2007-06-19 Specialy
PLEASE TURN OFF CELL PHONES & PAGERS IN COUNCIL CHAMBERS. ' 1
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CITY OF MQUND MISSION STATEMENT: The City of Mound, through teamwork-and cooperation,.-provides at a reasonable
cost,. quality cervices that respond to the needs of all citizens, fostering a safe, attractive and flourishing community.
AGENDA
MOUND CITY COUNCIL TUESDAY, JUNE I9, 2007 ~- 6:30 P1VI ~ = `'
SPECIAL'MEETING MOUND CITY COCTNC[L CH~IMBERS
*Consent Agenda: Items listed under the Consent Agenda are considered routine in nature and will be enacted by a single roll call
vote. There will be no separate discussion of these items unless a Council Member or Citizen so requests. In that event the item will
be removed from the Consent Agenda and considered in normal sequence.
Page
1. Call meeting to order
2. Update from representatives of Mound Harbor Renaissance Development
(MHRD) and Welsh Companies including Lost Lake District and Harbor
Lane (Auditor's Road) District
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3. Discussion on property acquisition as it relates to redevelopment
4. Adjourn
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470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis MN 55402-1458
(612) 337-9300 telephone
(612) 337-9310 fax
http:!/www.kennedy-graven. com
Affirmative Action, Equal Opparmnity Employer
Joxx B. DEaly
Attorne~at law __-_-_
_ _ ______-- _- Direct Dial (612) 337-9207
Email: jc{eannlCextnedv-eraven.com
MEMORANDUM
DATE: June 15, 2007
TO: HRA Commissioners, Mayor and Council
FROM: John Dean
SUBJECT: Early Acquisition of Property
From time to time the HRA or City receives voluntary requests from landowners for the
HRA/City to purchase their property.
In some of those instances the HRA/City has a possible use for the land; but has not yet
developed its plans to the point where it would have initiated contact with the landowner
regarding purchase.
There are several reasons why it is in the best interests of the City/HR.A to consider and
possibly accept these voluntary offers to sell land. They include:
1. Certainty as to land costs for budget and feasibility purposes.
2. Elimination of activity that could cause delay once the project starts.
3. Avoidance of possible need to use condemnation.
4. An opportunity to purchase at a reasonable price.
Staff believes that it would be useful for the Council/HRA to provide direction to it
regarding how it should reply to such landowner requests in situations where the HRA/City
has no immediate need for the property, but has identified a future use.
312943v1 JBDMU220-1
Most of these requests come from landowners of property located in redevelopment project
areas, but the request could come from other places as well. An example might be a tract of
land located next to city property such as a park.
Factors to Consider
Staffbelieves that any directions from the HRA/City should take into consideration the
following factors:
1. The form of the purchase transaction.
2. How soon the property will be needed. -_
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4, Whether funds are available to finance the purchase.
S. Complicating factors that may make an otherwise desirable purchase
undesirable.
The Council/HRA may well have additional factors that should be considered.
Su ~estions for Guidelines
In order to stimulate discussion on this matter, we would offer the following suggestions
regarding the listed factors, and the idea of having guidelines generally.
1. The CounciUHRA can take the position that it will not have guidelines; that
it will ordinarily not purchase property ahead of need, and the landowner
will have the burden of establishing that it would be in the best interest of the
City/HR.A to do so.
If the CounciUHRA think guidelines may have a place
2. Because we are dealing with situations in which there is no immediate need
for the property, by far the most advantageous approach for the HRA/City
would be to enter into option agreements (or contingent purchase
agreements) with the landowners. Consequently, the HR.A/City may want to
consider a guideline that would require an option form of transaction, but
would specify the actual purchase price if the option were exercised.
3. If the option form of agreement is utilized, some of the other factors maybe
of less immediate concern. For example, when the property would be
needed is not so important if we are not actually purchasing it up front.
If we assume that the option form may not always be available, then we
believe that the factors of timing of need and available funding need to be
considered. Stated differently, the exercise is to use our limited resources
where they will do the most good. For that reason, we would suggest that
requests to sell (which will use the same funding source) be prioritized on
312943v1 JBD MU220-1
the basis of anticipated time needed with the soonest getting the high
priority.
In terms of funding, we suggest that no request to purchase be considered if
'funds are not currently available to be used for that purpose, and to pay for
all of the other costs related to the transaction including, if applicable,
relocation payments, contamination remediation, closing costs, etc.
4. Regardless of the form of agreement, purchase price will be an important
motivation in deciding whether or not to consider the request to purchase.
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price that is not more than the City/HRA's view of the market value of the
property as reflected by the assessors EMV for the property. If an option
form of transaction is to be used, we suggest that the same market value
approach be taken, and that the actual purchase price be included in the
option agreement.
5. Whatever we call the "guidelines" they should also make it clear that they do
not obligate the City/HRA to approve any request to purchase (even if it
meets the guidelines) and they do not entitle any landowner to be able to sell
to the City/HRA even if the request meets the guidelines.
6. We also suggest that any guidelines contain "bail-out" provisions that would
rule out the voluntary transaction. Such situations could include difficult or
excessive costs related to such items as relocation benefits; or significant or
unknown costs related to contamination, demolition or site preparation.
Other points
1. It is not staff s intention to engage in discussion of any specific sale request
at the study session. The intention is to receive guidance from the
HRA/Council that will allow staff to formulate a response. The
HRA/Council would be involved in future stages of any transaction,
including, of course the ultimate decision to approve any proposed
agreement.
2. For the purposes of the study session, in very general terms, we are talking
about two types of agreements:
(i) Purchase Agreement. I use this term to refer to a form of agreement
by which fee title is transferred at a stated purchase price from the
seller to the buyer in a relatively short time after the satisfaction of
normal preconditions such as title and contamination. Ordinarily the
buyer looses its earnest money if it defaults and does not purchase.
312943v1 JBD MU220-1 3
(ii) Option Agreement. I use the term to refer to a form of agreement by
which the buyer has the option to accept fee title at a stated purchase
price from seller in a relatively lengthy time after the exercise of the
option; and subject to satisfaction of normal preconditions. The
buyer may or may not loose its option money if it elects not to
exercise depending on the language of the agreement.
There are an infinite variety of agreements, but these are probably the basic forms
that we will be looking at.
312943vi JBD MU220-1
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Building 46,500 sf (Required)
40,900 sf (Provided)
• Demolition of existing 1966 Bus Storage Garage
• Remodeling of 1988 Public Works Office and Vehicle
Maintenance Building
• Purchase and demolition of 3 neighboring properties
• Re-Use of existing .74 Acre Maintenance Yard
• Screening & stormwater management have not been
accounted for
• Minnetrista storage yard is not accounted for
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• Central location
• Utilizes existing land &
buildings
• Good access to site
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• Site is not large enough to
accomodate space needs
• 3 Adjacent properties must be aquired
• Future expansion limited
• Layout of facility limited due to existing
buildings and site contraints
• Duplication of common functions with
Park Building
ARCNIiECiURAI AIIIANCE
Site 318,078 sf (Required)
115,700 sf (Provided)
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New public works building 2,145,000
Remodeling existing PW building 1,115,000
Demolition /Site work 142,100
Sub total (including 7.5% cont.) 3.657.258
Soft Costs (22%) 804.597
Owner Provided Items
Land (3 residences) 750,000
Salt /Sand, Seasonal storage bldg 248,500
Yard bins 32,700
Sub total 1,031,200
Total Project Cost
5.493,054
0 fion 1 a City of Nlound Public Works
p Concept Plans
Option Ib
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• Demolition of existing 1966 Bus Storage Garage
• Remodeling of 1988 Public Works Office and Vehicle
Maintenance Building
• Purchase and demolition of 4 neighboring properties
• Re-Use of existing .74 Acre Maintenance Yard
• Screening & stormwater management have not been
accounted for
• Minnetrista storage yard is not accounted for
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• Central location
• Utilizes existing land &
buildings
• Good access to site
• Additional parcel allows
more yard or binding
space
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• Site is not large enough to
accomodate space needs
• 4 Adjacent properties must be aquired
• Future expansion limited
• Layout of facility limited due to existing
buildings and site contraints
• Duplication of common functions with
Park Building
ARCHIiEC1UHRE AIIIANCE
City of Mound Public ~I/orks
Concept Plans
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space needs ~ ,5 30 6~ "
Building 46,500 sf (Required)
49.300 sf (Provided)
Site 3i8,o78 sf (Required)
135.300 sf (Provided)
Ctrs t
New public works building 2,901,000
Remodeling existing PW building 1,115,000
Demolition /Site work 161,100
Sub total (including 7.5% cont.) 4.490.383
Soft Costs (2a%) 987,884
Owner Provided Items
Land (4 residences) 1,000,000
Salt /Sand, Seasonal storage bldg 469,000
Yard bins 53.400
Sub total 1,5aa,4oo
Total Project Cost
7,000,667
Option Ic
• Demolition of all existing Public Works Building
• Purchase and demolition of 4 neighboring properties
• Re-Use of existing .74 Acre Maintenance Yard
• Proposed Lynwood Blvd closure to expand PW yard
• Screening & stormwater management have not been
accounted for
• Minnetrista storage yard is not accounted for
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• Central location
• Utilizes existing land &
buildings
• Good access to site
• Additional parcel allows
more yard or binding
space
• New construction allows
more efficient layout
• Parking seperate from
yard space
• Provides safest and
largest site option
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• Site is not large enough to
accomodate space needs
• 4 Adjacent properties must be aquired
• Future expansion limited
• Layout of facility limited due to
site contraints
• Duplication of common functions with
Park Building
Ci~~ c ~ 1~1c~r~ Public t~/orks
~'oncept Plans
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Building 46,500 sf (Required)
46,500 sf (Provided)
Site 318,078 sf (Required)
135.300 sf (Provided)
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New public works building 4,132,500
Remodeling existing PW building NA
Demolition /Site work 226,250
Sub total (including 7.5% cont.) 4,685,656
Soft Costs (22%)
1,030.844
Owner Provided Items
Land (4 residences) 1,000,000
Salt /Sand, Seasonal storage bldg 469,000
Yard bins 93.600
Sub total 1,562,600
Total Project Cost
7.279,101
RflCHIiECiUflAI ALLIANCE
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Option Id
G'ity of l~lound Public ~Uorks
Conce t Plans
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• Demolition of existing Parks & Island Park Hall Building Building 15,300 sf (Required)
• New building constructed in southwest corner of site and 15.300 sf (Provided)
will serve as retaining wall for hill above
• No additional land required Site 86,803 sf (Required)
• Screening & stormwater management have not been
accounted for 45.300 sf (Provided)
• Space needs of building accomodated, although site is too small
• Utilizes existing land Site is not larg enough to accomodate New public works building 1,423.250
• Potential for improved space needs Remodeling existing PW building NA
appereance and safety Adjacent properties difficult to expand Demolition /Site work 79,050
into, due to severe slopes Sub total (including 7.5% cont.) 1,614.973
• Layout of facility limited due to site
shape, area, and topography Soft Costs (22%) 355.294
• Duplication of common functions with
Public Works Building Owner Provided Items
• Potential neighborhood resistence to Land
expansion and / or removal of Island Seasonal storage bldg 122,500
Hall Building Yard bins 11,700
• Site circulation is limited resulting in Sub total 134,200
potenial operational inefficiencies Total Project Cost 2,104,466
• Access through residential neighborhood
RHCH11EC1UHRE ALLIANCE required
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Option 2
City of Mound Public Works
Concept Plans
• New io+ acre site - Location to be determined Building 53.589 sf (Required)
• Combined Public Works and Parks Facilities 53589 sf (Provided)
• Minnetrista Pile Storage is included
• Screening & stormwater management are provided Site io acres (Required)
• Entire Space Needs are accommodated with room for expansion T.B.D. (io acres shown)
pros
• Site can be selected to
minimize impact on adjacent
,uses
• Operational and space
efficiencies can be achieved
through shared uses of
common areas
• Existing City sites can be
converted to their "highest and
best use" and provide income to
off-set project cost
• No impact on existing facilities
during construction
ARCH11ECiURRI ALLIANCE
cost
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• New site must be acquired New public works building
• New facility may have perceived Demolition /Site work
negative impacts with neighbors Sub total (including 7.5% cont.)
or surrounding municipalities,
i.e. noise, traffic, appearance, Soft Costs (22%)
use, etc.
• Depending on location, may be Owner Provided Items
less centrally located Land Acquisition
Land Disposition (income)
Salt /Sand, Seasonal storage bldg
Yard bins
Sub total
4.874.000
337.500
390863
1,232,520
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(i,5oo,000)
556,500
53,000
io9,5o0
Total Project Cost
6.944.382
summary space needs °~•r~