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1993-05-04 Council minutesPage No. 3613 May 4, 1993 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, May 4, 1993 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, was held at 7:30 o'clock P.M. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. Mayor Mertensotto called the meeting to order at 7:30 o'clock P.M. The following members were present: Mayor Mertensotto, Councilmembers Huber, Koch, Krebsbach and Smith. BOARD OF REVIEW Mayor Mertensotto opened the meeting for the purpose of continuation of the annual Board of Review. Council acknowledged a report from the Dakota County Assessor's office informing Council on actions taken with respect to written appeals on property valuations which had been submitted at the April 20th meeting. Council also acknowledged a listing of individuals who appeared at the meeting and met with the Assessor's staff for review of valuations. Councilmember Smith moved to adjourn the Board of Review meeting. Councilmember Koch seconded the motion. Ayes: 5 Nays: 0 AGENDA ADOPTION Councilmember Krebsbach moved adoption of the agenda for the meeting, revised to combine items 9 h and j, moving Ivy Falls easement acquisition negotiations to closed session. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 APPROVAL OF MINUTES Councilmember Huber moved approval of the amended minutes of the April 20th Board of Review meeting. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 Councilmember Krebsbach moved approval of the minutes of the April 20, 1993 regular meeting Page No. 3614 May 4, 1993 with corrections. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 CONSENT CALENDAR Councilmember Koch moved approval of the consent calendar for the meeting along with authorization for execution of any necessary documents contained therein. a. Acknowledgment of the Code Enforcement monthly report for April. b. Adoption of Resolution No. 93-26, "RESOLUTION CALLING FOR REDEMPTION OF OUTSTANDING GENERAL OBLIGATION IMPROVEMENT BONDS OF 1993.11 c. Acknowledgment of the minutes of the April 27th Planning Commission meeting. d. Acceptance of the donation of a 3511 Mitsubishi television set by the Dakota County Chapter of the Mother's Against Drunk Driving, direction to staff to send a letter of appreciation, and authorization for the purchase of mobile cart to accommodate the set for a cost not to exceed $650. e. Acknowledgment of a change in the starting time for the May 18th meeting to 8:00 p.m., so that the starting time is not in conflict with school district election hours. f. Approval of the list of contractors dated May 4, 1993 and attached hereto. g. Approval of the List of Claims dated May 4, 1993 and totalling $267,900.95. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 PUBLIC COMMENTS Mr. Virgil McQuay, 976 Kay Avenue, stated that he had submitted a letter to Mayor Mertensotto in September, regarding an incident with NSP employees, and that he has not received a response. He also made assertions about the police department and asked that the Council become involved in the matter. Mr. McQuay stated that if the issue is not resolved by a Page No. 3615 May 4, 1993 letter from the city tomorrow, he will file a written request through the Dakota County Attorney. He asked Council to direct the City Administrator to write to NSP asking for their information on the incident. Mayor Mertensotto directed Administrator Lawell to write to NSP to say that Mr. MCquay states that the company did not transfer all of its information on the incident. HEARING: CASE NO. Mayor Mertensotto opened the meeting for the CAO 93-01, HEAVER purpose of a hearing on an application from Keith Heaver, developer, and Mr. & Mrs. Dave Graff, property owners, for a critical area variance to allow construction of a home in the critical area, on Lot 7, Block 2, Ivy Falls West 2nd Addition, with a deck setback of 23 feet from the bluffline, and for a five foot front yard setback variance. Mr. Heaver explained the variance request, stating that several different concepts were developed and considered, but that given the amount of land available to work with, the lot is not buildable without variances. He informed Council that the front yard setback is compatible with other homes near the property. Responding to a question from Mayor Mertensotto about hardship, Mr. Heaver stated that the limited amount of buildable space creates a hardship. He informed Council that the proposed home is a two-story structure, containing about 3,000 square feet, and is consistent with homes in the area. The five foot front yard setback variance will keep the house in line with the neighboring homes and will reduce the variance from the bluffline. Mayor Mertensotto stated that the Planning Commission feels there is a demonstrated hardship because of the physical constraints of the property and recommends that the variances be granted. Councilmember Krebsbach asked if granting the variance will save vegetation at the back of the lot. Mr. Heaver responded that it will, and that silt fencing will be used during construction. Page No. 3616 May 4, 1993 Mayor Mertensotto asked for questions and comments from the audience. Mr. Rob Maston, 1300 Wachtler, stated that he is concerned about the bluffline setback variance and potential disturbance to the vegetation on the hillside. He explained that his home is below the Graff lot and that he is concerned that no trees be lost and that dirt from construction does not come down the hillside. At the suggestion of Council, Mr. Maston reviewed the plans. After review, he stated that he is satisfied with the plan and does not oppose the variances. There being no further questions or comments, Councilmember Krebsbach moved to close the hearing, to approve a Critical Area bluff line setback variance of 23 feet to the deck and to approve a five foot front yard setback variance to allow construction of a home 25 feet from the front property line at 1297 Knollwood Lane, subject to a condition that a silt screen or silt fence must be used during construction, with the finding that the standards for approval of a Critical Area Overlay District variance had been met. Councilmember Smith seconded the motion Ayes: 5 Nays: 0 CASE NO. 93-09, Council acknowledged an application from ATLANTIS POOLS Atlantis Pools for a variance to the front yard setback requirement at 573 Emerson Avenue, a through lot, to allow construction of a swimming pool in the rear yard, and a height variance to allow construction of the required pool fence on the property line fronting the public street. Mr. Scott Hubbard, from Atlantis Pools, explained that the lot fronts on both Emerson and Coleshire, so both sides of the lot are considered front yards. He stated that all of the houses in the neighborhood front on Emerson, and that all of the neighbors have approved of the variances. Councilmember Smith asked if the existing fence line will change. Page No. 3617 May 4, 1993 Mr. Hubbard responded that it will not, that the new fence will be in the same location as the existing fence. He informed Council that the Planning Commission discussed the need for a landscaping plan, and stated that landscaping in place along the existing deck and a hedge runs along the back of the property will be retained. With respect to the Commission's recommended condition requiring a more detailed drawing showing the distance from the pool to the house and electric line disposition, he stated that NSP is going to put its lines underground and that he has submitted a more complete drawing showing the setbacks to the house, etc. He informed Council that the fence will be coated chain link. Mayor Mertensotto responded that he believes the Planning Commission suggested using shrubs to overcome any deleterious affects from the pool and therefore asked for a better landscaping plan. Councilmember Smith suggested that if the homeowners want more privacy they can landscape more densely. Responding to a question from Councilmember Krebsbach, Mr. Hubbard stated that all of the neighbors have signed statements approving of the variances. Councilmember Krebsbach moved to approve a ten foot front yard setback variance to allow construction of a pool on a through lot at 573 Emerson Avenue, as proposed, and a variance to allow a five foot chain link fence in the front yard, subject to the conditions that the five foot fence be coated chain link, that all electric transmission lines be underground, and that additional landscaping be installed as needed. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 CASE NO. 93-10, COONAN Council acknowledged an application from Mr. & Mrs. Michael Coonan, 2237 Apache Street, for a 10 foot front yard setback variance and a two foot, three inch side yard setback variance to allow construction of a garage with a second story living space addition to their home. Page No. 3618 May 4, 1993 Mrs. Coonan explained that they do not have a garage, as the previous owners of the home turned the former garage into living space. Mayor Mertensotto pointed out that there is a precedent in Friendly Hills where owners have converted attached garages into living quarters and constructed new garages which encroached on setbacks. Mrs. Coonan stated that the Planning Commission recommended two conditions for approval, blacktopping of the driveway and submission of revised plans showing additional yard dimensions. She informed Council that she and her husband had already planned to blacktop the drive and that they have submitted a revised plan. She also stated that the existing siding on the house will have to be removed, and the exterior materials used on the proposed addition will match those which will be used on the house. Councilmember Smith moved to approve a ten foot front yard setback variance and a two foot three inch side yard setback variance to allow construction of a garage and living space addition at 2237 Apache Street, 20 feet from the front property line and seven feet, 9 inches from the side property line, as proposed, on the conditions that the driveway be paved and that the siding on the new structure match the siding used on the existing structure. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 CASE NO. 93-05, VAN Council acknowledged an application from Mr. Ted Van for the simple lot division of Lot 2, Oak Point Addition. Mr. Van informed Council that his neighbor, Paul Katz would like to buy a small portion of his property for scenic purposes, and that approval of the subdivision will allow him to sell about one acre to Mr. Katz. He explained that the land he proposes to sell is located in the southeast corner of his property. Mayor Mertensotto stated that the Planning Commission properly addressed the question of buildability. He informed Mr. Van that the subdivision documents must definitely show Page No. 3619 May 4, 1993 that the parcel to be sold (Parcel A) is unbuildable so that anyone checking in the future would be put on notice that the property is not buildable. City Attorney Hart stated that the city could record a certified copy of the approving resolution to the County so that anyone reviewing the record in the future would be sure that it was the intent to preserve the lot, or Council could require a scenic easement over the property. Mayor Mertensotto responded that he would have no problem with recording a copy of the resolution, which would prevent a claim in the future that since the lot was subdivided it must be buildable. He pointed out that the filing of the resolution would be acknowledgment by the applicant that the lot will not be buildable in the future. He also stated that there should be a finding in the resolution that the land owners and the city agree that the property is unbuildable. Councilmember Krebsbach stated that there was a discussion by the Planning Commission about a gazebo that the Katz's put in their yard a number of years ago. She asked whether Council can also provide in the resolution that no gazebos can be placed on the parcel. She stated that she would not want to see any future controversy and suggested that there should be a condition restricting the owners from placing any structures on the lot, including no accessory structures, and that the parcel must remain as open space. Mayor Mertensotto stated that this is the reason why he suggested the resolution clause where both parties agree that the parcel is unbuildable. Attorney Hart stated that the term unbuildable means there can be no development on the lot, which means there can be no structures at all. Councilmember Smith moved adoption of Resolution No. 93-27, "RESOLUTION APPROVING THE LOT DIVISION OF LOT 2, OAK POINT SUBDIVISION," revised to include a finding that the land owners and the city agree that the property is unbuildable, and subject to the condition that Mr. & Mrs. Katz submit a letter to the is unbuildable for its scenic is no economic attributes. Councilmember Ayes: 5 Nays: 0 WATERMAIN EXTENSION Page No. 3620 May 4, 1993 city acknowledging that Parcel A and is being acquired solely characteristics and that there value other than the scenic Koch seconded the motion. Council acknowledged a memo from Public Works Director Danielson regarding a request from property owners along Delaware Avenue, south of the Centex Development, for an extension of the city's watermain. Mrs. Celia Kennedy, 2565 Delaware, stated that she is one of the property owners requesting water services for the three properties adjacent to the Centex development. She submitted a letter from Mr. Merrill Biel, another of the property owners. Mrs. Kennedy stated that she met with Public Works Director Danielson last week and was told that the assessment would be $28 per front foot. She informed Council that the lots are very wide and the homes are set back more than 200 feet from the street. She explained that the assessments would be about $4,700, and the cost to bring water from the street to her home will be an additional $3,000 to $4,000. She asked if there is some way to lower the assessment cost. Mayor Mertensotto responded that staff indicates that while the city cannot assess properties on the other side of the Delaware, because they are in Sunfish Lake, those owners would have to pay a hook -up charge if they connect in the future. He pointed out that the three lots are enough that they could be subdivided in the future. Mrs. Kennedy responded that because of the location of the houses, none of the lots can be subdivided. Mayor Mertensotto asked for the frontage of the lots. Public Works Director Danielson responded that two of them are 330 feet wide and the third is about 80 feet wide. Councilmember Huber stated that the staff report only speaks to the water assessment rate but does not address sewer, and that Mr. Page No. 3621 May 4, 1993 Biel's letter states that it would cost about $16,000 per lot for the utilities. Mrs. Kennedy stated that her water assessment would be $4,620, there is a $400 St. Paul Water Department charge to bring in the service to the property line, a $200 WAC charge, and then the cost of bringing the water from the service to the house - $16,000 would be the total cost for sewer and water. Mayor Mertensotto stated that the length of the watermain would have to be about 400 feet, 165 feet wide across the Biel and Kennedy lots and about 70 feet of the Kane lot. He suggested that the cost be divided equally - so that each lot pays the assessment rate for 133 feet of frontage. All of the lots would be treated the same because the each of the lots would receive the same benefit. This would reduce the Biel and Kennedy assessments by about $900 each, and the balance of the project cost could be paid by the Water Revenue Fund. Councilmember Smith pointed out that the City would be picking up the cost for the frontage along Delaware in Sunfish Lake. Mrs. Kennedy stated that she would agree to an assessment for 130 feet. Councilmember that the lots future. Mrs. are very long they could be of -way and aci home could be Huber asked if it is conceivable could be subdivided in the Kennedy responded that the lots and narrow and there is no way divided because of County right - :�ess; there is no way another built on any of the properties. Public Works Director Danielson stated that sewer has been stubbed in at the north property line by Centex. Because the extension to the Delaware Avenue properties is so difficult, the Centex contractor is not willing to design it, and the sewer extension will be done in the future. Mayor Mertensotto stated that if the three property owners would be willing to submit a formal petition and waiver of hearing and accept an assessment for 130 feet of frontage. at $28 per foot, plus the usual connection charges, Council would authorize the Page No. 3622 May 4, 1993 engineering staff to prepare a contract change order to extend the watermain to serve the three properties. It was the consensus of Council that action on the proposed resolution to order the improvement be tabled until the property owners submit petitions and waivers of hearing. SOMERSET 19 Council acknowledged a memo from Treasurer Shaughnessy regarding a request from the Somerset 19 Homeowners Association for reconsideration of the manner in which its fire improvement assessment roll was computed. Mr. Howard Guthmann, representing the homeowners association, stated that the buildings were fire approved when they were built in 1972 but the Fire Marshal recently required a fire standpipe. He further stated that the City Administrator told him there might be a way the city could assess for the cost of the fire protection improvements and the arrangement he made was to submit invoices for the cost - about $25,000. He sent the invoices in with the understanding that costs would be assessed and if they were paid by October, 1992 (before certification to the county) there would be no interest. He informed Council that the check from the city was $2,200 short of what he anticipated because the city charged interest. Mayor Mertensotto explained that the city expended public funds to the association in January of 1992, and that as of October, 1992 the cost became an assessment. Mr. Guthmann responded that the agreement did not include front end interest or he would not have considered it. Treasurer Shaughnessy stated that anyone who checked with the city was told that they could pay the assessment without interest until October. Three owners paid early, and most of the others paid their assessments in September or October. Mayor Mertensotto pointed out that the city reimbursed the Association $21,970 for the improvement costs in early 1992 and did not get money back until October. Page No. 3623 May 4, 1993 Mr. Guthmann stated that the only issue is that he felt he had an agreement with the city that the money would be a low cost loan until October 1992. Mayor Mertensotto responded that his concern is how the city can spend money for a private purpose without getting a return on the money. He suggested that the $2,155.56 being contested be split between the association and the city, pointing out that the city would then be foregoing its typical assessment administration fee. There was brief discussion over whether the refund should be made to the association or the individual property owners. After discussion, Councilmember Koch moved to rebate $1,077.82 to the Somerset 19 Condominium Association. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 COMMUNITY SURVEY Council acknowledged a memo from Administrator Lawell regarding the Dodd/110 Community Survey Mission Statement. Councilmember Krebsbach suggested that the fourth point should state that Council neither encourages or discourages "future" commercial development. In response Mayor Mertensotto suggested that it be changed to read "..encourages or discourages increased or decreased commercial development..." Mayor Mertensotto asked what "what variety" in the eighth point encompasses. Administrator Lawell stated that this is what he is least comfortable with because of all the problems which have come before Council over the last several years. He further stated that he proposes that the newsletter article on the matter include one or two maps to clarify the issue. one map would be the easement area and the other would show options which have been shown on past drawings. Council discussed which options discussed in the past should be shown. Page No. 3624 May 4, 1993 Councilmember Koch stated that her idea of the survey was the Council wanted to let people know existing conditions and not lead them in any way. Councilmember Huber agreed, stating that he would add wording to the text which might talk about various alternatives which have been considered but stating that none has been endorsed. He further stated that if any of the options are listed, the option of doing nothing at all should also be listed, so that people are not led in any direction. It was the consensus that a base map, without any options shown, should be used in the newsletter. Mayor Mertensotto asked what options have been given. Administrator Lawell responded that the Dahlgren Shardlow Uban report discussed three options and all had variations on the ring road concept. Mayor Mertensotto stated that schematics of the various proposed alternatives are available to residents by contacting city hall. Administrator Lawell asked if item 8 should be included as an option, which would charge Decision Resources to describe the option in the survey. Councilmember Krebsbach stated that there are two phases to the survey, one is to determine the level of satisfaction and dissatisfaction with the intersection, and the other is that if Council determines there is a high level of dissatisfaction, to describe he options and gauge public opinion. She reiterated Councilmember Huber's concern that people would feel driven to make a choice if given options. Councilmember Koch suggested dropping points 8 and 9, in which case respondents would not be led in any direction. Administrator Lawell responded that the survey purpose would be to determine the adequacy of what exists and afterwards there would certainly be much more public input. Page No. 3625 May 4, 1993 Councilmember Krebsbach stated that if Council is not ready to address one of the options it should not be circulating them. If the intent is to get information on whether people are dissatisfied with the intersection, then the next step would be to develop options with public input. Councilmember Smith asked whether the survey should solicit input from people, to get their ideas on what should be done. Administrator Lawell asked if the result of the survey is that vehicular access is not a problem but pedestrian access is, would the intersection be looked at in terms of today's problem or future problems. Mayor Mertensotto stated that this is the problem with a two phase approach, which does not look at the long term future. He suggested that number 8 should ask if Council should look into options for the intersection. Administrator Lawell stated that point 9 tries to get at how the residents see the needs for future land uses in the area: this would impact the future of the intersection. Councilmember Huber stated that he does not see how a phone survey would be able to adequately describe the options that are being considered. He felt it is the goal of the survey to try to gauge the satisfaction with the existing configuration and whether there is any support for putting in some type of overpass and/or retaining wall or holding onto the Mn/DOT property. He felt that a survey could be conducted where those issues could be discussed without discussing how an overpass would be constructed. Councilmember Smith suggested asking if the residents are satisfied with the present situation, pointing out that businesses changes will occur in the future and asking if they feel the intersection is adequate to handle them. Councilmember Huber stated that residents would not know the specifics of potential changes and if they said they were not satisfied, the next way to gauge public Page No. 3626 May 4, 1993 support would be to have a meeting to get public feedback on drawings and options. Administrator Lawell responded that timing is the big issue. An overpass may not be needed today but may be needed in 20 years. Councilmember Huber suggested people could be asked if they are satisfied with the present configuration and then a question which talks about future population growth and asks whether they see the current configuration as being good for he future. Councilmember Smith stated that the way a question is framed is important - it must include something tangible that people could envision, for instance, if the traffic doubles, would the current configuration be good. She also felt that it is important that contours be shown on the newsletter map, because the terrain is what makes the intersection so difficult. Administrator Lawell responded that the 1985 DSU study identifies the characteristics of the intersection, and this could be used as narrative. It was the consensus of Council to drop item 8 and revise item 9. Mayor Mertensotto suggested that residents surveyed could be asked if they have an opinion as to the type of development that should take place in the area, or, in the alternative, that will take place. Councilmember Krebsbach stated that if public opinion on those two issues is received Council will have something to work with. It was the consensus that item nine be revised so that it is an inquiry as to the future land uses in the area and gauge resident perception as to the development of the area. Mr. Brian Birch, present for the discussion, stated that the first three paragraphs of the mission statement have not been clarified. He further stated that in his opinion council has entered into a condition of illegal seizure of the (Mn/DOT) easement area that he has lis pendis rights to. He felt that the last Page No. 3627 May 4, 1993 sentence of the second paragraph should be stricken, and that the word "critical" should not be used in the first sentence. He stated that he feels that points 3, 5, 8, 9 and 10 of the statement should be deleted and that points 8 and 9 are biased wording. With respect to the proposed newsletter article, he felt the first sentence should be removed, and stated that he takes offense at the wording that Council was prompted by concerned property owners to make decisions about the intersection. Mayor Mertensotto asked Mr. Birch if he is saying that all of his appearances before Council on the matter have been for no purpose, and pointed out that Mr. Birch is one of the concerned property owners referenced in the article. Mr. Birch responded that he is not prompting Council, stating that prompting connotes acceptance, and that the sentence should be revised if Council is looking for unbiased survey responses. He suggested several other changes to the article, and stated that if Council does nothing and lets him develop the land, it would still have the right to condemn the property. He felt that instead of spending money for a phone survey, the city should send mailings to all residents if the matter is as critical to the city as Council says it is. Councilmember Krebsbach responded that the reason a survey is not being mailed is because Council is looking for validity in the survey - the phone survey has only a 3% margin of error. She pointed out that the second phase will involve a mass mailing. Mr. Birch distributed a letter to the Mayor and Council members and asked that he be allowed to read the letter for the audience. Mayor Mertensotto responded that he did not think the letter is an appropriate response to what Council is trying to do, as it implies that the matter is a personal one. He pointed out that this is not a yes or no situation, but rather that Council needs public input and direction. Page No. 3628 May 4, 1993 Councilmember Krebsbach stated that she would be happy to strike the first sentence as Mr. Birch has asked, but that she feels the presentations Council has had point out that for some people this is a critical issue and Council needs a process through which to make a decision. It was the consensus that the sentence should remain but that "pressing" should replace "critical," and that the last sentence of the first paragraph should be revised to stated that DRL has been retained to conduct the survey so that community opinion can be taken into consideration in Council's decision making process. Councilmember Huber stated that the intersection is the heart of the city and the most important intersection in the city and Council must deal with it appropriately. Councilmember Huber moved to adopt the mission statement as discussed and amended and to direct staff to schedule review of the draft survey questionnaire at the May 18th Council meeting. Councilmember Koch seconded the motion. Ayes: 5 Nays: 0 RECESS Mayor Mertensotto called a recess at 10:30 p.m. The meeting was reconvened at 10:35 p.m. NORTHLAND INSURANCE Mr. Dale Glowa, from United Properties, was present for the continuation of discussion on his request for tax increment financing assistance for a proposed office building for the Northland Insurance Company (NIC). He explained that he is not quite sure of the final size of the proposed building, but if the size is reduced from what has been presented, the amount of tax increment funding will be reduced accordingly. Mayor Mertensotto stated that Council should have some assurances that there is a minimum size which will be guaranteed. Mr. Glowa responded that the minimum sized building would be 65,000 square feet and that he is just asking for concept approval for tax increment at this time. He stated that new construction of 65,000 square feet would be Page No. 3629 May 4, 1993 the same size as the existing NIC building above ground, and that while this is the minimum proposed size, the building will likely be much larger. He informed Council that if United Properties is successful in getting the NIC project, he anticipates there will be a future addition. Mayor Mertensotto asked if Mr. Glowa would agree to a condition that the limited revenue note would be valid and binding as long as no sale or transfer of the building occurs. Mr. Glowa agreed to the condition. Councilmember Krebsbach stated that she originally had a question on the impact of the taxes on the school district and that the question and her other questions have been answered. She informed Council that she understands there will be no impact on the school district. Councilmember Krebsbach stated that she would like the whole industrial park to be high quality, including the subject parcel and the undeveloped land along the freeway. Mayor Mertensotto pointed out that $271,000 per year is being paid in real estate taxes on the existing NIC facility and if they were to relocate and the building were vacated there would be no guarantee that there would be a new tenant for the building or that the taxes would not be reduced. He felt that approving the use of tax increment financing would benefit the city. Councilmember Krebsbach stated that she would like the building to have a basement, particularly underground parking, and that she would also like to see a third building in the future. Mr. Glowa responded that while underground parking is a possibility, it is not a necessity in the market place and few people are willing to pay the additional costs. He stated that NIC will not make a decision to lease the property based on underground parking - if it something they don't want, it would be another reason for NIC to look elsewhere. With respect to a third building, he stated that if United Properties retains NIC, it is likely they will remain in their buildings long term and that they will do Page No. 3630 May 4, 1993 future expansion. He explained that NIC has asked him to do a site plan which would accommodate 900 employees in the future and that the site plan shows a future phase three. The third phase would be outside of the tax increment district. Councilmember Huber stated that he has been struggling with the request and sees several benefits. He felt that the existing NIC facility is very nice, and the firm has brought many good things to the community, and he does not hold it against NIC that they are asking for a break. He stated that the problem is that Mr. Glowa is asking that NIC be allowed not to pay a good portion of its property taxes for the next 13 years and that the request is basically driven by the fact that the market is over built in the Twin Cities. If approval is granted, the facility will need services from the city and, except for the TIF administration fee, the city will not be reimbursed for those services. He stated that when residents move to the city they are asked to pay their fair share, and he felt that NIC should do the same. He further stated that if another office building is built it will only contribute to the problem of the over built Twin Cities market. Mr. Glowa responded that in this particular case, if the request is approved the city will have the opportunity to keep one of its major employers - otherwise, NIC will move to a facility which will be less costly. In this case the city would be helping to create a big vacancy in Mendota Heights. He also stated that in the alternative, the city has the opportunity to keep a tenant that is growing and is very strong and generates a big tax revenue for the city. He felt that the only way United Properties can compete with other communities to keep NIC is with pay-as-you-go tax increment financing. He stated that except for the NIC project, the likelihood of the land being developed in the next five to ten years is very poor given the market place unless it were to develop as an industrial site. Mayor Mertensotto stated that when the school superintendent was before Council to discuss the referendum, he talked about how much Eagan had lost in tax abatements. He further stated Page No. 3631 May 4, 1993 that Mendota Heights has not had much of a loss, and for this to continue the values in the industrial park must be kept high and existing employers must be retained. Mr. Glowa stated that United Properties has proven itself to be a good neighbor and has always paid its property taxes. He informed Council that the industrial park property was purchased by United in 1959 anticipating the 1-494 crossing to occur in the early 19601s. When this did not occur, United could have built basic buildings but instead waited until the crossing to build high integrity buildings. He felt that the industrial park is without question the best developed in the Twin Cities, and that United Properties has attracted major concerns to the park - uses which surrounding communities don't attract. For this reason industrial park property values are high. He informed Council that the City of Plymouth has been resistant to giving any assistance to attract business to the community in the past but has suddenly begun notifying businesses of the availability of tax increment financing because TIF is a tool to attract firms to a community. Mayor Mertensotto pointed out that if TIF is approved, the city would not be giving United Properties money up front - they must pay taxes to get any TIF revenue. He pointed out that Mr. Glowa has agreed to the condition that United the TIF benefit will be lost if its interest in the property is sold. Mr. Glowa responded that the benefit goes directly to NIC, not to United Properties, and one of the parts of the puzzle does consider the sale of the building to a third party. He understood the condition to mean that NIC will get the TIF benefit as long as it occupies the building and is current in its taxes. Councilmember Smith stated that TIF is a tremendous tool to accomplish the goals of the city, and while she has also agonized over the issue, she feels it is important to retain NIC and this is reason enough to support the request. She further stated that the write down list which Council ultimately approves must have legal support. Page No. 3632 May 4, 1993 City Attorney Hart stated that he has reviewed the enabling statutes and believes that four broad categories of costs fall within the guidelines of statutes, which include site preparation costs, exterior project-specific costs, site utilities and lighting, and sound attenuation construction. Mayor Mertensotto informed Mr. Glowa that he would like a written schedule and letter as to what he understands the minimum building size requirement will be for TIF support. Councilmember Krebsbach what guarantee there will be that the building will be of the same quality as the existing NIC facility. Mr. Glowa responded that the planning request will likely be for a PUD, and that he proposes to maintain the same quality as the existing building. Mayor Mertensotto stated that when the letter is received the matter will be placed on Council's consent agenda and endorsement will likely be given to the concept. Attorney Hart stated that when the final building plans are submitted he will work with United Properties and its legal Council with respect to tax increment details. COUNCIL WORKSHOP Council acknowledged a memo from Administrator Lawell regarding possible Council workshop topics. It was the consensus to conduct the Council goal setting session on June 5th, from 8:00 a.m. to noon and to conduct joint session with the Planning Commission for discussion of proposed PUD ordinance amendments at 7:30 p.m. on June 3rd. Council deferred setting a date for Airport Relations Commission interviews to the May 18th meeting. CLOSED SESSION Council acknowledged a memo from Administrator Lawell recommending adjournment of the meeting to a closed session for discussion of labor negotiation developments. ADJOURN There being no further business to come before the Council, Councilmember Koch moved that the meeting be adjourned to closed session for Page No. 3633 May 4, 1993 discussion of labor negotiation developments and Ivy Falls Creek easement negotiations. Councilmember Smith seconded the motion. Ayes: 5 Nays: 0 TIME OF ADJOURNMENT: o'clock P.M. Ka+-hleen M. Swanson City Clerk 411V 0 a WS Charles E. Mertensotto Mayor