City Council Worksession

South St. Paul WORKSESSION AGENDA SSP City Hall 125 3rd Avenue North Training room Monday, June 26, 2023 7:00 pm AGENDA: 1. Concord Street Assessments 2. Liquor at Kaposia Landing 3. Cannabis Legislation Update and Proposed Interim Ordinance 4. EDA Gap Loan (512 Concord Exchange South/Watson Trading) 5. Post Construction Traffic Flow – 7th Ave. and 2nd Street 6. Council Comments & Questions A COUNCIL WORKSESSION REPORT DATE: JUNE 26, 2023 1 DEPARTMENT: ENGINEERING Prepared By: Nick Guilliams, City Engineer ADMINISTRATOR:RG AGENDA ITEM: Concord Street Special Assessments DESIRED OUTCOMES: Review and discuss special assessment process for the Concord Street Improvements Project. OVERVIEW: Background A Feasibility Study and Report for the Concord Street Improvements was prepared in February 2020 detailing the proposed public improvements, right-of-way requirements, estimated costs, method of financing/assessments, and project schedule. Construction of the Concord Street Improvements project began in 2021 and is scheduled for completion in the summer of 2023. A final assessment map and final assessment role has been prepared based on the anticipated final costs. Preliminary and Final Assessments Special assessments levied against the benefitting properties are proposed to finance a portion of the City’s costs. The Feasibility Study and Report, prepared in February 2020, provided preliminary assessment amounts based on the City’s standard assessment policy as described below: Summary of Preliminary Assessments • Assessed on a front footage basis o Maximum of 75-foot assessable length for residential frontage properties o 60% assessment rate for residential backage/alley properties • Anticipated 2021 assessment rates o $94.85/foot for reconstruction (north of Armour Avenue) o $52.95 for pavement rehabilitation (south of Armour Avenue) • Assessments capped at 5% of total property valuation for non-residential properties based on Dakota County assessed property value. Summary of Final Assessments Following preparation of the Feasibility Report and Order of Project Improvements, a limited special benefit analysis was completed to review the preliminary assessment amounts. The final assessment amounts were either maintained or lowered from the preliminary amounts based on the findings of the special benefit analysis. No special assessments were increased from the preliminary assessment amounts. A summary of the final capped assessment methodology per property type is provided in the tables below:  Reconstruction Area Assessment Cap Residential Properties w/ Frontage Capped at $3,200 Residential Properties w/ Backage Capped at $1,920 Publicly-Owned Properties Capped at 5% of PV* Commercial Properties w/ Direct Access Capped at 5% of PV* Commercial Properties w/o Direct Access Capped at 0.5% of PV Commercial Properties – Flag Lots Capped at 3% of PV PV = Property values, per Dakota County assessed property value at time of Feasibility Study * No change in assessment amounts from Feasibility Report Rehabilitation Area Assessment Cap Publicly-Owned Properties Capped at 5% of PV* Commercial Properties Capped at 5% of PV* PV = Property values, per Dakota County assessed property value at time of Feasibility Study * No change in assessment amounts from Feasibility Report Schedule The schedule for the proposed assessment process is as follows: City Council Receives Final Assessment Map and Roll July 17, 2023 Calls for Assessment Hearing Neighborhood Meeting August 3, 2023 Assessment Hearing August 21, 2023 Due to the complexity of the assessment process on this project, staff is recommending a neighborhood meeting be held in advance of the assessment hearing so staff can explain the assessment process and answer individual property owner questions. Assessment Policy Property owners can pay all or a portion of the full amount with no interest until September 17th. After September 17th, 2023, interest will accrue from the date of the levied assessments. Any amount remaining will be certified to 2024 property taxes to be spread out over 10 years at 5% interest. Deferments are available for those meeting eligibility requirements such as age or disability. ACTION NEEDED Review and discuss.  CITY COUNCIL WORK SESSION REPORT A DATE: June 26, 2023 2 DEPARTMENT: CITY CLERK Prepared by: Deanna Werner ADMINISTRATOR: RG AGENDA ITEM: Liquor and Beer at Kaposia Landing DESIRED MEETING OUTCOMES: Authorize a 1st Reading of an Ordinance Amending the Parks and Recreation Chapter 42, Article III, Public Conduct in the Parks Section 42-62. - Liquor and Beer to allow alcohol, under limited conditions, at Kaposia Landing. DISCUSSION: The current language in the code states: Sec. 42-62. Liquor and beer. It is unlawful to have in possession or to consume intoxicating liquor, as defined in Minn. Stat. § 340A.101, subd. 14, in, upon, or within any park or park and recreation facilities or properties within the city. Minn. Stat. § 340A.101, subd. 14, defines intoxicating liquor as: “Intoxicating liquor" is ethyl alcohol, distilled, fermented, spirituous, vinous, and malt beverages containing more than 3.2 percent of alcohol by weight. This means any liquor outside of 3.2 alcohol is not allowed in any of the City’s parks. The size and location of Kaposia Landing makes it an attractive site to consider allowing alcoholic beverages in certain situations due to: • Its distance from residential areas. • A centrally located concession area which could house alcohol for events. • Restroom facilities. Allowing alcohol at Kaposia Landing is a topic which has been under consideration but is receiving attention at this time due to an event that has been scheduled at the Kaposia Landing Ballfields late in August (The Gay Softball World Series will be held on August 28, 29, 30 & 31, 2023). This organization would like to be able to sell and consume alcohol at the event this summer. The neighboring cities of West St. Paul and Inver Grove Heights are also revising their code to allow alcohol to be sold and consumed in parks in their cities. The proposed ordinance is attached and has been drafted to reflect similar language to what surrounding cities are using. Specifically: • Alcohol by Volume will be capped at 16%, which will allow beer, seltzers, wine coolers, hard lemonade, etc. to be sold/consumed. • Alcohol will only be allowed at events with a valid permit through Parks and Recreation. • Alcohol can only be served/sold by an organization with a temporary on-sale liquor license issued by the City of South St. Paul and the State of Minnesota. • No alcoholic beverages will be sold at any youth focused events or tournaments. ACTION NEEDED Review and discuss. Sec. 42-62. - Liquor and beer. It is unlawful to have in possession or to consume intoxica�ng liquor, as defined in Minn. Stat. § 340A.101, subd. 14, in, upon, or within any park or park and recrea�on facili�es or proper�es within the city subject to the following excep�ons: Kaposia Landing Area A (Ball Fields) Only: 1. Consump�on, sale and dispensing of alcoholic beverages of not more than sixteen percent (16%) Alcohol by volume (ABV) in original, single-serve, non-glass containers of no more than 16 ounces in size, may occur at Kaposia Landing, Area A (ball fields), incident to a sale made pursuant to a temporary on-sale liquor license issued to a club or charitable, religious, or other nonprofit organiza�on, including a state registered poli�cal commitee in connec�on with a social event within the city, sponsored by the licensee and subject to a valid permit for park use issued by the Park and Recrea�on Department of the City of South St. Paul. 2. Persons of lawful age may consume alcoholic beverages containing not more than sixteen percent (16%) alcohol by volume (ABV) in original, single -serve, non-glass containers of no more than 16 ounces in size on the premises of Kaposia Landing Area A (ballfields) in accordance with the City of South St. Paul’s city ordinances and the laws of the State of Minnesota, in connec�on with a social event within the city sponsored by the licensee and subject to a valid permit for park use issued by the Park and Recrea�on Department of the City of South St. Paul. 3. Alcoholic beverages shall not be sold at any youth focused events or tournaments. 4. No alcoholic beverages may be consumed and/or dispensed without a valid temporary on-sale liquor license approved by the City of South St. Paul and the State of Minnesota. Kaposia Landing Area B (Open Area) Only: 1. Consump�on, sale and dispensing of alcoholic beverages of not more than sixteen percent (16%) Alcohol by volume (ABV) in original, single-serve, non-glass containers of no more than 16 ounces in size, may occur at Kaposia Landing, Area B (Open Area), incident to a sale made pursuant to a temporary on-sale liquor license issued to a club or charitable, religious, or other nonprofit organiza�on, including a state registered poli�cal commitee in connec�on with a social event within the city sponsored by the licensee and subject to a valid permit for park use issued by the Park and Recrea�on Department of the City of South St. Paul. 2. Persons of lawful age may consume alcoholic beverages containing not more than sixteen percent (16%) alcohol by volume (ABV) in original, single -serve, non-glass containers of no more than 16 ounces in size on the premises of Kaposia Landing Area B (open area) only in a fenced area designated for alcohol consump�on. 3. No alcoholic beverages shall not be sold at any youth focused events or tournaments. A CITY COUNCIL WORK SESSION AGENDA REPORT Date: June 26, 2023 3 Department: Legal Prepared by: Amanda Johnson, Asst. City Attorney Peter Mikhail, City Attorney Administrator: RG AGENDA ITEM: Cannabis Legislation Update and Proposed Interim Ordinance ACTION TO BE CONSIDERED: Update regarding recent cannabis legislation and proposed interim ordinance. OVERVIEW: During the 2023 Legislative session, the Minnesota Legislature passed a group of laws that legalize adult-use cannabis in Minnesota and create a regulatory framework for cannabis businesses (collectively “2023 Cannabis Laws”). The new law legalizes the possession, use, manufacturing, and sale of cannabis products within the state. It establishes the Office of Cannabis Management (“OCM”), which is charged with, among other things, enforcing a system of regulation for the cannabis industry and the hemp consumer industry, including licensing. The law also establishes labor standards for the use of cannabis and hemp products by employees, testing of employees, and establishes expungement procedures for certain individuals previously convicted of a crime related to cannabis. There are a variety of effective dates within the 2023 Cannabis Laws. Possession, use, and the ability to grow cannabis at home will be legal beginning Aug. 1, 2023. Legal sales are expected to begin in January of 2025, when the OCM is going to start issuing business licenses. Importantly, a city may not prohibit cannabis businesses within a city but may limit retail businesses to no fewer than 1 per 12,500 in city population. In South St. Paul that means the City has the discretion to limit the number of retail cannabis business to at least two. There is also an ability to restrict cannabis businesses near schools (1,000 feet), residential treatment facilities (500 feet) and some public parks (500 feet). Currently, there are many unknowns with the 2023 Cannabis Laws, as the League of Minnesota Cities, state agencies, and others are just beginning to evaluate how this law may impact local governments. The one decision that we wish to bring to Council at this point, however, is narrowly focused. The 2023 Cannabis Laws allow local governments to adopt an interim ordinance to regulate, restrict, or prohibit the operation of a cannabis retail business within the City until January 1, 2025, for the purpose of conducting studies or holding a hearing to consider adoption of reasonable restrictions on the time, place and manner of the operation of a cannabis business to protect the planning process and the health, safety and welfare of its citizens. (To be clear, such an interim ordinance would have no effect on the legalization of possession and use that goes into effect August 1.) Due to the many unknowns with the 2023 Cannabis Laws, we are recommending that Council enact an interim ordinance prohibiting the operation of cannabis retail businesses within the City to provide City Staff with the time to study the appropriate locations within the City for cannabis businesses and review and incorporate the future model forms and policies of the OCM. If the Council is agreeable, the ordinance would come before Council for a first reading and a required public hearing in July. STAFF AND CITY ATTORNEY RECOMMENDATION Staff and the City Attorney recommend Council authorize Staff to move forward with Interim Ordinance. 60-DAY REVIEW DEADLINE: NA ENCLOSURE Draft Interim Ordinance  City of South St. Paul Dakota County, Minnesota ORDINANCE NO. _____ AN INTERIM ORDINANCE TEMPORARILY PROHIBITING THE ESTABLISHMENT OF NEW USES OR THE EXPANSION OF EXISTING USES RELATED TO CANNABIS BUSINESSES WHEREAS, during the 2023 legislative session, the Minnesota Legislature passed a package of laws, Chapter 63—H.F.No.100 of the Minnesota 2023 Regular Session, that legalize adult-use cannabis in Minnesota and establish a regulatory framework for the cannabis industry (collectively “2023 Cannabis Laws”); and WHEREAS, as a part of the 2023 Cannabis Laws, the Office of Cannabis Management (“OCM”) was created with responsibilities that include issuing licenses for cannabis businesses and drafting and approving the related rules and procedures; and WHEREAS, Minn. Stat. § 342.10, part of the 2023 Cannabis Laws, lists 16 different types of cannabis business licenses, including licenses for the growing, manufacturing, selling, testing, transporting of cannabis and cannabis events (“Cannabis Business Licenses”); and WHEREAS, according to information from the League of Minnesota Cities, the OCM will not be prepared to issue Cannabis Business Licenses until January 2025 and many details related to the Cannabis Business Licenses are yet to be determined; and WHEREAS, the OCM has also been tasked with developing model ordinances for local governments for reasonable restrictions on time, place and manner of the operation of a cannabis business, the forms and procedures for the retail registration required by local governments, and the model policies and procedures for cannabis business compliance checks; it is unclear when those documents can be expected; and WHEREAS, the 2023 Cannabis Laws includes a provision, Minn. Stat. § 342.13(e), that authorizes the City to adopt an interim ordinance to regulate, restrict, or prohibit the operation of a cannabis business within the City until January 1, 2025, for the purpose of conducting studies or holding a hearing to consider adoption of reasonable restrictions on the time, place and manner of the operation of a cannabis business to protect the planning process and the health, safety and welfare of its citizens; and WHEREAS, the City Council held a public hearing on the proposed interim ordinance on July 17, 2023; and WHEREAS, the South St. Paul City Council has determined that an interim ordinance to prohibit the operation of a cannabis business is necessary and appropriate to give City Staff the time to study reasonable restrictions on the time, place and manner of the operation of cannabis retail businesses to protect the planning process and the health, safety and welfare of its citizens. NOW, THEREFORE, pursuant to Minnesota Statutes, Section 342.13(e): The City Council of the City of South St. Paul does ordain: SECTION 1. No business, person or entity may operate a cannabis business that would require a Cannabis Business License under the 2023 Cannabis Laws until January 1, 2025, or until ordinances regulating such uses become effective, or until the Council rescinds this Interim Ordinance, whichever occurs first. SECTION 2. City Staff is directed to conduct a study to gather information, analyze the model ordinances and policies from the OCM when they become available, and make a recommendation to the Council regarding reasonable restrictions on the time, place and manner of the operation of cannabis retail businesses. SECTION 3. SUMMARY PUBLICATION. Pursuant to Minnesota Statutes Section 412.191, in the case of a lengthy ordinance, a summary may be published. While a copy of the entire ordinance is available without cost at the office of the City Clerk, the following summary is approved by the City Council and shall be published in lieu of publishing the entire ordinance: The City will be undergoing a study regarding cannabis businesses to determine if regulations are appropriate. No cannabis business may operate until the City adopts regulations regarding these uses, or determines no regulations are necessary and rescinds the interim ordinance or until January 1, 2025, whichever occurs first. SECTION 4. EFFECTIVE DATE AND EXPIRATION DATE. This ordinance shall be in full force and effect from and after its passage and publication according to law and shall expire upon adoption of ordinances regulating such uses, until the Council rescinds or terminates the Interim Ordinance or January 1, 2025, whichever occurs first. Approved: _________________________ Published: _________________________ Adopted this day of , 2023. 2 City Clerk 3 A COUNCIL WORKSESSION REPORT DATE: JUNE 26, 2023 4 DEPARTMENT: ADMINISTRATION PREPARED BY: Ryan Garcia ADMINISTRATOR: RG AGENDA ITEM: EDA Gap Loan (512 Concord Exchange South/Watson Trading) DESIRED MEETING OUTCOMES: Discuss request from Watson Trading, LLC, for an EDA Gap Loan for the redevelopment of 512 Concord Exchange South. Provide Council with opportunity to ask any questions about the application or the development. Receive Council direction with respect to whether to present the item for consideration at a future EDA Meeting. OVERVIEW: Asian Mart is a Filipino-inspired market and deli currently serving the Twin Cities region with a store in Burnsville. Asian Mart is proposed to be the anchor tenant in a multi-tenant commercial/retail building at 512 Concord Exchange, between Footh Automotive and Stockyards Tavern & Chophouse. Watson and Charmaine Fong, owners of Asian Mart, have identified South St. Paul – and the Concord corridor in particular – as an underserved area that is well-positioned to thrive in the specialty foods market. For the past year, Staff has been working with Watson Trading to establish a new store in SSP. The developer has obtained all City approvals and closed on the purchase of the property, and has received financing approval for a commercial loan (through CorTrust Bank), an SBA loan (through Amplio) and MCCD financing for more than 88% of the project costs. After extending these sources as well as owner equity ($200,000) as much as possible, a project gap of $125,000 remains. As such, Watson Trading has applied for financing assistance through the EDA’s Business Development Loan Program to assist with extraordinary site costs related to soil correction, stormwater management, and utilities. Staff has reviewed business and personal financial information related to the request for gap financing, and is prepared to recommend that the EDA extend a forgivable loan from the EDA’s Business Development Fund to Watson Trading for the project. The following factors influence Staff’s recommendation: • The developer has significant “skin in the game” at this point – they have already purchased the real estate (for $100,000) and incurred almost $70,000 in soft costs. • Among the soft costs incurred by the developer was a geotechnical evaluation which, unfortunately, reveals that the soils on the site require correction, to the tune of about $105,000. In addition, stormwater management will need to be accomplished in an underground retention system, at an additional expense of over $80,000. These costs were unforeseen, and addressing them really adds no value to the property that can be recovered (as collateral) – effectively they are necessary but mostly sunk costs. These types of costs are often targeted for grants (through DEED, Dakota County) but given  the scale of this project staff is comfortable pursuing a forgivable gap loan through the EDA’s program. • The proposal supports Goal #2 of the City’s 2022 Economic Development Strategy, which is to “attract strong, growing, and new businesses and developments to SSP” by “leveraging SSP’s geographic and demographic advantages” and facilitating “commercial… developments that diversify the City’s economic activity and tax base”. • While the loan does not represent a “Business Subsidy” by statutory definition, the proposal meets a number of the purposes found in the City’s Subsidy Policy and other policies for financial assistance: o Redevelop underutilized areas of the community o Encourage development of commercial areas in the City that will result in higher quality development and private investment o Enhance economic growth by increasing the tax base o Create additional job opportunities within the City o Accelerate the redevelopment process to achieve development on sites that may not be redeveloped without public financial assistance o Enhance the economic diversity of the City and provide essential products and services within the City. If, following Council’s discussion of the proposal at the worksession, it is the Council’s consensus that the proposal is a reasonable and desirable utilization of the EDA’s program, Staff will prepare a resolution for future EDA approval to approve a loan to the business in an amount not to exceed $125,000 for assistance with site preparation costs. If supported by the Council, Staff would recommend that the loan be structured with a 60-month interest-only payment of $468.75 (10-year amortization), with the EDA forgiving the principal at the end of the 60-month period if all of the following conditions are met: • Developer completes soil corrections • Developer installs stormwater management infrastructure in compliance with approved stormwater management plan, Stormwater permit, and all applicable codes and ordinances • Developer completes construction of retail building with a minimum of 8,000 square feet of floor area in general compliance with the application that was approved by the City of South St. Paul on December 19, 2022 • Developer commences and maintains operation of Asian Mart retail store at the 512 Concord Exchange South location • Developer pays all property taxes and special assessments when due • Developer makes all interest-only payments when due FUNDING SOURCES AND OTHER FINANCIAL CONSIDERATIONS: The City’s Development Loan Fund has sufficient cash balance to fully support the proposed credit facility. Project Sources & Uses are summarized below: Use of Funds Amount Source of Funds Amount Land $100,000 CorTrust 1st Mortgage $1,294,707 Site Preparation $218,897 SBA Loan (Amplio) $1,035,765 Construction $1,802,703 MCCD Loan $125,000 FFE $306,080 Owner Cash Equity $196,391 Soft Costs $349,183 EDA Loan $125,000 Total $2,776,863 $2,776,863 ATTACHMENTS: Site/Orientation Map Approved Development Plan Property/Orientation Map Approved Development Plan A COUNCIL WORKSESSION REPORT DATE: JUNE 26, 2023 5 DEPARTMENT: ENGINEERING Prepared By: Nick Guilliams, City Engineer ADMINISTRATOR: RG AGENDA ITEM: Post Construction Traffic Plan – 7th Avenue N and 2nd Street N DESIRED OUTCOMES: Discuss Post Construction Traffic Plan on 7th Avenue N and 2nd Street N. OVERVIEW: Background The 2nd Street and 7th Avenue Improvements Project is currently under construction. During the design process in 2021, the traffic flow of this street was studied in conjunction with the new Dakota County Library. A traffic impact study was completed and included feedback from the County, School District, Public Works, and the Police Department. The study was presented to the Council at the May 10, 2021 Work Session and included several alternatives. The preferred alternative was to make 7th Avenue a One-Way Street traveling north from Marie Avenue to 8th Avenue. This is the alternative that is in the project plans and currently under construction. The benefits of this alternative as follows: • Enhanced Pedestrian Safety o Parking lot users only cross one lane of traffic. • Additional Parking o Diagonal parking on both sides provides for additional parking for students and users of the Library and Community Center. • Improves Traffic Operations o Removes southbound traffic on 7th Avenue and reduces number of students parking on side streets. ACTION NEEDED Review and discuss.