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01-12-2018 Minutes (Special) CITY OF SALINA, KANSAS SPECIAL MEETING OF THE BOARD OF COMMISSIONERS January 12,2018 8:00 a.m. The Special Meeting of the Board of Commissioners was called to order at 8:00 a.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of y silence. = Those present and comprising a quorum: Mayor Karl F. Ryan (presiding), Commissioners Trent Davis,Joe Hay,Jr., Melissa Rose Hodges,and Mike Hoppock. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney;and Shandi Wicks,City Clerk. ADMINISTRATION Jason Gage, City Manager, requested that Agenda Item 3.1 be moved to after Agenda Item 3.2. Mr. Gage introduced the guests in attendance that may be called upon by the commissioners during the meeting. Commissioner Hoppock stated he had performed title work on numerous properties that were to be discussed today. He continued by stating that the Ethics Commission was contacted and had given the okay for Commissioner Hoppock to participate in the discussions today. Greg Bengtson, City Attorney, stated he had contacted legal counsel for the Ethics Commission regarding the possible ethics policy conflict and continued to explain the details of the services provided by Land Title Services. Commissioner Hodges asked if the Ethics Commission would provide a letter for the justification. She continued by stating she would like for a letter to be provided. Commissioner Hoppock stated he would be working to have a letter written by the Ethics Commission and provided to him. (3.2) Redevelopment of Downtown. (3.2a) Resolution No. 18-7510 approving the Hotel Transferee Agreement and authorizing the Mayor to execute the Hotel Transferee Agreement. (3.2b) Resolution No. 18-7511 approving the Alley Transferee Agreement and authorizing the Mayor to execute the Alley Transferee Agreement. (3.2c) Resolution No. 18-7512 approving the Old Chicago Transferee Agreement and authorizing the Mayor to execute the Old Chicago Transferee Agreement. Michael Schrage, Deputy City Manager,explained the project, the agreements, fiscal impact and action options. Mayor Ryan thanked Mr.Schrage for his hard work on the agenda item. Commissioner Hodges asked how the financial advisor clarified the relationship between the bank and the developer. Roger Edgar, George K. Baum & Company, stated the conversation started with a phone call but more detailed work would go into reviewing the Page 1 banks. He continued by stating he was comfortable with the relationship between the bank and the developer relating to bank financing for the project. Commissioner Hodges asked if Mr. Edgar believed the requirements of the letter from the Secretary of Commerce were being fulfilled. Mr. Edgar stated he was not aware of any issues with the requirements but that was more of a question for bond counsel. Gary Anderson, Gilmore & Bell, stated he had conversations with the Department of Commerce last week and everything was in line to meet the requirements of the Secretary of Commerce. Commissioner Hodges asked for clarification on the use of reasonable discretion in the transferee agreements. Mr. Anderson stated companies could be in different situations which may cause the use of reasonable discretion. Jason Gage, City Manager, stated bonds would not be issued if the provisions would not be applied correctly. He continued by stating Stifel and the bond underwriter were the two (2) entities that would need to be satisfied for bond issuance. A conversation continued to ensue between the Commission, Mr. Anderson and Mr. Schrage regarding the reasonable discretion within the transferee agreement. Commissioner Hoppock asked if there was an ability to do part of the bonds backed and part of the bonds unbacked. Mr. Anderson stated yes and there would be reasons why you could do that. Mr. Edgar provided additional information regarding backed bonds versus unbacked bonds. A conversation continued to ensue between the Commission, Mr. Edgar, Mr. Gage and Mr. Schrage regarding the bonding options. Commissioner Davis asked if the three projects would have enough income generated to cover the bonds. Mr. Anderson stated there was information they knew and could mathematically predict but there were things that could not be predicted such as interest rates, etc. Mr. Gage stated the three companies have been very successful in operating these types of businesses in the past in other markets. Commissioner Hodges asked what the amount was needed for a reserve for the bonds. Mr. Gage stated the goal was to have $500,000 set aside for 2018 and if that same amount was continued to be set aside until 2020 when the bonds were issued, there would be plenty of money in reserve. Mr. Schrage provided additional information on the reserve fund. Mr. Edgar stated the bond issue would fund the project cost, the cost for issuance of the bonds and the debt service reserve fund. Commissioner Hodges asked what projects were currently scheduled to come out of the special sales tax fund. Mr. Gage stated the Smoky Hill River Renewal project, streets, Police Department Training facility and various Parks & Recreation projects to name a few. A conversation continued to ensue between the Commission and Mr. Anderson regarding the bonding options. Commissioner Davis asked for additional information on what the $1.5 million was for in regards to the hotel transferee agreement. Mr. Schrage stated the money listed for the project remains the same as it was presented in the past. A conversation continued to ensue between the Commission, Mr. Gage and Mr. Schrage regarding the hotel project funds. Commissioner Davis asked if it was proper to link one transferee agreement to another. Mr. Page 2 Gage stated for the smaller projects it would provide a higher level of confidence but from a City of Salina perspective they were not in favor of the two agreements being tied together but it had a low impact. He continued by stating the Old Chicago project would not receive any STAR Bond money. Commissioner Davis stated the number of bowling lanes for the Alley Project were reduced and asked for additional information on the market projection. Andy Pfister, Development Strategies, stated the market project went from $4 million to $3.7 million, the owner had retooled the layout of the building to include additional income generators due to the bowling portion being a low income generator. A conversation continued to ensue between the Commission, Mr. Pfister and Mr. Gage regarding the Alley Project including the new layout of the building, income generators and use of the building. Commissioner Davis asked when the agreement would be brought to the City Commission for the off-site parking on Fifth Street. Mr. Gage stated New Market Tax Credit money can be used for the off-site parking on Fifth Street across from the Fieldhouse. He continued by stating there were a couple of tasks to include an asbestos report that were being completed before the finalization of the parking lot agreement. Mr. Schrage provided additional information on the status of the asbestos report. A conversation ensued between the Commission, Mr. Schrage, Mr. Gage and Mr. Anderson regarding the funding of the project and the action options on the transferee agreements. Commissioner Davis asked if the restrooms need to be updated to the Fieldhouse was there a pot of money the renovations could come out of. Mr. Gage stated the New Market Tax Credits money would be used first then the STAR Bond project money could be used next. Commissioner Hodges asked where the debt service portion of the streetscape project would come from. Mr. Gage stated the debt service portion would come from the sales tax fund. Commissioner Hodges would like to see what Kansas High School Athletics Association's thoughts were on the Alley Project and continued to provide her thoughts on the use of the facility. She continued by asking for additional information on the Alley Project's income projection. Mr. Schrage stated the base deduction was accounted for in the total revenue generated by the entire district. Commissioner Hodges asked if the Alley Project would be going back to the Design Review Board with the change in layout and size of the building. Mr. Schrage stated the new layout and building size had been taken back to the Design Review Board. Lauren Driscoll, Director of Community & Development Services, stated there was an additional item for the Alley Project that would be going before the Design Review Board that would add square footage to the project for an outside patio. Commissioner Hoppock asked if the transferee agreements were included in the original development agreement package. Mr. Gage stated the development agreement was the first agreement followed by the supplemental agreement. He continued to state the transferee agreement format was attached to the supplemental agreement. Commissioner Hoppock asked if there was any negative public comment on the project. Mr.Gage stated he did not recall much if any negative public comment on the project. Commissioner Hodges stated she had received comments on the project but they had not jI been negative but more so concerned regarding the funding of the project. Page 3 Mayor Ryan asked if the commission would like a short break. The meeting recessed at 10:00 a.m. for a ten (10) minute break. The meeting reconvened at 10:10 a.m. Don Boos, 500 Graves Blvd, Salina 2020, Inc. and Blue Beacon International, provided information on the developers of the Old Chicago and the Alley and thanked a large list of members for their help. He continued to provide additional information on the hotel project. = Frank DeSocio, The Alley Entertainment Center, provided additional information on the Alley Project. Amro Samy,Old Chicago, provided additional information on the Old Chicago project. Jon Blanchard, 1117 W. State Street, provided his thoughts on the project and asked for additional information on the streetscape construction costs. Mr. Schrage explained the construction costs. A conversation continued to ensue between Mr. Blanchard and Mr. Schrage regarding the streetscape construction costs. 18-006 Moved by Commissioner Davis, seconded by Commissioner Hays, to adopt Resolution No. 18- 7510 approving the Hotel Transferee Agreement and authorizing the Mayor to execute the Hotel Transferee Agreement. Aye: (5). Nay: (0). Motion carried. 18-007 Moved by Commissioner Davis, seconded by Commissioner Hodges, to adopt Resolution No. 18- 7511 approving the Alley Transferee Agreement and authorizing the Mayor to execute the Alley Transferee Agreement. Aye: (5). Nay: (0). Motion carried. 18-008 Moved by Commissioner Davis,seconded by Commissioner Hoppock, to adopt Resolution No. 18- 7512 approving the Old Chicago Transferee Agreement and authorizing the Mayor to execute the Old Chicago Transferee Agreement. Aye: (5). Nay: (0). Motion carried. (3.1) First Amendment to Development Agreement for the Salina Downtown STAR Bond Project District. Jason Gage, City Manager, explained the amendment and action options. Commissioner Hoppock asked what the additional money would be used for if the project was awarded for the higher amount. Jim Kowach, Director of Public Works, stated some of the project money was spent on the project engineering but the project would be bid as a base project with additional alternates that would include additional lighting, parking lot features and plaza upgrades. Commissioner Hodges asked for additional information on the timing of the water line project. Mr. Kowach stated the waterline project phasing would be up to the contractor that the project would be awarded to. Commissioner Hodges asked for additional information on the phasing of the project. Mr. Kowach stated the north block was the primary concern of the developer and continued to explain the phasing based on the graphic included in the agenda packet. Commissioner Hodges stated she noticed money set aside for the enhancements of trash I corrals in the capital improvement project and asked for some consideration of added ! enhancements to the back parking lots to allow for additional access. Mr. Kowach stated a portion of the project would allow for temporary closure of driving lanes and replacement Page 4 of the sidewalks with additional signing and added temporary lighting if necessary. He continued by stating staff was working with Arts & Humanities for art on the trash corrals. 18-009 Moved by Commissioner Hoppock, seconded by Commissioner Davis, to adopt Resolution No. 18- 7513 authorizing the Mayor to enter into the First Amendment to the Development Agreement for the Salina Downtown STAR Bond Project District. Aye: (5). Nay: (0). Motion carried. = DEVELOPMENT BUSINESS N (4.1) Application No. Z17-2B, (filed by Earles Engineering on behalf of Heaven Sent Properties and the Revocable InterVivos Trust of Jason Ingermanson), requesting a change in zoning district classification from R-1 (Single Family Residential) and C-5 (Service Commercial) to PC-3 (Planned Shopping Center) district and approval of a final site development plan for a proposed Popeye's Louisiana Kitchen restaurant and a drive up window on property addressed as 720 South Ohio Street. (4.1a) First reading Ordinance No. 1840916. (4.1b) Declare that a compelling public interest exists to allow first and second reading of the ordinance on the same day. (4.1c) Second reading Ordinance No. 18-10916. Dean Andrew, Director of Planning, explained the request, project, fiscal impact and action options. Commissioner Hays asked if the developer was the same developer that built the Popeye's on South Ninth Street and north Salina. Mr. Andrew stated it was not the same developer as either location. Commissioner Davis asked what the type of buffer would be between the restaurant and the residential area. Mr. Andrew stated there would be a 6 foot tall wood fence installed with a 15 foot buffer that would include tree plantings. A conversation ensued between the Commission and Mr. Andrew regarding the buffer area. Commissioner Davis asked if the neighbors were in favor of the restaurant. Mr. Andrew stated yes with the additional size of the location. Commissioner Davis asked if there were any restrictions on the height of the ventilation of the building. Mr. Andrew stated the roof height would be 18 feet so the venting would be 20 to 22 feet high and there was not a current code requirement for the ventilation system. Commissioner Hodges stated there was a citizen that addressed the drainage from the property and asked if there was a topographical map showing the drainage. Mr. Andrew stated there was a drainage plan and the entire property would be lined with curbing which would direct the water to Ohio Street. Commissioner Hodges asked whose responsibility it was for the utility hookup for the water. Mr. Andrew stated the payment for the utility hookup would be that of the contractor or the developer. Commissioner Hodges provided her thoughts on implementing a time limit of the operation of the restaurant to reduce the noise for the neighbors. A conversation continued to ensue between the Commission and Mr. Andrew regarding the noise and light plan for the property. Page 5 Commissioner Davis asked what the public interest was on the agenda item. Greg Bengtson, City Attorney, provided information on the ability to hold the hearings of both hearings of the ordinance on the same day. He continued to state with the holidays moving the schedule of the project off schedule, staff felt it was best to include a compelling public interest in the agenda. 0_ Commissioner Davis provided his thoughts on the project and the need for additional changes for public comment. Commissioner Hodges provided her thoughts on the project and the compelling public interest. U Mayor Ryan provided his thoughts on the project and the compelling public interest. Commissioner Hoppock asked for additional information on the parking spots for the location. Mr. Andrew stated there had been concern in the past regarding over creation of parking spaces for properties and there was a process created that would determine the required number of parking spaces. He continued by stating if the number of parking spaces went over the required number, the City Commission would need to approve the request. Jeff Maes, ComPro Realty, 157 S. Seventh Street, provided information on the project, the operating hours of the business, the drainage of the water on the property and the timing of the project. Commissioner Hoppock asked for the location of the drive-thru speakers. Mr. Maes stated the box would be on the northwest portion of the building. Commissioner Hodges asked if a condition was put on the building for operating hours, could that be removed in the future. Jason Gage, City Manager, stated the condition could be removed in the future by amending the planned commercial district for the property. Commissioner Hodges asked Mr. Maes for his thoughts on having second reading on the same day. Mr. Maes stated the specific project had been a long project and it had been approximately 45 days since the action of the Planning Commission. 18-0010 Moved by Commissioner Hodges, seconded by Commissioner Davis, to pass Ordinance No. 18- 10916 approving a change in zoning district classification from R-1 (Single Family Residential) and C-5 (Service Commercial) to PC-3 (Planned Shopping Center) district and approval of a final site development plan for a proposed Popeye's Louisiana Kitchen restaurant and a drive up window on property addressed as 720 South Ohio Street on first reading. Aye: (5). Nay: (0). Motion carried. 18-0011 Moved by Commissioner Hoppock, seconded by Commissioner Hays, to declare a compelling public interest exists for second reading approval of Ordinance No. 18-10916 on the same day as the first reading. Aye: (4). Nay: (1) Hodges. Motion carried. 18-0012 Moved by Commissioner Hoppock, seconded by Commissioner Hays, to adopt Ordinance No. 18- 10916 approving a change in zoning district classification from R-1 (Single Family Residential) and C-5 (Service Commercial) to PC-3 (Planned Shopping Center) district and approval of a final site development plan for a proposed Popeye's Louisiana Kitchen restaurant and a drive up window on property addressed as 720 South Ohio Street on second reading. A roll call vote was taken. Aye: (5) Davis, Hays, Hodges, Hoppock, Ryan. Nay: (0). Motion carried. Page 6 Jeff Maes, ComPro Realty, provided information on a recent water issue at the Southgate Shopping Center and stated the customer service of the employees was phenomenal. He also provided information on a friend traveling from Nashville arriving at the Salina airport with a gun in a case with the need for an additional padlock on the case before he could get on the flight. Members of the Salina Police Department ran to Wal-Mart and purchased a padlock and provided it to the gentleman without allowing him to pay for it. He continued by stating it was another phenomenal service provided by staff. y ADJOURNMENT :5; 18-013 Moved by Commissioner Davis, seconded by Commissioner Hays, that the special meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 11:28 a.m. ckafrA f; [SEAL] Karl F. Ryan, Mayor ATTEST: �� :, ,,^^ Shandi Wicks,CMC,City Clerk 1 1 Page 7