4.1. SR 03-12-2001TO:
FROM:
DATE:
SUBJECT:
Item # 4. I.
MEMORANDUM
Mayor and City Council
Pat Klaers, City Administrator
March 12, 200 I
Review Use of Funds from Holt/Jackson Land Transaction
The city owned Holt and Jackson property has been sold for a commercial development
project. After closing costs the city received $348,085.
It was a very long and difficult process to assemble this property with clear title. Part of the
side was Right-of-Way and part of the property was owned by the Elk River Associated
Investors, Inc. In exchange for this Association deeding the property to the city, I indicated
in a November 30, 1995, letter to them that (if the site sells) I would recommend to the
Coundl that 50% of the revenues be dedicated toward Business Park or Industrial Park
development.
Assembling, platting, and getting clear title to this property took years and the efforts of the
city was contested by various groups throughout the process. Ultimately, the city did get
clear title (Order and Decree of Registration) in order to sell the property. Prior to selling the
site, the city also had to provide sewer and water and this involved additional expenses as the
utlifies from the residential development around the cemetery did not get to the site and the
water line from the northern part of Elk Park Center had not been looped through this area.
In total, the city has somewhere in the neighborhood of $45-50,000 invested in assembling
this property and providing it with full utilities.
Furthermore, on June 14, 1999, the City Council purchased an Ice Resurfacer for the arena.
The cost was $82,546 and the motion stated that money from the Holt and Jackson Avenue
site be used to reimburse the reserve fund which originally financed this purchase.
A summary of the figures looks something like the following:
Revenues 348,085
-48,085
300,000
-150,000
150,000
-82,546
Balance $67,454
(goes back into the capital projects reserve fund)
(for business park activity)
(for ice resurfacer purchase)
It is recommended that the money that goes toward business park activities actually go into a
TIF matching fund. As the City Council knows, there is a penalty placed upon municipalities
with each new TIF district and this results in either an LGA loss or a local match
requirement. It is suggested that this $150,000 be dedicated toward this use.
Staff needs Council input on what to do with the $67,454 balance that is unallocated. These
funds could be used for any purpose including paying for part of the Library site expansion,
funding new bleachers at the Ice Arena, financing some of the improvements at YAC,
adding some beautification improvements to the downtown project such as tree grates, trash
receptacles, planters, etc. or it could go into equipment reserve or any other reserve, such as
one for a community center or YMCA project. There is no hurry for the Council to make
this decision - and I need to know if you want more information on various options.
Action Requested
The City Council is requested to use the proceeds from the Holt and Jackson transaction as
follows:
$48,085 into the Capital Projects reserve
· $150,000 into a Business Park TIF match reserve
· $82,546 into the NSP reserve
It is recommended that the City Council consider where to allocate the $67,454 remaining
balance.