HomeMy WebLinkAbout15.C.2. Vierling Drive Improvements Project No. 2002-4
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CITY OF SHAKO PEE
Memorandum
TO: Mayor & City Council
Mark McNeill, City Administrator
FROM: Bruce Loney, Public Works Director
SUBJECT: Vierling Drive Improvements, from
C.R. 15 to Orchard Park West, Project No. 2002-4
DATE: April 1, 2003
INTRODUCTION:
This agenda item is for City Council to consider the development of the City parcel north
of Vierling Drive improvements and south of the Upper Valley Drainageway.
BACKGROUND:
The City Engineering staff is currently designing the improvements for Vierling Drive,
from C.R. 15 to Orchard Park West, Project No. 2002-4. Previously, on February 4,
2003, the City Council reviewed alternatives for alignment for this project and selected
Alignment No.3, which would allow for a fire station in Lions Park near Lions Park
pond. Staff is completing the design and the right-of-way acquisition process with the
property owner to the south. Attached is a drawing showing the alignment and a
proposed subdivision for the parcel of land north of Vierling Drive and south of the
Upper Valley Drainageway.
The proposed subdivision that City staff has developed is a five lot single-family
residential subdivision similar to the subdivision adjacent to this parcel. The purpose of
this agenda item is to discuss with City Council on whether this parcel of land should be
sold as vacant land to potential developers, or should the City develop this parcel by
platting the parcel and selling the five lots to builders.
Staffhas reviewed and analyzed the assessments based on the new alignment and benefit
of property associated with this project, and is looking at costs for the development of
this parcel to analyze the City expenditure and revenue on selling this parcel or platting
this parcel and selling the lots.
Alternative No.1
If the City sold the land to a potential developer, City costs for this alternative would be
as follows:
City Assessment Cost for Vierling Drive $190,000.00
Future Costs of Improvements $ 60,000.00
Future Platting Costs $ 20,000.00
Total Expenditures $270,000.00 (not including the land costs)
Staff estimates the market value of the five lot subdivision at $70,000 per lot, or
approximately $350,000.00 of revenue. Most developments would operate on a margin
of 20% profit, thus the sale of the 1.5 acres could be sold with the City realizing a
"profit" of approximately $20,000.00 depending on the proposals (bids) received.
Alternative No.2
The second alternative is for the City to plat the property and sell the lots. The cash flow
analysis is as follows:
City Assessment for Vierling Drive $190,000.00
City Assessment for Local Street Improvements $ 60,000.00
Platting Costs $ 20,000.00
Total Expenditures $270,000.00
We estimate the market value of the five lots at $70,000.00 per lot, or a total of
$350,000.00. As compared to Alternative No.1, the City might realize a "profit" of
$80,000.00 above the assessment and platting costs for the development of this land,
versus the $20,000.00 in Alternative No.1.
Discussion:
The question for the Council is whether or not the City should be in the development
business and the pros and cons for each ofthese alternatives are as follows:
Alternative No. 1
Pros
1. Selling of City property - City disposes of the land to a private developer and is
not developing property which the City regulates the subdivisions of land.
2. The City does recoup the assessments on Vierling Drive and does receive a
modest revenue from the sale of the land.
3. This proposal would not take as much of staffs time as the other proposal.
Cons
1. Not as much potential revenue would be received as Alternative No.2.
Alternative No.2
Pros
1. The City could potentially receive more revenue by developing the land and
selling the lots.
2. By developing these lots, the City could sell some ofthe lots to smaller builders in
the area.
3. Engineering staff has designed the subdivision improvements in order to design
the storm sewer and ponding needed for Vierling Drive.
Cons
1. Public perception of the City doing a subdivision in which the City is also the
regulator of the Subdivision Ordinance.
2. Potential risks of holding the lots and the costs of assessments until the lots are
sold.
Staff would like to review these proposals with City Council and have City Council
provide direction on whether to sell the land to a potential developer, or for the City to
develop this land and incorporate the improvements of a potential street and utility
improvements into the Vierling Drive plans at this time. If this proposal were to proceed,
staff may need assistance from consultants in preparing the documents for subdivision
approval and for the platting of the property. Staff would like to point out that the Lions
Club would have an issue and may affect this decision or future decisions and as follows:
. Any excess revenue from the development or sale of the property, the Lions Club
and Park & Advisory Board would like to see if those revenues or a portion of
those revenues could be put back into Lions Park development.
Staff feels the issues are:
. Whether or not the City Council wishes to develop this land for a single-family
residential or other uses besides open space.
. Whether or not City Council wishes to sell the land to a potential developer.
. Whether or not City Council wishes to plat the property itself and sell the lots to
builders.
City staff is busy developing final plans for Vierling Drive and could incorporate the
subdivision design in these final plans.
ALTERNATIVES:
1. Discuss the various alternatives on the development of the land north of Vierling
Drive and south of the Upper Valley Drainageway and provide staff direction on
what alternatives to proceed with.
2. Table this item for additional information.
RECOMMENDATION:
This is a policy decision for City Council on whether or not the City should be involved
in developing land that it owns or sell the land to potential developers. If the Council
believes the City should not be involved in a development of City parcels that need
preliminary plat approval, then the alternative to sell the land is recommended. If the
City Council desires to maximize the revenues on this parcel, then developing this parcel
into a plat is recommended. Also, the City will need to install a storm sewer and pond on
this parcel for Vierling Drive. Constructing Vierling Drive and the other improvements
at the same time would be the most cost effective.
ACTION REQUESTED:
Provide direction on which alternative should be used for the parcel north of Vierling
Drive and south of the Upper Valley Drainageway owned by the City of Shakopee.
~~
"Bruce Loney
Public Works Director
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