Planning Commission Meeting Date: September 5, 2024
To: Members of the Planning Commission
From: Ben Martig, City Administrator
Jake Reilly, Community Development Director
Mikayla Schmidt, City Planner
Nate Carlson, Economic Development Coordinator
Title
Consider Resolution Providing Recommendations to the Northfield City Council Related to Potential Redevelopment of the 5th & Washington Municipal Surface Parking Lot.
Body
Action Requested:
The Northfield Planning Commission consider and pass a resolution with its recommendations related to the potential redevelopment plans for the municipal surface parking lot at the corner of 5th and Washington Streets in the City of Northfield. The resolution will be included in the Supplemental Memo on Tuesday.
Summary Report:
Following a presentation by City Staff at the August 15, 2024 regular meeting of the Northfield Planning Commission (PC) staff recommends the PC consider the resolution to provide the City Council a recommendation related to the potential redevelopment project. The resolution is designed to represent feedback from the PC at the August 15, 2024 meeting, including but not limited to an assessment of the project’s ability to meet defined 2008 comprehensive plan policies and/or meet potential future policies being developed during the 2045-horizon comprehensive planning process now underway.
Additional information about the financial and fiscal impacts of the proposed potential development will be provided during the presentation, and is attached to this memo.
The City Council delegated advisory responsibilities to the EDA through CC Resolution 2024-044. The EDA first reviewed the proposed project at its regular June meeting and again at the August 26, 2024 regular meeting of the board. The August presentation is attached and offers additional information about the financial aspects of the project as proposed.
5th and Washington:
Staff will provide updated information on the 5th and Washington redevelopment plans. Since parting ways with the original development group, staff has been working with several consultant partners to develop conceptual scenarios for the development: TSP Architects, the firm providing guidance for a new liquor store; Bruce Jacobson, the landscape architect and community engagement consultant for the Riverfront Enhancement Action Plan; and internal stakeholders from the housing and planning groups within the Community Development Department.
Team members include:
Ben Martig - City Administrator
Jake Reilly - Community Development Director
Nate Carlson - Economic Development Coordinator
Melissa Hanson - Housing Coordinator
Mikayla Schmidt - City Planner
Brian Whitt - City Liquor Store Manager
Bruce Jacobson - Landscape architect and community engagement consultant
William Jacobson - Visualization consultant
Von Peterson - Principal/Architect, TSP Architects
Greg Schoer - Architect, TSP Architects
This project is part of a broader context within the downtown commercial district and a component of the overall comprehensive outcomes for development in the City. The adopted Northfield Comprehensive Plan policy direction for economic development is, in part, to diversify and increase the tax capacity of the city in a fiscally responsible manner, starting with infill projects. The 2045-horizon plan underway contemplates the same end result.
Through an on-site engagement event later in September, community members will be invited to participate in envisioning the site plan and design elements, given defined project goals and outcomes as stated by the City Council.
The Northfield EDA discussed the project in detail at the regular meeting in June and with the finance subcommittee in July. The Planning Commission discussed the project in similar detail at the August Planning Commission meeting. Although the two groups have different charges, both expressed similar concerns and desired outcomes. Below is a summary of first, common concerns, followed by Planning Commission-specific ones.
- The City of Northfield needs to provide clarity to the community regarding the financial feasibility of a new and improved municipal liquor store, and the policy considerations that go into maintaining a municipal liquor program. Highlighting the “why” and “how” of moving the liquor store will provide better understanding to the public.
- The City of Northfield needs to be clear and transparent regarding the cost and rationale for the structured parking component of the project. Public perception of parking needs will continue to be central to any redevelopment project discussion, and the City should provide answers to those concerns.
- A phased approach that starts with no- or low-cost solutions to solving perceived parking problems is preferred.
- The commercial components of the project must be reviewed in greater detail. Northfield has a vibrant and successful downtown market. However, new commercial space comes at a premium. Advisory board members have raised concerns about the financial feasibility for retail and service businesses to afford new construction. More than one person identified a need for newer “class A” office space, which has not yet been contemplated as a component of this project.
- The housing component is a significant stated and demonstrated need for the community. Construction costs - specifically the cost of raw materials and the cost to borrow money to fund real estate projects - associated with housing are very high at this time. Advisory board members recommend more information about the financial feasibility of including housing. At this time, in order to accommodate at least 50 homes in the project, the maximum height limit for downtown is exceeded with the preliminary design work.
- However, engaging a qualified private development partner with local experience could help inform the long-term financial outlook of a multi-family mixed-use building. The Committee raised the question of scaling the project to secure a more effective project in the near term.
- The overall massing and basic design elements are supportable, particularly the reimagining of Grastvedt Lane as a people-friendly and people-first place.
- The adopted 2008 Comprehensive Plan does not include a policy direction clearly supporting the City maintaining a municipal liquor operation.
- Neither the adopted 2008 Comprehensive Plan nor the adopted 2019 Climate Action Plan include a policy direction clearly supporting structured parking.
- The Planning Commission seeks clarity regarding the project’s ability to support the clearly stated policy direction in the adopted 2008 Comprehensive Plan to increase and diversify the tax base, particularly with infill development projects. Given this is an infill development project yet is likely to be city-driven, is set to have a municipal liquor operation component - the property value of which is not taxed - and structured parking - the value of which is uncertain in property tax capacity terms - more information is needed about the costs and benefits to a project including those elements.
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Alternative Options:
None at this time.
Financial Impacts:
Information associated with financial impacts provided by the City’s Financial Advisor, Nick Anhut of Ehlers, are included in the linked EDA meeting (Attachment) and presentation.
A committee of EDA Board members, Randy Yoder, Enoch Blazis and Andy Beaham, met with the City’s redevelopment finance team on August 15, 2024. Community member, Rick Estenson, was invited by the City Administrator to participate in the meeting due to Rick’s previous work as a banking professional and trusted community leader.
The committee, with expertise as business owners, small business advisors, real estate, hospitality, banking, and development/fundraising professionals asked detailed questions in order to determine the following facts:
- The municipal liquor store project is financially feasible and poised for long-term success, and the City should continue planning for this part of the project.
- The commercial component is also financially feasible, ideally with a private development partner.
- The parking component can and should be part of the project. However, more information is needed about the appropriate number of parking spaces and mechanisms for funding the construction and subsequent maintenance of the project.
- The cost to build the housing component is likely out of reach for the City/EDA/HRA or for a non-profit entity given current economic conditions. Of primary concern is the cost to obtain construction financing, and potential for a still-high price point for raw materials.
Tentative Timelines:
• July - Initial EDA Review and Feedback
• August - Initial Planning Commission Review
• August - EDA Resolution Initial Recommendations to Council
o September - PC Review and Resolution
o September - HRA Review
o September - Council Work session
o September - EDA regular meeting continuation of work based on Council feedback