HomeMy WebLinkAbout14.A. Comp Plan Amendment for Valley green Corporate Center-Res. No. 5908
CITY OF SHAKOPEE / 'I fj.
Memorandum
TO: Mayor and City Council
Mark McNeill, City Administrator
CC: Shakopee Planning Commission
FROM: R. Michael Leek, Community Development Director
SUBJECT: Comprehensive Plan Amendment to Reguide Property from Business Park
to Medium Density Residential and Open Space
MEETING DATE: August 19,2003
REVIEW PERIOD: April 24 - August 22, 2003
CASELOG NO.: 03-051
INTRODUCTIONIDISCUSSION:
On April 24, 2003 the Ryan Companies filed a request to amend the Comprehensive Plan to
reguide 69 acres in Valley Green Business Park from "Business Park" to "Medium Density
Residential." The April 24th request was reviewed by the Planning Commission at the public
hearing on June 5, 2003, at which time it heard from members of the public. The Planning
Commission voted unanimously to recommend to the City Council denial of the request to re-
guide 69 acres from "Business Park" to "Medium Density Residential." On August 6th, the
Council heard a revised request to re-guide 42 acres from "Business Park" to "residential PUD,"
and to depict the proposed open space as such. The Council referred the revised request to the
Planning Commission to consider at its meeting of August 7th.
ALTERNATIVES:
1. Offer and pass a motion approving resolution no. 5908 as presented or with revisions, to
wit, a resolution approving the revised request of Ryan Companies to re-guide 42 acres
from "Business Park" to "residential POO" and changing the designation of another 84
acres to "Open Space" for action at its August 19, 2003 meeting. Under the City's Zoning
Code, the resolution would require a 2/3' s vote.
2. Offer and pass a motion directing staff to prepare a resolution of denial for action at the
August 19, 2003 meeting.
3. Table the matter for additional information, with written assent from the applicants to
extend the review period.
PLANNING COMMISSION RECOMMENDATION:
The Planning Commission did review the revised request on August 7th. It heard from Steven
Menden, who indicated his wish for a broader public meetinglhearing on the revised request. It
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also heard from Kathy Gerlach, who said that circumstances had changed since the Commission
first reviewed a possible residential component that argues against its efficacy at this time.
At the close of the discussion, the Planning Commission did recommend approval of the revised
request 6-0.
ACTION REQUESTED:
Offer a motion consistent with the Council's wishes and move its adoption.
d~
R. Michael Leek
Community Development Director
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RESOLUTION NO. 5908
A RESOLUTION OF THE CITY OF SHAKOPEE AMENDING THE 1999
COMPREHENSIVE PLAN UPDATE BY AMENDING THE LAND USE PLAN TO RE-
GUIDE LAND GENERALLY LOCATED SOUTH OF STH 169, EAST OF CSAH 83,
NORTH OF CSAH 16, AND WEST OF DEAN LAKE AS FROM BUSINESS PARK TO
RESIDENTIAL PUD (42.0 acres)
WHEREAS, Ryan Companies U.S. Inc., applicant, and Valley Green Business Park,
property owner, have requested the re-guiding 42 acres from business park to "residential PUD",
and 60.9 acres from commercial to business park; and
WHEREAS, the subject property is legally described as described on the attachment titled
V alley Green Corporate Center Legal Description; and
WHEREAS, notices were duly sent and posted, and a public hearing was held on the
original request before the Planning Commission on July 3,2002, at which time all persons
present were given an opportunity to be heard; and
WHEREAS, The Planning Commission reviewed the revised request on August 7, 2003,
and the City Council heard the matter at its meeting of August 19,2003.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of
Shakopee hereby adopts the following findings of facts relative to the above-named request;
Finding No.1: The original Comprehensive Plan as depicted on the City's current land use
map is not in error.
Finding No.2: Significant changes in community goals and policies have not taken place
relative to the subject property.
Finding No. 3: Significant changes have occurred in the neighborhood development pattern.
Significant and ongoing demand for quality residential sites coupled with the
greater compatibility of residential over business park uses with the adjacent
Dean Lake make the proposed change to medium density residential
desirable.
Finding No.4 The current comprehensive plan does not require a different provision.
BE IT FURTHER RESOLVED, that the request to amend the 1999 Comprehensive
Plan Update by re-guiding 42 acres from business park to "residential PUD" is hereby approved.
Passed in regular session of the City Council ofthe City of Shakopee, Minnesota, held
this day of , 2003.
Mayor of the City of Shako pee
Attest: ,
Judith S. Cox, City Clerk
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*<1
CITY OF SHAKOPEE
Memorandum
TO: Shakopee Planning Commission
FROM: Julie Klima, Planner II
SUBJECT: Comprehensive Plan Amendment to Reguide Property from Commercial
and Business Park to Commercial, Business Park, Medium Density
Residential and Open Space
MEETING DATE: June 5, 2003
REVIEW PERIOD: April 24 - August 22, 2003
CASELOG NO.: 03-051
Site Information:
Applicant: Ryan Companies US, Inc.
Property Owner: Valley Green Business Park
Location: South of Highway 169 and East of CSAH 83
Adjacent Zoning: North: Highway 169
South: Planned Residential District (PRD)/Light fudustrial (Il)/Rural
Residential (RR)
East: Low Density Residential (R-IA)
West: CSAH 83
MUSA: The site is within the MUSA boundary
INTRODUCTION:
Ryan Companies has filed a request to amend the Comprehensive Plan to reguide 69 acres in
Valley Green Business Park from "Business Park" to "Medium Density Residential." The
subject site is currently guided Commercial and Business Park, and the resulting guiding would
be Commercial, Business Park, Medium Density Residential and Open Space. The subject site is
located south of Highway 169 and east ofCSAH 83 (see Exhibit A). The property is
approximately 265 acres in size. Please see the applicant's narrative attached as Exhibit B.
The applicant is requesting approximately 66 acres of business park, 36 acres of commercial, 69
acres of medium density residential and 84 acres of open space. As stated in the applicant's
narrative, the 69 acres of residential proposes 499 residential units. However, because the
request is for a land use reguiding, staff suggests that the Planning Commission focus on the land
use itself rather than the specific site plan. While it is important to understand the nature of the
development proposal when considering the change in land use guiding, the specific
development plan is not fully developed, and the more appropriate time to discuss specifics of
1
the site plan would be at Planned Unit Development (PUD) and platting review should the
applicant file those requests.
The following is a brief history of the land use guiding ofthe site.
1980 Comprehensive Plan: guided for commercial uses along the 83/169 frontages and light
industrial uses extending eastward.
1996 Comprehensive Plan: guided for commercial uses along the 83/169 frontages and light
industrial uses extending eastward.
1999: Based on the adopted Comprehensive Plan, which guided the site for business park and
commercial uses, a request was made by Valley Green Business Park to rezone the property from
Agricultural Preservation (AG) and Light Industrial (II) to Highway Business (B 1) and Business
Park (BP).
2002: Request was made by Ryan Co. to reguide the property to allow for medium density
residential uses on approximately 57.7 acres of the site (on the west side of Dean Lake). The
request was withdrawn at the applicant's request in November 2002.
2003: Current application was filed. The current application proposes the re-guiding of 11.3
additional acres for Medium Density Residential than was requested by the application submitted
and withdrawn in 2002.
The City's current adopted land use plan identifies the area directly south ofHwy 169 and east of
CSAH 83 for commercial development and the remainder of the site for business park uses. The
draft Comprehensive Plan update, which has been shared with both the Planning Commission
and City Council and discussed in joint workshops does not propose a change to residential
guiding on the subject site. The background analysis (the 2002 Supply and Absorption Analysis
prepared by Maxfield Research for the Scott County HRA) supporting the continued use of the
property for commercial and business park uses essentially states that the access to and visibility
of the site are exceptional and can not be replicated elsewhere in the City. The analysis further
states that with these land use designations in place, the city would have a land supply for these
classifications of approximately 6 to 9 years. The applicant's narrative also discusses this topic
further.
The applicant and/or property owner have recruited Maxfield Research to provide an update of
the Supply and Absorption Analysis. A copy of that update is provided as Exhibit C. This
update estimates that the supply of commercial and industrial land supply is at least 10 years.
The update cites the slower than expected recovery ofthe economy as the main reason for the
extension of land supply. By extension, the applicant contends that the development of a portion
of this site for Medium-Density Residential use is appropriate since additional opportunities for
Business Park development will come on line in the Jackson Township area when needed for
such expansion.
FINDINGS:
The Zoning Ordinance does not specify criteria for granting a Comprehensive Plan Map
amendment. Though reasonable criteria would be Criteria 1-3 for Zoning Ordinance amendments.
Staffhas provided Criteria 1-3 for the Commission's review and discussion.
Criteria #1 That the original Comprehensive Plan is in error;
2
Criteria #2 That significant changes in community goals and policies have taken place;
Criteria #3 That significant changes in City-wide or neighborhood development patterns
have occurred.
ALTERNATIVES:
1. Recommend to the City Council 1) the approval of the request to reguide 69 acres of the
Valley Green Corporate Center site from Business Park to Medium Density Residential,
which will result in the property being guided for commercial, business park, medium
density residential, and open space uses, and 2) direct staff to revise the adopted and draft
land use policies.
ill the event that the Commission exercises this option, staff offers the following draft
findings for the Commission's consideration.
Criteria #1 That the original Comprehensive Plan is in error;
Finding #1. The adopted 1999 Shako pee Comprehensive Plan is not in error.
Criteria #2 That significant changes in community goals and policies have taken
place;
Finding #2. There have not been significant changes in community goals and policies
since the adoption of the 1999 Shako pee Comprehensive Plan. An update to
that Comprehensive Plan is currently under discussion, and may result in
changes to community goals and policies.
Criteria #3 That significant changes in City-wide or neighborhood development
patterns have occurred.
Finding #3. Because of the economic downturn of the last two years there have been
significant changes to industrial and business park development patterns
that affect this site. Specifically, Valley Green Business Park, located on
the north side of STH 169 currently has in excess of one million square
feet ofvacant space available for industrial and business park uses. This
fact significantly affects the suitability of the Valley Green Corporate
Center site for solely business park developmentfor the short to medium
term,.
2. Recommend denial to the City Council of the request to reguide the property for
commercial, business park, medium density residential and open space based on the policies
set forth in the adopted and draft comprehensive plan documents.
3. Continue the public hearing and request additional information from the applicant or staff
4. Close the public hearing, but table the matter and request additional information.
3
STAFF RECOMMENDATION:
Staff recommends either alternative no. 1 or 2, dependent on the Commission's analysis ofthe
impact of changes in industrial and business park development patterns in the last few years.
ACTION REQUESTED:
Offer a motion consistent with the Commission's wishes and move its adoption.
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Comprehensive Plan Amendment
to ReguideLand Use
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INCORPORATED
CONSUL TING PLANNERS
LANDSCAPE ARCHITECTS
300 FIRST A VENUE NORTH
SUITE 210
MfNNEAPOLlS, MN 55401
612-339-3300 PHONE
612-337-5601 FAX
April 22, 2003
Honorable Mayor and City Council
City of Shakopee
clo Michael Leek, Community Development Director
129 Holmes Street
Shakopee, MN 55379
RE: Valley Green Corporate Center and Dean's Lake Residential,
Comprehensive Plan Amendment
Dear Mr. Leek,
On behalf of Valley Green Business Park and Ryan Companies we are requesting an
amendment to the Shakopee Comprehensive Plan for the Valley Green Corporate Center and
Dean's Lake Residential (VGCC) project. The project will be developed on 265 acres south of
Trunk Highway 169 (TH 169) and east of County Road 83 (CR 83), currently legally described
as the Valley Green Corporate Center 1 st Addition. This amendment supports the goals of the
Comprehensive Plan in the continued development of Shakopee as a strong, diverse, well-
designed community.
Introduction
The elements of our request are as follows:
0 The Proposed Land Use Plan in the draft of the Shakopee Comprehensive Plan Update
guides the property Business Park and Commercial, as it has been for many years.
. The Proposed Land Use Plan under this amendment will guide the property as Business
Park, Commercial, Medium Density Residential} and Open Space, as illustrated on the
attached exhibit, and summarized as follows:
. Business Park 66j: acres
. Commercial 36j: acres
. Medium Density Residential 692: acres
. Open Space 84j: acres
. Street Right-of-way 11j: acres
. The major land use change proposed in this request is to reguide a portion of the
Business Park area to Medium Density Residential, placing residential development to
take advantage of the sensitive and attractive Dean's Lake environment.
Michael Leek, City of Shakor:. Apr ,2003 2
..,..,.._".."." _. __0' 0". -
. The property is subject to environmental review under an Alternative Urban Areawide
Review (AUAR) completed in 2000, a supplemental AUAR in 2002, and a revised AUAR
to be completed shortly. Preliminary analysis of the VGCC project indicates that the new
residential component will present fewer environmental impacts than either of the earlier
concepts analyzed.
Background
The Valley Green Corporate Center and Dean's lake Residential project has evolved over the
last year as Valley Green Business Park and Ryan Companies have considered the most
appropriate uses for the property. The property is the last significant parcel of land owned by
Valley Green Business Park and has been guided for commercial, industrial, and business park
uses. for many years.
The initial business park development proposal on the property was analyzed for potential
environmental impacts in an AUAR in July 2000. Responding to the overall residential and
industrial real estate market and the success of the adjacent Southbridge Residential project,
Ryan added a residential component to the project and reduced the amount of commercial and
business park development. This previous development concept, including 258 residential
units, was studied in a supplemental AUAR in September 2002 and incorporated significant
natural open space buffer areas following the recommendations of the City's consultant, Brauer
and Associates. Although analyzed for environmental impacts, the land use scheme in that
project was not incorporated into the City's Comprehensive Plan. The current proposal involves
a residential component of 499 units on 69 acres.
Preliminary analysis of the current development concept indicates that environmental impacts
will be further reduced with the additional residential development, due to the increased open
space and green area and the reduced pavement and other impervious surface associated with
residential development compared to office and industrial buildings. The developers will abide
by the conclusions and restrictions of the revised AUAR, when it is completed by the City.
Land Use Concept
The land use concept for the VGCC project revolves around five main issues:
. Access and visibility for Commercial uses near the CR 83fTH 169 interchange
. Visibility for Business Park uses along the TH 169 frontage
. Proximity to the Dean's lake environment for Medium Density Residential development
. Continued strong demand for residential development in Shakopee and the region
. Weaker demand for industrial uses compared to five years ago or even one year ago
The VGCC project concentrates Commercial land uses on 26 acres on the western edge of the
property, immediately adjacent to CR 83, TH 169, and County Road 16 (CR 16), with access to
both CR 83 and CR 16. This is not a change from the current Comprehensive Plan; this portion
of the property has been guided and zoned Commercial for many years.
The VGCC project places Business Park uses along the northern edge of the property on the
TH 169 frontage where these businesses can take maximum advantage of the visibility afforded
to this regional transportation corridor. This is not a change from the current Comprehensive
Plan either; this portion of the property has been guided and zoned Business Park for many
years.
Michael leek, City of Shako~ Api _, 2003 3
Medium Density Residential is located adjacent to Dean's lake and within an open space
corridor encircling the residential neighborhood. The neighborhood is designed to take
advantage of its natural setting on Dean's lake as well as incorporate new man-made open
space and park elements. There are existing residential parcels on the south side of Dean's
lake and major residential development on the east side of Dean's Lake in the Southbridge
development. The new VGCC neighborhood - 499 units on 69 acres, or about 7 units/acre -
consists of single family homes and townhouses in a variety of designs. It is large enough to
establish itself as a viable, identifiable neighborhood in the City, and will have convenient
access to employment, shopping, and recreational activities in the immediate area.
The Shakopee Comprehensive Plan Update notes a number of principles and strategies to be
followed in planning future Medium OensJ1y Residential areas, including the following:
. Providing housing diversity and "life cycle" housing
. Creating identifiable neighborhoods, as opposed to a series of plats
. Limiting the location of medium and high density development to areas that support
existing and future commercial and industrial uses
. Emphasizing appearance, site design, human scale and pedestrian systems
. Dispersing, rather than concentrating, these areas throughout the city
. Locating medium and high density housing areas along busier roadways in order to
reduce traffic impacts on low density neighborhoods
. Using medium and high density areas as a transition between low density
neighborhoods and commercial or industrial uses
The VGCC project furthers all of these strategies with its integrated neighborhood design;
variety of housing types; proximity to commercial and industrial areas; proximity to TH 169, CR
83, and CR 16; extensive sidewalk and trail system; and its location between existing residential
uses south of Dean's lake and the future Commercial and Business Park uses in Valley Green
Corporate Center.
The land use plan amendment we are requesting would identify Open Space areas on the map,
something not shown on the current land use map for the property. Areas for wetlands, storm
ponds, park and trail features, and open space corridors have been designed into the plan
following the environmental analysis in both the original AUAR and the supplemental AUAR.
Market Demand
There is ample evidence of continued strong demand for residential development of all kinds in
Shakopee, the surrounding area, and the Metropolitan Area as a whole. The housing market
has remained strong, despite the economic downturn of the last three years, and continued
sluggishness in other sectors of the economy. The residential component of the VGCC project
will have a strong market for its homes.
The demand for industrial land, however, is weaker than for residential uses, and is
considerably weaker than predicted even a year ago. The Shakopee Comprehensive Plan
Update cites the 2002 Supply and Absorption Analysis of Commercial land in Scott County,
prepared by Maxfield Research for the Scott County Housing and Redevelopment Authority.
That study indicated a six to nine year supply of industrial land in Shakopee. The
Comprehensive Plan concludes that there is a need for additional industrial park locations to
meet future demand and identifies the area west of current Shakopee city limits along TH 169 in
Michael Leek, City of Shakop, Apn .,2003 4
Jackson Township as an ideal location, an area that is expected to be annexed into the City in
about ten years.
The Supply and Absorption Analysis has been recently updated by Maxfield Research for the
Shakopee market (see attached memorandum "Update of Commercial/Industrial Land Supply in
Shakopee, Minnesota, April 16, 2003), concluding that the industrial land supply will last for "at
least ten years" vs, the six to nine year horizon identified previously, The update notes that the
economy has not rebounded as anticipated last year, and has continued to be sluggish for
commercial and industrial development, effectively extending the land absorption period to over
ten years. Therefore the current industrial land supply will likely last until new industrial
locations west on TH 169 are annexed into the City.
With this new information we believe that converting a portion of the Business Park land to
Medium Density Residential will not affect the City's standing in the industrial market place. The
City can continue to keep a reasonable share of industrial land available and also encourage
the development of a well-designed residential neighborhood in the Dean's Lake area.
Conclusion
The plans for the VGCC property have evolved over the past year to include a scaled-down
business park and a new residential neighborhood integrated with the Dean's Lake
environment. This residential component meets the policies in the Comprehensive Plan for
siting such neighborhoods, and serves as a buffer to an existing residential area. It will also add
customers and employees for future commercial and business park development nearby. The
demand for industrial land in the foreseeable future, based on the most recent expert analysis,
supports the change from Business Park to Medium Density Residential land use being
requested in this Comprehensive Plan amendment.
We respectfully request approval of our request and look forward to working with you to see the
Valley Green Corporate Center and Dean's Lake Residential project develop to its full potential.
Attachments:
Current Land Use Map
Proposed Land Use Map
Maxfield "Update" Memorandum, April 16, 2003
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April 16, 2003
MEMORANDUM
TO: Mr. Phil Carlson
Dahlgren, Shardlow and Uban, Inc.
FROM: Ms. Mary Bltiold
Mr. Sam Newberg
Maxfield Research Inc.
RE: Update of Commercial/Industrial Land Supply in Shakopee, Minnesota.
Introduction
This memorandum contains an estimate of the future supply and absorption of commercial and
industrial land in Shakopee, and is an update to the Shakopee portion of the commercial and
industrial land supply and absorption analysis performed in March 2002 for the Scott County
Housing and Redevelopment Authority. Contained in this memorandum are an update of the
conunercial and industrial market conditions in Shakopee and Scott County, an updated land
supply estimate using the same methodology as the March 2002 report, and new interviews with
key commercial real estate brokers .and developers that work in Shakopee.
Market Overview
The Twin Cities office and industrial markets are experiencing a slower than anticipated
recovery from the recent economic recession, compounded by the current conflict in Iraq. It is
expected to be two to three years before the office and industrial markets recover.
Shakopee contains a majority of larger industrial buildings in Scott County, and the overall area
(Scott County) is the smallest sub market in the Twin Cities. Consequently, a single vacancy in a
large building can affect the submarket significantly. The 2003 Towle Report indicates Scott
County had a 4th Quarter 2002 Office/Warehouse vacancy rate of 50.9% and a BULK
Warehouse vacancy of 32.2%. Overall vacancy is 40.6%, by far the highest vacancy rate of any
Mr. Phil Carlson April 16, 2003
Dahlgren, Shardlow and Uban, Inc.
real estate submarket in the Metropolitan Area. Including sublease space, the vacancy rate is
over 46%. However, alUlUal net absorption was positive overall at 350,000 square feet. At that
rate of absorption, it would take approximately four years for existing vacancies to lease up.
The retail market in Scott County is healthy compared to the industrial sector, bolstered by
substantial residential development in the County. Current retail vacancy in Scott County is
14.5%, which is down from over 20% one year ago, according to the 2003 Towle Report.
Recent developments include Sam's Club and Wal~Mart at Southbridge Crossing in Shakopee.
A third big box anchor is being sought for a 120,000 square foot store. A buyer is also sought
for a vacant 83,000 square foot K-Mart building.
The office market in Scott County and Shakopee is very small, and consists l11.ostly of single-
tenant buildings less than 15,000 square feet. The current vacancy rate for office buildings in
Shakopee is 7%.
Updated Interviews
We interviewed prominent commercial/industrial real estate developers and brokers in Shakopee
to gauge the strength of the market and how it has changed since the March 2002 report. The
overwhelming observation is that the economy is taking longer to rebound due to a variety of
economic reasons at the local, national and intemationallevels. The economy did not rebound
toward the end of 2002 as anticipated, which pushes a real estate recovery farther into the future.
The following bullet points are highlights from our recent interviews.
. The economy remains uncertain, and businesses are wary of investing in new products or
expanding. As a result, demand for space is minimal.
. Recovery in the industrial market is over one year in the future, and probably at least 18
months away. Even when a recovery occurs, existing vacant space will at least partially
fill before demand for vacant land picks up.
. One comment supported converting land use from industrial to residential due to the
current strength of the respective markets.
. Demand for single-tenant/corporate campus users is non-existent at this time, and notable
single~tenant properties still sit vacant in Valley Green Business Park, including a vacant
ADC Telecommunications building.
. The opinion of available land supply varied by interview, ranging from five years to 10
years.
Revised Land Supply
We updated our forecast ofland absorption based on CUlTent data provided by the City of
Shakopee, Scott County, the Minnesota Conunercial Association of Realtors, Colliers Towle
Turley Martin Tucker, and commercial real estate brokers and developers familiar with the area.
MAXFIELD RESEARCH INC. 2
Mr. Phil Carlson April 16, 2003
Dahlgren, Shardlow and Uban, Inc.
We used a similar methodology for our updated forecast similar to our March 2002 report, and
based on the most recent data available.
Table 1 shows our revised land supply forecast for the City of Shakopee, with a comparison to
our March 2002 forecast.
TABLE 1
ESTlMA TED COMMERCIAL LAND SUPPLY - 2010
ORIGINALlUPDA TED STUDY
City of Shakopee
Original 2002 Updated 2003
Conu11ercial Industrial Commercial Industrial
!Average Annual Permits Issued II 6.6 5.8 I I 7.7 4.6 I
ICtimes) Acres per Permit II 3.3 11.4 I I 4.1 13.1 I
!requals) AI'erage AnJlual Acreage I Consumed 1996 - 2000 Consumed 1996 - 2002
21.7 65.9 3].4 59.8
IAnnual Predicted Absorption II 2001 to 2010 I 2003 to 2010
40.0 75.0 30.0 60.0
I Current Developable Acres I March 2002 April 2003
509.4 364.6 439.4 364.6
I(minus) Total Predicted Land Absorption I 2001 to 2010 2003 to 2010
400.0 750.0 240.0 480.0
kEqualsj Gross Land Supply II 109.4 -385.4 I I 199.4 -115.4 I
(plus) Vacant Land Occupied I 17.1 138.6 I I 16.7 135.1 I
b Vacant Buildin s
I 23.3 19.3 I I 8.3 65.2 I
I(Equals) Net LandSupply in 2010 I I 149.9 -227.9 I I 224.4 84.9 I
Source: Maxfield Research, Inc.
Our results show a greater supply of available commercial and industrial land than previously
estimated. Our previous study took the average number of commercial and industrial permits for
new constlllction as issued between 1996 and 2000. Our revised land supply added the years
2001 and 2002. The result is a slightly higher average annual commercial permit rate, due, in
part, to a recent surge in retail activity driven by the Southbridge Crossing retail center. This
MAXFIELD RESEARCH INC. 3
Mr. Phil Carlson April 16, 2003
Dahlgren, Shardlow and Uban, Inc.
will likely continue, following strong residential growth. Average annual industrial pennits
shrank slightly, due to the weak industrial market in 2001 and 2002.
Based on the amount of land absorbed since the March 2002 study, the CUlTent developable
acreage as of April 2003 in Shakopee is estimated to be 439 acres of cOlllinercial and 365 acres
of industrial land. Using the updated average acres developed each year between 1996 and 2002,
we estimate demand for 240 acres of conunercial land and 480 acres of industrial land by 2010.
The addition of current allocated land in vacant buildings and in pending development results in
a net availability of 224 acres of commercial and 85 acres of industrial land in 2010. The overall
supply ofcol11mercialland, in effect, is at least 10 years.
In the case of both commercial and industrial land supply, we estimate a greater land supply, as
of2010, than previously predicted. We cite the slower than expected recovery of the economy
as the main reason for this extended supply of land.
Conclusions
The ClUTent commercial real estate market conditions in Shakopee are sluggish overall, with
substantial vacancies in the industrial sector. The newly-discovered Shakopee industrial sector
has been particularly hard hit by the recession. Speculative development continued after the
boom of the late 1990s ended, and the telecommunications industry suffered in particular. Also,
increasing vacancies throughout the Metropolitan Area caused tenants to favor space more
centrally-located, preferably within the Interstate 494/694 beltway, causing vacancies in
Shakopee to rise even higher.
The result of all of the above factors is a substantial amount of vacant industrial space in
Shalcopee that will take some time to absorb, and a real estate recovery that is likely to begin
more than one year from now. Thus, the amount of commercial and industrial land available will
require more time to absorb than was previously forecast in March 2002. Our update of
cOlTunercialland supply and absorption in Shakopee supports this.
MAXFIELD RESEARCH INC. 4
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