HomeMy WebLinkAbout02/26/1997 NOTE TO FILE
SHAKOPEE CITY COUNCIL
FEBRUARY 26, 1997
No City Council meeting was held on February 26, 1997. There was just an Economic
Development Authority public hearing by the new makeup of the EDA consisting now of only
Council members. This modification was made at the City Council meeting on February 25,
1997.
A copy of this notice has been entered in the February 26, 1997, EDA agenda packet, and the
February 26, 1997, City Council agenda packet for informational purposes only.
Judith S. Cox
City Clerk
TENTATIVE AGENDA
ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
SHAKOPEE,MINNESOTA
Regular Meeting Wednesday,February 26, 1997
1. Roll Call at 6:00 p.m.
2. Approval of the agenda
3. Public Hearing -Blocks 3 and 4:
a.) Physical design and proposed uses
b.) Financing
4. New Business:
a.) Resolution amending the By-Laws provision relating to EDA meeting date
and time.
5. Other Business:
6. Adjourn
EDAGENDA.DOC
TEL : Feb 26 ,97 13 :58 No .013 P .01
the'rincipat • PRINCIPAL FINANCIAL SECURITIES, INC.
In vestment Bankers-Member New York Stock Exchange
Financial , Information Services Facsimile
Group
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OF: _ Phone# (800)331-4923
Direct# (612)342-0657
DATE: 2.\2-‘.0
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Number of Pages
Fax #: "LE (01
If there are any problems with this Principal Financial Securities,Inc
transmission,please call:Sharon Oselelo 701 Fourth Avenue South
Sales Assistant (612)342-0571 Minneapolis,MN 55415-1655
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ISL Feb 26 ,91 1358 No •016 I- •114
'Q 3595843 3~_�eie ,?�� xitlttFrani lien to their •dispute 7h •v `,`t' MARY C.
641! teo, based In San Ma- The was led t,
on Worth B23 556 3G Ult.the cuuntres I rtnCSS Schroeder Y hillier
707 717 raised some also haus Tann Flr+meds!Inc.Other
22g 169 185 +148 underwriters wnr curs about the pertness included Co.Ma Dunbar Devil-
'
TRIDENT REA*
e am' 7090 799 ; lad . arrangement in I, fho ug pl etd the 'gement nc.,Eldnt Corp., ers
Lakes Maa-
ttBq 792 94 839 2 8 In 1993,the live-county 8roup1noFnsbdRrslana
7 rtlDO • 117 729 825 rp 1°g agency soJJ bo Ybuus• lae..6hoed AsCuu ,cj
690 320.3 tttinion.Of w ich rankltotally counsel Best rtr Flans-.
de ol~ 1752 694 610 +17h bought$10 million,o develop 19 rOf thsod
best efforer'a ause of
isTrawlho . 7�' 213 apanrnett asrre6Dertsun
�_ apart hot P JCcts cud acquue a she riper t best filar i!;u_ t„
parkatbr dee clause of
-~- -"-- a[tnhJefich+toutalned an o g t agreement.
the counties charged that 'this
Ys arepet• type of vague
O/'� }•W the re c egret-meet in use forceable and legally unea- �� h1.tr '
good
time
tt elf,1�tlrJgrd to use agrermcut
{/ `✓� tAdr five
co tfI lbtyrontutionoffuturet gatd}ng •
s date any anomie/leer/runic- wan invented h
!rt`i/� shurtfall f he Ise .
D� appreciation�rL should the housh, tastnnals to Y investment pro.
I'•: • �>� Afton meet exphetatfuns•g prujects not encourage ,come-
s
of more booms(and,const- • linin te[.l°
•
ir..forei
The projects!sited to meet ex- 9uenyy,the generation • 9ratc•oat
¢n contacts
Pecta:iuns almost Immediately of more ridsession
i7 pn+kssional Ips}." electrical arid 41,
t acs and the a e e That statement drew a sharp • j+Ct'atsPeakrr.
P�Q�oCol — rsayertive cvunuds to'd�rhs rebuke Ftiday from P P WOrim Trane Con
r —1�� res ec tax uu y a holm. sol Lek- !teems(;enc.
Business traveler coerattni losses ono covet pttslJaaiMdter&Schroeder vice Prc'!tCistgclws rcqu,.
�t f les t0 0 Each
/h` county said no. 'Thee is absolutelyuntrue,' Sponvored by the Mu.
lisot id leather ter a Muslim*• -: Last May.Frank}tu tiled suit in said Cold in . " in-
• U.S.District Court is were'Old ' The bonds that
aj cher tir a uslim ••! that• lie,charting the Ave counties and n on bunch
ch that Min-were the s EXPERIENCED
:- she almost GJtw1t whin she put l0 cuuntY board m rnotal obligation bunds that Min-
4;1.
X ERiI;NCFD INFO Sl`
-' is an ititr-liter canceled- C°tbera of
forbte1g11 of curiuecr n nesou state end 1 1-
I g
ftving Urne for 68 blue-leather toting variousa J with vio• Deal guvent• p4
from Pit-cute 8 securities revile- menta have been selyn
f who want to es for her boss.Jat uel(n tions.Franknu wants the rg ►+0°urJet&for decades.• d end r:4; tO ' f
'relationship f frames
Kennedy.f thenb the First Lady.t o order the eounties to i r coup a edkh e n said
send Y o a add
to dignitaries special impose u the meets.What-. +S ar la!to to Loud
h,What-. les ant fn p t abkd the sen- �.•
In ends r Av
Mu ec
ireMuslim count' 'A counties to ..
1tg1uR- pee besot the reycestnteduna !rig units of ratify obtain
rather tat -The nuances of religion S the crsu,rueneeded
fro No-
ir
, to i: A
protocol ( e trod and commitments male by the !torts ave Y
•
•
arc rot and c o in the Operating
ati an gift selection Agrceruents, penin Deficit duce 1Yoeles'efforts to pro•
ith �Hodes
tricky,•Pederson said.•A c Franklin mine badlyneeded h
at►vycin• u!deesnter•ur silver corkscrew would have purcttaseQa never
inOus-
t-the•_ may be beautiful silver
e, onbonds,•F b•EcJhck said.
Companies In The
wurtt!tuoltf 'You sbe be Send to an executive t by Robert in
! OM OIL in prepared ltd FOCI(Target? Minneapolis Areal
it rid its':, hot i prohibited.",ountry"Gere alto- F Nod�'o C°sU°• coming Hard R°d<Cale may he P s Area.
dmoteln Petquickly, replied the 8 ro !sure Center e- `�''
tr particu• Ike many multinational•
counties. The bonds were coma 5,t>Qp.a nnia
the companies,Citicorpbacked by dee full faith and credit i aIth'sv void rte- 1 baa' :"'r
Whin.
ver, offices lets Its localat�I when C i ago. s.the origi- F
euuntrtes choose, Of.•any governmental unit nal arena resu4ertn f,closed more �• -;,,"-1,8'.-rn.f„ ,.
or condor what a gtvta.But' none Of the counties hada legal Than duet
corporate there are tight no anon to approve
Y .we earn ago.
!many But the yrore a t have been '" 2'i.'•�'4wi:• (►
yes- guidelines. lel,
J requested therm* talking to '�•+ elt:. a
American lavish main inhibit(/'oaf +j•the counties contended. ue u•'said Dura W g _ w0ltld �" s�
ta,Sot gift-giving main i is the Foreign Plaintiff Franklin High and of Tar a<de reieta+! Yair"�.to sa.t,
ka. Corrupt pro gn T director
The lawpPractices Att.of 1917.. the a•Free Income Fund Iss one of and vier president o f Center lisw_ a»Me"
hey
wearspecifically t of 1977 world's most sophisticated Mulling or a esti estaen s,es,..,
gifts fspecifign o daio that Investors in municipal for t ked to pnumber I
•
rte Mus• might be construed a brtbt, said the counties, p _bonds,", We've talked k a number-I •a,.ti.e; t,
eMtailless-• That can eco In a lot as ferrite,-bri ., •.sequences
than accept the can- toldethe Haig Ruck(tots that e •r,... .• t��3a +_C,
St,senQ T tan conlike ofte of quences of its own investment knew
right
of interested to Jct me tr.. r" � awe.ter
'oc••
BILINISng
bon+u government ownership of In- detislun, Franklin has brought 1,tvw ct hI away.'
ua.And dustrd It countries such as Chi- this lawsuit in an attempt to bully Naong the other possibilities.s, ; :i.,,„,„,,......."'"'"'"'"4fil.4
name Jtaly. commtsabnrrs IindividuallY Warg said,Is the Art Star Cafe,a
mars forth Loud news, said Dan- anted!and counties into toning
sports-theme restaurant aloe
thO
Newcomb.new foe-discretionary teed! ndcg a•••tiwo4 a .,:r, a.rrw
Mod at a lawyer and antax1 r e tines of Punic ddeteson- : •�"••ti++..,,,
expert on corporate gifts and situation it is unconscionable
tic owned by big-nano
mat- honorariums at Spearman 4 Franklin to Clain that it los any tctraJofmvvlcatars. a+lJetes in- ro t
W , SterLu • right to have special benefit noes •lb"a•ii m °'a'
' 'DO amended the sun-batty en ip p s War said he wants a •gr
!ince"•'1 • approved by the counties.' fledged the fill
Of up and fur- •W
s Q D get amended
atw batty l and brief written by attorney Thomas s Hing in the fad of 19e7, run •tssota;c
bone tde• gifts- Beyond that, Fabel of the r+li Y tentopeited•sen9cerarauren •►•.�.rrita; " +• y!_1
:auto eotnb salt!, tinea oils tam only oyer dialog arena events.
'"ur est+•i•.rl r
often doesn't affect gibs between yr( Llndqulsrllr Ve►n+utrt- P
dean" hue patties. say The counties have askedareVVarg said the Hat tenant will Dineen r r,,.Mat"'
•; an American District hikecounties
John a U.S.U.Shave better visibilityb " '�1 11.w:gr.",".
Cate and a German CEO." • -.--- dismiss Franklin's suit Tures to entrance will be on te outside t 'S••+•a ar+••w . t t,
cost • Can d a thine gifts beE ."'..lrN has••the request un nhd - the is what
insteadneeded
de inside.
s in 'We've created *emetic der ad- 'That's whit •��••
clic ne of a•kind we ^treed trurriC2."-CIS--"11-4-S4 •mat
!ices i250,t>00 tato he mutti•county housing au- Day 1•"let sold
On't -above foa%aeculirea,� repan . arra
like .Pcttrnon Y is current with interest New TCF
.0e--
s
• payments on the I percent Financial Beg '•"-aMr.n.r,, •aroti Min�_
rids but has Inadequate TCF r'inar+ctal Cs►..,
Ilan
` Tiffany's.
serves under quate're. process of buying Corp.�•is in the •8�3nh m• •nslAragaimali armee.
�/� `O.establish anent Fratkl<n tate bond agree• ds office > 1 the Eden Fsai. •aw'...a+q.+.coat
mature In 200.5.s bon_ds are set to housed a bonding that Locatedonce 1
•
One option inc.. fromPortion uo , rvr +s.w
?st'sharehojd�• r- F to satisfy bond- ogy True •-� 6 t .ow.gr�.a,r�
holden would be to Sq Trdtaulo D La..,epr,ft„-
buudin sett the square-Iout building along
n I50,000- d.eaooso°.
buildings to-a third perry.But his interstateu uilding Is west of r ett,r..,. Y
al whether canrrotlyd by SEC
• third art •- ay.'uncertainthe would ha� t /hwy.4e staffotit a 15.1 7is"` r*Ad.,. •m'O p�s..o.•.w,..
a ° - jest since o e n such a pro- Jn About 400 employees comytts- �a tt r•'tt+•n`''r... �� twee:: .:
Portuaily for fraudulent prac. 8 rertuueut helpw g he toeppvt1rate staff of the
roes which could tester in the needed to build it inrt as nenciu institution win i a A-
1 release hf property a peace.A secured re first the two-story bit nOee tate r
trees thanY someone t e arructun tite bv,. 5 option is to re- Orarq Y u durSundgla:. sae�•'i;•an re.the •C1
rob
I haler te lost secucir•- onus Cut that Lao; vt.the urcatlysccuadquar- .kr,,,,,
.•r:t'W.• -%�•:• ' .•+•M•a.
said CM s Ito ) probably wutdd r 1997.Term of the se nisi- '"`•'"•+•"•t'"mei-,-...~ ,..••`•k.se0tar• •t'
.deism to a letter l'to artvn An- holders to ' luire bard-
Ser staff t SLC. talc a tu:nnr. tior,for the Itr•s3te tom le par e..Z."7ti"'4"" °"'i
•"•„s's3...,:s:.."►".,",'::'
Is ru,rarcu some degree. ,al hit of not beets disclosed• y hare `,,_,.
Ing t'Mnn,er+ts on the�;ef�isw• +�•, f... '"'"" ,�`"""`v
ue,At- The counties'motion for die- About B00 ICF •�•.rr•.F..i4rry,•„�•r".,, S'-,`sem"'^s".
thoul;hthecom:neut ^'is;a1 vete rt 80 la memployees r�•.re.arayr
endue period on also takes a swipe at is-
m. n0 date a .e .:3d nree:af , syndicate thatdowntown ti^.,'•a•
has been s• the p uer,r s P eseut R:::
tt a put M,nulit.. is location • • uO'4,71.7,,,,,=,I171170't
Btov a, and�beftitd p,oitj t`estnierr prnj to c„p,.ti,;t par cam h:i' '•° :k� e.:.rt" r s;r :. ..
t F moves tl " r•�r< 3'
B eh Ni,:r•ar.1i•rr•r brought it to the c r .r:t ) Eft ♦n�i+ra s.. ,....,,,,•.
tn:ri rt.At one point,tiro:, s r •i . s:'ra
Litt:,;r Sri' t•r to a par- __ —. -
t`�•.�•� — — afn,. rfu,.n.. t.h.f a 7! -�._. .
- .
RESOLUTION NO. 97-3
OF THE ECONOMIC DEVELOPMENT AUTHORITY
FOR THE CITY OF SHAKOPEE,MINNESOTA
A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY FOR THE
CITY OF SHAKOPEE, MINNESOTA, ELECTING OFFICERS.
WHEREAS,the Economic Development Authority for the City of Shakopee, Minnesota
has been created; and
WHEREAS, officers now need to be elected.
NOW, THEREFORE, BE IT RESOLVED BY THE ECONOMIC DEVELOPMENT
AUTHORITY FOR THE CITY OF SHAKOPEE, MINNESOTA, AS FOLLOWS:
That in accordance with the Resolution creating the Economic Development Authority
for the City of Shakopee. Minnesota, and the By-laws of the Economic Development Authority,
the Board of Commissioners of the Economic Development Authority hereby elects the
following individuals to the indicated offices:
President:
Vice President:
Secretary:
Treasurer:
Assistant Treasurer: Gregg Voxland
The terms of office of the President. Vice President, and the Treasurer shall expire on the
date of the annual meeting of the Board in 1998. The terms of office of Secretary and Assistant
Treasurer shall expire upon action by the Board to elect another person to fill the office or
otherwise modify the term of that office.
Passed in session of the Economic Development Authority for
the City of Shakopee, Minnesota, held this day of , 1997.
President
Attest: Secretary
ko_ctcrrj 262197
FEBRUARY 12, 1997
SIRS,
I AM UNABLE TO ATTEND TONIGHT`S MEETING DUE TO MY WORK SCHEDULE. I HAVE BEEN
A SHAKOPEE RESIDENT FOR 22 YEARS. I OWN A HOME HERE, I WORK AND TRADE IN
SHAKOPEE. I HOPE YOU WILL HEAR THIS LETTER IN MY ABSENCE.
I HAVE JUST HEARD OF THE PROPOSAL TO TEAR DOWN THE OLD CITY HALL BLOCK AND
REPLACE IT WITH A 3 STORY STRUCTURE THAT I'S NOT IN KEEPING WITH THE
ARCHITECTURE AND FLAVOR OF DOWNTOWN . SINCE I HAVE JUST LEARNED OF THE
PROPOSAL AND HAVE NOT HAD THE OPPORTUNITY TO RESEARCH THE PROJECT, I WILL
TRY TO ADDRESS ONLY MY CONCERN FOR KEEPING WHAT IS LEFT OF OUR OLD DOWNTOWN
AREA INTACT.
SINCE THE BY-PASS HAS DIVERTED THRU-TRAFFIC FROM 1ST. AV, THE DOWNTOWN AREA
SEEMS TO BE THRIVING. THERE ARE ALWAYS A LOT OF CARS PARKED ON THE STREET
AND THE BUSINESSES SEEM BUSY. I DO BUSINESS DOWNTOWN AND ENJOY THE FRIENDLI -
NESS OF THE AREA, THE HOMETOWN FEELING AND THE CONVENIENCE OF THE PARKING .
I THINK THAT OUR DOWNTOWN AREA IS A GEM AND SHOULD BE PRESERVED. MANY OF
MY COWORKERS, FRIENDS AND NEIGHBORS AGREE.
SINCE I BECAME AWARE OF THE THIS PROJECT , I HAVE TALKED TO THE PEOPLE I
WORK -WITH AND OTHERS ABOUT-WHAT THEY MIGHT KNOW ABOUT THIS PROJECT. YOU
MIGHT BE INTERESTED TO KNOW THAT MOST OF THEM KNEW NOTHING OF THIS PROPIISAL
AND WERE HORRIFIED TO LEARN THAT THE BLOCK WAS TO BE RAZED AND REPLACED BY
AN APARTMENT/BUSINESS COMPLEX OF CONTEMPORARY DESIGN.
I ALSO UNDERSTAND THAT THERE HAVE BEEN MANY I NQUERI ES BY PRIVATE BUSINESS
INTERESTS INTO THE PURCHASE OF THE CITY OWNED PROPERTIES DOWNTOWN , BUT
THAT THERE HAS BEEN A MORATORIUM ON THE SALE OF THESE PROPERTIE-S FOR THE
LAST 3 YEARS.
I WOULD HOPE FOR A SOLUTION THAT WOULD PRESERVE THE ARCHITECTURAL STYLE AND
FEELING, IF NOT THE ACTUAL BUILDING= , AND WHAT WOULD ALSO CONTINUE THE
TRADITION OF PRIVA-I E OWNERSHIF AND ENTERPRISE Da:NTiil 1 .
SINCERELY ,
_. AN _TO! AIR'E}-::
' 3
CITY OF SHAKOPEE
Memorandum
TO: Mayor and City Council
Economic Development Authority
FROM: Mark McNeill, City Administrator
SUBJECT: Blocks 3 & 4 Summary
DATE: February 21, 1997
INTRODUCTION:
Because of the amount of information which has been provided over the last several weeks for
Blocks 3 & 4, I've been asked to provide a summary of the status of a variety of information on
the project.
BACKGROUND:
Attached is information from a variety of sources on different components of the Blocks 3 & 4
issue.
1. Description prepared by Michael Leek outlining the history, and chronology of events.
2. Research on the historic documentation process prepared by Economic Development
Coordinator Paul Snook.
3. Information provided from the Scott County HRA,including:
a. Architectural notes from 2/14/97 Design Review Committee meeting.
b. Project Timeline
c. 2/5/97 Maxfield Letter re: housing rental recommendation
d. 2/6/97 McCombs Letter re: EDA question responses.
4. Preliminary Project Financing Structure,provided by Gary Fields of Springsted. This is
a summary of the information which he provided at the February 12th EDA meeting. Mr.
Fields will be in attendance at the February 26th meeting to make a brief review
presentation and answer questions. There have been some questions raised as to "new-
project numbers; this sheet may be what is being alluded to. In addition, the article in the
Fe:Tuary 20th issue of the Shakopee Valley News may have had some inaccuracies,
w1..ch may also have contributed to a misunderstanding.
' f
5. City financing, including City contribution towards financing.
a. Status of Pooled TIF Increment
b. Blocks 3 & 4 "Funds Available Summary"
Because of a previously scheduled out-of-town vacation, Finance Director Gregg
Voxland will not be in attendance at the February 26th public hearing.
Note that the preliminary budget that had been set in 1995 was at$2.325 million. Actual
and anticipated expenditures to date are $2,537.330 or$212,330 more than what had been
budgeted.
On the other hand, current and projected project receipts currently total $2,585,927, or
nearly $261,000 more then what had been budgeted. This anticipates a fund balance of
approximately $49,000 at the end of the project, if numbers don't change.
At its meeting of February 18th,the City Council responded to a request by the EDA to
make an interfund loan to the Blocks 3 & 4 project of an initial $500,000, with an
authority to add up to $400,000 additional as needed. This will address the $900,000
current shortfall needed to complete the project. This is also consistent with the plan for
the Blocks 3 & 4 project, which anticipated a temporary cash flow deficit at this point in
the project. Had the blocks been demolished in 1998, as had been originally anticipated,
there would be a reduced need for a transfer.
To address some other confusion,the Joint Powers Agreement is by and between the EDA and
HRA. In that, it calls for EDA approval of the exterior design. Financial responsibilities,
however, are those of the City, and it is the City Council who will be ultimately making the
decision on any issuance of bonds. Therefore, any development agreement will need to be
between the City, and HRA.
Note also that, contrary to reports in the local newspaper. a final design has not been approved
for the building. The Design Review Committee is expected to meet the week of February 24th
to review direction given to the architect February 14th. At that time, consensus was reached on
an all brick, and a flat roof construction: however, a final recommendation to the EDA is not yet
being made.
fLu oNwAtuu
Mark McNeill
City Administrator
MM:tw
CITY OF SHAKOPEE
Memorandum
TO: EDA
Mark McNeill, City Administrator
FROM: R. Michael Leek, Community Development Director
SUBJECT: History of Blocks 3 &4 Project;Design Review Process
DATE: February 26, 1997
History of Scott County HRA/Shakopee EDA Redevelopment Project:
The current,joint redevelopment project had its beginnings in February of 1996. A full
chronology of events prepared by the HRA's Director is attached for your information.
During a meeting between the HRA and the City's then-acting administrator and
Community Development Director to discuss the HRA housing study, the idea of Blocks 3
and 4 as a mixed use site was mentioned. Subsequently, on March 11, 1996, the BRA
approved a memorandum from its Director regarding the assembly of an initial
development team and additional meetings with representatives of the City.
On March 20, the HRA formally met with the EDA to express HRA interest in proceeding
with a mixed use project on Blocks 3 and 4. At that time, a downtown retail study was
authorized to be commissioned by the HRA. The retail study was completed in June. On
June 19, 1996, the HRA Director indicated to the EDA that the HRA would be unable to
proceed further with the project without a joint powers agreement between the HRA and
EDA. Between June 19 and July 24, an agreement was negotiated between the HRA and
EDA. That agreement was approved by the EDA at its July 24, 1996, meeting. Among
other things, the agreement established a design review committee to evaluate and make
recommendations regarding the design of the project. The Committee consists of 2
representatives from the I-IRA, 2 representatives and 1 representative of the Downtown
Council
In August of 1996, the HRA retained Frank Dunbar as Project Coordinator effective
September 1, 1996. During September and October several concept sketches were
reviewed for the project, five architectural firms were interviewed, and finally SMMA/WF
was selected as architect for the project. Between November 25, 1996, and the present
the Design Review Committee met four times. After the January 7, 1997, meeting of the
Committee the Project Coordinator met with general contractors to obtain estimates of the
project cost. Once these were obtained, they were shared with Springsted, Inc., which
prepared a financial feasibility analysis of the project. This analysis was presented to the
HRA on February 11, 1997, and the EDA on February 12, 1997.
Design Process:
There have been 4 meetings of the Design Review Committee. The dates of these
meetings and the topics of discussion at the meetings follows;
November 25, 1996 - Conceptual discussion with the architect based on initial
sketches
December 9, 1996 - Meeting to review changes suggested at previous meeting,
as well as a rough model showing the relationship of the
proposed building to Downtown
January 7, 1997 - Meeting to review additional suggested changes and
alternative roof and exterior treatments
February 14, 1997 - Specific and detailed recommendations made to the
architect for preparation of final architectural drawings
It is anticipated that at least one more meeting of the Committee will be held at which a
final recommendation to the BRA and EDA will be formulated. It should be noted that
while the Design Review Committee formally has five members, other members of the
EDA and Downtown business community have participated in the meetings as well.
CHRONOLOGY OF EVENTS REGARDING THE REDEVELOPMENT OF BLOCKS 3 & 4, SHAKOPEE
• Wednesday, February 7, 1996 - Shakopee City Hall
Meeting with Barry Stock, Acting City Administrator and Paul Bilotta to discuss the housing
study. Block 3 & 4 was mentioned at that time as a possible mixed use site.
• Friday, March 8, 1996 - Shakopee City Hall
Meeting with Stock, Bilotta, SC-HRA Director, Mayor and Councilman Zorn to ascertain SC-HRA
interest in developing Blk 3 & 4.
• Tuesday, March 11, 1996
HRA approves a memorandum from the Director to assemble an intial development team and
remeet with city officials.
• Monday, March 18, 1996 - Shakopee City Hall
Initial meeting between EDA members, HRA development team, city staff and elected officials
to further discuss a possible mixed use joint development and how it needed to be pulled
together.
• Wednesday, March 20, 1996
Formal meeting with EDA to express HRA interest in proceeding and authorizing a retail study
to be commissioned by the SC-HRA.
• June, 1996
Retail study completed, several meetings held with the consultant from draft to final report.
• June 19, 1996
SC-HRA Director presented a memorandum summarizing the housing study results to the EDA.
HRA cannot expend any additional funds unless we have a joint powers agreement to develop
Blocks 3 & 4.
• Wednesday, July 17, 1996 - Shakopee City Hall
Meeting to discuss the elements of a joint powers agreement with city staff.
• Wednesday, July 24, 1996
EDA approves Joint Powers Agreement with the SC-HRA on a 5-2 vote.
cf:WIJ/BLK3&4.SHK
• Tuesday, January 7, 1997
EDA Design Committee meets to review design options as requested at the last meeting in
December. The Design Committee authorized the Project Coordinator to take the exterior
options out to general contractors for cost estimates on a 54 unit apartment building with
30,000 sq. ft. of retail space. The Housing and Retail Consultants will be asked to provide final
recommendations on how much housing and retail rent per square foot could be charged.
Also, the retail consultant is to provide us with the type of businesses we need to broker out.
All this information will be ready the first week of February when it will be turned over to our
Financial Advisor to crunch the numbers against the design option cost estimates and bring that
information (Financial Proforma) back to the Design Committee who at that point would make
a final recommendation to the EDA.
• Tuesday, January 7, 1997
City council votes to endorse the footprint.
• Tuesday, January 14, 1997
Project Coordinator meets with city staff to review demolition timetable and specifications.
cf:WIJ/BLK3&4.SHK
The Documentation Process for Blocks 3 & 4 Properties
In February, 1997 the City of Shakopee Planning Department contacted the Scott County
Historical Society to find what, if any,documentation had been done by the Society with
respect to Blocks 3 &4 properties. The Society disclosed that they had not documented
the properties, either in written or photographic form.
A subsequent search of the City of Shakopee's Building Department files produced the
following:
• Cards for each lot and building which indicates:
-property identification number
-address
-year built
- building dimensions
- square footage
-lot size
-owner name and address
-a photo, in most cases taken in the 1970's
• Photographs of each building,front and back sides; dated December of 1996
In February of 1997,this original information was reproduced for Scott County Historical
Society's records, and for retention in the Blocks 3 &4 redevelopment project file.
BLK34DOC.DOC 1
ARCHITECTURE ENGINEERING STRATEGIC PLANNING RESOURCES
8C-HRA
FEB 191997
SMMAL
Symms*Maini a McKee Associates/Winsor fancy PROJECT MINUTES
ST. PAUL.MN • MINNEAPOLIS.MN • CAMeRIOGE.MA
Project Shakopee Downtown Redevelopment Project No.: 96427
Prepared Meeting Date: 2/14/07
Re: Harry Olsen Meeting No: 9
Distribution: Bill Jaffa,Frank Dunbar,SDH,DJL, (MF)
Attendees: Design Committee,EDA Representative,HO
Item S Action Discussion
At this meeting various exterior design issues were reviewed and discussed with
the following direction noted.
1 Roof is to be essentially flat,built-up or membrane type,sloped to interior
drains.
2 Exterior walls to be all brick,utilizing more than one color and pattern for
some diversity.
3 South elevation is generally acceptable as presented.Study alternating bay
windows with french balconies.
4 North elevation to be similar but with first floor openings limited to entrance/
service locations.Provide for signage and screening of mechanical items.
5 Reduce plaza width and distance between buildings from 80' to 60' and
restudy skyway design for clear span.
6 SMMA/WF Revise Schematics for use on 2/24/97.Next Design Committee meeting to be
scheduled during that week.Formal acceptance will of SD package will be
requested,so that documents can proceed.
The information herein reflects the understanding reached. Please contact the author if you have any questions or are not in agreement with these Project Minutes.
HO/HO/m41497.doc
■
421 Wabasha Street North.Suite 200,Saint Paul,Minnesota 55102 612.227.0655 Fax.223.8030
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MAXFIELD
RESEARCH
GROUP
February 5, 1997 A DIVISION OF
A ,F 4 i , _ . , :Ris . INC.
Mr. William Jaffa
Executive Director
Scott County Housing and
Redevelopment Authority
16049 Franklin Trail Southeast
Prior Lake, Minnesota 55372
Dear Mr. Jaffa:
This letter presents my final recommendations for rents for the units proposed for the planned
senior building in downtown Shakopee, Minnesota. The rents are based on a review of the
housing study completed for Scott County as well as the planned unit types and sizes. The fol-
lowing table summarizes the rents for each unit type:
No. of Size Rent
Unit Type Units (Sq. Ft.) Rent per S.F.
1 BR-stand. 6 690 $ 575 $.83
1 BR-large 12 740 595 .80
1 BR/den 18 845 675 .80
2 BR-stand. 8 949 750 .79
2 BR-large 8 1,090 850 .78
52
The table shows that the standard one-bedroom units would rent for$575 per month or$.83 per
square foot, the large one-bedroom units would rent for$595 or$.80 per square foot, the one-
bedroom with den units would rent for $675 per month or$.80 per square foot, the standard two-
bedroom units would rent for$750 per month or$.79 per square foot and the large two-bedroom
units would rent for$850 or$.78 per square foot. Units with balconies can command rents of
$15 per month higher than those shown above. Units in the far end of building A may need to be
discounted slightly depending on initial leasing results. These units are roughly 150 feet from
the elevator in building B.
Our research indicated that a very high proportion of senior households in the region have mod-
erate incomes. In Shakopee, for example, estimates show that more than half of all senior
�— — - —FI
612-338-0012 620 KICKERNICK.-330 FIRST AVENUE NORTH
612-338-0659 FAX MINNEAPOLIS.MINNESOTA 55401
Mr. William Jaffa February 5, 1997
Scott County HRA Page 2
households had incomes below$15,000 in 1996. Among older seniors,householders age 75 and
over, nearly two-thirds have incomes below$15,000. Some units may be discounted on a case-
by-case basis for moderate-income senior households;not to exceed one-quarter to one-third of
the units.
Based on the above rent structure and our review of the plans for this building, I expect that
stabilized occupancy (95 percent) should be reached within five to seven months of opening,
assuming a late winter or spring occupancy. Opening during the fall or winter months could
delay lease-up by three to four months. The absorption estimates assume that 18 units will be
pre-leased and the remaining units will lease at an average of 5 to 6 units per month.
Please call if you have any questions or need any additional information.
Sincerely,
MAXFIELD RESEARCH GROUP
A Division of Apartment Search, Inc.
',-//ti 1M 1 64/I-
Thomas R. Melchior
Executive Director
TRM:trm
copy: Mr. Frank Dunbar, Dunbar Development Corporation
Mr. Gary Fields, Springsted Inc.
Feb-19-97 10:38A APARTMENT SEARCH 612 830 9019 P.01
February 18, 1997
Post tt"brand tax transmittal memo 7671. sof pays:,.
Mr. William Jaffa - 14, swn�
Executive Director eat. �fi��� 7)/1n. !`C 1.0 N)J.t
Se
Scott County Housing and Dept. Phone*C77. 4/t 74 �1)0 X fi t.v7
Redevelopment Authority S-00i 1,
16049 Franklin Trail Southeast ti=' -It1-7-- S36$ s""
Prior Lake,Minnesota 55372
Dear Mr. Jal]a:
I understand that there has been some question about the target market lin the proposed market
ratc senior building in Shakopee.
Buildings which offer few,if any, support services(similar to the subject project) typically mar-
ket to seniors age 55 and over. These buildings attract residents with a wide range of ages, per-
sons in their 50's, 60's, 70's and 80's. Other types of senior buildings which offer many support
services attract a higher proportion of frail seniors,mostly residents age 75 and over. Our study
for Scott County examining the rental market included an examination of overall senior housing
demand. The size of the market age 65 and over was examined since this is a usual retirement
age and that most residents of projects of this type are over age 65. Since the subject project will
not offer substantial services, the age profile will be younger than most senior buildings and will
include persons in their 50's.
Please call if you have any questions or need any additional information.
Sincerely,
MAXFIELI) RESEARCH GROUP
A Division of Apartment Se irrh. lnc.
Thomas R. Melchior
Executive Director
•rRMArm
MEMORANDUM
TO: Scott County BRA DATE: February 6, 1997
Dunbar Development
FROM: McComb Group, Ltd.
RE: RETAIL FEASIBILITY
This memorandum responds to three requests for additional information related to the proposed
downtown development.
1. Identify potential tenants suitable for the retail area of the proposed development and prepare
a proforma income and expense analysis.
2. Evaluate the potential for a multi-story retail development on Blocks 3 and 4.
3. Evaluate the potential for a commercial office building on Blocks 3 and 4.
Each of these subjects is addressed in the following pages.
RETAIL MARKET AND FINANCIAL FEASIBILITY
This analysis is based on the market research conducted by McComb Group, Ltd. in June 1996, based
on market conditions anticipated for 1998, the proposed opening date. This report identified the type
and amount of retail space that could be supported by sales potential for individual tenant categories
and market rent levels. Chapter V: Summary and Recommendations from our previous report is
attached as Appendix A.
Potential Retail Tenants
The proposed development on the north side of the central business district is a very desirable
location for retail stores, food service, services and professional offices. The proposed development
will occupy a permanent and desirable location in downtown. This location, due to realignment of
Highway 101, creates high visibility for customers arriving from the west, north and east.
Potential tenants consistent with the proposed Downtown Shakopee redevelopment and its location
are contained in Table 1. Business types are organized by category and include a range of typical
store sizes and anticipated net rents. These space and rent ranges are typical of each business
category, but individual businesses may desire more or less space. This table demonstrates that
businesses have different store sizes and different rental rates. Rental rates depend on potential sales
volume and store sizes needed for each business. These rental rates assume typical store size and
sales potential for each business. The retail area of the proposed building is designed to be flexible
so that each tenant can have store size that is appropriate for its business.
1
Table 1
POTENTIAL TENANTS
DOWNTOWN SHAKOPEE DEVELOPMENT
Size Rental Rate
Merchandise Category Square Feet Range
Convenience Goods
Bakery 1,200 - 1,500 $13.00 - $16.00
Liquor Store 3,000 -4,000 11.00 - 14.00
Florist 750 - 1,500 15.00 - 18.00
Shoe Repair 500 - 750 15.00 - 18.00
Average 13.50 - 16.50
Eating & Drinking
Casual Dining Restaurant 4,000 - 5,000 $12.00 - $15.00
Coffee Shop 1,000 - 1,500 13.00 - 16.00
Bagel Shop 2,000 -2,500 13.00 - 16.00
Average 12.67 - 15.67
Shopping Goods
Family Clothing 2,000 - 3,000 $12.00 - $15.00
Electronics 1,500 -2,000 13.00 - 16.00
Bookstore 1,500 -2,000 11.00 - 14.00
Jewelry Store 1,000 - 1,500 18.00 - 21.00
Cards & Gifts 1,500 - 3,000 15.00 - 18.00
Video Store 3,000 -4,000 12.00 - 16.00
Decorative Accessories 1,000 - 1,500 14.00 - 17.00
Average 13.57 - 16.71
Services
Travel Agency 1,000 - 1,200 $16.00 - $19.00
Dry Cleaning 1,000 - 1,500 14.00 - 17.00
Film Processing 500 - 1,000 18.00 - 21.00
Beauty Salon 1,000 - 1,200 13.00 - 16.00
Instant Printing 1,000 - 1,500 13.00 - 16.00
Eye Glasses/Optician 1,200 - 1,500 16.00 - 19.00
Average 15.00 - 18.00
Office
Bank 2,000 - 3,000 $16.00 - $19.00
Insurance 800 - 1,200 13.00 - 16.00
Finance Company 1,000 - 1,200 13.00 - 16.00
Medical 1,000 - 2,000 13.00 - 16.00
Dental 1,000 - 2,000 13.00 - 16.00
Chiropractic 1,000 - 2,000 13.00 - 16.00
Accounting 500 - 1,200 13.00 - 16.00
Legal 750 - 1,200 13.00 - 16.00
Real Estate 500 - 1,000 13.00 - 16.00
Average 13.33 - 16.33
Source: McComb Group, Ltd.
2
Rental income derived from the retail area will depend upon the mix of stores and the rental rates
negotiated with each of these tenants. The proposed building contains about 28,500 square feet of
leasable area. Total square footage represented by this list is far in excess of the space available
within the proposed development. Store size ranges from 500 to 5,000 square feet. Rental rates at
the low range are$11.00 to $18.00 per square foot. The high range is $14.00 to $21.00 per square
foot. The average rent at the mid-range is about $14.00 per square foot. These rental rates assume
a tenant allowance to assist each tenant with finishing its space. The average tenant allowance budget
is about $20.00, which has an annual value of about $3.20 per squarefoot annually for a ten-year
lease. It is up to the developer to select the mix of tenants that is most compatible with the proposed - -
development and rental rates that are consistent with building economics.
Financial il'F a ib i
e s
ty
Proforma annual revenue and expenses for the retail component assuming stabilized operations is
contained in Table 2. Scheduled rental revenue is estimated at $400,000 or about $14.00 per square
foot. Common area maintenance (CAM) covers the retail area's proportionate share of maintaining
common areas and parking and is estimated at $1.79 per square foot on a stabilized basis in 1998.
Property taxes are allocated proportionately between tenants in the retail component. No percentage
rent is shown in the proforma to provide a conservative presentation for financing purposes. It is
assumed that all retail leases will contain percentage rent clauses where that is appropriate for that
type of tenant. Stabilized vacancy is estimated at 7.5 percent.
Table 2
RETAIL COMPONENT
DOWNTOWN SHAKOPEE DEVELOPMENT
PROFORMA INCOME STATEMENT, 1998
(28,500 Square Feet GLA)
Stabilized 1998
Revenue
Rental Revenue $400,000
CAM Recovery 51,000
Tax Recovery 121.500
Total 572,500
Less Vacancy 43.000
Total Revenue $529,500
Expenses
CAM $ 45,000
Property Taxes 121,500
Management Fee 20,000
Other Expense 4,000
Total $190,500
Net Operating Income $339,000
Source: McComb Group, Ltd.
3
Expenses include CAM, property taxes and management fee. CAM is estimated at $1.56 per square
foot and property taxes are estimated at $4.25 per square foot. A management fee is provided to
cover management costs. Other expenses are estimated at $4,000. Net operating income or income
available for debt service is estimated at $339,000.
Costs associated with initial lease-up are assumed to be included in the development budget. Since
most tenants will have leases of ten years or more, leasing costs in the initial years will be low.
Annual leasing costs of about $4,500 annually should be allowed for startingin the third year_to _
replace tenants that leave before their lease expires. Assumptions for the financial analysis are
contained in Appendix B.
MULTI-STORY RETAIL
Based on market research conducted in downtown Shakopee, there is no market potential for multi-
level retail on Blocks 3 and 4. Our report indicated there was demand for about 35,000 to 40,000
square feet of retail space at the proposed location. This finding was predicated on site size, trade
area population and retail competition.
The potential for a larger multi-level retail development cannot be supported by either the size of the
site or trade area population. The reasons for this are as follows:
♦ A multi-level retail development would require a larger floor area to provide an interior mall
at ground level and the upper floors. This would increase the amount of retail space on each
level. This would result in about 60,000 square feet of space on each level. Assuming two
levels, this would total 120,000 square feet. Assuming three levels would result in 180,000
square feet.
♦ A building with 60,000 square feet of GLA would require a building pad of about 72,000
square feet excluding sidewalks, landscaping and truck docks. This would leave no room for
on-site parking.
+ A retail development containing 120,000 to 180,000 square feet of GLA would require 540
to 800 parking spaces. This would require between 4.9 and 6.5 acres of parking, excluding_
the retail building pad. This would have to be located off-site.
♦ In downtown Shakopee, it is likely this parking would have to be provided in a parking_
structure at significant cost.
♦ A multi-level retail building would cost more per square foot to build due to masonry
construction, common area finishes and escalators. This would require net rent costs above
those that can be supported in the market.
♦ A multi-level retail building would have higher CAM costs and property taxes. This would
increase the cost of occupancy above the level that merchants in Shakopee can afford.
♦ Trade area population is not large enough to support a retail development of this size.
4
• Multi-level retail in a downtown such as Shakopee would attract little interest from tenants
based on experience with other multi-level downtown retail developments in the metropolitan
area.
For the above reasons a retail component significantly larger than recommended in our original report
is infeasible based on market demand, financial feasibility, site size and required parking.
COMMERCIAL OFFICE BUILDING'__ _ .
McComb Group did not specifically study the office market as part of its retail market analysis.
However, over the years we have conducted market research for the City of Shakopee, Valley Green
Business Park,Minnesota Valley Electric Cooperative and other municipalities in Scott County and
northern Dakota County. In addition,we have conducted office market studies in other communities
similar to Shakopee. The results of these studies indicate that had a market study for office space
been conducted in downtown Shakopee, the results would not encourage development of a
commercial building. There are several reasons for this conclusion.
• The major office users in communities like Shakopee are commercial banks or local
corporations. Banks typically build an office building to house their executive offices,
banking function and support staff. They typically build additional space which they lease to
other tenants such as accountants, lawyers or other professional groups until they need the
additional space. The potential for this type of building has evaporated due to consolidation
occurring within the banking industry. Most towns now have a branch bank as opposed to
a central banking function. Local corporations prefer one-level buildings of the type built in
office parks due to lower occupancy costs.
• Construction of an office building in today's market requires an anchor tenant for 50 to 60
percent of the space. The types of tenants that could serve as anchors for a downtown office
building are not interested in multi-level commercial space in a downtown such as Shakopee.
These tenants prefer to locate in a business park environment on one level to avoid the cost
of multi-level construction.
♦ The proposed downtown Shakopee development would accommodate an office building
of
about 100,000 square feet of floor area. An office building of this size would require an
anchor tenant of about 50,000 square feet to obtain financing. At the time we conducted our
retail market analysis, we did not obtain any information that indicated there was a 50,000
square-foot tenant seeking space in downtown Shakopee.
• An office building similar in size to the proposed downtown development (100,000 square
feet)would require about 400 parking spaces or about 3.2 acres of parking. A small amount
of this parking could be located on site. The balance would have to be off site. Since this is
employee parking, street parking could not be used to meet this parking demand.
Based on the above facts, it does not appear likely that an office building could be developed -- with
or without a subsidy.
5
Appendix A
Chapter V
SUMMARY AND RECOMMENDATIONS
The previous analysis included an evaluation of downtown Shakopee, proposed First Plaza retail sales
in the city, purchasing power in the primary and secondary trade areas and sales potential for the
downtown retail area. Based on this analysis a recommended market position for downtown
Shakopee and the proposed First Plaza development has been formulated and includes merchandise
categories and services that are suitable for the area.
Downtown Shakopee currently has about 150,000 square feet of retail GLA, with a significant
amount of space devoted to convenience goods categories of food, and eating and drinking.
Shopping goods retail categories include men's and women's apparel, sporting goods and antiques.
Services round out the other major retail category. This tenant mix is characteristic of a large
neighborhood center or a small community center. The retail businesses and services in downtown
Shakopee are characteristic of an historic freestanding trade center with a distinct trading area. The
encroaching suburbanization and population growth resulting from Shakopee's location in the
metropolitan area creates competitive pressures and development opportunities that alter traditional
development and shopping patterns in the area. This is evidenced by the commercial area that has
evolved along Marschall Road and the Shakopee Town Square shopping center southwest of
downtown. As development continues in southern Shakopee, retail development pressure will occur
around intersections along the Highway 101 bypass. The Shakopee Town Center development is an
example of this trend.
Downtown should focus on its unique heritage, location and strengths to maintain its viability as a
retail center and expand its business activity. The existing retail strength of downtown includes:
• Convenience-oriented grocery and restaurants
• Destination retail tenants in the shopping goods category that draw from outside the trade area
• Antique stores
• Personal services consistent with a neighborhood center
• Business services consistent with a downtown business center
• Medical services related to a regional medical center
• Legal services associated with a courthouse location
These market segments represent the core business for downtown Shakopee and provide the base on
which to add additional business.
Shakopee and its neighboring communities contain major entertainment and amusement venues that
attract over 8 million people to the area. Valley Fair and Mystic Lake Casino represent over 75
percent of this visitor traffic. Some businesses located in downtown benefit from this visitor traffic
as well as travel parties passing through on Highways 101 or 169. Shakopee should continue and
expand its effort to serve travel parties associated with these entertainment attractions and visitors.
This is unlikely to be a major market segment, but it is an opportunity that can spell the difference
between average and above average sales performance results.
Shakopee should continue efforts to capitalize on its historic heritage. The downtown area has a
good stock of turn of the century buildings, attractive sidewalk landscaping and convenient parking.
Efforts should continue to upgrade and renovate these buildings. Shakopee is one of three remaining
river towns in the Twin City area. Stillwater has capitalized on its location and historic buildings to
establish a thriving downtown community. Hastings, south of St. Paul, is working to emulate some
of Stillwater's success. Shakopee is located southwest of the most populated portion of the metro
area with good accessability. Two of the areas major attractions are based on historic themes:
Historic Murphy's Landing and the Renaissance Festival. These-attractions provide the opportunity
for Shakopee to build on their historic theme.
The proposed First Plaza development will result in a slight increase in retail space downtown. The
current site of the building contains approximately 20,000 square feet of retail GLA according to the
McComb Group survey. The new building is expected to contain approximately 37,200 square feet
indicating an increase of approximately 17,000 square feet. Based on the current inventory, this is
an increase of approximately 15 percent. The site for the proposed development is currently a
location of several businesses that should be retained in downtown Shakopee. Efforts should be
exerted to relocate these tenants to other locations in downtown Shakopee and retain their customer
traffic.
The market potential identified in this report indicates strong potential for the proposed retail
component at market rents. Retail rents in Shakopee depend on location, building size and business
economics. In the Marschall Road area retail rents of$14.00 to $15.00 per square foot for 1,000 to
2,000 square feet are common. Rents in the Shakopee Town Center area range somewhat lower
from$8.50 to $11.00. Current rents in the downtown area range from$5.00 to $9.00 per square foot
depending on store size. Rents in the downtown area are below normal for Shakopee due to several
factors. In many cases the older buildings contain spaces that are larger than the businesses located
in them need. As a result the rent that the business can afford to pay is low per square foot because
the space is too large. Also, the older buildings don't have the appearance or utility of new space.
New space to be developed in downtown Shakopee with the ability to be demised to fit the space
needs of the individual businesses should be able to command rents comparable to the Marschall Road
area for similar space. This would include both retail and service tenants.
Development Recommendations
The proposed First Plaza site is an excellent location with excellent visibility from Highways 101 and
169 and from Lewis Street. The proposed site plan shown in Figure 1 at the beginning of the report,
envisions a large landscaped area fronting on First Avenue. The two retail buildings at each end of
the Plaza are prime locations, but diminish the value of some retail space in the main building as
discussed earlier. A park or plaza is certainly attractive, but there may be a more effective way to
utilize this space. The City may wish to consider a development concept that moves the retail
building closer to First Avenue and leaves a 30-foot or 35-foot wide sidewalk for seating area in front
of the retail buildings. This space could be utilized for sidewalk seating to serve retail tenants. The
store spaces contained in the two freestanding buildings could be incorporated in the main building
and extend north of the building to provide the larger spaces.
Downtown retail development in small towns benefits from the energy and synergy created by retail
spaces that face each other and interact easily. The smaller open space described above could be used
for seating or even outdoor dining for restaurants and fast food establishments located in the building.
The land area behind the building could then be utilized for parking to serve the retail businesses.
This would have the advantage of moving parking to the fringe of the downtown and near the bypass.
This would also create the opportunity for retail storefront presence on the north side of the building
where they would be noticed by passing traffic. This could be an important form of advertising for
these businesses, and parking would also be readily evident to customers.
Prospective tenants for the proposed FirstPlaza development include:.many of the business types .
identified in the previous chapter, sit-down and take-out dining, and personal-and professional -
services of all types. Businesses of this type will be attracted to a building that is designed to meet
their space needs and provides convenient parking for customers. First Plaza has the potential to
create retail store sizes that can be designed to fit the size of the businesses that occupy them. The
building should have the ability to accommodate store spaces that range in size from 500 to 5,000
square feet with the flexibility to serve both retail and service tenants of all types.
•
Appendix B
ASSUMPTIONS
DOWNTOWN SHAKOPEE DEVELOPMENT
PROFORMA INCOME STATEMENT, 1998
REVENUE
Rental income is estimated at $400,000 annually based on a blended rental rate of approximately
$14.03 per square foot. Lease term is estimated to be ten years with a step rent in the sixth year equal
to 7.5 percent.
Percentage rent is not estimated for this analysis. It is assumed that all tenants, where appropriate,
would have percentage rent clauses in their leases.
CAM reimbursables are estimated at $1.79 per square foot including a 15 percent administrative
reimbursement.
Property tax recovery is based on actual property taxes levied.
Vacancy is estimated at 7.5 percent for stabilized operation. First year vacancy assumes 55 percent
occupancy at opening, increasing to 92.5 percent within 12 months.
EXPENSE
Common area maintenance expense was estimated at $1.56 per square foot and includes all
common area expense, maintenance, insurance and general and administrative expense.
Property taxes were estimated at $4.25 per square foot assuming a value of approximately$75.00
per square foot and an effective property tax rate of 5.5 percent.
Management fee was estimated at five percent of net rental income.
OTHER EXPENSES
Leasing fees should be estimated at$3.00 per square foot, assuming that five percent of this base or
about 1,500 square feet is re-leased each year due to store closings. Initial leasing costs should be
included in the development budget.
Tenant inducements are estimated at approximately $575,000 or about $20.00 per square foot.
Tenant inducement is subject to negotiation and varies by tenant type, store build-out cost and other
factors.
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CITY OF SHAKOPEE
Memorandum
TO: Economic Development Authority
FROM: Mark McNeill,Executive Director
SUBJECT: Public Hearing/Blocks 3 &4 Financing
DATE: February 21, 1997
Gary Fields will be in attendance at the public hearing on February 26th to go through the
financing for the Blocks 3 &4 project.
Unfortunately,Finance Director Gregg Voxland has had scheduled for a couple of months an out
of town vacation for that week. I will do my best to fill in for him,but I do not have the history
that he possesses.
Aft."0-1/LUILLI
Mark McNeill
Executive director
MM:tw
CITY OF SHAKOPEE
Memorandum
TO: Economic Development Authority
FROM: Paul Snook, Economic Development Coordinator
SUBJECT: Resolution 97 -2, ammending the By-Laws provision relating to the EDA
meeting date and time.
DATE: February 21, 1997
Introduction:
Staff has prepared Resolution 97 -2, amending the By-Laws provision relating to the
EDA meeting date and time based on the Board's direction at the February 12, 1997
regular meeting.
Background:
The EDA Board determined at its February 12, 1997 meeting that setting a different meeting
date is appropriate so the proper sequence for attending to economic development items is followed
with minimal delay between EDA action and City Council consideration/action.The Board agreed to
meet on the Monday prior to the first City Council meeting,and the third Monday of each month.The
attached resolution,if adopted,will formally implement that change.
Action Required:
No motion and vote approving the attached resolution amending the EDA By-Laws.
MSTRMEMO.DOC/RML 1
#q. q
RESOLUTION NO.97-2
A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF
SHAKOPEE,MINNESOTA,AMENDING THE BY-LAWS PROVISION RELATING TO THE
MEETING DATE.
WHEREAS,the current regular meeting dates were set through adoption of Resolution 96- 11,
providing two meetings each month to conduct regular business;and
WHEREAS,the Economic Development Authority frequently receives requests for action after
economic development action item(s)have already been considered by City Council;and
WHEREAS,the reason the City Council considers some action items before the EDA has an
opportunity to do the same is that those items are time sensitive,and delays of even a few days can be
a problem;and
WHEREAS, it is appropriate to set a different meeting date so the proper sequence for attending to
economic development items is followed with minimal delay between EDA action and City Council
consideration/action.
NOW THEREFORE,BE IT RESOLVED BY THE ECONOMIC DEVELOPMENT AUTHORITY
FOR THE CITY OF SHAKOPEE,MINNESOTA AS FOLLOWS:
That the By-Laws of the Economic Development Authority,Section III,Procedures,paragraph 2,
Regular Meetings,are hereby amended to read as follows:
2.Regular Meetings.The Board shall hold regular meetings on the Monday prior to the first
City Council meeting(the first Tuesday of the month).and the third Monday seeenand-
fourth Wednesday of each month of each year,such meetings commencing at 6:00 p.m., or at
such other time as the Board may determine.
Note:the underlined language has been added;the stricken language has been deleted.
Passed in regular session of the Economic Development Authority for the City of Shakopee,
Minnesota,held this 26th day of February, 1997.
President
Attest:
Executive Director
RES97-2.DOC 1