HomeMy WebLinkAbout5.b. Presentation of Redevelopment Financing Options for Rosemount MallCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
PORT AUTHORITY COMMISSION MEETING DATE MARCH 16, 1993
AGENDA ITEM: REDEVELOPMENT FINANCING OPTION
AGENDA SECTION:
FOR ROSEMOUNT MALL
WORK SESSION
PREPARED BY: JOHN MILLER,
AGENDA
ECONOMIC DEVELOPMENT COORDINATOR
ATTACHMENTS: MEMORANDUM FROM JOHN MILLER
APRAa!Eq B .
The attached memo outlines in very general terms a method of "redeveloping"
the Rosemount Mall. Some commissioners have told me that the Port
Authority should concentrate on redeveloping the downtown and not invest
large sums of money in the very speculative business park.
This proposal is for discussion only. It shows how part of the downtown
redevelopment might be started. Tentatively, I've scheduled the mall
owners to appear at the April work session. You can discuss options in
more detail with them at that time.
RECOMMENDED ACTION: None. Informational item only.
PORT AUTHORITY ACTION:
MEMO
TO: Port Authority Chairperson Dunn
Commissioners Anderson, Carroll, Edwards, McMenomy, Sinnwell,
Wippermann
FROM: John Miller, Economic Development Coordinator
DATE: March 11, 1993
RE: Redevelopment Financing for Rosemount Mall
Here are some generalizations about the downtown and the Rosemount Mall that most of us
would probably agree to:
• The mall is the largest building in the downtown and is at the "perceived
center" of the downtown.
• The mall has serious code violations that prevent it from reaching 100 percent
leased status.
• The owners cannot financially afford to demolish the building and are not
inclined to do so anyway.
• The Port Authority cannot afford to purchase and demolish the mall and
redevelop the site.
• The auto parts store was a mistake, it uses too much parking, it obscures the
mall, and the auto repair business is not conducive to attracting other
businesses to the site.
• The auto parts store is a strong revenue producer for the mall owners.
• The mall needs access on both the north and south ends, fire suppression, and
elevators for handicapped persons.
• The exterior of the mall needs a face-lift.
• The mall owners are making a good -faith effort to improve the appearance of
the mall through painting, cleaning, and to lease space.
• The mall in its present condition sends a bad message about the vitality of the
downtown to the general public.
• There is little hope of doing a mega -project as far as downtown
redevelopment is concerned.
• There is no unifying theme holding together any of the downtown other than
immediacy to T.H. 3.
Page 2
Based on all of this I think we can also agree that since we can't get rid of the mall, we
might as well look for some ways to improve it. Now to improve the mall we need to
accomplish three things:
• Get some money to the mall owners.
The partners already have a mortgage against the property of about a half
million dollars. Their chances of getting more private money are slim. So
that leaves the Port Authority.
• Protect the interests of the Port Authority.
If the Port Authority simply makes a loan to the mall owners, it would take a
second mortgage. This is similar to the Rosemount Plaza Condominium deal
and enough said about that.
• Implement the downtown development plan.
Presently, the Downtown Scoping Committee is working on the final elements
of the plan. While that work isn't done, my guess is that it will call for
landscaping, lighting and other amenities to "unify the downtown. "
So how do we do this? Here's a proposal for your consideration.
Let's assume:
• The Port Authority buys the parking lot from the mall (and perhaps the auto
parts store) .
• The Port Authority acquires (or condemns) easements or title to land on both
the north and south ends of the mall permitting the mall to get access.
• The Port Authority utilizes the land remnant by the old Post Office for
parking.
• The Port Authority provides the mall owners with easements permitting
parking on the "parking lots" with the mall being responsible for maintenance.
• The bank holding the mortgage permits the mall owners to sell the parking
lot.
Now let's also assume that the mall people make the following improvements:
• Elevators
$40,000
• Sprinkling
$30,000
• HVAC
$40,000
• South exit
$10,000
• North exit and court
$40,000
• Upgrade exterior of mall
$50,000
(and Champion?)
• Leasehold improvements
$50,000
• Professional fees
associated with improvements:
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1. Survey $ 5,000
2. Architectural $20,000
3. Legal $5,000
Total $30,000
Total cost of all improvements would be $320,000. Purchase price of the parking lot would
be $320,000.
A final note of explanation. The above proposal shows one method of initiating a
redevelopment project in the downtown. It is certainly open to negotiation and is by no
means a take -it -or -leave -it deal. It comes before you as a result of conversations I've had
with some commissioners who are uncomfortable with a $1,500,000 price tag on the first
phase of the business park. The argument has been made that, "gee whiz, instead of
spending all that money on the business park, where we don't have a single interested
business, with the same money we could transform the downtown." Well, here's a high
visibility project that will create space for new businesses, start a new round of
redevelopment in the downtown, generate TIF money, and get rid of some code violations
for about one-fifth of the cost of the business park.
So what do you want to do? Do you want to proceed with the business park? Switch your
emphasis to the downtown?
I've visited (obviously) with the partners of the Rosemount Mall. I have them tentatively
scheduled to attend your April work session to talk about redeveloping the mall area. Take
some time and think it over.
dw