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1984-11-29 Council minutesPage No. 2149 November 29, 1984 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA - Minutes of the Workshop. Meeting Held Thursday, November 29, 1984 Pursuant to due call and notice thereof, the workshop- meeting of the City Council, City of Mendota Heights, was held at 7:30 o'clock P.M. at City Hall, 750 South Plaza Drive, Mendota Heights, Minnesota. Mayor Lockwood called the meeting to order at 7:30 o'clock P.M. The following members were present: Mayor Lockwood, Councilmembers Blesener, Hartmann, Mertensotto and Witt. Planning Commission members present included Chairperson Cameron Kruse, Jerry Morson, Bill Burke, and Kathleen Ridder. ADOPTION OF Councilman Hartmann moved adoption of the agenda for the meeting. AGENDA Councilwoman Witt seconded the motion. Ayes: 5 Nays: 0 PRESENTATION BY GARRON CORPORATION Mr. Steve Gage, President of Garron Corporation, began by presenting a slide show of the National Association of Industrial and Office Parks describing the development process. He also gave the Council and Commission some background information on Garron Corporation, in- cluding their most recent development, Creek Ridge in west Bloomington. Mr. Gage then went on to describe the development that Garron would like to do on the Gould property at the end of the Mendota Bridge. He indicated that they had considered anything from 50,000 square feet up to 200,000 square feet. He said that Garron felt the site was a good one because of the beautiful vista overlooking the Twin Cities area. He said that they would like to have a major anchor tenant to occupy most of the office space, since this project would be competing with the almost two million square feet of office space now under construc- tion along the 494 strip in Bloomington. He added that four to five possible tenants had been out to look at the site, and all had expres- sed a good deal of interest. Mr. Gage said that they had looked at a number of types of development on the site, and added that 75 to 100,000 square feet of office space could be accommodated with surface parking. Anything beyond that amount would require a structured parking ramp, which could make the project financially unfeasible. The first development concept they looked at was totally within the development restrictions for the B-1A zoning classification currently on the land and the 45 foot height restriction. This would allow Garron to build a three story or 42 foot high office tower with a very large footprint and about 90,000 square feet. Page No. 2150 November 29, 1984 Mr. Gage said that Garron would like the City to consider a variance to that to allow a building of 6 to 7 stories, something around 90 to 100 feet tall, and 115,000 square feet of office space. He indicated that such a building would probably be of glass and aluminum construction. Mr. Gage said that the maximum development potential of the site would be around 200,000 square feet, which Garron would probably develop as a twin-tower concept, with a 600 car parking ramp. Mr. Gage said that as far as Garron was concerned, the critical issues for consideration by the City were: 1. Would the Council and Commission consider a redesignation in the Comprehensive Land Use plan from residential to business development. 2. Could access from Highway 55 be improved. 3. Would the City be willing to entertain proposals for variance for height restrictions. 4. Were there any problems in connection with the wetland swale on the site. 5. Would the City consider tax increment assistance for installation of utilities and/or assistance in building the parking structure required for a larger development. PLANNING City Planner Howard Dahlgren responded that the original Comprehensive PRESENTATION Plan of 1959 had designated this area for business development. He said that it was changed to multi-family residential in the 1979 plan, because for the 12 years prior to that time, Gould Corporation had attempted to sell the site, and found the only interest was for hous- ing development. Most office developments during this time period were going into the two downtown areas. Mr. Dahlgren said that that had now changed and there were more office projects being constructed in the suburbs, therefore the zoning had been left as a business designation. He said he did not think that traffic created would be a problem for either residential or business development, but that it would probably be important to improve the access from Highway 55 to Acacia Boulevard if this would be a business development. Planner Dahlgren and Public Works Director Jim Danielson also indicated that the "wetlands" on this property was not really a designated wetlands but simply a swale for drainage, and the only problem in developing was to assure that the viability of the drainage way was maintained. ENGINEERING PRESENTATION Page No. 2151 November 29, 1984 Public Works Director Danielson gave a description of the proposed four stages of utility service installation envisioned in the feasi- bility report, including immediate service for the site to be de- veloped by Garron. Mr. Danielson indicated that eventually, the water line should be looped back to Lexington Avenue. He also said that a sewage lift station would be required at the high point on Pilot Knob Road. FINANCE Mr. Shaughnessy indicated that part of the original thinking in CONSIDERATIONS establishing a tax increment district was to assist in paying utility assessments for lands that would be difficult to serve, so that the cost to the developer would be only that for a "usual" property. Under the feasbility report as prepared by the City Engineering department, the proposed assessment per acre for Garron would be around S10,000, which he said was very equivalent to what was paid for the Mn/DOT garage and the United Properties developments. Mr. Shaughnessy said that the total tax increment subsidy for the project, if those parcels east of Pilot Knob Road are eventually developed, falls very much in line with that amount originally anticipated in the tax increment district plan. In his analysis of the revenues and expenditures, Mr. Shaughnessy said that a 100,000 square foot building could rapidly repay the utility cost subsidy (about 3 years). He added that including a project for assistance in the parking ramp would require a supplement and amendment to the tax increment plan, which would have to be submitted to the school district and County for comment. Mr. Shaughnessy said that a 150,000 square foot building, with commensurate utility and parking facility assistance could also be paid back within a reasonable period, approximately 5 years. The assistance needed to develop a 200,000 square foot building could take almost 17 years for repayment. City Administrator Frazell commented that the figures for a parking subsidy presented in the staff memos assumed that the City would be paying the full cost for construction of those structures. He said that the developer had not necessarily asked for that, nor had it been proven that that level of subsidy would be necessary. He suggested that if the Council was amenable to considering a tax increment subsidy, the City would probably want to see a proforma on the project to see just what level of subsidy would be needed to make it financially feasible. Administrator Frazell said that some cities had also structured tax increment subsidies in such a way that it was partially a loan, repaid to the City, rather than totally a direct grant. GENERAL ( ) DISCUSSION OF ISSUES AND CITY POLICY ADJOURN Ayes: 5 Nays: 0 Page No. 2152 November 29, 1984 Mr. Gage commented that the project simply would not be financially feasible if the developer had to bear all the cost of the structured ramp parking. He said that he thought a larger project would be more aesthetically pleasing on the site, and that both the developer and the City would have to consider what financially made sense for them. Mayor Lockwood indicated that he thought this was an important site, serving as the "gateway" into Mendota Heights. In general, he said he thought a 100,000 square foot structure would be too small for this site, and that a more substantial development, such as the twin-tower discussed would be more aesthetically pleasing. Councilman Hartmann indicated that he had no problem with the tax increment district subsidizing the utility costs, but was skeptical about getting into subsidizing a parking garage. However, he indicated that he would be willing to consider a proposal. Councilwoman Blesener said that she shared Councilman Hartmann's concern, but would be willing to look at a proposal. Her word to the developer was to proceed cautiously. After some discussion, the developers agreed that they would like to have the City proceed with a public hearing on the feasibility report for public utility installation. It was agreed that this would be placed on the Council agenda of December 4th, for the purpose of setting a public hearing date at the second meeting in January. Mayor Lockwood summarized the meeting by saying that there seemed to be tacit agreement among the Planning Commission and City Council that the developer should_proceed with their concepts for the project. There being no further business to come before the Council, Councilwoman Blesener moved that the meeting be adjourned. Councilman Hartmann seconded the motion. TIME OF ADJOURNMENT: 10:39 o'clock P.M. Kevin D. Frazell City Administrator ATTEST: Robert G. Lockwood Mayor