HomeMy WebLinkAbout7.a. Receipt of Development Concepts for Old Repairs, Inc. Site .
` CITY OF ROSEdlOUNT
EXECUTIVE SiJ1�iA,RY FOR ACTION
PORT AUTHORITY MEETING DATE: APRIL 5, 1994
AGENDA ITEM: RECEIPT OF DEVELOPMENT CONCEPTS AGENDA SECTION:
FOR OLD REPAIRS, INC. SITE NEW BUSINESS
PREPARED BY: JOHN MILLER, AGENDA NO.
ECONOMIC DEVELOPMENT COORDINATOR 7. A.
ATTACHIKENTS: "PRELIMINARY PROJECT PROPOSALS" APPROVED BY:
FROM WHITE FUNER.AL HOME AND KURT WALTER-HANSEN
MEMO FROM JOHN MILLER, CORRESPONDENCE FROM
KARL BIEWALD
Please see the attached memo from John Miller.
RECO�NDED ACTION: Please refer to the Miller memo.
PORT AUTHORITY ACTION:
MEMO
TO: Chair Carroll
Commissioners Anderson, Busho, Edwards, McMenomy, Staa.ts, Wippermann
FROM: John Miller, Economic Development Coordinator
DATE: April 1, 1994
RE: Review of Preliminary Project Proposals for Redevelopment of the Repairs,
Inc. Site
The Rosemount Port Authority recently directed its staff to find development projects for the
old Repairs, Inc. site. We found three persons or businesses expressing interest.
1. White Funeral Home
2. Dr. Kurt Walter-Hansen
3. Dr. Karl Biewald
Two proposals were received following the "preliminary project proposal" format adopted
originally by the Rosemount EDA and later adopted by the port authority. Dr. Biewald and
his partner, George Bloomer, inquired about the site but chose not to submit a proposal
because of the time constraint, i.e. they didn't have adequate time to study the local office
market. I believe both men are still interested in the site, however, and would consider a
project if the port authority does not select one of the actual proposals.
The proposals from White Funeral Home and Dr. Kurt Walter-Hansen, however, are good
news for Rosemount. Either would represent both a fmancial investment in the downtown
and the addition of a service presently not found in the city or the expansion of a service
presently here. Both would construct substantial and aesthetically pleasing buildings. And,
implementation of either project would serve as an impetus to a refocused and increasingly
dynamic downtown.
Unfortunately, both projects will not fit on the Repairs, Inc. site. One must be given
preference for use of the land. To aid the commissioners in their decision I have reviewed
the proposals and have prepared the following summary:
White Funeral Home Dr. Walter-Hansen
Land Use: Funeral Home Animal Clinic - offices
Size of Structure: 5280 square feet 9568 square feet
Building Exterior Brick veneer and/or Brick veneer
dryvit (stucco) or
lap siding
Construction Date: 1994 1994
Job Creation: One full-time with 31 - Uses Dr. Walter-
several part-time Hansen's estunate of one job
per 300 square feet of
building
Value of Construction: $450,000 $400,000
Assistance Needed: * Land for $1.00 * Land for $1.00
* TIF through 2000
* Additional park land
:xx� * �x � * :x * � :�
Prior to the submittal of preliminary project proposals, I had the opportunity to visit at length
with both proposers and other city staff persons about the development. Here is some
additional background that may be of interest to the commissioners.
Dr. Walter-IIansen: At present Dr. Walter-Hansen is working from a location at 14670
South Robert Trail, a remodeled residence. Other adjacent properties are also under Dr.
Walter-Hansen's ownership. Prior to considering the Repairs, Inc. site, Dr. Walter-Hansen,
operating as Shamrock Animal Hospital, purchased land in Apple Valley with the thought of
moving the business to that city with only a satellite clinic left in Rosemount. With a recent
change in "trade areas", however, a more strategic location for Shamrock Animal Hospital is
the north side of downtown Rosemount. If Dr. Walter-Hansen could find such a site I
believe he would keep the animal hospital in Rosemount.
If the animal hospital were to relocate it would permit the redevelopment of the present
hospital site which incidentally is adjacent to three vacant lots owned by the port authority.
Moving the animal hospital might very well permit a domino effect of redevelopment
activity, regardless it would permit the creation of a relatively large parcel of land in the
downtown at anytune in the future.
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White Funeral Home: This is a service that Rosemount does not presently have.
Representatives from White have been looking for sites in Rosemount for several months and
White is serious about becoming part of the city's business community.
One of the attra.ctive parts of the White proposal is the effect on parking for both the
downtown and the adjacent city park. For much of the time the funeral home would have
only very limited parking needs. The site would then be available for park users and for
persons with destinations to the Dakota Central building ar possibly South Robert Square.
The addition of the parking would certainly send a signal to downtown business persons that
the city is sympathetic to their concerns about the lost parking from recent T.H. 3 changes.
The location of the parking in front of the building would certainly strengthen the perception
that adequate parking did exist in downtown Rosemount.
x� x� � � � � � � � �
No�u =ahJut the fin�?ci� analysis? I�g� would the gQrt authority ce�n� o�:t �ith e�+h�r ef thP
proposals?
First, let me state that both proposers are financially strong. There should be no doubt in
anyone's mind that both could perform and complete the project. In that regard Rosemount
is fortunate. But let's look at some numbers.
Cost of the Repairs, Inc. Site
Purchase $130,500
No-Repurchase Agreement 20,000
Demolition 11,300
Watermain Extension 6,500
TOTAL $168,300
This total includes no port authority staff time nor any city employee staff time. It does not
include architect fees paid to aid Repairs, Inc. in evaluating other buildings in Rosemount.
In addition, it does not include appro�cimately $12,000 of Repairs, Inc. rent paid to the port
authority and presently held in an escrow account to be repaid upon Repairs, Inc. relocating
to a code-compliant location in the city. For our purposes though the $168,000 total is
acceptable for comparison purposes. Lzt's do the comparison.
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White Funeral Home
>
City Assistance (land) $168,000
TIF received by the
port authority (1) ( 112.500 )
Total Assistance $ 55,500
Dr. Kurt Walter-Hansen
City Assistance (land) $168,000
TIF received by Dr. Walter-
Hansen (2) 100,000
Park land provided (3) 16,830
Tota1 Assistance $284,830
�1� Acc:��es a �?�.�ilding ual��� �f �454,QQ4 and ann�� increment ?.���al r� _fi_v� tn,QT'c�At�Y �f
the building value.
(2) Assumes a building value of $400,000 and annual increment equal to five percent of
the building value.
(3) Includes 8,415 square feet of land at $2.00 per square foot.
Let's see if we can determine a simplified break even point. Assume that the annual
property ta7c payment for White (this now includes land with a value of $43,120 derived by
multiplying the area of 21,560 square feet by a $2.00 value) is based on an estimated market
value of $493,120. Annual taxes are likely to be $24,600 of which the city can expect
something like 25 percent or $6,165. Dividing the total assistance of $55,000 by the annual
city tax payment of $6,165 deterinines a break even point for "the city" of nine years.
Now assume the annual property t� for Walter-Hansen (this now includes land with a value
of $62,370 derived by multiplying the area of 31,185 squaxe feet by a $2.00 value) is based
on an estimated market value of$462,370. Annual taxes are likely to be $23,120 of which
the city can expect something like 25 percent or $5,780. Dividing the total assistance of
$284,830 by the annual city tax payment of $5,780 determines a break even point for "the
city" of 49 years.
Now there are certainly flaws in this simple analysis that are big enough to drive a truck
through. For example no considera.tion was made for the present value of money, a
calculation that would extend both break even points but extend Walter-Hansen much more
than White.
4
On the other hand, there was no consideration of hastened development of the present
Shamrock Animal Hospital site and the adjacent port authority owned land or of the synergy
produced by additional employment the Dr. Walter-Hansen proposal would have on the
downtown. And the building values may not be entirely accurate: White is at about $70 per
square foot and Walter-Hansen is at $40. May guess is that one is a little high and the other
on the low side.
�xm * m � �x � � �x �
In conclusion, I recommend that the commissioners select the proposal that, in their
opinions, work best for the Repairs, Inc. site, that the selected proposer be directed to work
with the port authority staff in completion of a development agreement for the site and that
an escrow be required from the selected developer in the amount of $5,000. The escrow
would serve two purposes, to cover port authority costs in conveying the land and to cover
other costs and to serve as a performance bond.
The proposer not chosen for the Repairs, Inc. site should be directed to work with the port
authority staff to select and present to the port authority a site with a development proposal
for completion of the proposed land use. This to be done within 90 days.
The port authority has two strong proposals before it with experienced business person as
proposers. It should not lose either.
dw
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�,
PRELIMINARY PROJECT PROPOSAL
TO THE
ROSEMOUNT PORT AUTHORITY
Please list all principals involved in the development of the proposed project:
Kurt Walter-Hansen
Mark Lindell (Charles Novak, Architect)
S.B.A as my financiai support
Contact Person: Kurt Walter-Hansen
Address: 14670 So. Robert Trail, Rosemount, MN 55068
Telephone Number: 4 2 3-3 5 6 5
� * � � � � � *
Please address the following as accurately and completely as possible on additional
sheets of paper:
1. Describe the development experience of the persons listed above and note any projects
on which those persons have worked with the city of Rosemount.
2. Describe the project and/or proposed use of the property in question.
3. Explain why the developer(s) wishes to locate the project in Rosemount.
4. Note the building/site size required to develop the project.
5. Describe the number of full-time equivalent jobs, if any, that would result from
development of the project.
6. Identify any special needs required to insure project development (semi-truck access,
highway access, city sewer, city water, high visibility, special permits/licenses,
specific location).
7. Explain the assistance, if any, needed from the port authority to allow for
development of the project.
. �
���
SHAMROCK ANIMAL HOSPITAL
14670 South Robert Trail
Rosemount, MN 55068
Telephone: (612) 423-3565
3/31 /31
Preliminary Project Proposal
Repair, Inc. Building Site
Questions 1-7
1 . Developed land and relocated a bank building in Appie Valley serving
as the General Contractor. Project completed in 1992. Converted
residential property to commercial property now known as Shamrock
Animal Hospital. Latest addition to this project completed in 1989.
Served as General Contractor working with the City of Rosemount.
2. Proposed use would be Animal Hospital. Relocating the existing
Shamrock Animal Hospital to this site. The building size would
allow space to be rented out to supporting business or others.
3. This lot would make it possible for me to build a new hospital
within this calender year. �
4. May need additional land or scale the project down.
5. As a general rule, one full time job is created per 300 sq. ft. of
building.
6. High visibility is needed as well as city sewer and water. No
special permits or licenses are required other than my license to
practice veterinary medicine, which I already have. No need for
semi-truck access.
7. I am requesting a similar support package that was offered to Dr.
Kerry Johnson for his project on the same site.
Thank you for considering my proposal for the Repair, Inc. site.
Sincerely,
.����,�1��������-a-�---
Kurt Walter-Hansen
Enclosure: Site Plan
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MILLER FUNERAL HOME
DESIGN AND CONSTRUCTION
3335 WEST ST.GERMAIN
P.O.BOX 1228
ST.CLOUD,MINNESOTA 56302
OFFICE:612-251-4109
FAX:612-251-4693
March 25, 1994
■
Mr. 7ohn Miller '
Economic Development Coordinator
City of Rosemount
2875 145th Street West
P.O. Box 510
Rosemount, Minnesota 55068-0510
Dear John:
Per your request, enclosed is the "Preliminary Project Proposal" for the Rosemount Port
Authority.
If you have additional questions or comments, please don't hesitate to conta.ct me.
Also, at this time I plan to attend the port authoriry's meeting on Tuesday, April Sth.
Sincerely,
MILL F NERAL H ME ESIGN AND CONSTRUCTION
��
�d� � ---'
Gary . Verkinnes
Vice esident
G :dmc
Encloswes
A DIVISION OF JIM W.MILLER CONSTRUCTION,INCORPORATED
MILLER FUNERAI HOME �
DESIGN AND CONSTRUCTION
3335 WEST ST.GERMAIN
P.O.BOX 1228
ST.CLOUO,MINNESOTA 56302
OFFICE:612-251-4109
FAX:612-251-4693
�
'
The Information Contained Herein
Has Been Prepared for:�
ROSEMOUNT PORT AUTHORITY
A OMSION OF JIM W.MILLER CONSTRUCT1pN,It�CORPORATED
PrincipaL• Jim White
Contact Person: Gary W. Verkinnes
Address: Miller Funeral Home Design and Construction
P.O. Box 1228
St. Cloud, Minnesota 56302-1228
Telephone Number: (612) 251-4109
,e ,e ,r * ,r ,t ,r x
Items Number 1 through 7 from the Preliminary Project Proposal are addressed
herein.
Question 1. "Describe the development experience of the persons listed above and
note any projects on which those persons have worked with the city of
Rosemount.�
The principal person involved in this project is Jim White, owner of White
Funeral Home, Lakeville, Minnesota. Mr. White has previously been
involved in two funeral home projects. These funeral homes are Iocated
in Lakeville and Farmington, Minnesota.
As the contact person, I, Gary W. Verkinnes, have been involved in
funeral home design and construction for nine years through Jim W.
Miller Construction, Incorporated. I have worked on funeral home
projects in Coon Rapids, Shoreview, Cottage Grove, Cambridge, etc.
Question 2. 'Describe the project and/or proposed use of the propert�in question.'
The described funeral home project is 5,280 square feet. The funeral
home has been designed for slab on grade construction. The wood
frame building would have a combination brick veneer and/or Dryvit or
lap siding.
4
Question 3. "Ex�lain why the developer�,) wishes to locate the project in
Rosemount."
Mr. White has expressed interest in locating a funeral home in
Rosemount for quite some time. Currently, Rosemount does not have a
funeral home facility. Mr. White feels that, because of the increasing
� population to the Rosemount area, a funeral home is needed within the
city.
Additionally, Mr. White's son expresses an interest in the funeral home
business. Upon project approval by the city of Rosemount, Mr. White's
son may possibly run the business and move into the city of Rosemount.
Question 4. "Note the buildina/site size required to develop the project."
The building size is 5,280 square feet. The site appears to be 110 feet
by 196 feet (21,560 square feet). The site allows for 20 parking spaces.
Question 5. "Describe the number of full-time equivalent jobs. if any, that would result
. from development of the�ro�ect.
There would be one full-time job and possibly several part-time jobs
created as a result of development of this project.
Question 6. "Identify any special needs required to insure project development (semi-
#ruck access. hi hway access. city sewer, city water. high visibility1
special permits/licenses. specific location).
This funeral home project requires city sewer and city water.
Additionally, the Minnesota Department of Health requires a permit.
Question 7. "Explain the assistance. if any, needed from the�ort authority to allow for
development of the project."
Assistance currently being sought from the port authority would be for
the City to sell the property to the White Funeral Home for $1 and
provide city sewer and city water to the site.
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March 24, 1994
Mr. John Miller
Rosemount City Hall
2875 145th Street West
Rosemount, Mn 55068
Re: Repairs Inc. Project
Dear John,
Thank you for meeting with George Boomer and I on March 23rd. The
meeting was very informative and there is interest on our part.
However, given that we have had no previous time to devote to this
project, that the deadline to submit a Preliminary Project Proposal
is March 28th and especially since we both will be out of town as
of March 25th, we respectfully need to decline. George and I would
need a month to research tenants and to do not want to submit a
formal Preliminary Project Proposal unless we are fairly certain of
the rental outcome.
Since you have two other applicants for this project, we do not
want to stand in the way of Rosemount's future. However, if March
28th is not a firm date or nothing concrete is positively resolved
with the other applicants, please get back to us.
With rega ,
� �.
Karl . Biewald