Loading...
HomeMy WebLinkAbout2013-09-11 HEDC Packet AGENDA CITY OF MAPLEWOOD HOUSING AND ECONOMIC DEVELOPMENT COMMISSION Wednesday, September 11, 2013 7:00 P.M. Council Chambers -Maplewood City Hall 1830 County Road B East 1.Call to Order 2.Roll Call 3.Approval of Agenda 4.Approval of Minutes: a.June 12, 2013 5. New Business: a.Approval of Loan Program Application, Larkin Dance Studio b.Approval of Selling Excess City-Owned Real Property Policy c.Approval of Sale of City-Owned Real Property, Castle Avenue and Van Dyke Street 6.Unfinished Business: 7.Visitor Presentations: 8.Commission Presentations: 9.Staff Presentations: a.Commissioner Appreciation Event, September 26, 2013 (No Report) b.Development Summary (No Report) 10.Adjourn MINUTES OF THE HOUSING AND ECONOMIC DEVELOPMENT COMMISSION 1830 COUNTY ROAD B EAST, MAPLEWOOD, MINNESOTA 7:00 P.M., WEDNESDAY,JUNE 12, 2013 1.CALL TO ORDER A meeting of the Commissionwas held in the City Hall Council Chambers and was called to order at 7:02p.m.byActing Chairperson Kloncz. 2.ROLL CALL Commissioners Gary Kloncz, CommissionerPresent Mark Jenkins, CommissionerPresent Absent Jennifer Lewis, Commissioner Joy Tkachuck, CommissionerPresent Absent Beth Ulrich, Chairperson Absent Dennis Unger, Commissioner Warren Wessel, CommissionerPresent Staff Michael Martin, Planner 3.APPROVAL OF AGENDA Commissioner Jenkins commission presentations park strategy discussion for July 11, 2013, and to Move item 7. Visitor Presentations ahead of 5. New Business. CommissionerWesselmoved to approve the agenda as amended. Seconded by CommissionerTkachuck.Ayes –All The motion passed. 4.APPROVAL OF MINUTES CommissionerWesselmoved to approve the HEDC minutesforMay 8,2013. Seconded by CommissionerJenkins.Ayes –Commissioner’sJenkins, Tkachuck & Wessel Abstention –Commissioner Kloncz The motion passed. 5.NEW BUSINESS a.Review of Proposed 3M TIF District i.Planner, Michael Martin introduced the item. ii.Analyst, Springsted Incorporated, 380 Jackson St., Ste 300, St. Paul, MN, Tom Denaway presented and answered questions of the commission. iii.Assistant City Manager, Chuck Ahl addressed and answered questions of the commission. June 12, 2013 1 Housing and Economic Development CommissionMeetingMinutes iv.Mary Ippel, Springsted Incorporated, 380 Jackson St., Ste. 300, St. Paul, MN, addressed and answered questions of the commission. Commissioner Jenkins moved to approvethe proposed 3M TIF District for the development of the company’s new Research and Development facility. Seconded by Commissioner Wessel.Ayes –Commissioner’s Jenkins, Tkachuck & Wessel Nay –Commissioner Kloncz The motion passed This item goes to the city council on July 22, 2013. Commissioner Jenkins stated he is in favor of the3M TIF Funding because it is not financing public buildings, because it is going to retain local jobs and local have residents who would not be relocating to another state. It would not be a significant increase on city services and because 3M has agreed to pay $285,000 in park charges and agreed to pay city fees. Commissioner Kloncz stated he is voting nay at this time because he felt he needs to do more research to understand TIF funding. Commissioner Jenkins will represent the HEDC at the city council meeting in July. b.2014–2018 CIP Plan Review and Debt Analysis i.Assistant City Manager, Chuck Ahl gave the presentation and answered questions of the commission. Commissioner Wessel moved to approve the 2014 –2018 CIPPlan Review and Debt Analysis. Seconded by Commissioner Tkachuck.Ayes –All The motion passed. Commissioner Kloncz volunteered to be the HEDC representative at the June 18, 2013, city council meeting. Commissioner Wessel volunteered to be the HEDC representative at the July 8, 2013, city council meeting. 6.UNFINISHED BUSINESS None. 7.VISITOR PRESENTATIONS Visitor Presentations was heard ahead of other items on the agenda. a.Bob Zick, North St. Paul resident addressed the commissionregardinghis comments regardingthe review of the proposed 3M TIF District.Assistant City Manager, Chuck Ahl responded to the question from Mr. Zick. June 12, 2013 2 Housing and Economic Development CommissionMeetingMinutes 8.COMMISSIONPRESENTATIONS a.Commissioner Jenkins said the Park Task Force will be having a meeting for Maplewood business owners on July 11, 2013, from7:30-9:00 a.m. at the Maplewood Community Center. 9.STAFF PRESENTATIONS a.Development Summary i.Planner, Michael Martin gave an update on the development in the city. 10.ADJOURNMENT Chairperson Ulrichadjourned the meeting at9:02p.m. June 12, 2013 3 Housing and Economic Development CommissionMeetingMinutes MEMORANDUM TO: Charles Ahl, City Manager FROM: Michael Martin, AICP, Planner Melinda Coleman, Assistant City Manager SUBJECT:Approval of Loan Program Application, Larkin Dance Studio DATE: September 4, 2013 Introduction Molly Larkin Symanietz, of Larkin Dance Studio, has made an application to the city requesting consideration of a commercial reinvestment loan. This loan would assist Larkin Dance Studio in moving to the vacant building and site at 1400 East Highway 36. Discussion Ms. Larkin Symanietz’s application is requesting a loan from the city for $100,000. The city loan would go toward exterior upgrades for the 1400 East Highway 36 site. Improvements would include a new parking lot, site drainageupgrades, a possible rain garden, new landscaping, new lighting and screening for the east side of the property. This site has been vacant for several years and has not been well maintained. It is the applicant’s intent to grow its business in the new location. The applicant currently has three full-time and 10 part-time employees, but would expect to hire four or five full-time and 10 part-time new employees by January 2016. The applicant would also be looking to add different business segments to supplement the dance studio.Additional uses could include a child care facility and a small café for its patrons. Please refer to the attachments for the applicant’s full application. On December 10, 2012, the city’seconomic development authority (EDA) approved and establisheda levy to generate funds for business development and redevelopment purposes. This is the city’s first application of request since the levy has been established. The EDA would have several options in structuring a loan to Larkin Dance Studio. The request for $100,000 could be satisfied with a combination or EDA levy dollars and the waiving of city fees –for example $75,000 in a loan and $25,000 in fees waived. In addition, to encourage the expansion of the business the EDA may consider making part ofthe loan forgivable if certain benchmarks are met –for example, additional employees hired by a certain date. Summary The housing and economic development commission (HEDC) is being asked to consider support for city financial assistance to assist Larkin Dance Studio in renovating the site at 1400 East Highway 36. The HEDC should consider options for how the EDA would structure any assistance.The HEDC work plan identifies the non-residential areas surrounding the Highway 36 and English Street intersection as an area of focus for the city to concentrate its redevelopment efforts. This proposal has the opportunity to bring a new user to the area and provide upgrades to a site that has been sitting dormant.  Recommendation Approve the use of EDA levy funds for a commercial reinvestment loan to Larkin Dance Studio. Attachments 1.LocationMap 2.Aerial Site Map 3.HEDC Work Plan 4.Applicationfrom Larkin Symanietz, dated August 28, 2013 Attachment 1 1400 East Highway 36 Chad Bergo 1400 East Highway 36 - Larkin Dance Studio Location Map Attachment 2 1400 East Highway 36 Chad Bergo 1400 East Highway 36 - Larkin Dance Studio Aerial Site Map Maplewood Economic Development Commission Economic Development Priorities, Implementation Activities and Timeline Economic Development Priorities Redevelopment The Maplewood Business and Economic Development Commission recommends actively exploring opportunities for redevelopment in three potential areas in 2013. Redevelopment is a multi-year process; the BEDC would lay the foundation by exploring market opportunities, building familiarity with business and property owners in the target areas, and determining the level of city support needed to stimulate new investment. St. John’s Hospital Area: Growth is anticipated in the health care sector. The reuse of Gander Mountain by HealthEast reflects market interest in a location close to St. John’s. Ancillary medical office buildings have the potential to generate significant property tax revenue as well as quality employment opportunities. The long term plans of St. John’s and market potential for additional health care related development/businesses should be explored. Gladstone (Frost Avenue and English Street): Historically, this area of the community served as a key commercial node in the community and is considered the original settlement site of Maplewood. However shopping, traffic patterns, retail formats and typical retail parcel sizes have changed, and market forces alone may not be sufficient to stimulate reinvestment. Highway 36 and English Street: Change is underway in this area with the major reconstruction of Highways 36 and 61 in 2013. This can serve as a stimulus for redevelopment within these key transportation corridors. Underutilized buildings, vacant parcels and redevelopment opportunities exist within this area. Business Retention The BEDC recommends that it undertake a business retention effort, with an emphasis on relationship building. Starting in 2013, the focus of retention efforts will be primarily on businesses in potential redevelopment areas. There are approximately 1,000 businesses in the three potential redevelopment areas, distributed as follows. St. John’s Hospital Area Gladstone Highway 36 and English Street Corridor Ideally, visits to redevelopment area businesses will involve one staff member and one volunteer. City staff would be responsible for scheduling and maintaining pertinent information; volunteers can bring a business perspective to the visit and send a strong message that the city cares. A simple interview guide should be developed to make sure that key information is gathered while creating an opportunity to listen to the business and build a relationship. It is estimated that staff capacity allows for approximately 3 visits each month. In addition, the BEDC recommends that the Mayor or City Manager notify GREATER MSP and Ramsey County that the city would like to be informed of visits in the community, so that it might send a representative of the city as part of delegation on visits to major employers. Implementation Activities and Timeline The following implementation strategies and timeline are suggested. Third Quarter 2012 a. Redevelopment areas broadly defined and agreed to by BEDC and EDA. b. Funds budgeted for market analysis in early 2013 c. Business lists developed for redevelopment areas; interview guides developed Fourth Quarter 2012 d. Develop and issue RFQ or RFP for market analysis for the three key market areas with preliminary redevelopment feasibility analysis to help determine the level of city support that may be needed to stimulate investment. e. Complete 3 business retention visits; review & refine the process f. Send letter to GREATER MSP and Ramsey County requesting that the city be invited to participate in business retention visits to major employers in the community First Quarter 2013 g. Retain consultant and begin market analysis & preliminary feasibility to determine level of city support needed to stimulate investment h. Conduct 9 business retention visits to businesses in the potential redevelopment areas Second Quarter i. Consultant completes market analysis and preliminary feasibility; shares results 2013with EDC j. Conduct 9 business retention visits to businesses in the potential redevelopment areas Third Quarter 2013 k. Consider market analysis and preliminary feasibility. Develop a strategyfor the potential redevelopment areas. Set priorities and determine the level of city engagement that may be needed to stimulate private investment in revitalization of these areas including the following: Do nothing • ID area only & indicate city is receptive to redevelopment of the area • Create vision or physical concept plan • Conduct environmental review • Purchase property, assemble sites, clean-up sites, provide incentives for • redevelopment Align comp plan, transportation, zoning, design standards, development • review process Create implementation strategy based on market opportunities, catalyst • sites, financing tools and funding opportunities Share with neighbors & partners – e.g. area residents, business owners, • Met Council, MnDOT, county, watershed district, others Market to developers • l. Review business retention process. Is it meaningful? Does the number of visits per month work well for staff & volunteers? How might it be improved or adjusted? Continue conducting visits based on insights gained from the review process. Possible Future Activities The BEDC also considered strengthening electronic communication with businesses. Because the city has a business base of more than 1,000 businesses, personalized outreach to all businesses would require a substantial commitment of resources. Electronic communications would allow the city to reach a broader base of businesses and a visitation approach. One option is to work with the city communications department to build a database over time of e-mail addresses for businesses and develop a newsletter targeted specifically to businesses. As taxpayers, businesses have different concerns and service needs than residents. It could include positive messages about growing businesses in Maplewood and identify specific ways that businesses might access a variety of city services (e.g. expansion assistance, fire safety, employee participation in park and recreation opportunities, etc.). A business oriented newsletter would ideally be distributed 2-4 times per year. Another option is to conduct annual or semi-annual business events, sponsored by the city, to which businesses are invited. Approaches such as a Mayor’s Breakfast, luncheon speakers or events that feature city facilities such as parks or the community center provide an opportunity for relationship building with businesses. Attachment 4 APPLICATION FOR COMMERCIAL OFFICE USE REINVESTMENT LOAN PROGRAM Date received:_________ Return to: Community Development Dept. By:__________________ City of Maplewood Rec.#:______Date______ 1902County Road B East Maplewood, MN 55109 651-249-2300 Fax: 651-249-2319 APPLICANT 1.Co-applicant/business name: Larkin Dance Studio Contact person: Molly Larkin Symanietz Address: 3000 White Bear Ave, Maplewood MN 55109 Telephone: (Work) 651-779-0764(Home) 651-338-8489 Fax: 651-779-6106 Co-applicant/building purchaser and future owner: 1400 East Highway 36, LLC Contact people: Joe Card, telephone number of 651-271-8181 Avi Levi, telephone number of 651-329-4956 Interest in the property: The property that we (Larkin Dance Studio and 1400 East Highway 36, LLC) are interested in is the former Minnesota Granite building that is located at 1400 East Highway 36 in Maplewood. This building has been vacant for several years and it is currently a distressed property that is in need of substantial repairs. The current lender is involved in the sale of the building and the City of Maplewood has had to complete work and general maintenance on the property for lawn-care and weed control. The total projected costs for this project are approximately One Million Six HundredForty Two Thousand Dollars ($1,642,000). With the overall project costs being so high, we (Larkin Dance Studio) needed to find an investor that would work with us to acquire the property and complete the renovations of the building to convert it from a manufacturing facility to a dance studio. We found the investor in a family that had a son not only take classes but also teach at the Larkin Dance Studio. Joe Card and Avi Levi (through the entity 1400 East Highway 36, LLC) plan to purchase the building at 1400 East Highway 36 in Maplewood solely for the purpose of leasing the property to us (Larkin Dance Studio). We (Larkin Dance Studio) will have the option to purchase the building at anytime during the lease term. Weplan to move our dance studio to 1400 East Highway 36 in Maplewood and be open for business on or before January 1, 2014. We need to upgrade our facilities and reduce our operating costs to insure a successful future and to better serve our students.  3DJHRI  Attachment 4 2. Applicant's real estate broker and attorney: Dean Trongard with Options Real Estate, Inc. Address: PO Box 33, Maple Plain MN 55359 Telephone: (Work) 612-812-1616 Fax: 763-267-7664 3. Applicant's architect (if selected): Phil Stein with DLR Group Address: 520 Nicollet Mall Suite 200, Mpls. MN 55402 Telephone: (Work) 612-977-3576(Home) 651-214-8335 Fax: 612-977-3600 4. Applicant's contractor (if selected): Joe Card with Card Construction Address: 644 Brookside Ln, Mendota Hts. MN 55118 Telephone: (Work) 651-271-8181 Fax: 651-552-9986 5. Property owner(s) of record: MN Granite and Marble Company Address: 1400 Highway 36 East, Maplewood MN 55109 Telephone: (Work) N/A. Fax: N/A. 6. Applicant's business form (corporation, partnership, sole proprietorship, etc.) and state of incorporation or organization: Larkin Dance Studio is a Minnesota corporation and 1400 East Highway 36, LLC is a limited liability company in the state of Minnesota. PROJECT 1. Project name: Larkin Dance Studio Building 2. Legal description of the site: The property consists of two property identification numbers. P.I.D. 10.29.22.32.0008: 6HFWLRQ7RZQVKLS 5DQJH10-29-22 3ODW 10 / 29 / 22 /HJDO'HVFULSWLRQ E 233 3/1o Ft Of N 25o Ft Lying S Of Hwy Of Fol Subj To Sth 36/118 And Ex E 39 Acres Part S Of N L Of Sd Sth And E Of Np Ry R/w Of N 1/2 Of Sw 1/4 Subj To Esmts In Sec 10 Tn 29 Rn 22 P.I.D. 10.29.22.32.0009: 6HFWLRQ7RZQVKLS5DQJH10-29-22 3ODW10 / 29 / 22 /HJDOSubj To Esmts And Ex N 250 Ft And Ex Part In E 39 Acres Of N 1/2 Of Sw 1/4 Part S Of Hwy N Of Cope Ave 'HVFULSWLRQAnd E Of A L Par With And 233 3/10 Ft W Of W L Of Sd E 39 Acres Of N 1/2 Of Sw 1/4 Of Sec 10 Tn 29 Rn 22  3DJHRI  Attachment 4 3. Why is city assistance needed in order to move forward with your proposed project and how will the assistance be used? As previously stated, the overall project cost is estimated at $1,642,000. This breaks down to $775,000 for the building (which our investor will purchase and lease to us). Our investor (1400 East Highway 36, LLC) has also agreed to provide $50,000 toward property renovations. The interior build-out projected costs are estimated at $595,000. The exterior renovation costs are estimated at $200,000. The estimated SAC/WAC charges are $22,000. Our plan for financing the overall project is as follows: 1400 East Highway 36, LLC will purchase the property and lease it to us and we will have an option to purchase the property at anytime during the entire lease term. This is $775,000 toward are needed funds. 1400 East Highway 36, LLC will contribute $50,000 toward the renovation costs. We (Larkin Dance Studio) have $630,000 to contribute toward the project (through dance studio funds, personal savings and a home equity loan). We currently have a projected shortage of financing funds of $187,000. We are counting on the City of Maplewood to contribute $100,000 towards the project through a business subsidy agreement. For the remaining $87,000 shortfall we likely phase in some of the renovations to fit within our budget. As we look at the overall project, we have an investor to buy the building. We have the needed funds for the interior renovations and we are looking to the City of Maplewood to help with the exterior renovation costs. The funds we would receive from the City would be used for the following improvements: parking lot, site drainage, possible rain garden, landscaping, new lighting and screening on the east side of the site. As the financing section (Item 8) shows, wehave budgeted all available funds to this project. We need assistance from the City of Maplewood in order to move forward with this project. 4. Describe the project as proposed, i.e. how much commercial square footage, etc.  Include contractors bid and diagram or photo if applicable. The property consists of approximately 2.34 acres of land and one main building that is approximately 21,000 sq. ft. and a smaller out-building that is approximately 1,920 sq. ft. Copies of two contractor bids are attached. 5. How will the use of assistance be used to create or retain jobs within the city of Maplewood?  3DJHRI  Attachment 4 We believe Larkin Dance Studio has not only been a successful community business but it has proven to be a priceless amenity for the City of Maplewood for over 37 years.The current studio facility is only 12,000 sq. ft. The new location of over 21,000 sq. ft. would allow us to retain our current workforce, expand our business andadd additional instructors, employees and other key personnel. This new facility would provide for 2 additional large studios. In our current facility we have 3 full-time employees. With the new space, within the first two years (by January 1, 2016) we project adding 4 to 5 additional full-time employees. We currently have 10 part time employees and with the new space, within the first two years (by January 1, 2016) we project adding 10 additional part-time employees that will be working at least 10 hours per week. In the new space, we project needing at least two new instructors to support our projected growth of 100 to 150 additional students. The new facility would also provide for an expansion of the retail business and our plan for possibly two or three new business segments; a child care facility and a small café for our patrons and possibly voice lessons (which may be a subtenant or an expansion to our current class offerings). In addition to jobs, the move will enable us to offer additional scholarships to Maplewood residents. For over 60 years Larkin Dance studio has been much more than a school to learn dance. It is a family. Relationships have been formed. Help has been given to those in need. Shirley Larkin was known for her generosity. Many years there were balances uncollected from patrons that had fallen on hard times. Rather than having formal scholarship programs, Shirley showed her generosity by forgiving debts to those who could not afford to get caught up on their dance bills. In this economy, many people in our neighborhood are feeling the pinch. We have the same compassion for our dancers that are in need that our mother did. After we are established in our new facility, and we have a good handle on our operating costs,we will help more families in need. We plan to announce families in need to get reduced and free dance lessons. Our projections for scholarships are as and competition schedule. Within the first two years of being open for business (by January 1, 2016) we plan to students and families that need assistance. Over the years, Larkin Dance Studio has spent literally millions of dollars on rent. As costs continue to rise, it is more difficult to operate profitably. Owning a building will help reduce our overhead costs and we will be building an asset rather than paying rent for someone else to build their assets.  3DJHRI  Attachment 4 Please help us give back to our community through your financial assistance and make our dream become a reality. 6. What improvements will be made to the site, building exteriors and/or landscaping? The funds we are requesting from the City will be used for exterior site renovations to include improvements to the parking lot, site drainage, possible rain garden, landscaping, new lighting, screening on the east side of the site. The parking/traffic flow of the proposed site plan would increase safety for the patrons and children. 7. Estimated project costs (as applicable): a. Land & Building acquisition: $775,000* *The building and land cost will be deferred until our option to purchase is exercised. b. Investor property improvement allowance $50,000 c. Projected Interior build-out costs $595,000 d. Projected Exterior build-out costs $200,000 e. SAC/WAC estimated costs $22,000 Total $1,642,000 8. Financing: a. 1400 East Highway 36, LLC building purchase $775,000 b. 1400 East Highway 36, LLC build-out allowance $50,000 c. Bank Financing: (Home equity loan) $200,000 d.Applicant Funds: Larkin Dance Studio $230,000 e. Applicant Funds: Owners of Larkin personal funds $200,000 f. City Financing: $100,000 g. Shortfall - $87,000  3DJHRI  Attachment 4 MEMORANDUM TO: Charles Ahl, City Manager FROM: Michael Martin,AICP,Planner Melinda Coleman, Assistant City Manager SUBJECT:Selling Excess City-Owned Real PropertyPolicy DATE: September 4, 2013 Introduction The city has been presented with a purchase offer for propertyit owns at the intersection of Castle Avenue and Van Dyke Street. Because of this purchase offer, city staff is recommending the city adopt a policy to guide this and any futureproposals. Discussion The proposed selling excess city-owned real propertypolicy outlines Maplewood’s mandatory criteria and the city’s review policies, procedures and criteria. These would be in effect for anyrealproperty that the city deems inexcess and proceeds to sell. The proposedpolicy incorporates the minimum requirements for selling real propertyas required by Minnesota state statutes. The policy requires the planning commission and housing and economic development commission (HEDC) to make a recommendation to the city council deeming the real propertyin excess and available to sell. The council than shall deem the real propertyin excess. If the intent is to use proceeds from a salefor economic development than the city council will transfer ownership to the city’s economic development authority (EDA) to sell the land.Once a buyer has been found, the EDA shall call a public hearing and make any final decisions on selling the land. If the proceeds are to be used for other publicfunctions then the city council shall remain the owner of the real property. The HEDC will also review any purchase proposals and make a recommendation to the city council orEDA. Recommendation Adopt the selling excess city-owned real propertypolicy attached to this report. This policy has Maplewood’s criteria and project review policies, procedures and criteria for any city-owned real property that would be sold in the city ofMaplewood. Attachments 1.Proposed Maplewood Selling Excess City-Owned Land Policy 2.League of Minnesota Cities Informational Handout P:\HEDC\Agenda Reports\2013\091113 PROCEDURE FOR THE SALE OF EXCESS MAPLEWOOD REAL PROPERTY 1 PURPOSE AND AUTHORITY 1.01 The purpose of this document is to establish the criteria and process for the City of Maplewood (the “City”) to sell ordispose of excess city-owned real property. 1.02 The City's ability and authority to sell and dispose of real propertyis governed by the limitations established in Minnesota Statutes. 1.03 The Citymay amend this document at any time. Amendments to these criteria are subject to the same review requirementsestablished by this policy. 2 DEEMING CITY-OWNED REAL PROPERTY IN EXCESS 2.01 The planning commission shall review all proposals for the sale of city-owned land. To sell city land, the planning commission must determine the sale of such land would be consistent with the city’s comprehensive plan and other official controls. The planning commission shall make a recommendation to the city council. 2.02 The housing and economic development commission shall review all proposals for the sale of city-owned land and shall determine whether the land is in excess and suitable for sale into the private development market. The housing and economic development commission shall make a recommendation to the city council. 2.03 The city council shall consider recommendations from the planning commission and the housing and economic development commission on deeming any city- owned properties. 3 SELLING EXCESS CITY-OWNED REAL PROPERTY 3.01 If the proceeds of any sale of city-owned real property is intended for the use of economic development in the city then the real property shall be transferred to the City’s economic development authority. The city attorney shall prepare a purchase agreement for approval by the city council and the City’s economic development authority. 3.02 If the proceeds of any sale of city-owned real property is intended for public use, except foreconomic development, than the city council shall retain ownership. 3.03 Any agreements or contracts with Realtors or other real estate professionals to represent the City must be approved by the city council or the City’s economic development authority. 3.04 Upon receiving any purchase offers for City-ownedreal property, city staff shall prepare a report for the housing and economic development commission’s review. The housing and economic development commission shall make a recommendation to the city council or the City’s economic development authority. 3.05 For real property owned by the City’s economic development authority, a public hearing mustbe held and noticed in the City’s official newspaper at least 10 days prior to the scheduled meeting. 3.06 Any and all purchase agreements or other legal documents related to transferring land must be reviewed by the city attorney. 3.07 The city council or the City’s economic development authoritymay close a public meeting to determine the asking price for real property to be sold, to review confidential or nonpublic appraisal data, and to consider offers or counteroffers for the sale of real property. 3.08 Any proposed changes to the City’s comprehensive plan’s future land use map or the official zoning map shall be the sole responsibility of the entity purchasing the real property. All land use applications and public hearing processes must be adhered to by the purchasing entity. MEMORANDUM TO: Charles Ahl,City Manager FROM: Michael Martin, AICP, Planner Melinda Coleman, Assistant City Manger SUBJECT:Approval of Sale of City-Owned Real Property, Castle Avenue and Van Dyke Street DATE: September 5,2013 Introduction The city has received a purchase offer for property it has been marketing for sale. The property is located on the southeast corner of Castle Avenue and Van Dyke Street. Refer to the attached maps. This property has135.38feet of frontage and 296.68feetof lot depth for an area of .92square feet. It is currently zoned R1 (single dwelling residential) and guided LDR (low density residential)in the comprehensive plan. As a note,the abutting single dwelling parcel to the southat 2260 Van Dyke Streetis for sale and being sold with the anticipation for commercial development by that property owner. This lotis the same size as the city-owned parcel. Request Staff would like the housing and economic developmentcommission (HEDC) to make a recommendation to the city council and the economic development authority (EDA) on this parcel being excess land owned by the city and accepting the purchase offer. Discussion Excess Land The city acquired this parcel through a private transaction in 1974for right-of-way or utility purposes. A portion of this parcel was utilized to build the roundabout at the Castle Avenue and Van Dyke Street intersection. The rest of this parcel is not needed for any additional right-of- way purposes. The city has run anownership and encumbrance reportand there are no restrictions against the property which would limitany potential sale. Since this parcel does not have any deed restrictions and is not needed by the city for any additional public functions, staff is recommending the city deem the parcel in excess and move forward with selling the property. Purchase Agreement The city hired Mike Brass, a real estate agent with Colliers International, to represent the city and market this parcel. The city has received a purchase agreement for this property from a development group that would intend to develop this site with a commercial use. The purchase agreement submitted to the city is considered confidential information and because of this Mr. Brass has submitted a letter for the HEDC’s review indicating the offered sale price represents a fair market value.His letter also includes information on comparable sales from the surrounding area. The property is zoned and guided by the city’s comprehensive plan for single family residential use. Any purchase of the property would be contingent on the buyer making the appropriate land use applications to zone and guide the land for commercial use. The city’s normal public hearing and notification process would be utilized for any land use applications. The city council approves all official land use and map amendments. The intention is to use the proceeds from this sale for future economic development pursuits. So to move forward the City of Maplewood must transfer ownership of this land to the city’s EDA who then would officially sell the land to an outside group. The EDA is required to notice and hold a public hearing prior to approving any land sales. Recommendation A.Approval of a recommendation to the city council in determining the property the city owns on the southeast corner of Castle Avenue and Van Dyke Street is in excess and not needed for any public use and should be marketed for sale. B.Approval of a recommendation to the city council and the city’s economic development authority to move forward with a purchase agreement to sell the property located on the southeast corner of Castle Avenue and Van Dyke Street. Attachment 1.Land Use Plan Map 2.Zoning Map 3.Aerial Photo 4.Survey Drawing 5.Mike Brass Letter, dated September 5, 2013 4700 Lexington Avenue N+1 952 837 3050 Minneapolis -St. Paul MAIN Suite B +1 952 837 3051 North Suburban Office FAX Shoreview, MN 55126 www.colliers.com September 5, 2013 Michael Martin, The Purchase Agreement for the Van Dyke site is for $6.49 per square foot. The survey square footage includes a portion of the Roundabout in front of the property. If you remove the roundabout square footage the actual price per square foot would be closer to $7.56 per square foot. The comparison is shown on the attached Completed Deal Tracking for sites that I have sold. Two good comparables on the Deal Tracking Sheets are the two Lande Estate sales that are currently under contract with a projected close date in September and July 2014 The White Bear Parkway Propertysite is closing in three weeks. That site is next to Bremer Bank and is on Birch Lake that sold for $6.04 per square foot and is in a highly desirable area but with much lower car counts and visibility. The Centerville Road Propertyis under contract for $4.74 psf. This site sits in between I-35E and Cub Foods. This site is half retail and half zoned for apartments. This site has very high car counts and demographics. The apartment zoned land portion pulls down the value of the retail land as well as a water tower on the site which makes development difficult. Both of the above properties have wet lands but the square footage listed is the usable land value. Two recent closing are also good comparables; Piccadilly site in Mahtomedisold for $7.88per square foot.This property sold more on a per unit basis because it was sold as a senior housing site. It was bought on a basis of $14,000 per unit or $1,030,000 divided by 72 units = $14,305 per unit. This site is a highly visible site at the entrance to Mahtomedi with views of White Bear Lake. Wall-Mart sitesold for $8.09 per square foot. This site had I-35E to the east and is in the Wal-Mart parking lot to the west. This is a highly desirable location with very high traffic counts on two sides. This is the high end of the retail locations. The two sales previous to the Wal-Mart site on the Land Sales sheet are located in Shoreviewfor two sites located between Target and I-694. These sites are now a strip retail center with 5 tenants and a Trader Joe’s. These two sites sold for $9.95 per square foot for the strip center and $13.89 per square foot for the Trader Joe’s site. The Shoreview Trade area is surrounded by homes and has limitedland for development. This area is desired by retailers because of the high demographics and the very high daytime demographics because of the high number of corporate employers in the area. Also these sites had ponding off site which makes the usable land more valuable. The Vandyke site is located close to Highway 36 and close to White Bear Ave. The preferred retail sites would be on the North side of Highway 36 because the grocery anchor and most of the newer retail is on that side. With this in mind I believe getting $7.56 is a very fair market price for the Van Dyke site. Sincerely, Mike Brass Vice President I I L I I I I I I I a k 19 JRA 2 Attachment 5 I :I 01 . Attachment 5 I :I