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City Council Regular Meeting Minutes • August 23, 1994 Page 5 1 Wagner commented that while none would object to having nice residential homes on the 2 Apache site, all need to face the reality of the financial impact and difference between 3 residential and commercial tax rates. 4 Mayor Ranallo reported that the City and Council have been working on this project for 5 several years and the Apache Plaza owners have not expressed an interest in down zoning 6 to residential nor has there been interest from residential developers. Ranallo reviewed 7 estimated costs to demolish Apache Plaza, buy-out existing leases, and redevelop this site 8 with streets and utilities ($25 million for approximately 100 residential lots). He stated 9 Council reviewed these figures and the resulting tax impact and decided not to pursue that 10 option. 11 Ranallo pointed out that St. Anthony has a low number of commercial projects which 12 also has an impact on approving school referendums. He explained that CUB and Knox 13 Lumber will result in approximately $875,000 in taxes, 20%of which would go to St. 14 Anthony and 50%to the School District. Wagner stated he is convinced that the 15 residential aspect is not valid. •6 Marks reported that due to reduced occupancy at Apache Plaza,they have received an 17 abatement of taxes two times; however, a project of this type could reverse that trend. 18 Ranallo agreed and noted that the addition of CUB and Knox will create 200 jobs for St. 19 Anthony's youth and residents. 20 Richard Hehr, Real Estate Representative for Payless Cashways, Inc. (Knox), presented 21 their proposal to construct a Knox Lumber business at Apache Plaza. He explained that 22 this is a prototype store which they call the "Quantum Leap". Hehr showed the Council 23 and audience an artist's colored rendition of the structure which includes 70,000 square 24 feet of inside retail and that the majority of outside storage will be enclosed within line 25 buildings. It was noted that lumber customers will be able to drive their vehicle into the 26 enclosed line building area for loading merchandise. With regard to the multi-story 27 apartment building, Hehr explained that the line buildings will be of masonry-type 28 construction and will completely block off visibility. Hehr reported their business is 29 usually about 60%retail and 40% small contractors who do home improvement projects. 30 Since they are not a wholesaler,they do not work with large contractors. Hehr stated they 31 are excited about the possibility of building with CUB at Apache Plaza and feel this will 32 be beneficial for them as well as St. Anthony. 33 Dennis Cavanaugh, president of C.G. Rein Company (managers of Apache Plaza), 34 commented on the low occupancy they are currently experiencing and various options considered, including residential. However,they determined that the highest and best use 36 of this property is commercial. Cavanaugh reported that Apache is currently generating 37 less than $15 million per year in retail sales which is very poor in dollars per square foot.