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City Council - 01/22/1980 APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL TUESDAY, JANUARY 22, 1980 7:30 PM, CITY HALL COUNCIL MEMBERS: Mayor Wolfgang Fenzel , Dean Edstrom, Dave Osterholt, Sidney Pauly and Paul Redpath COUNCIL STAFF PRESENT: City Manager Roger Ulstad; City Attorney Roger Pauly; Director of Community Services Bob Lambert; Planning Director Chris Enger; Finance Director John Frane; City Engineer Carl Jul l i e; and Joyce Provo, Recording Secretary INVOCATION: Mayor Wolfgang Penzel PLEDGE OF ALLEGIANCE ROLL CALL: All members present. I. APPROVAL. OF AGENDA AND OTHER ITEMS OF BUSINESS Osterholt requested that the following items be added under the "New Business" category (VIII . ) , A. Discussion on letter received from Fritz Anderson, and B. Minnesota Vikings interest in locating in Eden Prairie. ; . MOTION: Redpath moved, seconded by Osterholt, to approve the agenda as amended and published. Motion carried unanimously. II . MINUTES OF THE CITY COUNCIL MEETING HELD TUESDAY, JANUARY 8, 1980 Pa. 7, delete 2nd para. , and insert in lieu thereof the following: "MOTION: Redpath moved, seconded by Pauly, to, direct Staff to send a letter to the Fish and Wildlife Services indicating that the Council would be interested in having thQ bluff portion of the Peterson farm preserved as open space, and the Council world also be interested in knowing what their plans are before a specific position is taken by the Council . Redpath, Pauly, Osterholt and Penzel voted aye; Edstrom abstained. Motion carried. " MOT? Redpath moved, seconded by Edstrom, to approve the minutes of the Coy- meeting held Tuesday, January 8, 1980, as amended and published. Mot .�rried unanimously. III. CONSL, .'•I.ENDAR A. Re for extension of developer's agreement for Master's Condominiums Ti- ;,r Ti, .,i was removed from the Consent Calendar and continued to the Fe'. .> 5, 1980 City Council meeting B. Sep : tic Hearing for Opus Plaza Office Building for February 19, 1980 4L C. Fins ,flat approval for Shady Oak Industrial Park 3rd Addition (Resolution D. FinaI plat approval for Shady Oak Industrial Park 5th Addition (Resolution No. I3U-20} City Council Minutes - 2 - Tues. ,January 22, 1980 E. Clerk' s License List "Lion' s Tap" mechanical amusement device was removed from the License List and Staff was directed to investigate the type of mechanical amusement device which is being used. A report on this to be provided to the Council ' at the February 5th Council meeting. 4 MOTION: Redpath moved, seconded by Pauly, to approve items B - E (excluding Lion's Tap mechanical amusement device from the Clerk' s License List until Staff has reported back to the Council on same) . Motion carried unanimously. IV. PAYMENT OF CLAIMS NOS. 6956 - 7162 MOTION: Redpath moved, seconded by Osterholt, to approve Payment of Claims Nos. 6956 - 7162. Roll Call Vote: Redpath, Osterholt, Edstrom and Penzel voted "aye" ; Pauly "abstained" . Motion carried. V. PUBLIC HEARINGS A. Creekview Estates by Heinen & Burnett. Request to rezone from Rural to R1-13.5 1: and preliminary plat 25.5 acres into 29 single family lots. Located at 9840 and 9940 Bennett Place Ordinance No. 79-39 and Resolution No. 79-197) Continued from December 4, 1979 City Manager Ulstad explained Mr. Heinen and Mr. Burnett, the proponents, appeared before the Council the first time on November 6, 1979 and outlined k their proposal . As a result of that presentation and discussion there was concern on the access to the plat and the improvement of right-of-way leading north and south fronting on Mr. Heinen and 1r. Burnett ' s property, and also the improvement across Mr. Sutton's property. There was a question about that improvement and how it was going to be funded. Ulstad stated City Engineer Jullie and he have visited with the proponents on this. City Engineer Jullie stated he did look at preliminary type cost estimates for the utility (sewer and water, storm sewer and street improvements) that would be required along Bennett Place from County Road l south to Blossom Road. Jullie worked up a breakdown on what the potential assessments against the abutting property owners would be and set up a meeting thereafter with Mr. Heinen and Mr. Burnett. Mr. Sutton was alsa invited to attend this meeting but he was unable to come to the meeting. At that time Jullie explained to the proponents the various cost elements, adding the per front foot rates are substantial and the assessments that would accrue to the abutting properties are rather high. Jullie asked the proponents to look at the benefits to their parcels and to determine if there was any possibility that they could come to some agreement with Mr. Sutton to have these impr'ovelrtents acceptable, the right-of-way dedicated, and the assessment program agreeable to Mr. Sutton and possibly to Mr. Blossom. Mr. Burnett, 9940 Bennett Place, commented he went over the cost estimates with Mr. Sutton provided by Mr. Jullie and have some agreement as to the fact that there is benefit to both Sutton's property and the development that is being proposed. Burnett added there is some question in Mr. Sutton's mind as to the cost estimates as it is a rather expensive program. Subject to a more precise estimate, Rl)rnett stated he believes there is something that can be worked out with Mr. Sutton. Mr. Heinen, 9840 Bennett Place, referred to letter he received from Mr. Wold who is the Planning Engineer for the Department of Transportation of Hennepin County, which read as follows: "Hennepin County strongly supports the comple- ;:ity Council Minutes - 3 - Tues. ,January 22, 1980 A. Creekview Estates (continued) tion of Bennett Place south of CSAH 1 . The new southerly access must be directly opposite the northerly Bennett Place intersection which as you know was just put in with the Olympic Hills Addition. Upon completion of Bennett Place from the south, we recommend closing the Blossom Road z access to CSAH 1 . The skew angle of intersection plus the poor sight p distances make the existing CSAH 1/Blossom Road intersection unsafe. " Osterholt asked the amount of the improvement. l Juliie replied there would be a range depending on how much fill material } is available on the site, and he has made some assumptions that it would be available. The cost would be about $170,000.00 from County Road 1 all the 1 way down to Blossom Road. It would be possible to shorten the length up i just carrying it down to where the new street connection for the proposed development would be, which would cut off 100 - 150 feet or so. The front foot rate,would still be approximately the same - $120.00-$125.00 per foot on each side. Penael asked Mr. Heinen & Mr. Burnett how they would feel about the commit- ment being a little firmer toward the distribution of road cost assessments for Bennett Place prior to the 2nd Reading of Ordinance No. 79-39. Both Heinen and Burnett acknowledged that would be acceptable. ti Osterholt questioned if there is any property where we would have to enter into condemnation. Juliie replied there would be acquisition of right-of-way necessary to make the improvements and if it were the case the Blossoms could not be contacted, then we would have to enter into some sort of formal taking procedure. MOTION: Redpath moved, seconded by Osterholt, to close the Public Hearing and give a lst Reading to Ordinance No. 79-39, rezoning from Rural to R1-13.5 for Creekview Estates by Heinen and Burnett. Motion carried unanimously. MOTION: Osterholt moved, seconded by Redpath , to adopt Resolution No. 79-197, approving the preliminary plat of 25.5 acres into 29 single family lots for Creekview Estates by Heinen and Burnett. Motion carried unanimously. MOTION: Osterholt moved, seconded by Edstrom, to direct staff to draft a developer's agreement incorporating the recommendations of the Staff and Commissions, and resolution of the assessments before a 2nd Reading of Ordinance No. 79-39 can be considered. Motion carried unanimously. B. COR Investments Office & Multiple by COR Investments, Inc. Request to rezone 2.8 acres from Planned Study to Office and 1 .4 acres from Planned Study to RM 2. 5. Located south of TH 5 and West of Superamerica Station Ordinance No. 80-01 ) Bruce Knutson, Knutson Architects, reviewed the proposal with the Council and displayed graphics of same. Planning Director Enger explained this proposal was first considered at the 41 October 22, 1979 Planning Commission meeting and was returned to the proponent for revision. The initial proposal was for a 48,000 square foot office building. The revised proposal was reviewed by the Planning Commission on December 12, 1979 and the Commission recommended approval to the City Council of the PUD stage, which would includo zoning of 2.87 acres from Planned Study to Office District and 1 .3B acres from PS to RM 2. 5 for elderly housing, incorporating the recomendations of the Staff Report dated December 6, 1979, City Council Minutes - 4 - Tues. ,January 22, 1980 £� B. COR Investments Office & Multiple by COR Investments , Inc. (continued) and provided that a feasibility study be done on the need for garages for the elderly housing, and provided that the proponent understands that he may be required to aid in the improvements of TH 5 and County Road 4. Director of. Community Services Lambert added the Parks, Recreation & Natural Resources Commission recommended approval to the City Council on January 7, 1980 as per the Planning and Community Services Staff reports, with the exception that the cash park fee not be waived and should be set at $100/unit and allocated to the Senior Citizen Center at Staring Lake. Edstrom asked if there has been additional discussion through the County on the access to Highway 5. Enger replied in the negative. 9 ' Edstrom then asked what the posture would be from a planning standpoint if the State and County would not permit an access. Enger replied from a planning standpoint he feels the right-in/right-out is an advantage to the project and helps distribute peak hour flow going to the east between County Road 4 and TH 5. Without a right-in/right-out all the peak hour traffic which flows toward the east must go out on to County Road 4. Along with that Enger stated he believes the peak hour traffic coming from the west in the morning has the advantage of using a right-in and not having ,'' to interact with the intersection at all . However, Enger commented he would like to talk to the Mn/DOT about what they feel the problems might be. Osterholt referred to statement in letter from the Mn/DOT dated November 7, 1979: "We assume there will be no direct access to TH 5. " Enger replied he is in a quandary as to why that statement was placed in their letter because two years ago when they reviewed the entire COR PUD there was at one time a full access anticipated from the duplex cul -de-sac to Highway 5. Mn/DOT at that time was willing to approve a full access. Enger further added from a planning standpoint he felt it would not be advisable to have a full access. Osterholt commented in light of the letter from the Highway Department, he would have felt more comfortable when we received the letter if we would have gone back to them and pointed out what they assumed was not correct, so we would have some opinion from them. Osterholt asked that a response from the Highway Department be requested at this time. Osterholt suggested before a four-story building goes up on the property that somehow prospective owners should be made aware that is what is being planned, preferably by placing signage at the entrance to the development. Edstrom explained the City has set a policy with respect to wanting elderly housing at this site. In reading the materials Edstrom stated he has some doubt as to whether it is feasible as it seems like the financing arrangements , etc. , are anything but positive at this point. If we are looking at an elderly proposal here, Edstrom asked how do we know in fact it is goinq to happen and we are not going to be presented a year from now with a proposal for an additional high volume traffic professional building because it is the only thin] feasible. Oliver Rekow, a partner in COR Investments, Inc., replied financing of most types is difficult, and several of the programs which have been designed to provide financing for housing for the elderly are basically stopped up because of the situation with the House Ways and Means Committee and the so-called Ullman Bill . All one can be hopeful of is that some of the beneficial legislatio that would make housing for the elderly somewhat economic will get some Council Minutes - 5 - Tues. ,January 22, 1980 B. COR Investments Office & Multiple (continued) movement. There are some ways of financing housing for the elderly not as financially economic or rewarding to the entrepreneur as other plans. Mr. Rekow added it would be inappropriate for him to say that they would not be back at another time asking for some other type of zoning. They have the best of intentions and want very much to proceed with housing for the elderly and have worked with the City Planner and the City Manager, and are very much aware of Eden Prairie' s desire to have housing for the elderly. They are going to make every effort to follow through in accordance with the zoning as requested. Pauly inquired what would happen if for some reason the elderly didn' t fill the units - what becomes of the project? Mr. Rekow stated the proponents would be guided in their thinking by what seems to be the sentiment that has been expressed by the Council about not wantinq anythino further on the property that would create more traffic. They would probably have to look at some other form of housing for the elderly site. 1 Osterholt stated he would like the traffic situation resolved before any action is taken on this proposal . Edstrom added we should receive responses from both the County and the State. MOTION: Osterholt moved, seconded by Edstrom, to continue the COR Investments Public Hearing to the February 5, 1980 Council meeting. Motion carried unanimously. C. Michelangelo Gardens by Rembrandt Enterprises. Request to rezone 36 acres from Rural to RM 2.5, preliminary plat approvals for 7 lots, and approval of an Environmental Assessment Worksheet. Located east of 169/212 and south of Hansen Auto Ordinance No. 80-02 -- rezoning; Resolution No. 80-13 - preliminary plat; and Resolution No. 80-16 - E.A.W. ) Greg A. du'Monceaux, architect and planner representing Rembrandt Enterprises, reviewed the proposal with the Council displaying graphics and a model of the project. Planning Director Enger explained the first phase of this project was the PUD Concept Plan which was approved by the Council late in the Fall of 1979. The project before the Council now is a request for rezoning and preliminary platting of outlots. The item was reviewed at the 9/10, 9/24, 11/13, 11/26 and 12/10 Planning Commission meetings . The Commissions recommended approval to the City Council on a 7 - 0 vote that the Council consider approval of the Rembrandt Enterprises request to rezone Blocks 1 and 3 and Lots 1 and 2 of Block 2 per the recommendations of the Staff Report dated 12/6/79, provided that Outlots A and B, and Lot 3, Block 2, not be included at this time, and also the motion for preliminary platting was approved 7 - 0 subject to the Staff Report dated December 6, 1979. Director of Community Services Lambert added the Parks , Recreation & Natural Resources Commission recommended approval to the City Council unanimously on January 7, 1980 as per the Planning Commission Staff Report dated 12/6/79 with the following exceptions: 2. The Cash Park Fee applicable at the time of the building permit shall be paid, and the Nine Mile Creek Floodplain shall be dedicated to the City, and 7. The western portion of the site should be developed prior to phase two. City Council Minutes - 6 - Tues. ,January 22, 1980 C. Michelangelo Gardens (continued) Y MOTION: Osterholt moved, seconded by Redpath, to close the Public Hearing and give a 1st Reading to Ordinance No. 80-02, rezoning 36 acres from Rural to RM 2.5 for Michelangelo Gardens by Rembrandt Enterprises. Motion carried unanimously. MOTION: Pauly moved, seconded by Osterholt, to adopt Resolution No. 80-13, approving the preliminary plat for Michelangelo Gardens. Motion carried unanimously. MOTION: Pauly moved, seconded by Redpath, to adopt Resolution No. 80-16, finding the Environri.ental Assessment Worksheet for Michelangelo Gardens a private action does not require an Environmental Impact Statement. Motion carried unanimously. MOTION: Redpath moved, seconded by Osterholt, to direct Staff to draft a developers agreement incorporating the recommendations of the Commissions and Staff. Motion carried unanimously. D. Olympic Hills 6th Addition by The Preserve and Olympic Hills Corporation. Request to rezone approximately 111 acres from Rural to R1-13.5, preliminary plat 84 single family lots , and approval of an Environmental Assessment Worksheet. Located east of Sunnybrook Road and west of Mount Curve. Ordinance No. 80-03 - rezoning; Resolution No. 80-14 - preliminary plat; and Resolution No. 80-15 - E.A.W. ) F Don Ringrose, Bather, Ringrose, Jarvis, Gardner, Inc. , representing The Preserve and Olympic Hills Corporation, spoke to the proposal and displayed graphics depicting the project. Mr. Ringrose commented to the main concerns expressed by the Council previously: 1) the fact that the lots could be larger which the proponents have addressed in two ways. In The Preserve section they had some lots with widths of 90 feet or so, they have now dropped out three lots in that area and have simply expanded the remaining lots to take up the width that was created and now they have lots that are on, the average of 100 feet in width in that general vicinity. In the other area they have expanded the lots lengthwise so the lots extend out into the area which is also identified as fairway for the golf club. The deed for title for this property which is under the easement area will go to the individual homeowners; however, those lots would be subject to an easement which would allow the golf course to utilize the property for golf club purposes . If in the event that property is no longer needed for golf club purposes, then those people still have fee to the full extent of their lot and nothing further would happen- to them. 2) The more fundamental issue was "is this the beginning of the end for the golf club". Mr. Ringrose stated it is the intention of the golf club to not subdivide the entire golf club into single family Tots or any other use. The proposal that addresses that issue consists of first a commitment in what- ever legal form is appropriate based on the attorneys involved, that in effect this is the last development that will occur within the golf club. If in the event that the golf club fails and the property in effect has to be sold for whatever reason, there would be an agreement entered into between the City and the golf club that the City would have right of first refusal . and in that fashion by acquiring the property could forever preserve it as open space or, if the City so deemed, a public golf course. The right of first refusal would be put in a legal format subject to the City Attorney's approval and Council such that it would transfer to subsequent owners. The obligation of the right of first refusal would transfer with the land to the new owner or any subsequent owner after that. If after fifty years from now after the third or fourth owner it is deemed that it is no longer feasible for it to City Council Minutes - 7 - Tues. ,January 22, 1980 D. Olympic Hills 6th Addition (continued) to remain and be operated as a golf club, before it can be sold to anybody else the City again would have the right of first refusal . Mr. Ringrose further added the developers and the City Attorney have also for the last two or three months been reviewing some conditions relating to the 1st through 5th Addition of Olympic Hills where there was some confusion as to what should have been done. The golf club has responded to the attorney on every item in addition to committing to no future development on the site. The proponents have also agreed to all of the conditions and suggestions that Staff made in the prior presentation such as one that no development g will occur until some sort of surfaced permanent roadway is available on the westerly end. Planning Director Enger explained this item was reviewed at the 12/10/79 Planning Commission meeting and the Commission recommended on a 6 - l vote that the City consider approval of the rezoning and preliminary plat subject to the conditions outlined in the December 5, 1979 Staff Report. Director of Community Services Lambert added the Parks, Recreation b Natural Resources Commission reviewed this proposal on December 17, 1979, and recommended the Council consider approval as per the Planning Staff Report with the following change: that the Neill Lake Dike be dedicated for a pedestrian system at the time of final plat approval , and that The Preserve provide any additional trail easement required to connect this dike trial to the existing trails in The Preserve. Penzel asked if the proponents would be willing to sign an agreement permitting acquisition of the golf course by the City for what it is on the tax roles for? Larry Peterson, representing The Preserve, replied he believed that would be agreeable. Redpath asked if the proponents would be agreeable to making sure the final holes are playable before any construction starts. Mr. Ringrose explained they have discussed this and the sequence would be to develop the three new holes, get them fully playable before abandoninq the existing holes, which in effect says the development of the lots themselves would probably be at best in 1981 . Osterholt suggested that all the homesites in the proposed development be assessed the cash park fee and asked if the developer would be amendable to that? Mr. Peterson replied in the affirmative. Osterholt added there are some points concerning work not completed by The Preserve as addressed in the letter from City Attorney Pauly, and asked if the developer is willing to complete those items. Mr. Ringrose replied it is his understanding that the developer and Olympic Hills concurs and would suggest as a condition of approval prior to the acceptance of final plat, completion of those items which are listed and if for some reason they can't be completed physically, through the weather or something else, there would be a performance bond or some other legal document to insure their completion. City Attorney Pauly added that would be acceptable. Mr. Ringrose stated the proponents would be willing to build the pathway if the City saw fit to make that a condition of the approval . Osterholt asked Mr. Mike Adams, Olympic Hills Corporation, if he understands and is willing to make the commitment to give the City right of first refusal on the golf course based on the assessed valuation. Mr. Adams replied in keeping what they are trying to accomplish they would agree to that condition. The orice is not rplpvant as thev do not ..intend to sell the pelf course, City Council Minutes - 8 - Tues. ,January 22, 1980 D. Olympic Hills 6th Addition (continued ) Mr. Jones , 9416 Clubhouse Road, asked what consideration has been given for h assuring completion of i teals. Penzel replied one of the things the Council is attemting to do is tie down all of the loose ends as far as the previous phases of the development are concerned and we will have an ironclad commitment that those things will be taken care of prior to work on this particular addition. Also there should be intersection improvements at Co. Rd. 18 and Anderson Lakes Parkway this year with signalization. .fi Mr. Jones further questioned if the lots proposed, without the easements , would meet the requirements of the zoning ordinance. Penzel replied the Council has been assured by Staff and the proponents that they will be in conformance with the requirements of the zoning ordinance and will not be undersized lots. A Don Hadd, 9805 Garrison Way, stated one of the things he is concerned about in The Preserve is the build up and loss of open spaces. If Olympic Hills can do what they say and preserve the integrity of the golf course and keep it at that nature, that is fine, and if they can he assured that no more building will be allowed that is also fine. Would like to be assured the golf course will be kept as open space. Mrs. Jones, 9416 Clubhouse Road, asked what will happen to the run-off when the upper hill is turned into houses as they had water within 10 feet of their back door during the heavy rain last year. Mr. Ring rose replied the net effect will be positive. Everyting that is high 4L and comes down to the street will be intercepted by the street and there will be storm sewers in the street which will take the water permanently down to a ponding area. Also the proponents would prefer whenever possible to struc- ture the front yards of the houses higher than the street from an aesthetic standpoint so portions of the north side will also drain into the street. Jullie added that the engineering staff can take a look at the grades and elevations and will verify there is an overland overflow route that would be at a lower elevation than the elevation of the homesites. MOTION: Pauly moved, seconded by Redpath, to close the Public Hearing and give a 1 st Reading to Ordinance No. 80-03, rezoning Olympic Hills 6th Addition by The Preserve and Olympic Hills Corporation from Rural to R1-13.5. Motion carried unanimously. City Attorney Pauly asked Mr. Adams if he could see any problems with the lenders as to the commitments which he has made this evening. Mr. Adams replied he could not imagine any problems. City Attorney Pauly asked that it be made part of the record that the offer for the granting of the right of first refusal did originate with Olympic Hills Corporation, and not at the suggestion of the City, as outlined in Mr. Adams letter of November 14, 1979. MOTION: Osterholt moved, seconded by Redpath, to adopt Resolution No. 80-14, approving the preliminary plat for Olympic Hills 6th Addition. Motion carried unanimously. MOTION: Redpath moved , seconded by Pauly, to adopt Resolution No. 80-15, finding the Environmental Assessment Worksheet for Olympic Hills 6th Addition a private action does not require an Environmental Impact Statement. Motion carried unanimously, City Council Minutes - 9 - Tues. ,Janua ry 22, 19BO D. Olympic Hills Fth Addition (continued) MOTION: Osterholt moved, seconded by Redpath, to direct staff to draft a developer's agreement addressing the concerns expressed by Staff and 4 requirements by the Planning Commission and the Parks, Recreation & Natural Resources Commission, that construction not commence until points in City ' Attorney Pauly's letter have been satisfactory completed or bonding or legal documents received, cash park fee to be received on all lots , acceptance of the proponent's offer of right of first refusal at the assessed value at the time of sale to the City, completion of the golf course before construction of any homes , and also that the sidewalk be put in by the developer. Motion carried unanimously. ' E. Reinstating Planned Study Properties around Co. Rd. 4 and T.H. 5 back into Planned Study Ordinance No. 80-04 Penzel requested that staff check to make sure the parcel rezoned for Stewart Sandwiches is not included in this Public Hearing. City Planner Enger stated he would make sure the Stewart Sandwiches parcel is not included before the 2nd Reading of the ordinance is held. MOTION: Redpath moved, seconded by Osterholt, to close the Public Hearing and give a 1st Reading to Ordinance No. 80-04, reinstating Planned Study properties around Co. Rd. 4 and T.H. 5 back into Planned Study. Motion carried unanimously. F. Request for Municipal Industiral Development Bond approval for Einess Norderhus and Anderson project Eden Prairie Professional Building)_ in the amount of $700TOOO.00 Resolution No. 80-23 Lance Norderhus , one of the principals making the request, spoke to the request for Municipal Industrial Development Bond approval as outlined in application submitted to the. Council . Norderhus gave 3 reasons for the request: 1) current market conditions, 2) a professional building would provide services to fill needs in the community and should encourage employment, and 3) in the course of developing the professional building it will benefit the elderly. City Attorney Pauly distributed a substitute resolution for Council ' s consideration. Edstrom commented that the original resolution was woefully inadequate and he has not had a chance to review the substitute resolution other than finding it is different from the resolution for Tekcom Properties prepared by the same bond counsel . City Attorney Pauly explained apparently when the original resolution was sent to Mr. Frane it was indicated that it had gone to his law office, however, for some reason they did not receive a copy. In reviewing the material in the last couple of days Pauly' s office noted it, and contacted the bond counsel whereupon the submitute resolution was drafted with the bond counsel ' s consent. MOTION: Osterholt moved, seconded by Edstrom, to close the Public Hearing and adopt Resolution No. 80-23, approving the request for Municipal Industrial Development Bond approval for Einess, Norderhus and Anderson project (Eden Prairie Professional Building) in the amount of $700,000.00. Motion carried unanimously. City Council Minutes - 10 - Tues. ,January 22, 1980 G. Request for Municipal Industrial Development Bond approval for Tekcom Properties in the amount of 1 ,250,000.00 Resolution No. 80-21 Robert J. Vesaas, Project Coordinator for Anderson Development, explained they are attempting to help one of the local firms , Tekcom Properties , to Jl become established in their Shady Oak Industrial Park. Mr. Vesaas introduced the two partners in the venture: Ron Schwinkendorf, President and Chief Executive Officer of Tekcom Properties , and his associate, John G. Mutschler, ^ Partner and Counsel for Tekcom Properties. Both Mr. Mutschler and Mr. Schwinkendorf spoke to their request as outlined , in application submitted to the Council . Mr. Fredrickson, Miller & Schroeder, responded to a question raised by Osterhol t as to where the other financing will be coming from as the project is listed for $1 ,978,000, and the proponents are asking for Municipal Industrial Development Bonds in the amount of $1 ,250,000. Mr. Fredrickson commented it is his understanding that the correct estimated cost is $1 ,900,000 and some of that is a soft number as they are not sure how much office space is going to be completed with the structure. The remainder of the financing will come from Owner Equity. Os terholt asked what financial arrangements will have to be made on the ownership. Finance Director Frane replied he understands there is going to be a 50-50 partnership between Mr. Schwinkendorf and Mr. Mutschler. Penzel asked if there were any others committed to rental . Mr, Mutschler responded not at this time. Finance Director Frane explained in situations of this nature it is his under- standing in order to receive final approval of the lender they will have to have a high percentage of the property leased out. Mr. Fredrickson added usually a break even for it to pay occupancy costs and debt service on the mortgage is about 70%. Penzel questioned if the terms of the lease have to coincide with the length of the mortgage. Mr. Fredrickson replied if they were doing a public bond issue conceivably they would request that they have firm leases that coincide with the length of the bonds. This is a typical general purpose kind of . property and the typical length of lease is 3 - 5 years and that is perfectly acceptable to bond buyers because they understand that as leases expire and are renewed generally they have been at higher rental rates. So it is to every- one' s advantage, kind of the opposite of what it was a few years ago, to keep leases relatively short term so the rents can be escalated as inflation continues. Ed strom commented the lack of substantial present leases of the facility troubles him as the Council has turned down proposals in the past that were even stronger than this one in terms of where it stands at this time. Penzel stated he has substantial concern regarding what appears to be a rather speculative nature of the proposal which is the unleased portion. The propo- re nts might be wiser to firm up their position regarding the use of the proposed structure. While it is true there is no financial obligation on the part of the City to defer any short fail in the repayment of these bonds, the City' s good name is attached to that. The Council , Penzel commented, has the responsibility towards the maintenance of that good name, financially as well as otherwise. For that reason Penzel stated he would be unable to support the application. A ty Council Minutes - 11 - Tues. ,January 22, 1980 t� G. MIDB' s for Tekcom Properties (continued) f Tom Lohmann, Dain Bosworth, Inc. , explained in the case of a spec building, investment real estate, or multi-tenant building, in a great majority of cases the Council will find that no one will sign a firm lease prior to the actual construction beginning on the project. They can give letters of intent to lease, but very infrequently, unless the tenant is also an occupant of the building, do you see a firm lease in advance of the construction of the project. Mr. Vesaas stated he supports Mr. Lohmann' s comments. Penzei felt even a commitment or letter of intent would be helpful over the total speculative approach. The proponents requested a continuance of this item to the February 19th Council meeting. MOTION: Redpath moved, seconded by Edstrom, to continue the Public Hearing for the request of Tekcom Properties for Municipal Industrial Development Bond approval to the February 19, 1980 Council meeting. Motion carried unanimously. Edstrom suggested the proponents talk to Finance Director Frane in the interiam as Mr. Frane knows the varying views of the Council members regarding MIDB's. H. Request for Municipal Industrial Development Bond apRroval for S.K.S. Properties in the amount of 1 ,000,000.00 (Resolution No. 80-22 Tom Lohmann, Dain Bosworth, Inc. , representing the proponents, summarized the application as submitted to the Council . S.K.S. Properties is an investment partnership made up of three individuals : l) Robert Strachota, 2) Terrence Kingston, and 3) Peter Sontag. Lohmann stated there is a cause for the City to strongly consider tax exempt financing for this type of project. It is important to recognize that a lot of smaller businesses are unable to afford to build their own building and thus cannot take advantage of tax exempt financing, In Mr. Lohmann's opinion it is very important the City consider the smaller businesses along with the larger companies that occupy buildings within Eden Prairie. When considering this resolution Mr. Lohmann stated the Council ought to consider that the lending institution that will be purchasing this loan will take necessary precautions to protect their interests. Further if the Council is concerned about the ability to generate leases, it is important to consider the amount of vacant space in the community at this time for the small user who has a need for approximately 30% office space and the balance warehouse space. The vacancy rate is extremely small and that is one of the reasons Mr. Lohmann has undertaken this project. Mr. Lohmann added sophisticated investors will be buying this particular investment. In this particular case National Farmers Union & Casualty Company has been named the buyer, which is a large financial institution. They have visited the site and have looked over the plans and specs. It appears from the initial analysis that this particular project fits their needs. The permanent funding will not take place until breakeven plus 10% net income has been achieved, so there are a number of ways in which to cover this type of risk in the debt instrument. Peter Sontag stated he realizes the key concern in such a project for the Council is the ability to lease the space and they have engaged a firm to help them do this. Thus far they have had several very interested parties, i .e. , a bakery which may take 50 of the space, a food distributing corporation, and another product manufacturing company. There seems to be adequate demand for this type of building. `:ity Council Minutes - 12 - Tues. ,January 22, 1980 H. MIDB' s for S. K.S. Properties (continued) Osterholt questioned if the proponents would be leasing the building at market rates or less than market rates? Mr. Lohmann replied the market bears out what the rental will be and it will be at market rental rates. With conventional financing the rates would be higher than market rental rates, which would thus not justify the project. Mr. Sontag added there is no plan on their part to go to the high rents as there is no need for it. Sontag asked the Council to convey to them what conditions would be necessary to gain approval of MIDB' s for their project. Penzel suggested the proponents ? : discuss the feelings previously expressed by Council members at other meetings with Finance Director Frane, as Mr. Frane is well aware where various Council members stand regarding the minimal standards the Council would expect. Mr. Sontag requested a continuance of this item to the February 19, 1980 Council meeting. Osterholt asked what the proponents would hope to accomplish during that time period. Mr. Sontag replied they hope to obtain letters of intent from various parties interested in locating in the building, and hopefully leases. } MOTION: Osterholt moved, seconded by Pauly, to continue the Public Hearing for the request of S.K.S. Properties for Municipal Industrial Development Bond approval to the February 19, 1980 Council meeting. Motion carried unanimously. I. Request for Liquor License by Brothers Restaurant, Eden Prairie Center City Manager Ulstad explained the application has been reviewed by Staff and the Public Safety Department. Fred Burstein one of the owners of the Brothers Restaurant, reviewed the application, distributed a copy of the layout of the restaurant, and gave a brief background on the history of the Brothers Restaurants. Also in attendance in support of the liquor license were: Rich Robey, Manager of the Eden Prairie Center, and Sam and Leonard Burstein, owners of the Brothers Restaurants. Penzel asked the identity of the manager for the restaurant. Fred Burstein explained for purposes of this application, because they cannot start construction until they know the liquor license has been approved, they have designated one of the brothers to be manager. However, they do understand before they can open up their restaurant and serve liquor, that any other manager than the brother that has been designated as manager of the restaurant, will have to be approved by the City Council . Captain Wall stated their investigation has been completed and everything found to be satisfactory. MOTION: Redpath moved, seconded by Osterholt, to close the Public Hearing and continue final approval by the Council of the liquor license for Brothers Restaurant- to the February 5, 1980 Council meeting. Motion carried unanimously. MOTION: Pauly moved, seconded by Osterholt, to continue the Council meeting past the scheduled 11 :30 PM adjournment time. Motion carried unanimously. VI . REPORTS OF ADVISORY COMMISSIONS No reports. city Council Minutes - 13 - Tues. ,January 22, 1980 VII . REPORTS OF OFFICERS, BOARDS & COMMISSIONS A. Reports of Council Members 1. Mayor Penzel requested that Commission/Board appointments be scheduled for the February 5, 1980 Council meeting, and asked Council members to contact interested parties for purposes of nomination. 2. The Council thanked the Eden Prairie Fire Department and Fu`6Tic7Safety Department for their hard work and dedication in the fire at the landfill . B. Report of Ci ty Attorney 1. Resolution No. 80-11 , authorizing participation in the Suburban Police Recruitment System continued from January 8, 1980 City Manager Ulstad requested the Council not take action on this particular request, allowing staff a few months to see how this operation and application of available personnel is working out. MOTION: Pauly moved, seconded by Edstrom, to return Resolution No. 80-11 to staff as per the City Manager's request. Motion carried unanimously. 2. Outdoor Advertising Signs City Attorney Pauly gave background information on the sign ordinance and reviewed the history of the Naegele signs and legal aspects concerning their location. C. Report of City Manager 1. Request for occupancy ermi t for the Fairview Southdale Detox and Receiving Center to be located at 9927 Valley View Road Mayor Penzel explained he has had contact with the South Hennepin Human Services Council who have reviewed this request and recommended approval to the City Council. Penzel also stated he has had contact with the nearest neighbor, Mr. Bearman, who said he and Hilger' s (other neighbor) were given a very courteous and professional presentation on the proposed use and felt the proponents were amenable to giving them what was a necessary safeguard - that being an early warning in case someone gets out of hand. Mr. Bearman was satisfied with that conmit- ment and felt it was a good location for this use and supports its operation. Penzel added he asked City Manager Ulstad to check into the function of the Chanhassen Center as to any problems the City of Chanhassen may have had as a result of this facility. Ulstad responded he was not able to talk to the administrator; however, it is his understanding in reviewing with our Public Safety Department and Hennepin County that the reason for changing the location is one of economics. Whereas the County has been supporting this program on their own in the past, the present proposal is for private enterprise, i .e. , Fairview Hospital , to operate these facilities and they feel they can provide three of these facilities for the same as the one that is being operated in Chanhassen. Another reason is they want to locate it in the County and closer to the users. City Council Minutes - 14 - Tues. ,January 22, 1980 =; 1. Request for occu ancy._ermit for the Fairview Southdale Detox and Receivin Center to be located at 9527 `,'a"ey View Road continued Kirby Erickson, Administrator for Fairview-South Hospital , referred to his communication dated January 14, 1980, and offered to answer any questions the Council members may have. Mr. Erickson introduced Allen Nohre, Director of Human Services, who will be administering the proposed project, Bob Rowland, Director of the detox program in Dakota County and a consultant for the proponents , and George Bergman, professional engineer who will be working on the architectural design of the project. Mr. Erickson responded to a question raised by Osterholt regarding food services. They do propose to cater food from Fairview-Southdale to the site but it will not be prepared on the site. MOTION: Redpath moved, seconded by Edstrom, to approve the request for an occupancy permit for the Fairview-Southdale Detox and Receiving Center to be located at 9927 Valley View Road. Motion carried unanimously. D. Report of Director of Community Services 1. Letter from Elliot Perovich, Chairman of the Metropolitan Parks & Open Space Commission, regarding Anderson Lakes Park Director of Community Services Lambert reviewed his memo with the Council , stating the Anderson Lakes Joint Master Plan is not a joint master plan any more if the Council approves the proposal in the letter from 4LMr. Perovich dated January 11 , 1980. Osterholt questioned what Eden Prairie funds were involved. Lambert replied q P he has been working on that question for about two months and figures seem to indicate it to be approximately $100,000.00; however, he has not finished reviewing the past two months. Osterholt stated until the figures are complete he would like to reserve any action on this item. Edstrom asked if the Parks, Recreation & Natural Resources Commission had taken any action on this item. Lambert explained the Commission reviewed this item on January 21st and on a 4 in favor and 1 opposed vote, recommended approval to the Council with a couple of contingencies: 1) if we are going to get reimbursement they would like to see us try to get the money plus interest; and 2) they wanted to see Hennepin County commit to keeping Bryant Lake open if they take it over. Council continued this item to the February 5, 1980 Council meeting and requested figures on how much Eden Prairie taxpayers have invested in the Anderson Lakes/Bryant Lake facilities to-date. Osterholt also requested figures from Finance Director Frane on the tax loss to the community. 2. Metropolitan Airports Commission lease for Flying Cloud ballfieid expansion Osterholt felt the money sr-iuld be spent on ballfields at a location where there is a larger population, and also where lights would be allowed. MOTION: Redpath moved, seconded by Edstrom, to refer this item to Staff and the City Attorney for review and recommendation, to be considered at the February 5, 1980 Council meeting. Motion carried unanimously. City Council Minutes - 15 Tues. ,January 22, 1980 x s 3. Request to remove park building at Round Lake Park MOTION: Osterholt moved, seconded by Redpath, to approve the Staff recommendation to remove the park building at Round Lake Park. Motion carried unanimously. 4. Acceptance of deed from the Metropolitan Park Foundation MOTION: Osterholt moved , seconded by Redpath, to accept the Quit Claim Deed from the Metropolitan Park Foundation giving the City of Eden Prairie two pieces of property along Purgatory Creek as per Staff recommendation. Motion carried unanimously. E. Report of Finance Director 1. Re nest for Final approval for Municipal Industrial Development Bonds for R an Construction Company in the amount of 2,400,000.00 Resolution No. 80- 8 - MOTION: Redpath moved, seconded by Edstrom, to adopt Resolution No. 80-18, approving the request for final approval for Municipal Industrial Development Bonds for Ryai Construction Company in the amount of $2,400,000.00. Redpath, Edstrom and Pauly voted "aye" , Osterholt and Penzel voted "nay". Motion carried. VIII.NEW BUSINESS A. Discussion on letter received from Fritz Anderson Osterholt referred to letter he received from Fritz Anderson, Mr. Anderson has approximately 6 acres of property and his trees were tagged and he contracted to have the trees hauled out which cost him around $2,000. Under our subsidy program he is supposed to get $1 ,000, and he ended up getting $352.00 because in the middle of the program the rules were changed. All Mr. Anderson is requesting is that he get what was originally thought to be agreed to. Council members concurred with Mr. Anderson's request and that he submit a claim to be paid by the City. B. Minnesota Vikings interest in locating in Eden Prairie Osterholt requested that a letter be drafted to the Minnesota Vikings encouraging their development in. Eden Prairie. IX.ADJOURNMENT MOTION: Redpath moved, seconded by Pauly, to adjourn the Council meeting at 12:35 AM. Motion carried unanimously. I