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City Council - 12/19/2000 - Workshop APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL WORKSHOP/FORUM TUESDAY,DECEMBER 19,2000 5:00-6:55 PM,CITY CENTER HERITAGE ROOM II CITY COUNCIL: Mayor Jean Harris, Councilmembers Sherry Butcher, Ronald Case, and Nancy Tyra-Lukens CITY COUNCIL STAFF: City Manager Chris Enger, Parks & Recreation Services Director Bob Lambert, Manager of Recreation Services Laurie Obiazor, Public Works Services Director Eugene Dietz, Community Development and Financial Services Director Don Uram, City Planner Michael Franzen, Housing and Redevelopment Authority Manager David Lindahl, IT Manager Lisa Wu, IT Coordinator Mike Hutter, Director of Management Services Natalie Swaggert, City Attorney Ric Rosow, and Recorder Lorene McWaters VISITORS: Jan Mosman, Councilmember-Elect; Len Simich, Executive Director of Southwest Metro Transit; Jay Scott of North American Development I. CALL MEETING TO ORDER-MAYOR JEAN HARRIS Mayor Harris called the meeting to order at 5:15 p.m. M APPROVAL OF AGENDA M. COUNCILMEMBER E-MAM ORIENTATION IT Coordinator Mike Hutter demonstrated GroupWise WebAccess, the City e-mail package Councilmembers will begin using January 1, 2001. Hutter explained how to log into the system,use the navigation bar, read and send e-mail, use the calendar, and set up passwords. IV. SOUTHWEST STATION DEVELOPMENT CONCEPT DISCUSSION Jay Scott of North American Properties explained his firm had been working with Southwest Metro Transit Agency and City staff over the past six months on a mixed-use development proposal for the Southwest Metro site. Under this plan, the transit facility would be in the middle of the site,which would include two other major components. The eastern portion of the site would consist of two commercial buildings, about 20,000 square feet each. One building would house small restaurants and quick-serve businesses. The other building could be live-work units,with residences on the upper level, or could house small office spaces tied in with retail components. The parking structure,which would occupy the levels, would accommodate commercial parking during the day and would ensure enough parking to achieve the desired density. There is another small, challenging portion of the site on which a bank or day care center could be situated. Scott said the concept focuses on strong connections across the site, including a covered walkway. COUNCIL,WORKSHOP MINUTES December 19, 2000 Page 2 The western portion of the site would be primarily high-density residential. The plan calls for two mid-size structures with a total of 470 units. Parking would be on the first level with seven floors of living units above. There would also be approximately 35 townhomes clustered at either end of the two buildings. The mixed-use concept comes into play here with small commercial enterprises, such as dry cleaners,to support residents. Scott said the idea is to emphasize the"transit village" concept, de-emphasize the auto, and build to human scale. City Manager Enger noted that the concept presented is an"intensified"version of what had been previously discussed for the site. He asked Scott to explain how the project would change if it were not subsidized. Scott said they would probably be able to preserve some of the density on the eastern end of the site,but that it would lose much of its intensity. The buildings would probably be three or four stories instead of the envisioned seven or eight. Enger asked if parking spaces would be lost. Scott said they would be. Len Simich pointed out that parking spots would be lost only to the commercial segment and not to Southwest Metro. Scott said North American was ready to go with either the subsidized plan or the scaled down version, and that they want to be part of this type of showpiece project. Councilmember Case asked why public funding was needed for the denser plan. Housing and Redevelopment Authority Manager David Lindahl explained that the cost of mid-rise construction is at least 20 percent higher than that of regular construction. Land cost per unit goes down with density; however, construction requirements push the cost up. Case asked if there is a point at which density does start to pay for itself. Mike Basilio, multi- family housing partner with North American, explained that because of construction costs, even if the land were free the deal might not make financial sense. hTigh-rise construction can result in an additional 50 percent in costs because of safety code requirements. He said the market will pay only so much, and the projected rental rates for these units are the highest in Eden Prairie. He said this is why so few mid-and high-rise rental sites are being built. He noted that bad soil conditions on the Southwest Metro site would add considerably to construction costs, and that creating more density forces building additional parking structures, at a possible cost of$15,000 to$20,000. Lindahl asked if North American feels they could deliver a quality residential product without the subsidy. Basilio said North American is willing to go full market and do what the area can afford. Case asked why North American would do this. Lindahl said the City's goal has been to create a downtown image somewhere in the city center, but this hasn't happened because of market resistance. He said the Southwest Metro area is a gateway site that could create such a downtown image. Any new rental development would also help fulfill livable communities goals, and the concept is consistent with the plan approved by the Council last year. Councilmember Butcher asked if any part of the site would be amendable to higher-priced housing. Scott said his research shows that because of traffic congestion and the location of the Pickled Parrot restaurant,the site is not amenable to higher priced housing. Lindahl noted that a previous plan by another developer called for a large number of rental units on the eastern side of the site. Pickled Parrot owners had expressed concern over having residential units near the restaurant because of the level of noise expected to be generated COUNCIL WORKSHOP MINUTES December 19, 2000 Page 3 during the summer from their 200-capacity outdoor seating area. Butcher asked if there is any other plan that wouldn't require as much public funding. Scott said the current plan works best and keeps the TIF down. Len Simich said that Southwest Metro's goals are similar to those of the City. SWMT desires development that complements operations and does not interfere with operations. The Commission had felt that the east end housing previously proposed would conflict with their operations. On the other hand, commercial uses on this on this end could have high evening and weekend use and not take away from transit parking during the day. Simich said that while SWMT has applied for and received capital needs grants, they still need the revenue that would be generated by this type of venture. Financial Services Director Uram noted that there would be about a$12.5 million funding gap on the proposed development. Making up this gap would require a tax increment district, all of which would be pulled off the housing portion of the project. The only way to include a residential district would be to include subsidized housing. He said there is also a possibility that the district may not generate enough tax increment to fund the entire project. Enger said staff is looking for input from the Council on going foward with the development in spite of the$12.5 million gap. He reminded the Council that their recent strategy has been to designate 20 percent of rental units as affordable housing. Butcher said she would hate to see the affordable housing component cut from the plan, and Lindahl noted that the City is currently lagging in affordable housing goals. Councilmember Case asked staff to compile a comparison of Eden Prairie and nearby communities regarding affordable housing goals. He said the Council needs to know if the City is ahead on its goals. Mayor Harris asked how the development would look without subsidy. Scott said it would be more traditional three- or four-floor buildings rather than the proposed eight stories. There would be approximately residential 350 units as opposed to 470. Harris asked if the Council still wanted to see housing on the west side. Tyra-Lukens said yes,but she is worried about what may happen to the east side of the site. She said residents have voiced a desire for an urban, cool type of site, and that she is distressed to see this might not happen as envisioned. Eden Prairie resident Dick Feerick complimented Tyra-Lukens on her work on the Southwest Metro Transit Commission and said he feels TIF is appropriate for this site. V. COUNCIL FORUM A. HIGHVIEW DRIVE/LAKELAND TERRACE RESIDENTS ON SEWER CONSTRUCTION PROJECT Neighborhood residents in attendance included Perry Forster, Arlynn Leapaldt, Gwen Leapaldt, Gary Dusterhoft, Charlie Tutler, James Holton,Phillip gervold, Tom Knauer, Debbie gervold, Mark Kammer, Kelly Mulligan,Dave Florenzano. Arlynn Leapaldt said some residents don't feel the City has dealt with them honestly or fairly regarding the water and sewer project under construction in their neighborhood. He said City presentations at neighborhood meetings did not offer COUNCIL WORKSHOP 1VIEWIES December 19, 2000 Page 4 residents the option of not doing the project, and that they do not understand who is making the decisions. He said he believes the majority who signed the petition for the project did so for fact-finding purposes only. He said the results of a survey conducted by the City had been requested by residents but not provided. The City held a neighborhood meeting on September 18 to discuss the project in advance of the assessment hearing. According to Leapaldt, a majority present voted to wait until spring. A week later, residents received a letter stating the project would begin within a week. The letter said the property owners most affected by delaying the project had not been at the meeting and cited environmental and safety concerns. Leapaldt said he believes those in the neighborhood with failing septic systems had more say in the matter than others. Public Works Services Director Gene Dietz said a petition for the project was received in 1996, and that a feasibility hearing was held in June of 2000. A contract was then awarded per the schedule outlined in the feasibility study. The bid was to be awarded at the September 5 Council meeting, but the proposal was delayed by two weeks. The September 19 meeting was unexpectedly cancelled, so the contract was awarded on October 3. Mayor Harris said she remembered the timing of the project being discussed at that time. Councilmember Case asked what the residents were currently seeking. Resident Tom Knauer referenced a letter he had hand-delivered to the City Center the afternoon of the current Forum. He said his problem was with the timing on the project, not with the feasibility study. He did not understand why the City started tearing up the street in mid-October when residents had expressed concerns'over beginning the project so close to the onset of winter. He said only a couple of residents had an interest in starting the project this year, and City Engineer Al Gray had recommended rebidding the project to begin next year. Knauer said 90 percent of the easements needed for the project were unresolved. He said residents want to know why the project was started this fall and that they are being heard. Dietz noted that the road grading is complete, and the gravel base is in. Sanitary sewer and storm sewer are also in on the main part of Highview Drive. Knauer said residents want to be assured they will be treated better during the second phase of the project. He asked if it was City or legal policy to start a project when 90 percent of the easements were unresolved. Dietz pointed out he had offered to meet with the neighborhood on this issue a couple of months ago. Knauer said they chose to appear at the Council Forum because they were concerned they may not get answers to their questions. Gwen Leapaldt said that residents' questions had not been answered at previous meetings. Councilmember Butcher said she felt at a disadvantage because she had not had a chance to read the letter that was delivered that afternoon, and suggested addressing the matter at another meeting. Case agreed that the Council needed to meet with the neighborhood and trace the sequence of events. City Manager suggested in order to be most productive in any upcoming meeting that the residents moderate the tone of rhetoric as some of the responses did not show the same courtesy and respect they COUNCIL WORKSHOP AW4UTES December 19, 2000 Page 5 were demanding. Knauer said he saw his letter,which he admitted was strongly worded, as his only chance to be heard. It was agreed that another meeting would be set to further discuss the residents' concerns. B. MAX THOMPSON—METRICOM Since only five minutes remained before the Council Meeting was to begin,Mayor Harris asked Mr. Thompson if he was willing to appear at a future Forum. He agreed to do so. VI. ADJOURNMENT Mayor Hams adjourned the meeting at 7:00 p.m.