HomeMy WebLinkAbout15.A.3. Assessment Agreement for 2003 Reconstruction Project 2003-3
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CITY OF SHAKOPEE
Memorandum CO ~ ~~ ~"'~~ ~T
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TO: Mayor & City Council
Mark McNeill, City Administrator
FROM: Bruce Loney, Public Works Director
SUBJECT: Approval of Agreement on Payment of Special Assessments and
Other Issues - Kelley Fuels on the 2003 Reconstruction,
Project No. 2003-3
DATE: November 18,2003
INTRODUCTION:
Attached is an agreement for payment of special assessments and other matters between the
City of Shakopee and Kelley Fuels in regard to the 2003 Street Reconstruction Project. The
purpose of this agenda item is for City Council to accept and approve and to authorize the
appropriate City officials to execute the agreement for the special assessments and other
related matters associated with the Kelley Fuel parcel on this project.
BACKGROUND:
On May 6, 2003, a public hearing was held on the 2003 Reconstruction Project No. 2003-3,
and Council ordered the improvement project to be designed on Fourth A venue, from
Naumkeag Street to Shenandoah Drive; Viking Steel Road, from Fourth Avenue to C.R.
101; and Cavanaugh Drive, from Viking Steel Road to the Union Pacific Railroad crossing.
Also included in the actions for ordering the improvement and preparation of plans and
specifications, was for staff to prepare a benefit appraisal for the Kelley Fuel parcel along
Viking Steel Road, from Fourth Avenue to the Union Pacific Railroad crossing.
Attached to this memorandum is a summary letter from Patchin Messner Appraisers on the
benefit appraisal that was done for the Kelly Fuel parcel. The conclusion of the appraisers
on the special benefit received by the Kelley Fuel parcel for the improvements on Fourth
Avenue and Viking Steel Road is a benefit of $250,000.00. In the feasibility study, the
proposed assessment for both Fourth Avenue and Viking Steel Road totaled $359,000.00.
Staffhad previously sent this letter to the Council to indicate what the special benefit would
be and has been negotiating with the property owner and his attorney for an agreement for
special assessments and other related matters.
Attached to this memorandum is an agreement prepared by Kennedy & Graven and as part
of negotiations with the property owner for the special assessments and other related matters
with their parcel. An agreement has the following items for Council consideration and
reVIew:
. The special assessment will be reduced to $225,000.00 with no reduction in interest
rate and $125,000.00 of the assessment will be current with the remaining
$100,000.00 to be paid among the other lots that are created from platting in the
future as a hook up charge. There is also a ten-year sunset clause on the payment on
the remaining $100,000.00.
. The City will pay $6,500.00 for easements necessary for the Fourth Avenue
improvements and will pay an additional $9,000.00 in easement costs for the
easements associated with sanitary sewer, storm sewer and watermain through the
Kelley Fuel parcel.
. No stormwater trunk charges will be charged on land north of the watermain
easement to the railroad crossing. However, all stormwater trunk charges and
ponding charges will apply to the lots created south of the watermain easement, as
shown on the exhibit to the agreement.
. Sanitary sewer service lines will be installed as part ofthe project.
. All areas disturbed in construction with this project will be restored to its existing
condition.
Attached to the agreement is an exhibit which shows the amount of easements which are
necessary for the City to construct the improvements on and by the Kelley Fuel parcel. In
previous special assessment agreements on Valley View Road, the City did give a 10%
reduction in the assessment in order to avoid appealing of the special assessment by the
property owner. The other dollar amounts that have been negotiated, will provide the City
with all the easements necessary to bring the watermain, sanitary sewer and storm drainage
systems in order to construct Viking Steel Road and provide utilities to the SPUC service
building. Assessments that cannot be covered on this parcel will be included with other
benefiting property owners on this project, unless Council directs otherwise. City staff and
the City Attorney's office have worked with the property owner and his attorney to prepare
this agreement, and staff would recommend that this agreement be entered into in order to
obtain the easements and resolve the issue with the assessment on the Kelley Fuel parcel.
City Council would need to authorize the appropriate City officials to enter into this
agreement.
This agreement has been sent to the attorney for Kelley Fuels, Inc. and it is anticipated that
an executed agreement will be placed on the table for the November 18, 2003 Council
meeting.
ALTERNATIVES:
1. Authorize the appropriate City officials to execute an agreement regarding the
payment of special assessments and other related matters between the City of
Shakopee and Kelley Fuels.
2. Do not execute the agreement regarding special assessments and other related
matters.
3. Table for additional information.
RECOMMENDATION:
Staff recommends Alternative No.1, as the City Attorney and the property owner have
come to an agreement on the right-of-way acquisition and in regard to special assessments
on this parcel, and would end any condemnation action or appeal of special assessments
associated with the 2003 Street Reconstruction Project.
ACTION REQUESTED:
Authorize the appropriate City officials to execute an agreement regarding payment of
special assessments and other related matters between the City of Shakopee and Kelley
Fuels for the 2003 Street Reconstruction Project No. 2003-3.
~~~
ruce Loney
Public Works irector
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KELLEYFUELS-l1115/03
This space reserved for recording purposes
AGREEMENT RE PAYMENT OF SPECIAL ASSESSMENTS
This Agreement is entered into as of ,2003, by and between the City of Shako pee
("City"), and Kelley Fuels, Inc. ("Kelley").
RECITALS
A. Kelley is the owner of a parcel of land ("Property") located at 1644 East Highway # 101 in
the City. The Property's PID # is 27-906-054-0 and the Property is approximately 9.2 acres
in size. The legal description of the Property is contained on Exhibit A to this Agreement.
B. The City is proposing to adopt special assessments on the Property with respect to the 2003
Street Reconstruction Project, City Project No. 2003-3 ("Project"). The City's appraisal
indicates that the amount of special benefit to the Property derived from the Project
improvements is $250,000. Kelley disagrees with this amount.
C. Kelley has constructed a new building on the northerly 3 acre portion of the Property that is
located north of the east/west watermain (the "North Property").
D. Kelley is proposing to plat and subdivide the remainder of the Property (the "Remainder
Property"). No plans have been submitted at this time, but it is anticipated that the
Remainder Property will be subdivided into 5 additional parcels with 3 fronting on Viking
Steel Drive and 2 fronting on Fourth Avenue.
PAC-238096vl
SH155-124
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E. Kelley and the City desire to enter into this Agreement to settle their dispute over the
amount of the proposed assessment and to set forth the obligations of the respective parties
with respect to payment ofthe special assessment and related matters.
Now therefore in consideration of the mutual covenants and conditions set forth in this
Agreement, the City and Kelley agree as follows:
1. The Recitals are true and correct and are incorporated by reference into this Agreement.
2. The parties agree that the Property is benefited by the Project improvements in the amount
of $225,000.00. The City will levy $125,000 as a special assessment on the North Property.
Kelley will pay that amount in the manner required by state law and the City's ordinances
and regulations. The remaining $100,000 ("Balance Amount") will be paid in the manner
set forth in Paragraph 5 of this Agreement.
3. Kelley waives notice of hearing and waive the right to the hearing required by Minnesota
Statutes, Section 429.031 on the $125,000 special assessment to be levied on the Property.
4. Kelley waives any and all rights to appeal or otherwise contest or challenge the levying of
the $125,000 special assessment against the North Property, including but not limited to the
right to challenge whether the increase in fair market value resulting from the Project is at
least equal to the amount of the Project cost that is being assessed against the Property and
that such increase in fair market value is a special benefit to the Property. Kelley further
agrees that any requirements of Minnesota Statutes, Chapter 429 with respect to the
adoption or levying of the special assessments are waived to the extent that those
requirements are not met.
5. The Balance Amount shall be paid as follows:
5.1 The Balance Amount will be allocated equally to each lot that is created by subdivision
or platting ofthe Remainder Property. The Balance Amount will be paid as a hook-up
charge at the time a building permit is requested for each of the lots, but in any event no
later than 10 years from the date of this Agreement. At the time such request for a
building permit for each lot is made, the applicant shall pay the allocated principal
amount plus interest. The City will issue no building permit for a lot until the payment
required by paragraph 5 is made.
5.2 Any portion of the Balance Amount that is still outstanding 10 years from the date of
this Agreement, must be paid in full by Kelley along with any accumulated interest, on
that date.
6. Simple annual interest shall accrue on the Balance Amount at the same interest rate that is
charged for the special assessments that are adopted in connection with the Project. Interest
will accrue from the date of this Agreement until the date that a building permit is applied
for, or full payment is made.
P AC-238096v 1
SH155-124
2
7. When the Property is submitted for plat approval, the plat will include street dedication
along the easterly border in the total amount of 30 feet, including the 24.5 feet which have
already been dedicated for that purpose. If the City determines that it needs more than 30
feet for road right-of-way, it must acquire any additional amount in excess of the agreed-
upon 30 foot dedication by direct purchase or eminent domain.
8. When the Property is platted, the City agrees that it will not require dedication of any land
for a sidewalk. If the City determines that a sidewalk is needed, the City must acquire the
land and install the sidewalk at its expense.
9. Kelley agrees to deed or dedicate by plat easements as depicted on the attached Exhibit B.
The City will pay Kelley $9,000 for the sanitary sewer, storm sewer and watermain
easements and $6,500 for the easements along Fourth Avenue.
10. All property in the area to the north of the east/west watennain on the Property will be
exempt from all storm drainage fees, including storm water trunk charges and storm water
ponding charges.
11. The City will install five (5) sanitary sewer connections on Viking Steel/Sarazin Drive and
one (1) sanitary sewer connection on Fourth Avenue as part of the Project and will work
with SPUC towards achieving location of the watermain in the boulevard.
12. The City will place grates on the storm sewer structures located on the Property to allow
drainage from the Kelley Property into the storm sewer system.
13. The City will replace trees, shrubs, sod and landscaping and repair damage to the berm that
may have occurred during construction of the Project, in accordance with ordinary City
policies.
14. The covenants, waivers and agreements contained in the Agreement shall run with the
Property and shall bind future owners of the Property and the heirs, successors and assigns
of Kelley. It is the intent ofthe City and Kelley that this Agreement be recorded as a part of
the land records of Scott County, Minnesota.
15. Nothing in this agreement is intended to affect any other payments that might be due to the
City, or any other governmental entity, at the time that the Property is platted, subdivided, or
connected to public sanitary sewer.
PAC-238096vl
SH155-124
3
CITY OF SHAKOPEE
By
Its Mayor
By
Its City Administrator
By
Its City Clerk
STATE OF MINNESOTA )
) ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of ,
2003. by William P. Mars, Mayor; Mark McNeill, City Administrator and Judith S. Cox, City Clerk
of the City of Shakopee, Minnesota, on behalf of said City.
Notary Public,
My Commission Expires:
PAC-238096vl
SH155-124
4
KELLEY FUELS, INC.
By
Its
By
Its
STATE OF MINNESOTA )
) ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this _ day of , 2003 by
and , on behalf
of Kelley Fuels, Inc.
Notary Public,
My Commission Expires:
PAC-238096vl
SHl55-124
5
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Kelly Parcel; Legal description for entire tract
The land referred to is situated in the State of Minnesota, County of Scott, and is
described as follows:
All that part ofthe Southeast Quarter ofthe Northeast Quarter of Section 6, Township
115 North. Range 22 West. Scott County. Minnesota, lying south of the railroad right-of-
way of the Chicago, St. Paul, Minneapolis and Omaha Railroad and lying East of the
following described line: Commencing at a point on the south right-of-way ofthe
Chicago, St. Paul, Minneapolis and Omaha Railroad South 79 degrees West 450.9 feet
from an iron pin located on the East line of said Section 6, Township 115, Range 22,
about 1260 feet North of the East Quarter comer of said Section 6; thence Southeasterly
at right angles to said Railroad right-of-way a distance of 328 feet; thence South and
parallel with the East line of said section 6 to a point on the South line ofthe Southeast
Quarter of the Northeast Quarter of said Section 6, EXCEPTING therefrom the following
described tract: Commencing at a point on the South right-of-way line of the Chicago, St.
Paul, Minneapolis and Omaha Railroad South 79 degrees West 81.5 feet from an iron pin
located on the East line of said Section 6, about 1260 feet North of the East Quarter
comer of said Section 6; thence south 79 degrees West along said Railroad right of way
119.4 feet; thence Southeast at right angles a distance of 100 feet; thence Northeast at
right angles a distance of 100 feet to a point 80 feet West of the Section line of said
Section 6; thence North parallel to and 80 feet from the East line of said section 6 a
distance of 101.9 feet to the point of beginning of the excepted tract.
F:\ WPWIN\1281-4 7\survey\KellyUnderlying.doc
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~PROPOSED PERMANENT
~ STREET, UTILITY AND
" DRAINAGE EASEMENT
4TH AVE AREA=2256 SF
VKG STL RD AREA=35909 SF
.. EX. ROAD EASE=-29479 SF
TOTAL AREA=8686 SF
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~ PROPOSED PERMANENT,
~ UTILITY AND DRAINAGE
EASEMENT
4TH AVE AREA=3389 SF
/ VKG STL RD AREA=11932 SF
/ WITHIN PROP AREA=20896 SF
TOTAL AREA=36355 SF
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~ PROPOSED TEMPORARY,
I ~CONSTRUCTION EASEMENT
4TH AVE AREA=1670 SF
VKG STL RD AREA=5668 SF
()<).,. WITHIN PROP AREA=16555 SF
<<-- v TOTAL AREA=23903 SF
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1670 SF 0 100 100 200
S LINE OF THE SE 1/4 3389 SF ~ _ ~ I I
OF THE NE 1/4 OF SEC 6 2256 SF - -
T 115 R 22 ( IN FEET )
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WSB Project no. 1516-003 Date 9/17/03
.... 4150 Olson Memorial Highway 4th Avenue Improvements
~ Suite 300 Revised Date 10/21/03
WSB Minneapolis,MN 55422 . .
. FAXi~~~~~~~~ Easement Exhibit B
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city of Shakopee
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PATCHIN MESSNER & DODD
(952) 895-1205
V ALUA TION COUNSELORS Fax (952) 895-1521
;
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July 17, 2003 I
City of Shakopee
129 Holmes Street South
Shakopee, MN 55379-1351
A TIN: Mr. Bruce Loney, P.E. ,
Public Works Director
RE: Complete Appraisal, Summary Report
Kelley Fuels, Inc.
1644 East Highway #101
Shakopee, Minnesota
Dear Mr. Loney:
At your request, I have made a complete appraisal of the above captLoned property, for the
purpose of estimating the market value of special benefit derived from a street improvement
project described herein. The subject property has been appraised both before and after the
street improvement project, with the difference between the two values indicating the market
value of benefit.
The improvement project includes the upgrade and reconstruction of 4th (Fourth) Avenue
from a 24 foot wide bituminous roadway with no curb to a pavement width of 44 feet with
concrete curb and gutter. In addition, a trail on the north side and sidewalk on the south side
of 4th Avenue is proposea.
The improvement project also includes the upgrade of Viking Steel Road, which is currently
gravel and 24 feet wide. It is proposed to be constructed as a 36 foot wide bituminous-
surfaced roadway with curb and gutter. Also, municipal sanitary sewer, water and storm
sewer will be installed and extended north to the Union Pacific Railroad intersection.
The subject of this report is a 441,112 SF site (396,232 SF net of proposed 4th Avenue/Viking
Steel Road right-of-way), located along the west side of Viking Steel Road, between 4th
Avenue and the Union Pacific Railroad. It is currently improved with two existing buildings
and one building under construction. For purposes of this appraisal and determining special
benefit, only the land will be valued in both the before and after conditions.
This Complete Appraisal is intended to comply with the Uniform Standards of Professional
Appraisal Practice (USPAP) of the Appraisal Foundation. The appraisal is presented in a
Summary reporting format, as described in USPAP Standards Rule 2 - 2(b). As such, this
TWIN CITIES OFFICE: ROCHESTER OFFICE:
Skyline Square Building. Suite 220 (507) 252-1615
12940 Harriet Avenue South P.o. Box 7343
Burnsville. MN 55337 Rochester, MN 55903
ii
report presents only summary discussions of the data and analyses used in the appraisal
process. Additional information and do~umentation concerning the data and analyses of this
appraisal have been retained in my files.
Based upon the inspection of the subject property and consideration of the many factors
influencing market value, I conclude that the subject's market value, as of July 8, 2003, is as
follows:
Before Land Value $503,000
After Land Value . $753,000
Indicated Special Benefit $250,000
It should be noted that this letter does not qualify as an appraisal, and the reader is directed
to the following report for the supporting data, analyses and conclusions. The "Contingent
and Limiting Conditions" sectiqn of this report should be thoroughly read and undE!rstood
before relying on any information or analyses presented herein. .
As the undersigned appraiser, I hereby certify that I have investigated all information
believed to indicate the market value of the subject property. To the best of my knowledge
and beliefs, the statements contained in this report are correct, subject to the limiting
conditions set forth herein. If you have any questions or comments after reading this
apprais,al report, please feel free to contact me at your convenience.
Respectfully submitted,
PATCHIN MESSNER & DODD
~~.~~
Jason L. Messner, MAl
Minnesota Certified General Real Property
Appraiser License #4000836
PATCHIN MESSNER & DODD