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Mounds View Planning Commission November 17, 2021 Regular Meeting Page 2 ________________________________________________________________________ 5. Planning Cases A. Resolution 1143-21, Recommending Approval of the Intent of the Mounds View Economic Development Authority to Sell Land; 4889 Old Highway 8 and 4943 Old Highway 8 Community Development Director Sevald stated in 1996, the City acquired 4943 Old Highway 8 for $70,000 for the purpose of realigning Old Highway 8. The home was removed, the road realigned, and the land has sat vacant since. It was noted the Skyline Motel was built in 1953. Between January 2015 and August 2019, the motel averaged 4.7 police calls per month, and created a negative impression as the city’s gateway (Police calls included 30 proactive visits, 27 medical assists, 20 disorderly conducts, 16 assaults, 13 arrests, and 10 domestic disturbances, among others). In 2016, a developer had plans to purchase and demolish the motel, and redevelop the site as a four story, mixed-use complex with 61 apartment units affordable to families earning <50% of the Average Median Income (AMI), and offices for social services and non-profits. The project cost was estimated to be $15.7 million. In 2018 the development partnership dissolved, and the City was asked if it wanted to assume the Purchase Agreement. The EDA purchased the motel for $1.3 million, removed the buildings, and began marketing for redevelopment. Community Development Director Sevald reported at that time, industry experts suggested that the highest and best use was warehouse/manufacturing with outdoor storage. That type of user would not justify an equal return on the EDA’s investment (now, $1.5 million). The industrial value is estimated at $5.00+/- p/sq ft. If selling all for industrial, the City would lose about half of its investment. Community Development Director Sevald explained in 2019, the EDA considered proposals for redevelopment, including; a hotel and warehouse; assisted living facility; apartment building; and self-storage facility. The EDA’s preference was to combine the assisted living facility and apartment building projects on the City’s site and adjacent land owned by Bauer Welding. In 2020, the developer of the assisted living facility withdrew their proposal due to market changes at the beginning of the COVID pandemic. In 2021, the EDA entered into a Predevelopment Agreement with a developer to sell the Skyline Motel site for $1.5 million contingent upon the developer obtaining public financing for the project (120-units of senior housing, with income ranges between 30% AMI – 60% AMI). The project’s cost is estimated to be $29 million. The EDA also entered into a Predevelopment Agreement with Bio-Clean to sell a portion of land for their planned expansion. Community Development Director Sevald commented the City Council’s position is to sell the property to break even on its investment, while obtaining a redevelopment project that will benefit the community; and to assist adjacent BioClean and Bauer Welding with their planned expansions as much as possible. The proposed land sale(s) and development projects accomplishes this goal. Staff commented further on the request and recommended approval.