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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