7.6. A. & B. SR 06-06-2005
Item 7.6 A & B
13065 Orono Parkway
Elk River, MN 55330
May 27, 2005
File #: 819610]-0030
The Honorable Mayor and City Council
City of Elk River
13065 Orono Parkway
Elk River MN 55330
RE: NOR1HSTAR BUSINESS PARK FEASIBILITY STUDY
Dear Council Members:
Attached is the feasibility study for the Northstar Business Park to be located on the Brown
property owned by the Economic Development Authority (EDA). This feasibility study was
recommended by the ED A and ordered by the City Council. Prior to completing the final
document, a draft was presented to the EDA and a section in the report discusses their
comments. The improvements are proposed to be financed by tax increment financing
and/ or tax rebate generated by development of the lots. The largest issue with this
proposed improvement is how to balance the risk associated with developing a large portion
of it without any users versus how to get users without having the business park developed.
The EDA recommended an option outlined in the report that would prepare plans and
specifications and platting for the entire area but only proceed with underground utilities in
the first phase. The estimated cost of this option is approximately $250,000.
I will be available to make a brief presentation to the City Council on June 6th. The
Economic Development staff will also be present to discuss a potential user for the first lot
in the site, and also a potential grant program through the Minnesota Department of
Employment and Economic Development that could possibly help fund a portion of the
infrastructure.
Attached are two resolutions for the City Council's consideration. The first one receives the
feasibility study and orders the public hearing to be held on July 5,2005. Even though the
City is the only affected property owner, the City's tax increment financing (TIF) attorney
has recommended that no steps be waived in the public improvement process if TIP
Phone: 763.635.1000
Fax: 763.635.1090
www.cLelk-river.mn.us
financing is to be used. The second resolution would order the preparation of plans and
specifications and the platting process to begin for the Northstar Business Park.
If you have any questions or comments regarding this issue, please call.
Sincer"cly~
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Terry ].1vfaurer, PE
City Engineer
S:\EngineerImprovProj\2005 Improvement Projects\Northstar Business Park\05 2705 cc memo.doc
RESOLUTION 05-
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION RECEIVING THE FEASIBILITY REPORT AND ORDERING A PUBLIC
HEARING ON THE IMPROVEMENT IN THE MATTER OF THE NORTHSTAR BUSINESS
PARK IMPROVEMENT OF 2005
WHEREAS the Feasibility Report ordered by the Council in Resolution 05-34 has been prepared with
reference to the Northstar Business Park improvement and was received by the City on June
6, 2005; and
WHEREAS the Feasibility Report recommends that the proposed improvement is feasible;
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota:
1. The City Council will consider the Northstar Business Park improvements as described in the
Feasibility Report and the assessment of the property abutting this proposed improvement for all or
a portion of the cost of the improvement pursuant to Minnesota Statutes, Section 429, at an
estimated total cost for the improvement of $1,307,600.
2. A public hearing shall be held before the City Council on the proposed improvement on the 5th day
of July, 2005 at 6:30 o'clock p.m. at the Elk River City Hall Council Chambers.
3. The City Clerk shall provide two published notices (one week apart) in the official newspaper with at
least three days between the last publication date and the hearing, and mailed notice ten days to the
hearing as required by law.
Passed and adopted this 6th day of June, 2005.
Stephanie, A. Klinzing, Mayor
ATTEST:
Joan M. Schmidt, City Oerk
S:\EngineerImprovProj\2005 Improvement Projects\Northstar Business Park\Resolution rev feas order ph.doc
Stephanie A. Klinzing, Mayor
RESOLUTION 05-_
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION ORDERING PREPARATION OF PLANS AND SPECIFICATIONS AND
PlATTING IN THE MATTER OF THE NORTHSTAR BUSINESS PARK IMPROVEMENT
OF 2005
WHEREAS a public hearing relating to the Northstar Business Park improvement will be held on July 5,
2005 before the Elk River City Council after ten days mailed notice and two weeks published
notice of the hearing was given; and
WHEREAS the City Council will duly considered the Feasibility Report and those matter presented at the
public hearing by those person desiring to be heard on the matter;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota:
1. T eny J. Maurer is hereby designated as Project Engineer for this improvement. The Project
Engineer is directed to prepare plans and specifications for the making of the improvement and the
solicitation of competitive bids.
2. The Project Engineer is also directed to proceed with the platting process for Northstar Business
Park.
Passed and adopted this 6th day of June, 2005.
ATTEST:
Joan M. Schmidt, City aerk
S:\EngineerlmprovProj\200S Improvement Projects\Northstar Business Park \Resolution order plns&spec&platting.doc
Project No. 81961 OJ
FEASIBiliTY STUDY
NORTHSTAR BUSINESS PARK
ELK RIVER, MINNESOTA
JUNE 2005
FEASIBILITY STUDY
FOR
NORTHSTAR BUSINESS PARK
ELK RIVER, MINNESOTA
JUNE 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.
Terry J. Maurer, P.E.
Lic. No. 15316
Date
~~
Prepare :
John M. Anderson, P.E.
Lic. No. 25889
~Q~
(pI I 10)"
Date
INDEX
I. INTRODUCTION...................................................................................................... t.
II. PROJECT SCOPE....... ........................ .......... ........ ..................... ............................ .1.
III. NECESSITY AND COST-EFFECTiVENESS........... ........................... ......... .............1
IV. EXISTI NG 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................................................... ............................6
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 Expansion I Wetland Fill
Exhibit 7 - Phasing Plan
..
I. INTRODUCTION
On April 4, 2005 the City Council adopted Resolution 05-34 ordering the feasibility study
for the development of the Northstar 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 Northstar Business Park development. The study will discuss the existing
conditions, proposed improvements, phasing, estimated construction costs, and
overhead costs which include city administration, design and construction engineering,
fiscal, and legal expenses.
III. 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
Northstar Business Park is currently undeveloped. The site is approximately 80 acres.
Roughly half of the area is wetland and cannot be developed as shown on 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 property lines. The power line along the west side of the property crosses the
western edge of proposed Lot 7. Northstar 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 Ids
in varying size as shown on Exhibit 2. A regional 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
Street
V. PROPOSED IMPROVEMENTS
The proposed improvements for the Northstar Business Park development include
street, sanitary sewer, watermain, storm sewer 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.
The street improvements consist of an urban style roadway 39.5 feet face to face in
width with barrier 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 in 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 in/right out only. 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
consist 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 system will be designed for a 10-year rainfall event;
2
3
calculations will be in compliance with city qodes. The storm sewer system will be
designed to provide lateral connections for site development of each lot to pick up storm
water runoff internally. 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
an 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 wil establish basic
drainage patterns on the individual lots. As lots develop, site specific grading plans will
need to be prepared to establish site drainage patterns. 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 during 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. The
proposed wetland fill is shown on Exhibit 6.
VI. PHASING
The Northstar Business Park can be developed in multiple phases. The first phase
would begin at the intersection of 175th Avenue and Twin Lakes Road. For purposes of
discussion it is assumed that phase one would consist of approximately 750 feet 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 the first
phase, until future phases are completed. The temporary pond would discharge into the
existing drainage ditch which flows to the expanded regional storm water pond. A
temporary cul-de-sac would be installed to provide a vehicle turn around. Sanitary
sewer is not affected by phasing, as it flows to the intersection of 17Sh Avenue and Twin
Lakes Road. Site grading of the entire site and expansion of the 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 phasing plan is
shown on Exhibit 7. Phasing should reduce the initial investment by the City and will
defer the cost associated with future phases.
VII. PLATTING and PERMITS
Plattina
Phase II
$40,000
$64,000
$115,000
$200.000
$419,000
$42,000
$117,000
$0
$8000
$586,000
$1,307,600
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 (Dewatering)
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
Sanitary Sewer Improvements
Water Improvements
Storm Sewer Improvements
Street Improvements, Site Grading, Pond Expansion
Estimated Construction Costs
Phase I
$23,000
$31,000
$38,000
$404,000
$496,000
$49,600
$139,000
$8,000
$29.000
$721,600
Construction Contingencies (10%)
Overhead (28%)
Geotechnical Investigation
Platting/Lot Staking
Estimated Total Project Cost
Estimated Total Project Cost (phase I & II)
4
5
IX. FINANCING
It is the City's intent to assess all costs associated with the improvement against the
benefiting property. Since the property is own~d by the EDA, the City will be assessing
itself. It is the City's intent to use the proceeds from Tax Increment Financing (TIF)
and/or Tax Rebate 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
and/or Tax Rebate proceeds to retire the debt versus the desire to have marketable lots
for industrial prospects. There are two options to address these canpeting 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 underground utilities in the first
phase but not the street component, (project cost estimated at $250,000) then
when a prospect is ready to begin only the street component would need to be
bid and built. If the development of a lot occurs prior to completion of the street.
component temporary access to Twin Lakes Road could be allowed.
Either ofthese options would help minimize the financial risk of lacking cash flow needed
to retire the debt incurred with development of Northstar Business Park.
X. ECONOMIC DEVELOPMENT AUTHORITY
On May 9, 2005 a draft version of this report was presented to the Economic
Development Authority. After lengthy discussion of the various options from full
development of the entire Northstar Business Park to do nothing and wait for a
significant prospect, the EDA passed a motion unanimously to recommend to the City
Council that Option 2 described above be followed. That option would proceed with
preparation of plans for the entire area but only bid and construct the underground
utilities in the first phase. After industrial prospects are identified to generate significant
proceeds to retire the debt, then finish construction in the first phase. Finally, future
phases would proceed to construction as development of the lots in the first phase
occurs.
XI. PROJECT SCHEDULE
Cathy Mehelich, Director of Economic Development, has identified the first prospect that
agreed to locate in the Northstar Business Park. This prospect is anticipated to build
approximately a 20,000 square foot building to be located on Lot 6. The following
schedule assumes the need to have utility construction complete for a fall/winter
occupancy.
~
EDA Acquires Property
City Council Orders Feasibility Study
City Council Receives Feasibility Study and
Orders the Public Hearing
City Council Authorizes Preparation of
Plans/Specifications and Platting
City Council Holds Public Hearing and Orders
Improvement
City Council Approves Plans/Specifications for
First Phase Utilities and Authorizes Advertisement
for Bids
Planning Commission Reviews Preliminary Plat
Bid Open
City Council Approves Bid and Awards Contract
Construction Begins
City Council determines cost to be assessed and
sets Assessment Hearing
City Council Holds Assessment Hearing/Adopts
Assessment Roll
Construction Complete
1999
April 4, 2005
June 6, 2005
June 6, 2005
July 5, 2005
July 18, 2005
July 26,2005
August 10, 2005
August 15, 2005
August 2005
September 6,2005
October 3, 2005
October 2005
XII. CONCLUSION
The total estimated project cost for the recommended development of the entire
Northstar Business Park 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 and paid through the
use of TIF and/or Tax Rebate proceeds from lot development. To minimize the financial
risk, it is recommended only a partial construction (underground utilities) of the first
phase proceed at this time. The estimate cost of this approach is $250,000.
Based on the information gathered and the analysis presented, the proposed
improvements discussed in this study are feasible from an engineering standpoint.
6
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Mey 31, 2005 8:39:59 a.m.
EXHIBIT
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R/W
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70'
39.50' FACE TO FACE
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2" WEARING COURSE MIXTURE (MVWE45035C)
BITUMINOUS TACK COAT
2" NON-WEARING COURSE MIXTURE (LVNW35030C)
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COMPACTED SUBGRADE
TYPICAL STREET SECTION.
NORTHSTAR BUSINESS PARK
PROPOSED STREET SECTION
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Mey 3'. 2005 8:39:59 a.m.
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May 31. 2005 8:39:59 a.m.
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PROPOSED WETLAND
FILL = 4796.26 SQ.
FEET
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Mey 31, 2005 8:39:59 c.m.
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PHASING PLAN
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May 31, 2005 8;39:59 c.m.
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