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120991 EDAOFFICIAL FILE COPY CITY OF NEW HOPE EDA AGENDA EDA Regular Heeting #11 Agenda #11 President Edward J. Erickson Commissioner W. Peter Enck Commissioner Gary L'Herault Commissioner Gerald Otten Commissioner Marky Williamson December 9, 1991 2. 3. 4. Call to Order Roll Call Approval of Minutes of November 25, 1991 Discussion Regarding Acquisition of Foremost, Inc. Property, 7528 42nd Avenue North, Improvement Project No. 474 Adjournment Approved EDA Minutes Meeting #10 CITY OF NEW HOPE 4401Xylon Avenue North Hennepin County, Minnesota 55428 November 25, 1991 CALL TO ORDER ROLL CALL APPROVE HINUTES 7305 42ND AVENUE NORTH PROPERTY Item 4 President Erickson called the meeting of the Economic Development Authority to order at 9:51 p.m. Present: Erickson, L'Herault, Otten, Enck Absent: Williamson Motion was made by Commissioner L'Herault, seconded by Commissioner Enck, to approve the EDA minutes of November 12, 1991. All present voted in favor. Motion carried. President Erickson introduced for discussion Item 4, Discussion with Rapid Oil Inc. Regarding City-Owned Property at 7305 42nd Avenue North. Mr. Donahue, City Manager, explained that Valvoline Company would like to make a presentation to the EDA regarding the city-owned property at 42nd and Winnetka. He stated the proposal is for a Rapid Oil Change facility on the site next to All Star Sports. He indicated the EDA does not have to take any action tonight on the matter. He pointed out that the EDA may accept or reject the proposal and is under no obligation. Commissioner Enck inquired whether All Star Sports has expressed an interest in the property. President Erickson stated he did speak with Mr. Norman on Friday and he is very interested in expanding his building and would like to discuss it with the City. Mr. Mark Segal, Valvoline Rapid Oil Change, Inc. Real Estate Field Representative, was recognized. He stated they are willing to pay a fair market value for the property. Mr. Segal showed a prototype building of Rapid Oil Change. He stated Rapid Oil Change would change the property which is currently non-taxable into taxable functioning property. President Erickson explained that he would favor utilizing the property for an addition to the All Star Sports facility rather than a automobile service station. He New Hope EDA Page 1 November 25, 1991 pointed out that the plan for 42nd Avenue Redevelopment was to minimize commercial uses of property where petroleum products are dispensed and the Rapid Oil Change is closely related to this type of use. Mr. Segal inquired whether the purchase price would influence the EDA's decision. President Erickson stated at this time the EDA cannot react to All Star Sports because they have not made a formal proposal. Mr. Segal emphasized that Rapid Oil Change businesses are good corporate neighbors, and he asked how long the EDA is willing to wait for a formalized proposal from All Star Sports. President Erickson noted that he would like to see something concrete this winter so construction can begin next summer. Commissioner Enck pointed out that President Erickson has provided his feelings regarding the site; however, the other EDA members may not agree. He explained that he would like to consider a proposal and purchase offer; however, Mr. Segal has not provided that tonight. He stated he would like to see the market value and traffic generation, etc. Commissioner L'Herault agreed that more information is necessary. He commented that he feels a Rapid Oil Change is considerably different than a gas station operation. Mr. Oonahue pointed out three items: first, the EDA is the property owner and can act like a property owner; second, the EDA has a development plan for 42nd Avenue which would have to be modified to accept this proposal; and third, a purchase offer should be presented at the same time as the proposal. Mr. Segal stated his primary purpose tonight was to introduce Rapid Oil Change and obtain an inclination from the EDA as to their feelings for the property. He indicated he would be happy to return with a proposal and purchase offer. Mr. Sondrall, City Attorney, informed the EDA that a public hearing would be required before city-owned property could be sold. Therefore, the EDA should bear in mind the notification requirements. Commissioner Enck recommended that Mr. Segal provide a New Hope EDA Page 2 November 25, 1991 ELECTRONIC INDUSTRIES Item 5 MOTION Item 5 NORTH#EST YNCA It~ 6 rendering of the structure and indicate the structure's value when he presents the proposal. Mr. Segal replied that he would not be able to give the EDA a site plan unless the project was authorized due to the expense. He reported that he could provide an old set of plans and a rendering. He stated a 1300 square foot two-bay building is proposed for the site. President Erickson introduced for discussion Item 5, Discussion on Request for Authorization to Obtain Appraisal on Electronic Industries Property at 7516 42nd Avenue North. Mr. Sondrall indicated the City has formally served an order under the Hazardous Building Act which would require action on the part of the property owner. The action would be either to respond formally much like an answer in a civil lawsuit or do nothing which would cause the City to make a motion in court to have the building razed. He explained that nothing will happen on the property for 30 days. The property owner has contacted the City and indicated that they would be willing to sell the property at a reasonable price, in light of the order. They do not desire to make extensive repairs to the building, only to have the property taken by the City. Mr. Sondrall stated an appraisal is necessary so the EDA can determine the property's market value. He pointed out that if the property is not sold to the EDA, the City will proceed with its action in district court for requiring improvements to the property or the demolition of the property. Mr. Donahue indicated the approximate cost of the appraisal is $3,500. Motion was made by Commissioner Enck, seconded by Commissioner L'Herault, to authorize the appraisml for $$,$00. All present voted in favor. Motion carried. President Erickson introduced for discussion Item 6, Discussion with Northwest YMCA on Their Vacant Parcel. Mr. Duane Ostlund, representing YMCA, was recognized and stated the assessment for Quebec Avenue Extension for the YMCA amounted to $76,000. He stated on behalf of the YMCA Chuck Holmes sent a letter to Mayor Erickson regarding a New Hope EDA Page 3 November 25, 1991 proposal indicating that the YMCA would deed over to the City of New Hope the holding pond and the high ground south of the YMCA as its payment for the project assessment. He stated several years ago the YMCA allowed the City to construct a holding pond on its property and the Y was not compensated but cooperated with the City. He explained that the YMCA not only is a health enhancement facility but it does a tremendous job working with the youth and family of the community. The $76,000 assessment will severely hamper their ability to continue the programs at the same level. Mr. Ostlund asked the EDA to seriously consider the proposal. He pointed out that timing is crucial as the assessment deadline is November 30th in order to avoid interest. President Erickson stressed the need to separate the issues. He stated if the City is interested in purchasing the property, that should be issue number one and the assessment is number two. He encouraged the YMCA to make arrangements for paying the assessment or putting it on the tax rolls. He stated if the City purchases the property, the YMCA could do whatever it wishes with the money. President Erickson stated the EDA will consider the proposal but is not prepared to make a decision tonight. Mr. Donahue stated it should be made clear that the issues are separate and the YMCA has a deadline to meet in terms of filing their appeal if they desire to go that route. Mr. Sondrall stated the appeal notice is based on the YMCA's ability to appeal their assessment not just pay it. If they decide the assessment was inappropriately levied against their property, they would have 30 days from the day of the adoption of the assessment to challenge the amount. A possible acquisition of the property would in no way extend the appeal period or waive any challenge that the City might make in the event they want to appeal it later. The assessment was adopted on October 28, 1991; therefore, the YMCA has until November 28th to make an appeal. Commissioner Enck questioned the size of the property. Mr. Donahue stated it is .96 acres. He stated staff is exploring the possibility with Crystal for a joint salt/sand dome or a fuel facility. The property alone is New Hope EDA Page 4 November 25, 1991 AD~OURNHENT probably too small; however, it may be feasible if it were combined with the large piece of vacant property owned by the school district south of the bus barn. He commented it may also serve the school district's fuel needs. Motion made by Commissioner L'Herault, seconded by Commissioner Enck, to adjourn the EDA meeting as there was no further business to come before the Council. All present voted in favor. The New Hope EDA adjourned at 10:21 p.m. Respectful ly submitted, Valerie Leone City Clerk New Hope EDA Page $ November 25, 1991 REQUF~T FOR ACTION Originating Department Approved for Agenda Agenda Section City Manager EDA 12-9-91 Item No. Kirk McDonald By: Management Assistant By:. (.~/ 4 / DISCUSSION REGARDING ACi~UISITION OF FOREMOST, INC. PROPERTY, 7528 42ND AVENUE NORTH, IMPROVEMENT PROJECT NO. 474 Staff requests to discuss the acquisition of the Foremost, Inc. property at 7528 42nd Avenue North with the EDA. In previous meetings the EDA gave direction to proceed to acquire all three properties in the area (Foremost, Electronic Industries, and Ardel), clear them and work towards redevelopment, so as to comply with the intent of the 42nd Avenue Redevelopment Project which is to improve the neighborhood. At the October 14th EDA meeting staff indicated that the appraisal of the Foremost property had been completed and discussions were continuing regarding the possible acquisition of the property and the relocation of the business in the City. It was determined that the Foremost Project should be separated into two issues with the fu'st priority being the acquisition oft he property/redevelopment of 42nd Avenue and the second priority being the relocation of the business within New Hope. Staff met with the owner of Foremost Inc., Mr. Fredendall, and his attorney on November 2?th and negotiated an agreement whereby the City could acquire the property. Said agreement is outlined in the attached letter from the City Attorney and staff requests to discuss the agreement with the EDA. The negotiated purchase price, not to exceed $585,000, is based on payment o? outstanding mortgages, real estate taxes, assessments, and relocation costs, and is comparable ~ costs the City could expect to pay in a contested condemnation action. The agreement reached on November 27th was based on the outstanding mortgage amounts .:. of 1uly 17th and the attorney representing Foremost has provided updated mortgage amou~, subsequent to the City Attorney's letter, as follows: MOTION BY SECOND BY Review: Administration: Finance: RFA-O01 ~ Request for Action EDA December 9, 1991 Page -2- Previous Current Mortgage Mortgage Amounts Amounts Outstanding Mortgage on Building Outstanding Mortgage on Addition $445,751.00 $457,440.18 39.211.00 )6.761.74 $484,962.00 $494,201.92 Unpaid Real Estate Taxes Unpaid Special Assessments Relocation Expenses 64,792.00 64,792.00 14,682.00 14.682.00 20.000.00 20.000.00 $584,436.00 $593,675.92 Staff has indicated to Foremost that the offer on the property, not to exceed $585,000, stands and would not be incr~ to cover the updated/increased outstanding mortgage amounts. A cash flow projection for Tax Increment District #8, which includes the loan to Autohaus, shows that the district is projected to have a cash balance of $3,500,000at the end of the district's life in 2004. The cash balance projected for the end of 1991 is $615,831,but the Director of Finance/ Administration indicates that the balance at the end of the year will most likely be $626,377 and exceed the projected amount. Mr. Fredendall has indicated that if the City does acquire his property he is willing to work with the City and State on economic development programs that would allow him to relocate his business in the City of New Hope. Previous EDA Minutes, memos, correspondence, and a copy of the Foremost appraisal are attached for your information. Attachments: Attorney Correspondence 12/3 TIF District 8 Cash Flow Projection Foremost 7/17 Correspondence - Outstanding Mortgages EDA Minutes 10/14 EDA Minutes 7/22 EDA Minutes 6/24 Staff Memos Foremost Appraisal ]3 E'C -- $--9! TUE 17 : 20 CORR I CK & $ON~RALL SP~qO~ O, Of]MY December 3, 1991 Mr. Daniel J. Oonahue City Manager City of New Hope 4401Xylon Avenue North New Hope, MN 55428 RE: Foremost Property Acquisition Our File No: 99.11090 Dear Dan= This letter will confirm our discussions with Foremost, Inc. regarding the acquisition of their property located at the corner of 42nd Avenue North and Quebec Avenue North. Said meeting occurred on November 27%h, 1991, Basically, we discussed the following: 1. A purchase price not to exceed $585,000.00 (this figure was arrived at based on the following: payment of outstanding mortgage equaling $484,902.001 payment of unpaid real estate taxes for years 1990 and 1991 of $64,792.00; payment of unpald special assessments not certified to tax rolls of $14,6e2.00; payment of relocation expenses of $20,000.00). 2. After acquisition of the property we would continue to allow Foremost to operate at the property without payment of rent for a petted not to exceed twenty-four months. Foremost would pay al] operational costs associated with their use of the property including, bus not ltmi~ed to, real estate taxes, utility charges and insurance. Also, they would receive a 90 day notice provision to vacate the property. 3. Upon their vacation of the property, they would be allowed to remove all personal property, machinery and equipmen~ DEC-- ~ -- 9 I T U E I "~ '. 2 I C OR R I C K ~ $ 0 N I) R A L L ~ F~'~ 85 Mr. Daniel J. Donahue December 3, 1991 Page 2 including any item which would be considered a movable fixture. In other words, they would have all salvage rights =o the building given the fact that we intend =o demolish the building for redevelopment, 4. Foremost would agree to execute an agreement providing the EDA with an equal share of the judgment collected on ~heir ]awsuit against Elec=ronic ~ndus=ries after payment of attorney's fees and no~ to exceed $50,000.00. In other words, there will be the possibility tha~ the City would receive a $50,000.00 reimbursement in the even= that Foremost was very successful in their lawsui~ agatnst Else=tonic ~ndus%ries. Naturally, =he acquisi=ion would be effectuated as part of an eminent domain action. The negotiated agreement ts relatively comparable to the costs we could expec= in a contested condemnation action. Assuming Foremos~ could deliver an uncon=&mina=ed property, our appraisal establishes the property v~lue ~ $475,000.00. A contaminated or impaired proDer=y value per cup appraisal is $433,000.00. ACtually, ! ~hin~ Electronic Indus=ties is doing a fairly good job of cleanup and it would be prudent to analyze a negotiated settlement based on an uncontaminated property. Therefore, for =he purposem ef this comparison Z have assumed ~ha: a condemnation commission would accep= =he $475~000.00 value. Fur~her~ ! think it would no= be unrealistic ~o believe =hat Foremost would be entitled to $3e,000.00 in movin~ and re- establishment expenses. Finally, I think attorney's fees, appraisal fees and cour~ costs associated with the acquisition of this property may be in the range of $30,000.00. As a result, the total co$~ ~o the City in a contested condemnation action would be somewhere be=ween $540,000 to $550,000, If Foremost is successful in [hetr lawsui~ against Electronic Indus%rios, the City's final cost based on our negotiated se~[lementmigh~ be as low as $535,000.00. Of course, =his assumes the risk that their litigation will be successful. In speaking with the a~orney fo~ Foremost, they ars very confident about %he litigation and have no in=en~ion of accepting a "low ball'" offer simply to obtain a settlement. They are basically proceeding on an all or nothing basts. Since I am not privy to ~he nuances of the 3awsutt, it would be inappropriate for me to gtve an optnion regarding =he probabili=¥ of a successful verdict, however ! think we can be optimistic abou= a successful outcome ~n ltght of the v~gor and zealousness that Foremost~$ attorney has shown with :~ -- 9 I T U E I 5' -' 2 I CORR I CK & SON~RALL Mr. Daniel J. Donahue December 3, 1991 Page 3 regard to the lawsuit. In that regard, I certainly feel that Electronic Industries will definitely have their hands full in Oefending t~is case. Besides, any time you do go into court you have a 50/50 chance and this case appears as if it i~ going to COurt, Please contact me if you have any further questions, Very truly yours, Steven A. Sondra11 slt3 cc: Kirk McDonald, Management Asst. CITY OF NEW HOPE CASH FLOW PROJECTION TIF DIST NO. 8 BEGINNING CASH 1990 1991 1992 1993 199/, 1995 1996 1997 1998 450,000.00 454,109.31 615,830.87 786,830.72 97:~, 969.56 1,165,636.73 1,370,878.93 1,589,945.67 1,782,719.41 REVENUE: TAX INCREMENT 142,109.31 280,000.00 280,000.00 280,000.00 280,000.00 280,000.00 Z80,000.00 280,000.00 280,000.00 INTEREST 62,000.00 27,2~6.56 36,949.85 47,209.84 58,378.17 69,938.20 82,252.74 95,396.74 106,963.17 LOAN REPAYMENT 41,435.00 41,435.00 41,435.00 41,435.00 41,435.00 41,435.00 TOTAL REVENUE EXPENDITURES: BOND PRIN BOND INT FISCAL AGENT fEES CONSTRUCTION COSTS OTHER COSTS CASH BALANCE 204,109.31 348,681.56 358,3f~.85 368,644.84 379,813.17 391,373.20 403,687.74 375,396.74 386,963.17 75,000.00 80,000.00 80,000.00 90,000.00 95,000.00 100,000.00 105,000.00 115,000.00 109,960.00 105,385.00 100,506.00 95,1~6.00 89,131.00 82,621.00 75,623.00 67,975.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 200,000.00 ; 200,000.00 186,960.00 187,385.00 182,506.00 187,146.00 186,131.00 184,621.00 182,623.00 18~,975.00 454,109.31 615,830.87 786,830.72 972,969.56 1,165,636.73 1,370,878.93 1,589,945.67 1,782,719.41 1,98~,707.58 CITY OF NEg HOPE CASH FLOI~ PROJECTION TIF DIST NO. 8 BEGINNING GASH REVENUE: TAX INCRE#E#T INTEREST LOAN REPAY#ENT TOTAL REVENUE EXPENDITURES: BOND PRIN BOND iNT FISCAL AGENT FEES CONSTRUCTION COSTS OTHER COSTS 1999 2000 2001 2002 2003 2004 1,984,707.58 Z,202,100.04 2,451,476.04 2,674,404.60 2,932,568.88 3,207,7-/'5.01 280,000.00 280,000.00 280,000.00 280,000.00 280,000.00 280,000.00 119,082.46 132,126.00 145,888.56 160,464.28 175,954.13 192,466.38 399,082.46 412,126.00 425,888.56 440,464.28 455,954.13 472,46b.38 120,000.00 130,000.00 140,000.00 150,000.00 160o000.00 170,000.00 59,690.00 50,750.00 40,960.00 30,500.00 18,750.00 6,375.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 181,690.00 182,750.00 182,960.00 182,300.00 180,750.00 178,375.00 CASH BALANCE 2,202,100.04 2,431,476.04 2,674,404.60 2,932,568.88 3,207,775.01 3,501,86~.39 INCORI=ORATEO III 7528 - 42nd AVENUE NOFITH MINNEAPOLIS, MINNESOTA 55427 TELEPHONE: (612) 533-0793 FAX: (612) 533-3087 July 17, 1991 Kirk McDonald, Management Assistant City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Dear Mr. McDonald: In reply to your memorandum of July 9, 1991 concerning the Foremost project, please be informed that our outstanding mortgage on the building is $445,751.00, plus a second mortgage of $39,211.00 for our addition. At this time we are leaning toward leasing instead of owning. If you have any other questions, please call me. Respectfully, Allen Fredendall President AF:dj PRECISION SHEET METAL · STAMPINGS · SILK SCREEN:'- m FOREMOST, ]NC. 7528 42ND AVE. N. #474 Item 4 He stated besides the purchase price Mr. Trieber would like two other items addressed: 1) a plan for the site; and 2) excess fill material, Mr. Donahue explained that another factor to be taken into consideration is the potential development at 5501 Boone Avenue North (North Ridge development). The property is low on the south and it is possible that excess soils from the Custom Mold property may be deposited on this site and if so, the purchase price may be lower. Mr. Oonahue stated Chuck Thompson of North Ridge may be coming before the EDA in the near future. He indicated the City may want to consider becoming part of the North Ridge project and utilize the south portion for vehicular parking or some other use. The EDA authorized the City Manager to proceed to negotiate with purchasing the land from Custom Mold. Mr. . Donahue stated any proposal made would be contingent upon approval by the EDA. Mr. Trieber stated if the City does not need the dirt, he would contract to have the dirt hauled away. However, if the City wanted it he could relocate the dirt. He expressed concern with the height of the potential salt dome and requested review of a concept plan. President Erickson commented that the City would have to go through the Planning Commission process and would work closely with Custom Mold to ensure that all concerns are addressed. Mayor Erickson introduced for discussion Item 4, Discussion Regarding Acquisition/Relocation of Foremost, Inc., 7528 42nd Avenue North. Mr. Donahue stated the appraisal of the Foremost, Inc. property has been completed and staff is continuing discussions with Foremost regarding the possible acquisition of the property and the relocation of the business within New Hope. Mr. Donahue updated the EDA and indicated in the past, the City has reviewed the Foremost deal as two projects in one: 1) the redevelopment of the Foremost property; and 2) the relocation of the Foremost facility within New Hope. He stated staff recommends establishing the redevelopment of 42nd Avenue as the City's first priority. He commented that whether Mr. Fredendall of Foremost relocates in New New Hope EDA Page 2 October 14, 1991 AD,.IOURN#ENT Hope or not, should be considered secondary. He stated staff hopes that the business will remain in New Hope; however, that should be a separate issue. Mr. Oonahue stated staff is in the process of obtaining an analysis between Foremost's appraisal and the City's appraisal of the property. Mr. Donahue stated a review appraisal would cost between $1,000'to $1,500. He stated he would use this information to determine what the City would be required to do under condemnation opposed to what the City might be willing to offer for the property. The EDA agreed with Mr. Oonahue's recommendations in that it would be advantageous to separate the issues. Motion made by Commissioner Otten, seconded by Commissioner Williamson to adjourn the EDA meeting as there was no further business to come before the Council. All present voted in favor. The New Hope EDA adjourned at 9:45 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA Page 3 October 14, 1991 Approved EDA Minutes Meeting #7 CITY OF NEW HOPE 4401Xylon Avenue North Hennepin County, Minnesota 55428 July 22, 1991 CALL TO ORDER ROLL CALL APPROVE MINUTES FOREMOST, ZNC, Ite~ 4 NOTION ADJOURNMENT President Erickson called the meeting of the Economic Development Authority to order at g:05 p.m. Present: Erickson, L'Herault, Otten, Enck, Williamson Motion was made by Commissioner Enck, seconded by Commissioner L'Herault, to approve the EDA minutes of June 24, 1991. All present voted in favor. Motion carried. President Erickson introduced for discussion Item 4, Request Authorization to Obtain Appraisal on Foremost, Inc. Property at 7528 42nd Avenue North (Improvement Project No. 474). Mr. Donahue stated in order to proceed with the acquisition of the Foremost property and before a grant application can be submitted, specific costs must be identified. An appraisal is necessary so the City can structure an offer to purchase the property at fair market value. Staff is recommending that the appraisal be conducted by Brad Bjorklund, BCL Appraisal, Inc. for $$,000. He stated the appraisal will be funded out of 42nd Avenue tax increment monies. Motion was made by Commissioner Otten, seconded by Commissioner Enck, authorizing the appraisal on Foremost, Znc. Property at 7528 42nd Avenue North (Improvement Project No. 474). Motion made byCommissioner Enck, seconded by Commissioner L'Herault to adjourn the EDA meeting as there was no further business to come before the Council. All present voted in favor. The New Hope EDA adjourned at 9:10 p.m. Respectful ly Submitted, Valerie Leone City Clerk New Hope EDA Page I July 22, 1991 Approved EDA Minutes Meeting #$ CITY OF NEW HOPE 4401Xylon Avenue North Hennepin County, Minnesota 55428 June 24, 1991 CALL TO ORDER ROLL CALL APPROVE MINUTES FOREMOST, INC. Itm 4 President Erickson called the meeting of the Economic Development Authority to order at 9:05 p.m. Present: Erickson, L'Herault, Otten, Enck, Williamson Motion was made by Commissioner Otten, seconded by Commissioner Enck, to approve the EDA minutes of May 28, 1991. All present voted in favor. Motion carried. President Erickson introduced for discussion Item 4, Discussion of Request by Foremost, Incorporated for Economic Development Grant Program/Economic Recovery Fund Application (#474). Mr. Donahue stated City staff recently met with representatives of the Minnesota Department of Trade and Economic Development to discuss an Economic Recovery Fund Application to assist Foremost in the relocation/expansion of its business. Estimated costs for land, building and equipment at the new site total $815,800. These costs do not include the acquisition of the present Foremost site, which Mr. Fredendall feels has a value of $720,000. While the grant application could be structured to assist with the acquisition and development of the new site, the grant funds cannot be utilized by the City for the purchase of the existing site. While the acquisition price of the Foremost property might be reduced significantly if Foremost is successful in their suit against Electronic Industries and awarded damages, some source of revenue for the acquisition of the property (whether it be $400,000 or $720,000) must be found if the grant application is to proceed. A cash flow projection for Tax Increment District #8, which includes the loan to Autohaus, shows that the district is projected to have a cash balance of $3,500,000 at the end of the district's life in 2004. The cash balance at the end of 1990 was $454,000. While there is presently not enough cash in the district to purchase the property, the excess cost could be financed internally and paid back to the district. What has to be decided is whether the EDA desires to purchase the Foremost property and draw down the balance of the cash flow so that the New Hope EDA Page ! June 24, 1991 grant can proceed. A second alternative that staff has discussed with Foremost, in the event that the City does not purchase the Foremost property, is that perhaps the City should shift its focus towards the acquisition of the Electronic Industries site. This would be less costly and the purpose here would be to rid 42nd Avenue and Foremost of the building/property from where the contamination was generated. The building would be demolished and the land possibly added to the present Foremost site to provide room for expansion and/or to make the Foremost site more marketable. In either case, a preliminary decision needs to be made regarding the acquisition of the Foremost site because this will determine if the grant application proceeds or not. Without the acquisition of the property, Foremost does not have the equity that is needed to invest in the grant for the relocation. Mr. Donahue stated the preliminary testings of the soils under and around the Foremost building show that there is no soil contamination but there is ground water contamination. He noted that Mr. Fredendall is asking $720,000 for the property, although it may have a market value closer to $420,000. The EDA could assist him by purchasing the Foremost property, however, by doing so, it would deplete the tax increment funds. Mr. Donahue recommended pursuing the Electronic Industries site. He stated the City is currently trying to get the building up to code and as a last resort may have it removed. He stated an option would be for the EDA to acquire Electronic Industries property, clear the building, clean up the soil problems then divide the properties between the two neighboring properties, Foremost Inc. and Ardel Industries. He stated the remaining properties would be brought into code conformance and the City would need to structure some type of agreement that if and when they ever sell the building, the City may recoup its investment. He commented that this would be less costly and would make both neighboring properties more attractive for sale. The EDA questioned the results of the wells. Mr. Donahue stated the wells are having a positive impact as the ground water contamination levels have significantly decreased. New Hope EDA Page 2 June 24, 1991 Commissioner Enck expressed concern that the extent of contamination is unknown as well as the cost for remedial action. He commented the EDA must address these issues. Also, the source of funding must be explained--appears to be Petro dollars. The cost/benefit ratio for the whole district must be determined. Mr. Enck spoke against the option of purchasing the Electronic Industries site since the City would then become the generator of the soil contamination problem. He also stated he dtd not believe that splitting the property between the neighboring property owners would accomplish anything since the buildings do not meet standards. He stated the EDA must find the real value of the Foremost property. He stated if the EDA assisted in any way, he would recommend demolishing the whole area to carry on with the intent of the redevelopment to dress up the 42nd Avenue and put some viable properties there. He stated 'the EOA could take over the properties, clean them up, and do remedial excavations. This would end up costing the EOA 10% of the total costs. He stated that cost could be carried over against Electronic Industries. He stated if Foremost can proceed on their own with some assistance from the EDA (purchasing property at market value), then the EDA would be complying with the intent of the 42nd Avenue Redevelopment Project which is to improve the neighborhood. President Erickson agreed with Commissioner Enck's recommendations. Mr. Oonahue informed the EDA that most of the tax increment monies would be depleted. President Erickson noted that Foremost is anxious to reach an agreement since they are really cramped at their present building. He stated they are in a bind since they cannot get a loan from the bank to expand the building due to the soil contamination. However, the EDA should not pay an additional $300,000 than what the property is worth. President Erickson felt an appraisal is necessary and Foremost should share the cost. Mr. Donahue stated Foremost is currently having an appraisal conducted and is paying the entire cost. The EOA discussed the necessity of retaining an appraiser to determine the property's market value. New Hope EDA Page 3 June 24, 1991 AD~2OURNHENT Mr. Donahue stated staff will communicate with Foremost and update Mr. Fredendall of the EDA's intentions. He stated Foremost is still pursuing its suit against Electronic Industries. Mr. Donahue summarized the EDA's direction to proceed to acquire all three properties, clear them, and work towards redevelopment. He reiterated that the EDA cannot use grant funds to purchase Foremost's existing building, but noted that the funds may be used for~a new site which would offset the costs. Commissioner Enck stated if a grant is utilized for part of Foremost's new building, less money may be needed for its former building. The EDA directed staff to pursue the grant application process. Motion made by Commissioner L'Herault, seconded by Commissioner Enck to adjourn the EDA meeting as there was no further business to come before the Council. All present voted in favor. The New Hope EDA adjourned at 9:25 p.m. Respectful ly Submitted, Valerie Leone City Clerk New Hope EDA Page 4 June 24, 1991 CITY OF NEW HOPE MEMORANDUM DATE: October 11, 1991 TO: Daniel J. Donahue, City Manager FROM: Kirk McDonald, Management Assistant SUBJECT: Summary of Discussion With Foremost, Inc. This memorandum is intended to briefly summarize our meeting with Foremost, Inc. held on September 30. As you are aware, BCL Appraisals recently completed an appraisal on the Foremost property and the final value estimate on the property is as follows: Conclusion without pollution stigma Less pollution stigma Final Value Estimate as Allegedly Polluted $475,000 42.000 $433,000 The appraisal states that: "The site is stricken with stigma of pollution because of its proximity to polluted Electronic Industries. As a result of that stigma the subject owner has had problems marketing and mortgaging. He has caused 'monitoring wells to be installed to measure onsite pollution, tried to measure his loss in market value and has sued Electronic Industries for loss in value. It is the opinion of the MPCA (Minnesota Pollution Control Agency), that given the current level of knowledge from the subject and Electronic Industries test wells, the current regulations and continued voluntary cooperation between the subject owner and the MPCA a "no action" letter will be forthcoming for the subject property. A "no action" letter is the equivalent of the MPCA saying that the subject owner is not ~ contributing polluter and is not responsible for any polluticr found on its property. These types of letters are written by the MPCA when contamination is cleaned up or is in the process of heir: cleaned up and is not the problem of the property owner and t~-~ property in question." Foremost also had an independent appraisal of their proper~ completed and indicated that the impaired appraised value az similar to the BCL value, but that their unimpaired value wa~ significantly higher ($660,000). They were not willing to share their appraisal wi~h the City. - 1 - Foremost indicated that they were interested in an offer being structured that would address the following area~: Real Estate Leasehold Improvements Moving Expenses Relocation Costs Occupying Costs (stay in building until relocate) Foremost specifically indicated they wanted the following: $625,000 for land/building and ability to preserve claim against Electronic Industries. City commit up to $285,000 or actual cost of leasehold improvements· One year rent free in their existing building after the City purchases it, so they have adequate time to find a new location· City assume full bill for Data Engineering (already have committed to two-thirds of cost). 5. Attorney fees with a cap at $10,000 The City indicated preliminarily that we were willing to discuss the following terms: $500,000 for land/building (without stigma and if lawsuit against Electronic Industries is successful, City cost to be reduced by award amount. 2. $285,000 in leasehold/moving expenses· 3. Foremost to proceed with SBA (Small Business Administration) loan· City pursue and successfully obtain $100,000 Economic Development Recovery Grant. Finding a suitable location for Foremost in a new ou existing building (Foremost wants to lease - not own). Finding a developer for the 42nd Avenue site, if al. three properties' are acquired· 7. Foremost must remain/relocate in New Hope. The staff will be meeting with the City Planning Consultant an~ City Attorney to discuss these issues prior to the October 14th EDA meeting· - 2 - CITY OF NEW HOPE MEMORANDUM DATE: July 9, 1991 TO: FROM: Dan Oonahue, City Manager Kirk McDonald, Management Assistant/Communi=y Development Coordinator SUBJECT: Qutline for Foremos= ProPec= Subsequent to the June 24th EDA meeting where it was determined that the City should proceed with =he Foremost grant applica=~on and the acquisition of the Foremost property, I have met wi=h =he Planning Consultant and we have outlined the sequence of even=s that we feel need to be accomplished in order =o achieve =he goals of both t~e City and Foremost. we will be mae=lng wi=h Mr. Fredendall on Thursday, July ll=h at 11:00 a.m. and wan= =o discuss the outline at that meeting. 1. C£tyhave appraisal of Foremost property completed so =ha= ~: independent appraisal is available to document price paid for proper=y*, This informs=ion is needed both =o s=ruc=ure an offer and to complete =he grant application. An appraisal will answer the questions about =he large disparity be=ween the market value listed and what ~he owner feels the proper=%' is worth. 2. Foremoa~ submi= appropriate documentation regarding outstand- ing mortgage and ma~e determination as to whether =hey woo': own new ~uildll~J oF lease i= from developer. Both of the items will impa¢~ on how grant package is assembled. 3. Ci~y/Coneultan~ CoBOlete coet/~enef£~ analysis on acqu~s.- tion/redevelopment of Foremost/E.I./Ardel proper=les ~- impac~ on TIF Dis~rict. ci~yee, zal~e offer ~o purchase proper~y based on complan- of Tasks L & 2 and address following issues: A® B. C. D. E. Purchase price Foremoe~ waiving relocation benefits Cl=y assuming costs for demolition Foremoet's relocation within City Appropriate adJustmen=s made to purchase price Foremos= lawsuit agains= Electronic Indus=ties successful. -2- offer to purchase proper~¥ - if Foremost accepts, proceed ~ollowing seeps. If Foremost re~ecCs, renegoc~a~e. seeks 504 loan application v~Chp~£vaCe consul~anC £n con~unc~£on ~'c~.~e C£~¥'s submittal or,ha appl£ca~£on. Fo~os~ ~£~ n~d ~o s~m£C scaCenencs and oCne~ necessary docunenCaC£on. continue vock on conde~nation of B.I. propar~¥. Final grant application submitted in conjunction wi~/~504 loan package. APPRAISAL OF ~ial Real F_~a~ 7528 42r~ Avenue North New Ho~e, Minnesota 55428 The Ci=y of New Ho~e c/o Mr. Kirk Mcmm~d 440~ Xylon Avenue Noz'~h New Ho~e, Minneso~ 55428 AS OF 7-30-91 File N%ATk~.r 91844 we cer~i~ ~ have ~ly ~~ ~he su~jec= proper~y ~~iI~, Bill ~1~ a~ off~ ~ ~, ~I~ ~~11, ~~~ ~ a~ny ~. ~ ~ ~ of ~ ~l~e ~ ~lief, of ~ ~ S~~ of ~f~io~ ~= of ~ ~i~l ~1~= ~ ~ ~=i~ for ~ ~ a~i~l ~e p~= or ~~la~, ~ ~ ~j~ D~- I= is ~ ~on ~= ~ of J~y 30, 1991, ~e ~= value cf ~J~ D~, giv~ i= ~ ~l~y ~llu~, is: Brad Sjorklun~, MAI, SRA MN LIC. ~4000377 TABLE OF ~ PAG~ FJR~CSE OF A~PRAJ-KAL ..................... i ~FIC. A~ON ........................ ii C~ ~ ~~~ ~~ .............. 2 S~ D~~~ ....................... 3-~ ~~ ~ ~~ .................. !0-!i ~ ~ ~~ ..................... 12-27 ~Y & ~SI~ ..................... 29-3~ 55DERLYTNG ASSUMPTTONS, CONI'ING~, & LIKITING CONDITIONS APPRAISING QUALIFICATI(~S OF SRAD ~JORKI/A~ S.R.E.A. Pi~&~: CITY MAP ZOND~ MAP PLAT MAP ~ ANALYSIS The pro,art7 is legally descr~ as Lo= 5, A,~tor's Subdivision No. 324, the adjacen= vacated alley, s~ree~: ar~ utiliL7 eas~r~n~s, Henne~in County, Minnesota. ~ Iden~ifica=ion Number: 17-118-21-22-0008 Assessor's Marke= Value: (land) $ 85,800 (bld~) $408.200 To~ $494,000 $27,266.80 Ur~id ~alance of Speci~ Assessmentm: ~ Paid has been no rm$~mV~ sale of the su~jec~ during the pas= 5 y~. .~.._~ r~rke=ir~ ~eri~x~ for & pro~.rL'y of ~ L-y~e is abou= 12 ~o 18 monrh-~. New Hc~:e is a ~e:ord =ier westmrly suburb of ~~lis ~a=i~ of ~= 22,680. I= ~ a~~~ly ~ ~ ~e~ ~~1 ~i~ ~ ~ ~jor ~~=ion cf ~~~ f~ a= ~ ~~i~ of 42~ Av~ No~ (C.S.A.H. ~9~o~ ~) ~ W~~ Av~ (C.S.A.M. ~156). H~ ~ ~ pla~ s~ 1960. ~ ~ci~ Or ~C ~1~ ~e ~~ ~= w~d ~y aff~ ~jor ~~=i~ ~ ~ Ci~ is p~id~ by ~y ~169 (fo~riy ~ ~ 18) ~o~ ~ ~ly Ci~ 1~: al~ by ~o~ ~d (42~ Av~ ~ C.S~A.H. ~9), ~ ~ ~ (C.S.A.H. ~10), ~c~ (26~ Av~/C.S.A.H. ~70), ~ W~ Av~ (C.S.A.H. ~156). of ~ 1~ ~ of ~ Av~ & ~ of 42~ Av~ ~~ wi~ ~ ~ ~~ bl~ ~~i~ ~l~s. ~e Sci~ ~ ~ ~~ ~, ~ ~ ~~,rly ~= of ~e city, ~ 1~ ~~ ~i~ ~N~ H~. ~ ~ ~ of ~ ~j~ a~ 42~ A~, ~ a ~ lev~ offi~ ~ld~. ~ ~ ~=i~ ~ivi~ ~, li~ ~~~ly ac~ ~e 42~ Av~/~ ~9~i~. I=i~ ~ lie ~i~ ~ lie ~ ~ ~ f~ ~ of ~e ~j~ on 42~ ~ ~ a~ 42~ Av~ f~ ~ ~j~. ~yo~ i= ~ ~ s=ore, ~ lay of ~ 1~ ~ ~a=~ ~ g~=ly ~11~. Lucation The pro~er~'y is loca=ed a= 7528 42nd Avenue Nor~2~, New Ho~e, Mi~:~e~ota. Size A=co~ =o d/mensions on the Plat Map, an~ on a co~y of a Ray Frascn survey, boUh of whic~ arm co~ied in n%e Adder~a, the property is 125.4' eq%~%ls 43,890 s~ feet, le~s a per~aR~= s~_r~e= o~-~e~t at r. he sour_h property line area Typically 6' wide ar~ a corner cut ~r~allirg a~ou= 840 s~ feet for a fir~l lar~ size estimate of about 43,050 ~,~e feet. Street easements are considered to ~e taken in the equivalent of fee for purpose of ~ a~raisal. It is highly unlikely that the street easement area will revert to ~%e su~jec~ pro~ owner in the for~-e?~ble futn~re. The Prasch survey in =he A&klenda shows a na~w ~%ree foot wide ~.~ent parallel and adjacent ~o the south pro~er%7 line of the subject. or_her ~en=s were re~or~ or were ok~erved. ~ne pro~ert~ ~ins ak~u= 12~' of f~n~ge on ~e ~ side of 42~ Av~ ~, ~,~ ~ si~, ~ ~ li~=~, ~ a ~~ ~n~ll~ ~~~. ~ ~ ~ ~ 1~~ ~ ~= y~ ~ is ~ifi~ for a Av~ ~~~. ~e p~ ~ ~~ ~= 334' of f~n~e ~ ~e ~a~ly side cf ~ si~. Utilities The pro{~.z~7 is serve~ with all municipal utilities including sanity%fy s~wer, rmm%i¢i~%l war,.r, electricity, natural gas, ar~ tele~one. ~~p~¥ ~ Soils ~~s ~ ~ ~ ~ ~ ~r~y of clay ~a~vely ~le for ~ ~1~ ~i~. ~yl~ ~ori~. ~lluCi~ l~els, ~ ~, ~~r~. ~ l~=i~ of f~.~r~ wells ~ ~e w~ ~~. ~ o~ ~~=ion f~ El~nic I~i~, a ~lluter ~. ~1~ ~ ~=~ of ~lls on ~ ~j~ is a r~= of wi~ ~ ~llu=i~ s:i~. ~ a~ ~yl~ ~ori~ Accessibili=v and Identity The si~e has p~ 1~. ~ The p~ is zone~ I-2, rep~ in =he A co~y of %he Zonir~ Yap Hi~hes= and Bes~ Use Highes~ and ~ Use ~ ~f~ ~; ~ ~~ly p~le ~ l~al ~ cf ~ 1~ or ~ ~~ ~~, ~ ~ ~ysi~ly ~le, a~ria~y ~~, f~i~ly f~le, ~ ~ ~~ ~ ~he hign~ ~ 1~ ~ of ~fici~t size for ~i~ wi~ a ~ie~ ~ of ~ 1~ ~d ~ ~. ~i~ ~ of ~ ~j~ wi~ ~~ ~~ ~~c ~ti~ ~ favo~le f~ ~i~ ~1~ ~~ion ~ ~~ 9 1/2% ~ 10%. A ~ ~i~ ~1~ is ~ s~ll ~e r~z~ ~ja~= ~~c ~~i~ ~il ~n~tion wo~d ~ici~e~ ~ a ~ ~ ~e a "~ a~i~" ~i~ of ~, ~~ ~f~ p~'s ~~, ~ ~ for ~ le~r of ~~ ~ a 1~ of ~ ~i~ ~le s~~ly dev~ ~ si~ ~ i~ ~~ ~ ~ ~, ~ ~~. ~he lan~ i~ improved wi~/~ a one story, czmcz~ block am/ stmel frame inUusnrial ~uil~hn~ win onsi:m ~av~ 9arkin~ ar~ larnmcapin~. Size 80' X 87.5' ~ 7,000 17.5' X 66' - 1,155 40' X 76' ~" 3,040 120' X 80' s 9.600 TO~ 1 20,795 ( l, 600 s~uare fee= GBA sf office space, or 8% office) The k~tldir~ was re~o~ ~o ~ave ~een originally built in 1962, wir_~ a a~4~tion and %he las= rear addition cons~-uc~ in 1978. Foundation A ~our~d concre~ and concrete block foundation system is observed. I= appears ~o be in ~verage =o goo~ condition. Only minor settlement was cmsa.~.,=~a~ in sc~e floor cracks and in one series of wall cracks near %he midpoint cn Quebec Avenue. O:ncre~e ~loc~ ex,riot wall ar~ in,_riot s~l ~os= and beam framin~ is ok~rved. It a$~Mmrs ~o ~e in average ~o good condition. Roof The roof is a ~cmel ~%r jois: ~.ructure wir. h me=al de~, rigid insula=~:~ ~ ~ ~!ay of ~1~ ~~ ~ ~vel ~ is re~ ~ Prove ~ ~a~ 5 ~ 6 y-~ ~o. ~ ~f 1~ w~.re~ ~ ~e ~f is Floor~ The floor~ are hea~y poured ar~ rei~foroed cor~e~e. A nuT~:~_r of cracS~ were o~_rved ~u= ~ floor is generally level and fully usable. Floor~ offices arm covermd wi~h vinyl tile. Interior Walls Ln~_rior walls arm primarily Dain~ed concrm~e blocks wi~_h average ~o fair q~l iTy plywood panelir~ in the offices. In,-riot walls are in average Ceilinqs arm o~en ~ %he steel fz-ame in %he ~ sgace an~ dropped =o acous:ic tiles wi~.~ recessed fluorm~c~nt lighting in %he offices. ~nere is aT=ached fl~ore~:en~ li~h~tr~ in ~ sho~ space. ~Ors/Window~ The k~ildir~ has me~l frma~ w~ wir.~ swin~-ou: o~_n~ sections ac office, sir~le pahm glaze~. Therm is a glass and me~al fron= enr. ry dour, service doors ar~ wood sectional overhead doors for loadir~ at r_ruck bed height. Doors and w~ arm in average condition. A 1,200 am9 elec=ri= main serves ~he h~tldir~. There arm ei~t 200 ~ circuits ar~ four 100 am9 cir=uits. ~_ri~e~er plug-ins are found in the sr. cp sDaoe ar~ ~ office a~._-T~ ~o have average quality dis~_ribution. Hookups plumbir~ The office is d~c~ly served by %-~o, two fix=urm wambroc~s wir. h ceramic tile floor and waincots ar~ ~%m ~ has a ~%ra~e five f~ washroom incltxiir~ a 360° Bradley ~ washer. T~_re is a 30 gallon natural gas fLrec wa~r hea=mr ar~ co~:er pipir~ was al:served. Plu~in~ is average. Hea~/cool Hea~ is ~lied ~y s~ven ceilir~ hur~ P~.znor or Dayton ceiling hung gas fired ~l~wer units in ~%e ~ space. A Carrier nat%tral gas fired ~ar~.ace and cenT_wal air ~r~'tion/~ %uli~ serves ~%e office~. S~lementaz7 offica ii: con~i=ionir~ is provided by one wall air condi=ioner. ~he office also t~s s~oke ear~.r (air purifier). O~her Ecui~men= A r/%ree ~:n sir~le rail, rail crane~is= Dasses in an eas= wes= direc~Isn fr~m %he recessed loadin~ dock ~ the wid~ of the building. No o~her personal ~r~, machinery, furni~ or rela~ed items are included ~_n r.~.~s real es=a~ appraisal. Miscellaneous and Condition ~e general layou= of ~/te buildin~ is ~hown on r. he buildin~ sker~.n in ~ Addenda. The buildi~ has a good basic design ar~ layou~ for lign-~ manufacTurir~ and r_he mode~: amoun: of office usage ~hat usually r. hat %5~e of u~e.. The rear sho~ ~oace is divided in~o ~%ree or four ge_p. er~_i us~ areas sc~e of whic~ are Dartitioned. There are T~o sets of smaller offices. O~ an overall basis, ~2%e bu.ild/r~ has a good basic design, ad .ec~ate and is in sliq~t=ly above average overall con~i:ion. On-Si~e The buildin~ cccugies ~ ~f of ~e si~. S~ ~i~ ~i~ ~ bi~ ~v~ ~ lo~, ~ivm isle, bi~ ~V~ ~ ~, ~t b~ ~ ~ ~ider~ =o ~ ~ crC. f~ ~1 General Appraisal The valuation of a Typical parcel of rmal e~ca=e is derived principally %~=z~n U%ree ~asic a~oroac~es ~o value: The Reglacemen= C_~-~_ Approac.~ o~i~%ion of value is reached ba.~ed upon e.~ ju~e~en= wi~_~ ~ ou=lir, e of t/%e a~raisal p~=. ~ ~ifi~ly, ~ app~~ ~ value ~e d~~ ~ folly: Remlacemen= C~m~-~_ Amoroach Tr~s a~~ ~ ~t a ~= ~t~ of ~ ~= of replacL~ Ute a~~'s ~i~ ~ j~~=. The ~ A~oroac~ involves an analysis of ~_he proper~ in ~.arms of a~ili~y =o provide a ne= an~l ~ in dollars over a given economic life. The e~:imaDed ne= anm~l ~ is r/~en capitalized a= a ra=e c~,~sura~e with ~e rela:ive cer~a~ of i~s continuance and involved in ownership of %he property, ~y u=iliza=ion of r_he formula: Ino:m~, divided by Capi~aliza=ion Ra~e, equals Value. Marshal% Valuation Service Sec=ion 14, Page 15 Type - Average Class C manufacturir~ ~ial bui!din~ ~i¢ Uni~ Cos: $23.94/sq. ft. Scuare Foo~ Refinements Cold Clima~.e Hea:& Office A/C 40% TrUCX 5s~ Heign= $ 1.06 .48 $25.48 Height and Size Rmfinemen=s Wall Heig~= (15.5') F!oorArea/Perime~er (20,795/732) 1.030 .975 Temporal & Loca=ional MultiDlier~ Central USA, Class C, Section 15 .97 1.13 $25.48 X 1.030 X .975 X .97 X 1.13 = $28.05/~q.f=. Direct Construction Cos~_ The k~]aing co~=air~ 20,795 consr, ruction cos: is calcula~ as foll~: 20,795 sq.f~. @ $28.05 - $ 583,300 Site Improvements 80' Rail Crane (3 15,750 sg. ft. Bi=. ~aving @ $1.10 $c,%41ng, site lighting &misc. 4,700 17,325 4.500 26,525 SAY ~r~eC~ C~nStruc=ion cos=s Interest ar~ taxes on lan~ during construction and d~velof~en= ~eriod, finan:~, an~ misc. ex~ensas a= approximately 3% of Mi~-e~ construction cos= and site in~rovements. (3.0% of $609,800 = $17,964) SAY $ To~a! Direc~ and Indirmct Construction Costs F~timar=,~ A~_~crued Deoreciation ~ysical Func~ional~c 35% for g~nmral acjeinc]', wear and ~ 5% for lack of onsite parkirg & sr,:rage 40% 16-18 y-~ effective age of a 40 year ~al economic life $251, Land Valuation (Fr~m Markm= ~a A~roach) T'~,~-.~I Value Ind/~-~e~,~ $473,90c A number of prcger~ies similar to the su~jec: property w~ic~ were r~;7 ~:i~, size, age, ~ p~~ ~ili~, f~~, ~ o~Ser ra~ ~ foll~ ~. ~~hle a= ~= $97,000, ~ ~ ~ ~ (1~ ~ ~idL~s) wc~h $475,000, ~ ~~ ~1~: LAND ONLY 43,050 ~ fee= lar~ area @ $2.25 = $96,863 20,79'5 scfm~'e feet of k~Lil~ area @ $22.85 = $475,166 Di_~o~ion of e .~~le Land Sales Five lar~ sales arm demcrik~d on foll~ ~g~. ~~ ~ is a ~le for ~ff~ ~~ ~ l~tion, ~, size, ~~~y/~ils, f~~ ~ ~ ~t~. ~ ~j~~ a~li~ for l~ti~ ~ ~ ~ ~a=ive ~=ifi~le ~ff~ ~~ fr~ one ~le's l~i~ ~ ~~ ~ ~ 1~~ ~1~ on high For ~ ~ ~e, a 5% a~ia=i~ 1986 ~ a 10% ~ is ~~. ~i~ ~=, a ~ 5% ~j~=. Size ~ff~~ ~ ~ pri~ for ~ ~1~ ~ size, ~1 o~ ~s ~ ~1. ~n~r~ ~ ~= ~ils ~ ~i~ly ~ for ~is ~ of ~te a~~. ~ 1~ i~ ~. A 10% ~~j~= is ~e ~ ~ ~le'~ ~r[~ i .8O 1.15 I. 05 1. O0 1. I0 $2.26 $2.40 2 1. O0 i. 05 1.15 $2.10 3 1.10 1.05 1.15 1.00 $1.49 4 1.25 1.15 1.05 1.00 $1.23 $1.86 5 1.35 ' 1.10 1. O0 $1.64 $2.44 5'%lbj. A%~//Goo/ 7-91 41,826 ~ $1o[:e C~ T. AND SALE Type of Propez%7: DaCe of Sale: Sell~r/S:yer: Sale Price: Lan~ Area: Uni= Price: Indugcrial lar~ sale 5651 Int~.rnational L2, BI, Science P.I.D. ~06-118-21-32-0007 I-i, Indusnrial A~ril, 1986 P4:~ewood Pr~oer=ies I_nc/Veijo Tarnanen $17 §, 000 121,856 S~m fee~ $1.44 per sc~w~ foci, $2.26 ~er scf~-e fco= correcT, ad ga~e of Sale: Seller/Suyer: Sale Price: Uni: Price: ~ial lar~ sale S~ of Hwy 18 Service R~ad & Science Cen~er Drive, L/, B1, Brardell 34 A~Lttion. P.I.D. ~07-118-2!-22-0012 I-l, I.i~n= L'ch/sT. rial April, 1988 Grr InvestmenUs/Hoy~ Develops_n= $572,095 272,426 SqUare fee= $2.10 per s~ foo= ~ ~= ~ ~=i~ $10,000 ~ ~il ~~icn ~ril of 1987 for $1.90 ~r ~e f~:. Si~e Ls level ~ ~ wi~ all utili=i~. ¢1't I' / 1 (,,ti (~) L~us~rial lar~ sale 5300 BC~m Ave. rA~ NOrth, New P.I.D. ~ 0~-11~-21-~002 I-l, ~t ~i~ J~y, 19B7 ~i S~ ~ ~/~ ~~i~ $389,100 260,489 ~ f~ $1.49 ~ ~ f~ $11,728.~3 ~i~ ~~ ~l~ -54--TH LucaCion: ~aCe of Sale: Sale Price: Uni: Price: ~ial lan~ sale ¢. 4400 ~ Avenue North, New Hope P.I.D. $17-118-21-22-0010 I-2, Indus~i~ AUCJU~:, 1986 Pu~engren & Associates Inc/Ronald Van $94,000 ar~ $121 special ams~ssmen~.s 77,700 sc~k%re fee= $1.23 per square Site is loca=ed ak~:u= one Block norLh of is served wi=21 all u:ili=ies. ~a~a of Sale: S~ll~r/S~y~r: Sale Price: Uni: ~i~: Lndus~.rial land sale 3335 Pmnnsyl~ Avenue North, New Hope Lll, ~ip~] e I-2, ~~ J~, 1989 $300,000 ~ $45,000 ~ils ~~ion ~s~ 209,449 ~ $1.64 ~ Utiliti~ ~ a~il~le. Si~ is w~ ~ eieva~ wi~ 1.5 a~ of N EVA Da COURT Oi_~o~_~ion of Ccm~able Buildin~ Sales Six cc~le buildir~ sales ~ ~~ briefly ~ ~ ~e of ~ ~j~~ a~li~ ~ ~ ~le ~ foll~s. A ~ a~~. ~ l~ti~ of ~ ~1~ ~ plot~ on ~e City Yap ~ ~1~ uti!iz~ ~ ~ ~. F~ of ~ s~ ~1~ ~e f~ ~ N~ ~ ~ ~.~ ~ ~a!. ~1~ wi~ ~ior s~t f~t a~ ~11 at sli~y ~ pri~ r~ir~ ~ ~1 ~ri~ ~~ f~ 1986 ~ p~: ~Ve ~ ~ ~ ~ a~i~. ~ ~ y~ 1986, a 10% a~~:ion ~~. ~ ~ly 1987 ~i~ ~=i~ ~= ~= ~~ ~ = for ~ ~ ~ y~. H~ev~, ~ ~ of s~, utiliti~ ~ it is ~iev~ p~~ value. for 1987 ~ 1989, a 5% ~ ~j~= ~ y~ ~ ~de. !n la=a ~ for ~e f~: ~ of 1991, a ~ 5% adjust ~ ~de. ~.e r~i~ ~ ~f W~ ~ ~ ~. ~ ~1~ ~ sli~y f~ ~ ~ ~~ ~ ~ ~1~ ~ ~1~ size ~~s ~ ~ ~11 at ni~ pri~ ~r a q~ affo~h~i~ ~ ~ ~1~ size. A l~er n~ a~le ~ b~ ~ ~1~ size ~~s ~ ~iv~ ~le ~ 2, 3, ~ 4 ~ ~t ~f ~e size of ~m ~j~ r~irh~ Lard to b~ild/n~ .ratios on ea~% of the C~l~ ~xamined. ~le ~ wi~ a 1~ ~: of ~ 1~ ~ili~ sli~y ~ pri~ ~ ~ f~t of ~1~ ~, all ~tio ~ ~ld~. ~ey ~ ~ adj~~ of 5%. Di_~_ ~ion of Czx,~le ~ildin= Sales Cont'd Adjus=men=s made for ~ff~ ~ ~m, ~ti~, ~ ~%e ~=i~y cf offi~ ~ ~~ ~ ~1~ ~ ~ ~j~ w~ ~~ly offi~ ~ ~ ~ ~j~'S 8% offi~. A ~ ~j~: of 15% ~fo~ ~=~. S~I~ ~~ ~ ~ for ~~ differ~ ~ ~= of ~ ~1~. A f~~ ~j~t ~ ~ ~ ~1~ ~ld wi~ eider si~fi~y l~e or 1~ ~~ ~ ~~ for ~ f~c~. ~,~1~ ~. 3 ~ 4 ~ ~ 1~ ~ ~j~~ ~ ~ l~e size of ~ ~~ for ~ f~~ ~ for a ~j~ ~ of $22.83 ~ ~ f~. ~1~ 5 is ~ ~ $22.85 ~ ~,~ f~t. 1 1.00 1.10 .95 1.10 .85 .95 $23.78 2 1.05 1.00 .95 .95 .80 1.00 $31.29 $22.- 3 1.10 1.15 .95 .95 .95 .9 $24.32 $25. 4 1.10 1.15 1.00 .95 1.00 .9 $23.21 5 1.10 .95 1.00 1.00 1.10 1.~7 $18.09 $20.- 6 1.10 .95 .95 1.00 .65 SUB~. AV~/GOOd 8-91 43,080/20,795 $% offi~ Corner Arq/Good 1.00 $33.44 L~ca:ion: Lac/al 2e.~-rip=ion: Zoning: Dar~ of Sale: Seller/Buyer: Sale Price: Land Area: ~ulldin~ Area: Unit Price: Bu/ld~ Description: 7701-09 42r~ Aven~e NorTh, New Ho~e A~!~or's .~divi~ion ~324, H~ep~ ~~. P.I.D. ~17-11S-2!-23-0005 I-2, ~~i~ J~,,~, 1987 ~ & ~~/~ ~~er $410,000 111,513 ~ f~= !5,440 sf ~~ial; 1,800 sf offi~ $23.78 ~ ~e f~= G~ ~1~ ~ 1962. ~e~ b!~ ~ s~! f~ ~i~ ~1~ wi~ 17,240 to ~f. 4,800 ~e f~= ~~ial offi~ 16 f~ ~1, ~ 10,640 sf ~ion. C/D ~ wi~ $74,353.53 d~. ~evio~ ~ ~ril of 1975. ~ial bu/ld/~q sale 5401 50Or~ Avenue, New Hope L~y. P.!.D. ~06-!IS-21-34-0008 I-l, I~r_rial Marc~, 1989 ~i~, ~ld & ~orie/~ ~ $435,000 60,200 ~ f~ 10,404 sf ~~i~; 3,500 sf offi~/~ZZ~h%e $31.29 ~ ~ f~= G~ I~i~ ~ ~ild~ ~lt ~ !961..~, ~04 ~-~'.~e~ ~ild~ is 100% fo~ air h~t~, wl~h air ~=io~. ~r~ for fire. ~ildL~ ~ hn av~ge/g~ ~ion. 22% of ~ ~ is offi~ ~zz~e ~ frcn=. ~a3. ~e. Type of L~cacion: LK3al Description: DaCa of Sale: Seller/Buyer: Sale Price: Lan~ Area: Buildd.ng Area: UniC Price: Bu%lc~ Oe.~cripcion: Industrial b~ilcLir~ sale 5417 Boc~e Avenue No~, N~ Ho~ Bi~ 2, ~i~ ~ I~~. P. I.D. I-l, ~~i~ ~, 1986 wa~e Shevi~i!! i~ $331,070 41,964 ~re f~ 13,613 ~re f~ $24.32 ~ ~e f~: G~ l~i~ ~ ~ild~ ~1~ ~ !970. f~ ~il~, 14 f~c ~11. 13,613 ~css ~ fo~ air h~, no air ~i=icn~ cr spr~~. Five r~~ wi~ one l~dh~ C/D ~ wl~ $30,000 d~, ~i~ due y~. ~~ for 50 ~. .i ~ype o~ Location: ~ ~$crip~ion: Zoning: ~ar~ of Seller/Buyer: Sale Prica: Lan~ Area: ' ~uild/r~ Area: Uni: Pric~: Bu/ld~ 5e.$crip~ion: Incest_rial ~uild/r~ sale 5241 ~ Couz~, Crysr~l L1, B1, ~l~-S~ ~i~ion g.I.D. ~09-!18-21-22-0009 I-2, I~ial J~y, ~id ~r/~ld N~n $235,000 26,292 ~e f~ 10,125 ~ f~ $23.21 ~ ~ f~= G~ I~i~ ~ ~ld~ ~il= ~ 1960. Concrete C/D ~ wi~ $25,000 d~, ~1~ Indus:rial ~u/ldinq sale 5101 Lakmlar~ Avenue No~, ~, B1 FI~. P.I.D. ~09-!!8-2!-24-0025 I-2, H~ ~~i~ A~, 1990 $340,000 43,263 ~e f~ 18,800 ~,~e $18.09 ~ ~ f~ G~ !~i~ ~1~ ~1~ ~ 1953. ~~ ~1~ ~lls. c. 800 f~n~ wi~ c. 1,200 ~re f~ of 18,800 ~e f~ G~. 16 f~ ~i:ion. w~avel ~ ~ side ~ r~ar. SALE #6 Type of Property: r~cation: L~gal Description: Zoning: Da~e of ~e: ~11~/~: ~e ~i~: U~ ~i~: ~1~ ~ip=i~: Industrial building sale 3501 Nevada Avenue Nor=~, New Hope L3, Bi, Stren~l Addition. P.I.D. ~20-!!S-21-2!-.2C11 I-l, Industrial A~ril, 1990 Edwar~ & Gall Re il ly/Marv in Schmidtz $592,000 72,250 s~e feet 12,240 sf Lndus~rial; 2,160 sf office $33.44 per sc~re foot GBA New industrial building built in 1987. Fa~r~catad concrete walls with 16' ceilirg$. 17,705 GBA, 15% office space. Sprinkler in very good Oonciition. Metal stampirg ~uyer occupant. I~11- The su~jec~ ~ is owner occupied. ~ of %he small size Lndusr_rial huild/r~s fourg~ i~ r. he nei~Dorbxx~ ar~ owner oo:L~oied facilities r. hac are nc: rmn~_. Buyers of properties of t. he su~jec~ r~ns, li:~.le rmn~%l, expense, or capi~aliza:ion ra~e informa:ion is available. A~ ~ a~oroach ~o value was ~refore market value analysis. The ~rme approaches =o %~lue indicate9_ ~e following: $473,900 $475,000 Not A~01ied All r.hrme of t_he s~ar-~dized approaches =o value werm considered in rte market value analysis of ~or_~ ~he ~e su~jec= properties. The income apprcact was deemed ~o be n~t applicable due to the owner oco~i~ nature of r. he rarke-. for buildings of U~ subject ty~. The Cc~ Apgroach considered ~he reDlace~-n= cost of r_he building improvements, deducted c~e[ormciation an~ added lard value. Its weakness lies the large amount of estimated deDreciation. Buyers and sellers rely more s~:~ly on the co~c approac~ wD~_n kz/ild~s arm new and not w~en r_~.ey are ever 25 y"~ old like %b~ subjec=. The Markmt C~ata' At:~z'~ch best illustra~ %he ac=ions of ~ypical ~uyer~ saller~ of pries of r_he subjec~ rype. Several good quality, nearny c~les were fo~u~ ar~ cc~ ~o r. he ~jec=. Some were older sales. Newer sales werm also foun~ ar~ t/~e¥ supplied ~itional good quali~y suppcr-_ for the subjects marke~ value. For r. his value conclusion es~tma~e wi%hour a pollution ~cigma most em~r~s~z is placed usx~ %he fir~,~js of ~e Markat Dm~a Ap~roac~ wi~ good ~:u: sec~rd.a_~ om~.l~on wit~u: Poll~ S~/qma pollution stigma $19,500 an~ $22,500 Value F.~--~a as all~/e~ly Pollu~ $475,000 $ 42,000 $433,000 Pollution %~e si~e i~ ~crickmn wir. h ~e s~i~ of ~llu:ion w~ls ~ ~ ~1~ ~ ~~ ~&i~ ~llu=ion, ~i~ ~= ~ ~ ~ ~ ~~c ~i~ for a 1~ ~ v~ue. a~i~" le~ will ~ fo~ for ~e ~j~ D~~. A "no a~icn" ~~~ ~llu~ ~ ~ ~= ~~le for ~p~ ~ ~ ~ p~ ~ ~i~. a~ion" le:~ ~ p~. ~ ~1~ ~ let~.~ ~= =ey ~ pr~ily for ~i~ s~=ion p~i~ 1~ of 25 si~ ~ ~ ~~li~ ~ ~ "~ a~i~" le=~ ~ve ~n ~i~ ~ ~ 3 1/a y~. Five of n~, a p~ ~ ~ ~, ~ g~iz~ ~i~ ~= a "~ a~ion" 1~ ~ d~ wi~ ~ ~ ~ ~.e pollution S%&ama Cont'd 8.85 mon:n or apgr~xima~_%!y 9 ~. ~ ~i~ ~i~ p~ly ~v~~ ~ ~~ for ~~ wi~ ~ adja~= ~ l~e ~1 ~ ~ll~e~ 1~ ~ ~ley ~k ~ ~e ~~ =~ ~i~. ~ 9~ for ge~ a "~ a~icn" le~ f~ p~i~ ~ja~= ~ a ~1 ~ ~llu~ ~= ~ ~ well 1~ ~ ~=i~ of a old ~c ~ for ~i~ ~ic ~=i~'s facili~ ~ ~ ~i~ ~k 16 ~ 9 ~n~ ~ively. ~r ~~=i~ ~1~ ~ v~ well ~ ~ ~j~ ~ere fc~ ~r~ wells ~ ~~ ~ ~ ~1~ ~ ~, or~ ~g~~ ~ o~. File 1190 1270 Nam~ & Address Dixie ~emical Co. E. Corner Hwy 55 a= Pine Bend Road, Rosem~un= Ca~o= Ca~o= & 1151 Verno~ D~. C~lden Valley TL~e ~-riod SaUcing Pollution "No Action ~t=er" Nit. ra~ & ~ulfi~.s 6-88 to 8-88 from refiner ~o sou~.h (hloroe~helene in old se~:ic tank 8-88 to 6-89 1280 615 CO. ~. 18, in old ~e~:ic ~ 7-88 to 11-89 1540 82 2r~ Ave. SE., New BriC, on Tric~loroe~.hylene fr~ ~Tall sDill 1-89 to 10-89 Pol%u~%on Stic~a Cont'd File ~ Name & Address 1450 Terry Bros. Cons~. 3320 ~%~0u~li¢ Ave. St. Louis Park ~ollut%on Rmilly Tar con,s%mina=ion Tim. Pario~ "No Ac=ion 3-89 to 3-89 1690 2265-85 W. CO. ~/. C, R~eville Benzene e~. fr=n adj. Williams & Ama~ r~nk farms 3-89 ko 8-89 1740 R~san~amn= Die Castir~ (S~c=ro Alloy's) 13220 Doyle Path R~emount well contaminated 3-89 ~.o 12-39 1810 1920 2040 1820 7301 W. Lake S%reet St. Louis Park 1974 fire chemical spill Allianz Val~ 1000 Bi. . Dr. Soil piles ccnr~mnina~ Mi~mW~ ~ Dis:r~. 1060 33Z~ Ave. SE, RR & many Holiday $=ation S~orm Buried a.~t chemi~s SWC Broadway & llth St. Forest Lak~, ~ 2-86 ko 9-87 11-89 to 10-90 10-89 r~: 6-90 9-89 =o 12-89 Pollution Stigma Cont'd MPCA P~ Time ~_riod Seek~ File ~ Name & Address ~ "No Ac=ion 2450 ~~ ~1 ~ ~i~o~yl~ 7~0 ~ 6-91 2631 3~ Ave. ~. 1860 Caliber Development Oil ~0ill, land farm 10-89 ~o 11-90 c.2660 Fern~rookLane cleanup Average Mcnr.~s 8. £ 5 The above described study indicates t~at ~he marketin~ period for a like ~ su~jec~ ~hat is alleged ~o ~e contamina~ will ~e ex,_haled by ap~rnxima~ely 10 ~. The normal marketir~ period for a pro~_r~y like su~jec~ would be ~, 12 to 18 n~n=hs and tha~. process would to a certain d~ ~e able ~ overla~ wi%h a ce~ amount of ~ time required =o a "no ac~on" letter or equivalent. It is t/~.refo~ concluded ~nat rl~e al!eq~ea pollution of the su~j~ pro~ will cause a six mon~.h increase Ln rlne ncrr_a_ In addition ~o ~he ir~reased marketir~ time ~eriod and ~ loss of value ~a: it crma~, %he su~jec~ 9r~ owner will ~e responsible for r_he costs ~o ok~ain ~he "no action" le~Jr or its equivalent. For =~e su~jec~ prc~e.~r: ~ ~ ar~ ~ly k~om~ ar~ ca~ ~e enticipa~ a~ follows: 1) 3) 4) 5) Owners t/mm ml:ent dealing wit~ alleged pollution hirir~ contractors, a~raiser, atr. orney, ard supervisir~ Owners oonsult~ a~rney =o su~ervi~ MPC~ pz"oces~ Owners financial consular/appraisal chaz~es $ MPCA s~aff c~es for prc~ucir~ "no ac=ion" le=~er or equivalen=$ 2, Soil/wa~.r investigation re~or~ production $25, Antici~a~ Owners Com:s R31!ut%on St%~ma C~n='d Owners c/nar~e~ are ex~ =o ~ a~~~ly o~ w~ of h~ at, ~y, $75.00 ~ ~ ~s $3,000.00. ~ ~ will ~ ~r~d over a~~=i~ of 35 ~ 40 ~ a=, ~y, $150.00 ~ h~ for =~ ~ ~ ~ f~ for p~ ~. ~ of ~ "~ a~i~" le~-~ effo~ ~olv~ a ~=i~ ~e ~.ere ~llu=i~ ~ ~ ~j~ p~ is ~~ ~ ~= a= 1~= ~o~er $3, CCC. ~=~ ~ ~y for ~ ~ of f~i~ ~~~ ~ r~ire ~1~ ~ ~ ~ ~. ~ ~~ will ~ levi~ for s~ff p~~ ~ "~ a~i~" le=~. A ~vi~ of ~e fil~ ~i~ ~~ for a ~a~v~y ~1 effo~ ~ !~ ~e ~j~ ~o~d a f~ ~~ doll~ ~ $2,500 ~ a ~ ~~. ~h~ ~ici~!i=!~ ~ s~ff ~~ ~ 1~. ~t ~ ~= ~he ~ wi~ ~e ~j~ prc~ ~ ~ ~t ~ ~ti~ ~ of ~r~ well ~=~ will ~ a slier ~ti~ ~t of m~ is ~tici~ for nt ~~ ~ ~ ~ ~f-~t ~ for ~e ~j~ ~ ~ ~~ a= $39,000, ~ is ~ ~ili~ for ~e ~~c ~i~, ~ a law ~i=. ~: law ~z ~ alr~dy re~ ~ ~il~ ~:~f-~= ~~ for ~ ~e ~=ion~ i~ cf ~{~ li=i~:i~. ~~= for ~e ~=~f-~= ~ from a is d~=~ ~= ~e ~ will ~~ a=~y's ~~ f~ ~ [ Zonint[ Pollution $~cmma litigation. Tlx~e atTz:~ney's fee~ could greatly exceed ~ ~e. I~ ~ ~fo~ a ~ ~~ ~: ~ ~ wall a~~y ~f of ~ $39,000 ~~ ~ or ~y $19,500 ~ ~~ of ~ ~~c ~i~ ~1~ ~lluti~. ~ ~lluti~ ~i~ ~ ~~ at $475,000 on a 9~i~ ~ge. ~e pr~u ~ of $475,000 ~= ~giv~ for 6 ~n~ a~ a ~t ~~ ~ of 10% ~ $452,381, ~=~ a 1~ ~ ~= val~ of $22,619, ~y $22,500. ~ ~~ ~ folly: Conclusion wi~m/l: pollution s~igma T~= pollution s~igma- $19,500 and $22,500 ~tals FLnal Value F~cimate as Allegedly ~ollu~9 $475,000 42.000 $433,000 //,~ -.EEC. /7, ~,,.,,,,. wENOY :, ~ 415T -/ [ Plat Map ) 1.01' SURVBYI COMPANY, INC. ,~ L, L, E,, v FI. NO. SCALE V' 0- 0ENOTES iRON P. 'Z. C). No. ',"t - I I'd -Z~. C.~. ~ o. No. ct 3Z4, tlennepm County, ~irmesota, except, ra~ e~e Lytn[ 9~o~ ~&ne "~' deRr~b~ beL~. ZS d~tLb~ I~l LY&fll norC~ of ~Lfle "~' ~escrLb~ at e point on the east X~ne of LOt S, AudLtor's Subd~visLofl No. 324, Ilennep:~ II~ne~tn Co~ty Since ~d Hilhviy NO. 9 ~ diXjfl~t~ ~n I~tN ~ ~T~ = tim 87.42 F~t: ~heKe S~th 88 dqrm 48 niflotfl 32 s~s vest lZO.~ f-- Note: Sketch only, no tro~s '~-? " sec to establish prope:'~y I Bmlding Sketch 'J Photograph Views Vi~ ~ o~ 42~ Ave~u~ Photograph Views