Loading...
HomeMy WebLinkAbout09-19-19 MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting September 19, 2019 1. CALL TO ORDER The meeting was called to order by Chair Simmons at 6:30 p.m. Members Present: Simmons, Bernhjelm,Butterfield, Cordes, Craig, Jolley, Wilson Members Absent: None Also Present: Adam Kienberger, Community Development Director; Pam Heikkila, Heikkila Studios; Kara Hildreth,Dakota County Tribune 2. PLEDGE OFALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Jolley, second by Bernhjelm to approve the Agenda. APIF,MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Bernhjelm, second by Jolley to approve the Consent Agenda as follows: a) Approved Meeting Minutes (August 22, 2019, Regular Meeting) b) Received Monthly Financial Statements APIF, MOTION CARRIED. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) Downtown Facade Improvement Grant Program Application Ms. Pam Heikkila, Heikkila Studios has submitted a grant application for her building at 345 3rd Street. This building was designated as a Heritage Landmark in 2001. The grant request is for$20,722 and a project amount of$41,445. Due to the designation,there are certain provisions in the city code for any building permits issued. The work to be done includes: - Replacing missing bricks, brick repair and tuckpointing with restorative work on various deteriorated areas on both the Oak Street and Third Street sides of the building base - $8,000 - Put new stucco on two brick walls—the north wall along the walkway between the buildings and the upper back side which faces the parking lot- $31,725 - Install sheet metal flashing at the roof base - $1,720 EDA Minutes(Regular) September 19,2019 Page 2 The grant amount requested exceeds the allowed grant amount of$10,000 and exceeds the current fund balance of$500. There is certain design criteria to be followed with landmark buildings. One of the main requirements is that any applicant has to obtain a Certificate of Appropriateness in order to obtain a building permit. In order to obtain this certificate the work must meet the Secretary of Interior's Standards. There are several things to note: 1. The grant amount exceeds what is allowed for a grant and exceeds our current fund balance. 2. At this point a Certificate of Appropriateness has not been obtained. Therefore, staff is recommending this application be continued to a future meeting pending the three items noted in the staff memo. Member Bernhjelm asked if the Certificate of Appropriateness needs to be obtained from the Planning Commission as historic preservation falls under them. Staff explained upon application, it would go on a Planning Commission agenda at a regular meeting and it would be discussed by the Planning Commission. Ms. Pam Heikkila started brick restoration last year at$170,000. The building was appraised for$305,000 this year. She has received multiple quotes and has been working on this for a year and a half There is no one that will do any brick work until next year. Bricks are falling off the building and they are cleaning them up every day. If anyone on the EDA cares, hopefully you have looked at the building and see how dire this is. If we wait until next year,the building will fall off in big pieces. No one will do brick work this year, so stucco is the only option. It would be on the back top half of the building and the walkway side between the two buildings. It's a structural thing and a crisis at best. This is Farmington's oldest building. We don't have time to wait. If you don't give me a grant, at least give me the permission to protect my building so it stays alive for history. If you don't I would definitely say this commission does not care at all. I have worked on this for a year and a half In early April, she had a masonry contractor out and said it would cost$100,000 - $200,000. Again,that is way out of her budget. She just took out a loan for the roof and the building is not appraised for that much. She didn't know if the EDA was here to help people or be a huge burden on their back, but if she walks away and they say she can't protect her building, she has strong words for this committee. If you even postpone it, I would say you are anti-protecting the buildings downtown. She has bids for$312,000 from a Farmington company to just fix the bricks. Her business has been bringing people into this community for a long time. The EDA needs to be here to help. If you postpone it, it will fall. She has someone who will do stucco this fall. She has had 20 contractors come and none of them will do it. So either I can protect it, or it will fall. The bricks are like sugar. One more winter, and it will be much worse than it is now. EDA Minutes(Regular) September 19,2019 Page 3 Chair Simmons stated Ms. Heikkila did a really nice job with her application and it is very well laid out. Just to clarify for this committee, this committee cares very deeply. You will not find more citizens who are volunteering their time and want to utilize this program more than the people in this room. But we are bound to follow the order of procedures which in this case, is the Heritage Preservation Commission has to approve that building plan before we can allow dollars to go to it. She asked what is the barrier for getting on their agenda first? Is it that the stucco isn't approved and that is why you are coming to us? Ms. Heikkila stated it was her understanding that if it is in the walkway and the back and people are not seeing it, she would think the committee would just say go fix your building. Chair Simmons stated that is the Planning Commission. So is that why you haven't gone to them, is because of your interpretation of the guidelines? Ms. Heikkila stated all summer she has worked on getting bids and masonry people are busy. They give a bid, but can't do the work this year. Member Bernhjelm felt she needs to go through the Planning Commission process. We would need to find the dollars if we were going to approve it this year, as we have spent our budget this year. Member Butterfield asked why she is requesting over the allowed amount. Ms. Heikkila stated the last bid she received was $312,000. So this is to just stop the building from falling. She just took out a loan for the roof. The other alternative is she closes the business and you have another empty building to look at. Member Butterfield stated the grant program goes to $10,000. So tell us why we should pay out$20,000. The grant money has been paid out to other people that have applied. Ms. Heikkila stated it is Farmington's oldest building, they do school tours,troops were quartered there during the war. The history of the building is so rich. Other buildings don't have that kind of history. It's 142 years old. It showcases Farmington very well and it is what you would want a lot of the businesses to look and feel like. That is what she is trying to do for the community. Member Bernhjelm stated the only thing that can be done this year is the stucco on the walls. Ms. Heikkila clarified all of that can get done this year. She wants to get on the contractor's list for next year for the other two sides. She doesn't have those funds and even if she did, she wouldn't put it in there because you are not going to get it out. It won't sell for that much. She is doing it as a donation to Farmington. She will never get her money back out. Member Butterfield asked if there are any other county or state grants for historical building restoration that could help. Staff stated nothing that seems to be a match. Chair Simmons recalled funds from a CDBG grant at one time. Staff stated we used CDBG funds for$20,000 for the roof. That was about two years ago. EDA Minutes(Regular) September 19,2019 Page 4 Member Jolley asked when applicants approach us about a grant do you explain the parameters? Staff stated yes. So she is aware $10,000 is the top limit. Ms. Heikkila has been working on obtaining bids and no one is able to do it this year until she found this one company. Member Jolley stated if we were to approve this, we would need to alter our rules for this program,which is something we haven't done for others. Ms. Heikkila stated, but they don't have the historical premise that her building does. Chair Simmons stated the owners of Homestead Church were facing hundreds of thousands of dollars for their building and they requested a grant for the $10,000 limit. With any adjustment we would have to be very thoughtful with that going forward. The goal of the program was to have more impact on more businesses so we could do more than two businesses a year. We need to be thoughtful of that especially since we have had very large projects approach us and we have stuck within those parameters. Ms. Heikkila stated she is very grateful to see that building filled. Member Wilson tried to recall when we set this up, do we approach businesses with this program to let them know, and have we done that. The question that is impossible to answer is, if there was an active Heritage Preservation Commission, and given their lense is only focused on that aspect,would they have brought this forward as something that really needs attention. His second thought, is given the amount of resources this committee and the city has as a whole spent on downtown,he wondered if we really say we have this grant program, but it needs to be targeted toward maintaining one of our most valuable assets,which is our downtown. That would be a shift in how we have done things. Member Bernhjelm felt there is a line between private business owners and the city. She fully supported the idea of Ms. Heikkila trying to maintain a historic building. When allocating city dollars for the downtown for sidewalks,the Rambling River Center, etc.,to offer out money for private businesses starts going down a path she is not comfortable with as a governing body. She wants to support businesses, but she doesn't want to get into discriminating against businesses because we are soliciting who we think should be improved upon. Member Simmons felt this discussion is more for our next item and brought it back to this application. Staff stated the next Planning Commission meeting is October 8, 2019. Could this building plan get on that agenda? Staff replied yes. Members stated she could then come to our next meeting or we could call a special meeting. Ms. Heikkila stated by the end of October it is too late, because with masonry or stucco it has to be warm enough to do the work. She invited members to come see her building. She should have had it painted, but she had no idea it would deteriorate overnight. The bricks are like sugar. Member Butterfield asked if she was aware she needed a Certificate of Appropriateness. Ms. Heikkila stated no. She didn't think masonry was that EDA Minutes(Regular) September 19,2019 Page 5 expensive. She went through many companies and most can't do the work until next year. She noted 50%of her clients are not from Farmington. Chair Simmons stated the committee appreciates her urgency. In the past they have called special meetings for urgent issues and this committee is willing to do that. Member Bernhjelm appreciated the urgency also, but we have to work through the budget and there are steps you need to take in the meantime. Member Butterfield stated she started this process last year with getting bids. So it is a little unfair to come to the committee now and present this that it has to be done now. The committee is very open for you to get the certificate and we can re- evaluate our program, but those things will take this meeting and the next meeting. Ms. Heikkila understood, but she has one person that can do it this year. Until then, she could not find someone who was able to do it. Member Cordes suggested scheduling an EDA meeting for October 9, 2019. Staff stated part of what we are trying to address with this issue is not put the actions of the HPC into the EDA, but provide enough background and detail to inform the decisions we make tonight. Some of the materials in the application outline some of the criteria the HPC is obligated to weigh in analyzing how a Certificate of Appropriateness would be issued for any scope of work. This is the first time we have seen a scope of work submitted for a building that caused us to do some initial research to determine how a Certificate of Appropriateness would be issued apart from any application to the EDA. There could be other professions in historic preservation brought in to review that. Everything could be done in a couple weeks, but it is not a guarantee that the Planning Commission would issue a Certificate of Appropriateness on October 8, even pending additional submittals based on our understanding of the Secretary of the Interior's Standards qualifications and requirements for different types of exterior applications to a historic building. It is not a certainty that it would be issued. Ms. Heikkila is trying to keep it as historic as possible. Anything that faces the outside streets, she will try—she has a painting bid for next year so the same thing doesn't happen. Staff stated there is a fair amount of due diligence that will need to be done to issue a Certificate of Appropriateness. Member Butterfield stated there are a couple other discussions that need to follow and one is our next item,providing a funding increase to the grant program as is and a second discussion is the current bid and increasing the bounds of the program and that is not on today's agenda. MOTION by Bernhjelm, second by Craig to continue this application to a future meeting. APIF,MOTION CARRIED. Chair Simmons stated staff will keep the EDA informed and action will be taken based on the action of the Planning Commission. Ms. Heikkila is very concerned that if the project isn't started in October, it will be too cold and she will be taken off the list. EDA Minutes(Regular) September 19,2019 Page 6 Member Wilson asked if a project can be started for this program. Staff stated a project cannot be started if grant funding will be requested. What if part one is started and done and then part 2 is brought to us. Staff stated you can do a project in pieces, but the EDA needs to consider that they are considering what is within the scope of the application. Other work can be done to the building that is based on city code. Member Wilson noted we only have $500 left in the budget for this year so literally we cannot do anything. So you could look at parts of the project. b) Approve Downtown Facade Improvement Grant Program Funding Increase Staff's memo outlined the history of the grant program and the dollars invested. In 2018,the original $20,000 grant funding budget was increased by $5,978 due to the amount of applications received. Currently there is $500 left for 2019. Allowed grant amounts are $1,500 to $10,000. Staff recommends for the remainder of 2019 and into the future to increase the grant funding amount to $25,000. Staff explained if an application comes in tomorrow for$4,000 do you want the answer to be we don't have any money left so come back next year or do you want additional applications to come in for the remainder of this year? Member Craig felt at this point of the year,will many people be looking at doing projects? Staff noted the previous applicant had a point where there are problems with scheduling contractors. Staff has received three serious inquiries about applying yet this year. Member Craig asked where will the extra$5,000 come from? Staff stated within our existing fund balance. Regarding the EDA budget, we have $198,000 available for programming today. The Dakota Broadband will no longer be taken out of the EDA budget. Chair Simmons would like more overall EDA budget information before deciding on increasing the grant funding for 2020. Member Bernhjelm stated her feeling is while she is pro-business she has a hard time continuing to allocate more funds to private owned businesses when we have a long list of needs from the city side of things that need to get funded. She really likes the grant program and seeing how much private money has been invested. The City Council is not increasing the levy for next year, so there is no new money coming in. Member Craig noted there is a list of maintenance items that we can't even touch. Member Simmons asked if we should decide whether to increase grant funding for just 2019 and move changing the limits for the future to another meeting. Member Butterfield stated our total funding right now is $200,000. Staff stated that is our available fund balance; what we have available in the bank for programming. Each year we receive income of$40,000. Member Butterfield stated with the current program we had $14,000 available for future funding and we discussed starting a similar program for other areas of town. So we have $14,000 of unallocated program funding,not$200,000. Staff stated it depends on how you look at it. If we look at it from creating a new program, and if you want to also base it on the longevity of that program. The fund balance of the program remains in perpetuity. Member Bernhjelm noted we approve applications first come, first served rather than accept them all at the beginning of the year. She would rather allocate dollars to a EDA Minutes(Regular) September 19,2019 Page 7 historic building in downtown than some of the others,where it is not a dire need. Member Jolley stated the applicant's justification for asking for more dollars than allowed was that it is a historic building,therefore making it a more desirable place for those funds. In this block, there are six historic buildings and all those people could say we could use the money too. She would not feel good about making that the reason we change the rules. She didn't know how we can discuss this year when we have an applicant that needs the money yesterday and we don't have it. We almost have to take it from next year. Staff stated the TH3 program is one more piece. The one big benefit of this group is we operate with a fund balance which means it does not expire on an annual basis. It rolls over each calendar year. It is more of a policy decision about how we want to see those dollars utilized long term. Because this is a completely locally administered program and very nimble,we can very simply transfer dollars. Chair Simmons felt we should not assume the $40,000 is there every year. Member Butterfield felt it is completely reasonable to increase the grant funding for this year and next year. This is a program the EDA has funded for the recent period. To keep helping the business owners who want to improve buildings is historic. Member Bernhjelm stated say we add $5,000 this year and now we have $5,500. Is the answer we say no to Heikkila Studios and wait for something to come in at$5500 or say she can have $5500 of the $20,000 and now we are back to zero. Now we are working project to project on funding. Chair Simmons agreed and would rather focus on our objectives for 2019 and see where we land and revisit our strategic plan for 2020. Member Butterfield stated so if three more applications come in,we are uncomfortable allocating more, so we turn away businesses that are wanting to improve their façade which is the exact opposite of what the program is intended to do. We are saying we want to shut it down for this year and come back next year. Regardless of the previous proposal and asking for a ridiculous amount of money, adding to the fund balance and paying that out to the next applicant, and another applicant comes in November with a really great project that met the benefit of what the program was intended, we would be making the same decision and considering another allocation. Chair Simmons agreed, but didn't want to get into planning for 2020. Member Wilson felt reviewing all applications at the same time is reasonable. We started with a small dollar amount and it was not a subsidy of the city. As we have increased funding,this committee has gotten more contentious about it. To question each project, has taken out the good will of the program. He likes staffs recommendation to increase the funding to $25,000, but at the same time he almost wants to back down the size of the grant award. Our move up to $10,000 has turned us sideways. Member Wilson suggested at a future meeting discussing do we take applications from January 30 to April 1 and send a letter to businesses that we are accepting applications up to a dollar amount during this time. If we get a request in July,we considerate it at that time. If we increase funding for this year and bypass the current request, that is not fair. If we increase it,then we should make an award to Heikkila for$5,500 which is in our budget. Chair Simmons asked if we should increase it more and give her the $10,000 limit. EDA Minutes(Regular) September 19,2019 Page 8 Member Bernhjelm asked what if someone else comes in and we have increased it for one person. Member Jolley stated anything received after Heikkila's would be deferred to next year. Chair Simmons suggested waiting to decide about increasing for 2019 until we have an application in hand. Member Craig felt we have to set the rules and stick with them, otherwise someone will be unhappy. Staff explained the recommendation in this memo ignores the first item on the agenda. We currently have $500 in this program for the rest of the year. If someone wants a new awning, do we say try again next year, or based on our balance do we want to increase funding so dollars are available. That changes the answer. MOTION by Bernhjelm, second by Wilson to keep the façade grant funding as is for$20,000 with $500 remaining for 2019 and not change the policy for increasing or decreasing the current limit of what people can request. APIF, MOTION CARRIED. Member Bernhjelm stated at a future meeting look at funding amounts for 2020. Member Jolley stated that would turn down Heikkila's application. Chair Simmons clarified just for this meeting. We can look at it again in October. Member Wilson felt it is worth a policy discussion at a Council level. Is there an investment that is worth making to preserve what we have with our downtown versus letting it go and rebuild a new downtown in the future. We have something other communities would die to have. He is not suggesting the Council would voluntarily start improving private buildings. But the reality is there is a historic designation to it and there are old buildings. Member Bernhjelm asked staff if the commissions ever present a budget to staff to bring to the Council. In that situation, she would say that the Planning Commission,which now owns heritage preservation,would need to come to Council with a request during budgeting time that we want X amount of dollars to fund this program. Council is taking recommendations from department heads, but if we don't hear from commissions, there is no way to budget for programs. The Planning Commission just inherited historic preservation and the budget is set for 2020 so there is no funding for it for next year unless we shift funds in the general fund. Staff stated boards and commissions have not brought budgets to the Council. The Council has provided dollars down to the commissions. Those budgets are determined by the department heads and city administrator that are brought to the Council through a number of work sessions. He recommended for October or November, we have the ability to allocate dollars within our fund balance. That is not part of the Council budget process. It is internal policy about how we allocate that pool of dollars. That discussion can be brought back later in the year. c) Business Retention and Expansion Communications Strategy Update Chair Simmons noted this item could also be a long discussion yet tonight. Member Wilson suggested continuing it to October. Members agreed. Member Wilson asked if we are having a planning or goals meeting for 2020? This item could be part of that. Member Bernhjelm felt the EDA could benefit from a EDA Minutes(Regular) September 19,2019 Page 9 session like that. MOTION by Wilson, second by Jolly to continue this item to the October meeting. APIF,MOTION CARRIED. d) City Council Update Member Craig distributed the list of maintenance items for the city that have been put on hold. We have $10 million worth of maintenance work that needs to be done. Members asked questions about the various items on the list. 9. DIRECTOR'S REPORT a) September Director's Report The South of the River Real Estate Summit was held today. Six Mayors made presentations. There were 100+commercial and residential brokers in attendance. Regarding the Open to Business program, Laurie Crow is no longer with the program and they are working on new staffing for us. 10. ADJOURN MOTION by Bernhjelm, second by Cordes to adjourn at 8:10 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cu wtlni a Mu.LLer Cynthia Muller Administrative Assistant