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HomeMy WebLinkAbout2000-05-02 Minutes, City Commission, special .---.. -- -- - .-- -- ------ --- -.- -------.- - MINUTES OF THE MEETING OF THE CITY COMMISSION BOZEMAN, MONTANA May 2, 2000 ***************************** . The Commission of the City of Bozeman met in special session in the Commission Room, Municipal Building, on Tuesday, May 2, 2000, at 12:00 noon. Present were Mayor Youngman, Commissioner Brown, Commissioner Frost, Commissioner-Smiley, Commissioner Kirchhoff, City Manager Johnson, Assistant City Manager Brey, and Deputy Clerk of the Commission Murphy. Sianina of Notice of SDecial Meeting Each Commissioner, in turn, signed the Notice of Special Meeting. Interview of Dotential consultant for economic feasibilitv study This was a conference call held with Janet Smith-Heimer and Ray Kennedy of Bay Area Economics of California. Commissioner Kirchhoff opened the conversation by explaining where we are at as a city, what we are trying to negotiate, and why we are calling you. Present in this room are five City Commissioners, the attorney who is representing WalMart, the attorney who is representing the property owners, and several members of City staff. We are here because . WalMart is requesting an addition to its existing facility, and in order to see that move forward they have agreed to two extra steps -( 1) an economic impact assessment, factors included to be determined by the City and the firm doing the study; (2) submission to some form of enhanced design review. We are talking to you today to find out what your skills and backgrounds are to see if you are a good match for what we would like to see happen from this study. This study will be conducted through the mutual agreement of WalMart and the City. The firm will be contracted and paid by WalMart, not the City. Janet Smith-Heimer provided background information, stating she is the founder of Bay Area Economics, which was started in 1986. They are an urban and real estate economics consulting firm with offices in San Francisco and Davis, California and suburban Washington DC. Their consultants have backgrounds in city planning and/or real estate and economics. They work with city, county, state, and federal governments and the private sector. They focus mostly on urban kinds of projects; they do not work on large subdivision-type things. The firm does a lot of work for the public sector, assisting them with strategies, planning, feasibility studies, economic development, affordable housing strategies, mixed-use downtown projects, downtown revitalization studies, economic analysis, and impact fees studies. They serve as a real estate advisor as well. Ray Kennedy, consultant and author of the Eureka, California study, stated the most recent study relating to the effect of big box retail was conducted in Eureka and focused on . WalMart; but it actually covered other ground, including the possible impacts of other types of big box retail as well. Typically in California what the cities are concerned about is the fiscal impact because cities get a big chunk of the sales tax revenues. Issues to be addressed in such a study include retail leakage, (taking sales from other stores and what the impact will be); population and shopping patterns; future growth; potential job impact; quality of jobs; and the range of goods available. Commissioner Kirchhoff asked Mr. Kennedy, regarding the study you mentioned, was it your conclusion that WalMart would have a net positive effect on Eureka? Mr. Kennedy replied it is a mixed bag. They would capture sales going out of the city. Eureka is not a 05-02-2000 Special -.. .-- ----.- --- .---.----.--------.- - 2 - growing area; it is an isolated city with a stagnant economy. We concluded the net fiscal impact would have been positive. We felt there was a lot of other retail already present in the city, as well as in the county; and we didn't feel the impacts would be great on the downtown because those impacts have already been felt. Commissioner Kirchhoff stated the City Commission is investigating whether or not we want to change our policy regarding bringing in large-scale retail outlets, like Home Depot. Our primary concern is quality of life issues. We have brought in a new arterial street, which . connects to the interstate; and it is predicted there will be a shift in retail from the downtown to the arterial. We need to determine how we deal with this situation as best we can. WalMart is respectful of any kind of reasonable request we make, with regard to this study, that will help us beyond the effects of WalMart. Ms. Smith-Heimer replied our firm does a lot of work on quality of life issues; growth issues. We are very sensitive to these issues. We have done work for cities, counties, and federal agencies all looking for ways to attract and retain firms and their employees, including affordability of housing issues. We are very conversant on these issues. We do work alot on downtown revitalization; we have won several awards for our work in this area. Ms. Smith- Heimer noted she has seen Bozeman's downtown area and well understands Commission concerns about retaining the character of the community. Commissioner Kirchhoff asked if Bay Area Economics has given any thought to the methodology you might use to conduct a study in Bozeman. Mr. Kennedy inquired if there are any government sources of information on what sales are in these stores; any information available at all? Commissioner Kirchhoff replied during public testimony heard at one Commission meeting, there was mention made of increases in dollars spent in Bozeman, injections of dollars, that have occurred in the last four or five years. Commissioner Smiley added it has been mentioned downtown businesses bring in $100 million per year, so there are some statistics that could be useful. . Mr. Kennedy continued, saying one source that is current as of 1997 is the economic census; there should be some information there. Sometimes you just have to go out there and make your best estimate or get people to self report. There are a lot of publications that have generic estimates for sales based on square footage, and there are a lot of services that make estimates. You can use that information to the extent it is applicable to the local context. Mr. Kennedy noted the economic census is a program of the federal government that provides retail sales, by category, down to the local level. What would be most useful here would be data regarding both the city and the county, then you would look and see what has happened with the population since 1997 and generate sales by category. This would give you a sense of what sales are. It would also be helpful to look at the overall county population and figure county averages versus city ones, assuming Bozeman is capturing sales from outside the city. Ms. Smith-Heimer added we are suggesting we start with the economic census. It is a pretty good basis of information through 1997. We can then analyze what has been happening in the city and county. Depending on your guidance, we would either call major retailers added since that time, if they will self-report; or we can attempt to do a survey of merchants. Any other data sets available would also be helpful. . Mr. Kennedy asked if there are any retail employment figures available. City Manager Johnson replied they are available through the state of Montana. Ms. Smith-Heimer stated they would look at those figures as well because that is also an indicator of the growth of the economy. Mr. Kennedy inquired if the retail power center that recently opened on the arterial was opened since 1997. Commissioner Kirchhoff answered yes, and it is not near build out yet. So far there is a Costco and a Target; but at full build out this area will provide more than two million square feet of retail space, which is in addition to an outdoor mall on the same avenue, providing another 300,000 square feet of retail space. Full build out on that avenue could be 05-02-2000 Special - 3 - at 2.5 to 3 million square feet, as it is currently planned. WalMart is located on a different avenue. Mr. Kennedy asked if there are any traditional malls. Commissioner Kirchhoff responded there is one that opened in 1979. The owners are currently investing in refurbish~ng it, and they have filled up most of their spaces. There are two major anchors planned; the Bon Marche and Dillards. . ' ' Mr. Kennedy questioned what is currently on Main Street. Commissioner Kirchhoff stated Bozeman has a strong tourist economy and that is the kind of business that dominates Main Street - galleries, specialty stores, restaurants, theaters; there are no real staples. Sales are flat and have been the last three years, and the time between store,closure and reopening is lengthening. The University is located one mile from the downtown and those sales are not a huge share of the market. Mr. Kennedy asked if the students are concentrated near the University, to which Mayor Youngman replied ther'e are significant dormitories and family housing areas, but there are students housed in every neighborhood in town. Ms. Smith-Heimer noted another issue relating to the quality of life is the fact that the character of the community is an attraction. She suggested one of the things that could be done would be to interview firms already located in Bozeman and who are considering leaving, those firms who considered coming to Bozeman and chose to go elsewhere, and those currently located in Bozeman and planning to remain. The purpose would be to try to identify the factors that are important to these kinds of firms as they make these location decisions, and how quality of life issues factor in. Bay Area _ Economics would conduct a series of interviews to try to determine the factors that contribute to the quality of life; housing, community services, community character, historic buildings, so forth. Commissioner Kirchhoff stated there are some local economists who have done similar work, and he offered to share the names and give Ms. Smith-Heimer and Mr. Kennedy some . of the studies that have been completed. Ms. Smith-Heimer said those would be helpful, and they could start with those studies. Mr. Kennedy asked how large the WalMart is currently. Mr. Sabol, attorney representing WalMart, stated the store is 120,000 square feet and is six years old. Although the exterior is different from any other store, the interior is the typical WalMart interior. The addition proposed is 80,000 square feet and will be oriented toward grocery sales. Mayor Youngman added one of our subset questions for you would be the impact of , this expansion on the grocery sector economy. This would not be the major focus, but we would like to have that addressed. Ms. Smith-Heimer noted they have also done a lot of work for cities needing to accept large grocery chain stores, and those impacts on the local grocery merchants. Mr. Kennedy added one such study was recently completed for WinCo Foods out of Idaho and Oregon. They are planning a 90,000 square foot store, and this study was specifically tailored for grocery store impact. Commissioner Kirchhoff stated the intention of this study, as he sees it, isn't as much giving a thumbs up or down for WalMart; rather it is providing data that is reliable and will allow the Commissioners to focus their attentions on how they need to address these issues in the future. . Ms. Smith,.Heimer asked if there have been any discussions regarding size limitations. Commissioner Kirchhoff responded there was, but they didn't go very far. The Commissioners were angling toward an interim, six-month ordinance to give them some breathing room but that didn't happen. Public sUPPo,rt was not behind it. Mayor Youngman added the Commission is searching to identify any impacts that can be mitigated. Commissioner Kirchhoff noted there is concern about the residential population growth this community has had in the past ten years, which has increased air pollution among other things. We are climbing up the EPA scale and getting close to having to mitigate our pollution. Any new policy should recognize supercenters increase, rather than reduce, air pollution. 05-02-2000 Special ------------...--..-.. - -- ---.-...------ - 4- Ms. Smith-Heimer recognized there are questions regarding trip generation. Mayor Youngman stated Bozeman is also a growing high-tech center for the region, which may hook into future job development, quality of life issues, and others. Ms. Smith- Heimer asked if the City is working on economic development strategic planning. Mayor Youngman stated the City isn't, although strategic planning is gaining more and more interest. She added, regarding HUD, we are doing whatever is required of us. We are also in the . process of updating our comprehensive transportation plan, and we are on the verge of being able to do mass transit. Ms. Smith-Heimer inquired as to the rate of growth, to which Mayor Youngman replied 3.5 percent more or less; and that is projected to continue for many years. Commissioner Smiley added until the 1960s Bozeman was tiny and people were accustomed to going to Billings to shop. Now we have people who come here from the surrounding areas, 40 to 50 miles away. Those people who go to the retail centers also go downtown to shop at some of the specialty stores. Ms. Smith-Heimer said their primary research would be conducted with shopper surveys- telephone ones, which would involve calling residents to find out where they shop now and how their shopping patterns have changed and intercept surveys, where they would meet shoppers on the street and conduct the survey. Commissioner Kirchhoff inquired if consultants from Bay Area Economics are planning to come to Bozeman to do this study. "Absolutely" , replied Ms. Smith-Heimer. Commissioner Brown stated there is also concern with land consumption, noting there is a very large amount of potential retail space on North 19th Avenue. The City currently controls the development of land within the city and land proposing to annex. The County has jurisdiction over land surrounding the city. Ms. Smith-Heimer asked if this has made expanding into the donut areas easier or harder. Mayor Youngman replied it is moving toward being easier; it is an evolving discussion. The County's master plan process is underway, and they are talking about concentrating growth around Belgrade and Bozeman. The worst-case scenario . for the City is development of areas that are not going to be annexed into the City. Ms. Smith-Heimer clarified that originally the City and County had joint planning and administration and that has now changed? Mayor Youngman replied that is correct. Commissioner Smiley added part of the reason why the donut around Bozeman was turned back to the County was because the people who lived there couldn't vote for those who were representing them. Commissioner Brown suggested another major issue for the City is impact fees. The City has significant impact fees that have now been challenged in court. The City recently lost a fairly large business complex, which was,built at the edge of town, because they didn't have to pay the impact fees. Often this determines if businesses build in the City or in the donut area. Mayor Youngman noted there is increased support among county residents for zoning, planning, and government involvement. There is also a ton of support for open space preservation, which is one of the top issues consistently identified. Commissioner Kirchhoff added there is currently no county-wide zoning; you can petition as a group for a zoning district. Ms. Smith-Heimer stated her firm does a lot of work in support of these long-term . issues; how much retail land is the right amount, where does it go, what kind is it; these are the kinds of issues they deal with. They try to help plan land use and designate how many acres will be dedicated to retail; such as when you build out to a certain population, you can have this much retail space. Mr. Sabol asked Ms. Smith-Heimer, based on your knowledge, experience, and expertise on the types of studies you have talk.ed about, what is the time frame in your mind to do the type of study we might envision? Ms. Smith-Heimer asked if he had a time frame in mind. Mr. Sabol replied there is no specific time frame, but WalMart's plans are on hold.' They are now supposed to be in the review process but are not being reviewed. They are anxious to move 05-02-2000 Special - 5 - ahead; the building seasons are short here. They are looking for a ballpark time frame. Ms. Smith-Heimer replied she is hearing WalMart is the catalyst to these other issues. They could do the study in phases, which would mean they could risk. losing some of the broader issue analysis, but timing is sometimes of the essence. We become engaged in answering the questions of the moment, and then use some of that information to give you the long-term answers. We would structure this study in phases, and we would work with you to frame phase one so we wouldn't delay this too long. . Mr. Kennedy stated they did the Eureka, California study in a month or a month and a half; the WinCo Foods study was completed in a similar time frame. It depends on how quickly you can gather the data; anything involving surveys can start to eat up more time, but that step can be avoided initially. Ms. Smith-Heimer offered they can safely say six to eight weeks for completion of phase one; does that .help? Mr. Sabol asked what kind of money is Bay Area Economics talking about for phase one? Ms. Smith-Heimer answered they would need to respond in writing. Mr. Sabol then asked how they would arrive at a dollars and cents figure without coming up here and finding out how long it would take to gather the required information. He continued, saying he appreciates this conversation, and they seem to have the experience and expertise in the fields the Commission is interested in; but they need to come up and take a look at Bozeman as quickly as possible and put together a proposal as quickly as possible so WalMart and the Commission can take a look at it immediately thereafter. Ms. Smith-Heimer and Mr. Kennedy indicated they will try to come to Bozeman sometime next week, and they will give City Manager Johnson their timeline sometime today. That concluded the conversation with Bay Area Economics. Mr. Sabol stated most of what Mr. Kennedy and Ms. Smith-Heimer have said he already knew. What they are lacking is an in-depth knowledge of Bozeman and an overall knowledge . of Montana. They are used to working with urban areas, which is why Mr. Sabol suggested they come to Bozeman, so they would better understand the area and the problems we have here. He suggested getting them here and talking to them, let them look around; they should be able to "ferret out" other studies that have been done. Mr. Sabol said, "Gallatin County has been studied to death by the Business Affairs Bureau in Missoula. II If they could find out what is already available, they could give us a more meaningful proposal. Mr. White, attorney representing the landowners, stated Eureka is more rural than we are, so they do have some experience with rural issues. Mr. Sabol stated that, upon further reflection on where the Commission and WalMart are and what they have tried to do, he is not sure they went about this in the right way to begin with. We should have sat down and developed a list for potential candidates of what we want to know. With the Watts proposal, they were grasping to come up with a way to tell us what we wanted, which produced a proposal which was not what the Commissioners really wanted them to come up with; and they are familiar with Bozeman and Montana. Mr. Sabol offered what the Commissioners are really after here, and what WalMart has offered to provide, is an economic study to determine the effects of large retail facilities on the economy as a whole. What does that have to do with WalMart? They are already here; they exist; and they want to add 80,000 feet of grocery store space. Where do they go with what we are doing here? All grocery stores are corporate entities anyway; they will survive. Most . of this study is not applicable to adding 80,000 feet of grocery space. . Mayor Youngman responded the size issue is what got this whole thing going in the first place. In terms of WalMart expanding, that is part of these questions; and the Commission does want to get a better handle on that. Mr. Sabol asked once the Commission gets a handle on this down the road, how does it relate to what WalMart is doing because a lot of these issues do not effect WalMart because we are already here. We are conducting this study for food and information for this Commission to evaluate large retail facilities coming in in mass later. WalMart is concerned 05-02-2000 Special ----.,.----------- -..------- - 6 - with the timing and the time frame. Their plans are on hold until we gel this economic thing done. Is that true? Nothing is happening in the planning stage and that makes them unhappy. Mr. Sabol continued, some months ago when we were at the point of i;ln interim ordinance, he said to WalMart maybe we can do a development agreement. They asked questions then regarding the time frame; they see the summer slipping away and plans aren't being reviewed; the selection of an economist hasn't been done, and Mr. Sabol stated he thought selecting the economist was going to be the easier part of this. His indication from . WalMart's land people is these studies generally cost $7,000 - $10,000. Somewhere along the line WalMart is going to draw the line. We need to get going on the plans; we need to know when the economic study is going to be done. It strikes me that even if the study is done in six to eight weeks, then the interpretation comes, which is going to be the tough part. This study can be looked at in varying ways; after it is interpreted, what do we do about it? Mr. Sabol said he is having a difficult time coming to grips with this study's ability to come up with anything that will be applicable to Commission approva.1 of WalMart's expansion. Mr. Sabol asked where do we go now, because I think interpretation is going to be difficult. Mr. Sabol stated he is to the point that he thinks the better answer at this time for the City and WalMart is to say, "Instead of going through all this, WalMart will give the City a check and say, 'Here, do what you want with it.' Use it to purchase your open space park; fund your economic study; whatever you choose." That seems to me to simplify the problem tremendously. This gives you time to develop your economic study and put it out. to bid. Mr. Sabol noted he would sooner see that happen and see WalMart proceed ahead with their store. The City will have the ability to do immediate and real' things for the community, like Sundance Park and other things. Studies are wonderful tools, but sooner or later they are on the shelf gathering dust. Unless you use them continually, they aren't worth much to you. Mr. Sabol said he has no authority to give the City a check, but he doesn't see this process going anywhere. . Another bridge to cross, according to Mr. Sabol, is annexation. That thing is a big problem to the Westlakes and, indirectly, to WalMart. The landowners are unwilling to sign the . . annexation agreement with the impact fee language in there. If they won't sign it, in theory, the City won't annex; if you don't annex, 'WalMart is dead in the water anyway. The annexation question needs to be resolved fir$t, before we spend money on an impact study. Mayor Youngman responded the Commissioners' concern is there be a level playing field, and they are trying to determine that with the impact study. Mr. White, speaking on the annexation issue, noted WalMart sits on about 16 acres right now. There are another 23 acres to the east to be annexed as well. Mr. White has talked to everyone about the annexation and asked if it would be helpful to sit down and talk with Planning Director Epple and the Commission. He stated he sees three or four options right now. The Westlakes have a large chunk of land that should be developing in the City, not in the County. The issue is timing, when should this land come in;should they annex all of it or part of it? There are easements out there in the County already. The Westlakes could leave the annexation issue alone until the litigation is settled. If it is beneficial to the City to bring in all the land at once, then the Westlakes could bring it all in. Commissioner Brown asked if there is a process to bring in only part of it. Mr. White replied there are no plans for the rest of the property at this point in time. He believes City planners prefer to have the two acres that are needed for the retention plan in the City, rather . than in the County. The original- proposal was to annex 2.5 acres, but the Commissioners requested all of the property be brought in at once. Then the Westlakes ran into the impact fee program issues. Mr. White noted the Westlakes are agreeable to bring in the 2.5 acres now, then bring in the rest later since they don't plan to do anything with it anyway. However, they do get calls from time to time from other large stores inquiring about its availability. Mr. Sabol suggested dropping back to annexing only the 2.5 acres. Then the Westlakes will sign the agreement, and no one will have to worry about any language changes or anything like that. To bring in the whole piece at this time, with the current language, is not 05-02-2000 Special .----- -- -.-.- --- -..--- ---------- - 7 - acceptable to the Westlakes. Mr. Sabol also,noted that WalMart is paying the impact fees on the portion of land they are using. What they ~eed the additional land for is their landscaping buffer. Mayor Youngman stated the City needs to know exactly what Mr. Sabol has suggested. She then thanked everyone and stated the Commissioners appreciate all comments received today. . Adjournment - 1 :21 D.m. There being no further business'to come before the Commission at this time, it was moved by Commissioner Kirchhoff, seconded by Commissioner Frost, that'the meeting be adjourned. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Kirchhoff, Commissioner Frost, Commissioner Brown, Commissioner Smiley, and Mayor Youngman; those voting No, none. ~(JU--- MARCIA B. YO GMAN, Mayor ATTEST: V~ ;/~ ROBIN L. SULLIVAN Clerk of the Commission . PREPARED BY: ~v.- ~. '~(~~lLLl~.~) KAREN- L. DeLA THOWER Deputy Clerk of the Commission . 05-02-2000 Special --- ----