HomeMy WebLinkAbout9D 4662 Dakota St. Purchase Agreement ReportPhone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: JANUARY 6, 2020
AGENDA #: 9D
PREPARED BY: CASEY MCCABE, COMMUNITY DEVELOPMENT DIRECTOR
PRESENTED BY: CASEY MCCABE
AGENDA ITEM: ADOPT RESOLUTION No. 20-010 – APPROVING THE PURCHASE OF
PROPERTY AT 4662 DAKOTA STREET SE AND AUTHORIZING THE
MAYOR AND CITY MANAGER TO EXECUTE THE PURCHASE
AGREEMENT
GOAL AREA AND
OBJECTIVE:
Desirable & Sustainable Development
3. Explore ways to encourage downtown as a vibrant destination.
DISCUSSION: Introduction
The purpose of this agenda item is to consider approval of a resolution
approving the purchase of property at 4662 Dakota Street SE and authorizing
the Mayor and City Manager to execute the purchase agreement.
Current Circumstances
The owners of the property next to City Hall have approached staff to see if
the city would be interested in purchasing their property at 4662 Dakota
Street SE. There are two single-family homes located between City Hall
and the Rotary Gateway Park; the City of Prior Lake purchased the
property at 4664 Dakota Street in 2014.
The property at 4662 Dakota Street is approximately 70’ X 200’ (14,000 SF)
and is occupied by a 1¼ story single family home and two -car detached
garage. The 3-bed, 1.75-bath home was built in 1946 and has
approximately 1,335 SF of finished space and includes a mostly unfinished
basement.
Scott County has a 2020 estimated market value of $228,700; the sellers
are requesting $289,500. There are no special assessments due on the
property. Real estate taxes for the first half of 2020 would be prorated
between the current owners and the city at the time of closing.
ISSUES: City staff toured the property and feel the home could potentially be rented
by the city; however, if redevelopment of this site is anticipated, it may
make sense to remove the home for that purpose at this point. City staff
anticipates a need for additional funds to replace appliances, HVAC
systems or other repairs either prior to or upon rental of the home. In
addition, the seller’s property disclosure statement indicates an older roof
and water getting into the basement during heavy rains. The city does rent
the home next to this property and that experience has shown revenues are
limited due to an average of $3,750 annually spent on property taxes,
maintenance and repairs.
FINANCIAL
IMPACT:
The property owners submitted a purchase agreement requesting a sale
price of $295,000 and a closing date of January 31, 2020. City staff
submitted a counter offer of $275,000 and the property owners countered
with a purchase price of $289,500. In addition to the acquisition cost, the
city would be responsible for property taxes for the remainder of 2020 and
2021; closing costs and title work estimated at $5,000; and potential repairs
if the home is to be rented or demolition costs if the home is to be removed.
ALTERNATIVES: 1.Motion and second to approve a resolution approving the purchase of
property at 4662 Dakota Street SE and authorizing the Mayor and City
Manager to execute the purchase agreement.
2.Motion and second to deny a resolution approving the purchase of
property at 4662 Dakota Street SE.
3.Provide direction to staff and continue discussion at a future meeting.
RECOMMENDED
MOTION:
ATTACHMENT:
As determined by the Council.
1.Real Estate Purchase Agreement
4646 Dakota Street SE
Prior Lake, MN 55372
RESOLUTION 20-010
RESOLUTION APPROVING THE PURCHASE OF PROPERTY AT
4662 DAKOTA STREET SE AND AUTHORIZING THE MAYOR AND CITY MANAGER
TO EXECUTE THE PURCHASE AGREEMENT
Motion By: Second By:
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
The owners of the property at 4662 Dakota Street SE; PID 250010570 (“Property”)
have approached staff to see if the City of Prior Lake (“City”) would be interested in
purchasing the Property; and
The property owners have submitted a Real Estate Purchase Agreement
(“Agreement”) and are requesting a sale price of $289,500 and a closing date of
January 31, 2020; and
Redevelopment in downtown Prior Lake is supported in various policy and planning
documents of the City, including the 2040 Vision and Strategic Plan and the
Comprehensive Plan; and
The Prior Lake City Council finds acquisition of the Property will facilitate future
redevelopment in downtown Prior Lake.
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 Finance Director will determine funding options (use of reserves or debt issuance) for the
purchase price of $289,500, together with all Buyer related costs identified in the Agreement.
3. The Mayor and City Manager are authorized to execute the Agreement and any documents
necessary to close the transaction.
Passed and adopted by the Prior Lake City Council this 6th day of January 2020.
VOTE Briggs Thompson Burkart Braid Erickson
Aye ☐ ☐ ☐ ☐ ☐
Nay ☐ ☐ ☐ ☐ ☐
Abstain ☐ ☐ ☐ ☐ ☐
Absent ☐ ☐ ☐ ☐ ☐
______________________________
Lori Olson, Assistant City Manager