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HomeMy WebLinkAboutMINUTES-08/12/2008-AdjournedAugust 12, 2008 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Adjourned Meeting - 6:00 p.m. An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday, August 12 2008, at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered by the following Councilmembers: Hutchinson, Manvel, Ohlson, Roy, and Troxell. Councilmembers Absent: Brown, Poppaw Staff Members Present: Atteberry, Krajicek, Roy. North College Marketplace — Pre -Application Hearing with City Council The following is staff s memorandum on this item. "EXECUTIVE SUMMARY The applicant, 1908 North College, LLC, will present a conceptual plan showing its intent to develop a supermarket -anchored shopping center on a site located at the northeast corner of North College Avenue and East Willox Lane. The development may contain a 123,000 square foot supermarket, attached in -line shops, and several outlying pad sites for a fueling station, bank, fast food restaurants, and retail shops. BACKGROUND The subject properties are located within the Fort Collins Growth ManagementArea and within the City of Fort Collins limits. Cumulatively, the site is approximately 29 acres in size and is located at the northeast corner of the intersection of North College Avenue and East Willox Lane. The properties are largely undeveloped, with the exception of an auto dealership at the corner of the intersection and a restaurant directly to the north of the auto dealership. There are existing residential units on the north and south sides of Grape Street near the northwest corner of the site. There is a major irrigation ditch along the north side ofthe properties and existing wetlands on the north and east portions of the properties. The properties are zoned CCN, Community Commercial North College. The surrounding zoning and land uses are: N: Multi -Family and Commercial in Larimer County; existing residential E: Multi -Family and Commercial in Larimer County; existing residential S: Commercial North College in the City; existing shopping center W.• Commercial North College in the City; existing commercial m August 12, 2008 PROPOSED USES: The applicant's conceptual plan shows the intent to develop a supermarket -anchored shopping center on the site. The development may contain a 123, 000 square foot supermarket, attached in - line shops, and several outlying pad sites for a fueling station, bank, fast food restaurants and retail shops. There may be a total of 175, 000 square feet of leasable floor area in the overall shopping center. The properties containing the auto dealership and restaurant will not be apart ofthe future development on the site. The existing residential units on the south side of Grape Street will be purchased and their properties included in the development; while existing residential units on the north side of Grape Street will be excluded. City staff is currently working with the applicant to develop a plan that will preserve most of the existing wetlands, and provide on -site wetland enhancements and mitigation. CITY PROCESSIDECISION POINTS: The City's development review process is outlined and defined on the Development Review At -A - Glance line diagram that is available in the Development Review Center and online. Since the subject property is already annexed into the City, the diagram identifies a timeline beginning with the Conceptual Review or Preliminary Design Review options. The next step in the process is a Neighborhood Information Meeting, typically held before a formal submittal of an Overall Development Plan or Project Development Plan to the City. From this point on, the process is as follows: Project Development Plan application submittal. This phase of development review results in a public hearing, with a decision being given by either a Hearing Officer or the Planning and Zoning Board. Any decision given at this point is appealable to City Council and can be upheld, overturned, or remanded to the original decision -maker for more information and decision. Final Compliance Plan application submittal. There is no public hearing associated with this phase of development review. The Final Plans are reviewed by City staff and ultimately approved administratively, with the plans being approved and signed by the City Engineer, Current Planning Director, and appropriate City departments. Building Permit application process. " Mayor Hutchinson noted this was the first time Council has held a pre -application hearing to provide an opportunity for Council to hear a developer's vision for a proposal and to allow Council to ask questions to gain a better understanding of the proposed development. A pre -application hearing is intended to be used only for significant projects and should occur only occasionally. The benefit of a pre -application hearing is to allow Council to gather accurate information that is non -binding on the developer. It is not appropriate for Council to express an opinion, either in support or opposition m 7. __ August 12, 2008 to the proposal. The hearing will also give feedback to the applicant at an early stage in the development process. No decisions will be made at a pre -application hearing. City Attorney Roy stated there are two purposes for the hearing. One is to give Council first-hand information about the overall proposal and to enable the developer and his team to receive feedback from individual Councilmember's perspectives about particular issues or concerns that might warrant special attention. Council makes two types of decisions: legislative, in which it has broad discretion, and quasi-judicial, in which it sits as a judge in applying particular criteria to an application. Any proposal that qualifies for a pre -application hearing involves both types of decisions. A legislative decision, which would be a discretionary decision, involves the possible financing arrangement. The ultimate quasi-judicial decision would be the approval or disapproval of a project development plan heard on appeal and needs to be based on information presented at the hearing and the criteria in the Land Use Code. The applicant and other parties -in -interest are entitled to a fair hearing and a decision by an impartial tribunal. In order to balance the two types of decisions, all information from a pre -application hearing will be on the record and the site visit that occurred will be recounted at any quasi-judicial proceeding concerning an appeal so that everybody can understand what information Council is using as a basis for its decision. A pre -application hearing is intended to preserve Council's impartiality and not allow it to be compromised by individual, off-the-record contacts. No decisions will be made at a pre -application hearing, but Councilmembers may be able to provide feedback to the developer. Steve Olt, Interim Current Planning Director, stated the developer is proposing a shopping center with a supermarket as the anchor store. Staff is working with the developer to mitigate impacts on the wetlands located on the property. No formal development proposal has been submitted to the City but a project development plan will be submitted in the future. The proposal has been through the Conceptual Review Process and a Preliminary Design Review which is required prior to formal submittal of a development proposal. A neighborhood meeting has been conducted with 75 people in attendance. Once the project development plan is submitted, it will go through a formal development review, culminating with a public hearing before the Planning and Zoning Board. If the proposal receives Planning and Zoning Board approval, the proposal moves into the final Compliance Plan submittal where staff examines construction documents in detail and the final plans would be approved. Eric Holsapple, Loveland Commercial LLC, owner/developer of the applicant, 1908 North College, LLC, stated his company has completed previous mixed -use projects that involved natural areas, neighborhood buffering and other issues. Attempts to develop the proposed site have been made since the 1980s. The Urban Renewal Authority now in place in the North College area is a major reason why this property could now be developed. The property also has been removed from the Dry Creek Floodplain which makes it easier to develop. The site consists of seven properties with five different owners. Loveland Commercial now owns 23 acres and has contracts on the other pieces of property. With the help of the URA, there is much blight in the area that needs to be addressed, particularly some of the mobile home park located on Grape Street. Attempts have been made to add the restaurant property and the auto dealership, located on the corner of College and Willox, but they have not been successful, due to financing constraints. There are nine residential tenants located on Grape Street and the developer and his team are working with the URA to provide relocation 56 August 12, 2008 assistance for those tenants. The intent of the project is to develop a destination retail development, anchored by King Soopers Marketplace. The Marketplace will be a beautiful store with tremendous selection. There will be pad sites for restaurants, small retail, fast food and a gas station as part of the King Soopers operation. Mike Mulhern, President of Mulhern Group, Ltd, 1730 Blake Street, Denver, stated the Mulhern Group is the master planner and design architect for the project. The overall site plan contains 25 acres, with approximately 7 acres on the northeast and eastern portions to be maintained in perpetuity as enhanced wetlands and 18 acres are to be developed. The site opens onto North College and Willox and will use the 7 acres of wetlands and the canal on the north edge of the property as a buffer to the residential area located east of the site. The King Soopers building, at 123,000 square feet, will also act as a buffer between the noise and lights of the parking lot and the residential area. A roundabout will be located on Willox to serve this development and the Albertson's Center to the south. He showed photos of other projects developed by his firm and noted the designs from his firm take a "big box" concept and break it down with interesting architecture and streetscape into more friendly pedestrian scale developments. The development of the streetscape in the proposed project will meet Fort Collins' strict standards and will enhance College and Willox. A cluster of four buildings will create a gateway from North College and the inclusion of shops that are south of the Marketplace will bring a pedestrian -friendly retail space into the project. Bruce Hendee, President of BHA Design, stated the project will include bike lanes along Willox, both sides of North College Avenue, and a sidewalk will be added to the east side of College that will extend in front of the shops to create a pedestrian -friendly development. Neighbors in the area have requested pedestrian access from Highway 1 to Willox as many would like to walk or ride bicycles to shop in the area. Sidewalks will be extended so pedestrians will have direct access to the store fronts. One goal is to create an attractive gateway into Fort Collins and the landscaping will include street trees and attractive plantings using a xeric approach. There are three wetlands on the site with some native cottonwood trees located near the wetlands as well as Russian Olive and White Poplar, which are not desired trees. Steps will be taken to preserve the cottonwoods but the Russian Olive and White Poplar will be removed. 2.45 acres of wetlands would be impacted by the development, top soil would be removed and be stockpiled, then redistributed in expanded wetland areas used that will be used for mitigation. Plantings will be added along the edge of the wetlands to enhance them. There will be a three-year monitoring program after the implementation of the wetlands mitigation. The cattails currently in the wetlands will be kept and additional seed will be added. Willows will be planted along the edge to provide buffering and upland, drought -tolerant species will be added up -slope from the wetlands. One or two walls will be added to create transition and the additional detention in the wetlands. A fence is proposed behind the King Soopers building to keep trash from blowing. A dense vegetative buffer will be planted to help block views from the King Soopers and additional plant buffering will be added to protect the neighborhood visually from the site. Mr. Holsapple stated the site is a difficult one to develop and it was purchased because it was located in an urban renewal area. Before the property was acquired, guidelines were developed to lay out how the City and his company could partner together. A memorandum of understanding between the City, the URA and his company has been signed to outline concepts in connection with the 51 August 12, 2008 development of the property and was put in place to get needed direction from staff and to structure negotiations with King Soopers. The cost to develop the site is greater than the value of a development. Acquisition of property is voluntary and no condemnation has been used. More money has been paid for consensual contracts than would be for those acquired through condemnation procedures. The College and Willox intersection improvements will be primarily paid by this development, even though there are four corners to the intersection because the other corners do not generate enough to pay for improvements. The URA and Street Oversizing Fund are critical components to improve the intersection. Much design work has been done to retain the wetlands on the north side of the site. The site will be raised two feet, storm drainage has been added and the northern wetlands will be preserved almost entirely. The King Soopers building will be located in a soft part of the site which increases foundation costs to stabilize the building. The cost to develop the land is approximately $17 million while the value of the land is $8.5 million. There is a gap in funding and it is proposed to use 50% of the property tax increment financing (TIF) to cover that gap. The limitations of funding have prevented acquisition of all the properties on the site as there was not enough funding to acquire the auto dealership and restaurant located on the comer. Proposed public improvements include the intersection at Willox and North College and the roundabout on Willox. The Access Plan indicates a possible future connection to Spaulding Lane on the north side of the site but the project will terminate at Grape Street and not prohibit eventual connection to Spaulding. However, it appears unlikely that connection will ever occur. Storm drainage costs are quite high to allow the plan to retain the wetland on the north side. King Soopers is not interested in owning the wetlands and talks are underway with the City to determine if the City will take ownership of the wetlands and the storm drainage. The project will create an aesthetically pleasing entryway into Fort Collins and be a catalyst project for the North College Urban Renewal Area, assemble blighted properties to increase overall impact with no condemnation, solve necessary infrastructure problems and benefit all properties along North College. This project meets City criteria in the North College Urban Renewal Plan and the North College Business Association strongly supports the project. Councilmember Manvel asked why the maps provided did not show all the properties discussed and what the plan was for Grape Street. Mr. Holsapple stated the maps were made before the properties were under contract but all the properties in the proposal are now under contract. The development will offer street access that terminates at Grape Street. At some future point, it may be proposed to close Grape Street to College and access will be provided through the development. Councilmember Roy asked if nine residents would be displaced by this plan. Holsapple stated the nine residents are renters. The two property owners have agreed to sell and the rentals will be vacated at closing. A request has been made from the URA to assist in relocating the renters. Councilmember Roy asked what resources would be necessary to aid low income renters in finding other housing. City Manager Atteberry stated he would provide a response. Mayor Hutchinson asked for an estimate of cost to mitigate the south wetlands and preserve the north wetlands. Mr. Holsapple stated the cost will be approximately $1.5 million. 52 August 12, 2008 Councilmember Ohlson asked for clarification of the amount of wetlands to be impacted as the information provided states the area impacted will be under 1.5 acres and he also questioned the location of those acres. Steve Long, Cedar Creek Associates, stated the correct number should be 2.48 acres. The three wetlands located on the site will all be impacted, to some degree. There is a total of 6.88 wetland acres on the site. Councilmember Ohlson asked how the mitigation will be accomplished and if 2.48 acres will be added. Olt stated staff has not yet evaluated the details of any mitigation. Mr. Long stated there are 6.88 acres of wetlands on the site, the development will impact 2.48 acres and the proposal is to construct 2.48 acres to bring the total number of wetland acres back to 6.88 acres. Councilmember Ohlson asked if any other type of surface for the parking lot was considered other than an impervious surface. Mr. Long stated no other type of surface has been considered at this point. Mr. Holsapple stated King Soopers was not comfortable with using a pourous surface for parking as the grocery carts with small wheels are difficult to push on such a surface. Jim Hibbard, Water Engineering Field Operations Manager, stated discussions have been held with the project engineers concerning water quality treatment before the stormwater reaches the wetlands. Staff is reviewing some best management practices other than pervious pavement such as inverted medians. Pervious pavement has been tested on a small scale in Fort Collins and on a large scale in Denver for urban drainage projects with multiple failures with the technology. A moratorium has been placed on new pervious pavement applications in the flood control district in Denver. Councilmember Ohlson asked what assurances would be provided that the water in the wetlands would be of an acceptable quality after the stormwater treatment. Hibbard stated the wetlands cannot be used for water quality treatment because once it connects with the stormwater system it becomes "waters of the U.S." so the water quality treatment must occur before the water enters the wetlands. The intent is to minimize any degradation of the wetlands caused by parking lot runoff. Councilmember Ohlson asked if the payment of the TIF funds be based on actual costs or would the entire amount of $8 million be committed to this project. City Manager Atteberry stated analysis and verification of costs will be part of the public/private partnership. Councilmember Ohlson asked if the commitment between the City and the developer would include an amount that would not be exceeded for payment of costs. City Manager Atteberry stated the development's financial performance will be included as well as a cap on the amount allowed for costs that will be based on real costs and not planning estimates. Joe Frank, Advance Planning Director, stated staff will receive a certified statement of cost estimates that will be generated by the applicant and reviewed by staff to ensure the estimates are accurate and fair. Councilmember Ohlson stated the proposal uses URA funding to pay for normal costs of infrastructure development that would normally be funded by the developer. He asked why the URA would pay for "ordinary" costs of infrastructure improvements instead of funding only "extraordinary" improvements. Mr. Holsapple stated the project does contain "extraordinary" costs for stormwater improvements related to the wetlands. The project incurred extraordinary costs in assembling the properties for the site and the URA did not assist in acquiring titles for the properties. 53 August 12, 2008 Some of the infrastructure improvements will be paid by the URA as compensation for the extraordinary costs incurred to assemble the properties for the site. Frank stated the URA policies adopted by the Board, state the URA will not pay for the cost of infrastructure needed normally required of development except under certain situations. The URA will pay the costs normally required of development if the project meets certain requirements: (1) if infrastructure costs are extraordinary or an unusually costly remedy for blight factors; (2) the project is for affordable housing; (3) the project creates significant numbers of new, primary jobs; (4) the project has great potential to capture spending that is leaking out of the market area or is a destination use that will attract others from the outside; or (5) the infrastructure serves other development and redevelopment sites facilitating further improvements to the area. Staff believes the applicant has proven this proposal will be a destination use, the infrastructure costs are extraordinary and unusual and the infrastructure will also serve other development in the area. Mayor Hutchinson noted the first use of URA funding was for a water line, which was an "ordinary" project, that met some of the criteria listed and was useful in providing utilities to other sites on the same street and help to retain a local business and jobs. Councilmember Roy asked if the Albertson's Center, located south of the proposed project, would remain in business if this project moves forward. Mr. Holsapple stated the financial projections for the project have been based on the assumption that the Albertson's Grocery Store stays in business. Albertson's has closed many of the stores located in Colorado and there is a possibility the North College store will be closed in the future. If that occurs without the completion of this project, the north side of town will not have a grocery store. Frank stated it is not clear what impact a new King Soopers will have on the Albertson's store. A market study done in 2005 for the North College area evaluated what new uses would be good for the area and found there was support for another grocery store in the area that would be an anchor in a shopping center. Councilmember Roy asked how a marketplace concept can succeed in the area as there is a Super Walmart nearby and there is a low population in a 3 mile radius around the project. Mr. Holsapple stated there has been a large market for a King Soopers store in the North College area for 10 years and King Soopers wants to put a store on this site. Councilmember Roy asked why the auto dealership and restaurant properties, located on the corner of College and Willox, are not part of the project site. Mr. Holsapple stated he was involved in negotiations with the owners of the properties and no sale agreement was reached because the cost of relocation was too great for the businesses. Those businesses will do more sales when this project opens. The URA staff is in discussion with the owners regarding facade improvements to the businesses. City Manager Atteberry noted no property has been taken by condemnation for this project and a way has been found for the project to co -exist with those two businesses. Mr. Holsapple noted the size of the King Soopers has allowed the project to co -exist with the businesses as the store was located further back on the site and the entrances moved further away from those businesses. Councilmember Manvel asked if improvement of all four sides of the College/Willox intersection was the responsibility of this project and if the costs will be recouped as further development occurs. August 12, 2008 Mr. Holsapple stated there are two pieces to improving the intersection: oversizing and the local street sections. This project has to improve its side of the intersection, as well as the west side to upgrade the streets, to operate safely for the development. Approximately 25% of the cost of the street improvements would be a development cost to the project and the balance of the costs will be reimbursed from the Street Oversizing Fund or the west side of College as it redevelops. The costs have increased over 30% in the past 90 days. Frank stated engineering estimates prepared by the City indicate there $700,000 to $800,000 possible to be repaid by future redevelopment to the URA. Councilmember Manvel asked about destination shopping and how the estimate that 25% of future shoppers would come from outside the area was determined. Mr. Holsapple stated King Soopers developed that figure and hopes to draw from Wyoming, Poudre Canyon and Wellington. Councilmember Manvel asked if King Soopers will own the store. Mr. Holsapple stated King Soopers insists on ownership because of the size. King Soopers does not want to own the wetlands and talks are continuing with City staff about ownership of the wetlands. Councilmember Ohlson asked for staff s opinion on the proposed roundabout. City Manager Atteberry stated a roundabout is highly functional, aesthetically pleasing alternative to an intersection with signals and the City has an adopted policy that requires roundabouts to be considered. Mark Jackson, Transportation Group Director, stated a decision about a roundabout will affect the design of the intersection at College and Willox. Using a roundabout at the proposed site will lessen the need for double left -turn lanes at College and Willox. The traffic impact study will help determine if the roundabout fits the City's parameters, is safe and that it helps move traffic at the site entrance and at College and Willox. Councilmember Ohlson asked if the site property would generate the same property tax increment whether the King Soopers is in business or not. City Manager Atteberry stated that information will be provided. Councilmember Ohlson stated this development is a type of development desired on North College and pledging property TIF is appropriate to facilitate this development. A roundabout would be appropriate for the site but no road should be allowed through the wetlands. He was concerned about using $8 million for this public/private partnership. Mr. Holsapple stated the proposed development is a first-class design that could be a catalyst for further development in the area. Less funding from the TIF will affect the quality of the project. There is great cost associated with removing the blighted conditions from the Grape Street properties to bring the properties into productive commercial properties on North College. The roundabout will be a tremendous addition to the area but is very expensive to build. The gateway features will be innovative and eye-catching but will be considered "extras" if the amount of TIF provided is less than proposed. Councilmember Manvel asked for a listing of the costs that will be incurred that are beyond what a development would expect to pay and other expenses the development will be paying. Mr. Holsapple stated his team has been through the figures with City staff. Lucia Liley, attorney representing 1908 North College, LLC, stated early discussions with staff identified a large part of the gap in funding was Mr. Holsapple's need to assemble all the properties and the extraordinary 55 August 12, 2008 costs associated with the properties, such as property costs, acquisition costs and demolition costs. The City's attorneys and Ms. Liley determined a cleaner approach, under the URA statute, than trying to reimburse for the extraordinary costs of land acquisition, would be to identify other public improvements in an equivalent amount and fund those to reimburse the extraordinary costs of land acquisition. City Attorney Roy stated he had spoken with bond counsel and others around the state who have worked regularly with URA funding and reviewed the statute. It is not clear whether the improvements funded by the URA must be public. The important idea is that the improvements, whether public or private, have substantial public benefit and be helpful in eliminating blight. The conventional expenditure is for public improvement and not improvements that provide public benefit. It is preferable to focus the URA funds on public improvements and this proposal does use URA funds for public improvements. Mr. Holsapple added that staff has requested information about engineering work, the actual cost of the wetlands mitigation, the amount of stormwater funds to be used for wetlands mitigation and the amount of stormwater funds to be used for parking lot runoff management. Those calculations are ongoing and will be provided to staff in the next few weeks. Councilmember Manvel asked for a timeframe for the TIF payments as most of the funds will be expended up front for the improvements and the increase in the property tax will be over a period of 20 years. Chuck Seest, Finance Director, stated staff has compared the gross TIF available and what would be utilized for the up -front costs. There are financing costs with the TIF because the URA does not have an established TIF stream. Public improvements in the public right-of-way have been identified and the idea is to use a form of financing to provide an advance for those improvements. Staff is considering a bond to fund the improvements on the site that would remain with the ownership of the site. The financing costs will add another 20-25%. Councilmember Troxell stated there is a need for this type of development in North Fort Collins. Councilmember Roy stated this project is one that is appropriate for North College. He was concerned the project would demolish lower income housing and displace low income citizens. Pledging property tax increment is appropriate to facilitate development and redevelopment in the area. The amount requested is huge but the City has not provided much infrastructure to the area for many years and many improvements are needed. The proposed roundabout is a positive addition to the proposal. He did not support a road through the wetlands that could connect to Spaulding. Councilmember Ohlson stated pedestrian access should be from North College and not through the wetlands area. Mayor Hutchinson stated this is a type of development that is desirable for North College. Assisting this development with the use of the URA TIF was a good use of those funds. The roundabout is a good approach to the entrance on Willox. City Attorney Roy stated there will be two tracks for this proposal, if Mr. Holsapple and his team choose to move ahead. One concerns the financial arrangement that will come for Council consideration and the other track deals with the project development plan that will go through normal Land Use Code process and may or may not come before Council. 56 August 12, 2008 Mr. Holsapple stated approximately $200,000 has been spent so far to bring the development to this point and it will cost about $200,000 for the next steps. Council has provided comments that are helpful and some changes will be made to the proposal. City Manager Atteber y stated Council has not discussed the value the new increment brings to the URA. The plan will move North College forward. This project is one of two major developments proposed for the North College area and both are critical catalysts for future development of the area. Ad*ournment The meeting adjourned at 8:00 p.m. /•GIIYWH I`Ip, ,fir► ,� 11. 57