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VII.2. Disposition of City-Owned Property; Elverum CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Kersten Elverum, Director of Planning & Development Date: September 18, 2024 Subject: Disposition of City-Owned Property _____________________________________________________________________ PURPOSE The purpose of this discussion is to determine the City Council’s interest in selling one or more parcels owned by the City/HRA and to provide direction to staff. No formal action will be taken. INFORMATION The City of Hopkins/Hopkins HRA owns four properties in the downtown area that have been considered for redevelopment in the past. Those properties are: o Lot 800 (NW corner of 1st Street North and 10th Ave) o 15 6th Avenue North o 501 Mainstreet o 525 Mainstreet Recently, staff has been asked by several developers if the City of Hopkins would be interested in selling any or all of these properties. There have been some exploratory meetings with developers to understand their interest and vision for the sites and staff agreed to bring the conversation to the City Council for direction. If the City Council is interested in a potential sale of any of the sites, staff would recommend issuing a Request for Proposals (RFP) with the City’s vision and goals for redevelopment identified. It is difficult to estimate what the near-term benefit of the sale price of the land would be as there are a number of factors that would impact the developer’s ability to pay full market value including the City’ s goals around affordability, density, land use and sustainability. The long-term benefits will come from future taxes and the highest and best use the development brings to the community. Planning & Economic Development Lot 800 The Lot 800 property is currently part of the downtown municipal parking system and serves as a park and ride lot for Metro Transit. The park and ride function will be eventually moved to the Shady Oak LRT Station. The parking lot has been underutilized for the most part, given its location outside of the core downtown commercial district, but has provided a free, unrestricted parking lot for employees of the downtown. Development on the site would turn a tax-exempt use into taxable property and provide the opportunity for more people to benefit from the convenience and benefits of living in the Avenues neighborhood. The property is zoned RX-N. Under this zoning, there would be a maximum building height of 2.5 stories. The minimum off-street parking requirement is1 space per studio/one-bedroom units and 2 spaces per two-plus bedroom units. Density under the Comprehensive Plan guidance is 20-100 units per acre. The interest that has been shown is for a townhome-style development with a 2-stall garage for each unit; 12-14 units total. To achieve this, the developer has indicated that 3-story building height would likely be needed to make the development financially- feasible. There would also likely be some flexibility requested in setbacks so Planned Unit Development (PUD) zoning would potentially be needed. The City of Hopkins did release an RFP for this site in 2022. We did not receive any proposals that were considered viable at that time. In order to get a viable proposal this time, staff would recommend the following criteria: • Rental townhomes or owner-occupied townhomes • Height of 3 stories achieved through PUD zoning • Compliance with the Inclusionary Housing Policy for affordability Additionally, staff would recommend: • Energy Star appliances, EV chargers and rooftop solar-ready as minimum sustainability requirements • Family (3-bedroom) units preferred 501 & 525 Mainstreet, 15 6th Avenue North The Hopkins Housing & Redevelopment Authority purchased the properties through a mediated settlement related to a larger redevelopment project. That larger project did not move forward but the HRA was committed to purchasing these three parcels. (see attached map) Previous direction was to hold the property until a time that the larger project could move forward. Since that time, the owner of the remainder of the property needed for a larger-scale development has invested in their property and have indicated that they are not interested in selling or redeveloping now or in the future and that the property is part of a succession plan. The property is zoned RX-D. Under this zoning, a low-rise apartment/mixed-use building or row homes would be allowed. The maximum building height is 4 stories. The minimum off-street parking requirement is 1 space per studio/one-bedroom unit and 2 spaces per two-plus bedroom units. Nonresidential uses do not have a required parking minimum in this zone. Density under the Comprehensive Plan guidance is 20-100 units per acre. In order to fully-utilize the HRA-owned property, staff has had discussions with interested parties for both transitional and permanent use of the sites with the goal of providing some community benefits. Community benefits could be a use that gives back to the neighborhood, such as a community garden, or a development that meets City goals and provides tax base support. Recently, staff has met with a housing developer that focuses on sustainable building design on urban infill sites to learn more about the opportunities and challenges of a missing middle scale housing development on one or more of the sites. The key to making a development proforma work for a medium density, sustainable housing development is to waive or significantly reduce the parking requirements. Parking would need to take place off-site (in a municipal or private lot) or have the need eliminated through a travel demand management plan, which may include transit passes, shared vehicle, bike facilities and marketing. The elimination of parking requirements is being used in other cities, including Minneapolis, to allow for missing middle development but has not been tested in Hopkins. In order to get a viable proposal for these lots, staff would recommend the following criteria: • Rental apartments or owner-occupied condominiums • Height of 4 stories • Compliance with the Inclusionary Housing Policy for affordability • Flexibility on parking requirements through a travel demand management plan Additionally, staff would recommend: • Energy Star appliances and rooftop solar ready as minimum sustainability requirements with a preference for a higher standard such as LEED, B3 or Green Communities Discussion The following are the points of discussion: Is the City Council interested in exploring the development opportunity at Lot 800? Is the City Council interested in exploring the development opportunities for 501 & 525 Mainstreet (and possibly 15 6th Ave N)? If not, are there temporary uses that you would like staff to explore? If so, what would be the goals that would be included in an RFP related to the following: • Density/Height • Sustainability • Affordability • Parking • Other design criteria • 1st floor retail FUTURE ACTION If the City Council is interested in selling property for development, a draft RFP would be developed and brought back to the City Council in October for approval and authorization to issue the RFP. Staff would solicit development proposals through December and those proposals would be brough back to the City Council for consideration in January. If the City Council agreed to facilitate a sale of property, the City would enter into a purchase agreement outlining the terms of the sale. SUPPORTING INFORMATION • Map of City-owned property