Economic Development Authority Meeting Date: August 26, 2024
To: Members of the Economic Development Authority
From: Ben Martig, City Administrator
Jake Reilly, Community Development Director
Nate Carlson, Economic Development Coordinator
Title
Consider Resolution Providing Initial Updates & Recommendations to the Northfield City Council Related to Potential Redevelopments to the Projects Currently Known as the “5th & Washington Redevelopment” and “5th & Water Street Redevelopment.”
Body
Action Requested:
The Northfield EDA will receive a presentation from staff regarding the 5th & Washington redevelopment project and discuss the project.
Summary Report:
Staff is recommending the EDA consider a resolution to provide the City Council an initial advisory recommendation related to redevelopment as outlined in the memo. The resolution is being drafted along with an updated presentation building from the work and feedback from last meeting.
The City Council delegated advisory responsibilities to the EDA through CC Resolution 2024-044 (Attachment 1). Economic Development staff has prepared a presentation on the proposed 5th & Washington redevelopment project.
5th and Washington:
Staff will provide an update to the EDA 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, along with the City’s financial advisor will facilitate the work session.
Team members include the following:
Bruce Jacobson - Landscape architect and community engagement consultant
Von Peterson - Principal/Architect, TSP Architects
Greg Schoer - Architect, TSP Architects
Nick Anhut -Municipal financial advisor, Ehlers
Ben Martig - City Administrator
Jake Reilly - Community Development Director
Brian Whitt - City Liquor Store Manager
Nate Carlson - Economic Development Coordinator
Melissa Hanson - Housing Coordinator
Mikayla Schmidt - City Planner
Staff is seeking direct feedback from EDA Board members regarding direction for the overall design, the project components, and financial feasibility. 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. The 2045-horizon plan is expected to contemplate the same end result.
Based on the EDA Board’s guidance to the City Council, staff will begin a community engagement process in September that will bring the community along by sharing the defined project goals and outcomes and offering opportunities to influence site planning and design within that framework.
The Northfield EDA discussed the project in detail at the regular meeting in June and with the finance subcommittee in July. Several themes can be extracted from the conversation between EDA Board members and City Staff:
- 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 to solving perceived parking problems has been mentioned by several members of groups advisory to the Council.
- The commercial components of the project also need to be reviewed in greater detail. Northfield has a vibrant and successful downtown market. However, new commercial space comes at a premium and EDA members have raised concerns about feasibility of retail/service-type commercial users. 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 associated with housing are very high at this time. EDA 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 is exceeded with the current preliminary design work.
Alternative Options:
None at this time.
Financial Impacts:
Financial impacts will be presented by City staff during the meeting. The City’s Financial Advisor, Nick Anhut of Ehlers, will provide a project scope for EDA Board members to discuss.
A committee of EDA Board members, Randy Yoder, Enoch Blazis and Andy Beaham, met with the City’s redevelopment finance team on August 15 to receive a cursory review of the project financials. A 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.
This committee identified the following themes as it pertains to the cost of the project:
- The 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, and more information is needed about the appropriate number of parking spaces. The City should define how the parking will be funded.
- The housing component appears financially infeasible given stress in the housing and construction finance industries today. However, a private partner could help educate the City staff and elected and appointed boards regarding the long-term financial outlook on 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.
Tentative Timelines:
• July - Initial EDA Review and Feedback
• August - Initial Planning Commission Review
o August - EDA Resolution Initial Recommendations to Council
o September - HRA Review
o September - Council Worksession
o September - EDA regular meeting continuation of work based on Council feedback
Timelines will be discussed as the projects proceed.