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December17, 2018 Item No. ______
AMENDMENT TO DEVELOPMENT CONTRACT FOR INTERSTATE SOUTH LOGISTICS PARK
PROPOSED ACTION
Staff recommends adoption of the following motion: Move to approve: First Amendment to
Development Contract for Interstate South Logistics Park.
OVERVIEW
Scannell Properties received approval of a final plat and development contract for the first phase of
Interstate South Logistics Park on August 27, 2018. The development consists of two industrial lots
located at the intersection of County Road 70 and Dodd Blvd. One of the lots is for the new
Schneiderman Furniture Distribution Center currently under construction and the second lot will be
developed as a multi-tenant office warehouse that is proposed to begin construction in 2019.
This development includes the construction of 217th Street west of Dodd Blvd to provide public street
access to the new industrial lots being platted. As the attached letter from Scannell Properties
indicates, weather conditions this fall did not allow for 217th Street to be paved and thus it is currently a
gravel road. Scannell is requesting an amendment to the development contract to allow for the
issuance of a Temporary Certificate of Occupancy for the Schneiderman building to be issued prior to
the pavement of 217th Street.
Staff concurs that the weather conditions this fall were not typical and that Scannell made all attempts
possible to complete paving of 217th Street. It should be noted that the Schneiderman parking and
loading dock areas were able to be paved. Staff recommends approval of the Amendment to the
Development Contract that will allow for the issuance of a Temporary Certificate of Occupancy and will
require paving of 217th Street by June 30, 2019.
PRIMARY ISSUES TO CONSIDER
Will occupancy of the Schneiderman Distribution building prior to the paving of 217th Street be a
maintenance concern? Scannell has agreed to maintain 217th Street until it is paved next spring.
SUPPORTING INFORMATION
◊ First Amendment to Development Contract for Interstate South Logistics Park
◊ Letter from Scannell Properties dated November 26, 2018
Financial Impact: $ N/A Budgeted: Y☐ N☐ Source:
Related Documents (CIP, ERP, etc.): Zoning and Subdivision Ordinances
Envision Lakeville Community Values: Diversified Economic Development
Report Completed By: David Olson, Community and Economic Development Director
294 Grove Lane East
Suite 140
Wayzata, MN 55391
tel: 763.331.8850
November 26, 2018
Mr. David Olson
Community & Economic Development Director
City of Lakeville
20195 Holyoke Avenue
Lakeville, MN 55044-8339
Re: Interstate South Logistics Park – Request for Development Contract Amendment
Dear Mr. Olson:
On behalf of Scannell Properties #180, LLC, we are requesting an amendment to the
Development Contract (Developer Installed Improvements) for Interstate South Logistics Park
between the City of Lakeville and Scannell Properties #180, LLC, dated August 27, 2018 (the
“Development Contract”) to allow for temporary occupancy of the distribution center currently
under construction on Lot 2, Block 1, of Interstate South Logistics Park.
Scannell’s contractors initiated site work for construction of the distribution center and the
Developer Installed Improvements serving the project on August 29, 2018, with full expectations
of installing the base lift of bituminous pavement in the parking areas on Lot 2 and on 217th
Street by the end of October. Unfortunately, we went on to experience the sixth rainiest
September in recorded history. Scannell’s contractors made great strides towards maintaining the
original schedule despite the historical weather. These efforts included additional resources and
significant dollars expended to best position ourselves for substantial completion and timely
occupancy.
Our efforts to overcome the wet fall quickly became compromised when winter weather and
below freezing temperatures arrived uncharacteristically early. With daytime highs in the low
40s and overnight temperatures in the high 20s during the first week of November, the
opportunity to install exterior concrete and bituminous pavement was greatly limited as asphalt
plants were beginning to cease operations for the season – two to three weeks earlier than normal
years.
We were fortunate to be able to install a majority of the concrete curb and gutter and the entire
base lift of bituminous pavement on Lot 2, again at the expense of additional resources and
winter condition costs. However, after several discussions with the City, we were unable to
install the base lift of bituminous on 217th Street. The current status of 217th Street is a
compacted, aggregate (i.e., gravel) road.
Mr. David Olson
November 26, 2018
Page 2
Section 34(F) of the Development Contract states, “…no one may occupy building for which a
building permit is issued on either a temporary or permanent basis until the streets needed for
access have been paved with a bituminous surface and the utilities are accepted by the City
Engineer.”
Due to the untimely and uncharacteristic weather conditions experienced this fall, an amendment
to the Development Contract to allow for the issuance of a temporary certificate of occupancy on
Lot 2 on the condition of an aggregate road in lieu of bituminous is appropriate because (i) all
onsite base bituminous pavement on Lot 2 has been completed; (ii) 217th Street is a dead-end
road with a temporary cul-de-sac providing access to what will be a single, privately-owned
facility; (iii) the current status of 217th Street as a gravel road does not pose a threat to the life,
health or safety of the general public; (iv) denying occupancy for the owner/occupier of Lot 2
would create an undue hardship as they would be unable to operate their business.
Further, Scannell proposes conditions to the amendment including requirements to (i) perform
snow removal on 217th Street to maintain a safe, passable condition; (ii) install the base lift of
bituminous surface as early as reasonably possible and no later than twenty (20) business days
following the re-opening of the nearest asphalt plant in the spring; and (iii) street sweep and
clean Dodd Boulevard on an as-needed basis in the spring if gravel or debris is being tracked
onto the public road.
If you have any questions or need additional information, please contact me at (763) 331-8854 or
at dans@scannellproperties.com. Thank you, in advance, for your consideration and assistance
with this matter.
Sincerely,
Dan Salzer
Development Manager
217th Street Extension
Property Information
December 13, 2018 0 875 1,750437.5 ft
0 270 540135 m
1:9,600
Disclaimer: Map and parcel data are believed to be accurate, but accuracy is not guaranteed. This is not a legal document and should not be substituted for a title search,appraisal, survey, or for zoning verification.
Interstate South
Logistics Park DistributionCenter