Ed031003.docCITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes March 10, 2003
Regular Meeting City Hall
CALL TO ORDER
President Enck called the meeting of the Economic Development Authority to order
at 8:22 p.m.
ROLL CALL
Present: W. Peter Enck, President
Sharon Cassen, Commissioner
Don Collier, Commissioner
Mary Gwin-Lenth, Commissioner
Steve Sommer, Commissioner
APPROVE MINUTES
Motion was made by Commissioner Sommer, seconded by Commissioner Cassen,
to approve the Regular Meeting Minutes of February 24, 2003
. All present
voted in favor. Motion carried.
IMP. PROJECT 743 President Enck introduced for discussion Item 4, Discussion Regarding Updated
(formerly #597) Proposal and Continued Interest by Quest Real Estate, Inc./Plymouth Heights Pet
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Item 4 Hospital on City-Owned Property at 9200 49 Avenue North (Improvement Project
No. 743).
Mr. Kirk McDonald, Director of Community Development, stated in follow up to
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the February 10 discussion staff and consultants have met again with
representatives of the Plymouth Heights Pet Hospital. He stated they have submitted
a more detailed proposal. Staff requests that the EDA provide direction to staff as to
how to respond to this updated proposal and to Plymouth Heights Pet Hospital’s
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continued interest in the city-owned property at 9200 49 Avenue. Mr. McDonald
stated the other potential development for this property was Amcon Construction,
but they have not pursued the matter further as of this date.
Mr. McDonald cited the most recent correspondence submitted by Quest Real
Estate, Inc., on behalf of Plymouth Heights Pet Hospital, which states that “This
letter shall serve to express the continued interest of my client: Mr. Fleming, in
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purchasing the parcel of land at 9200 49 Avenue North in New Hope for
construction of a pet hospital. We were pleased to learn the EDA and City Council
members of New Hope have indicated an interest in our initial development
proposal and would like to pursue the matter in more detail.”
Mr. McDonald stated the applicant has submitted a background narrative on
Plymouth Heights Pet Hospital, a proposed site plan prepared by Paul Meyer
Architects, Inc., and a proposed image sketch, an estimate from Dobszenski & Sons,
Inc. for soil correction and site preparation work at the subject property.
Mr. McDonald stated Plymouth Heights Pet Hospital is seeking to acquire the
property “as is” from the City of New Hope for $61,500 ($4.00/square foot for the
property less soil correction costs). He noted the city would retain one-third of the
site for a storm water pond. He commented that Plymouth Heights Pet Hospital
currently serves over 6,000 active patients including more than 700 New Hope
families and represents a valuable asset to the community. Mr. McDonald expressed
support for the project as the applicant, Mr. Fleming, is prepared to move
expeditiously on the development plans. He stated if the EDA is interested in
pursuing Mr. Fleming’s proposal for purchasing and developing the subject
property, they would provide an “Option Agreement” on the property for a
New Hope EDA March 10, 2003
maximum term of no more than ninety days. This would allow sufficient time for
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them to review documents, prepare plans and obtain the necessary approvals before
closing on the property. Mr. McDonald stated the developer would like a tentative
agreement from the EDA at this time before they incur additional expenses.
property, they would provide an “Option Agreement” on the property for a
maximum term of no more than ninety days. This would allow sufficient time for
them to review documents, prepare plans and obtain the necessary approvals before
closing on the property. Mr. McDonald stated the developer would like a tentative
agreement from the EDA at this time before they incur additional expenses.
Mr. McDonald stated staff is supportive of the development and recommends
meeting with the city’s financial consultant to discuss the financial implications of
the project and taxes that would be generated by the project.
He stated representatives of the Plymouth Heights Pet Hospital are in attendance
and are available to answer questions.
President Enck questioned whether the developer could use the pond for part of
their green space requirements. Mr. McDonald responded affirmatively.
The EDA expressed support for the project.
Commissioner Cassen disclosed that she has had past business experiences with Mr.
Ludovissie of Quest Real Estate. She also mentioned that she is a pet hospital
customer, but there is no conflict of interest.
Commissioner Cassen questioned the accessibility of the pond by the city. Mr.
McDonald stated the city would require a 20-foot wide access easement between
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49 Avenue and the pond.
Mr. McDonald pointed out that the property is zoned I-1, Industrial, and pet
hospitals and veterinary clinics are not currently listed as permitted or conditional
uses in the I District. However, staff and consultants are currently working on a
modification to the code to allow animal day cares in the I District and the Planning
Consultant believes this use would also be appropriate for that Zoning District.
Commissioner Sommer expressed support for the project but acknowledged concern
regarding the sales price. He mentioned the city purchased the property six years
ago for $195,000, and a higher sales price would recoup some of the city’s expense.
President Enck pointed out that tonight’s action is only the beginning of the process.
The EDA unanimously expressed support for the project and directed staff to work
with Quest Real Estate on behalf of Plymouth Heights Pet Hospital.
IMP. PROJECT 740 President Enck introduced for discussion Item 5, Discussion Regarding Joint
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(formerly #665) Development Proposal for City-Owned Property at 7500-7528 42 Avenue North,
Item 5 the former Electronic Industries Site (Improvement Project No. 740).
Mr. Ken Doresky, Community Development Specialist, stated staff is requesting
EDA discussion and direction regarding a joint development proposal from Retail
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Site Development Services for the city-owned site at 7500-7528 42 Avenue North.
The development proposal is for two uses: a Culver's restaurant on the western
portion of the site and three office condominium buildings (with seven separate
ownership units) on the eastern portion of the site.
He stated the intention of the presentation is to inform the EDA of the proposal and
to seek direction for further action. He stated representatives from both parties are in
the audience.
Mr. Doresky stated the City has been working for several years to initiate the
environmental cleanup process and subsequent commercial redevelopment of this
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site. He reviewed costs of $500,000 for the 7540 42 Avenue property (purchase
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price of $450,000 plus demolition costs of $50,000); and $71,000 for 7516 42
Avenue (purchase price of $40,000 plus demolition costs of $31,000); and $482,000
New Hope EDA March 10, 2003
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for acquisition of 7500 42 Avenue North. The total cost for the three properties
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was $1.1 million. Mr. Dan Donahue, City Manager, clarified that these costs were
not paid by property tax dollars but rather by the redevelopment tax increment
district.
Avenue (purchase price of $40,000 plus demolition costs of $31,000); and $482,000
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for acquisition of 7500 42 Avenue North. The total cost for the three properties
was $1.1 million. Mr. Dan Donahue, City Manager, clarified that these costs were
not paid by property tax dollars but rather by the redevelopment tax increment
district.
Mr. Doresky stated in conjunction with cleanup funding grant applications
submitted during the spring of 2002, the Council approved a Request for Proposal
(RFP) process for the site. As a result of the RFP, the City received a proposal for
the office condominium component of the current proposal. Using the office
condominium proposal in the cleanup grant applications, the Department of Trade
and Economic Development (DTED) rated New Hope’s application #1 in the State
of Minnesota due to the economic development and job creation potential. DTED
subsequently approved a fully funded grant in partnership with a Hennepin County
approved grant. Culver’s Restaurant/Retail Site Development Services came later in
the process and staff suggested they provide a joint development proposal with the
office condominium developer.
He reviewed a preliminary site plan showing a Culver’s Restaurant on the western
portion of the site and the office condominiums along the railroad tracks on the east
side of the property. He stated the proposal states:
“RSDS will serve as the coordinator of the New Hope project with Dexter
Marston acting as the contact person. Dexter Marston is a licensed real
.
estate broker in the State of MinnesotaRSDS’s fee will be $40,000 for the
services related to the New Hope project. The services include: providing
buyers for the site (JSC Development (Culver's) and Frey Development
(Office Condominiums)) and overseeing the project through City approvals
and closing. The City will be responsible for this fee and should include
this cost with their other expenses when determining the value of the land.
At this time I expect that the two prospective buyers will represent
themselves in negotiations for the site. If either party chooses to have
RSDS represent their interests during the negotiations, the City of New
Hope will be informed of that change.”
Mr. Doresky stated staff is supportive pursuing the redevelopment of this site with
this development proposal, but has some concern about the fee being requested.
Staff recommends that the EDA authorize staff to pursue this matter further and
meet with the City’s financial consultant and the developer to discuss the financial
implications of the project. Staff would propose that the City and the developer split
the cost of the financial analysis 50/50 on this site, due to the fact that it is City
owned. Staff will then return to the EDA for further direction.
Discussion ensued regarding the RSDS’s proposed fee of $40,000. It was noted that
the city has never paid this type of a fee in the past.
President Enck expressed concern about three separate buildings. He also expressed
his reluctance to approve a $40,000 real estate service fee.
Commissioner Cassen pointed out if an agent is representing a buyer/developer,
they typically are the ones to pay for the real estate commission; however, it is
negotiable. She commented that the $40,000 fee should go into the project cost and
if Mr. Marston is representing the developers then he could negotiate it with them.
Commissioner Cassen was supportive of the development and layout with three
separate buildings for office condominiums.
Commissioners Collier and Sommer also expressed support for the project.
Commissioner Sommer commented that he likes the ownership option for small
businesses.
New Hope EDA March 10, 2003
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President Enck acknowledged agreement to the concept but provided the following
concerns regarding the configuration: excessive curbcuts, poor traffic circulation,
the three office buildings back up to the railroad tracks with no access to the rear,
and lack of green space. He also noted the need for a property owners association
similar to a townhome association.
The EDA was supportive of staff working with the developers, but clarified that the
EDA objects to payment of a $40,000 fee.
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Mr. Donahue interjected that a current planning study of the 42 Avenue area
includes an office analysis that will determine if there is a need for office space. Mr.
McDonald stated the information may be available within two months.
Commissioner Cassen noted that Frey Development may have already conducted a
survey.
Mr. Bernie Frey, Frey Development, was recognized. He stated the office
condominiums are geared for smaller businesses that may desire to own rather than
lease property and cannot financially afford to purchase property and construct a
single user building. He stated a unit size can range from 1,300 to 3,000 square feet
and the typical users are professional offices. He reported on the successfulness of
past projects. He pointed out that a building with three units is the most appealing
environment as the middle unit has a balcony and each of the side units has side
windows. He stated the average price is $125-130 per square foot. There would be
an office association similar to townhome association agreements.
Mr. John Seibert, President of JCS Development Inc., was recognized. He stated
they are very interested in the site for construction of a Culver’s Restaurant. He
asked the EDA to reconsider its position on the realtor fee due to the uniqueness of
the situation. He noted the city is selling the property and the seller normally pays a
realtor commission.
The EDA directed staff to proceed to work out issues with the developers.
ADJOURNMENT
Motion was made by Commissioner Collier, seconded by Commissioner Sommer,
to adjourn the meeting
. All present voted in favor. Motion carried. The New Hope
EDA adjourned at 9:17 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA March 10, 2003
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