HomeMy WebLinkAbout12-10-13 Worksession Packet 0
City of Oak Park Heights City Council Worksession
Date: Tuesday, December 10, 2013
Location: Oak Park Heights City Hall — Council Chambers
Time: 6:30 PM
1. Call to Order
2. Frontage Road Alignment Update
3. Discuss Information from Mayor McComber Regarding Nass Property/MNDOT
Plans for Manning Avenue
4. Council Appointments for 2014 (requested to be placed on Agenda by Mayor
McComber)
5. Adjourn
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City of Oak Park Heights
14168 Oak Park Blvd. N+Box 2007.Oak Park Heights,MN 55082+Phone(651)439-4439•Fax(651)439-0574
December 6,2013
MEMO
TO: Mayor and City Council em
FROM: Eric Johnson,City Ad inist
RE: STH 36 and Osgo Ave.—NE VRoad�.Despite several discussions with both NDOT and been able to secure additional State funding for the possible
rerouting of the frontage road.
Issue#'I:
Recall,the State was going to purchase an eastern sliver of property from CARQUEST for$200,000+1-with the City being able to purchase
the balance of the property for an additional$240,000+1-as workout verbally,through Fury Motors,with CARQUEST out of Raleigh, North
Carolina.
During this period,CARQUEST was bought out corporately by Advance Auto Parts,which concluded they were no longer interested in any
past MNDOT purchase. Both the City and MNDOT concluded that if there was a way execute the SCRCP and not to buy the sliver of
property from CARQUEST,that may induce CARQUEST to move along with proposed transaction,otherwise in the future CARQUEST will
be paid twice for the property,once by the State and then FULL PRICE for the balance of the property.At this point, MNDOT will not be
buying any lands from CARQUEST, and if the City or another party wanted to purchase the property the price would likely be over
$650,000+1-.
Issue#2:
Similarly, I had mentioned at the last meeting,the City had hoped to purchase the former gas station property for$250,000+1-as the State
of MN was going to purchase an eastern sliver for roughly the same amount making the total to$500,000 and making the property owner
whole.Unfortunately,despite the City's request to not make this decision. MNDOT independently determined that they no longer needed to
make this purchase for their SCRCP needs.Given this,the entire purchase price becomes$500,000 to the City or a re-developing party.
Issue#3:
As a result of these two items above,the source-use of monies(see below) needed to be restated. I have discussed possible increased
revenue with the County and the State, however at this time the State appears only to be able to contribute a total of$401,333(including
HPP funds);and I have not discussed the increase with the County in a deep fashion as of yet.
However even if these two entities were able to contribute additional funds as noted,the City is still being asked to fund$1.4 million dollars
(rounded)for the project—principal only- and which is difficult to provide given the economic risks and unknowns. The City would be
required to issue a bond for the costs;and which at 4%over would require the City to pay back near$2.6 million dollars which would not be
fully recovered by the TIF until approximately 2036.This means there is no new net tax base and the City is assuming road maintenance
costs forever. So at this point I would not recommend moving forward with this until such time as the State of MN provides
substantially more funding, alternative alignments are proposed that reduce acquisition costs or greater private investment is
committed to that raises TIF proceeds.
City of Oak Park Heights
5TH 36&Osgood Ave.Alignment-Possible Source and Use-Updated 12-3-13-WITHouz DEED PONDING PHONIES-WTTH HPP FUNDS
;AX OyErt-k MNDDT HPP DEED Total
Land Acqusition
Westbury Property(Parcel Q $ S5,00o $ $ 275,000 $ 330,000
Erickson PostAcqus4icn $ 208,334 $ $ 58,333 $ 500,000
Carguest Acqusitien $ 650,000 $ - S 650,000
Construction $
Road Construction(Oren to0sgood-new Alignment) $ 181,727 $. . $ $ 181,727
Ponding $ 91,900 $ 91,000
trailway construction $ 45000 $ $ $ 45,000
Env,Review,dean-up&Demolition $ 60,900 $ $ 60,000
Contigency $ 37,773 Y $ - $ - $ - $ 37,773
Permitting $ 5,000 $ $ 5,000
Engineenng/Design $ 17,OOD $ $ 68,000 $ 85,OD0
ProjectAdmin-(Engineerin &legal) $ 30,0011•' $ $ 30,000
Total $ 1,380,834 S 233,333 $ 333,333 $ 6&000 $ $ 210151500
I will discuss the attached work-sheets of the meeting,but they generally display that the revenue to pay the bond back would not be collected
for 22 years,assuming a$9 million increase in market value(new Fury Motors Building).
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