MOTION: Hadley moved, seconded by Melander, to approve the agenda. The motion carried 6-0.

MOTION: Churchill moved, seconded by Melander, to approve the minutes as presented. The motion carried 5-0 (1 abstention-Bergman).

Chair Edgeton opened the public hearing at 7:03 with the standard remarks.

City Planner Tom Lovelace introduced the item. He explained that the Class III restaurant designation did not exist until the end of 1998, long after the Planned Development was established.

Blundetto expressed concern about traffic generated by a coffee shop, citing situations at Caribou where it becomes difficult to move in and out. He asked as a minimum that the city's traffic consultant review the plan. Edgeton noted the proposed site is more self-contained than the Caribou site.

Steve Panko, representing the petitioner, introduced himself and said he was available for questions.

Lovelace proceeded to outline the site plan building permit request.

Melander asked if the petitioner is willing to change the north elevation. Panko said they are willing to add parapets but would like to leave the false windows up to the tenants, although they will put the windows in if needed.

Bergman asked if the color matches Wal-Mart, whether the tie-in with Wal-Mart is preferred as opposed to its own identity.

There being no comments from the public, Edgeton closed the public hearing at 7:21 p.m.

Edgeton opened the public hearing at 7:35 p.m.

Assistant Planner Margaret Milton introduced the item. She noted a veterinary clinic is interested in Lot 3, and a daycare in Lot 1. Milton stated sidewalks will be required as part of the subdivision.

Blundetto stated he found it useful to get comments from the engineer with the packet.

Sandra Williams, an association board member for Foxmoore Ridge, stated Dr. Snyders had created his office to look like a home. She expressed concern with on-street parking and refuse blowing around.

There being no further comments from the public, Edgeton closed the public hearing at 7:43 p.m.

Assistant Planner Kathy Bodmer outlined the proposal.

Edgeton opened the public hearing at 7:48 p.m. There being no comments from the public, Edgeton closed the public hearing at 7:49.

MOTION: Churchill moved, seconded by Hadley, to recommend approval of the comprehensive plan designations for the annexed properties as follows: Property 1 (golf course) as "Park" and Property 2 (part of Evermoor Apple Valley) as "LD", Low Density Residential at 0-6 units/acre. Motion carried 6-0.

MOTION: Churchill moved, seconded by Hadley, to recommend approval of the zoning designations for the annexed properties as follows: Property 1 as "PD-168" (Valleywood Golf Course) and Property 2 as "PD-681" (Evermoor Apple Valley. Motion carried 6-0.

Milton introduced the item.

Community Development Director Rick Kelley gave a history of the Metropolitan Council's Program for Affordable Housing. He noted both the developer and the City would be involved in a contractual arrangement with specific performance requirements. If the developer defaults, the money provided by the Metropolitan Council program would have to be returned. Another plan of recourse is to rescind the Certificate of Occupancy. Kelley stated it is important that the City participate because the private marketplace has not been constructing affordable units.

Blundetto asked if the affordable housing angle gives the petitioner additional leverage in this case, and also whose job it is to negotiate the performance standards. Kelley replied that it is just the opposite, given there is a negotiated agreement outlining the requirements. He stated the City Council determines the performance standards, but that staff has been working with the petitioner.

Edgeton said that Apple Valley's Economic Development Partnership reviewed the proposal because there is such a great need for affordable housing for employees of local businesses.

Churchill, Melander and Blundetto posed questions with regard to project financing and enforcement. Mr. Kelley noted the funding deadline coincides with the funding cycle of the State of Minnesota. He explained the ongoing enforcement process to maintain reduced rental rates, which includes annual information regarding the rents charged and the occupants. The Dakota County Community Development Agency (formerly HRA) has agreed to assist with the administration of that. The dollars are transferred to the developer through the City to offset the cost of construction with the idea that it is necessary to keep the mortgage payment low to keep the rents low. The CDA is also establishing a Tax Incremental Financing District to enable them to underwrite some of the taxes. Kelley also enumerated the rents and what income levels they are designed to serve -- with 20% of the units for people with 20-25% of the median income, and the balance somewhat below market rate ($700-850) for folks at 50% of the median income level.

Milton explained the suggested negotiated performance standards and clarified the density bonus provisions in the City Code. Kelley reminded the Commission that the petitioner is not requesting a deviation from performance standards for density.

Bergman asked what dollar increase the tenants would pay if the masonry reduction from 50 to 40% were not approved. He also asked if fencing would be required around the pond. Milton said fencing is not required around any of the storm water ponds.

Blundetto queried what prevents developers in the program from changing their minds after the foundation's been poured. Kelley explained there would be deed restrictions, and all parties would have to agree to rescind the program.

Melander stated he didn't like past tense use of the word "negotiated" performance standards and had additional concerns: a lot of impervious surface to exacerbate drainage volumes; not comfortable with the elevations; challenging topography.

Milton explained that any tree mitigation requirements are in addition to the 2-½% landscaping requirement.

Churchill asked whether there would be funds available in the next funding cycle, and whether there is a danger the project would not get funded. Kelley noted that the legislature decides on availability of funding for the next year.

John Duffy, the petitioner, noted that the distance between Building #6 and the adjacent home exceeds 300 feet, and there is an elevation difference of 27 feet. Duffy pointed out that if all density bonuses allowed by Code were exercised, a total of 97 units would be allowed. The petitioner is taking a couple density bonuses and requesting 84 units. Duffy went on to say the building materials are 99% maintenance free. The interior includes Berber carpets and VCT tiles. Minnesota Housing Finance is the lender, and they have architectural specifications. He said ideally they would have a site manager living in the apartments. There will be an office operating 38-40 hours a week even if the manager isn't living there. There would be a caretaker on site with a list of vendors for major repairs, etc. The lender also has a review requirement and gives the owner 30 days to make corrections. This requirement is in place for 30 years.

Duffy also said they try to provide activities and amenities, such as reduced rates for memberships at the YMCA and city activity centers. They provide a computer lab staffed by Vista and high school volunteers, as well as a homework help program. Finally, Duffy referenced some of their other affordable housing projects in Burnsville and Chasta, as well as those under construction in Woodbury, Wyoming and Roseville. He further explained the financing complexities associated with the project, and said the Met Council could fund the applications taken this round.

There was some discussion about the timing of the sketch plans and application by the petitioner in relation to the finalization of the Metropolitan Council funding programs and when staff and the Planning Commission were made aware of the events.

Edgeton stated her preference to keep the handicap units, play area, and affordability rather than allow a building with the same number of units without any variances.

Mr. Kelley pointed out that the building design is intended to minimize large open hallways, provides no underground parking or elevators in order to reduce operating costs while still meeting City Codes.

Pat Reisinger, a resident in the Greenleaf 7^th Addition, congratulated the Commission on looking at whether this project could work in Apple Valley. He stated he is a clinical social worker, and that smaller buildings such as those proposed are better for tenants' mental health. He went on to say we have a social responsibility to provide affordable housing when we can, and he thinks this is a great deal.

Blundetto said that although he was voting in favor of the project, he seriously hoped the programs promoting affordable housing were not used to develop this land.

MOTION: Churchill moved, seconded by Hadley, to recommend approval of the site plan and give building permit authorization for construction of seven apartment buildings with 84 units, subject to funding through the Met Council and the Inclusionary Housing Act, with the following conditions: (a) the final grading plan should address all outstanding issues raised by staff; (b) the landscaping shall be revised so that no trees are planted in any utility easement. A details planing list shall be submitted for verification of the City's 2 1/2% landscaping requirement at the time of building permit application; (c) no tree removal or site work of any kind may begin until a Natural Resources Management Permit has been obtained. Motion carried 6-0.

MOTION: Churchill moved, seconded by Hadley, to recommend approval of the following negotiated performance standards: (a) reduced building setback for Building #6 from the required 40 feet to 21 feet; (b) reduced building setback for Building #7 from the required 50 feet to 20 feet; (c) reduced building setback for Building #1 from the required 25 feet to 0 feet; a reduction in the amount of required brick or other non-combustible material from 50% to 40%. Motion carried 6-0.

A. Sketch Plan for a Preliminary Plat to Subdivide One Existing, Occupied Single Family Lot into 2 Lots, Located at 13674 Dunbar Way, by Pete Smith

Bodmer introduced the project and asked Pat Wrase to address the engineering issues.

Consulting Engineer Pat Wrase said they reviewed the proposal for 100-year and 500-year storm events. His concern is that the lowest elevation of the building is one foot below the Apple Valley standard of three feet above the high water level. Wrase also confirmed that city sewer and water are currently available to the site.

Edgeton asked about the size of lots in the area. Bodmer stated the average lot size in the subdivision is 28,000 s.f., the smallest is about 15,000 s.f.

Blundetto said he thought the plan would work. Edgeton added agreement, especially on a curved roadway.

Pete Smith, the applicant, stated he and his wife would probably build a smaller home to live in on the second lot, if subdivided, and that they would be sure to keep it within the intent and style of the neighborhood.

Edgeton expressed her desire that the applicant saves as many trees as possible.

Kelley stated the Metropolitan Council Member Rodriguez is putting together information about standards they are looking for encouraging new urbanism, livable communities, etc. There is a possibility of a joint meeting with the City Council on the fourth Thursday in September, but October seems more likely.

Edgeton said she thought it would be helpful to have further discussion about affordable housing programs. She recommended Mark Ulfers with the Community Development Agency do a short presentation at an upcoming meeting.

Churchill moved, seconded by Bergman, to adjourn the meeting. Motion carried 6-0. The meeting was adjourned at 9:37 p.m.