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2007-05-01 City Council minutesMay 1, 2007 Page 1 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, May 1, 2007 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, Minnesota was held at 7:30 o'clock p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Huber called the meeting to order at 7:30 p.m. The following members were present: Councilmembers Duggan, Krebsbach, Schneeman and Vitelli. PLEDGE OF ALLEGIANCE Council, the audience and staff recited the Pledge of Allegiance. AGENDA ADOPTION Councilmember Duggan moved adoption of the agenda as presented. Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 APPROVAL OF MINUTES Councilmember Duggan said he would like to draw attention to the minutes as they did not reflect some of the comments that were made during the presentations from the representatives of the Par 3 and Vote No committees, and those comments made by some of the Council members. Councilmember Duggan referred to the concept plan for Southview Senior Living where the report showed the condominium units measuring from 400 sq. ft to 600 sq. ft. and said he averaged the middle five units to find they were 860 sq. ft. Councilmember Duggan said he never challenged this at the time of the presentation, but wanted to share that information at this time. The presentation showed the smaller units, but there were actually some larger ones as well. Councilmember Duggan moved to approve the minutes of the April 17, 2007 City Council Meeting as corrected. Commissioner Krebsbach seconded the motion. Ayes: 5 Nays: 0 May 1, 2007 Page 2 Councilmember Schneeman asked where Precinct Five is located. City Clerk Kathleen Swanson said voting for this precinct is done at Friendly Hills Middle School. Councilmember Krebsbach asked Ms. Swanson to review the polling locations in relation to the precincts. Ms. Swanson reviewed the locations and the areas that they cover. Councilmember Krebsbach moved to approve the minutes of the April 24, 2007 Election Canvassing Board Meeting. Commissioner Duggan seconded the motion. Ayes: 5 Nays: 0 CONSENT CALENDAR Councilmember Schneeman moved approval of the consent calendar as presented, and authorization for execution of any necessary documents contained therein. a. Acknowledgement of the Minutes from the April 25, 2007 Planning Commission Meeting. b. Acknowledgement of the Building Activity Report for April 2007. c. Authorization for Reimbursement of Fall Protection System for the Water Tower. d. Approval of Hiring Engineering Intern. e. Approval of Permanent Appointment of Pam Deeb. f. Approval of Permanent Appointment of Sharon Hinze. g. Approval of NOC Appointments. h. Adoption of Ordinance No. 412: "AN ORDINANCE AMENDING TITLE 3 CHAPTER 1 OF THE CITY CODE ". I. Adoption of Resolution No. 07 -26: "RESOLUTION ADOPTING AN INVEST MENT POLICY". j. Approval of the List of Contractors. k. Approval of the List of Claims. Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 PAR 3 BOND SALE Finance Director Kristen Schabacker asked to have this discussion later in the evening as Mark Ruff from Ehlers and Associates is not yet present at the meeting. Mayor Huber said discussion on this item will be held when Mr. Ruff is in attendance. May 1, 2007 Page 3 CASE NO. 07 -06, JOHNSON Assistant to the City Administrator Jake Sedlacek reviewed the case in which the applicants, Randall and Joy Johnson, 2219 Swan Court, propose to remove cattails along a 15 -ft. stretch of lakeshore on Rogers Lake. The reason for this proposal is to allow the applicants to create an access for a sailboat. Mr. Sedlacek said because this vegetation is both above and below water, the applicant will need approval from the DNR before he can do any work. Mr. Sedlacek said this case was recommended for approval by the Planning Commission with the condition that there is no loss of groundcover vegetation on the shore. Councilmember Duggan said he would not want to see this lake eventually fill in with cattails as they seem to propagate themselves. He asked if residents will always have to go through the DNR to remove them. Mr. Sedlacek said as long as any of the vegetation is above water, DNR approval is required. Councilmember Krebsbach asked if there were any other concerns about the protection of the wetland. Mr. Sedlacek said the applicants are not proposing any changes. Councilmember Duggan asked for clarification of the area that will be affected and said it makes sense to clear this area to make way for the boat. Councilmember Schneeman asked who is responsible for applying to the DNR. Mr. Sedlacek said the applicant is. Randall and Joy Johnson, applicants, explained why they choose this section as it is the least affected area. Councilmember Krebsbach asked how deep the lake is for sailing. Mr. Johnson said it is about 4 to 5 feet deep. Councilmember Schneeman asked about the catamaran that is on the property. Mr. Johnson responded that the catamaran is his, but that goes out on Lake Pepin. May 1, 2007 Page 4 Councilmember Schneeman said she believes small sailboats or canoeing are good for the lake, as it is good to stir up the water once in a while. Councilmember Vitelli moved adoption of Resolution 07 -28: "A RESOLUTION APPROVING THE WETLANDS PERMIT AT 2219 SWAN COURT AS PROPOSED." Commissioner Duggan seconded the motion. Ayes: 5 Nays: 0 CASE NO. 07 -07, JONES Assistant to the City Administrator Jake Sedlacek reviewed the case in which the applicant, Gary Jones, 2213 Swan Court, is proposing to clear undergrowth, creating a path to the lake and place a temporary /seasonal dock in Rogers Lake. Mr. Sedlacek said the dock is covered under the DNR ordinance, and this case refers to only the clearing of vegetation. Mr. Sedlacek said the Planning Commission had recommended approval and has asked the applicant to be careful in removing this vegetation to minimize the impact. Councilmember Vitelli moved adoption of Resolution 07 -29, "A RESOLUTION APPROVING THE WETLANDS PERMIT AT 2213 SWAN COURT" as proposed. Commissioner Schneeman seconded the motion. Ayes: 5 Nays: 0 CASE NO. 07 -08 Assistant to the City Administrator Jake Sedlacek EDGERTON reviewed the case in which the applicant, Vern Edgerton, is proposing to construct a fence. Fences up to 6 feet tall are allowed as conditional uses on corner lots. Mr. Sedlacek said the existing fence is currently located outside the property line and the applicant is proposing to place the new fence inside the property line. Mr. Sedlacek said the applicant is replacing this very old fence with a 5 -ft black chain link fence to better protect his dog. May 1, 2007 Page 5 Planner Steve Grittman said this is proposal meets all the conditions of the CUP and the Planning Commission had recommended approval. Mayor Huber asked Public Works Director Sue McDermott if she had any concerns. Ms. McDermott said she did not, and was glad that the fence will be moved further away from the right of way. Councilmember Duggan said he believed the fence is an ornamental fence and commended the applicant for having a lovely property and putting in a new fence that will enhance the area very well. Councilmember Duggan said he hopes the City leaves the curb and gutter off this street to keep the character of the property as it is, having a country feel. Mr. Edgerton, 682 2nd Avenue, said that the fence was changed to an ornamental fence to better keep the dog in the yard. Mr. Edgerton said the slat -style fence will keep the dog from trying to climb up as she could on the chain link. Mayor Huber commended Mr. Edgerton on the great job he has done with his property. Councilmember Vitelli moved adoption of Resolution 07 -30, "A RESOLUTION APPROVING THE CONDITIONAL USE PERMIT AT 686 2ND AVENUE." Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 CASE NO. 07 -09 Assistant to the City Administrator Jake Sedlacek ABRAMOVICH reviewed the case in which the applicant, Simon Abramovich, 719 Spring Creek Circle, is proposing to do some minor grading as part of a remodeling job. Mr. Sedlacek said the task at hand is a wetlands permit as the applicant is also doing some renovations to the house. Mr. Sedlacek reviewed the layout of the property and explained how the additions will be laid out. The land must be graded out to allow for the egress windows being installed on the home. Mr. Sedlacek said anything within the 100 -ft of the wetland area needs a permit for any encroachment. Staff has reviewed this plan and does not see a lot of impact upon the May 1, 2007 Page 6 wetlands, and part of the home has a 14 -ft. encroachment into the wetlands buffer. Councilmember Krebsbach asked if Staff will be monitoring this project to make sure that the encroachment will not go any further. Ms. McDermott said Staff will be inspecting to make sure the erosion control is in place and monitoring the grading as well to make sure the drainage works according to the plan. Councilmember Krebsbach said this yard and creek is beautiful. Councilmember Duggan expressed his concern on how much the deck encroaches into the wetland. Mr. Sedlacek reviewed a detail map that the applicant has provided that shows the approximate 100 -ft. buffer and the deck location. Mr. Sedlacek said the age of this deck is not known at this time, and it was existing at the time of the application. Councilmember Duggan asked what the amount of encroachment is for the deck. Mayor Huber said if the deck was added without a permit, it would be a non - conforming deck, and Council would have to determine whether or not a permit would need to be issued. Councilmember Duggan said greater care should be taken considering the softness of the ground, so that the slope will be preserved. City Administrator Jim Danielson said Ms. McDermott's calculations indicate that the distance between the wetland and the home is 80 -ft., and that the creek moves so that there is about a 4 -ft. difference. Mr. Sedlacek said this home was just recently purchased by the applicant, who closed on this home this spring. Councilmember Krebsbach asked if this creek rises from time to time, and if there is any concern about water problems and flooding. Mr. Danielson said not at this point, but farther downstream, there have been some issues that the City is dealing with now. Councilmember Duggan said some of the homes on the other side of the creek seem to have some challenges by the water level. May 1, 2007 Page 7 Councilmember Krebsbach said she is concerned about any changes to the creek bed. Mr. Sedlacek said there is an 8 -ft. difference from what the bottom of this grading will be. Councilmember Vitelli asked if any of the ground will be removed, or just moved around the property. Mr. Sedlacek said it will be moved around on site for re- landscaping. Mayor Huber asked if anyone on the Council wished to further investigate the deck and any permitting that may have or may not have been done. Councilmember Duggan said that since these applicants have inherited this home as it is, the City should have to live with it and the applicant should not be punished for having a non - conforming deck. Councilmember Duggan said he would like to be sure that the City has taken all the necessary steps to preserve the slope areas (in relation to all the construction) with the appropriate materials. Councilmember Vitelli moved adoption of Resolution 07 -31, "A RESOLUTION APPROVING THE WETLANDS PERMIT AT 719 SPRING CREEK CIRCLE." Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 CASE NO. 07 -10, RYAN Assistant to the City Administrator Jake Sedlacek reviewed the case in which the applicant, R. J. Ryan, is seeking an 11 -ft. variance from Highway 55. Mr. Sedlacek said the applicant has identified a hardship on the property by having a pipeline easement, and that the Planning Commission has determined that this property creates a unique circumstance in this B -3 zone. The Commission also found that the applicant proposes a reasonable use of the property. Ms. McDermott said this is a natural gas line, but is not sure of who owns this line. Mr. Sedlacek said the proposed building complies with all the other setbacks, including the 75 -ft. easement for the pipeline. Councilmember Krebsbach asked if the applicant was present at this time. Mr. Sedlacek said he has not seen them May 1, 2007 Page 8 yet. Councilmember Krebsbach said she would like to wait until the applicant arrives before going further with this case. I Mayor Huber put this case aside and continued with the rest of the agenda until the applicant arrived. CASE NO. 07 -11, Assistant to the City Administrator Jake Sedlacek NOEL NELSON reviewed the case in which the applicant, Noel Nelson, 933 Delaware Avenue, has a single car, detached garage in their Friendly Hills neighborhood. This garage, which is non - conforming, is old and dilapidated. Mr. Nelson is wishing to construct a two -car garage in its place. Mr. Sedlacek said the conditional use permit is for the detached garage, and the variance is for 6' to the rear yard setback. The existing garage is located right on the property line. The applicant is requesting the variance to allow the garage to be placed 4 -ft. from the rear property line, and the required setback is 10 -ft. The garage needs to be moved closer to the property line to give enough room between the garage and the existing home. Mr. Sedlacek said there is also an existing utility pole on the adjacent neighbor's property, and this proposal would satisfy the 5 -ft. easement around that pole. Mr. Sedlacek said this variance would also allow for an existing apple tree to remain at it is. The Planning Commission recommends approval of this request. Councilmember Duggan asked what the distance was between the proposed garage corner and the corner of the porch. Mr. Nelson, applicant, said if he had to adhere to the 10 -ft setback, the distance would be about 5 -ft between the buildings, and may even appear closer with the overhangs. Mr. Nelson said if he is granted the variance, he would have about 8 -ft. to 10 -ft. between. Councilmember Vitelli moved adoption of Resolution 07 -32, "A RESOLUTION APPROVING A CONDITIONAL USE PERMIT AND A 6' VARIANCE TO THE REAR YARD SETBACK FOR A DETACHED GARAGE AT 933 DELAWARE AVENUE." Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 May 1, 2007 Page 9 Councilmember Duggan asked how the driveway would be laid out. Mr. Nelson explained how the driveway would be extended to the second garage door, and continues around the south side of the garage for an extra concrete slab. Councilmember Krebsbach told the applicant that he has a beautiful porch. CASE NO. 07 -12 Assistant to the City Administrator Jake Sedlacek CAROL NELSON reviewed the case in which the applicant, Carol Nelson, 1312 Wachtler Avenue, would like to replace an existing detached garage. Mr. Sedlacek said the applicant wishes to replace with an exact same structure. Mr. Sedlacek said all the requirements of the conditional use permit as far as size and setbacks have been met. The applicant is proposing to raise the elevation of the foundation as there is currently a lot of water damage to the existing foundation. Councilmember Duggan stated that the applicant paid a fee for replacing an existing garage with an exact replica, and perhaps the City could consider giving back some of the fee. Mr. Sedlacek said these fees are still needed for the time and labor of Staff, as well as the hearing process and notification for the Planning Commission and the City Council. Councilmember Vitelli moved adoption of Resolution 07 -33, "A RESOLUTION APPROVING A CONDITIONAL USE PERMIT FOR A DETACHED GARAGE AT 1312 WACHTLER AVENUE." Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 2030 COMPREHENSIVE Mayor Huber asked that the Council skip to Item K on the PLAN WORKSHOP agenda and discuss the scheduling of the 2030 Comprehensive Plan Workshop. As part of City Planner Steve Grittman's work plan, there needs to be a joint meeting with the City Council and the Planning Commission. Councilmember Krebsbach said this meeting will be worth the time spent as there are some key issues that need to be discussed. Mayor Huber said this is a time that the City can see if anyone sees any need for changing any part of the Comprehensive Plan. May 1, 2007 Page 10 Mr. Danielson reminded the Council that this work needs to be completed by the end of 2008. Councilmember Vitelli asked the Council members if this is the right time to be doing this, and is there any need for more information to prepare for this meeting. Councilmember Duggan said this will give the Council a chance to take an overall, collective look at where the City will be in 10 years time. Also, this information needs to go to Met Council as they want to have all the documents from all the 190+ communities. Councilmember Duggan said the Council needs to do everything they can to continue the planning process that has been used over the past 20 years, allowing the City to develop the way it has, and it's important to have preplanning and prethinking so that the Met Council does not suddenly come back and say the city is way under population and must make all kinds of changes. If the Council goes through this process, it will give proper documentation for any argument and discussion with Met Council. After some discussion about a possible date for this meeting, Mayor Huber asked the Council members to get back to Mr. Danielson with their availability, and to have Mr. Danielson check with the Planning Commissioners to see what their availability is and put this item back on the agenda for the next Council meeting to further discuss scheduling of this meeting. Mayor Huber said he would like to have this completed by June 15tH CASE NO. 07 -10 Mayor Huber said that since the applicant is not present RYAN at this meeting, he recommended that this case be tabled until the next meeting. Mayor Huber moved to table Case No. 07 -10 until the next regular City Council meeting. Councilmember Vitelli seconded the motion. Ayes: 5 Nays: 0 CASE NO. 07 -13, MENDOTA Assistant to the City Administrator Jake Sedlacek MALL ASSOCIATES informed Council that the applicant, Mendota Mall Associates, Highway 110 and Dodd Road, is proposing a May 1, 2007 Page 11 planned unit development and has submitted a concept plan for the Council's review. Mr. Sedlacek said this property is mostly guided as mixed use planned unit development and is zoned B -4. There is a small portion on the east end of the property as nature preserve, and the entire site will need to be to be rezoned to MU -PUD. The concept plan is proposed to construct 7,200 square feet of new retail and 7,200 square feet of restaurant in two new buildings along Highway 110. Mr. Sedlacek reviewed an aerial photo of the property indicating where this concept would be laid out. Councilmember Krebsbach said she would like to have some clarification on the ownership of the MnDOT parcel in relationship with the Dodge Nature Center and the property owned by Mendota Mall Associates. Mr. Danielson said there is a state easement between the mall property and the nature center, and this area is under MnDOT's control. Councilmember Duggan said he walked this property and asked about the roadway along the creek. Mr. Sedlacek said this is a private road and the applicant will be addressing this area during the presentation of the concept plan. Councilmember Duggan asked who owns the creek. Mr. Danielson said the applicant owns the creek, but the City has an easement in that area. Councilmember Duggan asked if the DNR has any jurisdiction on this wetland. Ms. McDermott said the City will be reviewing any activity in this wetland area. Ms. McDermott said this creek has no name designation. Mr. Aaron Hemquist, RLK Inc., is the engineer for this project. Mr. Hemquist reviewed the site plan and answered questions from the Council. Mr. Hemquist said there is an existing pond that is very long and narrow. The applicant proposes to construct a pond that is considerably bigger. Councilmember Duggan asked if the pond runs parallel to the creek, and is not a part of the creek. Mr. Hemquist said that is correct. The new pond will be constructed to treat the entire fully developed site, and will have some decorative retaining walls around the pond. May 1, 2007 Page 12 Councilmember Krebsbach expressed her concerns for the green space currently in this area and if this plan goes forward, she encouraged the applicant to keep as much green space along Highway 110 as possible. Councilmember Krebsbach referred to the Dodge Nature Center and said the preserve experience can really be affected by this 7,200 square foot retail space and asked the developer to do anything possible to provide a buffer along this edge. Councilmember Duggan asked how much of the creek would be lost. Mr. Hemquist said all of it would be lost to the site because there will be a new pond in that area, and an underground pipe would be installed to drain the creek and direct the water to the pond. Councilmember Duggan asked if the applicant has considered the possibility of combining the parking of the retail and the restaurant, as there could be a lot of green space saved. Mr. Hemquist said it is anticipated that both the retail and the restaurants will be open during the same hours. Councilmember Duggan asked if the applicant has considered the possibility of bringing the two buildings closer together and having the road move to Highway 110 on the very eastern edge of the property creating a boulevard with trees along it. This would give extra protection to the preserve area. Mr. Hemquist said there will be no traffic going behind the building near the nature center. Councilmember Duggan said there has been concern expressed by the Planner and the Planning Commission that the proposed road cutting through the southeast corner would serve as a shortcut and asked if this road could be excluded from the plan. Mr. Hemquist said he could not promise to do that, and explained how they will work with this area to better position the loading docks and provide landscaping. Mr. Ken Henk, representing Paster Enterprises, the applicant, at Mendota Mall Associates, 2227 University Avenue, St. Paul, MN, presented and reviewed building elevations, providing more details of the site. May 1, 2007 Page 13 Mr. Henk explained how MnDOT's property comes into play, and said the nature center has first rights to purchase this property. Mr. Henk said either way, that area will most likely remain green. Mr. Henk said the plans will allow for some type of drive up window on the end of one of the buildings. Councilmember Schneeman asked if this would be for fast food. Mr. Henk said it would be. Councilmember Schneeman said this building is for retail. Mr. Henk said the term "retail" would also include some type of food service, such as Caribou Coffee. Mr. Henk reviewed the materials and colors to be used in the project, which will be close to what the Village has. Mr. Henk said whatever materials will be used on these buildings will be used on any additional development, plus the existing structures will have a face lift with these materials. Mr. Henk said he would like to provide more preliminary plans on what they are envisioning for this space, which can include senior housing and daycare facilities. The thought is to grade the site, with major cuts in the southern portion of the property to bring the elevation up along Highway 110, and with these two buildings, the overall scheme can be visualized. Councilmember Vitelli said he believes there is too much parking and impervious surface. Councilmember Vitelli said the retaining wall is a concern to him in that this may open up the opportunity for graffiti. Councilmember Vitelli said the new street will be an interesting and attractive short cut for people coming north on Dodd Road and wanting to take a right on Highway 110. Councilmember Vitelli said there should be more of a plan for the total site rather than the next phase. Councilmember Vitelli said he learned some history of this area, which shows that the existing structure was not laid out so well. This property was planned long ago when there was supposed to be a clover leaf intersection for Dodd Road and Highway 110. The existing structure is not in a good location, and now the Council is being asked to approve an addition. Councilmember Vitelli said architecturally, this plan seems dull, as it seems like boxes. He would like to see the two May 1, 2007 Page 14 buildings brought together rather than the applicants saying someday in the future they would bring the architecture of the existing building into conformance with the new style. It seems that should be a part of this now, making the total site more attractive rather than the end result looking like another piece is being added. Councilmember Vitelli asked where the water feature would be. Mr. Henk said a waterfall would be located where the pond is, across from the restaurant seating area. This waterfall will aerate the pond and create a white noise. Councilmember Vitelli asked that another item of discussion come with the proposal for the future to address the ability to keep the pond full, as currently the dell behind the senior complex across the street is getting empty, and the City is told that they would have to hope for rain or start feeding the dell with the fire hydrant. Councilmember Vitelli said he would like to see the applicant nail down more the future plan of the total site if this is handled as a PUD, and try to get rid of some of the parking. Councilmember Schneeman said she agrees with Councilmember Vitelli's comments and is very disappointed with the current shopping center. Councilmember Schneeman said she would never approve anything until a plan comes forth. Do It Best Hardware has been out of business for about one and a half years, and the sign is still up, and she does not see that the applicant cares much about this area. Something wonderful could be done there and she hopes that the plan will address the other shops there because they may become "orphans ". Councilmember Schneeman said there is a desperate need for retail shopping for the women residents in the area, as there are not a lot of these types of stores in the area. Food stores/big grocery stores would not be a good fit in this area. Councilmember Schneeman said she would like to know what the plans are for the existing shopping center and would like to see a concept plan for the whole thing. Councilmember Schneeman said the applicant could very well treat the older tenants the same as new ones and this is a fairness issue. Mayor Huber said he agrees with the comments that have been said, and there is a lack of total design. Mayor Huber May 1, 2007 Page 15 said there is no clear vision for the existing area and he does not see where the mixed use is being part of this plan. Mayor Huber said the applicant is asking the City to give up things in terms of zoning, and it is clear that an overall site plan is being requested. Mayor Huber said he does not believe this is any benefit to the City at this time. Councilmember Krebsbach said she agrees that the whole plan should have a vision of a mixed use. Councilmember Krebsbach said placing the retail adjacent to the Dodge Nature Center gives an opportunity to be near one of the few preserves in the state, and there is nothing in the plan that recognizes that. The building would have to be pulled away from the preserve and move up the street. This plan disassociates itself from Mendota Plaza. Councilmember Duggan asked if the applicant has considered placing cottages along the Dodge Nature Center, which would give a mixed use and a better use of the preserve as a back yard to cottages. This could also be done on the southwest area. Councilmember Duggan said that unfortunately, the anchor building is an anchor in the worst sense of the word, and he believes the message has become clear that this building needs to be addressed. If the applicant wants to complement the buildings across the street with the proposed buildings, it can't be done unless the existing building is removed. Councilmember Duggan commented on the access from Highway 110 being a very sharp turn, and students will take this as a shortcut to get across the highway to get to Caribou Coffee. Councilmember Duggan said he is very concerned about the creek and is not comfortable having it cut off with a drain pipe into a pond. Councilmember Duggan said he is concerned about the idea of feasibility studies on what is going to work here based on what has happened across the street and the time it is taking to fill those buildings. Even putting a popular restaurant, such as Axels, in this area would be a challenge. Councilmember Duggan said even the feasibility study that was done for Bob Kowalski did not give a great draw for this May 1, 2007 Page 16 area, and how much business would this concept plan bring based on that experience. Councilmember Duggan said the plan could be maximized by bringing the restaurant closer to the creek, and maybe the buildings don't have to be so big, perhaps a series of smaller buildings could be placed along this area. Mr. Henk said he appreciates all the feedback and knows there are some issues with the existing building. Mr. Henk said the thought was to leave the southern areas open at this time, and he understands the comments with the PUD - the whole idea being to fill in the whole parcel and have a master plan to fill out the entire area. Mayor Huber said the City wants to see a total plan that should be consistent with the Comprehensive Plan, and at the same time, the City is here to try to see that property developed to its best use. The City wants to work with the applicant to see what that use is. Mayor Huber said the City understands that the applicant may say some of these ideas will not work, and then perhaps everyone will need to take a step back and ask where to go from here. Mayor Huber said he would like to continue this discussion and thanked the applicant for their time on this project. PAR 3 GENERAL Finance Director Kristen Schabacker said there is a OBLIGATION BONDS resolution on the agenda to provide for the sale of general obligation bonds to purchase the Par 3. Mark Ruff, Ehlers and Associates, said the Council has the opportunity to comment on the structure of the bonds that are being proposed to be sold pursuant to the referendum. The anticipated schedule would be that the bond sale would be held on June 5, 2007 and at that time, the City would award the sale of the bonds if they so choose. Before the awarding of the sale, there would be a process where an official statement (the document and facts and figures behind it) is prepared, and he will conduct a conference call with the rating agencies to see what the rating view is of the City's financial and growth development status at this time. Mr. Ruff said closing would be approximately the last week in June. May 1, 2007 Page 17 Mr. Ruff said the report presented at this time addresses some issues: • The election did contemplate a maximum bond issue of $2,790,000. It is the recommendation of Ehlers and Associates that the Council offer to the public market a bond issue of maximum par amount $2,810,000 (which is approximately $20,000 more). State law contemplates the concept and allows cities, counties, and school districts to increase the amount of bonds to allow for something called "underwriters discount", which is comparable to taking a home mortgage and paying points. The upfront cost reduces the overall interest cost of the bond issue over time and increases the market and has a better chance of reducing the overall tax impact to the taxpayers. This is clearly the Council's call under state law if they want to choose this. If they choose not to, the City will still receive a very good interest rate. On top of the cost of $2,675,00 is the cost of acquiring and improving this facility, the costs related to carrying the interest costs between now and when the City will actually start levying, the City will not levy until 2008, and the City will not actually be receiving money until the summer of 2008, there needs to be one interest payment until that day, and there will be the need to pay the cost of attorney fees, rating fees, and Ehlers' fees as well. Interest rates of will be determined on June 5th This is a competitive sale and he would expect 4 to 7 bidders from around the country. If the City does not anticipate issuing more than $10 million this year, that should broaden the market as IRS rules as such that if a community issues less than $10 million, the banks can purchase those bonds and receive the same benefit. With interest rates increasing, the IRS has rules about how much interest the City can earn on funds on the construction or tax levy proceeds and Ehlers' cautions the cities, counties, and school districts are subject to IRS rules on how much money they make off taxes and bonds. Mayor Huber asked for clarification that the $20,000 would let the City buy down the interest rate and so that may serve to get a better interest rate so that the total payment stream may be better if the City goes with the $2,810,00. Mr. Ruff May 1, 2007 Page 18 said they may come back to the City on June 5th and say they have found underwriters that were looking for a different type of structure, and it is only $2,790,000 and did not take the full maximum amount that is allowed under this proposal. Mr. Ruff said this plan would allow taking the maximum of about $28,000 in fees. Mayor Huber asked if, on June 5th, the recommendation would be who the best bidder is for this issue. Mr. Ruff said there is a process and calculation that is undertaken called a "true interest cost ", which measures both fees and interest rates over a period of time. Mayor Huber asked Mr. Ruff if he thought the City would be better off going with the $2,810,000 to give the opportunity to get a better deal for the taxpayers. Mr. Ruff said it is their recommendation and public trust is important, so if this approach is too difficult to communicate to the taxpayers given the time frames, the City will not be getting a bad interest rate if they choose not to go this route. Mayor Huber expressed his concern about the risk. Mr. Ruff said the market has been remarkably stable, given the world events and the fear of recession. If these bonds were sold today, the rate would be something just under 4 %. Fora risky bond, the risk would be about 5 %. Mr. Ruff said this is a very good time to sell bonds. Councilmember Duggan asked how significant this is based on the whole thing, and that $20,000 is a very small amount. Mr. Ruff said he is told by bond traders that with today's interest rates being so low, there are people who like to have different structures that run contrary to what others may think are rational and those different structures have to do with tax laws. Some people would rather have to pay the City more money upfront and have an interest rate that is maybe 4% on their bonds. Other people, given where their bond tax situation is, will buy bonds — these people are not individuals and banks, but they are bond funds. So maybe that bond fund would want to pay a little less and have a lower interest rate over time. These traders who work with underwriters have these conversations on a daily basis and it changes from day to day. In this case, the thought of having an extra $20,000 is just to give some flexibility, and may May 1, 2007 Page 19 mean a lot in terms of achieving more bidders to get a better chance of lowering the costs to the taxpayer. Councilmember Duggan asked what impact the $20,000 extra would have on the average homeowner. Mr. Ruff said at the top end, it would mean $1 a year more per taxpayer, but the taxpayer would be saving on the interest rate in the long run. Councilmember Duggan asked for confirmation that the way the resolution is crafted, and the way Mr. Ruff has presented this plan, is that it could be a $2,790,000 bond and that the worst case scenario is that it might go to $2,810,000 and this could be more beneficial to the residents. Mr. Ruff that is correct. Councilmember Vitelli said that after hearing this research, he would suggest taking the advice of Mr. Ruff. The key issue is what will be the total cost over a 15 -year period to the residents. By allowing the extra $20,000, there is a chance that one offer will come in that is a lower cost than with the $2,790,000. This gives flexibility on June 5th and this is the right thing to do. Councilmember Vitelli said he is in total support of this recommendation. Councilmember Schneeman said this is good because now it explains to the public exactly what the thinking is. Councilmember Krebsbach said the City has the option on June 5th to not go with the $2,810,000. This seems to be the best action to give the best deal to the City. Councilmember Vitelli moved adoption of Resolution 07 -27, "A RESOLUTION PROVIDING FOR THE SALE OF $2,810,000 GENERAL OBLIGATION BONDS SERIES 2007A." Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 CASE NO. 07 -14 Mr. Sedlacek introduced the case where the applicant, UNITED PROPERTIES United Properties, is requesting that the Comprehensive Plan be amended for the northeast corner of Highway 494 and Pilot Knob Road. It is currently guided "I" (Industrial) and they are asking it be changed to "B" (Business). Mr. Sedlacek said the applicant has provided some concept drawings. May 1, 2007 Page 20 The Planning Commission has provided a lot of feedback for this case. Mr. Sedlacek said the site is currently guided for restaurants, and it has been a very hard to find restaurants to come into this area. Mr. Dale Glowa, United Properties, introduced Drew Johnson, with the retail group at United Properties. Mr. Glowa said United Properties is requesting an amendment to the guide plan to allow retail uses on this corner. There is no project at this time, and there are no requests for zoning changes at this point. Mr. Glowa said this amendment will enable United Properties to approach the retail market with confidence and try to find tenants for this project. Mr. Glowa gave an overview of the history of this property. Mr. Glowa presented a map showing approximately 20 acres of undeveloped land in this business park, United Properties is looking at doing a retail project that will be service oriented on a neighborhood scale to serve the business employees in the area. These services include coffee, dry cleaning, sandwiches, pizza, ethnic restaurant, packaging store, etc. United Properties has continually encountered problems in trying to get in larger scale restaurants. Mr. Glowa said he believes these types of amenities would serve the employees in this area and has been receiving a lot of feedback from these employees wishing to have the convenience of stopping on the way to and from work. The City Council in the past has expressed negative concerns about C- Stores (convenience /gas). The tenants are now asking for this type of service. Mr. Johnson has been contacted by a major C -Store company and United Properties is confident that they could land this type of business, and incorporate this type of use into this area (architectural and lighting consistency, noise issues will be addressed). May 1, 2007 Page 21 Mr. Glowa said they are only in the concept stage and they need to meet the needs of their tenants and create vitality within the business park because the park is aging. Mr. Glowa spoke about Grand Oaks in Eagan, where there is an office development with the addition of these types of services, and it has been a very successful arrangement. Because of this, United Properties has lost three prospective tenants totally about 65,000 sq. ft. of space to that development. Mayor Huber said it is becoming logical that United Properties is not going to get a restaurant for the site, and he believes they have given it their best efforts. Mayor Huber said on the flip side, a c -store or gas station does not appeal to him. Councilmember Vitelli said it could be that finding a restaurant has not been a success because of the price. Mr. Johnson said he just met with a brokerage firm that represents a lot of national chains and was told that it's hard to do a restaurant in Minnesota because of the TIF sharing laws. United Properties is currently having some problems doing free - standing restaurants with some sites in Bloomington and Lakeville that have 4 or 5 times the traffic, because of higher construction costs. United Properties has tried to subsidize people, but because of the investments that need to be made inside these buildings, and the staffing, they did not get the traffic to support the cost. Councilmember Vitelli asked if United Properties has had discussion with the Marriott. Mr. Johnson said they have and there were some representatives at the Planning Commission who later told Mr. Johnson that they were delighted with this concept. Mayor Huber said if there were a sense Council was interested in allowing this, what information would United Properties be coming back with. Mr. Johnson said the Planning Commission asked if the City would be able to place restrictions on what is placed on this site. United Properties wants to be as flexible as possible in response to the market, and it's likely that a mini - market/c -store would work with the limited services. May 1, 2007 Page 22 Councilmember Schneeman said she thinks this is such a beautiful site and she would hate to see a strip mall and filling station on that corner. Councilmember Schneeman expressed concern for a gas station open all night and the lighting that would be on. Councilmember Schneeman asked if the tenant purchases the land as well as the building. Mr. Glowa said that was correct. Councilmember Schneeman asked if any thoughts were given to add a health/tennis club. There is a market for that. Mr. Glowa said the 3.76 acre site is not big enough for that, unless it's the smaller businesses such as Snap Fitness or Curves. Mr. Johnson said consideration has been taken in account for the traffic flow from the airport and river area, from which businesses have to draw customers. Councilmember Krebsbach asked what the occupancy rate is in the business park. Mr. Glowa said about 91% full. Councilmember Krebsbach asked if there has been any impact on the industrial park because of Brown College. Mr. Glowa views this as a plus because they are tenants in the park, and some of that activity can be negative due to parking in the streets and there are people walking casually around. For the most part, the activity level is a positive one. This is a solid organization and it's good to have this anchor there. Councilmember Krebsbach said a concern is pulling people off Highway 494. Highway 13 is the busiest area for the police department, and there is a concern that this part of Mendota Heights will be opened up. The City needs to think about a 24 -hour service that a gas station would bring in and how that would affect the area. Councilmember Krebsbach said she would not support 24 hour businesses. Councilmember Krebsbach said she would be interested in talking to United Properties as the City reviews the Comprehensive Plan to see if United Properties would see any need for redevelopment. Councilmember Krebsbach said the business park is a very classy area, and believes the City could go to another level if the gas station / c -store is taken off the discussion. There is room for more regional corporate headquarters in this area and thinks she that would May 1, 2007 Page 23 be a great market. Mr. Glowa said he would be happy to participate. Mayor Huber said one of the concerns the City has had with the gas stations is that the City does not wish to have a place where the parking lot serves the airport. This is an area where the City would be concerned as well as they do not want to attract that kind of business. Councilmember Krebsbach said the City went through a 4 -5 year period where proposals for servicing the airport came in (such as car rental) where the Council wanted to guide the city away from that and still keep the character of the City. It's important for the Council to keep looking at this intersection and monitor what is happening. Mr.Glowa respects these comments and over the years, United Properties has worked with 210 acres in the Mendota Heights Business Park, as well as several hundred acres in Eagan, and his concern is how to retain the current tenants and attract new tenants so that it does not become a retail mall where all they can get in there is a Dollar Store. Mr. Glowa talked about the importance of redevelopment and revitalization of business parks and retail areas. Councilmember Duggan asked for the applicant to come back with some answers to: what the current traffic is on Pilot Knob Road, Northland Drive and Mendota Heights Road, and how well Cordon Bleu is doing as a restaurant. Councilmember Duggan said United Properties has established success for the community and he will support the resolution that is before the Council. Councilmember Duggan said the normal draw of retail is 3 miles. United Properties is a bit crimped because of Highways 494, 55, and 13 are natural boundaries. On the north side, there is Highway 110. It seems to be a stretch for people to come down to this location from Highway 110. This goes back to being fresh and vibrant and new as opposed to a Dollar Store type of tenant. Councilmember Duggan said he would like to know what the distance is currently from this proposal to the nearest gas station/pizza place /coffee shop locationy. , May 1, 2007 Page 24 Councilmember Duggan said he does not believe a { feasibility study would need to be done and asked if United Properties would anticipate drawing more traffic from south of Highway 494. Mr. Glowa said he does not have a traffic count but does not observe any traffic problems in the park. Corden Bleu is doing well. The new one does not have a restaurant yet but it is in their budget to do one in 2008, and that will be their last addition. Councilmember Duggan said based on the experiences over the years with United Properties he is happy to move adoption of the resolution. Councilmember Duggan moved adoption of Resolution 07- 34: "A resolution approving a comprehensive land use plan amendment from "I" to `B" District" as proposed. Mayor Huber seconded the motion. Further Discussion Councilmember Krebsbach said she would like to hear from the police department regarding a gas station. Councilmember Duggan asked if this needs to go through Met Council. Ms. McDermott said it will. City Clerk Swanson called the roll. Ayes: 2 (Mayor Huber, Councilmember Duggan) Nays: 3 (Councilmember Schneeman, Krebsbach, Vitelli) Motion Failed Councilmember Vitelli said he would like to see more information on what the impact to the City would be. Councilmember Krebsbach said the City needs to determine what the impacts on the city will be. Councilmember Vitelli said it seems that the SuperAmerica reports a lot of incidents. May 1, 2007 Page 25 Councilmember Duggan said the City has an obligation to work with United Properties to preserve what they have built with the City. Councilmember Vitelli suggested that a conceptual plan of what this would look like would be a good idea to review. Mayor Huber said this was a good discussion and United Properties has received some feedback, and will figure out where the concerns are, and can come back to the City with some additional information. Councilmember Krebsbach said a workshop could be held to discuss this further. Mr. Johnson said he would like some guidance — since the petition is to change the guide from "1" to `B" and it's pretty clear that there is a possibility of allowing for limited service retail without the gas station. United Properties could go back and re -study the market and find another mini - anchor that does not have the same kind of client and traffic issues. Councilmember Krebsbach said the Council still needs to have discussion amongst themselves and the Police Chief on this project. Councilmember Vitelli said it seems that a big issue is the 24 -hour gas station, and suggested that perhaps these retail businesses, even with the gas station, could have a time limit on their operation. Police Chief Aschenbrener said there are a large variety of issues with gas stations. His does not believe the 24 -hour timeframe is as big an issue as the guiding of the type of clientele. Mr. Danielson asked if Staff should bring this back at the next meeting with a resolution for denial, or will it be tabled. Mayor Huber instructed Staff to come back at the next meeting with a new resolution for denial, but wants to continue having some open discussion on this project. Mayor Huber said this will not have to go through the Planning Commission as they have already recommended approval. May 1, 2007 Page 26 PAR 3 MANAGEMENT Mr. Danielson said the first steps were taken this evening with the authorization of Ehlers and Associates to proceed with the sale of the bonds to purchase the property. The money would be available on June 25th and Staff will be working toward closing before July as there would be some tax implications after July 1. Mr. Danielson said he and Mr. Sedlacek will be meeting with the manager of the Burnsville Par 3 and the current manager of Mendota Heights Par 3 to clarify the establishment of continued operations after the closing, such as cash handling, (as there are no credit card authorizations for City Staff), food service license, beer license, repairs that are needed, contracting of employees for the remainder of 2007. Mr. Danielson said if there is a contract with the employees to continue for the rest of year, operations for 2008 and beyond will need to be determined. Mr. Danielson said Councilmember Vitelli has recommended establishing a task force that could help answer questions. Mr. Danielson said Jerry Murphy, a long time past manager of Somerset Golf Course is willing to participate. Mr. Murphy is also a reserve police office for the City. Mr. Danielson suggested having the current manager of the Par 3 on the task force to help explain how the course operates. Mr. Danielson recommended Mr. Sedlacek be a staff representative. Mr. Danielson said it would be wise to keep this task force to a small number at this time. Councilmember Duggan suggested adding a member of the Council and the Parks board, as well as having a citizen serve on this committee. Councilmember Schneeman said perhaps some subcommittees could be formed — keep it small to get started. Councilmember Krebsbach said she would not be for a citizen representative as she does not know what the criteria would be. Councilmember Krebsbach feels this group is needed to get organized, and there is no need to have a "watch -dog" at this time. Councilmember Vitelli said the Park board member could serve as a citizen member as well. Councilmember Vitelli said it was his experience that too many people on a task force could lead to gridlock. There are a lot of ideas and there will be new management. An operating plan is needed, as well as a marketing plan. May 1, 2007 Page 27 Councilmember Vitelli recommended Theresa Gangelhoff be used as a resource. This probably needs to be a committee for about 90 days and it's important to begin immediately. Mayor Huber said looking long -term; one of the key issues would be working with the leagues for feedback on how the golf course could be improved. Councilmember Krebsbach said that is an excellent idea and can provide some names of league members if necessary. Councilmember Duggan asked about the $7,500 payments and will they continue. City Attorney Tami Diehm said the City pays on the first of the month. Because the referendum was successful, the City now makes a payment on May 1 St and on June 1St, assuming the City will close in June. Councilmember Duggan asked if rent will be prorated if a full month is not leased. Ms. Diehm said that was correct. Councilmember Vitelli said a memo was received from John Mango, a resident of Mendota Heights, and he asked Staff to contact this resident to make sure there is an understanding of this memo, since Mr. Mango develops and finances golf courses. Mayor Huber recommended that Staff give regular updates on the committee's progress at the Council meetings. COUNCIL COMMENTS Councilmember Duggan spoke of his invitation by the Minnesota International Center, which is associated with the University of Minnesota, to assist in their Ireland celebration to be held on May 121h Councilmember Duggan reminded everyone of happy hour at Sage Market and Wine Bar. Councilmember Duggan suggested that the Mendota Heights Garden Club be asked if they would like to do some planting at the Par 3 golf course. Councilmember Krebsbach said she observed a lot of golfers 5 ring the Par 3 and reminded all of the City Cleanup on May May 1, 2007 Page 28 Councilmember Schneeman said there will be so much enthusiasm and many ideas will come forth. Councilmember Schneeman talked about her husband's experience with a camp that had help of volunteers. Councilmember Schneeman announced the birth of her 38th grandchild, a girl named Mary Jeanne. Councilmember Vitelli said he was pleased on the outcome of the referendum vote, and was surprised at the emotions that went into this process. He believes the Council did the right thing to go this route and let the citizens make this decision. Councilmember Duggan talked about some of the families that have been enjoying the golf course. ADJOURN There being no further business to come before Councilmember Krebsbach, moved to adjourn the City Council meeting. Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 Time of Adjournment: 10:30 p.m. Rebecca Shaffer ATTEST: Recording Secretary John J. Huber Mayor