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HomeMy WebLinkAboutWork Session #1 Alternative Development Scenarios O � Pitlp ti � t ~ J • 4646 Dakota Street SE '�'�vrv�soK� Prior Lake, MN 55372 CITY COUNCIL WORKSHOP REPORT MEETING DATE: JUNE 24, 2013 PREPARED BY: FRANK BOYLES, CITY MANAGER JANE KANSIER, ASSISTANT CITY MANAGER PRESENTED BY: FRANK BOYLES AGENDA ITEM: CONSIDER ALTERNATIVE DEVELOPMENT OPTIONS FOR PROPERTY LOCATED AT CR 21/WEST AVENUE DISCUSSION: Introduction The purpose of this agenda item is to consider a number of potential development options for the 5 acre parcel located south of County Road 21 and east of West Avenue. This property is currently undeveloped, but there is a stormwater pond, County road, a sidewalk and a light pole located on the property without easements. Over the past several years, the City has been working with the property owners to address these issues and to obtain the necessary easements, without success. Historv As noted above, the property is undeveloped but there is a long history on this site. Following is a timeline of some of the events: 1980's County acquired storm sewer and right-of-way easements on this property for the CR 21 construction. The easements were never recorded. 12/1997 The City sent an easement document to the Rhoads, the property owners of record at that time, for a stormwater pond to be constructed as art of the West Avenue reconstruction ro'ect. 6/1998 The Rhoads signed the easement and returned the document to the Cit . 6/1998 The City sent the easement document to the Scott County Recorder's office for recording; the document was somehow lost at the Count and never recorded. 6/2/1998 The City opened bids for Project #98-14 (West Avenue reconstruction 8/19/1998 Stormwater ond was raded Fall, 1998 Pro�ect com leted 9/20/1999 The City realized the easement had not been recorded and attem ted to re-secure easement from the Rhoads'. 12/16/1999 The City received a reply from Renee Rhoads stating the ro ert had been sold to Staber. 1999 City sent a letter to Staber requesting easement; no response in file and easement never si ned. 10/2001 The City received an application for a preliminary plat and a preliminary PUD for the development of 32 townhouse units on this ro ert . 3/18/2002 A lication was withdrawn before Cit Council action. 8/18/2003 City Council approved Resolution #03-141 amending the Comprehensive Land Use Plan to designate this property C-TC Town Center . This is the current desi nation. 4/5/2004 The City Council approved Ordinance #04-16 rezoning this property to C-3 (Specialty Business). This is the current Zoning desi nation. 12/18/2008 City Council heard a presentation on a concept plan for a 57-unit senior housing building on 3 lots within this site. No additional a lications were filed. 5/19/2010 Property owners cut down trees and begin grading site without a ermit. Ci issued "Sto Work" order. 9/22/2010 City sends a letter to the property owner outlining several issues and re uestin a meetin to discuss these issues. 10/12/2010 Scott County sends a letter to the property owner stating its position on access to the property from CR 21. The County states access to this property will be from Duluth Avenue and from West Avenue; no access will be ermitted from CR 21. 2010-2013 Multiple contacts with property owners and property owners' attorneys on this site. The City sent several easement documents to the owners for review, although none have met their approval. Sand Company offers owners $500,000 to purchase three parcels. Offer rejected on the basis that owners wish to dis ose of entire iece. Current Circumstances On June 13, 2013, the City received a letter from the property owners' attorney demanding payment for the pond or removal within thirty days. City and Scott County representatives met on June 14, 2013, to discuss potential options for this site. County attorney corresponds with owners attorney requesting a sixty day extension in order to determine if another plausible option can be pursued. The following are the options identified by the staff: Option #1: City and County pay appraised value for land used for ponding, sidewalk, light, right-of-way and access restriction. City pays $110,000 and County a s $110,000. PROS CONS • The matter is disposed of in the • CR 21 access restriction not short run addressed • Stormwater ponding for any future • Parcel likely to remain development on the site will be the undeveloped sole responsibility of the developer . Potentially higher court financial decision on award for damages • Actual cost of this option least predictable because of access restrictions Option #2: City purchases total parcel and Scott CDA develops 54-unit senior housing building. City pays appraised value of $1,050,000 for five acres. Three acres needed by CDA are leased from City for $1.00. CDA builds, subsidizes and operates senior housing on three parcels and double or quad units on fourth parcel with fifth parcel used for access and ponding. Page 2 PROS CONS Property developed • City finances costs for parcel and • 54 additional units of senior is paid back appraised land value housing and Quad/Double in 30 years when bonds are • Access restriction addressed released. Fifth parcel purchased • Land purchase is a long-term jointly by city and county investment for city � CDA pays PILOT payment in lieu of ro e taxes Option #3: County and/or City purchases five acres using County bridge and road funds. In one year, Sand Company purchases three parcels and constructs 54 units of tax credit workforce housing. CDA purchases Lot 2 for 6-8 units of multi-family CDA rental housing. Lot 1 purchased jointly by City and County for drainage and access ur oses. PROS CONS • Property developed with 54 units of • Senior or luxury multifamily project workforce housing added forgone. • City/County paid back for'/2 of • City, County and CDA have not yet investment in 12 months determined the cost share for the • County shares cost of one parcel remaining two parcels. • Workforce housing subject to property taxes • Back up plan is CDA would purchase Lots 3, 4 and 5 for CDA multi-family housing should Sand Company's tax credit application not be funded by the MHFA. • Access restriction addressed Option #4: Remove the existing public infrastructure from the property. This requires filling in the pond and removing the sidewalk and light pole. Estimated short term cost of this action is $50,000. PROS CONS • Least costly alternative now • Lot remains undeveloped • Stormwater ponding for any future • Untreated storm water flowing into development on the site will be the County system and to Prior Lake sole responsibility of the developer . In the short-term, the City may need to pay to provide ponding at another site to comply with City and Watershed requirements • Does not secure necessary right- of-way for future CR 21 expansion • There will be trail and sidewalk closures due to missing sections • Access restriction not addressed • Ma not avoid court action Conclusion Staff is seeking Council direction. Of the options identified above, staff believes that 3 is the most appropriate.lt provides housing for an important segment of our workforce. It assures the entire parcel is developed, access restrictions addressed and ownership matters are permanently concluded. It shares the responsibility to all three public entities. It has a backup plan. It provides for ongoing property tax to Page 3 support all entities. With two experienced entities like Sand Company or the CDA managing the property we are confident of ongoing maintenance of the property. Page 4 HUEMOELLER & GONTAREK PLC ATTORNEYS AT LAW 16670 FRANKLIN TRAIL P.O. BOX 67 PRIOR LAKE, MINNESOTA 55372 (952)447-2131 Fax: (952) 447-5628 E-mail: HBG e ,priorlakelaw.com ALLISON J. GONTAREK BRYCE D. HUEMOELLER THERESA A.PETERSON June 13, 2013 Mr. Frank Boyles By Facsimile (952-447-4245) and U.S. Mail City Manager City of Prior Lake 4646 Dakota Street Prior Lake MN 55372 Re: Gary Staber/LeArnold and Judy Klingberg property Dear Mr. Boyles: My clients, Mr. Staber and Mr. and Mrs. Klingberg, have authorized me to contact you regarding the status of the holding ponds that were built on their property without their consent. As you know, we have been in extensive negotiations to try and resolve both the ponding issue and the right of way takings on this property, that abuts 185�`/CSAH 21 and thought we may have had a tentative resolution over six months ago. Nothing has happened, something that appears to have been the standard for these negotiations between my clients and the City over the past 5 years. Mr. Staber and Mr. and Mrs. Klingberg are beyond frustrated and estimate that they have had to pay over $150,000.00 in property taxes that would not have been necessary had they had been able to sell their property. While certainly the market and economy played a large part, my clients feel that the City did little to cooperate with potential buyers. In order to reach some conclusion, even in a partial manner, Mr. Staber and the Klingbergs are hereby demanding that they be compensated for the installation of the holding pond AND be guaranteed a right in/right out to Duluth Avenue from the property, with direct access from Duluth to 185 within 30 days of the date of this Mr. Frank Boyles City Manager City of Prior Lake June 13, 2013 Page Two letter. Any agreement will not affect any other access rights that are available to the other lots held by Mr. Staber or the Klingbergs. If the City is unwilling to meet this demand, then the holding pond must be removed within that 30 day period and the land restored. As you know, the City had no legal right to create that holding pond area and it constitutes a trespass onto private property, as does the sidewalks and light post on the Klingbergs on the eastern edge. Please advise no later than June 20, 2013 as to the City's intent. Thank you for your assistance in this matter. �er� truly ours, �, � �,�, � � .� � Allison J. Gontarek Cc: clients c, �..�� � � ,� �� ���-Y—� �, � � — �, d � / � (� � ���-,�� � �' �� I . a % � � ��� ',- � �� _ '% � �'/%� I� I� ;`�=�i ° � ' �. '�-� C3 _� �C"�� �' , ,� l�r`- -- � � --�= I ' ; �- �{ - -� , � -�-- �, __ _ _ ; - � � „ _- � , � � �-- -� � � �--�- - �,�,�;`. � ' WESTAVE. 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