HomeMy WebLinkAbout04 21 2014 EDA Report 8C
4646 Dakota Street SE
Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: April 21, 2014
AGENDA #: 8C
PREPARED BY: Dan Rogness, Community & Economic Development Director
AGENDA ITEM: PROPERTY ACQUISITION ON COLORADO STREET
DISCUSSION: Introduction
The purpose of this agenda item is to act upon the directive given to the EDA by the
City Council on April 14 regarding the appropriateness of two property acquisitions
on Colorado Street.
History
The city has been planning the future of the downtown area since at least 2006 in
relationship to improvements to County Highway 21, including its intersection with
Duluth, Arcadia, Main and TH13. Most recently, the city and county completed sub-
stantial improvements to Arcadia and CH21 as the new main entry to downtown at
County Road 21 taking the place of the Main intersection with a new street connec-
tion south to Colorado Street. Two single family homes were acquired for that south-
erly street extension of Arcadia Avenue. In 2015, the county will complete and ac-
tivate the signal lights at Arcadia and CH21, install “Jersey Barriers in the middle of
CH21 from Arcadia through the Main Avenue intersection and remove the stop signs
at the Main and CR 21 intersection”.
Over time, consultants have identified various extensions of the Arcadia intersection
to the south. The extensions include terminating Arcadia at Pleasant; extending Ar-
cadia to the existing Franklin Trail intersection; extending Arcadia through the Gross
property and connecting to the west at Duluth; extending Arcadia through Colorado
due west to intersect with Duluth; and a final option to extend Arcadia as a service
road next to TH13.
The City Council has not yet approved a specific alignment of extending Arcadia
south of Colorado to Pleasant Street. However, a comprehensive plan amendment
was adopted which does not identify an alignment for a roadway but does identify
that a road connection from the downtown to Southlake Village is desirable as a
support roadway for TH13 and for CH21.
City staff has been notified by two property owners located at the intersection of
Colorado and Arcadia that they wish to sell their respective properties and are ask-
ing the city to articulate what it intends to do so they can make plans for their prop-
erty.(see attachments).
Current Circumstances
Therefore the City Council’s directive to the EDA is to “prepare a report with recom-
mendations” on the appropriateness of acquiring two residential properties on Col-
orado Street that are currently for sale. The two properties are summarized as fol-
lows:
A. 4577 Colorado Street – for sale by owner at “around” $120,000; county es-
timated market value = $89,600 (for taxes payable 2015)
B. 4589 Colorado Street – for sale by realtor at $214,500; current county esti-
mated market value = $185,600 (for taxes payable 2015).
An estimated budget, not including possible future demolition, would be approxi-
mately $310,000 for the two properties based on further negotiation.
From the staff perspective there are reasons supporting and opposing the acquisi-
tion of the land.
REASONS TO OPPOSE THE ACQUISITION
This acquisition will result in the properties being removed from the tax rolls.
The city will incur an additional estimated $310,000 in debt which will require
payment from one source or another.
Funds for this purchase could be put to another use.
The acquisition could send a signal that an alignment decision has been made
when it has not.
The acquisitions could mean three additional acquisitions in the future, and
those residents would have questions about the status of their property.
REASONS TO SUPPORT THE PURCHASE
Future Redevelopment. The map Attachment 1 shows two properties as A
and B that are currently for sale and subject to short-term acquisition. If for
some reason A and B are not used for the extension of Arcadia, then A and
B alone could be used for future redevelopment by themselves or in conjunc-
tion with parcels in E which creates a potential commercial corridor east to
Main..
Future Parking. While parking in the south downtown is not nearly the issue it
is today on the north side, it could someday be an issue. For example, a parcel
immediately north of these two parcels on Arcadia and CH21 is redeveloped
from residential to commercial. Since this is town center and at a main inter-
section, it is not unreasonable to expect that off-street parking will be neces-
sary to serve such a redevelopment.
Extension of Arcadia. Virtually every extension alternative of Arcadia to the
south, except the service road option, requires these two properties for right-
of-way purposes.
Cost. Purchasing now is likely to be less expensive than in the future because
of inflation; the city may be able to reduce the costs further by the rental of
one or both houses.
CONCLUSION
The EDA should determine if it believes the city should attempt to purchase the
parcels. The EDA could establish a maximum purchase price that it recommends.
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It could also suggest a funding source. Or, the EDA could leave those questions to
the city council.
ISSUES: The issues associated with the potential purchase are set forth above.
FINANCIAL A preliminary estimated acquisition budget of $310,000.
IMPACT:
ALTERNATIVES: 1. Recommend that the staff prepare a report for city council consideration set-
ting for the EDA’s recommendations with respect to purchasing the two par-
cels and the rationale therefore.
2. Table action, and request further information from staff.
RECOMMENDED Staff recommends a motion and second in support of Alternative #1
MOTION:
ATTACHMENTS: 1. Map of properties south of Arcadia between Colorado and Pleasant.
2. City Council report dated April 14, 2014
3. MLS information on 4589 Colorado Street
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