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MINUTES <br />CITY COUNCIL <br />SEPTEMBER 27, 1995 <br />then be able to walk into a bank and obtain financing. <br />Fifield pointed out that the four Market Place parcels <br />have declined in valuation. Three years ago the <br />valuation was in excess of $3 million. It is now at <br />$1.9 million. Fifield felt there was ample opportunity <br />to add value to the property. <br />LaValle questioned whether $350,000 would be adequate <br />for building rehabilitation. <br />Grootwassink reported that they have had someone look <br />at both the roof and HVAC units. There is about 60,000 <br />square feet of roofing which will need to be replaced, <br />and a few HVAC units. Mark Hotzler, Mr. Grootwassink's <br />partner, reported that over the course of time they <br />will need an HVAC plan and a portion of the cash flow <br />will be put toward that replacement plan. <br />LaValle asked what other malls Grootwassink has <br />redeveloped. <br />Grootwassink replied that they did the Town & Country <br />Mall in Burnsville, which is almost identical to the <br />Market Place. In that mall 40,000 square feet of roof <br />was replaced as well as six air conditioner units. The <br />interior mall area was brought out. $300,000 was spent <br />in repairs and remodeling. <br />Hotzler reported that a downtown Lakeville mall they <br />redeveloped was 70% vacant at the time of purchase. <br />That mall was brought to 1000 occupancy and 90% of the <br />cash flow was put back into the property. <br />Pat Vitale asked what the rent would be at the Market <br />Place. <br />Grootwassink replied that rents will be at $5 per <br />square foot. That rent level enables the space to be <br />rented out easier than the competition. <br />LaValle asked if tenants would be from outside the <br />City. LaValle suggested that the $5 rent could cause a <br />problem for existing malls in the City, and he did not <br />want to see those malls lose tenants to the Market <br />Place. <br />Fahey felt that the market forces should dictate. <br />Fahey felt that rent was not always an issue with <br />tenants. Sometimes landlord relations motivated <br />businesses to relocate. Fahey also pointed out that <br />the rents at the existing Market Place are lower than <br />the rents at other shopping centers in the City. <br />5 <br />