Memo Grocery Store Project - 6th-8th Ave
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DATE:
TO:
FROM:
SUBJECT:
CITY OF HOPKINS
MEMORANDUM
January 28" 1992
Honorable~~~or and city Council
<'t..ld- . tIt .
Tom Harmen1ng, Commun1 yDeve opmen D1rector
GROCERY STORE PROJECT - 6TH TO 8TH AVENUE
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I. Purpose of Discussion
city staff and legal counsel desire to discuss the following
items with the city Council:
A.
Staff desires to receive direction from the City Council
regarding specific issues relating to the proposed agreement
with the Hennepin county Regional Railroad Authority (HCRRA)
as related to the acquisiti~n of the HCRRA right-of-way.
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B. Staff .desires to update and receive direction from the city
Council regarding discussions which have been held with
North Hopkins community of Concerned citizens (NHCCC)
regarding concerns which they have expressed relating to the
grocery store project.
C. Discuss alternatives available to the city Council regarding
undertaking a grocery store project in Hopkins.
II. Background Information
What follows is an outline of events which have occurred over the
last year relating to.this project.
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December. 1990 - HCRRA adopted a resolution approving in
principle the elements of an agreement to allow for the
release of the HCRRA right-of-way.
Mav.1991 - The city and Ryan Construction entered into a
redevelopment agreement relating to the development of a
grocery store/retail complex on the subject property.
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Staff continued to 'work with HCRRA staff on the agreement
relating to the right-of-way release.
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Honorable Mayor and City Council
January 28, 1992.
Page 2
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o August. 1991 - The City Council held a series of meetings
with North Hopkins community of Concerned citizens. The
City council authorized staff to work with a committee to
. study the feasibility and implications of various design
alternatives for the project site. The committee was made
up of City staff, NHCCC representatives, Business Council
representatives, and the developer/Super Value
o Auqust - October, 1991 - The committee undertook the
analysis. NHCCC representatives undertook a meeting of
their own to solicit input on asca~ed-back version of the
project.
As a result of the analysis, the committee came to a
consensus that ascaled~back version of the project, which
only involved the construction of the grocery store and the
acquisition of three homes, be considered further. The
NHCCC developed a position statement outlining conditions
which they felt needed to be met to allow for their support
of the project.
November. 1991 - The City Council received the report from
the committee, the position statement of NHCCC, and approved
a revised project area and authorized the completion of a
traffic and environmental study. The revised project area
(see attached plan) scaled-back the project and only
involved the acquisition of three homes to allow for the
development of a 40,000 sq. ft. grocery store.
o November. 1991 to present - During this period staff spent
some time working with NHCCC on resolving their concerns.
However, no significant progress was made on the studies due
in part to the reluctance of the developer to participate in
the cost to complete the studies. The developers'
reluctance stemmed primarily from the concern that the city
may not be successful in gainingHCRRA approval of the
right-of-way release. As a result, efforts were undertaken
during this period to gauge the potential for the City to be
successful in obtaining approval from the HCRRA on the
release of the right-of-way.
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III. outline of Issues/Recommendations
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North Hopkins community of Concerned citizens (NHCCC)
A.
Attached is a copy of the position statement submitted by
NHCCC which outlines the concerns and assurances which, if
met, would allow for their support for the scaled-back
project.
Staff has proposed that the city address these concerns
through,the adoption of a resolution by the City council.
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Honorable ~ayor and city council
January 28, 1992
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This resolution, a draft copy of which is attached, outlines '.
those activities which the City Council is willing to
undertak~ to address the concerns of the neighborhood. The
City council is not being requested to adopt the resolution
at its meeting on February 4th.
Staff has met with the NHCCC to review the resolution.
During this meeting representatives ofNHCCC indicated they
felt circumstances had changed due to the recent proposal
made to build a grocery store on the Pines site. As a
result, the NHCCC did not feel they could necessarily
support a grocery store project between 6th - 8th Avenue
even if the HCRRA .released the right-of-way. However, the
NHCCC representatives did seem to feel that it was important
to have some type of redevelopment occur between 6th - 8th
Averiue~ As a result, it was proposed that the resolution bJ
drafted in somewhat of a generic fashion such that the city
would agree to undertake the steps outlined in the
resolution no matter what kind of redevelopment project
occurred on the site. The NHCCC appears generally
comfortable with the language in the resolution.
B.
Hennepin County Regional Railroad Authority (HCRRA)
The speclfics of the proposed agreement with the HCRRA
differs significantly in several ,areas as compared to the
resolution adopted by the HCRRA in December, 1990. The
original resolution contained the following understandings:
o HCRRA will transfer ownership of the right-of-way to.
the city and retain an easement for LRT purposes.
o HCRRA will have the option of extending LRT along
existing corridor or use Ninth Avenue. The city would
be required to provide an easement on city property
along County Road 3 and Ninth .Avenue.
o HCRRA agrees to not extendLRT alohg the existing
corridor for at least 20 years. If LRT were extended
on the existing corridor, HCRRA will compensate the
owners of the property in an amount not to exceed $7.5
million.
o If LRT were constructed along Ninth Avenue, the HCRRA
will consider installing an LRT stop in downtown
Hopkins. Furthermore, the HCRRA will consider
providing a full traffic move intersection at Ninth
Avenue and Mainstreet.
Attached is a memo from steve Bubul, Holmes and Graven,
which summarizes the significant issues that have emerged
during negotiations with the HCRRA staff. You will note
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January 28, 1992
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that some of these issues appear to have been generally
resolved. However, there are several requirements being
made by HCRRA staff on which staff desires further
direction. These issues, along with a recommendation as to
what staff feels the City's position should be, are as
follows:
1. Five year termination provision.
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The HCRRA has added a requirement that the developer
must complete construction of the project within five
(5) years after the date the agreement is signed. If
construction is not completed, the HCRRA would then
have the ability to terminate the ground lease over the
right-of-way without returning the City's initial rent
payment ($116,000).
City staff tentatively agreed to the concept of a five
year termination clause but only if commencement of
construction was required to be undertaken within the
five year period. Furthermore, city staff requested
that if commencement of construction had not occurred
in the five year period, and the HCRRA terminated the
agreement, that the HCRRA would return the city's
initial land payment. The HCRRA rejected the city's
changes.
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staff Recommendation
Due to the fact.that the City has a long term goal of
redeveloping the subject property, staff would suggest
that we not agree to the five year termination clause
as proposed by the HCRRA. As an alternative, the city
could agree to the five year termination clause
provided the HCRRA returns the initial rent payment
back to the City. At this point, it is estimated the
rent payment will be approximately $116,000.
2. HCRRA Obligation if Ninth Avenue Corridor is Used.
The city has requested the HCRRA.deed the right-of~way
within the grocery store project area to the tenant
without compensation if the HCRRA constructs LRT along
Ninth Avenue. The HCRRA has agreed to this idea in
concept. However, the HCRRA is proposing language
which does not provide a definitive date as.to the
transfer of ownership.
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staff Recommendation
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It is staff's feeling that if the HCRRA does in fact
use the Ninth Avenue corridor, the HCRRA should be
required to deed over the right-of-way within the
project area. staff would recommend that the agreement
contain a provision that the HCRRA transfer ownership
of the right-of-way in the project area within six
months, after the City determines that,the LRT system is
in operation along Ninth Avenue.
3. Amount of Initial Rent
ThJ original resolution adopted by the HCRRA called for
the sale of the right-of-way in the project area for
fair market value. Under the ground lease structure,
the City has agreed to pay the fair market value up
front as "initial rent." The City had an appraisal
completed which found that the value of the right-of-
way was $116,000.
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At this point, the HCRRA has not accepted the city's
value, although I might add that no major discussion
has taken place on this item.
staff Recommendation
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. As indicated in Mr . Bubul ' s memo, if allot'her issues
are resolved, it would appear that the City and HCRRA
should be able to reach some type of agreement on the
value of the property. ~
4. Waiver of city/HRA Condemnation Rights
The HCRRA added a clause to the ground lease under
which the City and the HRA would subordinate their
condemnation rights to the HCRRA in connection with the
right-of-way. Thus far, city staff has objected to
this provision. However, HCRRA has refused to remove
this clause.
o Staff Recommendation
If the city were to agree to this prov1s1on, it would
result in the city ,and HRA waiving an important power
which could be necessary in the future to redevelop the
I site from a long term perspective. As a result, staff
would recommend that we not agree to providing a broad
waiver of our condemnation rights.
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January 28, 1992
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5. City Charter Restrictions on Duration of Easement
The resolution adopted by the HCRRA calls for .the City
to give the HCRRA a permanent easement along co~nty
Road 3 and Ninth .Avenue. However, according to the
city's Charter, granting such an easement to theHCRRA
may constitute a franchise which, under the City
Charter and certain statutes, may be granted for no
longer than 20 years. This was unacceptable to the
HCRRA.
The HCRRA proposed that the Ninth Avenue easement
initially run for 20 years, provided that if the city
does not renew the easement/franchise, the city will
pay the $7.5 million necessary for the HCRRAto ,
terminate the ground lease on the existing right-of-
way. If the City determines in the future that the
HCRRA is not subject to the 20 year franchise
limitation (for example, because of legislative
changes), the easement will become permanent and city's
obligat~ons regarding the existing right-of-way will
terminate.
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staff Recommendation
staff would recommend the City utilize the HCRRA
proposal as it has been the city's intent to grant a
perpetual easement to the HCRRA. It is likely that at
some point in the future the franchise limitation will
be eliminated ifLRT actually proceeds in the
metropolitan area. '
6. Ninth Avenue and Mainstreet Intersection
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It was the city's understanding that the HCRRA would
agree to provide a full traffic movement intersection
in all directions at the Ninth Avenue and Mainstreet
intersection if LRT was built along Ninth Avenue. The
HCRRA did not view this as a firm obligation, and I
might add the language in the resolution adopted by the
county BOClrd seems to support thb HCRRA staff position.
Thus far the City staff and HCRRA staff have agreed to
incorporate language similar to that which is in the
resolution on this point. This language essentially
will indicate that the HCRRA will consider the
implementation of a full traffic movement intersection
on Ninth Avenue and Mainstreet. Thus .far, HCRRA staff
has been reluctant to agree to a full traffic movement
intersection due to unknowns as to how the intersection
would work as related to LRT, as well as concerns for
traf.fic safety.
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Honorable Mayor and city council-
January. 28, 1992
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o 'Staff Recommendation
Although the proposed language does not firmly obligate
the HCRRA, staff would recommend that the City agree to
this compromise.
7. city Payment of LRT Cost on Ninth Avenue
The HCRRA has required that if LRT is built on Ninth
Avenue, the City will pay for all costs associated with
relocating utilities and reconstructing the street,
curb and gutter on Ninth Avenue, as well pay for the
present value of the increased maintenance cost
associated with on-street trackage.
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staff has inquired as to the HCRRA's current policy in
other communities as related to cost sharing the
expense for relocating utilities and reconstructing
streets to accommodate LRT. Staff was informed that
the HCRRA really has no policy in place at this time
relating to the cost sharing of utility relocation and
street reconstruction. We were informed that any
policy which they would implement would be consistent
with a regional policy developed to address this type
of issue. Thus far a regional policy has not been
developed.
The Engineering Division has estimated that it will
;cost approximately $750,000 to $800,000 to
relocate/reconstruct utilities and reconstruct the
street, curb and gutter and sidewalks along 9th Avenue
between county Road 3 and First Street North. This
cost estimate includes a 10% contingency and a 20%
expenditure for engineering and other administrative
costs.
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staff has discussed with the Public Works Director the
potential need within the next 10 to 20 years to
undertake the work along Ninth Avenue whether or not
LRT should proceed. Although no in depth study has
occurred, it was the Public Works Director's feeling
that within the next 10 to 20 years, the need to
replace the sanitary sewer and water main will probably
not be a high priority. However, storm sewer work may
be necessary. The Public Works director also indicated
that it may be necessary in the next 10 to 20 years to
reconstruct the streets/sidewalks. If the city were to
undertake a street reconstruction project, an
examination would also be made of the public utilities
under the street. Based upon the Public 'Works
Director's comments, it would appear that the City will
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Honorable Mayor and City council
January 28, 1992
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probably be undertaking some of the necessary work
within Ninth Avenue whether or not LRT would occur.
The ~ork which would most likely be completed would be
the reconstruction of the streets and sidewalks. It
probably can be assumed that the city would probably
spend half of the $750,000 to $800,000 to reconstruct
the street, curb and gutter and sidewalks.
o staff Recommendation
It is staff's position that the City should be
obligated to only pay for those street reconstruction
and utility relocation costs which any other
municipality in the metropolitan area would normally
pay if LRT were extended down a street. Dependent upon
the regional policy developed, this may require the
City to pay for the total reconstruction of th~ street
and relocation of the utilities.
with regard to the requirement for the city to pay for
any increased maintenance cost, it would be staff's
recommendation that we not agree with the provision as
is does not appear to bea requirement which other
cities will need to meet.
IV. Alternatives
staff has identified a number of options available to the City
council as related to the construction of a grocery store in
Hopkins. These options, along with an outline of appropriate
actions, issues and comments, are outlined below:
Option 1 ~ Continue with project Between sixth to Eiqhth Avenue
Activities
o Provide staff with specific direction as to the
council's position on issues relating to the HCRRA and
NHCCC.
o Direct that city staff and legal counsel prepare the
city's own draft/version of the lease agreements and
documents necessary to allow for the release of the
HCRRA right-of-way.
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Adopt at a future City council/HRA meeting a resolution
which will address the concerns expressed by NHCCC.
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Honorabl~ Mayor and city council
January 28, 1992
Page 9
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o Formally present the proposed agreements to the HCRRA
Board at an upcoming meeting and request that they
approve these documents.
o If the HCRRA approves these documents, steps would then
be taken to continue with the project between Sixth and
Eighth Avenue.
o If the HCRRA Board rejects the'city's proposal, the
Council would then look at other available
alternatives.
Issues/Comments
o This action will essentially force the issue at the
HCRRA level. Due to the impasse which staff has
generally reached with HCRRA staff, it appears this
step has now become necessary.
o The City will need the assistance of a County
Commissioner to carry this matter before the HcRRA
Board.
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The City should have a secondary option in place in the
event the HCRRA Board does not approve the release of
the right-of-way.
option 2 - Do Nothing
Activities
o Take a "wait and see" posture as to future plans.
o Attempt to assist existing grocer with making
, improvements to existing store. '
o Do not rezone property outside of C.B.D.at this time
to accommodate a grocery store project.
Issues/Comments
o May risk having a competing store locate in close
proximity to Hopkins. This may have an effect on the
ability for the expansion of grocery store facilities'
in Hopkins. This option may also have an effect on the
existing grocer in Hopkins.
o This option does not satisfy market demand for
additional grocery store space in Hopkins.
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January 28, 1992
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Option 3 - Analyze Viability of Suburban Chevrolet site
(This site involves Suburban block between 11th and 12th Avenue
as well as block between 12th and 13th Avenue)
Activities
o Determine that past and present policy/strategy on need
for grocery store in downtown area is still
appropriate.
o Direct that staff work with Super Valu/Ryan
Construction on development of Suburban Chevrolet site.
Analyze land use/market issues. Attempt to work with
o~ners of Suburban Chevrolet. Possibly open site up to
grocery store' developers other than Ryan Construction.
o Do not rezone property outside of the C.B.D. to
accommodate grocery store project at this time.
Issues/Comments
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Suburban site presents concerns regarding ability to
accommodate future expansion of grocery store.
At this point staff feels that placing a grocery store
on the Suburban site may not be the most ideal
development, i.e. entertainment type use may be more
preferred.
Super Valu has been unenthused with the site.
May require creation of, new TIF district as existing
district ends at 12th Avenue. Based upon recent
legislation, the creation of a new TIF district at ,this
time does result in some negative consequences (e.g.
loss of L.G.A.).
Activities
Option 4 - Analyze Variety of Alternatives
o City Council determines that it desires to reassess
past objectives/strategies/assumptions regarding
locating grocery store in city.
o Authorize market and land use analysis on various
sites, e.g. Pines, Suburban, R.L. Johnson.
o Do not rezone property outside of C.B.D. to accommodate
grocery store project at this time.
Issues/comments
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Study opens door to other sites, outside of downtown,
being considered for a grocery store development of
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study may support project outside of downtown.
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o study could cost $10,000 to $15,000 and would take
approximately 4-6 weeks to complete. '
o May wish to determine if existing grocer can operate
store downtown with a competing store outs~de of the
C.B.D.
o Places grocery store project proposed for the Pines on
hold which could'have an affect on the viability of the
project.
option 5 - Analyze/Consider pines Proposal
Activities
o Undertake review and analysis of proposal made by Oak
Grove/Hartman Dev.
Issues/Comments
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City previously turned down proposal by Ryan
Construction to develop site for grocery store.
'Previous land use study recommended a mixed use
development on site.
Planning Commission has reviewed concept plan and
expressed interest in allowing property to be developed
commercially.
Location of grocery store on this site may have an
affect on the existing grocer downtown, assuming this
grocer is not a tenant for the pines project.
Need to examine land use and traffic impacts.
Rezoning and Comp Plan amendment is required (4/5 vote
necessary to approve).
Should consider the ability for Taits building to be
reused, assuming Taits is a tenant for the pines
project.
v. staff Recommendation
Staff recommends the City utilize option 1 and attempt to bring
some type of closure to the city's ongoing discussions with the
HCRRA. If the City should be unsuccessful in reaching an
agreement with the HCRRA, staff would suggest the City then
utilize Option 4 which involves the City undertaking an analysis
of all of the alternatives relating to the development of a
grocery store in Hopkins. '
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Honorable Mayor and City council
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The timetable for undertaking option 1 could be as follows:
o February 18 or March 13 -city council/HRA approves draft of
agreements to be submitted to HCRRA. Pursuant to the NHCCC
resolution, it may be appropriate to conduct a public
hearing on this item.
City council would also be requested to approve the
resolution which addresses the NHCCC concerns.
o March/April - Present agreements to HCRRA Board for
consideration. If successful, continue implementation of
project. If unsuccessful, begin implementation of option 4
- "Analyze variety of Alternatives." This option could take
4-6 weeks to complete.
Attachments:
o NHCCC position statement
o Plan of Scaled Back Version of Project Between 6th-8th Avenue
o Memo From steve Bubul
o Resolution to Address NHCCC Concerns
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CITIZEN CONCERNS
October 30, 1991
INTRODUCTION
The citizens took on a very important task when they watched the City
of Hopkins try to take out nine homes and create a large retail
development in a residential area. It was difficult, but proved that
the people do have some power and can let their voices be heard. It's
been hard to come to "an agreement that will please everyone. The fact
that the project has been scaled down to just a grocery store, taking
only three homes, is a big improvement.
The opposition states that tax dollars should NOT be spent to take out
any homes for the benefit of a business (especially one that was built
only 12 years ago by the same means). Some residents do not want to
live next to a large grocery store. Others feel we need to help the
downtown Hopkins area from experiencing more vacancies. At the same
time some feel we should be filling our vacant lots and store fronts.
The ideal solution for all citizens and businesses would be to rebuild
the grocery store in its current location and incorporate surrounding
retail into this improvement. We are told because of parking
restraints and having to level the current grocery store this is
impossible. Hopefully all options have truly been explored in regards
to the welfare of all of Hopkins.
We are in agreement with the fact that some type of improvements are
needed on Mainstreet between 6th and 8th Aves. N. .in Hopkins. Until
this happens, nothing will be resolved. We also accept the fact that
Super Valu wants a new and bigger grocery store in Hopkins. The
citizens are being told if the downtown Hopkins area loses its grocery
store it will cause even more demise' and this in turn could result in
less tax dollars being generated by business and placing a greater
burden on the residents. We are also being told that the only site
that Super Valu will build on in the downtown area is this site.
Thus, it's time to work for a compromise.
We, the citizen representatives for the North Hopkins Community of
Concerned citizens, will approve the grocery store only concept
located on Mainstreet between 6th and 8th Avenues North if the
following concerns and assurances are met to the satisfaction of all
parties involved. We have to assume that those who have not made
their desires known to this point, having been given ample opportunity
to do so, are in agreement with this document.
The attached information is broken down into two categories.
The Concerns and Assurances section states our minimum requirements to
achieve an acceptable compromise. The Additional Suggestions section
simply highlights some important issues at the onset that policy
makers should keep in mind as they make their decisions.
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CONCERNS AND ASSURANCES
Page 2 of 7
CONCERN #1 - TRAFFIC AND NOISE
Assurance 1) We request that an independent traffic study be done at
the expense of the City to be reimbursed by the developer. This way
the study can be the property of the City and can be used in case this
development idea fails and ,a different idea is pursued. When
completed the citizens group and others should be allowed to review it
and give input on its results before the concept is approved.
Assurance 2) To obtain a direct route from County Road 3, the grocery
store should be positioned so that the loading dock and additional
delivery doors will be located an 8th Ave. N. If the traffic study
results show overwhelming evidence that the, loading dock on 6th Ave N.
will better serve the impacted residents, ,we will reconsider this
request at that time.
Assurance 3) All necessary road improvements done in this area
because of the increased vehicle and truck traffic caused by this
development will be assessed only to the grocery store. This would
include rebuilding of corners so trucks can turn easily, additional
reinforcement to roadways, any width changes, and/or resurfacing work~
No residential assessments may be used to improve roadways that will
strictly benefit this development.
Assurance 4) The City Council will direct the police department to
exam1ne ways to eliminate loitering problems on 6th Ave near
Mainstreet immediately. This policy must be continued throughout
construction and operation of ,whatever business is in this location
and wherever the loiterers may regroup nearby.
Assurance 5) Unless the traffic study shows otherwise, we request at
least one additional stop sign on 5th Ave., N. to slow increased
traffic, discourage illegal truck use and protect school bus stops and
pedestrian crossings to Burnes Park.
Assurance 6) Because of the size of the proposed grocery store and
being that it will abut a residential area, we request ordinances and
necessary signing (as determined by the traffic study) that will
prevent any delivery truck traffic to the north of the store. If in
the future more drastic action needs to be taken to protect the
neighborhood, it shall be done at the expense of the store, NOT
residents.
Assurance 7) An extensive landscaping berm must be built by the
developer and maintained by the property owner or manager for the
protection of the abutting neighbors. The City Staff must oversee
that the developer conducts a survey of the directly impacted
neighbors to determine if they want walkways and/or fences included in
this berm to further protect their homes. If neighbors desire these
extras, they will be done at the expense of the developer. Every
existing, healthy, and mature tree that, is in this landscape berm must
remain.
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Assurance 8) During demolition and construction, every effort must be
made to control the noise, pollution and increased vehicle and truck
traffic so the residents', homes are affected as little as possible'.
,Addi~ional input on the building of the cul-de-sac on 7th Ave. N. and
other problems that can occur during construction must be handled at
the request of the impacted homes directly affected by this
development. Residents may NOT be assessed for any costs incurred
during this process.
CONCERN #2 - REZONING
Assurance 1) After the part of this area this is now zoned
residential is rezoned commercial to allow for this development, no
further changes in rezoning to the north of this line can occur for a
period of 20 years. This includes NO changing of zoning to
accommodate additional parking. The result,of this will assure
residents of no further encroachment of commercial into residential.
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, Assurance 2) The citizens feel the LRT lines should be reserved for
public use but since this concept contradicts this, we wanta promise
that the remaining portion of the NW corridor for LRT be made into a
walking and bike trail, regardless of whether a grocery store is ever
built. This trail should start at the corner of 9th Ave. N. and 1st
st. N. and extend on the current diagonal until it reaches the
Minnetonka Lapp Corridor trail on the north side of Highway 7. This
trail must be constructed of the same material used by Minnetonka in
its trail system and must be completed 6 months after the passing of a
resolution with Hennepin county transferring this l~nd. If the City
of Hopkins fails to complete this in the stated time frame, the mayor
must write monthly updates in the Sailor explaining why this hasn't
been done and what he is doing to assure its completion. The money
for this is already identified in the Park and Recreation budget.
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Assurance 3) A copy of this documen~, or amended document be provided
to Hennepin County off~cials prior to the adoption of a resolution to
acquire the LRT right of way through this site.
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CONCERN ~4 - Use of Tax Increment Financing
Assurance 1) To keep an effective tax base in Hopkins and to help
prev~nt further demise of the downtown retail area, we feel TIF can be
used to acquire this property, level buildings, and clear the land.
Assurance 2) The citizens feel TIF districts should be made publicly
known and use of this method of financing should be reserved for 'a
last resort method of development and only to assure residents of
stable taxes in the future.
CONCERN ~5 - SITE PREPARATION, USAGE, AND MANAGEMENT
Assurance 1) The success or failure of this business is NOT the
responsibility of the citizens. If the business should fail, or need
fpr transfer of ownership is necessary, the building may only be used
for a grocery store or approved retail store.
Assurance 2) The City may NOT provide additional financial assistance
or make other arrangements to benefit the proposed project.
Assurance 3) A Phase One / Phase Two Environmental study
completed by the proper authorities. Payment of the cost
cleanups required shall be negotiated with the developer~
pertaining to environmental clean up should be enforced -
ADDED EXPENSE TO TAXPAYERS.
must be
of any
Laws
NOT AS AN
CONCERN ~6 - TAKING OF HOMES
Assurance 1) The City must be sure that the three homes acquired for
this development are paid a fair market value for 'this acquisition
since it is being done at the expense of tax dollars.
Assurance 2) No more than three homes may be taken unless it is to
enlarge the landscaped berm and further insure the seclusion of this .
development from a residential area.
T
Page 5 of 7
.
ADDITIONAL SUGGESTIONS
Related to:
CONCERN #1 - TRAFFIC AND NOISE
A. A delivery window of 8 AM to 4 PM be set so neighbors are not
disturbed during odd hours by trucks.
B. Truck engines may not idle needlessly. This will prevent the
build up of diesel fumes.
c. A delivery schedule should be established so there will not be a
build up of trucks waiting to unload.
D. Off street parking for employees is provided.
E. If project ST-12 in the capital improvements plan is still
pursued, it should be done at the approval of the residents in the
blocks that abut this street and at NO assessment costs to homeowners.
CONCERN #3 - PROPOSED IiRT LINE
.
Tax payers do NOT want to see the destruction, waste of natural
resources and tax dollars being used to level this development in 20
years to allow for light rail. If a resolution cannot be written to
secure this building for retail use then the City should pursue
development in this area without using the property owned by Hennepin
County. We suggest Rudy Luther's body shop and used car lot be made,
more aesthetically pleasing to the downtown area or help be given to a
smaller successful business to develop this area, such as Koss Paint.
CONCERN #6 - TAKING OF HOMES
This property is currently being used by other businesses. NO other
homes or further encroachments into residential areas will be allowed
to accommodate the relocation of any of these businesses.
GENERAL ADDITIONAL SUGGESTIONS
since the citizens are willing to work out a compromise for the
grocery store issue, in downtown Hopkins, we feel it only fair that the
City (Mayor, City council, and city staff) publicly address what
actions are being taken to address the many other vacant lots and
buildings throughout all of Hopkins. Improving only the downtown
business district is not in the best interest of all the tax payers.
We're sure that these items will be addressed by the strategic
planning commission, but we feel the citizens input into this
commission will not be a fair representation of all the tax payers as
previously planned. In the near future we want to hear answers to the
following:
~ 1) What actions will take place and what can we expect to locate in
Tait's current building?
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Page 6 of 7
2) When will Suburban Chev be vacating its building in downtown? What
is being planned for this area? Who owns this building and property?
Will the City again be forced \ into using TIF or other tax money to
fill" this vacancy?
3) How many inquiries have been submitted regarding development on
the vacant lots on County Road 3? We feel it is not beneficial to all
the tax payers to allow this property to sit vacant waiting for the
warehouse and office space developers to come forward. The fact is,
the market for office and, warehouse space in the Metro Area is
currently saturated. Some proof of this fact is already visible in
the Hopkins area. A few examples are the new warehouse building by
Super Valu's refrigeration warehouse and the vacant Country Club
Market building.
4) What benefits is Rudy Luther being given so that the city can
acquire his body shop ,and used car lot? Where will he be relocating
these areas of his business?
5) The negotiated document generated from this original offering
shall be tendered to all these persons directly affected (dislocated,
abutting, and neighborhood) and to the local newspaper for notice of
publication.
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CONCLUSION
Page 7 of 7
To restate what was mentioned above, the Concerns and Assurances
· section states our minimum requirements to achieve an acceptable
compromise. The Additional Suggestions section simply highlights some
important issues at the onset that policy makers should keep in mind
as they make their decisions. '
In conclusion, the strong voices, of your constituents will not be
silenced un~il these assurances are addressed in a legally binding
form.
Daily, we see 15 vacant store fronts, in the downtown area and projects
being done more than once. The City wonders why we question the
addition of a new major retail store. We question whether our elected
officials are truly looking out for the best interests of all the tax
payers.
Thank You.
We, the undersigned have read the concerns compiled by the
representatives of the North Hopkins Community of Concerned citizens
and will address these items to the best of our ability to reach a
satisfactory conclusion for all parties involved.
HOLMES & GRAVEN
CHARTERED
WRITER'S DIRECT DIAL
JOHN M. LEFEVRE, JR.
ROBERT J. LlNDALL
LAURA K. MOLLET
DANIEL R. NELSON
BARBARA L. PORTWOOD
JAMES M. STROMMEN
STEVEN M. T ALLEN
JAMES J. THOMSON, JR.
LARRV M. WERTHEIM
BONNIE L. WILKINS
Attorneys at Law
.OBERT A. ALSOP
ONALD H. BATTY
".. STEPHEN J. BUBUL
ROBERT C. CARLSON
CHRISTINE M. CHALE
JOHN B. DEAN
MARY G. DOBBINS
STEFANIE N. GALEV
CORRINE A. HEINE
JAMES S. HOLMES
DAVID J. KENNEDV
JOHN R. LARSON
WELLINGTON H. LAW
CHARU(S L LEFEVERE
470 Pillsbury Center, Minneapolis, Minnesota 55402
(612) 337.9300
Facsimile (612) 337.9310
MEMORANDUM
DAVID L. GRAYEN (1929-1991)
OF COUNSEL
ROBERT L. DAVIDSON
JOHN G. HOESCHLER
TO:
Tom Harmening, Community Development Director
,City of Hopkins
FROM:
Stephen Bubul
~
DATE:
January 27, 1992
RE:
Status of HCRRA Contract
You asked me to summarize the ~ignificant issues that have emerged
in negotiations with the Hennepin County Regional Railroad
Authori ty (HCRRA) regarding the LRT corridor transaction. This
memo outlines the key issues, explains how each issue has been
resolved in negotiations to date, and adds a comment regarding the
City's position on each issue.
.
The issues are' grouped according to those involving the existing
right-of-way, and those involving the alternate corridor.
A. Existing Right-of-Way.
1. Issue: Ground Lease versus Fee Acquisition. The 1990 County
Board resolution (Resolution) called for the City to acquire
the right-of-way for resale to a developer, with the HCRRA
retaining an easement for LRT purposes. The easement right
could not be exercised for twenty years, and the HCRRA would
be obligated to compensate the developer for damages up to
$7.5 million.
The HCRRA changed the structure such that the HCRRA retains
fee ownership and grants a long-term ground lease to the City
(which the City assigns to the HRA and in turn to the
Redeveloper). The HCRRA may terminate the ground lease after
twenty years, subject to the same damage provision described
above.
How resol ved: The city accepted this change after Ryan
Construction indicated that a ground lease was acceptable.
.
Comment: The change is acceptable, with the caveat that this
structure eliminates the normal property tax lien on this
property. Property owned by a tax-exempt entity and leased to
a private for-profit entity is taxed as a personal obligation
of the tenant rather than an assessment against the property
SJll28495
HPllO-38
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5.
SJ1328495
BPllO-38
itself. The consequence is reduced security for tax increment
purposes.
Issue: City Indemnification of HCRRA. The HCRRA proposed
that the City indemnify the HCRRA for any costs in excess of
$7.5 million if the HCRRA terminates the ground lease. This
protects the HCRRA against disputes that the redeveloped
property twenty ,,years from now is worth more than $ 7 .5
million. "
How resolved: The City agreed to this provision, on the
condition that Ryan Construction in turn indemnify the City
for same risk. Such, a provision was included in the
Redevelopment Contract with Ryan.
Comment: This solution seems reasonable.
3.
Issue: Assignabili ty of Ground Lease. The HCRRA required
that the ground lease was assignable only to Ryan
Construction, which would prevent the City ~rom carrying out
this redevelopment project with a different developer if
necessary.
How resolved: ,The HCRRA agreed to permit assignment to any
entity with whom the City (orHRA) has entered a redevelopment
contract.
Comment: This solution is acceptable.
4.
Issue: Uses of Right-Way upon Termination 6f Ground Lease.
Under the original structure, the HCRRA would have held an
easement that could be used solely to construct an LRT on the
right-of-way. Under the ground lease structure, the HCRRA has
the right to terminate the ground lease after twenty years for
any public purpose.
How resolved: The City agreed to this provision.
Comment: While the City would prefer to restrict the right to
terminate, the practical impact of this change is small; the
HCRRA is unlikely to incur the costs of termi,nation for any
reason other than LRT.
Issue: Five Year Termination Provision. The HCRRAadded a
requirement in the ground lease that the developer must
complete construction of improvements on the right-of-way site
within five years. If that does not occur, the HCRRA may
terminate the ground lease without returning the City's
ini tial rent payment. "
How resolved: The City tentatively agreed to the concept of
a five year termination clause, but specified that only
commencement (rather than completion) of construction must
occur within five years, and required the HCRRA to return the
2
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City's initial rent if the lease is terminated under this
clause. The HCRRA rejected the City's changes.
Comment: The termination clause in general is troubling, as
the City risks the loss of this redevelopment site if the
project is delayed for some reason. It also seems contrary to
the intent of the Resolution, which was to make the property
available for twenty years. Without repayment of initial rent
upon termination, the clause is clearly inequitable.
6. Issue: HCRRA Obliqation if Alternative Corridor is Used. The
City has requested the HCRRA to deed the right-of way over to
the tenant without compensation if LRT is actually built on
the alternate corridor. The HCRRA has agreed in concept.
How Resolved: The HCRRAproposed to transfer the right-of-way
after the LRThas been in service on the Alternate Corridor
for at least two consecutive years. The HCRRA also determines
the timing of the transfer.
7 .
Comment: The time period and degree of HCRRA discretion seem
unreasonable; the HCRRA's obligation on this point should be
firmed up.
Issue: Amount of Initial Rent. The Resolution called for
sale of the right-of-way for, fair market value. Under the
ground lease structure, the City has agreed to pay the fair
market value up front as "initial rent." The City submitted
its appraisal showing a value of $116,000. '
How Resolved: To date, the HCRRAhas not accepted ,the City's
value. The issue has not been discussed yet.
Comment: I f all other issues are resolved, the parties should
be able to reach agreement on the value.
a.Issue: Waiver of City/HRA Condemnation Riqhts. The HCRRA
added a clause to the ground lease under which the City and
the HRA subordinate their condemnation rights to the HCRRA in
connection with the right-of-way. The City objected to this
provision.
How resolved: The HCRRA has refused to remove this clause.
Comment: This provision waives an important City and HRA
power, which could be necessary to redevelop this site in th~
long-term. Such a waiver may even ,be improper as against
public policy. Any conflicts over condemnation that arise in
the future can be addressed when they occur.
1.
B. Alternate Corridor
SJB28495
HPllO-38
Issue: City Charter Restrictions on Duration of Easement.
The Resolution calls for the City to give the HCRRA a
3
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2.
per~anent easemeht on the Alternate Corridor. However, the
easement on Ninth Avenue may constitute a franchise, which
under City Charter and certain statutes may be granted for no
longer than twenty years.
How resolved: The HCRRA proposed, and the City has
tentatively agreed, that the Alternate Corridor easement will
initially run for twenty years, provided that if the City does
not renew the easement, the City will pay the $7.5 million
necessary for the HCRRA to terminate the ground lease on the
existing right-of-way. If the City determines in the future,
that the HCRRA is no't subject to the twenty-year franchise
limitation (for example, because of legislative changes), the
easement will become permanent and the City I s obligation
regarding the existing right-of-way will terminate.
Comment: This solution seems workable, as the City does not
dispute the need for a permanent easement. Further, the
franchise limitation is likely to be eliminated if LRT
actually proceeds.
Issue: Ninth and Main Intersection. The City understood that
the HCRRA would ensure full traffic movement in all directions
at the Ninth and Main intersection if the LRT is built on the
Al ternate Corridor. The HCRRA did not view this as firm
obligation.
How Resolved: The City and the HCRRA agreed to incorporate
language from the Resolution on this point: "consideration
will be given [by the HCRRA] to . at a minimum the
provision of full traffic movement intersections at Ninth
Avenue and Main Street.,"
Comment: This language does not firmly obligate the HCRRA,
but is probably a reasonable compromise given the uncertainty
of future conditions.
3. Issue: HCRRA Indemnification of City for Improper Street Use.
The City required the HCRRA to indemnify the City for any
claims from property owners that the LRT interferes with their
right in public streets. The HC~RA rejected this provision.
How Resol ved:The City tentatively agreed to remove this
requirement. The HCRRA will simply warrant that it will
comply with state law regarding street uses.
4.
SJB28495
HPllO-38
Comment: This solution is less than ideal, but is probably an
acceptable compromise. Under state law, an LRT running in the
street is almost certainly a proper street use, and the City's
risk of liability is small.
Issue: Ci ty payment of Incidental LRT Costs. The HCRRA
requires that, if LRT is built on the Alternate Corridor, the
City will pay : a) all costs to relocate utilities and
4
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reconstruct streets and curbs and gutters; and b) the present
value of the increased maintenance cost associated with in-
street track.
How Resolved: The City has agreed to pay the clause (a) costs
to the extent such costs are customarily charged to the local
municipality. This point has not yet been resolved with the
HCRRA. The city has not agreed to pay the clause (b) costs.
Comment: The City is willing to pay a reasonable share of
clause (a) costs, i.e., whatever a municipality would normally
pay in this circumstance. The clause (b) costs are a
fundamental change in the terms of the transaction as set
forth in the Resolution. This provision could dramatically
increase the City's financial obligation.
SJB28495
BPllO-J8
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Public hearings have been held in the past when TIF funds
have been proposed to be used, and will be held for future
projects as required by state statute.
H. site Preparation, Usaqe. Management
The future use of the subject property may only be
undertaken pursuant to the uses permitted by the zoning
Ordinance.
I.
A Phase I environmental analysis will be undertaken on all
properties to be acquired for the project. A Phase II
environmental analysis will be undertaken on those
properties identified as necessary or appropriate in the
Phase I analysis. The payment for the expense of any clean-
up .identified in the environmental analysis shall be
negotiated with the developer.
Acquisition of Property
The City will acquire all properties necessary for the
redevelopment of the subject property pursuant to state
statute and compensate the property owners based upon the
fair market value determined for the properties.
The City council does not expect to acquire more than 3
homes to accommodate the proposed project unless it is to
enlarge the buffer area to insure adequate separation of the
project from the residential area.,
J. Additional suggestions
The city Council acknowledges receipt of the "Additional
Suggestions" provided by the NHCCC and will take these
suggestions into consideration as a part of its review of
redevelopment proposals which may be made.
.
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d r -r- :-.
BE IT FURTHER RESOLVED that a copy of this document will be
provided to the HCRRA.
Adopted by the Hopkins City Council this
, 1992.
day of
ATTEST:
James A. Genellie, City Clerk
Nelson Berg, Mayor
VI
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CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION: 92-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOPKINS
OUTLINING PROPOSED ACTIONS TO ADDRESS CONCERNS OF THE
NORTH HOPKINS COMMUNITY OF CONCERNED CITIZENS REGARDING
THE FUTURE REDEVELOPMENT OF PROPERTY BETWEEN 6TH AND 8TH
AVENUE, NORTH OF MAINSTREET.
WHEREAS, the city of Hopkins and the Hopkins HRA desire to
facilitate the redevelopment of certain property located
between 6th and 8th Avenue, north of Mainstreet, the current
boundaries of which are illustrated on attached Exhibit A
(SUbject property); and
WHEREAS, the City of Hopkins has been working with the Hennepin
County Regional Railroad Authority (HCRRA) ,on the release of
HCRRA right ,of way which dissects the subject property; and
WHEREAS, the North Hopkins Community of Concerned Citizens
(NHCCC) has organized and developed a position statement
which outlines concerns and assurances which they desire to
see met, or considered, in order to allow them to express
support for the release of the HcRRA right of way and the
future redevelopment of the subject property; and
WHEREAS, the City of Hopkins and Hopkins HRA desire to address
the concerns and assurances outlined by the NHCCC.
NOW, THEREFORE, BE IT RESOLVED by thedcity Council of the City of
Hopkins that the City of Hopkins and/or Hopkins HRA have
undertaken or propose to undertake the following activities
to address the concerns of the NHCCC as a part of the future
redevelopment of the subject property:
A. Traffic Concerns
A traffic study will be undertaken to ,address traffic issues
relating to redevelopment proposals which may be submitted
for the subject property. If a grocery store project is
proposed to'be undertaken on the sUbject property, the
traffic study will include the following analysis:
o Impact of project from a vehicular and truck
movement perspective, assuming the proposed
grocery store is located on the west side of the
site as well as on the east side of the site.
o
Steps which should be taken to alleviate the
identified impacts including specific street
improvements, signage, positioning of the store,
.
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construction of cUl-de-sacs, alley realignments,
,etc.
Upon completion of the traffic study the NHCCC, adjacent
property owners, and other interested parties will be given
the opportunity to review and comment on ,the study.
The City council will not assess costs to residential
property owners for roadway improvements which strictly
benefit a redevelopment project.
B. Loitering Concerns
C.
D.
The City,of Hopkins Police Department currently is and will
continue to investigate ways to eliminate loitering problems
being experienced at 6th Avenue and Mainstreet.
Berming
Through the Conditional Use Permit Process the developer of
the subject property will be required to develop a plan to
provide a buffer between the proposed commercial project and
the residential area to the north. This plan may include
fencing and/or an earthen berm with landscaping. The
developer will be required to meet with, the adjoining
residential property owners to determine the type and extent
of the buffering desired. It is the intent of the City
Council that this buffering be ,effective, attractive, and
consistent in design. Furthermore, the developer and or
subsequent land owner will be required to maintain the
buffering which is installed.
Construction Impacts
Through the Conditional Use Permit,Process the developer of
the subject property will be required to submit a plan for
Council approval to address construction noise, traffic, and
pollution.
E. Rezoning
Upon completion of the redevelopment of the subject project,
the adjacent properties to the north of the project between
6th and 8th Avenue and 1st street N. will continue to be
zoned R-4 Medium Density Residential and guided for future
land use in the Comprehensive Plan as medium density
residential. Prior to this property ever being rezoned or
reguided in the Comprehensive Plan, the following will
occur:
o
A public hearing will be conducted by the Planning
and Zoning Commission regarding any proposed
rezoning of the property. Notice of the public
hearing will be published in the newspaper and
.
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.
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i
sent to all affected property owners as well as
all property owners located within at least 350
feet of the affected properties. The Planning
Commission will provide a recommendation to the
city Council on the proposed rezoning. In order
for the rezoning to occur, the city, Council will
be required to approve the rezoning at two
separate meetings with both approvals requiring 4
of 5 council members agreeing to the rezoning.
o A public hearing will be conducted by the Planning
and zoning commission on any proposed amendment to
the comprehensive Plan which changes the future
land use designation of the property. A notice of
this public hearing will be published in the
newspaper and sent to all affected property owners
and all property owners within at least 350 feet
of the affected properties. The Planning
commission will provide a recommendation to the
city' council on the proposed amendment~ In order
for the proposed amendment to occur, the city
council will be required to approve the '
Comprehensive Plan amendment only if 4 of 5
council members agree.
The future use of the subject property may only be
undertaken pursuant to the city Code, the zoning and
Subdivision ordinance, along with all related rules and
regulations contained therein, and the comprehensive Plan.
The City council will direct staff to notify all property
owners located in Blocks 65 and 66 of West Minneapolis
Second Division, of the zoning of their property.
F. LRT Line
o
HCRRA Agreement -- Upon completion of 'negotiations of,
the agreement with the HCRRA regarding the release of
the HCRRA right of way between 6th and 8th Avenue, and
prior to final approval by the city Council, the City
Councilor HRA will conduct a public hearing on the
agreement.
Trail Installation -- The city has adopted a capital
Improvements Plan for the period of 1992-1996 which
proposes the installation in 1992 of a trail on the
HCRRA right of way between 8th Avenue North and the
western Hopkins city limits. Installation of this
trail in 1992 is subject to the following:
- Obtaining funds through grants or other available
sources to pay for the trail improvements.
- Approval by the HCRRA of the installation of the
trail.
o
I FEBRUARY 1992 MARCH 1992
S M T W T F S S M T W T F S
1 1 2 3 4 5 6 7
2 3 4 5 6 7 8 8 9 10 11 12 13 14
9' 10 >, 11 12 13 14 15 15 16 17 18 19 20 21
16 17 18 19 20 21 22 22 23 24 25 26 27 28
23 24 25 26 27 28 29 29 30 31
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AGENDA
6 P. M. · GROCERY STORE DISCUSSION
7 P.M. . HRA MEETING
HOPKINS CITY COUNCIL
FEBRUARY 4, 1992
7:30 p.m
I. CALL TO ORDER
II. CONSENT AGENDA
PRESENT
BERG
ANDERSON
SHIRLEY
KRITZLER
REDEPENNING
MIELKE
GENELLIE
KERRIGAN
MILLER
HARMENING
GUSTAFSON
GESSELE
1 APPROVAL OF THE JANUARY 21, 1992 REGULAR COUNCIL MEETING MINUTES
2. APPROVAL OF DISBURSEMENTS, PRELIST 880
3. APPROVE MISCELLANEOUS LICENSE APPLICATIONS
4. APPROVE AGREEMENT WITH BRAUN INTERTEC FOR ENGINEERING & MONITORING
SERVICES - GROUNDWATER MONITORING WELLS - LANDFILL (Rpt 92-33)
5. APPROVE BUILDING PERMIT SURCHARGE (Res. 92-11) (Rpt 92-35)
7 APPROVE COUNCIL WORKSESSION MINUTES, JANUARY 14, 1992
8. APPROVE REVISION OF RESOLUTION NO. Res 92-2 (Rpt 92-39)
9. ADOPT RESOLUTION REGARDING TAX FORFEIT PROPERTY (Rpt 92-36)
10. AUTHORIZE USE OF TELEPHONE CONSULTING FIRM (Rpt 92-40)
Vote: Berg
Shirley
Redepenning
Kritzler
Anderson
III. NEW BUSINESS
(a) CONSIDER ACTION - GROCERY STORE CONCEPT REVIEW - PINES (Rpt 92-37)
Recommendation:
No action required
(b) CONSIDER ACTION - ACCEPT ASSESSMENT & SET PUBLIC HEARING - MAINSTREET
WATER & SEWER ASSESSMENTS (Rpt 92-34)
R Jmmendation:
Move to adopt Res. 92-10 "Resolution for hearing on proposed
assessments, Mainstreet improvements. Project 90-04B)
Vote: Berg
Shirley
Redepenning
Anderson
Kritzler
Cd) CONSIDER ACTION - CHILDS PLAY THEATER (Rpt 92-41)
R,.....ommendation:
Approve the concept of an entertainment complex in downtown
Hopkins which includes Childs Play Theater and instruct
staff to work with developers and secure proposals for a
feasibility study.
Redepenning
Anderson
Kritzler
Vote: Berg
Shirley
(e) CONSIDER ACTION - FIRST READING OF ORDINANCE - ADULT ORIENTED BUSINESSES
(Rpt 92-38)
Recommendation:
Move to approve Res 92-13 approving Ordinance 92-703 for
first reading.
Vote: Berg
Shirley
Redepenning
Anderson
Kritzler
(e) DISCUSSION ITEM - COUNCIL/STAFF CONFERENCE (no report)
Recommendation:
Move to set February 28 - 29, 1992 as a special meeting of
the Council - time and place to be determined.
Vote: Berg
Shirley
Redepenning
Anderson
Kritzler
'!"
PUBLIC COMMENTS/CONCERNS
v.
REPORTS - COMMITTEES/COMMISSIONS
VI.
ADJOURNMENT