##VIDEO ID:99Iafemlzoo## e okay everybody ready to roll here we go well good morning everybody and welcome to the uh Thursday October 24th 2024 meeting of the DI Housing and Redevelopment Authority and um uh we are handling these meetings as we are with our City Council meetings online as well as in person and uh if you want to participate in community comment which is the only portion of the agenda this morning where we have an opportunity for public input uh the code is up on the screen it's going to come up fairly fast and so the rest of us will be uh discussing uh or we have just a singular matter in front of us this morning from an not an action standpoint but informational standpoint uh and so I'm going to now ask uh that the that the um roll call be taken care of as I call the meeting to order and I guess uh Scott Neil is going to handle the roll call this morning our executive director M multitasking a new role thank you Mr chair commissioner Risser here commissioner Jackson here commissioner Pierce here commissioner agnu here chair huband here uh we have next the Pledge of Allegiance Pledge Allegiance Al of the United States of America and to the Republic for which it stands one nation under God indivisible with liberty and justice for all and we have a meeting agenda that's been published for all of us on the H and the public is there anyone that wishes to modify the agenda on staff or or the H any commissioner is there a motion to approve the meeting agenda as published so moved second CHR Jackson moves commissioner Pierce seconds the adoption of the meeting agenda is published any further discussion all those in favor of adopting the meeting agenda is published say I I I posed carried the meeting agenda as published as adopted and now we are back at Community comment uh and so if there are folks that uh wish to uh call in this would be a good time for you to think about getting online and getting ready I'm going to ask if there's anybody in the audience who wishes to address the h and a matter of concern to them that's not otherwise on the agenda today or scheduled for a future public hearing seeing no one coming forward um turn to director benad I don't yet have anyone on the line but because there is a short delay in the broadcast I would recommend waiting one minute or so to give people that opportunity my clock shows it at 7:34 I'll come back to you at 7:35 or when I have a caller whichever is first very good thank you e a minute has now passed and I still don't have a caller so I think it is safe for you to move forward with the agenda all right very good thank you um our practice is to have the executive director comment on um a public comment that was made the at the prior meeting meeting I don't think there was any comment report this morning all right and so we'll move on to the consent agenda there's a couple items on the consent agenda including our one of our new uh acronyms to learn laa so we'll be uh learning more about that as time goes on and um nice of the legislature to put that in place so that we have some funds to work with on housing issues uh is there anyone who wishes to remove an item from the consent agenda is there a motion to adopt the items on the consent agenda so moved commissioner Jackson moves second commissioner Pier seconds the adoption of the items on the consent agenda and a single motion any further discussion all those in favor of adoption of the items on the consent agenda and a single motion say I I I opposed carried those items are adopted uh and next uh we are going to move on to um uh the reports and recommendations portion of the agenda we have no public hearing matters in front of us this morning and so uh this is the um continuation of the discussion on um what might happen what might be uh at the what we call the Macy's site or The Enclave project and um one of the charges for the developer and for our staff was to look at what we could do in the um on that site in the absence of tax increment financing usage or partial tax increment financing usage and I think our staff and the developer have worked uh diligently on this over the past couple of weeks to be able to make a presentation to us this morning so as we get into November we're going to be making some decisions we have a a more well-rounded base of knowledge so manager nindorf go ahead yes good morning um well as you had mentioned we're still uh diligently working towards uh uh getting this full proposal in front of you but we wanted to take this opportunity to continue the follow-up discussion that we started a few weeks ago um similar to to our presentation a few weeks back um I'll start with an overview um a little bit of information about some various scenarios and the and the fiscal impacts and then um I'm going to pause and turn it over to the develop developer Patrick Brahma who will go into a little bit more detail about what some of those Alternatives might look like I think that was a responsive to your to your request last time um and then if if uh uh after you see what the Alternatives look like that might put some of the numbers in context I'm happy to come back and go through those in more detail or or or entertained questions um the packet is very heavy there's lots of uh slides U most of it is repeat from our conversation back in July and August um I did add add a few new slides um so that's what I'm going to focus on this morning but just be aware I'm not going to go through that whole slide deck but it's in there if there's any questions and I'll kind of run through the highlights let's see yeah maybe this battery is dead sorry check it out okay there we go all right little technical error first thing in the morning um so so an overview of this project um as we've mentioned for quite some time um after meeting with the developer reviewing their performa looking at their budgets looking at the costs looking at how the project has evolved uh we still reach the same conclusion that without the use of tax increment financing to rebse to reimburse them for some cost in the future this project is unable to proceed it's unable to secure debt and Equity to move forward um staff still has the same recommendation that we consider the use of public financing thanks as Tiff to help get this project um over the line and get get the debt and Equity uh signed up um a few questions to consider and these are some questions um uh similar but just putting them front and cent of this time um when we use tax increment financing in a Dina um in addition to all the provisions and restrictions of state law we also add another measure and that's to make sure that the project delivers not just benefit to the developer but benefit to the general public um and that benefit is measured in a number of different ways um uh it it trickles up through our policies and standards and guidelines that have evolved over decades and and even some new ones in recent years um and they're articulated in our uh H year in review document uh in that document we update it each year and there is a table where we just streamline look at at some of the public benefits that are proposed pending and delivered so to me the fundamental question as we consider the use of tax increment financing here is whether or not they've delivered enough public benefit um uh we feel strongly that they've met all the standards in state law uh we feel strongly that um the site qualifies we've uh you know all the numbers add up but there's still that that gut check does it deliver enough public benefit in recent weeks you've asked about how could the psych be redesigned or reconfigured to not use Tiff and um fundamentally um that redesign would um would most likely not comply with our comprehensive plan our small area plan and many of our policies so then the question is do you have a preference um if if we don't want to use tax increment here instead do we want to relax some of those policies and standards that have evolved um uh or fundamentally one other option is should the project just not proceed it's certainly within your authority to do that to make that decision so a quick reminder the site it's 8 Acres uh developed in the late 1970s the site is under contract to the developer for purchase by Macy's and they've got a purchase deadline that's coming up um uh early January of next year the development team is the same Enclave companies um a specialist in in multi family and and Commercial and they're partnering on this site with lifestyle communities who will be doing the condominium building uh the site plan is the same and my apologies I noticed this morning this is actually the preliminary from the summertime but um this just as a reference point the site plan is still the same subdivide the site into four individual building pads for four separate buildings um the use of tax increment has been um discussed in Earnest uh over the last several months um but just to reminder that even when the developer came forward in March of 2023 in that first sketch plan they raised the the concern that based on the size and scope of the site that they felt that tax increment would most likely be needed um so that's uh uh that's how the site has evolved a lot of public benefits I'm not going to go through each of these but um this one I think is particularly of Interest all the space uh in red uh would be subject to some type of public easement either a roadway easement sidewalk easement Plaza easements utility easements parking easements um uh typically these types of buildings are all private property and while it is privately owned it would be available to the public um that's something that has worked well on other sites and we'd like to continue that here and then the most unique thing about this particular um Redevelopment site is the opportunity to potentially uh link uh the neighborhoods on the west side and east side of France Avenue uh with some type of public infrastructure um so far we've been focused on more of an underpass we've also considered a bridge um that goes over the road to some degree uh we l started looking into that actually back in 2007 um was that first study to to do some kind of um pedestrian Improvement that would separate people from from the fast moving traffic on France with this particular Redevelopment District uh coupled with the site on the west side of the street there might actually be an opportunity to to deliver that um don't want to raise our hopes up completely though because we haven't done all the study we haven't done all the engineering we've done enough to know that we think this could actually work we still have to work on funding financing final design all those crucial things um but with this particular site how we've structured the arrangement with the developer is that 75% of the future incremental taxes would first be dedicated to reimburse the developer um and then the remaining 25% goes to the city for the public infrastructure uh typical tax increment deals 90% 95% in some cases 100% of that Revenue goes back to the developer in this Arrangement uh we don't think that's warranted frankly it's not necessary for the developer to meet their objectives so we've purposely structured it that way to make sure that there' be sufficient funding for the city if we really want to go forward with this type of public infrastructure before you jump off of that slide um I think this is an important point that you just made that um the city would get a portion of the tax enement financing that would be used for repayment after the project was complete that 25% of this would be coming back to the city during the life of the Tiff District to assist us in in some of the things that we want to accomplish so what what are in addition to the potential passageway uh or some sort of Crossing uh across France Avenue what would be the other things that would be allowable use for us with that 25% and I'm thinking of things that people have expressed concerns about well there's going to be more people living there and there's going to be more you know burden on on the rest of the general public uh can we be used to help defray some of those costs even though we know the developer is going to take care of all of the things that we might normally take care of on the site like sidewalk maintenance Street Maintenance those kinds of things could you talk a little bit more about that sure so for this 25% it really needs to focus on public infrastructure improvements so uh roadway improvements sidewalk and bike trail improvements utility improvements um those types of general public purpose um it could also be pooled that's a provision in in tax increment law um it could be pooled for affordable housing um inside the district or outside the district and it could also be pulled for infrastructure um within uh not anywhere within the city but um within the southeast project area it could be pulled there uh I don't know if if we'd recommend that at this point but that is a possibility uh but with the with a 75% uh part of the reason that that number is where it is is because the developer is already doing most of the public work they're adding the new utilities they're adding the new sewer they're rebuilding Gallagher they're rebuilding That Sidewalk along France in that area so um uh some of those expenses are already covered um but the city could certainly do public infrastructure we've done that um uh in the Grand View District uh where we use the the taxes paid by the avador building to fund the road roads sidewalks new roundabouts on the west side of the highway and uh with the Eden Wilson project the old Perkins the new mson green we've done something similar where the tax revenue from that building has paid to redo all the roads here on the east side of the highway um so we could do something similar with this project um but at this point what we're really focused on is is the immediate needs at this site so that's really where our attention has been yeah that's helpful thank you commissioner Risser had a this prompted her to have a question as there all her comment and I I have actually several questions um and a and several concerns and one is that embedded in the language of the Tiff term sheet is a statement that the city and HRA currently believes it's in the best interest of the public to construct a public underpass or bridge to allow pedestrians and other non-motorized users such as bicyclists and people who use devices um to cross France Avenue and um located in the area of the project and my concern is it was in this room February 15th and I would encourage people to go back and look at that video of the h meeting um 10 minutes and I'm saying that we need a study um to go back and to go back to the drawing board and this is in the context of being asked to approve an $80,000 uh professional service contract with lhb to look into a pedestrian Crossing and at that meeting I was assured that we were going back to the drawing board and that was what that contract was for um but I had reservations because the area being examined was so limited and I specifically requested that the area be expanded so that it included Gallagher because to me it makes no sense to be investing um um apart from where the prominade or excuse me the the bike trail already exists and to be you know thinking about not doing it at an intersection and um I was told reassured by both colleagues and staff that that study would go back to the drawing board and we would that would be what that was I have not seen that study um even though we were told in the agreement that we would be getting a complete feasibility scope within 2 to 3 months that was February March April May that study we have not had and we were going to get the full scope in four months June okay and it's October right now and we have all this stuff in front of us and we don't even have the basics of the study and I also at that meeting expressed reservations about um Contracting with lhb um because it wasn't an open process and I really um felt like and we had received an email from a resident asking why there wasn't going to be an RFP and at that meeting I had a lot of reservations I put them aside and I supported voting for this contract but since then um lhb is the enti that determined the Macy's site qualifies for Tiff um potentially they are the ones that's their drawing right there for the underpass um they're they haven't turned in this contract and so as we're having this discussion I am really having a hard time dealing with the basics of what we're talking about because it really feels as if we're going about this in a very problematic way the other thing is in terms of Tiff financing high level this would be the third Tiff District in a two block area on France for a project that was approved the site plan is the Pud we bundle we mix all the colors of the Pyramid of discretion into One Singular vote and so when we are resoning we are approving a site plant and I have pushed back in the past about bundling that way and I I really have issues with that but this would be the third time we did that and so when we talk about well we need to make changes because otherwise this project can't move forward this project is baked into the zoning and I think you know when we look at the US Bank site and we look at the 20 or the 7200 7250 site those are both Tiff financed puds specific to a singular site plan you look you look at the ordinance it says you know approved Plans Incorporated here in um that were received by the city September 3rd that is the my my understanding is that that is the only thing that can be built on the site and so to add Tiff financing public financing public money to a project that can only be done by one develop ER is really makes me incredibly uncomfortable and I have to ask because you know I've been trying to figure that you know how did we get to where we are and you know is this a process that actually is okay and I you know turn I would like to hear the impression of our attorney on that and specifically you know this the city is supposed to follow if you look at state law and what we can zone for there's a whole list of stuff that you can zone for I don't see site plans on there I don't I don't see this level of granularity so I I'm wondering if that's an overreach but you know as I look at this and I think about where we are right now it's absolutely it's frustrating on so many levels and you know as an elected official I'm trying to do what I swore I would do when I accept this position and I just feel like so much is coming at me that I have a lot of questions about that was a lot I don't know if that was a lot um I'll try I don't and I you know but yeah would it be appropriate if I responded to some maybe in the order that you presented some of your questions um I might not catch all of them and I'll then I'll turn it over to Mr Kendall if you wanted a response from him um if that's okay chair I think so I tried to jot on some of them too so um so the study on uh The Pedestrian Crossing that contract was approved back in February um the time frame what did not align it did it is taking longer longer to produce that the biggest part of that was that the Architects and Engineers were working hand inand with the developers so they don't want to work um they they don't want to um come up with some scenario some you know conceptual design that was impossible because it didn't match up with the site plan so it was an iterative process um the site plan finally got locked in in June which then allowed the engineers on on our side to at least put one pin in the place knowing that okay that that preliminary plan is is approved so we know that's where the corner of the building is we know that's where the curb is going to be we know that's where the sidewalk is going to to be so that was that was a delay definitely um the the engineering team did present an update to us and gave us a draft report I forgot the meeting date uh August or September um and the final still is pending we still do owe you the final and that is coming we've aligned it so that when all these items go together for a final vote that that document would be available in advance of that so um uh uh so you have that that final report rather than the draft and the final report does does address this uh the scope expansion that you had requested so it goes from G from the southern edge of Gallagher to the northern edge of 72nd Street um that's the focus area and as I recall back in February there was conversation as well of well should we do something up by the mall up by 66 Street or 69th Street that's a great question maybe we should um but we uh our Focus now is on these areas that we know are changing and that we know there's an opportunity in front of us here so that's that's how we determine the scope of that work so I do do expect that report it is coming it should be on the November 14th meeting agenda member yes commissioner go ahead um when you say working hand inand with the developers that's not really I come out where already did it that's not what I thought that study was going to be about and I do have reservations about how the location of it and um we did get financing here in Edina for a bridge across France Avenue and I think it was part of the outcome from the 2005 study uh people decided not to pursue that bridge but instead and got permission to use the funding to make um safety improvements at grade level and we so we have invested in at grade level cross and when I hear about how okay well maybe what we'll do is we'll reroute part of the 9M Creek Trail so that it's not on the south side of Gallagher um when you're at the west side of France uh but instead on the North side you know I feel like that's ignoring a lot of the investment that has already gone in by the city to do the atg grade improvements so there's there's a lot of parts here that are moving and um it is it is really concerning but okay thank you for that respond Mr chair commissioner if I could correct one statement when I said they were working hand inhand with the developers please don't take that out of context my intention is that the engineers that we hired that the city hired that the H hired were working hand inand with the engineers that have intimate knowledge of those two private projects um because we didn't want to design this potential public Improvement without with blinders on and so the engineers got together and talked about how their water flows on their site where their elevations are where their grades are where where their critical utilities are it was those types of conversation so that altogether um if this is decided to move forward um all those three pieces would match up the piece on the east side of the road the piece out the City's piece in the road and then the developer piece on the other side of the road so um uh those conversations uh are essential for good projects to work and the tunnel concept has changed you know initially it was going to look like um what goes on at York um and it was going to be open and very light and then we learned that no it's only going to be a 10 foot um wide area of light coming through and then it was going to be a 50ft wide t tunnel and then it's going to be 25 ft and I I just feel like um it keeps moving away from something where people might feel comfortable and I I do know you know the one thing I could find which is in that prominade report in regard to grade separate separated Crossings at France Avenue due to the length of the crossing and due to the difficulties of making tunnels safe and comfortable it is recommended that overpasses be used instead of underpasses and so you know I if you're looking I I just I'm growing increasingly concerned and I want to say for the record even though it says in the Tiff draft that um we see this the HRA considers this a public benefit I as a member of the HRA do not see a tunnel at this location under France as a public benefit and all right thanks for that obervation uh you also had a question from uh commissioner rer about the process that we're using here yeah with the zoning process I I would defer that to Carrie Teague or Dave Kendall um I'm not an expert to speak about the zoning law uh there was a question about the or comment about the uh this being the third PUD in a three block area any observations on that uh that's accurate there's several uh Parcels that are Zone PUD and a um certainly several on France Avenue others throughout other neighborhoods as well it was more it was also commenting that and I I do believe all three puds Zone specifically to the site plans and um would like feedback on that and how it um lines up with Minnesota law about zoning and what municipalities can do you mean the fact that the puds have their own site plans because they're puds is that what you mean the the the reality that when we vote to approve a site plan we are voting to approve to rezone they are bundled together we are mixing and and the thing is I'm trying to figure out how we can have three well two puds on France Avenue that aren't exactly moving forward we're creating or we're talking about creating a third and what exactly is it that is causing or you know is this a factor is our approach to development something that's stying development because the only thing that can go up are the site plans that the developer has proposed they're baked into the zoning is it okay to bake in site plans to the zoning is that okay is it in alignment with Minnesota law director Teague you want to come up and comment on it and then we can go to our attorney too yeah I believe the question was legal but but that is the intent of the Pud we're baking in that site plan in the in the approvals within the ordinance that that's the only project that can be built on that site I'll turn it over to Mr Kendall uh yeah Mr chair commissioner as correct uh so this is the nature of PUD that it requires the zoning requires that particular project to be built I I think it's when you're doing a PUD I think it's appropriate and necessary probably to have a site plan required by that PUD because the nature of PUD is you want that particular project built in that way that's what you've discussed and negotiated for uh if the question relates to uh whether the H is because the city council has approved PUD zoning on that site whether the H is then somehow required to approve Tiff I don't think it is um it's two separate bodies acting in two separate capacities um so the HRA is free to decide not to approve Tiff uh if that happened then presumably either the developer would have to come back and ask for a change to the Pud zoning to some kind of different or smaller scale project or they'd have to go back to the private market and see once again if they could try to obtain additional financing to build the approved project but the H is not required uh to approve Tiff simply because the city council has approved PUD zoning uh and I think that is you know something that the council when approving or uh reviewing PUD Zone just has to be aware of um you are approving that particular site plan so and if it's a large complex expensive site plan it may be difficult to line up financing for that and the developer may have problems with that and they may have to come back in at some point and ask you to somehow change that site plan so that's a potential danger drawback issue to using PUD uh it's you know there's upside and downside but that's one of the downsides is that if you have a large complex expensive PUD it may be some time and some difficulty before it gets built all right and then um you had remarked commissioner that uh these were Tiff Finance plans long France Avenue I would I would characterize it differently myself they were Tiff assisted plans the the bulk of the financing is coming from equity and debt I would think from the developers not not from the city we're we're we're assisting on public benefit elements of these things that that's correct yeah and um I I don't recall the exact price tag of each of those projects off the top of my head this morning but the proposal at 70th in France uh multiphase uh four different buildings um uh the first one was finished um the the second and third ran into financing issues as we know as we do know about um but the 70th in France as well as the 72nd in France um are designed to follow the city's policy and best practices so those projects are fully privately funded at least theoretically the one at 70th is delayed um uh and then Tiff is used um after the project is finished after those public benefits are delivered then a tiff note is issued to reimburse that developer for that set amount that was predefined um but the first step in each and every project in AA um is that first they have to secure that private funding um at this the property across the street from this uh the the Macy's furniture site uh the 7200 site uh my understanding is that the developer is moving forward uh they're working on getting a foundation uh permit at this point uh on the office building um they're still hoping to break around this fall it's getting getting tight to break round on that but but my understanding is that is that their financing did finally come through their private financing took much much longer than anyone ever expected um uh but I but those projects I think you address it very clearly Mr chair that the private funding comes first that de the debt and the equity is that's the developers responsibility after they finish their projects that's when the Tiff would actually be uh repay it over time one of the other commissioner rer wasn't around when we did those at grade Crossings but the comment that we've invested in that grade Crossings that's a County Road and actually that money came from the Met Council as I recall we were talking about doing an overhead passageway and then we ended up doing three Crossings at grade um because of some of the challenges we found around an overhead yeah my recollection I just started hear that time I think that was 2014 or 2015 uh we had a we did have a Federal grant that came through the through the Met Council for the bridge and I I don't uh I was not here when the decision was made not to do the bridge the overhead Bridge um but the those dollars got the project started um the county was not able or willing to step up so the city stepped up we actually used Tiff money from the Centennial Lakes Tiff District to supplement the budget and get the rest of those three um uh we had the the crosswalks we had all the intersection improvements my recollection was about uh well probably more than half of that project cost came from Centennial Lake Tiff dollars that were available for infrastructure improvements okay um so yeah so the the purpose of our gathering this morning was to kind of learn uh what we could do at that site the Macy's site The Enclave site in the absence of Tiff or with more limited use of Tiff and now we're we're running into some potential time issues here so let's try to push forward on on this purpose of this meeting this morning yes thank you we'll do let me just cut to the chase uh for this morning uh at our last conversation we were asked to look at some Alternatives um uh so the developer has done that um uh and then this and then I did some estimates based on some of those Alternatives um so some of these might make more sense after you see what Patrick is is going to present but we are asked about the park maintenance fees um so in AA um we've got a long history of having private developments that are right on Parks help fund those maintenance and operations in the park they don't pay for all of it um but it but it's those fees that help reduce the the the cost burden to the overall tax paay um so with this proposal um this is one thing that um was a was a we talked a lot about this one but where we landed um and Patrick just close your ears right now um so this project it'll pay about $80,000 in fees annually that that would be restricted to maintenance of Centennial Lakes Park in that promad uh that would last for 30 years uh with an annual escalator each year and then at the end of that term it would it would expire and wind down that's similar to agreements that that were made with Developers in this area for the last 30 years um so that's the orange line is is those Park fees um the blue line on the bottom is what we've received from the site for the last 40 years which is nothing um uh as at least as far as as far as the park fees so if if Tiff is not used on this site um the city loses the leverage to ask the developers to help out with the park um the only way that we can get these fees is if we use Tiff and as a condition of getting that Financial financial support so that's what that's what that looks like and then I try to model a couple other things um and these are just caveats I'll talk through them when we go here let me just say it's it's tough to model hypothetical situations right there's so many variables we don't control any of those variables um we with this analysis I try to bookend a couple things so I know where we are today as is is the property pays $348,000 a year in property taxes each year $45,000 in change comes to the city half goes to the state fiscal disparities some to the schools and some to the county um but if we look over a 26e period which is that lifespan of a of a Redevelopment Tiff District the city would receive $1.18 million over that 26e period we were asked hypothetically uh at the last meeting well what if Macy sold and renovated the property and a new user came in and did something um lot of lot of guesses here but um Sophie doubled the value I think that was the the ask to us at the last meeting what if that value doubled well then the benefit of the city doubles we'd receive a little bit over $2 million over the next 26 years the state would still get their half the county gets some the the schools get some one caution is that properties like this in the last several years have been of high interest by nonprofit users um churches houses of worship places like that over the last several years I do get on a relatively frequent basis inquiries from expanding growing churches that are looking for big sites on big roads so they can attract big audiences to to their to their worship Services um and that's great and that's allowed all those good things but they're tax exempt so one of the dangers just to remind folks is once they're exempt they might pay nothing in property taxes um so just a caution there and then here's the other thing that we do know don't have a ton of control but but the the chart on the bottom is is the 26-year cumulative payments that the city would recognize if we choose to use tax increment financing and and see this project being built so I'll start on the left of this chart um the green box is those city taxes the one little bit over a million dollars 45,000 a year when when Tiff is used that base is frozen initially right that's that's the concept of Tiff but when that happens on this site the developer um thanks to City's policies and standards and laws uh also has to pay about $1.8 million to our water fund to make sure that all the water pipes in a Dina can keep delivering water to the community they pay about $1.6 million to our sewer fund to make sure the sewer pipe works and when you flush the toilet it goes where it needs to go um since they're subdividing the site they're paying just under $3 million in park dedication fees that that's a check that's written to the city it can be used for any park for uh for any Improvement in any park Citywide the second green box is that um cumulative amount of Park maintenance fees that adds up to another $3 million so with this project if this project moves forward with Tiff you've got $9.6 million that comes to the city either upfront or spread out over the term and then the the big blue bar there that's the 25% of the tax increment this project would generate so um that could be used by the city to fund an underpass and overpass sidewalks um we could pool it for affordable housing and other places any legal use by state law um would would be eligible for that amount so that total dollar amount comes to about $40 million over 26 years and then here's an here's a the last hypothetical I have for you this is um our estimate at the taxes generated to the city if the city approved an alternative plan and that's what Patrick's going to show in minute if we approved a different plan without Tiff um so if that were the case um uh there's a lot of caveats to get to that alternative plan but um the tax increment um would not become tax increment it would just be regular taxes so the dollar amount to the city would be higher upfront um they would still have to pay the sewer fee they'd still have to pay the Water fee um but they would not have to um have the infrastructure fee through the Tiff they won't have the park fees that dollar amount over 26 years comes to $26 million so there's a spread of about $15 million uh benefit to the city at large if we use Tiff versus if we had an alternative plan where we did not use Tiff um Patrick's going to show you um um little b a little bit more about that alternative plan but to suffice it to say it that plan based on staff's quick review it probably would not be approved because it doesn't comply with our our comprehensive plan our affordable housing plan our sustainability plan or our small area plan but hypothetically that's what it would look like um I I just had one um on on this Slide the only thing I would would ask for differently and I think we should be showing both sides of it every time we look at a project I think for me this feels like maybe the first time we've gone through this level of of specificity and looking at the financials in this way um and so I think this it's it's very additive and it's a good part of the process the only thing I would add here and I think you kind of spoke to it would be what is the difference between with no Tiff once the project is done and we can estimate say two years um how does that impact the tax both the capacity and the funds available right and then with Tiff once the the district is desertified that's the point where right the tax base the capacity shifts and then there's more dollars available I'd want to see that um along with those so I'm not asking a question I'm making a request the next time we do this that we're able to show um that as well we'll definitely have have have that for you in fact ERS is working on that um I just got a draft last night so we'll we'll get it to you at the next one thank you yes commissioner I also really like this slide and I think it helps show the picture numerically and I I think that's always a struggle that we have I know that this is intended to be um the financial impact specifically to our city I also think it would be helpful as we're having discussions to potentially add into this view I know we have other views of this but impacts to the school district um and potentially the County taxes as well um just because we we continue to get questions about that and I think this visual in particular could be really instrumental in showing those other impacts sure happy to do that we did do something similar in the in the last several presentations um this chart that showed the benefit to the schools the schools get they get their benefit right away um um if the of course if the project moves forward it it all if the project does not move forward it all stays the same um yeah we can think about doing it that in that bar chart fashion yeah I think the visual is what's impactful on this one so thank you um back go back to that one you were just oning in that yeah there so is it so if there's an alternative project non- Tiff related uh there would not be a park dedication fee uh it depends on what that hypothetical project is okay um uh there might be uh but it really hypotheticals are tough I mean um as we started to lay these out it didn't comply with any of our standards and it's hard to make guesses like that so I would say that you know the to the points that Commissioners Pierce egno just made I just say it a slightly different way the the pros and cons of whether it's worthwhile to wait wait for the increment period to capture the increased value over the base value or the value of a project that's done without Tiff kind of the I think kind of saying the same thing a different way for sure that's what I'm thinking the comparison actually is yeah so because that's a that's I think it ends up being a judgment call because of the variables involved and so but the more information we can have to help us make those judgments really good so anyway go ahead so the U in the chart there's also a graph here that may or may not be helpful um I want to be mindful of time here as well so these are the same five hypotheticals the Asis condition which is the top red line and then the approved plan condition which is the bottom Green Line This measures the different types of of fees that the city receives um uh and a lot of those fees would be you know used to offset tax levies or to supplement a future tax levy and then the right half of this graph um or or this chart shows the various public benefits uh remediation of of environmental issues creation of new jobs new housing new affordable housing um compliance with that self-d plan to make that whole area more W more walkable and livable um the sustainability goals the uh the idea of moving towards more of a public parking structure rather than everything being private and duplicative um and then New Street streetcape New plazas those types of things um so with these uh you know with the Asis condition obviously um it is what it is um nothing wrong with what it is but there's no direct benefit to the to the um City at this point uh and then some of those hypothetical that provide various um levels of of of benefit or not so I just want to I make sure we've got plenty of time for for Mr Brahma he's why we're here this morning um but just questions to consider uh going back to where we started um does this project deliver a suitable degree of public benefits uh it is designed to comply with all the codes and St with all the standards and guidelines and whatnot in the in the city um uh and if it if some of those standards need need to be relaxed to move this forward without Tiff which which one should be relaxed um uh we've got a lot of standards that have been around the affordable housing has been a goal since the 1970s that more recent policy was adopted in 2015 after a lot of input the sustainability the Southdale plan years of community input on those so if we do need to relax some of them it'd be helpful to understand which one and how we might go about doing that um and then another option is should other public financing um Alternatives be considered we put this out on the table back in August um there are alternatives to doing Tiff notes um what ad did back in the 80s and 90s is we just went and bought land um rather than um than having a developer do it for example the city bought the gravel pits and we put that money out there and we sat on the land and when the office Market was ready we sold that piece and when the re when the housing was ready we sold that piece that's another strategy um it's much more aggressive um and uh doesn't really comply with our current Tiff policy but that's still an option um but just a couple questions for thought there as you consider uh what Mr Brahma has to share so I'm GNA I'm going to wrap it up there and turn it over to Mr Brahma to run through um he's going to some he's going to start where he finished last meeting and then supplement it with some images to help put it in Greater context good thanks manager nindorf Mr Brahma you get to be the star of the show here again as we talk about alternatives to what uh was approved from a project standpoint as we look at this um potential use of tax increment financing good morning chair members of the commission good to be with you again um yeah as uh Mr newford mentioned we uh connected with the HRA back on the 10th of October we went through a presentation that was a little bit more um text driven without images was basically going through a table that answered a few questions that we were asked uh I'm not going to repeat uh kind of the text side of things and the table side of things that we went through at that meeting unless I'm asked I'm happy to go back through that if desired um but I'm going to spend more time on the visuals of those different questions so going to go through this chart that we went through before and we'll flip back and forth between this chart and some visuals feel free to interrupt me along the way so the first question that we were asked uh would the project happen uh the project that was approved on the 17th of September if Tiff was not available um if it isn't clear just uh the answer is no this project wouldn't occur but for Tiff there is a financial gap we've known that there'd be some sort of financial gap or need for Tiff we didn't know the exact amount until we got through further into City approval process so we knew exactly what it was we were building and what policies we need to comply with to what degree however we always knew that there'd be a financial gap we attempted to be transparent about that from the very first written application we made that wasn't even Tiff related it was uh land use related back in 2023 but tried to communicate that um along the way uh the current site the way it is today if if uh Tiff wasn't available uh we understand that um the site would just continue on the way that it is we say that in the context that we approached Macy's Macy's did not approach us we actually worked on trying to get a purchase agreement for over a year um it was tough to get it under contract uh we understand that they're comfortable continuing to operate their store as is uh and would uh into the future and you know as far as hypothetical as what would happen if our project did did or did not move forward I I don't want to answer that on behalf of Macy's I our understanding is they would continue operating uh lots of text here again we went through it in a little bit more programmatic way in our last uh meeting um but uh kind of took that first question and then and then started pairing it backwards or looking backwards what would we need to change to that project that was approved on the 17th of September to make it work without Tiff so we went through four or five items um and talked through that uh we also put dollar values in connection to those four or five items um I do wanted this is a little bit of repeat so I apologize for the commission members uh but just for the sake of anybody watching from the public I just want to be transparent that we're not asking for this or requesting it the developers not proposing these items uh the main reason why we wouldn't propose this or request this is we respect that these are these aren't minor requests these are major requests complete change to City policies uh Vision strategic or excuse me comprehensive plan so um we just from a core value perspective Enclave does not we tried to avoid going to cities with with asking for too many changes to the city's policies procedures um comprehensive plan those types of things we try to fall in line with those items to the best of our ability so if we were talking about one item uh perhaps we would we would feel better about coming to the city and and making those requests but in this case um we think this is a significant enough of a list that we wouldn't make the request so putting a visual to that um this is the Macy's site uh in in this previous screen here we did outline ver verbally what what the project would look like here is a visual um I'm going to throw out some caveats before I start explaining what is proposed here uh this is a um utilizing a program called testfit uh it is a pretty in today's day and age it's actually pretty Advanced software and you can do a pretty quick sketch of a project and it looks semi-realistic pretty fast but for the caveats this is basically backup napkin level of sophistication this is you know if it was 20 years ago it would have been someone taking a marker and drawing on on a on a a sheet of paper or overlay of a of a site so um this is something that I did the developer did this is not an architect or um a licensed designer uh the intent here is is schematic it's meant to just show space and mass and help us identify the roughly the number of units and kind of the scale of a project so what we're looking at here is mentioned in the teex side of things is breaking the site up into two blocks rather than four uh we would be looking at five over two buildings so five stories of wood which are colored in white over two stories of concrete colored in Gray um these buildings would look and feel kind of like a mix of like the 71 France project to the North and the Fred I say the Fred because the Fred's a large building those are large buildings with large unit counts where is 7 in France those buildings are broken up a little bit more but the exterior design the look and feel the height would be some sort of mix between those two projects uh there are some caveats that I can go through in this design um just for the sake again because this is so rough I you know we wouldn't propose literally this you know there'd have to be exterior design that looks nice we'd have walkout units against the prominade that are shown in Peach here we would assume that we'd have some small piece of commercial on the corner against G Gallagher um uh we do some refining on the seventh floor of certain portions of the building to have step backs but this is the hypothetical image of the discussion that we had uh on the 10th I I anticipate there might be questions on this specifically so I'm going to pause and then I can go through my last slides y commissioner Brer um I do have a question about eliminating the affordable housing um and specifically in the PCD 3 um District multi-residential uses are allowed as a conditional use but it's required that um new rental housing will remain affordable for a minimum of 20 years if seeking a PUD and it does go through the amount of anything over 20 units so this is part of our municipal code for the PCD three subdistrict that if multif family is included there has to be that affordable housing component if City financing is approved then it needs to be in place for 30 years so I just want to underscore that I guess it's more of a comment than a question Comm rer was that was that in the context of a PUD um it in a PUD there is language about that uh but it also addresses financing and the the range of it so I just want everybody aware that in our code for the PCD 3 subdistrict if we're adding residential to the commercial that is an element of it a requirement a code requirement oh just to be clear maybe director Teague could come up oh my understanding from the affordable housing policy is that if if the developer wanted something from us PUD or a variance anything of that nature then the affordable housing policy comes into play if they built a project that was in compliance with the existing code for that particular zoning District do they still have to comply with affordable housing requirements they do within the PCD 3 District the the section that was referred to affordable housing is a requirement um other questions for Mr Brahma comments this is all residential now no no retail no restaurants other than that portion that's highlighted in blue yes it would be just a single single use Market Apartments other questions or comments from Commissioners oh this is go ahead you have some this was just this is what you have approved this is the current project but yeah so everybody's aware of this um that's all I have what was the uh on your on the on the hypothetical model what was the setback from the prominade versus uh under the hypothetical versus Under the approved plan uh because this is a pretty rough design the setbacks aren't fully resolved but what you're looking at there right now in that bottom right image it's showing the prominade um closer to the bottom of the screen there the setbacks uh when you comp compare and contrast the setbacks of the current project range from the currently approved project uh so the next slide um range from 35 to 90 ft setback what you're looking at there is 25 to about 90 ft setback um with that being said because this is a crude initial design there are some some pushes and pulls uh in this design uh in the for example that I have is um the south side of that building so if you're looking at that bottom right image that the cell side so against Pinstripes is actually set back further from that property line than even our currently approved design so likely we would pull back from the prominade a little bit push back closer to Pinstripes a little bit and to make up the difference so the net net difference between the two projects would be pretty it wouldn't be drastic we could get semi close and what was there any estimate on your part of the of the cost or the value of that hypothetical project upon completion we're talking now about I think you're if I remember right we're in the $300 million range for the total value market value of the project that was approved this one was it 2third of that or you know the have just hypothetical range of value compared to what we appr approved I ran a very rough analysis and I know I have that number exists I don't remember what it is off the top of my head because I was focused on cash flow cash flow is what drives the financial gap and the Need For assistance so I end up focusing everything on the cash flow over time to figure out what the financial gap is but I can follow up with staff uh get that number I I don't recall it would be it would be less um I don't care I don't remember exactly how much less yeah yeah you know I don't want you to guess but just I know it's there's an element of guesstimation going that would go on regardless but might be helpful for us other questions at this point in time manager nondorf anything else that you wanted to add I think that might have been that's the only thing on our agenda yeah I don't think there's anything new but just the reminder when I showed those bar charts with the various estimat um when I modeled uh this one uh again very rough numbers my assumption was that the project cost was about the same um we haven't looked at in haven't looked at this thoroughly um but also a reminder you know with this hypothetical alternative um I keep reinforcing the word hypothetical because as I recall and correct me if I'm wrong on this one but to make this financeable without tax increment they would ask for a waiver from that ordinance about affordable housing that'd ask for a waiver from the sustainability policy they'd most likely ask for a park dedication waiver if there if one would be applicable here um and then they wouldn't be able to to divide the property into those smaller blocks so each of these two buildings would be um pretty massive in scale which is what we've been trying to get away from in that whole greater Southdale uh plan um so there's a lot of a lot of caveats a lot of uh a lot of concern staff has not fully vetted these drawings for anything but just um based on what Mr Brahma had uh told us at our last meeting about the need to make to bring the cost down um we know that there'd be a lot of waivers that would be requested so we modeled it as best we can uh taking a quick look um but just a reminder that there's a lot of concerns with that Comm Jackson has a question and I think I've got to wrap up for you yeah this is a zoning question so this is what's allowed the size the the height is what's currently allowed in this District this would not be a PUD is that correct yeah if this were to come in under the PCD 3 zoning the current zoning on the site this project wouldn't come close to meeting our setback standards floor area ratio standards it might meet height I don't recall exactly the height limitation there but definitely um they would need to seek a lot of variances okay terrific thank you that's very helpful but uh but just so I I'm sure I'm understanding the right context I think your response of the question is accurate so I'm not challenging that but but I think we're using the current Paradigm to answer that particular question so if this came forward we would be looking through the lens of the comp plan or current policies all of that is that correct we would we'd still be looking at the comprehensive plan the zoning the the district guidelines which which totally makes sense and so the the ask and and the issue is I personally think some of this really should be part of the process much earlier right when we talked about in the past a sketch plan review was I heard May or you even say like it could be on the back of a napkin like we didn't want developers to spend $2 million to get to a point where there's a sketch a preliminary approval on a sketch plan um and so the questions I just I'm trying to figure out a way in our process which is not this we're using this project to have this conversation but but to tee up choices we can make and so we can't like we don't have those choices in front of us today uh because we've got the comp plan we've got these policies that we've already agreed to uh but the council could make a different decision to say well yeah to your point we're going to relax a particular um policy to reduce the amount of TI to get a project done like those kinds of tradeoffs um that's all I'm trying to that's what I'm after right and so I think it's important that when we answer that question we're making that we're using the current lens that we look through that we operate through which is totally fair right um but that's actually not the question that that's not the reason the question was asked um and so I just want to be clear about that um as as we go forward so thank you commissioner richer um I want to Echo um commissioner Pier's points and actually when I watched the meeting that I missed I thought I literally thought we should have had this dialogue months ago if not a year ago um and I also want to say that just in terms of transparency and what the public is seeing when you look at the request on better together for this project to be rezoned to PUD it's says in return for providing affordable housing and a building that meets Sustainable Building policy comma and then the applicant is requesting and there's a list of things that have to do with you know physical variances that they will need but the implication is that this is something the developer will provide not something that is dependent to a certain degree on public financing and that needs to be out there early on so that the public you know if they're going to respond to this they'll be able to respond to this also the language I'm uncomfortable seeing at the very beginning it gets confusing and obscure because we're saying they're going to provide affordable housing but it's a requirement that they meet because it is PC3 and so that you know there needs to be more clarity on that point and I I know I've spoken out about this before but I keep seeing commercial land being transformed into market rate residential and when I see the proposal without Tiff again we have commercial land going market rate residential my neighborhood it's happened on three Parcels there's still it's purely residential on commercial land it's not compliant but I mean we just find ways to keep doing that and I I fear we're going to lose the diversity of our land um and what we can and cannot do with it so there's those concerns thank you commissioner Richard I'm commissioner U thank you I agree with my fellow Commissioners that I definitely want us in the future to be having these conversations earlier I think we need to kind of emphasize what are the other Alternatives as we're going throughout this process and still I don't know that that would have changed things in this project because throughout I think that this developer has been responsive to the questions that we've had or the direction that we've had there's been a lot of transformation of this project and I'm really excited about it I I think it is what we need for this area and so I I love this exercise I want us to do it earlier next time but I I just want to add that there was a lot of excitement when we approved this and I I think that more information is always better but I don't know that it would have been material and change the outcome of where we're at so I think what we do is we learn and we iterate on the process but we also can't go back in time on this project in particular and so we can choose to not approve it right like obviously yes um but I always think what are those actual alna this one presented here sure it's one alternative it probably wouldn't have been approved because it was one big wall along France and yes it didn't meet all of the needs but I I do continue to question like what would be something that we want to see as a city here and we've all infused those ideas and those Visions to make this project what it is today and it isn't just Market raid housing right there's a lot of it but there's also um res or retail there's also um office space there are a lot of components that we want to have in this site um so I just want to I know that this is important conversation but I just wanted to rot Us in that um as we continue the dialogue thanks for that Mr braho would you would you come up for just a moment I want to make sure that you know and I think it was on your third slide this is to reinforce I think the conversation up here particularly commissioner Pierce's comment said I understood you to say that with respect to uh item number two shift land use strategy those are items you said I understood that Enclave would never ask of us because or or variance from those rules and and guidelines in in the in the context of making a request just to reinforce that is that was that a correct understanding on my part yes that is the correct answer and it's it's all about degrees so I mean it's one thing hey we need a variance of five feet of a setback and one side of a building that happens you know I guess I don't want to suggest anything for what you would approve or not but that's not uncommon for someone to ask for like a small single off requests but what these are not small from our perspective a small request these are strategic shifts um that are major requests in our Viewpoint and that's why we we wouldn't take these lightly and we wouldn't come to the city uh with this level of request it would to me that sounds like a policy discussion not a developer request so member Jackson asked that key question about underlying zoning and director teue came up and talked about that that this project would never comply with pud3 but I think what I heard you saying was that on the hypothetical project that is what you could build and make it work with just in the absence of any of the considerations around pud3 and if you if you looked at the requirements of pud3 in depth you might not even be able to go forward with a project is that a fair oh yes that's correct it wouldn't yep that and hence the reason that slide you're referring to number two was yeah that shi that was the inference that I got from it I just wanted to understand it better that you weren't coming and saying this is what we could build and and you should approved this you were just saying this this is what it would look like correct if we were going to make it work with no assistance at all correct that cause anybody else to have any follow on okay commissioner Jackson so I just want to kind of go back to something that Mr new andorf said that an alternative would be for the city to buy the land and then develop it and I feel like in a lot of these conversations we are a it's this struggle we have back and forth between the city being a real estate developer and having a private real estate develop Market come to us with ideas and I just keep thinking about the view public work site still empty and we've tried that and it's it's incredibly complex for us as a city council to be real estate developers and I just wanted to put that point out there or as the H me or as the H yeah yeah both yeah that's right it's the H this Thursday morning but um but it's incredibly complex we don't have the staff that a developer has for economic modeling and um you know looking at financing and everything everything so I just it would be a massive change in how we do business if we wanted every site to be uh developed according to what we as an HRA have in mind rather than inviting public developers to come forward so I just wanted to put that out there well Mr nondorf what what I kind of captured is I think two of the key questions and maybe you raised this at the beginning or commissioner rer uh as we get to this discussion in November is is there sufficient public benefit being delivered you know give us your thoughts again on that make sure that we understand that clearly and then I think this the second question was what we've been going through here with this process is it worthwhile to wait for the increment period to expire to capture the increased value over the base value uh or um or the value of a a non- tiff project over that same period of time if that's articulated very well I think I know where what you're saying the um I mean to me those are the two fundamental questions as as you consider whether or not just to help with the financing on this project um uh this the financing is a request by the developer um I think Mr kendle very clearly stated it's optional we don't have to get involved um the project would not move forward but that's not really our problem that's the developer risk that's why they're in that industry um so as as we work with our advisers at Ellers and dorine Whitney of course we always make sure that we follow state law and have all the financials and all the legal matters resolved but fundamentally it still comes down to is this a project that meets the state law plus our local policies and we Define our local policy as at public benefit so if you feel that it that it passes that test that that might inform your decision so we we are queued up so November 14th we're expecting to come come back to the H with um three massive Redevelopment contracts for your consideration uh with the report on the on the um pedestrian crossing the final report um and then the resolution for the Tiff district and then that would roll over into the city council approvals later in the month so that's where we're aiming um uh based on conversations with the developer he thinks he can still get uh on that schedule he thinks he can still get to the closing date um uh and we'll try our best to get there if that's your direction Comm rer has maybe the wrap up comment or question one other question and I really want this addressed because of the way we do the Pud and it is site specific um I really want assurance that awarding Tiff to such a development is okay and here's the thing I know puds can be created so that what's find is the amount of green space or prvious Surface that has to remain um the amount of you know you can set up a PUD without having to Anchor it to a specific site project and I really need to know if what we're doing is okay and if it is okay are there any complications of awarding Tiff to that because it's a lot of public financing and it's flowing to one specific developer project so I would like to have clarity on that by November thank you okay anything else from anybody anything for the good of the order Mr executive director anything for us uh thank you Mr chair we're still working on I got good input helpful input from all of you on HRA schedules we're still working on that should be coming back to you in November all right is there a motion to adjourn we made it so moved second got a motion and a second uh was it commissioner Jackson that moved all right and commissioner Pi seconds a motion to adjourn any further discussion those in favor of adjourning say I I I opposed carried uh H this Thursday October 24th 2024 stands adjourned for