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HomeMy WebLinkAbout11-09-1998RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA 5409 Recessed Council Meeting No. 32 — November 9, 1998 Agenda Item B-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. F-1 Wishing to be heard was Craig Wendland, Wendland & Utz Law Firm, representing GAC TS. Mr. Wendland apprised the Council of the Time Square project proposed by the Chafoulias firm saying that it would include office, retail, entertainment and lodging space. He named the developments which have already been developed or are in progress by Chafoulias companies including, 1 st Bank Center Place, Galleria, 201 Office building, Barnes and Noble, Hilton Garden Inn and the Woolworth Building, stating the commitment of these individuals to the greater Rochester area. Mr. Wendland asked the Council to consider three things: Agree to a one year commitment to bring important component pieces together including the financing, leasing and land acquisition; asking the City to participate by supporting a tax increment project of approximately $6.280 million; and a parking structure of approximately $5.9 million to accommodate 500 cars. Their estimates indicate that the increase in the tax base alone for this project would amount to approximately $1.5 million on an annual basis. Wishing to be heard was Hal Henderson, Hammel, Green Abrahamson Architects. Mr. Henderson went over in detail each of the floors of the five -floor retail/office/entertainment structure and the additional floors of lodging space. Wishing to be heard was Teresa McCormick, Hammel, Green Abrahamson Architects, who tied the components together to create an interior urban space for all citizens to enjoy. Wishing to be heard was Andy Chafoulias, GAC TS. Mr. Chafoulias stated that this project is financable and that GAC TS is dedicated to getting the project to fruition. He said that it will bring people to the community and particularly the downtown area. Wishing to be heard was Virginia Smith, Ginny's Fine Fabrics, 12 South Broadway. Ms. Smith was opposed to the GAC TS project stating that it would remove small and unique businesses such as her fabric store. She is not able to pay the high rentals that would be needed to move into a project such as proposed. She said that with either project, the parking lot behind the building would be compromised and is vital to the downtown business; it is the only remaining surface lot in the downtown area. She also noted the money that the City has spent resurfacing the lot and putting in utilities for Rochesterfest and Farmers Market activities. Wishing to be heard was Jerry Nelson, Local Developer, supporting the GAC TS project. Mr. Nelson felt that the area should be developed at once and not piece- meal into several projects. He also said that Chafoulias is a local developer who is committed to the downtown Rochester area. Wishing to be heard was Janet Petrich, Salon 37 on South Broadway. She noted that she would like her business to remain where it is. Ir ­ 5410 Agenda Item RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA Recessed C:nirnril Meetinn Nn 39 — November A. IAQR Wishing to be heard was Kevin Mullen, Attorney, 2090 Highland Avenue, Denver, Colorado, representing Royal Townhomes. Mr. Mullen said that they had discovered an unmet need in the Rochester area for short-term apartments. He noted that their project lends itself to retail and office space as well as the lodging aspect. He said that the company is committed to the project, have made a substantial financial investment, and that they are ready to immediately start. Wishing to be heard was Chris Colby, Yaggy-Colby, representing Royal Townhomes He noted that the 12-story complex would consist of two levels of office and retail with ten levels of extended stay apartment use. They felt that adequate parking for the project existed with the surface lot and the various ramps. Wishing to be heard was Dan Berndt, Attorney, Dunlap and Seeger, representing Royal Townhomes. Mr. Berndt stated that this is the first project to come to the City where the City has not been asked to commit time, money and condemnation assistance. If designated as the developer, they will be ready to go in 120 days with completion of one to one and one-half years from start. They would ask for 25 percent of TIF dollars on a pay-as-you-go basis and intent to negotiate in good faith to reduce the LGA (local government aid) cost to zero. Mr. Berndt asked that the City allow them to develop 40 percent of the block and work with GAC TS in the development of the rest of the area. If the Council is unwilling to designate Royal Townhomes, designate both developers to come back to the Council with the project within 120 days. Wishing to be heard was Omar Sapri. Mr. Sapri reminded the Council that he has a proposal, the first one, on the old Library Building. He does not wish to develop a portion or the entire block but would rather keep the older buildings a reminder of the City's past and renovate the existing library building. He indicated he is currently in litigation with the current property owner. Mayor Canfield felt that the use of the entire block by the Chafoulias Company would open the City to the east and north. The other project would seal off the remainder of the block. He suggested that Royal Townhomes move their project to a more desirable location for better utilization of the short-term apartments. Councilmember McConnell noted his concern about the time frame. He stated that the block should not be developed without entertainment. He noted financial drawbacks to the Chafoulias proposal but stated that everyone would find something there. He supported the Chafoulias project. Councilmember Hruska stated that it was important to him that both proposals were looked at. He felt that Royal Townhomes did a good job and would be the best proposal for the community. Councilmember Evans said that it was also important to him to hear both projects. He felt, however, that the Chafoulias project would be the best for the downtown area and would help all of the business in the surrounding Rochester area. 1 RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA 541� Recessed Council Meeting No. 32 — November 9. 1998 Agenda Item Councilmember Stobaugh stated that the Chafoulias companies have made a huge impact in the downtown area. However, he stated that he would like to see a variety of business owners in the area. He hoped that both of the developers could ,be designated Councilmember Senjem felt that the Chafoulias project would be a place for the people. Councilmember Marcoux stated that the Council needed to look at a design for the future and what Rochester should be forty years and beyond from now. She felt that the Chafoulias project offered more for the future of the City. President Hunziker asked if both developers could be designated. Craig Wendland, representing the GAC TS group, stated that the Royal Townhomes has the most strategic location and that a joint venture would not be feasible. However, they would participate in a good faith discussion with Royal Townhomes. Councilmembers Evans moved, McConnell seconded, to adopt Resolution No. 693- 98 approving GAC TS as the designated developer for the Old Library Block for a one year time frame. Ayes (4), Nays (3). Motion carried. Councilmembers Hruska, Stobaugh, President Hunziker voted nay. F-2 Assistant City Administrator Gary Neumann asked that the matter of Reconsideration of Housing Tax Credit Award be withdrawn this time. He noted that it will be brought back to the November 16 Council meeting. Having no further business, Councilmembers Senjem moved, Hruska seconded, to adjourn the meeting. Ayes (7), Nays (0). Motion carried. City Clerk