HomeMy WebLinkAbout11.g. Reaffirmation of Support for Proposed Carlson CenterMEMO
TO: Port Authority Chairperson Dunn
Commissioner Anderson, Carroll, Edwards, McMenomy, Sinnwell, Wippermann
FROM: John Miller, Economic Development Coordinator
DATE: February 3, 1993
RE: Background Information for Carlson Strip Center
Throughout much of 1991 there were discussions between the Rosemount Economic Development
Authority and the Carlson family, the owners of Carlson Tractor and Equipment.
The Carlson were interested in constructing a retail center of 47,000 to 53,000 square feet with
different documents in the city's files showing different sizes. It was believed by the Carlsons that
for the center to be successful it needed a grocery store as an anchor.
The Carlson family had completed a fair amount of work in determining the feasibility of the
project. For example, Retail Systems was hired to complete a market study and a contractor
provided a written preliminary quote for construction. A CPA firm provided a pro forma.
According to an April 30, 1991 memorandum written by Tracie Pechonick, the grocery store and
in turn the strip center project were feasible only with a $300,000 subsidy from the city. And also
to be resolved, according to Tracie, was the ethical question of "Is it ethical to subsidize one
business that may potentially cause another long standing Rosemount business (Tom's Super Value)
to close?"
By late summer of 1991 the EDA had decided two issues:
• The city would not support a "subsidy" to a new business that was in competition
with an existing business, i.e. the Carlson would have to reach an accommodation
with Tom Kirkey.
• "Funds from the EDA could possibly be used for costs such as the parking and drive
areas, on-site concrete work, traffic signage and deceleration lane, on-site utilities and
on-site electric. "
However shortly after this the project became inactive. The Carlson were having trouble
attracting an anchor and there were mixed feelings on the EDA board about expanding the
commercial/retail function outside of the established downtown. These and several other minor
issues caused the project to languish.
In the last few months, however, interest in the strip mall increased and presently the Carlson
accept the facts that:
• The local market is big enough to support only one "good sized" grocery store.
0 To be successful the strip center needs a grocery store.
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• To promote the feasibility of the grocery store in the proposed center, the Carlsons
have started negotiations with Tom on the sale of his business
At present, the Carlsons are still interested in receiving city assistance in completing the strip
center. I have visited with them and informed that:
• The project location is outside the pre -1979 Redevelopment District and that changes
in the Tax Increment law prohibit Rosemount from creating a commercial or retail
general development district, i.e. there is not money available from a new TIF
district.
• The money the EDA had formerly suggested might be available for infrastructure was
excess TIF money from the pre -1979 district that has since been committed to the ice
arena and community center project, i.e. there is no money available from, the old
TIF district.
• The Port Authority has other means of assisting in the, project.
This brings us to today. The Carlson have visited with representatives of the local grocery
wholesalers including Super Value and Gateway. It seems that the grocery wholesalers are
constantly looking for trade area expansion and that Rosemount has recently attracted more serious
consideration.
To promote the strip center, the Carlson are asking if the Port Authority still supports the concept
of a strip mall of approximately 50,000 square feet adjacent to C.R. 42. This is evidently of
importance to the grocery wholesalers who the Carlsons think will be jolted into action, i.e. if they
don't do something their competitors will work with the city and capture the grocery sales for
Rosemount. If the commissioners do support the center, the Carlson ask that the Port Authority
through its chairperson and its staff aid the project by visiting with the grocery wholesalers and
advising them that development of a larger grocery store is a priority in Rosemount.
With regard to any financial assistance, I've suggested that one option is for the Carlson family to
finance the complete project -- including the purchase of Tom's -- privately_ In turn the Port
Authority would have the option to transfer title of some developed land in the business park
provided the Carlson family finds a developer or develops the land within (for example) five years.
This was of interest to Ron Carlson and his economic consultant Tom Heiberg. The land transfer
would be a relatively low cost method of promoting development of the strip center and business
park with no out-of-pocket costs beyond what's already budgeted.
Me