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Home My WebLink About10A - City Owned Properties MEETING DATE: AGENDA #: PREPARED BY: 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 CITY COUNCIL AGENDA REPORT March 7, 2005 10A Frank Boyles, City Manager AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE PREPARATION OF SPECIFICATIONS TO RECEIVE BIDS TO SELL TWO CITY OWNED PROPERTIES FOR REDEVELOPMENT PURPOSES: 1) .83 ACRES LOCATED AT FRANKLIN TRAIL AND PARK NICOLLET AVENUE; AND 2) A 50 X 100 FOOT PARCEL LOCATED AT THE NORTHEAST QUADRANT OF MAIN AVENUE AND HASTINGS. DISCUSSION: Historv: Over the years, the City has acquired property for various reasons. Prior Lake City Code and State Statute specify how such real property owned by the City is to be disposed of. The code identifies a process to be used as follows: 1. The Planning Commission would review each city owned property proposed for sale to determine whether such action will comply with the comprehensive plan. 2. As part of #1 above, the City Manager is to solicit the input of affected city staff. 3. Although not referred to in the ordinance, it would be advisable to obtain an appraisal on each property. One of the two properties will need a survey as well. 4. The City Manager prepares a notice inviting sealed bids and specifications for such bids which establishes the terms and conditions of the sale. Pursuant to Minnesota Statutes 471.345 the sale would be made to the highest bidder conforming to all sale terms and conditions as set forth in the specifications. 5. The City Manager will invite sealed bids by publishing notice in two consecutive weeks of the official newspaper. At least five days must elapse -between the date of the final notice and the time for submitting the bids. The City Manager, or designee, must be present at the bid opening and the Manager is responsible for maintaining a record of such sales. The City Manager may require the posting of a bond to guarantee the performance of the bidder. The City Council must approve the actual sale at a regular or special meeting. The Council would have the flexibility to reject all bids if it desires. Current Circumstances: There are two properties which the staff recommends The Council consider for sale. A description of each is provided below. The purpose of both sales is to facilitate the construction of new retail/office/commercial buildings to foster continued economic redevelopment of the downtown and the South Lake Village area. The sales are intended to add value to each property and return them to private ownership. Each parcel is described below: .83 acres at Franklin Trail and Park Nicollet Avenue. This property was the former T. J. Towing property. It was purchased by the City on April 4, 2001, for $180,000. Under the terms of the purchase agreement, the www.cityofpriorlake.com 1:\COUNCIL\AGNRPTS\2005\receive bid~e"ec~.r4~s Jl3~.9~.44 7.4245 former owner was responsible for completing an environmental Phase I and lion the property. The property contained a substandard building and a considerable array of auto parts and frames. A May 24, 1999, memorandum indicates that the City Council, Planning Commission and Economic Development Authority believed that removal of this blight would improve the area's prospects for development/redevelopment. Accordingly, the City purchased the property. The construction of Village Lake Drive and of Keystone Communities together with the redevelopment of Priordale Mall (South Lake Village) has increased the attractiveness of this area for redevelopment. It is our recommendation that redevelopment can be further encouraged by selling this parcel to a bidder who: 1. Is the high bidder. 2. Utilizes this property plus the adjacent one acre Park Nicollet property for a building project. 3. Builds a two-story structure of 7,500 to 10,000 square feet per floor. 4. Building uses are limited to office and/or retail. 5. Meets all ordinance criteria. 6. Conforms with the new buildings in the area from a design perspective. 7. ,Adds considerable valuation to the property. 8. Enters into a development contract which identifies all of the understandings between the parties and the timeline for construction. 9. Obtains a performance bond. 10. Understands that neither tax increment financing nor tax abatement will be available. 50 X 100 foot Darcel at the northeast Quadrant of Main Avenue and Hastinas Avenue. This property was acquired by the City when TH13 and County Road 21 were realigned. The City's objective was to realign accesses from businesses (the Rich Gross building) directly to County Road 21 to Main Avenue. The City found that it was beneficial to acquire the entire property for the construction of Hastings Avenue. Since acquiring the parcel, a public parking lot has been constructed on the south side of Hastings. A building was once located on this parcel to the north of Hastings. It is our understanding that it was destroyed by fire. Since we do not know how much of the parking area will be required for county Road 21 right of way or even whether Hastings will continue to have permanent access to Main Avenue, this 50 X 100 foot parcel appears to be the only city prop~rty in this area which could be made available for redevelopment. It is our recommendation that downtown redevelopment can be further encouraged by selling this parcel to a bidder who: 1. Is the high bidder. 2. Will utilize the property to construct a three- or four-story building of 2800 to 3000 square feet per floor. 3. Building uses are limited to retail and offices. 4. Meets downtown design standards. 5. Conforms to all other zoning requirements. 6. Adds considerable value to the property. 1:\COUNCIL\AGNRPTS\2005\receive bids to sell city owned properties 030705.DOC 2 ISSUES: FINANCIAL IMPACT: ALTERNATIVES: RECOMMENDED MOTION: 7. Enters into a development agreement which identifies all of the understandings between the parties and the timeline for construction. 8. Provides a performance bond. 9. Understands that neither tax increment financing nor tax abatement will be available. Conclusion: The Council is being asked to authorize city staff to initiate the process outlined above. The immediate steps will be to ask the Planning Commission to confirm conformance of such action with the comprehensive plan, obtain appraisals on the properties, secure a survey and prepare specifications. The key issues are: 1. Does the Council believe it is appropriate to sell these parcels to foster additional economic development? 2. Does the Council believe that the criteria proposed above will provide necessary assurances that a project of the type desired by the Council will take place in a timely fashion on each parcel? Action to sell these properties could have a positive financial impact if the properties are sold at appraised value, and the construction projects take place without tax increment since the property taxes on the improved parcels will be considerably more than presently generated. 1. Authorize the staff to request Planning Commission input on consistency with the comprehensive plan, obtain appraisals and a survey, and prepare specifications for the sale of both properties. 2. Take no action and request that the staff provide additional information on this topic. Alternative 1. 1:\COUNCIL\AGNRPTS\2005\receive bids to sell city owned properties 030705.DOC 3 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 RESOLUTION 05-xx A RESOLUTION AUTHORIZING APPRAISALS AND THE PREPARATION OF SPECIFICATIONS TO SELL TWO CITY OWNED PROPERTIES Motion By: Second By: WHEREAS, The City owns a .83 acre property at the intersection of Franklin Trail and Park Nicollet Avenue; and WHEREAS, The City owns a 50 X 100 foot parcel at the northeast quadrant of Main Avenue and Hastings; and WHEREAS, The parcels were acquired for public purposes; and WHEREAS, The sale of each parcel will facilitate continue economic development and redevelopment in the area of Franklin Trail and Park Nicollet Avenue, and Main Avenue and Hastings; and WHEREAS, The City code and State statute set forth the process for the sale of such real property; and WHEREAS, The City Council desires to foster continued economic development. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The staff is directed to ask the Planning Commission whether the sale of other properties is consistent with the comprehensive plan. 3. The staff is directed to obtain appraisals for both properties and a survey on the downtown property to be drawn from the Community Development Budget. 4. The staff is directed to prepare specifications and notice of bid for City Council review and action. PASSED AND ADOPTED THIS 7th DAY OF MARCH, 2005. Haugen Haugen Fleming Fleming leMair leMair Petersen Petersen Zieska Zieska YES NO City Manager, City of Prior Lake R:\RESOLUTI\ADMINRES\2005\prepare specs to sell two city owned properties. DOC www.cityofpriorlake.com Phone 952.447.4230 / Fax 952.447.4245