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HomeMy WebLinkAbout6B & 6C - Spring Lake Township Annexation AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: STAFF AGENDA REPORT 6B&C FRANK BOYLES, CITY MANAGER CONSIDER APPROVAL OF ANNEXATION OF 230 ACRE AND 31.25 ACRE PARCELS LOCATED IMMEDIATELY SOUTH OF THE CITY'S WATERFRONT PASSAGE BUSINESS PARK. MAY 19, 1997 The City has received a petition to annex both properties from all property owners. Since receipt of the petition and scheduling of the hearing, numerous meetings have taken place between the property owners and the Township Board. The Township Board has now approved the Joint Resolution and three party agreement which in the opinion of staff is the preferred course under the circumstances. The Council should decide: 1. Whether it wishes to annex the property. 2. Whether such annexation should be accomplished through the Joint Resolution / Three party contract or through ordinance. Minnesota Statutes provide for more than one method of annexation for property located within the Orderly Annexation Area and subject to an orderly annexation agreement. Initially, when it appeared the Township would not favor annexation of the 260 acres, the owners of the property on April 11, 1997 submitted petitions to the City requesting annexation. The petitions require that the City conduct a public hearing following 30 days public notice to determine whether the properties should be , annexed by ordinance. The ordinance is then forwarded to the Minnesota Municipal Board. The second method of annexation which is the one the staff is recommending requires consensus between the township, City, with input from the property owners. This method involves adoption of a Joint Resolution between the Township and City which recommends Annexation of 16200 Ea~h:5(9ooIDoAve. S.E., Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 44r7-4245 AN EQUAL OPPORTL"NITY EMPLOYER DISCUSSION: ISSUES: 6BC51997.DOC the Property under certain circumstances and III accordance with the wishes of the property owners. Following receipt of the April 11, 1997 petitions, the City established a Public Hearing date for Monday, May 19 to receive input on whether or not an ordinance authorizing annexation should be adopted. Under Minnesota statutes, affected property owners have been notified, and considerable publicity has been contained in the Prior Lake American. It is entirely likely that a large number of Township residents will be present to express their opinions regarding annexation. On Thursday, May 15, the Township Board met to discuss the possibility of adopting a Joint Resolution authorizing the annexation of the property for which petitions have been submitted. The Township Board had previously voted by a margin of 2-1 to support a Joint Resolution if the City paid a $60,000 fee in exchange for the annexation. The fee was intended to cover lost tax revenue to the Township if this property develops in Prior Lake. At the May 15 meeting, the Township Board authorized the Chair and Clerk to sign the Joint Resolution and three party agreement (drafts attached) between the City, property owners and Township if the City and property owner agree to both. The $60,000 fee is being paid by the property owners in increments of $12,000 over a 5 year time period. The payment is made to the City, who in turn conveys the payment to the Township. The rationale for this payment method is that it was used in the Woodridge annexation in 1991, and affords the Township some level of security that payments will be received even after annexation. To protect the City, the agreement requires an Irrevocable Letter of Credit be provided by the Property Owners to the City to assure that there will be no forfeiture of the payments by the property owners. 1) Should the City Annex the 260 Acres? 2) If so, what mechanism should be used? Financial proformas (attached) show that if the property is developed in general conformance with the concept P.U.D. that the property owners presented to the City Council earlier this year at a workshop that up to 700 homes could 2 , . be constructed under no school option and 280 homes under a school option. I am attaching for Council information a copy of each pro-forma. As Councilmembers can see, under either scenario, the developed property will cover its service-related expenses through tax revenues. With annexation, the property will develop on an urban basis rather than rural. Development will be consistent and in accordance with City zoning requirements and will be complimentary rather than undermine our taxpayers' substantial investment in the business office park. Even if the commercial property receives Tax Increment Financing, under which the tax revenue of the property continues to be shared by all Taxing Districts while the Tax Increment created by the construction is devoted to the project, the tax scenario is positive for Prior Lake, and especially when viewed after the Tax Increment expires. The 60 acre business office park is complimentary to the City Council's objective to diversify the City's property tax base by encouraging commercial development. It provides employment opportunities to Prior Lake residents. Finally, it provides additional opportunities for business owners living in the community to establish their businesses here. The annexation of the 260 acre parcel requires additional City services. However, the location of the property adjacent to the Maintenance Center and Fire Station make it readily assessable to deliver such municipal serVIces. If the Council elects to annex the property, the staff believes the most effective method is through the Joint Resolution process. The Council should review the Joint Resolution to determine whether there are any questions. Even greater focus should be given to the three party agreement, since it establishes the relationship between the City, Township, and property owners during and after the annexation of this property. The Joint Resolution was drafted by Terry Merritt who is representing the City on Annexation matters and the three party agreement was prepared by Andrew McCarthur, the Township's Attorney. 6BC51997.DOC 3 If the City Council adopts the Joint Resolution, the annexation process will be expedited. Under the Joint Resolution process, the Minnesota Municipal Board will have thirty days to review and comment whereas under annexation by ordinance, the Board has an indefinite time to review and approve. Annexation by Joint Resolution expedites the process, and reduces annexation-related expenses for the City, Township, and property owners. AL TERNATIVES: 1. Determine whether the property should be annexed. 2. Determine whether annexation should take place by Joint Resolution or by Ordinance. 3. If by Joint Resolution, then determine if the Council wishes to honor the property owner's request to continue the hearing to June 2, 1997. 4. Direct the staff to prepare amendments to the Comprehensive Plan, which would incorporate this property within the City's boundaries as part of the Urban Service Area for Utility Extension purposes. RECOMMENDATION: The staff would recommend that the property be annexed for the reasons set forth above. The most effective and expeditious means of annexation is through Joint Resolution, therefore it is recommended that the Council adopt the Joint Resolution and three party agreement. The Council should determine if it wishes to honor the petitioners' request to continue the public hearing to June 2, 1997. This action preserves the rights of all parties. As a practical matter, the hearings would be canceled upon submission of the fully executed Joint Resolution Municipal Board. Finally, the Council should provide direction to the staff to initiate a Comprehensive Plan amendment to incorporate this property within the City of Prior Lake as an extension of the Municipal Urban Service Sewer and Water Area as expeditiously as possible. ACTION REQUIRED: 1. Conclude that annexation IS appropriate through a motion and second. 6BCS1997.DOC 4 6BC51997.DOC 2. Adopt resolution 97-XX which is a Joint Annexation Resolution. By motion and second determine if the petitioner's request to continue the public hearing is to be approved. Direct the staff to amend the Comprehensive Plan. 3. 4. 5 ~........ ,-/'.-; ,. ~. ., Ii : '~ ''-/ ~~ "/ ., ,,---~--'~ ",.- '" '/ " ' ,,- '" .~ ~", . -' . / 1 ~- '., . '. ''----, . : ~---=-' '-:;;:..:- '~ \c- ~ c, [::::::,-4',.".-.1_ '~~..... l'~ le: n!= ,1 >j E21, "-"r...... " ~ _,__ '~"~i' ~ I __j''':'-'' '. :o-~ : '~..:'.':...), - " -' ~- " n_ ! . ',:J ( , " '?! '- ?-' "-::fi ~ ~v.; ,_, ~ - mY , ~,- r -J c-:7~~~i\? 'jiY"i; ~~-,-C'-~ Ii}' " t=":~'<i1':=-i '1'. (=<~ r-. " ----;". ...~"I_ , -'- . / ?'/ _______ f---- -'" ~ . , _,' --ZJ '_~ I' .,~ 6::{'1 .. mG , '--L:~ ~'- =~ /'~ ~ ,'~ / ,;~ . -- rS-"-< =--, -, j. r,..., '?'-/'c- ~ c ~~ ~'"r''' 1",,'0 "S,,,;:-. ,_ ~' ~ -- . ""~,~'" '~', \\., _"-c" _ . " · 'C'. -,., "'0;._ ',,~\ "n. ' . 3. L.,-=. o/A~~,;>-.---r-_ (~~ _~_~~, '~,"--1:~: ~ . ~{~,~ ._c;~ -v.. ',~ ._ ~ . '~'-\-\'~-' ~-';:::"'_'~,t'::_'~ ';, , ~:)Q~"". ~. 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'-.: ~ '~./-\': \.'\~-.,:. . ~-~'-;-' _\\j ~~~ ~~-::~::,~.:" -co-, ~""'4y, _, "( ',!$'1';;"""':::=; , ~.~_.>.:..;~< ) ;,o.,'-=.... . - 'C :~'~ ~"'~ ~~:~::~ "":-7 : : '..., ~ I Y:f.,I! --=-~., -ift:; 'I '. ~ >" ';--~\ ' ..., -:: :~; i ~ . p.) ~ ~~ ~~ ~ ~ e; z::. m b- !:! -< C:;J ;- > "TI ~ ~ ~ : ~: ~~ ::\G\ ;~ ~f [1l:j g~ g ~ ~ Z ~ ~ ~ r' , , , '---, ,. '! -, ...... . ..,. ~~~=:: \ :::::. '\- :~~- --- " A~~~- 'i_,L-..._ .,~ 1...- '- . INTEROFFICE MEMORANDUM DATE: Frank Boyles, City Manger Ralph Teschner, Finance Director Annexation Area #2 Fiscal Impact Option #2 - Includes School Site f- Revised 5/1/97 TO: FROM: RE: The following table indicate approximate tax revenue and service expenditures that might reasonably be projected during the 5th and 15th year of existence for properties located in Annexation Area 2 adjacent to the Business Office Park. There are 260 acres in the proposed annexation area of which 50 acres is wetlands, a school option of 80 acres, 57 acres anticipated to be developed as a continuation of Waterfront Business Office Park and 73 acres of proposed residential development. In order to arrive at valid comparisons it was necessary for a number of assumptions to be determined as indicated below. 1 Year Tax Stream/Service Demands Tax Capacity Valuation Property Tax Revenue Service Cost Net Impact ..... ..................... $17,495.00 $5,725.00 $1,134.00 $4,591.00 5 Year Tax Stream/Service Demands Tax Capacity Valuation . ................... Property Tax Revenue Service Cost Net Impact 15 Year Tax Stream/Service Demands ~r()pel1:1Taxl{e:v.eI1':l:~u Service Cost . ut-JetIrnpact $672,695.00 (Res) }::~~!;W99Q;~(pl:nU $220,113.00 (Res) :~~'~~;.g$.~~QQ(9(Qm $532,345.00 (total) $239,274.00 ::::::::~:::::::::::~:~:::::::~:::::::::::::::::::::::::~:::::::::::::::::::::::::: ::.:;:::;.;:;:;::::::::::::.;.::::;:;:::::::::::::::;:::::::;:;:::::::::;:;:::;:::: .. ....... ............................. $293,071.00 Assumptions: . $17,495 beginning tax capacity valuation . 28 housing units constructed per year . $150,000 market value average . $2,340 per household tax capacity valuation . Municipal 1997 tax rate of .32721 held constant . Commercial/industrial tax valuation: zero in year 5 due to TIF $10,000,000 in year 15 (market value) $460,000 tax capacity valuation (4.6%) $312,232.00 c/i property tax per county fiscal disparity worksheet . Service cost: $440 per capita ($6,153,718/14,000) $378 per capita (86% ofTCV residential) . Population: 2.25 per household 280 additional housing units (per developer estimates) 1997 - 3 2002 - 318 2012 - 633 16200 Eagle Creek Ave. S.E.. Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQuAL OPPORTUNITY EMPLOYER H:\MEMOIMEM9703.00C INTEROFFICE MEMORANDUM TO: FROM: RE: DATE: Frank Boyles, City Manger Ralph Teschner, Finance Director Annexation Area #2 Fiscal Impact (Option #1 - No School Site) ~ Revised 5/1/97 The following table indicate approximate tax revenue and service expenditures that might reasonably be projected during the 5th and 15th year of existence for properties located in Annexation Area 2 adjacent to the Business Office Park. In order to arrive at valid comparisons it was necessary for a number of assumptions to be determined as indicated below. Service Cost $17,495.00 $5,725.00 $1,134.00 1,655,495.00 (Res) .........................$4~g~q99.00..(@lH....... ,695.00 (Res) *~q$;$$$,Qq{9~Q?q $850,250.00 (total) $596,484.00 ......-..."..........,.............. .......- .-,.............--.......... ...-...... "',' -..-....,............. ............................................... . '.-.. ..'... ............. ......."...................-.... ...---..............-..-.....-.......... ..........:...-:-................-...........-.,..........'........,..........'.....-...... n.. . ... _._... ._......... ...........q.'................................... . . ...... .......... ......._,-... . .. . ........................... $253,766.00 Assumvtions: · $17,495 beginning tax capacity valuation 70 housing units constructed per year . $150,000 market value average · $2,340 per household tax capacity valuation · Municipal tax rate of .32721 held constant · Commercial/industrial tax valuation: zero in year 5 due to TIF 510,000,000 in year IS (market value) 5460,000 tax capacity valuation (4.6%) $312,232.00 cli property tax per county fiscal disparity worksheet . Service cost: 5440 per capita ($6,153,718114,000) $378 per capita (86% ofTCV residential) · Population: 2.25 per household 700 additional housing units I 997 - 3 2002 - 790 2012 - 1.578 16200 Eagle Creek Ave. S.E.. Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQl;AL OPPORTl'NITY E:v1PLOYER HIMEMOIMEM9703 DOC SENT BY: 5-15-87 17: 1,5 SEVERSON SHELDON~ 6124474245;# 2/ 3 D K )L\ 'y T IN THE MATTER OF THE JOINT RESOLUTION FOR ORDERLY ANNEXATION BETWEEN THE CITY OF PRIOR LAKE AND SPRING LAKE TOWNSHIP, MINNESOTA PURSUANT TO MINNESOTA STATUTES 414.0325, SUBD. 1 To: Minnesota Municipal Board Suite 225 Bandana Square 1021 Bandana Boulevard East St. Paul, MN 55108 The Town of Spring Lake (Town) and the City of Prior Lake (City) hereby jointly agree to the following: 1. That the following described area in Spring Lake Township is in need of orderly annexation pmsuant to Minnesota statutes 414.0325, that this agreement supercedes any existing agreements as to the property described herein. and that the City an.d Town designate the following area for orderly annexation: The Northeast Quarter of the Northwest Quarter except the South 8.75 acres of Section 12, To"\VDship 114, Range 22, Scott County, Minnesota, according to the U.S. Government Survey thereof: and All that part of the Northeast Quarter (NE 1/4) lying south of the Chicago, Milwaukee and St. PaulIWlroad Right-of-way; West Half(W 1/2) of the Northwest Quaner (NW 1/4); the South Eight and 75/"100 (8,75) acres of the Northeast Quarter of the Northwest Quarter (NE 1/4 ofNW 1/4); AND the Southeast Quarter of the Northwest Quarter (SE 1/4 ofNW 1/4)~ All in Section Twelve (12), Township One Hundred Fourteen (114), Range Twenty-two (22), Scott County, Minnesota, EXCEPTING from the above Registered Land Survey Nos. 19, 98, 114 and 128~ and Tract E, Registered Land SUIVey No. 114, Files of the Registrar of title~ Scott County, Minnesota. 2. The orderly annexation area is in need of municipal sewer and water ftom the City for potential development. 3. There are approximately three people in the orderly annexation area. 4. Both the Town. and the City agree that no alteration of the stated boundaries of this . agreement is appropriate and that no consideration by the Minnesota Municipal Board (Boud) is necessary. Upon receipt of this Resolution, the Board may review and comment, but shaD, within thirty (30) days, order the annexation in accordance with the terms ofthisjomt resolution. SEI'IJT BY: 5-15-37; 17:15; SEVERSON SHELDON~ 6124474245;# 31 3 D~~~T 5. The City will cause to be paid to the Town, the payments outlined in the Agreement between the Property Owners, the Town and the City attached hereto as Exhibit A Approved by the Town ofSprmg Lake this day of . 1997. TOWN OF SPRING lAKE By: Town Board Chair By: Town. Board Clerk Approved by the City of Prior Lake this _ day of . 1997. CITY OF PRIOR LAKE By: Mayor ATTEST: city Manager 2 SENT BY: 2:0' d ltj1.01 5-16-97 10:57 SEVERSON SHELDON~ 6124474245;# 3/ 3 D-~ \\ \=--r DPArl' ! .---- I , ~~ ~ TB:IS AGRElDIEN:t' made this clay of Hay, 1997, by ilnd ~tw en the city or P~ipr Lake, a municipal corporation under the lAWS ~t the S'ta'te ot: Xinneso-ta ("City-), Sprinc; Lake Township, a polflot:ical aubdivision. of the State ot Minnesota C"TO"imship") I and Xes. ink eonB~-uotion , Enqin..rinq, Inc., D.~field Development LLC, John ~es.nbrink and Larry Gensmer ("Developers~). 'WBEUAS, Kesenbrink CQna1:rUctiQn & Engineerinq, .Inc. anc:l Dee DevelopmentLLc,are the owners of cert.ain pro~1:.y l.Clca~ed the Township described as follows (.Proper~y"): ' See EXhibit A. I.. 0 Co- WHElaAS, Devel.op8~S have peti tionad the City for annexation o"f the &bove descrlbedproperty into tns City, and WHEREAS I th. T~ship has agreed to s.isn that certain JoiDt Raso1ution For Orderly Annexation &ttachad as Exhibi~ 'A~ ~n ~he cor.dition that the el~~ ~j Oevelop&r agree to pay to th~ TOfn-hip 'the sum. of $60,000.00, paya:bl. in equ.al annual in.taJ.lm~t.,s pv.r a period of fi~e (5) ye4re of S~2,OOO.OO , the firs~ instbllmrnt or WhiCh will be due and payable upon the date of annexation ~th. above aescribed,property and eaah yearly in8tal~.ntshall e due ana payable upon the anniversary date of. the same, and WHEREAS, the DQveloper has agreeQ to provide the ci ty w ~ an irrevoca!:)le standby Letter of Credit for the blslance' Q the payments due during t.be five year period to guarantee paym nt of the aqreed upon amount to the Township, ana that aaidLet er of Credit may be reduced. yearly to an a1Qount conformin "to the r ducaa. balance due. Said Letter of credit may . the sae\tri1!.)'I r8quire~: for any sub.equent o~velopm.nt. A9ref!Jl1.,nt. b tween \ the City anc:t Oevelopers. r ().,..~ ~\~ ''::I Q~~r"'-J.c.. ",U <...~ ~ NOW, THEREFORE, in consideration of the ]Dutua~ cov ant.. , undertakings and aqreement. of the parties, the parti.~ a ee as tollows: - I 1:. The City aqreo. to execute the .Joint Rt!solution For ~derlY Annexation, Exhibit A. and oause payment of the $6Q,000:00 0 the Township as' stat:ed ~boYe. c.......S.- .---- ",~-Io t.,.. s b <L \ o.p . Z. The Townsbip ~qre.. to execute the Joint R.so~ution, Exhi it A. (L.'>w.-"" ") , 3. Developers a<;Jr.. to provi~ the initial payment of $12,00.00 4irectly toth@ 'T~wnahip, to make the subsequent pAymerits S s4t xorth a~ov8, and,ta provide the City with an Irr8VQCa~l.,tet ar of Credit to ~Qc~e payment to the TovnShip.(j4q,ooO). ::;:001...../ r.lCJC':7C-'" .,. ,_ ___ ... ,___ _ ~ .__w_._._ . _ ;.._'._. ';'..J:~.: ~ I' , William s. ll4dzwi1J. Andnw ]. MacAnhuT; Mich4el C. Couri. Megan M.McDo1U1ld. RADZWILL & COURl Anameys oJ Law 705 Cenn-al Ayenue &.sr PO Bar 369 St. Mit:.hael, MN 55376 (612) 497~1930 (612) 497-2599 (FAX) May .16, 1997 ! I I I I i , I I ! Resoluti~D Por Terrence Merritt Attorney at Law Severson, Sheldon, Dougherty & Molenda, P.A. Suite 600 7300 West 147th street Apple Valley, MN 55124-7538 RE: City of Prior Lake- Spring Lake Township, Joint Orderly AnDeKa~ioB Dear Mr. Merritt: I The Town Board of Supervisors of Spring Lake Township last hight, on a 2-1 vote, contingently adopted the Joint Resolutidn For Orderly Annexation as you drafted and transmitted to me yestbrday. The Town Board Chair and the Town Clerk were authorized to ekecute the OAA Joint Resolution, and an agreement for payment betwe~n the City, the Tpwnship and the Developer upon adoption of the OA1 Joint Resolution ,by the City, the City executing the payment ,aqrerment, and the City providing adequate assurances to the Deve~oper~ that they will in fact provide the requested services to the are~. To demonstrate good faith, the Developers have tendered for d~poSit in this la... firm's trust account the initial yearly payment of $12,000.00, to be held and dispersed upon approval of the I Joint Resolution by the Minnesota Municipal Board. I The Develo~ers have represented to the township that in thel event that for some reason the city fails to act upon the I Joint Resolution,. as both they and the township are requesting, at their regularly ~cbeduled City Council meeting on May 19, th~t the Oeveloper.sWill,. request that the public hearing SChedUle.. d f r Kay 19 be continued:to June 2. If the City fails to act upon :the atter the Tovnshfp joins in that request for a continuance td Jun~ 2~ " , . I The Develo~ers have further represented that ~f, forwhatev~r . i I I , G0'd st'Gt'L,t't' O.L 1 ++0 "I"E>i l-.Jno:] '3 {{llflZP"E>CJ WO~~ Wd6G :[0 L,661-91-S0 mOd ltHOl ,Lett~ tel) Attorney Merritt May1;6.,i997 Page 2 ; reason, the city is unable to provide adequate assurances ~o them that they will t~mely endeavor to deliver service to theare4, ,that they i~tend to withdraw their current petitionreq~esting annexat10n ~ Such as:surance would merely be, a statement of the commitment-stated within the joint resolution and which is necessary })y statute for annexation to occur. i . I [. cc: sprimg Lake ~own Board Bryce p. H~emoeller, Esq. have proceeded in 9004: faith the city of Prior La~e will . \ ' l~sted above as, requested by . I. ! i I \ I I i I I I i I I I I I I Both the:Townshlp arid the Developers in this matter. It is expected that reclprocateand ,act upon the matters the Developers and the Township. D21 0 d Sl7Cl7L.1717 i I r I I \ I I I' I I i ! i I I I I I !.:!-.to ;n-el !..In 0:) '& {11 rn z P-eCl WOCl.:l Wd0\Z : [0 L.661-91-S0 OJ.. HUEMOELLER & BATES ATTORNEYS AT LAW 16670 FRANKLIN TRAIL P05T OFFICE BOX 67 PRIOR LAKE, MINNESOTA 55372 JAMES D. BATES BRYCE D. HUEMOELLER May 16, 1997 Telephone (612) 447-2131 Telecopiet" (612) 447-5628 Frank Boyles Prior Lake City Manager 16200 Eagle Creek Avenue Prior Lake, MN 55372 Re: Deerfield/Mesenbrink Annexation Petitions Dear Mr. Boyles: At a special meeting on May 15, the Spring Lake Township Board of Supervisors authorized its Chairman and the Town Clerk to sign the proposed joint resolution and payment agreement for annexation of the Deerfield/Mesenbrink land after the documents are approved by the Prior Lake City Council. We were anticipating that the proposed joint resolution and payment agreement would be considered by the City Council on May 19 in lieu of the scheduled hearing on the Annexation Petitions. In order to permit the Township to attend the May 19 City Council meeting to discuss the proposed joint resolution and payment agreement without having to unnecessarily incur the additional expense of preparing to oppose the Annexation Petitions, I am at this time, on behalf of Deerfield Development LLC and Mesenbrink Construction & Engineering, Inc., requesting that the annexation hearing scheduled for May 19 be continued by the City Council to its June 2 meeting. Sincerely yours, ~thN-~ Bryce D. Huemoeller BDH/th cc: Deerfield Development LLC Mesenbrink Construction & Engineering, Inc. Andrew J. MacArthur, Esq.