Let's call the meeting order. Everyone please rise for the pledge of allegiance to the flag of the United States of America and to the republic for it stands nationy and justice for all. Any changes to the agenda? No, Mr. Mayor. Motion to approve the agenda. Motion by Josh. Second. Second by Kate. All favor. Agenda is adopted. We have no presentations, proclamations, or acknowledgements. Uh, so we'll open it up for public comment. Is there Is there anyone here that cares to speak under public comment tonight? Anything not on the agenda? Going once. Going twice. All right, we'll close public comment. Any changes to or any anyone have any items on consent agenda they'd like? Otherwise, I'll take a motion. Motion to approve consent. Second. Motion by Amenda, second by Kate. All in favor? I adopted or approved. We have no public hearings. So, let's get right into general business. We have a number of items. Anyone second to pull up the presentation, Mr. Mayor? So, the first item on the agenda tonight is um a request from RNF Properties for a comprehensive plan amendment. Uh we are seeking council feedback and direction on the request. Just sharing my screen. And just for the record, I'm pinch hitting for Renee who's out for family issue this week. So, um, so RNF Properties, as council's aware, owns 155 acres, um, and southeast quadrant of County Road 2 and County Road 91 and the area north of Whispering Hills. They're proposing um residential development of the property south of Marketplace Boulevard, so in uh this area right here. Um, mixed use and commercial development north. in this um polygon identified in red here. And they have a concept plan uh that they've submitted which contains single family, detached, mixed use, commercial, residential as well as um commercial residential and standalone commercial. So the 2040 comp plan has that property currently guided primarily for commercial um with the southern portion um generally south of where the movie theater screen is as medium density residential. On the right hand side you can see what the request contains. Uh they are looking to guide the majority of the existing track and trackmovthe parking area to low density residential some medium density residential uh to be located along France Avenue. Um the area behind the movie screen and before you get to Whispering Hills would be regued as low density residential. And then they would be looking for the southern portion of the marketplace commercial development to be regued as mixed use, the northern portion remaining as commercial. So this item was presented to the planning commission at their February 27th meeting. Uh the commissioners that were present recommended that all of the land south of Marketplace Boulevard be regguided to low density residential, so detached single family. Uh one commissioner that was not present at the meeting did provide comment um outside of the meeting and indicated that they supported the request as it was submitted by the applicant. So, if we break it down and go into it at a more granular level, um this area, uh currently located north of Marketplace Boulevard and west of France Avenue, is currently guided as commercial. The request is to create a new mixeduse district, which would be depicted in this area in green, that would allow up to 100% high density residential, 100% commercial, or any variation of the two in of the two uses. is basically it would provide for all of those things but would not place minimum or maximum standards on any of them within that district. The commission was split over allowing full flexibility to allow commercial highdensity residential or any variation of the two. Two of the commissioners were in full favor of full flexibility. Two of the commissioners were in favor of requiring a commercial component but were not specific uh with regards to what percentage would be appropriate and deferred that to the city council. So to provide a little bit of history on this, um last year the applicant had approached the city and verbally presented a concept for um a mixeduse project and marketplace to the planning commission and the council at that time. It indicated that it would most likely be two commercial buildings with the first floor in both buildings being commercial. The planning commission indicated that they would be receptive to that. they felt it was a good compromise and the council expressed similar sentiment. Then uh later in 2020 in winter spring of 2023 um the applicant came in with an actual drawing and at that time they'd indicated that they were looking for still two residential buildings in the concept plan. the most westerly one to be entirely residential. The easterly one to be commercial on the first floor and residential above and also potential commercial pads than that same area. Um the application that we have now is requesting full flexibility for the developer to respond to the market or the development as he sees fit to either be all commercial, all res all multif family, residential or any combination that they feel is appropriate. So there are a number of pieces of feedback that we are seeking from the council so we can move forward with responding to the applicant's request. and I've broken those questions down and would ask that the council respond to those peace meal just to keep the conversation um orderly and structured. Um and the first and in here I would like to provide an opportunity for the representative of the applicant to speak and I guess we can we can go through these questions or we can provide Beth an opportunity to provide feedback prior to that. What would be your preference, Mr. Mayor? Uh, is Beth here? Thought I saw her back there. No, she isn't. Okay. I I saw it's just it's just Jody. I couldn't see face beyond the podium. Okay. So, then I would recommend we just start working our way through the questions. Okay. The first piece of feedback would be does the city council Tom's online. Do you know that? Oh, he is. Tom, do you want to provide feedback? Nod. If you if you want to There he is. Um, yes. I um I thought I'd just listen and then uh we can handle questions as they uh come about. Okay. Uh first piece of feedback we need from the council is does the city council support the reuidance of property located south of Marketplace Boulevard. So, this would be the property that is currently occupied by the track and the movie theater and the outdoor storage further south of that to um or I guess this piece here, this medium density, the planning commission would recommend that everything be low density. Um the applicant has requested medium density and that was a the question would be to the council what is would be your preference um with this portion here that's guided medium density first did I was there a public hearing was had on this no this is first time through for feedback the public hearing will be held so right now where it stands is the council can say no we're not in favor of the comprehensive plan amendment and the process essentially can stop. So see if we have that there's support before. Okay. Yep. Because when we do the hearing, we have to post what the change is and you guys have the ability to tweak it. So we're basically looking for the direction on what that would look like when it goes to hearing. It's good question. Maybe a preliminary question before even that. So let's hypothetically say something changes with how this is zoned. What does that do to the track and what's currently there? Anything? No. No. So the whole concept behind this and you will recall that Tom had previously indicated that at some point it's logical to assume that the track will redevelop. Now later under his ownership under somebody else's ownership it's going to happen. Um based on Tom's experience and our experience of working with the Met Council with comp plan amendments and get everything squared away. Tom's goal was to get everything squared away and help facilitate the red potential future redevelopment of the property. knows what it's going to be. It's in the comp plan. Everything's squared away. You can just move forward. Basically, reszone it and then redevelop um plat redevelop reszone it plat it and then redevelop the property. Um so this is really just about trying to be proactive from a planning standpoint on both of on the part of the property owner and staff agrees that that's a good good thing to do. Um, so the way this would be set up in this district is the existing uses would still be permit. The existing uses would be permitted uses. The intent was not to create a legal non-conforming or grandfathered status. We're simply guiding what the property is going to become once it redevelops. Tom, did you ask to um are we looking at going from commercial to medium density? Is that the area we're looking at right now? Yes. Currently, um the entire track site, this parcel, this parcel here, as well as the southern portion of marketplace commercial development is all guided commercial. Right. Okay. Any other But what you're asking about right now is just the small sliver right there where your arrow is to go to medium density there. Yep. And then the other side would be low density. Yep. The planning commission had recommended that it all be low density south of Marketplace Boulevard. The applicant is requesting ability to have medium density along France Avenue. What is the reasoning for medium density there and not low density? Um I'm going to defer to Tom with regards to what their thought process was in the request. From a staff standpoint, we don't think it's um an incompatible use. Generally, you're going to have a little bit higher density along uh major transportation corridors. And this is a this is a major collector within the community from a road classification standpoint. It's a collector road. And um currently what's on the other side of the road is guided for commercial. Although we have had some discussions at a staff level, full disclosure, that if this property gets reged to commercial or to residential, we may want to look at the southern portion of the property across the road and look at possibly regiding that to residential as well. The reason it's guided commercial today is because of the potentially compatibility of the track with residential. So, um, that may change in the future and given the layout, it's very possible that that could that city could choose to guide that medium density as well. So, it would be consistent with what's across the road. I'm just concerned about losing our commercial guidance because I feel like we do need some more commercial in our city. So, um, staff's opinion on this is that south of Marketplace Boulevard, you're starting to get separation from County Road 2. So, if you think about what commercial or good commercial property wants, it wants visibility, traffic counts, and access. Um, as you start moving south of Marketplace Boulevard, you start to lose traffic counts and visibility. Um and staff is not opposed to the idea of regiduiding that for residential north of Marketplace Boulevard. That is an area that has great much much greater potential for commercial. Um and that staff believe that discussion would have a much stronger bearing on the property north of north of Marketplace Boulevard. Um but that's staff's opinion. Right. you'll pull up a better map to look at. Okay. I'm just trying to see the the cut off here on this box like for this like the street the marketplace below right would be right here, right? Yeah. But then it goes it goes down to the entrance to the track. What's that? Down to the entrance to the track. Yep. um that would be where we would have any future intersections. Everything's been set up for the intersection to be there. So on the proposal from the applicant, they're just assuming that would be a nice normal break for the change in land use would be at that street. So we're looking at we have quick trip there and then essentially all housing of some sort whether it be high or medium density and then low density and no commercial in that area. Well, potential. So, the applicant is looking to have um maximum flexibility in the green area so they could decide what it could be and they're looking for the guidance to allow all of it. Um however, the applicant also indicated that the reason that they were looking for the flexibility to put residential is because they don't believe that the market exists or is weaker for that today. That would imply that the greatest likelihood be that would be residential. Do you want Mr. Ryan to weigh in on the difference between medium and low density. Mhm. Yep. Do you need to unmute him? No, Tom's unmuted right now. Okay. Tom, do you want Can the council Y Yeah. Can the mayor you can hear me? Okay. Um, so it's kind of uh I don't know the answer to the question of what's the best thing, medium density or low density. um those things to me um the market dictates if people are um look for town houses and there's an overabundance of single family houses. I know Elco New Market has always wanted to have a house choice for everybody within the city or that wants to move to the city. So it's always um a challenge to meet those needs. Um, and I know there are some town houses, um, and areas for town houses in Elco New Market. Uh, but if there's enough if there'll be enough 10 years from now or 5 years from now, um, it was hard for me to argue with the planning commission when they said, um, they wanted, um, pretty much single family houses in this area. Um, it's a beautiful area. It's got a lot of personality. It's well treed with mature trees. Um, and the speedway, as long as the speedway exists, those trees will not be messed with or taken down. Um, it's also got what we've we've called for decades now, we call it Lake Elco. It's a beautiful uh piece of ground. Um, and you know, there's been exchanges between, you know, the our ownership of the property and and city staff um about trails and parks and and things. So, the whole community community can start to enjoy this piece of ground and the water the water features um the wooded features as um as time goes on. uh if that when that time comes. um you know to me the commercial component for this piece of property um if just from a standpoint of you know I've looked at land development for over 40 years with my Ryan contracting business and this is just not a good piece of ground that leads that lends itself for commercial use. Um it's much too beautiful. Um it's it just needs to be utilized for residential component. And um go ahead, Tom. I aside from the aesthetics, is there another reason you don't think it's a good potential commercial property? I think Tom um Tom made some great points. um the visibility um the environmental concept um you know there's um I really do feel that every time you know it's a great thing to say we need more commercial properties within a community but when you add commercial property and commercial uses to a property um it depends what they We saw in Elco New Market just as an example, you added a quick trip or the quick trip was added. Beautiful building. Everybody's enjoying it, but it really makes it hard on a similar business who already is in New Market Elco. And um the same thing can happen to restaurants, other types of businesses. So the balance and the timing, you know, maybe maybe 40 years from now, um the balance needs to be looked at again of the commercial uses versus residential uses within the city of Elco New Market. But you know, uh new businesses coming into town don't necessarily make it easy on the existing businesses that are there. I've always thought the idea of having um bring commercial businesses into a community that has to be supported by a population and um Elco Newark's population just you know it's at 6,000 people it's got a ways to go before you start taking massive pieces of ground and leaving them for future future future um way in the future. for commercial uses. Yeah, I think I heard Tom say there's going to be a 20% boom here to get us from 5 to 6,000. That sounds cool, but no, I'm totally cool with the whole zoning of reszoning of it. Um, you know, I would even potentially argue for more medium density um instead of just all I certainly don't want to do all just single family there at all. Um, you know, I had a question and I um I was I've been out of town for a while here and why why we have to pin it down exactly between medium density and um and low density. Can't we leave? In other words, um you know, like there was a there's a pretty definite red square or red rectangle around the medium density. I'm not saying that that's the exact size, you know, but I'm wondering if we have some flexibility there, what the size that medium density is, uh for when that time comes that the market has um you know, has some control over what's really needed in the community. We we we don't because when the property gets developed and the developer applies for their sewer extension permit, it gets reviewed by the Met Council and the Met Council will review the density, the number of units on that property to make sure it's consistent with the comprehensive plan. And if it doesn't match up, so it's a Met Council requirement. Yep. So, we have to draw the line in the sand. You can always change it. You can come back and do an amendment, but if you don't match up with the densities that are divided on the geography that's been identified, you won't get the permit. We ran into that on Tom's project on the preserve, and we're running into it on other other projects. They don't let you balance between two portions of the property. They say this portion is guided this way, that portion is guided that way. Here are the density requirements for it. You have to fit in that box or we won't sign off on it. is medium I'm sorry is medium density um like town houses or could that be like an apartment complex as well? Um medium density can be um it could be potentially single family. Um but it's generally if you want rules of thumb low density is generally detached single family. Um, medium density is generally town homes or smaller um, multif family and then high density is generally larger or more dense multif family as a as a rule of thumb. Okay. I'm just trying to visualize. So where would like the an apartment complex like the one by firehouse or yeah firehouse grill be considered? That would be high density. Okay. So in the so along with these general land use guidances to lay it out and make sure things work. Um the applicant has also submitted some conceptual plans about how you'd lay out the property and in those conceptual plans they've identified the medium density area would most likely be town homes. They wouldn't be absolutely held to that or that specific layout. But it's they're act they're doing a good job of saying, "Okay, we want to make sure um before we uh you know, from a layout standpoint before we get too far down the road." Okay. So, as I said, I'm good with how it's presented here and I disagree with the planning commission. I think there should be some medium density. Um, and I think this is also a strategic play too in the sense of if we leave it commercial, if some of these absurd housing bills go through, there could be highdensity uh residential being popped in there and they would conform with potential stuff. So, I think zoning it or reuiding it as residential is smart so that we lock it down that way at least and then if we have to play with the density level, we could do that later. I um yeah I the first thing that popped in my mind was the current legislation that basically strips us of any ability to zone. Um that said working under the current rules you know I I agree with Gina. I am concerned about losing any residential. I mean, or any commercial. I think any property owner in town that has a property that has some guidance or commercial, I I wouldn't blame them one bit for approaching the council and seeing if they can get it regguided because that's just what the market's dictating at that time. But from a planning standpoint, you can't give away all your commercial, which isn't helpful for a property owner. Having said all that, we're not making a decision necessarily today. We're just providing direction, right? Right. At the second, I I don't know that I'd support it, but I wouldn't stand in the pro stand in the way of the process either. Um, that's just my opinion. Um, I tend to lean towards supporting Josh a little bit more medium density along the road right there. Um, makes sense to me. Um, Tom had a good point. You know, as a commercial owner, you want to be closer to two. So, anything north of marketplace, I would consider staying commercial. Um, I I wouldn't want to build a building down here where he's proposing medium density for commercial use. It's too far off the beaten path for commercial. They they like to be seen. So I fall in line with Josh. Yeah. Okay. Amanda, do you have a do you have a take? Um I think for these for this um portion of it that it makes sense to go residential. Yeah. Yeah. I mean that particular property if we're looking at residential I think that would be the better part for medium density. So so at this point we're we're expressing that we're we're open to considering it. There seems to be some support on the council to give Tom the direct well both Tom's the directions needed. So it sounds so just to clarify, it sounds like the council is supportive of everything south of Marketplace Boulevard being regided for residential and is okay with um the area identified along France Avenue being medium density residential. Is that a fair statement for the purposes of proceeding in the process? Again, I'm I'm not necessarily in support of it. Neither is Gina, but there's enough on the council that are supportive of this process moving forward. But then we're looking at changing what is already zoned from medium density to low density, right? As Yes. Okay. So, it would kind of balance that a little bit. Okay. Well, and I think I'll throw another caveat in here. I mean, if something were to come along on the east side uh across the street and there's a proposal to reguide that that then turns it incompatible with whatever I mean it's so hypothetical right now that I mean well I can see this visualizing but again across the street something could happen too and if if that development or developer or owner you know moves quicker you know that's where I mean I I know the point is to help guide you know Tom and everything here too be and be fair to that. But it could change based on you know different things happening in the future. So I mean because if we do that then yeah I tend to agree then maybe that east side needs to be regided as something else. But if something happens on the east side first then maybe that changes how I view what goes on the other side there. Um so doesn't help a whole lot for development sake but yeah. Yeah. I just think we would need to whoever the council is, we need to be mindful of maybe our lack of commercial um going forward like in other areas um like closer to 35 and stuff, but can't predict that. So yeah, I think the you feel you have sufficient direction, Tom? Yep. So the mayor's right. The next step would be we'd be posting a hearing and what I'm not hearing is direction from the council to change right the request. So um then the next question um is what's happening north of marketplace boulevard in the southern portion of the marketplace commercial development. So does the city council support the creation of a mixeduse land category and as shown below? And then the next question will be if it's yes, the next question on the next slide is going to be how does commercial fit into that mixed use category so to speak. So the first question is are you okay making it mixed use meaning that under some terms you would allow highdensity residential in the blue colored area? You're saying no? I I think that in my opinion I think that should stay just commercial. I I just have a question because further up in a slide wasn't it so that they could it could be mixed use but basically it could be either commercial or high density res residential. So then if we agree to it then there's not a guarantee that there's going to be commercial there. That's that's a next step. That's the next question. That's the next question. Okay. So, the current question is, do you want to allow for the potential for residential to be there at all? No. So, can you go back to the one slide that has his the proposal that we looked at before this one? Yeah. Because I felt like we were supportive at the time of this proposal like when it was when it came to us in the first. So the applicant did present this or something very close to this to the planning commission and the council which indicated that this western building would be entirely residential and the first floor of the eastern building would be um commercial and there would be opportunity for some small pad you know small commercial pads for you know just I'm throwing some Taco John's or Subway or a small real estate office. Are you saying no I'm just hypothetic you heard it here first. Yeah. um but would provide for some small commercial pads um out here. Um and planning commission and council did give at the time fairly unanimous support to that concept. I think if we're regarding the rest essentially for commercial, I think we should reserve that for I mean I'm sorry for residential I think we should reserve that area for commercial. The question the mixed use is this more I mean we don't currently a mixeduse zoning. We are creating something from whole cloth, so to speak. So the question is, do we want to consider adding mixed use zoning? Correct. And I would say I'm all for looking at that. I don't know that I'm I don't know how I feel about it being specifically on the spot, but the question is for it is that the question while we are creating a mixeduse district, what could potentially the only place it would be applied is here. So it is specific to this propert. So it is spec. Okay. I thought it was more conceptual. No. And then we have if we were to go mixed use, we have the ability to sort of choose a percentage of what would be and the request. Is that it? So the applicant is requesting maximum flexibility. It can be all one, all the other or anything in between. The council however has the ability to do what what you want. So if you wanted to say no, we want it to be all commercial, you can do that if you would and it would just stay as it is today. You could say nope, we're fine. We want it to be highdensity residential, you can reguide it that direction. If you want it to be a mix, you can do that, but you should provide direction on what that mix looks like. All right. Is anyone particularly in favor of pursuing this with a mixeduse designation? For sure. And I am not for that particular area, but I'm open to it. I just think it needs to be like a 5050 split at a minimum with the higher percentage if we were to shift it one way being towards commercial. Um, I'm open to discussion of it obviously, but I would definitely want to keep the majority of it commercial with maybe residential above it just because we have just agreed to take the commercial out of south of it. Yeah, we agreed to look at it. Look at it. Yes. Sorry, should have chose my words better, but yes. So, I'm I I'm kind of the same. I mean, I am I'm open to it conceptually, even I'm open to discussing it on the spot. I'm I'm very concerned about what it would look like, but I don't think it's a showstopper, and it sounds like the council in general is open to having that discussion. The next part, as it pertains to the actual split, I I don't know, are we I don't know if we're in a position to really make that assessment. I mean, the staff looked at what other cities are doing or There is no no standard and it would also depend on the geography. So does the mix only include the footprints of where the buildings are because then you're looking at the mix of the square footage in the buildings or the main floor of the buildings. If it includes the area that's been requested it by the applicant, it would also include these potentially, you know, potential remote pads and then that's a different that's going to change the percentage you might be might be looking at. I do want to point out for the council that from a process standpoint, we're beyond the we're receptive to this. We have an application in the door. We're actually looking for direction from the council of what we post for action on. Um so we're we're at the point of getting while there's time to make refinements on the details. We're we're at the decision point a decision point in the process. At the same time, we haven't heard from the community yet. We haven't had public hearing. We haven't done so. We can tell you all that, but we still have to listen to what people have to say. I mean, correct. Changing all the other area from commercial to residential, I think that we should reserve this little portion um for commercial. Um so, can I interrupt? Can I ask? Okay. So again, you guys saw this exact plan um last winter about this time. And uh [Music] this this apartment building, the first one would be the if you guys are familiar with a location on this map, the first building would be kind of the um I call it the southwestern corner. I'm sorry. And that was about 40 45 units. Um and we did a market study last year if you recall of um and absolutely nothing available within a 15-mi circle of this building at that time anyhow um for availability for this type of housing. Um, and I'm sure you all know that there is a shortage of this type of housing in Elco New Market and surrounding area. You have to get all the way up into Lakeville to find this um this type of housing. Um also these buildings um and their use absolutely kickstart these small little commercial retail areas. Um, and this is more of a more of a plus by far to anybody that wants to put like a Taco John's or a coffee shop or whatever is going to go in this in the corner of Marketplace Boulevard in County Road 2 in that corner there. Um people who are building these types of buildings, bringing these types of businesses to communities are looking for population to drive their success. Uh where are the people going to come from that that need these types of of amenities, stores, and these apartments are certainly a major part of that. Um and I don't know um the my object was it not to trade wasn't to trade um low uh low density or medium density housing for something that could be built 5 10 15 20 years from now for something like these apartment buildings that I'd like to build at least one of in the next year. And um so that's that's that doesn't make sense to me to to use that type of thinking trading one area of commercial for another area. You should make a decision in my opinion the best location for commercial compared to high residential housing types and what the need is for the community. And uh you know that's that's what we have here. We we're trying to get these at least one of these apartment buildings in the ground this fall. And so um that's always been the discussion. And then um and then it came up then we were made aware that the speedway was was um guided for more commercial and that just didn't make any sense to us. So that's why we're here right now. Thank you. I mean, I I want to preserve commercial. I understand. I I I'm I mean, I can get on board with with a mixed use. Um, and Tom, you're 100% right. I mean, you do need to drive that population. You do need to have I mean, that I think that apartment would be a good thing. um just how do we how do we do it and hold on to commercial at the same time is my thing as as far as like the percent goes I mean we we so we could work on the percent maybe we talk with the vision so I'm just going to like hypothetically what what the applicant had brought in was this building was entirely residential the first floor of the eastern building was commercial and there were commercial If that's the vision the council's okay with, staff can work on the specific percentages that would reflect, you know, we can create the language that would create create that vision. I think the question becomes um if you were to allow residential in this portion, what would be kind of the under what criteria? What would be the terms? How much are you okay with whole buildings or do you want all the first floors to be commercial? Do you want 50% of first floors to be commercial? You're okay with one of these buildings being entirely residential, one being commercial. I mean, hypothetically, you could just take the area where the building that's all residential is, and you could just guide it highdensity residential. I love this concept planet at the very beginning. I'd approve this in a heartbeat. If this was the hypothetical plan in front of us, it would right I'd support it wholeheartedly. I would too. I I think it's there's some challenges in the marketplace on it, but I thought it was a great idea and I loved it. So, what are we where do we go from here? Well, what where so if the council can reach uh consensus or at least a majority on what the vision is, staff can create the language that would describe it. Um it it it it may or may not Tom's asked for ultimate flexibility, but if that's not where the council's at, you have the discretion to change that for what you would be putting forward for the for the reididence in the comp plan. Um I am not in favor of just full go for whatever you want either residential or commercial. Um obviously I've stated I would like to see it commercial. I loved this plan when it first came in. If he does something like this, I would be on board to do that, but there's got to be commercial. Yeah. The question is how much? Well, what would you say that? I mean, you guys could figure out the percentages if we say it comes in looking similar to this. To Tom's point to clean it up. I mean, just chunk out that bottom southwest corner to high density residential. Do the rest mixed use and say the first floor has to be at least minimum commercial. I mean, or you do the whole area is, you know, 25. I worry about that though because I I I think there's I think there's some challenges in the marketplace and I think we'd be back here in a year having the same conversation. I worry that we don't have public transportation out here and if we're looking at high density, what about the people who maybe don't have vehicles? Is their only option right now Quick Trip for food and everything? You know, I mean, I just I don't know. It's a fair point. I don't Well, I disagree with the point because these apartments are probably going to be more than most of our mortgages. So, I assume most of these people are going to be able to afford a vehicle if I can afford my mortgage. So, I mean, I think that's a different discussion for a different type of housing. Um, I think, you know, you are moving out of the sort of like city landscape as well. So, you know what you're moving into when you come out here. And if you don't have a car, it's an interesting choice to to choose to live out here. But I I feel like we're all in agreement that we want to preserve some commercial. Yes. It's just a matter of how much is 50% within the ballpark that we would be interested in considering. And and to clarify, when staff's talking about 50%, we're talking 50% of any ground low, you know, first floor square footage. If there's residential on top of that, there's residential on on top of that, unless you want it to be a total square footage relative to the square footage of the residential. I I mean, I just I I can't envision I'm I'm thinking of downtown Savage. I'm thinking of Shakipi. I'm thinking of Mano. I can't visualize a building, a multifloor building that has half the first floor being residential or a portion being residential and a portion being business. That just doesn't I I don't know of any good examples and maybe there is some, but I can't visualize it. No, that are successful or of successful businesses underneath. I don't I think it's I mean and that's where in my brain it's the full thing, you know, a percentage of the full thing because then that could allow for the one full just highdensity residential building if the other one plus some of the scattered about businesses could be all commercial. Then you hit that bigger percentage mark. So um I'm just going to talk way a couple ways could do it. So, if Tom is certain he's going to build that piece as high density residential and you guys are okay with that building being entirely high density residential, the simplest and most straightforward thing to do would be to guide that portion of the property just highdensity residential if that's what the council wants. with regards to the percentage of the mix. Um, you can say I a couple ways you could say everything just everything on the ground floor in the mixed juice area has to be residential. Now, that might happen in the multi-story building, but it may mean you never get those other those other paths. Um, so there's there's there's flexibility and design issues. I think Tom and his design people have done a really good job to realistically lay out how it might be, but we all know from experience that sometimes the reality doesn't look exactly like what's what's put there. I think the easiest thing for staff at this point would be you guys to describe the vision that you have and then we will craft something that we think is executable from both a comp plan and a regulatory standpoint. Um and then uh and we'll get Tom's feedback on that and then obviously when we're working on that. Um but at the end and there'll be room to tweak it once we get into the process. But the most important thing is what is the council's vision? Well, and what's presented here was the first level commercial and I mean that was kind of the vision I had kind of rethinking it. I'm so concerned if we have high density and you know bring in a lot of people and I get we we want to grow our population but what about the amenities for all these people or the services I mean green space parks trails um grocery store I mean I I understand that people bring that but if we're already zoning everything else to residential I think the issue is that we repeatedly hear you don't have enough people for us to bring our business to your area. This would give us an opportunity to have more to bring more people in and with I guess my hope would be that then that would drive some interest from a commercial standpoint. Just so I understand when you Are you talking about having the whole thing go residential? No. Okay. So, what's the what's the percentage that we want to get to? And and Tom Ryan, I'll ask you. I mean, what you've kind of heard us talk I mean, I think you've heard us express our desire to maintain a certain level of commercial in that area. I mean, and I know you want to bring something to the market that the market's going to be receptive to. What do you think is doable? Because uh because what I'm hearing is that this what's displayed on the screen now isn't really doable anymore, right? Thanks, mayor, for asking that question. That's that's an amazing question and it's and it's extremely to the point. Um, and the other council member mentioned something uh that I hear, believe it or not, I hear more than this council hears when I go to sell a piece of property like this. This 12 acre parcel here I've had on the market since 2005. I've tried to think of every way possible to sell it to commercial users. even to the point the last time there was a grocery store conversation uh that happened um wasn't that long ago and that person's you know they look at numbers they look at people they look at how many people are in a driving distance they don't care if you live in Lakeville or Elco it's how many people are within this certain distance their demographics got to work out to to justify what they spend on these buildings And uh I hear it all the time. There's not enough rooftops. There's not enough rooftops. And planners, planner after planner have told me that, you know, Elco New Markets got it all wrong from a standpoint, and I apologize to bring that to you, but from a standpoint of build the commercial buildings and the people will move in. That doesn't work that way. I at least that's not the common sense. That's not the proven path. you put the people in the community and then the commercial businesses can afford to be built there. So, mayor to exactly uh answer your question is we've looked at um the second building could very likely support commercial on the first floor and and you know really mayor what it might end up being is it might be one half of it might be a workout center for the people who live there or it might be like um you know pet pet care place or daycare or something like like that in the lowest level of that building to support the people that are living there or the people that live around that surrounding area. Um really what commercial businesses are looking for are those little standalone buildings that you see out there something where they can have 1500 square ft or 1,200 square ft and it's a drive-thru. And by the way we this plan only shows two of those little satellite buildings. We've got another plan in our mind that's that has three or four commercial buildings there. So, those are the hot items for this type of an area. And every everybody kind of keeps forgetting that just to the to the west of Quick Trip there is uh they've got about another acre of land there to the west of Quick Trip. And then of course the um the New Market Bank site um that's still available. I know that's an acre. So there is a lot of commercial property within this little quadrant um that we have here. And um so um and my answer again is we'd be lucky to fill that second building with retail customers. Um but at the same token um we're open to looking at it as time permits. Now, um this whole u little development that we're that we've been talking about here, which is everything south of the bank and everything east of the bank, um we want that completely built out with within 5 years. I mean, wouldn't that be something to have that whole space occupied um with viable commercial buildings and housing units that and and just the traffic that would surround this little little area would be huge and um it'd be I I think a nice shot to the rest of the area. Thank you. Um, so maybe to help with this discussion, I don't disagree generally with anything that Tom said. We do in account, we need we need housing. We need greater variety housing. We need commercial. All those things are true. The discussion though really is where you where's the appropriate location for it. The policy decision for the council is is this the best place for residential or certain types of residential? Is this the best place for the community? As we've talked before, the interest of the developer is near-term. If they're a developer and going to walk away, it's three years. If they're a developer, hold it, it's 20, maybe 40 years. The interest timeline for the city is 80 to 100 years on those decisions. And Tom's right, residential comes first. So there isn't in a perfect world, it would all come at the same time. But the reality is it comes in disjointed based on availability of property and how the market evolves over time. So I would suggest to the council that the council keep in mind this is a question about what and where. Um keeping in mind the where knowing that the market at any point in time may not be perfect for any particular use but it is a consideration. And I would just suggest that you keep in mind that um residential can go anywhere so to speak. Commercial is very limited based on transport the factors that we talked about. And those locations within any community only exist in a finite area. And we're not building for the community of 5,000 we are today. We're making land use decisions for what the community is going to be 50, 60, 70 years from now. And the only thing I would say to that is being on council now for 10 years, we gota I'm trying not to swear, we got to get stuff going and we gota we got to we got to break the seal on some of these things. And I think as much as I want to perfectly guide every inch of this town, we have to I I mean I think we have to be open to I love this design. And I know we're thinking bigger picture, whatever, but I I I think we we get in our way too much and and we in a good way because Rich has trained me to think of where the roads are going to be 100 years from now. And I mean I I'm so like thinking that. So I don't think we're being rash in some of these decisions. And I'm not saying you're saying that that was what I'm trying to imply, but I I mean I think we have to be flexible based on the market for what it is today is what it is or five years and from now we're going to still be staring at an empty lot and wishing and hoping for that perfect commercial to be perfectly onto and what's the number? I don't care really. I mean you'd be open to full flex. No, not at all. No. So, I mean, so that's where I think it I think it needs to be either first floor, all first floor because I don't I like I I'm it was down in Mano for a volleyball tournament. I'm sitting at Taylor Center looking across the street and you got you got Caribou and whatever right there, Panera and then you got this the the whole first floor and then apartments above that. Now, I know it's a little bit different because you could argue college, whatever, but that's what I'm envisioning right there. And you got all the different little restaurant shop, coffee things, haircut place, whatever it was. Um, but I could see one of those buildings being just residential. Um, and then, you know, have that mixed use. So, so if that's the vision, I'm okay with that, too. I can easily get on board. So, so if that's the vision, we can craft the language to describe that from a planning standpoint and a regulatory standpoint. If that's where the council's at, just confirm to reflect the concept that um Tom had brought in. uh winter spring of 2023 of the western building being entirely residential, the first floor of the eastern building being commercial and the remainder of that property being guided commercial or providing as much flexibility as we realistically can to achieve a vision similar to that. Is that fair? Yeah. Okay. Yeah, it's it's a difficult discussion. I mean, we all want and I think we're all kind of on the same page. I think we all are looking at this from a long-term perspective. We all want to see we're all thinking of this from a hundred years out. We all understand that residential is what drives the commercial business. So, we're all on the same page. It's just a matter of getting to the finite details of what that looks like. And that's a tough conversation to have. So I think do you feel you have what you need um to move things along? Let me just go through and double check since um I'm doing fill in. I think we have the direction that we need for purposes of moving this item forward through the application process. The next step would be to then draft what would be the published comp plan change for the re guidance and that would go through the planning commission next month and then would eventually come back to you guys. So, okay. Is there any other questions on this that we need to address or we move on to the next general business? Um, this is what we need. We can move on to the next item, Mr. Mayor. Okay. Uh, general business item B. And thank you, Tom Ryan, for participating and dealing with us on the council trying to figure out what we're doing. So, so the next item on the agenda, Mr. Mayor, is to authorize the construction engineering services for the 2024 old new market reconstruction project. Um Rich, do you have anything to No. Um it occurs to me this a little bit out of order since the next items are to actually award contracts. We'll just take it that uh approval would be contingent on award of those contracts if there's actually going to be a project. But I I have nothing to add beyond what was in the memo. We've I think we gave an estimated fee and to bundle because we'll we'll put the same people to try and cover both. Um, we think that's feasible even if we have to bring in extra support sometimes. In fact, whoever is on these two jobs will probably also be running out to park 35 and and uh overseeing that with help as needed. So, spread the cost around, keep it down for each project. Anyone have questions or concerns? Do you need a motion? I'm assuming no motion's needed. We need a motion to authorize subject to award of the of the street projects. So moved. Second. Motion by Kate, second by Josh. All in favor? I. The next two items are award of the projects. The first one would be the 2024 Old New Market Street reconstruction project. Um local contractor Ryan Contracting uh was the lowest apparent bidder for that particular project. The council previously approved the template for the contract. So, this would just be a motion to adopt resolution 2417 accepting the bid um for the project. So, moved. Second. Motion by Kate, second by Gina. All in favor? Same routine. Uh for the 2024 pavement rehab project, the lowest apparent bidder was McNamera out of Rosemount. Uh council being asked to approve resolution 2418 accepting the bid for the 2024 pavement rehab project. So moved. Nice. Second. Motion by Amanda, second by Kate. All in favor? I just can't believe Amanda made a motion. I was just waiting for Kate to take the whole whole run. I was just slowing down to see if you step in there. So the and to note for the viewing public u both of those projects came in under engineers estimate the pavement project not um advantage of having local local con local and relatively local contractors. Uh the next item now that we've awarded projects we have to pay for them. So, we have Rebecca Herz from uh Ellers here, and Rebecca's going to go over the authorization or the set sale for the issuance of the debt for these projects. Thank you. Good evening. Uh again, Rebecca Kurtz from Ellers and I believe in your packet there is a pre-sale report from Ellers that I'll be um pulling some highlights from. But um what we are here tonight to consider is issuance of $3,370,000 of general obligation bonds series 2024A. Um this one bond issue will have the three purposes which include the street reconstruction for the old new market project. Um for that portion of the bond debt service would be paid from city adval property taxes. The second purpose is the improvements for the old new market project and for that portion debt services um proposed to be paid from special assessment revenue to the benefiting properties and then revenues from the city water and storm water utility fund. And then the third purpose of this bond is the pavement re rehabilitation. And for that debt service um will be paid for from special assessments from those benefiting properties along with advor property taxes. Um with this bonds are being issued um if you are going to issue bonds you need to have the authority per Minnesota statute. So, chapter 475 um generally to allow for the issuance of bonds and then we are using the street reconstruction authority and then the improvement authority ties to the portions where we will be assessing to benefiting properties. Um but ultimately even though we are anticipating that different portions of this will be paid from assessments from some utility revenues um in addition to advant property taxes these bonds would be general obligation bonds. So ultimately the city if you move forward with this does pledge its full faith and credit and taxing powers to make sure that debt service is paid 100%. um that is pretty standard with past issues that the city has done. And one of the benefits of the general obligation pledge is that it does help get a lower um typically a lower interest rate than if they were pure revenue. Um with the bonds that you have before you tonight, we are proposing a 15-year term. We worked with staff and your engineers to tie that with the assessments and um what cash flow would work best or what we believe would work best for the community. Principal would be due in February in the years 2026 through 2040 and then that's once a month or once a year interest would be paid every six months beginning in February of 2025. Um with this though we are also proposing that the bonds would be callable or you would have the ability to prepay or refund them without penalty um beginning in February of 2033. Um your past bond issues have been rated by standard and pores global ratings. Um we are proposing that again this issue be rated by SNP. um your current rate bond rating is a double A+ and so we are recommending that we would move forward with requesting a rating for for this um issue. Um we are again just as a point of in um information we are recommending a competitive sale for this. So what that means is that we would solicit bids um then bring forward those that after we have received them in roughly a month and we'd compile them on our behalf and bring forward the lowest bid with a recommendation at the council meeting on April um 25th. Um as a final point of interest and then I'm happy to answer any questions. We do continually review your outstanding debt um and want to continually be in touch with staff if there were any opportunities to refinance or um prepay debt. Um currently with the market we are not finding those. But um we did we do continue to do that and did that again um just in case there was something out there that would apply right now. So we'll continue to watch for that and bring those forward at a future date when the opportunity um moves forward. But um we are recommending that based on the fact the bids were awarded that you consider moving forward with calling for the sale of bonds. If you do choose to do that this evening, we would be back here on April 25th with the results for you to consider and then um funds would be available on May 9th. With that, I'm happy to answer any questions you may have. Anyone have questions? I have one question. Um I'm just wondering if you can tell me what um this sentence means a little bit more because this um I don't know a lot about bonds. So n absolutely under the risk factors it says if the city receives a significant amount of prepaid assessments it may need to increase the levy portion of the debt service to make up for lower than expected interest earnings. Does that mean that we might need to raise taxes to pay that interest or Yes. So the way we have um structured this is that the assessments for the most part we've assumed would come in people would pay them over the term of the debt and um we've had discussions with staff and um our understanding is typically you don't have a majority of the people prepaying them immediately and so it has been structured that the assessment revenue would come in for the most part over those 15 years. Um if in the this situation um you end up with 50% of your assessment revenue coming in as a prepaid in the next six months, then um we would work with the city and try to invest that. So you could maximize investments as you pay that down with your debt service. But there would be a risk that if you had significant prepayments, then you might need to levy a little bit more. um later on and that would be the difference between the rate at which we the interest rate on the bond and the return that we're getting on the investing the prepaid assessments. I think keep in mind too that the assessments are not the majority of the revenue that by far. That's all I have. Thank you. Thank you. Okay. Any motions or concerns? Well, no. I I'll make the motion to approve resolution 24-9. It just makes me sick seeing how much interest we got to pay on this kind of stuff. Yep. Yeah. So, that's a motion by Josh. Second. Second by Kate. All in favor? I. Okay. Moving on to the next item. So the next item is a discussion by the city council regarding the establishment of a tiff district tax increment financing district in park I35 for the purpose of reimbursing the city for infrastructure costs and potentially for uh waved connection fees associated with the business subsidy to Niagara. Um this will has two parts to it. The first part will be Rebecca talking about the use of if and tax abatement generally. Um and then staff will provide a financial analysis with various scenarios. I can get. Thanks, Tom. Again, Rebecca Curts. Um, and as mentioned, we are going to get into a little more of the details of how TIFF could be used for um by the city for the um part 35 industrial park. But I did want to take a step back since I know there are some new faces and um even for those who have listened to my TIFF presentation before um maybe do a little bit of a refresher on just what is tax increment and how does it work. So, um I apologize to those of you who are comfortable with this um for the repeat and if you are not comfortable with TIFF or have questions um definitely feel free to to ask them and I'm I'm comfortable if I'm interrupted during the discussion. So, um, so tax increment financing is one of the few tools that communities have to assist with, um, reimbursing or paying for some of the costs associated with new development or redevelopment in a community. And from a general working definition, it's the ability to capture and use u most of the increase in prop local property tax revenue from new development or redevelopment within a defined geographic period or par area special parcels identified um within a defined period of time. So there is a maximum term if you set up a tiff district. And one of the um benefits of it sometimes from a city standpoint is this decision can be made after steps are followed by the city council. So while you as the city council would have the ability to capture city, county, and school taxes if you set up a a tax increment district. Um, and while the county and the school district are notified of your intent to do that, it ultimately is a vote by the city council that would capture that increase in taxes for all three jurisdictions. Um, so what does that mean from if you look at it um more visually? Um, and you can see here we have um the the base or that blue bar and that would be any parcel that's in your community today. And right now those those um parcels are paying taxes to city, county, and school district um along with a small portion to other special taxing jurisdictions. The purple triangle on the chart represents when new development comes in and increases over time. So in the example, if you did it in the um park 35 industrial park area, it would be for example when the Niagara project was built and that revenue comes in from the new development during the tiff district. Then the blue or that base that you're receiving today continues to go to the city, county, and school district. the purple or that additional tax revenue could be redirected to specific eligible costs which I will talk about in a minute here. And then after the term of the tax increment district, whether it is the maximum statutory term or if you as the council set it for something less than what um statute allows, then the city, county, and school receive that benefit of the full value of not only the property as it is today, but also that new development. Um during this time that parcel is going to continue to be assessed by the county assessor exactly like every other property. So just because it's in a tiff district doesn't Can I go back? Yeah. I thought that visual was super helpful. I finally after 10 years this might click. Yes. So, if I'm understanding everything correctly so far, if we were to not do a tiff restrict, for example, that blue would just include that purple then, and that blue would continue to go up. So, you'd basically jump to the green, right? Well, not even jump, but over that period of time, the county and the school districts would be able to collect that increased value as well with their taxes. Correct. that visual plus maybe one more that says if you do nothing like for get for people like me that finally nailed it. So, thank you. Well, thank you. I appreciate that. I was always thinking in my head that you know like we're I wrote down capture equals steal or divert, I guess, uh for steal. I mean, we are we're we're preventing the county and the schools from getting the taxes that they otherwise would have gotten. Um and then but this helps me and then at a certain point up to nine years then that it goes back to them and yeah. Okay. Was there a question? No, the light bulb just went off for the first time in a decade. Good. Great. Great. Well, and what I was also um going to just piggyback on that is so that the property does get assessed the same as whether it's in a tiff district or not and the uh property owners pay taxes regardless of whether it's in a tiff district or not. Um so kind of taking the the discussion from that last graphic one step further. Um, for example, if you look at what was represented in that blue bar, um, if you if that had a value of a hundred for easy math, that 100 is being split to city, county, and school district. And that is going to continue to go to city, county, and school district. You add the building on it when it's fully developed for simple math, you suddenly have a value of a thousand. So that's going to be the total tax capacity or total market value total value when the project is completed. And then with that the math for it in simple terms is the total value of a th00and when the project is done less that 100 that goes to city, county and school district for the term of the tiff and you get that captured value of 900. And then you multiply that times your tax rate to get the actual annual tax increment. And you see the term abatement there. I'm going to talk about that um at the very end as a little additional information. So with with this when you look at that increase in value multiplied times your tax rate that t is the 955. Now with this it is important to remember that there are things that are excluded from tiff which is why that definition is most of the increase in tax value. Um those base taxes continue to go to the city, county and school. There is for commercial industrial property a statewide tax that cannot be captured through tax increment that goes to the state. Um there are market value referendum taxes that at least in the um situation for Elco New Market are fully school taxes and those are based on the market value that is a lot of times an operating levy or referendums. Those cannot be captured through tax increments. So there's that portion that the school is going to actually see an increase even if you set up a tiff district because that market value for the community goes up. So that's that portion of the school taxes would would be increased and then it would it would increase the base color at the bottom level. Essentially those referendums would get added into that kind of the untouchable bucket perhaps. Um, I mean it it still stays the same. Plus, you're gonna test me now on my school expertise, but there Well, there it doesn't impact the So, the base is [Music] um I can go into the weeds as much as you want on this, but the base is on tax capacity and that is going to stay the same. And so the school taxes on tax capacity are not going to change, but there's the operating referendums typically are based on market value. And so that cannot be captured through tax increment. And so the portion of school t or school um revenue that is based on market value taxes would increase because you have a new project higher market value and therefore they and that piece isn't collected by tax increments. So they get to see that increase. So the referendums almost operate independently of the rest of Absolutely. Yes. I'm confused about the market value. Um so just generally or how would how would it how would it benefit the market value? Um so if the market value for the community and again making up numbers is um a thousand like as a community for a whole and you have a new project coming in um for example the Niagara project and because that is a large project maybe the market value for the community as a whole goes up from a,000 to,100 you're the school tax would go the referendum taxes would increase because you went from a,000 to,100. You have a higher market value in your city as a whole and so the referendum portion of the tax grows because the market value grows. Okay. Can it have the opposite effect? Can we have could it harm the market value? Um it generally you know if if if we went into a recession and the community and this could be anywhere that just our home and all values start to decline. I mean it would have in in a situation like that it could have an opposite but but a new development coming in could not harm the market value referendum taxes. Okay. that to harm that it's a bigger economic issue. Thank you. All right. So, um with tax increment, I know that some of you heard me stand up here and talk about tax increment um a couple years ago in the context of a housing project. Um there are different types of tax increment districts and common ones are economic development, which I'll talk about more today, redevelopment and renovation and renewal. if you're redeveloping parcels where you have buildings in substandard conditions. Um housing if you are looking at doing um housing projects that have an affordable component and then soils if there are soil conditions that need remediation for building. What I am going to focus on today is the economic development tiff districts. And with an economic development district, that goal really is looking at increasing your tax base, um creating new jobs, growing growing your community in in that way. Um typically we see them with um econom or with um business parks and those types of new manufacturing industrial type projects. Uh economic development tiff districts have a maximum term of 9 years of increment. The statute reads eight years after first receipt. With any tax increment district, um the term is set as a maximum, but as I alluded to earlier, you as the council always have the ability to go less than that. You just cannot go more. And then um one of the establishing requirements is really what you're going to do with it or what the project will be at the end. And so with an economic development district, it needs to be specifically for manufacturing, warehouse distribution, storage, um research and development, telemarketing or also um within those types of projects that could be set up in an economic development district. So that brings us to some more specifics on why we're having this discussion tonight. Um, as as alluded to in the introduction, there could be an opportunity if you chose to do this to use those increases in taxes from the Niagara project to pay for all or a portion of um the infrastructure expenses and or reimburse some of the write down that the city has looked at for the water and sewer connection fees. Um, so eligible costs for a project such as this would be the street and then the water and sewer infrastructure. Um, and then as I mentioned the re uh reduced connection fees for water and sewer. In this situation, what we would consider is having the city retain the tax increment to reimburse for these. So it would not be a situation where anything would be paid to the developer. this would be reimbursing and held within the city. Um, and then with with tax increment, you always have the ability to retain 10% for administration. Um, I think as we talk through this, one of the items to kind of just think about is weighing that yes, tax increment or we'll talk about abatement in a minute. Um, is an opportunity to reimburse for your utility funds and pay for some of these infrastructure costs. The other side of it is, you know, if you did not use tax increment, you would see an immediate benefit from that tax base. And so that I I'll leave that there. We'll finish the discussion on how this could work and then that can be something we can come back and kind of revisit um later on this in our discussion. Um, as you're aware, the proposed location would be um in the south um east corner there along um 35 where the indust or industrial park or business park is um including the Niagara project as long as as well as um other future development. Um as I mentioned, it could be a maximum term of nine years. Um, we do have some numbers I'm going to walk through in a second here and I just want to set the framework for those. We've worked with the assessor. They provided a range of for the Niagara project of a completed market value between 33 and 40 million. So, the numbers that we're going to see in a minute are based on that. Um, they also used the preliminary 2024 market values, um, tax rates, and I have not assumed inflation. So they're just flat. We believe conservative. So as we look at what might happen if you did go down the path of establishing a tiff um for for that reimbursement based on the market value estimates from the assessor. We are predicting that the total property taxes for the project would be between um a million and 1.24 million. And that's total taxes for city, county, school, um, all of those state taxes. And you can see that on that with those taxes that we cannot capture through TIFF. There's the portion that goes to the state. There's the fiscal disparities portion. Those market value taxes um that would be an in you can't capture, but that would be an increase for the school district. um the base value taxes that continue to go to the city, county, and school. And while they would pay between a million and 1.24 million in taxes, there could be annual TIFF revenue between 430,000 and 526. Um, how that breaks down then is you can see here that the city portion of it ranges from about just under 193,000 to not quite 236,000 and then break down from the county school. Special taxing jurisdictions are um like uh county EDA um mosquito control, little little pieces like that. So with um TIFF, if you did decide to go down this, there is a process um that we would need to or want to start maybe sooner than later. um gather information. We have a lot of that step completed, but there is a process where there is a tiff plan. There are notices that go to the county and the school district. Um there is a public hearing notice that needs to be um published and then ultimately it ends with the city council holding a public hearing and considering that resolution if you do want to establish a tiff district. Um roughly the timeline is about 45 to maybe 60 days and that district would need to be established before the construction started. Um on the business part I just want to touch on tax abatement and say that it is another tool that cities have similar to tax increment. Um, one of the benefits maybe from um, a lot of other taxing jurisdictions is that with tax abatement, while it is capturing, you know, that increase in in taxes and redirecting it much like TIFF, it requires that city, county, and school or everybody who's going to participate in the abatement holds their own public hearing and takes their own vote as to whether or not they want to participate. in the abatement. So I I'll follow up on that. Oh, okay. So I was going to say um with this a lot of times we see it challenging to have schools participate in abatement and counties really it depends on the individual county and policy. So I can't stand here and say yes you know we we would expect um to see other jurisdictions participate. I would say it is probably unlikely if you went down the tax abatement route that you would see the city or the county or the school district participate. Based on past discussions I've had with the school districts on this topic. Um I would say that if that's a fair assessment with regards to the school districts, they almost never participate. With regards to the county, I've had a recent discussion with senior county staff and they've indicated that the practice at the county is they remain silent on tiff because they really don't have a choice, but they do not participate in tax payment. So, we would have to assume if we want to consider to go back on Rebecca's comments, it would be a safe assumption that we'd only be capturing the city's portion of the property taxes or tax increment in that tool. Can I do a quick followup to that? Has Scott County ever participated in abatement and or is it just general practice? I'm just curious if there's any precedent of Scott County. I am not aware that they ever have and when I had the discussion with the county administrator, they said we do not participate in tax abatement. And then a followup to the followup would be do cities ever do the abatement? So that's why the county doesn't participate because they don't or they're not forced to make that decision. No, I think it's a um there are situations where the county might if it's a if they view high enough value to the project. Um generally my experience in Scott County is that the board has felt that you have tiff as a tool that will address most of the things that they'd be asked to participate such as housing or major economic development projects. Generally, when you come down to tiff, tax abatement versus tiff, you've got a bigger shovel with tiff, you've got more flexibility with abatement. Um, but the dollars are smaller. Um when we've looked at options in the past, generally what you find is that um tax abatement doesn't generate enough to fill the gap or make the difference, but you get so it works for small projects with smaller gaps. Um or where you have a situation where you just can't fit it inside the box of one of the the tiff districts. TIFF is a bigger shovel. You get to where you want to be faster or more completely. Um, but there's more rules and the boxes are very specifically defined and you can't always fit all projects in them. Any other followups? Go ahead. So, um, as as Tom said, the abatement process is a little simpler really. It is a public hearing. So, um you go through that and you gather the information, but you don't have all of the notices because each individual entity has their own process to um evaluate if they're going to participate. So, you would hold a public hearing and then adopt a resolution. Um if you did want to move forward with abatement, uh the breakdown again would be you know looking at that increase um with the each portion based on the 30 to $40 million completed market value. So the city portion of the abatement would be um between about 193 and about 236,000 annually. Um, you know, we touched on this a little bit just now on kind of some differences. Um, again, really looking at abatement being a simpler process, a lot more flexible, but if you want more bang for your buck, um, TIFF gets you that ability to capture all of that increase. Um, if you are looking at doing a specific dollar amount to be reimbursed for a project and if it is eligible for TIFF, um, I would say typically we see that TIFF is a way to get that reimbursement. And I I mean this generally whether it's for this specific Niagara um related development or for any type of housing projects, people default to TIFF because you can get the funding paid and get it paid off in a shorter period of time because you do get to the benefit of all three taxing jurisdictions. Um, one item I do want to just note on the next slide as it relates to tiffen abatement, there is no guidance or annual maximum or statutory maximum with tax increments. So you can have as many tiff districts, as much of your tax base in a tiff district as you want. All of that is really left to the city to be a policy decision. Um with tax abatement there is a maximum set forth in statute and that is the greater of um 10% of the net tax capacity or $200,000 and that is roughly um about $650,000 for the city of Elco New Market. I'm not saying you want to go to that but just for per um kind of for parameters with that that would be your annual maximum. Um, so future options and considerations. Just a couple other um, points to keep in mind when we talk about tiff and abatement. Um, with both of these, you could, if you set up a tiff district or an abatement, um, for the entire industrial park area or both of those parcels, know that you would have the option in the future to descertify or remove a portion of that um, prior to that maximum and establish a new tiff district if you wanted. So if you set up the entire area in a tiff district and in three years you have a new project come in that you do want to provide tax increment assistance to you would have the ability to modify the tiff district to um address future goals or um needs for the city and the council. Um and and with that to happen, you don't have a waiting period. Like you could descertify it or remove those parcels and at the same meeting set up a new tax increment district. So you're not locked in forever. Um I mentioned that if you did want to consider using tax increment for um this project and reimbursing yourselves that we would need to have the district in place prior to breaking ground and permits being issued. And that ties with the butt four test related to tiff. Um with that then we have a proposed timeline out here. Um you can see that it doesn't allow a lot of time before you would need to at least take some initial action and move. Um with that we would assume then under this scenario that the public hearing could be May 9th. um then consider the resolution to establish the district and that would have it in place assuming maybe a early June groundbreaking or building permit being pulled. Um with that again I think there's going to be some follow-up discussion on how this idea of using TIFF um relates to some of the numbers specifically with the utilities. And so I'm happy to take questions now, but I'll be here as discussion continues too. Thank you. Well, first, does anyone have any immediate questions before we continue on? Okay. Thank you. All right, Tom, do you have We do. So, one second. So Rebecca provided a very good overview of tiff and tax abatement and how they work and the analysis of how much increment you might be able to capture. But it still gets down to um is the juice worth the squeeze and how and if you do want to use tiff or tax abatement, how would you structure it? So Kelly and I worked on uh providing an analysis which would provide different scenarios to give you an idea. Now going into it, um I do have to say that there's a million different ways and a million different scenarios you could structure it because you could collect any portion of the new increment that you wanted to. You have you can capture it for um very you know anywhere from one to nine years. Um and you can direct the money into either of the eligible uses at any ratio that you so chose. So we just attempted to provide some um analysis to give you an idea of a little bit of the bookends to give you index points. Um and we think this will help you have a discussion. So going back and taking a look at the available tax increment, it's roughly between $430 and $526,000 a year annually that would be generated for all of the taxing districts. Um, the total increment then that you could collect over that time period if you're using a TIFF district would be between 3.4 and $4.2 million over that 9-year period. Um, and if you're looking at breaking it down on who gets what on an annual basis, the city um if you did not collect uh any tax increment, uh the city would be seeing an estimated increase once it was paying full taxes um around $192,000 on the lower end of the estimate. And just to do the quick math using last year's budget numbers, you're looking that would be an eight plus% tax impact um for the typical home uh due to the growth in tax base. So Rebecca indicated that there are two clear things that were eligible costs to be reimburseable through tax increment financing. One is infrastructure costs. So there is oversizing a and system costs that we are obligated to pay for as part of the overall development of the industrial park. Um is are those those are costs we would pay for in any development for anybody that came in. Yeah. Yep. But because there's the potential for tiff we could reimburse ourselves for that. Right. Actually if they were a low water user the cost our cost would be higher. I don't think they're a low water user. No if if a different use men that use less water, the city's costs would probably go up. So, the water portion of oversizing that we'd be paying out of the water fund, and this is just cash out or reimburse or a credit given to fees that they have due. Um, but the net cost to the water fund would be a little over $70,000 and sewer would be uh over $191,000. The other item that would be eligible is to reimburse ourselves for the connection fees that we waved for the site. While we are still collecting what we would normally expect to get off that same acreage for typical uses in the industrial park, we did wave um for that specific use a little over $3 million on combined water and sewer fees, almost $3 million on water and $140,000 on sewer. And you can see there's a big disparity between the two funds. So as we were doing our uh fiscal analysis uh there were a number of assumptions that we made. Uh one we have to point out that we are using year end 2022 data because year end 2023 data is not available. So we're still projecting from year end 2022. Um we used lower conservative assumptions regarding tax increment collection. So we used the bottom end of the range that was presented by Rebecca. We included assumptions for costs associated with upcoming developments. more of these oversizing costs, things like oversizing of pipes, lift stations, force lane, etc. The assumptions we made are for projects that are currently in some level of discussion, which is Park I35, Parkway Meadows, which is just north of City Hall by August Ventures and um Peasant Hills. We updated our development assumptions and we included that service associated with the old new market reconstruction project because it has sewer and water debt service associated with it. And then we include or mostly water and then we included plan future major capital projects the new wellwater tower and treatment and those are already included in the financial model for the utility funds. We also used conservative assumptions related to revenues associated with Niagara. So just to re um for the viewing audience and for the council to just uh provide an explanation of the charts that we'll be providing. On the left hand side it shows the balance of the reserves within the fund. On the right hand side it shows the number of uh new connections and platted units that would come in during the year. What we're really looking at most is this blue line. This shows where the projected fund balance is um for uh either the water or the sewer fund. In the water fund, you'll notice this orange line coming across. This is the minimum fund balance we're contractually obligated to maintain or try to maintain within the water fund because of the loan we have with the public finance agency for the water treatment plant. And then we also have this purple line and that is the minimum fund balance we want to retain under our own policies. Any questions on that? What you see here is the updated um the model with updates without Niagara, without any tiff collection. And what you see there is that our fund balance in the water is projected to be essentially flat with potential in the future for that to start to grow a little bit out in the future as we have some expenses potentially drop off. Normally what we're looking for in a healthy water fund is we are collection collecting development fees like trunk fees and connection fees and base fees to help pay for infrastructure costs. And so we want to see this line going upwards showing that we are collecting those fields, those fees and building those reserves for what those fees are intended to collect. You notice that the water fund is not doing that although it does start to go in that direction out in the future. The sewer fund does move in that direction. We need to point out that we are looking at that fund um dropping be it being below and drop staying below at least through 2025 below the minimum fund balance we've called out for in policy but it is projected to grow in the future as we move forward. So if these are what we would call the clean or the base assumption um presentation is everybody I'm with that okay so moving forward we're going to move through various scenarios. So scenario one would assume that we would be collecting only for reimbursement of infrastructure costs. So that would be that $262,000. Given the fact that the estimated total increment, it would be $430,000 a year. You could conceivably collect it in one year. Now in reality reality, as you know from when you may have built your house, there's partial tax payment in the first year. So there would only be partial increment collection. For simplicity of presentation of the concepts, we just assume you get full increment year one, year two, year three. So Tom, with that amount, why would we even have to I I'm certainly why would we even have to get tiff? Because the property taxes that are going to coming in are going to be sufficient. Well, the property taxes don't go into the water and sewer funds. So, one thing that we need to be clear is tiff allows us to redirect those new property taxes to the water and sewer funds to pay for eligible costs. um where normally we would not have the ability to do that. We wouldn't be able to transfer from the general fund to Okay. Um but based on the amount of increment you're collecting, it would be a very short payback, so to speak. Um if all you were collecting for was the infrastructure. Now, what does that look like when you actually plug it into the model? Um up here in the upper leftand corner, this is the clean model. There's no TIFF, no Niagara. Now understood we don't get TIFF unless there is a Niagara or another industrial user but we wanted to be able to isolate the impact of the TIFF. So we at this point in the upper right hand corner we haven't included any of the revenues or expenditures associated with Niagara and you will see that while there is an impact it's barely perceptible within the scale of the whole fund. But if you think about it, we're only collecting $191,000 at one time and within the entire fund. Well, $191,000 is a substantial amount of money relative to the entire fund. It's not enough to change the trajectory with regards to the health and um the financial position of the fund. Any questions on that? Now when you look when you include Niagara, what you find both with no tiff and with tiff because there's such a little impact is that the revenues from Niagara basically wash out any impact from tax increment collection at those levels. So at the highest level, you can say that the collection of tiff for water, while it's a substantial dollar amount, is not going to have a significant impact on the long-term health of the farm, positive or negative. The bigger impact is just simply the revenues that we would be receiving from Niagara. Any questions on that? Okay, John. Oh, I was just going to reiterate for my own brain. There is no difference. There is no benefit to do a TIFF then based on the water fund because we're going to get enough revenue from the water fund anyway or revenue that tiff wouldn't add any value. the the relative I heard you say if you are reimbursing for only the infrastructure costs the dollar amounts relative to the fund it's negligible and when you put it to scale now if you're looking at sewer you'll notice that tiff does have a noticeable impact although it's not substantial for collection and that reason for that is you're looking at $191,000 in a fund whose scale is smaller than water. Um so there is an impact but it's not you're not the line isn't going you know all of a sudden going straight up. Um you're seeing a small improvement and you'll also notice that once you include revenues associated with Niagara and the sewer revenues off Nagra are smaller relatively speaking to the water for obvious reasons. You'll still see the same relative impact, but the overall health and trend is going to be much much more impacted by the revenues from Niagara than it's going to be from any tiff collection if you're only collecting for the infrastructure costs. Any questions on that? Okay. So, what if we did a three-year reimbursement? And the reason that we looked at that is if you're doing a three-year reimbursement, that means you're not collecting the full tiff in any given year. and everybody starts collecting some taxes right away. And the amount of total increment you're collecting is relatively small. So, as you can see, the city, while it might not get 192, would still get $153,000 of increment coming into the taxes. So, we presented this scenario. However, when you put it into it, you kind of have the same results because you're you're taking the same amount, you're just splitting it out over three years. the relative impact of that on the water fund and on the sewer fund is relatively small um just because of the total dollars you're dealing with relative to the overall fund. Any questions on that? Okay. So, what if we change it up now? We're just going to collect only for the waved connection fees. Now, we're not talking couple hundred th a few hundred,000. We're now talking $3 million. So the dollars go up substantially. The difference now though is that neighbor if you're going to try and collect for that full amount and you would have the capacity to do it, you're also giving up for all of the jurisdictions that new tax base for seven years and partial in the eighth year. Um so any questions on how that would work? Okay. So what does that mean? Well, question. It goes back to the expense of the So, how does that the expense of the waving of the of the connection charges actually hit our balance sheet, so to speak? Doesn't those funds just not collect? We're just not collecting. You're not writing any checks. There's just not. So, in effect, what collecting it would do is provide a substantial infusion of revenue into the reser for the reserves of both. I just wanted to clarify what I was thinking. Yep. Um you're thinking correctly, Mr. Mayor. Thank you. Um so if you look at the water fund, you do see a very notable um impact financially for the fund um even with uh under including the revenues that you would have from Niagara. So when you start talking, you know, $2.9 million, it has a significant impact. Um the question of course is the trade-off though is that you are redirecting for 8 to nine years the new tax revenues that you would be getting off of the property. So you start having to make a decision now of is it in the best interest to have that kind of infusion into the utility funds to be able to u make the funds more resilient and give you greater capacity for rate control or rate adjustments or is it better to have those taxes available as taxbased growth for the positive tax um you know property tax impact that it would have. If we look at sewer, because the dollars are so much smaller, you're only talking $139,000. Again, um the relative impact just gets is relatively minimal. So, if you're looking to do it for connection fees, don't you're really only going to see the bang for that collection. The greatest impact on the water side, you're really not going to see it as much on the sewer just because of the dollars involved. Okay. Now, when you took a look at scenario two, well, what if you didn't collect what if you didn't want to try and reverse yourself for all of the connection fees that were waved, but you only wanted to do it for a portion. So, essentially say, we're only going to collect half the increment for the maximum amount of time that we could. City would still receive close to $100,000 um when the property's at full property taxes and the other jurisdictions would also receive 50%. So, you would still see the taxes, but at that point, you're only collecting $1.8 8 million, not 2.9 in the water. And rather than $139,000, you'd be collecting 96 everybody. Okay. Now, when you look at the impact, there is still an impact, but it's just more muted. Um, on the water side and on sewer, again, it was barely showing before. It's still it shows even less here. So, again, the biggest return would be if you collected it for the water fund. And of course, um, you're still giving up half of the property taxes for the life of the TIFF district. Um, so we ran the numbers again and I'm going to start moving quicker through because you guys can see the themes that are emerging here. What if we were collecting for both? We would have the capacity potentially to collect for full reimbursement of both of those things. The charts are going to show the same thing that they showed previously. um there would be a notable impact to the water fund um for the collection, but you'd be giving up all of the property taxes for the life of the all those new property tax for the life of the tiff district. Um and on the sewer side, uh would have a limited impact when you're looking at a high level relative to the health of the fund. Um and then we looked at partial collection. Um, and it's going to be the same as previously. So, I'm just going to buzz through that. So, when we get right down to it, what conclusions can we arrive at? One, the use of tax for reimbursement of infrastructure under connection fees would result in substantial amount of revenue. So, even if you're collecting $300,000, $300,000 is a lot of money into the utility funds. However, when you're evaluating the impact on the overall financial health at scale and the trends within the funds, um you can interpret it a little bit differently. Uh the impact of the reimbursement of infrastructure is limited just because of the total dollars that are involved. The impact of the reimbursement of the connection fees does have more impact. It's notable for water, but it's limited for sewer. So the council really needs to determine whether the greatest benefit is putting the emphasis on property taxes or revenue for the utility funds at the expense of collecting those property taxes in some portion for some period of time. And when you are thinking about it, you might want to consider the following. What are the future needs of revenue within the general fund versus the sewer and water fund? So we've shown you what we're projecting for expenses around utility fund but we also know that we just authorized utility projects which require substantial amount of advalorum taxes going into the future. what is going to be the impact to the other taxing jurisdictions under TIFF? They don't have a choice, but as good stewards of public dollars and relationships to those organizations, this would impact school districts in the county. And then if tax increment financing is utilized, you need to consider the ratio, what percentage of the increment you want to collect in the term. So that's staff's presentation. In short, I don't think that there is a right answer to this. It's a policy decision about where you think the greatest benefit to the public is going to be, whether to collect the property taxes mostly or in full or whether or not you want to divert any to the utility funds. Thank you, council. Who has the first question? I have a few questions and comments, but if anyone wants to go first, is yours. I know. Um, so I see this as reimbursing ourselves for the subsidy we gave Niagara and Ner is a multi-billion dollar company and I see this is taking away from the county and Lakeville school district and I'm personally not okay with that. So I'm strongly against it. Can you clarify that a little bit more because we're not because we didn't write a check or anything to pay anything, right? But in that presentation and actually in our packet um doesn't it mention and didn't you mention Tom that it would be kind of reimbursing us for the connection fees that we waved? And that's kind of why I asked the question I did because you kept saying reimburse but we didn't spend anything. So we're not really reimbursing. Correct. It was we we didn't spend anything. We just chose not to collect but we could collect through another means now if we if we wanted to or felt we needed to. So basic so in a well right. Yeah. Yeah. But the difference is Niagara is a multi-billion dollar company and our well Lakeville school district is hurting right now specifically. So I just well nothing we're doing now would impact positively or negatively Niagara. They're not part of this deal at this point. It would really be only for the city's purposes and for the general taxpayers or rateayers. So there's no benefit to Niagara in any way for us to set the tiff district at this point. I'm just looking at it from the big picture and um I know I wasn't a part of the council at that time, but I can't justify um a tiff based on our previous decisions. So um I'm at a that's how I feel right now. But I just want to be clear. So we've already authorized the subsidy y to Niagara. That's That's done, right? Niagara doesn't benefit from this whatsoever. No, but they benefited from w us waving over $3 million, right? But that's that's done and over with. So reimburse ourselves. It's to improve the health of the funds. I guess I just I'm wanting to make sure there's that clear distinction. Niagara doesn't benefit from this in any way, shape, or form. No, but they did. And I feel like this is to reimburse us for that subsidy in a sense. So is in your opinion is this kind of almost a referendum back on the subsidy discussion rather than today's press? No, it's connected. In my opinion, it's all because I mean it we would collect it to reimburse ourselves for that fee that we did not collect at that time which could have been substantial for our sewer and water funds. But at this point by not doing it I guess that what I'm losing the connection is that we're not like Niagara is not benefiting. This is just a way of we can collect some additional revenue to supplement our funds. What would we use that money for then? It didn't seem like it made much of a difference. Well, overall, what it would do generally speaking, it would increase the reserve levels within the funds. So, the funds would be healthier. That would give us greater ability to be resilient if there's negative financial impacts to the funds or and or give you greater ability to control rates and or possibly adjust rates in the future because you have those because you have those dollars coming in. And I'm not picking on you. I'm actually kind of against this as well, but just for different reasons. I just want to make sure I understand yours. Yeah. Are you going to change topics? Because I was going to piggy back off that one because I I see it the exact same way. I I see it as if we thought these these fee if this money was valuable now or then, we should have just collected it then instead of waving it and now collecting it. That's where there there is that connection of if it was that important, we should have just collected it because we justified it. I justified it as we have one pipe going in. We don't have all this cost. That's why we could reduce and wave those fees and that's why we waved those fees. So, it feels like I'm going backwards on that justification now saying how beneficial it would be to have those then that same argument should have held up back then if I made that decision again. Yeah. And but further though it is actually going to impact Lakeville school district and the county whereas if we would have just collected the fees then it would have been impacting a multi-billion dollar. I do need to point out that's based on the assumption that Niagara would have come without that incentive. Um because if there's no Niagara then there's no new taxes. So I would point out that that's a kind of a it's very hypothetical like this would have happened if then um But your point, Gina, is that really the county, the other districts really aren't going to see any benefit from this for a substantial model, right? And what happens if I'm just saying if the industrial park or Niagara is not successful 10 years from now, do we just lose that tax base? I mean, well, regardless of whether a business is su successful, there are taxes applied against the the property and they're either paid through a number of means either paid by the building owner. Um, they may be paid by the bank if the bank forecloses on the property and if they go tax forfeite, the property gets sold and the tax those back taxes get paid and if it gets sold to somebody, somebody's going to do something with the property and they're going to pay taxes as well. So, I don't know that that's as much of the issue, but I do think the point that you're raising, Gina, about if we capture those taxes for our utility funds, nobody else is getting them. And that's that's a very clear policy decision about where's the greater where's the greatest public interest in good about where those dollars go. Yeah. And I don't know if you guys are all on top of it, but Lakeville School District is really um having a lot of issues right now financially. So, um I I just don't feel comfortable with a tiff, but I'm open to conversation. Anyone want to Well, I'll just I'll speak. I mean, my my objection is purely I just want all the money to come in on property taxes so we can control the levy. I would agree with you, Joe. I don't want to see the school or the county. Well, first of all, school for sure because yes, you are correct. They're in a world of hurt right now and uh I think they need as much money as they can get. Sorry, my speaker's not on. And uh as far as the county goes, we take that money away from them, then they're just going to increase their taxes to us and we're going to end up paying even more as citizens. So, I 100% agree with everything everybody said. There's no impact to the water, no impact to the sewer, all the negatives to the county and the school. That's going to lead to higher taxes anyway potentially and for the same reasons we talked about with the reimbursement side. And I just want to say this was the first time I understand TIFF. Like so thank you. This was awesome. I get it. I agree. I agree with you though. It's gonna be in the minutes multiple. Amanda, you gonna make the case for why we should do this? Yes, I am. Excellent. No, but is it fair to say also like I like Josh used the term stealing from the the county and the schools like aren't we also sort of taking money from ourselves too to redirect it elsewhere. So there's a potential negative impact there too. Yeah. Redirecting is probably a better word than stealing because Yeah. Yeah. But yeah, we are I mean it it that's why I said there when I was going through especially after we went through the financial analysis which we didn't know what the answer was going to be until we completed it is there isn't a right answer. Um it's clear though that if you're going to have a meaningful impact you are reimbursing yourselves for the connection fees and you're maxing out or you know the the tiff district but that means there's no positive tax base growth associated with that for almost a decade. Um and there are also and that's where staff was suggesting you have to look at what the needs are within the funds. If having the tiff in the first place is you know predicated upon Niagara coming and if the cash flow and revenues associated with Niagara is sufficient to meet our needs in that fund are the needs in the general fund property tax side greater and that's really and that's that's the policy decision. Um, and you guys are very familiar with the budget and what our needs are going to look like over the next, you know, the next three to five years. So, are we at a consensus where no one's really in support of this? Yes. Yeah. So, yes, but are we naive? Because I'm sitting here looking at the league's thing, TIFF is the most important tool available to fund community development and redevelopment efforts, blah blah blah blah blah. like it feels like if this is such a powerful tool. I mean, it's just that's one perspective, but I think that's I think there's different reasons to use it though where it can be powerful. If we're bringing in a bunch of jobs, if we're trying to incentivize a big business to come here that's going to provide a lot of then it really is. But in this case, I just Yeah. I mean, I don't I don't believe it is a good use. I wouldn't support it, but it's just like what am I missing? Because I mean, and it is stealing. I really do think it is stealing from taxes that they otherwise should have could have had. Except we're saying no, you can't have it because we want it more. We need it more for nine years and then you can have it. So I mean it is that. Um but no, I mean we're all consensus. I just trying to make sure I'm not making a stupid decision. Do you have direction? Yeah. So let's go on to reports administration. um discussion regarding municipal cannabis dispensaries. We provided an update for council. Um long and short uh where this has evolved to is that the state is continuing albeit in a very hazard jerky fashion moving towards implementation of the statute um sometime later this year and early 2025. uh they are a little befuddled because they don't have a director for the office of cannabis management at this point. They're using an outside contractor to basically set it up for them and there but they're still under a mandate to move forward. So that's made it rather difficult to get answers to a lot of the big questions we have which is where do cities fit into this position? How does it work? What's the process for licensing going to be? A lot of those, quite honestly, while we're starting to get some generalized responses from OCM, um, Office of Cannabis Management, they're still not fully defined. They're still in the rule making process as well. Um, as a result, uh, cities have tried to figure out, they don't have clear answers to be able to move forward and make decisions. where we are today is that uh OCM is indicating that based on their interpretation of the statute and I can't disagree with it. Um cities would be treated just like any other private lency that would be seeking a license in the process. If you guys recall from your briefing on the statute there are what they call uh sea applicants or social equity applicants. These are people that check particular boxes within the statute who will be given priority. currently the way that OCM would be interpreting it and the way the statute is generally written cities would stand behind that and we would sit with any you know ABC cannabis that would be applying for any eligible licenses if there is more applicants than there are licenses whether you're talking about pri sea applicants or general applicants or a combination of the two they've indicated that they would do some sort of a lottery type system where it's luck of the draw whether or not you get So, hypothetically, if the city had one license, if there was an SEA applicant, they would and they checked all and they checked the requirements for the license license requirements, they get the license. If there's two of them, they draw names out of a hat and the city doesn't get a license if we want it. If there's no SEA applicants, we would be in the pool of having names drawn out of the hat, so to speak, with anybody else that puts in a license. So, there is that. Um, so the question would be if you are looking to pursue it, are you okay as a city just being one of multiple licenses within the city? Does it make sense? I know we know that some of the larger cities are looking at it because there may be a market large enough that they can have a, you know, a cannabis dispensary next door across the street from their liquor store and it's an additional revenue source. But in a community our size, there may only be the market for maybe one lency, hypothetically. So if we wanted to have a default monopoly, because under the statute, there's only one license required for communities under 12,500. Um, and we would likely be under that population for a long time into the future. According to new projections, could be 20 years, um, we would have to reasonably we would want to be higher in the priority list. So, we'd either want to be at least equivalent to SEA applicants or maybe in front of SEA applicants. That will require a statutory change. Because of how things are slow getting out of the gate relative to the current legislative session, we would have to reasonably lobby somebody to amend one of the existing pieces of legislation that's going through to make that change in statute to provide that priority to municipalities. Um I would not recommend making changes to the population requirements just that if a city has an application for one establishment you get you go to the front of the list basically and then other people can seas and everybody else would come after on the same priorities that are identified today. What we're finding though from a level of interest is that cities as a whole are just starting to think about this. the distance that we are down the road about thinking about this topic. We are at the very pointy prick your finger point of the spear relative to other cities in the state. There's only a handful of cities, smaller cities that even really thought about the issue to any real extent which means then they haven't made decisions about how pro where they want to go with it or how proactive they want to be or whether or not how aggressive they want to be about it. In an ideal world, we would work to build a coalition of people that are interested in this topic, and we'd go to the legislature if there's enough support to get legislation changed and lobby for that change. We don't have time to do that. Licenses will be issued before next year's legislative session, and that window will have completely closed. Um, if we're looking to for that default monopoly position um to do it this year, there isn't enough time. We may build people later, but there's going to have to be a handful of cities that are going to really pull the sled on this, of which Elco New Market would probably be of the one, two, or three that are really facilitating it. With that realization, Brandon, who's our internal specialist on the topic, and I have talked about it, and we believe that it's going to be I mean, it's legal. It's okay. Um we're it's going to be resource intensive. Um and so we felt it would be appropriate to come back to the council and basically say given where we are today, where are we at as a city and what type of priority do you and direction do you want to give to staff on this particular topic? I'm a hard pass on pursuing this further, but I might be in the minority. I'm a hard pass. Oh, I I I would like to relatively put it or put it in relative ter I don't think it is that big of a lift. I need language and we need to get Port or Stevenson to amend it onto the period. That's it. I need one paragraph. We don't need support of a gazillion other cities. We just need them to stay neutral essentially. And and so I I mean I think it's a no-brainer. We give it a shot and if you don't get it and we don't get it amended on, who cares? Then we're right in the same spot we are right now. Fast forward few months. Um, and that's an easy lift. So, if you can give me language, I can get it to port tomorrow in Stevenson tomorrow and we could look at something if the council was interested in being that frontal about it. And that's fair. That's the key. I mean, but that's the key. Do we want to be that frontal about it and carry the language and push the amendment? Well, and that's fair. If if if you think it's going to be a major lobbying effort to get that change, it's more resource intensive. if you think it's um something that is the authors would be receptive to to amend it and Josh is absolutely right if it is really just creating the language and getting somebody to get it in the bill and champion it and get it across the finish line. Yeah. And it could be quiet too. I mean this could be the most vocal we are about it and we get it in a conference committee we get added in. I mean, there's ways to do it where we're not having hearings and testifying and whatever, but again, we would have to I support that what Josh is saying 100%. And part of it is because I think we need to I think it's safe to assume that if we don't do it now, then we're probably going to miss our opportunity. Um, and I also think that the it we can look at it also as having a municipal dispensary. It will benefit the entire community. um the entire our tax base, the entire city versus one um business owner. So, I I just I think it's important to do it now because now is the time. Um and I think it would be a huge benefit to our community and I think that it's going to come whether people like it or not. So, it's just a matter of is it going to be city-owned or is it going to be an individual owner? I'm all for cannabis. I just don't like private businesses and municipalities competing against each other. I just I feel wrong. But I think it's fair to point out that this is just about the legislative authority to do it or they preserving the opportunity. They're still the whole business analysis side of it whether it makes financial sense. So, right, Mandy, you're kind of the tiebreaker here. Yeah. So, I'm going to stick with my side of the room here. Okay. Fine. No. And well, and I guess I would just add too, I mean, even if it doesn't pass, I've talked to a few different lobbyists, law firms up there on a variety of different topics, and they're one of their arguments is too that even if cities don't get a a defined preference, there's a lot of reasons why we could justify for that sea type of argument for the community that we serve. and and there's there's other ways that we could probably start to compete with some of those applicants. Um so there isn't the the fear that cities won't have be able to to reach that threshold even if we don't have it in statute that allows for it or calls for it. So well let me know if there's anything I can do to help you Josh to um lobby or move it along. I see the language or even tentative proposed something. City attorney's office has indicated that they would be able to draft something that we can send to the revisor's office to draft something to give to an author. And then I can get it to to Senate Council and House Council and we can get amendments drafted up and you could maybe send it out to other cities that you think might be interested and yeah, we could sh get support and co-sign or whatever. If that's the direction, what we would do is we would circle back with the people we've been communicating with and just say, um, we're just doing this, guys. Um, we'll continue to work over here, but we're just going to we're just doing this over here. And I would expect the League of Minnesota Cities and Metro Cities to support an opportunity for local control in all of this. When we argue local control on basically every other topic, this seems like a a good theoretical just for local control to have the option to be that first tier or, you know, I would even argue cities should have first right of refusal and then it would go to, you know, uh, SEA applicant and then it would go to everybody else. You could push me on whether I think it should be equal or city gets at least one and then there maybe has to be another one. There's compromises that we could be making along the way. Um, we can look at the tax revenue, too. I mean, I feel like it we could use it. It would benefit us. Well, I don't want to get too far ahead of ourselves. I mean, right now, the direction that staff is looking for is is this something to keep working on? It sounds like Yeah. So, I'm trying to remember how this transpired in the past when we did it for the racetrack and the liquor license out there and got special legislation for that. Do you remember that, Tom? That was pre, was it? Yeah. I feel like the city needed to adopt a resolution requesting the language change. Um I wonder if that might be necessary. I don't think so because this isn't specific to our jurisdiction. Okay. Um I I would agree with Josh based on we need we need something language for somebody to just push it through for us. So and then do you even terrible language something to get in there and we can fix it certainly. But do you at some point in time do you are they going to want uh something from the city or um so the whole city's behind this and not just you bringing it to them? I don't know like a letter of support or sign off or whatever. Yeah. I I think it would be in in my experience and Josh has a lot of experience but one for instance when scale has done things like that um they the legislature will tell you what they need to justify them carrying it for you it may be as simple as you know they trust that Josh is saying nope this is something that our city is looking for and we think it's a good idea and they're amendable to it they're a legislator they can choose to amend their own legislation or whatever we're simply we're making a request of them with the idea that all this is doing is allowing cities to have the opportunity to consider it and be a top tier. Not that we we Elco New Market are moving down that path. We just want to keep it open as an option for all cities so they can be guaranteed to get a license. Anything more on this? I think we've got sufficient direction, Mr. Mayor. Okay. Next item. uh discussion uh regarding policy position uh regarding the preemptive housing legislation. So the council's uh fully aware that over the last multiple sessions um municipalities have been pushing back against uh various pieces of legislation which sought to basically um undermine or simply eliminate uh the city's ability to do land use planning um especially with regards to housing. Um in the current legislation uh legislative session, the legislation is starting to coalesce around what would be House File 409 or 409 which has started to include other preemptive housing legislation in the same package. Um it includes a number of things which are very scary so to speak from a city standpoint. Uh examples include that developers would have the ability by right to just put multif family housing into commercial districts. So aside from the ability of whether or not the infrastructure in that area is appropriate is set up to be able to handle that there's also it would allow somebody to simply come in and put all of our commercial property could just become multif family housing. So it has impact for um tax base, tax base diversification, ability to provide goods and services in your community, etc. Uh there's elements which limit the city's ability for parking. So you can only require one parking space per unit for housing. So, hypothetically, I could put up an apartment building with 50 apartments, all three-bedroom apartments, and I'd only have to have 50 parking spaces on my site. So, where does that go? Well, they're going to go on, they're either going to go to adjacent private property. So, if it's near a commercial area, those tenants will start taking over the parking lots of those commercial users, or it's going to go onto the public streets. Our streets are not designed to be able to accommodate it. And once we start accommodating it, not only does it impact our ability to maintain the infrastructure, snow plowing and all that kind of stuff, we've designed our streets and require off- streetet parking so we don't become, you know, Minneapolis or St. Paul where you have parking, you know, snow parking and all that kind of stuff. Um, but also then that becomes shifts the cost for providing that parking to the general taxpayer, not the development that created the demand. Other examples would be that within um residential areas by right, you can basically create multif family units, so twin homes. So the house next to you, somebody could just come in and remodel and turn into a twin home unit. Um no height restrictions. So, uh, I could come in and I could tear down the house or that house burns down, I could come back and build a four-story building, um, on that height restriction, maximum 150 ft. Um, so there's these types of things which are rolling through which have really big impacts to a large degree. It just says, why don't we just take our comp plan and just throw it out the window because there's no land use planning anymore. and it creates no expectations for anybody that's moving into a neighborhood of what that neighborhood is going to be or or or look like. So, those are just a few things that are in there. In the past, the council's been supportive of um efforts to push back on that and has generally authorized uh the mayor and the city administrator to participate and undertake whatever they need to do, whether it's signing letters, showing up and testifying at hearings, participating in meetings with legislators, whatever it is. um generally. So, it was a little bit of a use your best judgment type of uh thing. However, given that um the uh discussion on this is intensified and the lift is probably becoming greater with this session, um uh the mayor and I felt it would be good to bring it back to council and kind of get feedback again as to what we're authorized to do on behalf of the city, where the touch touchstone again as to where the city's position is on it. So, I've I've been active already on this. I've talked to our legislators. I've talked to Patrick who is writing a story on it. I'm scheduled to go on the radio on Monday. Before I go any further, does anyone have an issue with me doing? Is anyone supporting this legislation as it's currently? So, y'all are Josh, if you have a minute, that's cool. I was just getting Lindsay Ports already. I know. No, no, no. I'm hearing you. Is everyone okay with us pushing as hard as we can on fighting this? Yes. Cool. The only caveat I would say is we pick our battles and what do we want local control over? What do we need local control over? Not just say we need local control over everything because we all do that far too much as cities. Is that just a general comment or is that specific? specific and because there may be pieces in this legislation, I haven't gone through it line item by line item that might make some sense for compromises. Really? There could be like you think of some of the the Do you think we should material hearings and comp plan? No, no, no. But I'm not saying everything is great. I think most of it is stupid, but there are places for compromise. And I think that's where we as cities and the League of Minnesota cities and metro cities are notorious for this. We say no to anything that touches local control. Period. I I think you're right conceptually, but this is a crap bill. I'm not saying it's not. And it's not going to end up being this way. It's not going to pass like this. It will. It's already being amended. It's already getting cleaned up. It's already removing a whole bunch of stuff and they know that. They know it has to get better. So, I just we just be smart about we oppose the stupid stuff. Okay, that's all I needed. Let's move on to the next item. uh commissioner appointment process. So um we had three commissioner seats that were up. We had one on the parks and recreation commission and two on the planning commission. The only applications that we received and we received application from all the commissioners that are in those seats. They're all seeking reappointment. The question is given that do we want to just reappoint? Do we want to interview them? Do we want to ex do we want to reopen the position and repost? How long was the posting open for? Like three weeks. I favor just reappoint them. Me, too. Anyone post to that? Amanda, you okay? So, we're good. All right. Is there anything additional for public works? Um, no. Everything uh notables contained within the written report. Okay. Police. Uh good evening, mayor and council. Uh a couple things. We haven't had a chance to meet kind of discuss um the tragedy that happened in Burnsville here last month. Um Officer Adabo and myself went to the funeral. It was very moving, amazing, largest funeral there probably ever will be in Minnesota. Over 11,000 people. Just recognize our response to that, the community's response. We've gotten a ton of love from the community in form of food and everything that really hurts our waistlines as I like to point out. Um, but it is greatly appreciated. Uh, the Burnsville Police Department is looking at losing their 88 officers now and they obviously lost two, but 10 were on that day and possibly not coming back additional. So going from 88 down to 76 officers. Um that's going to be devastating to them. We're already super down on officers. So just locally the impact is going to be felt for many years. Um everybody else the impact to everybody else. I just want to drive that home when something happens. uh um Egan, Blaine, all these other agencies sent dozens of officers to help cover calls while that was going on. So overtime costs impact all these other departments. Um uh Roger D, the chief at Egan said they took over just the investigation division, so they didn't help with patrol. During that time, they have um in week following, they had five overdose deaths that they had to investig just nothing stopped in Burnsville when that happened. So just the impact to communities is so great. The impact to the state um the loss is horrific. So that impact I just want to drive that home. Not that all of you don't understand that but the ripple effects are huge for all the communities around when that happens. Um as far as our staffing uh we excited we have an interview tomorrow that So you could make it, Gina. But um we're we had one applicant um from outstate North Dakota. That applicant in one week became or went from non-eligible to eligible. So we're excited to interview him tomorrow. Uh has family connections. I thought kind of the funniest thing is I've actually met this candidate before at River City Days two years ago. Um, I didn't remember, but I remember the conversation because he was so excited. He spends his summer vacations in Elton with his family because they have family here and I just thought that was so awesome and when they saw the ad come up that we're looking for an officer, they wanted to be part of the community. So, I thought that was very cool. Um, so I'm hoping that works out, fingers crossed. Uh, if everything goes well where they interview well and it's somebody want to bring to our community, we'd be looking at about two months before they actually start. Um, so we're very excited about that. Uh, that will bring us to our eighth officer and then we be fully staffed using our legislative public safety funds that were given to us. So, we're excited about that. Uh, almost a month into our new schedule, we've had zero gaps in coverage. The flow has been great. The extra staff has been great. Um, you've probably noticed new faces around more at different times. So, Um Josh Gar um has taken over the other day shift. So you'll see him more. He's super excited about that. Making the adjustment to the family and kind of his life in general. And just to give some perspective, he has for 17 years in a row worked night shifts, um afternoon and evening shifts. So to get a chance to go to the day shift is pretty lifechanging for him and we're very excited to have him around during the day. So the impact of the new schedule public safety funds has already been felt and with that I haven't been at a meeting. If there's any questions or anything like that we can address that but other than that I can be done have questions chief engineering no report. All right. Community development parks. Anything to report on CC just my usual advertisement for the next event. Um March 23rd is the Easter egg hunt. Um you can sign up beforehand. Um but yeah, it's going to be a good time. Do you need more volunteers for help with that? We always need volunteers and help. Okay. So, if you want to join us, I know as far as like setup and stuff, it'll be 8:30, 9 o'clock that day. And then the the egg hunt happens at 10:00 a.m. sharp. And it I mean, it doesn't take that long. And then everybody scadaddles out of there usually pretty quickly. Did you hear there's going to be a foot of snow? Stop it. If there's a foot of snow, it'll be the egg hunt will take a little longer. Bring a shovel. That's all I got. All right. Other reports. Um, scale. I honestly was kind of half checked out during the meeting, so I don't really have a big report to give you. I was just I don't know. A lot of my other colleagues in scale were all kind of texting and talking more about this legislative stuff. So, sorry. I don't have a great report. You have anything for scale? Um the big presentation by the county there's a shortage of housing because everybody that's having market um the value specifically website if you want to go through it. It's pretty self-explanatory when you go through it. It's good information, but nothing any service delivery I35. That was this morning. Uh commissioner from INDOT was there. um she gave a presentation just on General Mindot, the whole story of all the different things that work together to direct them on why uh why um our funding probably never fits into the priorities. Um but it was a decent discussion. Uh the presentation will be posted on the website, so I'll send that out. No meeting in April. All right. Uh discussion by council. Anyone have anything? Motion to adjurnn. Second. Motion by Josh. Second by K. All in favor? I I. Thank you everybody. Good meeting.