08-01-2022 Council Work Session Packet

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WS-6 WORK SESSION STAFF REPORT Work Session Item No. 6 Date: August 1, 2022 To: City Council From: Michael Grochala, Community Development Director Re: Tax Increment Financing Request — Ryan Companies, 35E & Main Street Background In March of 2022, the City Council approved the relocation of the material stock pile from Centerville to the Rehbein Properties land, immediately south of Dairy Queen. Noted during the discussion was the potential development of the site with industrial uses. Since that time staff has been working with the property owner and two developers on an industrial project that would build out the entire land area between Northern Lights Blvd and Cedar Street. Ryan Companies, US, Inc., recently entered to a purchase agreement to acquire 33 acres north of Clearwater Creek. They are also coordinating plans for development of the 10 acres south of Distribution Alternatives by MSP Commercial. Ryan is proposing construction of 3 buildings totaling approximately 451,000 square feet of manufacturing, office and warehouse space with an estimated market value of $31,000,000. Development of the south parcel would add approximately 130,000 square feet and an additional $8.5 million in taxable market value. Approximately four acres of commercial land would remain north of Northern Lights Boulevard, immediately east of the One Stop Convenience store. There are a number of issues that will need to be addressed to facilitate the development and staff is working through those with the development groups. These include: Land Use Change The land north of Clearwater Creek is currently guided for commercial use and zoned GB, General Business. Staff is anticipating a Comprehensive Plan amendment to guide this land as Business Campus, and rezoning to an appropriate industrial district. Approximately four acres, north of Northern Lights Blvd, will remain commercial. Utility Relocation To maximize development of the southern 10 acres, the existing Xcel Energy transmission line will need to be relocated. This would allow for a 120,000 to 140,000 SF building on the site.