2.3.
HRA Work Session
- Meeting Date:
- 02/06/2012
- By:
- Darren Lazan, Housing & Redevelopment Authority
Information
Title:
Consider Process for Acquisition of Parcel at the Southwest Corner of Armstrong and 146th.
Background:
The HRA has directed and authorized the development team to approach three property owners on the west side of Armstrong Boulevard to discuss acquisition of their properties as part of the Armstrong Interchange and Sunwood realignment projects. All three properties are affected in some degree by the current project to realign Sunwood Drive, or the Armstrong overpass currently under preliminary design.
The three properties involved are highlighted on the attached exhibit. Together with the Oasis Market site acquired previously, the properties represent the majority of the Right-of-Way north of Hwy 10 necessary to construct the Armstrong Interchange and Sunwood Realignment.
One parcel owned by M&W Holdings, LLC (Wiser Choice Liquors) is owned by Jeff Wise, a seated City Council and HRA Member.
Preliminary appraisal valuations have been determined and the development team, along with the city attorney, are in the process of approaching the three owners with offers to purchase either the entire property, or the portions of the properties necessary to construct Armstrong Boulevard. The feasibility of which will be evaluated based on discussions.
The evaluation method used to assess the two northerly parcels was based on their value as raw land, which was the highest value as determined by the appraiser. While those parcels do have existing structures, and one has an operating business, the value of the land as a development opportunity exceeds that of the structures or business.
The southern parcel is owned by M&W Holdings, LLS whose sole member is Jeff Wise. Unlike the other two parcels, The highest value for this parcel, as determined by the appraiser, is in the structure and business located there today. This makes the negotiations on this parcel a broader discussion than the other two parcels.
The three properties involved are highlighted on the attached exhibit. Together with the Oasis Market site acquired previously, the properties represent the majority of the Right-of-Way north of Hwy 10 necessary to construct the Armstrong Interchange and Sunwood Realignment.
One parcel owned by M&W Holdings, LLC (Wiser Choice Liquors) is owned by Jeff Wise, a seated City Council and HRA Member.
Preliminary appraisal valuations have been determined and the development team, along with the city attorney, are in the process of approaching the three owners with offers to purchase either the entire property, or the portions of the properties necessary to construct Armstrong Boulevard. The feasibility of which will be evaluated based on discussions.
The evaluation method used to assess the two northerly parcels was based on their value as raw land, which was the highest value as determined by the appraiser. While those parcels do have existing structures, and one has an operating business, the value of the land as a development opportunity exceeds that of the structures or business.
The southern parcel is owned by M&W Holdings, LLS whose sole member is Jeff Wise. Unlike the other two parcels, The highest value for this parcel, as determined by the appraiser, is in the structure and business located there today. This makes the negotiations on this parcel a broader discussion than the other two parcels.
Observations:
Acquisition of the Wiser Choice parcel be comprised of three parts - Building, Land, and Business (relocation, fixtures, etc.)
The valuation of the building and land were determined by the appraisal and are likely to be items with little room to negotiate. State statute governs the amount a municipality can pay for acquisition relative to an appraisal, and the values considered are in the range acceptable not only to the seller, but similar to those contemplated for the sale of land to Mr. Wise for his proposed project in The COR. It is likely that the valuation agreed to for the acquisition of his parcel will be the same as that used for the sale of the property in The COR.
Attorney Goodrich will be present at the meeting to also discuss with the HRA the implications of the relatively new state legislation relating to minimum compensation when a property owner is forced to relocate. This law essentially requires that, notwithstanding the land/building appraisal amount, the damages paid must compensate the owner with an amount sufficient for the owner to purchase a comparable property in the community. This is a complex statute requirement and there is little reported law for guidance. Specifically, this statute provides as follows:
The valuation of the building and land were determined by the appraisal and are likely to be items with little room to negotiate. State statute governs the amount a municipality can pay for acquisition relative to an appraisal, and the values considered are in the range acceptable not only to the seller, but similar to those contemplated for the sale of land to Mr. Wise for his proposed project in The COR. It is likely that the valuation agreed to for the acquisition of his parcel will be the same as that used for the sale of the property in The COR.
Attorney Goodrich will be present at the meeting to also discuss with the HRA the implications of the relatively new state legislation relating to minimum compensation when a property owner is forced to relocate. This law essentially requires that, notwithstanding the land/building appraisal amount, the damages paid must compensate the owner with an amount sufficient for the owner to purchase a comparable property in the community. This is a complex statute requirement and there is little reported law for guidance. Specifically, this statute provides as follows:
Minn Stat. §117.187. Minimum compensation.
When an owner must relocate, the amount of damages payable, at a minimum, must be sufficient for an owner to purchase a comparable property in the community and not less than the condemning authority's payment or deposit under section 117.042, to the extent that the damages will not be duplicated in the compensation otherwise awarded to the owner of the property. For the purposes of this section, "owner" is defined as the person or entity that holds fee title to the property.
When an owner must relocate, the amount of damages payable, at a minimum, must be sufficient for an owner to purchase a comparable property in the community and not less than the condemning authority's payment or deposit under section 117.042, to the extent that the damages will not be duplicated in the compensation otherwise awarded to the owner of the property. For the purposes of this section, "owner" is defined as the person or entity that holds fee title to the property.
Recommendation:
It is the development teams recommendation that we proceed with the negotiations on land and building as discussed and underway with the adjacent parcels, and obtain outside resources to assess and negotiate the business components of the acquisition based on recent legislation.
Those three components will be compiled and presented to the HRA for approval at a future meeting.
Those three components will be compiled and presented to the HRA for approval at a future meeting.
Funding Source:
N/A
Council Action:
Provide consensus direction on the process in acquiring property owned by M&W Holdings, LLC - Jeff Wise
Attachments
Form Review
- Form Started By:
- dlazan
- Started On:
- 02/02/2012 12:31 PM
- Final Approval Date:
- 02/02/2012