Council Minutes

Minutes of Grand Forks City Council/Committee of the Whole
Monday, February 1, 2010 - 5:30 p.m._________________ __

The City Council met as the Committee of the Whole on Monday, February 1, 2010 at 5:30 p.m. following the Growth Fund meeting in the Council Chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Bjerke, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; absent: none.

Mayor Brown asked the Boy Scouts to post the colors and lead the city council in the pledge of allegiance to the flag. Mayor Brown read a Proclamation re. Scouting Anniversary Week February 7-13, 2010 and stated that the Northern Lights Council and its 502 Cub Scout Packs, Boy Scout Troops are celebrating scouting's 100th Anniversary. Spencer Dusso represented the Lake Agassiz District in Scouting made a brief presentation and that the Boy Scouts left with the 12 words that have been the moral compass for 100 years and will be their compass for the next 100 years. All Boy Scouts, former and present in the audience repeated the Scout law. Mayor Brown presented Spencer Dusso with the copy of the Proclamation.
:
Mayor Brown commented on various items during the past week and upcoming events:
Congratulations to the family Lamoureux for the Sports Illustrated spread this month, they represent us well.

2.1 Municipal Action for Immigrant Integration Agreement.
Robin David, president of Global Friends Coalition Board of Directors, which is a non-
profit in Grand Forks that exists to assist with refugee integration to help them become successful in our local community, and important to remember to look at this from a community asset model and that when having immigrants coming here with needs and if do refugee integration well in this community then the people who are arriving today are our future business owners, future teachers, community leaders and with this particular proposal we have a chance to really do things right in the community as we are seeing increasing number of immigrants coming here.
Council Member Kreun stated that if the City enters into this agreement, next step would be to formalize the community steering committee to work between the NLC and the community members and asked how that would be developed. Gershman stated there has been an ad hoc committee meeting, organizations that are working with the immigrant population, and have had several meetings and that the Mayor and a council member could decide to work with the agencies and appoint a committee and bring back to city council for approval.

Remarks were made by Ray Dohman, Greater Grand Forks, re. his opinion on opposition to
immigrant integration.

2.2 Grand Forks Tax Increment Financing Policy.
Jim Porter, 3596 Prairie Drive, stated he discussed with members of the subcommittee
and believes important policy for encouraging development esp. in specific areas of the city but also is important to establish the appropriateness of the policy, adopting best practice principals in the policy that include transparency and hold all parties including the City and businesspersons accountable.
He stated he was concerned of potential hidden costs that may be attributed to this policy that may lead to taxpayers exposure to risk, including increased expenses, loss of revenues, reduced capacity of city resources or generation of inappropriate development and even possibly lowering the average wage of the employees in the city - some examples could be project that would have gone forward without the TIF policy and revenues that would have been realized because the project would have gone ahead anyway.
That he is asking council members to consider inclusion in the review criteria of the policy, that developers will certify their project would not have gone forward except for this TIF policy; or that some of the review criteria includes quantity of jobs, quality of jobs that are created, including a livable wage for the employees. Therefore he was asking council members to consider inclusion of an accountability language in the policy that would include statements like public purpose for the TIF policy, expected incremental value for the goal of the project, goals for number or average compensation of wages developed by the project, commitment by the person to continue operation within the jurisdiction after the incentive was ended and also a description of the plan for obligations of the recipients if the goals aren't met and could easily include that they don't get the rebate for that year. He stated that he believes public disclosure or annual reports insure compliance with all the agreements, and more importantly provides the City with an evaluated type of information as to whether or not the TIF program is actually meeting the overall objectives that were established, and is asking members of the council to discuss inclusion of a reporting section in the policy that not limited to statements of goals, incremental values of the project within the past year and the number of average compensation of jobs created, including benefits, during the reporting period. Believes a reluctance to enact a disclosure statements in the subsidy agreements, concerns of a unfriendly business climate are unfounded. That he is asking council why wouldn't they want to include best practice principals in our TIF policy and recommended that the policy contain a clause in the review criteria as well require accountability in disclosure statements in the agreement clause before advancing this policy for a council consideration..

Council Member Bjerke stated that if we are going to have this policy, need to have some type of accountability if seek economic development, and if want to have tax breaks give them to everybody, and doesn't agree with it and will be voting no on it in general.

Council Member Gershman stated the City made a significant investment in downtown after the flood by assisting and getting apartment development there, we are protecting that investment and help the vacancy rate. The Regional Economic Development Corporation actually does have standards and watch those things, but that economic development can be risky, but our track record is good. He asked the city attorney if our City Code has for reporting purposes and tracking and investment.

Mr. Swanson reported that a TIF requires two different types of agreements to be entered into with the property owner or prospective property owner and in those agreements there are some requirements that have been provided, the concern he has is that discussion appears to ignore that a TIF is used in addition to economic development purposes but also for slum and blighted which would not even involve any of the issues such as employment, etc.; in addition what is different in a TIF than a normal economic development program is that in a TIF the extent of recovery or extent of backpay is going to be tied exactly to the investment or the project as being built - it is also limited to certain types of eligible costs, acquisition of land, infrastructure, site clearing, etc. and while a TIF can be used for economic development purposes it is limited to the hard project costs, it wouldn't necessarily appear in a policy but would appear in your agreement as you review, and if there are certain representations made by a property owner that are going to undertake in a TIF, you can make that a requirement, if they fail to do so, the exemption would not be granted for the year that they are ineligible.
We have not done the bond sale under a TIF for 15 or close to 20 years and there are reasons for that, thinks they would appear more likely in the actual agreements that are negotiated with any project you want to modify the policy, can certainly do that.

Council Member Christensen stated this process has been on-going for several finance committee meetings, it initially started when group of people came and requested an exemption and Mr. Carsen called out the policy that had been adopted by a council resolution dealing with TIF that had been adopted by a council sometime in 2002. At that time doesn't think that any of the provisions of NDCC 40-58.20.11, Item 6, had been enacted by the Legislature. Mr. Swanson has already touched on what is required under that section of the State Code - and that is what we did with the group that came forward looking for an exemption for a building to be built on 42nd.
The committee decided that it was more appropriate to have this available throughout the city rather than a certain area of the city so it is available for anybody that wants to do a project in the city that would qualify. It is a case by case basis, based upon what the applicant is trying to accomplish or could spur some economic development, and that is why the city attorney has included in project criteria economic development initiative, etc. and is very broad policy but still has to be applied on a case by case basis based upon the application.
That when he and Mr. Gershman were looking for an economic stimulus package for this community that is why we extended various tax breaks for new homes, commercial and a 25 ear exemption. This is an extension of some policy to try to get some development in areas of town. Certain areas of tow are entitled to a tax break because building in a Renaissance Zone.

Council Member Bakken stated if we are going to be competitive with our neighbors and other areas in the country, these are things we have to do, that 2010 is not going to be a good year, and need to do everything we can to move the city forward and expand our tax base which is what we are doing on case by case basis.

Council Member McNamara stated at their committee meeting they discussed follow up and that the supervision of these agreements would be dictated at the time we entered into one, and agreed that we would leave it to the council to assign that responsibility, and make sure that if there are conditions applied that we account for those conditions to the citizens.

Council Member Kreun stated it is important that it's noted that we have two types of TIF, one is the TIF if you sell bonds, more restrictions, more culpability and reporting methods, and more difficult to obtain that particular bond, money is actually obtained by the City and lent in a tax form to that particular individual business. The other one is the TIF tax exemption, where you are giving an exemption on a portion of the tax of the actual building, and that portion is subject to the value of the building and not jobs, interest rates or amounts of money, etc.; that if the building isn't built or built smaller or larger indicates the tax exemption, and after it expires you get the full amount for the life of that building, and that is what we are trying to accomplish - Ecolab, Lunseth's, Grand Forks Grocery buildings were built under TIF tax exemption - those are all long term buildings that are still here and paying full amount on their taxes at this time and that is why looking at long term building of our community.

2.3 Application for abatement for 2008 taxes by Marvella Egstad, 2036 Westminster
Court.____ ____________________________________
There were no comments.

2.4 Application for abatement for 2008 and 2009 taxes by Alan and Crystal Crask, 5398 West Maple Avenue.­­­______________________________________________________
There were no comments.

2.5 Applications for exemption of remodeling improvements to residential buildings at various locations________________________________________________________
There were no comments.

2.6 Pledged Collateral Report and Designate Depositories of Public Funds.
There were no comments.

2.7 Application for Class 4 (Food and Beverage Establishment) license by Mi Familia, Inc. dba Mi Mexico, 623 S. Washington St._________________________________
Council Member Bjerke stated there are numerous unanswered questions on the application, and disagrees with philosophy of having unlimited amount of liquor
licenses and will be voting no on this item.

2.8 Bids for Project No. 6555, City Hall carpet replacement.
Council Member Gershman stated staff gave him the courtesy of meeting and showed
him the new carpet that they will be using (tiles), there has been a significant improvement in design since he did his building and is comfortable in going ahead with the bid.

2.9 Funding assistance request from Grand Forks Regional Airport Authority to reconstruct Airport Drive at the Grand Forks International Airport._______
This item was pulled from the agenda.

2.10 Redevelopment of 732 and 816 N. 4th Street.
Council Member Bjerke stated he was opposed to the program - taking federal money to
buy houses, knock them down and rebuild new houses, then sell at a loss to people of low income.

2.11 Neighborhood Stabilization Program (NSP).
Greg Hoover, urban development director, made a brief introduction, that it involves two
projects with NSP money, one of the projects came out of the redevelopment of the civic auditorium area that has been on-going for considerable for some time, and the other project is off-shoot of the Mayor's in the City's tenure plan in homelessness, and before introducing architects for the two projects, gave a brief overview - that the first project is being done by the Dakota Commercial Development, a 3-story building costing over $6.3 million, with approx. 7500 sq.ft. of commercial space and 50 apartments with 1, 2 or 3 bedroom units, the developer will tear down the civic auditorium building and construct this building in its place, and we have been asked to provide the land and building which according to the city assessor is currently valued at $160,000, also provide approx. $1.2 million federal grant, the final design of the project will be subject to Downtown Development Review Bd. and issuance of the building permit and the developers asked for a tax abatement per NDCC and don't have the exact value of that at this point but are working with the city assessor on that and will be having to come back through the council with regard to that.

The other project is Prairie Harvest, mental health project, and will involve a little over $3.3 million to construct a 3-story building, 14 one-bedroom units of permanent supportive housing for long term mentally ill on the top two floors, bottom floor open space for their clients as far supportive services and wellness fitness area and this project would be across from the former post office on S. 4th Street.
On the other project are deeding land and will be providing a $2 million federal grant and transfer that ownership of the land valued at close to $44,000 and that this project will be subject to review by the Downtown Development Review Bd., issuance of a building permit and on this case the project is close to south historic district for the city, the Historical Commission has asked for review of the materials prior to this going forward.

He introduced Bobbie Hector Olson who is the architect for Prairie Harvest and she will go over several slides showing the project and then James Galloway, JLG Architects, for the civic auditorium lot.

Council Member Christensen asked what is the status of the land for Prairie Harvest as there are some title issues and use of the parking lot at the Church, the County resolution. Mr. Hoover stated the issue with the Church is on the lot that runs to Division Avenue, across from the old Deaconess Hospital and the… Mr. Hoover stated they have an unsigned agreement that says should 80 or 90% of that lot becomes occupied and unclear as to what they mean by occupied, and if that becomes occupied at that percentage, the City is required to provide 2 parking spaces for the Church, and there is ample area to do that . Christensen asked what was reason County did when said have to find them 30 spots. Mr. Hoover stated that in the deed where they gave the prop[erty to the City for the parking lot, should that lotr ever revert to something other than parking the citu had to provide 30 spaces to the County in trade. McNamara stated they had looked at that agreement and asked if that was recorded as part of the deed; Mr Hoover stated they have not been able to find a signed copy of that agreement and not sure if Mr. Swanson, has found a copy of that, he stated he thinks it is dependent upon the City to honor the part of that agreement that says we will provide those spaces to the Church, should anything develop on that particular lot, that this lot is not the lot where this project will go. Christensen stated that the County said they will approve the placement of the project on the corner across the street from the old Deaconess Hospital if you find them 30 stalls. Mr. Hoover stated the 30 stalls already exist in that lot, and the lot has about 109 stalls; and if they would like us to post them and reserve for County, would do that, but at this time all they said is we need to have those spots open for our use should we need it. Christensen stated he wants to make sure that we don't have an gottchas because to the extent we can, to the extent we could improve our relationship with the County and would it be incumbent upon those that are aware of this problem to make sure that we don't have a future problem - put an easement on there so Mr. Swanson or Mr. Warcup can review this to make sure that we don't have a gottcha going forward before they decide they are going to start spending some money and turn some dirt. Mr. Hoover stated they can put that in the project agreement. Christensen stated he wants to make sure that this gets approved by Mr. Swanson before you quote?? us further. Mr. Hoover stated that the action asked for of the council is to approve the project subject to review and approval of the agreements by the city attorney's office. Christensen stated the reason he is bringing it up now so that Mr. Swanson is aware of the problems so they are handled as part of the review. Mr. Swanson stated that he is not aware of these issues, that he was asked about two weeks ago if their office had a file with regard to the original acquisition, that they looked and do not, find that their office was not involved in the acquisition at the time it was acquired, it was the Downtown Parking Authority or one of its generations that actually acquired the property, and if there are title issues, they have not reviewed anything any title work, the agreement you referred to he is not familiar with. Christensen stated it was brought to his attention by a ember of the Church, and Mr. McNamara also stated it was brought to his attention and discussed it, what they saw in its draft form hopefully make its way into the legal documents. Christensen stated basically it would be in the deed for conveyance. Christensen stated he would like to get both parts and lots reviewed, and some title work if Mr. Swanson could do that.

Bobbie Hector Olson, presented project for Prairie Harvest, 5 lots and are discussing Lots 7 and 9 for building a 64x100 ft. building, showing plan where tentatively this is plan for future offices, but as part of this project it will be common space utilized by tenants, have arking along building, that this is an entire parking lot but are losing a few spaces, and trying to maintain as many of them as they can, have free space on both sides. She showed better picture of the main level where they have a fitness area, conference rooms, future office space but Prairie Harvest plans and will be working on grants and future office facility - two floors on top on this where have 7 one-bedroom apartments and a common space, and those two floors are identical on top of each other. Each apartment has a kitchen, living area, bedroom and bathroom and these units are designed to be handicapped compliance for handicapped. She showed schematics of what the outside would look like, haven't selected any materials at this time, are anticipating the main level would be brick, use some type of siding or metal panel system, and possible look for the exterior. They will be reviewing this project with the Historic Commission and the Downtown Development group for their input before final design and material selections are determined.

Council Member Gershman stated at the corner of South 4th Street and Division, why would we want a parking lot and not a building sitting there, aesthetically it is a downtown and putting a parking lot on the corner, and what was reasoning for that - that it makes sense to have a building on a corner because 3 or 4 story building, and the parking lot is closer to the church which makes it more convenient for them, but talking about a downtown here, and to have a parking lot on a corner in the downtown doesn't look good, that is a personal opinion.

Pam Demmers, program director at Prairie Harvest, sitting in for Deb Johnson, executive director, stated that was their intent was to build on the lot corner, they wanted because the two floors, second and third floors, will be residential and wanted to be closer to the residential, as the two homes that you see the existing buildings, wanted to be closer to give it a a residential feel for their people. Gershman stated he would disagree because those are regular homes and this is an apt. building and would ask you to reconsider, as he wouldn't support this being there, as this is our downtown and understands what you are thinking but doesn't think an apt. building next to homes is necessarily means it will feel more residential - not going to feel residential at all when you are sitting in your apartment - and is interested in the cityscape downtown and ask that you reconsider that.

Ms. Demmers stated she has no objections to Mr. Gershman's comments, and that they are here to get everybody's input. Gershman stated that Prairie Harvest has worked very hard on this project, and is a significant project. Hoover stated when they went to the County asked for approval
for Lots 7 and 9 and that is what they did, and would have to go back and ask for Lot 3 and doesn't see that as a problem but will have to do it quickly because we have requirements to get signed agreements to the State by the end of this month, and can do that if you wish, then he would ask for authorization subject to all title search, etc. but the City allow conveyance of Lot 1for this project.

Mr Swanson stated he was not aware of how titles



2.12 Knight Foundation Grant.




2.13 2010 Arts Regranting Program (Community Theatre).



ADJOURN

It was moved by Council Member Gershman and seconded by Council Member Bjerke to adjourn. Carried 7 votes affirmative.

Respectfully submitted,



Saroj Jerath
City Auditor