ITEM 1
City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441 -4414 Fax (763) 441-9163
TO: Mayor and City Council
FROM: Adam Flaherty, City Administrator & Finance Director
DATE: August 28, 2017
SUBJECT: Otsego Apartments Financial Assistance Request
On Monday, the City Council will be receiving a formal request for financial assistance from
Otsego Apartments, LLC for a multi-family housing project within Riverbend North. The applicant
has submitted the required application and has made the required escrow deposit. The City has
engaged Ehlers as the Tax Increment Financing (TIF) consultant for this request.
The applicant has submitted a PUD amendment development application to the Otsego Planning
Commission. The applicant requested continuation of that application being considered to allow for
submission of a financial assistance request, and has yet to be reviewed by the Planning
Commission.
The request for financial assistance from Otsego Apartments, LLC is for the TIF generated on the
multi-family housing development to be diverted towards the sewer utility availability and
connection charges (SAC) on the new development, and that the City waives the SAC on the
existing mobile home park for connection to the municipal system.
The City’s goal in considering the request for financial assistance would be that the existing mobile
home park and all future developments would be connected to the City’s municipal utility systems
rather than the private systems currently in place.
Materials Attached for Discussion
1) Completed Application
a. Request for Financial Assistance Form
b. Concept Plan
c. Summary Pro-Forma
d. Estimated Market Value from the Wright County Assessor
2) Ehlers & Associates
a. Analysis of Riverbend North TIF Request
b. Financial Calculations
3) Memorandum from TPC (8-23-2017)
MEMORANDUM
TO: Adam Flaherty
FROM: D. Daniel Licht, AICP
DATE: 23 August 2017
RE: Otsego – Riverbend North; TIF Application/Development Proposal
TPC FILE: 101.02
BACKGROUND
Darkenwald Corporation has submitted application to amend the Riverbend North PUD District
proposed and agreed to by the developer and approved by the City Council on 22 September
2014. The proposed development consists of multiple family residential uses, commercial
buildings and self-storage buildings. A public hearing to consider the PUD District amendment
and PUD Concept plan was opened at the Planning Commission meeting on 17 July 2017 . At
the developer’s request, the public hearing was continued. The developer has subsequently
submitted an application for financial assistance to be considered concurrent with the
development application.
ANALYSIS
CIC Plat. The developer recorded a Common Interest Community (CIC) Plat for the subject site
with Wright County on 7 February 2017. The CIC Plat divides the subject site into four units,
one of which includes the existing private WWTF. Minnesota Statutes 515B.1 -106 states that
use of a CIC plat for subdivision of property ownership does not invalidate or modify
applicability of the City Code, Zoning Ordinance and/or Subdivision Ordinance. The CIC plat
was recorded without City review and approvals and is not recognized as having standing for
the purposes of providing entitlements for development of the subject site. It is recommended
that development of the subject site comply with all requirements of the City’s Zoning
Ordinance and Subdivision Ordinance, including payment of development related fees, as a
condition of TIF assistance.
2
Private WWTF. Riverbend Mobile Home Park is currently connected to municipal water service
and served by an existing private WWTF. The developer originally proposed that the new
development within Riverbend North would be served by the existing private WWTF and
connected to municipal water. The City’s goal in considering the TIF application is the
elimination of the existing private WWTF and connection of Riverbend Mobile Home Park to
municipal sewer and all new development to municipal sewer and water utilities.
The subject site is located within the East Sewer District designated by the 2012 Comprehensive
Plan. Section 6-1-3 of the City Code requires all new development to connect municipal utilities
where available. The 2014 PUD District as agreed to by the developer and approved by the
City Council requires all new development within the PUD District to connect to municipal
sanitary sewer and water utilities. Sanitary sewer and water utilities are adjacent to the east
line of the subject site to serve the proposed development.
The operation of the existing private WWTF is subject to a permit issued on a periodic basis by
the Minnesota Pollution Control Agency every 5-years. The MPCA permit is an operating
license that does not provide the developer the right to serve additional development
superseding the City’s authority regarding land use and utilities as Minnesota Rules 7001.015,
Subp. 3.C incorporated in the MPCA permit for the existing private WWTF states “this permit
does not convey a property right or an exclusive privilege”.
The City’s WWTF Engineer has reviewed the facility plans for the private WWTF as outlined in
their memorandum dated July 11, 2017. The existing private WWTF in need of substantial
rehabilitation to continue operating in service to the Riverbend Mobile Home Park to protect
public health, safety, and welfare, much less providing service to the proposed apartment and
mini-storage uses. The ongoing operation of the existing private WWTF is a liability for the City
which is identified on the MPCA permit as being the jurisdiction ultimately responsible for
provision of sanitary sewer service under the permit in a manner that protects public health
safety and welfare.
CONCLUSION
An agreement between the City and developer that results in removal of the existing private
WWTF serving Riverbend Mobile Home Park is in the City’s interest. The removal of the
existing private WWTF eliminates an existing non-conforming use, provides for utilization of
City infrastructure capacity already in place, and removes City liability for on-going operation of
the private WWTF to protect public health, safety and welfare in the most effective way.
Removal of the private WWTF also allows for redevelopment of the entire property subject to
compliance with the Comprehensive Plan, Zoning Ordinance, and Subdivision Ordinance.
c. Andy MacArthur, City Attorney
Ron Wagner, City Engineer
Scott Schaefer AE2S