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01-10-06 WSJanuary 10, 2006 Page 1 MINUTES CITY COUNCIL WORK SESSION -January 10, 2006 A work session of the Hopkins City Council was called to order by Mayor Gene Maxwell at 5:30 p.m. on January 10, 2006, at the City Hall. Council members Halverson, Thompson and Youakim were present. City personnel present were City Manager Rick Getschow, Housing Coordinator Kersten Elverum and Planning and Economic Development Director Jim Kerrigan. Also present were Sid Inman of Ehlers & Associates; Bob Deike of Bradley &Deike; Dave Menke, Dave Wisnewski, Tom Shaver, Ericka Miller and Dave Bangasser of Opus; aim Holmes of Holmes Associates; Charlotte and Steve Flanagan, Fred Katter and Jeff Brown for the GPS Financial Group. Council Candidate Interviews Council members interviewed Council candidates Jerre Miller, Christian Oestreich, Bruce Rowan, Kyle Skiermont and Enrique Torrano. General discussion followed. General Consensus was to appoint Bruce Rowan. A resolution will be prepared for the next Council meeting. All agreed all the other candidates would have much to offer the city and should be encouraged to serve in other ways. Ms. Youakim offered to write a thank you note to each to be signed by the Council members. Mayor Maxwell and City Manager Getschow will contact each of the other candidates personally and encourage them to offer their expertise in other ways, such as enrolling in the Citizen's Academy or serving on a Hopkins Board or Commission. Discussion of Opus North Annex Property Kerrigan gave background to the Council before the SuperValu personnel arrived. He said that the big issue for discussion is the term sheet that was included in the memo to the Council. Opus is anxious to get started as soon as possible and would like to start work on the development agreement with Hopkins shortly. One issue is the 3-acre site north of Second; Opus and Hopkins are exploring a joint use plan, which RLK is working on so it can be taken to Minnehaha Watershed for approval. Opus is buying the North Annex land outright from SuperValu for approximately $10 million and would like to start demolition possibly in March. As most of the assessed value is in the land itself, the demolition should not be a big TIF issue. Development density would be very similar to what Medica planned, with 75% Class B office space and 25% "other uses," such as retail, hotel, or medical production. That 25% would be a maximum of 15,000 sq. ft, about the size of the Marketplace Lofts. If a hotel was built as retail, it would be a two- star hotel much like Embassy Suite or Hilton Express. Council would need to give approval of the PUD, which would spell out parameters. Construction would be in three phases, one for each proposed building. The Opus development pro forma show a need for $19.60 of tax increment assistance for each square foot of finished building; this is very close to what Medica needed. Answering Ms. Youakim, he said Paragraph 6 of the term sheet concerning eminent domain for neighboring properties has been removed. Answering Mayor Maxwell, Attorney Deike said the present agreement between Hopkins and SuperValu would be suspended. January 10, 2006 Page 2 Opus Vice President Dave Menke thanked the Council for the opportunity to explain the project. Opus feels the retail space market is recovering. The office campus would have 680,000 sq. ft. in three 5-6 story buildings. Orientation would be southeast! northwest with the main opening on Excelsior Blvd. The trail along the west boundary will be left intact. He thinks the road improvements completed when Medica was thinking of developing the area will be adequate for Opus. The AUAR done for Medica will be updated by RLK. Opus hopes to hold neighborhood meetings in the next couple weeks and start development by late summer. The buildings will have ahigh-quality exterior. The single level parking will be partly below ground level so as to set off the buildings. Opus feels the best use is office space. Ancillary retail would be limited possible businesses would be dry cleaners, sandwich shop, etc. There would not be a coffee shop due to the proximity of the Depot. A hotel has been discussed, but Opus will make office space the primary focus. Mr. Thompson asked about property off the northeast corner. Mr. Menke said Opus has talked to the owner of one corner of that property but feels obtaining the whole area is unlikely. Mayor Maxwell said he agrees demolition should proceed quickly so that the area will look good by summer. Mr. Kerrigan noted demolition cost is estimated at $2.4 million as there are asbestos issues. Mr. Bangasser added that some of the demolition debris will be ground up and used for fill. Mr. Inman said the existing TIF pays for the road debt, then the demolition. The construction TIF would be set up pay-as- you-go and probably last the length of the TIF district itself. He emphasized there is really not a risk because of the SuperValu warehouse TIF. Mr. Menke said he feels the cooperative use of the three-acre site to the north should benefit both Hopkins and Opus. Mr. Bangasser noted it would help solve drainage problems for the whole area, not just this site. Mr. Kerrigan said the basic schedule is to hold neighborhood meetings, etc.; develop a master plan; and write a PUD narrative document tied to the plan. He added certain changes Opus can make without coming to the Council will be specified in the plan. Each phase will go through a site plan review process. Maintenance of the undeveloped portion will be spelled out in the PUD. Eminent domain is not part of the plan. Answering Mayor Maxwell, Mr. Menke said if medical manufacturing is incorporated in the buildings, it would not affect the look of the office complex. Mr. Kerrigan said it has been stressed to Opus that traffic on Second Street will be an issue with neighbors. The mailing list for the neighborhood meetings will go beyond the parameters set by the ordinance. Mr. Menke added the complex will mean more jobs for residents. Ms. Halverson said it will be good to see something positive at the North Annex property. Mr. Thompson said he felt bad when the Medica project fell through, but feels this may be even better for Hopkins. GPS Redevelopment Agreement Update Housing Coordinator Elverum said that in July 2005 a development agreement was signed with GPS for a development between 5th and 6th Avenues and north of Mainstreet. GPS has been unable to meet all the requirements, largely due to a lack of pre-sales. They feel they have now reached an agreement for a purchase agreement for Park Plaza, which is a very important step. Therefore they are asking for an extension of the agreement with Hopkins HRA. They are also asking that the requirement for residents 55+ be removed. Staff suggests that the city grant an extension for a maximum January 10, 2006 Page 3 of six months with requirements that 25% of the Phase 1 units be sold in 90 days, and that they will undertake a revised parking analysis. A financial analysis must be completed. If HRA wants the extension, this could be done at the February 7 meeting. Mr. Flanagan expressed appreciation for all the help staff has given. Now that his attorney says a purchase agreement is ready for signature, he feels things can move rapidly forward. Keeping the purchase agreements in effect on the other properties involved has also raised costs. He feels the new project by Opus with "marry" well with the new GPS development, providing housing for the new workers. Addressing the parking issue, he said the present plan has 1.73 spaces per unit. If this ratio proves too low, additional parking will need to be identified for Phases two and three. New prospects tend to be younger than 55. Jeff Brown of Financial Freedom, a business that specializes in selling condos, said he is excited about the project and strongly recommends opening it to all age groups and selling all three phases at the same time. He added condo owners tend to be younger, single occupant owners; older buyers usually have higher car usage than the younger buyers. He noted the Twin Cities has a shortage of homes for first-time buyers. Mr. Katter said he has worked with Financial Freedom on other projects and they excel in selling new condos. He, too, suggested selling all phases together. He added that a further level of parking could be added beneath Phase 2 and 3 buildings if needed. Ms. Youakim said she lives in the area, and the parking issue has concerned residents. Mr. Kerrigan noted that SRF did a parking analysis and Phase 1 clearly meets the criteria; any necessary adjustments could be made in Phase 2 and 3. Answering Mayor Maxwell, Mr. Inman said he still needs the information from GPS. General Consensus was to extend the agreement six months and to remove the age requirement. The parking issue must be clearly taken care of. Mr. Kerrigan should bring the new agreement February 7 to the Council. Other Ms. Youakim said she enjoyed her ride-along with the police. A resident has approached her about a birdhouse on a property line; the owner has a camera and video photographing the birds, but the neighbor feels their privacy is being invaded. Mayor Maxwell noted that is a private matter, not a city one. Mayor Maxwell reminded Council members the holiday party will be at the VFW Thursday evening. Mr. Thompson asked if the issue of late hours for parks on July 4 had been addressed yet. Mr. Getschow said the Park Board meets next week. Mr. Getschow noted there had been two violations of selling liquor to minors, one by Big 10 (which belongs to the Best Practices program) and Decoy's (which does not). Big 10 has been fined, per the rules of the program. Mr. Getschow is working on a legislative agenda. He is working to get our legislators to a February meeting so Council can discuss city issues with them. He noted there would be an eminent domain hearing in Blaine at 2:00 Wednesday to discuss Johnson's bill. Rep. Simon has already said he feels that bill goes too far. January 10, 2006 Page 4 On motion by Mr. Thompson and second by Ms. Youakim, the meeting adjourned at 10:20 p.m. on a vote of 4-0. Kasey Kester, Secretary ATT ST: Eugene J. axwell, Mayor COUNCIL MEMBERS: