Anoka City Council

WORKSESSION OF THE ANOKA CITY COUNCIL ANOKA CITY HALL CITY COUNCIL WORKSESSION ROOM FEBRUARY 25, 2019 1. CALL TO ORDER Mayor Pro Tem Freeburg called the worksession meeting to order at 5:00 p.m. 2. ROLL CALL Present at roll call: Mayor Rice (arrived at 5:05 p.m.), Councilmembers Barnett, Freeburg, Skogquist, and Wesp. Absent: None. Staff present: City Manager Greg Lee; Finance Director Brenda Smith; Community Development Director Doug Borglund; Associate Planner Clark Palmer; HRA Housing Manager Darin Berger; Public Works Director Mark Anderson; Electric Utility Director Greg Geiger; and Recording Secretary Cathy Sorensen. 3. COUNCIL BUSINESS and/or DISCUSSION ITEMS 3.1 Update; Highland Park Neighborhood. Community Development Director Doug Borglund shared a staff report with background information that provided an update regarding work that has been completed in the Highland Park neighborhood. He also discussed the remaining work that needs to be completed as well as options and opportunities for this redeveloping area of the City. Mr. Borglund reviewed the properties purchased to date as well as the nine remaining properties to acquire. Housing Manager Darin Berger shared how due to weather relocation of the purchased homes has been difficult but that Sauter and Sons were working to stage and complete the relocations. Mr. Borglund asked if there was Council interest in pursuing an apartment project. Finance Director Brenda Smith shared comments regarding the estimated $5.9 million in costs in 2018 which is now $6.6 million including lending costs and that we have just enough to pay back the internal loans of $6.5 million. Mr. Borglund referred to cost of apartments would be explored if Council shared an interest in such a project. Mayor Rice said it was difficult to come out ahead but that we should not be afraid as it will make a complete transformation for a very nice neighborhood near the golf course and if we take apartments, we will no longer have that luxury. Ms. Smith said the project could bring in $1.5-$2 million. Councilmember Wesp asked questions regarding proposed Parkway routes and said Option 1 could be a buffer to the apartments with new development near golf course. Mayor Rice said Option 1 was not as desirable because of the number of children living in the apartments. Councilmember Freeburg stated the homes will not be as saleable if the road goes through Option 2. City Manager Greg Lee said ACAAP was currently reviewing building conditions for items such as ADA compliance but said there may be other opportunities at this site. Councilmember Skogquist asked if there had been other unit discussions with owners on Euclid Avenue or others. Mr. Borglund said some property owners have inquired about City interest but the City has not worked on any higher density properties yet. Councilmember Skogquist spoke about salability and functionality of this neighborhood and how some of the negatives will still not be addressed and will always be ACCAP and higher end homes near the course and how the road makes the transition easier and how we have to create a buffer to maximize the appeal of properties on the east. Councilmember Barnett asked if investors have concerns. Mr. Borglund said they do and agreed a buffer would enhance any project. Councilmember Skogquist said he was not opposed to investing in a problem property but in this neighborhood, it would take a lot of work. Mr. Lee said the property is not substandard necessarily but does not meet ADA requirements and will take a fair amount of money to address, adding there are no garages. Mr. Borglund said the City will continue with the remaining properties and wanted some direction on stopping after those nine properties and on the apartments. Councilmember Freeburg suggested removing the current apartments and making more room for garages, parking and storage. Councilmember Barnett said the area is increasing in value and therefore worth more and said we should incentivize through revitalization programs.  Mayor Rice confirmed the properties were in TIF districts and asked if we can use tax abatement. Ms. Smith said it was unlikely we could use tax abatement but would confirm. Mr. Borglund said it would be a difficult project with two stories and no elevators. Mr. Lee suggested the Parkway be constructed in 2021 in advance of Highway 10 as the last nine properties will take some time. Councilmember Barnett asked about other concerns with Verndale other than youth. Mayor Rice said the traffic in this area does not flow as well therefore were safety concerns. Mayor Rice said we should clearly raise the neighborhood or it will end up as a frustration and if we could remove two buildings, we could provide a much grander improvement that could be one solution. Council consensus was there was some interest in obtaining cost estimates for the apartments and to continue discussions with ACCAP. 3.2 Update; City Development Sites. Mr. Borglund shared a staff report with background information and provided an overview of all City-owned development sites with the City Council and their current status. He shared the development site marketing book for Council review and reviewed City properties that have sold. Councilmember Skogquist asked about the current Hyland Park and if we have established a neighborhood park location. Mr. Borglund said the plan would be to reconfigure a park in the same location. Mr. Borglund shared about uptown Anoka at the Rum River and a proposed concept to give a river town flavor on City Parcel 2 with Lennar-offered townhome and rowhomes, adding a third party was also interested. Mayor Rice suggested owning more, even if unbuildable, as we have some as open space. Mr. Borglund shared City Parcel 3 offered workforce housing for Volunteers of America, adding there was no design yet but would tie in with the rest of the campus. Mr. Lee explained the process used in the past when multiple offers were involved where the City invited developers in to share concept plans for Council consideration. Mr. Borglund asked for direction on City Parcel 3 that included a proposed concept plan for senior affordable housing. Mayor Rice said this site provided tremendous opportunities with the river and that we should try for a different type project such as higher end homes. Councilmember Freeburg cautioned about potential parking problems with this site. Mr. Borglund said parking review would be part of the planning process. Councilmember Skogquist asked if the parking was standard when approved but not enough; need adequate for any future projects. Mr. Borglund shared the plan to expand the pond in front of the library and the possibility of a grocer. Mr. Borglund shared that Gramercy Development was proposing a senior cooperative on the golf course on City Parcel. He said the site was 4.5 acres and would be a co-op project with four stories, 120 units and underground parking. He said they would need to relocate the park maintenance building and would incorporate a sales office at Green Haven. Mr. Borglund shared their offer of $945,000 which was full appraised value. Representatives (did not sign in) from Gramercy Development, said while they were new developers, they have been working on senior projects for the past 10 years. They shared how they formed a new company because they saw deficiencies for active seniors and that this site would meet that goal with the golf course as they would love to partner with Green Haven. They clarified the project would include up to 120 units but noted they did not want to overbuild as they would have to presell, adding their intent to help create value with the golf course and restaurant with the possibility of a workout room at the clubhouse to complement both projects. Gramercy Development Representative shared while co-ops are not new the active socialization is new and shared background on The Waters projects which was the first co-op in Minnesota. She said they want to do an independent senior living project and shared potential finishes with a huge focus on the common area for socialization. She said many seniors want senior rentals but they know the City wants ownership units and will work to market and explain co-ops as relationship-focused, great location and a successful project. Gramercy Development Representative said the project would be branded consistent with the clubhouse to help celebrate the course. Councilmember Wesp asked about what occurs with the unit when someone dies and noted the nearby Applewood project was almost complete and how there was a significant market for this project, then suggested a possible driving range concept be incorporated. Gramercy Development Representative suggested golf simulators as a possibility as we want that type of community activity as well, adding the minimum age requirement would be 62 years of age. Councilmember Skogquist asked questions regarding how co-ops work. Gramercy Development Representative explained they have a specific design that included families visiting but was not assisted living, adding they will work to increase membership as well. Councilmember Skogquist asked about boutique amenities such as concierge, club, yoga instructors, and library space. Gramercy Development Representative said they did not intend to include a café because of the restaurant then shared comments on age, mobility and needs. The Council asked more questions regarding co-ops and how they work. Gramercy Development Representative said the market was prime but the decision was what type of senior housing is in demand. Gramercy Development Representative said they are sensitive to timing and would work closely with Green Haven on marketing. Mr. Borglund said if the Council supported the concept the next step would include a purchase agreement, zoning amendment, approval process with Planning Commission and City Council, bidding, financing and bonds with construction of 18-24 months, adding they would have to also bid the new park maintenance building. Ms. Smith shared her excitement with this project as the park maintenance building had zero tax capacity and this project would then go into the TIF district which would be good. Council consensus was to support this the proposed co-op type project. Public Works Director Mark Anderson spoke about the new Public Works site on 7th and Garfield of approximately $16.5 million. He said the building was adequate but needed work and more indoor space but mostly needed a new roof, security and renovating at an approximately cost of $1.4 million. He said all activities should come back to this new building and not be split with new golf maintenance building. Mr. Borglund reviewed details of the final City sites. Mr. Lee noted these will be future workshop items but that staff was asking if the apartment concept on City Site 6 was acceptable and if so, staff would continue to work with the interested party. Mr. Borglund confirmed the project would be a market rate building or possibly 80/20 affordable units. Mayor Rice said the concept was fine but should likely be all market rate units. Council consensus was to consider the option of apartments as long as it made financial sense, adding there was no rush. Ms. Smith said we cannot pay for the public building with TIF but TIF would be generated because of this project. She said staff will review the figures, including deferred maintenance and TIF affects.  Councilmember Skogquist agreed, stating there was no pressing need for the Public Works area and that prices will increase as demand increases and provide variety in the product if we wait. He said there is a lot of discussion about the amount of rental properties in Anoka and adding more does not seem conducive as it could place the City over 50% rental properties. He said if done though we should place the TIF money received into correcting the problem. Mayor Rice said the argument has never been about percentage of rental units but the character of the City and neighborhoods being influenced by rental units and that apartments would make sense here as it would accomplish the goals and provide change in the area. The Council held discussion on City Parcel 15, 1900 South Ferry Street. Mr. Borglund reviewed other pending lot sales, including the Woodbury House, adding there currently was a lot of activity in Anoka. 4. OTHER BUSINESS 4.1 Staff Update. None. 5. COUNCILMEMBERS COMMENTS None. 6. ADJOURNMENT Mayor Rice adjourned the Regular Worksession meeting at 7:04 p.m. Submitted by: Cathy Sorensen, TimeSaver Off Site Secretarial, Inc. Approval Attestation: Amy T. Oehlers, City Clerk