HomeMy WebLinkAbout8B - Horkey Land Purchase Proposal
1k1 'J)U I
PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY
STAFF AGENDA REPORT
AGENDA #:
PREPARED BY:
SUBJECT:
DATE:
8B
DONALD RYE, PLANNING DIRECTOR
CONSIDER HORKEY LAND PURCHASE PROPOSAL
NOVEMBER 3, 1997
INTRODUCTION:
Roger Guenette has had conversations with Gary Horkey of
Keyland Homes regarding his possible purchase of a parcel of
land adjacent to the Keyland site on the east. The results of
those conversations are summarized in the attached proposal.
DISCUS~~
1 The proposal includes a phased purchase over a 5 year time
WI- frame and return of al xcess incremen 0 key. The
, EDA s ould come to some resolution of this issue as the
parcel in question could also be included in the parcel of land
proposed to be optioned by Jeff Wallis. If the EDA decides
not to sell the land to Mr. Horkey, the only other feasible user
of the property would be the owner of the 4+ acre parcel.
ISSUES:
Roger Guenette is recommending that the EDA sell the parcel
to Mr. Horkey on the terms contained in his memo.
I. EDA financing of the purchase.
2. Use of excess increments
./
ALTERNATIVES: I. Sell to Mr. Horkey at the proposed terms
2. Offer other terms to Mr. Horkey
ACTION REQUIRED: Motion directing staff
Document4 I
16200 E~e Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
OCT-27-1997 16:30 FROM ADVANCE INC.
TO
1-612-447-4245
P.02
DVAIICE
TO:
Gary Horkey
Frank Boyles
Don Rye
FROM:
Roger Guenette
DATE:
October 15, 1997
RE:
Sale of Additional Property to Keyland Homes
I recently met with Gary Horkey of Keyland Homes to discuss the possible sale of approximately
25,080 SF of property immediately adjacent to and east of the company's operations in WaterFront
Passage Business Park (see enclosed map). The costs associated with this transaction are identified as
follows:
Land acquisition (25,080 SF x $2.04)
Legal and administrative
TOTAL
$51.163
9.500
$60.663
Mr. Horkey is interested in acquiring the property to provide future expansion opportunities
although the timeframe for such action is indefinite. Without acquiring the property, expansion options
would be limited to 5,000 SF of additional facility. With the property. it would be possible to construct
15,000+ SF of additional facility. .
If Mr. Horkey expands the existing facility within the next several years. it would be possible to
generate TIF revenues that could be used to underwrite a portion of the acquisition costs. To facilitate
the future growth of an existing local business and market a small parcel within the business park, the
following financing arrangement is proposed for consideration:
· Down payment
. Annual payments
1998 through 2003
TOTAL
$10,663
Business Finance and
Economic Development
Specialists
CORF'OR^TE OFFICES:
P.O. Box 32609
Mpls.. MN 55432-0609
Phone: (612) 755-5393
Fox: (612) 755-7741
P.O. Box 3027
Mankato, MN 56002-3027
Phone: (507) 387-7117
Fox: (507) 387-6115
OCT-27-1997 16:30 FROM RDVRNCE INC.
TO
1-612-447-4245
P.03
benefit would be to Mr. orke _ Following are estimates of the TIF revenues that could be available to
r. orkey if a facility expansIon was completed in 1998:
. Potential 5,OOOSF expansion
. Potential lO,OOOSF expansion
CI'_nl:lltiVE! TIP
Revenues Net of LGA/HACA
~~725)
$37.450
$56,280
Expansion Proiect
. Potential 15,OOOSF expansion
By structuring the transaction in the manner depicted herein, the EDA/City would assist a local
business person by minimizing his cash flow requirements and create an incentive for rapid development
of property that is presently underutilized.
2
TOTAL P.03