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5.0. EDSR 05-09-2005 ITEM 1 5. • �/ City of Elk River MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Development DATE: May 9, 2005 SUBJECT: Consider Developer Proposals and Draft Feasibility Study for Twin Lakes Business Park Attachments * Proposal Appendix from Amcon Construction * Proposal Addendum from Duke Realty * Draft Feasibility Study—Twin Lakes Business Park May 2005 • Background The primary goal of the industrial development is to increase the city's employment and tax base. The objective is to have property readily available throughout the city for industrial development. At its March meeting the EDA reviewed the proposals from Duke Realty Corporation and Amcon Construction Company,and directed staff and Ehlers to meet with the two developers to gather more information about how their proposal would benefit the development of the business park through a master developer concept. In addition, the EDA discussed the public improvement schedule for the park and recommended and the City Council authorized the preparation of a feasibility study for the public improvement project based on the EDA's initial development concept. Issue Staff has proposed a name change to"Twin Lakes Business Park" for what is previously known as the"EDA-owned Brown property". The EDA is asked to review the additional proposal information submitted by the developers that are interested in the project. The EDA is also asked to provide feedback to the City Engineer and staff on the draft feasibility study for the infrastructure improvements. The feasibility study will then be finalized for presentation and consideration by the City • Council. Consider Development of Twin Lakes Business Park May 9,2005 EDA Meeting Page 2 of 3 • Analysis Developer Proposals Earlier this year Elders&Associates recommended that the EDA utilize a request-for- proposals (RFP) process that insures that the EDA would receive the highest price for the property,development to the highest and best uses and allow the EDA to control the process. The RFP process was also a way to market the site immediately to developers and brokers. Staff and Ehlers have met with the two developers for further discussion on their proposals. The developers were encouraged to submit additional information to clarify their development concept for the park. Amcon Construction submitted the attached proposal information clarifying their interest in acquiring the EDA property and a commitment to construct a 30,000sf facility in the park. Amcon recommends that the EDA consider alternative concept plans prior to development. Duke Realty submitted the attached proposal information clarifying their interest in a master developer concept in which the EDA would retain ownership and control of the park and work with Duke in the joint marketing and development of the park. Duke strongly recommends that the EDA withhold on infrastructure improvements until the first project is identified so as not to hinder the city's availability of larger lots for development. Duke commits to marketing the park for the development of medium to large sized industrial • users that will generate the greatest employment and tax base for the city. After review and discussion with Ehlers,at best both parties are willing to provide marketing assistance but neither seems interested in acquiring and undertaking the cost of improvements to the park. Therefore it may be better for EDA to abandon the master developer concept and consider contracting with a broker for marketing the park. Feasibility Study The City Engineer,Terry Maurer will provide the EDA with a PowerPoint presentation for discussion of the attached draft feasibility study. It is important for the EDA to consider how the improvement project will be funded. In the past several months the EDA has indicated an interest in initiating the public improvement project as soon as possible in order to have buildable lots available by fall 2005. This schedule was driven in part by a proposed 100,000sf industrial expansion project which has since been delayed for 24-months. The City Engineer,Terry Maurer has indicated that in order to have lots buildable by fall the public improvement process would need to begin in spring 2005. The logical source for payment of the improvement bond/special assessments would be through tax increment finance (TIF) revenues derived from new developments within the park. Initiating the improvement project prior to pending developments puts the city at risk • for not having a source to make bond payments,except through property tax levy,until TIF revenues are generated. Consider Development of Twin Lakes Business Park May 9,2005 EDA Meeting Page 3 of 3 • Ehlers &Associates has completed a preliminary TIF estimate that indicates that there appears to be sufficient TIF that could be generated to fund either the entire park or phase I improvements if all of the lots were built-out at the time the improvements are installed as envisioned on the concept plan. However,it is not realistic to believe such an aggressive build-out therefore there is a time lag that would create additional expenses since TIF revenues are typically not available until 18-24 months following project construction. The EDA could consider one of the following options ranging from the most financial risk to the least financial risk: 1) Recommend the Council improve the entire park through an improvement bond at an estimated cost of$1.3-million with lots available for construction late fall 2005. 2) Recommend the Council improve Phase I of the park through an improvement bond at an estimated cost of$750,000 with lots available for construction late fall 2005. 3) Recommend the Council complete minimal improvements and cost estimated at $250,000 to get a few lots available for construction late fall 2005 and TIF revenues generated to complete additional improvements (Option 2 listed on Page 5 of the draft feasibility study). • 4) Recommend the Council complete plans and specifications for the entire development or phase I improvements and market for first identified user(s),but do not bid or begin construction until there is at least one significant lot development proposed (Option 1 listed on Page 5 of the draft feasibility study). 5) Market for development,but do not complete plans/bid improvements until the first significant lot development is proposed. In considering the least amount of financial risk and the most flexible plan for marketing and development of the park, staff recommends that the EDA consider option#4 or 5 listed above. • 4erty To: Ms. Catherine Mehelich Director of Economic Development City of Elk River 13065 Orono Parkway Elk River, MN 55330 For: APPENDIX Proposal for Brown Business Park (Sale and Development) • Submitted Kevin Maas By: Director of Business Development Amcon Construction Company 1715 Yankee Doodle Road,Suite 200 Eagan, MN 55121 T: 651.379.9035 Email: kmaas@amconconstruction.com In participation with: • 3 AAMCON CS CBRE ®'i® 4tYb,�d • er Clarification Statements: 1. Amcon Construction will consider an entire purchase of the property with the EDA either now or at the time of"the first deal." 2. Amcon Construction is willing to commit to construct a new facility (30,000 s.f.) that meets the business park standards for completion by August 1, 2006. 3. Amcon Construction is willing to pay for a portion of property or the entire property for the land necessary to construct the first facility. 4. Amcon Construction is willing to commit to immediate development of an "industrial", small space incubator condominium facility. Ultimate size and plan to be determined upon market research. 5. Amcon Construction shall allow third party general contractor's to build if we acquire the property. 6. Placement and planning for the YMCA facility can be accomplished but should not restrict"private" development opportunities. 7. We are open to the specific demands of the marketplace recognizing Elk River has several small business's to attract but also willing to market for attracting large or corporate users. Revised proposed timeline and tasks: Task 1: Create alternative concept plans using input from staff and profes- sional consultants. Task 2: Develop specific site plan and developer proforma for"For Sale" indus- trial condominium incubators. Task 3: Negotiate and finalize development agreement and marketing plans for balance of property. Task 4: Develop three concept plans with exhibits, proformas following ex- pressed development objectives and marketing plans. Task 5: Submit implementation plan that shows schedule, development rights and terms, specific financing plan, and other terms associated with ap- plicable agreements. • CBRE �® `/ AIr SII ICON CB RICHARD ELLIB 0 )II P (II '14(r ..1:'\d 71 :'''';':'41 l'''''':::'''''''-':1-''' ''''' '''''' ''''''''''''':-;--6 :: ::::':------1:: 3'''t--:"'-''''''''''''''''''LP' 'II- „ :::i: ,:;:ii''''':'':ii:;:::.''.'''.'...f.:'',.'..1::::::'.1::'::,i'...,,'.1''''.:''':'.1'''.:41, 41 sz P "e '0 s-' -,")) I; III f t� •.,-'"'- , ` 1 / VI \..i ,,',- rD, , ,• ..,,.._ z C12f S31`d'} ,g..:-...:------------- --,_ _ . � ',.'::_',.,__..„,---..,-,-,.....0.1 -'1..',..1 r;' ,� ,:_ s. --L "'- �,i - - kyr � \ (..-......___ -. 0% -f--V f,i 'yrs -- _ ,�s�101.111,11.11!•1171 . c. t�� /, ////.� V Z `' E l co ' , ,' , dw ,• <-,;,:-:-.;,__, p/ ,ir•„K ( ‘,._,)'?:`,'(// i ,, , •gml.N %V!!v ,,,,4', 333Tii i^ O /, L f I ' I•�:�'� / M i'J7. �' •; ^" 4, l,� ,T .O Lam" y a yr.,:':::///,..11- 1 o1 R2 1 - -_ '` o -� y / II C / $70, fl - %: ,/,' '' Ngo - � N I / i,/ f I', �� ��' L Nt NN -. / .r 0 -,f t /'' •!.0•4„_.•'-W-4,........_411111111,0" AlSar „sc.; • 1 ” C wL • Z'} -may �'�` 0 0 `x m . ;:. +,_I 4): ; a ,, ___ . filli C� -,------;:=;-. 1,','''';)'',,",,, (N.i. ,.(1,i':7/1-, i ?).':`,‘, ,' ,' .-----,";'::.?:.y,--'‘,,‘'•,':'L.,' ;--, ,or;'..,,,..:(,,•-`! ,' c 1 ti'I' I,' * i %, 01 ', * ,:tH-,,----- .. )----.7,,V.0-:,;-,•-,-: 1; (1,;t ,, ' o-Ift li:7,$'(:`-'‘VVii./,, ,f';'..4',,-..7,..,';".,":"/./z,"- -":" , :' , ,-.4.1/ \ --• ''' k ...‘‘y,,,,,i,,o,, ,,,,s,,,,„:,,,,,,:.x,..,„.-..,. . ,ii...,..7.4 ,,,,, til\ ''''.% :-‘;‘_;;;;:!------.:".:7:„----- --- , IC:C14 z,..i il rte;,• `, ;I', i ❑ -, • - - "" ; W o� ,y � :t.'.,:./:::,,%-,**,--e 7 R '‘‘ ‘,,',, ‘, A'‘`'....,:s, . -_____ ._, ,,,,,,,,,,,,,51 ,--; ,- ; ..‘c„------„. 0 , , , ,,„ , „ , . _,,_ ...,„ , . ,,,:i.,,„.4;1..-..77: _.,-,..-. t_n7.,,,k\.. ....... _4.2,__;z0e--:<z_-- ;',e3,•,-'„'=',A-,y--;,'",,,:-:.•,':.•:7•';,..,-,,fi\:\,-..W_••. )) ._._„..._-7-)___ -,,r„T..•„-....!..-• ,,- ,,-, .i i . n J t ! s, °r ZANE AVE. 1 / 0 -� '��� //�f , yam ;_J ,' 0 1 I • ADDENDUM EDA Brown Property Development Submitted By: Duke Realty Corporation The purpose of this addendum is to clarify components of our March 1, 2005 proposal for the development of the Brown Business Park property and address questions that arose from our proposal. How does Duke add value to this project? Duke adds value to this project in four ways: 1. Experience 2. Expertise 3. Exposure 4. Owner's Perspective Experience: Over a period of thirty plus years,Duke has developed acreage to support more • than 115 million square feet of space for its own account and others. Locally, Duke has developed hundreds of acres for its own account and third party clients. Throughout these projects we have developed a delivery system to maximize profitability for both our clients and ourselves by viewing each development as a unique project with special requirements. The lessons we have learned as a local and national real estate development company help us add value to the City of Elk River's project. Expertise: Duke is a vertically integrated company. This means that we have in-house engineers, construction project managers,property managers, and leasing agents who bring a team approach to every development. Our delivery system is unparalleled. We have a construction group that starts with our development services manager, a professional engineer who assesses the best site layout and maximum site coverage for the project. Then our pre-construction manager determines the best way to design and construct the buildings while managing our customer's expectations, city requirements, and construction costs. The pre- construction manager passes the project on to our project manager who is then responsible for completing the construction project. This is all done under the supervision of a Vice President of Construction. Our leasing group is responsible for selling the space and attracting tenants/users to the development through our • broker and user connections. Our construction team works in tandem with our leasing group to ensure that we deliver the highest quality product to our customer. • Exposure: Duke owns more than 7 million square feet of space in the Twin Cities and over 110 million square feet nationally and therefore has unmatched exposure to a large tenant and broker universe. We have completed multi-market deals for a variety of companies which allows us to cross market ourselves and the land that we develop. We work with every major brokerage house on a daily basis, allowing us to stay in front of a large pool of potential clients and dealmakers. Through our website, face-to-face dealings, and industry presentations,we provide a scope of marketing and awareness of our products and projects throughout the marketplace. Owner's Perspective: We deliver an owner's perspective to each project we develop and this perspective adds value to your Brown Business Park development. We own, on a long term basis, a majority of the projects we develop. This owner's perspective helps us add value to your project because we recognize the value of making the right decisions at the early stages of a project. We have learned how flexible design and the use of the high quality materials add value to a project over time, value that is sometimes difficult to see in the beginning. It is important to design and develop a project that responds to the current market, and simultaneously anticipates the future needs of our clients, our municipal partners and future market conditions. As a long term owner of many of the projects we develop,we • have learned many lessons that help our developments stand the test of time. This perspective and these lessons learned add value to your project. In short,we believe that our experience as a real estate developer and owner,our in-house expertise and exposure in the market and our unparalleled delivery system is unmatched by any of our competitors and adds value to your project. Why do we believe 100,000 square foot buildings will work on this site? With its location next to the proposed Northstar Commuter Rail as well as the site's proximity to Highways 101, 10, and 169,we believe this site will be attractive to larger companies. A need for mass transit, either rail or bus lines,has always been a component in a site search for the manufacturing industry. Furthermore, the population growth in the North and Northwest metropolitan area will help attract larger users to Elk River. The other aspect we have considered is expansion options. The ability to expand a building to accommodate future growth is important to many companies. If a medium size prospect is identified and we can show them how the site could accommodate a larger building in the future,this development becomes that much • more attractive. This would also add to some of the flexibility issues that have been expressed. • Why not spend infrastructure money now? How will these costs be allocated in the future? While planning and budgeting for the infrastructure now is a good idea, we believe that the City should consider postponing the actual work, at least until the first project is identified to maximize the flexibility of the site and,perhaps, save money. If the infrastructure is built without an identified project, only those users that fit on the resulting lots can be accommodated. Our plan is to get a good read on the market before infrastructure work is started. This flexibility will allow for a greater base of users. Please note,however,that there is a potential marketing disadvantage because potential users have more difficulty visualizing their site on the ground. We can overcome this with appropriate marketing materials that show potential site layouts. Cost allocation will need to be determined at time of development. To the extent that it is economically feasible, costs will be allocated to each project as it is developed, or as it is associated with public improvements. It would be Duke's goal to work in partnership with the EDA to maximize the use of the estimated$1,204,800 in development costs currently proposed. This number • would not go away,but, if possible,be reduced through a more efficient use and by privatizing some of the costs. Is the Duke plan flexible enough to accommodate larger and small users? The plan that Duke submitted was what we viewed to be the highest and best use for the site. This plan maximized site coverage and addressed the EDA's goal of creating the largest tax base realistically possible for the City of Elk River on this site. This plan,however, is flexible. Planning for larger developments on the site preserves the ability to develop smaller buildings if required by market or other considerations. As we described above, a plan for smaller buildings(particularly if the infrastructure is constructed pursuant to the plan before a project is identified)will not accommodate larger users if they come along. Will relocating the gas line support additional development? Yes. If the gas line is relocated, the site will support approximately 70,000 square feet of additional development. If the City of Elk River adds Duke to its team,we will determine the feasibility of moving the existing gas line to increase the developable area. 410 City of Elk -�-� River MEMORANDUM TO: Cathy Mehelich,Director of Economic Development FROM: Terry Maurer, City Engineer DATE: May 9,2005 SUBJECT: Twin Lakes Business Park Feasibility Study Attached is a draft copy of the Twin Lakes Business Park Feasibility Study that was recommended by the Economic Development Authority and authorized by the City • Council. As you are aware, I am scheduled to present this to the EDA on Monday evening for their review and input. I will then final up the report including a section on EDA review. I believe the main point of discussion I would like to cover on Monday evening is the issue that Lori Johnson,you and I have been discussing relative to cash flow and when and how large of an improvement should be undertaken on the project. I will be prepared Monday evening with a brief PowerPoint presentation and hopefully, an open discussion with the EDA relative to cash flow and improvement size and timing. If there is anything else you would like to present at Monday's EDA meeting,please let me know. • S:\EngineerlmprovProj\2005 Improvement Projects\Brown property\05 09 05 EDA memo.doc Project No. 819610J FEASIBILITY • 'o TWIN LAKES B ,c-, 1;4 S PARK ELK RIVER, INNESOTA MAY 2005 • • FEASIBILITY STUDY FOR TWIN LAKES BUSINESS PARK ELK RIVER, MINNESOTA MAY 2005 I hereby certify that this plan, specification, or report was prepared by me or under my direct supervision and that I am a duly registered Professional Engineer under the laws of the State of Minnesota. i .'s Terry J. Maurer, P.E. Date Lic. No. 15316 Prepared By: Date John M. Anderson, P.E. Lic. No. 25889 Howard R. Green Company Court International Building 2550 University Ave W St. Paul, MN 55114 Phone: 651-644-4389 Fax: 651-644-9446 Toll-Free: 1-888-368-4389 • • INDEX I. INTRODUCTION 1 II. PROJECT SCOPE 1 III. NECESSITY AND COST-EFFECTIVENESS 1 IV. EXISTING CONDITIONS 1 V. PROPOSED IMPROVEMENTS 2 VI. PHASING 3 VII. PLATTING and PERMITS 4 VIII. ESTIMATED PROJECT COST 4 IX. FINANCING 5 X. ECONOMIC DEVELOPMENT AUTHORITY 5 XI. PROJECT SCHEDULE 5 XII. CONCLUSION 6 Exhibits Exhibit 1 — Existing Site Exhibit 2— Proposed Lot Layout Exhibit 3— Proposed Street Section Exhibit 4— Proposed Sanitary Sewer and Watermain Exhibit 5— Proposed Storm Sewer Exhibit 6— proposed pond /wetland Fill Exhibit 7 - Phasing • I. INTRODUCTION • On April 4, 2005 the City Council adopted Resolution 05-34 ordering the feasibility study for the development of the Twin Lakes Business Park. The Council took this action in response to a recommendation from the Economic Development Authority (EDA). The area to be included in the project is shown on Exhibit 1. The land is officially owned by the EDA. II. PROJECT SCOPE The purpose of this study is to analyze the development of the public improvements for the Twin Lakes Business Park development. The study will discuss the existing conditions, proposed improvements, phasing, estimated construction costs, and overhead costs which include city administration, engineering, fiscal, and legal expenses. II1. NECESSITY AND COST-EFFECTIVENESS The improvements proposed in this study are necessary for a number of reasons. The construction of the development is a means of increasing the City's future property tax base, create quality job opportunities for current and future residents, and protect the long-term vitality of adjacent commercial and residential areas. The proposed improvements constitute a large enough project to attract competitive bids and therefore can be built in a cost-effective manner. Based on this information the project is necessary and cost-effective IV. EXISTING CONDITIONS Twin Lakes Business Park development is currently undeveloped. The site is approximately 80 acres. Roughly half of the area is wetland and cannot be developed. , see Exhibit 1. A Northern Natural Gas (NNG) main that runs between the northern and southern property lines. Grades on or near the NNG main cannot be changed and permanent structures can not be built in this easement. Overhead power lines border the property on the west and north lines. The power line along the west side of the property crosses the western edge of proposed Lot 7. Twin Lakes Business Park is bordered by Elk River Business Park to the north, Twin Lakes Road to the east, and Burlington Northern Rail Road to the west. The property is currently not platted, the concept plan includes 9 lots in varying size, see Exhibit 2. A storm water pond is located near the northwest corner of the site. This pond was constructed to to serve the storm sewer system in Twin Lakes Road. • 1 V. PROPOSED IMPROVEMENTS The proposed improvements for the Twin Lakes Business Park Development include street, storm sewer, sanitary sewer, watermain construction, expansion of the Regional Storm Water Pond to serve the site, and mass grading to establish the lots. A detailed description of each proposed improvement is provided below. Street The street improvements consist of an urban style roadway 39.5 feet face to face in width with concrete curb and gutter and a 6 foot wide sidewalk along one side. For the purposes of this report the soils conditions have been assumed to match those found on the Elk River Business Park just north of this site. This street section has been assumed to match the section built in Elk River Business Park. The proposed pavement section for all the streets will be a 10 ton design consisting of 8 inches Class 5 aggregate base, 2 inches of bituminous base course, and 2 inches of bituminous wear course. In the design phase a geotechnical investigation will be conducted to confirm the assumptions used for the preliminary pavement design. There will be full access to the site at the intersection of 175th Avenue and Twin Lakes Road. The northern access to the site will be right turn in and right turn out. The existing median in Twin Lakes Road will not be opened due to the proximity to other full access intersections and the sight distance along Twin Lakes Road. The proposed street section is shown on Exhibit 3. Sanitary Sewer • Sanitary sewer improvements will include extending gravity sewer from the existing stub at the intersection of 175th Avenue and Twin Lakes Road. The sanitary sewer will be composed of 8 inch main with 6 inch service to all proposed lots. Gravity sewer will be extended at minimum grade to provide service to all proposed lots. The proposed sanitary sewer improvements are shown on Exhibit 4. Watermain Watermain improvements loop through the property from the existing stub at the intersection of 175th Avenue and Twin Lakes Road; and terminate north of the property, tying into an existing stub off of Twin Lakes Road. An easement from Elk River Business Park for the northerly watermain connection will be required. The proposed watermain will be 8 inch ductile iron pipe (DIP) main, 8 inch DIP service to all proposed lots, and 6 inch DIP to all fire hydrants. Fire hydrants will be spaced along the roadway to provide adequate coverage of the fronts of the lots. A site by site review will be conducted as lots develop to determine if additional fire hydrants are needed. The proposed watermain improvements are shown on Exhibit 4. Storm Sewer The existing regional storm water pond adjacent to Lot 1 in the northern part of the property will be expanded to the east to accommodate all ponding requirements for the development when fully built out. Storm sewer improvements will extend from southern part of the property along the road right-of-way and ultimately outlet to the expanded regional pond. The storm sewer will be designed for a 10-year event; calculations will be 2 • in compliance with city codes. The storm sewer system will be designed to provide lateral connections for site development of each lot to pick up runoff internaly. The proposed street design includes a low point near the common lot line between lots 7 and 8. The conceptual drainage design will provide for and overland overflow route between lots 7 and 8. A drainage easement will be place on this overflow route to provide for the 100 year rainfall event. The proposed storm sewer improvements are shown as Exhibit 5. General Sitework Mass site grading will bring the street to subgrade elevation and will establish basic drainage patterns on the individual lots. As lots develop site specific development plans will need to be prepared to accommodate site design. Due to the existing overhead power line and the grade along the north line, a retaining wall will need to be constructed along the north lot line of Lot 1. Wetlands The wetlands on the site were delineated along with the development of Twin Lakes Road. The majority of the existing wetlands surrounds a drainage ditch that conveys drainage from Klievers Marsh through the site. Additionally on Lot 1 there is a wetland along the remnants of a drainage ditch that flowed from the Elk River Business Park into the main drainage ditch. The remnant drainage ditch on Lot 1 no longer conveys drainage and splits Lot 1 into two pieces. The area on Lot 1 west of the remnant ditch is not accessible from the north, west or south sides. The only feasible access to the • western portion of Lot 1 is across the remnant ditch and because of this limited access it is necessary to fill this wetland in order to make reasonable use of the property. A Technical Evaluation Panel (TEP) review of this proposal will be necessary. VI. PHASING The Twin Lakes Business Park can be developed in multiple phases. The first phase could begin at the intersection of 175th Avenue and Twin Lakes Road. For purposes of discussion we have assumed that phase one would consist of approximately 750' of street and utilities, this would allow for the development of three proposed lots: 5, 6 & 7 and possibly Lot 4. A fire hydrant should be added at the phase break to allow for flushing since the watermain loop would not be complete. A temporary storm water pond could be constructed on proposed lot 8 to receive the storm water from phase 1, until future phases are completed. The temporary pond can discharge into the drainage ditch which flows to the expanded South Regional Storm Water Pond. A temporary cul- de-sac should be installed to provide a vehicle turn around. Sanitary sewer is not affected by phasing, as it flows to the intersection of 175th Avenue and Twin Lakes Road. Site grading of the entire site and expansion of the South Regional Storm Water Pond should be done as part of the initial phase to minimize additional costs associated with phasing and balance the site earthwork quantities. The proposed phases are shown on Exhibit 8. Phasing should reduce the initial investment by the city and will defer the cost associated with future phases. 3 • VII. PLATTING and PERMITS Platting The platting of the property will need to follow the city's platting process including submittal of a preliminary plat for review by both the Planning Commission and City Council. Following approval of the preliminary plat a final plat will be prepared for approval by the City and Sherburne County. Right of way and easements will be dedicated through the platting of the property. The proposed street right of way width is proposed as 70 feet to provide space for a 39.5 foot street, 14 to 20 foot boulevard and 6 foot concrete sidewalk on one side. Drainage and utility easements will be dedicated along with the final plat. The initial platting would create three outlots. The first would include lots 1,2,7,8 and 9. The second outlot would include lots 3,4,5, and 6. The third would include lot 10. As specific site development needs are determined final plats of the outlots will be needed to create lot sizes suited to individual sites. Permits Several permits will be required prior to construction of the proposed improvements. Required permits include, but are not limited to, the following: • Minnesota Department of Health Watermain • Minnesota Pollution Control Agency Sanitary sewer and Grading • • Minnesota Department of Natural Resources Water Appropriation VIII. ESTIMATED PROJECT COST The estimated construction costs and associated overhead costs for the proposed improvements are summarized in Table 1. Based on past experiences on similar complex-type projects in the City, the overhead costs have been estimated at 28% of the total construction cost. The overhead costs include city administration, engineering design, construction staking and inspection, and fiscal and legal costs. Table 1 Project Cost Estimate Phase I Phase II Sanitary Sewer Improvements $23,000 $40,000 Water Improvements $31,000 $64,000 Storm Sewer Improvements $38,000 $115,000 Street Improvements, Site Grading, Pond Expansion $404,000 $200,000 Estimated Construction Costs $496,000 $419,000 Construction Contingencies (10%) $49,600 $42,000 Overhead (28%) $139,000 $117,000 Geotechnical Investigation $8,000 $0 Platting/Lot Staking $29,000 $8000 Estimated Total Project Cost $721,600 $586,000 Estimated Total Project Cost(phase I & II $1,307,600 4 • IX. FINANCING It is the city's intent to assess all costs associated with the improvement against the benefiting property. Since the property is owned by the city (EDA) it will be assessing itself. It is the city's intent to use the proceeds from Tax Increment Financing (TIF) as lots are developed to pay the assessments. In discussions with Cathy Mehelich, Director of Economic Development and Lori Johnson, Finance Director the major financial issue is the timing of cash flow from TIF proceeds to retire the debt versus the desire to have marketable lots for industrial prospects. There are two options to address these competing issues. They are as follows: 1. Proceed with design of the plans and specifications for the entire development and the preliminary platting of the property, but do not bid or begin construction until there is at least one significant lot development proposed. If plans and specifications are complete a bid could be sought and construction could begin within 45—60 days. 2. A second option would be similar to the first with the exception that the City could proceed with bidding and construction of the undergrounoLaties in phase one but not the street component, (project cost estimated at %x,000) then when a prospect is ready to begin only the street component would need to be bid and built. If the development of of a lot occurs prior to completion of the street component temporary access to Twin Lakes Road could be allowed. • Either of these options would help minimize the financial risk of lacking cash flow needed to retire the debt incurred with development of Twin Lakes Business Park. X. ECONOMIC DEVELOPMENT AUTHORITY Xl. PROJECT SCHEDULE ktr EDA Acquires Property 1999 City Council Orders Feasibility Study April 4, 2005 City Council Approves Feasibility Study Plans and Specifications Ordered Prepare plans and Specifications Plans and Specifications Approved by City Council Advertise for Bid Bid Open Construction Contract Award Begin Construction Construction Substantially Complete Lots Available for Sale 5 • XII. CONCLUSION The total estimated project cost for street, storm sewer, and watermain including overhead costs is $1,307,600. The project is beneficial to the community. As previously stated, this cost will be financed through assessment of the cost to the benefiting property owned by the city. Based on the information gathered and the analysis presented, the proposed improvements discussed in this study are feasible from an engineering standpoint. . 6 l " OVERHEPb POWER LINES IL ,,,,, ,111 II... \ � �ww .., ,. , , , , , . . „. , . \ ,,,,,, \ .... \ \"`Ya,.�,, ,,, „.„„‘,‘,~...,„,,v,..,,,.......,... .�...,::,.../..,!)::,, . �� a 41,41, \\ \ ; � '���4) ACJ \ ��s�.��`` \ g � w v iceIIIII` \ \ 20 \ \\ ''A Baa 0 \ \ \ v \\ \\ s \ V A\ > ,. \ \\ ' 4 ,, ,,,,,,,,,,,,, ,,, ,,, , ,. ,.„ , , . \ .. , E \ \ \\\ ‘ ' . ::-..z."....,i,,,,,,:.:-„,:,,I, ,i''' ,..::' '2.#' 5: \ \_ 0 leo' \ \ \ \ r-leo I 819611)\819611J-EXHIBITS.DWG(TELGAAR) TWIN LAKES BUSINESS PARK EXHIBIT ,4‘,• V.: EXISTING SITEES R oma,c«WarlY 5/04/05 ver May 04, 2005 11.01.08 a.m. .... „.., . . . . " l �. OVERHEAD POWER LINES 7 d• ,; ±8.80 ACRES S ll 7.1114,44 2 \\\ Azz R 0'9Q. 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MUM 2.00% /4"/FT. 6' CONCRETE SIDEWALK 2" WEARING COURSE MIXTURE (MVWE45035C) BITUMINOUS TACK COAT 2" NON—WEARING COURSE MIXTURE (LVNW35030C) 8" CLASS 5 AGGREGATE BASE COMPACTED SUBGRADE TYPICAL STREET SECTION 819611)\819611J-EXHIBITS.DWG(TELGAAR) r, 74TWIN LAKES BUSINESS PARK ,,,rw EXHIBIT • PROPOSED STREET SECTION k.„ Ea I-biterd R Geen Compery 5/04/05 ' ver May 04, 2005 11;01:08 a.m. 1 3 1 10 ' / y , - / 114i '\ � � v k " ,...- \\ . .... . . , .. .., .., \-\\ 8 i \ .-- _ . , ,. .. , .„ , , i , \ i � � ' // a� �a IL i • ' .. / // , moi.. \ / 10 ' '.';'.,:::::: : „ ::: ::: \ J \ 6 '� ■ Z \ w 7 �\ / ?� o \ , a P " ♦t. , • T /\ \ ® � \ i;yah �.R�s � `\ ,� 0 120' 0 819611J\819611J—EXHIBITS.DWG(TELGAAR "42,, ? � rte, V �;` � s -1 ‘,„,,„,b',2:..:11,,,,,,„>, TWIN LAKES BUSINESS PARK EXHIBIT • - PROPOSED SANITARY/WATER1 sole.„ 4 i.Hovterd R 5/04/05 River May 04, 2005 11:01:08 a.m. i e ;. 0 OVERHEAbd POWER LINES EXISTING 7 1 1 STORM ,,,•:„. 14111 SEWS' EXPANSION :::;••••••••••••:;.•:::- ''',::,•..:,•......•.•...:.•.... 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