Anoka City Council

September 23, 2024 (Worksession) Page 1 of 11 WORKSESSION OF THE ANOKA CITY COUNCIL ANOKA CITY HALL CITY COUNCIL WORKSESSION ROOM SEPTEMBER 23, 2024 1. CALL TO ORDER Mayor Rice called the worksession meeting to order at 5:05 p.m. 2. ROLL CALL Present at roll call: Mayor Rice, Councilmembers Scott, Skogquist, and Wesp. Staff present: City Manager Greg Lee; Communications Manager Pam Bowman; Police Chief Eric Peterson; Public Works Director Mark Anderson; Community Development Director Doug Borglund; Liquor Operations Manager Kevin Morelli; Utility Director Del Vancura; and City Attorney Scott Baumgartner. Absent: Councilmember Weaver. 3. COUNCIL BUSINESS and/or DISCUSSION ITEMS 3.1 Presentation; The National Community Survey Questions. Communications Manager Pam Bowman shared a background report stating Brandon Barnett, Senior Survey Associate with Polco, would be presenting the National Community Survey results for Anoka. In mid-May, 3,000 randomly selected households in Anoka first received a postcard inviting the household to participate in the survey and a second mailing was sent including a cover letter with instructions, the survey, and a postage-paid return envelope. All mailings also included a web link to provide an opportunity for the residents to respond online. A total of 418 survey responses were received through this process, providing an overall response rate of 14%. On June 14, 2024, the online open- participation survey was then made available to all residents for two weeks, resulting in 42 responses through that process. Ms. Bowman said the survey results will be made available to the public on the City’s website and announced through various communication tools a day or so following the presentation. Mr. Barnett thanked Ms. Bowman for her assistance during the survey process then shared a background on Polco and their work. He shared facets of community livability polled from the survey that included community design, economy, mobility, parks and recreation, inclusivity and engagement, utilities, safety, natural environment, education, arts and culture, and health and wellness. He shared the survey process and mailing approach employed, and said the results were statistically weighted to reflect Anoka overall and had a 95% confidence interval with a +/-5% margin of error. He shared the survey results in detail and September 23, 2024 (Worksession) Page 2 of 11 compared them with national benchmarks, noting vibrancy of the downtown/commercial area, ease of walking, shopping opportunities, preservation of the historical or cultural character, and others rated higher in Anoka than national benchmarks. He outlined key findings that showed eight in 10 residents gave excellent or good ratings to Anoka as a place to live and the overall quality of life in Anoka and seven in 10 residents rated the overall image or reputation of Anoka as excellent or high. He reviewed responses in detail with many rating Anoka as either excellent or good in safety, the economy, mobility, community design, education, arts, and culture, and affordability. He outlined special topics unique to Anoka’s survey that included feedback regarding Better Values Liquor, a recycling center, community center, enhancements to the Anoka Senior Center, and improvements to the Anoka Aquatic Center. Mr. Barnett reviewed feedback regarding access to viewing local government meetings, how information regarding the City is obtained, and the rating of Anoka’s communication as excellent with the City newsletter rated the highest. He summarized survey conclusions that included the highest-performing areas of safety and the top three priorities for Anoka that included the economy, safety, and utilities. He shared comparisons to national benchmarks that showed of the 123 questions, 111 were statistically similar to comparison communities, with 11 items rated higher and no items rated lower. He outlined next steps the City could use to continue community engagement and how to track data then said he was available for questions. Councilmember Skogquist thanked Mr. Barnett for the report then asked about economics, methodology and demographic data collected and its accuracy and how both excess of response or lack of group response and how that is balanced if over represented. Mr. Barnett noted the demographic most likely to respond are older, white residents and that statistically the younger and minority demographic groups are less likely to respond and how they work with national data to define norms and look at areas where they fall short and how the data is calculated so as not to skew the survey. Councilmember Skogquist asked if one response could be weighted differently from a homeowner versus a renter for example or is the data just based on age, race, and other factors. Mr. Barnett explained the weighting table used that includes age, race, housing type, sex, and others factors and how the survey was not weighted based on age alone. City Manager Greg Lee said these surveys provide good data and shows that Anoka is on track with nothing showing that was way off the mark. He said people like to be in Anoka for events and entertainment and that the City could begin to focus more on public transportation as one opportunity for Anoka. September 23, 2024 (Worksession) Page 3 of 11 3.2 Discussion; Economic Development Commission (EDC) Hotel Market Study. Community Development Director Doug Borglund shared a background report stating the City obtained a grant of $9,000 through Anoka Country Regional Economic Development (ACRED) to cover 100% cost of a Hotel Market Study. He said the study was complete then summarized the results that include a hotel could be developed in Anoka of an upper to mid-size, traditional style of 80 rooms of double/queen on either two identified sites at 2nd Avenue and Van Buren Street and 7th Avenue and Bunker Lake Boulevard. He outlined the services that could include an exercise room, business center, social/leisure travelers with amenities of well-lit business areas, internet, complimentary breakfast, a small bar/food area, market item kiosk, and an indoor pool. He outlined target markets that included weddings, family reunions, and social events, especially in conjunction with the downtown area as well as nearby PGA tournaments and corporate/business travelers. He said a hotel could be competitive with the downtown area driving demand, adding the closest hotel was currently 4-5 miles away. He said the survey showed both sites were good but added the downtown site may be better. Councilmember Scott thanked the EDC for taking the lead on this concept and said the City has a lot of assets and that a hotel could be a great amenity to offer. Councilmember Skogquist asked if this topic has been discussed before. Mr. Borglund said the topic has been informally discussed in the past but now a study was conducted that shows the potential more formally. Individual (name inaudible/did not sign in) shared their former work at Majestic Oaks and asked if food/beverage/kitchen service would be offered as it may be a benefit to have kitchen and catering options and possibly alcohol offerings. Mr. Borglund said the focus of the study was limited on food service. Emily Larson, Mill Site Event Center, said they preferred Site #1 near the parking ramp and suggested reserving a level for direct access to the hotel and said they were excited about the conversation. She said they hold events weekly April- December and clients consistently ask for the nearest hotel and how she has to refer them to Coon Rapids. She said Anoka could use a boutique upscale hotel for other events such as a groom’s dinner for groups under 30 people. Jeremy Larson, Mill Site Event Center, supported adding a level to the parking ramp for a hotel, adding as chair of Discover Anoka Ticknor Bed and Breakfast is the only overnight option currently and there is a need. Councilmember Wesp shared he travels extensively and felt the north side would not be of interest to him as a traveler because it is not close to anything and felt the other location would be better. He said while he wouldn’t stay downtown himself there is a lot of interest in Site #1 and noted Ramsey is building a hotel September 23, 2024 (Worksession) Page 4 of 11 near their core area too and said a hotel needs to be sustainable and support the businesses in the City. Mr. Lee commented the January worksession will include a topic for Council input and vision on all City-owned properties and that this topic will be included for further discussion. 3.3 Discussion; Economic Development Commission (EDC) Business Survey. Mr. Borglund shared a background report stating the City of Anoka EDC completed a business survey earlier this year. He said 460 emails were sent to businesses and 58 of those businesses responded or 13% of those contacted completed the survey. He shared a copy of the questions and responses from businesses and summarized the survey results that included immediate concerns such as jail expansion, golf course, parking, safety in the downtown area, and development. He outlined input on how to help businesses succeed through public safety, parking, business licensing, and social district, and programs/resource offerings then spoke about other factors that influenced decisions to locate businesses in Anoka such as the Highway 10 improvements. Mr. Borglund spoke about other needs such as a grocer, housing/hotel, and restaurants then outlined input regarding anticipated future expansion. Brandon (didn't state last name/not signedin, Amore Antiques, noted many small business owners didn’t receive the survey and suggested getting the Anoka Area Chamber of Commerce and Discover Anoka more involved to get more responses. Mr. Borglund asked him to share his contact information and he would forward the survey to him. Joelle Allvord, Anoka, suggested changing the name of who surveys are coming from as well as the subject matter to something such as City of Anoka Survey to separate it from businesses' many emails it may make it more prominent. An audience member spoke about survey differences and suggested giving a different perspective on all the good things then asked about the parking survey that was to occur. Mr. Lee said a parking survey from the Parking Advisory Board (PAB) will be conducted separate from this survey. Councilmember Skogquist asked how regular surveys are distributed. Mr. Borglund said surveys are now being used in place of business visits to allow more frequent contact. 3.4 Discussion; Drug Paraphernalia. Mr. Borglund shared a background report stating at the August 19, 2024, Council meeting the Council considered repealing Chapter 46, Controlled Substances, Article XIV, Division 2. Drug Paraphernalia due to changes in State law related to September 23, 2024 (Worksession) Page 5 of 11 the legalization of cannabis. The Council determined that additional discussion was warranted before any action was taken. Below are some options the City Council could discuss: Option 1: repeal Chapter 46, Article XIV, Division 2 in its entirety; Option 2: restrict the sale of products identified in Chapter 46 only to be sold at State-licensed cannabis retail businesses; Option 3: restrict the sale of certain products identified in Chapter 46 from being sold in the downtown area. City Attorney Scott Baumgartner explained when originally adopted we followed the definition under Statute but since then Statute has been amended and paraphernalia is no longer considered a crime and we need to find what the City wants to regulate because there is an allowance now to sell paraphernalia in future cannabis businesses. He spoke about how the current ordinance places law enforcement in a difficult situation trying to regulate what is allowed based solely on the definition. Councilmember Wesp referred to when the City discussed allowing adult book stores in the 1990s and restricted them from the downtown area and how they worked with the businesses at the time and felt the same direction should occur here. He said while we can’t prohibit based on Statute maybe we can restrict in the downtown area and focus on what kind of image we want to have. He suggested having the Chamber, Discover Anoka, and ABLA weigh in as well. Jamie Croyle, House of Oilworx, said while she understands the Council doesn’t want to see headshops in the City she encouraged them to consider allowing them in some areas because then customers will go to other cities to purchase paraphernalia which results in lost sales. She suggested instead placing restrictions on size, square footage, and displays and not allowing paraphernalia to be the entire store. Councilmember Scott felt Option 2 was a minimum and allow to sell paraphernalia, adding we can restrict store locations already which is appropriate and suggested local artisans be allowed who create wood pipes for sale. Mitzie Valachi (not signed in), Urban Deli, suggested it would be strange to go to a municipal dispensary for product but not offer anything for sale to smoke that product. Mayor Rice said he liked the idea of regulating the space based on percentage of retail that includes paraphernalia. Mike Valachi, Urban Deli, commented that cannabis can be consumed with many different items but there are particular devices that would focus mostly on cannabis, typically glass pipes. Jamie Croyle shared if restrictions were put in place for real drugs people will get the cheapest item to use the drugs so a higher-end shop is not going to be the September 23, 2024 (Worksession) Page 6 of 11 place to buy something because most would rather put their money towards the drugs themselves and suggested offering higher brand products. Ms. Larson said she supported Councilmember Wesp’s comments about talking to business owners for feedback because they have found paraphernalia, garbage, and those who were homeless near their property along the river and were concerned as business owners. Mr. Valachi said they experience the same thing with garbage at Urban Deli and that the City should impart that to all clients as it is important to have good businesses in place that can share that knowledge and experience. Mr. Baumgartner spoke about low potency retailers and future cannabis retailers and suggested a hybrid approach such as 20% of floor area for paraphenila similar to hemp and if we limit the number of retailers for CDB and cannabis we therefore limit the number of locations and how that might answer the concern and still not distract from a business. Councilmember Wesp said these are different than a grocery store as they are vice businesses and encouraged getting business feedback first. Brandon shared concerns about those using marijuana specifically on sidewalks in front of his store and felt it was bad for customers and families and was not acceptable. Jamie Croyle said locations should be allowed to sell the items they need then spoke about the smoking ordinance in place restricting from 25 feet from entrances but how that was difficult to enforce and shared concerns with odor and smoke and said it needed to be addressed. Mr. Baumgartner referred to the nuisance law also passed with the cannabis law regarding smoking in front of stores for example. Councilmember Skogquist thanked everyone for the input and suggested surveying the businesses for options to try to define as best as possible to prohibit paraphernalia to only allow for cannabis. Council consensus was to bring back a draft ordinance for consideration. 3.5 Discussion; Regulation of Cannabis Businesses. Mr. Borglund shared a background report stating staff and the City Attorney were in the process of developing a new ordinance that would regulate cannabis businesses. On August 26, 2024, staff brought forward for Council direction as to what cannabis-driven businesses you want to allow in the City. Up until now, the focus has been cannabis retailers during meeting discussions. At the meeting, the September 23, 2024 (Worksession) Page 7 of 11 Council indicated they wanted to better understand all the potential uses. Since August 26, staff has been reviewing a number of the uses below. Many of the uses can become very dynamic and take on multiple functions as far as their operations. Staff is suggesting at this time that we move forward and establish the cannabis regulations and focus on the cannabis retail business use at this time. Mr. Baumgartner cautioned against allowing something we may not fully understand and opening the City to concerns. He said we can always start small then expand to other business types later but that we have to get something in place before the end of the year. He suggested starting small and learning from other communities and states about possible impacts then spoke about the need to learn what areas are best for the different license types which is difficult. He added many cities are struggling with this and that we can always expand the allowed business types later. Heather Rosten, Anoka, suggested review of other states’ statutes to see what they have done. Councilmember Skogquist said we have to do something around retail as it must be allowed while the other license types are optional and suggested focusing on the retail businesses first then expanding as we see fit. Council consensus was to bring back a draft ordinance for consideration for retail licensing only. 3.6 Discussion; Anoka Liquor Store Plan. Mr. Borglund shared a background report stating this item was requested by two Councilmembers to be placed on the agenda for discussion. He shared the current site at 7th and Main Street and direction to start marketing Option C to include both business lease and business ownership options. He reviewed a financial analysis in detail that included an excess TIF of $1.2 million and liquor revenue projections for 22 years of $5.9 million. He shared proposed concept plans and parking then shared a list of groups staff has contacted to date regarding this site. He shared MNCAR’s blast through ACRED that will be posted and other work and asked if the Council would consider housing/rental units above commercial at this site, a one-level structure instead of two, and consider leasing versus ownership. Mayor Rice said he asked for this item to be included because he felt the City may be stalling on this topic and that we need the revenue and should start the process. Councilmember Skogquist made comments regarding the different layouts and sites and how the Council settled on this site as it paid the taxpayers back. He likened it to the parking ramp downtown and how we want to do what is right and September 23, 2024 (Worksession) Page 8 of 11 get us in a position to make the taxpayers whole and felt it was worth continuing to do this longer. Mayor Rice confirmed a store would need 8,000 square feet plus 2,000 for a potential dispensary, for a total of 10,000 square feet. Councilmember Wesp said the current store is 4,900 square feet and the west store was larger. Councilmember Skogquist spoke about flexibility options that could include a portion of the site and not having one developer for the entire site and how we could can act separately while still having the overall project flow together. Mr. Borglund shared development layout options in detail that included access issues. Councilmember Skogquist asked if there is a way to do something similar to the other site and how it would look with multiple stories and if not condos maybe a common wall and have the other party manage and until rates come down. He said maybe the City could build our portion with a level above and wait for the next phase but still have the same look and feel. Mr. Borglund agreed this will be an expensive building and suggested possibly do a one-level structure to reduce cost if how it could be a slow-generating space and enhance financial feasibility. An audience member spoke about the 62 parking stalls and the businesses already in place that didn’t plan for parking and pushback from people with cars and overnight guests as a concern. Borgie Bonthuis, Planning Commissioner, shared comments regarding financial needs and leased space to meet TIF requirements now and how the City is receiving nothing from TIF and the liquor store was losing money. She said the longer people get in the habit of going to other places such as Total Wine the more difficult it will be and suggested constructing a one-story building now and opening it up later because waiting for a developer will take too long. Councilmember Wesp felt this was a prime location and agreed with Commissioner Bonthuis that if we wanted to be in the liquor store business, we should start the process now. Mayor Rice said we can’t make payments by constructing a one-story building and having two other buildings within the property. Mr. Borglund said we need to construct 7,400 commercial square footage to make the project work. Discussion was held on right-in/right-out possibilities as far west as possible and the possible entrance/exit from Main Street. September 23, 2024 (Worksession) Page 9 of 11 Councilmember Scott said it is worth the time for due diligence to get the best option, adding we don’t want to be too hasty but need to funnel funds back to our parks. Commissioner Bonthuis suggested a City-owned cannabis dispensary could be located here. Mayor Rice said the current store seems like a good location for cannabis and noted the City already owns the site. Councilmember Skogquist said he liked the two-pad approach and asked if 7,000- 8,000 square feet covers expenses. He said he liked the concept to flow together so we don’t do more than we can handle and let someone else handle the rest by creating our part through condos and keeping enough commercial space to pay our debt back. Mr. Borglund said at those square footages we may be a little short to pay the debt back. Mayor Rice said cost-wise it makes sense to do a one-story building because of the area and if we do a larger building with a parapet wall, others could do a two- story building onsite and then we’re doing a more reasonable project. Chair Bonthuis spoke about the length of time to date and finally seeing progress, adding costs will only continue to increase. Mayor Rice said we have renderings but no action to date because we’re trying to market to a builder. He said we can control parking within the entire lot and was curious if a developer would think there could be 2-3 buildings. Mr. Borglund said staff can work to create additional concepts. Mayor Rice said he would like to see a store constructed as a one-story building with a parapet wall to make the building look larger on that corner. Public Works Director Mark Anderson cautioned about the expense of such a building. Mr. Baumgartner asked if the City would require the same façade. Mayor Rice said that would be addressed under building standards. Councilmember Skogquist said he was not opposed to a housing option if it works and felt a mixed-use could work. Mayor Rice said a builder of a mixed-use would likely be skeptical of a first floor. September 23, 2024 (Worksession) Page 10 of 11 Council direction was to continue to explore a one-story building to maximize square footage at this site and move away from ownership of a two-story building. 3.7 Discussion; Anoka County Jail Expansion Project. Mr. Borglund shared a background report stating on August 28, 2024, Anoka County submitted land use applications for the proposed jail expansion and parking ramp then shared the 15-business day review letter per Statute that has been sent to all appropriate parties. Councilmember Wesp said he understood the direction then asked what does Anoka County want to do. Mr. Baumgartner explained they reviewed the criteria and responded appropriately asking for clarification on the submitted application and pointed to items rejected and those items clarification was needed that could be corrected but said we were not sure of some items because of the zoning. Councilmember Wesp asked if the City was on solid ground regarding our position. Mr. Baumgartner said he didn’t think we could be faulted for evaluating an application as we have done with others and that this doesn’t diminish our position on right-of-way and other concerns. Mayor Rice asked where people will park if the expansion is built. Councilmember Skogquist referred to concerns with safety and traffic flow if the expansion is constructed. Councilmember Wesp said we need to wait to gauge the County’s response before next steps are taken. Mr. Lee said this topic will be included on the next worksession agenda then noted there will be input regarding the study on county jails and how it fits on the site at three times the size. He added new County Administrator Jim Dickinson will be starting soon and that staff will be reaching out to him for discussion as well. UPDATES/REPORTS/COUNCIL SUGGESTIONS FOR TENTATIVE FUTURE AGENDA ITEMS None. September 23, 2024 (Worksession) Page 11 of 11 4. ADJOURNMENT Motion by Councilmember Wesp, seconded by Councilmember Scott to adjourn the Worksession at 7:46 p.m. Motion carried. Submitted by: Cathy Sorensen, TimeSaver Off Site Secretarial, Inc. Approval Attestation: Amy T. Oehlers, City Clerk