the west. He stated that the property does not have access or development potential for the property owner but that the city has had to enter the property to clear out beaver dams that blocked the drainage way in the past. He did not think that the city would incur any liability and felt that Council should not cut off consideration of the donation. He also pointed out that the only reason a value would have to be established would be for the benefit of the property owner for tax purposes. Councihneraber Krebsbach stated that she would like to look at the proposal further and see what impact it would have on adjoining property owners. She also felt that Council should look more closely at where it would want to draw the property line in relationship to adjoining property. Councilmember Smith asked what obligation the city would take on for maintenance of the property. Mayor Mertensotto responded that there would be no maintenance except that the drainage way would have to be kept open. Council directed Administrator Batchelder to notify the property �- owner that the city would like to physically inspect the property and `V� that Council has expressed interest in exploring the offer further. Page No. 4 May 20, 1997 Staff was directed to research the issue further to determine if there has been a similar offer in the past and to determine what past practice has been. Councilmember Huber stated that if the city accepted the property it would have to be with the understanding that there is no intended purpose for the property other than open space and there would be no guarantee that it will always be left in its current state. CASE NO. 97 -07, SWEENEY Council acknowledged a memo from Public Works Director Danielson and a revised proposed resolution regarding the preliminary plat for property located at the northeast corner of Wentworth and Wachtler. Mr. Bill Brown, surveyor for the property owner, Mr. Ed Sweeney, was present for the discussion. Mr. Brown informed Council that Mr. Sweeney has reviewed the proposed resolution and agrees to the conditions stated in the resolution and requests Council's adoption of the resolution as drafted. Mayor Mertensotto stated that the property owner must understand that if the county turns the road back to the city, the city will be the authority to review driveways. Mr. Brown responded that Mr. Sweeney understands that if jurisdiction for the driveways is no longer with the county, it would be a significant change and the city would need to approve the driveways. Councilmember Krebsbach moved adoption of Resolution No. 97- 23, "A RESOLUTION GRANTING A PRELIMINARY PLAT APPROVAL TO SUBDIVIDE THE LOT ON THE NORTHEAST CORNER OF WENTWORTH AND WACHTLER INTO THREE LOTS FOR SINGLE - FAMILY HOME DEELOPMENT." Councilmenber Smith seconded the motion. Ayes: 5 Nays: 0 FIRE HALL SITE Council acknowledged a memo from Public Works Director Danielson recommending steps the city can take to reduce problems associated with the vacant former fire hall site. Mrs. Laurita Weinzettel and Mr. Cliff Kirchner, owners of the properties adjoining the site, were present for the discussion. Page No. 5 May 20, 1997 Mayor Mertensotto stated that the city will take care of maintenance of the site, but the other issue is the use of the adjoining property. He stated that this is a B -2 District and the building goes back many years to the time when there was a general store on the site. He stated that the back of the site has now been developed into a large landscaping business storage area and the operator moves equipment and materials from sun -up to sun -down. Councilmember Smith stated that it is also her understanding that the operation is using the former fire hall site for parking. Mayor Mertensotto stated that instead of using the access between the commercial building and the fire station site, the operator uses the city property and the neighbor's property to drive across as well. He pointed out that the B -2 property is located within the city's tax increment district and if the city were to formally condemn the property for public purposes Council could be criticized for not having an intended public use for the property. He stated that one solution to the problem would be to install a fence from the highway right -of -way all the way down the side property line of the city property. j Mr. Kirchner stated that the landscaping business is his tenant and that he does not know that they are using Mrs. Weinzettel's driveway. He informed Council that he knows that that landscaping business has caused problems and talked to them today, but that he had not been notified by the city that there would be a discussion this evening. Mayor Mertensotto responded that Mr. Kirchner would have been contacted before the fence was installed and also to see if he would be willing to sell his property to the city. He informed Mr. Kirchner that the landscaping company is beyond what is permitted in the zoning district and requires more parking and more space than is available. Mr. Kirchner responded that he can take care of the parking problem but that the landscaper has difficulty maneuvering his trailers in and out and has asked if he can use the bottom area for a turn- around. Councilmember Smith stated that last week an area of the fire hail property was torn up by tire tracks and she can only expect that it was the landscaper's equipment that did the damage, about twenty feet onto the city's property. Page No. 6 May 20, 1997 Mayor Mertensotto stated that Mr. Kirchner is aware of the extent of the problem the city must correct. He informed Mr. Kirchner that Council does not want the landscaping firm running its trucks in and out and expanding its business and that the city has the right to fence its property. He suggested that Mr. Kirchner come up with a plan to resolve the problem before the next meeting and contact Public Works Director Danielson. He stated that if there is no solution by the next Council meeting, Council will authorize fence installation along the city's property lines, including the front, and the drive will be posted as a private driveway. Mrs. Weinzettel stated that she has brought the issue to Council before without results and does not want to wait another season before something is done. She informed Council that the landscaper's equipment was driven over her property yesterday. Councilmember Smith responded that the extent of the use of the property exceeds what is permitted in the B-2 district and is completely inappropriate as a use adjacent to a residential property. LIQUOR LICENSE HEARINGS Council acknowledged applications for liquor license renewals for Somerset Country Club, Mendakota Country Club, Mendota Liquor, Heritage Inn and Courtyard by Marriott, along with associated staff reports and recommendations. Mayor Mertensotto opened the meeting for the purpose of a public hearing on applications from Somerset Country Club for renewal of its Club On-sale and Sunday liquor licenses. There being no questions or comments from the audience, Councilmember Huber moved that the hearing be closed Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 Councilmember Huber moved approval of the issuance of Club On- Sale and Sunday liquor licenses to Somerset Country Club. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 Mayor Mertensotto opened the meeting for the purpose of a public hearing on applications from Mendakota. Country Club for renewal of its Club On-sale and Sunday liquor licenses. Ayes: 5 Nays: 0 Ayes: 5 Nays: 0 Ayes: 5 Nays: 0 Ayes: 5 Nays: 0 Ayes: 5 Nays: 0 Ayes: 5 Nays: 0 Page No. 7 May 20, 1997 There being no questions or comments from the audience, Councilmember Huber moved that the hearing be closed Councilmember Smith seconded the motion. Councilmember Koch moved approval of the issuance of Club On- Sale and Sunday liquor licenses to Mendakota Country Club. Councilmember Smith seconded the motion. Mayor Mertensotto opened the meeting for the purpose of a public hearing on an application from Mendota Liquor for renewal of its Off -sale liquor license. There being no questions or comments from the audience, Councilmember Smith moved that the hearing be closed Councilmember Huber seconded the motion. Councilmember Krebsbach moved approval of the issuance of an off -sale liquor license to Mendota Liquor. Councilmember Smith seconded the motion. Mayor Mertensotto opened the meeting for the purpose of a public hearing on applications from the Tharaldson Corporation for renewal of its Limited Service Hotel and Sunday liquor licenses for the Heritage Inn. There being no questions or comments from the audience, Councilmember Huber moved that the hearing be closed Councilmember Krebsbach seconded the motion. Councilmember Koch moved approval of the issuance of Limited Service Hotel and Sunday liquor licenses for the Heritage Inn. Councilmember Krebsbach seconded the motion. Mayor Mertensotto opened the meeting for the purpose of a public hearing on applications from the Marriott Corporation for renewal of its Limited Service Hotel and Sunday liquor licenses for the Courtyard by Marriott.. Page No. 8 May 20, 1997 yes: 5 Nays:0 Councilmember Koch moved approval of the issuance of Limited Service Hotel and Sunday liquor licenses for the Courtyard by Marriott. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 ROGER'S LAKE STUDY Council acknowledged a memo from Public Works Director Danielson regarding a presentation by members of the St. Thomas Academy Environmental Studies Class on results of their testing of Roger's Lake water quality. Environmental Studies Instructor Joe Reymann and students Clint Jamison and Devin Haldin were present for the discussion. Mr. Jamison and Mr. Haldin distributed the test results and reviewed those results for Council and the audience and responded to Council questions. TRANSIT SERVICE Council acknowledged a memo from Administrator Batchelder regarding MCTO transit redesign and proposed service changes to Mendota Heights. Council also acknowledged a copy of the redesign proposal and information from the Metropolitan Council. Mr. Steve Legler, Manager of Service Planning from the MCTO, Mr. Kevin Howe, member of the Metropolitan Council Transportation Committee, and Mr. Mark Hoisser, from DARTS were present for the discussion. Mr. Legler informed Council that the purpose of the redesign is to speed up transit service and improve transit service for suburb to suburb trips. He explained that the plan includes establishing a transit hub in the area of Robert Street and Marie Avenue in West St. Paul, wherein some of the big MCTO buses would be replaced by smaller vehicles operated by DARTS. He stated that virtually all of the transit routes are oriented to St. Paul destinations, but with a transit hub, MCTO can enhance the service to downtown but can also make transit between suburbs better. He reviewed the current routes serving Mendota Heights by MCTO and cooperatively with the Minnesota Valley Transit Authority. Route 48A would be unchanged under the redesign proposal, but Routes 5 and 7 would be replaced with a dial a ride service provided by DARTS with smaller vehicles which would provide all day service in the city and would connect with the MCTO at the hub. Page No. 9 May 20, 1997 vehicles which would provide all day service in the city and would connect with the MCTO at the hub. Mr. Hoisser described the dial a ride service, stating that it is a new service that is being added to DARTS. The service would operate from 6:00 a.m. to 9:00 p.m. weekdays, wherein there would be a one bus service on a timed transfer basis to the transfer hub in order to allow people to snake a connection with MCTO to get to downtown St. Paul. Mid -day, people would have to call in 24 hours ahead of time for service. He explained that there will also be a subscriber service for peals time wherein individuals would only have to call DARTS to make a change in their schedule. The fare system would be the same as MCTO, but people would be picked up at their homes and would get transferred to MCTO, so there is no extra cost to riders. Mayor Mel tensotto stated that one of the advantages of DARTS, especially for seniors, is the ability to ride from their home for medical and other services and then back without having to walk to a bus stop, but he asked how the new service will fit in with existing. He asked if DARTS has all of the necessary drivers and equipment available. Mr. Hoisser responded that this will be an added level of service and that the buses and drivers that will be used for the service are available. He informed Council that the new service will start in September. Mayor Mertensotto stated that the redesign information should be publicized so that people use the service. He stated that Council is very concerned that those people who do not have cars and need transportation to their work downtown have transportation available. He also stated that when the Brown Institute is open in September or October, there will be students who will come from Minneapolis. He pointed out that Council has asked for service along Hiawatha to Mendota Heights. Mr. Legler responded that a route to Minneapolis is still under consideration but it was moved to a later time frame because major construction will begin on Hiawatha soon and will take about three years to complete. He explained that current service goes north on Lafayette and west on I -94 to Minneapolis and it was felt that changing that to use the Mendota Bridge would result in longer travel time until Hiawatha is completed. Page No. 10 May 20, 1997 l Mr. Howe stated that the Brown Institute issue is brand new, after all the planning for the redesign was done, and that the Institute will be factored into consideration. He stated that MCTO will ask the institute representatives how many people may use transportation from Minneapolis to the school. Mayor Mertensotto stated that hub from T.H. 110 across the Mendota Bridge along Hiawatha to downtown Minneapolis would benefit Mendota Heights residents as well. He noted that Mn/DOT is installing fiber optics in the right -of -way in order to install controlled access lights at I -35E and he felt that if people run into delays getting onto the freeway, they may use public transportation instead if it is available. He stated that he uses Hiawatha Avenue and has not had significant delays because of construction. He pointed out that Mendota Heights residents pay $490,000 in taxes each year to the MCTO and that Council owes it to the residents to get some value for that money. Councilmember Krebsbach asked if it is possible that people could be dropped off somewhere other than the hub. Mr. Hoisser responded that people can be dropped off anywhere they like, wluch is the beauty of using the DARTS system. He stated that someone could come from their home in Mendota Heights to somewhere else in Mendota Heights. He informed Council that DARTS will also make accommodations for people who, for example, get ill at work and must come home. Responding to a question from Councilmember Krebsbach, Mr. Hoisser stated that the service will be for the general public, including children, and that DARTS will pick up a child to go to and from a destination. Councilmember Huber asked what the DARTS expectations are of someone calling for a ride. He asked if they would need to be at the end or their driveway waiting when the bus arrives. Mr. Hoisser responded that there is a "fudge factor" with DARTS so people would have at least a minute or two to leave their house and get to the bus. Councilmember Huber stated that if Route 95MU to Minneapolis is moved along T.H. 110 to the Mendota Bridge, a park and ride would be needed somewhere west on T.H. 110. Page No. 11 May 20, 1997 Councilmember Smith asked what the anticipated travel time is for a person on the existing route that will be eliminated compared to taking the circulator to a hub. Mr. Hoisser responded that he anticipates with DARTS connecting at the hub a customer will be able to get to St. Paul with no additional traffic time because there is a new, faster service planned from the hub to downtown. The Minneapolis route is not proposed to change as part of the redesign. Mr. Legler stated that he thinks the travel to downtown will be faster with DARTS taking people to the hub. He informed Council that there will be a shelter at the hub, perhaps temporary this year with permanent construction next year, and that there will be lighting and a park and ride at the hub. He stated that the capacity of the park and ride should be up to 200 cars and that there will be no charge for park and ride. Councilmember Smith asked what the subsidy is for the current system and whether there will be any change. Mr. Howe responded that MCTO will have a contract with DARTS and will pay for the service. Currently 30% of the MCTO costs are paid by fairs and the balance is form tax revenue. He explained that he believes through the savings MCTO makes because of the redesign, it will be able to increase the service by contracting with DARTS. He did not anticipate there will be any increase in cost for providing the service. Mayor Mertensotto stated that DARTS has provided excellent service over the years. Responding to a question from Councilmember Smith, Mr. Howe stated that it is hoped that the level of ridership will increase because of the improved service. Mr. Legler stated that MCTO did receive a number of comments at the public hearing on the proposed redesign and the concern that was expressed by those who made comments was about the replacement of bus service with DARTS along Route 5. He stated that the concerns were primarily with making a reservation a day in advance, but for trips that occur every day there will be a subscription service where a vehicle will be at the individual's residence at the same time every day. Page No. 12 May 20, 1997 Mr. Hoisser stated that except for the subscription service, individuals would have to call DARTS before 5:00 p.m. for a ride the next day, but exceptions will be made for people who are ill. Councilmember Smith asked how someone who is a subscriber for a morning and evening ride can get a trip from the hub if they are delayed at work. Mr. Hoisser responded that they can call DARTS and that this would be the type of case in which DARTS would make an exception. Mayor Mertensotto asked what is needed from Council. Mr. Howe responded that no action is necessary and the Metropolitan Cotuzcil will receive comments through May 29 and hopes to make a decision in June and then will publicize the changes in July through the end of September when the redesign is implemented. Mr. Legler stated that MCTO is committed to listening to the comments it receives and given that there has been concern in Mendota Heights over the loss of routes in peak hours, he will talk with DARTS to see if there can be some mix of DARTS and MCTO. SUPER AMERICA SITE Council aclaiowledged a memo form Public Works Director Danielson regarding the SuperAmerica Remedial Investigation/Corrective Action Design Review (RI/CAD), along with a site Corrective Action Design Report prepared by Delta Environmental, Environmental Consultant for SuperAmerica. Ms. Megan Tewinkel and Mr. Scott Williams, from Delta, and Mr. Steve Thompson, from the Minnesota PCA, were present for the discussion. Mr. Thompson informed Council that he is with the PCA's leaky tank clean -up program, which deals mostly with petroleum leaks. He stated that there are about 20 sites in Mendota Heights that are monitored by the program. He explained that the owners of the properties must do an investigation to see if there is contamination, and about 75% of the older underground tanks have had releases. He informed Council that SuperAmerica needs to find out how far the contamination has moved and whether it is causing any problems — which are defined by the PCA — including vapor problems, surface water problems or underground water supply problems. He explained that in the past PCA required total removal of Page No. 13 May 20, 1997 contamination, but that it has found over the years that contaminates do not have to be removed from all sites. Mayor Mertensotto stated that Council knows from the area studies of the site that there was at least seven feet of petroleum on top of the water tables and it had gravitated to the east and west lanes of the highway. He stated that the RI/CAD does not seem to address the fact that the contamination has gone that far. Mr. Thompson stated that in almost all cases PCA addresses the source area, where the contaminates are the worst. He explained that it is too expensive to try to treat the entire contamination area, and the problem is addressed at the source. He informed Council that PCA always requires the consultants for the owners to install monitoring wells to show that the contamination is not moving. He stated that this is a complicated site and the program is not yet fmalized because they do not yet know the extent of the plume. Also, there are also intermittent vapors in the sewer system, and another concern is that there are a couple of homes in the area that still have their own water supplies. He stated that the homes are not in the path of the contamination but they are close enough for PCA to investigate them. Mayor Mertensotto stated that he sees nothing in the report about off -site monitoring wells. He felt that the investigation should determine how far the contamination has gone and how far it will go. Mr. Thompson responded that the work is not done yet — the studies have not been completed, and the PCA had informed Delta that the extent of the contamination must be defined. Mayor Mertensotto stated that when it was first discussed, SuperAmerica showed a pumping station on the site and now that structure is gone. He asked what the monitoring wells will look like. Mr. Thompson responded that it is a complicated site, and often what the PCA does at sites were there is a lot of pre - product is have a pumping well — and a structure to put that into. At this site, that type of roach is not effective because of the soil types. The approach that is being taken is to come to the site twice a month with a high volume vacuum pump, and there will need to be temporary storage for the pre - product. Responding to a question about potential danger to the marsh near City Hall, he stated that this is why the monitoring wells are being installed — to be sure that contamination does not reach the marsh. He then explained the two levels of contamination. Page No. 14 May 20, 1997 Councilmember Krebsbach asked if the PCA will take some action to reduce the level of contamination off the site. Mr. Thompson responded that if tests find that contamination is beyond safe levels they will take remedial action. Mayor Mertensotto stated that Council does not want to have a maintenance shed sitting on the corner. He asked how the city prevents having an access shelter on the site. Mr. Thompson responded that he does not know if clean up is necessary or not, and that it does not look like a structure is necessary. If there is contamination that is moving towards the surface water, SuperAmerica would have to take some action, but there is technology now that would not require a structure. Responding to questions on whether there is any potential for explosion, Mr. Thompson stated that there is no danger at this time and the PCA monitors the site every other week. He stated that the sanitary sewer isms right over the pre - product, and it is hoped that the vacuuming will remove the problem. Ms. Tewinkel informed Council that Delta monitors for vapors every other week, screening four manholes on the site. Mayor Mertensotto stated that Council is concerned about what kind of accessory structure will be needed since the site is to be vacuumed out. Mr. Williams responded that a truck will come to the site and everything that is taken out will be removed from the site on that day. He explained that the pipe to the wells stick out about two feet and the temporary storage barrels will be removed shortly. Mayor Mertensotto stated that the report indicates that only about 100 gallons have been removed. Mr. Williams responded that this is good — many sites are pumped for years before that much product is removed. He felt that the recovery to date is promising. Mayor Mertensotto stated that Council is concerned about the plume and how far it has spread across the highway. Page No. 15 May 20, 1997 Ms. Tewinkel referred to figure five in the corrective action draft report, which indicates the location where two monitoring wells will be installed. Mayor Mertensotto stated that Council was supposed to get a proposed RI /CAD corrective action design 120 days before SA started construction. He further stated that the agreement also states that the city has 60 days to approve the RI/CAD, but Council is not really certain what it is approving. Mr. Williams responded that he believes there is sufficient information on the extent of the plume and that with the removal of the old tanks and lines, what remains is the massive contaminated soil on the site and that is bleeding out to the northwest. He explained that Delta intends to identify potential receptors and that Delta is assessing the vapor problems. At this point, the most practical method of dealing with the problem is vacuuming, and that will continue on the site for many years. Councihnember Krebsbach asked if Delta has found anything was going towards the marsh and something more aggressive needed to be done, would that occur off the SA corner. Ms. Tewinkel responded that Delta typically attacks the source and will do that with the pump truck which will remove a significant amount of contamination from the source area. She also informed Council that the vapors in the sewer will be monitored every other week. Councilmember Krebsbach asked how Delta notifies people if there is a problem. Ms. Tewinkel responded that the fire department is contacted immediately. Mr. Williams stated that if it is found that there is potential for impact to the marsh, more oxygen can be interjected. He stated that in the area of high contamination, the oxygen is depleted. Mayor Mertensotto stated that under the conditions of the developers agreement, Council has 60 days from the date of PCA approval of the R1/CAD. He asked Mr. Thompson if he will let Council know when the approval letter is issued and when the 60 day period will start. Page No. 16 May 20, 1997 Mr. Thompson responded that he will copy the approval letter to the city when it is sent out. CASE NO. 97 -09, OPUS Council acknowledged a memo from Administrator Batchelder regarding a request from Opus Development/AMB for consideration of a change in the requested TIF for the proposed development of the George's Golf Tee, along with a request for flexibility with respect to the prohibition on transfers of title. Council also acknowledged letters from Opus, and from Barna, Guzy and Steffen, Ltd., and a Geotechnical Evaluation prepared by Braun Intertec for Opus. Mayor Mertensotto stated that if the city is going to participate with TIF it is usually done up -front as part of the developer's agreement. He did not think Council could allow Opus to develop the property and then have someone else come in and ask for TIF after the fact. Mr. Martin Coyne, from AMB, stated that he would suggest that the city structure the developer's agreement with a specific requirement that at the time of completion, the tax increment would be with the owner of the property at that time. He informed Council that if the project starts in June it would be completed by the end of October, which would coincide with the mingling of all the assets in one fund, so the concept would allow the transfer to the new entity at the time of occupancy. Mr. Coyne stated that the new entity will be a corporation in Ameritech. Mayor Mertensotto responded that this would be a transfer of TIF, which Couuicil does not allow. Mr. Jeff Bangasser, from Opus, asked if similar conveyances have been allowed by Council. Mayor Mertensotto responded that there may have been one occasion because it was not classified as a sale because it was a family trust. Mr. Bangasser stated that if the recipient of the TIF does not use the TIF to gain a value eifliancement, the alternative may be to have the property independently appraised after construction and have the value determined without consideration of the tax credits. He further stated that, as part of the agreement, the city could require review of the terms of the conveyance to determine that the value of the TIF is not a consideration. Coiulcilmember Smith asked about the nature of the transfer and whether the owners of both entities will be exactly the same. Page No. 17 May 20, 1997 Mr. Coyne responded that the will. He stated that in this case it is Ameritech, wluch AMB manages on their behalf, and that Ameritech has a share in the co- mingled fund. He explained that other pension funds will be contributing properties to the co- mingled fund as well and will be getting stock in proportion to what they invest. Coiuicilmember Smith pointed out that the TIF will contribute to the market value, which will immediately create increased value to Ameritech and that is not Council's purpose in contributing TIF. Councilmember Krebsbach stated that AMB's proposal is to now request $250,000 up -front rather than $114,000 and that they would upgrade the exterior of the R.L. Johnson warehouse. She asked if all the components of the new entity exist. Mr. Coyne responded that the warehouse would be painted and the barbed wire fence would be removed. With respect to the new entity, he stated that it is being formed now and that it is a real estate investment trust. He explained that it may be able to be structured in such a way that AMB is the developer with the new entity taking over ownership when the project is completed. AMB would actually develop the property with the specific purpose of putting it into the trust and AMB will be the trust. Mayor Mertensotto pointed out that there would be two different entities and that public stock will be sold on the open market. Mr. Coyne responded that the whole of the AMB Corporation would go into the trust as well, because it will be managing the co- mingled trust and the clients who have stock in the fund will own the individual properties. Mr. Bangasser stated that the parties know that this asset will be held in a different entity than today and if AMB can be shown as the overall entity developing and fielding the project, there would be no increase in value to AMB. Cow- icihnember Krebsbach stated that she appreciates that the R.L. Johnson warehouse would be upgraded. She stated that she would also like to see the adjacent triangular piece of land maintained. Mr. Coyne responded that at the last meeting he got clear direction from Council that the triangular parcel should not be included. He stated that AMB has to resolve the TIF issue first before it can Page No. 18 May 20, 1997 control the other parcel, but that he may be able to include it within the project at some time in the future. Mayor Mertensotto asked why AMB cannot hold the property for the life of the TIF district without transferring it into the trust. Mr. Coyne responded that the principals of AMB are in the business of advising and consulting and are not investors — they are advising Ameritech. Mayor Mertensotto stated that no matter how it is viewed, there is a transfer of TIF. Mr. Coyne asked if there is a transfer fee that Council would entertain. Mayor Mertensotto responded that a transfer fee is not the basis of not permitting transfers and that Council is not talking about a transfer fee at all. He stated that Council has to protect the city against the legislature accusing the city of using TIF to entice businesses away from St. Paul and Minneapolis. Councilmember Smith stated that she understands that the reality is that if AMB waited, it would not be any different from allowing a one-time transfer. She stated that the entities are different than Council has permitted it the past and approval would set a precedent. Mr. Coyne asked about the possibility of exploring an option whereby Opus doing a turnkey project on behalf of AMB. Mayor Mertensotto responded that Council would have to know what the structure is and AMB does not have all of the answers this evening, so Council could not make a decision this evening. He asked who would sign the developer's agreement if AMB wants Opus to be the developer for the true owner, and pointed out that that entity would have to be identified. Councilmeniber Smith asked if the new entity would be set up before November. Mr. Coyne responded that he does not know the exact date but it would be by November. He expressed appreciation to Council for trying to help AMB but stated that he has a short window of time to get the project completed by winter and he felt that trying to work through the Opus approach would take too long. He stated that he Page No. 19 May 20, 1997 would rather withdraw the request at this time and hope that Mr. Waters will hold the property for a year. Mr. Coyne formally withdrew the application at this time, stating that he hopes to come back in the future. MISCELLANEOUS Council acknowledged an invitation from the National Park Service for a boat trip for Mayors and City Council members on May 31. Administrator Batchelder informed Council that if more than two members plan to attend, a notice of a Council meeting would be required. SPRING CLEAN -UP Administrator Batchelder informed Council that the annual Spring Clean-Up event was very successful and expressed appreciation to those who volunteered to help, including Mayor Mertensotto, Dan Tilsen, Stan Linnell, Nancy Bauer, Tom Knuth, Guy Kullander, and Marc Mogan. He also expressed appreciation to Mendota Heights Rubbish. He expressed special appreciation to Assistant Pat Hollister for organizing, publishing and running the event. COUNCIL COMMENTS Councilmember Koch asked that staff do a survey of Ivy Falls Park with respect to landscaping, dead trees, etc. ADJOURN There being no fiuther business to come before the Council, Councilmember Krebsbach moved that the meeting be adjourned. Councilmember Huber seconded the motion. Ayes: 5 Nays: 0 TIME OF ADJOURNMENT: 11:45 o'clock P.M. I athleen M. Swanson City Clerk ATTEST: Charles E. Mertensotto Mayor LIST OF CONTRACTORS TO BE APPROVED BY CITY COUNCIL HIM f7plMor. M-MR; M-WIFUr =. Bituminous Roadways, Inc. Concrete Contractor License Halvorson Concrete Inc. Hicks Concrete Construction Inc. Krause Brothers Inc. Leibel Construction Inc. Progressive Concrete & Masonry, Inc. Excavating Contractor License Bruhn Excavating Final Grade, Inc. Messenger Excavating, Inc. Max Steininger, Inc. Woodbury Mechanical Inc. Gas Piping Contractor License Four Seasons Air Specialist Judkins Heat & Air Cond, Inc. Managed Services Inc. Metro Gas Installers, Inc. Spriggs Plumbing & Heating NVAC Contractor License Four Season Air Specialist Judkins Heat & Air Cond, Inc. General Contractor License Acoustics Associates, Inc. Annsteel Deck, Inc. Befort Roofing Inc. Central Roofing Company Construct-All Corporation Custom Cuts Home Builders Herbst & Sons Const Co Inc. Steve Niznik Construction Co. Omega Construction, Inc. Dmmall/Stucco Contractor License Drywall Detailers Peteco Drywall S & K Stucco Inc.