HomeMy WebLinkAbout6.c. Review of Development ActivitiesCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
PORT AUTHORITY COMMISSION MEETING DATE: SEPTEMBER 1, 1992
AGENDA ITEM:
AGENDA SECTION:
REVIEW OF DEVELOPMENT ACTIVITIES
OLD BUSINESS
PREPARED BY:
AGENDA NO.
JOHN MILLER, ECONOMIC DEVELOPMENT COORDINATOR
6. C
ATTACHMENTS:
AP YED
MEMO UPDATING PROJECT AND MOTEL COMPLETION
On August 25 Commissioner Sinnwell asked for a complete update of all
projects and activities. Mr. Sinnwell asked this be an agenda item.
Attached are narratives of the several projects in which the Port Authority
is presently involved.
RECOMMENDED ACTION: None. Informational item only.
PORT AUTHORITY ACTION:
MEMO
TO: Chairperson Dunn
Commissioners Anderson, Edwards, Mawe, McMenomy, Sinnwell, Wippermann
FROM: John Miller, Economic Development Coordinator
DATE: August 27, 1992
RE: Project Updates
Commissioner Sinnwell visited with me on August 25 and requested as an agenda item an
update of all Port Authority projects and activities. Following is a summary of all activities
with the exception of motel development. A separate memo is attached detailing efforts in
attracting a motel developer, finding a location, and preparing a financial incentives package.
Armory Properties: The environmental assessment work is mostly complete. The only tasks
that remain are completion of the written report by the consultant and laboratory analysis of one
soil sample.
The consultant found the Armory properties (Al Monk et. al.) to be relatively clean. The fill
included sand and chunks of asphalt and concrete. When the site is excavated for the pond, the
chunk material will need to be taken to a demolition landfill.
The four buildings are served by two wells and two separate septic tank/drainfield systems.
Removal of these should be no problem. There is no evidence of contamination of groundwater
as the groundwater level is 75-80 feet from the surface. The minor oil spillage found at the site
is not capable of leaching to the depth of the groundwater.
The consultant believes there are PCB's in the capacitors of the fluorescent lighting fixtures.
The demolition contractor should assume there is and dispose of them properly.
Of the half dozen borings taken on the site, only one found any possible contaminated soil. At
the northwest corner of the property, dark soil at a depth of 15 feet was discovered. Field
analysis could not determine the nature of the material. Creosote or burned organic material
are possibilities and laboratory analysis is now being completed. When this is done, the Port
Authority will be able to advise the excavator of the nature of the contamination and work can
proceed without interruption.
The written report should be available in a week. An addendum giving the results of laboratory
analysis will follow in about three weeks.
Lee Smith of the Dakota County HRA has written to all of the property owners and tenants and
asked them to telephone him to make an appointment. He will meet with them individually to
discuss relocation benefits. As of August 26, Smith had meetings scheduled with John
Anderson and with A & G Auto Body.
With regard to financing, the City Council has scheduled a Public Hearing for September 15
to hear comment on the proposal to expand the 1979 Redevelopment District to include the
Armory properties. The Port Authority will also discuss the plan amendment on September 15.
Presently Steve Jilk, Port Authority Executive Director, is working with the City Council,
National Guard people, architects, and RAHA representatives to determine the amount of Port
Authority financial involvement. A summary of that work is found in the information packet
in Item 6.13 of your agenda.
Work issues with the Armory properties not yet resolved include purchase of the real estate.
We have not yet determined (as of August 27) who will negotiate with the land owners nor
when these negotiations can begin.
As of this writing, I have visited with two businesses regarding their relocation sites.
Mr. Anderson at Dakota Small Engine Repair told me he has already found a place to relocate -
vacant space owned by Fluegels. I advised him to visit with the planning people regarding
zoning, site plan, and sign permits.
As directed by the Port Authority, I completed concept plans showing possible utilization of the
Nordvick and Richard Sens properties. I also prepared a plan for the vacant land immediately
south of the Sens building. These concept plans were shown to Al Monk. He indicated an
interest in the Nordvick property and no interest in the other sites. (For further information
on plans of other businesses, please telephone me.)
Johnson Chiropractic Clinic: Kerry Johnson has been advised by various persons not to
relocate to the site immediately south of City Hall. The same people have told him that
Repairs, Inc. best suites his needs. Dr. Johnson advised Steve and me that he wanted to hire
an architect to complete a site plan showing he could utilize the Repairs, Inc. site for his office.
I understand that presently Commissioner Sinnwell is going to complete the plan. In that
regard, Don has asked for a copy of the survey when it becomes available. It is my
understanding the Johnsons are waiting for Mr. Sinnwell to complete this work before taking
any further action. They have extended the lease in their present location.
1993 Budget: At the Port Authority's recent budget work session, Commissioner Edwards
suggested a work program be prepared outlining the work items to be completed in 1993. I
have visited with Chairperson Dunn and Executive Director Jilk individually about the budget
and it was agreed the three of us should meet to discuss its content. I believe we will be
meeting on September 3.
I've also visited with Jeff May about the 1992 budget. Jeff feels strongly that the new 1993
budget and work program should be an operating budget only. From past experience with the
HRA and EDA it is apparent to the Finance Director that it is difficult to project capital
expenditures because real estate is involved. Mr. May also noted that as the Port Authority's
main source of revenue is debt financing, that capital expenditures would have little relation to
projected revenue.
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Resolution Approving State Legislation Creating the Port Authority: The resolution has
been recorded with the Secretary of State.
Supplement No. 2 to CDBG Agreement: Signed by Mayor McMenomy and submitted to
DCHRA.
Rosemount Mall - Old Post Office Property: I've given you some information about this in
my weekly contact sheets. As you are aware then, I've been working with the owners of the
Old Post Office in the Port Authority's disposition of the land fragment located on the west
side of the present real estate building.
Steve Jilk had visited with the owners earlier and discussed using the land for parking. At that
time Jilk suggested the possible transfer of title to the Old Post Office owners if they would
agree to pay for parking lot improvements on the site. Mr. Jilk asked the City Engineer to
complete a plan for the parking and prepare cost estimates. This work was done and I gave
the information to three of the four owners in July. They later indicated to me they were not
interested in making the improvements - the cost of $7,700 was too high.
The Old Post Office owners suggested another option. The Port Authority would grant them
title to the land for no fee. They in turn would landscape the property, maintain it, pay taxes
on it, and relieve the City of any liability from accidents on the land.
In the meantime, you will recall that Marie Jensen approached the Port Authority and inquired
about the possibility of getting land so that access to the north side of Rosemount Mall was
possible. By gaining access to the mall, it was hoped by Jensen that additional space in the
mall could be leased, bringing the building closer to profitability. I suggested to the owners
of the Old Post Office that a compromise be considered that would include the following:
1. The Port Authority give title of the land fragment to the Old Post Office owners.
2. The Old Post Office owners give title to a strip of land 20-25 feet wide to the
Rosemount Mall giving them land to build their access.
3. The Rosemount Mall people agree to landscape the north side of their building
and include a low steel rail fence on the property line. This would create a
spatial boundary between the mall and the Old Post Office parking lot. The
perceived boundary would help the owners of the Old Post Office police their
parking lot from the effects of students at the mall's alternative school.
The benefit to the Port Authority from all of this would be:
1. Creation of a landscaped area on the south side of the Old Post Office. Plans
would be reviewed and approved by the Commissioners.
2. Creation of a landscaped area on the north side of the Rosemount Mall, an area
currently featuring asphalt and a smooth -faced concrete block wall. Again plans
would be reviwed and approved by the Commissioners.
3. Creation of additional retail space in the Rosemount Mall.
4. Return of land to the tax base of the 1979 Redevelopment Area.
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5. Better student control on the north side of the mall.
Presently there seems to be general agreement between the owners of the Old Post Office and
Rosemount Mall that the concept is good. Everyone is now at the detail and design stage. The
Old Post Office owners have asked for an architect's rendering of the proposal. I've been told
by Keith Witter that he has ordered his architect to complete the work. When the work is
completed, I will continue my contacts.
Cameo Avenue Lots: Commissioner McMenomy recently inquired at a Port Authority meeting
about the status of the vacant lots owned by the Authority located on Cameo Avenue. As you
will recall, the land is located immediately south of the old Baptist Church. The residential lots
had been previously purchased by the City and were part of the "HRA/EDA inheritance"
received by the Port Authority. I had the opportunity to view the lots with Commissioner
McMenomy and we agreed they would be best used as the site of a single family residence.
I also became aware of Dakota County HRA interest and involvement in the lots. In visiting
with Mark Ulfers, Diane Nordquist, and Jessica Cook of the HRA staff, I was finally able to
determine the following:
1. The lots were originally purchased by the DCHRA for use in a senior housing
project. Obviously nothing every became of the project and the lots remained
vacant.
2. Title was placed in the name of the City.
3. If the lots are sold, the money is to go to the DCHRA unless an agreement with
the City can be approved stating otherwise. Jessica Cook informed me this would
be both complex and costly.
4. If the lots are sold and the money given to the HRA, an easier to complete
memorandum of agreement or other such document could be used to guarantee
to the Port Authority that the money would be used eventually for a senior
housing project in Rosemount.
5. A Public Hearing on the issue of the sale of the lots would be required.
In the meantime, I worked on a shortcut to utilization of the lots. Diane Nordquist of the
DCHRA works with Habitat for Humanity (you know - Jimmy Carter's group). Koch Refining
had recently purchased a single family residence on Akron Avenue and was interested in finding
someone to remove the brown rambler. Habitat for Humanity was contacted and indicated
interest in the home. I visited with Ms. Nordquist and we discussed moving the home to
Cameo Avenue. After some time had passed, Nordquist learned that Habitat for Humanity was
going to move the home, however, they had found a lot in Inver Grove Heights. But not to
despair. I will visit with Mark Ulfers not only about the sale of the lot but also about entering
into an agreement with the Port Authority to actively pursue a senior housing project in
Rosemount. The money from the sale of the Cameo Avenue land would then be dedicated to
that project.
I would hope an agreement with the DCHRA could include a timetable. That would aid in the
downtown planning effort and in the Authority's capital expense budgeting.
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Carlson Prop "rt This is an issue that Commissioner Sinnwell specifically inquired about on
August 25 and suggested that we consider another use for the property. I have visited with
Cliff, Ron, and Richard Carlson about their commercial land. As I noted in one of the weekly
contact sheets, they told me that finding a grocery store as an anchor for the project was a
problem. I had referred them to another chain not based in the Twin Cities.
About three weeks after our meeting, I followed-up with a telephone call to Ron Carlson. He
informed me they were having a problem getting to the decision maker. I told Carlson that I
had previously worked with someone who had an established working relationship with the
grocery chain. This third person might be of some help but would want to be paid for his help
or want a piece of the action. Carlson indicated that was possible.
I made the referral and now believe the "private sector" is working on the problem of the
grocery anchor.
A bit of advice. Always, always look at long term and highest and best use. Good
development takes time, don't go for the first thing that comes along and don't get frustrated.
It took Edina about 60 years to fully develop.
Railroad Property at T.H. 3 and C.R. 42: I've made contact with Ed Dahlby at the Soo Line
regarding the quonset building at C.R. 42 and T.H. 3 (northeast quadrant). Dahlby has noted
that the present renter is not a rail user - a major concern to the railroad is dislocating any
customer. He is making his way through the railroad's bureaucracy to determine if the property
can or should be sold. I expect an answer from him (really) in a couple of weeks.
The Soo Line is aware of the local discussion about the merits - or lack of - in creating an
industrial or business park in the southeast quadrant of T.H. 3 and C.R. 42. If a park is
established, the Soo Line hopes that a rail spur would be included. They want more business,
plain and simple. Because of this desire for the spur, I think they will be responsive to our
requests.
Strese Oil: David Strese has had the fuel tanks removed from the site. Lee Smith has mailed
a registered letter to Strese asking David to contact him to discuss relocation benefits. The
letter was mailed (I believe) on August 24.
I have visited with David Strese about relocation sites, as you are aware from my "weekly
contact sheet." Mr. Strese has indicated an interest in the Sens building. His thought is that
the entire ice -making structure could be moved inside the brown steel building with no
modifications needed. The remaining space would be used by Strese for storage associated with
his sweet corn business.
At this point Strese is the only person I've visited with who is interested in the Sens property.
None of the auto -oriented business people like either the location or the building. As a result,
I have not ordered an estimate of costs to refurbish the building for auto service uses.
I'm not sure where the condemnation proceedings are. Mike Miles will be able to give us a
verbal report on September 1.
The survey is completed and attached to the agenda packet.
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Repairs, Inc.: The environmental audit has been completed and the final report is being
prepared by the consultant. I was told by the consultant that he was unable to find any
underground storage tanks at the site. In addition, no evidence of asbestos was found and no
PCB contamination was evident. The consultant did find concrete chunks at the rear of the
property. Mr. Cope believes this might be the remains of the basement from a residence
formerly on the site.
I have prepared site plans for the Nordvick property (as I stated earlier in this narrative) and
shown them to Mr. Cope. He has indicated a strong interest in the Nordvick steel building and
was the first person to do so. I guess this gives him some unofficial right of first refusal. I
later visited with Arlyn and asked him what facilities he would like in the building. He gave
me a list, e.g. four bays and a separate office for used cars. I have contacted Min -Kota Sales
at the suggestion of Steve Jilk and should have some estimates for refurbishing the steel building
for use by Cope or some other auto service user.
The appraisals are not yet complete on the Nordvick property.
Lee Smith has written to Repairs, Inc. asking that he be contacted so that a relocation benefits
meeting date can be set.
Lund and Thorsen: As noted in the weekly contact sheet, Chairperson Dunn and I visited
with Leo Lund and Gary Thorsen. These men are the owners of the vacant land in the
northwest quadrant of the C.R. 42 and T.H. 3 interchange. They also own the APCO station
on T.H. 3.
After visiting with the property owners, I mailed a Port Authority application as well as funding
guidelines to Mr. Lund. About the same time Lund mailed a handwritten proposal to Ed Dunn
offering to:
1. Move the APCO station from T.H. 3 to C.R. 42, expanding (I believe) the
convenience store sales area.
2. Constructing 40,000 square feet of retail space (strip mall) in two phases.
"construction to meet City requirements."
3. Sell the existing APCO station to the Port Authority.
To accomplish this, Lund is asking for $400,000 of assistance. In doing some very preliminary
analysis, the tax increment from the project appears to be close to adequate.
Lund contacted me on August 27 and we agreed that I would have the analysis completed in
ten days. I will probably get Springsted involved. Other issues include 1) phasing, 2) use of
the existing APCO property, 3) land use design issues, 4) Lund -Thorsen financial guarantee,
5) tenant mix.
dw
Z
TO: Chairperson Dunn
Commissioners Anderson,
Wippermann
MEMO
Edwards, Mawe, McMenomy, Sinnwell,
FROM: John Miller, Economic Development Coordinator
DATE: August 27, 1992
RE: Motel Update
In July the Commissioners directed me to work to attract a motel to the City. This short
memo is an update on those activities.
You will certainly note that in the narrative initials are often used in place of names. This
is done to ensure anonymity to person currently considering doing business in the City. It's
to our interest certainly to protect them from unsolicited contact.
First some general background. I visited with D.F., an architect who has been employed by
various motel clients and who has a working knowledge of both the process of locating and
of designing motels. He noted there were generally three types of motels.
Convenience Motels: This type of motel is found in all major cities. Examples are small
Holiday Inns, Cricket Inn, Super 8, Red Roof Inns, and Motel 6. The clientele they serve
arrive by auto on either business or social purposes. The motels provide relatively
inexpensive lodging but little of anything in the way of amenities. Visibility from a major
roadway is of key importance. Also important is low land cost.
Convention Motels: This type of motel is found in business areas and usually far from
residential neighborhoods. The key to operating a convention motel is analysis of the
number and size of local businesses operating in a statewide, regional, or national market.
These are, after all, the businesses that would be attracting business travelers. It's almost a
truism that convention motels will locate next to industrial areas and that they are not afraid
of smokestacks. Examples of these hotels are the old Radison at T.H. 55 and I-494 and the
Metrodome Hilton at T.H. 280 and I-35.
The designs of the convention motels will illustrate their function as opposed to convenience
motels. They will usually have one large ballroom with four subdividable rooms. They
will have a number of smaller meeting rooms where businesses can have Christmas parties,
lunches, banquet, or sales meetings. The motel will have a high quality restaurant and other
amenities such as pools, saunas, game room, or exercise room.
Destination Motels (hotels): Destination motels (well actually hotels) are attractions in
themselves. These hotels cater to persons looking for first class accommodations, who want
the complimentary flowers and champagne. The closest thing to a destination hotel in the
Twin Cities is the Marquette. Just as a point of information, single occupancy room during
a weekday is $165.00, a suite can be had for $320.00.
Obviously, Rosemount should be seeking to attract a convenience motel, and at least now we
know what our target is.
To get a start on finding a convenience motel, I called a person I have known for several
years and asked if he knew of anyone doing motels. I was referred to B.H. who works for
one of the larger building contractors in the metropolitan area. B.H. indicated the
following:
If banks are afraid of retail development, they're terrified of the hospitality
industry.
2. The last convention motel to be constructed was Jim Steubner's Northland Inn
in Brooklyn Park. It took about 18 months to go from grand opening to
foreclosure. Steubner currently has 11 lawsuits filed against him and his
Northland Inn. It's probably going to be some time before another convention
motel is financed by any bank.
3. Even the chains, e.g. Motel 6, are slowing down (if not stopped) construction.
4. If any motel is constructed in the metro area in the next few years, it will
require public participation in financing. (Remember this, it will come up
again.)
5. He knew of no one looking to do a motel at this time.
I next called Gary Stout - you have his name on one of the weekly contact sheets. At first
Gary was cool to the idea of building a motel in Rosemount. His observations were
practically identical to B.H.
Stout did ask me to send him some information and he did visit the City. He was impressed
with the following:
1. There are no motels in the immediate area, e.g. none in Apple Valley and
none in Eagan.
2. The potential business from Koch Refining and the National Guard Armory.
3. The traffic count on C.R. 42 (12,000 vehicles).
Mr. Stout later called to report that he had someone who was interested - see attached voice
mail note. It's my understanding Stout and his client are now doing some serious looking at
Rosemount.
About a week ago, I called M.P. from P.D. Mr. M.P. also does business consulting along
with developing a couple of projects of his own each year. With all the bad commercial
paper around he also has been doing work-outs for banks. M.P. also gave the same
information as Stout and B.H. He was very direct when he said that Rosemount would need
to participate to the extent of $500,000 if it wanted a motel in the next year or two. M.P.
knew of one developer that might be interested - A.S. M.P. said he would refer him to us.
2
Ray Anderson is still interested in developing a motel in Rosemount. He is now considering
a site east of the Armory. Mr. Anderson also reports that he is able to raise more equity
from his investors. The C.R. 42 and T.H. 3 site has been dropped from consideration by
Anderson because of land costs. As you will remember, good visibility with low land costs
was a key to developing a convenience motel.
Summary: At this point in time Rosemount:
dw
1. Can expect to attract only a "convenience motel."
2. Has three potential developers looking at the City.
3. Has interest in locations both at C.R. 42 and near the Armory.
4. Will have to participate in financing any development to the extent of
$500,000.
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