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City Council - 12/30/1985 APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL MONDAY, DECEMBER 30, 1985 4:00 PM, SCHOOL ADMINISTRATION BOARDROOM COUNCIL MEMBERS: Mayor Gary Peterson, Richard Anderson, George Bentley, Patricia Pidr_.ock, and Paul Redpath CITY COUNCIL STAFF: City Manager Carl J. Jullie, Assistant to the City Manager Craig Dawson, City Attor- ney Roger Pauly, City Attorney Rick Rosow, Finance Director John D. Frane, Senior Planner Mike Franzen, and Recording Sec- retary Karen Michael PLEDGE OF ALLEGIANCE ROLL CALL: Councilmember Pidcock arrived at 4:10 p.m. I. APPROVAL OF AGENDA MOTION: Anderson moved, seconded by Bentley, to approve the Agenda as published. Motion carried unanimously. II . CONSENT CALENDAR A. Final aeproval of Munici al Industrial Bonds for Eden Square Shopping Center in the amount of $6,200,000.00 (Resolution Nd. 8 -28 B. Fiin_a1 r val of HousingRevenue Bonds for BM point II in the amount _, , solution No. 85-ZBIT C. Final aperoval of Housing Revenue Bonds for Preserve Place in the amount o 0. (Resolution No. - MOTION: Redpath moved, seconded by Anderson, to approve items A - C on the Consent Calendar. Bentley asked if all of these proposals have zoning. City Manager Jullie stated that Eden Square does not, but that preliminary approval for zoning has been given. Anderson asked how this fit into the resolution which the Council adopted at its last meeting regarding the fact that zoning was necessary before housing revenue bond approval was considered. Jullie said that resolution related to the preliminary inducement resolutions for housing revenue bonds. City Council Minutes -2- December 30, 1985 Councilmember Pidcock arrived. VOTE ON THE MOTION: Motion carried unanimously. III. PUBLIC HEARINGS A. R2guest for Housing Revenue Bonds for Eden Pointe in the amount of City Manager Jullie said this was a rehearing of a prior hearing to perfect the TEFRA rules. There were no comments from the audience. MOTION: Bentley moved, seconded by Redpath, to close the Public Hearing. Motion carried unanimously. IV. ORDINANCES & RESOLUTIONS A. Final approval of Housing Revenue Bonds for Eden Pointe in the amount of $- , , (Resolution No.- 1) City Manager Jullie indicated adoption of this resolution would give final approval to a 143-unit proposal in the southeast quadrant of { Homeward Hills and Pioneer Trail . City Attorney Rosow stated all the documents are ready. MOTION: Redpath moved, seconded by Bentley, to adopt Resolution No. 95-291, authorizing a project under Minnesota Statutes, Chapter 462C and the issuance of multifamily housing development revenue bonds to finance the project. Motion carried unanimously. B. Final apgroval of Housing Revenue Bonds for CSM in the amount of T64,UUU,OEYOeso u ion No. - City Manager Jullie noted that this as a special project in that the zoning for the project has not been reviewed. Jullie recommended the proponents be given the opportunity to explain their proposal to the Council. There was discussion as to whether or not the Council should consider the proposal based on whether or not they could "reasonably" expect it to be built. Pidcock asked how approval of this might affect the City 's bonding authority. City Attorney Pauly said if the City does not have a basis City Council Minutes -3- December 30, 1985 on which to make the determination that the project has a reasonable basis for being built, the result will be that the interest on the ' bonds will not be tax exempt and could result in the City 's certificates for subsequent bond issues not being acceptable to the IRS. Peterson said that if the City made a good-faith effort towards the proposed project then it would be possible for the project to be revised. Rosow said the City would have to reasonably expect that 800 units will be built. If the project should be scaled back when it comes to the zoning, that is not considered arbitrage. Gary Holmes , President of CSM, addressed the proposal. Holmes said the proposal calls for a density of 20.2 units per acre and the property is not presently zoned for that. He stated that the Cherne property on which this is proposed consists of 66+ acres of which 37 acres are buildable; 27 acres are wetlands. He noted that Cherne has agreed to sell CSM additional land so the project can be completed. He said that with a project of this size, amenities such as indoor racquet ball courts, tennis courts, party rooms, etc. can be included. Holmes indicated there were many ways which this could be built; at the present one of the buildings would be ten-stories with the other buildings being 4-stories and 6-stories. Holmes said this could be changed and they are willing to work with Staff to come up with an acceptable plan. Bentley expressed concern with the degree of the project. He wondered what would happen if, during the process of review, it was determined that this site was not appropriate for high density residential. Rosow said in order for the Council to approve these bonds it would have to reasonably assume this project would be built. Rosow stated that, based on the revenue ruling which the Council had discussed at a previous meeting, the City is a long way from any sort of a bad-faith issuance of bonds. Rosow said the Council has to determine whether or not it is comfortable with the project as it sees it. Anderson said there are two key words which bother him -- "reasonably" and "comfortable". Redpath referred to the December 27, 1985, memorandum from the Planning Staff in which this proposal was addressed. He asked if Staff was recommending "no go". Senior Planner Franzen said Staff had not had time to complete a detailed review of the project, but had identified a number of concerns related to the zoning code. Franzen also said there were questions regarding the density. Bentley asked if the proposal would be reviewed using criteria established for the Major Center Area (MCA) . Bentley said he believed criteria for the MCA was and should be different regarding setbacks, building height, mass, density, etc. Redpath concurred. Jullie said there had been discussions from time-to-time about setting up some special zoning i I 4 City Council Minu;.es -4- December 30, 1985 a, code amendments in the MCA so developers would not have to go through the variance process. Redpath noted that these were the recom- mendations included in the Major Center Area Study which was done a number of years ago. Jullie reviewed the process which had been used in the MCA Study. Lloyd Cherne, owner of the property, said he had heard for some time that this property would be for high-density residential use. He noted that over the years he had opportunities to sell the property for office use as well as low-density residential use. He stated he had more property he would be willing to sell to the developer to make the project possible. Bentley said he has been the major complainer about bonds such as housing revenue bonds. He said in looking at this project there is something in it which has not existed in some of the other proposals. He said he believes that tax-free bonds should be used by the City as a tool for development; they should be used as a tool to develop areas which the City would likc to see developed. He said he believed the question to be whether or not it is appropriate to use housing revenue bonds on this site and he said he believed it was appropriate. Bentley said another issue which should be considered by the Council is whether the type of use is consistent with what has been envisioned in a particular area and, again, he felt this was consistent with that. Bentley said he felt that 800 units could reasonably be built on this site and that the Council has no reason to believe that they would not be built. Bentley asked what would happen to the bonds between the time they are sold and the time the developer has gone through the zoning process. John Larson, bond counsel with Holmes and Graven, said the proceeds from the bonds would be invested in Treasury bills and the interest paid would be the same on both the bonds and the proceeds so there would be no arbitrage. Larson said after March there could be arbitrage earnings which could be used by the developer for expenses incurred in the process of development. Anderson asked what would happen if the Council granted approval for the bonds tonight and then did not approve the project when it came through the development process. Rosow stated there is a statement in the resolution for approval of the bonds which states the City does not guarantee zoning. Rosow said the Council does not have an obligation to rezone based on action taken on the bonds. Bentley said it seemed to him that the proponent appeared to be willing to work with the City to work out the questions which had been raised by the Staff. MOTION: Bentley moved, seconded by Redpath, to adopt Resolution No. 85-292, authorizing the issuance, sale and delivery of the $64,000,000 housing development revenue bonds (Fountain Place Apartments Project) , r' - - City Council Minutes -5- December 30, 1985 Series 1985 the "bonds" which bonds and the interest and any premium thereon shall be payable solely from revenues derived from revenues pledged pursuant to the indenture; approving the form of and authorizing the PxPcution and delivery of an indenture of trust, a loan agrement, and a bond purchase and remarketing agreement; approving the covenants, and confidential offering memorandum; approving the form of and authorizing the execution and delivery of the bonds; and providing for the securities , rights and remedies of the holder of said bonds. Motion carried with Pidcock voting "no". Anderson said he felt the information in the packet raised some questions. He said he would like to see something like this done, but he hoped the Council would not be caught in a bind by approving the bonding prior to reviewing the rezoning proposal. V. ADJOURNMENT The Council adjourned to a special session at which time City Attorney Pauly discussed pending litigation. i I l I .. :..., _ t ' r a i r Y a u r :a ! .1 . f � t t(1 I '1r r 1 p1�1 r T 1 ' t _ � r 1 t � � f� j j ! i ti �; . . � r� n '� ��. . . • . � ' . ¢� . �, 1 . � �- • � a • . .. ,r� �.` 'Irr ' �. �� i ' ,, x 1 � ° T �i. +f fi � �. • ,,` 1�• -• � `�,.a. _ � T `' .�`' ._ a �. w'� A �• ' � ♦� i.. ♦���� � /�;'_ ��'r • 4..�� � �� f +'�l 1 a�' • *^h,. • � •;�+}'.. •' •".. a:" . •�• . ���� s � s•, s'. �rl '• � r�. .:iz.- ; „�� ,� r � '�.� ,: .;� , ,. r'���\ � � .• �, �t . _� •�s i t iF F M; •'� 1 I J- t�;�a' ,' • f r���� .'� �`f•~ � ��' , �� � ��� '� 4-.y���� .4, � � �+«��''� .5 y CAMERA OPERATf)R'S CERTIFICATE I lk reby certify that the nucrophotumraphs appearing on this roll of fitrn are true. accurate, awl complete copies of the original records descchbed below. Reprmfuc:tlons 4ntended to serve as permanent records comply with standards established by the Minnesota Histuncal .Society. AGENCY OF OKIGIN: CI` Y OF EDEN PRAIRIE REC0RD SERIF Si CC'M COUNCIL MINUTES i BEGINS WITH: 1956 I:N1.)S WI"I*H- 1985 3 /26/1'i4 DATE CAMERA OPERATOR'S SIGNATURE 4 PRODUCING LABORATORY CITY/STATE