HomeMy WebLinkAbout4.a.Consideration of Proposal from Carlson Properties of Rosemont to Develop a Neighborhood Commercial Center in Rosemount CITY OF ROSEMOUNT
EXECIITIVE SLTbIl�lARY FOR ACTION
PORT AUTHORITY COMMISSION MEETTNG DATE: JULY 20, 1993
AGENDA ITEM: PROPOSAL FROM CARLSON PROPERTIES AGENDA SECTION:
TO DEVELOP A NEIGHBORHOOD COMMERCIAL CENTER OLD BUSINESS
PREPARED BY: JOHN MILLER, AGENDA NO.
ECONOMIC DEVELOPMENT COORDINATOR 4 . A.
ATTACHMENTS: DRAFT PROPOSAL SUBMITTED BY APPROVED BY:
CARLSON PROPERTIES, CORRESPONDENCE FROM TOM ,
HE IBERG DATED JULY 1, 19 9 3, MEMO FROM JOHN �� �����'+' _ .
MILLER, SPRINGSTED INC. PROJECTIONS ��II/�
Please see the attached proposal from Carlson Properties of Rosemount, my
review, and other supporting documents.
RECONIl�'ENDED ACTION: Motion to approve participation in the development
of the Carlson Neighborhood Commercial Center as outlined in Rosemount
Village Square proposal submitted by Carlson Properties of Rosemount
contingent upon city council approval of a "Project Plan" and "Project
Budget. "
PORT AUTHORITY ACTION:
MEMO
TO: Chair Dunn
Commissioners Anderson, Carroll, Edwards, McMenomy, Sinnwell,
Wippermann
FROM: John Miller, Economic Development Coordinator
DATE; July 16, 1993
RE: Carlson Center Proposal
I have received the proposal to construct a neighbarhood commercial center submitted
by Carlson Properties of Rosemount. The highlights are as follows:
• Carlson proposes to build appro�cimately 52,000 square feet of retail
space anchored by a 25,000 square foot grocery store. A second phase
would increase the grocery store to 40,000 square feet.
• The second anchor has not yet been identified, it may be a drug store.
• The county assessor has reviewed the project and has given an estimated
market value of $4,000,000. Annual property taxes are estimated at
$227,246 with the city's share being $52,109.
• Carlson's project is estimated to create 62 full-time jobs and 143 part-
time jobs.
• Financial assistance from the port authority in the amount of (present
value) $250,000 is requested in the pay-as-you-go format.
• Carlson has submitted financial data showing the actual cost of $212,298
square feet of land to be $645,645 or $3.08 per square foot.
• Carlson has provided a response to my letter of June 23 regarding:
l. Gateway's commitment to the project.
2. Potential tenants.
3. Calculation of land values.
4. Market analysis for the grocery store.
These are all issues raised by commission members.
• The Carlsons have met with Dakota County representatives regarding the
issue of road access. It has been agreed that access from County Road
42 will be permitted.
• City planning and engineering staff have met with the Carlsons regarding
site plan issues. An application for site plan review has been received by
the city. At this time it appears all site plan issues can be resolved.
• The city's financial assistance to the project has been reviewed by
Springsted, Inc. and by bond counsel Briggs and Morgan. No
unresolved legal issues were identified.
• Construction would start in 1993 with initial occupancy in March of
1994.
Other issues regarding the Carlson proposal:
• Competition with the existing gracery store has been used as an
argument against the project. I would reject this argument for two
reasons:
1. Presently most dollars spent for groceries go outside the city,
ergo, local shoppers must want other shopping opportunities.
2. To the best of my knowledge, the present owner of the existing
grocery store knew of the Carlson-Gateway Foods proposal when
he purchased the store, as did the wholesaler. The risk of
competition was understood and accepted.
• Carlsons center will hurt the city's traditional downtown. I would reject
this argument based on these reasons:
l. The Downtown Scoping Committee has determined that the C.R.
42 commercial area and the traditional downtown are dependent
upon one another. In this regard the only area where new large
scale projects are possible is C.R. 42 as it's the only place where
enough vacant land is available to support them.
2
Shoppers at C.R. 42 are more likely to support other downtown
businesses than are shoppers doing business in Apple Va11ey, i.e.
traffic in one area helps the other. Don't we a11 expect the theater
to help downtown Rosemount?
2. Can anyone name a successful commercial area or city with one
grocery store, one used car lot, one bookstore, one clothing store,
one clothing store, one drug store, one gas station.
• Financial assistance is not really needed by the Carlsons' project. Here's
the case against that argument.
1. The land has all utilities in and has good visibility from County '
Road 42 with an ADT of 13,000 vehicles. If a self-supporting
project were possible somebody would have built it. They
haven't.
2. There is no correlation between a property owner who is
personally financially secure and a economically feasible project.
Did Apple Valley provide assistance to wealthy people to locate
businesses in that city? Did Bloomington help the Ma11 of
America owners? Minneapolis?
• The Carlsons will not pay back any assistance.
1. Property t�es generated from the project will pay a11 the public
assistance costs. At about the same time, about $170,000 in
property t�es will annually be paid to other taxing jurisdictions.
Final Analysis:
With a relatively modest investment of approximately $250,000 Rosemount gets a big
return. It gets over 200 full and part-time jobs, $4,000,000 in tax base, and evidence
that the city's commercial and retail base is at take-off. City support should be given.
aW
3
47/15/93 15:56 FAX 612 22� 3002 SPRINGSTED INC. �002�'002
1'RELIMINARY ANALYSfS (NOT �oR GENERA� DISTRI[3uT10� �
City of Ra�emount, IUlinn�sata
Carisan Properties Proposal
Rosemount Villa e S uar�
Prajected Tax Increrr»nt Repart � Loc�) Eifort �nly!
�---- Tot�►! -----1 1�----- c ity ----�
Annual inoreased Increasa�! Tsuc T�
Peric�d �st. Market Tax Capacity Annual Gapa�ity Annual
Endi�g Value (1) Capacity R�te Taxes Rate 7axes
� � ��
12/31(93 0 Q 130.CtOfa°96 0 29�.81 Q°/4 Q
12131/94 0 0 13D.4QQ°�b 0 29.81 t�°,� 0
1 12�31/95 3,80Q,1 Q� 17'A�,$C15 13Q.QQO°Io 227,246 29.810°1b 52,109
2 12J31/96 3,800,1�3 174,805 130.QqQ°!o 2�7,�46 29.810�l0 52,109�
3 12/31/97 3,800,100 17�4,805 1�a,000% �27,24� 29.810°/a 52,149
4 y 2/3�/98 3,$OQ,1 t?0 i 7�,805 130.t}00% 227��46 29.$i C1°la 5�,109
5 12J31/99 3,�3C�0,100 174,805 130.000°r� 227,2A�6 29.81 t�/o �2,��9
B 1213i/20(70 3,$OU,1QQ 174,SQ5 13Q,000°� 227,2�Fs 25.$10% ra�,�09
� 12/31/2001 3,8Q0,10C} �74,805 13t7.004% 227,246 �9.81 Q°lQ 52,1 Q9
8 12(�i/2002 3,$00,100 174,$0� 130.000°/a ��7,2A�fi 29.$10°!a 52,109
$1,817,96$ �16,872 {3)
(1} Assumes project is 10Q% completed in 1993 for fuli ass�ssment an �/2/�4, anc!
taxes payable in i 995. Assumes$4,Q00,000 EMV af praject upan �c�mpletian
tess$199,900 currant �MV of land.
(2) EMV times cammercialrndustrisl classifi�atian rate of�.6Ct°�.
{3) Maximum supportable det�t tg`�9.0%+ ��$,�1'�
Less� 18 months of capit�il�ed interest _ 25,957
Avail�►ble for prajeat cQs#s&other expenses $262,�5�
Prepared by: Springsted Incarpnrated ( 15—Ju1�-93 )
C111�,e�ON I��20I��1�'�I�� o��o��ouu��rr
Box 69 • Rosemount, Minnesot� 55068 �J 612 • 423 • Z222
NOT FOR GENERAL DISTRIBUTION
July 1 , 1993
Mr. John Miller
Economic Development Coordinator
City of Rosemount
P.O. Box 510
Rasemount. MN 55068-0510 I
RE: Rosemount Village Square '
Response to your letter of June 23. 1993
Dear John:
In response to yaur letter of June 23. 1993. I submit on behalf of Carlson
Properties of Rosemount, the project sponsor and developer. the following:
1. Attached copy of internal memo from Gateway Foods Division President.
Rudy Gomchoc, to Jerry Nelson. President, Minneapolis Division of
Gateway Foods.
2. Letters of intent from potential tenants in addition to Gateway Foods.
a. Great Clips -- Mr. David Rubenzer, 1.200 sq. ft.
b. Mr. Movies. Store 4�82 -- Ms. Gail Bendt. 3.500 sq. ft.
c. Little Caesar Enterprises. Inc. -- Mr. Joe Rybowicz. 1.200 sq. ft.
3. Attached calculation sheet by Cliff Carlson.
4. Market Analysis Information is the property of Gateway Foods of
Minneapolis and the proposed operators. Market Analysis Information
is their opportunity information and as a policy it is confidential
information to Gateway.
Gateway and the operators are prepared to meet privately or in a closed
session with the Port Authority to discuss operating performas or
projections which were developed from the Market Survey material .
Thank you for this opportunity to respond to the Port Authority's questions.
The information contained herein about specific prospects and costs is to be
kept confidential by members of the Port Authority.
Since ly yours,
� � � �
' �- .
Thomas W. Heiberg
Representative
Carlson Properties of Rosemount
TWH/jjk
Enclosures
_.._.
.....�..
�r �F0�5'
�
����
TO: Jezry Nelson
FROM: Rudy Comchoc
�ATE: June 22, 1.�93 VIA FACSIMILE
SUBJ: Management Cammitte� Request P�,Gk�qe
Rosemount Jubi�,ee
Jer-x�y:
The Managem�nt committee Request Package for th� Ras�mount
Juk�ilee, h,as been approved as submitted.
Please contaat Terr�r Helz to have the proper paperwark
drawn up, in Qrr�er tQ pzoceed with this p�ojeCt.
sincerely,
Rud omchoc
RC:ps
.
July 1, 1993
Carlson Properties of Rosgriount
Box 69
Rosemount, NIlV 55068
Dear Cliff:
Please accept this letter of intent as our intention to negoti.ate
a lease with you for a�roximately 3500 square feet of space in
Your' n�w shopping center. We wnuld like to be close to the new
grocery store, if possible.
Sincerely,
,� ,� �,� '
0 f
Mr. 'es, Store �82
Gayle Y. Bendt
David A. Rubenzer
June 28, 1993
Mr. Cliff Carlson
Carlson Tractor-Equipment Company
P.O. Box 69
Rosemount, MN SSObB
De.aa-Cliff:
Adrienne Olson,my partner in Great Clips in Burnsville has indicated that she is interested
in leasing space for a Great Clips shop at your proposed strip center in Rosemount. We
typically use 1200 feet with a minimum of 20 feet frontage,a standazcl vanilla shell with
bathrooms to code, stub plumbing for sinks, hot water heater,and floor drain(s),electrical
and lighting.
Would you please provide us with a proposed site plan and available spaces and lease
terms.
We're excited to talk with you about this opportuniry. Thank you in advance for your
cooperation.
Best e ards,
Da�id Rube r
cc: Adrienne Olson
DAR/wmg
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May 22, 1992 . .
Cliff Carlson
Carlson Tractor & Equipment Co.
Highway 3 South
Rosemount, Minnesota 55068
RE: Rosemount Center - Space to be determined
Rosemount, Minnesota 55068
1 ) Tenant - Little Caesar Enterprises, Inc.
2) Use - A Little Caesar Restaurant for the retail
sales of food and beverages and related
promotional items.
3) Term - Five (5) years with two (2) additional (5)
five year options.
4) Permitting Time - Sixty (60) days from the execution of lease
to secure all building permits.
5) Fisturing Time - Sixty (60) days from when all landlord's
work is complete, official possession of
space is released and tenant has secured
all building permits.
6) Landlord a) Landlord to provide space of
Contributions - approximately 1200 (ZO x 60) sq.ft. as
discussed in our earlier conversation.
b) Landlord to provide a ?.5 ton roof-
mounted HVAC unit with distribution,
diffusers, accustat thermostat, and
hook-up per LCE plans and specification.
c) Landlord to provide electrical service
which shall consist of 208/240 volt, 3
phase, 4 wire, 400 AMP, service and 42
breaker panel , including breakers, with
plans and specifications.
�
I��1�le C«��es�rs�
d) Landlord to provide two (2) inch gas
line (per LCE plans and
specifications) .
e) Landlord to provide all underground
plumbing per LCE plans and
specifications) .
f) Landlord to provide (4) four inches
of smooth concrete floor, with vinyl
composition tile floor covering (per
LCE plans and specifications) .
g) Landlord to provide handicapped
restroom per all local and state
codes. Restrooms to include all
necessary fixtures such as handicap
rails, sink, mirrors, soap and paper
dispensers, ceiling light, exhaust
fan and water closet. Walls finished
' and painted to meet code ,
requirements. Floors finished with
vinyl composition tile (per LCE plans
and specifications) . Pre-finished
hollow core wood door with privacy
lockset and self closure.
h) Landlord to provide dropped ceiling
grid at height of 9.0 feet per LCE
specifications, with 2 'x4 ' lay-in
acoustical ceiling grid system. Said
tiles shall be smooth and washable to
meet Health Department requirements.
Landlord shall further supply 2x2
acoustical ceiling tiles in customer
lobby (per LCE plans and
specifications) . Also, landlord shall
supply 2 'x 4 ' recessed lay-in
fluorescent light fixtures (per LCE
plans and specifications) .
i ) Landlord to provide drywall extending
to the bottom of the roof structure,
drywall surface to be taped and
sanded, and painted with one caat of
walls.
�
�I� I`�INYfM/�e
j ) Landlord to allow tenant signage in
conjunction with signage provided to
other tenants, on front and side of
building per LCE plans and
specifications. Also, we ask
permission to erect our own, or be
allowed space on the pylon sign in
front of the shopping center.
k) Landlord to provide four (4) foot wide
rear door for deliveries.
1) Landlord shall complete automatic fire
sprinkler system, if required, above
and below ceiling to meet all local
code requirements and Little Caesar's
plans and specifications.
m) Landlord to provide a seventy-five
(75) gallon commercial hot water
heater or 80,000 BTU equivalent (per
LCE plans and specifications) .
n) Landlord to give tenant the exclusive
right to sell pizza within the
shopping center and all other
contiguous propertie5. _...___..._ "*'
,
7) Rental schedule - Five Year Lease
(1200 Sq.ft. )
1 . $10.00/ft. `'".. ;-��
2. $10.00/ft.
3. $10.00/ft.
4. $10.00/ft.
5. $10.00/ft.
Option 6. $11 .50/ft.
7. $11 .50/ft.
8. $11 .50/ft.
9. $11 .50/ft.
10. $11 .50/ft.
. '
�
Little C,aesars�
oPtion �
11 . $13.80/ft.
12. $13.80/ft.
13. $].3.80/ft.
14. $13.80/ft.
15. $13.80/ft.
16. $16.56/ft.
17. $16.56/ft. �
18. $16.56/ft.
19. $16.56/ft.
20. $16.56/ft.
This proposal is subject to all necessary governmental
approvals to operate a Little Caesar restaurant at this location in
addition to the final approval of Little Caesar Enterprises, Inc.
After your review, please contact me so that we may finalize
preparation of the lease. I appreciate your consideration of our
proposal.
i cere y,
l�
J e Ryb� icz
R al Estate Man g r
JR/dc
I.itde(',:►esar Entrrprius,Inc
59��)Ncw Wilke Road
tiuitc I(Fi
Rqlling Mc;klu���s,Illinuis(�(NNIR
Land Cost Summary*
8.6 Acres
for
Rosemount Village Square
Original cost of (4.87 acres) 212,298 sq, ft. purchased from Jim Evenson on
March 14, 1983 was E275.000.00 on a five year Contract for Deed at 10%
interest.
Interest paid on 5 year C.D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L 94.524
Interest cost at 10% on down payment of E35.000 for 5 years . . . . 17.500
Int. cost at 10% on t10.000 principal payment for 4 years . . . . . . 4,000
Int. cost at 10% on t10.000 principal payment for 3 years . . . . . . 3,000
Int. cost at 10� on t10.000 principal payment for 2 years . . . . . . 2,000
Int. cost at 10% on E10.000 principal payment for l year . . . . . . . 1.000
Interest cost to March 1988. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 122,024
Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275.000
Real Estate Taxes paid by us through 1988 on same . . . . . . . . . . . . . . 17.931
Cost of property as of March 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414.955
Int. cost for 5 years at 10% 1988-1993 not compounded . . . . . . . . . . 207.477
622,432
Taxes paid on same 1989 through 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.213
Cost in 1993 of 212,298 sq. ft. = E3.08/sq. ft. . . . . . . . . . . . . . . . . 5654.645
Total shopping center site is 375,236 sq. ft. x L3.08 = 51.155,726.80.
*The land was acquired at different times and from different Sellers.
Development costs were incurred at different times. To simplify calculations
the cost of the 4.87 acres was projected over the 8.6 acre site.
Prepared by Cliff Carlson
June 30, 1993