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01-08-02 WSJanuary 8, 2002 Page 1 MINUTES CITY COUNCIL WORK SESSION -JANUARY 8, 2002 A work session of the Hopkins City Council was held at 6:30 p.m. on January 8, 2002, at the City Hall. Council members present were Mayor Maxwell and Council members Brausen, Jensen, and Johnson and Rowan. City personnel present were City Manager Mielke, Public Works Director Stadler, Housing Coordinator Elverum, Economic Development Coordinator Hartshorn, City Manager Assistant Stahmer, Activity Center director Newville and Facilities Manager Strachota. Also present were Bill Rothstein, Jim Leary and Whitney Peyton of CB Richard Ellis, and Reuben Johnson and L. Joe DeWit of Super Valu. North Annex Redevelopment Mr. DeWit said market changes have led SuperValu to hire CBRE, one of the biggest real estate brokerage firms in the country, to do a preliminary survey. Mr. Leary said there are four major real estate sectors possible for the site: office, industrial, retail and multi-family housing. Vacancies for the 494/394 area are 9-12 %, and this does not include the Best Buy property. Corporate offices are not a realistic goal as most will use existing buildings rather than build. He anticipates 2002 will start a positive trend, but it will be small. Available office space is sitting empty now, for example Norman Pointe is only 20% leased after being open for a year and 401 Carlson has no signed leases and opens in one month. There are a couple million sq. ft. of office space sitting empty in this area. Mr. Johnson noted those buildings are Class A, and asked about this site. Mr. Leary said this would fall between A and B, and the 30 acres is a viable size. Mr. Peyton noted the site is hurt by not having premium restaurants nearby. Mr. Leary noted the industrial property nearby also hurts. He went on that he is not advocating warehousing, but something like high tech, which is now at 7.6 % vacancy, but at negative flow. Other possibilities would be office warehouse, office showroom, small tech companies. Flying Cloud Corporate Center would be an example of a possibility type for at least part of the site. High tech/medical would be likely candidates. Mr. _Peyton answered Ms. Johnson's question about hotels by saying they are the worst off at present. The events of September 11, 2001, hit them very hard. Mr..Johnson added ten real estate sales by SuperValu were called off immediately following that. Mr. Peyton said he knows the Council is not excited about retail, but Hopkins area has the population to support such. Generally one can figure 20 sq. ft. of retail per person, and it is not as subject to fluctuation as office space. "Day population" is high. Mr. Leary added a Galleria-type mall could be an asset. The maximum is 10,000 sq. ft. per acre unless there is deck parking; a national leader would probably want 50 acres. Mr. Rothstein said his estimate on selling times is: for retai112 months at $8/ sq. ft.; multi- family 15 months at $6/sq. ft; tech 24 months at $4 sq. ft.; and office 30 months at $7/sq. ft. Mr. Leary said he would recommend a mixture of retail, flex and tech as a mixture could start more quickly. He thinks the next step should be concept drawings of different combinations. Mr. Peyton stressed the city and SuperValu have to have a consensus of what they want. He feels January 8, 2002 Page 2 this is a unique piece, the largest inside the freeway loop. Answering Ms. Johnson, Mr. Peyton feels adding Alliant Tech property would make the site more viable. Answering Mayor Maxwell, Mr. DeWit said SuperValu would like to sell the site as one piece, but Mr. Johnson added they are willing to be flexible considering the present market. Mr. Mielke said the big thing now is to amend the option with SuperValu so that both Hopkins and SuperValu have time to consider options. Mr. DeWit said SuperValu is willing to consider such an extension; their concern is if the City will look at other uses to help the sale. Mr. Leary feels preliminary site plans could be done in 30-45 days with help of city staff. Mr. Peyton asked about Excelsior Blvd. plans. He feels that if Hopkins carries out its plan of East End development, it could set a new standard. Mr. Leary noted they had studied only the 30 acres, and this could really change their ideas. Mr. DeWit said he feels Knollwood and Eden Prairie draw people away from Hopkins and that carefully chosen retail could bring more business to Main-street. Mr. Peyton said he agreed it would add people but would still challenge Mainstreet as it would pull people to Excelsior Blvd. Ms. Jensen said she feels some retail could be found that would complement, not compete with, present businesses. Mr. Peyton said working on the connecting road under the freeway could tie the two together. City staff will meet with the Council before the end of January, and will work with SuperValu on the option amendment. All agreed brainstorming is needed. East CBD Design Goals and Objectives Ms. Elverum presented a rough draft, noting the committee is working on the third Wednesday of each month. Mr. Brausen and Ms. Hesch are part of the group. Already they are defining things that may require ordinance changes, such as signage. She asked if the Council would want them to look beyond East CBD. Mr. Mielke said he felt the business community should be polled before they think about all the downtown area. Mr. Brausen said things such as garbage enclosures and drainage guidelines might be good for the whole area. General Consensus: The rough draft is good and the committee should investigate some guidelines or ordinances for the entire CBD. Activity Center Revenues Ms. Newville said the Center had 35,000 visits in 2000. She presented possible options for the LifeWise program, community users and teens. Mr. Mielke said staff feels "discount cards" would "sell" easier than per visit costs. Ms. Newville said the difference between the $15 and $10 frequent user cards for LifeWise would be a local newsletter, which she and her staff would like to do. They already have to have 5 pages camera ready for the Minnetonka one so the increased work would not be great. General Consensus: The $15 frequent user card with free newsletter is good for LifeWise. The community charges look reasonable. Memberships for teens is good, as long as a scholarship option is there. Mayor Maxwell suggested the Legion and VFW be approached for sponsorship. Mr. Mielke will approach Minnetonka about the newsletter change. Ms. Newville should bring back the proposal with refinements, draft letters, and a plan of approach. January 8, 2002 Page 3 ®ther Update 13"' Ave. Vacation Request Mr. Mielke said letters and a-mails are being received both pro and con by the city. Answering Ms. Jensen, Mr. Stahmer said while Citigables would like no parking on 12"', their big issue is increased traffic. Mr. Rowan said the big problem for them is getting out of their parking lot because of poor visibility due to parked cars. Mr. Stahmer said a letter is going to each owner about the meeting on the 15r''. Answering Mr. Rowan, Mr. Stadler said he feels property values will not be affected if 13"' is vacated. Mayor Maxwell said he would like to see how many people south of the lot were towed during snow emergency so Council knows if extra parking would be a real benefit. Mr. Stahmer said a decision needs to be made the January 15 due to reconstruction deadlines. Mr. Stadler said they talked about an agreement that if there is future development of the property the city would get the road back. In that case, Mr. Stahmer added, Council would deny the vacation and approve the agreement. He thinks St. Joseph's would agree. In reply to Ms. Johnson, Mr. Stadler said St. Joseph's is saying there would be no parking by the school except on Sunday, and otherwise that area would be used only for bus circulation. Due to the $9500 cost of the design for the road and design time is down to two weeks now, Mayor Maxwell said he felt any conditional approval would require they pay that cost. Mr. Brausen said he would hate to see everything fail for $9500. He suggested going ahead with the bid and splitting the cost with St. Joseph's. He feels that if no agreement is reached, the Legion will be able to use the lot, but not the city. Mr. Stahmer agreed with that assessment, adding St. Joseph's had hinted at future development. Ms. Johnson asked if the parking lot design couldn't have half the traffic to 12`" and half to 13"' so 12``' could have a "win." Mr. Mielke said this is much like SuperValu wanting a vacation, and the city would not agree until there was a traffic study. Mr. Stadler said a city study had been done. General Consensus: Plans for the street will go ahead, but discussions will continue. City staff will tell St. Joseph's they need a traffic study done by Benshoof so there is a third party view, and that they need to provide a better design. Mr. Gorman will be talked to before the Council meeting about the agreement that if there is future development the city gets the road back. Mayor Maxwell asked for figures on car towing due to snow. Mr. Mielke will see if there is a statutory requirement to act on the vacation request Tuesday. The agenda will state that staff recommends this action, then only the action is what the public can comment on. County Road 73 and 5 Intersection Improvements Mr. Stadler handed out drawings of the current plan. Almost all of the 7 conditions asked by Hopkins have been met. The only exceptions are special paving and bollards instead of landscaping in the median. Hennepin County authorized different style traffic posts, a major change from past history. Use of different style signage has been approved by both Minnetonka and Hennepin County. The radii was changed from 75' to 45' which requires more right of way but reduces impact on the northeast corner and puts pedestrian crosswalks closer to the intersection. Minnetonka is pushing hard to have a trail on the south side of #5, which fits in with the conditions. While the task force would like even more done, he feels they have done very well to get the modifications they have and that the project should move ahead. Mr. Mielke added that Ms. Hesch feels the same as Mr. Stadler. Mr. Stadler added that real estate action is required; if January 8, 2002 Page 4 this is not done by Feb. 5 the project will not start this year. Mr. Stadler asked a Council member join the task force. Mr. Rowan and Ms. Johnson agreed to split the responsibility. General Consensus: The task force did a wonderful job and the project should begin. Mic~Pllanennc Mr. Mielke reminded Council of the police banquet. Ms. Jensen asked that art stimulus policy be looked at in the near future. Mr. Brausen said he was very impressed by Mr. Stadler and Mr. Stahmer at the 13"' Avenue meeting. Mayor Maxwell reminded members of the HBCA meeting Thursday at Chapel View. Mr. Brausen said he would be going. Mr. Mielke said SuperValu is scheduled for the Feb. 29 work session. This will cover deadlines, constraints, TIF, etc. Mr. Brausen moved for adjournment; Ms. Jensen seconded. Meeting adjourned at 11:05 p.m. Kasey Kester, Secretary ATTEST: Eug e J. axwell, Mayor