5.4. SR 04-03-1995of
Item 5.4.
River MEMORANDUM
TO: Mayor & City Council
FROM: William Rubin, Economic Developmeny~l
Coordinator 44 ~~''
DATE: April 3, 1995
SUBJECT: Financing Alternatives -
Custom Motors, 13913 Highway 10
Introduction
At its meeting on Apri13, 1995, the Elk River City Council will continue to
discuss financing alternatives related to the successful relocation of Custom
Motors from its current site at 13913 Highway 10 to another site within the
community. Resolution of this issue is sought so as to provide Custom Motors
with definitive direction on the type and the depth of public participation
related to the company's relocation in Elk River.
Background
The owners of Custom Motors indicate that they control a parcel of land that
is located in both Elk River and Ramsey. Although Custom Motors has the
ability to extend the purchase agreement or option to purchase, the site's
owner desires resolution to this matter. That is, other parties may be
interested in acquiring this parcel should Custom Motors fail to exercise the
option. In addition, the owner of the site indicates that these extensions are
costing it money by virtue of carrying costs, taxes, and the like.
Another issue is that of Custom Motors' owners successfully obtaining long-
term permanent financing for its expansionlrelocation. A representative from
the financial sector indicated at the March 20 meeting that it will be difficult
to obtain permanent financing in light of the fact that Custom Motors deals
with substances that may pollute or contaminate the site. Should the
City/EDA participate in supplemental financing, the same concerns would
apply. For example, in an EDA mortgage, one will find specific language
dealing with mortgagor warranties and covenants addressing hazardous
substances, hazardous waste, toxic substances, pollutants, or contaminants
• affecting the mortgaged premises. The basis for this point is that any public
13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425
financing tool should not be immune from the same concerns that a
conventional lender may have.
Given that, the City/EDA should not be expected to assume any more risk
than traditional lenders would assume. Unless adequate long-term financing
can be arranged, the City/EDA should be under no extraordinary obligation
to assume the successful relocation of Custom Motors to another site in the
community. Certainly the City and its EDA should be partners in the
expansion, relocation, or consolidation of commercial and industrial
operations within the community. However, with the scarcity of public funds,
the City can not and should not be expected to issue a blank check to ensure
that a business is retained within the corporate limits.
If a private sector lender steps forward with permanent fmancing, the
City/EDA will likely consider supplemental financing through its micro loan
fund. As with any request for assistance, the applicant will undergo a credit
analysis. This will help determine the applicant's ability to repay any and all
public funds.
•
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ITEM 5.5.
March 29, 1995
File: 230-246-10
Mr. Pat Klaers
City Administrator
City of Elk River
13065 Orono Pazkway
P.O. Box 490
Elk River, MN 55330
RE: FIFTH STREET/DODGE/ELK HILLS STREET IMPROVEMENTS
Deaz Mr. Klaers:
As you are awaze, at the last City Council meeting, the City Council by consensus
authorized us to begin work on the plans and specifications for this project. However, they
did not make a decision relative to the alignment of the Elk Hills Drive intersection. At
that same meeting, Mr. Gary Satwire made comments regarding a compromise intersection
alternative. He suggested that the City consider the curved alternative but place a stop sign
for northbound Dodge Avenue traffic. We have taken a preliminary look at Mr. Satwire's
suggestions and offer the following pros and cons relative to this type of intersection layout.
PROS
• A stop sign will help keep the intersection open for all vehicles coming from TH
169 and School Street.
^ Dodge Street grid Dodge Avenue aze pushed further to the east, providing slightly
more stacking than the curved option discussed previously.
^ Theeastbound-to-northbound left turn is a free movement, improving the level of
service (LOS) for left turning vehicles from LOS D.
^ Eastbound vehicles fmm either School Street or TH 169 have more area to perform
lane changes.
^ Pedestrian crossing distance is shorter.
CONS
^ The LOS for all northbound vehicles on Dodge Avenue is reduced, which will
result in increased delay.
• PIacing two stop signs at a T-intersection creates a potential safety problem since
it is harder for drivers to establish who has the right-of-way through the
intersection.
^ Weaving of traffic will occur as vehicles from TH 169 and School Street tLavel
northbound to Dodge Street and Elk Hills Drive.
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Mr. Pat 1{laers
March 29, 1995
• Page Two
^ The intersection contains a curve.
^ Elk Hills Drive is offset from the intersection.
^ This option has less stacking than the 4-way intersection discussed previously.
Currently, we are working with Mr. Satwire to further define the alignment of the road on
the property. We will. be able to present more detailed information at the public hearing
regarding the new alternative.
As was discussed at the last City Council meeting, the most appropriate schedule for
proceeding with this project would be to receive the petition that Mr. Satwire has indicated
he will be submitting to the City. At that time, the City Council could pass a resolution
ordering a public hearing on this project. We would suggest that the public hearing not
only include those proposed to be assessed for the improvements, but all property owners
that may be affected by the improvements. This would essentially be the same mailing list
that was used for the informational meeting held several weeks ago.
At the public hearing, it would be appropriate for an in-depth discussion of the various
intersection alternatives and, at that point in time, we would look for the City Council to
make a decision on the chosen alternative for the Elk Hills Drive/Dodge Avenue
intersection. The close of the public hearing would be the appropriate time for the City
Council to consider a resolution authorizing preparation of the plans and specifications and
ordering of the project. Given the consensus direction from the City Council to begin work
on the plans and specifications at the time of the public hearing, they may be 759'0-809'0
complete with the remaining work being the addition of the chosen intersection alternative.
We would not recommend that the City Council make any firm decision on the intersection
layout prior to the public hearing; however, we will be available at the April 3rd City
Council meeting to discuss any questions the City Council may have.
Sincerely,
MSA, CONSUL? T~IN~G ENGINEERS
Terry J. Maurer, P.E.
TJM:tw
Attachment
246-2901.mer
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