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HomeMy WebLinkAbout2001-09-25 CC Meeting Packet EnclosureOak Park Heights Request for Council Action Meeting Date: September 25, 2001 Agenda Item Title: Sigstad Carpets 1. Receive Attorney Correspondence 2. Receive Finance Director/Bond Issue Correspondence Estimated Time Required: 5 Minutes Agenda Placement: old Business Originating Department/Requestor: Community Development Requester's Signature: KrCD cvueZovi, cm6eA40 Action Re • uested: Receive Information At the City Council meeting of 8/28/01 the City Council voted to approve the Site Plan and Development Agreement for Sigstad Carpet's application to construct a new retail facility in the Central Business District. A request to extend Novak Avenue to their property limits was also included as part of their application to the City. The Finance and Legal Departments have compiled information regarding the road extension request that is included with this memo for your review. As outlined in the enclosed memos, the benefit of the road extension for Sigstad Carpets alone can not be assessed to adjacent properties. However staff does anticipate that we will receive a request to extend Novak Avenue the full length from 60 Street to 58 Street in the coming months. The developer is working with MNDOT to obtain an access permit to their site from 60 Street. Administrative Recommendation: Total Cost:: Budgeted: Budget: Approve Comments: Denial No Recommendation S:ISHAREDIForms\COUNCIL ACTION REQUEST.doc James E. Lammers Robert C. Briggs Mark J. Vierling .4- Thomas J. Weidner $ + Susan 12 Olson + David K. Snyder Timothy M. Kelley Mayor David B e audet 6400 Lookout Trail North Oak Park Heights, Minnesota 55082 Councilmember Mark Swenson 14846 Upper 55 Street North Oak Park Heights, Minnesota 55082 Councilmember Mary McComber 5728 Pedeld Avenue North Oak Park Heights, Minnesota 55082 Dear Mayor and Council: Re: Sigstad. Carpets LAW OFFICES OF Councilmember Lynae B { �' 6120 Oxboro Avenue North, Oak Park Heights, Minnesota 55082 Councilrn.ember Jack Doerr 14520 Upper 56 Street Oak Park Heights, Minnesota 55082 FAX (651) 439 -2923 Wk's Direct Dial: (651) 351-2118 September 7, 2001 Eckberg, Lammers, Briggs, Wolff & Vierling, PeLL.P. 1835 Northwestern Avenue Stillwater, Minnesota 55082 (651) 439 -2878 OE'y Paul A. Wolff (1944 Lyle J. Eckberg Of Counsel +Qualified Neutral Arbitrator ed Real Estate Specialist arri sending this letter as an update relative to this situation so that you can understand what has transpired since your last Council meeting. We have reviewed with the City Engineer and City Planner the opportunities to consider benefit to adjacent properties relative to the Sigstad Development. It appears that the parcel located across the street to the west ofthe Sigstad parcel does not have sufficient depth in order to be benefited to the level that would norrn.ally be attributed to that lot, given the cost of the extension ofthe water, sewer and street utilities in that area. The engineer's office had originally calculated benefit to a level in excess of $ 117,000 to adjacent parcels; however, after looking at the property with the planner, it does not appear that, given the existing City requirements on setback, that there is ample property within which to do a reasonable commercial development of consequence. 1 am also advised by having talked to a Mr. Nolde, who does not own the parcel, in fact, that he had been offered purchase ofthe parcel by the owner, Mr. John Haase, with Mr. Haase requesting $70,000. Mr. Nolde tuned him down, considering that the parcel does have its severe stations and, given the offer of purchase at that level would even recognize from the owner's perspective that there is not significant benefit to the parcel if he Mayor and Council September 7, 2001 Page 2 considers its present value at $70,000 and the projected benefit that we would have to assess were we to do this project would be $ 117,000. I have been in touch with the representative of Sigstad Carpets and have relayed that information to them that it does not appear that the adjacent parcel can sustain benefit from an • assessment standpoint or, at least, not to the level projected by the City Engineer in terms of the report that has been prepared. It is my understanding that Sigstad Carpets' representative is conferring with. Mr. Nolde and, potentially, V S SA relative to seeing if they would be interested in extending the road all the way back to 58 Street at this time and increase the size of the project to the point where the benefit could be reestablished more equitably relative to the balance of the properties if such a larger project were to be done. Consequently, there is nothing to do at the present time but to let the � pardes and property owners meet to see whether or not they can cooperatively determine a larger project from which benefit could be reattributed more equitably. Alternatively, the City Council may wish to consider the application of the Community Block Grant of $65,000 in 2002 to this project if the Council determines that the project has merit from that perspective and/or the possibility of using real estate tax abatement, which has now, been authorized by the Legislature. in the most recent session as an enticement tool for development, given the fact that there are costs that are going to be incurred in this project which may not directly benefit adjacent properties and may be in excess of the benefit to the property to be developed. We shall, of course, keep you updated on the matters as they transpire, This matter will not appear on the September 11, 2001 agenda but will be scheduled for Council discussion at the later September Council meeting. If any of you have any questions at any time, please feel free to contact me. MN /dcb cc: Kimberly Kamper, Acting City Administrator Yours very truly, Mark J. Vierling Memo September 6, 2001 To: Mayor and Council From: Judy Hoist, Deputy Clerk/Finance Director Re: Sigstad Carpets Utility and Street Improvements City of O. c Park Height I contacted Steve Mattsen at Juran & Moody regarding bonding for the utility and street improvements on Novak Ave. N. We do have the option of bonding although with this small of an issue if you bond for 15 years, the interest rate per year would be higher than if you bond for 10 years. When the bond payments are less than $25,000 per year, the interest rate increases. Attached is an e-mail and 2 separate bond structures from Steve Mattsen for your review. An alternative funding source would be the Capital Revolving Fund. This has a cash balance of $228,266 as of July 31, 2001 and has anticipated assessments receivable for 2001 of $47,000, which should be received in December of this year. With the current cash balance and the receivable, you would have enough funds for this project. If you use this fund for the project the Capital Revolving Fund would be depleted until assessments were received. If there is no benefit to the adjacent property owner and it can not be assessed, only half of the amount of the project would be repaid. You could also borrow money from the Street Reconstruction Fund for this project. This fund has a cash balance of $347,545 as of July 31, 2001. There are a couple drawbacks to using this fund. 1. This money is ea -marked for street reconstruction and will be needed for that purpose. If you decide on reconstruction any time soon, lending this money is not an option. 2. If there is no benefit to the adjacent property owner and it can not be assessed, only half of the loan would be repaid. Judy Hoist From: Sent: To: Subject: ATT0000I . html OPH 2001 42915 A.xls Mattson, Steve [smattsan mjsk.coml Friday, August 31, 2001 12 :48 PM 'jhoIst a cityofoakparkheights.com" FW: BOND ISSUE JUDY, I AM ENCLOSING TWO SEPERATE BOND STRUCTURES FOR YOUR REVIEW. ONE IS FOR 15 YEARS WITH 100% ASSESSMENTS TO BENEFITED PROPERTY AT APPROX. 1.00% OVER THE BOND RATE. THE ISSUE SIZE IS ESTIMATED AT $240,000 TO FINANCE $220,000 IN HARD COSTS. THE OTHER IS A ISSUE OVER 10 YEARS. PLEASE NOTE THAT THE 10 YEAR ISSUE HAS A LOWER INTEREST RATE PER YEAR AS THE MATURITY SCHEDULE HAS BLOCKS OF 25,000 PER YEAR WHICH MAKE THE ISSUE MORE MARKETABLE. THE ASSESSMENT RATE IS ALSO LOWER FOR THE AME REASONS. THE COST OF THE PAYING AGENT IS ALSO CHEAPER FOR THE 10 YEAR DEAL. CALL ME WITH ANY QUESTIONS THAT YOU OR YOUR CITY COUNCIL HAVE « «OPH 2001 429 10 A.xls »» « «OPH 2001 429 15 A.xls }» OPH 2001 429 10 A.xls [:r b i 0 N N .". 0 VO 1 0 . 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N N N N N N N 0000000000c N N N N i N N N N N c N N N cc Ln <F' rw, rr' r 1 v, r oo ri ao ❑i r r*r (+9 r- d t*, 4.9 r+, CO co ❑ rfi b4 rn co co v1 r4 rat Meeting Date: Agenda item Title: Estimated Time Required: Agenda Placement: Originating DepartmentlRequestor: Requester's Signature: Oak Park Heights Request for Council Action August 28, 2001 Sigstad Carpets:v 1. Utility and Street improvements 2. Resolution to Approve Site Plan Review and Conditional Use Permit. 3. Development Agreement 5 Minutes Old Business F1apning Cornission/StaffiConsultants Please do not hesitate to contact me with any questions you may have. Action Requested: Approval of Resolution and Development Agreement Receive Engineering Report and Direct Staff/Legal to proceed regarding street and utility improvements. The Planning Commission voted 5-0 to recommend approval of the Sigstad Carpet application at their meeting of 8/9/01 and this application was considered at the City Council meeting of 8/14/01. The City Council tabled this issue to tonight's meeting so that additional research could be conducted by staff on a number of issues. Enclosed with this cover memo please find a memo from the City Planner which addresses the questions raised at the City Council meeting as well as a Development Agreement prepared by the City Attorney and a Utility and Street improvement report prepared by the City Engineer. Also included in this packet is a letter from the City Attorney regarding Brown's Creek's jurisdictional authority for plan review in this area and a memo from the City Engineer which finds the on-site pond and drainage calculations for the project to be acceptable. 1 have spoken with Mr. Mark Doneux of Browns Creek who has advised me that Brown's Creek is not issuing any permits in this area, but may submit comments regarding the project dependent on their workload and/or level of interest or concern. 1 have also spoken with Ken Hartung regarding Middle St. Croix WMO's plan review for the project. Middle St. Croix's review would also consist of the submittal of comments or suggestions, without a permit requirement. Mr. Hartung let me know that the Middle St. Croix will not have their next meeting until 10/10/01, that this item will be placed on their agenda and that they may submit any comments they have regarding the project. The applicant has made application to both organizations. Administrative Recommendation: Approve Denial No Recommendation SASHARED\Forms\COUNCIL ACTION REQUEST.doc