110998 EDA Official File Copy
CITY OF NEW HOPE
EDA AGENDA
EDA Regular Meeting #8 November 9, 1998
Agenda #8
President W. Peter Enck
Commissioner Sharon Cassen
Commissioner Don Collier
Commissioner Pat La Vine Norby
Commissioner Gerald Otten
1. Call to Order
2. Roll Call
3. Approval of Minutes of September 28, 1998
4. Discussion Regarding Development of City-Owned Property at 9200 49th
Avenue North (Improvement Project No. 597)
5. Discussion Regarding Appraisal of Regent Apartments at 7136 60th
Avenue, 6017 Louisiana Avenue and 7124 Lombardy Lane (Improvement
Project No. 645)
6. Resolution Requesting the Purchase of Tax Forfeited Land at 7819
Angeline Drive (Improvement Project No. 603)
7. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
Approved EDA Minutes September 28, 1998
Meeting #7 City Hall
CALL TO ORDER President Enck called the meeting of the Economic Development Authority to
order at 8:56 p.m.
ROLL CALL Present: Enck, Cassen, Collier, Norby, Otten
Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald, Henry
APPROVE MINUTES Motion was made by Commissioner Collier, seconded by Commissioner Cassen,
to approve the EDA minutes of August 24, 1998. Voting in favor: Enck, Cassen,
Collier, Norby; Abstained: Often; Absent: None. Motion carried.
IMP. PROJECT 614 President Enck introduced for discussion Item 4, Resolution Authorizing Funding
Item 4 for Acquisition of Property Located at 7332 Bass Lake Road by Project for Pride
in Living, Inc. for Bass Lake Townhomes Project (Improvement Project No. 614).
Mr. Kirk McDonald, Director of Community Development explained that approval
of the resolution simply advances PPL $235,000 to utilize for acquisition and
demolition of the building at 7332 Bass Lake Road. The payment will be
considered part of the EDA's funding commitment under the Redevelopment
Contract.
RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption:
EDA98-10 "RESOLUTION AUTHORIZING FUNDING FOR ACQUISITION OF
Item 4 PROPERTY LOCATED AT 7332 BASS LAKE ROAD BY PROJECT FOR
PRIDE IN LIVING, INC. FOR BASS LAKE TOWNIIOMES PROJECT
(IMPROVEMENT PROJECT NO. 614)". The motion for the adoption of the
foregoing resolution was seconded by Commissioner Norby, and upon vote being
taken thereon, the following voted in favor thereof; Enck, Cassen, Collier, Otten,
Norby; and the following voted against the same: None; Abstained: None;
Absent: None; whereupon the resolution was declared duly passed and adopted,
signed by the president which was attested to by the executive director.
AUTOHAUS President Enck introduced for discussion Item 5, Discussion Regarding Release of
IMP. PROJECT 467 Security on Mortgage for Property Located at 7709 42"~ Avenue North
Item $ (Improvement Project No. 467).
Mr. McDonald stated in 1991 the City entered into a development contract with
the owner of the Autohaus property. The City has held security on the mortgage of
the property as a guarantee that all improvements would be completed and the loan
would be repaid. The loan has been repaid but there are several outstanding site
improvements issues including landscaping, screening of trash enclosure, parking
lot striping (ADA requirements), sign post on northeast comer of property, and
retaining wall location. Mr. McDonald pointed out that Autohaus repaid the loan
early and Color Lab, a former tenant of the building, has since relocated. He
stated the owner of the property desires to make additional improvements to the
building and site; however, in order to receive financing for the improvements, he
would like the City to release the mortgage. While staff is supportive of additional
improvements to the property, the City must ensure that conditions of the 1991
New Hope EDA September 28, 1998
Page 1
r
development comract will be met.
Mr. McDonald illustrated the revised site plan recently submitted by Tom
Boettcher, owner of the Autohaus property.
Mr. Boettcher, owner of 7709 42nd Avenue North was recognized. He reviewed
the outstanding issues as follows:
Item: Status:
Landscaping between Made minor improvements in summer of 1998;
Country Kitchen and petitioner is requesting acceptance of
Autohaus landscaping "as is".
Screening of trash enclosure Has contracted with a fence company to repair
fence and install slats.
Parking lot striping/lack of Intends to resurface and re-stripe parking lot
handicapped parking spaces after building improvements in 1998
Sign post on NE corner of Sign post has been removed.
property
Retaining wall setback Requesting acceptance in presem location.
Mr. Bo6ttcher explained the proposed improvements to the building's exterior.
President Enck inquired of the assurance that the improvements from the prior
project will be completed to the City's satisfaction.
Mr. Boettcher apologized that the issues were not taken care of sooner but assured
the EDA that all issues will be resolved. He commented that due to the lease with
Color Lab, he had no choice in the location of the retaining wall. Also, he advised
the EDA that he recently learned of a trail/track located 20 feet in the rear of the
Autohaus property which was installed by the YMCA without his permission. He
stated he has reached an agreement with the Y and will permit the track to remain
in its present location, the track will be maintained by the Y, and ownership of the
property remains with Mr. Boettcher.
Commissioner Cassen reported that she inspected the Autohaus property today and
noticed the property is unkempt with weeds around the building's foundation and a
box containing windshields in plain view of Country Kitchen.
Mr. Boettcher assured the EDA that the windshields and parts will be contained in
the new screened area. He stated the weeds will be eliminated with the building's
exterior improvements and parking lot resurfacing. He commented that depending
on the weather, the sealcoating/striping of the parking lot may take place this
week. Also, his agreement with the renters will include a requirement that the
building and landscaping are adequately maintained.
Mr. McDonald requested the oppommity for staff to provide input on the parking
lot striping plan.
Additional discussion centered around the outstanding issues on the property and
whether the EDA should release the mortgage without any substitute Financial
guarantee.
New Hope EDA September 28, 1998
Page 2
Mr. Boettcher reiterated his verbal commitment to fulfill all performance issues
relative to the development contract. He also noted that the renter has spent over
$400,000 on recent improvements to the building's interior.
The City Attorney noted the cost of the outstanding improvements is relatively
small; however, the development agreemem and addendum dated June of 1993
remains enforceable until June of 1999.
MOTION Motion was made by Commissioner Otten, seconded by Commissioner, Collier, to
release security on the mortgage subject to staff's approval of final plans for
the parking lot striping, landscaping, and screening. All present voted in favor.
Motion carried.
ADJOURNMENT Motion was made by Commissioner Collier, seconded by Commissioner Otten, to
adjourn the meeting. All present voted in favor. The New Hope EDA adjourned
at 9:40 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 3 September 28, 1998
I EDA
RF. T FOR ACTION
Originating Department Approved for Agenda Agenda Section
EDA
Community Development 1~,~
Item No.
ByKirk McDonald By:. 4
/
DISCUSSION REGARDING DEVELOPME, I~T OF CITY-OWNED PROPERTY AT 9200 49TM AVENUE
NORTH (IMPROVEMENT PROJECT NO. 597)
Staff requests to discuss with the EDA a proposed development for the city-owned property at 9200 49~
Avenue North.
In June 1997, the City of New Hope purchased this vacant 2.8 acre industrial site from Clarence
Brandell. The City acquired the property because a portion of the property is identified in the New Hope
Surface Water Management Plan as a future potential site for a water quality pond to help improve the
water quality of the large wetland north of, and adjacent to, the site. The City acquired the property to
have control over the future development of the site and is interested in a potential joint-
cooperative development (similar to Conductive Containers, Inc. on Quebec Avenue), where a
development could occur in conjunction with the installation of a water quality pond. The City
purchased the property for $195,000 and the City Engineer.has estimated that the City would need to
utilize approximately one acre of the site for ponding improvements, leaving two acres available for
development.
Over the past 18 months, the City has received several inquiries from industrial/commercial businesses
and developers who had or have a potential interest in the property, as follows:
· Shortly after the City purchased the site, the City was contacted by Upper Midwest Management
Corporation, owners of the office building located just west of the site, who indicated that they may
be interested in the property for a potential twin office building to match the existing building. They
notified the City this past July that they were no longer interested in the site.
· In March, Larry Johnson, owner of Precision Machine Shop in Hopkins, submitted a Real Estate
Purchase Contract to the City with an offer to purchase 1.8 acres of the property for $120,250.
Johnson, who currently leases space for his business, was proposing to construct an 8,250 square
foot industrial building on the site and the company has six employees. The maximum size of the
one-story industrial development for the site would be 20,000 - 30,000 square feet. The EDA took no
action on the proposal, as you indicated the plan did not maximize the site and was not the highest
and best use of the property in terms of valuation/real estate taxes that would be generated.
(cont'd.)
SECOt~D ~
RFA-OO ! ~
Request for Action Page 2 11-09-98
· In May, a realtor from Axiom Realty, repreSenting G&K S~rvices, Inc., a business that processes and
leases workplace uniforms, desired to register his client as a prospective purchaser of the property.
(3&K would'use the site as a satellite facility as a drop-off and pick-up site for garments for
processing at the company's main plant in Minneapolis, G&K needed approximately two acres of
land to construct an office/warehouse building of approximately 15,000 square feet. The EDA was
not necessarily receptive to this proposal-because it also did not maximize the use of the site.
Staff last discussed this property with the EDA at the July 27 EDA meeting and recommended that staff
develop a Request For Proposal that outlines what type of development the City desires for the site,
present it to the EDA for approval, and seek RFPs from interested persons. A preliminary draft of the
RFP is attached and if the EDA still desires to proceed with. the RFP process, staff will proceed in that
direction.
However, staff has recently met on several occasions With Gary Nordness, President of Essence Real
Estate Services, Inc., and with the owners of Contract Hardware Company, Inc., who are interested in
negotiating with the City for the purchase of the property and who have presented a concept plan that
would maximize development on the site. Contract Hardware Company, Inc. is a major supplier and light
manufacturer of door frames, lock sets and related hardware items. The company services and supplies
major developers, contractors and subcontractors, both locally and nationally with high end quality
products. It is a privately held company formed in 1991, and currently the company has three locations
and would consolidate all operations at the New Hope site. The company currently employs 14 people
and would anticipate adding up to five new employees upon completion of their project. The company .is
proposing the construction of a 26,000 square foot office/warehouse facility on the site and has
submitted the attached concept plan in order to hopefully move forward in acquiring a portion of the
City's site. A typical industrial office/warehouse facility of this size generates about $40,000 in property
taxes per year. They have reviewed the soil conditions on the property and know that a substantial
amount of funds will be needed to make soil corrections to utilize the site. They are requesting that the
City consider subsidizing the project in the form of a land write down for the soil corrections. They also
understand the City's desire to retain an easement over a portion of the property for storm water quality
purposes and are agreeable to cooperating with the City in that endeavor. Nordness was involved in the
development of many of the properties in the Science Industry Park area in the 1970 and 1980s. TO
date, no significant discussions have taken place on the purc.hase pdce of the property.
Staff is presenting this proposal to the EDA because we feel that it is a good proposal for the property
and that instead of proceeding with the RFP process, perhaps the EDA should direct staff to negotiate
with ERSI and Contract Hardware Company, Inc. for the purchase of the city-owned property.
Staff recommends that the EDA approve a motion directing staff to negotiate with ERSI and Contract
Hardware Company, Inc. for their potential purchase of the city-owned property at 9200 49"~ Avenue
North.
Hov 04 98 12:53p Je;;re~ D. Hordness (612) 486-0603 p.2
November 4, 1998
· Mr. Kirk McDonald
Community Development Director
Mr. Doug Sandstad
Building Official
City of New Hope
4401 Xylon Avenue North
New Hope MN 55428
RE: City OwnedLot: Lot 2, Block 1, Bmndeil Industrial Park 2nd
Addition
Gentlemen:
We thank you for your assistance in providing pertinent information regarding the
above captioned, in order to move forward in acquiring a portion of the subject
lot we am submitting for your review a concept plan which will utilize the property
and will provide the City of New Hope a substantial increase in tax base.
As we have discussed after review of the soil conditions we have discovered that
in order to utilize the property it will cost an inordinate amount of money and
would request that the city consider subsidizing in the form of land write down
that portion as it relates to soil corrections.
Our client, Contract Hardware Company, Inc. is acting in good faith to become
part of your community by addressing the concerns of the city aa it relates to the
subject property.
If after review of the concept submitted by Finn Daniels Architects and
Presentation to the council members and the members look favorably upon our
plan, Contract Hardware Company, Inc. would'enter into negotiations to acquire
the land, build the building and become a part of your community.
President,/'
NOKFH OAitS, Mlq 55127
Narrative
Contract Hardware Company, Inc.
2855 Hedberg Drive
Minnetonke MH 55305
Contract Hardware Company, Inc. is a major supplier and light manufacturer of
door frames, lock sets and related hardware items. The Company services and
supplies major developers, contractors and subcontractors both locally and
nationally with high end quality products. Clients will attest to its high standards
of quality and service in the industrial, commercial and retail industries.
Contract Hardware Company, Inc Is a privately held company formed in 1991 by
its Principals, Jeffrey L. McGowan, AHC, Edward J. Ladwig and Micl~ael
McCann. Currently the Company has three locations and would consolidate all
operations on the New Hope site.
The Company currently employs 14 people and would anticipate adding up to
five new employees upon completion of the project.
Through the efforts of its Principals, Contract Hardware Company, Inc. has
experienced unprecedented growth, while maintaining superb service and
accountability to its clients.
~ PROPOSED
~ t~u '* MULTI-TEN ANT
OFFICE/WA REHOUSE
9200 49TH AVE. NORTH
PROPOSED '?: :1
NEW HOPE, MINNESOTA
26,000 S.F.
BUILDING '.
n is
_ilI
$ 89'33'00' E
49th AVENUE NORTH
%ERICKSON/
DRIVE.
- 89].
~lePr -- 893- 8 ~q
u~o.a
-- 4- QQ X 903.1
) n 893.4 x AVENUE x 803.3 / x ~j.r . .
I" ; ..... ~ I
CITY OF NEW HOPE
REQUEST FOR PROPOSAL
9200 49TM AVENUE NORTH
FOR DEVELOPMENT
Section One: Introduction
The City is requesting proposals for the development of 9200 49"~ Avenue North. The
project will involve the partial development of this 2.8 acre vacant lot, located on 49t"
Avenue east of State Highway 169. The property is part of New Hope's limited industrial
(I-1) zoning district, and the potential development will need to conform with the uses
outlined in this report.
New Hope is a fully developed suburban community located just west of Minneapolis.
With only nine undeveloped parcels of land remaining in New Hope's commercial and
industrial zones, opportunities for development are at a premium in this area.
Therefore, the City is requesting proposals that will maximize the use of this property.
Section Two: Information about the property
The City purchased this property in June of 1997, It was a portion of a large section of
land previously owned by a private party. This specific lot was the last to be platted and
marketed for development by the owner, and the City offered to purchase the property.
Following the acquisition of the property, the City has worked to create development
cfiteda, as outlined in this request.
The City acquired the property as a means of controlling storm water run-off for the
entire area surrounding 9200 49"' Avenue North. The City is planning to enhance a
storm water storage pond in the northeast corner of this lot designed to reduce the
flooding of the area properties. The pond occupies a small portion of the northeast
corner of the lot, with the majodty of the pond lying north and east of the property. The
City is interested in proposals that would allow for increases to the wetland area on the
northeast portion of the lot. The City would sell the entire lot to the developer for a
negotiated pdce, while retaining an easement for the storm water pond.
With a total lot size of 2.8 acres, the holding pond will occupy the back .95 acres,
leaving 1.85 acres for development. This area has a width of 260 feet and a depth of
310 feet. The property is zoned I-1, meaning it is in the limited industrial district.
Potential uses in this area range from restaurants and commercial offices to
manufacturing and warehouse space. Some preferred developments are listed in the
following section. Located near the intersection of State Highway 169 and 49"' Avenue,
this property has access to the freeway system in the Minneapolis/St. Paul suburban
area. In 1992, a survey of 49"' Avenue indicated a daily traffic rate of 7,300 vehicles.
This number is projected to increase to 9,700 vehicles by 2015. It is a visible property
with freeway access.
Through the acquisition process, the City was alerted to the fact that the soil on this lot
would need to be improved prior to development. The City commissioned an appraisal
on the lot before it began negotiations, which included a soil survey: VVhile the appraisal
listed the fair market value of the property in 1997 to be $282,000, it also included
conditions referring to the quality of the soil. The soil study determined that the organic
soils on the surface would need to be removed and filled. In addition, depending on the
size of the building project, up to an additional six feet of fill would need to be dispersed
over the development area. Engineers have estimated the soil correction process would
cost between $80,000 and $100,000. Therefore, the appraiser re-calcul ated the fair
market value to be $182,000 at the time of the sale. Following negotiations, the City
purchased the property for $195,000.
Section Three: Proposal Criteda
The City, as earlier mentioned, is looking to maximize the use of this property without
directly affecting the surrounding residential and industrial properties. The property is
bordered on the east and west by industrial lots, and on the north by the storm water
holding pond. Across 49"' Avenue to the south ars R-1 single-family homes. It is the
interest of the City to develop the property while taking the neighboring residential area
into consideration. The City will give pdodty to proposals that blend well with the single-
family homes to the south and the adjacent industrial properties.
Th e City would like to see a high market value addition to this arsa. The following uses
have been identified as ideal uses, but are not exclusive for development:
· Light Industrial/Manufacturing
· Warehouse
· Commercial Office
The Building Official for the City of New Hope estimates that the maximum building size
could be around 26,000 square feet, with the minimum parking requirements. This
development would included warehouse, manufacturing, or office uses. The City is
looking for businesses that operate during the normal business day, with little to no after
hours operations. Heavy trucking is also discouraged from this site.
It is important to note that the City will not pay any realtor fees or commissions in the
event of the sale of the property.
Section Four: Timeline
"The City is interested in developing this property for a use compatible with its goals.
Proposals will need to be reviewed by the City Council before approval. The City would
like construction to begin by the summer of 1999. With this goal in mind, the City is
requesting that proposals be submitted by January 15, 1999.
In the event that no proposals ars approved, the City will review its goals and rs-submit
requests in the future.
Section Five: Proposal Content
RESPONSES MUST BE IN THE ORDER AND FORMAT PRESENTED BELOW.
ADDITIONAL INFORMATION, IF DESIRED, MAY BE INCLUDED IN ITEM 7.
1. Proposed project
A. Briefly explain your proposal.
B. Please include the following items and how they relate to your proposal. If
exact figures and explanations are not possible, please estimate using similar
developments already in operation elsewhere.
1) Type of use/product
2) Size of development (square feet)
3) Number of employees
4) Hours of operation
5) Traffic/parking needs
6) Expected noise levels
7) Preliminary site diagram (examples - see attachments B & C)
2. Firm Organization
A. How many years has your firm been established as a professional
developer?.
3. Professional Organization
A. How many people are employed in your firm and summarize their areas of
expertise.
4. Expedence
A. Please list some of the major development projects your firm has completed
in the Minneapolis/St. Paul area.
B. List projects similar in size and use to the project you are currently proposing.
5. References
A. List references for your five most recently completed projects.
6. Scope and Cost of Services
^. List the additional work tasks that you think are necessary to prepare the
property for development
B. List estimate cost of development, including land preparation costs.
7. Additional Pertinent Information
A. Provide any additional pertinent information about your firm or your proposal.
8. Certification of Information Provided
A. The information provided herein is to the best of my knowledge accurate and
can be accepted by the reci pient first named above as true representation of:
Company:
Address:
Title:
Date:
Section Six: Proposal Submission
Submit four (4) copies of your proposal to:
Kirk McDonald
Director of Community Development
4401 Xylon Avenue North
New Hope, MN 55428
Proposals must be received by January 15, 1999, at 4:00 PM Central Standard Time.
Proposals must be submitted in an envelope with the words "Proposal for the Brandell
Property" clearly marked on the outside of the envelope. Information must be complete.
The City of New Hope reserves the right to reject any and all proposals. Faxed
proposals are not acceptable.
4
BCL APPRAISALS
'BJORKLUND, CARUFEL, LACHENMAYER, INC.
2852 ANTHONY LANE SO., MINNEAPOLIS, MINNESOTA 55418 (612)781-0605 Fax: 781-7826
BRAD BJORKLUND, MAI. SRA REAL ESTATE APPRAISERS
AL CARUFEL, MA~ &
RON LACHENMAYER, SRA CONSULTANTS
LESLIE J. (LEE) RACINE, JR., SRA
March 12, 1997
The City of New Hope
c/o Kirk McDonald
4401 Xylon Avenue North
New Hope, Minnesota 55428
Re: Appraisal of 2.8 acres industrial land
Clarence Brandell; 9200 49th Avenue North
New Hope, Minnesota
Dear Mr. McDonald,
In respome to your request, I have conducted the required investigation, gathered the necessary data,
and made certain analyses that have enabled me to form an opinion of the market value of the fee
simple interest of the real property referenced above.
Based on an inspection of the property and the'investigation and analyses undertaken, I have formed
the opinion that as of March 7, 1997, and subject to the assumptions' and limiting conditions set forth
in this report, the subject property has a market value of:
ONE HUNDRED EIGHTY TWO THOUSAND DOLLARS $182,000
The appraisal report that follows is a Summary Report. This is a short form appraisal report which is
a brief recapitulation of the appraiser's data, analyses, and conclusions. More thorough and lengthy
supporting documentation is retained in the appraiser's f'de. If needed, a self contained, complete
appraisal report can be prepared for an additional fee at a later date.
Respectively submitted,
Cert. General Real Property Appraiser
Minnesota License//4003154
EB/rak
MORE THAN 80 YEARS FULL APPRAISAL SERVICES EEO/AA
Summary Appraisal Report - Complete Appraisal
This is a Summary Appraisal Report which is intended to comply with the reporting
requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of
Professional Appraisal Practice for a Summary Appraisal Report. As such, it presents
only summary discussions of the data, reasoning, and analyses that were used in the
appraisal process to develop the appraiser's opinion of value. Supporting
documentation concerning the data, reasoning, and analyses is retained in the
appraiser's file. The depth of discussion contained in this report is specific to the
needs of the client and for the intended use stated below. The appraiser is not
responsible for unauthorized use of this report.
PURPOSE OF THE APPRAISAL:
The purpose of this appraisal is to provide a current market value estimate of the
subject real property so that the client may buy the site for a water ponding project.
Mar/ret value is defined by the federal financial institutions regulatory agencies as follows:
Mar/ret galtte is the most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition is the comummation of a sale as of a specified date and the passing
of title from seller to-buyer under conditions whereby:
(1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised, and acting in what they cOnsider their
own best interests;
(3) a reasonable time is allowed for exposure in the open market;
(4) payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
(5) the price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated with
the sale.
(Source: Office of the Comptroller of the Currency under 12 CFR, Part 34. Subpart C-Appraisals, 34.42 Definitions If].)
INTEREST VALUED: Fee Simple
EFFECTIVE DATE OF VALUE: Date of inspection; March 7, 1997
DATE OF REPORT: March 12, 1997
APPRAISAL DEVELOPMENT AND REPORTING PROCESS: In preparing this
appraisal, the appraiser:
Interviewed the property owner, Clarence Brandell.
· Inspected the property on March 7, 1997.
· Gathered sale data on comparable land in the subject's and competing neighborhoods.
· Discussed perceptions of value for the subject and other industrial properties in the
area with the owner, buyers, sellers and brokers. Soil data was collected f-rom Doug
Sandstad, Building Official for the City of New Hope, as well as Ed Englund, owner
of adjacent real estate.
· Completed the Sales Comparison Approach to Value. The Cost & Income
Approaches are not applied.
To develop the opinion of value, the appraiser performed a complete appraisal process, as
defined by the Uniform Standards of Professional Appraisal Practice. This means that no
departures from Standard 1 were invoked.
HISTORY OF THE REAL ESTATE APPRAISED
Mr. Brandell acquired the land in 1965 as part of a tax forfeit purchase of 38 acre~. The 2.8
acre subject parcel is all that remains from the original acreage which is in Mr. Brandell's
name.
Originally, much of the 38 acres was a swamp that was surrounded by soft, peaty soils.
Sometime in the earlier years of ownership, Mr. Brandell spread fill (using his bulldozer)
over many parts of the land to prepare it for development. The subject and the parcel to the
east were recipients of much fill.
According to Mr. Brandell, there have been several attempts to sell or develop the subject.
Apparently, all have failed. In-so-far as is known, there has been no sale or listing of the
subject in the past three years. Should the subject be actively listed for sale with a
professional broker, it is estimated the marketing time would be about six to twelve months.
LOCATION DESCRIPTION
The subject is located in the City of New Hope, a second tier westerly suburb of Minneapolis
with a current population of about 21,646 based on the April 1, 1995 census by the
Metropolitan Council. New Hope is approximately seven miles northwest of Downtown
Minneapolis. The community is primarily residential in character, but there are scattered
industrial districts and one major concentration of commercial buildings focused at the
intersection of 42nd Avenue North (C.S.A.H. #9/Rockford Road) and Winnetka Avenue
(C.S.A.H. #156). Most development in New Hope has taken place since 1960.
New Hope has a council/manager plan B form of government, and provides its citizenry with
good quality municipal utilities and services. Essentially all of the city streets are paved,
most have concrete curb and gutter, street lights and service by sanitary sewer and water.
The entire city is located in School District//281, and MTC bus routes are found throughout
the area. No unusual municipal or economic influences are observed that would unduly
affect the value of real estate in New Hope. The economy has recovered from the recession
of 1990 and 1991. Vacancy is low (c.5%) in the industrial market. Warehouse and
manufacturing space is presently renting for $3.75 to $4.00/sf net. Office space is about
twice this amount.
Major transportation to the City is provided by Highway #169 along the westerly City limits;
also by Rockford Road, Bass Lake Road (C.S.A.H. #10), Medicine Lake Road (26th
Avenue/C.S.A.H. #70), and Winnetlm Avenue. These county roads provide good
community access. The subject is located on 49th Avenue, one block east of its diamond
interchange with Hwy #169.
The Zoning Map shows the nature of uses in the immediate neighborhood. The northeast
quadrant of Hwy #169 & 49th Avenue is an industrial district that is fully developed. A
large swamp lies in the center of the district. Abutting the subject to the east is a one story
office/warehouse facility (Englund Graphics). West is a three story office building, and
northwest is another office/warehouse facility. South of the subject across 49th avenue is a
neighborhood of single family homes.
DESCRIPTION OF REAL ESTATE APPRAISED
Legal Description:
Lot 2, Block 1, Brandell Industrial Park 2nd Addition.
Parcel Identification Number:
07-118-21-23-0022
Real estate taxes:
$7,724.16 base + $23.12 solid waste fee + $.1,023.38 special assessment --' $8,770.66
Assessors Market Value:
$124,000 land only
Site Description:
Location - 9200 49th Avenue North, New Hope; in Hennepin County, Minnesota. The zip
code for this area is 55428.
Size - 474' x (260.62' + 256.8') + 2 = 122,657 square feet subject to survey.
Easements - None observed.
Streets - The south edge of the site has 260.62 feet of frontage on 49th Avenue North. 49th
Avenue is a four lane road. It has a 68 foot right-of-way in front of the subject, is asphalt
paved, with concrete curbs, gutters, and sidewalks. The pavement is in good condition.
Utilities - All municipal utilities are located in the neighborhood and are available to the
subject property. These include city water and sewer, electricity, telephone and natural gas.
Topography - The site is rectangular, generally level and at street grade. There are
scattered trees, but the site is much more open than wooded. Ash, cottonwood and olive
varieties of trees are observed. None are very large.
Soils - .Eight soil boring logs taken on the subject property, several on the adjacent parcel to the
east owned by Ed Englund, a 1967 USGS Topographical Map, and the history of the subject
(from Clarence Brandell, The City of New Hope, & Ed Englund) are used to map a fairly good
description of the subject's soils. Boring logs and a topography map are found in the Addenda.
DESCRIPTION OF REAL ESTATE APPRAISED CONT.
Soils cont.
The top soils over the entire site are fill (generally clay, soft to stiff in nature) which
undulates in depth from about 2-8 feet below grade. These soils were added years ago to
level the site. Under much of the fill is a layer of organic material (peat), thence an
undulating pillow of finn, fine sand. The finn soils are nearest the surface in the northwest
comer, and follow a ridge which peaks along a line drawn from the northwest comer to the
center of the east edge. This ridge of finn soils falls off most steeply to the southeast and
northeast comers where there are the greatest amounts of organic soils and fill (above). To
properly develop the site, fill and other poor soils should be removed, thence replaced with
good soils that are properly compacted and suitable for load bearing purposes.
Zoning - The current zoning map shows the property to be zoned I-1, Light Industrial.
Access - The site is accessed by vehicular traffic from 49th Avenue. There do not appear to
be any developed curb cuts. Access to east and west bound traffic is available; there is no
road median on 49th Avenue.
Identity - The identity of the subject is office/industrial. It is zoned for light industrial
development. Abutting lands that influence to some degree the use of the subject are
developed with light office/industrial type uses. The residential district across the street
should deter heavy industrial use on the subject.
HIGHEST AND BEST USE
Highest and best use is defined as the reasonably probable and legal use of vacant land or an
improved property, which is physically possible, appropriately supported, financially
feasible, and that results in the highest value. The four criteria the highest and best use must
meet are legal permissibility, physical possibility, financial feasibility, and maximum
profitability.
Zoning indicates that industrial use of the land would be best. Office/industrial uses lie
immediately to the east and west of the subject. Residential uses are segmented from the
subject by 49th Avenue. A zoning change is not probable.
The site is of sufficient size for construction with a variety of buildings in any of several
locations on the parcel. The shape is conducive for development. A rectangular shaped
building is probable. However, soils are problematic. There is a lot of bad f'fll and peat
HIGHEST AND BEST USE CONT.
which would need to removed to properly develop the site. Furthermore, much replacement
fill would also need to be added, properly compacted, and the high water table must be dealt
with. Soil correction costs in the magnitude of $100,000 are realistic.
Economic conditions in the industrial market are good. Several sales of vacant land and
improved office/industrial types of real estate show a stable and healthy market. Vacancy is
low (lowest in new buildings) and rents are slowly "on the rise." Although New Hope is a
fully developed community, there has been a lot of new construction in adjacent Plymouth
and other competing market areas. Mortgage financing is readily available to qualified
borrowers with a 20% equity investment. Interest.rates are between 9.25-10.25%.
The maximally productive use of the site is to develop it with a rectangular shaped
office/warehouse building. This will best compliment the adjacent building improvements,
and the nearby residential property across the street. The existing market is healthy~ and
there are no foreseeable plans or conditions of the economy which would adversely affect
this type of development.
With the worst soils being more on the east side of the subject than the west, a rectangular
building footprint should be developed as much on the west side of the site as possible, and
more in the central to northern areas to minimize soil corrections. A reasonable estimate of
the buildings size might be about 25,000 square feet, measuring 100' x 250'. Most of the
soil corrections (where part of the site would be utilized by a corner of the building or a
paved parking area) should occur in the south east quadrant where fill and peat are deepest.
I
I
, ~ EDA I
Originating DepaxLment Approved for Agenda Agenda Section
Community Development EDA
1~98
Kirk McDonald Item No.
By.Sue Henry By:. 5
L~OF RE E
DISCUSSION REGARDING APPRAISA G NT APARTMENTS AT 7136 60TM AVENUE, 6017
LOUISIANA AVENUE AND 7124 LOMBARDY LANE (IMPROVEMENT PROJECT NO. 645)
At the July 27 EDA meeting, the EDA considered a request from the owners of Regent Apartments for
financial assistance for the potential rehabilitation of the three building, 36-unit multi-family housing
complex they own located at 7136 60"' Avenue, 6017 Louisiana Avenue, and 7124 Lombardy Lane. The
improvements the owners discussed with staff and the City Attorney included replacement or repairs of
windows, repair of parking lot, roof replacement, installation of perimeter drain tile systems, potential
repair or replacement of inoperable outdoor swimming pool, some new appliances, interior work
including hallway carpet and carpet replacement in some units, replacement of some kitchen cabinets
and floors, repair of leaking air conditioning units, and adding landscaping to the property. The City
Inspectors have confirmed that the buildings are in need of rehabilitation. Staff also discussed with the
owners the possibility of adding garages to the site (there are currently seven garages for 36 units) and
discussed improved property management. The total cost of the improvements without garages is
estimated at $180,000 - $200,000. The cost of the garages is estimated at $225,000. The EDA
responded that they would consider a loan, not a grant. The EDA also indicated a potential interest in
acquiring the property for redevelopment purposes and told staff to convey that to the owners, which
staff did. The EDA has targeted the entire 62"d Avenue and West Broadway area as an area for future
upgrading and redevelopment. The property is located in an area where TIF funds can be spent that are
generated from other districts.
Subsequent to the July EDA meeting, staff further discussed the potential rehab project with the owners
and the EDA comments regarding redevelopment. The owners submitted a letter stating that the Regent
Properties' partners would be interested in exploring the possibility of selling the properties to the City at
a fair selling price. They inquired if the EDA would be willing to proceed to have the properties appraised
and to explore a purchase of the buildings from Regent Properties. At the August 24 EDA meeting, the
EDA authorized staff to obtain appraisals of the properties.
(cont'd.).
MOTION BY SECOND BY
Request for Action Page 2 11-09-98
The buildings have a current market value as follows:
7136 60t~ Avenue $48,000 land / $216,000 building = $264,000
6017 Louisiana Avenue $48,000 land / $227,000 building = $275,000
7124 Lombardy Lane $48,000 land / $216,000 building = $264,000
$8O3,O0O
The appraisal of the properties has been completed and the market value of the three 12-unit buildings
is $1,000,000 or $27,777.77 per unit (based on 36 units) and the owners have been notified of the
appraisal amount. Staff have also obtained an estimate from a relocation consultant indicating that the
estimated cost to relocate the 35 tenants currently residing in.the buildings would be $258,000. In
addition, if a major redevelopment were to occur on this site, the EDA would probably want to consider
incorporating the two adjacent single family homes into the project area. The 1998 market valve of the
two single family homes is $93,000 (7128 60"~ Avenue) and $81,000 (7104 Lombardy). The preliminary
estimate for acquisition and relocation is summarized as follows:
Acquisition of Apartments $1,000,000
Relocation of Tenants 258,500
Acquisition of Single Family Homes (2) 174,000
Total Preliminary Estimate $1,432,500
The City Manager and Community Development Director also met briefly with a representative from
Lang-Nelson, owners of the Broadway Village Apartments to the west of these properties to inquire if
they would potentially be interested in working with the City on a redevelopment project on this site and
they did indicate some interest in the proposal.
Staff is presenting this information to the EDA so that the EDA can provide direction to staff as to how to
proceed. Staff requests that the EDA consider'the following options:
1. Obtain a preliminary redevelopment financial analysis from a professional firm to more clearly
identify project costs, calculate the potential tax benefits to the City if a redevelopment would
proceed, and investigate the creation of a new housing redevelopment tax increment financing
district.
2. Authorize staff to negotiate with the property owners of Regent Apartments for the potential
acquisition of the property.
3. Decline to proceed to negotiate with the property owners for the acquisition of the property due to the
high cost estimate.
4. Decline to proceed to negotiate with the property owners for the acquisition of the property, but direct
staff to coordinate with the owners on a potential rehabilitation loan to upgrade the properties.
If the EDA is interested in proceeding with a potential redevelopment project, staff recommends Option
1. If the EDA feels that acquisition costs are too high and does not want to proceed with redevelopment,
staff recommends Option 4.
ROlO
'.a, , -... CATHOLIC
OF
36 Unit Apartment Caupl~
New Hope, Minnesota
I The City of NeW Hope
c/o ~ Henry
4401 Xylc~ Avenue North
I New Hope, ~ 55428-2898
EFFECTIVE BATE OF APPR~T~
September 17, 1998
I (H~ Fr~R ~ 98811
BCL APPRAISALS
BJORKLUND, CARUFEL, LACHENMAYER, INC.
2852 ANTHONY LANE $O., MINNEAPOLIS, MINNESOTA 55418 (612)781-0605 Fax: 781-7826
BRAD I~IOP. KLUND, MAi, S~.A REAL ESTATE APPRAISERS
RON LACHENMAYER, SRA &
LESLIE $. (LEE) RACINE, JR., SRA CONSULTANTS
~ 12, 1998
~ city of New Hope
c/o susan ~
4401
Avenue
New Hc~oe, ~ 55428-2898
I%m:~ of Rec3ent A~ @ 7124 L~bardy Lane,
6017 Louisiana Avenue & 7136 60th Avenue, New Hope
of the subject prc~'s market value.
I have .fo~. the opinic~ that.as of Se~ .17, 1998, an~ subject to the
assumptions, ar~ l{m~ting conditio~ set fc~ch un this report, the market value of
the su~ect is $1,000,000 as follows:
C~ ~ITTX.T~ [~ ($1,000,000)
The ap~ repart that foll~ ~ a ~~. ~ ~ a ~ f~
~ ~ ~ ~ a ~i~ ~i~ati~ of ~ ~'s ~, ~~,
~'s file ~ ~d ~ ~ ~ ~ ~ ~ ~ a ~ ~
~ly ~~,
~ic Bj~~
~ ~~ ~4003154
MO~ ~ ~ ~ F~ ~P~S~ SERWCE5 EEO/~
Client City of New Hope
Dale of Valuation September 17, 1998
ProDerty Apgraised A 36 unit apartment complex @ 7124 Lombardy Lane,
6017 Louisiana Avenue & 7136 60th Avenue, New Hope
Prc~ Riqhts A~uraised Fee Simple
Name of Owner Regent Properties
Date of Inspection September 17,.1998
Prc~ Data Lar~ Area; 123,743 sc~m~e feet
Zc~ing; R-4, High Density Residential
~ With; Three, 2.5 story a~artment buildimjs
Build/rig Size; 10,365 sf GBA x 3 = 31,095 sf c~olex GBA
Building Age; 1961 or 37 years
Hiqhest and Best Use As Vacant: Develc~ment with multi-family
housing ca, lex
As Imlxoved: Present ~.
I
Indications of Value Cost Approach; $1,144,000
Sales ~ison Approach; 1,00S,000
Incame Ap~x~ach; $985,000 by Direct Capitalization
$1,006,000 by Gross Inoome Multiplier
Reconciled Value $1,000,000
6
property at the mailing addresses of 7124 Lombardy ~e,
The
is
6017 Louisiana Avenue, and 7136 60th Avenue North, in the City of New Hope.
The subject is a 36 unit apartment complex which is comprised of three
separate buildings, each with 12 units; 6 1BR & 6 2BR. The gross building
area of the complex is 31,095 square feet. The (contiguous) land area is
123,743 square feet. There are three par~.l.s of land which comprise the site
whole.
R~i p~ o~m~-mh.i.p consists of a ~ of d.t~--q: r±ghts. In ~
appmi.~al, emlolote real p~ ~p, or th~ fee -q:h~l~ in~ ~ill
1~
To develop the opinio~ of value, I performed a complete appraisal process,
as defined by the Uniform Stam~wrds of Professional Apuraisal Practice. ~
means that no ~k~partures frc~ Standard One were invok_-d. The re~ing format
of the appraisal is that of a Su~m~ry ~. This m-~ns that discussions of
develop my opinions of value are presented in a Sun~z~y fashion rather than
data, reasoning, and analyses is retained in my office files.
To pr~mre the r~rt, ~ ins~ction of the ~ (with the ~
owner), the nei~, and the completion of all (three) relevant
7
SCOPE OF A[~R~T~O-~ ~o
approaches to value were made. In developing the approaches to value, market
data was collected from numerous sources which include; BCL Appraisals, Inc.
office files, other appraisers, a confidential data exchange, realtors,
c~i,~rcial brokers, persons knowledgeable (owners and occupants of apartment
real estate of the subject property type and its niche in the market place);
municipal offices and court house records, the ~ (Mark Wasserman et al),
the building manager (Lee Brandt of Cities Management), several cc~puter on-
line information search networks, and the Marshall Swift Cost Manual.
The 36 apartment units are found on three parcels of land (totaling
123,743 square feet), in a. fully develc~ suburban neighborhood (in the City
of New Hope), in three detached buildings which were constructed in 1961.
Each ~uilding has 12 units; 6 2~R, & 6 I~R. The real estate owners (Re~
Properties) contract with Lee Brandt (of Cities Management) to (off-site)
manage the property for tbs. There is one resident caretaker.
Regent Properties has owned the real estate for over ten years. There is
only a few more years left on their mor~ge before it is owned free and
clear. Over the past five years, the real estate has not been for sale. The
owners report however that they do currently have some interest in selling it.
Should the subject be listed for sale at the appraised opinion of value, the
For the past three years, occupancy in the complex b~ been good (less
than 5%). The owners report that they have been a bit apprehensive in raising
all unit rentals to '%~rket levels" in fear of lo~ing good long term tenants.
The security and st~ability, of the income from good tenants paying sub market
rents see~ to make up for the extra income ar~ risk new tenants ~ring. At
any rate, the current manager is currently trying to bring all rents up to
'~arket."
i About ten Regent Properties received a loan
years
ago,
(from
City
of
New Hope) to replace the old roof coverings, siding and windows of the
i buildings with new membrane roofs, vinyl siding, and th~ slide-by
windows. With the exception of newer carpet in a few of the units that also
i ~ at this time, decoratir~ of the building interior has not occurred in
over ten years. The heating and cooling systems as well as most of the
appliances are original to the building. '
I ~¥ - Unpla~. l>art of tim South~-,.~: ¼ of th~ 1,I~ ¼ of th~
I ~. ..
Taxpayer: Re~nt Properties
Property I.D. Number: 05-118-21-21-0018, 0019 & 0020
I 1998 Assessors M.V. (cc~bi~ed): $150,000 (land) + $537,000 (bldg) = $723,000
1998 Taxes & Solid Waste Fee (cc~bir~d): $29,375.04
Total Tax a~d Assessment B~e~: $29,375.04
i ~d Balanoe of Special Asse~m~ts: Not Applicable.
9
The subject is located in the City of New Hope, a second tier westerly
suburb of Minneapolis with a cUrrent population of about 21,646 based on the
April 1, 1995 census by the Metropolitan Council. New is
Ho~e
approximately
seven miles northwest of Downtown Minneapolis. The community is primarily
residential in character, but there are scattered industrial districts and one
major concentration of commercial buildings focused at the intersection of
42nd Avenue North (C.S.A.H. ~9/Rockford Road)and Winnetka Avenue (C.S.A.H.
#15~). Most development in New Hope has taken place since 1960.
New Hope ban a council/manager plan B form of gov~t, and provides its
citizenry good quality municipal utilities and services. Essentially all
with
of the city streets are paued, most have concrete curb and gutter, street
lights and service by sanitary sewer and water. The entire city is located in
School District #281, and MTC bus routes are found throughout the area.
No unusual municipal or economic influences are observed that would unduly
affect the value of real estate in New Hope.. As suburban development has
sprawled into the outer lying metropolitan areas, activities by the Housing
and Redevelopment Authority of the City of New Hope (and adjacent Crystal as
well) have helped to maintain the vitality of real estate in this first tier
city(s). Record low mortgage interest rates have led to a healthy residential
market. Vacancy is low (c.3%) in the multi-family residential market, rent
values have been increasing annually by about five percent. Property tax
live at or below 60% of the median family inccm~ of the
Major ~tion rotfces to the market area are provided by Highway #169
which runs alor~ the westerly City limits, 1-394 & Hwy #55 which are two miles
south, 1-694 which is one mile north, and ~ #100 & cry ~d ~81 which are
about one mile east. Rockford Road, Bass Lake Road, Broadway Avenue, Medicine
Lake Road and Winnetka Avenue (all county roads) provide gOOd c~,~nity
access. The subject is located on one block east of Broadway Avenue, three
blocks ~ of cry Bd 81, 1/2 mile north of Bass Lake Road, and 1.5 miles
south of 1-694.
10
CITY & N~~KX~) DESCRIPTTC~ ~T.
The Zoning Map shows the ~e of ~ ~ ~e ~ia~ ~i~~. A
l~e ~ ~~ facili~ (252 ~t) ~11~ ~~y Village ~ ~
~j~ ~ ~e ~ ~ ~. ~ of ~ ~j~ ~e s~le f~ly h~,
~ ~ of ~e ~j~ ~ ~ ~ s~l~ (36 ~t) a~ ~1~
..
Location
The subject property is located at 7124 Lombardy Lar~, 6017 Louisi~
Avenue, and 7136 60th Avenue North, in New Hope, Hennepin County, Minnesota.
The zip code for these addresses is 55428.
Size
The subject has an irregular shape. The total size estimate is 123,743
square feet, excluding street right-of-way, subject to survey.
It is presumed there is a utility easement which encumbers some of the
north ~ge of the site. Phone and electric lines are obeerved. No other
easements were reported or were observed to affect the subject property.
Where tb~ pavement of iombardy Lane extends onto the subject (in a westerly
direction frc~ a northward continuation of the westerly right-of-way for
Louisiana Avenue), the City reports any road easement for a street has been
vacated. The county half section map in fact shows no street on the south
~e of the north part of the subject.
~he site has 154.6 feet of frontage on the north edge of 60th Av~_e, 266.6
feet of frontage along the w~st edge of' L0uisi~ Avenue, and 30 feet of
frontage on the north edc3m of ~ ?ane. Ail streets are two lane,
asphalt paved roads (in average condition) with concrete curbe, gutters and
street lights. ~ are no sidewalks. Curb-side parking is allowed.
Utilities.
The site is served with all municipal utilities. These include city water
and sewer. Other available utilities include electricity, telephone and
ar~ Soils
The site is level. Soils appear to be s~hle and well suited for normal
building construction. Evidence does not show on the subject building or on
adjacent buildings that the ground ba~ settled. About 10.5% of the site is
occupied by building footpr~ (garage & apartment), and 31.1% is occupied by
Accessibility .
The site is readily accessed along its street frontages. There are several
Tne overall is destination orient_~d__. The site does not
curb
a~ces~
have frontage on a busy street or major traffic collector.
.
gonin~
The site is zoned R-4, High Density Residential. Permitted uses in R-4
zonin~ include all R-3 permitted uses (multiple family, 12 or less dwellin~
unit buildings, boardin~ houses, day care facilities, parks & playgrounds, and
essential services), clube and lodges (without food & beverage service), and
other (larger) multiple family dwellings. Conditional uses are granted with
the approval of City Council. Examples of ~nditional uses include nursing
hc~es, elderly housing, and a group care facility.
The lot size minimum in the R-4 district is 15,000 square feet and the lot
width is 100 feet. The lot are minimm~ per each dwellin~ unit is 3,000 square
feet. Setback rec~,(~ements are as follows: front yard setback, 30 feet; side
yard setback, 20 feet; rear yard setback, 35 feet. Th~ maximum buildin~
height is four stories.
Identity
The identity of the parcel
multi-famii~
residential.
It
is
characterized by the zOnin~ as well as abuttin~ multi-family implements.
13
DES~XPI~CI~ OF ~
The subject land is improved with three, brick veneer, wood framed, Cla~ D
apart~t buildings. Each building is 2.5'st~i~ tall, and' h~ six t~
bedroom apartment units, and six o~bedroom units. There are a total of 36
units in the complex. Additio~l imprints that are part of the complex
i~lude an ~td~ ~imming p~l, an eight stall g~ge, a smaller t~ car
storage gewage, and paved parking lots and sidewalks.
Size
The size of the buildings were carefully ~ared with a tape measure
during the inspection. Each is identical. The building sketch in the Addenda
depicts the floor plan of -a building. The area of each floor in the buildings
is 3,455 s~,a~e feet. With three floors in each building, and three
buil~, the gr~ building area is 3,455 x 3 x 3 = 31,095 square feet.
Ore--bedroom units are about 615 square feet in size, and two bedroom units,
840 sc~,~e feet. Cc~m~n area hallways are eight feet wide.
Aqe
The subject property was constructed in 1961. The act~l age ~-~ of the
date of appraisal is 37 years. The effective age of the building will be
Foundation
The buildings ~ assumed to be const~cted on poured ~ete footings.
Concrete blocks lie on the footings in the garden level basement.
The huild~ have a wood frame.
The exterior walls are vinyl siding and h~ick. The average story height is
nine feet. ..
Roof
The buildings have flat. roofs with a rubber membrane.
Floors
The basement floor is a concrete slab. ~ther floors have a gypsum crete
base over a wood deck and trusses. Finishing of the floors is carpeting in
the c~,.,on area hallways, and on the unit interiors; carpet in the living-
rooms, bedro~s & hallways, ceramic tile in the bathrooms, and linoleum in the
Interior Walls
Sheetrock. Bathroom wainscot is ceramic tiles.
~ilinqs
Sheetrock with a paint splattered, textured finish.
The front and rear doors to each building are glass. Front doors to each
unit are solid core wood. Interior doors are hollow core wood.
Closet
doors
are metal. O~xdn~ windows on the ~uildings have slide-by -_~hes. Windows
Electrical
The main electrical, servics to each k~ilding is 400 am~ with one main throw
switch. Distr~~ is fine. Each unit h~s a circuit breaker panel.
meters for each unit are located in the mechanical room on the garden level of
I 15
sir~ and ~'~C-~]~ stall in each haan%rock, and o~ d~le ~ ~~
s~. F~ ~e (~) ~la~. ~ la~ ~ ~ a la~ ~
~ ~ ~ly 1~ for ~ ~ ~~. ~e ~ h~ f~ ~
~ld~ is 1~ ~ ~e ~~1 ~. ~ ~t ~ ~ ~si~ Av~
~1~ ~ a dinghy..
H~t~/~l~
~e ~1~ ~ h~ wi~ ~al g~' f~, fo~ a~ ~~.
~e ~ ~ ~ ~ ~t. ~n ~ ~e h~ ~~ly ~ ~ ~~
~ ~t. ~ ~t ~ a~ ~1~ wi~ el~ic ~11 sl~ a~
For ~e ~ of ~s a~i~l, ~ ~de f~ ~lly ~ia~
wi~ ~s ~ of ~ ~ ~1~ wi~ ~ ~1 ~. ~ ~
f~ ~l~e ~~ a~li~, a~ ~iti~, ~~ ~ ~.
~t is ~t a~i~ ~ ~~e, la~~, ~1 ~ ~ ~1~
~ition
~e ~ ~ ~j~ ~~ ~ ~ ~1~ ~l~e ~ ~fs,
si~, ~ w~. ~ ~~ 10 y~ ~o. ~ ~lf of ~e
~a~ fl~ ~~ ~ ~ ~ ~. ~tly h~, ~ of ~ ~
~lf of ~e ~li~, ~ all ~e a~ ~~o~ ~ ~~ ~
orig--. ~~ ~ ~ ~~ ~'~ ~ ~ig~l. ~ ~
~k a~, is ~io~ly ~le~.
On-Si~e & M{~ellaneoum Intorovements
32,819 sf ~lt ~v~t , .
4,216 sf ~e~ ~v~t
72,224 sf ~
58 ~i~ ~ ~lls
25 ~e~ ~k~ ~
3~~~
36~
36 r~rig~~
36 a~ ~tio~
5 clo~ ~1~
821 sf ~r ~1
8 & 2 ~ ~11 ~~
228 if ~cl~ f~ w/~i~ sla~
3 ~ ~1~
I · 17
Highest and best use is defined as the reasonably probable and legal use of
vacant land or an improved property, which is ~hysically possible,
appropriately supron, financially feasible, and that results in the highest
value. The four criteria the highest and best use must meet are legal
permissibility, ~hysical possibility, financial feasibility, and maximmm
profitH~ility. ·
The highest and best use of the property is first estimated as vacant land.
Hiqhest and Best Use as Vacant
From a legal perspective, the subject property is zoned B-4, High Density
Residential under the City of New Hope's Zoning Ordinance. Permitted
(outright) Uses in the R-4 district for the most part include multi-family
dwellings 12 or more units in size. Sc~e of the conditional uses which are
allowed with council approval are senior living facilities and nursing homes.
The lot size minimum in the R-4 district is 15,000 square feet and the lot
width is 100 feet. Setback requirements are as follows: front yard setback,
35 feet; side yard setback, 20 feet; rear yard setback, 25 feet. The max/mum
building height is four stories.
From a ~hysical perspective, the subject's lot size of 123,743 square feet
is well over the lot size m/nLmum. ~%e subject is also able to be served with
all municipal utilities, has good street frontage, access and shape, and soils
should support a building. No unusual grading or fill re~ are
From a financial perspective, ~c conditions are amenable t~ growth
and continued ~arket activity in the multi-family real estate ~usiness.
Vacancy is low, financing is readily available frc~ many lending institutions,
an~ interest rates (8.5%-9.5%) are reasonable ~ to make ~orrowin~ money
unless the land is purchased cheaply, or public funds are involved to write
down the cost of the lan~.
New Hope HRA redevelc~ activity and the location of the subject in a
tax increment financir~ (TIF) district should positively affect the
Hiqh~'t and Best Use as Vacant cont.
feasibility of developing the subject with a multi-family improvemant. Public
subsidy would probably be available in a "pay as you go" format where the
funds would not be provided to the developer until the amount of the funds is
met by an equivalent value in the constructed improvements.
The most probable use of the vacant subject site should be for an active
seniors type of apartment building(s). A 'zoning change or the approval of a
conditional use permit to allow a senior housing development is probable. The
senior housing development next to the subject is very successful, and the
their facility (or develop a new one).
The majority of new multi-family buildings in the metro area are these
(senior) types. The market seems to be moving in this direction for several
r~ons that include 1) retirees being tired of maintaining single family
houses, and 2) the increasing age of our population, the largest segment of
which (the "baby boomers"), is approaching retirement age.
Townhome develo~ remains a strong a type
alternative
of
development on the subject. Townhcm~ developments don't have as big a r~
for public subsidies. The ~ market 'is healthy, and these buildings are
excellent buffer type uses of land located between ccm~_rcial/~ density
residential and iow density residential developments. Upscale amenities and
the maintenance free living style is particularly attractive for aging "baby
however r~ a comiitional use permit and/or a down-zonir~. Because the
subject is in a TIF district thou~, and down-zon~ could lead to less
intensive, lower valued land use, a multi-family in, forewent
townhomes see~s a bit mox~' probable.
and Best Use as Improved
Hiqhest
As improved, the subject is a 36 unit general occupancy apartment complex.
Frc~ a lec/al standpoint, the complex is a conforming use of the land. .~e R-4
zoning outright permits the apartments.
With 123,743 s~e feet of land, at a minimum of 3,000 sc~,~e feet per
dwelling unit, (123,743 + 3,000) 41 units is the maximum allowed. With only
36 units, the density maximum is not exceeded. Conceivably, there is enough
land area to add five more units. However, is in not likely another five
unit
kuilding would be added. Additional garages are more likely. ~ne subject
lacks stall for each apartment, unit. In other legal rotters,
a
garage
setbacks seem to be satisfactory, and outdoor parking, as combined with the
garages, is sufficient.
From a physical perspective, the complex' Obviously contrasts against the
ideal im~ type. It is not new, and it not of a design which resembles
that which would be constructed on the ~acant site. It is a 37 year old
building which is significantly depreciated frc~ a cost new. But, the
structure is fine and the property owner has replaced the roofs, siding,
windows. Interior decorating (in each unit and in the c~l~n area halls),
and air conditioners are probably r~ed
replacement
of
appliances
within the next few years to keep the building competitive with the market.
For the past few years, vacancy in the subject om~lex and in many similar
buildings in the market area has been low. This phenomena will hold true- in
the future. There are few housing alternatives for many of the areas fixed
and low incc~ residents that make such buildings their home. However, the
low rents (that have been one of the ~ther reasons for the low vacancy) should
start to incr~.~e more so than they have in the past. This action should be
met with resistance as usual. It is difficult to raise rents because; 1)'
sensitive to the abilities of their tenants (some having lived
in the buildings for many years) to afford higher rent, 2) a tenant shake up
and high vacancy is feared, 3) the buildings don't offer too many amenities &
.4) re-pairs and unit replacements that are traded for a rent incr~-~e are
expensive and often cost prohibitive. Future rent increases will probably be
20
Hiqhest and Best use as cont.
in the range of $10-15/month.
Alth~ the subject exists in a somewhat troubled market, there has been
appreciation in recent years (5% annually) and most buildings like it are
operating on a positive profit margin. Expenses are usually about 55-60% of
the effective net income after subtracting some amount for vacancy and credit
losses and budgetingsome money for capital 'item repairs. This leaves 40-45%
of the ~ to pay for a mor~ge, and for the property owner to "live off
of." With future updating needs the subject has for unit replacements, a
probable expense estimate should be at the high end of the range.
On the whole, the subject's highest and best use is the present use. Tne
building is and should be capable of generating market rent, while maintaining
1~ vacancy and keeping expenses at a reasonable level. The potential of the
i~ as they exist to generate rent moreover adds value to them which
is significantly higher than the value of the property considered only as
vacant land.
"
I
I
I
I
I
1
51
The three approaches to value irzlicate the following:
Replace~_nt Cost Approach $i,144,000
les $1, oo8,00o
Income Approach $ 985,000 by Direct Capitalization
$1,006,000 by GIM
The Income Approach is the best approach to value and the indications it
provides are given the most consideration. The income p~oduc~ potential of
the subject will guide the market to the strongest opinion of value. The
of similar buildirgs provide direct evidence of prices the market has paid for
similar buildings. The Cost Approach provides only a fair indication of
value. In older buildings like the ~s~bject which are affect by much
depreciation, the market does not recognize cost as very indicative of value.
~ ~ ~ · - S1.000,,000
1
!
ZONING DISTRICT MAP
-~ R-1 Single Family Residential
R-2 Single and Two Family Residential '
R-3 Medium Density Residential
R-4 High Density Residential
Zoning Map]
Fron~ V~ew - **~ ~. ..... a,,~,~ Lane Building
. .'~w~. ~ ,,.
Rear View - 7124 Lombard,/ Lsne Sui!.f.
Photographs of Subject Property
Front Vie,',q - 6017 LouisLana Avenue Buildinc
Photographs of Subject Property
Rear View - -A36-60~h Avenue
Photographs of Subject Propert3
Car Garage
Photographs of Subject Property
Typical Kitchen
Photographs of Subject Property
Street Scene East on Lombardy Lane
Street Scan= Wes~ ,on -n~=~.:b~._d,- Lane
Photographs of Subject Property
Street Scene South on Louisiana Avenue
S5reet Scene ~to~,_.~ on Louisiana Avenue
Photographs of Subject Property
c-~- Scene ;;_-,~:~ on 6:i~h Avenue
Photographs of Subject Property
EVERGREEN LAND SERVICES CO. '
6110 BLUE CIRCLE DRIVE, SUITE 140
MINNETONKA, MN 55343
Office (612)-930.3100 Fax (612)-935-0862
October 2, 1998
Ms. Sue. Henry
Community Development
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428-4898
RE: Proposal for Relocation Services.
Dear Ms. Henry:
The following is a list of relocation services provided, as well as an estimate on total costs.
This estimate is for providing services for the properties at 7136 60th Avenue, 6017
Louisiana Avenue and 7124 Lombardy Lane.
Steps in providing relocation assistance services include:
· Initial meeting with the City of New Hope to discuss project coordination and
procedures; meetings with each owner and occupant to provide written general
information on relocation benefits, documentation requirements, and the process
applicable to each of their situation.
Determine needs and preferences for the move and replacement location for the.
occupants. Explain relocation benefits, the process involved with relocation, and the
payment documentation requirements.
· Offer advisory services regarding the move, explanations of relocation benefits and
procedures, and other assistance as necessary.
Preparing the required Notices of Eligibility for Relocation Assistance and 90-day Notices
to Vacate per the relocation regulations, for the City of New Hopes staffs review and
signature.
· Assisting the occupants in identifying and documenting eligible, reimbursable
relocation costs and confirming the submitted costs are reasonable and necessary per
the regulations..
Research for and provide referrals to available replacement properties, as requested.
· Preparing claims for relocation payment and making recommendations to the City of
New Hope regarding the eligibility of relocation benefits requested by the occupants.
· Throughout the project, addressing questions and concerns of the occupants, and
advising the occupants of their fights and obligations in the relocation process.
· Throughout the project, reviewing the project/relocation status and reviewing any
questions and concerns of the City of New Hope.
This list of tasks is not all inclusive but our activities will comply with Minnesota Statute
and Uniform Act regulations and will include all steps required in the process and
additional steps as may be helpful on a parcel by parcel basis. All written and oral
communication will be documented in each file and a by-weekly status report will be
updated and presented to the City of New Hope.
Evergreen Land Services proposes to complete all Relocation Services for the thirty five
tenants for the following amount.
Relocation Services $900.00 .her tenant (~ =
Estimated relocation claims ~_..~00.00 ?er tenant (3~ = $227,000.00
Total estimated relocation costs ~
If you have any further questions, please call me at (612)930-3 I00.
Relocation Consultant
*CONCEPT 2
*Vicinity Data*
Lots = 5 (3-12 unit apts.=36 units; 2 R-1 homes)
Land Area = 3.39 acres
R-4 Zone, High Density Residential
Max 49 units [1/3,000]
Max 147 units [elderly]
1.24 + .3 = 1.54 acres Lombardy
R-4 Zone R-1 Zone
7124 Lombardy
LOMBARDY
"B" 36,018 sf .82 acres
~., R-4 Zone ~ R-1 Zone
Z
6017 Louisiana Ay.
33,673 + i1, 196 = ~ · R-1 Zone
44,869 sf
.77 + .26 =
1.03 acr~ s 7128
I 60th A~ fao
R-4 Zone R-1 Zone R-1 Zone
7136 60th Ay.
60ch AVENUE NORTH :'"
4401Xylon Avenue North City Hall: 612-531-5100 City Hall Fax: 612.531-5136
New Hope, Minnesota 55428.4898 Police: 612-531.5170 Police Fax: 612-531.5174
Public Works: 612-533.4823 Public Works Fax: 612.533.7650
TDD: 612-531-5109 Fire Dep't. Fax: 612.531-5175
September 21, 1998
Paul Brewer
Lang-Nelson Associates
4601 Excelsior Blvd., Suite #650
Minneapolis, MN 55416
RE: Regent Apartments
Dear Paul:
Per our recent meeting with the City Manager, I have prepared some detailed
information about the Regent Apartment properties. Enclosed is a site diagram with
overhead picture and a copy of our zoning code with regards to R-4 and R-5 properties.
This land is currently in the R-4 high density residential zoning district. Combined, the
three properties comprise 2.83 acres. Adjacent land uses are Broadway Village to the
north and west, and R-1 residential to the south and east. According to the density
limits in the R-4 zone, this land could accommodate 41 units. If it were rezoned to R-5,
the City Code would allow 123 elderly units.
Please see the attachments for more detailed information. If you have any questions,
feel free to contact me at 531-5119. I will keep you informed as to the City's status on
the potential acquisition of the Regent Apartment properties. The appraisals are
currently in the process and once they are corn pleted, that information will be presented
to the Council for further direction.
Sincerely,
Kirk McDonald
Director of Commun!ty Development
CC: Dan Donahue, City Manager
Doug Sandstad, Building Official
Sue Henry, Community Development Specialist
Scoff Dornfeld, General Inspector
Marlene Isaacson, Section 8 Representative
Improvement Project File (,,~
Family. Styled City ~ For Family Living
' YOST & BAILL
ATTORNEYS AT LAW
August 19, 1998 ^
bmited babdity
Partnership
Lawrence M.
Gerald B. Yost'
Mr. Kirk McDonald je~y r~.
Director - community Development c~,s"[ Dokke~
4401 Xylon Avenue North Steven L. Theesfeld'
New Hope, MN 55428 Dav,d J.Yarosh
Cathenne D. Owen
Dame W. Boer,~ter
Re: Regent Properties Buildings: 7124 Lombardy Lane ~r,an Fren§er
6017 Louisiana Avenue ....... - ........ .
7136 60th Avenue ....................
Dear Mr. McDonald: -,.~ ~
e,e .on. R.N
Pursuant to our telephone conversation of this morning, this letter is to advise you and ~::Je .... · ....
the City that the Regent Properties' partners would be interested in exploring the c,?~
possibility of selling the above New Hope properties to the City at a fair selling price. ~'"~
Kindly inquire of the City Council and advise the undersigned whether or not they would :~.: ~....
be willing to proceed to have these properties appraised and to explore a purchase of the ,-:~-~.,...
buildings from Regent Properties. o-.-~: ~ ~
Thank you very much.
Su:e
cerely, o~,~ Fma-,oa PLx2a
Mm~eaDous :"'V'4 55402
Tele=~none 6!2~ ~38-6000
LMB/jpw Facsim,le 6t2] 344-1689
JUL-S~-lgc~ 17:~6 OBERP~:~SE~ & i'~=UEFLJX, P.R 6124~ P.1~/0:3
Edward B. Silberman
1421 East Wayzata Boulevard
Suite 210
Wayzata, Mn. 55391
473-2521
July 20, 1998
Susan Henry
Co~munity Development Specialist
City of New Hope By Fax: 531-~136
4401 Xylon Avenue North
New Hope, Mn. 55428-4898
Re= Regent Apar~ments 6017 Louisiana, 7136 60th Avenue No. and 7124
Lombardy Lane, New Hope, Mn.
Dear Sue=
Consistent with our meeting on today's date, I have listed the
proposed improvements to the above referenced 12 unit apartment
buildings which I believe are necessary to bring the buildings, the
individual apartments therein and landscaping into a s~ate of
repair, which is acceptable to the City of New Hope.
1. Windows- Replace glass where seals have broken. Replace
window hardware and screens as needed.
2. Waterproofing- Install drain tile in basement units of all three
buildings to alleviate existing water problems.
3. Appliances- Replace existing worn out appliances and air
conditioners,'as needed
4. Carpeting- Replace hallway carpeting in each building, a.nd
in individual units as needed.
5. Flooring- Replace Kitchen flooringin apartments, as
needed.
~. Parking Lot- Tear ou~ and replace or overlay the existing
parking lots.
7. Sidewalks- Replace and or repair existing sidewalks which
have cracked.
8. Pool- Tear out and fill in existing swimming pool.
9. Roofs- Repair or replace roofs as needed.
10.Window Air Units- RepairA/C sleeves ~o avoid water seepage into
walls.
.-lC3%~ 17:~)6 O]~EEI~:~SE~ & hE~r_RUX, P.~ 6124~ P.a3/la3
11. Sheetrock- Repair water stained sheetrock as needed.
12. Landscaping- Plant trees and other shrubs to enhance the
appeal of the property for the Tenantts and
neighborhood.
13. Garages- Construct 29 garages on the property so that
each apartment u/~it has a garage.
14. Other- Install garbage disposal units and dishwashers
in each unit.
I have not made an inspection of each individual unit, nor have I
obtained estimates for any of the work, however I would estimate
that the totalcost of the items listed above not including item 12
would be approximately $180,000.00 to $200,000.00. The cost of the
garages would be approximately $225,000.00.
If the City is willing to pay for the cost of the repairs and
improvements by a grant, the Owner's are willing to pay the cost of
constructing garages on the property as set forth in item 13. The
grant may contain conditions of ownership, a mutually agreeable
annual maximum rental rate increase based upon the cost of living,
and may include other mutually agreeable conditions which safeguard
the City of New Hope's investment.
Please let me know your thoughts on this matter as soon as
possible. The Owner's would like to begin the restoration of the
complex as soon as possible.
cc Larry Baill /
TOTRL P. ~
I EDA
I REQUEST FOR ACTION
Originating Depmi~lent Approved for Agenda Agenda Section
Community Development EDA
1 ~98
Sue Henry Item No.
By.Community Development Specialist
RESOLUTION REQUESTING THE I~RCHASE OF TAX FORFEITED LAND AT 7819 ANGELINE
DRIVE. (IMPROVEMENT PROJECT 603)
Staff has learned the City will need to pay for the appraised value of the property located at 7819
Angeline Drive if the property is intended to be resold. If the City does acquire the property, the site
would be developed into housing and resold to a first-time home buyer. The Hennepin County Auditor's
Office will perform the necessary appraisal for the process.
The property at 7819 Angeline Drive has an assessed value of $1,000 and a fair market value of
$13,700. The adjacent property, 7813 Angeline Drive, has an assessed value of $2,000 and a fair
market value of $17, 700. The two properties combined have a fair market value of $31,400. Based on
this information, staff recommends the City pay no more than $5,000 for the property at 7819 Angeline
Drive.
The attached resolution requests that the land be sold to the EDA by Hennepin County at a private sale
if the purchase price is $5,000 or less and authorizes the President and Executive Director to sign the
appropriate documents.
Staff recommends approving the attached resolution to proceed with the EDA's purchase of 7819
Angeline Drive.
RF,~,-OO J
11~4/98 17:1~ :TS~S,ATTORNEYS -> 531513~ NO.41~ P~
EDA RESOLUTION NO. 98-
RESOLUTION REQUESTING
PURCHASE OF TAX FORFEITED LAND
AT 7819 ANGEMNE DRIVE
BE IT RESOLVED by the Economic Development Authority in and for the City
of New Hope (EDA) as follows:
WHEREAS, the City of New Hope (the City) was notified by Hennepin County
that certain real estate known as 7819 Angeline Drive, PID No. 08 118 21 22 0075,
(the Land) has been forfeited to the State of Minnesota for failure of the owners to
pay taxes, and
WHEREAS, the City and the EDA wish to obtain title to the Land, for future
combination of the land with at least one adjoining parcel and construction on the
Land of a dwelling for Iow to moderate income housing, with the Land to then be
returned to the tax rolls, and
WHEREAS, the City Council passed a Resolution Confirming Non-Conservation
Classification and Authorizing EDA to Request Purchase of Tax Forfeited Land at
7819 Angeline Drive on November 9, 1998, and
WHEREAS, the EDA is only requesting to purchase ~he Land at private sale if
the purchase price is 95,000.00 or less, and
WHEREAS, if the price of the Land is more than $5,000, the EDA will not
purchase the Land, and the Land should be placed for public sale, and
WHEREAS., the actions discussed above are in the best interests of the City
and its people.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority
in and for the City of New Hope as follows:
1. That the above recitals are incorporated by reference.
2. That the EDA requests the Land be sold to the EDA by Hennepin County
at private sale if the purchase price is $5,000.00 or less, and that the
17:19 $S~S, RTT~YS ~ ~151~ HO. 41~ PO~
Land be sold at public sale if 'the purchase price is more than
$5,000.00.
3. That the President, Executive Director and EDA staff are authorized and
directed to sign such documents and take such other steps as are
necessary to give effect to this Resolution.
Adopted by the Economic Development Authority in and for the City of New
Hope this 9th day of November, 1998.
President
Attest;
Executive Director
COUNTY II ROAD
WINNETKA
ffq ~z.. ST, RAPHEL
ELEMENTARY e'~ ~.4- CATHOLIC
SCHOOL ~l~ CHURCH
~ 55TH AVE. N.
~4~ ~4~ ~4~ ~4~ ~4~ ST. RAPHAEL
~41~ e4n e4~k
~ 53RD