01-09-08 Council Agenda - Laserfiche WebLink

Home Browse Search

Way Jo Stc77 Wanala 515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 766 -4029 / FAX: (651) 766 -4048 www.ci.little-canada.mn.us MEMORANDUM TO: Mayor Blesener & Members of the City Council FROM: Joel Hanson, City Administrator DATE: January 4, 2008 RE: Land Dedication to City — Heather Oaks MAYOR Bill Blesener COUNCIL Rick Montour Barbara Allan John Keis Michael McGraw ADMINISTRATOR Joel R. Manson Attached is correspondence received from Mr. Ed Dropps, original developer of and owner of land adjacent to the Heather Oaks Townhome project at the corner of Viking Drive by the intersection of 35E and Highway 36 (see map attached). Mr. Dropps approached us about one year ago regarding our interest in selling him some excess Viking Drive right -of -way. He was contemplating the use of this land in combination with Outlots C & D for the construction of up to six more townhomes. An appraisal was conducted by Nicollet Partners (paid for by Mr. Dropps) that valued the City's land at $240,000 less the costs associated with preparing the site for development. Those costs would have included fill, retaining walls, and apportionment of street assessment costs. Mr. Dropps reviewed this information and concluded that the economics of the project did not make sense. He recently approached me regarding the City's interest in accepting the donation of this land plus Outlot A (the ponding area). There would be no outlay on our part. Mr. Dropps would claim a charitable cash contribution pursuant to IRS regulations — Form 8283 (copy attached). He would also be responsible for establishing the value claimed to the IRS and any issues regarding the value of the gift would be between Mr. Dropps and the IRS. The upside to accepting this donation is the potential for future revenue generation if the property can be sold for development. If it is not developed, we still have control over property that can serve as green area. Lastly, we gain fee control over a critical ponding area that is a major part of our storm water system in this area (we have already been maintaining it to some extent). The negative factors to consider are the loss of property tax base if we put it to exempt status, the payment of real estate taxes until exempt status can be claimed (2009), and any environmental concerns that could be present. (I have included property tax information with this material.) Another factor to consider is the impact any development would have on the Heather Oaks Association in addition to coordinating potential development with them. Staff feels this donation is worth pursuing. We would like the Council's direction as to how to proceed. cc: Ed Dropps