6.1. SR 04-19-2004
Item # 6.1.
MEMORANDUM
TO:
FROM:
Mayor and City Council
Heidi Steinmetz, Assistant Director of Economic Development ~ S
DATE:
April 19,2004
SUBJECT:
Consider Arrow Building Center Redevelopment and Street
Vacation Concept
Attachments
. HRA Staff Report dated April 5, 2004
. Aerial Photo of Redevelopment Area
. Preliminary Site Plan - Arrow Building Center Redevelopment
Background
At its April 5, 2004 meeting, the HRA reviewed the Arrow Building Center redevelopment
concept for the construction of two new facilities; a 6,400 square foot office/ showroom
building and a 12,840 square foot warehouse building located at the intersection of King Ave
and State Street, north of Highway 10 and the railroad. The concept includes the removal of
the existing Eagles Club building, the former NAPA building, Arrow Building Center office
building and two warehouse buildings. The "x" on the attached aerial photo indicates the
building previously destroyed by a fire.
The HRA reviewed Arrow Building Center's preliminary request for Tax Rebate Financing
(fRF) to assist with the demolition and asbestos removal for the project. The HRA's
consensus is that Arrow Building Center proceed with staff in completion of the TRF
consideration process. Staff anticipates that the HRA, at its May 3, 2004 meeting, will
consider the completed TRF application and a recommendation to Council. Staff anticipates
that the Council hold a public hearing on May 17,2004 to consider granting final TRF
approval.
It was the consensus of the HRA to review and identify priority redevelopment areas, needs,
goals and objectives for any areas north of Highway 10 downtown at a future time rather
than delaying the project.
Arrow Building Center is working with John Weicht & Associates on the redevelopment
Consider Arrow Building Center Redevelopment and Street Vacation Concept
April 19, 2004 City Council Meeting
Page 2 of 2
plan and construction. A representative from John Weicht's office will be present at the
Council meeting to answer questions.
Issue
The attached preliminary site plan indicates that the project may include vacating portions of
King Ave and State Street (Railroad Drive) as a private drive rather than public streets. Staff
requests that the City Council review and provide feedback on the redevelopment and Street
Vacation concept. The following are issues to consider regarding the requested Street
Vacation:
. What utilities are located beneath King Ave. and State Street (City utilities, gas,
electric, cable, etc.)?
. Who will maintain State Street if vacated to J ackson Ave.?
. What is the plan for fire and emergency vehicle access if the Street Vacation occurs?
. What is the drainage plan for the project?
The City Council is the only body required to hold a public hearing and consider the Street
Vacation request.
MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Catherine Mehelich, Director of Economic Developmentfl2
DATE: April 5, 2004
SUBJECT: Consider Arrow Building Center Redevelopment Concept
Attachments
. Aerial of redevelopment area
. Preliminary site plan - Arrow Building Center Redevelopment
Redevelopment Concept
Staff has received a concept plan from Arrow Building Center for the redevelopment of its
facilities and operations located at the intersection of King Ave and State Street, north of
Highway 10 and the railroad. The redevelopment concept includes the existing Eagles Club
building, the former NAPA building, Arrow Building Center office building and two
warehouse buildings.
Arrow Building Center proposes to construct two new facilities; a 6,400 square foot
office/showroom building and a 12,840 square foot warehouse building. In addition the
project may include vacating a portion of King Ave and State Street (Railroad Drive) as a
private drive rather than a public street. The new construction cost of the 2 buildings is
estimated to be $1 million ($52/ sf), not including acquisition and demolition.
Arrow Building Center is working with John Weicht & Associates on the redevelopment
plan and construction. John Weicht will be present at the HRA meeting to discuss the
redevelopment concept.
Financing Request
In order to offset some of the costs of the redevelopment project, Arrow Building Center
has verbally requested Tax Rebate Financing (abatement) from the City. Mr. Weicht
estimates the cost of acquiring the Eagles Club building and the former NAPA building at
$400,000. The cost of demolition and asbestos removal for the 5 buildings is estimated to
be $100,000. Arrow Building Center is requesting the City's, and potentially Sherburne
County's, TRF assistance toward the cost of demolition. In addition Arrow Building Center
Consider Arrow Building Center Redevelopment Concept
April 5, 2004 HRA Meeting
Page 2 of 2
continues to consider acquisition and relocation to a vacated lumberyard in Becker or
relocation and new construction elsewhere.
Issues to Consider
There are several issues for the HRA to consider with regard to this redevelopment concept,
including:
. The HRA has identified the area south of Highway 10 and north of the Nlississippi
River a priority downtown redevelopment area.
. The HRA has not had an opportunity to review and identify priority redevelopment
areas, needs, goals and objectives for any areas north of Highway 10 downtown.
. Several adjacent properties, including Martie's Farm Service and the former Hunts Farm
& Feed elevator, have been improved with private reinvestment by the owners.
. According to the City's policies redevelopment of commercial areas is an eligible use of
Tax Rebate Financing and Tax Increment Financing. The project would be required to
meet statutory regulations and city policy requirements, including the "but for" test.
Staff is not requesting the HRA's action on this issue until the May HRA meeting.
However, staff requests the HRA's feedback on any issues for staff to research and respond
to for the May meeting.
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