7.1. HRSR 11-25-2002 Item 7 . 1 .
City of
Elk - .-�
River
MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Catherine Mehelich, Director of Economic Developmen
DATE: November 25, 2002
SUBJECT: Downtown Revitalization Project— Consider Proposal for
Property Redevelopment Eligibility Assessment Services
Attachments
• Staff Letter to Property Owners Regarding Contact by Developer's Broker
• Map indicating TIF Redevelopment Eligibility Assessment Area
• • TIF Property Redevelopment Assessment Proposals—S.E.H. &L.H.B.
Project Update
The HRA entered into a Preliminary Redevelopment Agreement with MetroPlains at its
October 2002 meeting. Staff has been working with MetroPlains on the following activities
in the last month:
• MetroPlains has selected JLG Architects to work on the Elk River project. JLG was
instrumental in the design and rebuilding of downtown Grand Forks after the floods.
• MetroPlains has selected Ken Brooks, KJB Real Estate Services to contact property
owners who may be part of the development concept area. Staff mailed the attached
letter to the property owners notifying them of this contact.
• Attended the Chamber of Commerce November Membership Luncheon and
presentation by MNDOT regarding plans for Hwy 10 and Hwy 169 Corridors.
• Staff is developing a feature on the city's website which would include monthly
updates on the Downtown Revitalization project activities.
• Determining the buildable area in relationship to the Wild&Scenic River boundaries
and requirements.
• Staff has reviewed proposals for TIF property redevelopment eligibility assessments.
TIF Property Redevelopment Assessment
The HRA has previously discussed the consideration of Tax Increment Finance (TIF) to
fund a portion of the redevelopment cost. One of the steps in the process of creating a TIF
redevelopment district is the evaluation of the physical condition of the buildings in the area.
S:\Downtown Revitalization\Memos\11-25-02.doc
Memo to HRA-Downtown Revitalization Project
November 25,2002
Page 2 of 2
Staff distributed request for proposals to three engineering firms for the completion of the
property assessments. Staff received proposals from the following firms:
• S.E.H. (Short Elliott Hendrickson Inc)
• L.H.B. Engineers &Architects
Staff has reviewed the proposals with Ehlers &Associates and the city's TIF attorney,Jim
O'Meara of Briggs &Morgan. The proposals were reviewed based upon the firm's
experience with similar projects,methodology and understanding of the TIF eligibility
requirements, and cost of services.
The area to be inspected is highlighted on the attached map. The condition of the buildings
will help determine the final district boundaries. The area includes approximately 31
buildings and 48 parcels. The inclusion of a particular building does not necessarily mean
that it will be redeveloped. However,inclusion does allow tax increment funds to be used in
the identified area for streetscape,public improvements and facade improvement programs
if sufficient funds are available. The evaluation is in no way related to determining the value
of property for assessment purposes, negotiation of purchase, or request for repair work.
Staff will send a letter to property owners in advance of assessments.
The cost for the TIF assessment services would be paid by establishing a "future TIF
district" account and interfund loan with the HRA. The interfund loan would be repaid by
future TIF revenues generated from the new district. If a TIF district is ultimately not
created or the project does not proceed, the cost would become an expense of the HRA.
S.E.H. estimates the cost to conduct the assessments to be $21,050. The LH.B. proposal
includes a not-to-exceed budget of$33,000.
Requested Action
Staff recommends that the HRA authorize staff to enter into an agreement for TIF Property
Redevelopment Assessment services with S.E.H.
•
1./,
lik''-(*_,
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River
13065 Orono Parkway
Elk River,MN 55330
November 21, 2002
RE: Downtown Revitalization Project
Dear Property Owner:
For the past several years the City of Elk River Housing&Redevelopment Authority (HRA) has
been reviewing the need to revitalize and redevelop portions of the downtown area. The area under
study includes your property as well as other properties shown in the enclosed map.
The HRA's planning process has included developing a concept plan for the redevelopment,
refining that concept and soliciting proposals from developers. At its August 26, 2002 meeting the
• HRA selected MetroPlains Development for which to work with the city to identify issues that must
be addressed prior to the final development agreement. The enclosed Downtown Revitalization
Q&A Newsletter responds to some of the recent questions about the project.
In the event that your property may be part of the developer's concept, MetroPlains Development
has authorized that Ken Brooks of KJB Real Estate Services contact you to discuss acquisition and
relocation options.
Please feel free to contact me at (763) 441-4905 if you have any questions.
Sincerely,
iii
„i���l,� �t%
Catherine Mehelich
Director of Economic Development
Enclosures:
• Map Indicating Developer's Concept Area
• Downtown Revitalization Q &A Newsletter, October 2002
CC: HRA Commission
IPMayor and City Council
Phone:763.441.7420
Fax:763.441.7425
www.ci.elk-river.mn.us
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LHB Engineers&Architects
250 Third Avenue North, Suite 450 igV V 4 2002
T T m Minneapolis,MN 55401
612 338-2029
j�jlJ Fax 612 338-2088
www.LHBcorp.com
November 11, 2002
Catherine Mehelich
Director of Economic Development
City of Elk River
13065 Orono Parkway
Elk River,Minnesota 55330
PROPOSAL FOR PROPERTY REDEVELOPMENT ELIGIBILITY ASSESSMENTS
Thank you for the opportunity to submit a proposal for services for the City of Elk River Property
Redevelopment Eligibility Assessments. LHB is a full-service architecture and engineering firm
with 130 employees in our Minneapolis and Duluth offices.
Our Community Design team has extensive experience working with local governments on their
planning, design, architectural and engineering needs. Having been personally involved as a City
Council President, I understand how cities function and the importance of maintaining the support
of the city council and community throughout the process.
LHB has significant experience with a variety of inspection and facility assessment projects,
including:
• City of Mound TIF District"1-2"inspection services
• City of Osseo TIF District inspection services
• Minnesota State Colleges and Universities system facility assessments
• State of Minnesota facility assessments
• Property Condition assessments for the St. Paul Department of Planning and Economic
Development(Franklin/Emerald Neighborhood)
• Condition survey of every property along the I-394 corridor for the Minnesota Department of
Transportation,prior to and during the construction of I-394
• ADA compliance assessments for the State of Minnesota(82 buildings in 1992)
SUMMARY OF PROCESS
A. Survey the proposed TIF district to determine if it meets the "Coverage Test":
1. To meet the coverage test,parcels consisting of 70 percent of the area of the district
must be"occupied"by buildings, streets,utilities, or paved or gravel parking lots.
2. A parcel is not considered"occupied"unless at least 15%of its total area contains
improvements.
Task performed by: LHB with City Staff Assistance
B. Make the following attempts to inspect the interior of each building in the district:
1. Obtain property owner's consent for inspection by assisting the City in writing a
letter of request(mailed by City)to building owners,and as needed:
Duluth,MN Minneapolis,MN
Proposal for City of Elk River—Property Redevelopment Eligibility Assessments
Page 2 of 4
November 11, 2002
a. make at least three telephone requests during varying times of the day and
week, and if letter and telephone requests are not successful,
b. make at least two attempts to personally visit with the owner at times the
owner is likely to be present.
c. Document all attempts to contact the property owners.
2. Document all property conditions relative to Minnesota Statutes Section 469.174
Subdivision 10.
Task completed by:LHB
C. Determine replacement cost for each building:
1. Replacement cost is the cost of constructing a new structure of the same square
footage and type on the site.
2. A base cost will be calculated by establishing the building class,type and
construction quality.
3. Identify amenities,which increase the value of the building over the standard
construction quality level.
4. The base cost and cost of amenities will be totaled to determine the replacement
cost for the property.
Task completed by: LHB
• D. Determine the existing condition of each building:
1. "More than 50 percent of the buildings,not including outbuildings,must be
structurally substandard to a degree requiring substantial renovation or clearance."
2. "Structurally substandard shall mean containing defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light and ventilation,
fire protection including adequate egress, layout and condition of interior
partitions, or similar factors,which defects or deficiencies are of sufficient total
significance to justify substantial renovation or clearance."
Task completed by: LHB
E. Determine Code Deficiencies in each building:
1. Determine technical conditions,which are not in compliance with current building
code applicable to new buildings.
2. Determine costs to correct identified deficiencies.
3. Compare cost of deficiency corrections to replacement value of building.
4. A building is not structurally substandard if it is in compliance with building code
applicable to new buildings or could be modified to satisfy the building code at a
cost of less than 15 percent of replacement cost.
Task completed by: LHB
F. Prepare a final report outlining findings:
1. Prepare a tabulated spreadsheet of the entire proposed district properties
111 conditions.
2. Prepare a written narrative analysis of the redevelopment district describing why
the property within the district does or does not meet the criteria as"structurally
substandard"as established in Minnesota Statutes Section 469.174, subdivision 10.
Proposal for City of Elk River—Property Redevelopment Eligibility Assessments
Page 3 of 4
November 11,2002
3. This analysis will take into consideration factors independent of the individual
structure inspections, and shall include defects in the overall urban environment.
4. Deliver final reports to City staff and present findings to City Council or Plan
Commission if required.
Task completed by: LHB
REFERENCES
Thomas Terry
Economic Development Director
City of Norwood Young America,MN
952/467-1806
Stephen J. Bubul,Kennedy&Graves
Legal Council
City of Mound,MN
612/337-9300
Mary L. Ippel,Briggs and Morgan
Legal Council
• City of Osseo,MN
651/223-6620
FIRM AND TEAM PROFILES/SAMPLE REPORT
We have enclosed information about our firm and resumes for Michael Fischer, Project
Principal, and Jerry Putnam, Project Manager/Architect/Inspector, outlining their relevant
experience. In addition, we have enclosed a sample inspection report and related forms
used during our inspection process.
TERMS
We propose using an AIA Document B727 (Standard Form of Agreement Between Owner
and Architect for Special Services). The contract will include "limit of liability" language
(equal to our fee or$50,000 maximum,whichever is greater). In addition,the contract will
contain language negotiated with the city indicating that LHB and the City, acting through
the City's legal representative, will, to the fullest reasonable extent, cooperate and
coordinate efforts in preparing responses to any third party challenges to the inspections.
SCHEDULE
Upon acceptance of this proposal,we are able to begin inspecting properties on November
18, 2002. The completion date for the project will be determined by the assistance we
• receive from city staff and cooperation from property owners. We anticipate it will require
between 45 and 90 days to complete this work.
Proposal for City of Elk River—Property Redevelopment Eligibility Assessments
Page 4 of 4
November 11,2002
I/
NEXT STEP
Upon acceptance of this proposal, we will draft an AIA Owner/Architect agreement for
your review.
COST ESTIMATE(FEES)
We propose to work on an hourly basis with the following key staff:
Project Principal,Michael Fischer(project oversight,contracts) $130/hour
Project Manager/Architect/Inspector,Jerry Putnam $100/hour
Project Administrator(Property owner contacts,documentation) $50/hour
Technician Assistance(if necessary) $75/hour
We will work on an hourly basis with a not-to-exceed fee budget of $33,000 plus
reimbursable expenses. Using this fee arrangement, the City will benefit financially by
assisting LHB with data collection. For example, we are assuming our staff will assist with
writing a letter to property owners and City Staff will mail the letters. We also assume
LHB staff will contact the property owners directly, but the City could assume this task to
reduce LHB's time on the project.
Thank you for the opportunity to submit a proposal for your project. Please contact me at (612)
752-6920 if you have any questions.
LHB ENGINEERS &ARCHITECTS
Mk terer_L2 k5„ •
MICHAEL A. FISCHER,AIA
DIRECTOR,COMMUNITY DESIGN GROUP
Attachments
c: LHB 2002 Proposal File
L:\MARKETING\Proposal Letters\2002\00000LT111102City of Elk River TIF Proposal.doc
•
• Firm LHB's Community Design Team
Profile
LHB is a full-service design firm. Since 196.6, our
corporation has focused its talents and expertise on
providing creative,practical and cost-effective design
solutions for our clients. With a staff of 130, we
provide multi-discipline services from our offices in
Duluth and Minneapolis. u;
LHB's Community Design Team specializes in
designing for local communities and governments.
The services we provide include site planning,urban
planning,master planning,land surveying,park design,
.
trail design, roadway design, municipal engineering,
landscape design, bridges, stormwater runoff,
erosion control. = ;V
tor ts.
We have designed new and renovated assisted living,
fire and police stations,city halls,community centers,
libraries, recreation centers, and multi-purpose
buildings.
Our team helps clients develop, design, fund and
maintain their infrastructure,buildings and open
spaces,striking a balance between aesthetics,economy
and the environment.
What sets LHB's design services apart from other
firms is the commitment of our staff to sustainable � i
design, the production of quality documents and
design excellence. Sustainable design means designing
projects that use energy and resources efficiently while
providing high levels of indoor air quality. A
commitment to the production of quality documents
acknowledges that a great idea can never be fully � � �."
realized if the documents that describe the idea are not
clear,concise or accurate.
A commitment to design excellence means that we
work with all parties involved to gain a true
understanding of how they intend to use a space. We w
begin each design process with a visionary charrette
aimed at identifying the components of the emerging For more information,please
project and prioritizing them from abstract to concrete
and from "wish-list" to budget-based reality. contact:
11113
Michael A.Fischer
• n Our goal is to "create environments that are as Community Design Director
satisfying to the soul as they are kind to the (612) 338 2029
(612) 338-2088 Fax
environment."
mike.fischer@LHBcorp.com
* Team Michael A. Fischer,MA -Project Principal
Profile
Michael has sixteen years of architectural experience as project principal, project
manager, project designer and project architect on municipal planning, educational,
commercial and governmental projects. He recently returned to LHB's Minneapolis
office to lead the Community Design Group, after completing a two-year Bush
Fellowship at the Massachusetts Institute of Technology, earning Masters Degrees in
City Planning and Real Estate Development.
Prior to attending MIT, Michael was an active member of the Duluth/Superior
community. He served on over 30 committees, boards and community task forces
between 1991 and 1996, including a term as City Council President and Chair of the
Duluth/Superior Metropolitan Planning organization. During that time, he also
managed and designed several award-winning architectural projects. Michael was one
of four architects in the country to receive the "Young Architects Citation" from the
American Institute of Architects in 1997.
Registration
Licensed Architect in Minnesota and Wisconsin
Affiliations
American Institute of Architects (AIA)
American Planning Association(APA)
Urban Land Institute (ULI)
Minnesota Design Team
Awards
Hugh Hampton Young Fellow
Bush Foundation Leadership Fellow
Recipient of 1996 AIA Minnesota Young Architects Citation
Recipient of 1997 National AIA Young Architects Citation
Education
Bachelor of Architecture,North Dakota State University
Master of City Planning,Master of Science in Real Estate Development and Certificate of
Urban Design,Massachusetts Institute of Technology(MIT)
Relevant Experience
• City of Mound TIF Inspection Services;Mound,MN
• City of Osseo TIF Inspection Services;Osseo,MN
• City of Superior Administrative Office Planning Study;Superior,WI
• Tower Avenue Downtown Revitalization;Superior,WI
• Franklin Emerald Planning Study;St.Paul,MN
• Norwood Young America Public Facilities Plan,Norwood Young America, MN
• Superior Public Library, Superior,WI;Barker's Island Master Plan,Superior,WI
LIE • Olivia Downtown Redevelopment; Olivia, MN� • Superior City Hall,Project Manager;Superior,WI
• Barker's Island Master Plan;Superior,WI
• Cloquet Downtown Revitalization Plan;Cloquet,MN
• Old Downtown Duluth Restoration Plan;Duluth,MN
Team Jerry A. Putnam, AM, CSI, CCS-Project Manager/Inspector
Profile
Jerry has twenty-one years of experience in all phases of the architectural process from
pre-design through construction administration including investigations,building condition
surveys,code reviews,estimating and specification writing. His work is considerable with
all major building types including educational,commercial and government facilities.Jerry
is the Director of Quality Assurance for the Minneapolis office.His current responsibilities
include LHB specification management,training LHB staff on specification writing,quality
assurance,product research,technical and code analysis,and consultant coordination.
Jerry is an active member in the Construction Specification Institute (CSI). He has been
recognized by CSI for his dedication and leadership in the construction industry. In addition
to being past president of the largest CSI chapter in the United States,he serves on many
local,regional and national committees,and gave presentations at many specification writing
classes and workshops,including currently being a member of the National Specifications
Competition Committee.
Registration
Licensed Architect in Minnesota and Wisconsin
Certification
Certified Construction Specifier(CCS)-Construction Specification Institute
Affiliations
American Institute of Architects
Construction Specification Institute
International Conference of Building Officials
National Fire Protection Association
National Trust for Historic Preservation
Education
Bachelor of Architecture,University of Minnesota
Bachelor of Arts, Major Architecture,University of Minnesota
Relevant Project Experience
• Proposed TIF District I &II; Mound,MN
• City of Osseo TIF Inspection Services;Osseo,MN
• Building Assessment -Willkommen Pavilion; Norwood Young America, MN
• Building Assessment-City Pavillion;Cologne,MN
• Biological Sciences Building Life Safety Improvement,University of Minnesota;St Paul,MN
• YMCA Camp Miller,Mitchell Dining/Conference Hall; Sturgeon Lake, MN
• Blaisdell YMCA;Minneapolis,MN
• Duluth Entertainment and Convention Center(DECC);Duluth,MN
• Memorial Hall Racquetball Court Renovation;Winona Star University;Winona,MN
T T • YMCA Remodeling; Duluth, MN
113) • Physical Education and Recreational Sports Complex Addition and Remodeling;
University of Minnesota;Duluth, MN
• Washington Junior High Community Center;Duluth,MN
• International Wolf Center,Ely,MN
SAMPLE TIF INSPECTIONS DOCUMENTS
Provided by
LHB Engineers & Architects
LHB
November 13, 2002
Item 1 Report of Inspection Procedures and Results Page 1-11
• This is the main body of the document outlining the
inspection procedures and final results obtained.
Item 2 Property Condition Assessment Summary Page 12
■ This worksheet summarizes all inspected properties within
the proposed redevelopment district
Item 3 Building Condition Analysis Page 13
• This summary is computed for every building that meets
the required deficiency thresholds.
Item 4 Property Inspection Form Page 14-18
• This is the form utilized in the field by our property
inspector.
Item 5 Cost Estimating Worksheet Page 19-21
• This sample represents 3 pages out of a 6-page set, used by
our property inspector to determine costs for fixing code or
condition deficiencies.
• REPORT OF
INSPECTION PROCEDURES AND RESULTS
FOR
DETERMINING TAX INCREMENT FINANCING DISTRICT
ELIGIBILITY
Anywhere,Minnesota
LHB Project No. 02600.10
Prepared For
Anywhere,Minnesota
November 13, 2002
•
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Prepared by
1,11B
LHB Engineers &Architects
250 Third Avenue North, Suite 450
Minneapolis, Minnesota 55401
•
PURPOSE OF EVALUATION
• LHB was hired by the City of Anywhere, Minnesota to inspect and evaluate the
properties within the proposed Tax Increment Financing Redevelopment District. The
possible redevelopment area includes properties in seven different blocks bounded by
two major corridors;Anywhere Road to the South and Somewhere Avenue to the East
(Diagram 1). The purpose of our work was to determine whether the tests for tax
increment eligibility, as required under Minnesota Statute, could be met.
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Diagram 1
CONCLUSION
After inspecting and evaluating the properties within this proposed Redevelopment
District and applying current statutory criteria, it is our professional opinion that this
proposed District should be eligible for Tax Increment Financing District Funding.
We have made this conclusion after following the State mandated process and eligibility
criteria as outlined in Minnesota Statute Section 469.174. The remainder of this report
describes our process and findings in detail.
•
Page 2
I
1. SCOPE OF WORK
• The proposed district consists of 36 property parcels comprised of the following types of
improvements: 6 single family residences, 4 apartment structures, 1 church, and 16
commercial or industrial buildings. There are 9 parcels that are vacant or have parking
improvements only.
2. INSPECTIONS
Of the 27 buildings in the proposed district, 21 building interiors were inspected (78%)
and 6 exterior(curbside) inspections were conducted.
3. PROCEDURAL REQUIREMENTS
The properties were inspected and evaluated in accordance with the following
requirements under Minnesota Statute Section 469.174, Subdivision 10, clause(c) which
states:
Interior Inspection—"The municipality may not make such determination [that the
building is structurally substandard] without an interior inspection of the property..."
Exterior Inspection and Other Means—"An interior inspection of the property is not
required, if the municipality finds that(1)the municipality or authority is unable to gain
access to the property after using its best efforts to obtain permission from the party that
owns or controls the property; and(2)the evidence otherwise supports a reasonable
conclusion that the building is structurally substandard."
Documentation—"Written documentation of the findings and reasons why an interior
inspection was not conducted must be made and retained under section 469.175,
subdivision 3, clause(1)."
4. PROCEDURES FOLLOWED
The City of Anywhere sent letters to all property owners and tenants located in the
district requesting that an interior inspection and evaluation be made of their property.
An interior inspection and evaluation was scheduled after a property owner consented to
the request.
An exterior inspection and evaluation was made of the property where either the owner
responded and refused interior access to their property or the owner did not respond to
our contacts. The type of inspection conducted at each property is noted on the attached
summary report.
Twenty-one property owners consented to an interior inspection, four refused an
inspection and two building owners could not be contacted by letter, a minimum of three
phone calls (day and night calls) and a site visit. Written documentation is on file
showing evidence of attempts to contact property owners.
•
Page 3
5. QUALIFICATION REQUIREMENTS
• The properties were inspected and evaluated to determine whether the qualification tests
for tax increment eligibility for a redevelopment district,required under the following
Minnesota Statutes, could be met.
Minnesota Statute Section 469.174, Subdivision 10, clause(a) (1)requires two tests for
occupied parcels:
A. Coverage Test—"parcels consisting of 70 percent of the area of the district
are occupied by buildings, streets, utilities, or paved or gravel parking lots"
The coverage required by the parcel to be considered occupied is defined
under Minnesota Statute Section 469.174, Subdivision 10, clause(e) which
states: "For purposes of this subdivision, a parcel is not occupied by buildings,
streets,utilities, or paved or gravel parking lots unless 15 percent of the area
of the parcel contains building, streets,utilities, or paved or gravel parking
lots."
B. Condition of Buildings Test—"and more than 50 percent of the buildings,
not including outbuildings, are structurally substandard to a degree requiring
substantial renovation or clearance;"
Structurally substandard is defined under Minnesota Statute Section 469.174,
Subdivision 10, clause(b)which states: "For purposes of this subdivision,
• `structurally substandard' shall mean containing defects in structural elements
or a combination of deficiencies in essential utilities and facilities, light and
ventilation, fire protection including adequate egress, layout and condition of
interior partitions,or similar factors, which defects or deficiencies are of
sufficient total significance to justify substantial renovation or clearance."
Substantially substandard is further defined in the statute under Subdivision
10, clause(c)which states:
"A building is not structurally substandard if it is in compliance with the
building code applicable to new buildings or could be modified to satisfy the
building code at a cost of less than 15 percent of the cost of constructing a
new structure of the same square footage and type on the site. The
municipality may find that a building is not disqualified as structurally
substandard under the preceding sentence on the basis of reasonably available
evidence, such as the size, type, and age of the building, the average cost of
plumbing, electrical, or structural repairs, or other similar reliable evidence."
"Items of evidence that support such a conclusion [that the building is
structurally substandard] include recent fire or police inspections, on-site
property appraisals or housing inspections, exterior evidence of deterioration,
or other similar reliable evidence."
Page 4
6. FINDINGS
• A. Coverage Test
1. The total square foot area of each property parcel was obtained from county
records, city records and site verification.
2. The total square foot area of buildings, streets,utilities,paved or gravel parking
lots on each property parcel was obtained from City and County records, and
actual field measurements.
3. The percentage of coverage of each property parcel was computed to determine
if the 15%requirement was met.
4. The total area of all qualifying property parcels was compared to the total area
of all parcels to determine if the 70%requirement was met.
Finding:
34 of the 36 parcels met the coverage test with a 95 percent area coverage. This
exceeds the 70 percent area coverage requirement for the proposed District.
B. Condition of Building Test
1. Replacement cost
The first step in evaluating a building is to deter ine its replacement cost.
This is the cost of constructing a new structure of the same square footage
and type on site. R. S. Means Cost Square Costs Data for 2002, factored
for the Twin Cities metro area,was used as the nationally accepted
standard for replacement cost calculations.
A base cost was calculated by first establishing building class,building
type, and construction quality level to obtain the appropriate Means cost
per square foot and multiplying it times the building square footage. The
quality of existing finishes and amenities were considered to determine if
we would use the low,medium or high range for average square foot
costs.
2. Code Deficiencies
Code deficiencies are those technical conditions which are not in
compliance with current building codes applicable to new buildings.
State statutes specifically state that a building cannot be considered
substandard if its code deficiencies are not at least 15 percent of the
replacement cost of the building. As a result, our first criteria was to
determine the extent of code deficiencies on each building.
The evaluation was made by reviewing all available information (from
city records) and making interior and/or exterior inspections of the
buildings. We utilized the following building codes depending on the type
of building inspected:
•
Page 5
• a. 1998 Minnesota State Building Code
b. 2002 Minnesota Energy Code
c. 1997 Uniform Building Code
d. 1992 One and two Family Dwelling Code
After identifying the code deficiencies in each building, we used R.S.
Means Cost Data for 2002 to determine the cost of correcting the
identified deficiencies. We were than able to compare the correction costs
with the replacement cost of each building to determine if it met the
required 15 percent threshold.
Finding:
19 of the 27 buildings (70 percent)had code deficiencies exceeding the 15 percent
threshold required by State Statute.
3. System Condition Deficiencies
System condition deficiencies are a measurement of defects or substantial
deterioration in site elements, structure, exterior envelope,mechanical and
electrical components, fire protection and emergency systems (only items
0 not covered in the code deficiencies)interior partitions, ceilings, floors
and doors.
The evaluation was made by reviewing all available information(from
. city records) and making interior and/or exterior inspections of the
buildings.
We only identified deficiencies that were visible to our inspector. We did
not consider the amount of"service life"used up for a particular
component unless it was an obvious part of that component's deficiencies.
p p p
After identifying the system condition deficiencies in each building, we
used R.S. Means Cost Data for 2002 to determine the cost of correcting
the identified condition deficiencies.
We added the system condition deficiencies repair costs to the code
deficiencies repair costs to arrive at a"Total Deficiencies Cost". We
divided this number into the total replacement cost for each building to
determine a percentage of total deficiencies. Total deficiencies per
building for this District ranged from .3 percent to 47.2 percent. Total
deficiencies for buildings that meet the minimum code deficiency
threshold ranged from 18.4 percent to 47.2 percent.
•
Page 6
The State of Minnesota is clear about the minimum threshold of code
deficiencies that must be met in order to consider a building substandard.
After meeting the minimum code deficiency threshold, the Statutes state
that defects or deficiencies should be of sufficient total significance to
justify substantial renovation or clearance." Based on this definition, we
re-evaluated each of the 19 buildings that met the code deficiency
threshold to determine if the total deficiencies warranted "substantial
renovation or clearance". After this re-evaluation, we removed three of
the buildings from the substandard list, lowering the percent of
substandard buildings from 70 percent to 59.3 percent. These were
typically buildings that had substantial code issues (not life threatening),
but had solid structures and recent upgrades to finishes or exterior
envelopes, making it economically possible to renovate.
It should be noted that there were two buildings in the District which in
our opinion,were substandard,but did not meet the minimum code
deficiency threshold. An example of this is the City's Public Works cold
storage facility(Figure 1). This building is a simple pole barn which
would easily meet the definition of substandard(29.2 percent total
deficiencies), except because of its simple nature and use,has only 4.8
percent in code deficiencies,making it ineligible to be defined as
substandard.
5 �
Figure 1
Finding:
16 of the 27 buildings (59.3 percent) are substandard according to the statutory criteria
for Tax Increment Redevelopment Districts.
Page 7
7. CONDITION SUMMARY FOR PROPOSED REDEVELOPMENT DISTRICT
• A. Distribution of substandard structures
Much of this report has focused on the condition of individual structures as
they relate to requirements identified by State Statutes. It is also important to
look at the distribution of substandard structures and how they impact the
overall district.
The substandard structures are evenly distributed throughout the proposed
district, with five out of seven blocks having at least one substandard building.
The two blocks without a substandard building have only one structure on the
block.
B. Summary of the Proposed Redevelopment District Overall Condition
This proposed redevelopment district is uniquely located at the intersection of
Somewhere Avenue and Anywhere Road. These corridors link Anywhere
with several major transportation corridors including Highways 400, 800, and
82 (Figure 2).
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•
Page 8
The City has invested significant effort to maintain a traditional downtown
IIIIretail area(Figure 3).
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The continued success of this area may be impacted by the adjacent uses
• including the subject area. Extraordinary redevelopment opportunities with
commensurately high redevelopment costs for site preparation and
infrastructure needs result directly from current public policy and community
expectations for the area. In this context,properties within the planning area
are not consistent with current land use and aesthetic standards for the
redevelopment of the area.
Several of the criteria identified in the statutory definition for"blighted area"
are evident in these properties. These include dilapidation, obsolescence,
faulty arrangement and design, excessive land coverage and obsolete layout.
Presence of these various blight criteria in addition to structurally substandard
conditions on many of the buildings in the area provide a strong basis for the
finding that the area should be eligible for Tax Increment Financing District
funding.
The most obvious criteria resulting in conditions of blight related to these
properties relates to faulty arrangement and design. Commercial and
industrial buildings are interspersed with single-family housing,multi-family
housing and the adjacent Anywhere Avenue retail area without appropriate
buffering between uses (Figure 4).
•
Page 9
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Noise, traffic and lighting from the industrial uses(bus garages, repair
facilities, storage buildings) impair the residential and retail environment
(Figure 5).
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Figure 5
In addition the public infrastructure(streets, curbs, gutters, sidewalks) is
failing due in part to the industrial use.
The layout of the buildings is generally disorganized and not conducive to the
efficient use of parking. Street access to building sites is poorly delineated
•
Page 10
and poses traffic safety concerns. Streets are inadequately designed in width
and construction for industrial use.
Overhead power lines and old wooden power poles are prevalent throughout
the area. The district is in apparent need of infrastructure enhancements that
could include the burying of power and enhanced delivery of technology to
local property owners.
Finding:
Based on our experience and our understanding of Minnesota Statutes,this area is an
ideal candidate for a Tax Increment Financing Redevelopment District.
•
8. EVALUATION TEAM
Michael A. Fischer, AIA—Principal, TIF Analyst
Jerry Putnam, AIA—Inspector
Shannon Diamond—Inspection and Data Coordinator
Attachment—Property Condition Assessment spreadsheet
Code/Condition deficiency report
O:\MAF\TIF Conference\Generic TIF Final Report.doc
•
Page 11
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ANYWHERE,MINNESOTA TIF DISTRICT
CODE/CONDITION DEFICIENCY/CONTEXT ANALYSIS
November 7,2002
TIF Code No. 12
Description of Condition Deficiencies
- Concrete sidewalks in poor condition.
- Front stair/stoop in poor condition.
- Joints in foundation walls need repointing.
- Foundation walls require waterproofing.
- Exterior wood trim needs painting.
- Bedrooms unsafe without proper window exits.
- Improper ventilation of bathrooms and kitchens.
- Basement seems extremely damp.
- Interior stairs unsafe with doors located directly at top/bottom without landings.
- Building interior is filled with trash.
- Building requires fumigation.
- All interior floor finishes are in total disrepair.
- All interior walls,ceilings,doors,windows and trim finishes in total disrepair
- All windows in poor condition.
- Kitchen cabinets and countertops are all missing.
Description of Code Deficiencies
• - Egress windows are required in all bedrooms.
- An exhaust fan is required in bathroom.
- An exhaust hood is required in kitchen.
- Sink in kitchen is missing.
- No energy efficient furnace.
- No combustion air for furnace.
- Need sump pump and piping to exterior for drain tile.
- Landing at stair door to second floor not provided.
- Landing at stair door to basement not provided.
Estimated Cost to Correct Code Deficiencies $ 11,331
Estimated Replacement Cost(New Building of same Type& Size) $64,750
Percentage of Replacement Cost for Code Deficiencies 17.49 %
Analysis of Building in Context with Overall District
In addition to the structurally substandard conditions outlined above,there are various conditions of
the property that are not consistent with current land use and aesthetic standards for the overall
district,contributing to the presence(or potential presence)of blight. The obvious conditions are:
- This single family home is interspersed with commercial and industrial properties without
appropriate buffering between.
- The property is quite large for a relatively small single-family home near a more densely
developed commercial district.
- This property does not have onsite parking or a garage, contributing to a traffic hazard on the
street.
•
13
T j]p LHB Engineers&Architects
Property Condition Assessment
Anywhere, MN-TIF District
Inspected By: XXXX Assessment Date: xxxxx
Time of Assessment: 10:30 AM-11:20 AM
PID# XX- XX-XX-XX-XXXX
Type of Assessment: Interior
TIF Map ID# XX
Property Address 1234 Somewhere,MN
Building Name: Office Building
Construction Date: 1950
Major Renovation Dates: 8/19/1988
Site Square Footage 0.417 Acres/18,177 SF
Site Coverage SF Building:3,410 SF Walks/Paths/Parking:14,767 SF approx. Coverage%: 100%
Number of Floors: 3 and 1 respectively(1939 and 1964 buildings)
Replacement Cost $788,000 Substandard Reqm't(15%replacement):$118,200 Deficiencies Total:$385,950
1.Building Summary
A.Construction Type: Fire Proof Heavy Timber Wood Frame Steel Other:
Steel Unprotected Steel Brick Masonry Concrete Masonry
B.Roof Type: Slate Asphalt Built-Up Single-Ply Stucco
C.General Description of the Building:
One Story with basement concrete block masonry building with brick msonry&aluminum storefront on east end.Basement is walk-out on west end.
II.General Requirements
Conditions:
A.Exterior Property Areas Hazards:
• Grading&Drainage: Erosion: None Ponding: None
Pavement/Paving: Sidewalks: OK Walkways: N/A Stairs/Stoops: OK
Driveways: OK Parking: OK Other:
Fences: Retaining Walls: OK Other.
Accessory Buildings: None
B.Exterior Structure Maintenance:
Surface Weatherability: Siding-N: Stucco Damage Windows-N:OK Doors-N: N/A
Siding-S: N/A Windows-S:N/A Doors-S: N/A
Siding-E: Brick @ Sills Windows-E:OK Doors-E: OK
Siding-W: OK Windows-W OK Doors-W: OK
Sealant: Replace All Skylights: N/A
Other. Damaged Stucco Canopy.Rusty N.wall access panels
Structural Members: Beams: N/A Columns: OK Lintels: OK
Foundation Walls: Noted mold in wood paneling at interior base of well west side.
Exterior Walls: Structurally OK-weatherability damage of stucco walls and brick sills
Roofs&Drainage: Inaccessible-Owner noted roof needs replacement,recently temporary fix along south
roof/parapet.Stains from leaks noted on interior of south walls.
Decorative Features: Reveals in stucco very weathered,staining stucco.
Overhangs: Damaged canopy N.E corner.
Extensions: N/A
Deck/Porch/Stair/Balcony(s): N/A
Chimneys/Towers: N/A
Handrails/Guardrails: N/A
Windows/Doors/Skylights: OK
C.Interior Structure Maintenance:
Structural Members: OK
Interior Surfaces: OK
Stairs/Ramps/Balconies: OK
Handrails/Guardrails: OK
Doors: OK
D.Rubbish and Garbage: N/A
E.Extermination: No evidence of infestation noted.
•
14
II.General Requirements
Codes:
A.Accessibility: Parking Access: OK Accessible Route: OK
• Req'd#Spaces: OK Req'd Signage: OK
• Parking Space Size: OK Building Access: West-OK,East-NO
Entrance: Yes Other:
Floors: 1st and Basement-NO
B.Egress: One exit from basement and two exits from 1st floor.
C.Clear to Publicway: Yes
C.Fire Department Access: Yes
D.Other:
III.Light,Ventilation and Occupancy Limitations
Conditions:
A.Light:
Habitable Space Windows: N/A
Common Halls/Stairways: Basement corridor,west stair and 1st floor stair landing/corridor.
Illumination Level: Basement corridor light level too low.Other areas are OK.
Full-time Path: Light switches need to be left on.Place where they can't be tampered with.
Other Space Illumination: N/A
B.Ventilation:
Habitable Spaces: N/A
Bathrooms/Toilet Rooms: Basement restrooms have none.1st floor unisex restroom OK.
Cooking Facilities: Breakroom cooktop has no ventilation.
Process Areas/Equipment: N/A
Clothes Dryer Exhaust: N/A
C.Occupancy Limitations:
Privacy: N/A
Minimum Room Widths: N/A
Minimum Ceiling Heights: OK
Bedroom Requirements: N/A
Area:
Access:
Restroom Access:
Prohibited Uses:
• Other.
Overcrowding: N/A
Sleeping Area:
Combined Spaces:
Efficiency Unit: N/A
Food Preparation: Breakroom food preparation area had sanitary conditions for prep and storage.
D.Other
III.Light,Ventilation and Occupancy Limitations
Codes:
A.Light
Natural Light(1/10 floor area): Most areas artif.Light,except lobbies,banking area,bookkeeping,Pres.Office,and Break
Room.
Light From Public way/courtyard All natural light is to public way or rear yard of parcel.
Artificial Light: .OK,except basement cooridor,mechanical room,and storage rooms.
B.Ventilation:
Natural(1/20 floor area): N/A,mechanically ventilated.
Mechanical:Antiquated system,no fresh-air makeup evident to minimum ASHRAE standards,replace system.
C.Hazards Occupancies: None
D.Residential: N/A
Natural Light(1/10 floor area-10 SF min.):
Natural(1/20 floor area-5 SF min.):
Yards/Courtyards:
Side(3 FT.min.to 2-stry.1 fUstory if higher):
•
•
•
15
IV.Plumbing Facilities and Fixture Requirements
Conditions:
A.Required Facilities:
Dwelling Units:
111 Rooming Houses:
Hotels:
Other Occupancies:
Employee Facilities: Yes,only 1st floor unisex is functional.Basement old and outdated.1 w.c&1 lay ea.
Public Facilities: Same facilites as employee.
Drinking Facilities: None provided
B.Toilet Rooms
Privacy: OK,with lock on door.
Location: OK,on 1st floor.Basement inaccessible.
C.Plumbing Systems/Fixtures
Clearances:OK,except for accessibility.See"Codes"below.
Hazards: N/A
D.Water System Appeared safe and sanitary.
E.Sanitary System City sewer
F.Storm Drainage OK
G.Other:
IV.Plumbing Facilities and Fixture Requirements
Codes:
A.Occupancy: Office
Required Fixtures: 3,410 SF each floor/200 sf per occ.=18 occ.=9 men&9 women
W.C.&Lavatories:1 watercioset and 1 lavatory each sex on each floor.
Drinking Facilities: 1 drinking fountain per floor.
B.Water Closets: Level: Basement •
Acessibility to room: Inaccessible cooridor too narrow,step in floor,and door to rooms,too narrow.
Mens: Womens:
Wateclosets: 1 Waterclosets: 1
Urinals: 0 Lavatories: 1
Lavatories: 1
Drinking Fountains:None D.F.Accessible?: N/A
• Acessibility Mens: Accessibility Womens:
W.C.Grab Bars:NO W.C.Grab Bars: NO Floor area for required turning radius:
W.C.Clearance NO W.C.Clearance NO Mens: NO
Lavatory Height: NO Lavatory Height: NO Womens: NO
Lavatory Clearance: NO Lavatory Clearance: NO
Faucet Control: NO Faucet Control: NO
Towel Dispenser: NO Towel Dispenser: NO
Soap Dispenser: NO Soap Dispenser: NO
Mirror: NO Mirror: NO
Level: 1st Floor
Acessibility to room: One unisex toilet room,door jamb not required 18"on push side of door.
Mens: Womens:
Wateclosets: N/A Waterclosets: 1
Urinals: N/A Lavatories: 1
Lavatories: N/A
Drinking Fountains:None
Acessibility Mens: Accessibility Womens:
W.C.Grab Bars: N/A W.C.Grab Bars: OK Floor area for required turning radius:
W.C.Clearance N/A W.C.Clearance OK Mens: N/A
Lavatory Height: N/A Lavatory Height: OK Womens: YES
Lavatory Clearance: N/A Lavatory Clearance: OK
Faucet Control: N/A Faucet Control: OK
Towel Dispenser: N/A Towel Dispenser: OK
Soap Dispenser: N/A Soap Dispenser: OK
Mirror: N/A Mirror: OK
Other:
• 1 u
16
V.Mechanical and Electrical Requirements
Conditions:
A.Heating Facilities
• Facilities Required: Two forced air furnaces in basement,antiquated,but in working order.
Residential Occ: N/A
Heat Supply: OK,to all areas.
Occupiable Work Spaces: Ok,to all areas.
B.Mechanical Equipment
Mechanical Appliances: Antiquated,not efficient,gas-fired.
Combustible Byproduct Removal: OK
Clearances: OK
Safety Controls: OK
Combustion Air: Not found
Energy Conservation: Not effiicent,should be replaced.
C.Electrical Facilities
Facilities Required: OK
Service: Size seemed appropriate for building size,but older equipment.
Electrical System Hazards: Access to service through mechanical equipment.Ground fault missing in wet areas.
D.Electrical Equipment
Installation: Appeared safely installed,but old.Not sure grounding and sizes of circuits are adequate for today's use.
Receptacles: Ground fault missing in wet areas.
Lights: Basement corridor lights inadeequate in style,lumens and quantity.
E.Elevators N/A
F.Ducts OK
G.Other:
V.Mechanical and Electrical Requirements
Codes:
A.Mechanical: Mechanical equipment not in fire-rated room(1 hour)separated for other areas.Equipment would not meet current codes.
B.Electrical: Access is through mechanical equipment.Equipment wouldn't meet current codes:
• C.Other:
VI.Fire Safety Requirements
Conditions:
A.Means of Egress Building Entry(ies): Two exits required.Two exits to 1st floor but not accessible.Basement has only one exit.
Aisles/Corridors: Basement corridor too long and narow.
Locked Doors: Entry/exit doors do not have panic hardware,just deadbolt and closer.
Emergency Escape: No emergency escape required or present.
Stairs: Only one stair open to both floors and split entry.
B.Fire Resistance Ratings
Rated Assemblies: Doors into stair and basement corridor not rated.Doors into stair landigns not rated.
Corridors: Basement has true corridor.Stasir landings at entry and upper floor have short corrdiors
too.
Exitways/Stairs: Non-rated open stair.
C.Fire Protection Systems
Smoke Detectors: Some,but not all areas.None in mechanical area.
Alarms: None.
Sprinklers:
None.Basement would be required since opening and distance requirements exceeded.
D.Other: Mechanical room is not separated from remainder of basement.Open to end of corridor.
•
17
VI.Fire Safety Requirements
Codes:
A.Egress: Building Entries: #Req'd: 2 Width: OK Acessible: No,split level.
Vestibules: Accessible: West-OK,East-NO Other:
LeveL�_ Stairs: Open Rise: 6 1/2" Run: 11" Width: West-39"East-59"
. Handrails: OK Extensions: NO Landings: OK
Ramps: N/A Slope: Landings: Handrails:
Corridor: Width: Rating:
Level: Basement Stairs: Open Rise: 61/2" Run: 11" Width: West-39"
Handrails: OK Extensions: NO Landings: OK
Ramps: N/A Slope: Landings: Handrails:
Corridor: Width: Narrow-36" Rating: NO
B.Exit Signs: Level: 1st Notes: None except graphic on door from bank to stair.
Level: Basement Notes: None.
•
A.Automatic Sprinkler Syste
Required: Required at basement because of opening and depth of building.None provided.
Throughout:Not required.None provided.
Partial: N/A
B.Fire Alarm System
Required: Required?
Pull Stations: None
Horns/Strobes: None
Heat Detectors: None
Smoke Detectors: A few battery operated scattered throughout.Not consistently provided in all areas.
D.Other.
O:\MAF\TIF Confen,noe\ISan,pb TIE Cost Estimating WorksheeLMlsjProperty Data
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Butler Square Bldg,Ste 710C,100 N 6th Street,Minneapolis,MN 55403-1505 612.758.6700 612.758.6701 FAX
architecture engineering environmental transportation
November 14, 2002 RE: City of Elk River
TIF Property Redevelopment
Assessments
SEH No. P-ELKRI0301.00 #10
Catherine Mehelich
Director of Economic Development
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Dear Ms. Mehelich:
Short Elliott Hendrickson Inc. (SEH) is pleased to submit this proposal for professional services for
Property Redevelopment Eligibility Assessments. This proposal is for services to determine
whether the qualification tests for tax increment eligibility (site coverage, building conditions) can
be met. We have reviewed the building and area information you forwarded to us on October 14,
2002 and are confident that we will provide you the documentation necessary to comply with the
required statutes (State Statute 469.174, subdivision 10). We have based the Scope of Work on the
• use of Geographic Information Systems (GIS) as a data resource and data gathering tool. The
methodology for determining qualification eligibility has been used by this office for the completion
of several other assessments in the metro area.
The cost for conducting the assessments is estimated to be $21,050.00. This cost is based on the
scope of work to assess an estimated 31 buildings and 48 parcels (refer to attached map, provided
by City of Elk River). Compensation shall be on an hourly basis to the established maximum fee,
not including ordinary reimbursable expenses (mileage, courier, reproductions,etc).
We understand that it is desired that the assessments and report be completed in a reasonable
amount of time after award of contract. We estimate that a project area of this size will require
approximately 75 to 90 days to complete starting from the time you issue a Notice to Proceed. It is
our experience that a `no response' rate from building owners is minimized or eliminated if more
time is given to complete the assessments.
To assist with the inspections, we request the following information from you, as is available:
1. A list of building related permits/public reports issued for each parcel over the life of the
building.
2. A letter authorizing and explaining the purpose of the inspections (for distribution to all
property owners). We can provide you with examples previously used for similar projects.
3. A parcel map of the area to be inspected(provided on October 14).
4. A list of all parcels including owner, current known business or resident name and address.
Short Elliott Hendrickson Inc. • Your Trusted Resource • Equal Opportunity Employer
r'
Catherine Mehelich
November 14, 2002
' Page 2
• 5. Access to county taxpayer information available in GIS database format (parcel shapes,building
shapes, aerial photography, as is available). As discussed with you, we are currently
investigating data availability with Howard R. Green. Occasionally, a data sharing agreement
must be signed by you to allow us to use the data, as required by the County — we will assist
with this process if it is required.
A summary of our process and methodology used for completing the assessments is best
represented by example. Enclosed, you will find a sample building inspection report, maps, and a
report of our methodology, which also serves as an example of what the final assessment product
will include.
We look forward to working with you on this project. If you approve of this Scope of Work, please
indicate so on the lines provided below and return one copy to this office. Should you have any
questions regarding this submittal, please do not hesitate to call me at 612-758-6788 or email me at
jzemke @ sehinc.com.
Sincerely,
/,
ason P. Zemke, AIA
Project Architect
rb: sjb
Attachment,Enclosure
document3
Approved by:
Approved for:
Date:
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Butler Square Bldg,Ste 710C,100 N 6th Street,Minneapolis,MN 55403-1505 612.758.6700 612.758.6701 FAX
architecture engineering environmental transportation
•
November 14, 2002 RE: City of Elk River
TIF Property Redevelopment
Assessments
SEH No. P-ELKRI0301.00 #10
Catherine Mehelich
Director of Economic Development
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Dear Ms. Mehelich:
Short Elliott Hendrickson Inc. (SEH) is pleased to submit this proposal for professional services for
Property Redevelopment Eligibility Assessments. This proposal is for services to determine
whether the qualification tests for tax increment eligibility (site coverage, building conditions) can
be met. We have reviewed the building and area information you forwarded to us on October 14,
2002 and are confident that we will provide you the documentation necessary to comply with the
required statutes (State Statute 469.174, subdivision 10). We have based the Scope of Work on the
use of Geographic Information Systems (GIS) as a data resource and data gathering tool. The
methodology for determining qualification eligibility has been used by this office for the completion
of several other assessments in the metro area.
The cost for conducting the assessments is estimated to be $21,050.00. This cost is based on the
scope of work to assess an estimated 31 buildings and 48 parcels (refer to attached map, provided
by City of Elk River). Compensation shall be on an hourly basis to the established maximum fee,
not including ordinary reimbursable expenses (mileage, courier, reproductions, etc).
We understand that it is desired that the assessments and report be completed in a reasonable
amount of time after award of contract. We estimate that a project area of this size will require
approximately 75 to 90 days to complete starting from the time you issue a Notice to Proceed. It is
our experience that a `no response' rate from building owners is minimized or eliminated if more
time is given to complete the assessments.
To assist with the inspections, we request the following information from you, as is available:
1. A list of building related permits/public reports issued for each parcel over the life of the
building.
2. A letter authorizing and explaining the purpose of the inspections (for distribution to all
property owners). We can provide you with examples previously used for similar projects.
3. A parcel map of the area to be inspected (provided on October 14).
4. A list of all parcels including owner, current known business or resident name and address.
•
Short Elliott Hendrickson Inc. • Your Trusted Resource • Equal Opportunity Employer
• Catherine Mehelich
November 14, 2002
• Page 2
5. Access to county taxpayer information available in GIS database format (parcel shapes, building
shapes, aerial photography, as is available). As discussed with you, we are currently
investigating data availability with Howard R. Green. Occasionally, a data sharing agreement
must be signed by you to allow us to use the data, as required by the County — we will assist
with this process if it is required.
A summary of our process and methodology used for completing the assessments is best
represented by example. Enclosed, you will find a sample building inspection report, maps, and a
report of our methodology, which also serves as an example of what the final assessment product
will include.
We look forward to working with you on this project. If you approve of this Scope of Work, please
indicate so on the lines provided below and return one copy to this office. Should you have any
questions regarding this submittal, please do not hesitate to call me at 612-758-6788 or email me at
jzemke @ sehinc.com.
Sincerely,
0ason P. Ze e, AIA
• Project Architect
rb: sjb
Attachment,Enclosure
document3
Approved by:
Approved for:
Date:
•
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LE-
O
City of Eagan
Redevelopment Eligibility Assessment
Proposed "Cedar Grove"
Redevelopment Area
•
September 28,2001
(Revised January 8, 2002)
Prepared by:
Short Elliott Hendrickson, Inc. (SEH)
Butler Square Building, Suite 710C
100 North 6th Street
Minneapolis, MN 55403
• SEH No. A-EAGAN0104.00
• City of Eagan
Cedar Grove Redevelopment Eligibility Assessments
September 28, 2001 (revised January 8, 2002)
PURPOSE
Short Elliot Hendrickson, Inc. (SEH)was hired by the City of Eagan. Minnesota,to
survey and evaluate the properties within the proposed "Cedar Grove" Tax Increment
Financing District. This proposed district is located on both sides of MN Hwy. 13 east of
Cedar Avenue ( MN Hwy. 77). The purpose of our work was to independently ascertain
whether the qualification tests for tax increment eligibility, as required under Minnesota
Statute, could be met.
The findings and conclusions drawn herein are solely for the purpose of tax increment
eligibility and are not intended to be used outside the scope of this assessment.
SCOPE OF WORK
The proposed district consists of 88 property parcels comprised of the following types of
improvements: 14 single family residences, 48 commercial structures, 15 properties with
only parking improvements and 12 vacant properties without any improvements (one
parcel contains both a single family residence and a commercial structure).
EVALUATIONS
Of the sixty-three (63)buildings in the proposed district, fifty-four(54) building interiors
were evaluated. A total of nine (9)buildings were available for exterior evaluation only.
FINDINGS
Coverage Test—Sixty-eight (68) of the eighty-eight (88)properties met the coverage
test with a 72% area coverage. This exceeds the 70% area coverage requirement.
Condition of Buildings Test—Fifty-seven (57)percent of the buildings—36 of the 63
buildings—were found to be "structurally substandard" when considering code
deficiencies and other deficiencies of sufficient total significance to justify substantial
renovation or clearance and code deficiencies alone (see definition of"structurally
substandard" as follows). This exceeds the Condition of Buildings Test whereby over
50% of buildings, not including outbuildings, must be found "structurally substandard."
CONCLUSION
Our surveying and evaluating of the properties within this proposed Redevelopment
District render results that in our professional opinion qualify the district eligible under
the statutory criteria and formulas for Tax Increment Financing District Funding.
SUPPORTING DOCUMENTS ATTACHED
• Summary report detailing the above findings.
2
• PROCEDURAL REQUIREMENTS
The properties were surveyed and evaluated in accordance with the following
requirements under Minnesota Statute Section 469.174, Subdivision 10, clause (c) which
states:
Interior Inspection —"The municipality may not make such determination [that the
building is structurally substandard] without an interior inspection of the property..."
Exterior Inspection and Other Means—"An interior inspection of the property is not
required, if the municipality finds that (1)the municipality or authority is unable to gain
access to the property; and after using its best efforts to obtain permission from the party
that owns or controls the property; and (2)the evidence otherwise supports a reasonable
conclusion that the building is structurally substandard."
Documentation— "Written documentation of the building findings and reasons why an
interior inspection was not conducted must be made and retained under section 469.175,
subdivision 3, clause (1)."
PROCEDURES FOLLOWED TO MEET REQUIREMENTS
The City of Eagan sent letters to all property owners and tenants located in the district
requesting that an inspection and evaluation be made of their property. SEH canvassed
the proposed area during a two-week period at the end of July, 2001.
An interior inspection and evaluation was completed if consented to by the owner or
owner's representative. An exterior inspection and evaluation was made of the property
where either the owner refused interior access to their property or the scheduling of the
evaluation was not able to be coordinated with the owner within the time given for the
evaluations.
For all subject buildings, the City of Eagan collected a listing of all available building
permits on record, noting date issued and types of work completed for each permit. SEH
reviewed this list as well as several actual permits for a sample of buildings. Additional
building data was collected from public taxpayer information available from Dakota
County. Building data from these public records was combined with and reviewed
against information gathered in the field.
QUALIFICATION REQUIREMENTS
The properties were surveyed and evaluated to ascertain whether the qualification tests
for tax increment eligibility for a redevelopment district,required under the following
Minnesota Statutes,could be met.
Minnesota Statute Section 469.174, Subdivision 10, clause (a) (1) requires two tests for
occupied parcels:
1. Coverage Test—"parcels consisting of 70 percent of the area of the district are
. occupied by buildings, streets, utilities, paved or gravel parking lots or similar
structures . . ."
3
• Note: The coverage required by the parcel to be considered occupied is defined under
Minnesota Statute Section 469.174, Subdivision 10, clause (e) which states: "For
purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities,
paved or gravel parking lots or other similar structures unless 15% of the area of the
parcel contains buildings, streets, utilities, paved or gravel parking lots or other
similar structures."
2. Condition of Buildings Test— " . . . and more than 50 percent of the buildings, not
including outbuildings, are structurally substandard to a degree requiring substantial
renovation or clearance;"
The term `structurally substandard', as used in the preceding paragraph, is defined by
a two-step test:
Step One: Under the tax increment law, specifically, Minnesota Statutes, Section
469.174, Subdivision 10, clause (b), a building is structurally substandard if it
contains "defects in structural elements or a combination of deficiencies in
essential utilities and facilities, light and ventilation, fire protection including
adequate egress, layout and condition of interior partitions, or similar factors,
which defects or deficiencies are of sufficient total significance to justify
substantial renovation or clearance."
• Step Two: Notwithstanding the foregoing, the tax increment law, specifically,
Minnesota Statutes, Section 469.174, Subdivision 10, clause (c) also provides that
a building may not be considered structurally substandard if it: ". . . is in
compliance with building code applicable to new buildings or could be modified
to satisfy the building code at a cost of less than 15 percent of the cost of
constructing a new structure of the same square footage and type on the site."
Based on the above requirements, the substandard determination of a particular
building is a two-step process; therefore, the findings of each step are independent of
each other and both steps must be satisfied in order for a building to be found
structurally substandard. It is not sufficient to conclude that a building is structurally
substandard solely because Step 2 is satisfied. It is theoretically possible for a
building to require extensive renovation in order to meet current building codes but
still not meet the main test of Step 1.
Furthermore, deficiencies included in Step 1 may or may not include specific code
deficiencies as listed in Step 2. In many cases, specific building code deficiencies
may well contribute to the data which supports satisfying Step 1; conversely, it is
certainly possible that identified hazards or other deficiencies which could be
included in Step 1 do not necessarily constitute current building code deficiencies. By
definition, the nature of the two steps is slightly different. Step 1 is more subjective,
whereas Step 2 is an objective test. Step 1 deficiencies are less technical and not
• necessarily measurable to the same extent of the code deficiencies in Step 2. To the
4
end that technical, measurable building code deficiencies support the satisfaction of
• the less technical Step 1, the following code requirements are defined in terms that go
beyond the technical requirements of the code and demonstrate their relevance in
terms of" . . . deficiencies in essential utilities and facilities, light and ventilation, etc.
Uniform Building Code (UBC): The purpose of the UBC is to provide minimum
standards to safeguard life or limb, health, property and public welfare by
regulating and controlling the design, construction, quality of materials, use and
occupancy, location and maintenance of all buildings and structures (UBC 101.2).
A deficiency in the building code (insufficient number of building exits,
insufficient door landing area, etc.) adversely affects one or more of the above
standards to safeguard `life or limb . . .and public welfare'; therefore, a deficiency
in the building code is considered a deficiency in one or more "essential utilities
and facilities, light and ventilation, etc.".
Minnesota Accessibility Code. Chapter 1341: This chapter sets the requirements
for accessibility all building occupancies. The Minnesota Accessibility Code
closely follows the Americans with Disabilities Act Accessibility Guidelines
(ADAAG), which sets the guidelines for accessibility to places of public
accommodations and commercial facilities as required by the Americans with
Disabilities Act (ADA) of 1990. The ADA is a federal anti-discrimination statute
designed to remove barriers that prevent qualified individuals with disabilities
• from enjoying the same opportunities that are available to persons without
disabilities (ADA Handbook). Essentially, a deficiency in the accessibility code
(lack of handrail extension at stairs or ramp, lack of clearance at a toilet fixture,
etc.)results in a discrimination against disabled individuals; therefore, a
deficiency in the accessibility code is considered a deficiency in "essential
utilities and facilities".
Minnesota Food Code, Chapter 4626: This chapter is enforced by the Minnesota
Department of Health and is similar to the UBC in that it provides minimum
standards to safeguard public health in areas of public/commercial food
preparation. A deficiency in the food code (lack of non-absorbent wall or ceiling
finishes, lack of hand sink, etc.)causes a condition for potential contamination of
food; therefore, a deficiency in the food code is considered a deficiency in
"essential utilities and facilities".
National Electric Code (NEC): The purpose of the NEC is the practical
safeguarding of persons and property from hazards arising from the use of
electricity. The NEC contains provisions that are considered necessary for safety
(NEC 90-1 (a) and (b)). A deficiency in the electric code (insufficient electrical
service capacity, improper wiring, etc.) causes a hazard from the use of
electricity; therefore, a deficiency in the electric code is considered a deficiency in
"essential utilities and facilities".
•
5
• Uniform Mechanical Code (UMC): The purpose of the UMC is to provide
minimum standards to safeguard life or limb, health, property and public welfare
by regulating and controlling the design,construction, installation, quality of
materials, location, operation, and maintenance or use of heating, ventilating,
cooling, and other appliances (UMC 102). The UMC sets specific requirements
for building ventilation, exhaust, intake and relief. These requirements translate
into a specified number of complete clean air exchanges for a building based on
its occupancy type and occupant load. A deficiency in the mechanical code
adversely affects the `health . . . and public welfare' of a building's occupants;
therefore, a deficiency in the mechanical code is considered a deficiency in "light
and ventilation".
Note: The above list represents some of the more common potential code
deficiencies considered in the assessment of the buildings in the proposed district.
This list does not necessarily include every factor included in the data used to
satisfy Step 1 for a particular building. Refer to individual building reports for
specific findings.
Finally, the tax increment law provides that the municipality may find that a building is
not disqualified as structurally substandard under Step 2 on the basis of reasonably
available evidence, such as the size, type, and age of the building, the average cost of
plumbing, electrical, or structural repairs, or other similar reliable evidence. Items of
evidence that support such a conclusion [that the building is structurally substandard]
• include recent fire or police inspections, on-site property appraisals or housing
inspections, exterior evidence of deterioration, or other similar reliable evidence."
MEASUREMENTS AGAINST TECHNICAL TEST REQUIREMENTS
Coverage Test
The City of Eagan utilized a GIS (Geographic Information Systems) database, available
through Dakota County, to obtain individual parcel information. The GIS database
contains both graphic information (parcel and building shapes) and numerical data based
on county tax records. This information was shared with SEH for the purposes of this
assessment.
The total square foot area of each property parcel was obtained from county records
(GIS) and general site verification.
The total square foot area of site improvements on each property parcel was digitized
from recent aerial photography (Spring, 2000) and compared with county records
(building area) and general site verification.
The total percentage of coverage of each property parcel was computed to determine if
the 15% requirement was met.
•
6
• The total area of all qualifying property parcels was compared to the total area of all
parcels to determine if the 70% requirement was met.
Condition of Building Test
Replacement Cost—the cost of constructing a new structure of the same size and type on
site:
R. S. Means Square Foot Costs (2001) was used as the industry standard for base
cost calculations. R. S. Means is a nationally published reference tool for
construction cost data. The book is updated yearly and establishes a "national
average" for materials and labor prices for all types of building construction. The
base costs derived from R. S. Means were reviewed, and modified if applicable,
against our professional judgement and experience.
A base cost was calculated by first establishing building class, building
construction type, and construction quality level (residential construction) to
obtain the appropriate Means cost per square foot. This cost was multiplied times
the building square footage to obtain the total replacement cost for an individual
building.
Building Deficiencies: Step 1 (Systems Condition Deficiencies)—determining the
combination of defects or deficiencies of sufficient total significance to justify substantial
renovation or clearance:
On-Site evaluations-Evaluation of each building was made by reviewing
available information from city records and making interior and/or exterior
evaluations. Deficiencies in structural elements, essential utilities and facilities,
light and ventilation, fire protection including adequate egress, layout and
condition of interior partitions, or similar factors, were noted by the evaluator.
Systems Condition Deficiencies may or may not include Code Deficiencies as
defined below. Energy code compliance was not considered for the purposes of
determining Systems Condition Deficiencies.
Building Deficiencies: Step 2 (Code Deficiencies)—determining technical conditions that
are not in compliance with current building code applicable to new buildings and the cost
to correct the deficiencies:
On-Site evaluations -Evaluation of each building was made by reviewing
available information from city records and making interior and/or exterior
evaluations. On-site evaluations were completed using a standard checklist
format. The standard checklist was derived from several standard building code
plan review checklists and was intended to address the most common, easily
identifiable code deficiencies. Mechanical Engineers, Electrical Engineers, and
Building Code Officials were also consulted in the development of the checklist.
Deficiencies were generally grouped into the following categories (category
names are followed by its applicable building code):
7
• • Building accessibility—Minnesota Accessibility Code
• Building egress, building construction —Uniform Building Code
• Fire protection systems—Uniform Building Code
• Food service—Minnesota Food Code
• Energy code compliance —Minnesota Energy Code
• HVAC (heating, ventilating, and air conditioning)— Uniform
Mechanical Code
• Electrical systems —National Electric Code and Minnesota Energy
Code
Office evaluations—Following the on-site evaluation,each building was then
reviewed,based on on-site data, age of construction, building usage and
occupancy, square footage, and known improvements (from building permit data),
and an assessment was made regarding compliance with current mechanical,
electrical, and energy codes. A basic code review was also completed regarding
the potential need for additional egress (basement stairways, for example),
sprinkler systems, or elevators.
Deficiency Cost—Costs to correct identified deficiencies were determined by
using R. S. Means Cost Data and our professional judgement and experience.
Actual construction costs are affected by many factors (bidding climate, size of
project, etc.). Due to the nature of this assessment, we were only able to
• generalize the scope of work for each correction; that is to say that detailed plans,
quantities, and qualities of materials were not possible to be known. Our
approach to this matter was to determine a preliminary cost projection suitable to
the level of detail that is known. This process was similar to our typical approach
for a cost projection that may be given to an owner during a schematic design
stage of a project.
Costs to correct deficiencies were computed for each building and compared to
the building replacement cost to determine if the 15% requirement was met. The
total number of buildings determined to be "structurally substandard" in this
manner was compared to the total number of buildings in the district to determine
if the 50% requirement was met.
Individual building reports are available for review at the offices of SEH and Briggs &
Morgan, St. Paul,Minnesota.
Technical Conditions Resources—the following list represents the current building codes
applicable to new buildings used in the Building Deficiency review:
1997 Uniform Building Code
MN 1341 —Minnesota Accessibility Code, Chapter 1341 (1999)
2000 Minnesota Energy Code, Chapters 7672, 7674, or 7676
Minnesota Food Code, Chapter 4626 (1998)
1999 National Electric Code
1997 Uniform Mechanical Code
8
•
PROJECT TEAM:
Molly A. Olivier, Interior Designer
Jason P. Zemke, AIA, Project Architect
Nancy G. Schultz, AIA, Principal
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CITY O F Legend
R O G E R S °Project Boundary
Building Assessment Category
Hennepin County
Coordinate System(it) Category t:Substandard Building Source Hennepn County,
• REDEVELOPED ELIGIBILITY and SEH.
Arigir
n Category 2:Existing conditions.Building
ASSESSMENT 150
Feet Category 3:Non-deficient Budding
04/162002 bd
BUILDING ASSESSMENT g
• Report on Structurally Substandard Building
Building ID/Business Name/Address: 4-1-4
Structurally Substandard Building(Y/N): Y
Step One
Under the tax increment law,specifically,Minnesota Statutes,Section 469.174,Subdivision 10,a building
is structurally substandard if it contains"defects in structural elements or a combination of deficiencies
in essential utilities and facilities,light and ventilation,fire protection including adequate egress,layout and
condition of interior partitions,or similar factors,which defects or deficiencies are of sufficient total
significance to justify substantial renovation or clearance."
The above building,based upon actual interior inspection and review of building permit records,meets the
above-referenced definition of structurally substandard for the following reasons:
Essential Utilities&Facilities
• Additional toilet fixtures required due to occupant load
• Deficient in facilities for disabled: disability parking incorrectly designated;exterior
accessible route too steep;lack of maneuvering clearance at entrance doors;lack of accessible
door hardware;lack of maneuvering clearance and accessible features in toilet rooms
Light&Ventilation
• Deficient in meeting Mechanical code:For building construction prior to 1989,mechanical
systems do not provide sufficient number of air exchanges
• Fire Protection/Egress
• Deficient exterior doors: small door landings,deficient threshold height
• Deficient exterior stairway: additional handrail required,deficient handrail extensions
Layout/Condition of Interior Partitions
• Inefficient kitchen area storage
Step Two
Notwithstanding the foregoing,the tax increment law also provides that a building may not be considered
structurally substandard if it is in compliance with the building code applicable to new buildings or could
be modified to satisfy the current building code at a cost of less than 15%of the cost of constructing a new
building of the same square footage and type on the same site.
Estimated cost of new building of same size and type(Total Replacement Cost): $489,768.31
Estimated cost of correction of code deficiencies(Total Deficiency Cost): $76,756.56
Percentage of Code Deficiency to Replacement Cost: 15.67%
Refer to Individual Building Summary Report for documentation of specific code deficiencies.
•
Report on Structurally Substandard Building
Building IDBusiness Name/Address: 5-1-3
Structurally Substandard Building(Y/N): I'
Step One
Under the tax increment law,specifically.Minnesota Statutes,Section 469.174,Subdivision 10,a building
is structurally substandard if it contains"defects in structural elements or a combination of deficiencies
in essential utilities and facilities,light and ventilation,fire protection including adequate egress,layout and
condition of interior partitions,or similar factors,which defects or deficiencies are of sufficient total
significance to justify substantial renovation or clearance."
The above building,based upon actual interior inspection and review of building permit records,meets the
above-referenced definition of structurally substandard for the following reasons:
Structural Elements
• Large crack in front entrance pier in need of repair;downspouts need to be replaced
Essential Utilities&Facilities
• Additional toilet fixtures required due to occupant load
• New elevator required to serve second floor office/break room/work area
• Deficient in facilities for disabled:disability parking incorrectly designated;lack of exterior
accessible route and curb cut;lack of maneuvering clearance and door hardware at interior
doors;lack of maneuvering clearance and accessible features in toilet rooms; inaccessible
• drinking fountain(knee clearance) and public service counter(height)
Light&Ventilation
• Deficient in meeting Mechanical code:for building construction prior to 1989,mechanical
systems do not provide sufficient number of air exchanges
Fire Protection/Egress
• Additional egress stairway required for second floor
• Deficient exterior doors: lack of door landings
• Deficient interior stairway:additional handrail required;handrail grip too large;deficient
handrail extensions and terminations
Layout/Condition of Interior Partitions
• Several interior areas damaged by vandalism
Similar Factors
• Movie theater does not have modern stadium seating;exterior `stucco-type' paneling in poor
condition
Step Two
Notwithstanding the foregoing,the tax increment law also provides that a building may not be considered
structurally substandard if it is in compliance with the building code applicable to new buildings or could
be modified to satisfy the current building code at a cost of less than 15%of the cost of constructing a new
building of the same square footage and type on the same site.
Estimated cost of new building of same size and type(Total Replacement Cost): $1,435,161.00
Estimated cost of correction of code deficiencies(Total Deficiency Cost): $287,185.88
Percentage of Code Deficiency to Replacement Cost: 20.01%
Refer to Individual Building Summary Report for documentation of specific code deficiencies.
Report on Structurally Substandard Building
Building ID/Business Name/Address: 41111■ 8-1-6
Structurally Substandard Building(Y/N): N
Step One
Under the tax increment law,specifically,Minnesota Statutes,Section 469.174,Subdivision 10,a building
is structurally substandard if it contains"defects in structural elements or a combination of deficiencies
in essential utilities and facilities,light and ventilation,fire protection including adequate egress,layout and
condition of interior partitions,or similar factors,which defects or deficiencies are of sufficient total
significance to justify substantial renovation or clearance."
The above building,based upon exterior inspection and review of building permit records,meets the above-
referenced definition of structurally substandard for the following reasons:
Structural Elements
• Large crack in exterior wall at southwest corner of building in need of repair
Essential Utilities&Facilities
• Deficient in facilities for disabled: no van accessible parking available
Light&Ventilation
• Deficient in meeting Mechanical code: for building construction prior to 1989,mechanical
systems do not provide sufficient number of air exchanges
Fire Protection/Egress
• • Deficient exterior stairway: additional handrail required;deficient handrail terminations and
extensions
Similar Factors
• Portion of metal roof edge fascia is missing;majority of metal roof edge fascia in need of
paint
Step Two
Notwithstanding the foregoing,the tax increment law also provides that a building may not be considered
structurally substandard if it is in compliance with the building code applicable to new buildings or could
be modified to satisfy the current building code at a cost of less than 15%of the cost of constructing a new
building of the same square footage and type on the same site.
Estimated cost of new building of same size and type(Total Replacement Cost): $418,503.74
Estimated cost of correction of code deficiencies(Total Deficiency Cost): $56,998.08
Percentage of Code Deficiency to Replacement Cost: 13.62%
Refer to Individual Building Summary Report for documentation of specific code deficiencies.
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