4.2. SR 11-08-2004
Item 4.2.
MEMORANDUM
DATE:
Mayor & City Council
Economic Development Authority
Catherine Mehelich, Director of Economic Developmen~
November 8, 2004
TO:
FROM:
SUBJECT:
Business/Industrial Park Land Discussion
Attachments
. City-owned Cargill Land - Concept Option
. EDA-owned Brown Land - Concept Option
. Economic Development Strategic Plan 2004-2007 Group Work Session Notes,
Industrial Development, May 2004.
Issue
For the past 2 years the EDA has directed staff to work with the private landowners before
considering development of city-owned sites. Over the past 6 months staff has received a
number of inquires for the City-owned Cargill land and the EDA-owned Brown land. Staff
requests the EDA and Council's discussion regarding its sites and development options and
provide staff policy direction in how we may proceed.
Background
The City's goal is to be "the light industrial hub of the northwest metro". This mission was
adopted by the EDA and part of the Strategic Industrial Marketing Plan. The purpose of
the goal being:
. To increase the city's furure property tax base thus reducing future increases in
property taxes on current residents.
. To create quality job opporrunities for current and future residents.
. To create an increased customer base for retail business.
Over the past 3 years staff has experienced two primary barriers to successfully recruiting
light industrial development in Elk River. The two barriers are:
. Availability of development-ready sites
. Land costs
Business/Industrial Park Land Discussion
Joint EDA & City Council Meeting November 8, 2004
Page 2 of2
In 2003, the EDA directed staff to work with Ehlers & Associates to analyze the cost barrier
and to discuss with the private landowners an opportunity to participate in a comprehensive
marketing strategy with the city to attract light industrial users. The strategy would be
designed to put all land in the city on a level playing field and yet be competitive within the
market. A draft agreement for joint marketing and development was provided to
landowners in July. As of date staff has not received comments from the landowners
regarding the draft agreement. In addition the EDA Marketing Committee reviewed the
barriers and the Ehlers analysis and recommended that the EDA consider opening a phase
of its property for industrial development.
Most recently Industrial Development was discussed at the Economic Development
Strategic Planning work sessions. The attached Group Work Session Notes summarizes the
industrial development discussion. One of the strategies was to consider using city-owned
land for development.
Staff has received the following types of inquires for the 2 sites:
. Warehouse with outdoor storage
. Purchase option
. 100,000-square foot light industrial building for local manufacturer expansion
. 20,000-square foot light industrial building for manufacturing prospect
Sites for Discussion
. City-owned Cargill land -
o 60 net acres, development is limited for 5-years (until 2005) by contract
o Requires platting and infrastructure
o Zoned for Light Industrial and a small portion for Commercial
. EDA-owned Brown land-
o 45 net acres
o Requires platting infrastructure
o Zoned for Business Park
Discussion Points
The EDA and Council may consider the following points for discussion:
. City /EDA development costs to date (land purchase)
. Estimated costs for public improvements/infrastructure
. Development phasing
. Desired price point
. Desired types of users and size
. Financing options for public improvements
Staff will provide information on the development costs to date and estimates for public
improvements at the joint meeting.
.
City of Elk River
Economic Developtnent
Srxategic Plan 2004-2007
May 2004 Group Work Session Notes
PRIORITY ISSUE #1:
INDUSTRIAL DEVELOPMENT
What is the issue?
Type of development preferred
Manufacturing (value added, highway)
How to increase the tax base
How to increase the employment base
Why an issue'
Nothing is happening
N at staying competitive
Consequences of dOln" nothing:
May lose existing businesses
Continue to have empty business parks
The debate goes on.. ...and on....
VISION ALTERNATIVES
Parks are filling in with "desirable businesses"
What makes them desirable?
Job type
Benefit program
Career opportunities
Retirement plans
Household supporting wages
Diverse services / products
Quality consu-uction
Utility costs are reasonable
Land costs are "affordable"
BARRIERS
. Cost of land
. Offers from other cities
. Reluctant owners (to sell land)
. Ability to provide utilities on a timely basis
'd'<
. PRIORITY ISSUE #1:
INDUSTRIAL DEVELOPMENT
STRATEGIES
Expand/grow existing businesses
Reduce the cost of development
Land cost
Utilities
Use city-owned land
Make utilities available
Have options available
J oint marketing with private owners
Designate several locations for businesses
Develop a "price point" policy
Develop a more generous incentive program
Provide an opportunity for owners to be part of the development
Consider City ownership of all parks, fInanced over a multi-year period
Develop a program to purchase portions of private parks over time - with options to purchase
additional land
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Case Number: EDA BROWN PROPERTY
~oward R. Green O:mpany
November 26, 2002
File: 81961OJ-0030
Ms. Cathy Mehelich
Director of Economic Development
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
RE: BROWN PROPERTY DEVELOPMENT COSTS
Dear Ms. Mehe/ich:
As requested, we have estimated the cost to develop an industrial park on the Brown Property owned
by the Economic Development Authority. The estimate was based on a conceptual drawing prepared
by Chris Leeseberg of the Planning Department.
In order to prepare this estimate, we had to make some gross assumptions regarding site grading.
We assumed there would be some topsoil to be stripped, stockpiled and re-spread. We also
assumed there would be the equivalent of one foot of grading over the entire site. We did not assume
that any fill material would be brought onto the site. Based on these assumptions, we have estimated
the development costs as follows:
Site Preparation/Grading
Utility Construction
Street Construction
$153,000
$448,000
$310.000
$911,000
$255,100
$7,500
$32.000
$1,205,600
Estimated Construction Cost
OVerhead (28%)
Geotechnical Investigation
Platting of Property
Total Development Cost
If you have any questions regarding this information, please call.
Sincerely,
Howard R. Green Company
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1326 Energy Park Drive. St Paul, MN 55108 . 651/644-4389 fax 651/644-9446 toll free 888/368-4389
Ms. Mehelich
December 23, 2002
Page Two
If you have any questions regarding this information, please call.
Sincerely,
Howard R. Green Company
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Terry J. Maurer, P.E.
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Ltr-122302-Mehelich
Howard R, Green Company
CONSULTING ENGINEERS
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River-' Case Number: CITY CARGILL PROPERTY
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~OWard R. Green Company
June 27,2003
File: 821330J-0325
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As requested, we have reviewed the concept plan for development of the Cargill Business Park
Option E and have estimated the development costs based on it. The development costs include
both the "hard" construction costs and "soft" development costs. We have assumed that the ~
phase of development would be Lots 1 and 2 with frontaQe on 171" Avenue. We have also assumed
that further development of the remaining property would take place in tbree additional phases.
Attached is a copy of the Option E concept plan for the Cargill Business Park development. Based on
this plan, we would offer the following costs:
Ms. Cathy Mehelich
Director of Economic Development
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
RE:
CARGILL PROPERTY DEVELOPMENT COSTS
Dear Ms. Mehelich:
A. Boundary Survey
Prepare a boundary survey for the entire parcel of property. This includes setting all of the
boundary corner property irons. The survey will be necessary for the final platting of this
property and will need to be done only once, no matter how many phases the ultimate final
development takes. The estimated cost for the boundary survey is $6,000.
B. Delineate Wetlands
The estimated cost to delineate all of the wetlands on the entire parcel of property,
including having a survey crew locate the delineated boundaries, is $4,200.
C. Topographic Survey
This item would include gathering topographic information over the entire site for
preparation of any existing condition plan to be used in the development of a grading plan
and infrastructure improvement plans. The price for this item would include both the
survey crew actually gathering the topographic information in the field and also the
preparation of a drawing using the boundary survey discussed previously to prepare a site
plan of existing topographic information. The total cost for this item is $29,000.
D. Preliminary Plat
This item would prepare a preliminary plat based on Option E for the entire layout of the
site. Total cost of this item is $1,850.
Ltr-06270:>-Mehelich
1326 Energy Park Drive' St. Paul, MN 55108 . 651/644-4389 fax 651/644-9446 toll free 888/368-4389
Ms. Mehelich
June 27, 2003
Page Three
If you have any questions regarding these items or would like to discuss them further, please call.
Sincerely,
Howard R. Green Company
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Terry J. ~re'r, P.E.
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Cc: Michele McPherson, Director of Planning
Ltr-062703-Mehelich
Howard R. Green Company