HRSR MEMORANDUM 06-28-1999 ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY
111)
MEMORANDUM
TO: Housing and Redevelopment Authority
r}O ROMs Paul T. Steinman, Director of Economic
1-i'! Development
DATE: June 24, 1999
SUBJECT: Agenda Memo for June 28, 1999,
HRA Meeting
5. Discussion:King and Main Project
Issue
The purpose of this agenda item is to bring the HRA members up to
• date on a number of meetings that have been held with HRA Chair
Kropuenske, city staff, and a prospective anchor business for a potential
King and Main project.
Background
City staff and Chair Kropuenske have had conversations with a prospect
for a project on the King and Main site. The project/concept being
discussed is for a professional office building with uses that would nicely
compliment others on the existing block, including the Jarmoluk dental
office building. The project would be potentially a two-story building
with at least two tenants on the main floor and office space on the upper
level.
When discussing various financing options with prospects, staff is
inclined to keep in mind the following HRA payment schedule for costs
associated with the initial King and.Main purchase and demolition:
• December 1, 1996 $75,000 - paid
• December 1, 1997 $37,000- paid
• September 1, 1998 - $18,500 - paid
•
• December 1, 1998 $18,500_ paid
13065 Orono Parkway• P.O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420•Fax: (612)441-7425
Equal Opportunity Housing and Equal Opportunity Employment
• September 1, 1999 - $18,500 unpaid
• December 1, 1999 - $18,500 -unpaid
• December 1, 2000 - $68,500 unpaid . .
• December 1, 2001 $63,948.65 - unpaid
• December 1, 2002 - $50,000 -unpaid
• December 1, 2003 - $50,0000 unpaid
• December 1, 2004 - $50,000 - unpaid
The best situation would be for a business/developer to pay the
appraised value for the lot up front - this is $165,000. Staff has been
discussing financing concepts that would include the HRA providing the
land to the project at minimum cost up front to the developer and, in
turn, taking back a mortgage on the property for the balance of the
appraised value. The gap between what is eventually recovered through
sale of the land and the actual cost of the project will be funded through
tax increments generated from this site in future years.
6. Discuss Post Office Relocation Issues
Issue
Staff has held two meetings with post office officials regarding their
• plans to relocate from their central business district location to a site on
Highway 169. The last meeting between staff and post office
representatives confirmed their general lack of interest in pursuing a
central business district location for any portion of their facility. They
discussed the issue of a Contract Postal Unit (CPU) in the CBD. This
CPU is not unlike a "franchise" of the postal service and is most familiar
in settings such as grocery stores and other large traffic generators.
Staff does not believe a CPU will provide the "anchor"feeling that the
current facility is providing to our CBD, especially since the postal
service still plans a large combined facility on Highway 169 that would
act as direct competition for any downtown CPU.
Staff has invited the postal service representatives to make a
presentation of their project at either an EDA or an HRA meeting in
July. Staff would like to have the EDA and HRA present at this
meeting to hear this discussion and provide input on their proposal.
Staff will let the HRA know when such meeting has been planned.
7. Central Business District Action Plan Updates
The major activity that has been taking place over the past couple of
• months on this action plan includes activities of the business working
group. This group has begun to undertake the steps of completing a
•' market study of the CBD and is using as its guide the attached
Workbook for Downtown Business Development provided by the
National Trust for Historic Preservation. Staff will briefly discuss the
process of completing this market analysis and progress of the other
working groups at this HRA meeting.
•