Loading...
HomeMy WebLinkAboutItem 7 City of Lakeville Community & Economic Development Memorandum To: Mayor and City Council From: David L. Olson, Community and Economic Development Director Copy: Justin Miller, City Administrator Zach Johnson, City Engineer Date: September 28, 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 north. 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 thru 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. The EDC discussed this issue at their September 22, 2020 Meeting. The EDC recommended unanimously to seek proposals from commercial real estate brokers to market this property on behalf of the City. Action Requested: Provide direction to City staff regarding the process for the marketing of the City-owned property located at Kenwood Trail and Icenic Trail. CITY OF LAKEVILLE ECONOMIC DEVELOPMENT COMMISSION MEETING MINUTES September 22, 2020 1. Chair Scherer cal led the meeting to order at 4:00 p.m. in the Council Chambers. Members Present: Comms. Christiansen, Collman, Dautel, Emond, Gillen, Matasosky, Scherer, Seiler, Starfield Ex-officio Members Present: Mayor Anderson, Chamber President Jech Members Absent: Comm. Stone Staff Present: David Olson, Community & Economic Development Director; Kati Bachmayer, Economic Development Coordinator 2. Approval of August 25, 2020 Meeting Minutes Comm. Starfield noted that the first item in the August minutes should be updated to properly reflect that Comm. Seiler conducted the August 25th meeting. Comms. Starfield / Emond moved to approve the minutes of the August 25 meeting with the noted amendment. Motion carried unanimously. 3. Review Options for the Marketing of the City-owned Property at Kenwood Trail and Icenic Way Mr. Olson stated that 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 cost of the property acquisitions was funded 55% by Dakota County and 45% by the City of Lakeville. After the completion of the road project, the City still owns a 2.25-acre parcel at the intersection of Kenwood Trail and the new Icenic Way backage road. This property was appraised at $785,000 in July 2019 and is zoned O-R (Office Residential), which is intended to provide a transition between commercial and residential development. Mr. Olson said city staff is seeking input from the EDC regarding the City’s two main options for marketing the property, which include having city staff market the property or listing the property with a commercial broker. The EDC members discussed the pros and cons of both options and inquired about the ability to “square off” the property to make it more desirable to developers. The small triangle piece needed to square off the parcel is owned by Lakeville Ames Arena. Mr. Olson stated that staff could research that question. A consensus was formed by EDC members that it was best to use the expertise of a commercial broker for this type of sale, especially in th e current pandemic real estate environment, and recommended that proposals be requested from several different firms. Economic Development Commission Minutes September 22, 2020 Page | 2 Comm. Scherer / Seiler moved to recommend the City retain a commercial broker through a request for proposals (RFP) process to list for sale the 2.25-acre city-owned parcel located at Kenwood Trail and Icenic Way. Motion carried unanimously. 4. Update on Round One and Round Two of the Small Business Emergency Grant Program Ms. Bachmayer provided updates to the EDC on the City’s two grant programs. The City has approved 39 businesses from its Round One grant program and is still processing three applications. Grant funds have been dispersed to 36 of the 39 businesses and the remaining three grant payments will likely be processed by the end of next week. During the August meeting, the EDC asked for more information about the total losses experienced by the business applicants. According to Northland Securities, the City’s third-party program reviewer, the highest documented loss was approximately $300,000; three applicants lost between $150-200,000; eight applicants lost between $100-149,999; ten applicants lost between $50-99,999; and 18 applicants had total losses under $50,000. The City’s Round Two grant program opened its application window on September 16 and has received 32 applications so far. The total amount of funding for this program is up to $400,000; equating to 40 grants worth $10,000 each. Applications are being accepted through September 30th. The City is actively working with the MN Department of Employment and Economic Development (DEED) and Dakota County officials to avoid grant recipient duplications. Both of Lakeville’s grant programs require that business applicants only receive grant dollars from one entity and are not allowed to receive grants from the City and the County or State. Mr. Olson reminded EDC members that all of the CARES Act funding must be spent by the City of Lakeville by November 15th. He also informed the EDC that the City Council will be considering a grant program for nonprofit entities during its October 5th meeting. Mayor Anderson noted that the Council has already received funding requests from 360 Communities, Lakeville Area Chamber of Commerce, Lakeville Convention & Visitors Bureau, and Fairview Ridges Hospital. Ms. Jech reminded EDC members that 501c6 organizations (like the Lakeville Chamber) have been considered ineligible for every other COVID-related grant or loan program at the federal, state and local levels. 5. Continued Roundtable Discussion of COVID-19 Impacts on Lakeville Businesses More discussion was held during this meeting about the local restaurant community and the concerns regarding impending colder weather combined with indoor dining capacity restrictions. Comm. Gillen and Seiler shared information about how their businesses were adapting to the Executive Order guidelines and preparing their facilities for an extended outdoor dining season in cooler temperatures. Comm. Gillen informed the group that Hospitality Minnesota has been lobbying Governor Walz to expand indoor dining to 75% capacity. Mayor Anderson shared with the EDC that he and a group of metro city mayors participate in regular conference calls with DEED Commissioner Steve Grove, and this mayors group was advocating for removing the capacity percentage and instead allowing restaurants to use six-foot distance guidelines to maximize indoor capacity while still adhering to safety protocols. Members noted that no Economic Development Commission Minutes September 22, 2020 Page | 3 matter what the restaurant guidelines are, it was important for customers to do their part by following masking and social distance recommendations. Mayor Anderson also discussed the importance of revisiting the City’s temporary patio policy to ensure that our local restaurants are able to maintain their outdoor dining space during colder months while indoor dining continues to be reduced. EDC members encouraged the City to begin conversations with the Metropolitan Council regarding the temporary delay of additional Sewer Availability Charge (SAC) fees for temporary patio areas, as that policy is set to expire at the end of the year. If reduced capacity restrictions remain in place, it will be crucial for the Metropolitan Council to change the method used to calculate these SAC charges in order to accurately reflect the usable dining space. 6. Director’s Report Mr. Olson informed EDC members that building permit numbers are on pace for another record year. The city took in $301 million in total building permit valuation in 2019 and is at $205,927,570 through August 2020. The City Council proclaimed October 1-7, 2020 Lakeville Manufacturers Week. This annual proclamation coincide s with Minnesota Manufacturing Week and celebrates the City’s manufacturing businesses that provide a significant number of jobs and tax base to our community. A manufacturing appreciation event is scheduled for October 9th. Adjourn Meeting adjourned at 5:25 p.m. Respectively submitted by: Kati Bachmayer, Economic Development Coordinator 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.