021296 EDA Official File Copy -
CITY OF NEW HOPE
EDA AGENDA
EDA Regular Meeting #3 February 12, 1996
Agenda #3
President Edward J. Erickson
Commissioner W, Peter Enck
Commissioner Pat la Vine Norby
Commissioner Gerald Otten
Commissioner Terr/ Weh//ng
1. Call to Order
2. Roll Call
3. Approval of Minutes of January 22, 1996
4. Discussion Regarding Property at 7500 42nd Avenue (Improvement
Project No. 474)
5. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes January 22, 1996
Meeting #2
CALL TO ORDER President Erickson called the meeting of the Economic Development
Authority to order at 8:08 p.m.
ROLL CALL Present: Erickson, Enck, LaVine Norby, Otten, Wehling
Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald, Bellefuil
APPROVE MINUTES Motion was made by Commissioner Enck, seconded by Commissioner
Wehling, to approve the EDA minutes of January 8, 1996. All present
voted in favor. Motion carried.
IMP. PROJECT 537 President Erickson introduced for discussion Item 4, Resolution Approving
Item 4 Agreements with Key Group Advertising for Billboard Agreements with
Naegele Outdoor Advertising for 1996 Shop Neighborly New Hope
Campaign (Improvement Project No. 537).
Commissioner Enck agreed with the need to reserve billboards for 1996
"Shop Neighborly New Hope" campaign advertisements.
He suggested that the February 7th Shop Neighborly New Hope meeting
with businesses include an opportunity to evaluate last year's program, the
cost to benefit ratio, and projected future benefits.
Mr. Steve Sondrall, City Attorney, pointed out that the EDA will be
committed to the contract with Naegele Outdoor Advertising Company
even if the EDA chooses to cancel the 1996 Shop Neighborly New Hope
campaign.
EDA RESOLUTION Commissioner Enck introduced the following resolution and moved its
96-02 adoption: "RESOLUTION APPROVING AGREEMENTS WITH KEY GROUP
Item 4 ADVERTISING FOR BILLBOARD AGREEMENTS WITH NAEGELE OUTDOOR
ADVERTISING FOR 1996 SHOP NEIGHBORLY NEW HOPE CAMPAIGN
(IMPROVEMENT PROJECT NO. 537)." The motion for adoption of the
foregoing resolution was seconded by Commissioner Wehling, and upon
vote being taken thereon the following voted in favor thereof: Erickson,
Otten, Enck, Wehling, Norby; and the following voted against the same:
None; Absent: None; whereupon the resolution was declared duly passed
and adopted, signed by the president which was attested to by the
executive director.
MHFA President Erickson introduced for discussion Item 5, Resolution Approving
Item 5 Submission of the Minnesota City Participation Program (MCPP) Application
to the Minnesota Housing Finance Agency (MHFA).
EDA RESOLUTION Commissioner Enck introduced the following resolution and moved its
96-03 adoption: "RESOLUTION APPROVING SUBMISSION OF THE MINNESOTA
Item 5 CITY PARTICIPATION PROGRAM IMCPP) APPLICATION TO THE
MINNESOTA HOUSING FINANCE AGENCY (MHFA)." The motion for
New Hope EDA January 22, 1996
Page 1
adoption of the foregoing resolution was seconded by Commissioner
Wehling, and upon vote being taken thereon the following voted in favor
thereof: Erickson, Otten, Enck, Wehling, Norby; and the following voted
against the same: None; Absent: None; whereupon the resolution was
declared duly passed and adopted, signed by the president which was
attested to by the executive director.
SECTION 8 President Erickson introduced for discussion Item 6, Resolution Approving
Item 6 First Amendment to Section 8 Housing Assistance Payments Program
Contract No. C-94-56 for Administrative Services Between the Metropolitan
Council and the City of New Hope and Authorizing President and Executive
Director to Execute Agreement.
Commissioner Otten questioned the funding for the proposed computer.
Mr. Donahue explained that the City requested not only the regular fee per
contract but also requested $2,000 for computer equipment, services, and
software. However, the Metro HRA has no funding for computer
equipment. Mr. Donahue recommended utilizing some of the funds
obtained through the additional contracts for computer-related expenses.
He stated request for approval of computer equipment will be made at a
later date.
EDA RESOLUTION Commissioner Wehling introduced the following resolution and moved its
96-04 adoption: ,RESOLUTION APPROVING FIRST AMENDMENT TO SECTION
Item 6 8 HOUSING ASSISTANCE PAYMENTS PROGRAM CONTRACT NO. C-94-
56 FOR ADMINISTRATIVE SERVICES BETWEEN THE METROPOLITAN
COUNCIL AND THE CITY OF NEW HOPE AND AUTHORIZING PRESIDENT
AND EXECUTIVE DIRECTOR TO EXECUTE AGREEMENT." The motion for
adoption of the foregoing resolution was seconded by Commissioner Enck,
and upon vote being taken thereon the following voted in favor thereof:
Erickson, Otten, Enck, Wehling, Norby; and the following voted against the
same: None; Absent: None; whereupon the resolution was declared duly
passed and adopted, signed by the president which was attested to by the
executive director.
ADJOURNMENT Motion was made by Commissioner Wehling, seconded by Commissioner
Enck, to adjourn the meeting. All present voted in favor. The New Hope
EDA adjourned at 8:15 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA January 22, 1996
Page 2
~~(~~~~) REQUF~T FOR ACTION
originating Deparhhent Approved for Agenda Agenda Section
City Manager EDA
2-12-96
Kirk McDonald ~, '~ Item No.
By: Management Assistant By:y/ 4
DISCUSSION REGARDING PROPERTY/4/[T 7500 42ND AVENUE (IMPROVEMENT PROJECT
NO. 474) _
/
One of the City's long-term economic development goals is the redevelopment of the three properties
located north of 42nd Avenue located between Quebec Avenue and the railroad tracks. The goal is to
acquire the industrial sites, demolish the buildings, accelerate the ground water clean-up, rezone the
property from 1-2, General Industrial, to B-4, Community Business, and market the site for commercial
redevelopment. The City has acquired and presently owns two of the three sites. The City purchased
the Electronic Industries property, 7516 42nd Avenue in 1993 and demolished the building. The City
also purchased the Foremost, Inc. property, 7528 42nd Avenue in 1993, and is currently leasing the
building.
The owner of the third parcel at 7500 42nd Avenue, where Ardel Engineering is a tenant, has recently
placed a "Building for Lease" sign on the building. The City had this property appraised in 1992 and
the market value estimate on the property was as follows:
Estimated value without pollution stigma $313,000
Less pollution stigma 29,700
Value estimate as allegedly polluted $283,300
In 1993, the City received a letter from the owner stating he would accept the sum of $325,000 for the
property. Due to the recent installation of the lease sign, the City Manager has authorized an update
of the 1992 appraisal.
Staff requests to discuss with the EDA if you are interested in pursuing the acquisition of the property
at this time, before the building is leased to another tenant. It is staff's understanding that Ardel
Engineering does not currently have a long-term lease with the property owner and staff have received
calls from businesses interested in leasing the property. If the EDA did acquire the property, perhaps
it could be leased to Ardel Engineering until such time that the demolition of the Foremost property took
place so both buildings could be demolished at once.
Staff requests direction from the EDA on this issue.
MOTION BY SECOND BY
t/U ~
Review: Administration: Finance:
I RFA-O01 ~
JENSEN & SWANSON, P.A.
.ATTORNEYS AT ~W
EDINBURGIt E×EeU'rn~. OFFICE PLAZA
8525 EDINBROOK CROSS~G
SUrE #201
BROOKLYN PARK. MINNESOTA 55443
Go]~)oN L. JENSEN*
WmuaM G. Swanson April 23, 1993 (612)424-8811
~CHARD D. K~P^. JR. Tvl~
~N~ Lmm~ F~ (612) 493-5193
D~ J. N~N
OF CO~SEL
C~ W. R~E~
j~ P. ~EDY
City of New Hope
c/o Kirk McDonald
4401X¥1on Avenue North
New Hope, MN 55428
Re: ~1~- 42nd Avenue North
New Hope, Minnesota
"Ardel Engineering" Property
Dear Mr. McDonald:
I represent Mr. and Mrs. Terry Jensen, the owners of the property
at 7516 - 42nd Avenue North, New Hope, Minnesota. Significant
issues have been raised, discussed and continue to evolve around
the contamination and/or apparent contamination affecting property
in the neighborhood of my client's property. It is my
understanding from news reports, including specifically the New
Hope Post, dated April 21, 1993, that the New Hope Economic
Development AUthority has acquired neighboring property at 7528 -
42nd Avenue North for a purchase of S450,000.00, with certain other
accommodations made to the current owner.
My clients are willing at this time to entertain an offer from the
New Hope Economic Development Authority for acquisition of their
property at 7516 - 42nd Avenue North, New Hope, Minnesota.
Further, Mr. Jensen advises me that he would at the present time
be willing to accept the sum of $325,000.00, subject to execution
within the next thirty days of an acceptable purchase agreement
which provides:
1. A mutually acceptable closing date;
2. Continued possession of the property by my clients and the
current tenants until December 31, 1995, with no expense to
my clients except utilities and general maintenance;
3. A reservation of salvage rights to be exercised at the
expiration of the period for possession;
*Rcal Estate Specialist CcrtiBcd By Thc Minnesota State Ilar Association
Page 2
4. Assumption by the City of all special assessments against the
property;
5. Pro ration of the real estate taxes effective as of the date
of closing;
6. Acceptance of the property in its "as is" condition effective
as of the date rights to salvage expire;
7. Specific acceptance of the property without any responsibility
for contamination and/or cleanup costs in regard to the
property;
8. Rese~vatlon in the purchase agreement of a right to an
exchange pursuant to the provisions of Section 1031 of the
Internal Revenue Code.
Please advise me as soon as possible as to whether the New Hope
Economic Development Authority and/or the City of New Hope wish to
present an offer to purchase as we are currently in the process of
lease negotiations with a tenant. Your decision will bear on these
negotiations in particular as to the length of term we offer for
any extension.
Thank you.
Sincerely,
Gordon L. Jensen
GLJ/3mb
cc: Terry Jensen
281\tlj12-3
We ,oertify to have personally inspected the subject property on February
17th, 1992 with the owner's representative, Frank Pickelman. To the best of
our knowledge and belief, the statements contained in this report and upon
"Certification, As~ions and Conditions" herein set forth. In addition,
this report conforms with and is subject to requ_~-e~-ents of the Code of Ethics
ar{d, Sta.ridar'ds of Professional Practice of the Appraisal Institute.
Employment in and compensation for making this appraisal are in no way
have
either
present or contempla~, in the subject property.
It is our opinion that as of FebDm~y 17th, 1992 the market value of the
subject property, given it is allegedly polluted, is:
TWO~EIGHTYTHREETHO3~~~I~LIARS $283,300
Brad Bjorklund, MAI, SRA
License No. 4000377
Eric Bjorkl&, Appraiser
BB/~/~k
The property is legally described as folly:
The w~_~t 100 feet of the South 350 feet of Lot 5, Auditors Subdivision #324,
Hennepin County Minnesota. T~u~s ~iption is subject to a 7.5' wide
sanitary s~wer easement along the east property line, and a 5' wide storm
sewer ~=ment alor~ the ~orth 227.5' of the east pro~_rty line.
Property Identification Number: 17-118-21-22-0006
Assessor's Market Value: $ 75,400 land
$238,200 buildir~
$313,600total
Curre~tTaxes: $15,077.46base
$ 1.183.54 special assess~.nts
$16,261.00total
Unpaid Balance of Special Assessments: Assumed Paid
Insofar as is known t_here bas bee~n no sale of the subject property in the
last 3 years. Terry Jensen is the current owner of the buildir~, and Frank
Pickelman is the owner of the business. The normal marketing period for a
property of the subject type is 12 to 18 months.
~be scope oft_k is appraisal involVed an inspection of the neighborhood, the
site, build~ exterior ar~ interior, the c~le sales, and the cc~pletion
of three approaches to value if appropriate.
Location
The property is located at 7516 42nd Avenue North, New Hope, Minnesota.
Size
According to dimensi~ on the Plat Map, ard on a copy of a Ray Prasch
survey, both of whioh are copied in the Addenda, the prc~ is 100' x 350'
equals 35,000 s~m~e feet, less a permanent street ~-~=m~_nt at the south
property line area typically 6' wide totallir~ about 600 square feet for a
final land size estimate of about 34,400 square feet.
~-~_nts
Street easements are considered to be taken in the equivalent of fee for the
purpcee of this appraisal. It is highly unlikely that the street easement area
will revert to the subject pzupert7 owner in the fo~le future.
The Prasch survey in the Adder~a shows a narrc~ three foot wide utility
easement parallel and adjacent to the south property line of the subject.
5' and 7.5' storm ar~ sanitary sewer easements lie along the north and east
property areas. An alley easement passes west alor~ the north property
line
line to ~ Avenue. It b~ not been used in many years. No other easements
Streets
~he pro~_wty contains about 100' of frontage on the north side of 42nd
Avenue North, also known as Rockford Road or County Road #9. It is a four
lane, t~o way, newer bituminous paved arterial street with concrete curbs,
gutters and sidewalks, newer street lighting, and a ~Dhore controlled
lardscaped in reoent years and is unified
street
bee~_n
for a couple of blocks in either 8~ection f~ the Winnetka Averse ~ 42rd
A¥~'a.~ in--ion.
The property is served with ali ~u~icipal utilities including sanitary
5
SITE [~%It~I~ O2~T'D
Topoqraph¥ & Soils
The subject is located with/n an area of glacial drift which overlies the
St. Peters Sandstone. The glacial drift oor~ists of interlayered and mixed
sands, silts, clays, and gravel. Ihe up~er 30 feet of the drift is primarily
till which consists of a tight, grayish clay with traces of sar~, gravel, and
silt.
Information gathered fr~ soil boring logs indicated that an alluvial
channel deposit runs u~ erneath the site fr~ the ~est/northwest to
ear-t/south_easy-t, and then herds to the northeast further ~c of th~ site. ~he
upper portion of the alluvial channel is rather permeable and is the type which
has the capacity to conduct significant volumes of ground water across the
site. However, accordir~ to Scott Carlst~-~, Hy~logist for the MPCA, the
size of the ac~_ mi channel and volume of water it conducts is c~paratively
small when viewed with lax~jer, deeper ar~ more significant aquifers in this
re~ion. A more dense glacial till, below the chan~el and a~proxiakately 10 feet
below grade defines the base of the normal grour~ water table. Sba] low
groundwa~ flow follows the contour of the alluvial ~.
Since the d~- _~r3uwery in 1983 of a ~ settlir~ taruk on the west side of
the subject build/n~ (lying on the neighbor's property), ar~ subsequent later
east of the subject, subsoils ber~th the subject are are assumed to be
contaminat~ with a number of contaminants. Tb%~ is due to the slow, down
gradient flow of groundwater th~ the alluvial cb~runel. ~he contamizmants,
which seem to be the most impo~t or most det~ced are trichloroethylene
(TCE), dichloroethylene (DCE), chromium, cop~ and lead.
It is not known how lor~ the settling tank on the Ele~cr~%ic I~dustries
property had been ruptured or how ~h oontaminati~ mterial bad entered the
soil previous to 1983. I~ess of past historical data, since the
of the site contamination on the El~c Iz~%~ property, efforts have
been made to clean up that site, and stop the flow of contaminants to the
subject. Numerous monitorin~ and pump out wells have been ins~]l~4 all aruur~
the site, and marked success has been noted in the removal of contaminants
trichloroethylene (TCE) and tz-uns-l,2-dichloroethylene (DCE).
$~qce the ~ o~ ~-~w~lJ~ action ~n F~~ ~987 (~
~e ~~ti~ of ~ ~ ~ si~fi~y f~ 290 m~llion ~ ~
b~li~ ~ ~ 30 ~ ~ ~ b~li~. ~~, ~ ~~ti~ of
of 30 ~ ~ billi~, ~ ~ahl~ ~ ~ ~t of ~.
la~ a~le ~o~ti~ (~ fz~ ~ 1991 ~ ~ for ~~c
~ ~11 V~ ~iet) ~ ~ l~s at 33 ~ ~ ~li~, or
33,000 ~ ~ billi~ ~ ~, 1991. ~le l~s of ~
~~ti~ ~d ~ ~iv~ at ~ ~t ~~ a~i~ ~ 20
Y~
or
~, ~ ~ ~y ~lf ~t ~ ~ ~ ~ ~~ of "a~ ~~,,
or ~ ~~i~ of ~~~ ~il ~ ~ ~ ~ of ~~ti~.
It ~ ~~ ~t ~ l~s ~~ ~ si~ ~ ~ ~ ~, ~~ it
~ ~le ~t ~y ~d r~ ~ t~. ~ 1~ ~ ~ ~ ~i~ ~
~ ~~s ~~ ~ si~ of ~~ti~ ~ ~ ~~ ~~
p~, ~ ~ t~ ~ ~1~ ~i~o~yl~ (~) ~ ~~ ~
i~ ~i~ p~, ~o~yl~ (~).
Ta~y, ~ ~ ~ ~ ~i~ of ~ ~~ it ~ ~le ~t ~
will ~ ~ ~ ~ ~.
de~ ~y ~ ~ ~ of ~ ~ ~~ ~. ~at~ ~ of
~ ~t~ly ~ ~s, ~ ~ l~ti~ ~ ~~ti~,
~ ~ ~ ~ cl~ ~ ~ ~ve ~ ~ ~~ at ~ ~.
At ~ ~, ~ ~ ~ ~ ~y ~ ~t a ~le ~ti~ ~
~ of ~ ~ ~s will ~ f~ ~ ~ve ~ ~ cl~ ~ ~ ~
~ ~fo~ ~ 1~ ~i~ of si~ ~ll~i~ will ~ ~~. ~ ~ a
~ ~ ~ ~ on ~e ~~(c ~~ p~, ~ ~y
~~t ~ ~d ~ cl~ifi~ ~ ~ ~ ~ ~~ti~ ~
To~hy & Soils cont'd
tb~ subject property at all. Fortunately, these h~avy metals do not seem to be
m~bile and are held in place by the soil fabric. In other w~rds, they stay put
and should be found only in the areas of direct contamination. The reasonably
knc~l~le buyer should also be aware of the fact that they w~uld not be held
responsible for clean-up costs of subject site for TCE, DCE and any other
Accessibility and Identity
The site has average access by a curb cut to 42nd Avenue. The rear alley
easement area has not been used in many years.
The property's identity is considered to be average. It is observable frc~
traffic in both directions on 42nd Avenue, and is adjacent to a well identified
oa:m~rcial district in an average to fair industrial neighborhood.
zord
2he p~ is zon~ 1-2, ~ ~±al. 3. ~ of tho Zon.i.r~ Map is
Higb~st and best use is defined as the reasonably probable and legal use of
vacant land or an improved property, which is ~hysically possible,
appropria~-ly supported, financially feasible, and that results in the highest
~ne land is of sufficient size for construction with a ~ariety of buildings
in any of several locations on the parcel. Zoning indica~ that industrial
use of the land would be best. Ir~k~-trial uses lie to the northwest and west
of the subject with ~rcial influences farther east and west.
~c conditions are favorable for ir~ustrial building construction
are between 9.5% and 10.5%. A new i~mh~-trial k~ilding has been constructed_ a
long block south of the subject at 3988 - 3980 Quebec Avenue. General ~c
conditions are still reoessionary.
SITE [~II~U/C~ (I~T'D
Hiqhest and Best Use cont'd
reccgniz~ water and soil contamination would
Electronic
likely present a development problem. City and state officials, ler~rs,
contractors, and labor unions would be reticent to allow ~_~u~ction on the
subject property where contamination might adversely affect health, safety and
value. Contaminated sites like the subject are rarely developed until either a
"letter of closure" or a "no action lettel~' are pro~ by the Minnesota
not the responsibility of the subject owner. After the subject property owner
voluntarily participates in a program to achieve a "no action" letter, does
mo~ths, satisfacto~ results about the level
a
of
a~kieves
of his c~n property's contamination, ar~ pays for MPCA staff time, a letter of
"no action" is likely to result.
The highest and best use of the site, as if vacant, is therefore to prooeed
in coo~_ration with the Minnesota Pollution Control Az3ency and obtain either a
letter of closure or a letter of no action while sim/ltaneously continuir~ the
present course of remediation and be~innin~ develc~ with an industrial
Mamff~ will 1~ ~ a "No 3~£on" lo~t.o.r t:~ ~ g ~cati.r~ that: ie
i~ not: ~ible for t.~ con~t£on on it'~ $±t.~.
i ~ne land is improved with a one story masonry and steel fr~m~ industrial
bu~ldir~ and mcclest bituminous and crushed rock paving.
I Size
~he subject contains (100' x 60') + (99' x 76') = 13,524 square feet of
I 9£oss building area. 1,200 square feet is fiDi~ office.
The front half of the buildin~ was built in 1961. The rear half of the
building was added a few years later.
Foundation
The buildir~ rests on a concrete slab and concrete blocks.
The building is framed with concrete blocks, steel po~ts and _h~m.
l c?_rior alls
The walls of the subject are paint_~ cor~x~te blocks. They appear to be in
average condition. Sc~e cracks in the morea~ were noticed where the newer
~(tion joim~ the original build(rig, and in a few additional places. Sc~e
paint w-us also chip~in~ off tb~ walls. This is typical. %~e front of the
subject is faced with brick.
Roof
The roof is that of a typical industrial building. It is framed with steel
open web joists, below co--ted me~a] decking, rigid insulation, and a
ccverir~ of built up as~t and gravel. It is in average cor~lition. There
are six skylights in the r~ar ~tion of the building. It was repor~4 that
sc~e leaking occurs around these. The roof was repaired two y~a~s ago. It has
water runoff down spouts.
Floor~
Vinyl tile cover~ the floor in the finished office area. ~ne tile is in
average condition. The floor in the shop areas behind the office are s~a] ed
concrete in average to good condition.
10
In~erior Walls
~]%e interior walls in the front office area of the subject are finished with
wood panelir~. ~he interior walls in the shop ar~a are painted concrete
block. The interior walls of the subject are in average to good cc~tion.
Ceilir~s
~he ceiling in the front office area of the subject is dropped aooustical
tiles with recessed fluorescent lighting in average oomdition. The ceiling of
tb~ shop in the original buildir~ has a clear span height of about 12 feet.
Ceilir~ height is about 16 feet in the r~=wer ~itic~%. Fluorescent light
fixtures, b~ting and cooling units, air ducts, air filters, electrical buss
~he front entry door is plate glass with metal frame. Interior office doors
are hollow core wood. The office/shop entry door is metro! with a wire
glass wirmk~. There is omc metal service door at th~ rear of t_he shop, ar~ one
over~, metal panel garage door. The garage door clearance is about 14'.
Exterior a~ int~ior doors are in aver~ to good condition.
W~ on the front of t_he bHlding are mmtal frame slid-rs. Wir~ows
ar~ the shop area are standard industrial sash type with single pane glass
and ~lltiple panels. Their insulation capacity is poor. ~hey were ~m]ed with
a translucent plastic m~. Wir~ of the subject are standard for
~ial buildir~s, arm1 are in average co~zlition.
Electrical
1,200 amp service is provided to the building. Service am~ d~cribution is
average to good.
11
Plumbinq
There is a two fixture fj_n~ washro~ in the office area, and a four
fixture w-dshro~ open to the shop area. ~he fixtures are in average oondition
and function adequately.
Heatir~/Cool ir~
suspended fr~ the ceiling in the shop. ~here are four hot air blower units,
and three air conditioner units. Cc~p~~ for the short duct air
conditioners are found on the roof. Seven ceilir~ far~ help to distr~ the
air. A combination heat and air conditioning unit serves the offices. ~ne
equilm~_nt is in average condition.
Sixty feet of electrical buss ~t, about 100 feet of light weight rail for
crane operation, a~d three electronic air filters are suspended fr~ the
Mi~:~_ll~n~:~u~ d Condition
Any property such as milling machines or lathes are personal property ar~
are not appraised. The building is in slightly above average overall
On-Site Improvements
An as~t paved parkin~ area lies in the front of the building. It
measures 42' x 90'. It is in fair to poor oondition. Class five gr~vel, sand
ar~ crushed rock cover the ground on the east side and rear of the buildir~.
~ere are two high intensity parkir~ lights anchored to a telephone pole at the
rear of the lot. One of these illuminates the parkir~ area at the rear of the
building. Az~=]] Enqin~_ ~rir~ & Mar~f~ pays for its use, but these
lights are the property of NSP.
The three approa~ to value indicat~d the foll~wir~:
Replacement Co~t ~~ $332,700
~t ~ ~~ $306,3~
~t ~ ~ys~ of ~ ~ ~ ~j~ p~~. ~ ~
~ d~ ~ ~ ~ a~li~le ~ ~ ~ ~ ~i~ ~ of ~ ~t
for ~l~s of ~ ~j~ ~.
25 y~ old 1~ ~ ~j~.
~he Market Data Approach best illustra~ the actions of typical buyers ar~
sellers of pruperties of the subject type. Several good quality, nearby
co,parables wer~ found and cc~ to the subject. ~ ~ older sales.
for the subjects market value.
For this value conclusio~ estimate without a pollution stigma mo~t em~is
is place~ upon tbm fir~s of the Market Data Approach with good but
(km~.lusic~ of value without poLlutic~ stigma $313,000
Pollutic~ Stiq~a. of $14,500 a~d $14,700 ~ $ 29,700
Value EsT~mmte as Allegedly Polluted $283,300
Pollution Stiqma
~he site is strickan with the stigma of pollution because of its proximity
to pollut~9 Electronic Industries. As a result of that stigma the subject
present occupant Frank Pick~lm~n and ~ Er~i~eezir~ & F~aLfm~ur~q.
Frank Piak~-lm~n, a possible buyer of the real estate relays the typical
concerns of a prudent and knowled~le buyer of a oog~m{~at~ site.
As a resallt of the pollution stigma, a fxfo/re cmaler will have problems
marketing and mortqaging the property. Cr~atir~ a "no action" letter for the
subject is the equivalent of the MPCA sayin~ that a future owner (or the
present one) or buyer is not a contributir~ polluter and is not responsible for
any pollution found on the proE~rty. These types of. letters are written by the
MPCA when contamination is cleaned up or is in the process of being cleaned up
and is not the prubl~ of the current property owner.
action" letters are pro~_ ~. The petroleum tank spills area produces many of
these lettez~ but they are primarily for service station proE~rties where
prope~ is pollut~4 by a type of pollution other than that ~ gasoline ar~
diesel tank spills. The ~ter and Solid Waste Division handles this kind
of contamination and the~y have report~ as of the date of this app~isal a
listing of 25 sites in the metropolitan area where "no action" letters have
been written in the past four y~rs. Five of these sites are known or
controlled by a, public entity and the balance were repo~y sold or about to
be sold on the open market and the "no action" letter was requested so that the
sale could occur. ~ of these files were ewam(~d in sc~e detail in the
MPCA offices in St. Paul, Minnesota. A followir~ listin~ sho~s the MPCA file
number, a property name and ~ress, the generalized nature of the pollution
affecting or alleged to affect these pro~.rties, the time period that the
parties sought a "no action" letter in deal~ with the MPCA and the
approximate number of months that were involved in that process. The average
amount of time involved with the MPCA in obtai~ a "no action" letter was
Pollution Stigma Oont'd
8.85 months or approximately 9 months. ~he various parties probably spent
another 1 to 2 mon__ ths prior to dealing with the MPCA in oonsulting a~i
developirg their strategy for dealin~ with the contamination problem. Sites
adjacent to large well known polluters like the Riley Tar site in St. ~
Park had the shortest ~i~ periods. The prooess for getting a "no action"
letter for pruperties adjacent to a ~ k~own polluter that has been well
identified by the MPCA is a rather short one. Even easily cleaned problems
like the excavation of a old septic tank for Precision Electric in Plymouth or
the excavation of allegedly less than a gallon of trichloroethylene spilled at
Multiteoh's facility in New Brighton took 16 and 9 months respectively. These
minor contamination problems should equate very well to the subjects.
M CA Prq -- 7 Time eriod
File # Name & Address Pollution "No Action I~tt~' Months
1190 Dixie Chemical Co. Nitrates & sulfites 6-88 to 8-88 2
E. Corner Hwy 55 at f~--,, refiner to south
Pine Bend Poad,
Rosemount
1270 c~ ~h~t ~h~t & Forbes C]%loroethelene 8-88 to 6-89 10
1151 Vernon ~r., in old septic tar~
Golden Valley
1280 Precision Electric Ch~-c~e 7-88 to 11-89 16
615 Co. Bd. 18, in old septic tank
Ply x h
1540 F~Lltitech Trichloroethylene 1-89 to 10-89 9
82 2nd Ave. SE., f~ small spill
37
Pollution Stiqma Cont'd
MPCA Property T~w~ Period Seekin~
m File # Name & Address Pollution '9~o Action Letter~' Months
1450 Terry Bro~. (kalst. Reilly Tar 3-89 to 3-89 1
m 3320 P~lic Ave. con~tion
m 1690 Jc~n Hancock Pr~. Benzene etc. ~ adj. 3-89 to 8-89 5
2265-85 W. CD. Rd. C, Williams & Amaco ~
I ' R~seville farms
m 1740 Rosemount Die C~sting Monitorin~ well 3-89 to 12-89 9
(Spectro Alloy's) contaminat~
m 13220 Doyle Path E.
I 1810 Androc Products 1974 fire Chemic1 2-86 to 9-87 19
7301 W. Tak~ Street spill
1920 Allianz Investment Soil piles contaminated 11-89 to 10-90 11
1000 B1. Valley Pk.~r.
2040 Midwest Bank Distrb. RR & ~any polluters 10-89 to 6-90 8
1060 33rd Ave. SE, nearby
1820 Holiday Station Store Buried a~Dh~lt c~i~--~ls 9-89 to 12-89 3
SWC Broadway & 12th Sro
Forest Lake, Mn
Pollution Stiqma .Cont'd
MPCA Property Time Period Seeking
File, ~ Name & N~. ~ess Pollution '~o Action Lette~' ~nths
2450 Hiawatha Metal Craft Trichloroethylene 7-90 to 6-91 11
2631 31st Ave. So.
1860 Caliber Development Oil spill, land farm 10-89 to 11-90 11
c.2660 Fernbrook ?a~e clear~p
~be above described study i~licates that the ~st/r~ period for a
like the subject that is alleged to be contaminat~_ will be ~ by
approximately 10 months. ~he normal marketing period for a pro~ like the
subject wuuld be frcm 12 to 18 months and that process wuuld to a certain
deqree be able to overlap with a oertain amount of the ~ required to obta/n
a "no action" letter or equivalent. It is therefore omlcluded that th~ alleged
pollution of the ~ubject prc~ will cause a six month increase in the normal
marketing period by itself.
that it creates, the subject pro~ ~ will be respom~ible for the ousts
to obta/n the "no action" letter or its equivalent. For the subject property,
those c=~ts are partially known and can be anticipated as follows:
1) Owners time spent dealir~ with alleged pollution prubl~
the testin~ and the process $ 3,000
2) Owners oonsult/r~ attorney to supervise MPCA process $ 5,500
3) Owners finm~i~ conmn~/~~ cha~es $ 3,000
4) MPCA staff charges for producir~ "no action" letter or equivalent $ 3,000
Total Anticipated Owners Costs $14,500
39
S~4ARY AND ~!tcIIC~I CG~T'D
Pollution Stiqma Cont'd
Owners charges are ex[~ to total approximately c~e week of time or 40
hours at, say, $75.00 per hour equals $3,000.00. The time will be spread ~ver
a series of weeks and months am~ not conoentrated. Legal fees are a rough
approximation of 35 to 40 hours at, say, $150.00 per hour for the supervision
of the process and dealing with the MPCA. At~ wrote most of the letters
in the MPCA files for pro~ owners.
~ of the "no action" letter efforts involved a potential sale where
bankers and appr~i~!s were re~,ired. Production of an appraisal doalirg with
pollution on the subject pr~ is ex~ to cost at least another $3,000.
Sometimes k~yers pay for these types of financial ir~-tlnm~nts ar~ require the
seller to shar~ the costs. MPCA charges will be levied for staff time spent
producirg the "no action" letter. A revie~ of the files imalcates that those
charges for a relatively small effort required like the subject should be only
a fe~ thousand dollars and $3,000 is a best estimate. %~en ~unicipalities like
St. Im, i~ Park or Minneapolis deal with the MPCA, the prooess is smoother and
MPCA staff d~rges are lower. That is not the case with the subject prop~
at this
point.
th~ pollution stigma is estimated at $313,000 on a previous page. ~e present
value of $313,000 not received for 6 months at a current estimated interest
rate of 10% is $297,797, indicat/rg a lo~s in market value of $15,203, say
$15,200.
~he final value estimate on the subject property as it is allegedly pollue~
is estimated as foll~s:
Est- i mat,:,,-] value without pollution stigma $313,000
Less pollution stigma- $14,500 ~ $15,200 totals $ 29,700
Final Value Estimate as Allegedly Polluted $283,300
76'
SHOP 99 '
199' 16'
o
NORTH
h ~
o ± I
00'
SHOP
42 ND AVENUE NORTH
~Bu~ing Sketch
["
I Photograph Views
View East on 42nd
Photograph Views ]
Agenda #3 Synopsis
February 12, 1996
NEW HOPE EDA MEETING
UNOFFICIAL SYNOPSIS
1. Call to Order 9:18 p.m.
2. Roll Call
Present: Erickson, Enck, Otten
Absent: Norby, Wehling
Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald
3. Approval of Minutes of January 22, 1996 Otten/Enck
4. Discussion Regarding Property at 7500 42nd Avenue Directed staff
(Improvement Project No. 474) to proceed with
negotiations
5. Adjournment 9:20 p.m. Enck/Otten