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HomeMy WebLinkAbout2007 [07] Jul 11CITY OF ST. JOSEPH ECONOMIC DEVELOPMENT AURTHORITY Meeting Minutes -Wednesday, July 11, 2007 Present: EDA Board Members Tom Skahen, Dale Wick, Carolyn Yaggie-Heinen and AI Rassier. Absent: Board Member Ken Jacobson Also present: Council Members Renee Symanietz and Steve Frank, Chris Schellinger and Wendy Haselbus with Remodeling Professionals, Traci Ryan with David Drown Associates, Jim McComb with McComb Group, Sonja Gidlow and Dr. MaryAnn Baenninger from the College of St. Benedict, City of St. Joseph Finance Director Lori Bartlett, City Administrator Judy Weyrens, other members of the public and Cynthia Smith -Strack of Municipal Development Group. Secretary Heinen called the July 11, 2007 meeting of the St. Joseph EDA to order at 3:00 p.m. Oath of Office Heinen welcomed Mayor AI Rassier to the EDA meeting and noted he will be filling the vacancy left by the resignation of Mayor Richard Carlbom. Heinen requested the Oath of Office be administered to Board Member Rassier. Strack administered the oath of office. Agenda. Secretary Heinen noted the City Council would convene at 3:15 p.m. to address agenda items 6(a) & 6(b). Heinen introduced the agenda. Moved by Wick seconded by Skahen to approve the agenda as presented. Motion carried 4-0. Approval of Minutes. Secretary Heinen introduced the minutes from the June 20, 2007 meeting. Motion Skahen, Seconded Wick to approve minutes from the previous meeting. Motion carried 3-0 with Rassier abstaining. EDA Accounts Payable. Heinen introduced the topic. Strack noted accounts payable for the month totaled $2,513.76 including $2,333.13 for MDG contract and payment for postage, telephone and the EDA advertisement in the Newsleader Visitor's Guide. Motion by Wick, second by Skahen to approve the EDA accounts payable for the month of June 2007 in the amount of $2,213.76. Motion carried 4-0. Financial Report. Heinen introduced the agenda item. Strack noted the financial reports included in the packet were: revenue, expense, check register and fund balance. Motion by Skahen, second by Rassier to approve the June financial reports as presented. Motion carried 4-0. Approve TIF Disbursements Heinen noted agenda items 6(a) and 6(b) required a quorum of Council Members so that a meeting could be convened. A quorum was not yet present so the items were delayed. Strack noted the City had taken receipt of the June portion of property taxes. Included in the disbursement were payment to TIF 1-3 (Borgert) and TIF 1-4 (Gohman/VicWest/MinnWest). Motion Wick, second Skahen to approve the disbursements in the amount of $11,385.53 for TIF 1-3 and $26, 744.64 for TIF 1-4. Motion carried 4-0. EDA Minutes -July 11, 2007 Appointment of EDA Chairperson Heinen noted the vacancy in the Chairperson Office due to the resignation of Mayor Carlbom. Motion Skahen, second Heinen to appoint Wick as EDA Chairperson. Motion carried 3-0. Newly elected Chairperson Wick took over as presiding officer. The City Council convened its meeting. Preliminary TIF Application: Schellinger Chairperson Wick introduced the agenda item. Strack noted that developer Chris Schellinger and consultant Wendy Haslebus were present to answer any questions regarding the proposed project. In addition Traci Ryan was present to address any questions the EDA had regarding the use of redevelopment TIF in conjunction with the project. Strack noted that Chris Schellinger had submitted apre-application for Tax Increment Financing assistance for the construction of a 9,000 square foot commercial (retail/office) facility at 24 College Avenue North in Downtown St. Joseph. Additional information regarding the proposed project is included in the joint EDA and Council packets. $230,000 in pay-as-you-go redevelopment TIF assistance is requested in order to help the project move forward. The Company provided the EDA/City with detailed preliminary source/use statements and proforma analysis illustrating a gap (net present value) in funding. In addition the applicant submitted construction cost estimates and a site plan for the property. Strack noted the developer wanted to seek approval of the use of TIF to assist the project prior to closing on the property. Construction was expected to be at the earliest this fall or the latest the Spring of 2008. The developer is representing the completed value of the project to be $1.2 to $1.4 million. The Assessor's office notes the EMV of $1.2 million is feasible. Strack noted Ms. Ryan had prepared preliminary TIF projections based on the estimated completion value. The projections indicated a net present value of TIF of $325,560 (25 years) or $230,772 over a 15-year term. Wick inquired as to the need for TIF as related to the proforma analysis. Strack reviewed the analysis noting a debt service coverage ratio of 1.01 without TIF assistance and 1.13 with TIF assistance. Strack noted commercial lenders often have a minimum debt coverage ratio when considering a loan, typically ranging from 1.10 to 1.35. The debt coverage ratio illustrates the project is not feasible without TIF assistance. In addition, Strack noted a cash on cash return of 0.4% without TIF assistance and 4.8% with TIF assistance. When compared to other investment opportunities including personal savings accounts, bonds and stocks it is clear the project would not attract investors, without TIF. Frank inquired about `delayed development fees' as illustrated in the sources and uses statement. Haselbus stated those fees related to the business needing to forego reimbursing itself for a period of time so as to put additional revenue back into the project. The EDA invited Ryan to the podium to address TIF projections. Ryan reviewed the projections in detail and described a proposed method to modify TIF District 2-1. Ryan suggested including additional parcels within the modification as a means of simplifying additional development that could occur near the proposed development. The EDA discussed the potential project and noted support for the concept of a new commercial facility at the subject location. Motion Heinen, Second Wick to recommend the City Council approve the preliminary TIF application and authorize submittal of the final application. Motion approved 4-0. EDA Minutes -July 11, 2007 The EDA thanked Schellinger for his interest in redevelopment in downtown St. Joseph. McComb Market Research Study. Wick introduced the topic and President Jim McComb of McComb Group. McComb reviewed the recommendations of the study in detail including: Future for retail and residential development in St. Joseph are inter-related. Increasing the amount of housing -single family and multi-family -will create additional market support for retail stores and services, including a supermarket. St. Joseph should seek to encourage additional multi-family and single family housing. Low vacancy rates in existing apartment buildings in St. Joseph, Waite Park, and Sartell, and the area's growing population indicate future demand for apartment buildings throughout the metro area. St. Joseph should seek to increase its share of multi-family housing from seven percent to ten percent of the area's multi-family housing. Student housing properties in St. Joseph report 100 percent occupancy. Rental rates for student housing in St. Joseph are generally higher than rental rates for similar housing in St. Cloud indicating market strength. St. Joseph and Saint Benedict's should consider programs to upgrade the quality of student housing in the central business district. According to city and college records, there are numerous single family homes in the central business district that are utilized for student housing. Constructing alternative student housing in the central area would free up these sites for redevelopment as commercial sites, increasing the supply of developable land. The southern portion of the central business district could be redeveloped as a community/college retail area containing retail and service establishments that serve both college students, staff, trade area residents, and visitors. St. Joseph and Saint Benedict's should consider the possibility of developing amixed-use building in the central business district that would have retail space on the first floor, and student housing on the second and third floors. This would provide relocation space for student rental housing now currently located in single family homes in the central business district. It would also provide additional modern retail space in the downtown area. Multi-family housing for older adults (empty-nesters) could be considered for other portions of St. Joseph's central area. This housing should not be adjacent to the retail/student housing area, but could be within walking distance. St. Joseph is not capitalizing on its current retail potential for several reasons. There is a lack of attractive, readily available sites for retail and service development that meet most retailers' needs for access, visibility, and site size. The central business district area has few, if any, developable sites readily available for a new tenant and many of these sites on Highway 75 have poor access. Land planning activities should be conducted for both the central business district and the Highway 75 retail area to provide development sites that are consistent with retailers needs for adequate visibility, access, and appropriate site sizes. For additional retail and service development to occur in the central business district, sites or business locations need to be identified. Create acommunity/college shopping area in the central business district. This would include retail stores and services that appeal to students, staff and trade area residents. EDA Minutes -July 11, 2007 Expand the retail offerings in the central business district for St. Joseph to attract a broader segment of young adults that enjoy the same types of interests and activities as college students and other St. Joseph youth. Student survey respondents offered a wide range of activities/interests that can be utilized to attract young adults to St. Joseph. College of Saint Benedict and Saint John's University represent untapped resources for businesses in St. Joseph. The two colleges have over 4,100 students, 900 faculty and staff, and attract over 137,000 visitors to St. Joseph on an annual basis. The City of St. Joseph, Chamber of Commerce, and Saint Benedicts should form a task force to identify business opportunities resulting from the colleges' educational and cultural activities. The colleges' proximity to the central business district provides an opportunity to stimulate redevelopment of St. Joseph's central area. The City and Chamber of Commerce should establish a business recruitment program to attract retail and service establishments that could serve trade area residents. The EDA, City, College and Chamber will review the draft proposal and submit questions/comments to McComb Group. 2006 Budget Wick introduced the topic. Due to time constraints this agenda item was postponed to a special meeting on July 25tH Adjournment. Motion Skahen, second Hein n to adjourn the EDA meeting. Meeting adjourned at 5:25 PM. n~ ~~~~ ~~('~j2~~' ~-'" EDA Minutes -July 11, 2007