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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 G T x w T T _ a = T = w y �C LONE OAK O � ■ �c yy o Q rn CQ x � O ''���� Ot � .dam !■� p STgT�TRUNK HWY.NO. 149 64L•ON �A tl 6•`q ado 1a� * 3 P� 't Jtt' Z GOA �6 WISPARK CORP IMRE O 0. 9 % IMRE WISPARK CORP IMRE IMRE CITY WISPARK CORP IMRE CTTY 44' IMRE ~� o;' ,yam ss 200 0 200 400 600 Feet PROPERTY OWNERSHIP N 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 -4- Cal I Vt �I x I, IES f? 4. 10 56Iit RRpT 114 M, u rIle < mmmmm � 4§4 rt .3 6 yYbb � y TRIANGLE OFFICE PARK MR19- DEVELOPMENT 2.805 Oodd Road•Eagan,Minnesota 55121 •Telephone(651)452-5100•Fax(651)452-0596 RECEIVED (c K 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