6.8. EDSR 01-20-2015 - Laserfiche WebLink

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City of Elk River Request for Action To Item Number Economic Development Authori 6.8 Agenda Section Meeting Date Prepared by General Business January 20, 2015 Jeremy Barnhart, Deputy Director, CODD Item Description Reviewed by Sale of Lots 1 and 2, Block 1, Natures Edge Cal Portner, City Administrator Reviewed by Business Center II Action Requested Respond to the letter of interest received for Lots 1 and 2, Natures Edge Business Center II (NEBC II). Background /Discussion The city has received a Letter Of Interest to purchase lots 1 and 2, block 1, NEBC II to develop a truck sales and service business. A Letter Of Interest is not a formal agreement to sell/ buy property however it does provide some confidence to the buyer to develop the necessary plans and documents to prepare the formal purchase agreements and, if applicable, financial assistance documents. Support at this stage is not binding. At this point in the process, three primary questions are raised: 1. Recognizing the EDA's discretion in selling its own land, and the need to deviate from the master plan for the area to support the project at this location, does the EDA wish to sell the property for a truck service and sales enterprise? 2. What is the appropriate price for the lots? 3. What is the EDA's appetite for the use of Tax Abatement for the support of a retail business? Use of the property. Previously, the EDA was asked to consider changing the land uses of NEBC to support more industrial growth. The need and anticipated demand for additional larger industrial properties was one of the primary reasons the EDA expedited the development of NEBC II. NEBC will serve as the front door to the city via the Twin Lakes Road employment corridor. Asking price. In August, the EDA commissioned an appraisal of all five NEBC II lots. Three lots are zoned and appropriate for commercial uses, and two are zoned for industrial uses. The commercial lots range in appraised value, per usable square foot, between $2.25 and $2.47. The industrial lots range in appraised value between $1.85 and $1.86. The full appraisal document is included in Dropbox. Please note that the appraisal is not public information and shall not be shared. Based on the appraisal and the commercial use proposed for Lot 2, Block 1, a price of $2.25 per usable sq. ft. for both lots is suggested ($1,316,695.50). Not noted in the appraisal, but a larger, 14.8 acre commercial parcel one block from Highway 10 could command a premium higher than this value, especially in our dwindling commercial market, as this would be the largest, platted, development- ready, P a w E R E U 6 Y NaA f RE]