05/06/1999 - City Council Special AGENDA
SPECIAL CITY COUNCIL MEETING
THURSDAY
MAY 69 1999
4:30 P.M.
CITY COUNCIL CHAMBERS
I. ROLL CALL & AGENDA ADOPTION
II. VISITORS TO BE HEARD
III. KOLLOFSKI ADDITION PROPERTY DISPOSAL
(Wispark & Imre)
5:30 IV. JOINT APC REVIEW OF THE COMPREHENSIVE
GUIDE PLAN
V. OTHER BUSINESS
VI. ADJOURNMENT
MEMO
- city of eagan
TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: APRIL 30, 1999
SUBJECT: SPECIAL CITY COUNCIL MEETING/THURSDAY,MAY 6
KOLLOFSKI ADDITION PROPERTY DISPOSAL
Enclosed is the information regarding the agenda item for Kollofski Addition property disposal. As
a reminder, the supporting information for the Comprehensive Guide Plan agenda item was
distributed on Thursday,April 29.
/S/ Thomas L. Hedges
City Administrator
Ashm
MEMO
city of eagan
TO: MAYOR& CITY COUNCILMEMBERS
FROM: TOM HEDGES,CITY ADMINISTRATOR
DATE: APRIL 29, 1999
SUBJECT: MAY 6, 1999 SPECIAL CITY COUNCIL MEETING
KOLLOFSKI ADDITION PROPERTY DISPOSAL
History
The Highway 55 Redevelopment Tax Increment Financing (TIF) District was created in 1996 to
foster private sector redevelopment in and around the Hwy. 55/Hwy. 149 intersection. A map of
the district is attached. As with any redevelopment TIF district, the primary goal is to remove
inconsistent land uses or blighted structures within the district boundaries. Both the Airliner and
Spruce Hotels were considered blighted buildings that had not been functioning for several years.
Residential properties within the Kollofski Addition, while zoned R-1 Single Family were
guided Business Park and therefore, the residential use was not consistent with the City's long-
range plan for the area. With assistance provided by the Dakota County HRA, the City
negotiated the sale of each of the Kollofski Addition parcels that contained single family homes.
The City used TIF income to cover the costs of demolition of the motels and homes in this area.
Demolition was completed in fall 1998.
During the past year the City has been approached by both Wispark and the Imre's regarding the
the Kollofski Addition properties the City owns. Both have acquired other property in the area
and have expresed interest in acquiring some, or all, of the City's properties. The individual
parcels owned by Wispark, Imre's, and the City are too small to redevelop without being
combined with other adjacent parcels. As such, the City has encouraged Wispark and the Imre's
to work together on a coordinated redevelopment plan that would require consolidation and re-
platting of the existing parcels in a manner that would accommodate redevelopment.
The Imre's have been in this area of town for a number of years and operate TMI Coatings and
some outdoor storage activities at the intersection of Highways 55 and 149. They purchased the
undeveloped parcels within the Kollofski Addition over the years and more recently acquired the
Schindeldecker property located at the south end of the pond. Wispark currently owns about 80
acres in this area surrounding the pond and has several office and office/showroom buildings
planned or under construction within the Grand Oak subdivision. A map of the current property
ownership adjacent to the City's parcels is attached.
By early 1999 Wispark and the Imre's had not been able to work out a joint-redevelopment plan.
To keep things moving forward,the City suggested that the two parties prepare separate plans for
redevelopment of their properties and any other properties in the area they hope to acquire.
These plans were presented to the Planning Commission over their last three meetings. The
minutes of those meetings are attached and provide a chronology of the process the Planning
Commission's used in making their final recommendation on disposition of the City's properties.
Disposition of City Property
The City purchased the Kollofski Addition properties with the intent to sell them for
redevelopment. To insure a successful redevelopment, the sale of the City-owned property
should be considered against the most logical and viable redevelopment plan proposed for this
area rather than simply the highest bidder. For a variety of reasons, staff has not had the City's
property appraised yet. However, that could occur fairly quickly once the City decides how it
wants to proceed.
As early as the February 11, 1999 Advisory Planning Commission workshop, both Wisark and
Imre's presented proposed development plans incorporating not only City held property, but
property both companies were in control of. The Planning Commission requested that both
parties return to the March 11, 1999 workshop with a joint redevelopment proposal. The Imre's
were not able to make that meeting, however Wispark presented information regarding their
attempts to work with Imre's to achieve a joint-redevelopment plan. The Planning Commission
then requested that the item be scheduled for further discussion at its April 15, 1999 workshop
allowing the Imre's an opportunity to respond to Wispark's proposals and present any further
information regarding their redevelopment plans.
At the April 15 Planning Commission workshop, both parties reiterated their development
scenarios and time lines. As reflected in the minutes, the Planning Commission's primary
concern was achieving a redevelopment scheme for the area that provided the most benefit to the
City. The Planning Commission also acknowledged that regardless of who acquires the City
property, it was probable that land acquisition through negotiation or condemnation would be
necessary as a matter of course due to the fragmented ownership pattern in the area.
Summary
The Advisory Planning Commission reviewed the Kollofski Addition property disposal at three
separate workshop meetings to assure suitable redevelopment in a reasonable amount of time.
Minutes of the February, March, and April 1999 Advisory Planning Commission workshops are
enclosed on pages _ through . Minutes from the March 24, 1998 City Council meeting
are enclosed on pages through Correspondence from the Imre's and Wispark is
enclosed on pages_through_.
City Administrator
Tom Hedges
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MINUTES OF THE ADVISORY PLANNING COMMISSION WORKSHOP
Eagan, Minnesota
February 11, 1999
A workshop of the Advisory Planning Commission was held on Thursday, February 11, 1999 at 5:00
p.m. Members present were Chair Carla Heyl, Jerry Segal, Gary Huusko, Greg Steininger, Gale
Anderson, Meg Tilly, and Ron Miller(Alternate). Also present were Senior Planner Mike Ridley,
Planner Julie Farnham and Planner Bob Kirmis. Larry Frank was absent.
APPROVAL OF MINUTES
The minutes of the January 26, 1999 Advisory Planning Commission workshop were approved as
presented.
VISITORS TO BE HEARD
None were present.
DRIVE-THROUGH COFFEE SHOP ORDINANCE AMENDMENT
Planner Kirmis gave a brief overview of a draft zoning ordinance amendment that would establish
drive-through coffee shops as conditional uses within the City's commercial and industrial zoning
districts. Planner Kirmis further advised the commission that contact had been made with the
Minnesota Department of Health which has indicated that it will require drive-through facilities to
have public sewer and water service. Planner Kirmis questioned the commission as to whether such
state requirement should prompt a change to the draft amendment text. The APC determined that
such state requirement should not result in a text change and did not recommend any changes to the
draft amendment.
IMRE/WISPARK MASTERPLAN PRESENTATION
Wayne Bishop gave a brief presentation of a business park development concept for the properties
under the ownership of the Imre's (TMI Coatings, Inc.) located north of Highway 55 and west of
Highway 149. The development concept included property presently owned by the City (former
Kollfski Addition properties)that the Imre's wish to acquire. Mr. Bishop indicated that the
acquisition of the City property is integral to their development plans and that a division of the
property would present significant development obstacles, particularly in regard to land access. Mary
Imre stated that they felt redevelopment could occur over the next 5 years as a phased development.
Redevelopment of the existing TMI Coatings buildings will depend on the market, but expect it
would occur in the next 5-10 years. She also stated that they have recently acquired the
Schindeldecker property.
On behalf of Wispark, Greg Miller presented a business park development concept for properties
under their ownership in the same general area. Mr. Miller stressed his opinion that Wispark's full
acquisition of the City owned property is necessary in order to achieve a unified business park
design. Mr. Miller stated that Wispark is interested in actively pursuing complete redevelopment of
the entire area in the next few years. He indicated that Wispark's primary concern is to create a
cohesive and attractive business park campus. They would like to place covenants on the entire
triangle area to ensure compatible quality of development. They would also like to establish
timelines for redevelopment. He pledged to redevelop the City's property within 2 years or give it
back.
Both the Imre's and Wispark agreed that past efforts to reach a cooperative joint development plan
for the area have been unsuccessful. Chair Heyl indicated that she believed it is in the City's best
interest for the two parties to work together to achieve a cohesive redevelopment plan for the area
rather than split the properties between them. At the suggestion of the APC,both parties agreed to
resume discussions regarding a cooperative joint development concept for the area. It was suggested
that they also include Howard Stacker, owner of the vacant property at the intersection of TH 55 and
149, in the discussion.
It was agreed that both parties would work together to create a joint development plan and present it
to the APC at their March 11, 1999 workshop.
OTHER BUSINESS
Senior Planner Ridley advised Commission Members that SRF Consulting Group has been selected
by the City Council to prepare the Cedarvale Area Redevelopment Study. Senior Planner Ridley
further indicated that SRF will make an introductory presentation of the project to the APC on
February 23`d at 6:00 p.m. (prior to the APC's regularly scheduled meeting).
The APC determined that the next APC workshop meeting is to be held on March 11 at 5:30 p.m.
ADJOURNMENT
The workshop adjourned at 6:55 p.m.
MINUTES OF THE ADVISORY PLANNING COMMISSION WORKSHOP
Eagan,Minnesota
March 11, 1999
A workshop of the Advisory Planning Commission was held on Thursday March 11,
1999 at 5:30 p.m. Members present were Chair Carla Heyl, Gary Huusko,Greg
Steininger, Gale Anderson, Meg Tilly, Larry Frank, and Ron Miller(alternate). Also
present were Senior Planner Mike Ridley and Planner Julie Farnham. Jerry Segal was
absent.
APPROVAL OF MINUTES
The minutes of the February 11, 1999 Advisory Planning Commission workshop were
approved as presented.
VISITORS TO BE HEARD
None were present.
COMPREHENSIVE GUIDE PLAN UPDATE
Planner Farnham gave an overview of the Comprehensive Plan update process. She
summarized the work completed to date and outlined the remaining tasks and anticipated
timeline for plan completion. She noted that the official public hearing will probably
occur in July or August with final plan adoption in late fall.
IMRE/WISPARK HWY 55/149 DISCUSSION
Planner Farnham handed out a letter from the Imre's stating that they would not be able
to make the meeting as they wanted more time to review the potential to utilize TIF
benefits. She noted that Greg Miller of Wispark wanted to come anyway to keep the
commission abreast of what has transpired to date.
Greg Miller, Regional Director of Wispark Corporation distributed copies of his
correspondence with the Imre's regarding redevelopment of the area and suggestions for
collaboration. He gave an overview of Wispark's on-going development in the area and
their long range plans to complete their business park. He stated that Wispark would like
to work with the Imre's but has concerns about the timing of their plans. He noted that
Wispark is ready to move forward. He expressed concern that the back and forth
discussions could continue for a long time. At some point the Planning Commission and
City Council will have to make a decision on what to do with the City property. He also
noted that because of the ownership pattern,the City may need to consider condemning
some property, either Imre's or Wispark's, in order to allow assembly of parcels large
enough to redevelop.
Carla Heyl expressed disappointment that the Imre's have not responded in a more timely
manner. She would like to keep this moving forward and would like to impose a
deadline for the two parties to state their intentions. She would prefer to see them work
together,but if that is not possible the City needs to look at what's in its best interest and
move forward. It is the City's responsibility to determine which proposal serves the City
better.
Gale Anderson asked questions regarding traffic impacts in the area. Greg Miller
responded that all the developers in the area are required to contribute to an escrow
account earmarked to cover the costs of transportation system improvements in the area.
This was the outcome of the AUAR(Alternative Urban Areawide Review) study. Mike
Ridley noted the AUAR is a type of environmental review that was completed last fall for
this area.
Larry Frank stated that he was not at the last meeting and therefore missed the Imre's
presentation. He expressed concern about them being unfamiliar with the development
process because,to his knowledge, they are not developers. Ms. Heyl interjected that
that is why it would be beneficial for the two parties to work together because although
both parties own land, Wispark has a lot of development experience.
Gary Huusko expressed concern that the Imre's waited so long to seek out information on
the TIF given we set this meeting date at the February workshop.
Ron Miller raised questions about the condemnation process. Ms. Heyl noted that the
properties are appraised to determine fair market value. The City is obligated to pay fair
market value. The City would essentially purchase the property then sell it to a developer
for redevelopment. It was noted that the original owner can dispute the value so the
process can become confrontational.
Greg Steininger stated he feels we should continue this to the next meeting to give the
Imre's another chance to respond to Wispark and state their redevelopment intentions.
Mr. Frank made a motion, seconded by Mr. Anderson,to delay a recommendation on the
sale of the City owned property in this area until the April workshop meeting.
Commissioners stated that it is intended that a recommendation on the disposition of the
City owned property will be made at that meeting so the issue can be forwarded to the
City Council. Motion passed unanimously.
It was noted that the next APC workshop meeting will be on Thursday April 15, 1999 at
5:00 p.m.
APC POLICIES & PROCEDURES
Commission members discussed the Open Meeting Law in relation to invitations for site
visits. Discussion also occurred regarding proper protocol for addressing questions to the
developer and/or staff. It was determined that members should be recognized by the
Chair in order to speak and that all questions and responses should be directed through
the Chair.
VISITORS TO BE HEARD
None were present.
ADJOURN
The workshop adjourned at 7:15 p.m.
MINUTES OF THE ADVISORY PLANNING COMMISSION WORKSHOP
Eagan Minnesota
April 15, 1999
A workshop of the Advisory Planning Commission was held on Thursday April 15, 1999
at 5:30 p.m. Members present were Chair Carla Heyl, Greg Steininger, Gale Anderson,
Meg Tilly, Larry Frank, Jerry Segal, and Ron Miller(alternate). Also present were
Senior Planner Mike Ridley, Planner Julie Farnham, Kim Imre, Mary Imre, Walter
Rockenstein(attorney for Imre's), Greg Miller(Wispark)and Mark Schottler(Wispark).
Gary Huusko was absent.
APPROVAL OF MINUTES
The minutes of the March 11, 1999 Advisory Planning Commission workshop were
approved with the following change: the date of the minutes was changed from February
11, 1999 to March 11, 1999. It was also noted that the minutes state the April meeting
was to be at 5:00 p.m. whereas the agenda said 5:30 p.m. Gale Anderson stated that he
did not receive the agenda.
VISITORS TO BE HEARD
None were present.
COMPREHENSIVE GUIDE PLAN UPDATE
Planner Farnham stated that there will be a joint meeting of the full APC and City
Council on Thursday May 6, 1999 from 5:30—8:00 p.m. The purpose of the meeting is
to review the rough draft of the entire Comprehensive Guide Plan and to determine
whether it is generally suitable to distribute to surrounding municipalities and school
districts to begin their required review which can take up to 60-days. She noted that
further refinement will still be possible and suggested that the APC and Council may
want to have another workshop to discuss specific issues, if needed, during the period
other communities are reviewing the draft. She also noted that this meeting is not
intended to take testimony from the public or property owners. There will be several
other opportunities for them to comment on the plan. We will host another community
open house on the entire plan; the open houses held last winter focused on the land use
plan only. The APC is also required to hold an official public hearing; that will probably
occur in August. Finally,the plan will be before the City Council for final adoption,
probably in November. So the public will have several opportunities to comment on the
plan in the future. It was noted that the May 6h meeting will replace the May APC
workshop meeting.
1
IMRE/WISPARK HWY 55/149 DISCUSSION
Chair Heyl welcomed the Imre's and Wispark and suggested that since the Imre's were
not at the March workshop, that they present their plans first. Walter Rockenstein,
attorney for the Imre's stated that the Imre's are interested in developing their property
and expect that will occur in phases. They are interested in identifying a reasonable
dividing line through the area that would give each of the parties buildable properties
with adequate access. Further,the Imre's are willing to enter into an agreement with the
City to develop their property within an agreed upon time frame (they anticipate 3-4
years) or the City could purchase all of the Imre's land,to the south tip of the pond, at
appraised value.
Ms. Tilly asked if the City could require Imre's to develop in a manner aesthetically
compatible with Wispark. Ms. Farnham stated that they would need to rezone to
Business Park to redevelop and that there are some design standards already in the code.
In addition, it seems the City would also be able to put something in an agreement to
ensure compatibility.
Ms. Heyl asked if the City would have to buy back the land it previously owned at an
increased value 3-4 years later?
Mr. Segal asked if Imre's had thought about selling to someone other than the City such
as Wispark, using the same method to figure selling price (appraised value). He does not
feel the City should get into the real estate development business. Mr. (Ron) Miller
concurred, noting that it would be preferable if any future land sales occurred between
private parties. Mr. Rockenstein responded that he would be nervous about entering into
an agreement with a party who could potentially oppose Imre's development proposals.
Ms. Heyl noted that the fragmented ownership in the area is the major problem and stated
that the question for the City is how can we get the appropriate ownership to ensure the
area will develop in the best interest of the City. Mr. Segal stated that he is disappointed
that so far the Imre's and Wispark have not been able to work out a coordinated
development plan.
Ms. Tilly asked if the City could open the sale of the Imre's property to a competitive bid
process if it doesn't develop in 3-4 years.
Ms. Heyl expressed concern that the Imre's haven't provided any more detailed plans
than presented 3 months ago. She feels Wispark has presented a definite plan. Kim Imre
responded that they do have a development plan prepared by Wayne Bishop that shows a
specific layout. Mr. Rockenstein presented an overview of the Bishop plan which
assumes Imre's would control the land south of Lawrence Ave. He noted, details need to
be worked out, in particular providing access off the new road (Blue Waters).
Ms. Heyl asked about the status of Wispark's current development. Mr. (Greg)Miller
gave an overview of the buildings currently under construction. Ms. Heyl asked if Imre's
2
are amenable to developing in a manner compatible with what Wispark has currently
developed and formalizing that commitment in an agreement. Mr. Rockenstein
responded that it is in their interest to develop in a compatible manner. Ms. Imre stated
that they would be amenable to having that in an agreement.
Mr. Frank asked about plans to screen the outdoor storage from new development, noting
that it seems out of place in this area. He suggested that it would be preferable if the
outdoor storage could be relocated to an industrial area. Mary Imre responded that they
have looked into fencing and landscape screening. Mr. Rockenstein stated that the
outdoor storage is integral to the Imre's business and it is not practical to have the
business offices and outdoor storage on separate sites. Mr. Frank asked what happens to
the outdoor storage when they build the other buildings shown on the Bishop master plan.
Mr. Rockenstein responded that at that time,the entire TMI business would be relocated.
Mr. Rockenstein stated that he assumed the City would be interested in taking control of
the property. Ms. Heyl stated that it would make sense for the City if it takes control of
the whole area rather than just the properties they now own.
Mr. Steininger stated that he understood that the Imre's want to develop their property,
but what does the City benefit from waiting 3-4 years to assume control of the property?
Mr. Rockenstein responded that first there is the issue of fairness to allow the Imre's a
chance to develop their property and second for practical reasons, if the private parties
cannot strike a deal on a property swap the City will have to use condemnation.
Mr. (Ron) Miller asked if the Imre's would commit to having the agreement apply to any
successors. Mr. Rockenstein responded they would. Kim Imre stated that the time would
allow them to consider other developers as well as Wispark.
Mr. Segal stated that he views the area an a whole and feels that if Imre's don't develop it
makes sense to give Wispark the opportunity to develop there since they are developing
much of the rest of the area and the City knows what it's getting.
Chair Heyl suggested that Wispark be given an opportunity to respond to the Imre's
current proposal and recap their plans.
Greg Miller reviewed the Wispark proposal noting that they believe a natural break exists
at the south end of the pond. He stated concerns that the Bishop plan is too conceptual
and has not been engineered to determine accurately if the plan will work. He noted that
Wispark's plans have been engineered. He stated that Wispark has made a substantial
investment in the area. He believes these properties would best be developed with one
building, which Wispark is proposing will be 100%office, not office-warehouse. He
noted that they would commit to complete the project in 3 years. They do not want to
sell land back to City. He also noted that the City may have to use condemnation
regardless of who it sells its land to. He stated that he was interested in talking with
Imre's about screening the outdoor storage,noting that it has made it difficult to lease
portions of Wispark's new office building.
3
Ms. Farnham asked for clarification regarding the possibility of a land swap and
developing a limited partnership. Mr. (Greg)Miller responded that they are not
interested in a land swap at this time. He feels the area would best be developed under
single ownership. He stated that he made an offer to the Imre's to finance development
on their property. Wispark would receive 50%of the profit,but Wispark would also be
paying for all the improvements. He noted that they had discussed a limited partnership,
but that does not offer the amount of control the Imre's want. Mr. Rockenstein stated that
he has not reviewed the proposal or discussed it with the Imre's yet, so he cannot say if it
is a fair offer.
Ms. Heyl stated that she would like Wispark to commit to develop under a PD to ensure a
certain quality development and also to shorten the development time frame to less than 3
years. She indicated she would like to see the Imre's and Wispark work out a limited
partnership arrangement. However, at this point she feels Wispark's proposal offers the
most benefit to the City,noting that they are ready to develop. She also noted that
condemnation involves appraised values too. If an agreement on land ownership can't be
worked out with the two parties, condemnation would be in the City's best interest in
order to get one owner. She feels comfortable that Wispark can complete development in
2 years versus Imre's proposal of 3-4 years and then potentially sell it back to the City if
it hasn't developed. She summarized what she thinks are the options before the APC:
1) Imre proposal - split City property between Wispark and Imre; or 2) Wispark
proposal—sell all City land to Wispark and they agree to develop within 2 years.
Mr. (Ron)Miller asked if option 1 would require Imre's to develop in 2 years. Ms. Heyl
stated that would be the intent. Mr. Frank stated that he feels the 2 year time frame
should be in any agreement. Ms. Farnham asked for clarification that the 2 years
commence after land consolidation is complete, noting that if condemnation is necessary,
that could take some time.
Mr. Frank stated that he favors option 2. Mr. Steininger agreed. He suggested that
Imre's need to develop an engineered plan to demonstrate that option 1 will really work.
Mr. Segal stated that he doesn't like plans that include a lot of contingencies and
uncertainties. He feels Wispark's proposal provides the most certainty. He would like to
see the two parties work together to achieve a land sale or limited partnership, he doesn't
think anyone gains from condemnation. He also stated that he likes the 100% office use
proposed by Wispark rather than office-warehouse. Ms. Tilly concurred, adding that she
feels the 2 year time frame is important.
Mr. Segal made a motion, seconded by Mr. Frank to recommend that the City Council
1. Approve the Wispark development proposal (general layout and use)
2. Sell the City owned parcels to Wispark
3. Agree to assist in land assembly through negotiation or, if necessary,
condemnation
4
4. Enter into a development agreement with Wispark to complete development
within 2 years after the land is assembled.
It was noted that there are lots of details that will need to be worked out with regard to
the development agreement. It was also agreed that the APC feels it would be in the best
interest of the City if Wispark and the Imre's could work together in this regard.
Motion passed 6-1 (Miller voted no).
Mr. (Ron)Miller explained that he was concerned that including all the property to the
south end of the pond puts the Imre's in a vulnerable position with regard to negotiating
sale of their property. He hopes that Wispark will offer them a fair price.
VISITORS TO BE HEARD
None were present.
ADJOURN
The meeting adjourned at 7:45 p.m.
5
Page 2/Special City Council Minutes
March 24, 1998
Mayor Egan summarized the discussion stating that the staff should work with the
MVTA in an effort to further develop the Yankee Doodle/Pilot Knob Road park and ride site with
the retail concept that is not in competition with existing retail in the area,but provides satellite
locations for existing retail to serve the transit rider. And,further,that a planning effort should be
coordinated with the MVTA to consider a site for a transit hub.
T.H.55 TIF REDEVELOPMENT AREA
City Administrator Hedges stated that staff has held several meetings to discuss a
comprehensive development plan for a land area generally surrounded by T.H. 149,T.H.. 55 and
Blue Gentian Road. He stated that City staff had been coordinating meetings with land owners to
discuss potential development concepts as well as a master transportation plan. The City
Administrator introduced Kim Imre,representative of T.M.I. Coatings,who was in the audience
and has expressed an interest in developing a portion of the site under discussion. Anne Kor,
owner of the Airliner Motel property,was also in the audience.
Assistant to the City Administrator Hohenstein provided a summary of various actions
that have taken place in the Highway 55 redevelopment area stating that the City has possession
of all five homes on Lawrence Avenue and Linde Lane. Both Wispark and the Imre family have
also acquired a number of properties and, in addition to other property owners in the area,staff
and MnDOT have been working on a traffic circulation pattern for the entire area. He further
stated that staff is requesting general direction with respect to several points:
1.) Should staff continue to encourage cooperation among the remaining property _
owners to bring about a comprehensive redevelopment and incorporate the City
properties at this time?
2.) Should the City solicit proposals from existing property owners,partnerships of
property owners or outside developers for the redevelopment of the City owned property?
3.) Is the City in a better position to solicit proposals at the present time with several
property owners or in the future, if additional consolidation of ownership occurs?
4.) Under which circumstances would the City underwrite any additional redevelopment
costs besides the acquisition of Lawrence and Linde homes?
5.) Under what circumstances would the City be willing to facilitate redevelopment of
the homes on Blue Gentian Road?
City Councilmember Awada asked specific questions about the City of Eagan's role in an
RFP process. Mayor Egan asked how many parcels are still remaining in the redevelopment
area? Assistant to the City Administrator Hohenstein reviewed a drawing of the TIF district
showing the various properties and also explained the survey that was mailed out to each of the
residential property owners on Blue Gentian Road.
Page 3/Special City Council Minutes
March 24, 1998
Senior Planner Ridley spoke on the transportation issues stating that access to Trunk
Highway 55 has become an issue. City Councilmember Awada further questioned why the City
has a role in plans for the redevelopment of the area. Assistant to the City Administrator
Hohenstein replied stating that staff is facilitating the Council's vision of bringing about a
comprehensive redevelopment plan for the area to replace the hodge-podge development scheme
that had taken place.
City Administrator Hedges stated that an important reason for the City facilitating
development opportunities for the Highway 55 redevelopment area is to assure a comprehensive
street and utility plan for the area which provides for better long range planning and better
development opportunities. Mayor Egan asked how the streets would be financed. Assistant to
the City Administrator Hohenstein stated that the streets would be financed by the adjacent
property owners.
City Councilmember Masin stated that the MVTA should also be involved in the
planning efforts since transportation is becoming important to business and the community. City
Councilmember Blomquist asked who are the developers and,specifically,how many developers
are interested in the Highway 55 redevelopment area? Assistant to the City Administrator
Hohenstein stated that,at the present time,the two parties expressing the most interest are the
Imres and Wispark. City Councilmember Blomquist stated that it might be advantageous for the
City to work with those developers to create two(2)parcels.
Assistant to the City Administrator Hohenstein stated that the City is asked on a
continuing basis by prospective developers about how the City's property in the area can be
acquired. City Councilmembers discussed how the City's property should be disposed and there
was a consensus that a master plan be developed,including the City property. Following a .
review of the entire Highway 55 redevelopment area,a sale would be considered at a later date.
City Councilmember Wachter commented on the single family residences along Blue Gentian
Road stating that it will be a matter of time and those properties will be included in a commercial
development. Mayor Egan asked how the homes,which were acquired by the City through Tax
Increment Financing,will be sold or moved. Assistant to the City Administrator Hohenstein
stated that there are five(5)homes and according to recent inspections,two are able to be moved,
one is on a slab and has no value to be moved and the two additional homes could be sold for
salvage, stating that they were built in sections and it is not feasible to move the homes.
Mayor Egan stated that once a master plan is completed for the Highway 55
redevelopment area,the City Council will give fiuther consideration on how the City properties
should be sold. It was also noted that the City Council will review roadway concepts and traffic
analysis of the Highway 55 redevelopment area at a special workshop meeting on April 21.
SCHEDULE PUBLIC INFORMATIONAL MEETING/WE4TER TRAIL
MAINTENANCE
City Administrator Hedges stated that at the request of the City Council,this workshop
item has been scheduled to address the continued requests being received by the City regarding
expanding the current winter trail maintenance program. He stated that the discussion should
focus on the process of presenting program proposals to the public and providing direction to
city of czagan
THOMAS EGAN
Mayor
July 9, 1998 PATRICIA AWADA
BEA BLOMQUIST
SANDRA A.MASIN
THEODORE WACHTER
Council Members
Kim Imre THOMAS HEDGES
TMI Coatings City Administrator
2805 Dodd Road E.J. VAN OVERBEKE
Eagan, MN 55121 city clerk
Dear Kim:
At its meeting on July 7, 1998,the Eagan City Council approved a contract with the
Dakota County HRA to prepare bid specifications for removal of the homes in the
Kollofski Addition. According to the contract, the HRA anticipates all the homes will be
removed or demolished by October 6, 1998. Once the homes are removed, the City will
begin proceedings to dispose of its properties in this area.
As Jon Hohenstein and I discussed with you and Greg Miller at a meeting in May, the
City Council is interested in seeing the area develop in a coordinated manner. As such,
they have indicated that they would like to see a master plan for how the properties could
be developed before considering sale of the properties. Such a master plan will need to
be reviewed by the Advisory Planning Commission and the City Council. Ideally,review
of a master plan should occur in a time frame consistent with the home removals so that
consideration of property sales could follow shortly thereafter.
As discussed at our May meeting, you and the Greg indicated a willingness to work
together to develop a master plan for redevelopment of the Kollofski Addition and motel
properties. I would appreciate it if you could keep me informed as to the progress on a
master plan. I would be happy to review any ideas you have and to work with you to
schedule a review time with the APC and City Council. You can reach me at 681-4698.
Sincerely,
J e Farnham
Planner
cc: Greg Miller
Tom Hedges
Mike Ridley
MUNICIPAL CENTER THE LONE OAK TREE MAINTENANCE FACILITY
3830 PILOT KNCB:COAD THE SYMBOL OF STRENGTH AND GROWTH IN OUR COMMUNITY 3501 COACHMAN POINT
EAGAN.MINNESOTA 55122-1897 EAGAN.MINNESOTA SS 22
(612)6A 1 aboc PHONE.(b l 2)e81-4300.
PHONE81
FAX 12)12) t 2 Equal Opportunity Employer FAX (612)681-43c0
tDG (6;2)454 8`..5 TDG (612)454-9535
WISPARK MAR I .
CORPORATION ✓ 612?313-2700
333 South 7th Street,Suite 140,Minneapolis,MN 55402LLL---..���.�� 612)313-2701
February 26, 1999
Ms. Mary Imre
TMI Coatings
Triangle Office Park
2805 Dodd Road
St.Paul,MN 55121
Dear Mary:
It was good to meet with you,Tracy, Guido, and Kim on Monday to discuss the development of
the contiguous land parcels we own in Eagan.
As we discussed, we are very interested in working out an agreement with you that will
accomplish our mutual objective of creating a quality business park on our properties.
Towards that end, we discussed a number of concepts which would achieve our objective while
also accomplishing your family's goal of maintaining 100% ownership of the properties you
currently own and plan to develop.
The following summarizes the concepts we discussed:
1. WISPARK will explore the terms and conditions of the Tax Increment Financing District,
which your properties are located within, to see what would be available to your family in
conjunction with a relocation of your warehouse and outside storage function to a new
location within 5 miles of your existing facility.
2. Assuming favorable TIF financing is available, as well as success in finding a new location
for you, we have assumed you would be willing to redevelop those portions of your property
in a timely manner. At such time that you would commit to this redevelopment, WISPARK
would consider some or all of the following:
a) WISPARK would trade its parcel, shown as Outlot C on the attached plan, for your
parcel 1 also shown on the attached plan. The terms of the trade would be based on a
mutually acceptable appraiser assigning values to each of our parcels with the owner of
the lower valued parcel supplementing the trade with cash for the difference. This trade
would be done in conjunction with WISPARK's acquisition of parcels 2, 3 &4 from the
city while you would acquire the parcels labeled 5 & 6. The vacated Lawrence Avenue
would be split equally between us. You would receive 100% of the vacated Linde
Avenue.
b) Our agreement to trade would be based on your agreement to prepare a preliminary plat
for your land parcels, which incorporates them into the overall master plan for the
business park.
c) WISPARK would also consider financing the construction of a mutually acceptable I
building on the land you own to the west of the tip of the pond. The financing would be
in the form of a participating mortgage which would contain the following preliminary
terms and conditions:
1
r
Borrower: Triangle Development, or a to-be-formed entity having your
family members as its members or shareholders.
Loan Amount: 100%of the actual costs(exclusive of the cost of the land).
Indemnification: The Borrower and its principals would indemnify WISPARK
over all environmental matters, fraud, and any diversions of
rents, insurance proceeds or other revenues assigned to
WISPARK. {
Collateral: The loan would be secured by a first mortgage and assignment of
rents on the building and land to be developed.
Purpose: The proceeds of the loan would be used to construct the project
as described in the collateral section above.
Construction
Loan Term: A 9-month"Construction Loan." During the Construction Loan,
the loan would be interest only.
Permanent
Loan Term: Following the Construction Loan, the loan would provide for an
84-month "Permanent Loan." At the commencement of the
Permanent Loan, the loan would be amortized over 25 years and
would balloon at the end of 84 months.
Rate: Contractual Interest would be payable monthly calculated at an
interest rate of 9.0%.
Participation: The Loan would also provide for Contingent Interest payable as
follows:
(1) Cash flow Contingent Interest would be payable annually in
the amount of the 50% of the actual "Cash Flow"* from the
property less any Contractual Debt Service required to be
paid to WISPARK during that calendar year; and
* Cash Flow shall be after an appropriate management fee and
replacement reserve.
(2) Residual Value Contingent Interest would be payable on the
earlier of(a) of the arms length sale of the property to bona
fide third parry purchase, (b) the maturity date of the Loan;
or(c) the permitted prepayment of the Loan (as provided for
in the Prepayment Section of this proposal). In the event of
a sale of the property, the Residual Value Contingent Interest
would be equal to 50%of the Net sales proceeds received by
-2-
the Borrower after repayment of the WISPARK Loan. In the
event that the Loan matures prior to a sale,Residual Value
Contingent Interest would be equal to 50% of the value of
the property(as determined by appraisal) over the balance of
WISPARK's Loan.
Fees: WISPARK would receive a loan fee to be negotiated.
Sources and Uses
of Funds(see note):
Uses•
Hard Costs(incl.gen conditions&GC fees) $
Hard Cost Contingency
Tenant Fit-up
TI Architectural/Eng.Fees
Landscaping Overage
Furniture/Fixtures/Equipment
Impact Fees
Sewer/Water/Other Fees
Architectural Fees
Engineering Fees
Legal/Accounting
Title/Survey
Taxes During Construction
Loan Fees/Costs
Capitalized Interest
Brokerage Commissions
Marketing
Operating Deficit
Soft Cost Contingency
Total Uses: $
Sources-
WISPARK Loan $
Total Sources:
Note: The cost of the land being used for the building would be the
Borrower's equity contribution for the development.
Prepayment: The Loan would be prepayable in whole at any time during the
term upon the Borrower paying WISPARK a prepayment
penalty equal to the greater of(a) an amount which when added
to the total amount of interest paid to WISPARK would provide
WISPARK with a minimum 12% annual return on its invested
capital or(b) 50%of the value of the property (as determined by
appraisal)over the balance of the WISPARK Loan.
-3-
Other: The Borrower would be responsible for payment of all costs
incurred by WISPARK in conjunction with the loan including,
but not limited to the following:
• Phase I Environmental Report (and Phase II or III of
necessary).
• Architectural review of plans and specifications as well as
monthly inspections during construction term.
• Legal Fees
I believe that the above reflects the essence of our discussions.
One additional concept, which we did not discuss, is that rather than WISPARK financing your
project, you could retain us on a fee basis to work with your architect to design and construct a
building for you. We would assist you as follows:
1. Assist in site planning/engineering;
2. Assist architect in building design;
3. Assist in obtaining all city approvals;
4. Prepare project cost budgets;
5. Prepare income/expense proformas;
6. Obtain financing for the project;
7. Bid&negotiate the construction contracts;
8. Monitor the construction activity;and
9. Oversee your leasing agent for the project.
By retaining us on a fee basis,you could utilize our expertise yet retain 100% of the development
for your own account. It would also allow us to coordinate the development of your project with
the overall park improvements. Once your building is completed our role is finished and you
could manage and lease the building yourself.
As always, I will be glad to meet with you to discuss these matters further, however,your written
response to our proposal would be helpful to frame any of our future discussions.
Please do not hesitate to contact me if you have any questions or need and additional information
concerning this matter.
Sincerely,
PARK ORPORATION
re ry iller, CCIM,CPM
VP/Regional Director
/kjr
cc: John Heller
Julie Famham
Mike Ridley
Carla Heyl
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TRIANGLE OFFICE PARK
MR19- DEVELOPMENT
2.805 Oodd Road•Eagan,Minnesota 55121 •Telephone(651)452-5100•Fax(651)452-0596
RECEIVED
(c
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LIAR ; 1 1999
„ U 6 KEENAN
BY:
OA 1 � IP :�raxi ie1. 176
M: / i/ .o
FROM: , .11fi1n
March 9, 1999
(CONTACT L'C;F P!!.FACS
Wispark Corporation
Attn: Greg Miller, VP/Regional Director
333 South 7th Street, Suite 140
Minneapolis, MN 55402
(612) 313-2700
(612) 313-2701 (fax)
Dear Greg:
I am in receipt of your letter dated February 26, 1999. As we
discussed, I am interested in redeveloping the property that we own in
Eagan. However, there are several issues which must be resolved before
this can happen. They are as follows:
1. As you are aware we currently have several long term leases
generating revenue on the properties involved. Any plans to displace
these tenants would have to at a minimum insure the replacement of
the lost revenues.
2. TMI Coatings, our family business, currently utilizes a portion of
the property in question for shop facilities and equipment storage.
The relocation, maintenance and management costs of an offsite
facility will be higher than the present arrangement.
3. While developing the property we own in Eagan has always been a long
term goal for my family, the costs associated with immediate
developing of this property is of concern to me.
Where 494.35E•HWY 55•HWY 149•LEXINGTON AVE.
Meet At The LARGEST CLOVERLEAF MIMNESOTAI
I
I
Wispark Corporation
Page 2
March 9, 1999
We have requested in writing a copy of the TIF Plan for our properties
in Eagan. I don't feel I can commit to a plan for redevelopment until I
have reviewed the TIF Plan and determined its provisions adequately
satisfy my requirements for this transition.
Thank you for your offer to assist with financing and redevelopment of
the properties in question.
I also suggest our March 11th meeting with The City of Eagan Planning
Commission be postponed until we have had time to adequately review the
TIF Plan and your proposals.
Sincerely yours,
/inm�berly Iie
Property Manager
cc: Julie Farnham
Mike Ridley
Carla Heyl
ka-wispark