01-14-1999 Council Agenda - Laserfiche WebLink

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515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 484 -2177 / FAX: (651) 484 -4538 MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: January 7, 1999 RE: Purchase of Nadeau Property on Country Drive MAYOR Michael I. Fahey COUNCIL Beverly Scalze Jim LaValle Steve Morelan Bob Pedersen ADMINISTRATOR Joel R. Hanson In December 1996, the property at 2925 Country Drive (see attached map) owned by Edward and Dorothy Nadeau was appraised at a total price of $82,000. That value translates to approximately $2.45 per square foot. At that time, Mr. Nadeau indicated his property was worth closer to $3.50 per square foot and did not want to sell at our appraised price. Recently, Mr. Nadeau approached me indicating he has changed his mind and would like the City to purchase his property. He has come to the conclusion that the value will not increase substantially and that ongoing expenses associated with real estate taxes are continuing to increase. Therefore, he would like us to proceed with the purchase of his property as soon as practical. You may recall that our plan of attack for the Country Drive properties was to purchase them as they became available. While that strategy has served us well in acquiring two of the properties in this redevelopment area, recent changes in property tax classification rates have limited the available cash flow from which we can finance these acquisitions. Current projections indicate that we have about $25,000 available to assist us with acquisitions. Therefore, this fund would face a shortfall until such time as a redevelopment project moves forward. It is my recommendation that we proceed with the purchase of the Nadeau property based on our 1996 appraised price of $82,000. My rationale for this recommendation stems from the fact that we already own one acre on the northerly 3 %2 acre redevelopment site. This parcel could someday be combined with our other property in assembling a larger redevelopment. Another factor I think merits consideration is that Mr. Nadeau sold a portion of his property for Kandice Heights II. He has been left with this remnant that is tough to develop on its own without impacting other properties in the area. Our purchase would complete his involvement in the redevelopment program. Lastly, it is always preferable to deal with willing sellers rather than property owners not ready to sell when we need the property. Page 101