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1989-06-20 Council minutesCITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, June 20, 1989 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 7:35 o'clock P.M. The following members were present: Mayor Mertensotto, Councilmembers Blesener, Witt and Hartmann. Councilmember Cummins had notified the Council that he would be attending the meeting late. AGENDA ADOPTION Ayes: 4 Nays: 0 APPROVAL OF MINUTES Ayes: 4 Nays: 0 CONSENT CALENDAR Councilmember Hartmann moved adoption of the revised agenda for the meeting. Councilmember Witt seconded the motion. Councilmember Hartmann moved approval of the minutes of the May 30th Joint Workshop meeting. Councilmember Witt seconded the motion. Councilmember Blesener moved approval of the consent calendar for the meeting along with authorization for execution of any necessary documents contained therein. a. Approval of a critical area building permit for Paul Katz , to allow construction of a gazebo at 1855 Hunter Lane, along with waiver of the Critical Area application fee. b. Approval of purchase order for Street Lights for Executive Drive, bid awarded to Killmer Electric for their low bid of $12,083.00 Page No. 2579 June 20, 1989 c. Approval of the list of claims dated June 20, 1989 and totalling $399,318.19. d. Approval of the List of Contractors and attached hereto. e. Acknowledgement of the May Treasurer's report. Councilmember Witt seconded the motion. Jim Losleben, 815 Hazel Court, requested that a letter be read from Bernard Friel regarding the Parks Bond Referendum Issue and asked if there will be any public discussion on the Airport Study Committee /Airport Noise. Mayor Mertensotto stated the Airport Study Committee is an informational item. Kevin Frazell, City Administrator, stated that consideration this evening is to discuss nominees who might be suggested to the speaker of the house for appointment to that committee. He stated that there are two items concerning the airport noise issue on the agenda, the other item concerns the potential of hiring a consultant to study the Airport Noise and Freedom of Information Request documents for the City and make some recommendations. Jim Losleben, responded that there is a lot of airplane noise and that he wanted to make these comments for the record. Mayor Mertensotto stated that the City received bids and that Roso Contracting had the lowest bid of $105,216.50 He asked Klayton Eckles, Civil Engineer, what the engineering estimate was. Klayton Eckles, responded that the Engineer's estimate was $112,000.00. Ayes: 4 Nays: 0 FOLEY FENCE VARIANCE CASE NO. 89-19 Ayes: 4 Nays: 0 MGM LIQUOR REQUEST FOR LIQUOR ORDINANCE Ayes: 4 Nays: 0 JULY 3RD CITY OFFICE CLOSING Page No. 2580 June 20, 1989 Councilmember Hartmann moved adoption of Resolution No. 899"RESOLUTION ACCEPTING BIDS AND AWARDING CONTRACT FOR CONSTRUCTION OF SANITARY SEWER, WATER, STORM SEWER AND STREET CONSTRUCTION TO SERVE NORTH IVY HILLS, 2ND ADDITION (IMPROVEMENT 88, PROJECT 6). Councilmember Biesener seconded the motion. Councilmember Witt moved to waive the CUP requirement) approve a 14 foot side yard setback variance for a fence. Councilmember Biesener seconded the motion. Mayor Mertensotto briefly reviewed the request from MGM Liquor for an amendment to the liquor ordinance. MGM is requesting that the store remain open on July 4th and January 1st. He asked if the amendment to the ordinance required a public hearing. Kevin Frazell answered no. Councilmember Hartmann moved to Adopt Ordinance No. 266, "An Ordinance Amending Ordinance No. 209 (Codified as Ordinance No. 1403), with the addition of January 1st to the Ordinance conditioned upon MGM Liquor paying the public hearing notice and publication costs. Councilmember Witt seconded the motion. After a brief discussion, Councilmember Biesener moved to close City Offices, Monday, July 3rd and designating a floating holiday for that date. Councilmember Hartmann seconded the motion. Ayes: 4 Nays: 0 RENEWAL OF AMBULANCE SERVICE CONTRACT Ayes: 4 Nays: 0 AIRPORT ANALYSIS CONSULTANT Page No. 2581 June 20, 1989 Mayor Mertensotto briefly discussed the ambulance contract. Councilmember Witt inquired how the service has been. City Administrator Frazell stated that the both the Police and Fire Departments have stated that the service has been excellent. Councilmember Blesener moved to approve the execution of the ambulance service contract with the Divine Redeemer Hospital. Councilmember Witt seconded the motion. In response to Mayor Mertensotto's request, City Administrator Frazell briefly outlined the necessity of hiring an Airport Analysis Consultant. He stated that the City of Mendota Heights has been working with MASAC, the City of Eagan and an operations committee to look at the issue of the flight corridor along 1-494. The three alternatives of those flight corridors were derived by that committee and were discussed respectively by the City Councils from the two communities who were not able to come to an agreement although they came fairly close on the agreement. He stated that during the negotiations the City of Mendota Heights filed a Freedom of Information Act request with the Federal Aviation Administration and the Metropolitan Airports Commission to obtain information concerning the definition of the corridor. He stated that the City is trying to get at the issue of whether or not the planes have gone so far to the north that an EAW or EIS should have been prepared. The City has now received that information and that information is quite technical, therefore, the City staff has requested that a professional consultant be obtained to analyze the report. He Page No. 2582 June 20, 1989 stated that David Braslau was suggested to analyze the report. David Braslau helped the City when the City implemented the noise attenuation requirements as a part of the Southeast Area Comprehensive Plan Amendment. He stated that Mr. Braslau is quite knowledgeable in the areas of aircraft noise and in particular land use surrounding airports. Mr. Braslau is also working with Bob Collete, who until recently, was an employee of the Federal Aviation Administration. He stated that if Mr. Braslau is retained by the City, he would propose to use Mr. Collette's services to assist in doing the analysis. The proposal submitted to the Council is more extensive than just analyzing the information that the City received under the FOIA request. They actually proposed to meet with officials at the MAC, FAA, Metropolitan Council and other places to evaluate the issue of the corridor, how it came to be, how that fits within the Environmental Review regulations with the Federal Aviation Administration and then come back and make recommendations to the Mendota Heights City Council as to whether or not the City has a case for our contention that there should be a review of the issue and suggest alternatives and also assist the City in trying to define ways that some alternatives could be implemented. City Administrator Frazell explained that the fees are divided into two parts. The first is to evaluate the information that the City has and conduct meetings and for that proposal the proposed fee would be $6,564.00. The second proposal, would be to look at the third track issues and define potential corridor changes and some , options that might be pursued by the City of Mendota Heights, the proposed_ fee would be $7,510.00. Mayor Mertensotto stated that the proposal is fairly detailed and that it will cost money to retain a Page No. 2583 June 20, 1989 professional consultant. He stated that David Braslau was highly recommended to the City. Councilmember Cummins arrived 8:10 P.M. Mayor Mertensotto stated that there should be a cap placed on the amount of money to be spent. He stated that a cap of $14,000 and proceed to award the contract placed on the proposal presented by David Braslau Associates, Inc. of Minneapolis. Jim Losleben, 815 Hazel Court, stated that he is concerned about the aircraft noise. He said that he realizes that the 15 degree turn is legal yet the corridor is empty and that the planes are flying over Mendota Heights. Councilmember Witt stated that the MASAC and FAA are denying that the planes are flying over the City and Councilmember Hartmann stated that there seems to be a southern boundary but no northern boundary. Mayor Mertensotto stated that the City must determine the value of the information received and that this is why the City is requesting a consultant to analyze the information. Ultan Duggan, 813 Hazel Court, suggested several proposals of which City should send letters to the Pilots Association and hire students to count violations of corridor. He suggested that if the students are out counting the violations, the City would have correct information to give to the Airport Council. Mayor Mertensotto responded that MASAC will deny that information and that the students have no credibility to battle these people. After further discussion Councilmember Cummins moved to contract David Braslau Associates based their proposal to complete the work outlined in both Ayes: 5 Nays: 0 AIRPORT STUDY COMMITTEE NOMINEE PARKS AND RECREATION COMMISSION APPOINTMENT Ayes: 5 Nays: 0 PARKS BOND REFERENDUM Page No. 2584 June 20, 1989 Phase I and Phase II with the maximum cap of $14,000. Councilmember Witt seconded the motion. City Administrator Frazell suggested an amendment to the above motion to appropriate the funds from the General Fund. Councilmember Cummins moved to amend the motion as stated above to appropriate the funds from the General Fund. Councilmember Hartmann seconded the motion. After a brief explanation regarding the airport study committee, Mayor Mertensotto suggested that the Council anticipate making a recommendation at the July 18, 1989, meeting. Mayor Mertensotto explained that the current vacancy on the Parks and Recreation Commission was created by the recent resignation of Commissioner James Stein whose appointment was to be through January, 1990. Councilmember Blesener moved to appoint Dick Spicer to the vacancy on the Parks and Recreation Commission. Councilmember Witt seconded the motion. Councilmember Blesener explained that the business before Council tonight is to set a date for the referendum and address the specific language to establish the referendum. She also stated that the funding should be appropriated to start the marketing preparation for the referendum. She also suggested that the City consider making an offer on the West property which is presently for sale with a realty company. The West property is located on the corner of Marie Avenue Page No. 2585 June 20, 1989 and Delaware Avenue. She stated that the City could make a purchase offer or optioning it contingent upon the successful passage of the referendum. Councilmember Biesener stated that the earliest date that the referendum could be held on would be August 15, 1989, and in order to do that a resolution needs to be adopted and that a sample ballot be submitted for review. She stated that it should be approved contingent upon final approval from the City's bond counsel. As a response to Mayor Mertensotto's questions, Councilmember Blesener further explained the questions which are proposed to appear on the ballot for the referendum. Mayor Mertensotto questioned the August 15th date as to whether there was enough time for the steering committees to promote the referendum. He also stated he wanted an opportunity for the maximum number of people to be involved in the referendum. Councilmember Biesener responded that there was a meeting on June 13th which invited all of the members of the review committee who started,to setup other committees to actually start the process of preparing informational materials and then there is a tentatively scheduled meeting for July 10th which would be a "kick off" meeting. As per Mayor Mertensotto's request, Councilmember Biesener recapped the questions on the ballet. She explained the first question regarding 2.7 million was for park improvements. She stated that essentially the City is looking at making major improvements to all seven of the existing parks and are including the construction of three new neighborhood parks on land that has been dedicated to the City already. The City is looking at 15 miles of additional trails in the City's trail Page No. 2586 June 20, 1989 system. The City will be developing five ball fields on 27 acres of land that is going to be dedicated to the City from the Southeast area of the City. It contains funds to developing joint use facilities at Henry Sibley Senior High School consisting of four ball fields as soon an agreement can be negotiated with the school district. It also includes funds to acquire a third parcel of land which could be used for an additional four ball fields or other park purposes. Councilmember Blesener further explained the second question on the ballet, "$700,000 for future land acquisition and development" is intended to provide funds to develop the third site which would be acquired under the first question. It also can be used to acquire additional park land within the City to hopefully complete the acquisition efforts for the whole parks system. She stated that the committee feels strongly that if they do not authorize the City at this time to have the funds available to act on acquiring land, that the City will not have the opportunity to get the land much longer because of the development presently going on in the City. Councilmember Blesener further pointed out that the bonds would not be sold and taxes would not be affected until those funds are needed and are used at some point in the future. Mayor Mertensotto read a letter submitted by Bernard Friel which expressed his objection to the two proposals to be recommended by City Council. Mr. Friel's letter stated that he wanted the minutes from the last meeting corrected regarding his objections to the parks referendum. Mayor Mertensotto responded to the letter submitted by Bernard Friel stating that the issues raised by Mr. Friel have been addressed. He stated that the committee is leaving this issue open for Council discretion. Page No. 2587 June 20, 1989 Councilmember Blesener stated that the Council needs to have the ability to act on the opportunities. Councilmember Cummins further stated that Ultan Duggan and Bernard Friel's opposition is noted in the minutes of the Park Study Commission. He stated that a year ago he worked hard to get votes on the referendum. He stated that the 2.7 million package is far better than last year. He stated that the Council is putting the questions to the voters and he hopes the voters support it. Councilmember Witt commented on question number two and that had there been monies to exercise the options last year the City would have been in a better position to move ahead. She said, as Ultan Duggan stated earlier, that the City has lost those sites, and that this puts the City in the position to not lose anymore. Jim Losleben, 815 Hazel Court, commented that he was involved in the bond issue the last time and that he wants to express his disappointment in the bond issue because land acquisition has to be the number one priority because the development that is taking place, the City is quickly running out of land. He stated that his disappointment in the bond issue is that there is nothing definitive as far as buying land. What is definitive is that you want the voters to authorize an amount of money and then spend it as we see fit and he stated that he thinks that the City will have a successful bond issue. He believes the bond issue will be a lot more successful if the City had a definitive plan going to the people. He stated that he was involved previously on a recommendation that was made to buy some C.G. Rein property across from the fire station. He stated that at that point in time the Commission was actually considering paying $50,000 per acre for the land. Page No. 2588 June 20, 1989 ( ) He stated that the people of the City would like to see what they are going to get for their money. He said that he is very much for a school agreement. He stated that the Council is asking the voters to spend their tax money for a lot of unknowns. Mayor Mertensotto responded that there is not a lot of unknowns. He stated that the City definitely knows what it is going to cost for the trail system. The City knows approximately what it is going to cost to put in the five ball fields and the two footballs into the Southeast area that is going to be dedicated to the City. He stated that that is no different than the previous bond issue other than we had more acreage and facilities. In response to a comment from Mr. Losleben, Councilmember Witt commented that the City doesn't have a particular parcel but that we need to have the money when looking at some future park acquisition. Councilmember Blesener stated that it would be nice to have the best of all possible worlds. It would be nice to have a tidy package that says that we can buy this piece of property, unfortunately the City is not in that position. Most of the available vacant land in the City has a number of issues surrounding it. It is either going to take many months to work out an agreement or to negotiate on a purchase. We need to have funds committed that the City can rely on being able to spend in order to enter in on negotiations. She stated that it would be wrong to continue to delay holding the referendum while we continue to negotiate on acquiring other pieces of land that we may not be able to do without having the money in hand to accomplish. She stated that as far as the agreement with the school district, the district has taken very positive steps recently to work towards a potential agreement. The City needs Page No. 2589 June 20, 1989 to allow the district time to work through their own political process and their own schedule. Council has demonstrated good sense and responsibility in how they have allocated the dollars. Jim Losleben stated that concerned about when the down land last year on a $25,000 an acre and less later you are willing to plus an acre. he is City turned bond issue at than a year spend $50,000 Councilmember Blesener stated that she has heard from a lot people that would like the City to have a little vision and buy land now. If we don't do it now, we will be running out of the opportunities. Mr. Ultan Duggan commented that he is in favor of park land and that he suggests that the City try to promote the trails portion of the referendum. He stated if the Council talks about ball fields only, he thinks that the people are not widely enthusiastic about ball fields. He said that it might be smarter to let all of the voters have the opportunity to speak and address the issue of a referendum in early September when they are back to school. At that time, people will be back in town and they would vote. He stated that the City Planner, Howard Dahlgren had identified several areas 10 years ago as suitable sites. We have lost all of those sites because of inaction on the part of the Planning Commission, Park Commission and the Council. He stated that the land was a lot cheaper two to five years ago He commented that Howard Dahlgren studied and suggested that the City needs 289 acres of park land. He asked if the City will ever be able to get the 289 acres of park land. Is there enough land available to buy. Ms. Vicki Katz, 1855 Hunter Lane, stated that she has worked on the committees for the referendum and that Ayes: 5 Nays: 0 Page No. 2590 June 20, 1989 it is important for the city to get moving. She said that the City should see that some of the problems that have occurred in the past don't happen again. City Attorney, Tom Hart stated that it is virtually impossible to get a willing seller to seriously negotiate the sale of land unless you can commit the dollars. If you try to make the purchase contingent upon a future event, it may or may not occur, i.e., the passage of a bond referendum, you lose a substantial amount of leverage in negotiating the purchase. Mrs. Smith, 2067 Theresa, asked if the Curley addition is included in the park upgrading. Councilmember Blesener stated that the City will be putting together informational packets that will give all of the specifics for the improvements to all of the parks and part of it will include Curley's site. She stated that the three new parks will be Mendakota, Hagstrom-King and Victoria Park. City Administrator Frazell discussed the Bond Counsel and the phrasing of the two part question for the referendum. Councilmember Blesener moved to approve Resolution No. 89-51, "RESOLUTION CALLING FOR AN ELECTION ON $3,400,000 GENERAL OBLIGATION BONDS OF 1989," , with the date of August 15th to be inserted and the language of the question as amended in the add on agenda contingent upon approval from the bond counsel. Councilmember Cummins seconded the motion. Mayor Mertensotto stated that the West property, 1805 Delaware Avenue, which Page No. 2591 June 20, 1989 is a part of the Sibley campus, mtlatml that the landowner would be willing to enter into a purchase agreement or option. He stated that the City pay the owner $500.00 option fee to remove the property off of the market subject to the City exercising the option of purchasing the property in 60 days. He stated that it appears that the owner would be willing to take $105,000 for the property. After a brief discussion, Councilmember Blesener moved staff to execute an option on the West property with a $500.00 option money with a 60 day option with a total purchase price of $105,000. Peggy Wise, 2077 Timmy Street, commented that the City should procure land for park sites for our future generations. Mayor Mertensotto explained that the West property is the only privately owned parcel on the Sibley campus site. The school district has not been able to successfully negotiate with the landowner. He stated that the City should negotiate with the owner and that the City knows what the assessor's appraised value is on that property and the City knows what their appraiser has placed a value on the property. He stated that the City is not buying raw land for $105,000. The City is buying an improved piece of property. Councilmember Witt seconded the motion. Ayes: 5 Nays: 0 Councilmember Blesener moved to approve an expenditure of up to $5,000.00 for informational materials which should be dispersed from the park fund. Councilmember Witt seconded the motion. Ayes: 5 Nays: 0 FURLONG HOME As directed by Mayor Mertensotto, City PURCHASES Page No. 2592 June 20, 1989 Administrator Frazell explained the history of the City's involvement with the Furlong neighborhood. City Administrator Frazell explained that the history of the Furlong neighborhood goes back to when the City's original Tax Increment Plan was put together in 1979. That plan involves many areas of the City for redevelopment in addition to the Furlong neighborhood. At that time, the plan called for the installation of sewer and water utilities to the Furlong addition and that was a project that was contemplated. However, in 1985, the City Council commenced a study of all of the land uses in the western part of the City, the Industrial Park as well as the residential areas -Mulvihill, Rogers Road and Furlong neighborhoods. It was determined at that time, that primarily because of the impact of airport noise and the lack of public utilities in the area that perhaps there were some alternate land uses that might be preferable than to try and have single family homes out there. As a part of that study, the residents in the area were surveyed by the City Planner's office and approximately 2/3 or 66 percent of the people who responded indicated that yes in fact, given the option, they would like to have the opportunity to move from the neighborhood versus trying to upgrade the neighborhood and solve some of the problems there. The City agreed to try and create a new tax increment district for Furlong that would go beyond the initial project which was to only install sewer and water and try and find a large scale developer who would come in and do a magnificent development, for the purpose of creating the additional tax revenues for the City to go out and issue debt obligations and use the money from that to purchase all of the homes in the Furlong, Rogers Road and Page No. 2593 June 20, 1989 Mulvihill areas and then repay those debt obligations with the new taxes from the new business that might locate there. Unfortunately what the City found is while the area has some long range attractiveness because of its location in the Metropolitan area, right now developers and investors seem to be very reluctant to come into the area because of the fact the highway department will be closing down or eliminating access on the roadway area in the near future to rebuild Highway 13, 110 and 55 and that includes the total closing of the Mendota Bridge for approximately a two year period for rebuilding. It became very apparent to the City that a number of the residents in the Furlong area and the other neighborhoods do have some pressing and immediate problems that simply can not wait until everything is in place and all of the highways are improved and the City finds a developer who is going to save the City from all of the problems that exist in those neighborhoods. He further explained that the City Council went back to the original authorization in the 1979 Tax Increment District and felt that because of the history of the project that it would be possible to use some of those funds to go ahead and begin acquiring homes for people who are willing and interested in selling their homes to the City because they had a problem and would like the option to move. He stated that the City sent a letter inviting anyone who was interested in selling their house to the City within the next few years to write the City a letter notifying the City of that fact and telling the City why you would think you would like to sell your house to the City. As of tonight's meeting the City has 16 letters, not all of the Page No. 2594 June 20, 1989 letters necessarily committing to selling their house tomorrow but saying that in the next two or three years they would be interested in being put on a list to be acquired. Our difficulty is that our existing Tax Increment District can have additional proceeds of about $400,000 a year to apply toward acquiring homes in the Furlong neighborhood. That will enable the City to acquire 3 to 4 homes per year depending on the value of those homes. He further explained that what the City is faced with is that there are still 16 people in the neighborhood who think that they would like to be acquired. The City needs to set up a priority list of who will be bought in 1989 and so on until all of those people have had the opportunity of having their homes purchased. There are a number of policy issues that have been raised with the Council in the past. He stated that the action before the Council this evening is to consider whether they should adopt a statement of policy on how the City is going to acquire homes in this area, why the City is acquiring homes. He stated that the policy statement (in its draft form) was sent to all of the residents in the Furlong addition approximately two weeks ago. He further stated that based on questions and answers from the residents that Council will either adopt or amend the statement at tonight's meeting including with coming up a scheme or plan in coming up with a priority list. Councilmember Biesener left at 8:55 P.M. Mayor Mertensotto briefly stated that the City has been accused of proceeding to buy out the residents or destroying the neighborhood for purposes of Page No. 2595 June 20, 1989 developing, he stated that that is not true. He stated that the residents came to the City and that is why the City is reacting to the situation. He said that the high costs of putting utilities in (sewer and water) which would probably cost about $25,000 per lot. Many of you indicated that you didn't want to pay that amount of money for the simple reason of the aircraft noise in the area. Many of you have indicated to the City that you have on land disposal systems that are in dire need of repair. He stated that many of the residents are pumping sewage into the water rather than calling in a tank truck and having the sewage pumped out. He stated that many of the people have complained that they have contaminated water supply systems. He stated that the City cannot spend money that we don't have. We have to have some relative hardship basis. Mr. Bob Tousignant, stated that he will only be speaking about the TIFD that pertains to the Furlong property. He commends the City Council for the diligence and the patience they have shown as they seek to find solutions. He stated that the Furlong area has no water, no streets and that they are being asked to abandon their neighborhood. While these areas are important, he stated that they have to be kept in perspective. He stated that he would like to submit a letter to the Council for their review and he read the letter for record. He stated that there are a number of areas that are not being addressed by the City's proposal. The first area that is not being addressed is the discounting of the value of the homes for air noise and lack of City services. The first question that he addressed the City Council on the buy out is, does the City of Mendota Heights have to destroy the Furlong Addition in order to expand its Industrial Tax Base. Are the citizens of Mendota Heights willing to have the City incur a loss of 1.5 to Page No. 2596 June 20, 1989 3.5 million dollars loss to support this buy out. He submitted an analysis of a proposed buy out which was put together by an accountant. He stated that 14 members of the Furlong Addition discussed the submitted proposal before the Council meeting. He submitted a recommendation from the property owners; a. Meet with all of the residents and work out the terms of the proposed buy out. b. Should the City Council be unable to meet this request then they recommend the buy out be terminated. Mr. Tousignant stated that currently in the neighborhood there are now three factions. He stated that one faction in the group that is willing to take the City's offer and would sell out under any condition. Another group of people would be willing to sell their property to the City at a fair market value without the discounts. There is a third group of citizens that values the neighborhood and they would prefer not to have the sell out take place and they would prefer to work for solutions that would meet the requirements of everybody. Mayor Mertensotto stated that again the Furlong residents prefaced their remarks about being asked to abandon the neighborhood. Again, he stated that the City is only reacting to requestsonot trying to expand Tax base. He further stated that if the Furlong residents want the City to stop this process now they would. He stated that there is no way that the City can come up with a definitive plan because the City cannot commit themselves to do something because the City does not have the money. He said that he doesn't dispute the figures presented by the residents but any redevelopment plan would be a waste of tax payers dollars. He stated that there are Page No. 2597 June 20, 1989 people complaining of contaminated wells. He stated that the City is responding to help these people. He reiterated the 3 fractions submitted by Mr. Tougsinant. He said that the City is not going to pay anymore than the fair market value and that the City is not required to pay anymore than that. He said that the City is working on this issue on a voluntary basis. The policy statement is what the neighborhood requested. Bob Tousignant said that three years ago a survey was sent out and the terms of that survey were would you sell your house at a fair market value with a 20 percent relocation expense. Under those conditions that is the way the response was put together. Now, the City has changed this. Fair market value and no relocation expense but you can live in your home for six months so that you can find another place to live. He stated that he feels that the City should make another survey and find out what the people want. Mayor Mertensotto responded that the City never adopted or committed to a relocation benefits proposal. The City Planner is the one that made the statement about the 20 percent relocation but that is true only in the case of involuntary takings. Bill, Furlong Resident, stated that he would have to pay $10,000 to pay off his mortgage above from what the City is offering. Councilmember Cummins commented that the City is having an appraisal done on the homes and that the appraisals will reflect the factors. He stated that the City is paying you for what the house is actually worth. Woman, stated that her house was appraised and they did take 20 percent off the price of the house. She said that she had it appraised a 12 percent less than her assessed value for her Page No. 2598 June 20, 1989 taxes. She stated that she can't sell her home based upon what she is paying taxes on. In response to Mayor Mertensotto's comment on the City abandoning the issue, she stated yes, at these prices. Bernie Wiesner, Furlong Resident, stated that they have been paying taxes on facilities that they have never had. Pearl Doffing, 1314 Furlong, stated that the proposal on paper looks good. She stated that if they got anything less that it doesn't make sense to be offered less money than what she is being taxed on. Lois Furlong, questioned if the appraiser hired is more qualified than the County Assessor. Councilmember Cummins responded that the appraiser is more qualified in that he has done individual appraisals and tax values don't always reflect individual assessment of your home. In response to Mayor Mertensotto's questions, City Administrator Frazell stated that there have been three appraisals submitted: Swenson, Huebner and Luchsinger. Woman, Furlong Resident, stated that she would sell based upon what her taxes are. Councilmember Cummins stated that they have been criticized for not making a decision but it is a complex problem because we don't have the resources to solve the way we would like to. He stated that he is ready to vote one way or another. He stated that they should either proceed with the buy out or terminate the program and the folks in Furlong can do with their properties what they choose to do. Man, Furlong Resident, stated that the roads are in terrible condition and that is part of the reason why they Page No. 2599 June 20, 1989 want to be bought out. In response to a questions from Mayor Mertensotto, City Administrator Frazell stated that the assessors did a door- to-door appraisal of all of Mendota Heights about four years ago. He said that the assessors felt at that time that the Furlong Addition was fairly accurate. However, they did concede because of the way inflated land values in Mendota Heights, that perhaps the Furlong Addition has been artificially inflated in terms of its assessed value. Councilmember Cummins stated that if the residents of Furlong Addition feel that they are being overtaxed, he would like to see the City go to the County on behalf of the neighborhood and challenge the assessed valuation of the neighborhood. Councilmember Witt stated that over the years discussing this matter, the feeling was that the costs to put in sewer and water were too expensive and that your desire was to be bought out. Bob Tousignant suggested that a special meeting be called with the City Council to discuss the proposal. After further discussion, Mayor Mertensotto directed staff to come back with a recommendation on how there might be further negotiations with the Furlong Residents and that they will specifically handle the issue on the second meeting in July. Councilmember Witt suggested that there be a special meeting called to get all of the residents together to discuss all of the issues. Councilmember Witt moved to hold a special meeting on Thursday, July 13th at 7:00 P.M. to discuss the Furlong Addition issue further with the residents of that neighborhood. Councilmember Cummins seconded the Ayes: 4 Nays: 0 DUFFY DEVELOPMENT CASE NO. 89-03 Page No. 2600 June 20, 1989 motion. Mayor Mertensotto directed staff to notify, by mail, each of the property owners of the Furlong Addition regarding the July 13th special meeting. John Duffy, submitted a financial plan for Council's review. He introduced Walt Hartmann to the Council who was going to explain the plan to the Council and answer any questions. Mayor Mertensotto briefly discussed that the people in the Curley Addition wanted a strip mall with a convenience store/motor fuel station attached on the west end. He also stated that Phil's Auto Repair could not exist as part of the zoning restrictions now. He also asked if the Evergreen wall of trees would stay until a back up screen was developed. He also asked if they would still grant the letter of credit to the City as far as payment of the taxes. The question that remained was whether or not under the strip mall proposal, with about 25,000 square foot development, would there be sufficient money to pay back $390,000 in 17 years. Walt Hartmann responded to a comment made by staff regarding the rate of return. He stated that the development will pay back at a rate of 4 percent without any inflation. If you were to include a modest 2 percent a year, it would total a 6 percent return on City money. Mayor Mertensotto asked if $380,000 is the figure that Mr. Hartmann is basing the calculations. He asked if it is going to go up. Mohamed, asked what does proposal do to traffic on frontage road. John Duffy, responded that a traffic Page No. 2601 June 20, 1989 study was submitted at the previous Council meeting. He stated that the State is going to close access to Highway 110. He stated that for safety reasons the State will be closing the highway egress. Mayor Mertensotto stated that the traffic in and out of the mall area would have no reason to go down the frontage road where you live, but it is true that you would have to go down the frontage road by the mall to get to Lexington Avenue. Councilmember Cummins stated that the Highway Department is intending to close off the entrances off of Highway 110 regardless of what the City does. Al Werthauser, 2044 Patricia Street, asked the Council to explain what is going to be included in the Tax Increment Financing. It is an awfully high risk investment for 6 percent return, he stated. Mayor Mertensotto responded that the City will be receiving a letter of credit to protect the City's investment. Mr. Hartmann, explained that the City can use increments generated by taxes to improve land for development and upgrade intersections. Peggy Wise, expressed her concerns about the state of the economy when the TIF was developed ten years ago. She asked if the City should ask a banker to review the figures submitted, and advise the Council of the credibility of the figures. Mayor Mertensotto responded that a letter of credit guarantees taxes will be paid. Councilmember Cummins stated that the whole project has been analyzed by a variety of financial experts both for the City and also the developer. Page No. 2602 June 20, 1989 ■ ) Peggy Wise asked if this is really going to improve the corner or is it going to be like Dodd Road and Highway 110. ( Harry Wise stated that a few thousand dollars of appropriate Evergreens and the condemnation of a warehouse would probably give you a better looking corner than you are going to get the way you are headed. In response to a comment made, Mayor Mertensotto stated that the City cannot make economic decisions for developers. Jim Losleben asked where the Tax Increment money from the old district go. Mayor Mertensotto stated that the City is using it now for improvements in the industrial area, the MAC property, utility extension, railroad crossings, street lighting in commercial district and participate in municipal state aid. City Treasurer Larry Shaughnessy stated that the County asked the City recently to complete a survey of all of the Tax Increment District expenditures by parcel number, and certify the improvements under taken against each parcel. Judy Werthauser stated that the City must consider other developments. City Administrator Frazell stated that there is an important point to be made and that is that the City is not putting money into the shopping center. The City's Tax Increment assistance is merely for the purpose of taking the opportunity to clean up the corner by removing the existing structures. It is important to recognize that the land between the Ethan Allen Furniture Store and the existing structures is already zoned for commercial development. The City cannot restrain trade. We are helping to guide the project for the Page No. 2603 June 20, 1989 community. Judy Werthauser asked Mr. Hartmann if the 6 percent will make that $390,000 over 17 years plus some. Mr. Hartmann responded that if you can use the $390,000 as the basis, out of the $390,000740 is basically acquisition of the site and the balance is the demolition and preparation of those two properties (the Curley property and the SOS property) and if you look at the increments at being approximately 31,000 a year it would come out based upon approximately 4 percent rate of return with no inflation. Judy Werthauser, asked if the risk is worth it. Mayor Mertensotto stated that everybody tries to protect their equity. Peggy Wise asked Mr. Hartmann if the analysis is predicated on tenants paying taxes. Mr. Hartmann responded yes and the taxes are calculated by two ways. One is by the value of the building and also by the income approach. Taxes per square foot. In response to a comment, John Duffy stated that a letter of credit protects the City. Tenants are already lined up and ready to go. He stated that this is a different market than the Mendota Plaza. Harry Wise asked that if you go bankrupt, who would pay the taxes. Mayor Mertensotto responded that the letter of credit from the bank would pay the taxes in this case. These are financial guarantees you can purchase from the bank. City Administrator Frazell stated that there is an additional protection for ( Page No. 2604 June 20, 1989 the City's interest in that the Tax Increment is repaid through the normal taxes that are paid on the property. Just like any tax property, if you don't pay your taxes for seven years it goes tax delinquent. The County will sell it at an auction and the first lien against the proceeds of that sale are any past due taxes. The City is pretty well protected. Jim Losleben stated that he is concerned that the City is going to approve more strip malls. Mayor Mertensotto asked John Duffy about the architectural style of the project. John Duffy responded that there are three different styles that have been discussed through the months. He stated that he would like to come back to the next meeting with plans that everybody is happy with. He stated that he would like some direction from the Council and the neighborhood as to styles that they like. He explained the three styles that are under consideration. The first style somewhat mirrors the Ethan Allen building. He referred to a diagram. The second style would be to copy the City Hall. He stated that they could use the same brick, rough line, same materials and the same glass as the new City Hall. The third style would be a modernistic look which he stated they liked the least. Mayor Mertensotto asked a member of the audience, Peggy Wise, what she would recommend the style should be like. Peggy Wise responded that the residents should have an input on the decision, in conjunction with Councilmember Blesener's opinion. Harry Wise stated this is only a facade that can be changed. He expressed concerns about elevations. Page No. 2605 June 20, 1989 John Duffy responded that the building can be lowered and that it is not a problem. Mayor Mertensotto stated that the question now is whether the Ethan Allen style or City Hall style. John Duffy stated that if they went with the Ethan Allen design that they would brick all four walls. He stated that there have been 15 different styles shown to the neighborhood and that there has been no response. Councilmember Cummins stated that he is comfortable with either design and that he would be happy to defer to Councilmember Blesener's opinion on architectural style. Mayor Mertensotto stated that he is more concerned about the structure than the design. In response to a question from the Mayor Mertensotto, John Duffy explained that Curley Furniture occupies 10,000 sq. ft. He stated that what ever money Curley gets he is going to re-invest back into the furniture store. He stated that it is tax exempt if it goes into a furniture store. He stated that Curley would have to pay taxes on it if he invests into a shopping center partnership. Mayor Mertensotto explained that under the PUD the City will be limiting the amount of permitted uses. Especially with car use, this will be a condition. John Duffy asked if the Mayor was specifically talking about Phil's Garage. Mr. Duffy that stated that he will show Phil's Garage as an attachment. Councilmember Cummins asked if the zero lot lining would impact the TIF or letter of credit. Page No. 2606 June 20, 1989 John Duffy responded that there would be no impact because the entire parcel would have to fall under a development agreement that would be entered into with the City. If the furniture store is separate, it is still included in the development agreement and is still covered under the letter of credit. City Administrator Frazell stated that as long as it is located with in the Tax Increment District it is covered and it doesn't matter who owns it. Deb Smith, 2067 Theresa Street asked if there will be any additional parking for Phil's Garage. John Duffy responded that additional parking is planned and that the total number of parking stalls including Phil's Garage meet the City requirement all in front. Beyond the City requirement, we put 6 additional spaces in the back. He stated that there is sufficient number of parking plus an additional 6 in the back for Phil's Garage. In response to a question regarding the fuel station, Councilmember Cummins stated that it will be a gas station/convenience store not a free standing structure right out on the corner. It will be attached to the west end of the shopping center. Mayor Mertensotto asked how many fuel pumps will be located on the site. John Duffy responded that it will be servicing 12 cars maximum which would be 6 pumps. Harry Wise stated that the main concern was that the neighborhood did not want 12 pumps. He said that there is currently 4 at the site now and that 6 might be feasible, but 12 is not. Mayor Mertensotto stated that that was one reason why the residents went along Ayes: 4 Nays: 0 HEARING: CENTEX PUD APPROVAL - CASE NO. 89-15 Page No. 2607 June 20, 1989 with the strip mall because it was going to be scaled back. The free standing station was the objection. After further discussion, Mayor Mertensotto stated that the financial plan is acceptable and that the Council is looking at the concept now. Councilmember Witt stated that she shares Jim Losleben's concern about strip malls and that they all recognize the problem on Highway 110 and Dodd Road. However, at this particular location there doesn't have to be any rezoning. She said that Mr. Duffy is indicating that he would proceed with the project with or without SOS Convenience Mart. She said that the Council did identify this as a blighted area and with the Tax Increment Financing they can clean it up. She stated that she would support the financing. Councilmember Cummins moved to continue the public hearing to 8:00 P.M. on July 18th. Councilmember Hartmann seconded the motion. Mayor Mertensotto asked Mr. Richard Putnam, Tandem Corporation, to give a brief synopsis of what has been approved regarding the Centex proposal. Mr. Richard Putnam, Tandem Corporation, introduced Tom Boyce, Centex Corporation, to the City Council. He briefly summarized the staff memos from 1987. He explained that there were two plans that the City approved: Plan A and Plan B. Both of the plans, at this point, can probably be improved upon. One of the plans required the City to purchase park property, 34 acres and the other plan had a small neighborhood park dedicated as part of an 80 acre development. Page No. 2608 June 20, 1989 He stated that the plan before Council, Plan C-3, is a plan that approximately has 26 acres of park dedication out of 103 acre site. It includes three softball fields, hockey rink, free skating rink, tennis courts, two soccer fields, two park buildings, trail system around pond. That property would be dedicated to the City. He stated that the bond referendum has a provision in it for development of those acres into neighborhood and community scale. He further stated that the other portion of the plan is a variety of housing from condominiums, manor homes, townhouses and single family units. The total is 563 units on the 103 acre site. Mr. Putnam, referring to a map, stated that the first phase approved for 136 manor homes is under construction. He explained that the portion that would be the new addition to that approval, modifying Plan A and Plan B, is the portion that extends to Delaware Avenue and borders down to the Kennedy and Field property. The project includes 46 single family lots on the east side, 65 townhouses located across from the King/Hagstrom Park and one phase of Hampshire, five sets of condominiums and two park areas - one soccer and tennis courts connected with a trail way and an area with three softball fields, hockey rink, free skating area and a park building with trail system. He stated that total park acreage would be about 26 acres and a total of 103 acres overall. Mr. Putnam explained the history of Plan B and how we have arrived at Plan C-3. He stated he is not submitting any of the conditions imposed on his plan by the Planning Commission. He stated he didn't plan to submit any plan with those conditions. Councilmember Cummins inquired about those conditions. Mr. Putnam responded Page No. 2609 June 20, 1989 that the conditions were to put in a signal light at Mendota Heights Road and Dodd Road, replace 33 townhomes with single family homes, include a park connection with Hagstrom/King Park, (Mr. Putnam stated the park connection was okay with him) and to minimize the number of 16 unit buildings in the project. Mr. Putnam stated that the City code allows 24 unit buildings and he did not wish to comply with reducing the number of 16 unit buildings. He stated the Planning Commission had attempted to redesign the project by putting together parts of different plans and that this didn't make sense to him. Councilmember Cummins and Councilmember Witt reiterated the 5 conditions of the Planning Commission recommendation. Councilmember Cummins asked about 15,000 square feet lotsfor the single family homes. Mr. Putnam replied that all the single family lots are at least 15,000 square feet. Mayor Mertensotto inquired as to how many 16 unit buildings there were. Mr. Putnam replied that there were eight. Ultan Duggan, 813 Hazel Court, stated the suggestion to reduce the number of 16 unit buildings was Planning Commissioner Krebsbach's suggestion and he felt the attempt was not to reduce the density so much as it was to reduce the number of large structures. Mr. Putnam replied that this type of redesign would cause a reduction in park dedication in order to reconfigure the project. He stated that he was present because the City had asked him to define the park dedication, not for a site plan review. He stated he was not favorable to the Planning Commission redesigning his project. He stated that his design is realistic and responsive to City requests and codes. There is a 24 unit building allowable and he has come in with a 4, 6, 8, 12 unit per building design,he stated. He followed by stating that it concerns Page No. 2610 June 20, 1989 him when, on the spur of the moment, someone tells him to reduce the number of 16 unit buildings. He stated that he has approval for Plan A which includes 618 units and doesn't give the City any parks. Putnam concluded by stating that he's been asked to make changes and he has done it, now you expect more. Councilmember Cummins replied that many of the new Planning Commissioners were not aware of the 1985 history. Mr. Putnam responded that a few Planning Commission members had complained about the Southeast Area Plan. He stated these land use issues and policies were made and that is what we have to go by. He stated that he has accommodated the City's request and that he didn't think the Planning Commission understood what was already on the table. Ultan Duggan compared Plan B to Plan C. He stated Plan B had 500 unites and a 34 acre park and that Plan C had 563 units and a 26 acre park. Mayor Mertensotto stated that while the Park has been cut back from 34 acres to 26 acres, in the first instance, the City would have to purchase the 34 acres and in the new plan the City is receiving a 26 acre dedication. Dan Tilsen, 1653 Victoria, stated that some Planning Commission members are new, however, he had felt constrained by time in reviewing Putnam's plan. Plan C originally was not entirely acceptable to the Parks Committee and by the time it was back to the Planning Commission, time was cut short. He stated the planning Commission had never had adequate chance to review ke, entire plan without the Parks timetable hurrying us up. He stated the five conditions, reflected the problem of not enough time to go through the Parks process first. Mayor Mertensotto stated that what you are saying is that this not a planning issue alone but also a Parks issue. Tilsen stated the Parks accepted it, the Planning Page No. 2611 June 20, 1989 Commission must like it or leave it alone. Jim Losleben, 815 Hazel Court, stated the park had been reduced from 34 acres to 26 acres. He stated that as the density goes up, so should the dedication to the park. Councilmember Witt stated that the voters, in a referendum, rejected paying for a 34 acre park, and that the current proposed park dedication is twice what is required for this development. Ultan Duggan presented to the Council the comprehensive plan amendment that was passed. He stated you came up the a comprehensive plan and now you are going back to earlier plan. The Metropolitan Council approved it and now you are going back to original plan. Ultan stated the number of units should be studied on the comprehensive plan. He stated the number of new units had already reached the projected number to the year 2000 and that the City has 11 years to go. He mentioned spot zoning. Councilmember Cummins asked staff about the proposed comprehensive plan to 6e submitted to Metropolitan Council. He said that the document indicates that this amendment could permit an increase in population by an estimated 250 to 300 residents. Under the comprehensive plan amendment that the City adopted, he said that he believes it could go up to 640 units or there about. How do you end up with a net potential increase? City Administrator Frazell answered that when you are talking about population projections on a comprehensive plan, it is difficult to estimate population because comprehensive plans are so general that you don't draw specific lines on a 200 scale map so that you can really calculate it. Ayes: 4 Nays: 0 Ayes: 4 Nays: 0 Ayes: 4 Nays: 0 Ayes: 4 Nays: 0 Ayes: 4 Page No. 2612 June 20, 1989 He stated that what the developer is proposing is a sketch plan that is based on the overall densities that are allowed on his 103 acres. The way that he has calculated that - single family area and park - he has transferred some of the allowable density to other areas and that is allowable within the City's PUD Ordinance. Councilmember Cummins moved the public hearing be closed. Councilmember Witt seconded the motion. Councilmember Cummins moved approval of the comprehensive plan amendment subject to Metropolitan Council approval. Councilmember Hartmann seconded the motion. Councilmember Hartmann moved to rescind the previous approval of the Kensington Sketch Plan B, planning case number 87- 24. Councilmember Witt seconded the motion. Councilmember Hartmann moved approval Kensington Sketch Plan C, planning case file number 89-15 contingent upon Metropolitan Council approval of the amendment of the comprehensive plan use plan. Councilmember Witt seconded the motion. Dick Putnam asked if the rescinding of Sketch Plan B is also contingent upon Metropolitan Council's approval. Councilmember Hartmann moved to reconsider the rescinding of Kensington Sketch Plan B. Councilmember Witt seconded the motion. Nays: 0 Ayes: 4 Nays: 0 Page No. 2613 June 20, 1989 Councilmember Hartmann moved to rescind Kensington Plan B contingent on Metropolitan Council approval of the Comprehensive Plan Amendment. Councilmember Witt seconded the motion. Mayor Mertensotto directed staff to notify Minnesota Pollution Control the proposed comprehensive plan amendment and to pursue an Indirect Source permit. Mayor Mertensotto asked Attorney Tom Hart if he would be preparing a new developers agreement or do we wait for Met. Council approval. Attorney Tom Hart answered that he would be preparing a new developers agreement. He stated that a critical provision would be paragraph 9 which discusses the alternatives. He stated that we should probably proceed because we are coming up on a deadline in June. He said that we are substituting Plan C-3 for Plan A in paragraph 9. HIRING OF Councilmember Hartmann moved approval CUSTODIAN of hiring a custodian. Councilmember Cummins seconded the motion. ADJOURN There being no further business to come before Council, Councilmember Hartmann moved that the meeting be adjourned. Councilmember Cummins seconded the motion. Ayes: 4 Nays: 0 TIME OF ADJOURNMENT: 11:17 P.M. Kevin Batchelder Administrative Assistant Page No. 2614 June 20, 1989 ATTEST: Charles E. Mertensotto Mayor