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HomeMy WebLinkAbout11.28.23 Special Work Session Minutes City of Farmington City Council Special Work Session Minutes Tuesday, November 28, 2023 The City Council met in a Special Work Session with Castle Road Township on Tuesday, November 28, 2023, at Farmington City Hall, 430 3rd Street, Farmington, Minnesota. 1. CALL TO ORDER Mayor Hoyt called the Work Session to order at 5 p.m. Members Present: Mayor Joshua Hoyt Councilmembers Holly Bernatz, Nick Lien, Katie Porter (listened in remotely), and Steve Wilson Members Absent: None Staff Present: Lynn Gorski, City Administrator Julie Flaten, Asst City Administrator/HR Director Leah Koch, City Attorney Deanna Kuennen, Community & Economic Development Director Tony Wippler, Planning Manager John Powell, Public Works Director Shirley Buecksler, City Clerk Castle Rock Township Board of Supervisors Present: Jon Juenke, Chair Sandy Weber, Vice Chair BJ Elvestad, Supervisor (listened in remotely) David Nicolai, Supervisor Pete Schaffer, Supervisor Molly Weber, Clerk Also Present: Drew Johnson, Sr. Vice President, Oppidan Investment Co. Jacob Steen, Larkin Hoffman Trisha Sieh, Kimley-Horn 2. APPROVE AGENDA Motion was made by Councilmember Wilson and seconded by Councilmember Bernatz to approve the agenda, as presented. Motion carried: 5 ayes / 0 nays. 3. DISCUSSION ITEMS 3.1 Discuss the Approval of a Resolution to Amend the Castle Rock Township/City of Farmington Orderly Annexation Agreement to Include 315 Acres of Empey Property Special Work Session Minutes of November 28,2023 Page I of 7 Mayor Hoyt welcomed the Castle Rock Township Board of Supervisors and everyone attending tonight's meeting. City Administrator Gorski thanked the Board for coming. It is an honor to have you here. We appreciate getting together to discuss and have a possible partnership together. Tonight, we have an introduction to this opportunity. The Township Board has heard this presentation already, But with our Council, we had established an ad hoc committee, so some of our Councilmembers have not heard this presentation and have not had an overview, so we want to be sure we are all on the same page, as well as the public. Drew Johnson of Oppidan Investment Company will be going over what the project entails and doing a project profile, design standards, and showing some pictures with examples of what some of these parks look like. We are proud to have you here and humbled to have you listen to what we have to say. The land is in Castle Rock Township and requires infrastructure from the City of Farmington. The Empey property owner is interested in annexing outside of the existing OAA. The objective is to facilitate the annexation of the Empey property, spanning 315 acres, into the City of Farmington. This proposed amendment is in consideration of a potential data center technology park opportunity. This proposed project represents a unique opportunity, one that would substantially increase the tax base in the region, boost the revenues of local businesses, offer educational job training, facilitate community outreach, and foster substantial investments. Its impact extends beyond Castle Rock Township and the City of Farmington. Mr. Johnson discussed the types of properties that fit into this type of project. Flat land with the ability to access municipal sewer and water, close to a solid work force, and more. There are not a lot of properties available like this. Where technology is going, the future are these contiguous campuses that can concentrate on investment and resources. They are not asking for tax increment financing (TIF), any public subsidies, or the City or Township to construct any of the infrastructure that would serve this campus. The Metropolitan Council has a large amount of recycled water to supply the summer cooling water which makes for a more efficient data center before that water goes back to the Mississippi River. City Administrator Gorski: There is no TIF for this project and no business subsidies. Castle Rock property owners will not be assessed for this project. We attended and presented at the November 141h project introduction meeting at Castle Rock. December 12 is the next Town Board Meeting and another milestone in this project. We would be looking for Castle Rock to vote on this annexation into Farmington. When the resolution is approved, the Memorandum of Understanding (MOU) starts, which includes the details. The timeline for annexation is estimated 90 to 120 days and the Alternative Urban Areawide Review (AUAR) is a six to nine months process. Special Work Session Minutes of November 28,2023 Page 2 of 7 The ask, Administrator Gorski said, is to allow the Empey property to be annexed into the City of Farmington. The fiscal impact also includes the county and the school district. We are estimating that when the build is done, by 2027, the estimated taxes for Castle Rock and Farmington are $239,747.62 for one year. It's not just about us. It's about the community as a whole. Mayor Hoyt affirmed that similar projects to this have a level of confidentiality and some questions may not be able to be answered tonight. Supervisor Nicolai asked about access to the property. Director Kuennen said those are details yet to come. When we get to the next step, we will be able to get those details. We understand the concerns. Supervisor Nicolai: If we agree, one big thing is the buffers were generous, and we are concerned about losing control of those buffers. Based on the orientation of the site, Mayor Hoyt asked if it would be fair to assume that the Township would like to see some level of primary access in the southwestern region of the property? Not a northern boundary access point. They agreed. I cannot preface enough that this is being done in good faith. Director Powell: The environmental review process will identify concerns of neighboring properties with a larger site being planned as a campus. Chair Juenke: These data centers use a lot of water. Is it new that you're recycling water more? Director Powell: We are not taking from the water tower— it's taken from ground water. We are not proposing any wells on the Empey property. The City wants to be sure we can supply what their needs are, but we are not proposing any new wells in that area. Chair Juenke: How much can you recycle before it goes to Met Council? Mr. Johnson: Recycled water is non-potable water. In Minnesota, the standards are quite high for recycled water. From the Met Council Empire plant, it would be water, once it was cleaned, ready to go back to the Mississippi River. It would go through a further polishing plant, which is required by regulations, to be used as non-contact cooling water within the data center. Given the reliability that these data centers need to have, using ground water, it would have to go through a water treatment plant, so the data center wants their system to work — and it's not practical, cost effective, or reliable to rely on smaller private wells for this project. We need to be hooked up to city systems. Recycled water is the only reliable large environmentally conscious thing to do. That's where the industry is going. Chair Juenke: Does this project give off much heat? Special Work Session Minutes of November 28,2023 Page 3 of 7 Mr. Johnson: Water is cycled. One a hot day, 50% of water is evaporated through the cooling process. Mayor Hoyt clarified the source of water will not originate from wells in the area. Mr. Johnson: City water and sewer has an industrial connection to the Met Council. Director Powell: Reminder, this is all within the City's comprehensive plan to make sure we can serve all these demands. Chair Juenke: Would the City consider tarring the road to the southwest? Director Powell: If there are lines coming from Empire, the question is it a project with Empire to fit those needs. If significant changes are needed, I anticipate we will know early in the process. Vice Chair Weber: How many gallons of water will be taken out of the ground per day? Director Powell: We have a general idea but will not know until we are further in the project. We plan to add 2.5M gallons of storage. Mayor Hoyt: As far back as 2019, we have discussed an additional water tower site. This is a project forcing us to do more extensive long-term planning. Supervisor Nicolai: Traffic numbers are projected low. Ideas on projections? Mr. Johnson: Growth over 10 to 15 years is very uniform, relative to constructing buildings but the power will come in chunks the public won't see. The public would see a pretty orderly build over 10 to 15 years, but within the inside of the building is different. Estimate full build in 2025 to 2038. One hundred people on the entire site at once. Off peak would only be security and night workers. Less than a few hundred workers. Mayor Hoyt: We are doing this in good faith. I believe the community recognizes things are a little bit different in today's society. This is a generational opportunity. At the end of the day, this is about a property owner, not the City. Know that whatever we decide to do together, and how we get to that point, it is absolutely done in good faith. We want to hear from the Township, we want to hear from your residents. We respect the landowner's rights, we respect the vision the Township has, as much as we do our residents' vision. Our ask is that we continue to do this in good faith, that as we go through this, let's hear reservations, likes and dislikes, but let's come up with an answer and go from there. Mr. Johnson: From our side, given that there is still an eight month environmental review process, planning and agreements, is it a time crunch or just an urgency Special Work Session Minutes of November 28,2023 Page 4 of 7 on the business as these same uses are being sought out around the nation? Minnesota is set to get a lot of this investment. The annexation is the gateway to having something done in 2027, which may be the urgency for it. Director Kuennen: By the time a project gets in front of an elected body, there is a sense of urgency. Prior to that, the developer has done a lot of vetting of various types to narrow it down to sites that they believe will work. The magnitude of the project and the lead times, they have to pull the triggers now. They cannot expend the dollars to do things until the certainty is there. City Administrator Gorski emphasized that we recognize our partnership. We currently have our OAA. We are going to put our best foot forward. The first year is a 50% cost. After their certificate of occupancy, that is the number we are talking about. Administrator Gorski presented the City's proposed tax distribution. The estimated taxes in 2027 are $239,747.62. The City is proposing that cost by 50% for eight (8) years, for a total payment just under $1 M. Chair Juenke: Have you thought about attorney fees for the Township? City Administrator Gorski said we can discuss that detail. I hope you are pleased and surprised with this offer. Mayor Hoyt: This is being done in good faith. Some details will be worked out in due time. As we start to work this, details will be filled in. Some conversations may be more in-depth. Let's have those conversations. We cannot do this without your approval. I believe we can come to a mutually agreed upon agreement. We can agree today that we can answer those questions when we get to that point. Chair Juenke: We agree, and we are here to listen. Director Kuennen: Having the resolution allows things to move forward. And the MOU —we work through those details while things get moving. Supervisor Schaffer: We only get together once a month, but you want an answer in two weeks. CityAttorney Koch said the attorneys can negotiate and the Y Y 9 Township Board could also schedule a special meeting. Mayot Hoyt: Something this big and impactful, the ask is — let's do what we have to do. Would your body be able to take two of you as an ad hoc group to meet? Or as full bodies in public meetings. Chair Juenke: Empire became a city so you can't go to them. That scares us that you're coming to us. Supervisor Nicolai: The annexation agreement is more to me than money. This Council is cordial and cooperative. What happens when there are five new members who are not? We feel comfortable with you but we cannot bet on the future with who is sitting in those chairs. Special Work Session Minutes of November 28,2023 Page 5 of 7 Councilmember Bernatz: Thank you all for being here. As the daughter of a dairy farmer, I see if from both sides. It's not lost on me. What that means is I can see the emotional side of the Empey's. It changes the trajectory of their family. believe it to be absolutely true — this doesn't happen for them or the developer unless we work through the details. This has the opportunity to change a lot of things for the community. Thank you. Councilmember Bernatz left the meeting at 6:15 p.m. Mayor Hoyt: For those that know me, I stand by my word. We will address the concerns that get us to a mutually acceptable OAA. The City is not trying to come into any township. I was part of the conversation with Empire when they asked us to take in the land just south of 160th, but we turned it down. We may not come asking, but someone else might, and we want to be in mutually agreeable situations where you can be respectful of what we're looking for and we can be respectful of what it is you need. I will always refer to it as the greater Farmington area because that's what it is. I will tell you that we are continuing down this path of maintaining civility, having honest conversations, establishing long-term relationships. We have to have a standard to take care of everyone in the area, whether they are city or township. Director Kuennen: At the last meeting, the Township expressed the desire to look at the existing annexation agreement to preserve and protect the identity of the future of the township. We heard that you wanted to update that, and we are willing to sit down and talk through that. We propose that we revisit that outside of this particular ask. In good faith, we are willing to sit down and talk about what that means. Mayor Hoyt: If there is a specific ask or something to consider, not only have we heard that, but let's put it in writing and make it formal, as we would with our proposed tax calculations. The intention is to put it in writing. Clerk Weber: What happens after eight years? City Administrator Gorski: This agreement would then be completed. Mayor Hoyt: The split is done in 2027, and eight years start from then. We want you to feel like this is a win with a very strong offer. Come forward with whatever it takes to get it done. Chair Juenke: The Board can meet behind closed doors before December 12th and have our asks to Administrator Gorski in writing before that date. In good faith, we will meet on Monday. Mayor Hoyt: In good faith, if fiscally we are on the same page for a mutually agreed upon distribution of the taxes, then let's check that box. If for some reason you're not, then put something in writing. The second part is an Orderly Annexation Agreement amendment, not Empey property, but the existing Special Work Session Minutes of November 28,2023 Page 6 of 7 agreement. Propose language for what you're asking for in that, send it to Administrator Gorski, and we can discuss it internally. City Attorney Koch: Castle Rock will meet Monday to discuss the terms and come back to us with specifics, correct? At that point, until we talk with your attorney, don't want us to worry about the titles of what documents are, we need the thumbs up from your attorney. We need to make sure we are working through this at the right rate so as much as you can focus on the terms themselves, that would be great, and we can start working on what that document will actually look like. I am happy to work with your attorney or one of you and Administrator Gorski will also be involved. Chair Juenke: In good faith, we will meet possibly next Monday. Councilmember Wilson: Administrator Gorski will then bring the ad hoc committee to work together. 4. COUNCIL COMMITTEE UPDATE No update. 5. CITY ADMINISTRATOR UPDATE No update. 6. ADJOURNMENT Motion was made by Councilmember Wilson and seconded by Councilmember Lien to adjourn the meeting at 6:34 p.m. Motion carried: 4 ayes / 0 nays. Respectfully submitted, 4 Shirley R ecksler City Clerk Special Work Session Minutes of November 28,2023 Page 7 of 7