HomeMy WebLinkAbout5.c. Approval of Dakota County RIG Grant Resolution
EXECUTIVE SUMMARY
Port Authority Meeting Date: January 21, 2020
AGENDA ITEM: Approval of Dakota County RIG Grant
Resolution
AGENDA SECTION:
New Business
PREPARED BY: Eric Van Oss, Economic Development
Coordinator AGENDA NO. 5.c.
ATTACHMENTS: Resolution, Draft RIG Application APPROVED BY: LJM
RECOMMENDED ACTION: Motion to Adopt a Resolution Approving the Dakota County
RIG Grant Application.
SUMMARY
Since 2007, the Dakota County CDA has been encouraging community revitalization and assisting Dakota
County cities with their redevelopment goals through a locally funded initiative called the Redevelopment
Incentive Grant Program (RIG). To date, over $12.2 million has been awarded to 60 projects and 25 plans.
This funding has leveraged nearly $100 million in other public and private funding for redevelopment
efforts. The Dakota County CDA is accepting applications for the 2020 fiscal year (July 1, 2019 – June 30,
2020).
All cities in Dakota County are eligible to apply. Maximum grant for plans is $15,000 and maximum grant
for projects is $250,000. The City has had the good fortune to receive several RIG grants that were used
for remediation and demolition of buildings associated with the Steeple Center, land acquisition for the
Waterford Commons, streetscaping on 145th Street, sewer line replacement for the CDA/Culvers site,
along with two planning grants.
Rosemount’s application is for the Morrison Downtown Redevelopment project. We are requesting
$250,000 from the Dakota County CDA for demolition and interior abatement work, which will include
remediation of asbestos. This grant will also be used as matching funding source for the Minnesota
Department of Employment and Economic Development redevelopment grant staff is also applying for.
The same activities are being requested for both grants.
Attached is the draft grant application. Staff continues to work on the grant application but is planning on
submitting the application around February 1, 2020, which is the due date for the DEED grant
application.
CONCLUSION AND RECOMMENDATION
Staff is requesting approval of the attached resolution of support for Dakota County Redevelopment
Incentive Grant in the amount of $250,000 for the Morrison downtown redevelopment project.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2020-
A RESOLUTION APPROVING THE SUBMITTAL OF THE MORRISON
APPLICATION FOR FISCAL YEAR 2020 TO
DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY
REDEVELOPMENT INCENTIVE GRANT PROJECT
WHEREAS, the City of Rosemount has identified a proposed project, the Morrison,
within the City that meets the Dakota County Community Development Agency (CDA)
Redevelopment Incentive Grant program’s purposes and criteria; and
WHEREAS, the City has established a Redevelopment Framework for Downtown
Rosemount, a Redevelopment Plan of which establishes goals and polices to create a
pedestrian friendly, mixed use, transit oriented Downtown, of which the proposed
project is a component; and
WHEREAS, the City has the capability and capacity to ensure the proposed project be
completed and administered within the Redevelopment Incentive Grant program
guidelines; and
WHEREAS, the City has the legal authority to apply for financial assistance; and
WHEREAS, the City is supportive of affordable housing and community development.
NOW THEREFOR BE IT RESOLVED that the City of Rosemount approves the
application for funding from the Dakota County CDA Redevelopment Incentive Grant
program.
BE IT FURTHER RESOLVED that upon approval of its application by the Dakota
County CDA, the City Administrator, is hereby authorized to execute such agreements
as are necessary to receive and use the funding for the proposed project.
2
ADOPTED this 21st day of January, 2020, by the City Council of the City of Rosemount.
_________________________________
William H. Droste, Mayor
ATTEST:
___________________________________
Erin Fasbender, City Clerk
RIG Project Application
1
REDEVELOPMENT INCENTIVE GRANT PROJECT APPLICATION
I. GENERAL APPLICATION INFORMATION
Project Name: Click or tap here to enter text.
Applicant City: Rosemount
Applicant Address: 2875 145th Street, Rosemount, MN 55068
Application/Project Contact: Eric Van Oss
Contact Email Address: eric.vanoss@ci.rosemount.mn.us
Phone Number: 651-322-2059
Authorized Official(s) for Execution of Contracts (name and title): Rosemount Mayor William Droste,
City Clerk Erin Fasbender
Amount of funding request: $250,000
Please list the specific Project components or activities that will be funded by the requested RIG:
Interior Abatement and Building Demolition and Clearance
II.REDEVELOPMENT PROJECT AND ACTIVITY INFORMATION
1.Existing Project Site Information
•Project site address(es):Click or tap here to enter text.
•Legal description of Project site (may be separate attachment): Click or tap here to enter text.
•Acreage of site: 2.66 Acres Number of parcels: 13
•Is the Project site publicly or privately owned? Private
•Current Project site owner(s): E & E Enterprises Inc. and MC-Herms LLC (Shenanigans)
•Describe the city’s goals and need for the Project including anticipated businesses, housing units,
and other proposed components. Please explain the public benefit of the Project. The proposed project
is a planned unit development (PUD) located in the downtown development district. The purpose of the
district is to encourage a viable downtown area and includes the proposed uses which will be a
combination of 124 market rate multi-family apartments and at least 4,000 square feet of commercial
space. The retail component is the second phase of the project and not part of the current grant request.
Consistent with the adopted Development Framweoark of Downtown Rosemount goals, the project
creates housing to keep the Downtown economically vital, and lead to more commercial investment.
DRAFT
RIG Project Application
2
The proposed apartment building increases the housing opportunities in the community as rental housing
is not readily available in Rosemount. The retail component would also support the goals of the
downtown with new storefront commercial activity. The existing structures are blighted and ill-suited to
the type of commercial development sought in downtown. There has been little reinvestment into the
properties over the last ten years. The location of the aparments fits the Council goals of providing a
walkable Downtown to existing commercial and service and the nearby park and ride permits
communter trips without the use of cars. This project is one of many areas the city has targeted in the
Downtown Plan to reinvigorate the Downtown to become a more active hub of the community.
• Has an end user committed to redevelopment of site? Yes
If end user committed, attach documentation of commitment.
• Provide a brief history of the site including previous uses, activities, prior or existing
contamination, and other attempts at redevelopment. The Site has been used for residential and
commercial uses since at least 1937. Previous tenants have included offices, automotive repair, grocery
store, fitness clubs, and restaurants. The existing buildings were constructed in the 1950s and 1960s.The
adjacent properties have been occupied by residences and commercial uses since 1937. Previous uses
have included offices, medical/dental clinics, an engraving facility, and restaurants. Currently the
property is occupied by three commercial buildings and paved parking areas. The northeast building is a
one-story building occupied by Medi-Car, an auto repair facility, and Chill Salon & Man Cave, a hair
salon. The southeast building is a one-story building occupied by Shenanigan’s, a bar. The western
building is a two-story building occupied by the Rosemount Mall. The Rosemount Mall is occupied by
offices, retail tenants, and currently includes multiple vacant spaces.The city had designated this site for
development in the Downtown Framework approved in 2004 and updated in 2017. This is one of the
first sites identified for redevelopment in 2004, however; the property owner was not interested in sellig
the site. The current project came about as the owners of the Mall and Shenanigans sites were both
interested in selling at the same time. Each site would be difficult to redevelop on it’s own due to lot
size.
2. Eligible Activities. Please check all activities that apply, briefly describe the activity, and provide the
dollar amount requested for the activity. Please see the “Redevelopment Incentive Grant Policy and
Procedures Guide” for a description of the eligible activities
Eligible Activity
Description RIG Funding Requested
☐ Acquisition - $-
☐ Relocation Payments - $-
☒ Clearance and Demolition Interior Abatement, Demolition and
Clearance of Rosemount Plaza
Shopping Center and Shenanigan’s
Buildings
$250,000
☐ Environmental Investigation - $-
☐ Environmental Remediation - $-
☐ Necessary Public Infrastructure - $-
☐ Geotechnical Soil Corrections - $-
DRAFT
RIG Project Application
3
3. Redevelopment Project Information
•Describe the Project including location map, photos, and current and projected site plans. Maps
should include property boundaries, north arrow, and an accurate bar scale. Attached Narrative
•Describe the specific components or activities that are part of the Project. Clearance and
demolition work that will include interior abatement for asbestos.
•What is the end use of the Project site? 124-unit market rate apartments and a minimum of
4,000 square feet of commercial space in the second phase of development
•Is demolition of slum or blighted buildings or other structures an activity of the Project? Yes
o If Yes, please describe. Two (2) out of three (3) buildings (66.7 percent) in the proposed
TIF District are structurally substandard to a degree requiring substantial renovation or
clearance, because of defects in structural elements or a combination of deficiencies in essential
utilities and facilities, light and ventilation, fire protection including adequate egress, layout and
condition of interior partitions, or similar factors which defects or deficiencies are of sufficient
total significance to justify substantial renovation or clearance.
•Describe how the Project will make more efficient use of the site. Two of the three existing
structures are blighted, additionally the physical design of the existing building is ill-suited to the type of
commercial development sought in Downtown. The building provides no exterior access to businesses
and it’s design obsolete. All access comes from a split-level interior common space, which is
inconsistent with current retailing desires. The split-level design makes it impractical to reconfigure the
building to provide individual storefronts with exterior access. Lastly, the position of the building on the
site does not lend itself to promoting a pedestrian-oriented environment. The majority of the frontage
along Highway 3 is comprised of a parking lot. Part of the existing mall is vacant, and filled space
supports several marginal tenants. The proposed development would create a mixed-use environment
that promotes new uses, building character and site design to enhance the core of downtown. High
density residential uses have been prioritized in the Downtown Framework Plan. Overall site density wil
be 47 units per acre increasing site efficiency. The use of underground parking will reduce the need for
surface parking and allow for more building massing. The redevelopment of the site provides the
opportunity to modify existing site access, reducing curbcuts, increasing safety and making the site
layout more efficient. The primary access will be shifted to align with 146th Street, making a regular
intersection with Hwy 3 which is currently lacking.
•After Redevelopment is complete, what portion of the Project site be publicly and privately
owned?
➢Public: 0%
➢Private: 100%
•Post-redevelopment Project site owner(s): Morrison LLC
•Identify any other Project partners such as developers, consultants, and regulating/permitting
agencies. Ron Clark Construction and Design, LHB, Inc., Braun Intertect, Ehlers, Inc.
DRAFT
RIG Project Application
4
4.Acquisition/Relocation Activities
•If the project includes property acquisition, clearance and/or construction activities, describe how
owners, tenants, and businesses will be temporarily or permanently relocated. The developer is
acquiring all of the property through a private transaction. The Mall will be acquired without any
remaining leases. The two users in the commercial outbuilding; Chill Salon and Medi-Car will remain in
the building until their lease is up.
Attach relocation plan, if applicable.
•When has/will the acquisition be completed? The developer has purchase agreements for all
sites. Closing should occur in spring 2020.
5.Redevelopment Project Environmental Information
•Has an environmental assessment been completed for the Redevelopment Project? Yes
•If so, what level of investigation was done as part of the Redevelopment Project? Phase I
Environmental Site Assessment and Non-Destructive Hazardous Building Materials Inspection Report
•Has the Redevelopment Project site been found or suspected to be contaminated? Yes
•Does your Redevelopment Project include the cleanup of contaminated soils, hazardous waste or
materials? Yes
o If yes, please describe information on type of cleanup, what measures have been taken to
address the contamination, consultant reports, and/or Response Action Plan. The project site
came back positive for asbestos contained in scattered floor tile, the mastic, thermal system
insulation, pipe fittings, and about 18,000 s.f. of ceiling texture. This will be abated prior to
demolation. Both the Phase I Environmental Site Assessment and Non-Destructive Hazardous
Building Materials Inspection Report are included with this application.
•Describe positive environmental impacts of the activities that are part of the Project. Removal of
asbestos from the building will improve the site DRAFT
RIG Project Application
5
6.Housing Affordability. Indicate the number of housing units planned in the Project, if any. Attach
separate sheet if necessary.
Total # of
Units
# of Owner
Units
# of Rental
Units
Proposed Rents/ Sales
Prices
Single Family - - - -
Townhouse - - - -
Apartments/Condominiums 124 0 124
Units rage from
$1,100-2,300 for studio
and 1-3 bedroom
Duplexes - - - -
Other: - - - -
•Will there be any mechanisms to ensure long-term affordability? No If yes, please describe. NA
7. Economic Benefits
•Current appraised or assessed value of the Project site: $1,110,400
•Projected appraised or assessed value of the site after Redevelopment: There will be a minimum
assessment agreement for $19,320,000
Attach the appraisal or assessor’s current and projected values.
•What are the current property taxes for the Redevelopment Project site? Total property taxes for
the mall and Shenanigans are $17,639 and $19,438, respectively. Pay Year 2019
•What will the estimated property tax be after redevelopment? $212,473 Pay Year 2023
•Project the number of new jobs on the Project site created after redevelopment. Total new jobs
(FTEs only) = Construction workers 15-60 jobs, onsite management/maintenance 4-7 jobs
•Number of new jobs with wages greater than $15.00 per hour = Construction workers 15-60
jobs, onsite management/maintenance 4-7 jobs
•Project the number of jobs retained on the Project site after redevelopment. Total retained jobs
(FTEs only) = NA
•Number of retained jobs with wages greater than $15.00 per hour = NA
8.Leverage. Itemize all other funding sources for the Project and the Activities identified as part of the
Project.
DRAFT
RIG Project Application
6
Source of Funds Amount Committed Pending
Minnesota Department of Employment and
Economic Development $478,908.87
TIF $4,000,000
RIG $250,000
Private (Developer) $25,042,373.10
- -
Total: $29,771,283
Itemize Project expenses for each Activity. Be as detailed as possible.
Project Activities/Expenses Costs Funding Source
Phase I Demolition of existing buildings $797,004.74
RIG, DEED,
Private
(Developer)
Sanitary Sewer Liner and Replacement $69,144.00 DEED, Private
(Developer)
Existing Power Poles and Line Removal $44,147.00 DEED, Private
(Developer)
Water Service Abatement $47,522 DEED, Private
(Developer)
- - -
- - -
- - -
Total: $957,817.74
• List other sources of funds requested or considered but not obtained for the Project, and explain
why they were not obtained, to the best of your knowledge. (The purpose of this question is to ensure
all other funding sources have been exhausted.) N
9. Readiness To Proceed.
• Please provide detailed timeline of the Project with all actions, phases, and anticipated dates for
completion. Planning Commission Recommendation of Approval 1/14/2020, City Council review of
Planning Project, Development Contract, and TIF Plan scheduled 2/4/2020, Land Purchase scheduled in
Spring; Demolition May & June of 2020 and residential construction start June 2020 with partial
Certificate of Occupancy proposed for 10/2020 with second CO 3/2021,
DRAFT
RIG Project Application
7
• Please indicate whether any of the following entitlement or due diligence actions are required or
have been completed for the Project:
➢ Comprehensive plan amendment: ☐ Status: Click or tap here to enter text.
➢ Environmental review: ☒ Status: Phase I ESA
➢ Market or feasibility study: ☐ Status: Click or tap here to enter text.
➢ Zoning amendments or variances: ☒ Status: Planning Commission recommendation of
approval scheduled for Council review 2/4/2020
• If the activity that is to receive RIG funding will not be completed in 12 months, please explain
why. (NOTE: The RIG program requires all RIG-funded activities to be completed within a 12-month
period) NA
DRAFT