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City Council - 08/22/2002 - Joint Meeting APPROVED MINUTES CITY OF EDEN PRAIRIE JOINT CITY COUNCIL/PLANNING COMMISSION MEETING TUESDAY, AUGUST 22, 2002 7:00 PM, CITY CENTER Heritage Room II 8080 Mitchell Road CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Ron Case, David Luse and Jan Mosman CITY STAFF: City Manager Scott Neal, Public Works Director Eugene Dietz, Economic Development Manager David Lindahl, City Planner Michael Franzen, and Council Recorder Theresa Brundage PLANNING COMMISSION: Frantz Corneille, Randy Foote, Kathy Nelson, Fred Seymour, Paul Sodt, Dave Steppat, Ray Stoelting HENNEPIN COUNTY: Carol Lezotte I. ROLL CALL / CALL THE MEETING TO ORDER II. INTRODUCE PROJECT TEAM Neal introduced Mark Koegler, Consulting Team Project Manager from Hoisington Koegler Grouop Inc., who gave an overview and current status of the Golden Triangle Land Use/Multi-Modal Transportation Project. He introduced project team members from his group and Bonz/REA, Inc. who were retained by the City of Eden Prairie and Hennepin County to work on this project. He said the IBI Group is also part of the team, although no members are present tonight. III. PROJECT INTRODUCTION/BACKGROUND Koegler said the team is 30-40 percent done with the project at this point in time. He said the intent tonight is not to press for formal decisions, but to exchange information specifically about land use scenarios, development opportunities and barriers, potential City actions and community policy implications. He said the purpose of the Golden Triangle Land Use/Multi-Modal Transportation Evaluation Project (the Golden Triangle Study) was conceived by the City and the County as a joint venture. He said it involves looking at the idea of taking an existing land use pattern, infusing it with a different land use pattern - in this case more of a mixed use - and determining the impacts on peak traffic congestion, tax benefits of the alternatives, transit and traffic and transportation improvements. He said elements of the program include evaluating the local real estate market, looking at potential alternatives as to what redevelopment sites might be appropriate, what kinds of land use patterns might be included, tax benefits of those uses, and travel demand forecasting to ultimately come up with a land use plan. JOINT CITY COUNCIL/PLANNING COMMISSION MEETING August 22, 2002 Page 2 Koegler said this is using sound methodology to test the overall premise that "Can land use change positively effectuate traffic and transportation? How might one go about doing that and what implementation steps would be looked at?" He said a group called the Technical Advisory Team is steering the process and meets with his group on a monthly basis. The group's representatives are from the City, Hennepin County, Southwest Metro Transit, Min/DOT, Golden Triangle Traffic Management Association and some property owners within the project area. He said the Golden Triangle is bounded by Hwys.169, 212 and 494. IV. MARKET OVERVIEW Dick Paik, Bonz/REA, Inc. said despite the current downturn, general prognostications from the Twin Cities economy are that we are going to resume growth at an average 1.5 to 2.5 percent per year driven primarily by employment in the professional services industry. He said the Southwest Suburban Corridor is the region's most prestigious and largest suburban corridor for this kind of growth. He said as far as the high-end labor goes, the indicators looked at first are education and professional and managerial executive occupations and Eden Prairie is the highest in those areas. He said is not as dominant in industrial occupations. He said industrial space is leasing at $4.5 to $5/sf with industrial office space leasing at close to $9/sf. He said high-end office space is at $15-$16/sf. Therefore, Paik said the corridor is a dominant office corridor. He said vacancy rates in apartments in the area are near 8-9 percent which is higher than other suburbs, but there is potential for new residential development in multi-family or townhouse configurations. Paik said retail numbers indicate the potential for larger "big box" retail stores seeking a desirable site, and hotels seeking highway access and visibility. He said the overall lodging market is healthy. Seymour asked if it was fair to compare Eden Prairie Center to Ridgedale when there has been a recent conversion upgrade of Eden Prairie Center within the last year. Paik said numbers have been improving by the month, but the performances of retail centers in this market area have not matched performance of Southdale. He said some of the sites are compromised by traffic. Sodt said he has heard that the problems of Eden Prairie Center are that residents are used to going to other centers to shop and asked if those numbers had been measured. Paik said in this case, the center is still attracting a net inflow but it has not been determined where it's coming from. Luse asked if the calculation included the growth of Eden Prairie Center. Paik said the research has been done over the past nine months and the full impact of the rejuvenation may not be part of that. Case asked if occupancy rates for employees living in apartments, or lower-end housing, had been looked at. Paik said it is being considered and will be discussed. Nelson said putting amenities or restaurant/entertainment-type businesses in the Golden Triangle could be a very important part of putting the "gleam" back into that area. JOINT CITY COUNCIL/PLANNING COMMISSION MEETING August 22, 2002 Page 3 Sodt asked about the attitude of company owners in the Golden Triangle as it relates to the desire to have residential areas within the Golden Triangle. Koegler said it has not been determined how they perceive the residential impact, but there will be more meetings. V. OVERVIEW OF PHYSICAL CONDITIONS Koegler said the dominant land use in the Golden Triangle area is industrial with an office component with about 56 percent of the parcels in that area falling into that category. He said more recently, the high density residential is at 2 percent. He said things examined included land value per square foot, total change in building value from 1997 to 2002, quality of construction, ratio in terms of land value and building value and floor area ratio. Koegler said a map of potential redevelopment parcels has been generated following the study. VI. FUTURE LAND USE PLAN SCENARIOS Koegler said there are two land use scenarios - Current Trends and Public-Private Opportunities. He said the possibility of looking at regional/commercial in the Golden Triangle area should also be considered, specifically at the intersection of Shady Oak and Hwy. 212. Koegler said the Current Trends option does not include major transportation improvements/ In the Public-Private Opportunities option, Koegler said there would be extensive redevelopment of existing industrial and office buildings to create a new residential neighborhood with medium- and higher-density housing with the ability to expand green space. He said there may also be opportunity to have a mixed use in a suburban context by using vertical integration, with office or small retail with residential above. He said mass transit is being looked at in terms of bus rapid transit and connections to the local transit network. He said the Golden Triangle Management Association has done a good job with advocating van pools and transit solutions. He said the context of those ideas will be looked at in terms of land use. Tyra-Lukens asked if we have the right proportions of office, industrial and housing in the scenerio. Koegler said the study attempted to craft a certain sense of market reality. Koegler said they're going to have to find the equilibrium point with reasonable market balance. Sodt asked about the health group property north of City West. He said a few months ago, United Health presented changes not the same as being shown on tonight's plan. He said it was mixed use and wanted Koegler to be aware of that. Koegler said it was simplified for purposes of land use colors. Stoelting asked if this could be compared to Centennial Lakes. Koegler said what is being stressed with this plan is more of a component of mixed land use. Frantz asked what potential there is for the whole Golden Triangle area to be completely redeveloped. Koegler said he will come back to that after Rusty Fifield talks. JOINT CITY COUNCIL/PLANNING COMMISSION MEETING August 22, 2002 Page 4 Luse asked if the issue of no downtown area for Eden Prairie was addressed. Kogeler said they have been sensitive to "sucking any of the life out of the major center area and trying to put it here." He said they scaled down commercial thinking and looked at a couple "big box" nodes that would not have been able to accommodate the major center area. VII. PRELIMINARY FISCAL IMPLICATIONS Rusty Fifield gave an overview of the preliminary fiscal and policy implications of future land use changes and what would be financially feasible. He said to do redevelopment, smaller parcels need to be developed them into larger sites. He said the acquisition of those properties and the preparation of those sites are the key economic barriers. The key to redevelopment is also finding a developer who wants to be in the Golden Triangle. In addition, Fifield said it's likely the City may have to make a financial investment in the redevelopment. He said one of the reasons for building the medium- to high-density housing vertically is to get more density to help offset the redevelopment expense. He said the City needs to be prepared to get involved by acquiring land and preparing sites, using condemnation or the threat of condemnation if necessary, providing financial assistance, building infrastructure and amenities, making use of the financing tools available, and seeking partners who share the interest. Fifield said tax increment financing could also be used for the Golden Triangle in that a portion of the buildings in that area would need to be designated as structurally substandard. He suggested that what would work best is tax abatement where a collaborative approach is taken with Hennepin County. Fifield said the greatest concern is the uncertain time limitations on the ability to challenge public actions - not only the condemnation of land, but the creation of a tax increment district, and where do you know that you've escaped the ability for a legal challenge. He said there also exists the potential for this to ripple into the 2003 and perhaps other legislative sessions. VIII. NEXT STEPS Koegler said the process is about 40 percent done and they will continue with the tax and fiscal analysis. He said the traffic piece is one of the centerpieces of this and they will look at allocating growth, traffic assignment zones, vehicular flows, and the whole traffic transportation issue. He said they are trying to get down to a recommended land use scenario based on a conceptual plan. He said an open house will be held in the Golden Triangle area sometime in September. Luse suggested with the right vision, this situation needs to be a partnership between the City and the developers. Koegler asked Dietz to summarize the transportation improvements - 494 and better ramp access to the major center area, etc. Dietz said the possibility of an interchange at Prairie Center Drive or Flying Cloud Drive was discussed with the Council and a plan was developed with Min/DOT saying there were "no fatal flaws." He said it is possible to put half of a diamond at Flying Cloud Drive, but it's $15 to $35 million. Dietz said they will be embarking on a similar study as what is being heard tonight to look at the whole area south of 494 and the possibility of what else could be done to make traffic more friendly in that area. JOINT CITY COUNCIL/PLANNING COMMISSION MEETING August 22, 2002 Page 5 IX. DISCUSSION/ADDRESS QUESTIONS Koegler asked Dick Paik about the market for 'lower-end' housing. He said although it could happen, it's not very likely that developers who get into the middle of the market will build that way. Koegler said as far as more amenities and entertainment-type uses, they have looked at it in a more fundamental kind of perspective like what kinds of things could happen there. He said some of those could be later mixes into the overall pattern of land use. He said those things are 'icing on the cake' and not the leading entities when it comes to future land use change, but things that could be part of that pattern. Regarding large-scale potentials for redevelopment, Koegler said is there a lot of financial challenge here, so the changes will probably be incremental. Luse asked what the City could do collectively to give the impression of the master vision of what we want to do versus using the old way of thinking and condemning properties and facing legal issues. He said it is that kind of positive perception that hopefully becomes reality. Koegler said the scope of this is really more focused on the premise that this area has transportation problems and can longer term land use changes effectuate that in a positive way and remove some of those barriers. He said this is the beginning of a much broader discussion of what happens to this area that is an exciting area that poses many challenges and we're just focusing on one piece of this. Koegler said the redevelopment will leave very few buildings that are there today, but there are a lot of other properties that can be kept marketable. He said if there is a balance that we can strike long-term between other uses - residential, commercial, office, etc. - and industrial, such that the industrial is maintained and occupied, it is probably the best long-term bet to maintain the quality and integrity of existing structures. Nelson said basically this is a "man-made island," and asked if the group is looking at this from a traffic perspective and not unlike another highly industrialized island instead of just a piece of land within the suburb. Koegler said that metaphor hasn't been carried too far. Dietz said there are plans by Min/DOT to improve an interchange at 169 and 494. He said the planning horizon is going to be defined by the legislature's will to agree, at best, in these kinds of things. He said this island was a great idea back in the late 1960s and early 1970s, but there has been no reinvestment at the State level that would cause the freeway system to sustain itself. He said this is about looking at what we can do be a catalyst to keep the values up and make improvements. Koegler said this is an area, because of the geography, has interesting potential where there are different types of land uses that support one another. It w as asked what the thrust or message of the whole plan is. Koegler said they thought it was important to go to the business community to all interested parties in the Golden Triangle before any plans are finalized. He said the message is that they have an evolving process that they'd like to be in an 'open house' kind of format to talk to people about some of these JOINT CITY COUNCIL/PLANNING COMMISSION MEETING August 22, 2002 Page 6 concepts and ideas and get their reaction to them. He said they looked at tonight as an opportunity to focus on the policy implications of change, how the Council responds to it and how the Planning Commission will make recommendations on it. He said this project is a great forum for all groups to get together and discuss the vision for land use, traffic benefits and services. Neal acknowledged Hennepin County's support of the project. Tyra-Lukens asked Koegler when they would return with further information. He said it would be towards the end of the year. X. ADJOURNMENT The meeting adjourned at 9 p.m.