6.19. SR 10-20-2003Item # 6.19
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
Mayor and City Council
Michele McPhers~0irector of Planning
October 20, 2003
Consider Offer for Emporium Site
Attachment
· Location Map
· October 14, 2003 Letter from John Gries - Gries and Lenhardt, PPLP
Request
We received the attached letter from John Gries, representing Jerry and Diane Gobel,
owners of the Ron's Foods property, indicating an offer for the Emporium site under City
ownership, located at the northeast corner of Highway 169 and Main Street. Mr. Giles'
letter indicates that an appraiser was retained and determined that the Emporium property is
valued at $5.00 per square foot. The Gobels are offering to purchase the Emporium site
from the City at this price. The letter continues to outline other issues regarding the desire
on the part of the City to include the two sites in a future redevelopment project, the
agreement with the Salvation Army to lease the building, and who would be responsible for
removing the building from the property, should the City elect to accept the offering price.
It is staff's opinion that the offer of $5.00 per square foot is substantially lower than the
market, considering the sale price for the Conoco site was $11.00 per square foot, and the
Post Office paid $6.61 per square foot for property in Mulvany Point one-quarter mile to the
east. In addition, there is the unknown of the Highway 169 corridor plans developed by
MnDOT.
Recommendation
Based on these facts, staff would recommend the Council decline the purchase offer from
the Gobels and continue to utilize the Emporium site for wellness and recreation programs
as appropriate.
S:\PLANNINGMVlichele McPherson\CCREPRTS\10-20 cc Emporium.doc
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Location Map
Case Number. THE GOBEL OFFER
GRI .-S & LENHARDT, P]L.L.P.
ATTORNEYS AND COUNSELORS AT LAW
1272S - 43rd Street NE ' Suite 201 - St, Michael, Minnesota S5376
Tel: 763-497-3099 - Fax: 763-497-3639
John R. Gries
David J. Lenhardt
Oregory J. Van H~st
Jill M. Pressell~r
Patrick W. Miehcnfelder
Nathan J. Allen
October 14, 2003
Ms. Michele McPherson
Office of Planning and Zoning
City of Elk River
13065 Orono Parkway
PO Box 490
Elk River, MN 55330
RE:
My Clients: Jerry and Diane Gobel/City Property at the Intersection of Main
and 160 in the City of Elk River
Dear Ms. McPherson:
As you are aware, this office represents Jerry and Diane Gobel, the owners of the
former Ron's Foods property at 321 Baldwin in the City of EIk River. I have also informed
you and the City Attorney that my client is interested in purchasing the city property (the
former liquor store site) lying to the south of the Gobel property at the intersection of 169 and
Main Street. Initially my clients' interest in that property related to helping resolve the
damages issue relative to the zoning dispute on the Ron's Food site.
Based on the legal description which you provided to me, the city parcel contains
approximately .79 of an acre. The Gobels have had the property appraised by Mr. Jack Prill.
I do not have his written report yet. However, Mr. Prill has told me that he has appraised the
property at $5.00 per square foot. The significant issues that affected the appraised value
included its location, on the one hand, its relatively small size and limited access, on the other
hand. The Gobels are proposing to purchase the city property from the city at the $5.00 per
square foot appraised value.
There are some issues to be resolved. One is the ultimate use of both the city parcel
and the 321 Baldwin parcel. The Gobels are aware that it is the City's desire that these
properties be part of a larger development that would include other surrounding properties.
That is also the Gobels' long term goal. For the present, as the City is aware, the Gobels are
Michelle McPherson
October 14, 2003
Page 2
proposing to lease the 321 Baldwin site to the Salvation Army. Gobels have, in addition,
made an offer on one of the neighboring houses (to the east) and would intend to attempt to
purchase other of those houses as they become available or by buyer initiated offers if it is
feasible. The purchase of the city parcel is part of that plan.
Another issue relates to the building that is presently on the city parcel. It is
understood that the Gobel offer does not include any value for the building. It is understood
that the building will need to be razed at some point. There is a question as to whether the
costs of razing that building would be on the city or on Gobel. From Gobel's standpoint that
would depend on what use Gobels can make of the city parcel during the next five years. If
the Gobels are able to make some use of that property pending its fun. her development, then
they would consider paying the costs of razing the building. One possible use for the city
property for the next five years would be to lease it to the Salvation Army for additional
parking.
Pursuant to our telephone conversation, I would ask that you present this proposal to
the City. If the City acts favorably to the proposal I would put it in a more formal document
or purchase agreement. Meanwhile, if you have any questions regarding this letter, let me
know. Otherwise, I look forward to hearing from you.
JRG/kls
cc: Jerry and Diane Gobel