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Mourns 1ViEw City of Mounds View Staff Report To: From: Item Title/Subject: Item No: Meeting Date: Type of Business Planning Case 05A Nov 17, 2021 Planning Case MA2021-002 Planning Commission Jon Sevald, Community Development Director Resolution 1143-21, Recommending Approval of the Intent of the Mounds View Economic Development Authority to Sell Land, 4889, AND 4943 Old Highway 8 Introduction: The City intends to sell the former Skyline Motel property to a developer for redevelopment into a 120-unit affordable housing project, and a portion of the same property to Bio-Clean for a building expansion. Prior to the City selling property, Minnesota Statute' requires the Planning Commission to provide a recommendation to the City Council or Economic Development Authority (EDA) with Findings if the sale is compliant with the Comprehensive Plan. Discussion: 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. 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)2, 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. 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. 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 1 Minnesota Statute §462.356, Subd 2 (Compliance with plan) 2 MN Housing Finance Agency, Table H: Projects Placed in Service between 3/6/2015 and 3/207/2016; Income Limits by Household Size (Ramsey County); <50% AMI = $36,750 (1-person household); $52,450 (4-person household). The mounus view Vision A Thriving Desirable Community