“My concern comes from page three and it's the line the board requested allowing for community space for the city council to have office hours at the lab and um two things one I know last year we did have a dialogue about changing the way we did minutes so that they would be more in line with the way Minnetonka does um we have not followed through with that and in minutes for both the HRA as well as city council um we are a block this sort of generic the board.”

“It is a B Corp also that spaces in a private office building um we are and I don't know if we are going to be paying rent to do that so there's you know that could be a problem but if we're not paying rent that could also be a problem because we're my understanding and I thought we were going to have documentation about the loan um renegotiation.”

“If I meet with somebody at Jerry's which is a private business do you are you do you disapprove of that I do not this is a different kettle of fish because this is making it official that this is our official space for City Council Members to office out of.”

“I think some of the issues with the word to office as a verb I think we understood that as a place where you might uh come in and uh sort of sit down for a couple of hours and and you might meet with people you might not it depends who wants to show up but it you wouldn't have it wouldn't be an official office it'd be a place where you could uh meet people for official business if you wanted to.”

“This is a piece of property that has a value it's in a desirable location uh as we all know we've uh looked at a number of different creative proposals over the years um but so far nothing has been built um uh we would staff would recommend that we um get this property back on the marketplace find new developers and uh or single developer however that might work out and move it forward uh to bring in the revenue and actually monetize this asset and return it to productive productive use.”

“With creativity comes greater challenge comes greater delays uh and uh we think it's in our best interest to move this forward um so with that in mind I'll I'll start getting to the uh to the questions and then happy to have the conversation at the end.”

“It's also um a challenge to have confidence that this that the sale actually gets closed I think we are all disappointed including the developer when the senior Co-op project wasn't able to move forward uh and we've we've uh found ourselves in that situation on a handful of occasions pick a developer seem like a really creative idea a good idea we put the numbers together spend a lot of time and uh and typically other people's money but then don't execute the sale don't get anything built so as we consider um moving this this Pro this project forward uh the best way to to get the sale to close is to be as clear as possible upfront what our expectations are try to root those in reality so that a de developer can actually achieve that and then get it moving.”

“Do we want to stick with a mandate that it be ownership or is it okay to say we strongly prefer ownership but would accept or at least entertain offers for either a combination of ownership and Rental um or um when we left off last summer the the consensus seemed to be any proposal that came in as all rental would just be not that would not be considered um just wanted to test the waters and see where where we are in 2025 um because that's that to me is the biggest question about the site is that how deeply are we in the in the ownership or are we open to combinations.”

“I gave the order actually to to demolish the building that was on this site in 2011 and since that time we have gone through many different cycles of of how how we wanted to manage the the ultimate Redevelopment of this site and we've tried to be uh tried to be as creative as possible but I think our our record on this site has shown that we we it just hasn't worked um when you think about the what the school district did with its with its land for the former bus barn on the other side of the railroad tracks they made a pretty quick decision they sold their land for $4 million which is was about half the size maybe a little less than half the size of our of our site and it redeveloped and they cashed out they monetized it um given our discussions around budget and and kind of the U the medium term that we're looking at this the sale of this proper property uh could provide enough economic value that we would translate that into our Capital spending right we would take whatever proceeds uh are generated by this put it into our Capital spending that would allow us to reduce our Capital Levy.”

“I really would encourage us not to go down that path especially because as things happen and we've seen this with you know the 7200 site the only thing that can go up there um is what the you know is the exclusive right of the person who has that site plan and so we are zoning in such a way that is so bespoke and so limited and then when things happen and they don't necessarily move forward for whatever reason we're locked into that and I think it makes us really cut off potential Market forces and it pulls things away from you know it pulls away opportunities from other developers and then you you get Tiff and Tiff was raised as a possibility and so if we're doing another proprietary PUD and then granting Tiff money to that so essentially public funds that can only be accessed by The Entity that owns those specific site plans that have been formally embedded in our zoning code I think that's a problem.”

“When this came before the Planning Commission um in the present iteration that we've been talking about they were very disappointed that this was not an exciting idea and so I always keep that in the back of my mind that they were very disappointed it wasn't something special and in particular um one of the things is that we've got that big drop off because the slope of the of the area changes and so one of the criteria I would like to add is if you can use that drop off for part work or something um I would include that because I think to bring in all that dirt fill it in is expensive it's an unnecessary expense.”

“Commissioner Pierce talked about City needs for this property I would like to see the analysis done that shows that this is not a good spot for the fire station intuitively I understand that but I would like to see um you know a a traffic design or something that shows why it's so difficult for emergency vehicles to get over there and get up to Morningside which is the neighborhood that most needs um additional coverage by fire.”

“If we sell this property I'd like the proceeds to go to purchase the land south of the fire station number two that we're building so that becomes HRA property we could use that money to pay down the bonds um I don't maybe it's not one for one but if we can I think that would be good and then we have that piece of land as an H property that we can talk about housing.”

“Can we possibly Zone this ahead of sale Zone it mixed use um and then sell it as that so that's it's not industrial and we don't and and kind of um you know make that decision ahead of time to lower the cost for the developer.”

“We could reone that proactively um the surrounding zoning is pcd2 similar to Jerry's but we certainly could do that yeah I think if we can Zone it um pcd2 if that's you know sort of the thing ahead of time that would lower the cost and the uncertainty for any potential developer and have them come forward.”

“If we rezone it to PCD PCD to sell the site they're entitled to a development that meets those pcd2 regulations so the sustainability policy um affordable housing policy those things would be tough to um tough to require in the absence of a PUD you mean right correct because we can negotiate them into a PUD but we can't require it by right right okay well that's a circle I'd like to Square um because if we can cut down the uncertainty for a developer and get this thing developed and get some cash in our account that would be good.”

“I have really some strong concerns about the reality that our affordable housing requirements are so burdensome that we cannot rezone rezone um to PCD to that we have to go to a PUD and I think we really need to look at our affordable housing policy because this is not um a situation that is sustainable at all we we can't we can't just keep going along this path.”

“I think you know we've had it for a really really long time I remember when a medical uh facility wanted to go up and I supported that when I was on the Planning Commission it was long ago um before manager Neil was here so it it's been a long time and we do need to advance um and so I think we are going to have to be flexible uh it's got to be pragmatic so you can hold me to that.”

“There's a correlation between flexibility on potential use and price because we don't know what could remember rard just ra an interesting uh notion and that is that you know from time to time you hear youand family physicians in Alina now are back talking to each other and they need more space well that that could command a higher price than multif family so it's really hard for me to figure out how to approach selling this especially when we sit with in two capacities you know if we were just the economic development arm and we said okay sell this uh sell this property for the best possible price you can get and then uh the city council has to decide whether or not they're going to permit that that land use uh it's that's a cleaner way in a way but we have to we have to wear both hats so it's a little bit more Awkward not impossible but a little bit more Awkward.”

“My biggest concern is and this is why I was asking the question what's different it's would be so easy for us to fall right back into the same process where we're all asking for things and adding to the project we kind of just kind of just did it saying well we want the pedestrian bridge and I don't disagree with that to have access to the Green Space um I'm disappointed that we don't have what we thought thought we were going to get right that would have been really cool but if we want to sell I definitely agree with whatever policies we have right we need to honor those unless there's some legitimate variants that we want to give uh but we shouldn't retract on those uh but if we aren't and I'll just use the kind of disciplined in this is the outcome that we're going for then we could very easily end up adding little things to it and then still end up with nothing there and so that's where I was going with criteria are there you know sacred things that we want to make sure we honor I think there are some of those things and then I think to a certain extent there are going to have to be things where we may say okay we'll we'll go we'll forgo a particular amenity to get the $9 million to then go do something really great for the community.”

“This chart show or this graph shows the taxable market value of that property so for the first uh on the left side I went back to 2020 um uh it had a very low tax base when it was a mostly vacant Perkins Restaurant um the the restaurant was open but the other three quarters of the building was vacant since they had moved their headquarters years ago when they were when they had to declare bankruptcy so in 2023 um the property sold in 2024 it started to be built and you see this the chart starting to spike and then in 2025 it's measured as being nearly complete and that's when it really makes that tremendous surge upward.”

“The conversion from a commercial space that's subject to fiscal disparities to a mostly residential space that is not subject to fiscal dis disparities so a reminder the Minnesota fiscal disparity law says that 40% of the value of a commercial property is subtracted from the City's tax base and the schools and the counties and it goes directly to the state fiscal disparity pool so that's great for the pool and a lot of the outside communities but it's not so great for us so converting an older commercial space to a newer res newer residential makes a big difference to our uh local tax base.”

“This is also a good example of of why we use Tiff notes rather than putting our money the city's money into the deal um at this point this district is underperforming based on where we thought it was going to be and that's really unfortunate um it's unfortunate for the city's aspirations it's unfortunate to the developers pocketbook not to ours so we're still making payments on the Tiff notes based on the re Revenue that they do generate but the revenue that they're generating is um much much lower than they were expecting.”

“The way we structure those deals that how dorsy writes them for us is we're only obligated to reimburse them for what they create they wanted to create 10 times more than they did they haven't but that's not our problem that's not our risk.”

“When that project was first started the tax base was just over a quar million dollars when the Tiff District ended the tax capacity was 3.6 million and that was 10 years ago so it's only increased since then I just wanted to put that out there um similar story in the Grand View number one District which was the the Condominiums The Office Buildings that type of thing.”

“Over a 7-year period it went from paying zero to right now their tax bill is over 1 .2 million a year because we use Tiff to redevelop that property and get it back to productive use now today that's an active Tiff Tiff District so this bar chart shows that um the topmost bar it's kind of a black on my screen that's the money that's being collected in the Tiff District so that's what's being used to repay the debt to build the parking garages and all all those uh infrastructure items.”

“When the Tiff District expires when all of our debt obligations are paid off that whole value the 1.2 million will get redistributed and that's when the city school and County really see that big jump so we're not there yet um but that's what we can expect um but with this one even looking at the short term um I just I blew up what the local agencies get um the dark blue or I'm sorry the dark green color on the bottom that's the Adina School District so they went from just like everyone else they went from receiving nothing in 2017 we put the property on the tax rolls in 2019 and got a little bit and then the Tiff District started being active and they you know built the property so the dollar amount to the to the schools doubled and tripled over over the years even with the use of Tiff.”

“One other question related to the end of the year and review report at the end you've got other HRA related programs um on page 26 and going forward can are those funded through Tiff funds or can you brief briefly tell me where the funds for these programs come from.”

“I just want to be transparent about when we pull Tiff dollars what happens to it and it looks like primarily that's in the spark fund at this point which has a limited time before it gets redistributed correct correct okay great thank you.”