HomeMy WebLinkAbout4.b. Selection of Developer for the Repairs, Inc. Site CITY OF ROSEMOUNT
EXECIITIVE SII1�iARY FOR ACTION
PORT AUTHORITY MEETING DATE: MAY 17, 1994
AGENDA ITEbi: SELECTION OF DEVELOPER FOR THE AGENDA SECTION:
REPAIRS INC. SITE OLD BUSINESS
PREPARED BY: JOHN MILLER, AGENDA NO.
ECONOMIC DEVELOPMENT COORDINATOR 4 . B.
ATTACI�IENTS: MEMORANDUM FROM JOHN MILLER APPROVED BY:
In the attached memorandum you will find an analysis of the proposals from
the two businesses interested in redeveloping the Repairs, Inc. site. From
the analysis you will see that the proposal from White Funeral Home offers
the port authority a substantial financial benefit.
If the port authority selects the White Funeral Home proposal, it should
negotiate through its staff a development agreement that ensures certain
conditions important to the port authority are met. �'hese would include
such items as 1) construction schedules, 2) cross-parking easements, 3)
building exterior, and 4) building value.
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RECOb�IENDED ACTION: Motion to sele t ��I�'� as the
developer for the Repairs, Inc. site�,contingent upon a submittal of a
$5, 000 refundable deposit to cover consultant costs, and submittal of
plans for an all brick veneer building, and successful compl tion of a
development agree:nent with the port authority within 45 days.
PORT AtJTHORITY ACTION:
MEMO
TO: Chair Carroll
Commissioners Anderson, Busho, Edwards, McMenomy, Wippermann
FROM: John Miller, Economic Development Coordinator
DATE: May 6, 1994
RE: Financial Analysis of Repairs, Inc. Redevelopment Proposals
The members of the Rosemount Port Authority have received two proposals for the
redevelopment of the Repairs, Inc. site. Both proposals are permitted land uses according to
the city's zoning ordinance and both represent aesthetically pleasing buildings that would be
attraetive additions to the downtown. In tlus regard the members should be pleased with the
progress the board has made in attracting new development to the downtown.
Of great importance to the port authority though is the fmancial aspect of the redevelopment.
• Both proposers are requesting port authority assistance in completing their projects and
because of this commissioners need to know the costs and benefits of both projects. That is
the purpose of this memo.
Here is a project summary:
White Funeral Home Rosemount Professional Buildin�
Size 5280 square feet 9568 square feet ma�mum
4000 square feet minimum
Building Ext. Brick veneer and lap Brick veneer
siding - possible
all brick veneer
Construction Date 1994 1994
Value of Constr. $450,000 $478,400 maximum
$311,000 minimum
Assistance
Requested Land for $1.00 Land for $1.00
TIF through 2000
Rosemount Professional Building
Large Option
City Assistance (land) $168,000
TIF Assistance 119,600
Tota1 City Assistance $287,600
As is the case of White Funeral Home, the redevelopment of the Repairs, Inc. parcel for the
Rosemount Professional Building could be accomplished without a direct property tax. This
would include purchase of the property, relocation, sewer extension, and demolition. The
cost, however, would range from $245,750 to $287,600.
As a final measure let's compare the fmal project values to the assistance requested.
White �uneral Home Rosemount Professional Building
Large Option Small Option
Land $ 54,780 $ 54,780 $ 54,780
Building 450.000 478,400 ' 311,000
Total $504,780 $533,180 $365,780
Assistance 55,000 287,600 245,750
Assistance of % . '
of Tota1 11% 54% 67%
I have recently rea.d my April 1, 1994, memo to you on the review of the preliminary
proposals which included some analysis of requested assistance. In that memo I included
some explanation of how the estimates were derived. It read very much like my tenth grade
geometry book, dull. I eliminated that from this analysis but I would be available to discuss
how the numbers were derived, for anyone interested.
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MEMO
TO: Chair Carroll
Commissioners Anderson, Busho, Edwards, McMenomy, Wippermann
FROM: John Miller, Economic Development Coordinator
DATE: May 18, 1994
RE: "Additional" Financial Analysis of Repairs, Inc. Redevelopment Proposals
In the agenda packet for the May 18 meeting was a memorandum providing some basic
fmancial review of two proposals the board has received for the redevelopment of the
Repairs, Inc. site. Copies of the memo have been made available to the proposers and
personal conta.ct has been made with both. In addition some of the commissioners have
raised questions about the costs and benefits of the project to the public. The following is an
attempt to address some of the more recent questions.
1. Q: What are the actual out-of-pocket costs for both proposals?
A: At this point in time they are identical. The money spent to date is:
Purchase $130,000
No-repurchase agreement 20,000
Demolition 11,300
Watermain extension 6,500
Tota1 $168,300
2. Q: Does either proposal offer the port authority the possibility of recapturing
some of that money?
A: Yes, the White Funeral Home proposal would provide the port authority with
appro�mately $112,000 ± of tax increment fmance revenue through the year
2000.
3. Q: What about building costs? In an earlier memo John Miller suggested that one
estimate might be a little high and the second estimate low. Since both
buildings are proposed to be brick veneer, what happens to the projected
cost/benefit if different dollar values of per square foot are used?
Page 2
A: Dr. Walter-Hansen, the suspected low estimate, has supplied the board with
revised cost estimates of $85 per square foot for the small building (now 5,000
square feet) and $65 per square foot for the larger 9,000 square foot building.
This does three things.
First, it increases the actual amount of'l� that Walter-Hansen would receive.
Second, it shortens the "breakeven point" in terms of years before the city
would recover its investment. Third, it reduces the city assistance as a
percentage of total project cost number with the large building option. Here
are the new numbers:
ROSEMOUNT PROFESSIONAL BUII.DING
Small O�tion Large O�tion
5,000 Square Feet 9,553 Square Feet
85 Cost Per Sc�uare Foot 65 Cost Per Sauare Foot
$425,000 Building Value $621,000 Building Value
.OS Approx. TaY .OS Au�rox. T�
$ 21,250 Available for TTF $31,000 Available for TIF
5 Years in District 5 Years in District
$106,000 Total TIF $155,000 Total TTF
Total project value and city assistance as a percentage of total cost:
Small Option Large Option
Land $ 54,780 $ 54,780
Building +425,000 +621,000
Total Project $480,000 $676,000
Assistance
Land $168,000 $168,000
TIF +106,000 +155.000
Tota1 $274,000 $323,000
Assistance as a
% of total
project 57% 48%
Page 3
As you will recall, the numbers given in the May 6 John Miller memorandum had
this assistance as a percentage of total project results.
Project Assistance as a Percenta�Ye of Tota1 Cost
White 11
Hansen 5mall Option 54
Hansen Large Option 67
4. Q: What about the breakeven point for Dr. Walter-Hansen's proposal?
A: Let's assume the following:
ROSEMOUNT PROFESSIONAL BUILDING
Small Option Lar�O�tion
Total Assistance
Land $168,000 $168,000
TIF +106,000 +155.000
Total $274,000 $323,000
Annual
Property Tax $ 21,250 $ 31,000
City Share .30 .30
Annual
City Share $ 6,400 $ 9,300
Total Assistance = Years to breakeven
Annual City Share
Years to
Breakeven 43 35
5. Q: Costs of construction keep changing for the proposals. Are there any real
numbers?
A: Yes. In the past the city and the port authority have both worked with Vanney
and Associates, a St. Paul architectural fum. Interestingly enough Mr.
Vanney designed and supervised construction of both a funeral home and an
Page 4
animal clinic. The funeral home is located in West St. Paul and is wood
frame with brick veneer described by Vanney as "showy," the funeral home
has a basement, precast floors, but no decorating allowance. The building
footprint was 5,613 square feet. Tota1 cost per square foot was $115.80. The
animal hospital Mr. Vanney designed is in Inver Grove Heights. This was a
2,500 square foot building with a full basement. The building had amenities
including a gabled roof and a quany tile floor. Total cost was about $144 per
square foot.
6. Q: What about intangibles?
There has been no effort to quantify issues such as impact on other downtown
businesses, job creation, or leveraging of other redevelopment activity. Too
many assumptions would be required, the results would be highly debatable.
7. Q: Is there "anybody coming over the hill?"
A: No.
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MEMO
TO: Chair Carroll
Commissioners Anderson, Busho, Edwards, McMenomy, Wippermann
FROM: John Miller, Economic Development Coordinator
DATE: May 18, 1994
RE: Purchase of Land in the Rosemount Business Park by Lemna Corporation
Recently Mr. Burt and I, as well as other city staff, have been working with Lemna
Corporation to facilitate a move of the fum from Mendota Heights to Rosemount.
As some of you are aware from a weekly progress report distributed by Mr. Burt, Lemna is
a water purification and treatment firm with worldwide sales. Its staff is mostly professional
and includes persons holding the doctor of philosophy degree.
Lemna is interested in purchasing approxirnately 5.5 buildable acres of land on the pond side
of Business Parkway. It is contemplating construction of 25,000 square feet of space with
additional space for lease purposes to later be used for Lemna expansion.
As Lemna is hoping for a July 1 groundbreaking, the port authority must complete several
steps to make the site buildable. The land must be subdivided and platted and it must be
rezoned. In addition terms of the sale and financial assistance must be resolved.
In this regard Mr. Burt and I are requesting the commissioners approve the following:
1. Motion for Mr. Burt and Mr. Miller to negotiate with Lemna Corporation for the sale
of land and any needed port authority assistance, contingent upon port authority
approval.
2. Motion for the consulting engineer to prepare a final plat for subdivision of the land
necessary for Lemna Corporation development.
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3. Motion for r. Miller to initiate on behalf of the Rosemount Port Authority rezoning
of the subdivided land from Agriculture to Business Park II. �
To date port authority and city staff persons have visited with representatives of Lemna
Corporation as well as Caliber Development Corporation, its architect and builder, and G.Q.
Associates, the firm that will aid Lemna in leasing excess space.
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