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Home My WebLink About13.F.2. Appraisal of Downtown Fire Station 13.r �� City of Shakopee � MEMORANDUM � TO: Mayor and City Council '� Mark McNeill, City Administrator ' , FROM: Kris Wilson, Assistant City Administrator��. �,1� , � � SUBJECT: Appraisal of Downtown Fire Station I I DATE: December 30, 2011 ' i Introduction I � The Council is asked to consider the results of an appraisal of the City's downtown fire station building ' and discuss the desired use or disposition of the building. ' � i Background I In the coming weeks, the City will be relocating Fire Station #2 from its current home at the corner of 2" I I ' Ave. and Scott St. to its new facility adjacent to Lion's Park. This raises the issue of what to do with the , old building. ' � At its July 5 meeting, the City Council directed staff to seek a professional appraisal of the building. � Richard Marks of Universal Valuation Services, Inc. was hired to complete the appraisal, which was received by City staff on December 16. Mr. Mark's summary letter is attached and the complete 120- page appraisal is on file with the City Clerk's office for those interested in reviewing it. The result of the appraisal was an estimated market value of $585,000. ' I Alternatives There are several possible alternatives available to the City, including the following, with possible impacts identified: 1. Put the building up for sale. While it is unclear how long it would take to find an interested buyer given the current economic climate, selling the building would ultimately generate some '' revenue for the City, eliminate the cost of maintaining and insuring the building and return the i property to the tax rolls. 2. Retain the buildin in its current state for stora e ur oses. There is no immediate or ur ent g g P p g need for cold storage, however, if the City were to keep the building it is likely that various I � � departments would identify items that could be stored there. However, this would require that '� the City continue to maintain, insure and provide a basic level of utilities for the building and I some aspect of the City budget would have to accommodate for these costs. Additionally, this , � I � � : would result in the building aging further and possibly declining in market value as various components, such as the roof and mechanical units, reach the end of their useful life. 3. Remodel the building for an alternative use. It is possible that all or a portion of the building could be put to use as a senior center or community meeting space. This would generate the i need to undertake an unknown amount of remodeling and raise issues of how to staff and fund an additional facility and any services to be provided within. 4. Lease the buildin . If the Cit does not have a use for the buildin but does not believe it is the g Y g i appropriate time to sell the property, another option would be to lease it out. However, the City has not been in the business of being a landlord to a private entity and this has the potential to raise numerous issues related to zoning, code enforcement, maintenance response, etc. Recommendation Staff recommends that the Council move ahead with either Option #1 or Option #3. If Option #1 were � selected the appropriate next step would be to direct staff to research and identify the appropriate I means of listing the building for sale. If Option #3 were selected the logical next step would be to identify potential City or community uses and then conduct a feasibility study to determine the likely j costs of remodeling the building and operating the facility for that use. , Option #2 is not recommended because it is likely to lead to the building operating as the City's ' basement or attic, while continuing to cost money for basic maintenance, insurance and utilities. i ' Option #4 is not recommended as it puts the City in the position of being a landlord to a private entity, which creates the potential for numerous conflicts of interest and creates additional workload for our I � facilities maintenance staff that we are not prepared to undertake. Relationship to Vision This item, along with the construction of the new station, relates to Goal B: Positively manage the challenges and opportunities presented by growth, development and change. i Requested Action ' i The Council is asked to discuss alternatives for the use or disposition of the downtown fire station �I , building and provide direction to staff regarding the preferred alternative and desired next steps. � I � � � I I � � Universal 2 I � Valuation Appr�isers / Consultants ' S@fVICeS, W��UniversalValuationServices.com � ��. � File Reference No.: 21116 To: Ms. Kris Wilson c/o City of Shakopee � 129 Second Avenue West Shakopee, Mn. 55379 Re: Summary Appraisal of a I� fire station building located at 334 Second Avenue West, Shakopee, Mn. 55379 � December 16, 2011 Dear Ms. Wilson, � Per your request, I am submitting a summary appraisal report of the above referenced property. The parcel has existing improvements. The purpose of �his appraisal is to estimate the market value of the above i � referenced property as of the date of inspection, November 1, 2011, for the City of Shakopee. The attached report presents the findings, analyses and conclusions of � this appraisal and identifies the property. Since the improvements contribute significant value to the underlying land, all three approaches to value are used in the valuation process. � It should be noted that the subject property has been used as a public � fire station since circa 1955. It currently has approximately 33% of � � the area of the building used for office/recreational space ancl 6'70 for the storage and maintenance of fire equipment used by the Shakopee Fire Department. When the building is vacated, it is doubtful that it will be used for a similar tenant, and an alternate use for the '� building is estimated in this appraisal report. Based upon the appraiser's inspection of the subject property in its � existing condition on November l, 2011, giving careful consideration to the many factors influencing market value, the estimated market value of the subject property is shown below. � LUE AS OF NOVEMBER 1, 2011: $585,000 i ESTIMATED VA � The above value conclusion is subject to a competent inspection of the subject property for the contamination of the property by dangerous materials or other substances which may be found on, within or around � the subject. To the appraiser's knowledge, no such conditions exist. However, should such materials or gases be found present, the appraiser reserves the right to re-evaluate the estimated value � subject to these conditions. UNIVERSAL VALUATION SERVICES 12951 KoeperAvenue, Shakopee, MN 55379 � Voice: (952) 445-9100 Fax: (952) 445-9101 � 3 , � It should also be noted that the value indicated above is considerably less than the assessed value estimated by the Scott County Assessor's � Office for assessment ye�rs �Q�Q �n� 2�1�. Tn .2��?, �he �sas��ed zra��az� was $Z69,800. In 2010 the value increased to $1,555,017. This is a � significant one year increase. I � The appraiser questioned the assessing staft' regarding this discrepancy and found that the replacement costs used to value the fire department building were based upon actual fire department � building costs. Public use buildings are revalued only once every six years. It was also found that the effective age of the building was stated as being 1995 rather than its actual age of 56 years (1955). � The value estimated in this appraisal reflects an alternate use for I the subject building as a vehicle service facility or an ' office/warehouse building. It was not appraised as a fire department � facility. The difference between the two uses is obvious. � Descriptions of the property appraised, together with explanations of � the appraisal procedures used, are presented in the report. The estimated market value is subject to the definitions of value, the Assumptions and Limiting Conditions, and the Certification contained � within the attached report. If you have any questions regarding this report, or the information �� contained herein, please contact'me at your convenience. �, Respectfully, � UNIVERSAL VALUATION SERVICES, INC. _..� � _.. / S i `� j i 1 j � i( �� ' `{ r' � ( . L 4 �.�'� � � � i , , ;j � ��, F �/ �� 1 `� `�� { L��`� Richard G. Marks (MAI) � i � I � ,� \ I � � I � UNIVERSAL VALUATION SERVICES � I