your password over. >> Yeah. And then my >> mine's a mess. >> Battery ran out. So, >> I have a power. >> I need Katie to get mine set up. May not be here yet anyway. >> Okay, here we go. Well, good morning everybody. It is uh Thursday, February 19th, 2026, 7:34 a.m. And this is the meeting of the housing redevelopment authority for the city of Vina. Uh city council sitting with a different uh hat on this morning. And um we're doing these meetings in a hybrid fashion. People may be watching in remotely and they're welcome to call in during the community comment portion of the agenda. There are no public hearings this morning. Uh and if we have something scheduled for a future public hearing, that's kind of off limits from a conversational standpoint, too. Uh so uh having provided that information uh let's call the meeting to order and uh have roll called by I s suspect our executive director. >> Commissioner Risser >> here. >> Commissioner Jackson >> here. >> Commissioner Pierce >> here. >> Commissioner Agnu >> here. >> Chair Hland >> here. Uh, next is pledge of >> allegiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all. We have a form of meeting agenda that's been published both to for both our benefit and the public's benefit. And um just wondering if anybody has any changes we want to make to the meeting agenda from a staff or a commissioner standpoint. Uh is there hearing nothing? Is there a motion to approve the meeting agenda as published? >> So move. >> I second. >> Uh Commissioner Pierce moves. Commissioner Agnu seconds the adoption of the meeting agenda as published. Any further discussion? All those in favor of adopting the meeting agenda is published, say I. >> I. >> Opposed, carried. Meeting agenda is adopted. Uh, and now we are at community comment. Let's get the phone numbers up on the screen just in case we have folks watching in. And if we have anybody in the audience that wishes to address the HR and a matter of concern to them, more than happy to have them um, step up and speak to the council or to the uh, to the HR, excuse me. And we've got uh manager Nundorf poised to make the first presentation. We got a couple of interesting matters this morning. Do we have anybody online? >> I don't have anyone online yet, but because there is a brief delay in the broadcast, I'd recommend we wait about a minute before moving on. My clock shows that it's 7:37, so I'll come back to you at 7:38 or when I have a caller, whichever's first. And >> just for the record, there's no one coming forward in the chambers either. So now 7:38 and I still don't have a caller, so I think it's safe for you to move forward with the agenda. >> All right, very good. Um, do we have anything to get to report on from the prior meeting? Executive Director Neil? >> Uh, we do not. >> Okay. All right. Uh we've only got one item on the consent agenda this morning. That's the minutes of the meeting of the H on February 5th, 2025. Is are there any changes or additions to those minutes? >> If not, I'll entertain a motion to adopt those minutes for February 5th, 2025 for the H. >> So move. >> Second. >> Commissioner Pierce moves. Commissioner Jackson seconds the adoption of the H minutes from the February 5th, 2025 meeting of the H. Any further discussion? All those in favor of approving those minutes from February 5, 2025, say I. >> I. opposed. Carried. Those minutes are adopted. Uh we've got two matters to discuss this morning. One is um related to the 701 France Avenue project and we've got an update there and some discussion about how to get that moving again. Uh and then also we're going to talk a little bit about potential uh affordable housing uh policy changes and uh our affordable housing development manager Stephanie Hawinson's going to handle that matter. So, first we will turn to our economic development manager, Bill Nuendorf, to uh lead lead us off on that discussion. >> Yes, good morning. Thank you. Um, this morning, uh, what I wanted to do is provide an update about the project at 70th in France. Uh, this is one that we've been talking about and working on for several several years. Uh, this first had its roots back in 2022. So, if it were easy, it would have been finished already. These large complex projects are complicated. This morning we are join joined by the development team. Uh we have Ted Carlson uh and Drew whose last name I'm forgetting I'm sorry Drew and Dan Leser and uh Jeff Windgritz with Mortonson uh development. Um uh so how we wanted to run this is I'll do a general overview and introduction kind of recap where we are and how we got here. Then I want to turn it over to the developers and have them um better explain some of their challenges, also frankly their successes, what they're seeing in the marketplace that's positive. And then we want to bring that full circle to see how we can perhaps work together uh to to bring this project back uh back on track. Um uh so this morning, we're not asking for any final decisions. We're not ask asking for any big commitments, but we are looking forward to your frank, sincere conversation and discussion. Um, as I mentioned, this project has uh weathered weathered a lot of financial challenges the last several years. The developers are at a point where they need to make a decision. Uh, they did not purchase this land just to watch it sit vacant. They purchased it to build something and build a successful project. So what they're really seeking for seeking this morning is your direct input and also um your thoughts and feelings about whether or not uh as an HR you are you are prepared, willing or interested in getting involved further. So far we've we've looked at all the traditional methods, right? Private financing was the first approach. There were some gaps. We looked into doing uh tax increment financing using our traditional PGO notes. ran into challenges there. So, if we're going to continue to be involved, we have to get more creative. And the challenge there is being creative without bearing any undue risk, right? Typically, as an HR, we're pretty riskaverse. Um, so that's what we're looking for this morning is your frank discussion uh and your insight uh whether or not the developer should continue to go down this path or whether it's time to make it for them to make a change. Um, so again, I'll run through some background information. Uh this was in your packet. Um there was actually two presentations that were uploaded. The one I'm running through this morning um was uploaded and available. The second one is a presentation by the developer. Uh and when I turn it turn it over to them, I'll go into that in more detail. It was available for view, but it was not in the packet and there's some policy uh national law uh reasons that that happened, but uh we can go through that separately. Um, but I wanted to to remind us of how we got here. Um, a lot has happened on this site uh and in this neighborhood uh right at 70th in France in that general area by Galleria. 2019 we saw a couple really interesting proposals at that intersection. uh a different developer uh brought an idea to to uh remove the the uh the old buildings that have now since been removed and build a a strip mall and a more traditional housing project as well as the bank. The bank has always been part of the conversation. And then separately, a different developer proposed building high-rise towers across the street. Um and there's a lot of conversation, a lot of input, a lot of thoughtful discussion about both of those. Uh but back at that time the general the general thought was on this southeast corner where the US Bank building had been a strip mall wasn't really where we were aiming. We thought as a community we thought we could aim some somewhat higher and create more of a um landmark type of project and frankly a bigger tax investment. Um and then on the other side of the street, uh where the Estelle project was discussed, the clear commentary from from the community and the and the decision makers was that that was not a location for a high-rise. Uh and comments were made that anything that's high-rise in nature when it gets to that height, it really should be on the east side of France Avenue. Um so that that that were those were the discussions back in 2019. Then there was a pause. Um, this development team got involved a few years later and was successful in securing entitlement rights um to follow some of the comments that were expressed by the city council and the HA a few years pre uh prior and that was to include density on this side of the street and do more than a strip mall to aim to aim higher and that's exactly what this development team did. So they they were approved um from an entitlement perspective to construct an office building, new class A office building, and a new class A residential uh high-rise building as well as the parking and the bank. I don't want to forget the bank. The bank's happy there. Um uh and that's where they ran into a lot of challenges with the market. At that time, as as I recall, we knew we had a tight window. Things were changing. We were coming out of COVID. There was some uncertainty but we thought that there was a window of opportunity to run and that's what the developers did. They chased that opportunity. Unfortunately the window of financing closed much more rapidly than anyone expected. So uh back in in those days we got we got to the point where we did uh agree to a traditional tax increment financing arrangement where the city would reimburse the developer. uh unfortunately the set of financial assumptions that that whole deal was predicated on are gone. The financial markets have changed radically since that time. So while there there's the entitlement project and uh a lot of time, effort and and goodwill was put forth to get this project in in place, the financial markets have not been kind to this and we're still struggling. Interest rates are still higher. A lot of investors find it much easier to invest in the stock market than in real estate. So despite the fact that this uh uh project met so many of the goals in our comprehensive plan, in our Southtale plan, uh our sustainability plans, all those different plans that we worked on, uh it just it's been stying to get that financing. Also a reminder, one of the reasons that we even had this conversation was due to the transformational nature of this proposal whereby it wasn't just a little increase 10% 20% 50% increase in the tax base. It was a massive increase in the in the in the tax base for the city. So even when you use tax increment financing for a period of time, it's still a tremendous boost for the for the uh taxing agencies and for the community. There's also um a whole list, I'm not going to read through it, of community benefits. There were reasons that we prepared this tiff agreement. There were reasons why the community was generally supportive of this project. um uh economic re reasons um uh just community reasons as far as creating a landmark, transforming a nearly 50-year-old building that was obsolete in the marketplace of not of interest uh to to to builders and and and tenants in that building to change that with a project that was an investment nearly a quarter of a billion dollars on one piece of property. That's a kind of transformational change and that rolls into a lot of other uh uh uh outcomes, positive out outcomes for the community from a financial perspective. Uh as an HR, you know, we're looking at the tax base, we're looking at the jobs, we're looking at the prominence of this project at this location, but also fees that that the city garners, massive investments in sewer and water fees for the city to help support our whole systems that serve the entire city. uh large investment in our affordable housing program to help deliver uh housing that is around for the long term as well as generating revenue for the for the park system. When you subdivide these properties and create residential, one of the city and state laws is that you have to pay a park dedication fee. Um so there's lots of other revenue that this project would generate. Um, and again, that's part of the reason why we entered into those uh tax increment agreements. Back in 2023, we did create a TIFF district. We found that the the buildings that existed did satisfy the conditions in state law um to to create a TIF district. Um, and that district starts to collect this year. Now, unfortunately, there's not a whole lot there, so there really won't be much collection. The taxes will continue to go to all the various taxing agencies. Um but we through through state legislation last year um part of the good news is we have more time usually you have you have five years to get all these projects finished. We were successful in working with this legislature to give us 10 years to finish the project. So that's that's helpful to us. It's a lifeline for the project for the developer and for the community. Um but we still need that financing. So that's still the big deal. Um, so I've mentioned some of the hurdles and they're all pretty obvious. You know, interest rates continue to be higher than they were three, four years ago. Um, the capital markets that typically invest in these big projects, they're finding more uh profit in other investments. They're they they don't need to do to get involved in in this type of project. Uh, construction costs increased tremendously after the pandemic. uh they've they've stabilized but they haven't really dropped and labor costs are still high as well. Um now in the office marketplace the developers will tell you more detail here but there's been strong interest in the office market. Um uh Adina is a fantastic location for professional office. It's been tr proven for decades and that fact is still out there today. In the residential market it's a different story though. the the pace of rent growth doesn't equal the the the rate that it costs to build that residential. So, the big residential piece is still going to be on hold until that market's back. Um, but we feel that there's strong interest in the office uh if we can figure out how to make the to get the financing to work. Um, uh, over the last year, um, this has not come as a surprise. is I I meet with the developers on a regular basis to keep pushing them and understand where where they are and when they can get started. We've considered and discussed um a lot of different strategies over the last year or two. Um we thought we might have a strategy last fall. We we wrote some things up. Um staff had some big concern some big concerns. Um, and after talking with the developer, uh, they agreed we should pull back that proposal and give it some more thought and and, um, and fine-tune it a bit. Um, so at a recent city council meeting, a resident expressed concern that the city that the city or the HA was going to issue $20 million in debt and it's going to be all on the on the backs of the taxpayers. Rest assured, that's not what the developer is asking. That's not what we're recommending. That's not what we're discussing. Um, but we we do want to talk about a a creative way um where the HRA can get involved that doesn't that doesn't require us to issue $20 million in debt. That is an option. It's legal. It's possible. Is it in our best interest? I don't believe that is. So, that's not what we we want to focus on here. Um, on this slide, it's item G. Um we we think the the best uh path forward at this point is not public debt but to do a lease revenue uh type of issuance where there'd be a long-term lease executed by the HA and that lease would be paid by the taxes generated by the office building. So that way it doesn't incur the same potential impact to our credit rating. doesn't show up as as a as a um as a bonding commitment. There's still some lot of details we have to work work through. Um but that's where we're where we're currently looking into uh structuring a lease arrangement where the developer would build the project, the city or the HA would lease it. We would use their taxes to pay that lease. When it's all paid off, the city would own it. um uh the developer building owner would continue to maintain and and pay for those operating costs an arrangement similar to what we've done at 50th in France. Um so uh that's that's where we want to um uh focus and I'll let the the developers get into that in a little bit more detail. But I just wanted to also let you know that this isn't just something we came up with. We've looked at lots of other ideas. Some of them we thought had had credibility or possibilities and as we explored them the risks were just too high. So we're trying to temper that risk and I think this is the best direction at this point. Um but again this morning um we're not looking for a full commitment or frankly any commitment but we really want to hear from you. Um because so far uh as we've looked at these traditional methods initially private financing and then the more traditional tax increment payo note they're not working. So in order for for this to happen the H would need to get more creative. We can do that without meaning more risk but just something different than we than we've normally done. Um but it's a it's a big project and it's still a risky project. Um uh when the HR entered into the into those tax agreements back in 2023, there was no guarantee the market was going to respond and start financing these projects. We hope that would happen, but we're at the point now where that strategy needs to be abandoned. We've got to find a different strategy, but it really rests with you. Um uh we want the developer to use uh their time and their resources in the best most efficient manner. If you think that uh this is something you want to continue to explore and be involved in, I'm confident that with our legal team and our financial advising teams, we can come up with a good with a good proposal. Um if it's something you're not comfortable with, it'd be better for you to express that today. Um, what we'd prefer to avoid is spending another six to nine months putting a proposal together, putting a project together, and then as a board we decide, well, no, we don't want to do that after all. That's just a waste of everyone's time and money. So, again, no final commitments here, but we are looking for your frank conversation. So, with that, I want to turn it over to Ted Carlson uh with with Orion Investments. uh he's been one of the uh one of the guys that's that's uh spearheaded this project for many years and I'll turn it over to him and then his team will run through their presentation which will go into more detail than mine did >> and at the end of course we'll all be available for questions. Thanks, Major. That was a good setup for the conversation. >> Uh, sure. >> Yeah. >> Um, good morning, commissioners. Ted Carlson with the Ryan Investments. Nice to see you today. Um I'm going to touch a little bit just on the state of the broader office market and what we're seeing not only in our community but throughout the Twin Cities and then Dan Leser with Morton will provide some further details. Um so you know as you're well aware we've got there's two great office buildings under construction in Edina today. Number one is the Craftsman at 7250 France. Uh property is currently 65% leased with great leasing momentum. In contrary to all the headlines we see about the office markets performing very well. I think you know why or how can that be? I think the largest factor is that even in times where um you know we've got challenges people want highquality spaces and high quality places to work. These spaces have a lot of natural light. They uh are places that people want to gather. Companies continue to enhance culture and bring people together. So that's what we're seeing with the craftsman and our counterparts at Opus right here across by Lady of Grace are having success also and they're 70% pre-leased will deliver in October and Opus will deliver in Q1 and then there's you know there's continued to be good leasing activity up and down France Avenue. So I think that's an important nuance that's quite contrary to the headlines we see today that despite the capital market challenges we face and despite the office headwinds elsewhere that our community is a good place for people to work. Um with that in in this packet uh that you can read there's a bunch of different statistics on the market up and down but the buzzword that we hear over and over again is flight to quality. So it it kind of reflects what my opening statements were that people want to be in great spaces. They are right sizing their office postco and they're willing to um pay pay the rates that we need to support new construction. Um in addition, you know, Centennial Lakes, which has kind of been a gem of our community for the 30 years since it's was constructed, continues to be very well leased. So I say think all the things we talk about in our community are reflected in the office market uh that we have today. We remain bullish that if we're able to figure out a financing mechanism that we can complete the office piece of this project. Just to add a little bit more why I think that's important. When you look at an office building, what does that bring? Well, yeah, it brings a lot of money in the construction, but what it brings is really high quality jobs to our community. And that's a really important factor. And if you think that there's roughly three people per thousand square feet of building, whatever metric you want to use on an office building that's just under 200,000 square ft, that's 600 highquality jobs in our community. And so while we don't necessarily talk about how that work lurks in the balance sheet or the math or anything else, as a resident of Edina and for our policy makers in Adina, I think that's a really important thing. So with that, I'll uh turn it over to Dan Leser who can talk further about some of the financing mechanisms that we're trying to bring to you today. >> Yeah. Thanks, Mr. Carlson. >> Good morning. >> Good morning, commissioners, Mr. Mayor. Dan Leser with Mortensson. I'm just going to jump right into the structure chart because I think it's really important to start talking about this. And what I'd like to start with too is all the agreements I'll describe, you know, leases, uh, uh, bonding documents that that we would issue, not you, none of that would happen until an office project has materialized, which means significant pre-leasasing, financing on board. All of those things would have to be buttoned up before we would come back and and really finalize all these documents. Um, so thanks, Bill, for your description. Um what we would start with once an office project materializes is as the owner of site C, we would convey that to the city, some city, it could be HA, could be um whatever entity makes sense. The city would then ground lease that back to a special purpose entity that we would create outside of the city realm. So this would be a third party taxexempt um LLC. they would actually be the owners of the improvements. Um, as tax dollars begin to come in, that future revenue stream would pay a lease that the city would sign with this special purpose entity. And over the life of that lease, taxes pay one to one. There's no grabbing of a dollar here or there. It's a do tax dollar comes in, a tax dollar goes through the lease and the life at the end of the life of the lease, improvements, land, everything reverts back to the city. City would already have the land, so it would really be the improvements reverting back to the city. >> Hold on a moment. >> Yeah, Jackson has a question for you. >> Yeah, I just want to make sure site C is just the parking garage, correct? >> Just parking. >> Okay, thank you. The main purpose of all of this is really to to bifurcate B and C and really isolate it from A. That that's really the primary issue here is is all the mechanisms that we had in place in the past relied on those two assets getting built, developed and completed at the same time. And that's really the crux of our issue is we believe B or A with the office can go now. There's there's demand in the market. There's a lot of interest. Um the residential piece is not and you know Bill talked a little bit about financing but it's also just it's really about the health of the rental market with all the luxury units that came online. We're 15 to 20% too low on rents, 15 to 20% too high on costs. And as Bill was saying, you know, investors are looking for money elsewhere or returns elsewhere. It doesn't mean they don't like real estate. They'll they'll still invest in high quality real estate here and they would love to do a building here, but on top of those uh you know cost and revenue issues, they want another 10 to 20% return on top of all of those other metrics which makes it uh really infeasible specifically for for expensive high-rise. Um so everything I just described really just addresses the parking for the office. So, how does you know whatever whenever the residential is ready to come online, how does that get parked? And and we had um parked that on site previously, which we would still do. In the meantime, that would get scraped be a surface lot. And so therefore, the the site C parking plus the surface lot stalls would serve the office building. When site B is ready to get built, the same structure could be used. and you know how the garage gets built, whether we phase it vertically, phase it kind of horizontally, I think we can we can look into and see what works best. Um, but this exact same structure could be used for that next asset and we just tack on another privately issued tax exempt bond issuance to build out the rest of the garage. And and I think it's also important to say the garage will be sized based on the increment, not any kind of funny math uh in the other direction. It's if we can only build 300 stalls because that's what the office generates in taxes, that's what gets built. And the same with the next phase to where it truly is sized in real time based on exactly what's getting built. This is a lot more detail that you guys can read if you'd like. Um, but it really is what I've just summarized here. If you guys had any questions, I can certainly answer more. Yeah, Dan, thanks. Let me check with my colleagues here to see if folks have questions at this point in time. So, um I guess one question we all have and I know that uh we've all probably had this conversation with Mr. Carlson and that is and I think he feels the same way. He's a resident of our community and um Mr. Nundorf mentioned this. We're not interested in anything that potentially affects our bond rating at a double AAA bond rating and we're not interested in more risk than what we would normally have assumed with respect to the prior project. So how does how does this idea uh fall within those within those concerns? >> Sure. Um extremely valid concern. Um, and a lot of entities, you know, whether it's municipalities or universities have this exact same issue, um, same concern. And so do we. Um, that's why we didn't come back asking you to issue bonds for us. We've we've actually executed with this exact same structure for a dorm uh at Augustana and a cancer treatment center in Wadina. Um, the health system had the exact same issue. We we're cash strapped. We can't we can't have our bond rating affected. This lease structure is not viewed the same as a bond issuance. How exactly it's viewed and how exactly that's going to affect the city's balance sheet. That's not my job to tell you guys. There's consultants in place that will do that as the deal materializes. We can look at real numbers, durations, timelines, interest rates, but it's not viewed the same. That I do know. It's it's really a contingent liability versus a direct general obligation. >> So, just walk us um back one more time through and maybe Bill can help with this too or or Mr. Carlson. Uh how this how this idea would work. You know, you you you would come what I heard you say, I think, was you wouldn't do site C parking until you knew that you were going to build uh site B office building. That would be the contingency involved. >> That's right. >> That would trigger then once you knew that you were going to go forward with the with the office building, then uh you'd come back to us and say, "Okay, we there was some kind of a legal agreement that we fulfilled that condition." And then we move into the phase of of you constructing the site C parking. We become the tenant basically and lease that from you. And then the taxes that are generated from the office building are used to pay the lease payments on the parking garage. At some point in time downstream certain number of years we end up it's a rent to rent to own. Is that what it is? Kind of in a in a >> in a common sort of way. >> Yes. >> You pay a mortgage on your house for 20 25 I guess 50 years now. Um, and then it's free and clear, yours at the end. That's how this would work. And one other clarification, you wouldn't be leasing it from us. I think one of the important things about structuring it this way because you guys are a taxexempt entity. The the SPE that we would form would also be a taxexempt entity completely independent of Mortonson of Orion and they would maintain taxexempt status. So that way the bonds that that entity issues can remain tax exempt. And that's the other important piece. If if you can do taxable bonds in this scenario too, but it's somewhere betweenund 1.2 to 1.8% higher of an interest rate to go to a taxable bond. >> Mr. Nerf, you were going to say something and I'm going to go to Commissioner Mercer. >> I just wanted to say that your summary was was pretty darn accurate, pretty spot-on as far as how the overall structure would work. Um the one piece that we didn't mention was that the operating costs, you know, that's something that also costs money to keep the electricity and all those types of things that would be borne as part of the uh developer or the office builder responsibility, office buildings responsibility. Um and so we, you know, we don't have any agreements prepared or anything of that sort, but we're looking ahead into not just getting it financed, not just getting it built, but getting it operated. and uh we think there's a way to make those things happen. >> So with the uh just as a segue, so the rent to own part of it, can you talk that about that a little bit? So you know, I think what we all sort of instinctually would worry about is that we're buying a $1,000 sofa and we're going to end up paying $5,000 for a $1,000 sofa. We don't want to want to do that. What What's How does that work part of it work? Yeah, I I think Dan had a really good analogy with with your mortgage. Um, you know, so the garage would be built, the HA would use the t the property taxes generated from the office building to pay the the loan on the on the on the garage. When the loans repaid, we own the asset. uh we would still have uh binding agreements that connect the parking asset to the office because in 30 years we don't want to just own a parking garage that no one uses. So we we'd want rights to control it but also we'd want to connect that parking garage to that office. you know, while it's um while it would be available for public use, um we would still want the office building to bear that operational responsibility, that maintenance responsibility. That's how we've structured our deals at um at 50th in France and at Jerry's. And we would look at something similar there. But the ownership, it would revert to the HRA when the loan when the mortgage essentially is paid off. be something similar to what we've done since the 70s with parking down 50th and ransor. >> Correct. >> Yeah. Yeah. The Adine has done this on at least three occasions in the past, but it's been decades. It we did this in the 1970s. We did it in the 80s. We did it in the '9s. We have not done in the last 20 years. So, it's been it's a tested um strategy. We just haven't applied it for a long time. >> Where does this fall in the realm of risk? uh what would Eller say about it compared to the pay as you go note that we had under the tiff? >> Sure. So u I met with Nick and Hut earlier in the week uh to get his his initial uh uh opinions on it. Um so overall, you know, I'll channel Nick and say it's complicated. There's a lot to it. There's a lot to study. Um but this type of lease structure is much less risky than it than issuing debt. there's still the possibility of of some risk. That's something we need to work through and understand what are those possibilities and is it meaningful? Um uh we haven't gone that far. Uh if this is something that you think you're interested in, then we're going to sit down and start hammering out some of the details and really understanding that risk. Um but we think it is minimal minimal if not negligible. >> Okay, good. I'm going to go to Commissioner Richard and Commissioner Pierce. So, >> Commissioner Agno, Commissioner Pierce doesn't show up about >> Oh, okay. All right. He vanished. Okay. All right. Um, and part of this might be something that executive director Neil could respond to. I'm trying to wrap my head around the fact that we're talking about a tiff district. We're going to take part of that tiff district and essentially turn it into a nonprofit. Correct. or is that not the right way to look at it or a non- taxgenerating entity? >> Uh, >> but not really. >> You could look at it that way. Um, it's no different than we were already doing. Um, generating the typically the the county and the city assessor doesn't create a tax value on a parking garage or parking lot. Um so there's no net difference but um but yeah essentially the ownership of that entity of this of the parking garage would be a taxexempt entity. >> Okay. So I keep coming back to the Pentagon park tiff district and the seven hills academy situation where we were basically creating a space or the request that was denied was to take part of that tiff district and it would not be income generating. And so that is the problem that I'm kind of getting you know wrapped around the axle about perhaps executive director Neil could address a couple things. what you know because this is not as big as Pentagon Park you know the percentage of the space that's being essentially removed from you know after the tiff district expires um how much revenue will we be losing how much is going to be diverted to pay for this um project I I feel like I don't have a good handle on the amount of funds that could flow elsewhere you know and just thinking of those opportunity costs. >> Sure. Yeah, happy to respond to that. Um, so the amount of revenue that's lost is zero. The amount of revenue that's being diverted is zero. And, uh, the amount of foregone revenue is zero. Um, so, uh, parking garages are not in a suburban area. A parking garage is not a revenue generating asset. Maybe in downtown Minneapolis, if you're serving the Viking Stadium and you're charging 38 bucks an hour, that might be a whole different situation, but in suburban centers, um, uh, I'm not aware of any parking garage located in the city of Adina, whether it's owned by the city, the H, or a private party, that is that re that generates a penny of tax revenue. So, there's no net difference. >> Okay. Followup. And I should have early in the morning. Coffee is not quite kicking in yet. Okay. Uh, as we've looked at this project, it has undergone a lot of different iterations. The parking garage was not the original concept. It was originally um housing and so that changed. So taking that space and I guess maybe it would be impossible to answer this because we don't know you know would if it were something other than a parking ramp but something that could generate revenue how okay basically how much space does this represent in terms of the whole tiff district >> roughly is it like a fifth of the acreage >> yeah uh that that's that's pretty close yeah the um the site C is maybe an acre out of six acres, maybe 1.2 acres in that area. Um, what could happen, I think that's where you're going, is um, if the HR is willing to learn more and get involved and maybe strike a deal, we're going to study that. We're going to run hard. If you're not interested, think then the developer goes back to the drawing board. So, what's possible on that site really could vary. um uh the the site I mean nothing's built at this moment, right? So lines can shift, footprints can change. If they have to go back to the drawing board, I think they really go back. Um so there's lots of things that are possible, but at this point the developers preference is to stick with that approved site plan and implement it implement that in phases. So I think it's too early to to guess what might be possible. think they want to focus on what has already been approved. >> And just in terms of, you know, how we got to where we are today, I think I am really troubled by just the shifting. You know, you can't control the marketplace. You can't control the finances. You know, in a way, this is a huge lesson in terms of how fluid everything is. And so you add on to that our greater Southdale area design guidelines and the requirement to put in roads and the cost of that and then you have the developer having to cover the roads. I've been trying to understand that piece of the development project because when I go and I try to find out more information, it seems as if if roads are a required part of the zoning, the city is supposed to set money aside. But here it's all on the developer. And so the developer needs to have creative land use allowances which when you look at that huge tower, you know, that was is not, you know, on the plans right now because of the financing not coming through. My big concern about that was that it possibly violated the amount of units per acre that could be built because the roads were not being taken into account when considering the legal buildable area. And I feel like what we're doing is because of our greater um Southdale area design guidelines, we're forcing um developers to come up with projects that perhaps violate our code and are possibly non-compliant. And I don't know what all of the dialogue has been about why we can't get financing for this. Um, and I just I'm really uncomfortable with our overall process and I want to in the interest of being frank and sincere. I really think we need to get those greater south we need to relook at those greater Southdale area design guidelines particularly putting in the roads because as I go back and I look at the coverage of previous plans it was very clear um you need to do these roads or we're not going to approve it and they backed off of the plan and one of the quotes from Carl is it Runk I can't I don't know >> Carl Runk >> Carl Runk was um the challenge in creating the new plan was to bridge the city's long-term vision and current market realities and quotes coming out of those meetings. You know, the feedback it needs to be more grand. It's lacking that big vision um that we want to see. And these are really ambiguous things that I don't, you know, I feel for the developer. I really do because I feel like we are putting up um expectations that are hard to pin down and possibly really painting the developer into a corner where the way to address our um requirements and it it's not really the way it's being handled. The guidelines appear to be more like requirements than guidelines. Forces them to build something that they might not otherwise build. Because I look at this project and I think you're talking about a class A office building with parking that is separate from it. And then when I look at the flood planes uh analysis for this site and see where the water issues are and then see where the roads are going in, you know, I I can't really I would love to see what the developer would do if they didn't have to follow the guidelines. So anyway, I think that's a lot and I got going down a lot of different rabbit holes, but I think we could learn a lot from what you know is going on right now and what you know because I really feel like we've painted this is probably not the optimal development that they want to have on the site. I have no idea and apologies if it is. I didn't mean to sound dismissive, but I would love to know what you would do if you didn't have those guidelines to grapple with and have to put in that road, those roads, the two roads. Um, anyway, thank you. >> Thanks. Uh, no, member Pearson, member and member Jackson. >> Thanks, Mr. Chair. Um, you know, I I do think the broader point of our policies um framing development that developers, they're doing things that they perhaps wouldn't do. Um, I think that's a legitimate thing for us to think about as a city when we do policy review things like that. So the the next line the next agenda item is attempting to do that. Um but I do assume that developers wouldn't do things that they didn't think would be profitable. Um but I so I have some general feedback. One I you know I'm going to apologize to you for something you don't even know that I did. When I read the item report, I didn't like the way it was it was framed. Like you used a false dilemma, right? You gave us two options. You said creative public financing or give up on the vision. And I was like, wow, is that are those really the only options? And then in your deck, you went through and we stopped at G, but there were a couple of options after G. Um, and so, um, I'm apologizing that that's where I went based on your item report. Um, as opposed to, uh, being a little bit more open thinking, well, surely he's gone through other options. Um, so that's like half of the notes that I had to talk about I can't talk about because you did that. So, thank you for that. Um, and so the um, if you could put back up the structure that Dan went through >> that one. >> U, it's not on our screen yet. >> Oh yeah, that guy. Um, and so before I get to that, the only thing that question I had from the two options you gave in the item report, you use the term public financing. And I think probably technically that is true, but I always internalize that to me more of like a cash outlay from the city. And that's not what that's not what this construct um at this stage is actually doing. Um and so that was the only thing that I I had a red flag when I saw public financing. Um and so I I don't know if there's a a different way to say that, but I totally understand what we're looking at. So I only have one question, one request. This is a complicated construct and what I I think I'd like to see is um and we can certainly talk about this outside of chambers but something where I can understand at each phase what the risk is. And so, um, a as an example, um, if site B is paying for the parking structure in phase one, then like a risk would be um, site B doesn't generate the property taxes perhaps or it can't be leased out or something like that. Um, if we go into this kind of agreement, um, you answered this one. I think the bond rating to the city is not at risk. Those kinds of things. And I would like to see that kind of all the way through. So, it's a little easier for for me at least to kind of walk through. And it does two things. It lets me know that you see the risk and there might be other risks that I can't even see that I'm not thinking about that you might see. So it lets me see that you have you're viewing those. And then the second piece would be well what's the mitigation strategy to that particular risk? And it's totally fine for a risk if you say well there is no mitigation strategy. I want you to say that. Um, but if there are, I'd put in there it's mitigated by right these actions. And I'd like to see that all the way through the document. Um, and then the last one, and I I the entity that would own the parking structure, if I'm saying that right, where does that where does that entity come from? Who who is it? How does it get constructed? Who manages it? Is there a board? Right? How how does that work? >> I'll I'll turn that over to to Dan Leser and he can explain how they've done it on a few other projects. >> Okay. It it's exactly what I think you would expect with a nonprofit. There is a board. Um, typically with the health care systems we've done, there's a couple seats that are maybe some bond investors and a couple seats that are people from the actual health system. And we would structure it in a similar way. Um, it truly is set up by, you know, there's multiple groups in the Twin Cities that do these um for private and taxexempt entities. And um I I think the next time we would come in to really dig down deep, I would have one of them come in with a true org chart and show >> kind of what that entity looks like, who makes it up, and how it's governed. >> Okay. >> Okay. Generally, a nonprofit entity board is what it is. >> Okay. Um thank you for that. And in the when you go through and you add the risk levels in here, I I I would like to see a a complete um I guess I call it an org chart. Like this doesn't have all Oh, I guess it is in there. The SPE is in there. Yeah. Okay. Yeah. I would I was just going to say that I'd like to see all the parties that are involved and perhaps this is all of them that would be involved um except the bond holders perhaps knowing who those are. So thank you. >> If we go further we we're happy to provide more clarity commissioner. >> Thank you. I think you answered this a little bit in your response to Commissioner Risser's questions, but would we ever in the short term and the long term be able to make revenue from this site? >> From the parking garage site? >> Yes, >> we'd have to check into the limitations on taxexempt debt. um uh there's a possibility of charging for parking, but if you create too much revenue, then you lose your tax exempt status. And part of the reason that we're going for that tax exempt is that we'll get a much better borrowing rate. So, we we'll have to do the math and see how much revenue generation is too much. We don't want to get in danger of losing our good good uh interest rates. >> Okay. At the end, would we own site C or how would that work? >> Sure. The way that uh uh the way that's shown in this chart, and Dan, correct me if I'm wrong. Initially, the HRA would own the dirt and then we would issue we we'd work through debt financing on the building. So, we wouldn't actually own the building until it's paid for, but then after it's paid for, the H would own the land plus the asset, the building that's on top of the land. >> Okay? So, making up because I don't know any of the the numbers yet, but let's say in 30 years, we would own the totality of that site and we could decide then at that point to tear it down and build another office building. >> Correct. Right. after it's after the um debt is paid off, uh it's ours, we could do with what we choose. Um there would still be some type of a agreement that, you know, if um if that parking garage is needed, we couldn't just tear it down without satisfying the need somehow. But in 30 years, if you know, people drive at a much different rate or there's different transit options or whatever, we could certainly do with it what we want. it would be our asset to uh to decide the fade on. >> Okay. Um my last question slash request um this is building off of Commissioner Pierce's suggestions. Um, I think for me it would be helpful to use almost similar visuals to what we had when we were getting into the agreement with the Henipin County Library of, you know, rent over time, how that grows, all of that to just show layering in risk, where are these kind of different decision points and and what does the total cost to us as a city look like over time, I think would be helpful. Um cuz I I think generally, right, I don't love it. Um I I don't want to own parking there. I don't think that it it's something that benefits us and I don't think that it's something that benefits the broader Dina community. I think it benefits this particular site, right? I think it will be used for people that are working there and people that, you know, maybe one day down the road are living there. Um, and to me that means then that it should be carried by the developers. Um, and I never liked a parking garage there to begin with. So I I surely don't like paying for it and then owning it. Um, but there's other people opinions. So thank you. >> Thanks Jackson. >> Yes. Thank you, Mr. Chair. So I'll start with your question for Bill and then I've got questions for the developer. Um, what happens? So we've got a tiff district on these three parcels and the tiff district is going to pay for the interior roads and various inundry other parts of this development. How is the tiff district changed when we do this? How what happens to the tiff district and particularly on parcel c. But tell me how that gets restructured. >> Sure. Sure. So in 2023 we created a tiff district and all the documents that go with that. the size, the boundaries of the district would not change. Um the eligible expenses would not change. We're still looking at infrastructure, roads, sidewalks, utilities, a lot lot of utilities, and the parking. Those are still the real focus on it. Um what might change is the duration. So right now um you know per our tiff policy when we do a tiff district we always try to to create it for the least amount of time that's necessary. A few years back we thought 15 years would work. We thought we could get it done in 15 years. The market has proven us wrong. So we do have the ability to extend the duration of that tiff district anywhere you know from 15 years to up to 25 in total. um that's something we'll explore and bring back to you. Um we still want to create the we want to collect the tax increment for the least amount of time that's possible, but we know that 15 years just doesn't work. So that that is one change. Um we'll explore it and decide if we need to do anything. Um it's also possible we might run the numbers and 25 years might not be long enough. Well, then we know that it's that this option doesn't work either. So there there's still a lot of work that has to happen. But if we do have any modification to the tiff district, the time, the duration, anything like that, we'll come back to the H and the city council. There's public hearings that are required. We've got to reengage the schools and the county. We basically start that whole public process back to square one to make a change to it. Um, but at this point, we do not expect to make the diff district bigger or smaller. That all stays the same. So, but I'm thinking the flow of revenues. So, we're going to only have one asset producing entity and that'll be the office building and the revenue is going to flow to the lease of the parking garage, the tax increment. So, is it going to be it'll have to be a fraction of that then to also pay for the internal improvements whether it's the roads or the other elements that you listed. >> Right. So, it won't be 100% of the tax increment that goes to pay for the parking garage. It'll be a fraction of that because the other um elements will also have to be paid for. Is that correct? >> Correct. Um yeah, the the the roads, the on-site road will still have to be paid for. We'll have to figure out if that falls on the developer lap or if that is part of the tax increment. Um we haven't gone that far, but that still is an expense. We would still want that road to connect when like when this garage is open, there has to be a road to get in and out of it. So, we'd want all that built. We'll just have to better understand where the funding comes from. >> Okay. And so, then I've got some questions for the developers um about um the just the structure of having parking separate from the building and then also more about the nonprofit. So, we have a resident who has said probably, I don't know, 20 times, you can't build a garage that's separate from an office building. No one will walk the distance in this climate. We hear this over and over and over again. Um, from this one resident. Um, tell us about because we we've got the marksman, the parking is right there. Um, tell us what the market is telling you about a parking structure where there's, you know, it's less than a block, but there is a walk. You do have to go out in the elements to get to your office. >> That uh Thank you, Commissioner Jackson. That's of zero concern to us. Um, the parking would be very similar to what ex >> the parking would be very similar to what exists today at Centennial Lakes or Normadale Lakes. and it's covered structured parking, so it's of zero concern. >> Okay. So, you you wouldn't have any problem getting this leased or uh getting it financed based on the fact that it's not contiguous to the building. >> Correct. >> Okay. Good. Thank you. Um and then with the the way we've talked about this this morning is we would be you would work on the office building. If the office building goes forward, then you would build the parking garage. I assume building a parking garage is much faster than building an office building. So that if the contingency is met that the office building is built, you can build the parking garage. >> Uh great question. I you know we certainly are paying attention to what's happening in our city. We're not tonedeaf to how things have changed and we as a development team think of how can we understand and reduce this risk. So I think about it this way. um first risk is the developer, then the equity, then the debt, and then the other entities that flow through that. And what we need is a mechanism to be able to market this site to potential tenants. Um going through this process will help us do that. So we need to secure the debt, we need to secure the equity, and we need to secure the leases before this project ever gets funded. So that is a major elimination of risk. The second piece that eliminates risk, which I think you're asking about, is what's the timeline of construction? >> Yeah. >> And I would say the rough timeline of construction for an office building of this size is approximately 24 months. A ramp of this size is approximately 6 months. So we stage and sequence projects similar to what we're doing now at 7200 and 7250 France where the building would be for lack of a better term 18 of 24 months 75% plus complete before the parking rent stop starts and and at that point you can expect there would be a significant amount of pre-leasasing to satisfy the debt and equity requirements which would further significantly reduce the risk profile. >> Okay, terrific. Thank you. That's very helpful. Then I just want to um dig a little bit more into this tax exempt entity. What what is the public purpose of the taxexempt entity? >> This is Mr. Leser's area of expertise. >> It truly would be the public's access to the garage. >> Okay? >> As simple as that. >> Okay. So when we looked at the TIFF agreement, certain number of brand of floors were reserved for the commercial office building and then there was certain amount of area that was available to the public. Um so would we have a we would have a similar structure uh when this is built that a certain number of places are guaranteed for the office building or would it be a general public um garage? Great questions. I don't think that we would intend to deviate much if at all from the current structures, the way that stalls are allocated between public and private. >> Okay. >> Because we'd spend a lot of time thinking about hours of operation, who and what when those stalls get used, and I don't think that there needs to be any significant if any deviation from what we'd already agreed upon. >> Okay. So, I'm thinking about the garage that's at the Pinstripes location. And when the Fallen to the Arts Festival is there, >> you can't park in the public lots because they're full. It's it's a very popular event. It is technically 100% private. Um, so you park basically illegally there to go to Fall of the Arts because there's no other parking around. Um, and it's very popular. So did we structure it so that on the evenings and weekends the public could go. So for instance it was fallen to the arts or you had something comparable to that in this public plaza that you've come up with and you're going to it's going to be a big weekend event. There's going to be a big need for parking but hey floors 3 through 7 or whatever it is four floors are reserved for the office building. Is it set up so that on evenings and weekends it could be used for the public? >> Yes. >> Okay. I I also want to point out an important nuance that I think that this parking would get built in phases. Think of it as a Lincoln log set. And for lack of a better term, I would say office building constructed, we build half the ramp. When site A multif family, whatever that becomes, we build the second half of the ramp to further reduce risk so that that growth and we can have that kind of placeholder um designed in phases. >> Okay. And as that's built, there will be sufficient public parking to meet the public purpose of the nonprofit. >> Yes. >> Okay. Great. Thank you. >> Back to Commissioner Russer. >> Um I do as the whole point of this meeting is to get feedback on what we think about um retooling the financial packet. I um want to say I am not in favor of this. And I also want to thank um Commissioner uh I'm having a little brain Kate um Agnu, Commissioner Agnu, it's early in the morning um for her comments on parking because I think um this makes me think about the Jerry the ramp near Jerry's where it's tucked away. It does not have immediate street access. Okay, so it's not snugged up by France or 70th. You have to work your way back to it. And one of the issues with our municipal parking ramp by Jerry's was that it was underutilized. And then that's how we got the Grand View pedestrian bridge. And as I think about, you know, it could possibly serve u different entities surrounding there. Okay, you drive to that ramp. How do you get to those places? You know, and I'm thinking, how do you get to Bugers? Do you you know make your way through the parking um lot of the bank and then go down the street and encounter the light fixture that's embedded in the sidewalk and then turn up and you know try to get to buggers. It's um sort of complicated and I feel like a lot of times when we view projects we view them in a vacuum and we don't really see how they are going to engage with the other entities around it. And while you can say it'd be easy to drive to it and park your car, how do you get from the ramp to all those other places? And I have a hard time believing um it could function well in that way. And so that's another reason why I have I do have problems with the parking ramp that's tucked away on the site. Um that's something that I wrestle with. So I think that is a problem. And to be crystal clear, I I do not like this um idea. So anyway, thank you. >> This is the conversation has been a good one. Triggered a couple other thoughts from me or questions that I have, I guess. Uh and Mr. Carlson or Manager Newandorf, you may have the answers to this, but remind us again the phase one construction of the ramp, was that designed primarily to accommodate the uh tenants in the office building um during the week and then there there was periods of time maybe in the evenings or weekends where that phase one parking I'll call it was available then for the general public. So if somebody wanted to park there, walk across the street to Galleria, that ramp, I mean, it was it's this time when they've got all the flowers there at Easter time and there's no place to park and park over there, walk across the street. >> Was that the way that was structured? >> It it was. Yes. Yeah. Excuse me. both uh if the parking garage is built in phases, phase one and phase two would have the same general general rules where um during the weekday hours for the office, the the priority for most of the spaces would be for those office users. But on all those other times, evenings, weekends, holidays, um when the office workers are not there, then the priority shifts to the public. Um so we want to try to maximize our assets. Um in the in the olden days we would have built two buildings, one for the public and one for the private. That's far too expensive to take that approach. So trying to so we're trying to co-mingle them and the strategy is the same. That that has not not changed. So, the idea of um having the parking garage available for uh the nearby shopping centers for their key events, whether it's a holiday um holiday promotion, the big flower show, whether it's for the whole holiday season in the wintertime, um that would still be the the case where we'd want these spaces available for the general public, whether it's a shopper or an employee. >> Okay. Uh, and then phase two, uh, wouldn't be built until we figure out what we're going to do with site A. And maybe the Mortonson folks could come back up and talk about site A a little bit because I I think that's one thing that we have a concern over, too. If if it doesn't look like high-end residential rental can be built there, what what are you thinking about? What's what's going to happen there? I mean, if it strikes me that when I think about your company, I'm I'm thinking if if you can't get done what you want to get done from a construction or development standpoint, the markets are indeed uh in a funky sort of position. So, because of the economic sort of strength that you have, it it it gives me pause. I'm wondering, well, what what what do you intend to do there? You just don't want to sit on that land and and make payments on it forever and have it sit idle, just like we don't want it to be idle either. So, what what are you thinking about? >> Yeah, thanks. Yeah, I wouldn't have too many more meetings in front of you guys if we just sit and pay on that thing for a long time. Um, high-rise residential I I think is what I would like to be specific about. Um, we can still have luxury housing that's not made out of concrete and steel that goes up 26 stories. I think that's always an option, right? Um, you know, shorter housing is 30 35% less expensive, I think, than high-rise housing. That starts to close the gap a little bit. Rents are lower, but costs are dramatically lower. That's an option. Our company doesn't build woodframe housing. So, that would mean we have to start thinking uh quite a bit more creatively about what we want to do there. But, we're we're not opposed to that. Um, hospitality is certainly an option there. I think this is an underserved market, especially with a lot more office product coming online. Um, there's going to be a lot more room nights available. All of those things are on the table and with the envelope that I think we have approved, we can fit a lot in that box. And does that box need to be the exact same size or shorter? I think that's exactly what we're going to investigate with whatever we can get there quicker. I think that that's really well said and I think it's similar to what the similar discussion we had you know a couple years ago when we were talking about 7200 and 7250 France is the phasing the time uh will kind of identify what gets built. I think we've also noodled around maybe it is even a second office building if it proves out to work well with site B. So I think that that the future flexibility for us to be re reactive and in tune with the market is very important. >> Yeah. I like the idea that you've included hospitality in the in the mix of thinking because um I know the Weston is they're rocking right along. They're doing better than most hotels in the Twin Cities. People want to be in Dina. It's a nice convenient location to Galleria and now the luxury wing at Southdale. And so something we're thinking about. Um, and if something happened on site A that didn't require us to expand to phase two on the parking ramp, well, we'd have a we'd have a parking ramp primarily serving an office building like we do now with juries and I think the I'm thinking about the parking ramp that was constructed with TIFF funds down at Pentagon. Is that do we own that or is that >> the Pentagon project is structured completely differently. So okay uh we don't own the debt nor do we own the asset. Uh that's strictly as a private project and >> we just had to build it. >> We uh it was built to yeah >> they flipped the timing. They built that in anticipation of the market not in response to the market. And that's why that risk is uh at this point it it's born by the developer. So we structured this one differently. That's not a great example to follow. I know from visiting with Bloomington that you know I think parking is a regular part of their their tiff commitment like a mall of America and other places that uh they think to get the businesses in that they want that they're willing to commit to parking. And this wouldn't be tiff, but it's just illustrative of the way some cities think about things. And um so this is more akin to me to public parking, at least for the president supporting an office building and and some retail at juries. Um and our city's made that kind of commitment in the past. So anyway, something to think about. Um, Commissioner Jackson, that maybe caused you to think about some other aspect of this. >> Well, I just wanted to say I'm really want to see this office building built. I'm super excited about it. It's a beautiful building. It's a perfect location for a class A office building. So, I'm in favor of moving forward with discussions on this. Um, and we'll I'm I'm thinking of Commissioner Agnu. Uh, if that space that's next to it could be an event center of some sort, I think she would like that. Um but uh that the possibilities are wonderful to think about. It could very well be an apartment building, but I'm very bullish on an apartment on a office building beautifully designed at 70th in France. I think that corner cries for a beautiful commercial building and so I'm in favor of moving forward. >> Well said. Okay, Commissioner Pierce. Thanks, Mr. Chair. Um, it would be rare for me to say I'm not willing to consider creative, strategic, responsible strategies. That's what you're asking today. Um, and so everything I framed earlier is, yeah, I would love to see something built there. I'm open to exploring other strategies uh to make that happen. Um, you didn't ask if we are okay with this particular strategy. That's not the way the item report is framed, but perhaps that really is your question. Um, and so I frame it that way really for the developers. So if that is the question, you've got clear direction. You got to infer from the conversation today that um we're all not on the same page with that particular option. Um and then I appreciate member Agnu talking about the parking. Um, and I really like I appreciate her saying I don't not excited about having a parking there and not excited about owning it. Um, and so that the question of are you open to other strategic options? Yeah, I'd love to to continue the conversation. Uh, but you guys have to figure out if that means you've got such a barrier to get to an approval. Um, do you still want to continue to spend dollars? because the second option was do nothing and start from the beginning to see if there is something different to be built there that perhaps would not have a parking ramp involved. And so I I try to be as transparent as I can um with both sides. That's kind of how I see the the tea leaves today. but would definitely love to have you come back and explore this particular option more. >> Great. Thank you. Um I would just like to remind everyone because frankly I admitted it myself was that the first floor of this office project is retail. I think that's an important differentiator for the district and the guidelines and everything else that there would be, you know, more activation and more uses within the building. That's just simply a land use reminder for everybody including myself. >> Yeah, thanks for that. I know in the rendering it said that it was retail. I just the way the conversation went today, I thought maybe it had shift at all to office. Okay, Commissioner Agnum, your thoughts on pursuing this further to see if it makes any sense. This idea of getting something moving there that and this may be a possible avenue is worth exploring. >> I don't love it. Um, I I personally wouldn't explore it. Um, it's hard because I want to see this happen on the site. I just wish there were a way that we could build the parking in to the project. Um, and so that's kind of where we're at is I think member Pierce said it well, like I'm I'm definitely open to creative ideas and solutions. And I I think that this is a point where we we need some creativity, but when the outcome is us buying and paying for and then owning a parking ramp and I I hear that there's retail, but I I think right I'll ask this as a question. Is the retail right now a bank? >> Um, great question. No, the entire first floor of the building on the corner of 70th in France is planned to be retail. >> Okay. But is there was there a bank planned for that space anywhere? >> Uh, no. The US Bank, the standalone branch. >> Okay. >> They kept that one acre of the site that we purchased. That's the retail. There's also retail planned for the entire first floor of the office building. >> Okay. And none of that in the first floor of the office building is planned to be a bank. >> No. >> Okay. Thank you. Um, I think that's the part that I'm I'm kind of struggling with is just like >> what we get out of this is a parking ramp and I don't know that I want that. >> So, I'm open to other creative solutions. I want to see this project go forward, but I don't love this creative solution. >> Mr. Carlson, come up for a second. Would you I'm thinking that the one of the reasons we have the ramp and maybe the main reason we have the ramp is because the water table's so high over there. You can't go down more than one level below the building itself or in building parking. >> Uh yes. >> My memory faulty there or is that >> chair Hublin? You're correct that uh we're constrained by the water table and the depth that we can excavate on the site which only provides one level of underground parking. Um, and I think when come back to some of the comments also to expand on that that Commissioner Risser commented on of how do you walk and how do you get places? That's kind of the whole impetus of the guidelines to create future connectivity. And I think about former um council member uh Fiser who laid out maps and showed how this grid would connect future throughout the site. I think that was a very I'd call it a keystone of the design of this project was to create future connectivity. And lastly, I think this dialogue has been very helpful for us as a development team. Really appreciate the honesty. Thank you very much. Ambiguity is tough for us, but I I think as we've learned more about this, and the reason we're even standing here today is again, we're not tonedeaf. So, um if we do decide to come back, I think we'll be able to really lay out some of the answers to some of the questions you had today so you can make further evaluation. Uh yeah, I joined uh council or commissioner Jackson being enthusiastic about this. Um leap of faith for me is that um there will be downstream activity that will create public demand for use of that space from a parking standpoint because we don't really know what's going to happen on site A yet. you're going to have some retail on site B, which is good. Um, and based on the fact that we've done, we own parking other places. I mean, with 50th in France, we've got an enormous amount of parking down there that we own. So, uh, it's not unusual for us to be in the parking business. Um, I'd prefer not to be in the parking business. Yeah. But I think it's it's a it's a reality of trying to think about how to make this site work and is it an idea worth exploring a little bit more and thinking about the downstream public benefit potential public benefit? I think it is for me. So just add on commissioner. >> Uh yes, thank you. I just want to remember that the previous design had the parking above ground in the office building so that that corner would be basically dead. It would have the retail on the ground level and then three or four stories of dead parking with no activation. And I remember uh council member Fischer talking about maybe can you at least have a stairwell in that corner so that you'd see people and then the office above that. And by moving the parking offsite you bring that activation to the corner and that was a really important change that happened. Um and then if we control the parking and we want to reduce the um uh supply of parking in the city to encourage people to walk, we can destroy the parking garage. Um so we have more control that way. Whereas if it's embedded in the office building, it's there permanently. So those are things that um drove the zoning decision for me um going forward. But yeah, I' I'd like to see the office building built. Sure. >> I just want to create space for executive director Neil if he has any comments on this project. >> Just just one quick one and that's talking getting back to the structure discussion we're having about uh a separate nonprofit owning something. Uh we have nonprofits that own property and they use it for a taxable purpose and then they are taxed um whether it's whether it's utility franchise fees or property taxes or whatever. So there are there are entities that are taxable that can buy property and take it off the tax roles if they're using it for a a non-t taxable purpose. So it's there's there's a lot to do to figure out how we put that kind of thing together, but it is possible. >> Um for me, just one final remark I'd say. I I don't want to throw out the the good in search of the perfect. You know, I really liked what we had before. I think all of us did and then the world changed. So, I'm going to go forward with this. As I said earlier, I m council member Pierce, Commissioner Pierce, what what's your level of comfort in going forward with drilling down on this idea a little bit further? >> Um I um >> sure I understood where you were. >> Well, thanks for coming back to me. I was trying to make two points. The broader point of I think it's good as a council for us not to sty creativity when we have challenges like this. And so my first point was, yeah, I'm going to always be open to continuing to work to come up with creative solutions to achieve a certain outcome. So just based on that, I think as long as the developer is is willing to move forward um and explore um continue to explore creative options, I'm in on that. And then um the questions I ask about the structure um this one is just far more complicated, I think. And so I would I would like for you to come back and what I outline in terms of understanding the risk and right being pretty um descriptive of how the monies flow and who the entities are. Um I would like to to see that. Um, it doesn't sound like a warm and fuzzy for me, but just have to trust. That's as warm and fuzzy as it gets cuz I'm I'm very pragmatic, kind of a logical thinker. So, I would like to see that next level of u um due diligence. >> You got two warm, one lukewarm, and a couple of uh and a couple of not so just kind of cool. You got it on temperatures on low or no, keep it on cold. So, >> well, >> hope that was sufficiently confusing for all of you. Th >> this is very helpful. We'll put our heads together and and and think about next steps. Uh when I started this conversation, I had mentioned if it were easy, it would have been finished already. We'll continue the journey. And so, uh we'll report back in whichever direction that is. It'll be a a few meetings in the future, but thank you for the insight and and sharing your frank comments and concerns. >> All right. Thanks. You know, um glad Miss Hawinson was on standby. I we got I think we got for most of us, we got a hard stop at 9. >> Well, and is this is something we can take up at another time? I would think, you know, there's no immediiacy to this. So, >> March, our next meeting is March 5th. >> Okay. All right. Uh is there anybody have anything they want to express for the good of the order? H comments? >> Um okay. Is there a motion to adjurnn? >> So move. >> Second. >> We got an enthusiastic motion to adjurnn by Commissioner Pierce. Equally enthusiastic from Commissioner Jackson. Any further discussion? All those in favor of German of the H meeting this Thursday, February 19th, 2026, say I. I >> I opposed carried. We stand ajourned. >> Thank you.