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HomeMy WebLinkAbout2005-11-07 OPH Memo Re SAC City of Oak Park Heights 14168 Oak Park Blvd. N • Box 2007. Oak Park Heights, MN 55082 • Phone (651) 439 -4439 Fax (661) 439 -0574 Memo To: Eric Johnson From: Julie Hultman Date: November 7, 2005 Re: SAC Charges - St. Croi Cleaners Mr. Nemec inquired whether or not the City would be able /willing to transfer the Service Availability Charges (SAC) from his current leased space at 5850 Omaha Ave. N. to his relocated business site at Oak Park Ponds Shopping Center. While the City may certainly choose to grant a reduction to Mr. Nemec's new location, of any credit realized at the current site, my quick answer would be "no." First, it is my understanding that Mr. Nemec purchased the laundry business and leases the space within which it is operated. I have no evidence that Mr. Nemec paid any SAC charges to the site directly or compensated the seller for SAC fees they incurred and which were dedicated to the business use at 5850 Omaha Ave. N. Secondly, we have no idea at this time what would become of the space once vacated by his business operation. Hope Adoption and Family Services is the current owner of the building and likely they would expand their office operations to the lower level; however until we know what the full use of the building is to be we have no way of knowing what SAC credit, if any, would be available. It is not likely that the timing of the sites new uses(s) configuration would coincide with that of the new business operation location, making it a paperwork challenge to document and requiring guesswork to effectuate. Third, prior to 1973 SAC units were not charged to buildings and operations using the sanitary sewer system. When the SAC system was implemented in 1973, such businesses became known as grandparented properties and had SAC units determined upon the known facts of the structure and its operations as they existed in 1973. Accordingly, Metropolitan Council would have determined the SAC units for St. Croix Cleaners at such time it was located in the former St. Croix Mall, which I believe was in April of 1970. In May of 1977 2 sac units were paid for a St. Croix Cleaners 18' x 66' addition (including 2 machines) to the Mall. A SAC Unit cost $375 in 1977. 1 am guessing that it was sometime in the mid to late 1980's that the business operation moved to the current site at 5850 Omaha Ave. N. In February of 1990, the back half of the building was converted to house a daycare facility and office. The permit for this work notes a SAC credit of 5 units, amounting to $3,000 at $600 each) given to this permit. I've not yet been able to ascertain why a credit of any kind was given as the laundry was also still in operation at the time. I have a call into Metropolitan Council regarding this. In the event a credit was determined after reconfiguration of the site at 5850 Omaha Ave. N., the City would prepare its monthly SAC Report and elect to take the credit as either: (1) "Site Specific," which would hold them for future use at 5850 Omaha Ave. or (2) "City- wide," where the credit would be used to offset any future remittances to Met Council for SAC Charges. SAC Charges are credited in units versus a dollar figure, so that a SAC Unit charged in 1977 at the rate of $375 per unit would be credited in 2005 at the current per unit rate of $1,450. Generally the City has taken credits "City- wide" and has offset amounts to be remitted to Met Council. Note that credits have been a result of demolition and not building use re- configuration. I would recommend that the City decline to offer a credit, if any, to the new location in units or dollar amounts in light of the large majority of SAC units for the business structure and operations at 5850 Omaha Ave. N. being grandparented unit determinations (use prior to 1973) with no cost to the business; there being no evidence of Mr. Nemec having financially contributed to any SAC units paid; the uncertainty of whether or not there will be a credit for the site; and the delicate balance of timing to carry a credit, if any, to the new cleaners location.