HomeMy WebLinkAbout9B - Redevelopment of Blocks 2 & 4
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
R
SEPTEMBER 5, 2006
9B
PAUL SNOOK, ECONOMIC DEVELOPMENT DIRECTOR
CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING STAFF TO
RETAIN A CONSULTANT TO ASSIST IN DEVELOPING A REQUEST FOR
QUALIFICATIONS AND PROPOSALS FOR REDEVELOPMENT OF BLOCK
2 AND BLOCK 4 IN THE DOWNTOWN AREA AND PROVIDE FINANCIAL
ADVISORY AND OTHER REDEVELOPMENT RELATED SERVICES AS
APPROPRIATE; AND ISSUE THE REQUEST FOR QUALIFICATIONS AND
PROPOSALS FOR REDEVELOPMENT OF BLOCK 2 AND BLOCK 4.
Introduction
The Economic Development Authority is asked to authorize staff to engage a
consultant to assist in developing an RFQ-RFP for the redevelopment of
Blocks 2 and 4 in the Downtown area, and provide financial advisory and other
redevelopment related services as appropriate; and issue Request for
Qualifications and Proposals for the redevelopment of Block 2 and Block 4.
The RFQ-RFP will be issued to developers.
Historv
The 2030 Vision and Strategic Plan calls for a thriving downtown, and for the
downtown to be a unique community focal point and attraction that contributes
to the City's identity and offers opportunities for recreation, employment,
housing, shopping and dining. Goals included under this element include
encouraging redevelopment, and construction of mixed use buildings.
Over the last few years, the City implemented a downtown facade
improvement program in which many existing buildings I storefronts were
renovated. This was a very effective program since many properties were
improved in the downtown area, and City funds leveraged private investment
by nearly a 1:8 ratio.
In order to initiate redevelopment, the City has worked on property acquisition
on Block 2 (the block with the VFW) over the last few years; having acquired
one property (Joe's Pizza building), and negotiated with the owner of another
(MN Nails).
At its July 20th meeting, the Economic Development Advisory Committee
moved to recommend that to the EDA direct staff to engage a consultant to
assist in developing a RFQ-RFP for the redevelopment of Blocks 2 and 4, and
provide financial advisory and other redevelopment services.
Current Circumstances
Downtown Prior lake is experiencing the beginning of resurgence in
commercial development. The new city hall and police station will help bring
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consumers downtown and serve as gateways to lakefront Park. The Rock
Creek Building at Main Ave and Hastings Ave will also be completed, adding
17,000 square feet of Class A office and retail space to the downtown.
The next step is to capitalize on this revitalization and move forward with
downtown redevelopment. City plans call for further revitalization of the
downtown area in the form of redevelopment. Block 2, on the south side of
Eagle Creek Ave (County Highway 21), and Block 4, on the north side of Eagle
Creek Ave have been identified as redevelopment areas.
Many buildings in these redevelopment areas are in poor shape, in which
deferred maintenance is evident. In addition, many of the uses such as an auto
repair facility and lumber yard, are obsolete with current zoning and the future
comprehensive plan.
Staff and Mayor Haugen have met with VFW officials to discover their plans for
remaining downtown. They expressed an interest in not only remaining
downtown but also in improving and expanding their facility.
Staff has had discussions with Duluth based Inter-City Oil, owner of property
that Sebastian Auto leases; the company has expressed interest in
entertaining an offer to purchase the property. Staff has contacted Sebastian
Auto. The owner of the business understands the future direction of downtown
development, and staff will work with him on finding alternate locations.
Following is a summary of ownership and redevelopment disposition of the
properties.
Block 2
c Current ownership. There are four properties on this block. The
VFW is the largest property owner and owns an older building and
a large parking lot behind the building on the western part of the
block. There are two vacant buildings in a state of disrepair, one
owned by the City, and another owned by a family that had a nail
salon business in it. An oil company owns the property on the
northeast corner and leases it to an automotive repair shop. The
owner of the automotive repair shop understands that the current
use of the property is obsolete and does not fit with current and
future zoning, and will eventually have to move.
c Redevelopment Disposition: The City has acquired one property
(Joe's Pizza) through negotiated purchase. The City Council is
very clear that the VFW is a community institution that needs to
remain in the downtown and be part of the redevelopment. The oil
company is willing to consider selling and would entertain an offer.
The City has attempted to negotiate with the owners of the vacant
nail salon building (MN Nails) but hasn't had success; the owners
have been difficult to reach and communication is complicated in
that the owners are recent immigrants from Southeast Asia with
English as their second language.
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Block 4
c Current ownership: the City owns parking lots, a retail building
(acquired for future right of way expansion and currently leased
by a flower shop) and the library (which is not subject to
redevelopment). There is a lumber / building supply business in
the middle of the block, which is an obsolete use and does not fit
with current and future zoning. The "Professional Building"
houses an antique shop and other businesses. A recently
developed retail/office building (bakery on street level and and
offices above) known as the "Speiker Building" is not subject to
redevelopment.
c Redevelopment disposition: A local developer has expressed
interest in redeveloping the entire block with exception of the
library and Speiker Building. The developer has informally
proposed (to City staff) that the City make a commitment of its
property for redevelopment first, and then the developer would
proceed with acquisition of the remaining privately owned
property and ultimately develop a mixed use project (retail, office,
and possibly residential), along with a parking structure
incorporated into the project as has been done at the Excelsior &
Grand development in St. louis Park.
To date the City has not issued a redevelopment RFQ - RFP for
redevelopment. As was done for the Main and Hastings site (where the Rock
Creek building is now under construction), the City would issue a Request for
Qualifications and Proposals for the selection of a developer to plan and
redevelop Block 2 and / or Block 4 (including retention of the VFW). However,
it will differ from the previous RFP in that it will call for the developer to acquire
the necessary properties rather than the City doing the outright acquisition.
Redevelopment will be a private-public partnership with the City participating in
financing the project through Redevelopment Tax Increment Financing.
Conclusion
Redevelopment in downtown Prior lake is supported and called for in various
policy and planning documents of the City, including the Comprehensive Plan,
2030 Vision and Strategic Plan; The Prior lake Downtown Development
Guide; and Prior lake Market Analysis by McComb Group, Ltd.
Block 2 and Block 4 are areas of redevelopment opportunity. In order to
proceed with redevelopment, it is necessary to issue Request for Qualifications
and Proposals for redevelopment. A preliminary timeline for the RFQ-RFP
process is as follows:
c September 5, 2006 - EDA approves retaining Financial Advisory
and Redevelopment Consultant Services to prepare RFQ-RFP.
c Late September/Early October 2006 - Issue Request for
Qualifications and Proposals for Redevelopment of Block 2 and / or
Block 4 in Downtown Prior lake
c October 2006 - Receive proposals from potential developers for
redevelopment of Blocks 2 and / or 4
c November 2006 - Select developer for redevelopment of Blocks 2
and / or 4
c December 2006 - Negotiate with selected developer(s) and prepare
development agreement
ISSUES:
Prior to soliciting the RFQ-RFP the City will need to address two issues:
1.) How does the City sell its portion of property for this redevelopment while
remaining in conformance with state statute?; and
2.) To what extent and how can the City provide assistance to develop public
parking and streetscape?
These policy and legal questions will be addressed as part of the RFQ-RFP
process.
FINANCIAL
IMPACT:
A rough estimate of a consultant to assist in developing the RFQ-RFP and
provide financial advisory and other redevelopment related services is
estimated at $15,000 - 20,000 drawn from the EDA budget.
ALTERNATIVES:
1. Approve the Resolution
2. Deny the resolution
3. Defer for a specific reason
RECOMMENDED
MOTION:
Alternative 1.
Reviewed by:
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Frank Boyles, C7ag
r / EDA Executive Director
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A RESOLUTION AUTHORIZING RETENTION OF A CONSULTANT TO DEVELOP
REQUEST FOR QUALIFICATIONS AND PROPOSALS FOR REDEVELOPMENT OF
BLOCK 2 AND BLOCK 4 IN THE DOWNTOWN AREA AND PROVIDE FINANCIAL
ADVISORY AND OTHER REDEVELOPMENT RELATED SERVICES AS
APPROPRIATE, AND AUTHORIZING ISSUANCE OF REQUEST FOR
QUALIFICATIONS AND PROPOSALS FOR REDEVELOPMENT OF BLOCK 2 AND
BLOCK 4
MOTION BY:
SECOND BY:
WHEREAS, the City of Prior lake, adopted the following:
1. Resolution No. 05-78, A Resolution adopting the 2030 Comprehensive Plan; and
2. Ordinance No. 01-16, An Ordinance amending the Zoning Ordinance for the C-3
Specialty Business District (Downtown); and
3. Resolution No. 05-103, A Resolution adopting the 2030 Vision and Strategic
Plan; and
WHEREAS, in December 2003 the City conducted market analysis (the Prior Lake
Development Potential report by McComb Group, Ltd) to determine future demand for
retail, residential, and office I industrial development; and
WHEREAS, in June, 2000 the City produced the Downtown Development Guide to
direct development and redevelopment in the downtown area, resulting in an amended
zoning ordinance for the C-3 District; and
WHEREAS, pursuant to the Comprehensive Plan, Downtown Development Guide,
2030 Vision and Strategic Plan, and Prior Lake Development Potential market analysis,
the City desires to facilitate progress and encourage the redevelopment of the
Downtown area; and
WHEREAS, as part of the redevelopment of the Downtown area, the City and its
Economic Development Authority (EDA) anticipates redevelopment of the properties
located on Block 2, bounded by Main Avenue, Pleasant Street, Colorado Street and the
City parking lot; and
WHEREAS, as part of the redevelopment of the Downtown area, the City and its EDA
anticipates redevelopment of the properties located on Block 4, bounded by Main
R:lAgenda ReportslSeptember 5 20061Sept 5. 2006 - Economi~~M~_~ent Consultant Resolution.doc
Phone 952.447.4230 / Fax 952.447.4245
Avenue, County Highway 21, Dakota Street and Erie Street, excluding the property at
(address) Main Avenue and the City Library; and
WHEREAS, the redevelopment of these properties along with other improvements in
the Downtown area are essential to the improvement of the health, safety and welfare of
the Downtown and the City as a whole; and
WHEREAS, the EDA may authorize funding from the Economic Development budget
for retaining redevelopment consultant services.
NOW, THEREFORE, BE IT RESOLVED BY THE PRIOR LAKE, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY, as follows:
Section 1. That the EDA hereby adopts each and every recitation in the preamble
of this Resolution as its findings.
Section 2. That the Executive Director of the Prior Lake EDA is hereby authorized to:
1.) Retain a redevelopment consultant to:
a.) Assist in developing a Request for Qualification and Proposals for the
redevelopment of Blocks 2 and 4 in the downtown area;
b.) Assist in evaluating qualifications and proposals submitted by developers;
and
c.) Provide financial advisory and redevelopment related services;
2.) Issue Request for Qualifications and Proposals for the redevelopment of Block 2
and Block 4 of downtown including the evaluation thereof and preparation of a
report with recommendations for consideration and final approval by the
Economic Development Advisory Committee, Economic Development Authority
and City Council.
PASSED AND ADOPTED THIS 5TH DAY OF SEPTEMBER, 2006.
YES
NO
leMair
Dornbush
Erickson
I Haugen
I Millar
leMair
Dornbush
Erickson
Haugen
Millar
Frank Boyles, Executive Director
R:\Agenda Reports\September 5 2006\Sept 5, 2006 - Economic Development Authority\Redevelopment Consultant Resolution.doc