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City of Lakeville
Community & Economic Development
Memorandum
To: Economic Development Commission
From: David L. Olson, Community and Economic Development Director
Copy: Justin Miller, City Administrator
Zach Johnson, City Engineer
Kati Bachmayer, Economic Development Coordinator
Date: September 22, 2020
Subject: Marketing of City-Owned Property at Kenwood Trail and Icenic Way
In 2015 the City entered into a Joint Powers Agreement (JPA) with Dakota County for the total
acquisition of nine commercial and residential properties along County Road 50 between
Ipava Avenue and Icenic Trail. These properties were needed for the construction of an
expansion of County Road 50 / Kenwood Trail to a four-land divided highway from the
County Road 60 / 185th Street to County Road 9 / Dodd Boulevard.
The City and County also worked with three existing businesses that were going to remain in
this area to address their access and parking needs upon completion of the road
improvements. The cost of the property acquisitions was funded 55% by Dakota County and
45% by the City of Lakeville.
After the property acquisitions and road expansion project that included a new backage road
were completed, the City ended up retaining a 2.25 acre parcel at the intersection of
Kenwood Trail and the new Icenic Way backage road. The JPA with Dakota County requires
that the proceeds from any future sale of this parcel be split with 55% going to Dakota
County and 45% to the City of Lakeville. This property was appraised at $785,000 or $8.00 per
square foot in July of 2019. The property is currently zoned O-R (Office Residential) which is
intended to provide a transition between commercial and residential development. This
property is adjacent to owner-occupied townhomes to the east and Lake Marion Elementary
and Ames Ice Arena to the norther.
The primary permitted uses in the O-R District are banks, office businesses, and instructional
type of uses. The allowed conditional uses include preschools, daycares, fitness centers,
residential care facilities, veterinary clinics. Other commercial uses like gas convenience
stores, sit down or drive restaurants, retail uses are not allowed.
The two main options for marketing the property include having the City market the property
or listing the property with a commercial broker. The City has sold several commercial
properties in the past without listing them with a broker including the former Cedar Avenue
Municipal Store and former Senior Center building on Holt Avenue in Downtown and two
undeveloped lots in the Fairfield Business Campus. In all of these cases, the properties were
purchased by either an adjacent property owner, or a local business owner.
The advantage of listing the property with a commercial real estate broker is that the
property would get more exposure to non-local potential buyers in addition to local buyers.
The commission to a commercial broker would range from 4-6% depending if listing broker is
also the selling broker. If the City elects to list this property with a commercial broker, it is
recommended that proposals be requested from several different firms.
Action Requested:
Provide a recommendation to the City Council regarding how this City-owned property
should be marketed.
City-Owned Property
Property Information
September 17, 2020 0 225 450112.5 ft
0 60 12030 m
1:2,400
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.