Anoka City Council

August 25, 2025 (Worksession) Page 1 of 12 WORKSESSION OF THE ANOKA CITY COUNCIL ANOKA CITY HALL CITY COUNCIL WORKSESSION ROOM AUGUST 25, 2025 1. CALL TO ORDER Mayor Skogquist called the worksession meeting to order at 5:00 p.m. 2. ROLL CALL Present at roll call: Mayor Skogquist, Councilmembers Campbell, Rostad, Scott, and Weaver. Staff present: City Manager Greg Lee; Police Chief Andy Youngquist; Public Works Director Mark Anderson; Public Services Administrator Lisa LaCasse; Recreation Manager Nickie Jenks; Finance Director Brenda Springer; Assistant Finance Director Liz Douglas; Assistant City Engineer Ben Nelson; Green Haven Golf Course Mike Brual; Green Haven Golf Course Brandon Howard; Electric Utility Director Del Vancura; Public Services Supervisor Jon Holmes; City Attorney Scott Baumgartner. Absent: None. 3. COUNCIL BUSINESS and/or DISCUSSION ITEMS 3.1 Discussion; 2nd Avenue and Van Buren City-Owned Site Development Concept. Community Development Director Doug Borglund shared a background report stating Gaugh Companies will present a proposed development concept for 2nd Avenue and Van Buren Street. Dan Hebert, Gaughan Companies, shared about a recent study that shows the need for hotels in Anoka and how they would like to propose a boutique hotel project they felt would fit into the character of the historic downtown Anoka. He shared further background regarding Gaughan Companies and their current and past projects, then outlined their concept in detail that would include condos, luxury apartments, a boutique hotel, and an event center that would include a sky lounge, health and wellness center, rooftop community room, and outdoor views of the river. John Harris, HA Architects, shared further about the proposed site plan and access on Golf Street, stressing the importance of being right on the river and in the center of the social district, as well as the connection with the Anoka County Government Center, and proposed a reverse C-building with two courtyards. He said being next to the parking ramp would be beneficial, but the project would still include 371 underground parking spaces for the tenants and hotel guests. He August 25, 2025 (Worksession) Page 2 of 12 spoke further about the site plan, walk-up units with outdoor spaces for residents, and the creation of a 20-foot-wide alley for service deliveries and a dog walking area. He shared proposed renderings and elevations of the full project that would include 371 parking stalls, 164 apartment units, 21 condos, an 11,000-square-foot event center, and 32 hotel rooms, then spoke about the proposed materials that would fit well with the downtown architecture. He said this would be a large project that would include a restaurant and connection with the river, and have other materials such as a water feature and glass to break up the brick then shared a video animation of the project to better share the scale of existing buildings if done. Mr. Borglund said staff was looking for direction on the proposed project. Councilmember Scott thanked the team for the presentation and said he liked the proposal as a cornerstone project that would fit well with downtown. He liked the mixed uses that would include shopping options and felt it would be a great project. Councilmember Weaver confirmed all parking entrances would be off Van Buren Street because, with the many events, 2nd Avenue becomes non-drivable, so having a secondary access off 2nd Avenue should be considered. Mayor Skogquist agreed, stating this is similar to the City including secondary accesses for the municipal parking ramp. Councilmember Scott asked if the 371 stalls would be for public parking as well as tenant parking. Mr. Hebert said this project would likely be constructed under a PUD zone so they would be able to designate ratios based on the number of apartment and hotel units, but still utilize the downtown parking in place. Mr. Harris asked if the ramp across from the government center was largely vacant in the evenings. Councilmember Scott said it was, but will likely be demolished in the future and replaced with one further to the east. Councilmember Weaver suggested further exploring a third entrance to the parking ramp, especially for events. Councilmember Rostad said she liked the local flavor of architecture being proposed, then stressed the need to address the Anoka County Historical Society as part of the project. Mr. Harris said history is very important to them as well, and that it would be great to incorporate the Society into the project in some way. Mayor Skogquist said he was impressed with the project as proposed, and while large-scale, it seemed to fit well in the area. He said he appreciated the brick on August 25, 2025 (Worksession) Page 3 of 12 2nd Avenue and said the portion facing 3rd Avenue is busy, and while housing may work, it may be better to have space for more mixed-use opportunities. Mr. Hebert said they did discuss the possibility of incorporating the Historical Society and other uses as part of this site. Councilmember Weaver asked further about aspects of a boutique hotel. Mr. Hebert explained the proposal would be similar to the MatchStick Hotel Crosby in Stillwater or The Dylin in Madison and could include two-room suites and kitchens for extended stays. Councilmember Scott spoke about the job opportunities that would result from this project. Councilmember Campbell said he felt this would be a wonderful project. City Manager Greg Lee clarified that the extended stay element would be at a fairly high price point and likely not be viable for any potential extended stay housing opportunities. Mr. Hebert noted that any lender would likely allow that use as well. Mr. Lee said the intent would be the connection to the parking ramp and noted the municipal ramp is 269 stalls, and this ramp is proposed for 371 stalls, and is at quite the scale then spoke about how they would connect the alleyway. City Attorney Scott Baumgartner asked if the restaurant would be included in the project or have a separate entrance, then asked about the number of retail sites. Mr. Harris said they would still want synergy for the whole project to work together and said the restaurant entrance would likely be off the lobby of the hotel, so guests don’t have to go outside to access the restaurant, and include 5,000-10,000 square feet of retail space, adding that they will be very mindful of what goes there. Finance Director Brenda Springer referred to the potential TIF revenue of this project that could cover the $350,000 remaining debt the City had incurred. Mr. Borglund said staff understands the need for this project to be something special and felt this proposed project would work well and enhance the downtown area. Councilmember Scott agreed, adding that with the hotel study indicating the need for hotels, this would be a good project and suggested this should retain a good street scene and include a nice, wide sidewalk for that activity. August 25, 2025 (Worksession) Page 4 of 12 Council consensus was to direct staff to continue with Gaughan Companies to further refine the concept and work to incorporate the Historical Society as part of the project. 3.2 Discussion; Anoka Community Center, Feasibility Study Preliminary Findings and Select Preferred Recreational Alternative. Public Services Administrator Lisa LaCasse shared a background report stating that pursuant to a resolution adopted by the City Council on August 7, 2023, the City of Anoka purchased the real property at 2939 6th Avenue, formerly known as Miller Manufacturing or the Lakeland Tool and Engineering, Inc. site. At the goals session meeting on February 10, 2025, the Council introduced and discussed the goal of exploring future uses for the Miller Manufacturing property along Grant Street, including its feasibility as a community center. Councilmembers expressed interest in exploring whether the facility could house court sports, such as pickleball and volleyball, as well as be used as a community space for seniors, including classrooms or banquet rooms. Discussion also included the need for indoor spaces for soccer and other field activities. On April 21, 2025, City Council adopted a resolution authorizing the feasibility study and approving the agreement with HKGi for said study. The first phase of the feasibility study being presented at the worksession includes a needs and competitive analysis with the exploration, at a high level, for sport/activity use options within the structure. On August 20, 2025, a walk-through of the existing building was held with Anoka Ramsey Athletic Association (AARA) president Dustin Reeder, who indicated that there is a strong demand for volleyball courts, the number of public courts is limited, and private options are costly, leading to access/scheduling challenges for the program. Soccer teams often resort to non- standard fields due to a lack of proper facilities, and can train/drill on any size facility. Full-size basketball courts can accommodate multiple other court sports. She reviewed key recommendations shared and then said overall, the existing building has the potential to accommodate a recreational center/sports activity center that may be used by teams willing to adapt to available space. Given this, there shall be consideration of prioritizing a cost-effective, flexible design will meets community needs and maximizes usability. Ms. LaCasse said Council should be aware that some of the information provided during the walk-through contradicted the survey responses submitted. She said staff is seeking discussion and input on which option should be further explored with additional concepts, cost estimating, and impact analysis, and direction on the type of facility type (i.e., athletic training/practice, game/tournament play, convertible space, etc.) to further analysis in the feasibility report. Rita Trapp, Vice-President with HKGi, and Andrew Cooper, President with Oertel Architects, summarized preliminary findings of the first phase of the feasibility study. They reviewed the local needs and the competitive analysis conducted, and walked through their findings from the high-level analysis of the building. The analysis intends to identify which parts of the building are reasonably reusable, what minimum improvements are needed to meet building August 25, 2025 (Worksession) Page 5 of 12 code requirements, what types of uses could fit within the structure, and how much the improvements may cost. They said that based on the approval of the agreement, the feasibility report is currently at the conclusion of Phase I, and Phase II will include concept planning, cost estimation, impact analyses, and a final presentation to the Council in November or December. Ms. Trapp outlined the proposed project in detail and Phase 1 of the feasibility study, which included a study purpose, needs analysis, competitive analysis, existing building conditions, and high-level alternatives. She spoke about five responses to the survey, which included the high school, community ed, ARAA, and Boreal FC, and outlined key trends that resulted, including programming needs and possible revenue potential, types of sports offered, responses to indoor needs, and what other facilities are in the general area and their offerings. Mr. Cooper further reviewed their input on the existing building and options for fitting potential uses into the Miller building structure. He reviewed the current four phases that totaled 175,000 square feet, stating it was not in good shape for repurposing for Space #4 and would be better leveled for outdoor recreational space, but that Spaces #1-3 have high ceilings and could be done, adding that the walls in between were not gravity-load bearing. He spoke about existing building conditions and issues and opportunities, and the need for updates for all current building codes and mechanical systems, and restroom demands. He spoke further about ceiling heights, then reviewed high-level alternatives and potential uses that included field house, social space, courts/fitness space, and reviewed alternatives in detail, including complete demolition to construct new to better fit needs. He reviewed the estimated costs of each option ranged from $19 million to $39 million. Ms. Trapp said they would do a certain level of work to confirm direction on what could potentially fit and get more input on the concepts, cost estimates, and impact analysis, such as athletic, community center, or other focus. Mayor Skogquist thanked the team for helping outline what could be done, adding he understood anything would be costly. Councilmember Weaver asked if any calculations had been done on court revenue to retire any type of debt, as the project will need a lot to generate that amount of money. Ms. Trapp said that analysis has not been done yet, as they wanted further direction first, adding that community centers do need to have a regular influx of cash, but would still be a competitive or community-based center, and will provide some rate information. Councilmember Weaver said he didn’t believe the City should invest any more money and instead sell the site and get it back on the tax rolls, stating a community center likely won’t work, but if we do want to explore that further, there are other non-taxable properties elsewhere to choose from. August 25, 2025 (Worksession) Page 6 of 12 Councilmember Campbell said he didn’t see how adapting the Miller building could work and felt the costs make this a non-starter project, adding the estimates don’t even include a parking lot. He said he would like to step back and create a task force instead to help identify other locations. Councilmember Rostad asked if there is another interest in this property, as bond money is due, and said we purchased the site to stop any future manufacturing use, and it would also be part of the TOD, which has since changed, and asked if there is another direction we could go. Mr. Borglund said, Before this study, we had builders interested in the site and likely would still be interested even if the site is no longer a transit hub, as it would be more of a neighborhood plan with successful housing. Councilmember Rostad said she recognized the demand for another gymnasium as all are currently at capacity, and if this doesn’t happen here, there is still a need for one somewhere else to continue to draw families to Anoka. Ms. Trapp said this doesn’t have to be an either/or situation, but noted it would be challenging to explore all options simultaneously. Councilmember Scott thanked the team for the presentation and said information from area clubs wouldn’t be for a full outdoor soccer field. He said competitive sports are expensive, and the revenue side is available, and while it may not be in this space, it would consolidate for more court space for revenue use year-round. He spoke further about equity and how he didn’t want to demolish a building before the debt is paid, as if we do resell the building has intrinsic value. Mayor Skogquist outlined why he wanted to look at this project, stating that when the City purchased the site, it was because we didn’t want manufacturing to continue and that we needed to pay on the bond to subsidize the ramp. He said we need to find a use for this space, and that we’ve heard for years the need for community space, and that industrial space has been re-used in other areas, and that he was supportive of exploring this further. He said, whether this is the answer or not, he wanted to see Phase II completed to get a full understanding, as he doesn’t want us to miss exploring this. He said we need to attract younger families to Anoka and want to finish what we committed to, and if the answer is no, we can still use the findings to look at another location. Councilmember Scott asked if there’s an option for a completely new build on the original site, as this is a large site, and we could retain the building now. Councilmember Weaver asked how much money has been spent on the study so far. Assistant City Engineer Ben Nelson said the study was approved for $50,000 and that this is the check-in point for next steps with Council. August 25, 2025 (Worksession) Page 7 of 12 Councilmember Campbell suggested creating an advisory committee instead and allowing them to work with the consultant, adding he believed this was a non- starter project and couldn’t imagine the total costs needed. Mayor Skogquist said he didn’t want to imagine the costs but wanted to know the costs, adding that there has been a need and desire for space a long time, and we need more information. Councilmember Rostad said she liked being innovative in considering this space, as she had concerns with this area, adding that the current market and employment were unstable, and if this is a way to maximize our options, it doesn’t hurt to continue. Mr. Baumgartner shared that he has volunteered with AARA for 17 years and knows the need for space, and agreed that it has the cash flow. He said basketball and volleyball are the only year-round sports and said it may be as simple as asking AARA how much they pay annually for court space to get a good working estimate. Ms. LaCasse said that data was requested in the survey, but that staff didn’t think we should include dollar amounts at this point, and noted AARA is planning to move forward with their own facility, and cautioned about relying on the organization for space. She noted they intend to send the survey again to capture those organizations missed, as it was sent in the summer and was missed by some organizations. She asked if the goal is to provide facilities in the interim and then take their usage away, or are we partnering with AARA, adding that they shared they need 100,000 square feet with 45-foot ceilings and that 40-50% of hours need to be committed to outside agencies to keep it viable. Mayor Skogquist said he met with Mr. Reeder, who felt both AARA and the City could build something, as they still need more space, and said we need to compare square footage build out based on rehab and new build, and understand this more, adding we can still use the study results for any future project if the Miller site doesn’t work. Councilmember Rostad said there are very few batting cages and pitching mounds available for public use that aren’t affiliated with a coaching system, and that this would be a great opportunity to make those elements accessible for many others. Mr. Nelson clarified general consensus was to continue exploring Option #1 with possible cost estimates for Option #3, with a focus on basketball and volleyball first, then baseball and soccer. Mayor Skogquist said he supported continuing to explore Option #1 but wanted further general information for Option #3, as Option #2 doesn’t seem feasible, and August 25, 2025 (Worksession) Page 8 of 12 that, based on the timeline, it would be good to get more information from AARA on their potential new facility in Ramsey. Councilmember Rostad said the focus should be on the indoor facility at this time only and not include any reference to parking needs, as that will be needed regardless. Councilmember Campbell said he didn’t oppose a new facility but felt the Miller building was not feasible. An audience member commented that most use would be based on demand, regardless of what AARA does with their potential facility. 3.3 Discussion; 2026 Budget – Enterprise Funds and Capital Funds. Finance Director Brenda Springer shared a background report stating that on August 4, 2025, staff presented the proposed enterprise and governmental 2026 budgets and levy to Council during a work session. Staff completed a utility rate study with Ehlers and Associates and shared that the new rates and billing structure were implemented in June 2025. She noted revenue projections have been included in the enterprise funds and that this evening they will focus on the enterprise and capital funds. All enterprise capital expenditures are proposed to be covered with each utility's/enterprise's revenues. She outlined the possibility of selling land at Green Haven and paying back the TIF debt, stating the electric department will have additional funds to transfer $300,000 to cover the following one-time expenses. She further outlined the revenue from AMU and explained the levy increase of 9.65% and debt of 0.89% for a combined increase of 10.54% for a total levy reduction of $530,000. She talked about new formula increases and the need to cover costs, then spoke about bringing in more funds for road funds from the franchise fee proceeds, although she was not sure when that would happen. Ms. Springer shared about the very favorable renewal from HealthPartners at 6.5% instead of the proposed 17% and noted there were no other budget meetings scheduled and that staff intended to bring forward a proposed 3% increase to all master fee schedules at a minimum, and will estimate revenue from there. Mayor Skogquist asked staff to provide a standard fee increase as well for comparison. Councilmember Scott asked to consider consolidating ice rinks as a cost-saving measure and use for year-round space, adding that there is a need for more volunteers to staff warming houses. Councilmember Weaver believed warming house staffing was a school district issue. Councilmember Scott disagreed. August 25, 2025 (Worksession) Page 9 of 12 Mayor Skogquist said he was very supportive of this direction and budgeting was not just about revenue but re-evaluating needs and services, and said Lincoln Field is usually the first to get cut, and that this is a legacy space but a terrible field, and that the City is responsible as we use this field, but the school district won’t improve it. He said we need to increase green space in this field, and if we want to have good schools people want to go to, we need to do these things or remove our use for the district to improve. He said half the usage of Lincoln is by the PTO, which could be relocated to another park. Ms. Springer spoke about salary increases for ice arena employees. An audience member spoke about cutting the footprint back from Lincoln considerably and how the school could quit dumping snow and salt in the area, which would help retain sod in the spring. Mayor Skogquist spoke about the need for incentives for this field and agreed that we have budgetary items and that this makes sense. He said pickleball is bigger than softball and that we could get more information on rinks from other cities. Councilmember Weaver suggested the Park Board discuss this first, and while some may not care for that, he wanted to hear their recommendation. Councilmember Scott stated he cared about the Park Board’s recommendation and agreed the topic should be brought to them for consideration. Councilmember Rostad asked how much less we are using these spaces due to weather changes and a snow machine, and Green Haven. Public Works Supervisor Jon Holmes responded up to discretion and time. Councilmember Weaver confirmed we have an agreement with Wilson and Lincoln, but not others, and if the Park Board discusses this, they should review the footprint. Ms. LaCasse spoke about the permanent bridge structure to help ensure the footprint remains the same. Councilmember Scott said Ed Evans works the warming house and feels unsafe, adding that it is not used much except for PTO nights. Discussion was held on rink attendance and on-street parking, and the challenge of this rink, and agreed that the Park Board should review how to streamline operations at Sorensen Park, especially when rink seasons can range greatly. Mayor Skogquist agreed that the Park Board should review this topic in September and bring it back for further review. Ms. Springer reviewed each of the enterprise funds along with the directors. August 25, 2025 (Worksession) Page 10 of 12 Utility Director Del Vancura reviewed expenses of the AMI meter project, Greens of Anoka, and Main Street, which will be heard at the September 2 meeting. Mayor Skogquist asked about infrastructure costs. Assistant Finance Director Liz Douglas said annual infrastructure is not just for one, but for maintenance and does go up based on inventory, and is a major part of the budget, and should be included as a capital budget. Ms. Springer referred to the utility rate study and stated that staff had already looked at capital needs and that Ehlers felt the new rates were appropriate. Ms. Douglas spoke about the electric revenue and a possible 3% increase in purchasing power, but said we won’t see much increase because it is all averaged out. Mr. Vancura said February 6 was the date to cover the transition. Ms. Springer reviewed the water budget in detail. Mr. Anderson reviewed capital improvements that included exterior repair of Wellhouse #4 and #5, and inspection and repair for Wellhouse #8, which has had very few mechanical failures to date, and the automation of Wellhouse #5, which is important as it dates back to the 1960s. Mayor Skogquist confirmed that well rehab would be included in the 2027 CIP. Councilmember Weaver said the pumphouse across from Alter is old and inquired about its roof, as this could be valuable to this location because of its historic value. Mr. Anderson said the staff contracted with a carpenter who walked the roof and which was very steep, and didn’t feel it was too bad, but agreed the point is valid and needs to see continued maintenance funding. Councilmember Weaver confirmed that dock revenue is supposed to go to park capital. Ms. Springer said that was correct, then reviewed summaries from liquor and golf enterprise funds. Discussion was held on the efficiency of the new director position with the profitability of the golf, liquor, and cannabis enterprise, and thanked staff for this shift. Mike Brual, Green Haven, shared about proposed capital items such as the sprayer and other projects, such as bunkers, cart paths, irrigation controls, and others. Mayor Skogquist suggested adding a line item for an elevator. Ms. Springer said that would likely be a building capital item and not a golf revenue item, then outlined golf plans in detail for the possible construction of a driving range for $6 August 25, 2025 (Worksession) Page 11 of 12 million. She spoke about revenue for golf ranges and costs, and how we were short $7 a round, and that the plan doesn’t include equipment over the next five years, and the need to cover any debt levy with revenue. Mr. Lee said that while the analysis is rough for a standard driving range, the staff is still exploring tracer technology similar to Top Golf for more of an entertainment factor. Ms. Springer reviewed the recycling budget and cash of $327,000. Councilmember Weaver asked where the can collection trailer was relocated to. Ms. LaCasse said the WRRB relocated the trailer to the aquatic center. Ms. Springer reviewed the building improvement fund and the Miller building that went into the asset land for sale for retail, and how any decisions made will reflect this fund. Mr. Lee said staff was reviewing modifications to the HDDR to pay for the park and said this was done at the same time as the Golf Street project, and that over time, it will pay for itself. Councilmember Weaver said we need to make sure we are meeting with business owners before anything occurs. Mr. Lee said that it is being done already, and parking fees shouldn’t be all day/every day, but focus instead on the entertainment district. Ms. Springer reviewed the State Aid Fund. Mr. Lee commented on how it was good to have a negative balance in this budget, as it’s instead an encumbrance for other funding. Ms. Springer clarified that this review was for the City’s State Aid fund but agreed with Mr. Lee’s comments. Councilmember Weaver referred to the $1.9 million deficit from the Highway 10 project. Ms. Springer agreed we need to figure out how to pay that back, adding that we cover any negative balance with electric funds, but are now adding the Highway 47 project, which needs to be considered. Mayor Skogquist said any potential development in this area will go to pay back the electric fund. Ms. Springer reviewed the proposed street projects, not there were no street renewal projects this year, then reviewed the Rum River Dam capital fund. Discussion was held on park dedication funds and where they can be used for new infrastructure or trailways August 25, 2025 (Worksession) Page 12 of 12 Ms. LaCasse shared Park Board projects being recommended totaling $235,000 for 2026, which would be covered by the increased utility rate. Councilmember Weaver asked for consensus for additional docks for review at an upcoming worksession. Ms. LaCasse agreed that it made sense for discussion at a worksession in September. Councilmember Weaver said he understood that Anoka County was not pleased with the $6.5 million from MnDOT. Mr. Nelson said staff will be sharing the findings of the study at a future worksession. 4. UPDATES/REPORTS/COUNCIL SUGGESTIONS FOR TENTATIVE FUTURE AGENDA ITEMS None. 5. ADJOURNMENT Motion by Councilmember Scott, seconded by Councilmember Rostad, to adjourn the Worksession at 8:13 p.m. Motion carried. Submitted by: Cathy Sorensen, TimeSaver Off Site Secretarial, Inc. Approval Attestation: Amy T. Oehlers, City Clerk