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HomeMy WebLinkAbout09-28-1998RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA 5365 Recessed Meeting No. 26 September 28, 1998 Agenda Item A-1 President John Hunziker called the meeting to order at 4:15 P.M. with the following members present: Councilmembers Mack Evans, Ed Hruska, Marcia Marcoux, Jean McConnell, David Senjem, Walter Stobaugh. Absent: None. President Hunziker asked that the E items be brought forward on the agenda prior to the continued hearing on the Subdivision Ordinance. Councilmembers Stobaugh moved, Marcoux seconded, to move the E items to the front of the agenda. Ayes (7), Nays (0). Motion carried. E-1 Fire Chief David Kapler recommended that the Council approve the bid of Floyd Larson Construction to construct Fire Station No. 4 at a cost of $1,892,194 which included six alternate deductions. Chief Kapler wanted the Council to know of the efforts that went into the building project prior to the bidding and their efforts to keep the building costs down as much as possible and still have what was needed to do the job. Councilmembers were concerned about the cost estimates of $90+ per square foot and the actual bids coming in at $109+ per square foot. Mike Jordan of Symmes, Maini and McKee Associates, architect for the project explained that when the project was estimated, it was not possible to tell what the costs were actually going to be in an unknown bidding climate. Although he did not believe that the project was being penalized for starting in the fall, he did feel that the costs would be increased if the project was rebid in the spring as a result of inflation. He stated that every effort was made to keep the building in line with the Council's previous high $90's per square foot expectations. Councilmembers Marcoux moved, Stobaugh seconded, to adopt Resolution No. 579-98 awarding Floyd Larson Construction the construction of Fire Station No. 4 in the amount of $1,892,194 including alternate deducts 1,3,4,5,6, and 7. Ayes (5), Nays (2). Motion carried. Councilmembers Evans and Hruska voted nay. E-2 Councilmembers Hruska moved, Stobaugh seconded, to approve the temporary gambling permit for Harriet Bishop Elementary School to hold a raffle on October 9, 1998 and to waive the 30 day time period requirement. Ayes (7), Nays (0). Motion carried. C-1 I Continued Hearing on Proposed Subdivision Regulations. Terry Adkins, City Attorney, reminded the Council that at the meeting on September 21, 1998, the Council approved the recommendation of the Planning Commission for Issue #1 — Neighborhood Meetings and Issue #7 — Requiring Private Roads to be Designated to City Standards. Wishing to be heard was John Arnold, Attorney, and a member of the Rochester Builders Association and Developers Council. Mr. Arnold told the Council that the Builders Association had no opposition with the grading issue as most of the grading will be done with major projects which require such in their application. Mr. RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL 5366 CITY OF ROCHESTER, MINNESOTA Reeessed Meeting Ne.26 SepternbeF 28,998 Agenda Item Arnold also noted that the Builders Association does but doesn't support the requirement on accepting liability for street improvements. They would like to see the language on the final proposal. The question of traffic capacity, Mr. Arnold stated, was an integral part of Conditions #3,4 and 5. He said that they all fall under the affordability issue question. Wishing to be heard was Jim Gander, 932 Sierra Lane N.E.; President Elect of the Builders Association. Mr. Gander told the Council that it is important for them to keep the cost of housing down, both higher -priced and lower -priced homes. They will make the impact to the cost of housing now and in the future. Wishing to be heard was Frank Kottschade, 4719 Warwick Lane N.W., owner and developer in Rochester. Mr. Kottschade gave a presentation on what drives the cost of housing in the area including lot prices, traffic impact fees. He noted that in the last 13 years, the cost of housing has escalated higher and faster than the Consumer Price Index. He stated that currently it takes 437 days for the development of a 50-acre piece of land. The amendments to the subdivision ordinance would increase this by 123 days with the traffic impact report requiring another 93 days. Mr. Kottschade stated that the national average of people able to afford to own their own home is 68 percent; Rochester is 62 percent. Wishing to be heard was John Sipple, 780 26th Street N.E. Mr. Sipple stated that he believes that if people wanted to live and work in Rochester, they would buy in Rochester no matter the cost of the homes. He feels that the consultant's recommendations on the amendments to the subdivision ordinance are very reasonable and proper. Wishing to be heard was Joe Bigelow, P.O. Box 247, Byron. Mr. Bigelow stated that the affordability issue is very important. He told how the price of a home in Rochester in 1975 for $13,760 with a lot price of $25,000 has now risen to the same home costing $78,000 and the lot $130,000. He said that the lot prices account for 20-25 percent of the cost of housing. Mr. Bigelow noted that it now takes three to four months to develop a subdivision; with the new regulations it could take eight to nine months. Wishing to be heard was Bob Winter, 828 26th Street N.E. Mr. Winter said beware of the middleman who comes with statistics. Don't take the figures you have heard at face value. Find another source to compare them with. Wishing to be heard was David Owen, 2011 Telemark Lane N.W. He stated that if the builders built homes that would last for 75 years, a few days more to go through the necessary steps for development wouldn't matter much. Interest rates are the number one influence in the housing industry. What we do locally doesn't have much influence on the interest rates in another part of the world. The subdivision regulation changes would account for only a 2 percent increase in the cost of a $125,000 home which isn't much for a quality house in a quality neighborhood in a quality city. 1 Agenda Item RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA 5367 Recessed Meeting No. 26 September 28, 1998 Wishing to be heard was Don Soderberg, 130 Cheval Lane N.E. Mr. Soderberg stated that when he hears that it takes 400+ days to get something through from the time you buy the land, it's too long. Take the timeline down to a reasonable timeline and then direct the staff to design it. If there is no agreement with the builders and the developers, housing will go to outlying communities that want it. Individuals think that developers and builders make all kinds of money on their developments. Sometimes you have to give away a lot to get someone to buy the home. Councilmembers adjourned for a supper break at 6:20 P.M. and reconvened at 6:55 P.M. Wishing to be heard was Kathy Schwartz, 1804 Fox Valley Drive S.W. Ms. Schwartz stated that she didn't think that there had been given an adequate definition of affordable housing. She said that there is a critical shortage of available housing. Houses in the price range of $60,000-$80,000 are nearly non- existent; $80,000-$100,000 very difficult to find. People are coming in with lower wages, no downpayments or cannot afford the homes on the market. Rochester is expected to grow faster than any other city in the State; it should be ready for that explosion. The heart of a community depends on a mixture of housing types including new construction. Ms. Schwartz stated that there isn't enough cooperation between the City and the County on infrastructure needs and planning for the future. Wishing to be heard was John Cravath, 300 Bear Paw Circle N.E., Byron, a builder and real estate broker. He stated that it is not possible to find a lot in Rochester for under $30,000. The demand is in the northwest part of the City at the present time. He asked the Council to look at the entire picture as a package realizing that the land prices are the largest piece of the pie. The many governmental permits required and the time frame all attribute to the cost of the homes. Wishing to be heard was Erin Benike, 1300 Eidenborough Lane N.W. Mr. Benike asked if a flow chart had ever been made of the process that someone other than a developer could understand. Phil Wheeler, Planning Department, said that there are supplements to the current Land Development Manual that explain several different phases that are needed. Dr. Robert Freilich, Kansas City, Missouri, discussed some of the concerns of the new subdivision ordinance amendments: 1. The neighborhood meetings need only ten days notice and can be held within the existing time constraints. There is no additional time added to the approval process because of the neighborhood meetings. 2. There would be no change in this or any other development process due to a major grading permit. It is entirely independent of any other subdivision or zoning process. 5368 RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA Agenda Item 3. The traffic report is already required under current regulations. It is standard with regard to the level of service requested and the analysis of off -site street traffic. There is no loss of time except when seeking a planing amendment or rezonng to an existing use of the land. The Council needs to understand the impact the development will have on whether and how it will change the infrastructure and impact the neighborhood. Traffic reports need not cost $150,000; staff can do for $4,000-$7500, experts can do for about $6,000. Currently the traffic impact reports only point out what we don't have now but will have in the future for a specific development but not what the traffic impact will be on adjacent streets. In your economic development program, if industry wants to come into the city and wants to locate along designated traffic routes, the city should help them put in sewer and water, and infrastructure because they are saving you multiple dollars for traffic impact reports. Dr. Freilich stated that the timeframe or cost issues are not of any magnitude. The development agreement has been made available to developers which will save them dramatic timeframe costs. The development agreement currently exists in 29 states. The agreement enables the developer to mitigate certain impacts on the project. Dr. Freilich pointed out that Mr. Kottschade made the point that infrastructure building is not absorbed by the developers, it is absorbed by the homeowners. The demand for housing fixes the price of housing on the development end. If you want to increase affordable housing in the City, you need to increase the density of homes on acreages. The land and its infrastructure is about 20-25 percent of the costs. There are about 68 percent of people who can afford at their income level a $125,000 unit according to Dr. Freilich; what is being done with the other 30-35 percent? There are certain programs available to work with developers such as the Minnesota Housing Finance Agency, TIF funding, public/private housing partnerships, CDBG and other programs. A typical $125,000 house costs the homeowner about $12,000 per year and requires a $48,000 income. If we can get the cost of housing down so that someone who makes $15,000-$16,000 per year can afford a house then we help affordable housing. But, it isn't going to be by eliminating the infrastructure needs. If a development creates off -site infrastructure needs that can not be dealt with, the needs should be phased by the developer over a period of time and there will have to be some mitigation for the developer. If someone can walk away and not have to pay for the infrastructure, then the rest of the community will have to pay. It is these costs that can bankrupt a city. Councilmember Marcoux asked if it would be beneficial for the City to have a project manager to assess each project and give the feeling of continuity. Dr. Freilich said that such a project manager is not needed in the subdivision regulations but in the administrative procedures. The regulations define what the 1-1 Agenda Item FJ L RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA 5369 Recessed Meeting No. 26 September 28, 1998 process is. The staff can address procedures by way of a policy manual or direction from the Council. Councilmembers -Senj em moved, Stobaukh seconded, to accept the Planning and Zoning Commission's recommendations on issues #2 and #6. Ayes (7), Nays (0). Motion carried. Councilmembers Hruska moved, Evans seconded, to continue the public hearing for Conditions #3, #4, and #5 to October 12, 1998 at 4:15 P.M. Ayes (7), Nays (0). Motion carried. Having no further business, Councilmembers Stobaugh moved, Marcoux seconded, to adjourn the meeting. Ayes (7), Nays (0). Motion carried. Ci y Clerk