- Meeting Date:
- 02/14/2017
Information
Title:
Purpose/Background:
PURPOSE
(1) Receive updated proposal/ request from Rum River Hills.
(2) Provide high-level, general direction to Rum River Hills.
BACKGROUND
-Proposed Project-
Rum River Hills approached the City in 2013/2014 with a proposal to redevelop their golf course, and hopefully help revitalize the 167/47 retail node. Rum River Hills proposed a roughly 165-unit, residential, golf community, development (with a mix of single family homes, town homes, and apartments). Rum River Hills is proposing to move two of their golf holes from the east to the west side of Highway 47, to the City-owned "water tower site." This redevelopment project calls for the construction of a Highway 47 pedestrian underpass, the reconstruction of Quicksilver, and the extension of a City sewer line.
-167/47 Statement of Goals-
Discussion of the Rum River Hills proposal was intertwined with the City's process to adopt a formal "statement of goals" for the 167/47 node in 2013. Please see the attached City policy. In summary, the City was willing to discuss assisting projects that removed/ improved blight in the areas of "primary concern."
-Direction Provided to Rum River in 2013/2014-
In 2013/2014, Rum River Hills was requesting the City pay for (1) 100% the pedestrian underpass, 550K, (2) 100% of the sewer extension, $1.6M, (3) 100% of QuickSilver, 690K, (4) and provide free land, 200K. The City rejected this request, as it was too much to consider at the time ($3M of city contribution). The City encouraged Rum River Hills to engage an engineering firm to develop better cost estimations for their project, so they can provide the City with better documentation. The City encouraged Rum River Hills to engage with a master developer/ equity partner. Lastly, the City encouraged Rum River Hills to reconsider how much they were asking from the City. NOTE: some elected/ appointed officials were also concerned this project didn't "directly" address the "primary area of concern" in the 167/47 Statement of Goals, and were not interested in this project, period.
-Comprehensive Plan/Zoning-
The project would require a Comprehensive Plan Amendment for a variety of aspects (sewer/water district - MUSA, land use, residential type). The concept has been reviewed by Planning Commission and the public in the general sense, but has not been specifically advertised for the specific project. If the City Council is comfortable with the parameters of the deal structure, Community Development Staff would recommend that the land use be the first step in review.
-Update, what's new?-
Rum River Hills began reaching out to staff again in 2015. They engaged SEH Engineering to complete a feasibility report for the project--to obtain pad ready sites (see attached SEH report). Rum River Hills is now not asking for free city-owned land (willing to pay). They are now not asking for the City to pay 100% of QuickSilver, but they are proposing to split the costs. They are still asking the City to extend the sewer line, and they still are asking the City to pay for the pedestrian underpass. Please see attached cover letter from Rum River Hills.
Timeframe:
Funding Source:
Responsible Party(ies):
Outcome:
Alternative 1: Continue negotiating/ reviewing this proposal
If it is determined that the City is generally interested in this proposal, and believes the basic/ preliminary deal terms are generally acceptable, then the City is willing to further discuss this opportunity.
(B) Staff would suggest Rum River Hills bring a developer to the table based on the currently proposed deal. Staff want's to know if this proposal is "real" and that a developer and/or equity investor is legitimately interested. Staff is concerned, even if the City was able to provide assistance as requested, the project still won't move forward. The City may also want to consider requiring Rum River Hills to open their financials for review. Although Rum River Hills won't be the primary developer on this project (i.e. they won't formally apply for a business subsidy), Rum River Hills will be directly involved, and will have a major stake in the success of the project.
(C) Staff would suggest the Council provide general direction to negotiate an agreeable land transaction price. Depending on where we settle, this too will effect staff's recommendation on this project. At this point, Rum River Hills is offering about 31K per usable acre (200K total).
(D) Staff would also note, we are concerned about equitable treatment to the City's two different golf courses. However, if we move forward with this project, the City assistance proposed should have clear community benefits beyond just the Rum River Hills' project (i..e. safe pedestrian connections across 47 via a second pedestrian underpass, new road entrance to Elmcrest Park, sewer available for 167/47 node and beyond, etc.). If the Council in not comfortable with how this project shows up from an equity perspective, it would be helpful to hear that now.
(E) Staff would suggest this project be reviewed by the Planning Commission, EBP, EDA, and Parks Board before it comes back to the Council again.
(F) The payback period for this project is unclear at this point. If the sewer line is considered formal City assistance, the payback for this project is very poor (25-30 years). If sewer is not considered City assistance, the payback will be cut in half, and may be reasonable. Another opportunity for improving the City's payback is considering using TIF. We can typically get 2-3 times the annual property tax generation from a project via TIF. If the Council wanted to further investigate this project, staff would suggest providing direction to further refine the City's proposed payback (i.e. cost-benefit).
Alternative 2: Do not continue negotiating/ reviewing this proposal in it's current form
If the City is not generally interested in this proposal, and the City is not willing to further discuss as-is, staff would suggest we provide Rum River Hills with feedback (i.e. only bring this proposal back to the City if....?)that would allow them to refine the proposal.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Mark Riverblood | Mark Riverblood | 02/09/2017 07:51 AM |
| Brian Hagen | Tim Gladhill | 02/09/2017 09:58 AM |
| Kurt Ulrich | Kurt Ulrich | 02/09/2017 02:28 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 01/13/2017 03:27 PM
- Final Approval Date:
- 02/09/2017