08-14-2002 Council Agenda - Laserfiche WebLink

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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 Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: August 9, 2002 RE: DeLonais Property Update MAYOR Michael 1. Fahey COUNCIL Beverly Scalze Jim LaValle Matt Anderson Rick Montour ADMINISTRA'T'OR Joel R. Hanson I met with Bob Grootwassink and Mark Hotzler this past week to discuss an option /purchase agreement with them regarding the DeLonais property. As you know, our development agreement with them required a new building of at least 10,000 square feet by November 1, 2001. Their failure to comply would allow us to take the building back at a cost not to exceed $375,000. I pointed out our desire to attempt to combine this land with the US Bank property and the NE corner of Rice and LC Road. They stated their agreement that redevelopment of all of this property in a coordinated fashion makes sense for all parties involved. However, they have a couple of interested parties who would like to buy the property from them. Therefore, they countered my concept by asking us to purchase the DeLonais site and the excess parking lot site at a price of $600,000. I stated I would present this proposal to the City Council, but did not think it would make sense to us at this time. (To accurately consider this option, we must factor in the cost of special assessment for Market Place Drive that will likely occur next year.) I have also talked to George Sherman regarding his discussions with US Bank. They have discussed a concept that may be workable from a financial standpoint. Mark Ruff of Ehlers is evaluating the financial and statutory (5 -year rule) implications of redevelopment on this combined six -acre site. (A preliminary report should be available within one week.) Before recommending a course of action, I would like to have the results of Mark Ruffs analysis and George Sherman's comments. Based on this information, we should chart a course of action that could include the following options: • Exercise default provisions and take land back for $375,000. (This makes sense if Sherman Associates can put together realistic package for entire six -acre site.