City Council Meeting Date: September 4, 2018
To: Mayor and City Council
City Administrator
From: Nate Carlson, Economic Development Coordinator
Chris Heineman, Community Development Director
Title
Consideration of Resolution approving sale of city owned land to Strobel & Werner Real Estate Holding Company, LLC.
Body
Action Requested:
Staff recommends approval of the attached Resolution for the sale of 0.35 acres of public parkland to Strobel & Werner Real Estate Holding Company, LLC that requires super majority vote (5 of 7).
Summary Report:
Staff presented the sale of public land for this project at the August 21, 2018 City Council meeting. A question was raised regarding the possible land use restrictions for the land being sold. After thorough staff review and in consultation with City Attorney, staff finds that the City of Northfield owns the property in Fee Simple with no attachments to a trust, the parkland is under a Registered Land Survey, which does not constitute a formal plat, and the land has no deed restrictions according to the title examination of the original City purchase of the land in 1958. Staff has provided a memorandum that provides detail and supporting evidence.
According to Chapter 15.5 of the Northfield City Code, the council may by resolution sell or dispose of real property only after a public hearing has been held and published notice of the hearing has been given.
Section 15.5. - Sales of Real Property. The council may by resolution approved of by at least five (5) members sell or otherwise dispose of any real property of the city. A sale or other disposition of the city's real property may be made only after a public hearing has been held and published notice of the hearing has been given at least ten (10) but not more than thirty (30) days prior to the hearing. The net cash proceeds of the sale of the property shall be used to retire any outstanding indebtedness incurred by the city in the acquisition or improvement of the property. Any remaining net cash proceeds shall be used to finance other improvements in the capital improvement budget or to retire any other bonded indebtedness.
Strobel and Werner Real Estate Holding Company, LLC have proposed a $1.5 million expansion on the current Aurora facility located at 1200 Highway 3 South, Northfield, MN. This building expansion will be occurring at the rear of the building to assist with current and anticipated business growth. Significant site improvements are required for this expansion project, including the construction of a retaining wall, relocation of the current stormwater pond, relocation of the chilling unit, relocation of an Xcel transformer, and relocation of the current 10’ utility easement.
The expansion requires a land conveyance of 0.35 acres of adjacent property. Staff has arrived at a potential land valuation of $22,716 for the 0.35 acres using a hybrid calculation of parkland valuation and commercial valuation. The calculation is demonstrated in an attached report.
City Planner Scott Tempel worked with the developer on the site plan and the Development Review Committee (DRC) conducted a formal review of the proposed project on Monday, July 16. A copy of the DRC approval letter is attached for your review. The Planning Commission conducted a Public Hearing on Thursday, July 19 to consider if the proposed sale of public land is in conformance with the Northfield Comprehensive Plan. The Planning Commission confirmed that this sale of public land is in compliance with the Comprehensive Plan.
City Attorney, Chris Hood, has drafted a purchase agreement between the City of Northfield and Strobel & Werner Real Estate Holding Company, LLC. The buyer has reviewed this purchase agreement. A copy of the draft purchase agreement is attached for your review.
Alternative Options:
If the sale of land is not approved, the developer will be forced to consider other options for expansion which may include moving the business outside the City of Northfield.
Financial Impacts:
The proposed valuation for the property in question is $1.47 per square foot, which totals $22,716. The net cash proceeds of the sale of the property shall be used to retire any indebtedness incurred by the city in the acquisition or improvement of the property. Any remaining net cash proceeds shall be used to finance other improvements in the capital improvement budget or to retire any other bonded indebtedness.
Tentative Timelines:
If approved, the developer plans to move forward with land acquisition and preliminary site work in the fall of 2018 followed by construction in 2019. The closing on the property will be scheduled within thirty days of the approval of the Resolution.