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Home My WebLink AboutX-B-01 Resolution Approval of Land Credit and Property Sale – Creek Rentals (2030 Spiral Blvd) City Council Memorandum To: Mayor Fasbender and City Council From: John Hinzman, Community Development Director Date: May 6, 2019 Item: Resolution: Approve Land Credit Sale and Concept Plan – Creek Rentals LLC – Lot 3, Bock 2, Hastings Industrial Park No 7 – 2030 Spiral Blvd (2.58 acres) City Council Action Requested Consider the attached resolution pertaining to the sale of Lot 3, Block 2, Hastings Industrial Park No. 7. The 2.58 acre property is located at 2030 Spiral Blvd: 1) Preliminary approval of a land credit for property acquisition. Land credits would reduce the market price of the land to $62,868.75. Preliminary approval will reserve the property through development of the development agreement. 2) Concept plan review to construct one business storage and three mini storage buildings totaling 48,000 s.f. Conceptual Plans have been provided. Final Site Plan approval will be necessary prior to execution of the land credit agreement. A simple majority is necessary for action. Background Information Chad Smurawa of Creek Rentals LLC is seeking to acquire the parcel to construct three mini storage buildings totaling 36,000 s.f. and one business storage building containing 12,000 s.f. Top Soil Stockpile The City placed approximately 8,000 cubic yards of top soil during grading of the Industrial Park in 2006 (the HEDRA report incorrectly identifies amount as 1,000 cubic yards). Use of the top soil for future City projects is desired. The cost of relocating the existing stockpile to another city owned site is estimated to cost $56,000. The stockpile must be removed from the site in order for future development to occur. HEDRA does not support the use of proceeds from sale of the property to relocate the stockpile. A separate action to declare the topsoil as excess property has been submitted in conjunction with the land sale. If the Council opts to use proceeds from sale of the property to relocate the stockpile, then the action to declare the top soil as excess property should be removed from the agenda. X-B-01 Financial Impact: Sale of the property will generate $62,868.75 in revenue. Development of the property would yield approximately $12,000 to $15,000 in City taxes annually ($25,000 - $30,000 in total taxes). Advisory Commission Discussion: The Hastings Economic Development and Redevelopment Authority (HEDRA) voted 7- 0 to recommend approval of the above actions at the April 23, 2019 meeting. Commissioners did not support using proceeds from the sale of the property to relocate the top soil stockpile. Council Commission Discussion: N\A Attachments:  Resolution  HEDRA Staff Report – April 23, 2019 X-B-01 HASTINGS CITY COUNCIL RESOLUTION NO._________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HASTINGS GRANTING LAND CREDIT APPROVAL TO CREEK RENTALS LLC FOR THE SALE OF PROPERTY LOCATED AT 2030 SPIRAL BOULEVARD Council member ___________________________ introduced the following Resolution and moved its adoption: WHEREAS, Creek Properties LLC has petitioned for acquisition of property under the Land Credit Program for a parcel located at 2030 Spiral Boulevard, legally described as Lot 3, Block 2, HASTINGS INDUSTRIAL PARK NO. 7, Dakota County, Minnesota; and WHEREAS, on April 23, 2019, review was conducted before the Hastings Economic Development and Redevelopment Authority (HEDRA), as required by state law, city charter, and city ordinance; and WHEREAS, The City Council has reviewed the request and recommendation of HEDRA. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HASTINGS AS FOLLOWS: That the City Council hereby approves the Land Credit Application as presented subject to the following conditions: 1. Complete construction of a 12,000 s.f. business storage building and 36,000 s.f. of mini storage buildings building with an estimated value of at least $1,102,038.42 within one year of executed agreement. 2. Payment of $62,868.75 upon transfer of the property. 3. Remain in business in Hastings for at least five years from the date of occupation. 4. Obtain Site Plan approval for construction of the business and mini storage buildings. 5. If the above requirements are not met, the owner must repay the City a prorated share of the subsidy. Council member ______________________ moved a second to this resolution and upon being put to a vote it was adopted by the Council Members present. X-B-01 Adopted by the Hastings City Council on May 6, 2019, by the following vote: Ayes: Nays: Absent: ATTEST: __________________________ Mary Fasbender, Mayor ________________________________ Julie Flaten, City Clerk (City Seal) I HEREBY CERTIFY that the above is a true and correct copy of resolution presented to and adopted by the City of Hastings, County of Dakota, Minnesota, on the 6th day of May, 2019, as disclosed by the records of the City of Hastings on file and of record in the office. ________________________________ Julie Flaten, City Clerk (SEAL) This instrument drafted by: City of Hastings (JH) 101 4th St. E. Hastings, MN 55033 X-B-01 HEDRA Memorandum To: HEDRA From: John Hinzman, Community Development Director Date: April 23, 2019 Item: Approve Preliminary Land Credit Sale and Concept Plan – Creek Rentals LLC – Lot 3, Bock 2, Hastings Industrial Park No 7 – 2030 Spiral Blvd (2.58 acres) REQUEST: Chad Smurawa of Creek Rentals LLC is seeking to acquire Lot 3, Block 2, Hastings Industrial Park No. 7. The 2.58 acre property is located at 2030 Spiral Blvd. The following actions are requested: 1) Preliminary approval of a land credit for property acquisition. Land credits would reduce the market price of the land to $62,868.75. Preliminary approval will reserve the property through development of the development agreement. 2) Concept plan review to construct one business storage and three mini storage buildings totaling 48,000 s.f. Conceptual Plans have been provided. Final Site Plan approval will be necessary prior to execution of the land credit agreement. Action follows preliminary discussion held at the March 14th Meeting. RECOMMENDATION: Approval of the land credit and concept plan is recommended. The City Council will consider similar action at the May 6th meeting. BACKGROUND INFORMATION: Comprehensive Plan Classification: The property is guided for Industrial Use per the 2030 Comprehensive Plan. The proposed use as a business and mini storage facility is consistent with the Comprehensive Plan. Zoning Classification: The property is zoned I-1 – Industrial Park. Business and mini storage uses are not expressly identified uses, but align most closely with warehouse and storage uses which are permitted uses within district. X-B-01 Existing Condition: The site contains approximately 1,000 cubic yards of clean fill which is used by the City. The fill would need to be relocated prior to development. The remaining site is flat and treeless. The lot was rough graded for development in 2006. Adjacent Zoning and Land Use: The following land uses abut the property: Direction Existing Use Zoning Comp Plan North Spiral Blvd Vacant – Future Industrial I-1 – Industrial Park Industrial East Vacant – Future Apartments R-3 – Medium High Density Residential Medium Density Residential South Stormwater Pond Vacant – Future Industrial I-1 – Industrial Park Industrial West Vacant – Future Industrial I-1 – Industrial Park Industrial BUSINESS SUBSIDY ANALYSIS: Property Size 2.58 acres Property Market Value $173,072.59 ($1.54 per s.f.) Estimated Building Value $1,102,038.42 Construction Credit $110,203.84 (10% of building value) Cash Due Upon Transfer $62,868.75 (market value less construction credit Justification for Subsidy:  Increased tax base of over $1 million.  Conversion of tax exempt property to a tax paying entity.  Creation of 0.5 new living wage jobs. Land Credit Requirements: 1. Complete construction of a 12,000 s.f. business storage building and 36,000 s.f. of mini storage buildings building with an estimated value of at least $1,102,038.42 within one year of executed agreement. 2. Payment of $62,868.75 upon transfer of the property. 3. Remain in business in Hastings for at least five years from the date of occupation. 4. Obtain Site Plan approval for construction of the business and mini storage buildings. X-B-01 5. If the above requirements are not met, the owner must repay the City a prorated share of the subsidy. REMOVAL OF DIRT STOCKPILE The City placed approximately 1,000 cubic yards of fill during grading of the Industrial Park in 2006. Use of the fill for future City projects is desired. The cost of relocating the existing stockpile to another city owned site is estimated to cost $56,000. The stockpile must be removed from the site in order for future development to occur. At the last HEDRA Meeting, Commissioners discussed a potential discount on the price of the property in exchange for the removal of the dirt by the developer. Commissioners spoke in opposition to the concept, preferring that City funds (not HEDRA funds) be used to relocate the pile. Options for removal of the stockpile have been discussed with the Public Works Department. Relocation using city labor and resources is not desired; labor and equipment have be allocated to more immediate issues. Funds to relocate the stockpile have not been allocated. Staff supports using proceeds from the sale of property to relocate the stockpile. The $62,868.75 in proceeds from the sale would offset the $56,000 cost for relocation. Development of the property would yield approximately $12,000 to $15,000 in City taxes annually ($25,000 - $30,000 in total taxes). The cost of relocating the stockpile would be offset by tax proceeds from development of the land within four years. CONCEPTUAL SITE PLAN REVIEW Creek Rentals has submitted a conceptual site plan and architectural information for review. The following comments serve to guide future site plan development and are based on the information received and property characteristics. Site Plan Approval: Site Plan approval through the Planning Commission and City Council will be necessary prior to executing of the Land Credit Agreement. Use: The business storage and mini storage units are considered a permitted use within the I-1 Industrial Park District. Zoning Setbacks: Setbacks in the I-1 District are not specified. It appears the lot provides adequate room for construction of the proposed building and associated parking consistent with adjacent setbacks. X-B-01 Access and Circulation: Access and circulation appear acceptable. All access would be provided through a singular entrance to Spiral Blvd. Parking: Parking for business and mini storage units is not expressly identified within the Zoning Code. Users typically park in front of the units. The concept plan will need to be further reviewed to ensure adequate parking is provided. Architectural Building Elevations: Architectural Elevations will need further review to ensure that they are consistent with the Zoning Code. The applicant has submitted pictures of potential buildings that have brick and metal exteriors. Landscape Plan: A Landscape Plan will need to be submitted. Grading, Drainage & Utility Plans: Grading, Drainage and Utility Plans will be reviewed by the Public Works Department. ATTACHMENTS:  Location Map  Letter from Applicant  Concept Plan X-B-01 LOCATION MAP X-B-01 X - B - 0 1 Mini‐Storage Facilities of the Past • No Landscaping • No Entrance Signing • Gravel Driveways • Poorly Maintained Grounds Grounds • Low Slung 'Commercial' Building • No Building Overhangs • Steel Building Design ‐ Lack Quality Exerior Finishes Building • Unattractive Grey Steel Fence • No Electronic Access Entrance Gate • No Security System • Poorly Lit Security X-B-01 Our Neighborhood Self‐Storage Development Community Investment  Financial Investment (exclusive of land) anticipated at $1,500,000  Local Ownership Well Maintained Landscape including Boulevard Trees Modern Exterior Finishes including Brick and Metal Modern, Attractive Low Profile Entrance Sign Attractive Gated Entrance with Black Front Security Fence Asphalt Driveways with LED Lighting Business Storage Units with Large 12’x14’ ft. doors 24 Hour Camera and Site Security System Warm, Attractive ‘Neighborhood’ Friendly Feel X-B-01 X-B-01