HomeMy WebLinkAbout4.a. Project UpdatesEXECUTIVE SUMMARY
Port Authority Meeting Date: April 19, 2022
AGENDA ITEM: Project Updates AGENDA SECTION:
Old Business
PREPARED BY: Eric Van Oss, Economic Development
Coordinator AGENDA NO. 4.a.
ATTACHMENTS: Small Area Plan APPROVED BY:
RECOMMENDED ACTION: Information Item.
ISSUE
Previous discussions with the City Council and Port Authority indicated a desire for more information
regarding completion of workplan activities. The following highlights some of the project and economic
development activities since the last Port Authority meeting.
Projects in Progress
The Morrison: Now that the project is completed, Ron Clark will be submitting invoices for approved
grant reimbursements through the County and DEED. Staff continues to work with Ron Clark on the
tenant space for the commercial portion of the development. A ribbon cutting is scheduled for May 17th,
2022.
Breweries/Tap Houses:
OMNI Orchards: OMNI has submitted plans for a building permit. Grading work will begin in the
spring, while the pre-fab building will be delivered in early summer and assembled in July and
August. Interior work will take place in early fall with an anticipated opening in October. OMNI is
planning on having their mobile tap room at events in Rosemount this summer and would also like
to have events on their site once the building shell is erected.
Tap Society: No update at this time – project is currently on hold.
Dave Schmitz/North 20 Brewing: Construction is progressing on schedule and should opening at
the end of May. Staff is working with the owner on a ribbon cutting date.
Israelson properties:
Rosewood Commons at HWY 3/42: Plans have been submitted for the memory care and senior
housing facility along with approvals needed for additional multi-family housing planned for the
site.
Rosewood Crossing: A building permit was issued for the next 32-unit apartment building.
Rec Center/Life Time: The purchase agreement for approximately 26 acres of land and other relevant
agreements were approved by the City Council on April 5th, 2022. The City’s website has a page dedicated
to this project for additional information.
LJM
UMore Residential/Amber Fields: Maplewood Development is working with individual developers on
the different housing types across the property. Grading and infrastructure work is underway. Staff has
received application for the first phase of development consisting of 190 single family homes and 110
townhomes.
Super America/Speedway: The property was placed in receivership with Lighthouse Management. Their
role is to find care for the liability, assets and property etc. The City will require underground storage tanks
be removed. This makes selling the site in its current use unfeasible, so staff is working on finding funding
opportunities to clean up the site in order to facilitate the development of a more desirable use.
The Home Depot/Project Osprey: Exterior utilities in progress. The extension of Boulder Circle is
anticipated to begin in June.
Scannell Project: Project is proceeding for final approvals of a proposed 500,000+ square feet FedEx
facility.
Las Tortillas: Las Tortillas is expanding into the adjacent retail space. They will add an additional 1,100
square feet to their existing foot print.
CDA Property: Schafer Richardson signed a purchase agreement with the CDA on the Akron property.
They will begin working with staff on a site plan submittal within the next few weeks after working
through some logistics of the pipeline easement on the site.
RFI and Inquires (February/March)
Housing: Staff met with 2 developers interested in multifamily sites in Rosemount. The developers are at
various stages in the site process, but all are focusing on the high-density sites near the Akron/42
intersection.
Commercial/Services: Staff met with 1 developer interested in retail projects.
Restaurant: Staff met with no restaurant users this month.
Industrial: Staff had 3 inquires or discussions regarding Business Park, UMore, and County Road
46/Hwy 3 sites.
OTHER
Expo: Staff surveyed the vendors of the 5th Rosemount Home & Business Expo. Some of the results are
provided in aggregate. Overall 56% of vendors were “very satisfied” with the Expo and another 32% were
“satisfied.” 100% of vendors agreed that their booth was “well visited by attendees” and 82% were either
“extremely likely” or “very likely” to attend in the future. 75% of vendors thought the Expo length was
“about right” and 25% thought it was “too long.”
Overall the Home & Business Expo was well received. In repose to feedback, staff will likely shorten the
total duration of the Expo next year by an hour. Vendors were pleased with the amount of foot traffic;
however, staff believes as we move out of Covid next year the event can be broadened to attract more
residents and utilizing more of the community center space. Ideas include involving the High School Choir
for a midday performance and using the classroom space to hold several workshops or classes on Expo
related activities.
Downtown Façade Grant: Five businesses have fully executed grant agreements. As mentioned at the
December meeting, getting bids from contractors are proving to be the biggest hurdle in moving forward
with projects, so staff is trying to be flexible with the timeline on façade improvements as many will likely
be completed in 2022. One project has been completed and has submitted paid invoices. 3 projects are in
various stages and 1 has been approved but work has not started.
Small Area Plan Hwy 3/46: WSB completed a Small Area Plan (SAP) on the commercial guided
properties adjacent to Highway 3 and North of County Road 46 to facilitate new business investment. The
report recommended a land use change from commercial to business park. Staff will begin this process
this month with the Planning Commission. The report is provided in the attachments.
Zoning Code Update RFP: Staff is working on an RFP for the previously discussed zoning code update.
Staff is working on finalized a draft this month before putting the project out for bid. Once a consultant
has been selected the entire project should take 3-4 months. The process staff envisions would include
working closely with the Community Development Department through the update process, a joint
session of the Council and Planning Commission, and then a public hearing on a draft ordinance.
Business Subsidy Policy: Staff is working on a final draft of this project. Due to the annual report this
item has been moved to the May agenda.
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Small Area Plan
Canada Circle Area
ROSEMOUNT LAND USE STUDY MARCH 2022160TH ST W
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Rosemount Land Use Study
WSB has been asked to review the area within Rosemount that is adjacent to the intersection of County
Road 46 and Hwy 3, in the Canada Circle area. Vacant properties on both the east and west of Hwy 3 are
being reviewed to evaluate the development potential of each site. The review is to evaluate the
appropriate land uses for the six different parcels in support of the projected highest and best use of
each to allow the city to maximize the potential tax base generated by the property and to allow for the
timely development of the area. As with all analyses it is a snapshot in time, with the current market
conditions that may change resulting in potentially different outcomes for the area depending upon the
timing for development.
The site is comprised of 6 Parcel ID numbers as listed below, for a total area of 62.33 acres.
East:
34-40701-00-010 – 1.3 acres
34-03210-70-025 – 21.33 acres
West:
34-03210-70-024 – 12.92 acres
34-03210-70-019 – 6.38 acres
34-03210-70-014 – 3.85 acres
34-03210-73-012 – 16.58 acres
The area is divided into two designated sites by State Highway 3. In general, the eastern site is
comprised of two lots, totaling 22.6 acres, which is one large developable lot and a remanent piece
created after right-of-way dedication. The western site is comprised of 39.73 acres; two vacant lots
owned by the same property owner, and two parcels currently developed. The two developed
properties are the current Murgic’s Automotive and a Sem Stream Propane. Parcel number 34-40701-
00-010 is the remnant from the creation of Boulder Avenue to the north. Parcel number 34-03210-
70024 which is included in the western parcel, appears to include the right-of-way for State Highway 3
that will result in a reduced area for potential development as compared to the acreage found in the
County records.
Planning Review
All properties included in this study were initially part of the South Urban Gateway Analysis for
Reinvestment (SUGAR), which reviewed the potential of a commercial district outside of the City’s
downtown core. The SUGAR Study created a vision for the South Gateway area into Rosemount. The
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report noted that the project area is well positioned along regional transportation corridors to serve
Rosemount residents’ demands, as well as those of the neighboring communities.
The SUGAR Study analyzed several factors to gauge the suitability of the study area for development
including the number of non-conforming uses and sites, the amount of undeveloped land within the
project area, and an assessment of the number of businesses that have recently changed or have made
new investments in their business. The SUGAR report determined that the study area could support a
variety of commercial businesses to meet the needs of not only Rosemount’s residences, but also the
neighboring communities. However, the report stated bringing sites into compliance with the City
Codes was necessary for the development of the sites and qualified that development would rely on
private investments as prospective businesses identify properties for development.
The SUGAR Study recommended that the current study sites, both on the east and west should be
developed as community commercial although there was some recognition that commercial with some
outside storage, such as car sales could be accommodated in the west.
Zoning Review
Four of the six parcels are currently zoned for General Industrial (GI) uses in the City’s adopted zoning
map, with the exceptions being the small remanent parcel created after dedication of Boulder Avenue
right-of-way and Murgic’s Automotive. The purpose of the GI District is to provide for the establishment
of both light and medium manufacturing uses along with warehousing, repair, and business uses. The GI
District is intended to include uses that may require outdoor and vehicle or trailer storage but excludes
heavy industrial uses. The Rosemount Zoning Code notes that the GI District can serve as transition
district between Heavy Industrial zoning districts and residential districts. Murgic’s is zoned C3 Highway
Service Commercial, and the remanent piece is zoned light industrial.
Other non-residential land in the area is zoned for Business Park, generally located within the
Rosemount Industrial Park area. Although much of that land is zoned BP, there has been interest in
allowing some outside storage. The LI, Light Industrial zoning district would be more appropriate for
those uses since outside storage is not allowed in the Business Park zoning district. The property north
of Boulder Avenue extension has been rezoned to LI to allow some outside storage with the proposed
warehousing use. Use of the LI or BP zoning districts makes sense along the highly visible Hwy 3 corridor,
where some outside storage may be needed for future users, but not to the extent allowed by the GI
district.
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Comprehensive Plan Review
Rosemount’s 2040 Comprehensive Plan designates much of the project area as Community Commercial
(CC). This land use designation is intended to provide retail, professional offices, and personal services
that serve the daily and weekly needs of the residents of Rosemount. The size of each Community
Commercial district is intended to be at least 50 acres or greater in size. Combined, the Study Area
properties would meet that minimum size. Proximity to arterial streets is needed for visibility while
individual business accesses shall be provided predominantly from collector, local, or private streets.
In the west, two existing businesses, Murgic’s Automotive and Sem Stream Propane, are located within
the area that is guided Community Commercial. Murgic Automotive is zoned C-3, Highway Service
Commercial and Sem Steam Propane is zoned GI, General Industrial. The Murgic Automotive site has
non-conforming site issues and Sem Stream has non-conforming use and non-conforming site issues.
Based upon development goals of the city, both properties would be candidates for future
redevelopment to more compatible uses. However, their presence in the west is a distraction from
commercial development on the two vacant parcels. A business park or light industrial use would be
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more consistent with the existing surrounding development and the new CA Gear development to the
north. Some outside storage could be accommodated on the west side, especially along the railroad
spur, and still be screened from public views. Similarly, the vacant parcels on the east side are
predominately designated for commercial but the large parcel is zoned GI, General Industrial.
Because of the differences between the project area’s designation as a commercial use in the
Comprehensive Plan and its zoning as GI General Industrial, the project area will require city actions to
bring the zoning and guide plan into compliance. The one exception is Murgic’s Automotive which is
currently zoned and guided for commercial use. Based upon this study recommendation, reguiding of
properties from Community Commercial to Business Park will be needed.
Outside of the study area there are several areas designated for commercial development. The vacant
land around the 42/52 interchange is designated for regional commercial development. Land at
significant intersections along Hwy 42; at Hwy3, Akron Avenue and near 42/55 intersection are all
designated for community commercial. The City of Rosemount has invested in infrastructure to promote
further commercial development along the 42 corridor and its designation as a principal arterial means
that high traffic volumes travel through and within Rosemount using County Road 42 as their primary
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transportation route. This means that community commercial land development in other parts of the
community, such as in the study area at Highway3 and County Road 46 intersection will be competing
with those more attractive sites. Further the amount of commercial development that will ultimately be
attracted to Rosemount is finite and therefore the study area will complete with the 42 corridor, which
may negatively impact the economic viability of both commercial areas.
Traffic Access Review
The existing local street network within the study area does not have significant traffic counts. A 2014
traffic access plan reviewed by the Minnesota Department of Transportation (MnDOT) estimated that
traffic volumes were at approximately 8,900 trips per day along Highway 3 and 500 trips per day along
Canada Circle. While all parcels are highly visible, the access locations for the properties are not overly
visible to traveling motorists. Boulder Avenue will be extended to the intersection with Hwy 3 and
create a future signalized intersection with Canada Circle and Hwy 3. Road right-of-way has been
dedicated to permit construction of the Boulder Avenue south to Hwy 3. The traffic access plan in 2014
shows a future potential configuration for the proposed new intersection. This intersection is expected
to have a signal and is anticipated to have significant traffic counts when the surrounding area further
develops. The Boulder Avenue extension will increase the visibility of the study areas eastern properties.
A graphic from the Trunk Hwy 3 Corridor Study illustrates anticipated future intersections with or
without signalization, is attached.
Market Analysis
The proposed development of the newly approved warehouse distribution facility, north of the eastern
properties, has changed the dynamics of the area from the currently envisioned Community Commercial
as shown in the recently completed Comprehensive Plan Land Use Plan. Development of the over
400,000 square foot facility, which will include a rail spur, allows for the area to see greater
development potential as a light industrial land use to be more compatible with the existing surrounding
uses. The area is currently bordered on the east by an auto salvage yard, to the west by a rail line, and
residential beyond and the southern border is County Road 46. The site abuts the rail line along the
western boundary with the northern boundary being comprised of a small auto repair facility and the
Boulder Avenue being constructed to serve the new distribution facility.
The eastern site has approximately 665 feet of frontage along County Road 46, however due to the
location of the signalized intersection with State Highway 3 at the southwest corner of the site, it would
be unlikely that the county would grant direct access into the site. The same restriction would also be in
place for additional accesses from State Highway 3 requiring the site to have its main access from the
newly constructed Boulder Avenue to the north. Extension of the frontage road along County Road 46
may also be explored. Commercial developments generally look to have easy access from the high
traffic corridors to maximize the potential traffic and sales. The eastern site would suffer from people
being able to see the commercial businesses but having a difficult time accessing the businesses.
While much of the 22.6-acre eastern site would not be highly conducive to commercial/retail
development there may be an option to retain a portion of the northwest corner, along a portion of
Boulder Avenue for a convenience store type of use. Currently the closest gas/retail convenience store
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is located .84 miles to the north along County Road 42. The increase in daily traffic anticipated by new
employees, approximately 60 plus jobs for the new distribution facility and more as the Business Park
develops may increase demand for services. This location may also provide a closer outlet for the
residents living to the west of the rail line. A small portion of the eastern site could be served by an
access off Boulder Avenue closer to the eastern border of the property to allow for sufficient stacking
and traffic flow. Traditionally convenience stores like to have a 2 - 3-acre site to allow for traffic flow
and layout of the facility. Should the City choose to retain a site of 2 acres the eastern site would have
19.6-acre site for the potential Business Park.
Using a general lot coverage ratio allowing for parking, truck movement and surface improvements the
eastern site could support between 275,000 to 300,000 square feet of light manufacturing/distribution
space. The exact amount of space would be contingent on the exact use, layout requirements, and
number of employees. Using a conservative value per square foot of $75 this would result in the
creation of an estimated $20 to $22 million in property tax market value.
The western property also has limited options for consumer access with access coming from the rear of
the property from Canada Circle. A turn lane is adjacent to the entire northern property line of the
vacant western properties. The anticipated signalized intersection of Canada Circle and Boulder Avenue
at Highway 3 may allow for a limited access (right out) on the northern boundary, but the primary access
would be from the west side, along Canada Circle.
The limited access and the shape of the lot would further limit the value of the property for commercial
development. Unlike the eastern lot, the western lot is not as good of a site for neighborhood
convenience store development. Should the entire 19.3-acre site be changed to a Business Park or a
light manufacturing use, the site, when excluding the estimated ROW, would accommodate between
200,000 and 210,000 square feet of space. As with the eastern site, the estimated space that could be
created would be based upon the final end users design and facility requirements. Using the same $75
per square feet of value this would create an estimated $15 - $15.75 million in property tax value.
The significant value of the estimated Business Park development for the two areas is further
strengthened by the current state of the manufacturing and distribution market with a low vacancy rate
of 6.0% at the end of 2021 for the southeast MSP market (JLL 4th Qtr. Report). This low vacancy is
further offset by the net absorption of over 3.8 million square feet of space. In addition to the low
vacancy rate, the absorption of space is greater than the new space being delivered indicating that the
vacancy rate should continue to decrease in 2022. The strength of this market is further supported by
information that indicates over 61% of the 2.8 million square feet of speculative space currently under
construction is pre-leased. The low vacancy rate is also starting to cause an increase in lease rates for
space with the asking rents rising to $5.15 per square foot according to JLL’s 4th Quarter Industrial
Insights. This is further indicated by the asking lease rates to $5.82 per square foot up from $5.64 based
upon the 3rd Quarter Industrial Insights.
In comparison, the retail market has a vacancy rate of 8.5% for the MSP region with indications that this
rate will continue to increase in 2022 (CBRE MarketView H1 2021). This softening of the market has also
resulted in the lease rates falling to $15.82 in the southeast area compared to the MSP average of
$19.06 per square foot.
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Another indication of the soft retail/commercial market is that only 23,231 square feet of absorption
while 28,000 square feet is under construction in the southeast submarket. These close numbers would
tend to indicate that much of the existing space that is or was vacant is remaining vacant for a longer
period. The good news in the forecasts is that the absorption is in the positive compared to 2020 when
the submarket saw a negative absorption of over 98,000 square feet.
Findings
The study area contains six parcels which are designated for community commercial in the City’s
Comprehensive Plan except for the 1.3-acre remanent piece that is designated Business Park. Two are
presently developed with a car repair service and a propane tank farm.
Four of the six parcels are currently zoned for GI, General Industrial which is an industrial land use that
allows a significant amount of outside storage. Murgic’s Automotive is zoned C-3 Highway Service
Commercial and the right-of-way remanent is zoned LI Light Industrial.
Currently the zoning and land use designation for most of the properties do not conform and a rezoning,
or reguiding or both will be needed.
The City of Rosemount has prioritized commercial development along the County Road 42 corridor with
investments, infrastructure, and planning; these community commercial sites may detract from the
successful development of the 42 corridor.
Due to the development pattern surrounding the study area, especially the lack of urbanized
development south of County Road 46, commercial land use attraction to this area will be difficult and
will be on a longer time horizon than potential Business Park development.
Anticipated access to the sites will be less desirable for commercial development than typically required
due to County and State spacing and design restrictions.
Future development growth in the Rosemount Business Park may prompt demand for a smaller
gas/convenience store which could be located in the northeast portion of the eastern site.
Near term demand for Business Park and light industrial land uses will mean that the area develops at a
faster rate, providing more tax base and local jobs.
Business Park development is preferable on high public visibility sites because of the prohibition of
outside storage but some light industrially zoned property, which allows some outside storage, can be
considered depending upon the site location and design.
Conclusion
Due to current market conditions relating to commercial and industrial development, the highest and
best use of the site, at this time, is a Business Park or light industrial use. Rezoning of the property to BP
Business Park, consistent with the zoning in the Rosemount Business Park to the north of the sites,
allows the City to create an attractive gateway into the community from the south. This
recommendation would require rezoning of vacant properties to BP Business Park and reguiding of
parcels to BP, which recognizes either BP or LI zoning districts. In addition, it is recommended that an
approximate 2-acre site be held in reserve on the eastern site, adjacent to Boulder Avenue extension for
future convenience commercial development.
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