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HRA Agenda 12-10-1997 SpecialAGENDA FOR SPECIAL MEETING MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, December 10, 1997 - 7:00 p m. City Ha0 MEMBERS: Chew Brad Barger, Vice Chair Steve Andrews, Damn Labr, Bob Murray, and Dan Frie. COUNCIL LIAISON: Roger Carlson. STAFF: Rick Wolfsteller, Jeff O'Neill, and 011ie Koropchak. GUESTS: Attorney Steve Bubul, Kemedy & Graven. Mark RufE Ehlers & Associates. Barry Fhah, Mall Redeveloper. Brad Johnson, Lotus Realty Services I . CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE DECEMBER 3, 1997 HRA MINUTES. 3. CONSIDERATION OF ADDING ITEMS TO THE AGENDA. i-' %'-A�-*r o 4. CONSIDERATION TO NEGOTIATE LEVEL OF TIF ASSISTANCE FOR REDEVELOPMENT OF THE MONTICELL.O MALL FOR DETERMINATION OF TERMS AND CONDITIONS OF THE PRIVATE REDEVELOPMENT CONTRACT BETWEEN THE HRA AND BARRY AND BARBARA FLUTH. 5. CONSIDERATION TO REVIEW THE APPRAISAL FOR OUTLOT A. COUNTRY CLUB MANOR FOR RECOMMENDATION TO THE CITY COUNCIL. 6. CONSIDERATION OF A REQUEST FROM THE IDC FOR A JOINT MEETING BETWEEN THE HRA/IDC. 7. OTHER BUSINESS: a) Next HRA meeting - Jammy 7, 1997. b) Koropchak out-of-town December 15 - 19, 1997. C) NG/CotmrumityCenter Update - Steve Andrews. ,4) N-k'c 10 1 oT K. ADJOURNMENT. cm HRA AGENDA DECEMBER 10, 1997 4. Consideration to ne¢otste level of TIF assistance for redevelgpment of the Monticello Mall for determination of terms and conditions of the Private Redevelopment Contract between the HPLA and S= and F"rbara Fhnh a Reference and Rr&g=md- At the December 3 meeting, HRA members deternmed the Monixel10 Mall redevelopment project met the HRA-TIF Policies. Following discussion and request for additional information, HRA members authorized Eblers and Associates and Kennedy & Graven to flu Cher explore the request for TIF assistance and called for a special meeting of December 10, 1997, 7:00 p.m. The motion was subject to receiving a cashier check in the amount of 55,000 hm the redeveloper and a fist of the mall tenants with proposed relocation destinations. Enclosed is an evaluation of request and a recommerMation for TI assistance from Mark Ruff. Things to consider: Amount of TI assistance. Cap on amount of TtF assistance by fine-item. D Method of fmanciug. (Pay-as-you-go or up-from) interest rate of net present value. Length of amortization. Amount of Assessor's EMV. Request or no request for Assessment Agreement. Relocation waiver Brom tenants and indemnify agreement from redeveloper. "But for' test evidence. Proforma. Local cotro mnity support of redeveloper and proposed tenant. Annual local contribution ($4.500). Administrative costa (55,000). Please note enclosed Letter relating to the TIF project consideration. r DEC 00 '97 10:14AM D4DZ5 8 ASSOCIATES P. 2/4 BM Nd ft CI—AOi 9 Ie, PUBLIC lI016NC! December 5, 1997 TO: 011ie Korepchak, Monticello HILA FR: Marls Ruflff- RE: Evaluation of Request for Tax Increment Assistance for Monticello Mall Redevelopment Based upon direction Erma the HRA received at rho Docemba S 1997, meeting, this letter is intended to review the parameters of the redevelopment of the Monticello Mall into a 65,000 square foot Cub grocery:tare and 5,000 of other retail space from the perspective of the private, financing and request for tax increment assistance. We an in receipt of the November 26,1997, letter from Lotus Realty outlining the request for tax imeramemt and a pro forma dated November 17, 1997, for the income and sources and Was expected from the project. Of printery concern to the HILA is the determination that the but for test is being met In other words, wotskl the project go forward as planned without tax increment assistance and what level of assistarms is necessary to make the project financially feasible for the developer. The request for tax increment assistance is $600.000 of pttsent value assistance for demolitiom, relocation, and site improvements to be reimbursed to the developer ova a 15 to 20 year period with steno at a 9% Interest rate. Our perspective on the buWm test is divided into the are-: lease rate an the fatillty. "a of qualified costs being requested, ed the rate of return to tits developer. Lease Rates The de velopa will be demolishing the existing 69,000 s.fmail and building the shell for the grocery store and retail and Icasing the grocery stag to for an initial lase rate of $7.25 per square foot for 20 years, with some inflation on the rem ova time. The smalls tenants we expected to pay 512 per square foot LD base tont Based upon discussion with other developers familiar with the large grocery store martak the rent is reasonable given the expected sales per square foot for the Monticello ama. Other developers indicate the probable rossoma for Cub's :.nation in Monticello am that this location offers very good ecaoaa for Super Value's distribution efforts to smaller stores near Monticello and that defensive ma" strategy to prevent other larger gmcay stem from entering the area's mullet. It is not likely, according to other developers, that Cub will eta Monticello and absorb operating losses for a period of yom. Therefore, the rent isreflaetive of tits expected ulna. Qua ins Costs As you ars aware, tax increment can only be used for caWn types of dwelopmem toga. The qualified costs requested are approximately as follows: Demolition/Relocation: $400,000 Site Improvements: 2mm Total: $600,000 The costs aro all estimates only and would need to be vained prior to do HRA issuing a tax iercramamt OFFICES IN MOIKUPOU& MN AND SROCUMD, MIN 2050 Norwest Center. 00 South 6MA1 Strut . Mlnft""i , MN 68403.6100 Te1-0heA9612-M.0201 . FAX 612.1704856 DEC OB 'Yi 10h14AM EHLERS 8 RSSOCIRTES P. 3/4 revenue note. It is our perspective that the demolition and relocation costs are appropriate cons for tax increment assistance in the can of a retail Uility, because these tae redevelopment costs which an ant encountered in raw load development We have two concerns on the eeloeatioa cost. First, the relocation costa should be capped to avoid the incentive for the cleverer to pay extraordinary benefits to aisting tensors who are unwilling to move. Qrtalnly the HRA should have the discretion to increase the relocation amount if a special circumstance arises. For example ifs particular tenant requires a specific location which may be more expensive than what can be fit within the budget and the HRA believes thst the relocation meas a certain public purpose, the HRA could consider this as a special cireummrnce. Second, the HRA's legal counsel has advised that all tenants will need to waive in writing their claim to relocation benefits under state and federal statutes sad that the developer indemnity the HRA for claims which may arise over a tenant relocation amount. Mr. Bubul can advise the HRA on this issue in mom detail on December 10th. The site improvements as a qualified cost is difficult m justify at this time because the developet has not submitted evidence that the costs of various new site improvements associated witb the redevelopment such as lighting utilities nloatiah, etc. are greater to this cost savings of having an existing parking lot. signalbation. road improvements without asscurnimts, and water and sewer service to the site. Therefore. our neommernded estimate of assistance based upon type of cath is $400.000 rather than the requested 5600.000. unless the developer cos demonstrate that the relocation costa will be higher than anticipated and the HRA agrees with the request Return to Developer and Fees A reasonable tate of return is die most important factor in evaluating the but for test. We prefer to focus on a simple return on equity evaluation as the best method of measuring rahtm. Return on equity means that if a developer has invested $1,000,000 of his/her own funds in combination with an appreciated non - mortgaged value In a development and the annual cash flow from a project is 5100,000, the return on equity is S 100,000151.000,000 or I OSA. Typical return on equity formal estategiventhe risks of the market, range from 12% to I11% pa year. Because the developer currently owns the Monticello Mail and is not purchasing it for the redevelopment, the actual equity in the project is more difficult to discern. It is wi nowledgod by the developer that the outstanding debt on rho facility is approximately 5350,000. The Question is what is the actual value of the piece of pmparty at this time. It is valued by the assenw at s"roxinutely Sg00,000, but this is probably net reflective of its currents, potential. Without tax increment assistance, the net annual cash flow after debt service is eapectod to be approximately $63,000. A 15% annual mum assumption for tiro ash flow on this property would mean that an equity investment of 5420,000 is the maximum a typical developer would hold. We have reviewed the preliminary costs for IN project and have determined that the stated development and leasing fees are within Industry guideline Reeoaamendatlos Given the factors listed above. his our recommendatlaus that the HRA consider an assistance level of 5400,000 to be reimbursed at an mteren ram of 7.5%, which is the current enlmate of the developer's actual eon of borrowing rather than a 9% rata To amortize this revenue obligation over 20 years would DEC 08 '97 10:15AM EH -ERS & ASSOCIATES P.4/4 L require an annual payment of S4S.000 per year. If 545,000 per year is used as a reimbursement amount and $63.000 per year is expected in cash flow. the equity investment required to mat a I S% rate of ratan is $720,000. Given the outstanding mortgage on the property of $350,000, the property would need to be worth $1,070,000 before demolition in order to justify the amount of assistance. It is also our understanding that there is some uncertainty over the &natal amount of taxes to be paid from this fieility. If the assessor's current estimates aro used, a VAN.000 market value would yield approximately $90.000 per year in tax increment. Themfwc, the HRA could retain the first 545,000 per year in tax increment and allow the remaining amount of inc einem to amortize the developer's debt. If the value wee to become higher. the HRA could choose to continue to split the increment on a 50/50 basis or choose to pay off the obligation of the developer faster in order to minimize the developer's higher 7.591 inteest cost. It would be our strong recommendation that the HRA reoeive the first $45,000 paid in tax incranent each year to avoid a drop in commercial tax rates from reducing the HRA's revenue stream. Please also be aware that the City and/or HRA will be required to make an annual local contribution to a project arta cost which would not have ben incurred without the district going toward equal to 54.500 per year hued upon an assumption of $90.000 per year in increment Please contact me with any question or comments. cc: Rick Wolfstollcr ` Steve Bubul Monticello BRA Members Monticello, Minn. RE: TIF project consideration - Barry Fluth - Monticello Mall Site Dear HRA Members; Please allow me to present some additional information for your consideration concerning the above named project While it is not my intention to try and convince you to not work with the project at hand, the issue of "what -but -not-for" remains suspect This, along with the State of Minnesota's stance, discouraging HRH's from using TEF funds for the purpose of retail development, further adds suspicion to this particular project PLEASE CONSIDER THE FOLLOWING FACTS: THE FUNDS OFFERED ARE FOR THE BENEFIT OF THE PROPERTY OWNER. NOT THE OCCUPANT - SUPER VALU. INC. Actually, Super Valu could very well be the owner of the property, by option, and any financial aid could be passed directly to them following your action. THE COMMUNITY WANTS AND NEEDS ANOTHER SUPERMARKET Maus Foods has been expecting a competitor for many years and looks forward to a community with local competition. We just don't want any competitor subsidized. Keep in mind, a big chunk of TEF funds is actually generated from my site!!! !!I Spend my money to encounsge(develop/subsidize my competitor?????? THE NEW RETAILER WILL BRING NEW JOBS TO THE COMMUTIITV While new jobs will be created, old jobs will be lost; possibly on a one-forne basis. This is one reason TIF is not considered a desirable venture for retail use.. T?u developer indicated 150 new jobs be created. with SO full time jobs paying between $8 - $12. Maus Foods currently employees IS 1 employees, with 70 full time paying between $9.50 - $ 17. A NEW BUSINESS OF THIS MAGNITUDE WILL BRING OTHER NEW BUSINESSES TO THE COMMUNITY The growth of business activity on one side of Hwy. 23 could be the demise of Ute businesses on the other side. A case -in -point is the failure of the property in question, and itt lack of ability to financially support the businesses within. When the supermarket in tin mall vacated the site, an entire string of failures soon followed. This demonstrates the importance of "customer traffic" to a geographic area and the repercussions that can occur when that happens. Which raises a big question -' what if the existing supermarket no longer remains at the present site, what is the long tern fate of those businesses nearby? In other words, if we create anew retail "anter of attention" in anew area, do we ultimately mate empty, financially stressed shops in another? All we may be doing is "solve one problem, just to create another!" CUB FOODS WELL BE A FINANCIAL CONTRIBUTOR JUST LIKE TARGET AND OTHER MAJOR COMPANIES It's my understanding these large corporations give a percentage of profits. No profits, no domuons. And I can assure one thing because the new competitive atmosphere that may exist , there will not be large profits generated by any supermarket for many years to come. Besides, if committees such as yours, are looking forJlwmial contributions only, l would really like to question what the previous HRA was trying to accomplish. F I Fj F Fj VOLUME 57/Nt FORTY-FIVE DOLLARS SEPTEMBER PER COPY PART ONE F 77)c a ninkirtq a Publication 0 For w 77jhjkiYjLq ftoPk Have Some Products Rea�,ched.-, ' I A Price Precipice? PRICING STRATEGIES BECOMING CRUCI�L shop colnphded ov,:r is far from the only rci- BY DOUGLAS P. HANDIER l'hu list ulwlailer m The past 12 months were a trying period for supermarkets. In June, sales of all categories nnoko unrroaclummis at grocery stores increased only 2.2 percent. With comparable increases in consumer years includes the loll- prices, this suggests that the physical volume of goods sold was absolutely flat. • Thu colnploimm m But based on nominal GOP, ifte economy expanded around five percent during the sante 1'ncaipa Cn.'s luo:k-to- period. Where are these incremental dollars going? Not to restaurants; sales there increased Ralphs/Fuml 4 Loss m 2.7 percent. With most economic pundits forecasting similar or slower growth in 1997, there h tolninick's in its,: Ali, is little reason to expect any significant acceleration in the growth of either food category. • 11m ac, loisil i, n, ,1 As has been the case for the post several years, the mass merchandisers continue to eat Urnµ by Sinilty's: an increasing share of the supermarkets' bread and butter. Sales of dry groceries were up • The mnµoing smut 7.7 percent at mass merchandisers for the 52 weeks ended March 30. The comparable fig- by New h:nµhand-lx,s,: ure for supermarkets was 3.6 percent. Sales of health and beauty care products increased inµ its acquisition of 15.0 percent at the mass merchandisers versus only 3.5 percent at supermarkets. kers as scall as a mhnl This donnel switching continues to be encouraged by the mass merchandisers' excep• fresh slows: tionally aggressive pricing. With food stores' profit margins continuing to hover around two • Thu continoc,l 1' percent of sales, there is very little room for supermarkets to reduce prices. prug rss of 11111,1 i N. sc Thus, for the remainder of 1996 and at least through 1997, pricing strategies will be its first soil in A1,1ha increasingly important. Expert category management will take on heightened importance. II •Thu continued 1 won't be enough to predict what consumers will buy at what price. The supermarket execu- mt' 1;i,11,t I mod (14111d, five will have to be able to deduce which categories and brands have the least or greatest British ndaih'r I. sai amount of price resistance among their customers. im:n•as-A its,.lnity In short, tho fine tuning that will have to bo done with pricing strategies may spell the • The ad cnn,..: , d difference between profit and loss for most supermarkets in the coming months. to,1• slut • Itrpmrls that tV, Douglas A Handler is duedor of research /or ACNielson. ilt I,:m pt i nµ to s•en t n Invditiuual strongly.) Lost rn,a, llww v BREAKDOWN•SPENDING mrnl;rrs mol acgnis Weekly spenaltiq In Supermarkets• - $60.71 per Household ,u1ai, s 111111+• 1 �.�.. , hi,1e ml emhwmrdali,� 1995 1994 tarots cousmralis,• Population 262.8 million 260.3 million activity incwased. Households 97.7 million 95.1 million Instihdu, a ws,•arcl Annual Weak Annual Week Influcalial folcu Perishables uuly also see the in Per Capita $ 578.03 $11.12 $563.05 $10.83 "µ`on rl,"+f„r si.-pi Per Household 1,554.82 29.90 1,541.14 29.64 Worth pondorinµ: Dry Grocery (Food) lures of Imi maimr Per Capita 314.54 6.05 309.90 5.96 1"'nth'"Its. ti"I'll„• Per Household 846.07 16.27 848.24 16.31 Total Foods dnsiµned to raise I Per Capita 892.57 17.17 872.65 16.79 Ioly,mhls. A di1, o I'owuuum Lin 11: r Per Housohold 2,400.89 46.17 2,389.38 45.95 Dry Grocery (Nonfoods) u,µuth,•r n war , ro \Ilhouµh Ihmw Per Capita 119.36 2.30 119.01 2.29 "1N':Ifn:lm Per Household 321.07 6.17 325.74 6.26 KKR Inds I„a:onm I General Merchandise/MBC '..-rry y industry stn. Par Capita 121.24 2.33 116.94 2.25 P chnso of NIR N,1b Par Household 326.12 6.27 320.09 6.16 •in1uµ of so Grand Total* inclu including Ihoso , Per Capita $1,173.66 $22.57 $1,146.51 $22.05 Bruin's. ' Per Household $3,156.99 $60.71 $3,138.13 $60.35 As has o ,I Jim, Now: Poprvlation and housshoW dwo ars hon, U, S. &Now of Ow Cwtrw, l,choln or1•pmsan Muvhoddr. lilts In a•n w bit I v, Ealsdn orrrrd farce w• ssm. Sales teem ors Gam 1095 CES 1990s. W h i to h-% • rad kx6oln mmchoadbs roar sw dowhed abo», r, •, Jun n of sm.) "I .Suprmorl.e on dsNried a Wwaoy Bora with m Lill rads d ov« f2 million. -- _ -- __ V plow la 111(i Nigl FOOD • • Raleorp's approximately three percen. Acre vphpee share of the ready -to -eat cereal market adding its Chex, Cookie Crisp, Almon SALES (000) % OF VOLUME Delight and other brands. That's estim 1994 1495 1994 1"S to bring its share to about 27 percent. Supermarketst $298,435,947 $308,437,710 75.0% 74.9% behind Kellogg's at about 33 percent. Superettes2 22,996,015 24,5 15,442 5.8 6.0 Ralcorp's remaining business, inclu private label cereal. Beech-Nut baby fe Other Grocery Stores3 54,898,038 56,1 80,848 13.8 13.6 and Bremner crackers and cookies. are Total Grocery Stores $376,330,000 $389,134,000 94.6% 94.6% being spun off to shareholders. Specialty Food Store34 21,470,000 22,461,000 5.4 5.4 Corresponding with virtually all the market share moves by major vendors Total Food Stores $397,800,000 $411,595,000 100.0% 100.0% been concurrent cost -reduction plans. 1. 0a, $2 millron They range from the major manufactur 2.$1 minion to $2 miflron and distribution writeoffs absorbed by 3. Under $1 milIron, Including oxweniw" own and atow me grocery . such companies as Procter & Gamble at 4 Inrludn mea, sedood, feud and Sowce: 1995 CES vagebwe morbb, eorthdwimy, bakery, dell and odw Good axes. Quaker some years ago to the basic real cation of support spending, such as trot By Store Af ilidim money and couponing. 1945 With that in mind• some observers or, SALES (000) % OF VOLUME wondering if the nation's leading soup, Pent may preparing itself to launch t Independent Grocery Stores � erY $54,478,760 13.3% next major round of market share move - r and Chain Grocery Stores* $334,655,240 81.3% Why else, some wonder, would Can Total Grocery Stares $389,134,000 94.6% den, N.J.-based Campbell Soup Co., w1. SFr{• •Ity Food Stores $22,461,000 5.4% sales and earnings are atoll time highs Toftrrrood Stores $411,595,000 100.0% and whose 199&97 marketing plan Includes the biggest new product blitz 'Chaim (I I or may wr*4 its history• be pondering what may be, Space: 1995 CES major restructuring? Campbell monagemeni is about to GROCERY• s receive a stmtogic plan proposal from Coopers & Lybrand following an In -duke Tonal onxery Steres 1537,500 study of the company's management or} Soles (000) $369,134,000 nization, manufacturing and marketing Average Sales per Store $2,914,861 structure. According to analysts, some 1 Average Number of Customers per Store 1,968 managers within the company believe 0 plan could result In the elimination of Number of Chains (11 or more storot)•• 32,040 some product lines, the revision of marl Total Sales (000) $334,655,240 Ing practices and significant staff cutbat Sales per Store $10,444,920 According to a company spokesman. % of Total Sales 86.0% the objective of the plan reflects a now - AD Chhor Sloss 101,460 familiar theme: "Tho idea Is to reduce it. ficienclos and reinvest capital back Into Total Sales (000) $54,478,760 growing the business." Sales per Store $536,948 A grocery category manager for a maj. %of Total Sales 14.0% Midwest wholesaler said. "You have to xd believe that like other majnr vendors hay J Unity -41 of Unift �� ore Ihoy want to Bret become the low-cost vt Ove 2 Million 30,400 $308,437,71 O $10,145,977 dor and than mover from their existing $I Milliorr32 Million 14,208 $24,515,442 $1,725,442 url er their propO ductition an m market shareth further end marking. $500,000•$1 Million 24,384 $22,769,654 $933,795 with aggressive A d that's the `"rich pricing. AndIhot'ethe All Othor 69,582 $33,411,194 $480,170 of kind of ihirtg that they hope w111 send m •Gros arae sola mporrsd bra S. of Comeern. �ery� • %cludn of gnxuy wra reewdieu of annual Bain vaiMrM sages both to the trade and to the public, Sorrel In the trade have not ad rnr e n /918 ANNOY (OsSUM ti EMI IIUIIS STUDY Last year's 5.30 mggers and acquisitions annmq U.S. food companies was the b{gbcst r'atc oj' consolidation since 1988. And 199,5 marked the f mirth consecutive Hear (If'incrcascd actiPity. The power struggle that has been devebpfnII between food stores gad tradltlanal foodservice estaMlshmeMs for an tmm*sed sham of the nation's food dollen has become o stalemate. Neither We won or lost much territory In 1998. The year concluded with food atoms capturing 81.8 peraaM of elle food dollar and restauratts getting the ether 119.2 percent. Food atoms' sllgfrt gain over their 1981 sham 611111110111 this msmeMlan of the previous two yews. whkh had heav4 favored toodsenke with lncmasing sham. With ablgat 8880 Whim in total food sats st stake, we will omlthnm to we heated oanITIOM a between food stores mal todswvleo purveyors, as well m ■tom eotivtty from mlatlme outside the lradttlonal food sates arena. 1995 Rasfouranh 36.i Mill Resfauranfs 36.5% Samres• U'S n'pl of Commas.' Bu'", d hide. Svitia- lumuer Scott Puler Co. chief financial offe- rs." Basil Anderson, a•hu joined the soup maker In the sane lesiliom. Anderson reportedly presided over It corporate staff reduction of suue 70 percent at Scoll. If 01111phell dues mffm:l such possihh• sweeping measures• it will du so. as Ihu aforementioned w•holesalor descrihlvl, from it pusilien of marketing and financial streogth. (�amplell's out sales for the nine.- mumth perlud !ndmi last Aln'il cv:m!dcd the $u hilliun mark, it seven pen.cnl tnrremse. liamiugs ruse IZ pmci-at 10 551(1 million. t lww's lwuo lltill! sim":111alloll Iles far on whelhcr the plan. it adoIlwd. Ivill 1,16.1 I the cnnanl, aggo ssivr mrov-ih•ul earkoting pLm.'11m-ugh fi.scol Iv!17, (:u11plsdl has schoda1m11ha intiodocliun 1,l to rla:md lu new soup Bars, supl-Iled hr n Irlsut.-d hudgulod udvmlising inr.rvawe 111 :II) jm-ir.rul. As large uuumlarturms mud distrilndors ruothoueslploozinglheproliWhilit11(1111 rivals wIm lack this g,-ogooplik.ml seep". smlrs INItlr 111' financial whon!withaII" matl,h Ihrml. mauv pnvlil.l ,I 'It-advLunsul• id,iliuu wilhim alt indimi-v sm.lms. Tho most envious ovidmu:n Connrs Isom such devrlopmaulls as Ahold's hli.stm iog cyaosloo puce in the Nurthrast, imhoi• aiding in IIs durprisingacquisilioe IdS11111 If y' proven acceptin; and ittr I110I'C pl, MTN 01.11 bank ca each WI so thcy WcIC0I11 YOU Yot FMJ tents which resemble a suburb more than a small town — an issue that must be recognized in a plan for Monticello's downtown. L The draw area for Monticello was defined as the communities of Monticello. Market Conditions Monticello Township, Big Lake, Big lake Township, Orrock Township, ° ° O Y't Becker, Becker Township, Clearwater, Clearwater Township and Silver Creek �,L e p Township. This draw area was established through an analysis of traffic now t ' �.a o ° partems, community interviews with local business owners and a survey of o �3 y •o ° nK ,°°�aa downtown businesses population, households and employment in the draw o a �J a ,o °°�. area all experienced substantial growth in the 19SOs and 1990s. 74 .t go7o oQ .t°e e The draw area had an estimated 30,000 persons in 1995 and nearly 10,000 households. Monticello alone had almost 6,000 persons and 2-100 households. Growth is k rho rs forecasted to remain strong through the remainder of the 1990s with s 1 overall growth rates between 35.0 and 40.0 percent. A forecast for Monticello's growth performed as a part of this study shows that 1,760 persons and 720 households could be added during the 1990s. The remainder of the i- draw area is forecast to add 7,650 persons and 2,810 households during the ° • ° ° ° yen a same period. Growth is expected to slow during the MOO& but Monticello is L40.000 still expected to add 1,000 persons and SOD households while the remainder of ° the draw area is expected to add 3.000 persons and 2,000 households. + S • ° res S During the next five years. Monticello and the remainder of the draw area will experience the greatest growth from the older adult age cohort (persons age 45 to 64). This strong growth is primarily the result of the aging baby boom gen- eration. the oldest of which have now moved into the older adult age group. This cohort is expected to increase more than 25.0 percent in the next five year 1 r tri period, resulting in roughly 7,700 persons in this category in the draw area by _ / 1� 2001, The implication for Monticello is that the aging of children will afford adults more time to leisure activities (eatertaituoeat eating out. travel). 0 a .000 F pursue thereby spurring demand for additional retail in Monticello. �A � w° Downtown Monticello has experienced a considerable shift in [acus during the° e � past five to ten years, leaving the downtown retail core ready diminished in 1 I 0 ° ° „tt^ intensity. Downtown still maintains a presence as s recoil concentration. but its Q • y° ° c imponaace has been reduced in the short-term as retail concepts have changed 5 ��o l ✓� vo 0 Downtown Monticello is still the financial and business hub of the community. in downtown, 7� New and long-established businesses continue to remain strong p �0 but believe that creating a new downtown dynamic will strengthen their ability S A New WIF snaasusmdrtftco Mia. rfs. j'.% Enclosed is some data relating to the supermarket trends as provided by Barb Esse, MCP Chair. Additionally, she reports in Wring to Paul Stemmer, ED Director of Ells River, the presence of Cub Foods and others has had a great impact on developers looking for development . f r "-:.� (Spm -off business). I contacted Kevin Doty, Marquette Bank, to rim a D&B on Bury and Barbera Fhuh on behalf of the HRA. BBF Properties is owner of mall, no info provided to acoouraant so no D&B. Suggested three years of tax returns including Schedule E and three years of Balance Shat and Income Statements. Property Taxes and assts are paid in -full. A delinquent water/sewer brill was just paid the other day. The current s/w bill is unpaid. L HRAAGENDA DECEMBER 10, 1997 Q A Due to the discrepancy as to the number of acres of Outlot A, the HRA on December 3 tabled any action until the December 10 special meeting and requested the appraisal be corrected accordingly. Addhionany, the payment for services rendered was held until such time the appraisal was corrected. Enclosed is the December 3 agenda supplement and the corrected appraisal. l believe the acreage was verified tbrough the City Engineer, WSB, Inc. One thought, with the Mayor's desire to complete the extension of West 7 Street perbaps the property becomes more valuable in the future. HRA AGENDA DECEMBER 3. 1997 7. Consideration to review the appraisal for Outlot A_ Country Club Manor_ for recommendation to the City Council A. Reference and background: At the November neeeting. Rod Dragstad was authorized to complete an appraisal of Outlot A for the HRA Enclosed is a copy of the appraisal. Also enclosed is a copy of a resolution, memorandum, and agreement between or by the City and HRA relating to this parcel. In lieu of the agreements between the City and HRA, it is the recommendation of Administrator Wolfsteller and Koropchak that the HRA review and recommend a disposition price for consideration of approval by the City Council. A few years ago when the City requested RFPs, the City was offered approximately $225.000 for the 16-acre parcel. However, the project fell through. Of the 16-acre parcel. 10.4 acres is available for housing development as 2.5 acres is required for parkland and 3.1 acres for storm sewer pond development. Per the request of the HRA in November. RFPs were mailed on November 14 to ten developers and Realtors and are due back no later than December 12. B. Alternative Action: 1. A motion recommending a disposition price of for City Council consideration of approval. 2. A motion recommending a disposition price of without City Council consideration of approval. 3. A motion to hold the property until development of West 7 Street creating a linkage to County Club Road. (Perhaps land value will increase) 4. A motion to table a decision until return of RFPs. C. Recommendation: In preparation of the anticipated return of RFPs and the desire to place the parcel back on the tax roll, perhaps a recommendation of a disposition price is in order. Ahhough it has not been determined who will benefit Atom the sale, it is recomntaded that the Council consider for approval any recommendation by the HRA: therefor, recommendation is Alternative No. 1. 'Rte Council needs to be updated on this item HRA AGENDA DECEMBER 3, 1997 Appraisal and agreements. HEARTLAND APPRAISAL I INVOICE I 11/26/97 I 3103 P.O. Bok 312 DATE -MUR lonticello, bin 55362 ,612) 295.3300 L Item APPRUSAL FZR POR SZRVICSS A�SRBD >MIC COON= CLAS IIAliOA Thank you. CUMI: H. R. A. JRWICZLL40 Total 0 400.00 Total 0 400.00 RESOLUTION 92- 25 SALE OF TAX FORFEITED LAND PARCELS WHEREAS, parcels of land in the city of Monticello bearing tax ID numbers 155-500-033400, 155-500-033402, 155-033-000010, 155-014- 003100, and 155-014-003080 have been forfeited to the State of Minnesota for non-payment of property taxes and are being prepared for public sale under tax forfeit land sale procedures of Minnesota Statutes, Chapter 282, and WHEREAS, the City of Monticello or its Housing and Redevelopment Authority has an interest in acquiring Parcel #155-500-033400 and 155-500-033402 for the purpose of redevelopment of a non -conforming and blighted area, and WHEREAS, parcel #155-033-000010 (Outlot A, Country Club Manor) has outstanding special assessments with penalty and interest totaling $554,494.73, and it is unlikely that a private developer would acquire this property because of the magnitude of the assessments owed, and WHEREAS, the City of Monticello HRA has interest in acquiring parcel #155-033-000010 (Outlot A, Country Club Manor) for residential development purposes. NOW, THEREFORE, BE IT RESOLVED: 1. The City of Monticello and its HRA requests that parcel #153- 033-000010, 155-500-033400, and 155-500-033402 be withheld from public auction for one year. 2. That parcel #155-033-000010 (Outlot A, Country Club Manor) be conveyed to the Monticello HRA for public purposes in accordance with the conditions established in a memorandum of understanding dated June 9, 1992, between the County of Wright and the Monticello HRA. 3. That the City of Monticello approves of the sale of tax forfeited parcels #155-014-003080 and 155-014-003100 by public auction. 4. That the City of Monticello certifies that the unpaid special assessments owing against tax forfeited parcels listed below are correct and any remaining amounts remnininq unpaid as a result of public sale shall be re-aasessed for a period of 5 yea►a at 81 interest. Parcel #155-014-003080 i 8,057.10 Parcel #155-014-003100 $ 8,057.10 Parcel #155-033-000010 $280,228.28 WHEREAS, The parcel of land known as Outlot A, Country Club Manor, Parcel No. 155-033-000010, is among those properties being prepared for public sale under the tax forfeit land sales procedures of Minnesota Statutes Chapter 282; and WHEREAS, Outstanding taxes through 1992 on this parcel total $6,402.39, with penalties and interest; and WHEREAS, Outstanding special assessments on the property total $554,494.73 with penalties and interest; and WHEREAS, This parcel is contained within an R-3 medium density residential zoning district of the City of Monticello; and WHEREAS, The Monticello Housing and Redevelopment Authority (HRA) is interested in seeing residential development occur on this property; and WHEREAS, It appears unlikely that a private developer would acquire this property because of the magnitude of special assessments owed to the City of Monticello; NOW, THEREFORE, The County of Wright and Monticello HRA agree as follows: 1. That the above described parcel is to be conveyed to the Monticello REA, as per Minnesota Statutes Section 282.01, Subd. 1, contingent, of course, upon the approval of a State deed by the Department of Revenue. 2. That the basic sale price for said parcel is to be waived, with the understanding that the Monticello HRA may reconvey the property to a private party in hopes of recovering the special assessments due on the property. 3. That any fees for the State deed and any other miscellaneous costs related to this conveyance shall be the responsibility of the Monticello HRA. 4. That the outstanding real estate taxes, without penalties and interest, totaling 14,327.26, shall be paid by the Monticello HRA to the County upon issuance of the State deed for the property. 5. That, in light of the close proximity of this parcel to Interstate 94, the City of Monticello may construct an earthen berm on the property for the purpose of providing visual and sound screening from the freeway. INDEMNITY AGREEMENT BETWEEN THE CITY OF MONTICELLO AND THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO FOR RAW LANDS DESCRIBED AS O UTLOT A. COUNTRY CLUB MANOR WHEREAS, both the Housing and Redevelopment Authority (the "Authority") in and for the City of Monticello, Minnesota and the County of Wright (the "County"), Minnesota agreed to the terms of the Memorandua. of Understanding between the Housing and Redevelopment Authority and the County of Wright relating to the described raw lands; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello held a public hearing for the acquisition of the described raw lands and affirmed that the described raw lands lie within Redevelopment Project Area No. 1 of the Modified Central Monticello Redevelopment Plan; and WHEREAS, both the City of Monticello (the "City"), Minnesota and the Housing and Redevelopment Authority in and for the City of Monticello shall agree to the terms of this Indemnity Agreement between the City of Monticello and the Housing and Redevelopment Authority relating to the described raw lands; NOW, THEREFORE, the City of Monticello and the Housing and Redevelopment Authority in and for the City of Monticello agree as follows: 1. That the HRA Is released of any obligation for repayment of the special assessments or associated costs with the acquisition of the described raw lands. 2. That the 11RA is released of any obligation of expenses or maintenance associated with the described raw lands. 3. That the HRA is released of any right of revenueo associated with the described raw lands. 0. That the parties of this Indemnity Agreement may make such modifications and amendments as will properly carry out the intent of the Agreement. Such modifications and amendment o shall be in writing. HRA RESOLUTION NO. 92-4 A RESOLUTION BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, AUTHORIZING ACQUISITION FOR FUTURE DISPOSITION AND REDEVELOPMENT OF LANDS DESCRIBED AS OUTLOT A, COUNTRY CLUB MAZICR WHEREAS, the Housing and Redevelopment Authority (the "Authority") in and for the City of Monticello, Minnesota shall affirm that the described raw lands lie within Redevelopment Project No. 1 of the Modified Central Monticello Redevelopment Plan; and WHEREAS, both the Housing and Redevelopment Authority in and for the City of Monticello and County of Wright (the "County") have agreed to the terms of the Memorandum of Understanding between the Housing and Redevelopment Authority and the County of Wright; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello shall agree to Four Thousand Three Hundred Twenty-seven Dollars and Twenty-six Cents ($4,327.26) as the acquisition price and shall assume responsibility of associated costs relating to the described raw lands; or WHEREAS, the Housing and Redevelopment in and for the City of Monticello shall propose the preparation of an Indemnity Agreement between the Housing and Redevelopment Authority and the City of Monticello; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello and the City of Monticello (the "City") shall agree to the terms of the proposed Indemnity Agreement between the Housing and Redevelopment Authority and the City of Monticello relating to the raw lands described as: outlot A, Country Club Manor. NOW, THEREFORE, BE IT RESOLVED by the governing body of the Housing and Redevelopment Authority in and for the City of Monticello finds the early acquisition to be in the public interest because: The proposed acquielton is necessary to carry out public Improvements in the area, or that the acquisition will contribute to the eliminination of blight or deterioration within the area or that the acquisition is necessary to relieve hardship; and HRA RESOLUTION NO. 92-4 Page 2 There Is afeasible method for the relocation of families and individuals to be displaced by the proposed acquisition. The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, does hereby authorize acquisition for future disposition and redevelopment of the said described raw lands. Adopted by the Monticello Housing and Redevelopment Authority this 5th day of August, 1992. � RRA Chi — person ATTEST: (� HRA Executive Director Appraisal of Vacant Land For H.R.A. Monticello Heartland Appraisals, Inc. P.O. Box 312 Monticello, MN 55362 November 24, 1997 H.R.A. Monticello CityOf Monticello 250 E. Broadway Monticello Mn. 55362 Re: Vacant Land Outlot A Country Club Manor H.R.A Board In accordance with your request. I have personally inspected the property described in this report for the purpose of determining the market value. I have appraised it as a whole, in fee simple, and fee of all indebtedness. This is a Summary Appraisal communicated by a narrative format: As a result of tttis inspection, and considering all the factors which create and influence value, it is my opinion that the propcny has a market value, as of November 18, 1991 of, One Hundred Seventy One Thousand Dollars (V 71,t1D0.00) This repon is submitted for your consideration, it describes the property and the methods used in arriving at the value estimate. Thank you for giving me this opportunity to be of service. Sinccrl'yy p If C Rodney E. ffragnen Certified Real Property Appraiser VIEWFROM NOR I'l I FND OF SH E VIIAV FROM SOUTH END Oil SITF VIEW FROM N.W. CORNER OF SITE S'I'RES F SCENE OI; COUNT RY CLUII (COAD STREE I' SC ENE OF CO. RD. 39 J 1 p .A �e \ --- MUI+W /e W IUSS.NI --• W, V Ln I m Z SCOPE OF THE APPRAISAL The property was inspected and photographed on November 18, 1997. The property is appraised as of November 18, 1997, the date I reviewed the property. Regional, city, county and neighborhood data was compiled based upon my observations, assisted by community data and my study of the area. Sales information was obtained from public records, as well as interviews with owners, and local realestate brokers. All information gathered on recent sales and market conditions was analyzed and correlated to arrive at a final value conclusion. In estimating the Ifighest and best Use of the subject property, an analysis was conducted utilizing the data compiled in the research mentioned above. After assembling and analyzing the data defined within the Scope of the Appraisal, a final estimate of value was arrived at by correlation of the approaches to value. PURPOSE OF THE APPRAISAL The purpose of the appraisal is to estimate the market value of the property free and clear of all encumbrances. The report is designed to function as a guide to the security the subject represents for purposes or arranging mortgage financing. This is a Complete Appraisal communicated in a Summary Appraisal Report. DEFINITION OF MARKET VALUE "Market Value", is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a. buyer and seller are typically motivated; b. both parties are well informed or well advised, and each acting in what her considers his own best interest; c. a reasonable time is allowed for exposure in the open market; d. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable there to and e. the price represents the normal consideration Cor the property sold unaffected by special or creative financing or Bales concessions granted by anyone associated with the sale. ZONING R-3 DATE OF THE -APPRAISAL The property is appraised as of November 18, 1997. Considering the conditions and circumstances odsting as of that date. SITE SUMMARY The subject site consists of 16.7 +/- acres, u regular in shape. The site is bound by 1-94, to the south county road 39, to the west, street to the north and to another commercial site (RV Center) to the east. Soil conditions appear to be somewhat sandy, conducive to the construction of roads and buildings. Utilities are available on the north bound side of the site. LEGAL DESCRIPTION Outlot A Country Club Manor, Monticello Minnesota t NEIGHBORHOOD The city of Monticello is located approximately 35 miles northwest of Minneapolis and 25 miles south west of St. Cloud. The four lane Interstate 94 runs in a east west direction through the city. The city of Monticello is self contained with schools, churchs, shopping, services and employment opportunities. The neighborhood is defined as the city of Monticello. The subject site is bound to the north by single family residential homes, to the east is commercial development which includes a new recreational vehicle center, to the south I-94 runs along the site and Co. Rd. 39 bounds the west end of the site. The city has experienced growth in the residential, commercial and industrial sectors over the past 5 years. The residential sector has had a mix of 1 st time home buyers to the higher value homes. Commercially the city of Monticello has had growth with additional shopping services and community projects. With the good base services of Monticello and the steady growth, values should continue to increase. HIGHEST AND BEST USE Highest and Best Use is defined as: "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability.' In estimating the Highest and Best Use of the subject , there are essentially four stages of analysis: 1) Possible Use. What uses of the site in question are physically possible? 2) Permissible Use (legal). What uses are permitted by zoning and deed restrictions on the site in question? 3) Feasible Use. Which possible and permissable uses wi!I produce a net return to the owner of the building? 4) Highest and Best Use. Among the feasible uses, which use will produce the highest net return or the highest present worth? In analyzing the Highest and Best Use, 1 have given careful consideration to each of the preceding qualities, with respect to its current and most probable future uses. The Dictionary of Real Estate Appraisal, Third Edition, Appraisal Institute, Chicago IL, 1993 , Pg 171. Possible Use: The site is fairly level, hes good access, and the em'vom hent nearby is mixed in character. The site could be used for a limited variety of residential and multifamily uses. The possible uses are restricted only by the subject's size and zoning. The potential use is controlled by the zoning regulations of Monticello, and it is unlikely that a use which varied substantially from the zoned use would be viewed favorably by the city council. Zoning changes do not come easily, and much care has been taken in the past to preserve and protect the quality and variety of uses within the city. This restricts any potential use to the use fisted in the zoning code. Permissable use: Properties permited under the R-3 zoning district are primarily multiple family Ldwellings in nature and include sinhleand twin family dwellings. None ul-tho cuvijuning land uses creates any adverse affect upon the subject. No condemnation nor change in traffic patterns are pending. Feasible Use: Feasible uses include the subject's current use. Single f)ttnily or multifltmily residences would be feasible on the she; the type of property that would show the greatest return to the site is multi fhmily use. I Highest and Best Use: Presently the site is open and vacant with the exception of 3 billboards which face I-94. The billboards according to the city are on 1 year renewable leases. Utilities are accessable, soil conditions are favorable for construction. There appears to be a good inventory of single family homes, which include the first time hopte buyers range to the upper range in value. Twin home inventory and demand within the city appear to be at stable rate. Multi family and apartments have had little new construction within the past 5 years. Apartments for rent currently have a vacancy rate of 5% or lower. The site is located along I-94 and would not be conducive to single family residential. Because the site is mainly bound by I-94 on one side and single family on the other, a somewhat mixed use would be the highest and best use with apartment buildings directly along I-94 which would provide a buffer zone to the residential area. The south eastern most part of the site would lend itself well to Twin homes. Therefore it is this appraiser opinion that the highest and best use would be for a mixed use of Apartment buildings along with town and twin homes. 14 SALES COMPARISON APPROACH The Sales Comparison Approach to value is based on the principle of substitution, which states, "When a property is replaceable on the open market, the value of the subject property tends to be set by the cost of acquiring an equally desirable substitute property, with no delays incurred in making the substitution." Sale #I Legal Description: S 1/2 of W 1/2 of SW 1/4 Except 208.75 x 208.75 of SWIM See. 35 T121 R24 Location: Albertville South Side 1.94 Date of Sale: July 1994 Zoning: R-1 Site Size: 39 Acres Sale Price: $155,000 Price Per Acre: $3974 Comments: This is an older sale however this is in close proximity to 1-94. Plans are for single fetta1y residential homes. Sale #2 Legal Description: Lot 4 Blk. 1 Hwy. 55 East Commercial Park Location: East end of Butialo roes Hwy. 55 Date of Sale: August 1997 Zoning: Commercial Site Size: 50,250 Sq. Ft. Sale Price: $150,000 Price Per Acre: $130,434 Comments: This site is located along Hwy. 55 on the east end of Buffalo. This is a commercially zoned area. Future plans is j to construct a motel. Sale #3 Legal Description: Lengthy see attached addendum. Location: Intersection 1-94 Co. Rd. 37 Albertville Date of Sale: January 97 Zoning: Hwy. Business (commercial) Site Size: 1.53 Acres Sale Price: $40,000 Comments: This site is smaller than the subject. There is i-94 exposure and good access. 1 Sale #4 Legal Description: Location: Date of Sale: Zoning: Site Size: Sale Price: Price Per Acre: Comments: Sale #5 Legal Description Location: Date of Sale: Zoning: Site Size: Sale Price: Price Per Acre: Comments: Outlot Parkside Third Addition Albertville (southside 1.94) February 97 R-4 (multifarrily) 6.15 acres $135,000 $21,951.22 This oudot is located on the south We of 1-94. The plat of Parkside includes single family with this sale, the future plans for improving is a 36 unit apartment. Outlot D Center Oaks xray LeBeaux Ave. Aknville February 97 R-4 (multifamily) 5.37 Acres $270,227 $50,320 This site is located approximately 5 blocks south of 1.94. The nature plans include a 44 unit apartment building. Sale #6 Legal Description: Lots 1,2,4;5 & 6 Blk. 1 Commercial Court Location: root Hwy. 25 Monticello Date of Sale: January 1996 Zoning: B-3 (Business) Site Size: 1.83 Acres Sale Price: $155,000 Price Per Acre: $84,699 Comments: This site is located along a highway business zone. Visibility is of Hwy. 25. Sale#7 Legal Desatiption: L.enghty see attached addendum Location: X70{ Future 7th St. (Along I-94) Monticello Date of Sale: October 1994 Zoning: 1-2 (at time of sale) Site Size: 69.3 Acres Sales Price: $557,760 Price Per Acre: $8,048.00 Comments: This is a site larger than the subject. The site is located along I-94 with residential and industrial uses around it. Future plans are to constrict a church. i, Sale#8 Legs) Description: W. 1/2 of N.W. 1/4 Sec. 10 T121N R25W Location: XXX Co. Rd. 39 Monticello Date of Sale: May 1997 Zoning: Gen AS. Site Size: 84.5 Acrd Sale Price: 5212,500 Price Per Acre: 52,500 Comments: This sale is located with Co. Rd. 39 access and 1.94 Exposure. This site is located on the south side of 1.94 versus subject on north Currently there are no city utilities of water and sewer. Sale#9 Legal Description: Lenghty see attached addendum Location: XXX Minnesota St. Monticello Date of Sale: May 1994 Zoning: B-3 Site Size: 9.15 Acres Sale Price: $313,340 Price Per Acre: $34,245. Comments: This site is directly S.E. of the subject site. There is I-94 visibility with utilities available to the site. Plans were to construct an an apartment building. Since the purchase the buyer defhulted and has gone back to the original owner. I FiPo t,o 3103 LOCATION MAV I-I'Top"Addiess XXX COUNTRY CLUB MANOR . MONTICBLLO C[om MRIGBT so MN ZIP Coa Kende -fit^.��- � �.. „„l �. I .+ �•� ,' C''') i • - ^�— 3:i 17 I �I PSN �n� 1L I ,� � r.✓-... �In Bale 8 � n) � Sole 7 ;, —30� ale e nin i t n ^NIONTICIiLLO o' (191 rj•- _ ' � �, '1 �ti�, �--�Y�'1- ��.� �/ .. .. � iuF.� 1 �' (�',� _ ,. ,� � :::r: ••, a `e � ` Sale a s Sale 1 ,7 1 ua[[n _ ale a �• rel �_ .,.._ r • - l �i , ( �',II1(�/��• it " .., Vii' `,,••� I 1 ^ :rJ ( (i::nr ..�I �''• ,1/. r !.� �,i,, ;. t�' , Ilan• r ...... it II" �-- w ^..� I''� 1'—C.. _•r' ��% ' .. rlun.n .. I l (/ _ SALES COMPARISON SUMMARY Sale03 Sale/4 Sale05 Sale06 SaleC7 Sale08 Sale09 January 97 February97 February97 January97 October97 May 97 May 94 Albertville Albertville Albertville Monticello Monticello Monticalle Monticello 1.5 Ac. 6.15 Ac. 5.37 At. 1.83 At 69.3 At 84.5 At 9.1 At $40,000 $135,000 $270,223 $155,000 $557,760 $212,500 $313,340 $26,143 $ 21,951 $ 50,320 $ 84,699 $ 8,048 $ 2,500 $ 34,245 Commercial R-4 R-4 B-3 I-2 Gen. AS. B-3 Saletl Sale /2 Date of Sale July 97 August 97 Location Albertville Buffalo Site Size 39 Acres 1.1 At Sale Price $155,000 $150,000 Price per Acre $3,974 $140,434 Zoning R-1 Commercial SALES COMPARISON SUMMARY Sale03 Sale/4 Sale05 Sale06 SaleC7 Sale08 Sale09 January 97 February97 February97 January97 October97 May 97 May 94 Albertville Albertville Albertville Monticello Monticello Monticalle Monticello 1.5 Ac. 6.15 Ac. 5.37 At. 1.83 At 69.3 At 84.5 At 9.1 At $40,000 $135,000 $270,223 $155,000 $557,760 $212,500 $313,340 $26,143 $ 21,951 $ 50,320 $ 84,699 $ 8,048 $ 2,500 $ 34,245 Commercial R-4 R-4 B-3 I-2 Gen. AS. B-3 Legal Description Sale#3 EXHIDIT 'A* Ilint pall ut the Southeast Quatlet of 111c Suulhensl Qudtlet of &cllun 36,'I'ownship 111, Itauge 24, Wllght Comity. minu ula, described ns follows: Cuuun mite Ing nl is Irobd un Ile Suolh lila: of sold Southeast Qudtlet or the Suulhensl Quat(et, dlstdid 880.00 feel West Irom the Suulhensl cot iter ui mild Southeast Qomlet of the Suulhensl Qusrllet, rald pulul Wog the tivuthtvent curter of the Until 2U acre+ of the Suullt 60 luds of enld Southeast Quarter of the Suulhensl Iluntlet; (hence on no nsmumed bent hig of Norlh I degled 18 fulnules A7 mends Wetl nluhg the West Ih1e of mild Lnsl 21) mrcr of the 51nt11161) tads td the Suuthedsl Qudtlet of Ile Sdddhensl Qunttet, It dlsldlrec of 1'l l . I I feel to it puinl un Ilse 11ur Ihel ly t INhl-uf-luny line Ut (dud dcqulred by Ile Slnte of Mltutcsulri fur ,ightvny pulpuses; Orel" cuulinulng Mutlh I degree 18 mlitules 47 secunds IVesl slung said West Ihte, n tumnot:c or 345.00 Ieel to the nelunl point of begiuttldg; thence Milt 88 degrees A 1 eltroles 13 secunds West, n disintn a of 255.110 Ieet; Iheace South I degree 181uluuldr 4'1 secutds Bast, a distrome of 1jim (cel to anld aurlherly 118111-ul-wry llor.; lhcnce outllttvestedy alung anld nurllrcrly t Igld•uf-tvny Ilne bclug n ouo-taugenlrnl curve, culrenve to the Southwest Itnvlllg a IAdlus of 521.51 feel and a ceuttnl nogle u1 7 degrees UU nthades 31 secuels, n disuusre of 61.58 feel, Ile druid of sold curve bedu North GY degrees 41 111111111ee U7 scuunds Weal; Iltelree Nullh I degree 18 ittirtules 41 securtds West, Is distance of 296.2) reel; thence Nu11h 89 deglees U I olhtute III mectouh End. it JIsldllce of 314.01 feel to the West lite of lire snid Inst 2U.0 acres; (hence South I degsce 18 uduulw 41 butiuds bsl•alung IN sold West Iltte n dlslnrh:e of 18J.Y2 reel Its the pultd of beglls111ttg. C Legal Description Sale# 7 Those ppnrts of Lots 4, 7, 8, the South 10 acres of Lo H 9, Lots 10, 11 and 12 AUDITOR "S SUBDIVISION NO. ONE according to the recorded map thereof, 91d i TerxiLorial bAd also known as Minneapolis and Monticello Road, Wright County, Minnesota lying northeasterly of the northeasterly right of way line of Interstate 94, lying southwesterly of the southwesterly right of way line of the Burlington Northern Railroad and lying northwesterly of a line described as follows: Commencing at the northwest corner of said Lot 12; thence east along the north line of said Lot 12, a distance of 172.65 feet to the southwesterly right of way line of the Burlington Northern Railroad; thence sonLheasLerly along said southwesterly right of way line, o distance of 915.31 feet ty the point of beginning of said line to be described; thence southwesterly LWLggCing 81 degrees 2a minutes right to said northeasterly right of way line of Interstate 94 anJ sold line there terminating. The above described land being parts of Southwest Quarter of the'Southwest Qunrter, the Southeast Quarter of the Southwest Quarter and Government Lot 1 of Section 12 and the Northwest Quarter of the NorthwesL Quarter, the Northeast. Quarter of the Northwest Quarter and the Northwest Quarter of the Northeast Quarter of Section 13 all in Township 121, Range 25. Wright County. Minnesota. Also: That part of Lot 13 of Auditor's Subdivision No. One according to the \ recorded map thereof n� Old Territorial Road also known as Mlnneopolis and Monticello Road being part of the Northwest Quarter of the Northeast Quarter of Section 13, Township 121, Range 25, Wright County, Minnesota hying northeast of the northeast right of way line of the Burlington Northern Railroad and northwest of the right of way line of County Road No. 75. Legal Description Sale# 9 EXHIBIT A - - Lot A of the Northeast Quarter of the Southeast Quarter of Section 10, Township 121, Range 25 accordirig to a plat filed March 14, 1886 in Book. 1 of Plate, page 566 and that part of Lot C of the North Half of the Southeast Quarter of said Section 10, Township 121, Range 25 according to a plat recorded October 23, 1913 as Document No. 74600 lying northerly and northeasterly of a line described as follows: Commencing at the northeast corner of said Northeast Quarter of the Southeast Quarter; thence south along the east line of said Northeast Quarter of the Southeast Quarter, a distance of 526.92 feet to the point of beginning of said line to be described; thence west deflecting 89 degrees 52 minutes 18 seconds right, a distance of 137.25 feet; thence northwesterly along a tangential curve concave to the north having a radius of 600.00 feet and a central angle of 43 degrees 16 minutes 32 seconds, a distance of 453.18 feet; thence northwest tangent to said curve, a distance of 357.48 feet to the northwest line of said Lot C of the North Half of the Southeast Quarter and said line there terminating. Also that part of Lot A of the Northwest Quarter of the Southwest Quarter of Section 11, Township 121, Range 25 according to the plat of record, filed October 23, 1913, Document No. 74602 lying north of a line described as follows: Commencing at• the northwest corner of said Northwest Quarter of the Southwest Quarter; thence south along the west line of said Northwest Quarter of the Southwest Quarter, n distance of 526.92 feet to the point of beginning of said line to be described; thence east deflecting 90 degrees 07 minutes 42 seconds left, a distance of 441.39 feet to the east line of said Lot A of the Northwest Quarter of the Southwest Quarter and said line there terminating. Except that part of said Lot A of the Northwest Quarter of the Southwest Quarter described as follows: Commencing at the northwest corner of said Northwest Quarter of the Southwest Quarter; thence cast along the north line of said Northwest Quarter of the Southwest Quarter, a distance of 407.61 feet to the center line of Minnesota Street being the east line of said Lot n of the Northwest Quarter of the Southwest Quarter; thence south deflecting 87 degrees 34 minutes 45 seconds right along said center line, a distance of 361.82 feet to the point of beginning; thence west deflecting 90 degrees right, a distance of 373.37 feet; thence south deflecting 90 dAyr�en lnfl•, n di ntnnen of 3sl).un fent, t mien nnAt deflectin41 go deyreen 1,4L, a distance of 303.37 feet_ w usid center lira of Minnesota Street; thence north along said center line, a distan0lp of. 350.00 feet to the point of beginning. CORRELATION AND CONCLUSION All of the comparable sales varied in size, sale price and price per acre. I reviewed several sales and narrowed it to the sales most similar to the highest and best use of the subject site. I reseancced sales that were located with or near 1-94 exposure. The sales research began in Monticello and expanded the search to Buffalo and Albertville. Albertville had a number of sales that provided indicators to value of the subject site due to its location along 1-94. One sale in Buffalo was a vacant commercial site located along Hwy. 55 with good eggress and ingress, plus the site was very small. The sale is not a good indicator to value of the subject site. The sales varied as to size from the subject however of the final 9 sales used for consideration as indicators to market value of the subject property. The sales that were not given any weight towards the final estimate of value included sale#2 , #3 and #6. These sales were not given any weight due to their size, ingress and egress, location and zoning. With the remaining sales per acre price varied from $2,500 per acre to $50,320 per acre. The zoning of the remaining sales were somewhat similar with the exception of comparable sale#7. The zoning was changed when the site was purchased for the construction of a church. Because the site zoning was changed, the sale provided a good indicator to market value of the subject. The sale is located with 1-94 exposure however no close access similar to the subject. Comparable sale# 1 is also given weight towards the final estimate of value. The site is close to I-94 similar to the subject however the zoning is R -I which does not allow the density of the subject site. The site is also similar in size to the subject site size. Comparable sales#4 and #5 are also given weight due to both have similar zoning as the subject site, the sites are however much smaller than the subject. Sale #8 is located directly accross 1-94 (tom the subject and has similar interstate exposure. This site is larger than (y the subject phis there is currently no city utilities. Comparable sale#9 is directly to the can of the subject seperated by the new RV. center that recently opened within the past month. Therefore after taking into consideration the comparable sales that I have given weight, it is this appraisers opinion that the subj ect has a fair market value of ; $10,247 per acre X 16.7 Acm — $171,124.00 Rounded to $171,000.00 ONE HUNDRED SEVENTY ONE THOUSAND DOLLARS CONTINGENT AND LIMITING CONDITIONS The certification of the Appraiser appearing in the appraisal report is subject to the following conditions and to such other specific and limiting conditions as are set forth by the Appraiser in the report. 1. The Appraiser assumes no responsibility for matters of a legal nature affecting the property appraised or the title there to, nor does the Appraiser render any opinion as to the title, which is assumed to be good and marketable. The property is appraised as though under responsible ownership. 2. Any sketch in the report may show approximate dimensions and is included to assist the reader in visualising the property. The Appraiser has made no survey of the property. 3. The appraiser is not required to give testimony or appear in court because of having made the appraisal with reference to the property in question, unless arrangements have been previously made therefore. 4. Any distribution of the valuation in the report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if so used. S. The Appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The Appraiser assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. The subject property currently has standing water making it unusable for construction of a single family home. This appraisal is based on information from the current owner that the subject site was a buildable site when originally purchased. 6. Information, estimates, and opinions furnished to the Appraiser, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy of such items famished the Appraiser can be assumed by the Appraiser. 7. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations of the professional appraisal organizations with which the Appraiser is affiliated. 8. Neither all, nor any part of the content of the report, or copy thereof (including conclusions as to the property value, the identity of the Appraiser professional designation, reference to any professional appraisal organizations, or the firm with which the Appraiser is connected), shall be used for any purpose by anyone but the client specified in the report, the borrower if appraisal fee paid by same, the mortgage or its successors and assigns, mortgage insurers, consultants, professional approved financial institution, any department agency, or instrumentality of the United States or any state or the District of Columbia, without the conveyed by anyone to the public through advertising public through advertising, public relations, news, and approval of the Appy 9. On all appraisals, subject to satisfactory completion, repairs, or alterations, the appraisal report and value conclusions are contingent upon completion of the improvements in a workmanlike manner. PROPERTY RIGHTS APPRAISED The unencumbered fee simple interests, fee simple being the largest possible interest or estate in property, subject to the limitations of eminent domain, escheat, police power and taxation. CERTIFICATION The appraiser certifies and agrees that 1. The appraiser has no present or contemplated future interest in the property appraised: and neither the employment to snake the appraisal, nor the compensation for it, is contingent upon the appraised value of the property. 2. The appraiser has no personal iutei eg in or bias with respect to the subject matter of the appraisal report or the participants to the sale. The 'Estimate of Market Value" in the appraisal report is not based in whole or in part upon the race, color, or national origin of the prospective owners or occupants of the property appraised, or upon the nice, color, or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. 3. The appraiser has personally inspected the property, both inside and out, and has made exterior inspection of all comparable sales listed in this report. To the best of the Appraiser's knowledge and belief, all statements and information in this report are true and correct, and the Appraiser has not knowingly with held any significant information. 4. All contingent and limiting conditions are contained here in (imposed by the terms of the assignment or by the undersigned, affecting the analysis, opinions, and conclusions contained in the report). S. This appraisal report has been made in conformity with and is subject to the requirements of the Code of Professional Ethics and Standards of Professional Conduct of the appraisal organizations with which the Appraiser is affiliated. 6. All conclusions and opinirms concerning the real estate that are set forth in the appraisal report were prepared by the Appraiser whose signature appears on the appraisal report, unless indicated as "Review Appraiser". No change of any item in the appraisal report shall be made by anyone other than the appraiser shall have no responsibility for any such unauthorized change. Rodney E. en - Certified Real Property Appraiser QUALIFICATIONS OF THE APPRAISER NAME: Rodney Dragsten ADDRESS: 1226 west River Street Monticello, MN 55362 EDUCATION: Normandale Community College Southwest State (Marshall MN) Univ. of Minn. APPRAISAL EDUCATION: Realestate Appraisal Principles Applied Residential Property Value Advanced Yield Capitalization Fair Housing Standards of Professional Practice ALD Capitalization Theory Part A Appraisal Reporting of Complex Residential Properties The New URAR Ay,� STATE OF KW(ESOTA �dq�lll DEPARTMENT OF COMMERCE 133 Eea 3ereih I �• •• .� a 3l1'au1,hU1SSIU1 IG12)2'JG•6319 tea, .... � . �+�.• A)TIVJ3ER urs„3r•. IDW00190 CERT FX OL R AL PkOr, buirel U/3109 30 Hn CE due by S/31P” RODNEY E DkA03TE4 1226 W k1VF:R 3Y bICAMCEUA, N0135!62.0000 CYon" E N D I , the unders i gned, an empl oyee of M i d -Amer i ca Business Systems hereby certify that the microfilm images ending with I��J1L_L�7 are complete and accurate reproductions of the original records of(_}, �C-"V-4rA'A �C% as accumulated during the regular course of business, and that it is the established policy and practice of Mid-America Business Systems to microfilm records for permanent file. It is further certified that the photographic process used for microfilming the above records were accomplIshed 'in a manner and -oh microfilm which meets the recommended requirements of the National Bureau of Standards of permanent micro- graphic reproduction. r �c Co , Name Date