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Home My WebLink About2005-03-28 CA Ltr to Mayor & CouncilLAW OFFICES OF Eckberg, Lammers, Briggs, Wolff & Viefling, P.L.L.P. 1835 Northwestern Avenue Jame F. Lamme Still water, Minn esota 55082 Lyle J. Eckbe Robert Cam. Briggs * (1916 -2003) M ar k J . V e -�- (651) 439 -2878 d Thomas J. Weidner 4- Su san D. Olson -�- FAX (651) 439 -2923 Paul A. Wolff (1944 -1996) D K. Snyder ------------------------ Sean P. St o k es Direct Dial No: (651) 3512118 Balers C. fleeren * Quahfied Neutral Arbitrator Laura L. Domagala Certified Real Estate Specialist Joshua D. Christensen �Qualified Neutral Mediator March 28, 2005 Mayor David Beaudet 6400 Lookout Trail North Oak Park Heights, Minnesota 55082 Councilmember Les Abrahamson 13990 — 56"' Street North Oak Park Heights, Minnesota 55082 Councilmember Mark Swenson 14846 Upper 5 5 Street North Oak Park Heights, Minnesota 55082 Councilmember Mary McComber 5728 Penfield Avenue North Oak Park Heights, Minnesota 55082 Councilmernber lack Doerr 14520 Upper 56"' Street Oak Park Heights, Minnesota 55082 Ike: Walmart Amended Conditional Use Permit and Developer's Contract /Agreement Dear Mayor and Council: I wanted to alert you to the fact that this matter is on your Council agenda for Tuesday night to be discussed at the March 29 meeting. I had a telephone conference with Mr. David Sellergren and Ms. Darcy winter on Monday morning, the 28 of March relative to their concerns on these documents. The Council should expect that there will be requests made of you by Walmart to do a couple of things relative to these documents. Those requests, I understand, will be in the following areas: 1. Amended Conditional Use Permit. As the Council is aware, you have a requirement within your ordinances and policies that all building permits, conditional use permits, PUD's and related permits have an effective shelf life of one year. That is to say, the permit expires if not implemented within the one year period. Walmart will be requesting the City grant an additional one year extension on the Amended Conditional Use Permit as there apparently is issue in terms of when in their time table they will be making the improvements that they have received your permission for effective as of your Council meeting of March 9. As apparently those improvements may extend to 2006107, they are going to request that you extend your Conditional Mayor and Councilmembers March 28, 2005 Page 2 Use Permit to allow there to be implemented at that later date so that they would not have to come back and ask for an extension at that point in time. 2. Development Contract. Related to the above extension issue, Walmart does not wish at this point in time to execute a Development Agreement that would implement /construct any of the Plan A (Developer's Site Improvements) or Plan B (City Infrastructure Improvements) until such time as they pull a building permit for the project. The City's practice has consistently been over the years to require the current posting of securities and thereafter to implement the City's portion of the Plan B Improvements within all development contracts using the development as security immediately following the execution of the development contract. The Walmart request would delay that until such time as they implemented or sought and obtained a building permit. It would be their proposal not to post any financial securities until such time as they actually pull a building permit for the property. In that sane vein, they are maybe requesting deferment and non- collection of park dedication fees as well as city connection fees which you have typically collected with plattings, again, until such time as the City is approached by Walmart to pull a building permit for this project. Discussion 1. Granting a one Year Extension on the Amended Conditional Use Permit to Have It Ex ' re March 9 2007 as Opposed to March 9 2006. The Amended Conditional Use Permit will be issued effective as of the Council directive which occurred on March 9, 2005. The request by the Developer to extend for an additional one year period the Amended Conditional Use Permit is not viewed as controversial or placing the City at risk under this particular project. Staff, therefore, has no objection to a one year extension, understanding however that the permission has to be granted by the Council. 2. Development Contract_ Requests. There are a number of requests that Walmart wishes to make relative to the Development Contract. Again, they are in the following realm: a. Delaying the posting of security and implementation of Plan A and Plan B Construction Improvements until such time as a building permit is pulled. b. Delay of collection of connection fees until a building permit is pulled. Mayor and Councilmembers March 28, 2005 Page 3 C. Walmart requests that the City cap or limit the total construction costs on the Plan B Improvements and absorb any risk or liability of cost overrun when and if these Plan B Improvements are constructed. Discussion a. The City's practice, which has assumed and implemented the construction of Plan A and Plan B Improvements immediately upon the execution of Development Agreement, requires typically the posting of all securities and completion of platting on the property which has been a practice that has well suited the City in the past years. Staff has been able to accommodate construction schedules, plan for improvements for various projects, proceed in an orderly fashion, and otherwise coordinate its internal and engineering activities relative to these projects. To the extent that the applicant seeks to defer all of that until such time as Walmart would pull a building permit, it would then place the project on Walmart's schedule in terms of when and if they proceed and, therefore, would require the City's professional and in house staff to mobilize only after an application for a building permit had been applied for. Also, the numbers that have been based on unit prices in both the Plan A and Plan B Improvements could also radically differ, depending upon when and if that would occur. As an example, even though road improvements are small inasfar as the Plan B Improvements, parking lot improvements are significant under the Plan A Improvements. Petroleum for asphalt, for a recent example, has observed a major change of cost as a result of petroleum price increases and production issues with those resources. Similarly, significant prices in piping and other improvements necessary for this particular project under either Plan A or Plan B numbers could be skewed as a result of economic forces when and if this project would proceed a year, a year and a half or two years from now. In that regard, even if the City Council were agreeable to extend the time for construction of these improvements until such time as the building permit would be approved, the City would not be well served by executing a development contract that limited or otherwise precluded a reevaluation of all of those construction numbers at such time as the building permit were submitted. Consequently, if the City was willing to consider this individual request from Walmart, the City should reserve to itself the opportunity to re- evaluate all of these numbers in Plan A and Plan B Improvements at such time as the building permit were to be applied for as market forces could significantly shift expenses in any or all categories when that would occur. b. Connection Fees. The City collects connection fees at the time the property is connected to its system, which usually occurs upon platting and execution of the Development Agreement. Although a deferral of collection and connection fees for one year may benefit the City in that they would be presumably subject to the City's increases that are affected every January 1, Staff does not see any benefit to the City to defer the collection of those at this time Mayor and Councilmembers March 28, 2005 Page 4 and would recommend that they be collected upon final plats being submitted and developz agreement being executed. C. Walmart's Request that the City Cgp Walmart's Liability or Potential Expense for the Construction of Plan B Expenses. Staff sees no benefit to the City of oak Park Heights in this request and recommends against it. Obviously Council may have its own inquiries or feelings relative to the issues to be presented, but I do want to provide this correspondence to you so that you could be aware of the nature of the requests that were going to be made to you on Tuesday night and you would have an opportunity to think about them and review those issues in advance of the Council meeting. Yours very truly, Mark J. Vierling MJVlsdb cc: Eric Johnson, City Administrator