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MINUTES New Brighton Economic Development Commission Approved Regular Meeting —August 17, 2010 • 7:30 a.m. Members/Liaisons Present: Gina Bauman, David Phillips, Mark Nelson, Dennis Flahave, Marie Hansen, Bob Berke, Bob Smith, Ruben Vasquez and Mike Murlowski Members/Liaisons Absent: Terri Snell and D.L. Beach Staff Present: Grant Fernelius, Community Development Director; Katie Bruno, Office Assistant. Call to Order Commissioner Nelson called the meeting to order. Approval of Minutes Minutes from the June 15, 2010 meeting will be submitted for approval at the 9-21, 2010 meeting. Report from Council Liaison Councilmember Bauman reported the Council has been working on the budget and will be recommending a 0% levy for 2011, with maintaining service levels in the City. Northwest Quadrant Report Developer Discussion Director of Community Development Fernelius reported the City has been meeting with about 6 developers over the past 18 months; the greatest interest has been in the residential market. • A brief explanation was provided for each of the following developers, TOLD, United Properties, Dunbar Development, Dominium, Ecumen and Stuart Companies. Some of the developers expressed concern with the gap in rents. The Senior Cooperative market has slowed down significantly, due to the decrease in sales of single family homes. Stuart Companies has expressed the most interest, they have prepared a proposal for a 125 unit market -rate building on Block H. The plan shows a 4 story building with underground parking. The current "L" shaped building design would require additional land in the adjacent greenway area (approximately 8,800 SF). The developer has indicated if they were selected for the project by early to mid-August, they could break ground in 2011. The developer is requesting $1.5 million of assistance to make the project work. The pro forma identifies a $500,000 land payment ($4,000 per unit) and a TIF assistance of $2.0 million. The City does not have $1.5 million of TIF cash available, so if there is interest in negotiating with Stuart Company, this amount would have to be reduced. This assumes, of course, that the City is willing assist the development at all. The City may also need to consider modifications to its NWQ Code to accommodate the project if modifications cannot be made. The City Council directed staff to continue the negotiations with Stuart Companies. It is anticipated that a counter proposal will be made by the City. The Council's desire to "fast track" a project is primarily based on the on-time opportunity to use Tax Increment Financing (TIF) district cash reserves that are not needed for debt service. Fernelius stated the City could wait for a better deal in a couple of years. However, the value of the current proposal and the associated tax increment should be considered ($167,000 to $191,000 per year) depending on the value of the project. A second variable is the land price. Concessions made on land price can be recouped if development happens in a more timely fashion. . Commissioner Murlowski and Smith expressed concern with selling parcel H for such a low price. Fernelius agreed, and expressed concern with setting values too low for future potential land values, but also noted land values have been on the decrease. Councilmember Bauman expressed concern that there is not retail in the development area, and may make it difficult to occupy the property. Commission Benke suggested often convenience retail follows development.