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ITEM 3.2C SCC 7.27.2015 MinutesITEM 3_2C SPECIAL CITY COUNCIL MEETING PRAIRIE CENTER JULY 27, 2015 *7:00 PM Call to Order. Mayor Jessica Stockamp called the meeting to order at 7:48 PM. Roll Call: Mayor Jessica Stockamp; Councilmembers: Vern Heidner, Doug Schroeder and Jason Warehime. Absent: Councilmember Tom Darkenwald. Staff: Lori Johnson, City Administrator; Andy MacArthur, City Attorney; Daniel Licht, City Planner; Ron Wagner, City Engineer and Tami Loff, City Clerk. Mayor Stockamp motioned to change the order of the agenda; moving Item 3 to Item 1. Seconded by CM Schroder. All in favor. Motion carried 4-0. 1. Otsego Apartments LLC TIF Application. Also present, Applicant Casey Darkenwald, John Darkenwald and Jim Illies. City Administrator Johnson stated that the purpose of this meeting is to respond to the Otsego Apartments LLC application for TIF assistance. She stated the Applicant requested $6.9 million over 26 years. She stated that it is entirely at the City's discretion to determine the level of assistance, if any that will be provided to the project. She stated that the options range from no assistance to giving the full amount which is calculated to be $6.4 million over 26 years. She stated staff developed a list of incentive options for Council discussion. City Attorney MacArthur said this would be the City's first TIF district so there is no precedent; it's up to the discretion of the City Council on determining if TIF assistance is provided. City Administrator Johnson presented incentive options as outlined in attachment. The City Council agreed to remove #2. The City Council discussed #3 regarding granting assistance for extraordinary site development costs. CM Warehime said there are other sites that don't have such extraordinary costs he feels #3 should be removed. CM Heidner said he has no problem using TIF for County Road Improvements. Mayor Stockamp said she agrees. CM Schroeder said he agrees to leave it on the list because it gives the City Council ability to say what the money is going to. CM Warehime said the City has a lot of open land; if this was Senior housing that would be a whole different discussion. Applicant's representative, Jim Illies, said this property will serve the senior market but it's just not restricted to seniors only. He also said he wanted to clarify its not low income, its affordable market rate. Applicant, Casey Darkenwald, said the real estate taxes are currently $6,000 or less. He also stated that he felt the SAC hookup fees are extraordinary further stating the park can't afford them; they are low income and as developers the applicant cannot afford the risk of undertaking $8,000,000 in debt. Applicant, John Darkenwald, said the value will not go up with the treatment plant in the middle of this site. Mr. Illies said this proposal will serve good quality workforce housing. CM Warehime said he thinks the City already has workforce housing. He asked Mr. Illies if he had the market analysis he had asked for at the last meeting. Mr. Illies said no and reiterated that the banks that provide financial backing will do their own study. The City Council reviewed the items listed one by one on the estimate of TIF qualifying improvements for the Otsego Apartments LLC document as submitted by the applicant. City Engineer Wagner said $35,000 of Civil Engineering could be added to the road improvement costs. City Planner Licht said the trail on the County Road could be added which is included in the Park Dedication portion. City Engineer Wagner estimated it at $15-20 linear foot about $50,000. City Administrator Johnson restated the extraordinary costs identified by the Council: demolition $110,273; WWTP removal $59,962; CR 42 improvements including traffic control $265,065; CR 42 curbs/driveway aprons $90,880; traffic Study $5,000; Engineering for CR 42 improvements $35,000; Trail installation $50,000. Total $616,180. CM Heidner said he is having a hard time using TIF for the Riverbend hook-up fees he stated he rather do a long term assessment on that portion. Mayor Stockamp, CM Schroeder and CM Warehime concurred. Mr. Illies said an assessment will not help the project. Casey Darkenwald said that would be over a 10% increase in rent within the mobile home park. The City Council concurred with $616,180 in TIF assistance for Otsego Apartments LLC with assessing the SAC $1,124,348 hook-up fees. CM Warehime asked what a reasonable amount of time is for phase two to be completed. Mr. Illies said that is usually outlined in the Developers Agreement. CM Heidner questioned the Park Dedication fee. City Planner Licht said it is based on units. City Administrator Johnson said it is now up to the applicant to determine if they want to proceed based on the level of assistance the City is offering. If they do, a public hearing would be needed for the TIF assistance. 2. 2016 Budget. City Administrator Johnson requested this item be tabled until the August 10 Special Meeting. Mayor Stockamp motioned to table the 2016 budget discussion until August 10, 2015 Special Meeting. Seconded by CM Warehime. All in favor. Motion carried 4-0. 3. Finance Director Recruitment & Selection. The City Council discussed the candidate. Mayor Stockamp motioned to make offer of employment to the candidate for the Finance Director and for the City Administrator to determine pay. Seconded by CM Heidner. All in favor. Motion carried 4-0. 4. Adjourn. CM Warehime motioned to adjourn. Seconded by CM Schroeder. All in favor. Motion carried 4-0. Adjourned at 9:49 PM. ATTEST: Tami Loff, City Clerk Mayor Jessica Stockamp *DIRECTLY FOLLOWING THE ADJOURNEMENT OF THE REGULAR SCHEUDLED CITY COUNCIL MEETING.