Economic Development Authority EDA

City of South St. Paul Economic Development Authority Agenda FLEMING FIELD AIRPORT 1725 HENRY AVE SOUTH ST. PAUL, MN 55075 Monday, November 7, 2022 IMMEDIATELY FOLLOWING THE CONCLUSION OF THE 7:00 P.M. MEETING OF THE CITY COUNCIL 1. CALL TO ORDER: 2. ROLL CALL: 3. AGENDA: A. Approval of Agenda Action – Motion to Approve Action – Motion to Approve as Amended 4. CONSENT AGENDA: All items listed on the Consent Agenda are items, which are considered to be routine by the Economic Development Authority and will be approved by one motion. There will be no separate discussion of these items unless a Commissioner or citizen so requests, in which event the item will be removed from the consent agenda and considered at the end of the Consent Agenda. A. EDA Special Meeting Minutes of October 17, 2022 5. PUBLIC HEARINGS: A. Approving the Conveyance of Land to the City of South St. Paul, Resolution 2022 – 16 B. Approving a Purchase Agreement for the Sale of Land to DRS Investment VIII, LLC, Resolution 2022 – 17 6. ITEMS FOR FUTURE FOLLOW-UP: General communications of the President and Commissioners are provided and may be considered for inclusion on a future agenda. There will be no discussion or decisions made related to these items at this meeting. 7. ADJOURNMENT: Respectfully Submitted, Ryan Garcia, EDA Executive Director This meeting is being taped by Town Square Television (NDC4). Replays can be viewed on Government Channel 19. Replay Times – Friday following Meeting at 1:00 p.m. & 7:00 p.m. 651-451-7834  MINUTES OF THE ECONOMIC DEVELOPMENT AUTHORITY CITY OF SOUTH ST. PAUL DAKOTA COUNTY, MINNESOTA Special Meeting October 17, 2022 Fleming Field Airport, 1725 Henry Avenue, South St. Paul, MN 55075 1. CALL TO ORDER The Special Meeting of the South St. Paul Economic Development Authority was held on 10/17/2022 in the Conference Room at Fleming Field Airport. President Francis called the meeting to order at 6:30 PM. 2. ROLL CALL Members Present: President Francis, Commissioners Bakken, Dewey, Hansen, Podgorski, and Seaberg. Kaliszewski arrived at 6:32 PM. Members Absent: None Staff Present: EDA Executive Director Ryan Garcia and City Clerk Deanna Werner. 3. AGENDA Motion/Second: Commissioner Seaberg moved, and Commissioner Dewey seconded approval of the agenda. Motion carried 6 ayes / 0 nays 4. CONSENT A. EDA Meeting Minutes of September 6, 2022 Motion/Second: Commissioner Hansen moved, and Commissioner Bakken seconded approval of the consent agenda. Motion carried 6 ayes / 0 nays 5. GENERAL BUSINESS: A. Vaquero Tax Increment Finance District EDA Minutes 10-17-2022  i. Motion to approve Resolution 2022-12, modifying the Tax Increment Financing Plan for Concord Street Tax Increment Financing District No. 2 to Eliminate Parcels from the District. Motion/Second: Commissioner Seaberg moved, and Commissioner Podgorski seconded approval of Resolution 2022-12, modifying the Tax Increment Financing Plan for Concord Street Tax Increment Financing District No. 2 to Eliminate Parcels from the District. Motion carried 7 ayes / 0 nays ii. Motion to approve Resolution 2022-13 modifying the Tax Increment Financing Plan for Grand Avenue Gateway Tax Increment Financing District to Eliminate Parcels from the District. Motion/Second: Commissioner Bakken moved, and Commissioner Hansen seconded approval of Resolution 2022-13 modifying the Tax Increment Financing Plan for Grand Avenue Gateway Tax Increment Financing District to Eliminate Parcels from the District. Motion carried 7 ayes / 0 nays iii. Motion to adopt a Modification to the Redevelopment Plan for Concord Street Redevelopment Project Area and the proposed Establishment of Vaquero Tax Increment Financing District, a housing district, Resolution 2022 – 14 Motion/Second: Commissioner Hansen moved, and Commissioner Bakken seconded adoption of the Modification to the Redevelopment Plan for Concord Street Redevelopment Project Area and the proposed Establishment of Vaquero Tax Increment Financing District, a housing district, Resolution 2022 – 14. Motion carried 7 ayes / 0 nays iv. Motion to authorize Interfund Loan for Advance of Certain Costs in Connection with Vaquero Tax Increment Financing District, Resolution 2022 – 15. Motion/Second: Commissioner Hansen moved, and Commissioner Bakken seconded the authorization of an Interfund Loan for Advance of Certain Costs in Connection with Vaquero Tax Increment Financing District, Resolution 2022 – 15 Motion carried 7 ayes / 0 nays EDA Minutes 10-17-2022 6. ADJOURNMENT Motion/Second: Commissioner Seaberg moved, and Commissioner Kaliszewski seconded the motion to adjourn the meeting at 6:54 PM. Motion carried 7 ayes / 0 nays Approved: Deanna Werner, City Clerk EDA Minutes 10-17-2022  EDA Agenda Item Report Date: November 7, 2022 EDA Executive Director: _________ 5-A AGENDA ITEM: Approving the Conveyance of Land to the City of South St. Paul, Resolution 2022 – 16 ACTION TO BE CONSIDERED: Following a Public Hearing, motion to adopt Resolution 2022-16. OVERVIEW: In 2019, the EDA completed a lot split to create two separate tax parcels from a pre- existing parcel that abutted the Drover Apartments to the north and south. The resultant north parcel is a portion of the Grand Avenue road right-of-way, primarily boulevard and sidewalk adjacent to the Drover Apartments. Following a public hearing, Staff is requesting that the EDA approve a resolution to formally convey this parcel to the City of South St. Paul. FUNDING SOURCES AND OTHER FISCAL CONSIDERATIONS: Recording costs for this conveyance will come from the EDA’s available development funds. ATTACHMENTS: Orientation Map Resolution 2022 – 16  Orientation / TIF Boundary Map Parcel to be conveyed to City  SOUTH ST. PAUL ECONOMIC DEVELOPMENT AUTHORITY DAKOTA COUNTY, MINNESOTA RESOLUTION NO. 2022 - 16 RESOLUTION APPROVING THE CONVEYANCE OF LAND TO THE CITY OF SOUTH ST. PAUL WHEREAS, the South St. Paul Economic Development Authority (“EDA”) owns certain real property located in the City of South St. Paul, County of Dakota, State of Minnesota, legally described on the attached Exhibit A (“Property”); and WHEREAS, the EDA desires to convey the Property to the City of South St. Paul (“City”) for right-of-way purposes; and WHEREAS, on November 7, 2022, the EDA held a public hearing on the conveyance of the Property and the EDA considered all of the information presented at the public hearing. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the South St. Paul Economic Development Authority that the conveyance of the Property to the City is in the public interest of the City and its people, furthers its general plan of economic development and furthers the aims and purposes of Minn. Stat. Sections 469.090 to 469.108; and the appropriate officials are authorized to take such action so as to effectuate such conveyance. Adopted this 7th day of November, 2022. _______________________________ _____________________________ James P. Francis, President Ryan D. Garcia, Executive Director  EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property in Dakota County, Minnesota legally described as follows: Those parts of Lots 1 and 2, inclusive, Block 3, The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, according to the recorded plat thereof, Dakota County, Minnesota, together with that part of the vacated alley lying between Blocks 3 and 6, said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, accruing thereto by virtue of the vacation, lying northerly of the following described land: That part of Blocks 3 and 6, and alley located between Blocks 3 and 6, all located in said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, described as follows: Commencing at the most Northerly corner of Lot 1 of said Block 3; thence South 19 degrees 19 minutes 52 seconds East, assumed bearing along the Northeasterly boundary line of said Block 3, a distance of 34.27 feet to the point of beginning of the parcel of land to be described; thence continuing South 19 degrees 19 minutes 52 seconds East along said Northeasterly boundary line of said Block 3, a distance of 260.79 feet; thence South 70 degrees 40 minutes 08 seconds West, a distance of 45.00 feet; thence South 19 degrees 19 minutes 52 seconds East, a distance of 75.00 feet; thence South 70 degrees 40 minutes 08 seconds West, a distance of 124.00 feet; thence North 19 degrees 19 minutes 52 seconds West, a distance of 337.11 feet; thence North 89 degrees 22 minutes 16 seconds East, a distance of 51.69 feet; thence North 63 degrees 25 minutes 46 seconds East, a distance of 121.01 feet to the point of beginning. Abstract Property PID: 36-72850-03-232  EDA Agenda Item Report Date: November 7, 2022 EDA Executive Director: _________ 5-B AGENDA ITEM: Approving a Purchase Agreement for the Sale of Land to DRS Investment VIII, LLC, Resolution 2022 – 17 ACTION TO BE CONSIDERED: Following a Public Hearing, motion to adopt Resolution 2022-17. OVERVIEW: As the EDA is well-aware, staff has been engaged in serious discussions about developing the parking lots surrounding “The Drover” with that same development team (Master and Simek Realty) since 2018. After navigating the complexities of the redevelopment site on the south side of Grand Avenue and west of Concord Exchange, EDA and City Council approved various actions (vacation of platted Pitt Street, Property Splits, TIF-related actions) at the Monday, October 17 meetings, and the City Council was asked to take action earlier tonight on the conveyance of a small piece of property to the EDA that would be included in the redevelopment site. The next step in this multi-faceted public-private redevelopment project is to hold a public hearing and consider the sale – for redevelopment purposes – of the property under the EDA’s control within the Vaquero redevelopment site. Resolution 2022 – 17 and the associated Purchase Agreement are thus presented for approval by the EDA on November 7. The Proposed Development In partnership with Master Properties, DRS Investment VIII, LLC is proposing the construction of a 170-unit, 5-story multifamily residential community with a diverse mix of unit sizes and configurations. 20% of the units (34 units) will be required (through a TIF Agreement, to be presented in December) to remain priced at rents attainable to households making no more than 50% of the Areawide Median Income. The development proposes to have luxury-level amenities, including heated underground parking, a swimming pool, rooftop lounge/patio, community rooms, exercise facilities, and more. The Development Property The Development Property in total includes land that is owned by DRS Investment VI, LLC (the Drover) as well as a bit of a convoluted mess of parcels that were until recently controlled by various public entities (City of SSP, South St. Paul HRA, South St. Paul EDA) but as a result of various recent actions are controlled by the EDA. The Developer received approval of a Preliminary Plat in May 2022 that illustrates the “consolidation” of the various pieces of land into a 2-lot Subdivision (Emerson Emelia Place) with “The Drover” on Lot 1 and “Vaquero” on Lot 2. A significant portion of what will be Lot 2 upon recording of the Plat is controlled by the EDA. In the image below, the EDA- controlled property that will be conveyed to the Developer vis a vis the Purchase Agreement is outlined in red. A Purchase Agreement has been negotiated between DRS Investment VIII, LLC and the EDA for the purchase of the EDA property. Staff is recommending approval of Resolution 2022-17, and thereby authorization to execute the Agreement and keep the project progressing. Staff notes the following essential elements of the agreement: • Purchase Price – The agreement establishes a purchase price of $350,000 for the site, payable at closing. Staff is supportive of the purchase price, for the following reasons: o The EDA completed an appraisal of this site in 2016, with an “as-is” fair market value of approximately $373,000. o The Developer will be bound to additional agreements (Development Agreement, TIF Agreement) which will each provide benefit to the City by helping the city to address other policy goals as found in the Comp Plan and other City Plans and Studies. Among these benefits:  As a part of this project, the developer will construct structured and underground parking, a portion of which will be available, via easement agreement with the City, to the general public. This is intended as a partial replacement (in addition to significantly increasing the amount of on-street parking in the area) to the large amount of surface parking that was lost with the development of the Yards and the Backyards across Grand Avenue from this site.  The developer is committing to rental rates for at least 34 units in the development that will be attainable for households making 50% or less of the areawide median income. This meets several comp plan and Master Housing Strategy goals and also helps the City to meet the Met Council’s Affordable Housing Allocation for SSP, which keeps the City’s Housing Performance Score high and retains our ability to leverage Met Council funding for redevelopment projects.  The developer will reconstruct the Grand Avenue Streetscape to provide a consistent aesthetic treatment to the Concord/Concord Exchange corridors. o This property is highly visible at a key gateway to the City’s core area, and has been underutilized for decades. The public benefit of improving these conditions, in addition to the potential to attract additional retail and small business development in proximity to the project, will provide sustained economic benefit to the corridor and the community. • Timeline –The agreement allows the developer up until Closing (January 31, 2023) to complete all surveys, inspections, testing, title commitment, and governmental approvals. While this is a unique approach (typically we wouldn’t allow a contingency window right up until closing), our multiple years of coordination/collaboration with the developer on this project minimizes the risk of this approach. • Other Agreements – To be clear, Monday’s Public Hearing relates only to the agreement for the developer to purchase land from the EDA. The Purchase Agreement is contingent upon the developer, EDA, and City executing numerous other binding contracts. These additional agreements stipulate more specifically the developer’s obligations through the development process and beyond. Specifically, at a future date the EDA and/or City will review for approval each of the following agreements: o Development Agreement – the developer, the EDA and the City will enter into a Development Agreement that binds the developer to build specifically the project as presented, as well as site improvements (stormwater management systems, surface and structured parking, etc.) and certain public infrastructure (sidewalks, streetlighting, relocated storm sewer). o TIF Agreement – the developer and the EDA will enter into a TIF Agreement that binds the developer to finance and build specifically the project as presented, and binds the EDA to provide a Pay-as-you-Go TIF Note to be paid back over 20 years from property tax increment that is generated by the project. o Modification of Drover Development Agreement – in 2018, the EDA approved a Development Agreement with this developer for the Drover project, which (among other things) contemplated either completing a “phase 2” or entering into a lease or purchase agreement to provide for the Drover’s required parking. The amendment will eliminate the references to the EDA owned parking lots and will also change the legal description, as the Drover will become Lot 1 Block 1 Emerson Emelia Place. o Termination of Parking Lease – In 1973, the HRA entered into a 50-year lease with the developer of Norwest Community Bank for parking over essentially all of the HRA’s property which includes much of what will be the site for the Vaquero as well as the 1-acre property across the street, south of Subway. This lease will be formally terminated. o Temporary Parking Agreement – during construction of the Vaquero, resident vehicles that typically park in the large surface parking lot surrounding the building will be temporarily displaced. The EDA will be asked to enter into a temporary parking agreement, commensurate with the construction of the Vaquero, to allow Drover residents to park on the 1-acre lot south of Subway. o Public Parking Agreement – a component of the Vaquero project is the construction of a single level (accessible at street level) of garage parking available to the general public. An easement agreement will be presented for approval that retains the public’s right to access and utilize a portion of the parking area. FUNDING SOURCES AND OTHER FISCAL CONSIDERATIONS: Closing proceeds from the sale of the property will be retained in the Vaquero TIF district to support eligible project expenses in the redevelopment project area. ATTACHMENTS: Purchase Agreement Resolution 2022 – 17  SOUTH ST. PAUL ECONOMIC DEVELOPMENT AUTHORITY DAKOTA COUNTY, MINNESOTA RESOLUTION NO. 2022 - 17 RESOLUTION APPROVING THE SALE OF PROPERTY TO DRS INVESTMENT VIII LLC FOR REDEVELOPMENT PURPOSES AND APPROVING THE RELATED PURCHASE AGREEMENT WHEREAS, the South St. Paul Economic Development Authority (“EDA”) owns certain real property located in the City of South St. Paul, County of Dakota, State of Minnesota, legally described on the attached Exhibit A (“Property”); and WHEREAS, the EDA desires to sell the Property; and WHEREAS, DRS INVESTMENT VIII LLC, a Minnesota limited liability company (“Developer”), desires to purchase the Property for the purpose of constructing a multi-family residential housing, public parking and other uses related thereto, as articulated in the Purchase Agreement (“Purchase Agreement”) between the EDA and Developer; and WHEREAS, on November 7, 2022, the EDA held a public hearing on the sale of the Property and the EDA considered all of the information presented at the public hearing. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the South St. Paul Economic Development Authority as follows: 1. The sale of the Property to Developer is in the public interest of the City and its people, furthers its general plan of economic development and furthers the aims and purposes of Minn. Stat. Sections 469.090 to 469.108; and the appropriate officials are authorized to take such action so as to effectuate such sale. 2. The EDA approves the Purchase Agreement, subject to minor modification as approved by the City Attorney, and the appropriate officials are authorized to take such action as to effectuate its execution and implementation. Adopted this 7th day of November, 2022. _______________________________ _____________________________ James P. Francis, President Ryan D. Garcia, Executive Director 1  EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property in Dakota County, Minnesota legally described as follows: PID: 36-72850-03-233; Abstract Property Those part of Lots 12 through 23, inclusive, Block 3, The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, according to the recorded plat thereof, Dakota County, Minnesota, together with those parts of the vacated alley lying between Blocks 3 and 6, said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, accruing thereto by virtue of the vacation thereof, lying southerly of the following described land: That part of Blocks 3 and 6, and alley located between Blocks 3 and 6, all located in said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, described as follows: Commencing at the most Northerly corner of Lot 1 of said Block 3; thence South 19 degrees 19 minutes 52 seconds East, assumed bearing along the Northeasterly boundary line of said Block 3, a distance of 34.27 feet to the point of beginning of the parcel of land to be described; thence continuing South 19 degrees 19 minutes 52 seconds East along said Northeasterly boundary line of said Block 3, a distance of 260.79 feet; thence South 70 degrees 40 minutes 08 seconds West, a distance of 45.00 feet; thence South 19 degrees 19 minutes 52 seconds East, a distance of 75.00 feet; thence South 70 degrees 40 minutes 08 seconds West, a distance of 124.00 feet; thence North 19 degrees 19 minutes 52 seconds West, a distance of 337.11 feet; thence North 89 degrees 22 minutes 16 seconds East, a distance of 51.69 feet; thence North 63 degrees 25 minutes 46 seconds East, a distance of 121.01 feet to the point of beginning. PID: 36-72850-06-143; Abstract Property Veterans Memorial Drive, more specifically described as that 52.00 foot wide strip, being 26.00 feet on each side of the following described center line: Commencing at a point on the South right-of-way line of Grand Avenue, distant 46.8 feet West of the Northeast corner of Block 8, said The Stockyards Rearrangement of Blocks 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 of the South St. Paul; thence Southerly at right angles to said south line of Grand Avenue, a distance of 108.37 feet; thence southeasterly on a tangential curve to the left having a radius of 112.01 feet and a central angle of 26 degrees 52 minutes, a distance of 52.53 feet; thence Southeasterly along a line tangent to said 112.01 foot radius curve, a distance of 329.5 feet more or less to the beginning of a 51.0 foot radius tangential curve; thence Southeasterly along said tangential curve having a radius of 51.0 feet and a central angle of 69 degrees 58 minutes 39 seconds, a distance of 62.29 feet; thence Northeasterly on a line, distant 26.0 feet Northwesterly of and parallel with the Northwesterly line of Lot 24, Block 3, said The Stockyards Rearrangement of Blocks 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 of South St. Paul, to the Westerly right-of-way line of Concord Street and there terminating. A-1 Abstract Property All that part of the following described parcel: Lots 2 through 16, inclusive, Block 6, The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, according to the recorded plat thereof, Dakota County, Minnesota, together with those parts of vacated Pitt Street and the vacated alley lying between Blocks 3 and 6, said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, accruing thereto by virtue of the vacation thereof, EXCEPT that part lying within the following described land: That part of Blocks 3 and 6, and alley located between Blocks 3 and 6, and of vacated Pitt Street, all located in said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, described as follows: Commencing at the most Northerly corner of Lot 1 of said Block 3; thence South 19 degrees 19 minutes 52 seconds East, assumed bearing, along the Northeasterly boundary line of said Block 3, a distance of 34.27 feet to the point of beginning of the parcel of land to be described; thence continuing South 19 degrees 19 minutes 52 seconds East along said Northeasterly boundary line of said Block 3, a distance of 260.79 feet; thence South 70 degrees 40 minutes 08 seconds West, a distance of 45.00 feet; thence South 19 degrees 19 minutes 52 seconds East, a distance of 75.00 feet; thence South 70 degrees 40 minutes 08 seconds West, a distance of 124.00 feet; thence North 19 degrees 19 minutes 52 seconds West, a distance of 337.11 feet; thence North 89 degrees 22 minutes 16 seconds East, a distance of 51.69 feet; thence North 63 degrees 25 minutes 46 seconds East, a distance of 121.01 feet to the point of beginning. FURTHER EXCEPTING THEREFROM, Veterans Memorial Drive, more specifically described as that 52.00 foot wide strip, being 26.00 feet on each side of the following described center line: Commencing at a point on the South right-of-way line of Grand Avenue, distant 46.8 feet West of the Northeast Corner of Block 8, said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul; thence Southerly at right angles to said south line of Grand Avenue, a distance of 108.37 feet; thence southeasterly on a tangential curve to the left having a radius of 112.01 feet and a central angle of 26 degrees 52 minutes, a distance of 52.53 feet; thence Southeasterly along a line tangent to said 112.01 foot radius curve, a distance of 329.5 feet more or less to the beginning of a 51.0 foot radius tangential curve; thence Southeasterly along said tangential curve having a radius of 51.0 feet and a central angle of 69 degrees 58 minutes 39 seconds, a distance of 62.29 feet; thence Northeasterly on a line, distant 26.0 feet Northwesterly of and parallel with the Northwesterly line of Lot 24, Block 3, said The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, A-2  eight, nine, ten, eleven and twelve of South St. Paul, to the Westerly right-of-way of Concord Street and there terminating. lying northeasterly of a line and its northwesterly and southeasterly extensions and said line described as BEGINNING at a point on the north line of Marie Avenue distant 35.00 feet west of the southwest corner of Lot 29, Block 3, The Stockyards Rearrangement of Blocks one, two, three, four, five, six, seven, eight, nine, ten, eleven and twelve of South St. Paul, according to the recorded plat thereof, Dakota County, Minnesota; thence northwesterly to a point on the east line of vacated Pitt Street of said plat and said point being 265.00 feet north of the north line of Marie Avenue measured at right angles to said north line and said line there terminating. Abstract Property The west half of Pitt Street lying south of the easterly extension of the north line of Lot 9, Block 8, Stockyards Rearrangement of Blocks 1 to 12, inclusive, South St. Paul, Dakota County, Minnesota, and lying north of a line running parallel to the North line of Marie Avenue and 265 feet North of the North line of Marie Avenue. A-3