01-23-01 WSJanuary 23, 2001
Page 1
MINUTES
CITY COUNCIL WORK SESSION -JANUARY 23, 2001
A work session of the Hopkins City Council was held at 6:30 p.m. on January 23,
2001, at the City Hall. Present were Mayor Maxwell and Council members Brausen, Hesch
and Johnson. City personnel present were City Manager Mielke, Public Works Director
Stadler, Community Development Director Kerrigan and Assistant City Manager Genellie.
Also present were Michael Boo and Eric Jalatz of Medica, Jim Vos of CRESA, and Sid Inman
of Ehlers & Associates.
SuperValu perishable warehouse public improvements update
Public Works Director Stadler said the only roadway improvement under the CUP of
October 25, 2000, which has not had a preliminary design approved is the Sd' St/6d' St/lOd'
Ave. S. intersection. If SuperValu had bought the commercial properties on the southwest
corner of their site, Option C would have been put in place. They were unable to reach an
agreement with the owners. A neighborhood meeting is scheduled for February 7; staff needs
further guidance so they know what to present at that meeting.
In answer to Council member questions, it was learned that the exact amount of private
land the owner on the corner would lose is not known (5-15 feet was mentioned, but the latter
probably includes public boulevard footage). SuperValu wants to get started by mid-March so
it would be helpful if action could be taken at the February 20 Council meeting. Access on
11"' will be closed by 2002. Mr. Kerrigan commented that the "pinch point" issue has been
dropped by SuperValu as it would cost them an extra $300,000 to move the wall beyond their
property. Mr. Stadler said getting property for the trail along 3rd St. is posing problems with
the trust company and General Resources.
General Consensus: The Council is not interested in purchasing the commercial
properties so as to implement Option C. Option D seems the best viable option. Exact figures
for the corner property should be obtained, including private property lost and exact setback
figures. Mayor Maxwell said he wants the Council to see the results of the neighborhood
meeting before the matter comes before the Council.
Medica project, tax increment
Community Development Director Kerrigan noted this was a preliminary discussion at
which no decisions were expected to be reached.
Mr. Boo of Medica said when they signed the letter of intent with SuperValu they
anticipated some TIF help would be available. The site has demolishment issues as well as
traffic issues as the present roads are not compatible with their type of business. He further
noted that using their own credit, rather than a developer's, reduces the amount of TIF
required. He emphasized that Medica plans to keep "open books" with Hopkins, and will
update city staff on any changes in figures as the project moves ahead.
Mr. Vos of CRESA presented a table of estimated costs and available funds. He
pointed out that under costs $9,227,000 is for a parking ramp to preserve green space; the
$3,826,000 site prep includes $2,000,000 for the intersection, which the county might help
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with; most of the $1,000,000 for environmental remediation is the estimated $800,000 for
asbestos cleanup (SuperValu was surprised at that bid and has indicated they will assume
$250,000 of that, in which case this number will be lowered accordingly). iTnder funding he
noted Medica's better credit rating means an over $7,000,000 difference in cost. Medica is
asking for $16,004,200 in TIF, with the understanding that if any costs are under the estimate,
the request would be lowered. Mr. Vos further noted that in comparison with the much
publicized Best Buy project, the dollars per square foot and per job are very comparable (Mr.
Inman of Ehlers & Associaates confirmed this later); however, Best Buy is asking for 30 % of
total cost while Medica is asking for 15 % .
Mr. Inman noted that funding would be "pay-as-you-go," which would mean 13 years
of increment (starting in 2005) in a 26 year district. He further noted the fact that the site will
be for a single user is good. He noted the abatement law is still "up in the air." He
recommended that if costs go over the Medica estimates, that the TIF amount should stay the
same. He said a cap should be set, but not a term, in case something Medica has no control
over should happen.
Further information elicited by Council questions included: much of the cost for the
underground tanks will be underwritten by a petro fund (up to 90%). Mr. Inman said no
remediative numbers (for either the asbestos removal or the underground tanks) had been in
their list when they assessed the property. Funding from the Met Council is still being pursued.
Mr. Vos noted the big "if" is if the county will help pay for the intersection. St. Louis Park is
raising issues with the busway so the implications of it are unknown.
The 3-acre site was again brought up. Mr. Inman noted TIF money can't be used to
buy the property. Attorney Jalatz said the important thing was the total budget amount of
$60,650,000; figures may need to be adjusted. Director Kerrigan noted the Park Board had
liked the ideas for that plat developed by staff. Medica indicated that if SuperValu wanted to
deal directly with the city on the 3-acre site they had no objections; Mr. Inman commented it
would be "cleaner" for auditing, etc.
Medica and staff hope a preliminary development agreement can be drafted by May or
June. A site plan involves assessment issues (traffic and noise studies, etc.) and can hopefully
be completed by October. A meeting with Hennepin Parks is set up for next week on issues
with the trail. Mr. Kerrigan says he wants to bring this issue back for one more work session
before bringing a TIF application officially before the Council.
General Consensus: Council favors the parking ramp so as to preserve green space.
Other issues need to be discussed at later work sessions.
Discussion of Utility Franchise Fee
Assistant City Administrator Genellie said a 1 % franchise fee would generate $58,000
for gas and $130,000 for electricity. He discussed the pros and cons of such a fee, and noted
what area cities have such fees.
General discussion followed. Mr. Brausen felt it was a "tough call" at present. In
answer to Mayor Maxwell, Mr. Genellie said such a fee should not be attached to any present
ordinance as if a referendum were called for, the complete ordinance would be endangered.
Mr. Mielke noted that previous minutes showed the Council had discussed such fees might be
used for the Center for the Arts, building the police building, and implementing Vision wishes.
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Ms. Johnson said her fear was implementing the fee might drive away the very people the
visioning process had brought in. Mayor Maxwell stressed he felt an overall plan has to be
developed before any decision on franchise fees could be made. Mr. Mielke said that Ms.
Yager's projection could be put into an easily understood format so the various choices could
be easily seen and understood. Ms. Hesch noted the $180,000 deficit of the Center for the
Arts had been the impetus for the first thought of the franchise fee; Mr. Brausen noted the
Center needs to recognize the urgency to market, etc. Ms. Johnson complimented Mr. Genellie
on the memorandum and attachments he gave the Council.
General Consensus: The overall picture has to be developed in terms of the visioning
process, including estimated costs, etc. These should include the-Depot, public works, parking
lots, HCA, pavilion, trail systems, police department, fire department. Once a consensus has
been reached about the needs -and this should involve the people of the visioning process and
the Citizens' Academy -then different funding options can be discussed.
Other
Mr. Brausen said he had received a call from Kathy Rolf that she had found the letter
sent by the city. He felt Driscoll's should be updated; Mr. Mielke will see to that.
Ms. Johnson said the "Priority One" items on the school referendum now total $55
million. A "Priority Two" list of $44 million includes $20 million for an ice arena/theater/food
service/daycare/tennis court complex. They are aiming for a November referendum.
Ms. Hesch said a presentation on reducing gun violence will be at the Sheraton Inn
Airport on February 7 from 9 a.m. to 3 p.m. Mr. Mielke will see that a staff member attends.
Mr. Mielke said Jim Geslie resigned from Public Works with two weeks notice.
At 9:30 p.m. Mayor Maxwell moved and Fran Hesch seconded to close the session so
as to .discuss the city manager evaluation.
Kasey Kester, Secretary
ATTEST:
.~~~~
Eugene J M xwell, Mayor