HomeMy WebLinkAbout06.20.2022 Outline for June 20 2022 Prior Lake City Council WorkshopOUTLINE
REDEVELOPMENT OF ABANDONED
RAILROAD RIGHT-OF-WAY AND
LOT 85 SUNFISH BAY
June 20, 2022
Prior Lake City Council Workshop
1. PURPOSE. The purpose of this meeting is to present and discuss a concept
(Concept) for the redevelopment of a portion of the abandoned railroad right -of --way (ROW) and
peninsula (Peninsula) on the channel (Channel) between Upper and Lower Prior Lake in the
south half of Section 32 and the abutting Lot 8, Sunfish Bay, into three parcels designated as
Parcels 1 (Peninsula), 2 and 3 on the surveys that accompany this Outline (Surveys). It is hoped
by the owner of the ROW and Lot 8 (Owner) that the Concept will be referred to City staff and
counsel to work with the Owner to refine the Concept, to include negotiating the terms for a
purchase agreement for the acquisition by the City of Prior Lake (City) of the Peninsula.
2. BRIEF HISTORY. A brief history of the unique land involved is helpful.
ROW Sunfish Bay
• Bankrupt railroad in 1980s.
• Multi -county auction sale of assets,
including ROW.
• Massive two county subdivision of the
abandoned right -of --way without
formal oversight or approval
presumably on the assumption that
adjacent owners would be primary
buyers.
• No regard to public services or access
to the newly created parcels.
• No apparent regard for zoning issues.
• Unique 1925 plat.
• Narrow private streets dedicated to
"lot owners."
• No provision for utilities or services.
• Small lots.
• Streets connect to adjacent land but
are not public.
3. OPPORTUNITY. This is an opp
ortunity fora "public/private partnership" to
advance the interests of both the City and the Owner.
1
Public
• Gain control of the Channel, a
strategic waterway.
• Facilitate surface water management,
the City's statutory duty.
• Expand a highly utilized and visible
public park.
• Acquire a possible centralized location
for a water patrol dock/slip (the
thought of Jim Dunn, who owned and
expanded the marina from 15 to 50
slips).
• Add tax value to underutilized
properties.
Owner
• Allows Owner to develop and sell two
residential lots.
• Attain highest and best use of the
property.
• Potentially enhance access to
neighborhood common docks.
• Corrects failure of City to extend
public Bass Street to ROW
(connectivity).
• Overcomes limitations of 1925 plat,
which predates public services and
roads.
4. CONCEPT. The Concept contemplates the purchase of Parcel 1 by the City as an
expansion of the existing Grainwood Crossing/Heritage Park (Park). Parcels 2 and 3 will be
developed as single-family homes. Since Parcel 2 does not abut on a public street, the Concept
anticipates that Parcels 2 and 3 will be combined into a "site" condominium under Minn. Stat.
515B in which the units will be the building envelopes on the ROW and Lot 8 with the result that
the unit owners will under Minn. Stat. 515B.1-103 (11), be vested owners of "undivided interests
in the common elements" of the condominium which will include Lot 8 thereby qualifying them
as "lot owners" under the plat of Sunfish Bay. The Concept has three basic components, two of
which require a formal agreement with the City.
A. Lot 8, and the portion of the ROW adjacent to its west line, will be sold for the
construction of asingle-family home to be accessed from Bass Street or Sunfish Trail. A
purchase agreement has been signed which is contingent upon the approvals by the City of a
building envelope and required permits for the new construction.
B. Parcels 1 and 2 are currently one tax parcel. The Concept contemplates a split of
the tax parcel, and a purchase agreement has been signed for the construction of asingle-family
home on Parcel 2 which is contingent upon the establishment of legal access over Bass Street,
and approvals by the City of the split of the Peninsula into Parcels 1 and 2, and a building
envelope and required permits for the new construction.
C. The Concept contemplates the sale of Parcel 1 to the City for the sum of
$150,000.00, and a commitment to develop Parcel 1 consistent with the approved building
envelope and permits for the Parcel 2 home site.
2
5. CLOSING AND CONDITIONS.
The Concept anticipates the closing on the sale of Parcel 1 to occur as soon as reasonably
possible after the satisfaction or waiver of the following contingencies and conditions:
A. The approval by the City of the OF of the ROW into Parcels 1 and 2.
B. The approval by the City of the CIC plat to establish the building envelope site
units for the construction of single-family homes on Parcels 2 and 3.
C. The affirmation by Chicago Title that the unit owners of the proposed building
envelope "site" units will be "lot owners" with the right to use the privately dedicated portion of
Bass Street for access purposes.
D. The approval by the Owner of a qualified appraisal for any gift portion of the
Parcel 1 transfer to the City.
6. NEXT STEPS. The Owner requests the City Council take the following actions:
A. Refer the Concept to City staff and counsel to finalize the process, details and
agreements for the purchase by the City of Parcel 1 and the CIC plat to establish the building
envelope "site" units, or an alternative method acceptable to the Owner for legal access to Parcel
2.
B. In this regard, it should be noted that the Owner has requested that Chicago Title
affirm that upon formation of the CIC the right of access via Bass Street will be insurable
without extraordinary cost or conditions.
7. PUBLIC BENEFIT. Upper and Lower Prior Lake are the heart and soul of this
community. The Channel is the sole connecting point between Upper and Lower Prior Lake.
It is heavily trafficked all year long. The Peninsula is a long-standing impediment to the safe
and open travel between the two basins. By acquiring the point of the Peninsula, the City,
which has a statutory responsibility for surface water management of the lake, will facilitate
significant improvement to the visibility, free flow and safety of passage through the Channel,
as well as improving the overall appearance of a prominent public amenity and the use and
enjoyment of the Park by the public at large. In addition to the public benefit, the Concept
provides for uses of the Peninsula that are consistent with the Comprehensive Plan and current
zoning, which will transform an existing underutilized property into a combination of new
single-family homes and an attractive and versatile amenity which have significant and
perpetual public value.
3
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6/20/22, 11:43 AM
Sec. 515B.1-103 MN Statutes
Office of the Revisor of Statutes
2021 Minnesota Statutes
S15B.1-103 DEFINITIONS.
Authenticate b PDF
In the declaration and bylaws, unless specifically provided otherwise or the context otherwise requires, and in this chapter:
(I) "Additional real estate" means real estate that maybe added to a flexible common interest corrununity.
(2) "Affiliate of a declarant" means any person who controls, is controlled by, or is under common conhol with a declarant.
(A) A person "conU•ols" a declarant if the person (i) is a general partner, officer, director, or employer of the declarant, (ii)
directly or indirectly or acting in concert with one or more other persons, or tluough one or more subsidiaries, owns, controls, holds
with power to vote, or holds proxies representing, more than 20 percent of the voting interest in the declarant, (iii) conhols in any
manner the election of a majority of the directors of the declarant, or (iv) has contributed more than 20 percent of the capital of the
declarant.
(B) A person "is controlled by" a declarant if the declarant (i) is a general partner, officer, director, or etployer of the person, (ii)
directly or indirectly or acting in concert with one or mote other persons, or tluough one or more subsidiaries, owns, controls, holds
with power to vote; or holds proxies representing, mote than 20 percent of the voting interest in the person, (iii) controls in any
manner the election of a majority of the directors of the person, or (iv) has contributed more than 20 percent of the capital of the
person.
(C) Control does not exist if the powers described in this subsection are held solely as a security interest and have not been
exercised.
(3) "Allocated interests" means the following uiterests allocated to each unit: (i) in a condominium, the undivided interest in the
common elements, the common expense liability, and votes in the association; (ii) in a cooperative, the common expense liability and
the ownership interest and votes in the association; and (iii) in a planned community, the common expense liability and votes in the
association.
(4) "Association" means the unit owners' association organized under section 515B.3-101.
(5) "Board" means the body, regardless of name, designated in the articles of incorporation, bylaws or declaration to act on behalf
of the association, or on behalf of a master association when so identified.
(6) "CIC plat" means a common interest community plat described in section 51 SB.2- 110.
(7) "Canunon elements" means all portions of the conunon interest community other than the units.
(8) "Common expenses" means expenditrtres made or liabilities incur�•ed by or on behalf of the association, or master association
when so identified, together with any allocations to reserves.
(9) "Convnon expense liability" means the liability for couunon expenses allocated to each unit pursuant to section 515B.2-108.
(10) "Common interest community" or "CIC" means contiguous or noncontiguous real estate within Minnesota that is subject to
an instrument which obligates persons owning a separately described parcel of the real estate, or occupying a part of the real estate
pursuant to a proprietary lease, by reason of their ownership or occupancy, to pay for (i) real estate taxes levied against; (ii) insurance
premiums payable with respect to; (iii) maintenance of; or (iv) construction, maintenance, repair or replacement of improvements
located. on, one or more parcels or pacts of the real estate other than the parcel or part that the person owns or occupies. Real estate
which satisfies the definition of a conunon interest conununity is a connnon interest conuuunity whether or not it is subject to this
chapter. Real estate subject to a master declaration, regardless of when the master declaration was recorded, shall not collectively
constihrte a separate common interest cotnnnmity unless so stated in the master declaration.
(11) "Condominium" means a common interest community in which (i) portions oftlre real estate are designated as units, (ii) the
remainder of the real estate is designated for conunon ownership solely by the owners of the runts, and (iii) undivided interests in the
common elements are vested in the unit owners.
(1la) "Construction defect claim" means a civil action or an arbitration proceeding Uased on any legal theory including, but not
limited to, claims under chapter 327A for damages, indeumity, or contribution brought against a development party to assert a claim,
counterclaim, cross -claim, or thud -party claim for damages or loss to, or the loss of use of, real or personal property caused by a
defect in the initial design or construction of an improvement to real property that is part of a common interest community, including
an improvement that is constructed on additional real estate pursuant to section 515B.2-111. "Conshuction defect claim" does not
include claims related to subsequent maintenance, repairs, alterations, or modifications to, or the addition of, improvements that are
part of the common interest community, and that are conh•acted for by the association or a unit owner•.
(12) "Conversion property" means real estate on which is located a building that at any time within two years before creation of
the common interest cotmnuruty was occupied,. in whole or in part, for (i) residential use. or (ii) for residential rental purposes by
persons other than purchasers and persons who occupy with the consent of purchasers.
hops://www.revisor.m n.gov/statutes/cite/515B.1-103 1 /4
By Marvin Garfinkel
Mesirov Gelman Jaffe Cramer & Jamieson
1735 Market Street
Philadelphia, Pennsylvania 19103
(215)-994-1450
[Note: These provisions assume that at time of recording of the Declaration no part of
the Power Center has been developed. The Developer will thereafter construct all site improvements
which will become part of the common elements and a number of the store buildings. Several of the
�A "Site" project may also develop as a non -condominium planned community in a jurisdiction that has adopted
the Uniform Common Interest Ownership Act ("UCIOA"). Section 1-106 of UCIOA provides:
(a) A building code may not impose any
requirement upon any structure in a common interest
community which it would not impose upon a physically
identical development under a different form of ownership.
(b) In condominiums and cooperatives, no
zoning, subdivision, or other real estate use law, ordinance, or
regulation may prohibit the condominium or cooperative form
of ownership or impose any requirement upon a condominium
or cooperative which it would not impose upon a physically
identical development under a different form of ownership.
(c) Except as provided in subsections (a) and (b),
the provisions of this [Act] do not invalidate or modify any
provision of any building code, zoning, subdivision, or other
real estate use law, ordinance, rule, or regulation governing the
use of real estate.
ZAny of the following might come within the of a site condominium concept provided there is some common
element and an appropriate declaration is recorded:
(a) A parcel of ground divided into a dozen lots on which houses and drives
that connect the lots may be constructed. Although the drives are most often designated as common elements, each
segment of a drive might be included as part of the unit on which it this becomes located and be made subject to an
easement of passage in favor of the other unit owners. Under this latter approach there must be some common
element in order for a valid condominium declaration to be recorded for the development.
(b) A parcel of ground consisting of two areas one of which is currently
occupied by an office building, with the other acre to be occupied by an office building to be separately financed.
Each area might be a unit with a driveway from the street to each building being a common element. Parking,
serving both buildings, may be a common element or be part of each unit subject to an REA.
(c) A shopping center that includes a number of stores that will continue to
be owned by the developer and leased to the store operators and also two large stores which will each be built and
owned by a department store company. This center maybe developed as a condominium with three units. Each
department store site would be a unit with the balance of the development being a single unit which might later be
subdivided under §2-113 of UCIOA. The parking areas and drive might be a common element or be part of the unit
subject to an REA.
Copyright 1995, 1998
By Marvin Garfinkel. All rights reserved.
00213005.02
m
A portion of the condominium is to be used as a retail center. Other portions will be
developed with a hotel, an office building and a tennis club.]
1. Selected Definons
"Building" means any buildings or portion thereof constructed at any time
within a Unit or which constitutes a Unit or of which a Unit is a part.
"Boated lbgeinber" refers to each of the members of the Board. Such persons
may also be referred to as "Directors" of the Association.
"Unit"3 means a Unit as described in this Declaration (including the -Plats and
Plans) as this Declaration may be amended from time to time and all Buildings and other improvements
or portions thereof erected on or within boundaries of such Unit at any time and from time to time.4
"Eligible 1Vlortgage"mmeans the following, provided that notice of the existence
of such mortgage has been provided to the Association pursuant to Section below: (1) any first or
second mortgage on a fee simple or leasehold interest in an entire Unit to secure an obligation to a bank,
trust company, savings bank, savings and loan association, mortgage service company, insurance
company, credit union, pension fund, real estate investment trust, credit corporation, or other institutional
3 Each "site" is a "Unit" for the purposes of the Condominium Act and as such is referred to in Yhis declaration as a
"Unit". The term "out -lot" is often used to refer to subdivided land that functionally may be the same as a "site" in a
Condominium Development. A "site" unit consists initially of air space and usually land surface and subsurface. Any
improvementswhich are later constructed upon or within the unit boundaries will become part of the unit. For
purposes of this discussion a "site" may be defined as a unit which consists of air space and may also consist of land
surface and subsurface but which is not a part of a building nor other improvementto real property and which at the
time of creation generally does not have physical boundaries. The commentary to Section 1-106 of the Uniform
Condominium Act C'UCA") notes that the first sentence of 1-106 prohibits discrimination against condominiumsby
local lawmaking authoritiesand it explains that "thus if a local, law, ordinance or regulation imposes a requirement
which cannot be met if the property is subdivided as a condominium but which would not be violated if all of the
property constituting the condominium were owned by a single owner this section makes it unlawful to apply that
requirement or restriction to the condominium." The commentarygoes on to note though that the second sentence
"makes it clear that, except for the prohibition on discrimination against condominiums, the Act has no affect on real
estate use laws ... For example, a particular piece of real estate submitted to the condominium form of ownership
might be of such size that all of the real estate is required to support a proposed density of units or to satisfy minimum
setback requirements." It then goes on to explain that merely designating portion of a condominium as
withdrawable real estate would itself not constitute a subdivision of the parcel for local zoning or subdivision law
purposes, but that the exercise of the option to withdrawwould constitute a subdivision and would be illegal "if the
affect of the withdrawal would be to violate setback requirements or to exceed the density of units permitted on the
remaining parcel." The comments to Section 1-106 of UCIOA are a bit more explicit but makes it clear that the
underlying concept is that local law must treat a condominium in the identical manner as it would treat a rental
properly. Building, zoning and subdivision codes and other local land use regulations must treat a condominium in
the same manner as they would treat a rental property where there is a single ownership of the entire parcel rather
than divided ownership as exists in the case of a condominium.
4Although the ICA and UCIOA in specifying unit boundaries contemplate the possibilitythat walls, floors or
ceilings may be designated boundaries of the unit it does not require that a unit be bounded by walls, floors or
ceilings. Thus, a unit may be described by metes or bounds or in any other convenient manner to the extent not
bounded by monuments or physical barriers. Under the UCA and UCIOA, no part of a unit need be within a
building and there need not be any physical boundaries between units or between units and common elements.
SThis provision will usually be negotiated with the prospective mortgages of the principal unit owners.
Copyright 1995, 1998
By Marvin Garfinkel.
00213005.02
All rights reserved.
(2)