HomeMy WebLinkAbout1989-04-24 Planner Memorandum Re TIF Assistance Application MEMORANDUM
TO: "1' Dan Wilson
I
-*ROM: Paviu Licht
24 April L931) Northwest
IQ
c
�PITE: Associated
RE: Oak Ptrk lieiclhts St. 'Croix ',all TIF Consultants, inc.
798.0-) - 6 o C (612) 925 -9420
FILE NO: 4601 Excelsior Blvd. • Suite 410 • Minneapolis, MN 55416
Attached is an application for TIF assistance on the
St. Croix 'lal . Prior to r; this project,
please wv nily authorization and direction.
If 1 2
WHITE - ORIGINAL YELLOW - FILE COPY PINK - C FILE
PUbfiCORP INC.
410 PillsbURY CENTCR (612) 337
MINNEAPOUS, MN 55402
M E M O R A N D U M
TO: City of Oak Park Heights
FR: St. Croix Mall Developers
RE: Requests for Tax Increment
DT: April 17, 1989
We are pleased to present to you at this time, our formal
request for Tax Increment Financing assistance. We have
reviewed your recently adopted policies and believe the items
attached conform with the request for information indicated
in those policies. If not, we will be more than happy to
provide additional information for your review.
At the current time the St. Croix Mall Developers are
requesting that the City establish a redevelopment district
for the purposes of providing an overall land writedown to
assist the developer and the redevelopment of the Mall. At
this time the developers are requesting an assistance of
1.2 million dollars and are requesting that the method for
providing the assistance be Pay -As- You -Go.
Included in the packet is the description of the physical
changes in the construction that will take place to the mall,
some information regarding qualification for a Tax Increment
Financing redevelopment district, a proforma indicating the
"but /for" analysis for Tax Increment Financing and a Tax
Increment Financing cash flow.
In reviewing our request for Tax Increment Financing in
comparison to the policies and procedures that the City's
established we see areas where there is a potential
difference. First is in the area of fiscal disparities. We
are asking that the city consider a variance to the policy
for this particular development.
It is our opinion that in a normal economic development
project the city's policy on fiscal disparities is
appropriate and should be adhered to. The objective of the
policy is to reduce the impact of tax increment activity on
existing tax payers and as future corporate citizens of this
city we appreciate those efforts.
•
It is our opinion though that the redevelopment of the St.
Croix mall presents a unique redevelopment opportunity to the
City. The current mall is in a nongrowth position and left
in its current condition will probably deteriorate further
over the years. It is our opinion that unless this project
is redeveloped the effect of the deteriorating market
condition on the rest of the tax payers in Oak Park Heights
will far exceed the effect of varying the policy of fiscal
disparities.
A second area of concern revolves around the policiy of
developer equity. We need to clarify the city's policy as it
relates to a pay as you go financing.
The third area of question revolves around the sale of a
project and the assessment agreement portion. Again, these
areas cause some financing problems as related to the Pay -As-
You-Go process.
We look forward to working with you on the development of
this mall and stand ready to answers any questions or to
attend any meetings which you think are appropriate to its
completion. If you have any questions please feel free to
call the project leader, Mr. Bradley Henning at Watson
Centers.
CITY OF OAK PARK HEIGHTS
APPLICATION FOR TAX INCREMENT
Please type
or print
I. APPLICANT
(a) Business Name, Address, telephone number:
Stephen M. Watson
252 South Plaza Building
Minneapolis, MN 55416 (612) 544 -7768
(b) Business Form (corporation, partnership, sole
r proprietorship, etc.), state of incorporation or
organization and date of formation:
Partnership - Minnesota - Not formed at 4/10/39
(c) Brief description of nature of business, principal
products, etc.:
Development and managemeant,of'r.etail properties.
(d) If project is leased, list prospective lessees,
nature of lessee's business, and principal products,
etc..
See II (h)
(e) If applicant is corporation, state officers,
directors, stockholders holding more than 5% of the
stock of corporation (state name, address and ,
relationship to applicant): [If Corporation is not
formed, set forth as much as possible concerning
potential officers, directors, stockholders.]
N/A
(f) If applicant is general partnership state general
partners and if limited partnership state general
partners and limited partners with more than 5%
interest in the limited partnership: [7f partnership
is not formed set forth as much as possible
concerning potential partners.) =_
General Partnership
Stephen M. Watson
Daniel A. Bergeron
Bradley A. Henning
(g) Name, address and telephone number of Applicant's
legal counsel and accountant: !'
Legal counsel - Loren Knott 340 -2600
Dorsey & Whitney i
2200 First Bank Place East
Minneapolis, MN 55402 I�
Accountant - Bonnie Sinkel 929 -2580
Pilarski, Sinkel & Hcankes, Ltd. ! !
II. PROJECT 5100 Eden Avenue S.
(a) Location (state tree
s 'sP6& ach the legal
description of project site):
St. Croix Mall_
Block 2, Lots 1,2,3,4. & 5
' is
(b) Present ownership of project site. If project site
is not currently owned by applicant, describe
arrangements by which applicant intends to acquire
or use site:
Applicant has entered into a contingent purchase
agreement with current owner.
(c) Describe Project: If Project is a building or
addition to building, specify number of stories,
square footage, related parking facilities, etc. If
Project includes equipment, describe equipment. If
mixed land use, describe project's physical
dimensions by type of land. use. (Attach site plan
and building elevations, 'if available): Site Plan Attached.
(d) Zoning:
i'
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(1) What is the zoning status of project site?
PUD
(2) Is zoning status appropriate for the intended
use?
Yes
i
(3) will rezoning, zoning variance, or conditional
use permit be sought in connection with
project?
PUD Amendment will be requested.
(4) Is the property properly subdivided for the
intended use?
Changes in property subdivision will
be requested as part of PUD amendment.
(5) Has site plan approval been obtained for this
project? If so, on what date
NO
(e) Estimated project related costs:
(1) Land acquisition: $
(2) Site development: $
(3), Building cost: $
(4) Equipment: $
(5) Architectural and
engineering fees: $
See attached project proforma
3
(6) Legal fees: $
(7) Bond discount, fees to
underwriter and brokerage
fees: $
(8) Interest during construction: $
(9) Offsite development cost: $
(10) Initial bond reserve fund: $
(11) Contingencies: $
(12) Other (please specify): $
Total $
(f) Total Estimated Market Value at
completion $
(g) Source of financing:
(1) Industrial Revenue Bonds: $
(2) Tax Increment Bonds: $
(3) Equity: $
(4) Bank loan: $
(h) Will project be occupied by applicant after
completion? If not, state name of future lessees,
and status of committments or lease agreements:
See attached
(i) Names and addresses of architect, engineer and
general contractor for Project: See attached
(j) Current real estate taxes assessed on project site,
and estimated real estate taxes on project site upon
completion of project:
See attached.
4
• �I
• �i
(k) Project construction schedule (If project is to be
completed in phases, indicate by construction year
percentage of total project completion)
(1) Construction Start Date June 1, 1989 ?
(2) Construction Completion Date July 31, 199;0
If phased project Year % Complete
Year % Complete
III. TAX INCREMENT FINANCING REQUEST
(a) Describe amount and purpose for which tax increment
financing is requested
Amount - $1,200,000
Purpose - Redevelopment and expansion of
St. Croix Mall
(b) Statement of necessity for use of tax increment
financing for the project
See Attached
IV. MISCELLANEOUS
(a) Detail the status of any previous or current
requests which applicant, its principals or
affiliates have made to the City or to other
municipalities for tax increment bond financing:
See IV (b)
i
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(b) If tax increment bonds issued for applicant by other i
municipalities list issuer, bond title, date of
bonds, type of project, total project costs, etc.:
See attached
• i
i!
(c) Has applicant ever been in bankruptcy? If yes, e
describe circumstances.
No
i
(d) Has applicant ever been convicted of a felony? If
yes, describe conviction and sentence.
No
(e) Has applicant ever defaulted on any bond or mortgage
commitment?
No
jl
(f) Will any public official of the City, either
directly or indirectly, benefit by the issuance of
the City's tax increment revenue bonds for this
project within the meaning of Minnesota Statutes,
Sections 412.311 or 471.87? If so, specify.
No '
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LEASE COMMITMENTS
II (h)
TENANT SQUARE FEET
Team Choice 2700
Brauns 3000
Creative Cupboard 2215
Hardware Hank 12050
Riverfront Cutters 570
LeSalon 1330
Lindes 3300
Mall Restaurant 2222
MGM Liquor 8970
Midwest Vision 1014
Pizazz 1600
Queen Fashions 1100
Radio Shack 2400
Ronald Jewelers 900
Snyder Drug 9000
St. Croix Cleaners 4248
Valley Sewing 1364
Cinemaland I, II & III 8150
Herbergers 54000
s
The undersigned, (a) (the) general partner
of applicant, hereby represents and warrants to the City that
(he) (she) has carefully reviewed this application, and that
the statements and information contained herein and submitted
herewith are accurate and complete to the best of the
Undersigned's knowledge and belief.
Dated; ey g9
' Applicant
By
Its
- The City reserves the right to require additional information
and supporting data from the applicant after the filing of
this Application.
I
7
Architect: Mr. Laurence Page
Arvid Elness Architects, Inc.
Butler North Building, Suite 200
510 First Avenue North
Minneapolis, MN 55403
Engineer:
Structural: Fowler Hanley Inc.
Mechanical/
Electrical: TAC Engineering
Civil: Suburban Engineering
General Contractor: Mr. John Forsberg
Watson Forsberg Construction
252 South Plaza Building
Minneapolis, MN 55416
0
REAL ESTATE TAXES
II(j)
LOT BLOCK PAYABLE 1989
1 2 $ 55,476
2 2 78,776
3 2 21,342
4 2 1,330
5 2 7,314
$'164,238
Discussions with Washington County assessor indicate future
real estate taxes upon completion of planned project would
increase $150,000 to $314,238. This increase is based on
1988 mill levy levels.
IV (b)
Stephen M. Watson and Daniel A. Bergeron are partners
in Minnehaha Lake Partners Project. Minnehaha Lake
Partners developed the Rainbow Plaza Shopping Center
located at Minnehaha Avenue and Lake Street in Minneapolis.
In conjunction with this project, the City of Minneapolis
issued $2,750,000 of Commercial Development Refunding
Revenue Bonds. The bonds are dated October 1, 1986.
Total project costs = $4,850,000
PubliCORP INC.
410 PittsbURr CENTER (612) 337.9292
MINNEAPOUS, MN 55402
April 18, 1989
Mr. Brad Henning
Watson Centers
252 South Plaza Building
1433 Utica Avenue South
Minneapolis, Minnesota 55416
Dear Brad,
Following is a descriptive analysis of the need for tax
increment assistance for the Mall project. This descriptive
analysis will be general in nature and is intended to serve
as an outline.
The Minnesota State Tax Increment Act, as it relates to
redevelopment projects, was designed specifically to address
situations such as the one that currently exists on the
proposed site within the City of Oak Park. The basic premise
of the redevelopment law is that there is a preexisting
condition on the site which makes it uneconomical to develop
in comparison to alternative vacant land development.
The preexisting condition that exists on the site is the
existing structures which must be purchased by the developer
in order to acquire the land. These structures are referred
to as nonperforming assets in that they will either be torn
down or substantially remodeled upon purchase. While they
have no significant value to the developer, they have value
to the existing property owner and therefore create a cost to
the development that would not exist if the development were
to take place on vacant land.
This preexisting condition adds substantially to the
cost of the project and makes it uneconomical for the
developer to proceed without city T.I. F. assistance.
The method for arriving at the level of assistance
needed is accomplished through the use of pro forma analysis.
Pro forma analysis is a mathematical method of analyzing the
project's long term cash flow. The pro forma analysis is
used by developers to provide information to lending
institutions to determine whether or not they are willing to
loan money to construct a project.
One of the significant factors in loaning money to these
types of projects is what's referred to as the "debt to
equity ratio." Banks usually do not loan 100% of the
project's cost because this method insures that if a problem
occurs later in the project, the bank will be able to
foreclose and sell the project and still maintain a profit.
Therefore, lending institutions complete an analysis to
determine how much of a construction cost they will loan
and how much the developer would put into the project in the
form of what's referred to as "equity."
The amount of equity a bank requires varies depending on
the credit worthiness of the individuals, the perceived
success of the project, and the type of use proposed. For
example, commercial retail projects which are constructed by
well known developers usually require 10% to 15% equity to
proceed. This percentage is lower than most other uses
because in the current market those buildings are easily sold
and have a variety of uses.
The Oak Park Heights Mall project developers will be
required to raise a substantial amount of equity, or personal
cash in order to proceed with the project. In order to raise
that equity cash, the developers must be able to prove to the
investing partners that the project has a substantial chance
of proceeding successfully and that the money that they
invest will bring them a return on investment equivalent to
the risk they're taking.
While the interest rate a person is seeking when
investing in a project is an individual decision, there are
some standards that are acceptable within the industry. For
example, at the current time most developers of commercial
retail space are looking at 13% to 15% return. These numbers
are understandable when one is aware of the fact that you can
purchase General Obligations of cities within the state of
Minnesota with an absolute guaranteed return ranging from 9%
to 10 %. Therefore, the rate of return that is shown on the
pro forma analysis must be attractive enough to account for
the risk of the project versus an alternative investment
opportunity.
In order then, to analyze the need for the Oak Park
Heights Mall project, various levels of tax increment
assistance were analyzed to determine how to counterbalance
the additional cost of the redevelopment and provide an
attractive rate of return to the investing partners.
In summary, the existing conditions on the site which
increased the cost of the developer are to be counterbalanced
by the use of tax increment in order to provide an
economical project to both the developer and the city.
The method for establishing the level of tax increment is the
rate of return an investing partner might get, assuming the
project proceeded, and how that rate of return is competitive
in the market place.
I hope that this provides a basic analysis for your
review. Please let me know if you have any additional
questions or comments or clarifications.
Sincerely,
Sidney C. Inman, Director
Development Consulting Services
Publicorp, Inc.
SCI /jp
PUbtiCORP INC.
410 PillsbURy CENTER (612) 337.9292
MINNEAPOUS, MN 55402
April 17, 1989
Mr. Brad Henning
Watson Centers
252 South Plaza Building
1433 Utica Avenue South
Minneapolis, MN 55416
Dear Brad:
As per your request, Publicorp has analyzed the proposed site
of the new Oak Park Mall to determine if it could qualify as
a redevelopment district.
As you may be aware the site currently is divided into five
parcels. Due to the necessity of the partnership agreement
of the developers, along with the proposed financing
structure of the project, the parcels will have to be
combined into one single parcel for tax identification
purposes prior to the establishment of any tax increment
district. Because of this fact, our analysis is based on the
district containing one parcel.
The Tax Increment Act states that property qualifies under
the redevelopment law if more than 70% of the parcels have
buildings and more than 50% of those occupied are blighted.
In our situation we have single parcel with five structures.
After discussing the particular parcel and its buildings with
the land owner they have represented to us that the current
buildings are substandard, both in code and in structure.
For example, part of one structure currently has a cracked
roof. It is the current plan to demolish three of the
structures (Wards Auto, a restaurant, and Action Rental) and
to perform major renovations on a fourth, (St. Croix Mall).
While further inspection and study may be warranted, it would
be our opinion that the site under the current tax increment
law would qualify as a redevelopment district.
Please let me know how you would like to proceed further to
determine the condition of the building as it relates to the
redevelopment criteria or any other questions you may have
regarding this development.
Sincerely,
Sidney C. Inman, Director
Development Consulting
PUbtiCORP INC.
410 PiltsbURr CENTER (612) 337.9292
MiNNEAPOUS, MN 55402
April 17, 1989
Mr. Brad Henning
Watson Centers
252 South Plaza Building
1433 Utica Avenue South
Minneapolis,MN 55416
Dear Brad:
The following is a description of the physical changes and
construction to the mall.
The existing St. Croix Mall was originally constructed in
1968 with subsequent additions and alteration. The current
mall consists of approximately 74,000 square feet of tenant
retail, 15,200 square feet of mall /common space, an 8,000
square foot of theater, an 11,260 square foot Hardware Hank
Store and an 83,260 square foot K -Mart which is connected to
the main mall.
The proposal for the St. Croix Mall includes extensive
interior remodeling, major additions, refacing of the
existing mall, and major site modifications. Proposed
program items include a) internal mall with a connection to
K -Mart and Hardware Hank; b) total remodeling of existing
mall space including skylights, lighting, ceiling, floor
surfaces, and tenant neutral strips; c) 9,840 square feet of
lower level storefront retail; d) new construction of a two
level 52,000 square foot Herbergers Department Store with
escallator and elevator service, e) 35,700 square feet of new
retail tenant space linking the existing mall with the new
Herbergers Store; f) total refacing of existing mall exterior
building skin; g) 1,215 parking stalls in a redesigned site
plan; h) landscaping and site exterior building skin; g)
1,215 parking stalls in a redesigned site plan;
h) landscaping and site lighting; i) upgrading of existing
HVAC and electrical systems, and j) roofing repairs and /or
reroofing.
As part of the overall mall remodeling, tenant standards will
be upgraded with new guidelines and standards being
developed. Mall entry canopies will be developed to upgrade
the mall image, as well as reinforcing a sense of
orientation. In conjunction with the new entry canopies,
site and building signage will reinforce the shoppers' sense
of direction.
Sincerely,
Sidney C. Inman, Director
Development Consulting
Publicorp, Inc.
SCI /jp
17- Apr -89 St. Croix Mall
Tax Capacity Rate 0.926600
Inflation Rate 4.0000% PLEASE REVIEW ALL ASSUMPTIONS <-------- - - - - --
------------------------------
Inflation Starts in 6 Year
Reinvestment Rate 6.00%
Collection Rate 100.0000%
Fiscal Disparities 0.0000%
Original Original * Project Project
Original Values: Market Value Tax Capacity * Project Values: Market Value Tax Capacity
------------------------------------------------------------------------------------------------------------------------------------
District #1 Est * District #1 Est 100,000 0.0330 3,300
* 6,516,200 0.0525 342,101
(Redevelopment Dist) * ----------
* 6,616,200 345,401
*
Lot 1 Block 2 100,000 0.0330 3,300
Action Rental 1,061,600 0.0525 55,734
---- --- - -- --- ---- - - - - --
1,161,600 59,034 * Total Taxes Total
* Sq.Ft. Sq.Ft. Taxes
* ------------------------------
Lot 4 Block 2 28,500 0.0330 941 * 180,500 1.773 320,048
Cane Lakes Res. 0 0.0525 0
--- ---- --- --- ---- ---- --
28,500 941
*
*
Lot 3 Block 2 100,000 0.0330 3,300
Wards Auto 371,100 0.0525 19,483
--- - - - - - -- ------- ---- --
471,100 22,783
*
*
Lot 2 Block 2 100,000 0.0330 3,300
St. Croix Mall 1,590,000 0.0525 83,475
-- -- - --- -- -- ---- - - - - - --
1,690,000 86,775
*
*
Lot 5 Block 2 100,000 0.0330 3,300
Theater 65,000 0.0525 3,413
--- -- - - - -- ----- -- - - -- --
165,000 6,713
----------------------------------
Grand Total 3,516,200 176,245
*
SW100 -01 Prepared by Publicorp Inc.
17- Apr -89 St. Croix Mall
* O.T.C. N.T.C. F.D. F.D. C.T.C. T.C.R. T.I. P.A.Y.G. Interest Total
* # YEAR O.T.C. N.T.C. #1 #1 Payment 10.75% Income #1
*------------------------------------------------------------------------------------------------------------------------------------
* 0.5 89 176,245 176,245 0 0 0 0.926600 0 0 0 0 0
* 1.0 89 176,245 176,245 0 0 0 0.926600 0 0 0 0 0
* 1.5 90 176,245 176,245 0 0 0 0.926600 0 0 0 0 0
* 2.0 90 176,245 176,245 0 0 0 0.926600 0 0 0 0 0
* 2.5 91 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 59,550 0 1,000
* 3.0 91 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 116,063 30 2,030
* 3.5 92 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 169,693 61 3,091
* 4.0 92 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 220,588 93 4,184
* 4.5 93 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 268,886 126 5,309
* 5.0 93 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 314,721 159 6,468
* 5.5 94 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 358,218 194 7,662
* 6.0 94 176,245 345,401 0 0 169,156 0.926600 78,370 77,370 399,496 230 8,892
* 6.5 95 176,245 359,217 0 0 182,972 0.926600 84,771 83,771 441,910 267 10,159
* 7.0 95 176,245 359,217 0 0 182,972 0.926600 84,771 83,771 482,160 305 11,464
* 7.5 96 176,245 373,585 0 0 197,340 0.926600 91,428 90,428 523,392 344 12,808
* 8.0 96 176,245 373,585 0 0 197,340 0.926600 91,428 90,428 562,521 384 14,192
* 8.5 97 176,245 388,529 0 0 212 0.926600 98,351 97,351 602,497 426 15,618
* 9.0 97 176,245 388,529 0 0 212,284 0.926600 98,351 97,351 640,435 469 17,086
* 9.5 98 176,245 404,070 0 0 227,825 0.926600 105,551 104,551 679,099 513 18,599
*10.0 98 176,245 404,070 0 0 227,825 0.926600 105,551 104,551 715,792 558 20,157
*10.5 99 176,245 420,233 0 0 243,988 0.926600 113,040 112,040 753,107 605 21,762
*11.0 99 176,245 420,233 0 0 243,988 0.926600 113,040 112,040 788,518 653 23,414
*11.5 0 176,245 437,042 0 0 260,797 0.926600 120,827 119,827 824,459 702 25,117
*12.0 0 176,245 437,042 0 0 260,797 0.926600 120,827 119,827 858,567 754 26,870
*12.5 1 176,245 454,523 0 0 278,279 0.926600 128,927 127,927 893,123 806 28,676
*13.0 1 176,245 454,523 0 0 278,279 0.926600 128,927 127,927 925,916 860 30,537
*13.5 2 176,245 472,704 0 0 296,460 0.926600 137,350 136,350 959,086 916 32,453
*14.0 2 176,245 472,704 0 0 296,460 0.926600 137,350 136,350 990,563 974 34,426
*14.5 3 176,245 491,613 0 0 315,368 0.926600 146,110 145,110 1,022,354 1,033 36,459
*15.0 3 176,245 491,613 0 0 315,368 0.926600 146,110 145,110 1,052,524 1,094 38,553
*15.5 4 176,245 511,277 0 0 335,032 0.926600 155,220 154,220 1,082,952 1,157 40,710
*16.0 4 176,245 511,277 0 0 335,032 0.926600 155,220 154,220 1,111,828 1,221 42,931
*16.5 5 176,245 531,728 0 0 355,483 0.926600 164,695 163,695 1,140,915 1,288 45,219
*17.0 5 176,245 531,728 0 0 355,483 0.926600 164,695 163,695 1,168,518 1,357 47,575
*17.5 6 176,245 552,997 0 0 376,753 0.926600 174,549 173,549 1,196,290 1,427 50,003
*18.0 6 176,245 552,997 0 0 376,753 0.926600 174,549 173,549 1,222,646 1,500 52,503
*18.5 7 176,245 575,117 0 0 398,872 0.926600 184,798 183,798 1,249,134 1,575 55,078
*19.0 7 176,245 575,117 0 0 398,872 0.926600 184,798 183,798 1,274,271 1,652 57,730
*19.5 8 176,245 598,122 0 0 421,877 0.926600 195,456 194,456 1,299,509 1,732 60,462
*20.0 8 176,245 598,122 0 0 421,877 0.926600 195,456 194,456 1,323,459 1,814 63,276
*20.5 9 176,245 622,047 0 0 445,802 0.926600 206,540 205,540 1,347,484 1,898 66,174
*21.0 9 176,245 622,047 0 0 445,802 0.926600 206,540 205,540 1,370,283 1,985 69,159
*21.5 10 176,245 646,929 0 0 470,684 0.926600 218,068 217,068 1,393,133 2,075 72,234
*22.0 10 176,245 646,929 0 0 470,684 0.926600 218,068 217,068 1,414,817 2,167 75,401
*22.5 11 176,245 672,806 0 0 496,561 0.926600 230,057 229,057 1,436,531 2,262 78,663
*23.0 11 176,245 672,806 0 0 496,561 0.926600 230,057 229,057 1,457,138 2,360 82,023
*23.5 12 176,245 699,718 0 0 523,473 0.926600 242,525 241,525 1,477,759 2,461 85,484
*24.0 12 176,245 699,718 0 0 523,473 0.926600 242,525 241,525 1,497,327 2,565 89,048
*24.5 13 176,245 727,707 0 0 551,462 0.926600 255,492 254,492 1,516,895 2,671 92,720
*25.0 13 176,245 727,707 0 0 551 0.926600 255,492 254,492 1,535,464 2,782 96,501
ST. CROIX MALL
OAK PARK HEIGHTS
� PROJECT PROFORMA
�
Without TIF With TIF
Potential Revenue .
Existing Mall 90,000 sq. ft. @ 5.50 495,000 495,000
Herbergers 54,000 sq. ft. @ 3.50 189,000 189,000
Expansion Area 36,000 sq. ft. @ 9.00 324,000 324,900_
________
1,008,000 1,008,000
Expense
Vacancy 10.0%
Expense on vacancy 4.0
Misc. 2.0
16.0% 161,000 161,000
________ ________
000 847,000
847
Net revenue ,
======== =======
Market value @ 11� cap $7,700,000
***************************************************************************
Without TIF With TIF
'
Costs
Purchase price 3,600,000 3,600,000
Construction costs
Hard costs 5,000,000 5,000,000
Soft costs 500,000 500,000
Construction interest 700,000 700,000
9,800,000 9,800,000
TIF
0 1,200,000
9, 800, 0690 8,600,000
========= =========
***************************************************************************
Without TIF With TIF
NOI
Revenue/Costs .
^ ST. CROI% MALL
OAK PARK HEIGHTS
PROJECT PROFORMA
^
Hard Costs
Site work $550,000
Building construction 3,150,000
Exterior renovation 600,6900
Interior renovation 700,000
$5,000,000
=========
Soft costs
Architect and engineering $225,000
Financing fees 200,000
Legal 50,000
000
Miscellanous 25,000
$500,000
========
Re: Watson Centers, Inc.
Background and References
WATSON COMPANIES' BACKGROUND
The Watson Companies began in 1925 as a general contractor in
Minneapolis and has grown to be one of the largest general con-
tractors in the Midwest and is responsible for many of its major
buildings. In 1948, Watson Companies expanded into the develop-
ment of office /warehouse combinations, motels and other commer-
cial properties for their own account. In 1969, Watson Centers
was formed- as the shopping center development arm of the Watson
Companies. Since that time, Watson Centers has been involved in
the development of nearly 3 million square feet of shopping cen-
ters. This shopping center experience ranges from enclosed mall
suburban centers such as the $36.0 million, 950,000 square foot
Valley West Mall in Des Moines, Iowa to the Centrum Plaza, a $5.7
million, 80,000 square foot downtown commercial redevelopment
project in Lincoln, Nebraska.
WATSON CENTERS PERSONNEL
The three individuals within the Watson Centers organization
responsible for new projects are Stephen Watson, Dan Bergeron and
Brad Henning.
Steve Watson's background includes graduation from both the
University of Minnesota with a Bachelor of Science Degree and
from the Tuck School at Dartmouth College with an MBA. After
holding financial management positions at the 3M Company and the
Leisure Group, he joined his family construction and development
business in the development of shopping centers and other commer-
cial properties. To date we have developed 13 shopping centers
and continue to manage eight shopping centers as well as a number
of other commercial properties. Steve's areas of concentration
at Watson Centers are finance and general management.
1
Dan Bergeron is Vice President in charge of Leasing for Watson
Centers. His background includes graduation from the University
of Minnesota with a Bachelor of Science Degree and 20 years of
experience in commercial real estate development. Dan has per-
sonally been involved in the development of 23 shopping centers
and holds the CSM designation granted by the International
Council of Shopping Centers. Dan has the proven knowledge of
real estate and retailers that is essential to a successful leas-
ing program.
Brad Henning is Controller for Watson Centers. He holds a BS in
accounting from the University of Minnesota and is a C.P.A. with
seven years of public accounting experience. Brad joined Watson
Centers in 1985 and is responsible for financial reporting and
controls.
REFERENCES
We submit the following references which we feel will be most
meaningful in your evaluation of Watson Centers' ability to put
together a quality retail development:
I. Financial
A. Mr. Anthony Pasko (Tony)
Norwest Bank Minneapolis
8th & Marquette Avenue
Minneapolis, Minnesota 55402
612- 372 -8794
B. Mr. Richard Riley
Eberhardt Commercial Real Estate
81 South Ninth Street, #400
Minneapolis, Minnesota 55402
(612) 336 -4211
C. Mr. Jon Dahlin
Eberhart Companies
3250 W. 66th Street
Minneapolis, Minnesota 55436
612 - 920 -9280
D. Mr. Thomas Crowley, Vice President
Heitman Financial Services, Ltd.
4408 IDS Tower
Minneapolis, Minnesota 55402
612- 332 -1603
2
II. Governmental
A. Mr. Tony Scallon
City Hall
City of Minneapolis
Minneapolis, Minnesota 55402
612 - 348 -2209
B. Ms. Lorrie Louder
Minneapolis Community Development Corp.
250 South Fourth Street
Minneapolis, Minnesota 55415
612 - 348 -7121
C. Ms. Rita Fassbinder
Greater Lake Street Council
1516 East Lake Street
Minneapolis, Minnesota 55407
612 - 721 -7458
III. Retail
A. Mr. Dennis Crowe
Rainbow Food Stores
1515 Excelsior Boulevard East
Hopkins, Minnesota 55343
612 - 931 -1100
B. Mr. Fred Hubbell, Chairman of the Board
Younkers Department Store
P.O.Box 1495
Des Moines, Iowa 50397
515- 244 -1112
C. Mr. Rich Evans
ShopKo Stores, Inc.
700 Pilgrim Way
Green Bay, Wisconsin 54304
(414) 496 -7113
D. Mr. George Torrey
Herberger's Department Store
518 St. Germain
St. Cloud, Minnesota 56302
(612) 251 -5351
If you have any questions or desire further information, please
feel free to call Watson Centers, Inc. 612 - 544 -7768.
3
SHOPPING CENTERS OWNED BY WATSON COMPANIES
Gross
Leaseable
Center Name Location Area
Valley West West Des Moines, Iowa 950,000 Sq.Ft.
Park Drive Omaha, Nebraska 100,000 Sq. Ft.
Centrum Plaza Lincoln, Nebraska 60,000 Sq. Ft.
Traverse City Traverse City, Michigan 130,000 Sq. Ft.
Valley West Park West Des Moines, Iowa 25,000 Sq. Ft.
Rainbow Center Minneapolis, Minnesota 75,000 Sq. Ft.
4
SHOPPING CENTERS DEVELOPED BY THE WATSON COMPANIES
Gross
Leaseable
Center Name Location Area
Valley West Glendale, Arizona 600,000 Sq. Ft.
College Park Phoenix, Arizona 80,0000 Sq. Ft.
Kandi Mall Willmar, Minnesota 200,000 Sq. Ft.
Minnesota Valley Shakopee, Minnesota 160,000 Sq. Ft.
Village Ten Coon Rapids, Minnesota 175,000 Sq. Ft.
Valley West West Des Moines, Iowa 950,000 Sq. Ft.
Valley North Fargo, North Dakota 100,000 Sq. Ft.
Brookings Mall Brookings, South Dakota 150,000 Sq. Ft.
Park Drive Omaha, Nebraska 100,000 Sq. Ft.
Centrum Plaza Lincoln, Nebraska 60,000 Sq'. Ft.
Traverse City Traverse City, Michigan 130,000 Sq. Ft.
Valley West Park West Des Moines, Iowa 25,0000 Sq. Ft.
Rainbow Center Minneapolis, Minnesota 75,000 Sq. Ft.
SHOPPING CENTERS MANAGED BY WATSON CENTERS, INC.
The Atrium Lincoln, Nebraska 650,000 Sq. Ft.
Hyatt Regency Minneapolis, Minnesota 50,000 Sq. Ft.
5
April , 1989
Dr. David Wettergren
Independent School District No. 834
Central Services Building
1875 South Greeley Street
Stillwater, MN 55082
RE: Proposed Creation of Oak Park Heights Housing and Redevelopment
Authority Redevelopment Project and Tax Increment Financing District
Dear Dr. Wettergren:
Enclosed please find one copy each of a proposed redevelopment project plan and
proposed tax increment financing district plan prepared by the Housing and
Redevelopment Authority in and for the City of Oak Park Heights, Minnesota (the
"Authority "). The approval of these plans and the creation of the subject
redevelopment project and tax increment financing district will be considered by
the City Council of the City of Oak Park Heights at a public hearing to be held at
approximately p.m. on May 22, 1989 at City Hall, 14168 - 57th Avenue North,
Oak Park Heights, Minnesota.
The Minnesota Tax Increment Financing Act, Minnesota Statutes, Sections 469.174
to 469.179, requires under Section 469.175, subd. 2, that 30 days prior to the
holding of a public hearing on the establishment of a tax increment financing
district or the adoption of a tax increment financing plan the City must provide an
opportunity to the members of the governing bodies of the affected counties and
school districts to comment relative to the fiscal and economic implications of
such plans.
Please review these plans and provide any comments you might have to me at the
City at telephone number . You are invited to attend the public
hearing to be held by the City Council on May 22, 1989 or to direct any comments
or questions that you might have to me at the above number.
Thank you for your assistance and consideration in reviewing these proposed plans.
Sincerely.
April , 1989
Mr. John Jergens
Chairman
Washington County Board of Commissioners
14900 - 61st Street North
Stillwater, MN 55082
RE: Proposed Creation of Oak Park Heights Housing and Redevelopment
Authority Redevelopment Project and Tax Increment Financing District
Dear Mr. Jergens:
Enclosed please find one copy each of a proposed redevelopment project plan and
proposed tax increment financing district plan prepared by the Housing and
Redevelopment Authority in and for the City of Oak Park Heights, Minnesota (the
"Authority "). The approval of these plans and the creation of the subject
redevelopment project and tax increment financing district will be considered by
the City Council of the City of Oak Park Heights at a public hearing to be held at
approximately p.m. on May 22, 1989 at City Hall, 14168 - 57th Avenue North,
Oak Park Heights, Minnesota.
The Minnesota Tax Increment Financing Act, Minnesota Statutes, Sections 469.174
to 469.179, requires under Section 469.175, subd. 2, that 30 days prior to the
holding of a public hearing on the establishment of a tax increment financing
district or the adoption of a tax increment financing plan the City must provide an
opportunity to the members of the governing bodies of the affected counties and
school districts to comment relative to the fiscal and economic implications of
such plans.
Please review these plans and provide any comments you might have to me at the
City at telephone number . You are invited to attend the public
hearing to be held by the City Council on May 22, 1989 or to direct any comments
or questions that you might have to me at the above number.
Thank you for your assistance and consideration in reviewing these proposed plans.
Sincerely.
April , 1989
Mr. Dale Birkeland
Superintendent of Schools
Northeast Metropolitan Intermediate School Dist. #916
3300 Century Avenue North, Room 245J
White Bear Lake, MN 55110
RE: Proposed Creation of Oak Park Heights Housing and Redevelopment
Authority Redevelopment Project and Tax Increment Financing District
Dear Mr. Birkeland:
Enclosed please find one copy each of a proposed redevelopment project plan and
proposed tax increment financing district plan prepared by the Housing and
Redevelopment Authority in and for the City of Oak Park Heights, Minnesota (the
"Authority "). The approval of these plans and the creation of the subject
redevelopment project and tax increment financing district will be considered by
the City Council of the City of Oak Park Heights at a public hearing to be held at
approximately p.m. on May 22, 1989 at City Hall, 14168 - 57th Avenue North,
Oak Park Heights, Minnesota.
The Minnesota Tax Increment Financing Act, Minnesota Statutes, Sections 469.174
to 469.179, requires under Section 469.175, subd. 2, that 30 dAys prior to the
holding of a public hearing on the establishment of a tax increment financing
district or the adoption of a tax increment financing plan the City must provide an
opportunity to the members of the governing bodies of the affected counties and
school districts to comment relative to the fiscal and economic implications of
such plans.
Please review these plans and provide any comments you might have to me at the
City at telephone number . You are invited to attend the public
hearing to be held by the City Council on May 22, 1989 or to direct any comments
or questions that you might have to me at the above number.
Thank you for your assistance and consideration in reviewing these proposed plans.
Sincerely.
RESOLUTION
RESOLUTION OF THE OAK PARS HEIGHTS
PLANNING COMMISSION FINDING THE HOUSING
AND REDEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF OAK PARK HEIGHTS' PROPOSED
REDEVELOPMENT PROJECT AND TAR INCREMENT
FINANCING DISTRICT WITHIN SAID
REDEVELOPMENT PROJECT TO BE CONSISTENT
WITH THE COMPREHENSIVE PLAN FOR
DEVELOPMENT OF THE CITY.
WHEREAS, there has been presented before the Oak Park Heights Planning
Commission a proposed plan for the creation by the Housing and Redevelopment
Authority in and for the City of Oak Park Heights, Minnesota (the "Authority ") a
redevelopment project pursuant to Minnesota Statutes, Sections 469.001 to 469.047
within which the Authority intends to undertake certain development activities;
and
WHEREAS, there has also been presented before the Planning Commission a
proposed tax increment financing plan pursuant to which the Authority proposes to
create a tax increment financing district within said redevelopment project area;
and
WHEREAS, the Planning Commission of the City of Oak. Park Heights has
reviewed the proposed plans relating to the redevelopment project and tax
increment financing district to determine whether said plans are consistent with
the comprehensive plan of the City.
NOW, THEREFORE, it is hereby resolved by the Oak Park Heights Planning
Commission that the plans as presented to the Planning Commission are consistent
with the Oak Park Heights comprehensive plan for development.
Dated: ' 1989.
Chairperson
Attest:
0 0
Councilmember introduced the following resolution,
the reading of which was dispensed with by unanimous consent, and moved its
adoption:
RESOLUTION NO.
RESOLUTION CALLING FOR A PUBLIC HEARING ON
THE PROPOSED CREATION BY THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF OAK PARK HEIGHTS OF A
REDEVELOPMENT PROJECT AND A TAX
INCREMENT FINANCING DISTRICT TO BE LOCATED
THEREIN.
BE IT RESOLVED, by the City Council (the "Council ") of the City of Oak
Park Heights, Minnesota (the "City ") as follows:
Section 1. Public Hearing. The Council shall meet on Monday, May 22,
1989 at approximately p.m. to hold a public hearing on the following
matters:
(a) The proposed creation by the Housing and Redevelopment Authority
in and for the City of Oak Park Heights, Minnesota (the "Authority ") of a
redevelopment project pursuant to Minnesota Statutes, Sections 469.001 to 469.047
and the approval of a project plan related thereto; and
(b) The proposed creation of a tax increment financing district within
said redevelopment project area and the approval of a tax increment financing plan
with respect thereto in accordance with Minnesota Statutes, Sections 469.174 to
469.179, as amended.
Section 2. Notice of Hearing; Filing of Plans. The City Clerk , is
authorized and directed to cause notice of the hearing, substantially in the form
attached hereto as Exhibit A, to be given as required by law, to place a copy of the
proposed plans for creation of the redevelopment project and tax increment
financing district on file in the Clerk's office at City Hall and to make such copy
available for inspection by the public.
The motion for adoption of the foregoing resolution was duly seconded by
Councilmember and upon vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted by the
Council of the City of Oak Park Heights, Minnesota on , 1989.
Mayor
Attest:
Clerk
EXHIBIT A
NOTICE OF PUBLIC HEARING
City of Oak Park Heights
County of Washington
State of Minnesota
Notice is hereby given that the City Council (the "Council ") of the City of
Oak Park Heights, County of Washington, State of Minnesota, will hold a public
hearing on Monday, May 22, 1989 at approximately p.m. at City Hall, 14168 -
57th Avenue North, Oak Park Heights, Minnesota relating to the proposed creation
by the Housing and Redevelopment Authority in and for the City of Oak Park
Heights, Minnesota (the "Authority ") of a redevelopment project pursuant to
Minnesota Statutes, Sections 469.001 to 469.047, as amended, the approval of a
redevelopment project plan related thereto, the creation of a tax increment
financing district within said redevelopment project pursuant to Minnesota
Statutes, Sections 469.174 to 469.179, 'as amended, and the approval of a tax
increment financing plan related thereto.
A copy of the redevelopment project plan and tax increment financing plan
proposed to be adopted is on file and available for public inspection at the office of
the Clerk at City Hall.
The property proposed to be included within the proposed redevelopment
project area is as follows: St. Croix Mall P.U.D., 2nd Add.
Block 2, Lot l
Block 2, Lot 2
Block 2, Lot 3
Block 2, Lot 4
Block 2, Lot 5
The property proposed to be included in the tax increment financing district
to be created within said redevelopment project area is as follows:
St. Croix Mail P.U.D., 2nd Add.
Block 2, Lot 1 Block 2, Lot 5
Block 2, Lot 2
Block 2, Lot 3
Block 2, Lot 4
Further information relating to the project and tax increment district may
be obtained from the office of the City Clerk. All interested persons may appear
at the public hearing and present their views orally or in writing.
Dated: , 1989
BY ORDER OF THE CITY COUNCIL
Clerk
A -1