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HomeMy WebLinkAbout2011.06.13 EDA Packet AGENDA CITY OF HUGO ECONOMIC DEVELOPMENT AUTHORITY MONDAY, JUNE 13, 2011 8:30 AM 8:30 am 1. Call to Order 8:31 am 2. Roll Call 8:32 am 3. Approval of Minutes EDA Meeting of May 9, 2011 8:35 am 4. Discussion on Pearson Mechanical Building 13497 Fenway Boulevard North • Jack Ritt, Chairman/CEO of North Star Bank 9:00 am 5. Discussion on Flexible Office Space • Mike Graff 9:30 am 6. Discussion on Tax Abatement 10:00 am 7. Update on Downtown Redevelopment 10:30 am 8. Adjournment e BACKGROUND MEMO FOR THE EDA MEETING OF MONDAY,JUNE 139 2011 3. APPROVAL OF MINUTES Staff recommends approval of the minutes from the May 9, 2011, EDA Meeting as presented. 4. DISCUSSION ON PEARSON MECHANICAL BUILDING - 13497 FENWAY BOULEVARD NORTH The Pearson Mechanical building and property located at 13497 Fenway Boulevard North is now available for sale or lease. North Star Bank holds the mortgage on the property and has been working with the current owner to sell or lease of the property. Jack Ritt, Chairman/CEO of North Star Bank, would like to have a discussion with the EDA on the availability of the building. He wants to make a connection with the EDA and the City as he markets the property. 5. DISCUSSION ON FLEXIBLE OFFICE SPACE At the April EDA meeting there was discussion on flexible office space and possible opportunities in Hugo. Commissioner Graff started the discussion and stated that he would like to meet with property owners that have vacant space and talk to them about this concept. The EDA directed staff to work with Commissioner Graff and set up meetings with property owners. Staff and Commissioner Graff met with Matt Alexander and Jack Appert from Kraus- Anderson, who owns the Healtheast Building and has vacant space. They have heard of flexible office space, but Kraus-Anderson has not used the concept before. They mentioned a company called Regus that purchases space and converts it into flexible office space. In regards to the Healtheast vacant space, Kraus-Anderson has not finished the space. The space would need to be finished and furnished. This is not an expense they would be willing to incur to accommodate for flexible office space. They also stated that the space would need to be managed and they do not see Kraus-Anderson managing the short-term lease involved with flexible office space, but would be open to a company leasing the vacant space to operate and manage flexible office space. Staff and Commissioner Graff will be contacting other property owners that have vacant space. Commissioner Graff would like to discuss the outcome of the meeting and other information he has gathered for flexible office space. 6. DISCUSSION ON TAX ABATEMENT At the April EDA meeting, staff was asked to put together information for the basics of tax abatement and how it can be used. Staff has included a document from Springsted on the concepts and mechanics of tax abatement. Staff will present the information to the EDA at the meeting. 7. UPDATE ON DOWNTOWN REDEVELOPMENT Staff will update the EDA on the progress of downtown redevelopment. MINUTES FOR THE EDA MEETING OF MAY 9, 2011 Miron called the meeting to order at 8:30 am. PRESENT: Arcand, Bever, Denaway, Graff, Klein, Puleo, and Miron ABSENT: None STAFF: Mike Ericson, City Administrator Bryan Bear, Community Development Director Rachel Juba, Planner APPROVAL OF MINUTES FOR THE EDA MEETING OF APRIL 11, 2011 Klein made motion, Puleo seconded, to approve minutes for the EDA meeting of April 11, 2011. All aye. Motion carried. DISCUSSION ON CITY OWNED PROPERTY MARKETING EFFORTS AND PURCHASE AGREEMENT The development team had a discussion with the EDA on their marketing efforts for the City owned property. They made a presentation to the EDA on their efforts. The development team also discussed a year extension of the purchase agreement for the property. The purchase agreement expires June 21, 2011. The development team showed the various site plans they have been working with to marketing the property. They have been targeting restaurants as the first piece to the development. They have also contacted the company that represents the former Carpenters Restaurant property. The site plan includes a 12,000 square foot event center that could be shared by two or three tenants. They also have created green space along Egg Lake. They have an idea for the architecture, but the details are likely to change depending on the tenants. The development team stated they want to do something unique and interesting to spark interest in downtown Hugo. Commissioner Puleo stated that the large event center would make the project unique and thinks people will be interested. Commissioner Bever stated that parking will be an important piece, make sure there is enough parking to accommodate the event center. The development team stated that shared parking will likely be proposed with this project. Commissioner Graff stated that he liked the restaurant and event center concept. He also made a recommendation to the development team to survey the commissions to see what restaurants they would like to see come to town and contact them. Commissioner Arcand stated she would like to see more than one restaurant come to town and feels that Hugo will be able to support more restaurants. Commission Bever asked what if the City owned the event center. The development team thought that was a good idea and would make the project a public/private partnership. Commissioner Denaway asked about the cost per square foot to construct the building. The development team stated approximately $150 per square foot. Commissioner Granger, who is on a temporary leave, was in the audience and stated that event space does not have a lot of cash flow, but maybe the shell can be constructed and the build outs can be sold. This will need to move quick since the bridge construction across I-35E is almost complete. Commission Klein asked the development team what their biggest hurtle has been. The development team stated the location has been struggle, but they feel the area and location has high potential. Commissioner Arcand asked if free land would bring a restaurant to this location. The development team stated that free land does have an impact, but a public/private partnership may be more enticing. EDA President Miron stated that the purchase agreement assumes the City will be a partner is some way, whether is TIF or a reduction of the purchase price. He stated that this issue will need further discussion. Commissioner Granger and Miron stated that would involve presenting numbers as to what the cost would be to the City. There would need to be discussions with the Finance Director and discussion on the administration. The EDA stated that they appreciated the work and innovation the development team has been doing for the property. Graff made a motion, seconded by Bever, to extend the purchase agreement for one year. All aye. Motion carried. DISCUSSION ON FLEXIBLE OFFICE SPACE Graff made a motion, seconded by Klein, to table this item until the next meeting. All aye. Motion carried. DISCUSSION ON COMMERCIAL AND INDUSTRIAL DESIGN GUIDELINES The EDA reviewed the draft commercial and industrial design guidelines. The EDA discussed four sided architecture and wanted to ensure that buildings that were close together and sides of buildings that are not easily seen have flexibility on four sided design. Staff stated that as long as the architectural elements are wrapped around the building and designed properly there is some flexibility. The guidelines allow flexibility for industrial buildings in regards to areas with loading docks that may already be screened with berms or landscaping. Commissioner Puleo asked about flexibility on specialty types of operations that are allowed in commercial districts, for example greenhouses. Staff stated that most specialty types of businesses are only allowed with a conditional use permit and staff would work with the applicant at that time on meeting the guidelines. In the case of greenhouses, the intent of Section 90-256 Plant Nurseries is to allow landscaping plants, shrubs, and trees, to be grown as an agricultural activity. DISCUSSION ON TAX ABATEMENT Puleo made a motion, seconded by Graff, to table this item until the next meeting. All aye. Motion Carried. DISCUSSION EDA BUSINESS CARDS During the discussions on the marketing campaign for the City, the EDA has discussed having business cards for EDA members. Commissioner Graff stated that this may not be necessary right now, but later when we have the marketing portion of the website. Miron made a motion, seconded by Arcard, to create business cards after the marketing portion of the website is complete. All aye. Motion carried. UPDATE IN DOWNTOWN REDEVELOPMENT Staff is working with Pete Sampair on applying for a Met Council Livable Communities grant. Staff discussed a joint Planning Commission and EDA meeting in January 2012, to discuss Hugo's identity. ADJOURNMENT Arcand made a motion, seconded by Graff, to adjourn at 10:40 am. All aye. Motion carried. File# 13795 EXCERPTS FROM AN APPRAISAL REPORT OF An Office/Manufacturing Facility LOCATED AT 13497 Fenway Boulevard Circle N. Hugo, Minnesota DATE OF APPRAISAL REPORT December 18, 2009 EFFECTIVE DATE OF OPINION OF VALUE December 18, 2009 FOR North Star Bank 1820 Lexington Avenue N Roseville, MN 55113 Attention: Kathy J. Greene FOR SALE AND/OR LEASE INFORMATION - CONTACT TROY PEARSON 651-520-9988 SALIENT FACTS AND CONCLUSIONS GENERAL DESCRIPTION: A one and part two story, masonry and steel, office/warehouse/shop facility LOCATION: 13497 Fenway Boulevard Circle N. Hugo, Minnesota LEGAL/PID: 30-031-21-41-0057 PROPERTY OWNER: R A Pearson Associates. LLC ASSESSOR'S $251,800 Land MARKET VALUE: $1,793,500 Building. AS OF JANUARY 2, 2008 $2,045,300 Total REAL ESTATE TAX LEVY: $60,454 (2009) ZONING: I-3-Industrial LAND SIZE: 143,748 Square Feet or 3.3 Acres TOTAL CROSS 35,000 Square Feet V Floor BUILDING AREA: 10,000 Square Feet 2nd Floor Office 45,000 Square Feet TOTAL DATE BUILT/AGE: 2006 HIGHEST& BEST USE: Industrial LAND VALUE: $2.70 per Square Foot or $390,000 NET RENTABLE AREA: 45,000 square feet MARKET RENT: $8.50 per square foot blended TERMS: 3-5 years assumed NET OPERATING INCOME: $337,850 OVERALL RATE: 9.0% VALUE BY COST APPROACH: $3,870,000 VALUE BY DIRECT SALES COMPARISON: $3,960,000 VALUE BY INCOME APPROACH: $3,755,000 APPRAISER'S OPINION OF MARKET VALUE: $3,900,000 DATE OF VALUATION: December 18, 2009 APPRAISER: F. W. Gergen, MAI Certified General Real Property Appraiser-- 3 raiser3 METRO AREA LOCATION MAI' -- —/�% -, Dayton Anoka 242 A Nil O K A n Lino Lakes 14 ; 4A q Rogers 13 169 18 The Green 121 Coon Rapid�`d 11 �1� Park 53 � � 21 � s1 Champlin 12 52- ��as Hugo 81109th Ave N \�51 �, Centerville 117 a„ 8A sra;: 10 Circle Pines 10 7 101 Teal Lake 202 /� Maine /( Lexington / 51 \ Park 103- `('1 I --- - 116 30 X610 J1, - 32----{SUBJECT PROPERTY _-- 14 i 13497 FENWAY BOULEVARD Hidd Osseo, Brookl Ark +�iLake 15 Corcoran Mead Maple 1o9 ° y�� a it '=�Mo ds View 'CIRCLE N,HUGO �`_, White Bear 55 11 Grove Beach Park �\ II11 50 1 D \�� 130 252' 45 I60 Dellwood Palmer Lake Park �I I o rbc Mey1 Shoreview 59 ° 35 144 Ard I��Sa_=_�.'-'_--_ 96 White 244 Maple Grove Community PlayFi d ei' J''U 77 51 Vednals 95 Bear Lake s4 H E N N E P I N 47 Brooklyn ~`L-- ghlon Heightso / t 55_` y Center Hi1Rop 76 ',i ( eGem Lake .Mahtomedi 12 Stillwater. Elm Creek munity 7 Playfield 169 5 -Columbia Heights �16 15 �-_ 65 ! 17 \\ 11ICW HO .b 152 47 ii 52 ��. 36 _- ^ , 9 ` C--111 Robbinsda1 65 8St Anthony Little 19 pine Springs Oak Park Heights! z4 Plymouth French - , 3 ,Roseville 21 Canada N�h S Medina 2a a Reg lona 100 4s ( ss QPUl WASHINGTON 21 153 I — Park 70 1oz 2 lir 27 Lauderd 36 AR M Y ° ! J Lake Elmo. 14 6 Gold ss ti _ 53 29 'l Long Lake Medicine Valle lj 30 °- 30 i Circle Park �n__ F Heights 6 13 Lakes - — a0 CMlnf eapoj� RAY, 120 15 65 146 = 12 - 32 - I- 31 64 ° akdale Hannan - M I--N NS O T A 5 10 Lake park 51 15 16 01 61 5 / St.,Louis Par 3 ,La all Wmilland t1 _ } - 'i- 22 33 4� I GfOn��7_�.VB � -G7 �. 35 Minnetonkau 7 "Bass ass ke rn 36 55 46 3 39 15th St S Deephaven 20 rk �, , Tonka Ba H ns Q _� _ 1s ° 19 y 21 d, ctti9innehahe s 156 /j` Woodbury Excelsior 3 Edina ) Lil dale W St. `. 60 156 v �cillS `` o Pau 1ss o Lily dale 1 __ r� 00 32 z 35 Me ota e ` 4 1' 1 sA 1 s / 62�3 RIC eld H -_�' _-- 52 Sout 17 212 17 ° 5 -110 �p li 19 if/ Beaver q1 5 _ o h�nhassen • Brook 31 L -1 s3 �• 10 den Rd °ECJen Pfllrle 52 ;, 13=` T - �� 4 �� y'.y ,1, 77 , 9521 CARVER las 26 ver 56 , 22 C34 20 28 rL 3 rove St. ul Park 1 28 55 ti eights' \ o 1 B mington > � Cottage Grove Ili 0 mi 5 10 15 Copyright©and(P)1988-2007 Microsoft Corporation andlor its suppliers All rights reserved htlp/twww.microsofl com/streetsl Certain mapping and direction data m 2007 NAVTEQ.All rights reserved The Data for areas of Canada includes Information taken wilh perrrussion from Canadian authorities,including C)Her Majesty the Queen in Right of Canada,L Queen's Printer for Ontario.NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEO.0 2007 Tele Atlas North America.Inc.All rights ressrved.Tele Atlas and Tele Atlas North Amenca are trademarks of Tele Atlas.Inc. PHOTOGRAPHS OF SUBJECT PROPERTY �I i i View to the northeast across Fenway Boulevard N. and Fenway Boulevard Circle N. 777 ,. , . .;,, t -17777, 1 w t. 01 �Hf a - View to the northwest across Fenway Boulevard N. at rear of subject building PHOTOGRAPHS OF SUBJECT PROPERTY j r s . View of interior of shop area of subject property View of interior of shop area of subject property showing 3 ton craneway PHOTOGRAPHS OF SUBJECT PROPERTY r {, • I View of interior of executive office View of interior of conference room We have considered easements,restrictions,encumbrances,leases,reservations,covenants, contracts, declarations, special assessments, ordinances, or other items of similar nature, These items have been reflected in the appraised market value. APPRAISAL PROCESS There are three basic valuation methodologies that may be used by appraisers in the estimation of Market Value. They are: the Cost Approach,the Direct Sales Comparison Approach and the Income Approach( if an investment property). These three approaches analyze data from the market to develop an independent opinion of value for the subject. The Cost Approach is based on the premise that the informed purchaser would pay no more than the cost of producing a substitute property with the same or similar utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements which represent the highest and best use of t he land or when relatively unique or specialized improvements are located on the site and for which there exists no comparable properties on the market. In this approach,the first step is the land or site evaluation by comparison with other sites in the area that have sold in the recent past,making adjustments for differences to indicate an opinion of value for the site. Second, the opinion of value for the site is added to the cost of replacement or reproduction of the improvements, then, reduced by the estimated accrued depreciation that has occurred. The Direct Sales Comparison Approach has as its premise a comparison of the subject property with others of a similar design,utility and use that have sold in the recent past. To indicate a value for the property, adjustments are made to the comparables for differences with the subject. This approach is most applicable when an active market provides sufficient quantities of reliable data and is unreliable in an inactive market. The Income Approach is the procedure in appraisal analysis which converts anticipated benefits (dollars and amenities) to be derived from the ownership into an opinion of value. The Income Approach which is widely applied in income-producing properties anticipates future income and /or reversions and discounts this to a present value through the capitalization process. Normally,these three approaches will each indicate a different value. The final step for the appraiser is to analyze the strengths and weaknesses of each approach and correlate a final opinion of value. 13 MARKET VALUE DEFINED The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: L buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their best interest,- 3. nterest;3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and S. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions o anted by anyone associated with the sale. PROPERTY RIGHTS APPRAISED The property rights appraised are of the Fee Simple Estate subject to title report exceptions. Fee simple is defined as follows: Absolute ownership unencumbered by any other interest or estate subject only to the four powers of government being taxation, eminent domain,police power and escheat. 14 PROPERTY DESCRIPTION The subject of this appraisal is a part one and two story, office/warehouse/shop facility consisting of 45,000 square feet of building of which 10,000 square feet is good quality 2 floor office space with elevator. These improvements are situated on a site located at the northeast comer of Fenway Boulevard N. and Fenway Boulevard Circle N. in Hugo, Minnesota. This site contains 143,748 square feet. PROPERTY IDENTIFICATION NUMBER AND LEGAL DESCRIPTION The subject property is legally described as follows: Lot 1, Block 1,Bald Eagle Industrial Park 5`h Addition, Washington County, Minnesota. The Property Identification Number is: 30-031-21-41-0057 CENSUS TRACT 702.02 REAL ESTATE TAXES AND ASSESSMENT 2008 Assessor's Market Value: 2009 Payable Tax: Land: $251,800 Real Estate Tax: $60,454.00 Building $1,793,500 Assessments: -0- Total $2,045,300 Total $60,454.00 HISTORY County records indicate that the subject property is currently in the name of R A Pearson Associates, LLC who acquired the property(vacant land) in December of 2005 for$166,768. No other recorded transfers of ownership have occurred within the past three year period. The original cost statement in 2006 indicated a construction cost for the proposed improvements at that time of $3,495,057 exclusive of land. This reflects a cost in 2006 of$77.67 per square foot. 15 ZONING The subject property is zoned I-3-Industrial under the zoning ordinance administered by the City of Hugo. Zoning divides the city into use districts and establishes regulations in regard to location, construction, reconstruction, alteration, use of structures and use of land. The purpose of the Industrial Districts is to provide for the establishment of industrial activities which draw from and serve customers from the entire community or region. Permitted uses in this district are numerous and vary greatly. The current use of the subject property is in compliance with the existing zoning and is similar to surrounding neighborhood developments. According to the City of Hugo,the current use of the subject property conforms to the existing zoning requirements. 16 DISCtiSSION OF THE CITUAREA The subject property is located at the northeast corner of Fenway Boulevard North and Fenway Boulevard Circle N. in the approximate center of Hugo,Minnesota. Hugo is a third to fourth tier suburb north of St.Paul and comprises an area of approximately 22 square miles on the westerly periphery of Washington County. Downtown St. Paul is located about 15 miles south, while Minneapolis is about 20 miles southwest. Hugo is bordered by Forest Lake Township to the north; May Township to the east; White Bear Township to the south and the city of Lino Lakes to the west. The city of Hugo is a growing community located in the northeastern metro area. This area in general has seen steady growth as the central portion of the Twin Cities has migrated outward. Communities such as Lino Lakes, Centerville and surrounding suburbs should continue to see growth as the Twin Cities experience urban sprawl.Hugo has a current population of approximately 12,022 people. This is a substantial increase over the 2000 level of 6,363 people. This is in spite of the three year moratorium on residential construction in the early part of this decade. Access to Hugo is very good, especially for a third to fourth tier suburb. Interstate 35E extends north and south just westerly of the westerly periphery of the city and provides ready access to downtown St. Paul within about 15 to 20 minutes. U. S. Highway 61, one block easterly of the subject property extends northerly from St. Paul and White Bear Lake through Hugo and north to Duluth. The city remains mostly undeveloped, with large areas of unimproved land. Land uses consist of single family residential subdivisions,some scattered agricultural uses and hobby farms, developing industrial areas as well as large areas of lakes and wetlands. The presence of many lakes within the city is helping to sustain strong single family residential growth.Residential development in the city is virtually all single family,with most of the housing newer and of good quality. Commercial development as expanded substantially in the past five years or so along Frenchman Road just easterly of Interstate 35#in the westerly part of the city. The complex of uses in this area include single family detached and attached housing,strip shopping centers and convenience goods and services. All of these facilities in this development have been constructed within the past four years. The Bald Eagle Industrial Park along Fenway Boulevard in which the subject property is located contains a number of large office/warehouse type properties similar to the subject property as well as smaller offices and a large mini storage facility. There is also some older,mostly steel on steel industrial buildings along 130`h Street N. - south of the subject property. Major growth in the city will most likely come from the development of single family housing for the immediate future. Commercial development is underway, but will probably accelerate as the population increases to support more businesses. The city is in the early stages of growth, and the outlook portends gradual or rapid growth for decades. 17 CITY/AREA LOCATION MAP N O D `�9 V) rn f h St t1/ Oneka Lake c z M Peltier Lake � a Rice Creek-Chain Z �, County Regional Z a P k "e Z > m VV rd 1� 73rd S' Q fav 12 > o s 14 Centerville W Centerville p z1 Mein St — - Lake O` CD 23 -N g Hugo Eoi&e �_ p U) _ _— 145th St N Rice Lake _J Ce ru �``ef St Q CL w Egg Lake v Anil N 61 I ❑ Lino Lakes BA 137th St N Birch St 10 154135th St �/ fake ISUBJECTPROPERTYZ 21 54 /84 13997 FENWAY BOULEVARD > 132nd St CIRCLE N,HUGO _ Q /V b �e CO z 130th St N Holly Dr E �i 5 ° 1211h St N Z 0 125th St N 3 'Bald Eagle z Ash St 61 !r✓`Q Lake 1 81 Otter Lake -- �- 120th St N 81 Z 7 North Oaks I Bald Eagle-Otter 60 Lake Park Bald Eagle Pari: b Ini 0.5 1 1.5 2 2.5 Copyright m and(P)1988-2007 Microsoft Corporation andlor Its suppliers All rights reserved htip.pwww.Microsoft comistreetsi Certain mapping and direction data 9 2007 NAVTEO.All rights reserved.The Data for areas of Canada includes Information taken with permission from Canadian authorities.iccludulg U tier Majesty the Queen in Right of Canada,U Queen's Printer for Ontano.NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ.9 2007 Tele Atlas North America.Inc.All rights reserved Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas,Inc DESCRIPTION OF THE SITE LOCATION: Northeast corner of Fenway Boulevard North and Fenway Boulevard Circle North,Hugo, Minnesota AREA: 143,748 Square Feet=3.3 Acres SHAPE: Semi-rectangular BOUNDARIES: N - 274.00 feet S - 513.48 feet - Fenway Boulevard Circle North E - 349.14 feet W - 323.27 feet-Fenway Boulevard North LAND TO BUILDING RATIO: 7.19 to 1 EASEMENTS: Typical drainage and utility easements around the periphery of the site. ENCROACHMENTS: None Noted STREET IMPROVEMENTS: Paving:Bituminous Curbs: Concrete Walks: None Alley: None UTILITIES: Electric: Xcel Gas: Xcel Sewer: City Water: City Storm: City PARKING: 70 spaces including 3 HC FLOOD DATA: The subject property is located in Zone C -no flood hazard VISIBILITY: Good from both streets TOPOGRAPHY: Generally level land slightly above surrounding property. Slopes to the rear toward the building to accommodate dock height trucks. SOILS: We were not provided with soil tests in conjunction with this report. Consequently we are assuming that the subsoil is sufficient to sustain existing or proposed improvements. 18 i,Bill S I 50 FT MDE INA E 35 FT ID SEWER EASE MEN 3 627.75 TIL ESM BALD EAGLE INDUSTRI L PARK 5T ADDITION v N (0059) < f/ C5 CO&) i 1' 69 19.3 35.57 ,g90 1� NOR-�H 91.29 ti O 296.69 OJ�E`1AFi FENWAY toga) ' 1 t00A 69.03 23o.02 n i Mdw Oryf4►r+QCO►YNOIR 1M �a PhotPlan • T . r' op r or SUBJECT PROPERTYAf .� lot ` • fill:a AERIAL VIEW 13497 FENWAY BOULEVARD CIRCLE N. HUGO DESCRIPTION OF IMPROVEMENTS GENERAL DESCRIPTION OF THE SUBJECT: The subject improvements consist of a masonry, one and two story office/warehouse/shop building containing a gross area of 45,000 square feet. The ground floor measures 125 x 280 feet and contains 35,000 square feet of which 6,400 square feet are leased to the White Bear Lake School District for office and classroom use. The second floor which is accessed by an elevator and two stairwells, contains 10,000 square feet of good quality office space. This area includes 15 offices, 2 conference rooms, a kitchen, a lounge, several storage rooms, 3 reception areas, 5 private bathrooms and 3 ADA restrooms. BUILDING LAYOUT: 16,400 square feet-office (36%) 28,600 square feet- shop/warehouse TOTAL: 45,000 square feet GROSS BUILDING AREA: 45,000 Square Feet NET RENTABLE AREA: 45,000 Square Feet BUILT/AGE: 2006 EFFECTIVE AGE: 2 years (limited depreciation) WALL HEIGHTS: Office is 9 feet; maximum shop/warehouse is 22 feet. FOUNDATION: Concrete FRAME: 12 inch tilt up prestressed concrete panels. FLOOR STRUCTURE: Concrete slab on ground level and prestressed or poured concrete over corrugated steel on second floor FLOOR COVER: Carpet in office and ceramic in restrooms ROOF STRUCTURE: Steel bar joists with corrugated steel overlay ROOF COVER: White E.P.D.M. membrane CEILING COVER: Acoustical tile in office areas; drywall in restrooms INTERIOR CONSTRUCTION: 5/8 gypsum board on metal studs in finished areas; double wall between leased space and shop/warehouse; exposed concrete panels in shop/warehouse area. Finished areas have acoustical tile and florescent lighting 22 EXTERIOR CONSTRUCTION: Concrete panels DOORS/WINDOWS: Exterior doors are welded metal framed with glass;interior doors are oak; windows are aluminum frame;. overhead doors are aluminum. ELECTRICAL: 600 amp 120/208 volt, 3 phase PLUMBING: Sixteen restrooms. Each restroom contains 3 fixtures. HVAC: Combination forced air/air conditioning package units for the finished areas and suspended gas fired heaters for the shop and warehouse areas with roof ventilators for exhaust and a makeup air unit on the roof.. SPRINKLER: Complete automatic system ELEVATORS: One elevator STAIRS: Two sets of stairs to second floor CONDITION: Very good The subject property is considered to be in very good overall condition. The elevator providing access to the second floor office area provides sufficient functionality to the structure. The subj ect property falls into a category of a high quality,high finish office/shop/warehouse facility with above average office ratio and finish. Design is functional. 23 e ' Tax Abatement in Minnesota Concepts and Mechanics 2011 Prepared by: Springsted Incorporated Saint Paul, Minnesota Minnesota Office Des Moines Office Richmond Office Corporate Headquarters 300 Walnut Street 1564 East Parham Road 380 Jackson Street,Suite 300 Suite 215 St.Paul,MN 55101-2887 Des Moines,IA 50309-2258 Richmond,VA 23228-2360 651.223.3000 515.244.1358 804.726.9748 651.223.3002 Fax 515.244.1508 Fax 804.726.9752 Fax Colorado Office Missouri Office Wisconsin Office 8400 E.Prentice Avenue 9229 Ward Parkway 1110 North Old World 31d Street Suite 104N Suite 500 Kansas City,MO 64114.3311 Suite 218 Greenwood Village,CO 80111 8163337200 Milwaukee,WI 53203-1100 . . 303.893.5800 414.220.4250 303.771.1334 Fax 816.333.6899 Fax 414.220.4251 Fax advisors@spdngsted.com www.springsted.com i Tax Abatement in Minnesota Table of Contents INTRODUCTION....................................................................................... 1 PARTICIPANTS........................................................................................2 THE MECHANICS.....................................................................................3 Qualifications.................................................................................................3 Duration and Restrictions..................................................................................3 FiscalDisparities.............................................................................................4 Bondingand Levy Limits...................................................................................4 Process ........................................................................................................5 Review and Modification...................................................................................5 HOW DOES TAX ABATEMENT COMPARE TO TAX INCREMENT?....................6 :�SPRINGSTED Tax Abatement in Minnesota Introduction In 1997, legislation authorizing the use of tax abatement in Minnesota was passed by the State legislature. Amendments to the statute were approved nearly every year since authorization. The statutory language defining tax abatement is quite brief and is contained in MN Statutes 469.1812 to 469.1815. Section 469 refers to the capture or deferral of property taxes due as"tax abatement." Under Minnesota law, tares due on real property subject to tax abatement must still be paid as due. If tax abatement is in place, the appropriate portion of the taxes can be captured for development purposes. Just what the appropriate portion is depends on which governmental entities hold public hearings and adopt abatement resolutions. A participating city,county,or school district is required to act separately to determine the use of its share of property takes. Unlike tax increment,tax abatement can be used to capture taxes on land and existing buildings as well as new improvements. The captured taxes must be used to offset the costs agreed to under an abatement agreement. '.J SPRINGSTED Page 1 Tax Abatement in Minnesota Participants Abatement Participants I y city Landowner/Developer Elected Officials . Landowner or Developer Advisory Commissions . Attorney • City Staff Fiscal Consultant: Springsted Incorporated Bond Counsel Other Possible Participants Abatement Parcel/Area Project County . Federal Government School District . State Government Metropolitan Council, etc. Other Municipalities Bordering Project Area i1 SPRINGSTED Page 2 Tax Abatement in Minnesota The Mechanics)) Qualifications Any political subdivision, including statutory cities,home rule charter cities,towns, counties, and school districts, is authorized to abate property taxes on selected parcels or defer the payments of the taxes and abate the interest and penalty that otherwise would apply, if: • The benefits gained equal or exceed the cost to the political subdivision or the abatement phases in a property tax increase, and • The abatement is in the public interest because it will: — increases or preserves the tax base; — provides employment opportunities; — provides or helps acquire or construct public facilities; — helps redevelop or renew blighted areas; — helps provide access to services; — finances or provides for public infrastructure; — phase in a property tax increase on the parcel resulting from an increase of 50%or more in one year on the estimated market value of the parcel,other than an increase due to improvement of the parcel;or — stabilize the tax base through equalization of property tax revenues for a specified time period with respect to a taxpayer whose real and personal property is subject to valuation under Minnesota Rules, chapter 8 t00. Duration and Restrictions Cities,counties, and school districts as combined jurisdictions may grant an abatement for no longer than 15 years(8 year maximum if no initial duration is specified),or for no longer than 20 years if two or fewer jurisdictions participate. However, individual jurisdictions may grant an abatement for a period of up to 20 years, if the abatement is for a qualified business meaning a taxpayer whose real and personal property is subject to valuation under Minnesota Rules,chapter 8100. No back-to-back abatements. Eight years must pass before a new abatement can be applied. In any given year,the total amount of property takes abated by a political subdivision for all parcels may not exceed the rg eater of(l) 10%of the i1 SPRINGSTED Page 3 Tax Abatement in Minnesota net tax capacity of the political subdivision for the taxes payable year to which the abatement applies,or(2)$200,000. The State will not reimburse school districts for lost taxes resulting from abatement. Taxes may be abated on the entire net tax capacity of a parcel including land or areas subject to the areawide fiscal disparities tax. Property in a tax increment financing district is not eligible for abatement. Fiscal Disparities In the Seven-County Metro Area and Taconite Tax Relief Area, where the fiscal disparities program is applicable, the abatement may be calculated from the net tax capacity either before or after the portion of tax capacity subject to fiscal disparities sharing has been deducted. The tax abatement law as originally enacted prohibited any abatement of the fiscal disparities portion of the tax. Bonding and Levy Limits General Obligation bonds supported by tax abatements may be issued without a referendum,and such debt does not count against the debt limit of the subdivision. Tax Abatement bond proceeds can be used to pay for public improvements that benefit the property, acquire and convey land or other property, reimburse property owner for cost of improvements to the property, or pay costs of issuance of the bonds. The maximum principal of bonds may not exceed the estimated sum of the abatements for the property for the years authorized. Tax abatements are not subject to levy limitations and are excluded from the calculation of the net debt limit. GI SPRINGSTED Page 4 t Tax Abatement in Minnesota Process A political subdivision may grant an abatement only after a public hearing has been held. Notice of the hearing must be published in a newspaper of general circulation not less than 10 days or more than 30 days prior to the hearing. The notice must identify the property for which abatement is under consideration and specify the total estimated amount of property taxes to be abated. The governing body must adopt a resolution specifying the terms of the abatement. The resolution must also contain a statement as to the nature and extent of the public benefits that are expected to be received. The political subdivision must add to its levy amount for the current year the total estimated amount of all current year abatements granted. Review and Modification The abatement resolution can provide that no review and modification is permitted. If resolution is silent, abatement may be reviewed and modified every second year after it has been approved. i�SPRINGSTED Page 5 Tax Abatement in Minnesota How does Tax Abatement compare to Tax Increment? The following does not apply to tax abatement but is applicable to tax increment: • "But For" test Existing tax base can be abated, a hearing and abatement resolution are required,and maximum duration is 15 years or 20 years if two or fewer jurisdictions participate or 20 years if the project qualifies. Tax increment taxes captured do not include existing land and building value,a hearing and tax increment plan are required,and maximum duration varies. :�SPRINGSTED Page 6 ,.,. .. .. ....... ... _. ...(t:uk!rV ay.k�rrll+rt^ .I}f.:,wlrlrala .. •c,,,i ..,.w.i w..iYzi w.r.:. ., and C,Vlns 1141CI-r,nspor -r— enterv*Ile Street 2011 ; hunt aln enance: for the owe gyol ByDeb$aures, zer to abandon the 25-year (� 1��� " itize'"Editnr street replacement program contained in the city's Pave- ment Management Program. CENTERVILLS-C�en- " t ,, "With the current bud- tervi[le leaders ?re thinking Fl� et constraints, it is not fea- :abat�t executing a U-turn on Get Bible to continue this pro- }t.�:the city's street niaintenance ram;'Palzers memorandum .program. (?ne gption being to council stated. GND • arade Info ;#considered would dispense Currently, the city is .with seal coating altogether spending about $600,000 ` and introduce a "thin aver- each year in annual debt ser t o o 2011 Good ;lays apprciach ca extending vice to fund its outstanding Clue! H t"ihe useful life of pavements g i", bond obligations, Finance included within the vitt'~ �;i6-mile street network. j director Mike Jeziorski First Spike' Neighbors Announce, : said. Those debt ob- Clues Posted The Centerville li ations include City council gthe 2004 and Page 1Q mer at a -pe- Meet Jim and Karen Bever 2009 Street t tial yt-ark and Util- the V. e s z i o nity Recon 1\Iay 25 to HUGO If you see Jim Bever, you'll likely see Karen Hy struction ht Bever nearby. discuss fi Projects, as It's been that way since the two met at Unity High School Mnancial issues well as the city's . in Wisconsin's Balsam Lake/Milltown/Centuria school dis- w as they aFeCT trier. the high school sweethearts were part of the school's first share of the Cen- 1S „the preparation of tennial Police Depart graduating class in 1961, and will celebrate 50 years of mar she citv's 2012_ budget. High School ment building in Circle riage next year. Ainong the discussion pines. ".° n�"� This weekend the Bevers, both 68, will both ride in the w�items was a proposal by e�'Pub- tic Works Director Paul Pal- U-Turns/Pa 1 Bever 6 is� �;� Page 10 14 ukv L"1 e&*P yaW1,to !—[be Hagar 1,fa014f aratit THANK YOU FOR, YOUR SUPPORT, Bevers/FrOm 1 made special note of the way back of a convertible in the that Jim affectionately intro- Good Neighbor Days Parade duces Karen when they meet Good Neighbors Then and NOW. as Hugo's 2011 Good Neigh- new people. Jim always intro- 1995 Lucille and Fran Lutz born of the Year. duces her as his 'bride; Rio- The committee assigned Pel said. 1996 Lois and Henry Vietor The couple married at 1997 Gert Granger the responsibility of selecting 18 and had two daughters, 199$ Marlene and Darrell Gran the winners this year received Dawne and Lori, by the time ger a record number of confiden- they turned 21. Ten years 1999 Pat Wittkop tial nominations for the hon later, sons Jim, Jr. and Tom 2000 Kathy Marler known as Katie the Pae Parade or, Lion Katie Rthalso followed. The now have 13 2001 Viola Maslowski kngrandchildren, ranging Lady—told The Citizen. g g g from 2002 Jim Gits "We were overwhelmed age 26 to 2. 2003 Judy g Olin er with letters,"she said."It was a Jun and Karen moved 2004 Sharron and Deane Vail tough decision:' to Hugo in 1987 and built l 2005 Jim Leroux To be el 'bre for the their home on 20-plus acres, eligible where they raised their sons. 2006 Karen and Len Charpentier Lions-sponsored award, one They lived in Hugo for 22- 2007 Pete Pedersen must be nominated.The hon- 1/2 years, running Bever & 2008 Gene,Theresa,Katrina and Paula Zerwas or is t within tgiven tsomeone who lives Sons Landscaping, and only 2009 Floyd Petty lives Hugo corn- recentlyrelocated to Forest munity or has been a good 2010 Ray Pribnow Lake. The couple is now in neighbor to the Hugo coin- 2011 Jim and Karen Bever munity. semiretirement.and Jim,Jr.is ., Accordin hLi- now running the family land- g to the scaping business, where Jim, the point where it wasn't even said,"how we need to keep a ons Club, it's a way of saying a right thing. positive spin on things." Sr.lends a hand now and then. thank you to someone spe- Karen runs a garage-floor "I finally got it figured And they do. cial for their caring and kind business. out later on;'Jim said. Karen enjoys it when grandchildren. But that level ofcommit- the et to take care of their ways—and for being a go you know," keep pretty busy,as Y g neighbor. The Bevers are the Jim said. "I was a ment and focus has continued youngest "The ;' 17th selection in a long line workaholic.I always put a lot to define the couple's life to- blessing is, you spend more of Good Neighbors recogni of hours in and bless her heart, gether, time with the grandkids, j tions,first begun in 1995. my wife put up with that for Jim and Karen spend teaching things that you prop It's clear from the nomi- all of our working lives.Work, g y much of their time in Hugo ably didn't have time to teach nation that the Bevers'caring helm out at Hugo Business our own children because ways begin at home. Rio el work, work, work, work, to helping g y Y g P Association events.They're al- you were so busy,"she said. ways volunteering at the Hugo Both of them laugh a lot «=r Kidz'n Biz Fest,Warm Hearts while they volunteer,and Jim +f for Charities fundraisers, the can't imagine doing anything .1i Hugo Good Neighbors Food without his bride. "She is al- Shelf events,Home and Gar- ways there,"he said.And then den Shows, and other com- he added,"I can always count munity gatherings. Jim has on her to do all the work.' 1 been a member of-the Hugo "That's true," laughed Economic Development Au- Karen,who said she has en- thority almost since its incep- joyed meeting many wonder- tion. ful people through volunteer- I They have a passion for ing. 1 helping businesses stay and "And I've always wanted ` grow in Hugo. to ride in a parade!" They are also adept at But she is quite serious turning life's negatives into about her passion for the corn- positives. munity. The two create a memo- "If there is any place 1 rial garden at the Minnesota could recommend to anybody State Fair every August in on where to go to bring up a s f i honor of Jim's brother and family," Karen said, "Ill sati former business partner,Toni, `Go to Hugo'VGrc have met so X # ' who passed away frons leuke- many wonderful peopie' mia in 1984 And the couple The Bevers will be recog has buried nine friends in the mzet��t.a ceremony at Lions F :past 12 tnonths�Jim said, Par 'i� Q P.M.Sunday,Juni n. "We were talking about 12 The public is invited to at r* ' that just this morning," Jim tend ?kt..a'� "v w ,,�� r�'"n #sny�( ''.'+• ` ` #'.r ! *"•:2�'.i•vL� M ;t� .f t�4 i,a , Ca,. , �^.. $, s.-.�11 �.:: e t " p r ,r, ;!`. s?y. rt _ .-•s '1+ 'r'r':'� q d 9`� 'f .rc 4. r 't v>'a o�t L. ?�,a; r::�,u w :�5 �� fx,'`>.a:�' 'x.�,rlrxr�. .kriu�'�,.�`#:�n