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PRIOR LAKE
ECONOMIC DEVELOPMENT AUTHORITY
DATE:
FRANK BOYLES, CITY MANAGER
APRIL 11, 1996 ECONOMIC DEVELOPMENT AUTHORITY
REPORT
APRIL 5, 1996
PREPARED BY:
SUBJECT:
This Agenda Report is intended to address each of the business items on the April 11
Economic Development Authority agenda.
1. Call to Order
2. Pledge of Allegiance
3. Presentations
4. Old Business
A. Discussion of Development/Redevelopment Proiect with Developers
At their March 4 meeting the Economic Development Authority received a
report from Roger Guenette with respect to a proposed
Development/Redevelopment project involving the Drive-Inn Theater site and
the Priordale Mall property. A concept plan of the project was also reviewed by
the Economic Development Authority including the need for acquiring and
relocating the various businesses in the area including the body shop, towing
company, Hollywood, Velishek Auto and EZ Stop.
The Economic Development Authority also reviewed a Concept Development
Proposal for this area and expressed its concerns and interests with respect to
the proposed project.
The City Council then conducted a workshop prior to its April 1st meeting to
discuss the assumptions with respect to the Development/ Redevelopment
project. Changes were made in assumptions #2 and #3. A revised version of
the assumptions is attached. More importantly, the Council concurred that the
assumptions are not set in stone but instead may be subject to consideration of
specific benefits which the public receives as part of the development proposal
and the degree to which it conforms to Council desires. At the April 1 meeting
the City Council also received a report from Advance Resources for
Development which provided preliminary financial information about the
project, compared the project to similar projects in other communities and
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be the most appropriate areas for annexation on the basis of the following
rationale:
1) All three are within Spring Lake Township with whom we have an orderly
annexation agreement.
2) The proposed areas for annexation are consistent with the township board's
request the City not "cherry pick" the best parcels and leave less desirable
parcels to the township.
3) Each of the parcels have or will have sewer and water stubbed to its
boundaries.
4) The land contemplated for annexation fulfills City needs including
extension of business park, additional properties for educational facilities,
or a logical addition to the city from the perspective of roadway access or
storm water drainage.
The information shown below has been prepared by Planning and Engineering
to assist the Council in the annexation decision.
ANNEXATION AREAS
Maps are attached showing each annexation area under consideration, the
contours of each area, potential roadway alignments and prospective zoning.
PROPOSED ZONING FOR EACH ANNEXATION AREA
In order to evaluate the feasibility of annexation of any or all of the three
designated areas, staff developed tentative land use and zoning scenarios for
each area. The following text and accompanying map summarizes the
scenarios for each area.
Area 1 - This area is located south of the Business Park and east of The Ponds
Athletic Complex and has an area of approximately 300 acres. The proposed
land use for this area is an extension of the business park on the northeasterly
portion of this property (approximately 100 acres) while the remainder is
designated as low density residential. (The last communication from the
school district suggests that this property on the west of the parcel is
unsuitable for their school building needs.)
This land use pattern builds on existing development in the vicinity. The
roads in the business park were stubbed out to the south property line with the
intent of serving this area at some future date. Fish Point Road currently is
the division between low density housing in Wilderness Ponds and the
business park and this division is simply carried further to the south. Also, the
easterly portion of this area is flatter than the westerly portion and would lend
itself better to heavy commercial and industrial use.
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Area 2 - This area is east of Highway 13 and south of 170th Street. The
proposed land uses include low and medium density housing, commercial and
agriculturallresidential. The commercial is at the corner of Highway 13 and
170th Street and relates to the future commercial development adjacent to
County Market. The medium density housing better utilizes the high amenity
area on the north side of Crystal Lake. The low density housing occupies much
of the remainder of the area except for the agricultural/residential area along
County Road 23. This area is proposed to remain in large lot zoning because of
the difficulty in providing sewer and water to this area in an economical
fashion.
Area 3 - This area is located west of Northwood Road, adjacent to Spring Lake
Regional Park. The entire area is shown as low density housing, consistent
with the type of development in the surrounding area. Given the road access,
this is the only reasonable designation for this area.
ENGINEERING DATA
Attached are narratives entitled Annexation Study, Annexation Area 1, 2 and
3. This information provides basic development data on each property together
with the estimated infrastructure costs to serve each area. The sheet entitled
"Annexation Study" summarizes the assumptions used by engineering.
The bottom line with respect to each annexation area is that the cost of
infrastructure (streets, sewer, water, etc.) can be borne by assessments
assuming the intensity of development shown. We have tried to estimate high
on the infrastructure costs and low on development densities so that the
estimates are conservative.
The estimated costs do not include year to year maintenance and operating
costs and their impact upon the general fund budget. For the sake of this
preliminary evaluation we have assumed that the tax base added will pay such
costs.
ANNEXA.TION PROCESS
If the City Council decides to annex one or more of these areas, a process must
be followed. The process is shown below:
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In 1972, the then-Village of Prior Lake entered into an orderly annexation agreement with
Spring Lake Township under provisions for such agreements contained in state statutes.
The agreement provided for the possible annexation of Sections 1,2,3,4,9,10,11,12 and
the east half of sections 5 and 8. Since that time, all of sections 1,2 and 3 have been
annexed as have portions of 10 and 11.
The agreement specifically confers jurisdiction upon the Minnesota Municipal
Commission (Board) to accomplish the orderly annexation. This fact is significant
because of a clause in the statute which would have given the Board only a 30 day review
and comment period if the agreement had called for this. However, because of the
language in the agreement, the full hearing process must be followed. This will be
discussed later in this report.
Only areas which are, or are about to become urban or suburban in character may be
annexed and then only if the City has available and is capable of providing municipal
services such as sanitary sewer, water and storm sewers.
Any property annexed shall receive a "tax break" over a three to five year period based on
the time required to provide municipal services. This '"break" is a staged, graduated
increase from township mill rates to City mill rates.
STEPS IN THE Al'-INEXA TION PROCESS
There are two possible approaches which may be taken in annexing part of an orderly
annexation area; the first is by ordinance and the second is by resolution.
Ordinance Procedure
1. The municipality sets a date for a public hearing.
2. Thirty days prior to the hearing, the City mails notice of the hearing by certified mail
to the affected township and all property owners in and contiguous to the area to be
annexed.
3. Following the hearing, the City may declare the land to be annexed.
4. The adopting ordinance is filed with the Board..
5. Annexation becomes effective upon issuance of order by Board. There is no deadline
for Board determination.
Resolution Procedure
1. The City confers with township officials
2. The City adopts a resolution authorizing annexation oflegally described property.
3. The City submits the resolution and stipulations to the Municipal Board.
4. The Municipal Board sets a date for a public hearing between 30 and 120 days after
receipt of the petition.
5. The annexation becomes official upon issuance of an order by the Board.
The reason for the difference between the two procedures is that, under the ordinance
procedure, the township cannot object to the annexation if all of the affected landowners
have requested the annexation. The ordinance procedure does not otherwise negate the
remaining provisions of the orderly annexation agreement.
ANNEXNEW.DOC/FB
CONCLUSIONS
At the Thursday meeting the staff will present additional information with
respect to these annexation areas and the merits and demerits of pursuing the
annexation.
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ASSUMPTIONS WITH RESPECT TO DEVELOPMENT
REDEVELOPMENT PROJECT INVOLVING FORMER DRIVE -IN
THEATER AND PRIORDALE MALL SITES
April 1, 1996
1. The Council intends that there be no reduction III the amount of
commercial zoned land in this development area.
2. To qualif:y for Tax Increment Financing the project must demonstrate that
it will build business tax base over time to reduce residential property tax
burden and add jobs.
3. The time for redevelopment of this area is now. Once similar development
or development on a larger scale occurs along the Highway 13/42
intersection there is less likelihood that development will occur here in
the near future.
4. Because the project involves acquisition of existing properties, relocation
of existing property owners and demolition of existing structures, the costs
are much higher than are normally incurred in development. The project
will not take place because of costs associated with such actions. Since
tax increment financing is the only available tool, this is the only means
of getting the project accomplished.
5. While tax increment financing delays the availability of new taxes, it does
allow for the project to take place now rather than sometime in the future.
It is possible that tax increment financing will not be available as a tool to
the city in the future. The improvement itself will generate new tax base
by making Prior Lake a more desirable community to new residential tax
payers.
6. Ta.."'{ increment financing should not be offered to individual enterprises
within the development/redevelopment area, to avoid the possibility of
subsidizing new businesses at the disadvantage of similar existing
businesses that did not receive any public assistance.. Instead, tax
increment financing is limited to the acquisition, relocation and
demolition of existing businesses, and to cover costs incurred by new
infrastructure (ring road, etc.) which have long been contemplated for
these sites.
7. Tax increment financing should be repaid over the minimum period of
time while providing for the basic economic assistance the project requires
to take place.
ASSlJMl'TI< .DOC
8. The first priority is to relocate those existing businesses on the site
wherever possible to reduce the costs associated with acquisition,
relocation and demolition, and to support existing Prior Lake businesses
9. An effort needs to be made to provide significant and preferably "prime"
space in the development to house businesses which are presently under-
represented or un-represented in the Prior Lake marketplace. Top
priority should be given to businesses such as, but not limited to,
restaurants, sporting goods stores, specialty shops, theaters, and retail
outlets other than those presently existing in the community.
10. It is vital to view the area as a unified economic development district.
The economic value and potential tax generation capacity of the district is
the key focus initially. Specific uses and other land planning concerns can
be melded as the economic feasibility is identified and approved.
ASSUMPTN.DOC