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5.12. SR 01-11-1999 rll ---'\) ( ); !II< Item 5.12. River MEMORANDUM TO: FROM: Mayor & City Council Pat Klaers, City A~or January 11, 1999 DATE: SUBJECT: East Elk River Update The city has received three appeals to the east Elk River trunk sewer and water assessments which were approved on December 3, 1998. The assessment amount was $6,000 per acre. The three appeals are from the Browns, Eulls, and Cargill. City Attorney Peter Beck will be in attendance to review with the City Council the next steps in the assessment appeal process. . I have recently learned that federal approval of the environmental worksheet for the Tyler Street construction project has been received. Once signed documents are received from the feds and the state, the city will then be allowed to spend federal money for the acquisition of street right-of-way south of County Road 12. City Engineer Terry Maurer will be in attendance at this meeting to provide an update on this approval process and the timetable for which we will be allowed to begin spending federal money. Director of Economic Development Paul Steinman has advised me that the developers for the trailer court property have officially acquired the approximately 68 acre property from Earl Hohlen. In response to the EDA approving a resolution on December 21 authorizing the eminent domain process to begin for the Warden and Mevissen properties, the appraisals for these two properties has been ordered. The appraisals are expected to be completed within two weeks. . 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330. TDD & Phone: (612) 441-7420 . Fax: (612) 441-7425 . . . Similar to the EDA action on December 21, the City Council (also on 12/21) authorized the eminent domain process to proceed for the obtaining of all necessary easements and right-of-way for the east Elk River street and utility project. Offer letters for land south of County Road 12 have been signed by the city and will be presented to the property owners by Evergreen Land Services in the very near future. Additionally, an appraisal of the George Deschenes property has been ordered so that we can make an offer for that property. As a reminder, the bids that were opened for the east Elk River project can be awarded within a 120-day window which ends around March 15, 1999. Staff has indicated to the commercial/industrial developer that we would present the "new" City Council with the bid information for their review and possible consideration following proof that the developers have obtained ownership of the trailer court property from Mr. Hohlen and following the dedication of easements and right-of-way from the developer. The city can only award the bids conditioned upon obtaining the necessary right-of-way and easements. In this regard, some of the work could immediately begin through the area of the developer driven projects. The Utilities Commission is expected to decide on January 12 what contribution the water department will make into this project based on the fact that the water trunk lines are approximately $800,000 short of cash flowing. Eventually the City Council will need to make a decision on what the city sewer fund will contribute to this project based on an approximately $300,000 shortage in funds for the sewer component of this project. This $300,000 shortage assumes that the TIF project will ultimately fund the sanitary sewer lift station improvement (approx. $600,000). Work continues in putting together a developers agreement for TIF 19. This agreement will provide the framework for assistance into the redevelopment project and for part of the funding of various city public improvements. . . . The EDA has expressed interest in purchasing part of the Brown property (south of the Vandenberg property) for business park development. The land which the EDA would purchase would be the balance of the property which is not needed for the street or surface water improvements. Mter we receive approval to spend federal funds for the street part of this project, we will then finalize negotiations for acquisition of the entire Brown property and the EDA will then make a determination on whether or not it can afford and desires to acquire the balance of this property for future business park development. Everything discussed by the City Council last November and December regarding the east Elk River project is slowly but surely moving forward. In the very near future the City Council will be presented with the issue of whether or not to award bids for the large or a smaller version of the east Elk River project. It is important for the City Council to have a good understanding of the finances associated with this project, both in terms of shortages and cash flow concerns, before any decision is made regarding awarding of bids. A worksession on this project seems appropriate and the scheduling of such a worksession should be discussed by the City Council.