HomeMy WebLinkAbout10A - Brooksville Center 1st Addition
CITY COUNCIL AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
REVIEWED BY:
AGENDA ITEM:
DISCUSSION:
JULY 20, 1998
lOA
JENNITOV~PLANNER C\~!
DON RYE, PLANNING DIRECTOR ~""
CONSIDER ADOPTION OF RESOLUTION 98-XX
REJECTING ALL BIDS RECEIVED ON JULY 6, 1998 FOR
THE SALE OF CITY OWNED PROPERTY LOT 2, BLOCK 3,
BROOKSVILLE CENTER 1ST ADDITION AND DIRECTING
STAFF TO LIST THE PROPERTY WITH A REALTOR AND
AUTHORIZING THE CITY MANAGER TO NEGOTIATE ANY
FUTURE SALE THROUGH SUCH REALTOR
Histo11!..
The City of Prior Lake purchased Lot 2, Block 3 Brooksville Center
1st Addition (2.4 acres) on July 6, 1983. The purchase price of the
property is unknown. The taxes paid are zero because of our tax
exempt status. The purpose for the purchase of the lot was to provide
right-of-way for Toronto Street to connect with Woodridge
subdivision to the south. The lot is 274.12 feet wide and the City used
80 feet ofthis for right-of-way (0.70 acres). The remaining portion of
the lot (1.7 acres) was being held for future use as a dance studio.
However, the City no longer has a need to hold the property since the
dance studio will be included with the library/resource center.
State statute allows for municipalities to dispose of property, by a 2/3
vote of the City Council, after finding the disposal ofthe property has
no relationship to the Comprehensive Plan. On January 26, 1998, the
Planning Commission considered this request, and found the sale of
the property to be consistent with the Comprehensive Plan.
The Planning Commission suggested the proceeds from the sale be
used for future capital improvements. In February 1998, the City
Council made it a directive to utilize the funds for redevelopment. If
the City Council would like to specifically earmark the dollars it must
be done is a resolution designating the fund and purpose. This can be
done by the City Council when final approval is given to sell the
property after a purchaser has been located and a price agreed upon.
L~98FILES\98SUBJEC\97 -1l8W71J 8CC1.DOC 1
162uu t.agle Creek Ave. ~.t.., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
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On March 2, 1998, the City Council adopted Resolution 98-28
directing staffto obtain an appraisal and survey for Lot 2, Block 3,
Brooksville Center 1st Addition and proceed with solicitation of bids.
At the time, the estimated cost for a survey and appraisal were $2,500.
The actual cost was $675 for those services. Per Section 1-12-1-3 of
the City Code, the notice was published in the Prior Lake American on
June 20 and June 27, 1998. The bid deadline and public opening was
July 6, 1998.
CurrentCucumsmnces
Two bids were received for the property. Apartment Home Equity
Program, Inc. offered $23,500 and Towering Woods Partnership
offered $60,500. The appraisal estimates the value ofthe property at
$110,000 or approximately $1.50 per square foot. Considering the
Kestrel Village property (zoned R-3) was purchased for $1.27 square
foot in 1994 and the Safe Haven for Youth property (zoned R-3) was
purchased for $1.82 a square foot in 1997, this property with the same
R-3 Multiple Residential zoning would expect to be of similar value.
$1.50 Per square foot is a reasonable price given recent sales of similar
property.
The appraisal utilizes the Direct Sales Comparison approach in
reaching an estimated market value. That is, recent land sales of
commercial and multiple residential properties were compared to assist
in determining the value. Attached is summary data from the
appraisal. Please contact the Planning Department if you would like a
complete copy ofthe appraisal (approximately 50 pages).
The Issues
The City Council must determine if the highest bid is acceptable.
Section 1-12-1-3 of the City Code states the City Council may accept
the highest bid. As an alternative, the ordinance allows the City
Council to reject all bids and list the property with a Realtor or give
the City Manager authority to negotiate the disposition in an
appropriate manner.
Conclusion
The Towering Woods Partnership bid of $60,500 represents 55% of
the appraised value. The City received this bid without actively
marketing the property. Listing the property with a realtor may allow
the City to find a buyer willing to pay a price closer to the appraised
value even after the realtor's fee is considered. If not, the City Council
can make the decision to readvertise to solicit bids at some future date.
FISCAL IMPACT:
Cost Recoverv Analvsis
L:\98FILES\98SUBJEC\97-1 18\971 18CC3.DOC 2
.
ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
Because the purchase price of the property is unknown, the cost
recovery is unclear. At the present, the City has spent $675 for the
appraisal and survey.
Three alternatives exist.
1. Adopt Resolution 98-XX rejecting all bids and directing the staff
to list the property with a realtor and authorize the City Manager to
negotiate any future sale through such realtor.
2. Accept the Towering Woods Partnership bid of$60,500 and direct
staff to prepare a resolution.
3. Defer this item and provide staff with additional direction.
The staff recommends Alternative #1.
Motion and second to adopt Resolution 98-XX rejecting all bids and
directing the staff to list the property with a realtor and authorizing the
City Manager to negotiate the sale through the realtor.
L:\98FILES\98SUBJEC\97 -1 18\971 18CC3 .DOC 3
RESOLUTION 98-XX
REJECTING ALL BIDS RECEIVED ON JULY 6, 1998 FOR TJiE SALE OF CITY
OWNED PROPERTY LOT 2, BLOCK 3, BROOKSVILLE CENTER 1ST ADDITION
AND DIRECTING STAFF TO LIST l.l:1E PROPERTY'" 1111 A REALTOR AND
AUTHORIZING T.itE CITY MANAGER TO NEGOTIATE ANY FUTURE SALE
THROUGH SUCH REALTOR
MOTION BY: ,SECOND BY:
WHEREAS, the Prior Lake Planning Commission considered the request to dispose of city
owned property at Lot 2, Block 3, Brooksville Center Ist Addition on the
26th day of January, 1998; and
WHEREAS, the Planning Commission has reviewed the request as contained in Case File
#97-118, and determined the disposal of the property is in compliance with
the Comprehensive Plan; and
WHEREAS, the City Council heard the request on February 17, 1998 and March 2, 1998.
WHEREAS, the City Council adopted Resolution 98-28 directing staff to obtain a survey,
appraisal, and proceed with public bidding for the sale of the property.
NOW TJiEREFORE, BE IT RESOLVED BY T.I:1E CITY COUNCIL OF PRIOR LAKE:
FINDINGS
1. The appraisal for the subject property estimates the market value to be $110,000.00
2. Notice of the sale and bid closing date of July 6, 1998 was published in the Prior Lake
American on June 20 and 27, 1998.
3. The bids were publicly opened on July 6, 1998 at 11:01 a.m.
4. The City received two bids. One from Apartment Home Equity Program, Inc. for $23,500
and one from Towering Woods Partnership for $60,500.
5. The City Council has considered the effect of disposing of Lot 2, Block 3, Brooksville
Center 1st Addition and has determined there is no relationship of the disposal to the
Comprehensive Plan.
16200 Eh~~u1tjflt~93~lEl~tr39axJil;eJcleFMinnesota 55372-1714 / Ph. (612) 447-4230 / Fax (61~8447-4245
AN EQUAL OPPORTUNITY EMPLOYER
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6. The property is surplus to City needs.
7. The contents of Planning Case File #97-118 are hereby entered into and made a part of the
public record and the record of the decision for this case.
CONCLUSION
Based upon the Findings set forth above, the City Council hereby rejects all bids submitted on
July 6, 1998 for the sale of Lot 2, Block 3, Brooksville Center 1st Addition (less right-of-way)
and directs staff to;
. Proceed with the sale of the property utilizing a Realtor and authorizes the City Manager
to negotiate any such offers through the Realtor; and
. Through the administrative subdivision procedure set forth in the City Code, to proceed
with the division of the right-of-way from the remainder of the parcel.
Passed and adopted this 20th day of July, 1998.
YES
NO
Mader
Kedrowski
Petersen
Schenck
Wuellner
Mader
Kedrowski
Petersen
Schenck
Wuellner
{Seal}
City Manager,
City of Prior Lake
1:\98fi1es\98subjec\97-118\rs98xxcc.doc
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APPRAISAL SUMMARY
SUMMARY OF IMPORTANT CONCLUSIONS
LOCATION: At the corner of Toronto Avenue and Tower
street, Prior Lake
TYPE OF PROPERTY: Vacant Land
OWNER OF RECORD: city of Prior Lake
DATE OF INSPECTION: April 24, 1998
DATE OF VALUATION: April 24, 1998
HUDSON MAP COORDINATES: 161-4B
LAND AREA:. 1.699 Acres +/-
74,000 +/- Square Feet
DIMENSIONS: See attached section Map
194.12 X 380.00 X 195.35 X 380.01
IMPROVEMENTS: None
ZONING: R-3 Multiple Residential
PROPERTY RIGHTS
APPRAISED: Fee Simple Estate
LEGAL DESCRIPTION: Lot 2, Block 3 Brooksville Center First
Addition, Scott County, Minnesota
HIGHEST AND BEST USE: Those uses permitted by present zoning
6
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PROPERTY ID~~~IFICATION
NUMBER:
REAL ESTATE TAXES
PAYABLE 1996:
SPECIAL ASSESSMENTS:
UTILITIES:
ASSESSED VALUE:
FINAL ESTIMATE OF
VALUE:
......' ~-,....,.
25-022006-0
Tax Exempt
None
Telephone, Electric, Gas,
Sewer / Water, Storm Sewer.
None Reported
$110,000
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LAND SALES SUMMARIZED
SALE SALE SALES SIZE PRICE
NO. DATE PRICE SQ. FT. PER SQ.
FT.
KESTREL V'LLAGE 1 3/94 $210,000 165,528 $1.27 B-3/R-3
FA'RV'E~" CLlN'C 2 3/95 $133,000 66,500 $2.00 R-1
PARK N'COLLET 3 1/96 $597,500 506,167 $1.18 B-3
BEH't.., PR'ORDALE MALL 4 8/96 $ 90,000 60,984 $1.48 B-3
SAFE HAVEN 5 11/97 $ 46,000 25,265 $1. 82 R-3
-.,.
COMPARABLE SALES ADJUSTMENT GRID
TOTAL VALUE
PRICE PER ADJ. PER
SALE NO. SQ. FT. SIZE LOCATION ACTOR SQ.
FT.
(Xl (Xl
1 $1. 27 1.13 1.00 1. 44 $1. 83
2 $2.00 0.98 0.90 0.88 $1. 76
3 $1.18 1. 34 0.90 1.21 $1. 42
4 $1. 48 0.97 1.00 0.97 $1. 44
5 $1. 82 0.85 0.95 0.81 $1. 47
MEAN OF SALES PER SQUARE FOOT = $1.58
40
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DIRECT SALES COMPARISON APPROACH
Summary:
The Direct Sales Comparison Approach to Value (Market Approach) is
based upon the principle of Substitution. The principle states
that a person would not be willing to pay more for a property than
it would cost to acquire a comparable substitute property. The
analysis compares recent sales of comparable properties to the
subject when there is sufficient data available from the market.
The approach is easily understood and utilized by both buyers and
sellers when familiarizing themselves with the market.
In estimating the Market Value of the subject site, the most recent
transfers or offerings of comparable sites were analyzed. I
selected five land sales which were in the subject's neighborhood
or closely associated with respect to location and amenities. All
sales were adjusted for differences between them and the subject to
arrive at a relative market value. Following is a summary of those
transactions. After making adjustments to this data for such
factors as location, size, utility, etc., and considering the
relati ve strength of each sale as an indicator of value when
compared to the subject site, I found that the value would fall in
the following range:
$1.42 per square foot to $1.83 per square foot with a mean of $1.58
Based on my analysis, it appears $1.50 per square foot of gross
land area is a reasonable representation of the subj ect 's land
value assuming a site which is fully developed and ready to receive
a building improvement conforming to the current R-3 Multiple
Residential zoning. Thus, a value for the subj ect land is
calculated as follows:
site area: 74,000 Square Feet @ $1.50 per Sq. Ft. = $111,000
Rounded To: $110,000
33
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