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6. Select Representative to Work with City Council to Develop a Strategic PlanCITY OF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 L MEMORANDUM TO: Housing & Redevelopment Authority Park & Recreation Commission Planning Commission Public Safety Commission FROM: Don Ashworth, City Manager DATE: March 13, 1996 <. ez.. SUBJ: Development of a Strategic Plan for�the City of Chanhassen The City Council has requested that a representative from each of our commissions join them in helping to develop a Strategic Plan for the City of Chanhassen. Department heads and I have also been requested to be a part of the development process. Jim Brimeyer of the Brimeyer Group has been selected to coordinate the plan process as well as to prepare a draft document for final review by the City Council. Attached please find a copy of the proposed agenda. The two session dates have been set'for April 2 and 16 —both starting at 5:30 p.m. We'll be using one of the four meeting rooms at the Recreation Center, 2310 Coulter Boulevard. A light dinner will be served on both dates. ates. 'Each session is anticipated to be'approximately 4 -5 hours in length. Whoever volunteers or is selected.to.represent your commission can anticipate receiving a work session packet in advance o� each of the two 'session dates. Mel volunteering or being selected b q $ M`commissiori will also receive a`dratt copy of the City Council's Strategic Plan prior to its being formally submitted to the City Council for final adoption: ° o �. .., f• s rp.l,. """ c: Mayor and City Council Kate Aanenson, Planning Director ; ci 4 1 Todd Hoffman, Park & Recreation Directr Todd Gerhardt, Assistant City Manager Scott Harr, Public Safety Director Charles Folch, City Engineer The Brimeyer Group, Inc. EXECUTIVE SEARCH CONSULTANTS PROPOSAL FOR CONSULTING SERVICES CITY OF CHANHASSEN MINNESOTA The objective is to assist the City in a planning session to: 1. Begin the discussion to develop a vision or mission for the City. 2. Identify a clear set of goals for the City. 3. Establish priorities for the goals and direction of the City. 4. Develop support for these goals among Council, Commissions, and staff. 5. Develop a model for implementation of the goals. PHASE I 904 Mainstreet Suite 205 Hopkins, MN 55343 Begin process to develop a vision for the City - Conduct exercise to answer questions leading to the draft of a Mission Statement. PHASE H Conduct a planning session with City Council, Commission Representatives, and City Manager. This session will: * Identify stakeholders * Assess the current strengths and weaknesses of the organization * Identify opportunities and threats of the organization * List and clarify goals, establish priorities * Identify strategic issues PHASE III After identifying the strategic issues, review a model plan for implementation and a framework for accomplishing the completion of these issues. (612) 945 -0246 9 fax (612) 945 -0102 The Brimeyer Group, Inc. EXECUTIVE SEARCH CONSULTANTS CITY OF CHANHASSEN 904 Mainstreet PROPOSED SCHEDULE Suite Hopkins, MN 55343 343 Planning Session Session I (3-4 hours) Expectations Strategic Planning Develop draft of Mission Statement Identify Stakeholders SWOT Analysis Adjourn Session II Identify goals Establish priorities Identify Strategic Issues Review model implementation plan Adjourn SPECIAL FOCUS Commercial Real Estate he Twin Cities stretch- es from Monticello and Belle Plaine in the west to New Rich- mond, Wisconsin, in the east. Of- fice towers, warehouses, and big- and provides,quick access to the airport, which remains north of the Minnesota River. On the cen- tral riverfront and in outlying Wright and St. Croix counties, telecommuters rub shoulders with ' box retail stores stand shoulder to retailers and light industrialists in shoulder along Interstate 35E developments that mimic small - ][he Lay north to Forest Lake and a town streetscapes. rerouted Highway 169 south to Welcome to the metro commer- ' Jordan. In downtown Minneapo- cial real estate market, circa 2010. lis, drained of major retailers but A fairly realistic vision of it, any- still a vibrant office and entertain- way. After bottoming out in the of ment market, a light -rail transit early 1990s, the market for office, link relieves traffic congestion industrial, and retail space has re- bounded; vacancy rates are down and rents are up across the region, FMK ,- in r not As the turn of the millenium fast approaches, who can help but wonder how the event will be prompting a new cycle of expan- marked by changes in how and where we live and work? We've taken a peek at what's around the outer subu bs as Chanhassen, corner in the commercial real estate realm to learn what's on the horizon for our cities' landscape Maple Grove, Bloomington, Woodbury, and Eagan. Dozens of for the year 2000 and 2010. By Phil Davies new office or industrial develop- SPECIAL FOCUS Commercial Real Estate ments worth hun- dreds of millions of dollars are slat - ed for construc- tion this year or in 1997. Future retail projects include a power center on the site of an old limestone quarry in Minneapolis and a large shop- ping center in Woodbury. How fast and in what direction will the commercial universe expand? Will the business landscape in the year 2010 look much the same as it does today, with tightly packed office towers downtown and free- way- girded industrial parks, of- fice complexes, and shopping plazas in the suburbs? Or will the information revolution, nascent "neo- urban" plan- ning, and the Met- ropolitan Coun- cil's efforts to rein in urban sprawl change assump- tions about what and where to build? These are difficult questions, given the vagaries of the economy and regional poli- tics. Another na- tional recession may freeze invest- ment in new construction; the state legislature may opt for a new airport in Dakota County, sparking wildfire growth in the southeast; the state may lower property -tax and workers' com- pensation rates, slowing the exo- dus of manufacturers across the St. Croix River. Yet the shape of things to come in the commercial marketplace can be discerned, fairly clearly in the short-term, more vaguely and with umpteen provisos in the long -term. Here, offered with a generous grain of salt, is our per- spective on the Twin Cities com- mercial universe at the turn of the millennium and beyond. 2000: Onward and outward The Twin Cities is one of the least densely built -up urban ar- eas in the country, thinner on the ground than Los Angeles or Houston. That's not likely to change through the year 2000. The inexorable spread of indus- trial parks, office towers, and shopping centers into the coun- tryside will continue as develop- ers take advantage of inexpen- sive, clean land, low property taxes and tax - increment financ- ing (TIF) offered by bedroom communities eager for commer- cial growth. Industrial and Office/warehouse developers will lead the charge, building on inex- pensive land with good highway access inside the Met Council's Metropolitan Urban Services Area (MUSA) line. High -tech, office, and eventually retail proj- ects will follow as new subdivi- sions rise on parcels served by municipal water, sewers, and electricity. Meanwhile, land in the central cities and first -ring suburbs will be recycled as rising rents downtown create a demand for more office space, and city governments offer TIF and other incentives for redevelopment of brownfield sites — abandoned and polluted land that requires cleanup before being used —at key locations. � : -.IIr r r = � N � GMAC Commercial Mortgage Corporation is pleased to announce that we've been selected by Transamerica Life Companies as an Exclusive Loan Correspondent in the Minneapolis Metropolitan Area For more information, please call: Thomas Quasius G/YIAC 612 -921 -2151 Commercial Mortgage TRANSAMEIUCA LIFE COMPANIES - - -- ­ ouanvtn MUNIHLY The suburbs: Westward ho The Met Council, city planners, and virtually all the developers contacted for this story predict rapid growth in the west metro area, where resi- dential and indus- trial development is already nudging the established MUSA line. High- way projects such as the new Bloom- ington Ferry Bridge over the Minnesota River and the scheduled extension of High- way 610 from the Mississippi River to Interstate 94 will accelerate the westward drift of the metro area's center of I I gravity. Virtually every develop- er in the Twin Cities has major plans for the southwest suburbs of west Bloomington, Eden Prairie, Chaska, and Chanhassen, magnets for com- mercial develop- ment because of their concentra- tion of executive housing. And the next five years will see plenty of activity in the newly fashionable northwest. "A lot of busi- nesses that are currently located in Plymouth are Minneapolis expanding, and as Co uncil they expand, they're moving in- to Maple Grove and Brooklyn Park," says Kent Carlson, vice "I think one of the wild cards is what happens to Mystic Lake. How big they get, what else they get into. They could make a significant difference in that area." president of industrial develop- ment for Minneapolis -based Ryan Companies. To accommo- date the migrants, Ryan plans to add three new buildings this year to Northland Park, a 90 -acre of- fice /warehouse development at Highway 169 and I -94 in Brook- lyn Park. Three or four more will follow in 1997, Carlson says. Meanwhile, in Maple Grove, Rouse Company of Columbia, Maryland, and two other devel- opers have tentative plans for a regional mall that would draw traffic from Highway 610. Commercial development south of the Minnesota River — the largest undeveloped chunk of real estate inside the current MUSA line —is expected to ex- plode at the dawn of the next century, after housing becomes firmly established. A number of light - industrial and warehouse projects are already on -line, in- TWIN CITIES BUSINESS MONTHLY MARCH 1996 X05 Commercial real estate brokers will find all the right And most importantly, space available. So, if you're stuff at The Interchange Office Park, just west of searching for a new base of operations, plan a trip Minneapolis. Like a convenient location along to our space station. For information, call COMPASS 1-394 and 169. An award winning restaurant. I COMPAS MA S I Management and Leasing at 546 -8700. NACEMEW AND LEASING WC NEWSRA010 WMNN 1330 GIVES YOU THE TWIN CITIES MINNESOTA & THE WORLUI EVERY YO MINUTES WMNN... NEWSRADIO 1330 BRINGS YOU NON -STOP NEWS, WEATHER, BUSINESS UPDATES, TRAFFIC REPORTS, SPORTS AND LIFESTYLE PROGRAMS. WE'RE JUST TALK, TALK, TALK, ALL DAY LONG, BUT YOU'LL NEVER BE BETTER INFORMED. We Inventory We Store It. We Install It.:""" ::::::::::: T U H U We Maintain It. We Reconfi re I gu t. W �. ll We Move It. Repair It. We're Commercial Furniture Services, Inc /Commercial Funniture Movers, Inc. And the only thing we don't do with commercial fumlture is build it. 4301 HIGHWAY 1 $T. LOUIS ­K. MINNESOTA SS416 611- 9311603 FAX 6 1113 1 -4 01 5 106 MARCH 1996 TWIN CITIES BUSINESS MONTHLY L SPECIAL FOCUS cluding Valley Green Busi- ness Park, a distribution and office /warehouse complex at the intersection of highways 101 and 18 that Allianz Life of North America aims to ex• pand to 188,000 square feet this fall. However, still less than ideal access may hamper growth in Shakopee and Pri- or Lake, speculates John Kari, a senior planner with the Met Council. "I think one of the wild cards is what hap- pens to Mystic Lake," he says. "How big they get, what else they get into ... they could make a significant difference in that area." The Mde- wakanton Dakota tribe is seeking tax - exempt status for a mixed -use business park it has proposed for a 550 -acre tract off County Road 83. Less torrid growth is fore - cast for the east metro area. Large swathes of the region, particularly in the lake -stud- ded northeast, are likely to remain residential enclaves for 10 years or more. Grant Township, Lake Elmo, and Afton are taking a go -slow approach to development, trying to hold the line on fur- ther extensions of MUSA to- y 1 ward the St. Croix River. But Woodbury, blessed by excel- lent freeway access and prox- imity to 3M Company, will remain a hot location for office /warehouse and retail through the year 2000. Two city projects slated for the near future include Tamarack Village, a 750,000- square -foot power center at I -94 and Ra- dio Drive, and Woodbury Commerce Center I, a pro- posed office /warehouse cen- ter at I -94 and County Road 19. Development is also ex- pected to blossom in Eagan, Cottage Grove, and Mendota Heights, where Bloomington - based United Properties hopes to add 350,000 square feet of office /warehouse this year to a 210 -acre business park at I -94 and Pilot Knob Road. "We have confidence in the growth on the east side of town," says Brian Carey, United Properties' project manager of development. Dick Zehring, senior vice president of Welsh Compa- nies, Inc., a commercial bro- kerage based in Bloomington, foresees a boom along Inter- state 35E in the north, noting that Forest Lake has begun to attract industrial development because of its low property taxes and base of executive housing. "I would look for some major development over the next five years in White Bear Township between the Twin Cities and Forest Lake," he says. "I think that's a prime development area for industri- al warehouse and distribu- tion." The central cities: Filling in the gaps Downtown Minneapolis' 22 million square feet of multi - tenant office space represents Dick Zebring, senior vice president of Welsh Companies 1 I '1 J "Enough lenders lost enough money, espe- cially insurance companies, that they are not going to finance buildings [on speculation] like they did in the past." about 40 percent of the metrowide market. City plan- ners expect to see another 2 million to 2.8 million square feet built by 2000 as down- town continues its rebound from the depressed values of the early '90s. Growth will be modest but steady, predicts John Labosky, president of the Minneapolis Downtown Council. "I have confidence that lenders have learned their lesson," he says. "Enough lenders lost enough money, especially insurance companies, that they are not going to finance buildings [on speculation] like they did in the past." Naturally, Labosky doesn't subscribe to the "edge city" theory of author Joel Gar - reau, who predicts down- towns will lose their tax base and influence to suburbs. He notes that 40 tenants have moved downtown from the suburbs in the past two years, most of them service compa- nies such as banks, insurance companies, and law firms. Meeting rising demand for Class A office space will re- quire construction of new towers, perhaps on the Con- servatory site, which the Ryan Companies has under contract for purchase, or at three prime locations in the financial core owned by Opus Corporation of Minnetonka. Downtown planner Rick Johnson sees office tenants occupying new towers at the north end of Nicollet Mall and making the leap across Hennepin Avenue to take advantage of good highway access on Interstate 394 and plentiful parking. "We still think there's an office market west of Nicollet," he says. Downtown retail and en- tertainment will probably de- cline or barely hold its own, despite a gradual increase in housing units on the river - front or in the warehouse dis- trict. The failure of River - place and the Conservatory, along with last December's collapse of a proposed retail /entertainment complex at Fifth Street and Hennepin Avenue, suggest that down- town will have difficulty com- peting with the Mall of \J WE MOVE EVERYTHING FROM MICE TO MASTERPIECES * arrett Moving &Storage know how to move everything that's important to you. Whether we'rf moving your company's valuable computers or your art galleries priceless works of art, Barrett has the right attitude, and the right equipment, to do the job right. Trust Barrett Moving & Storage for your next move. (612) 944 -6550 aarrett MASTERS AT THE ART OF MOVING l: THE PENTAGON, WASHINGTON, DC To change a light bulb in Washington, 6 forms done in triplicate sent to all Department Heads (replacement time 2 months) i . PENTAGON PARK, EDINA, MN A simple phone call to our friendly staff (replacement time less than 2 hours) Service is another good reason to office at Pentagon Park. Our, friendly experienced staff is located on -site. So whether you need a light bulb changed or a file cabinet moved, there is always someone available to help. And you won't have to fill out any forms. A simple phone call is all it takes. Pentagon Park even provides a 24 hour emergency hotline and free winter jump starting. At the Pentagon they call that a "fail safe" system. At Pentagon Park, we just call it our job. • A Dr. 1 For more information, call (612) 820 -1600 NORTHCO REAL ESTATE SERVICES 4900 Vildng Drive — Edina, MN 55435.5314 L Large Midwest apparel manufacturer is looking for the right salesperson to help introduce a new line of NCAA licensed products and current product lines to retailers in Minnesota and Wisconsin. Draw plus commission to start with unlimited potential. Three years of on the road sales experience required. No rookies need apply. Send resume with references to: LAMCO P.O. Box 740 Chillicothe, MO • 64601 B U I L D I N G" t ', D O W N T'O W; IV .- Abovr: First B,.k plan Bd—.'Fourth A— Ro p CREATIVE S0LUT'1,0NS THAT W.OR Imaginative architecture and engineering • Broad construction capabilities Financial strength and flexibility • Real estate development and management expertise Prime Downtown Real Estate Sites Available OPUS. 9900 Bren Road East Minnetonka, Minnesota 936 -4444 908 MARCH 1996 TWIN CITIES BUSINESS MONTHLY SPECIAL FOCUS I Commercial Real Estate America and suburban shop- ping centers. In downtown St. Paul, where vacancy rates on Class A and B multitenant office space are dropping at last; the modest needs of state government will continue to drive the market for the next few years. The only major of- fice project in the foreseeable future is a $60 million state - government tower on the site of the outmoded Capitol Square building at llth and Cedar streets. However, that project is as yet unfunded. Aware that downtown must become more vibrant if it is to attract new business ten- ants and bring vacant store- fronts back to life, the city is focusing on quasi - public riverfront projects such as re- placing the Wabasha Bridge, expanding the Civic Center, and paving the way for a vastly expanded Science Mu- seum of Minnesota. All three will be finished by 2000. "We see the riverfront as poten- tially a major key to the fu- ture of downtown," says Ken- neth Ford, planning adminis- trator for the city's Department of Planning and Economic Development. Developers have tradition- ally steered clear of inner -city rehab projects, terrified of li- ability for polluted soil and groundwater. But TIF, other municipal subsidies, and leg- islation such as last year's Metropolitan Livable Com- munities Act (which provides $6.5 million in grants for brownfield cleanup) will make redevelopment inside the Interstate 494/694 loop increasingly common. John Allen, managing part- ner of Industrial Equities, LLP, a development firm in Minneapolis, observes that "in- fill" projects, such as the Crosby Lake Business Park on the St. Paul riverfront and his own Lakeview Business Campus at Interstate 35W and County Road 88 in New Brighton, offer relatively in- expensive land, convenient freeway access, and most im- portant, a large pool of cheap labor. "The per capita in- comes of the suburbs are quite impressive, and don't lend themselves to individu- als looking for minimum - wage jobs," he says. "Con- versely, the cities have a pre- ponderance of people who don't have the skills for man- agerial positions, but are looking for entry -level posi- tions in manufacturing, as- sembly, or warehousing." In -fill also holds promise for retail, says Bill McHale, vice president of retail devel- opment for Ryan Companies. Assisted by $10.4 million in TIF for environmental cleanup, the company is building the Quarry, a power center in northeast Min- neapolis anchored by Target Stores, Rainbow Foods, and Home Depot. "We're look- n y Above: Fhh Sant Touea Bdh Uni —iiy of& 77w H r r n u J 11 Economic growth in the Twin Cities is expect- ed to support an additional 1.7 million jobs - 52 percent of them in the western suburbs — by the year 2010. ing at redevelopment oppor- tunities— underutilized land that has certain characteris- tics," McHale says. "I imag- ine that'll be more of a dri- ving force in the next five years than new, far -out de- velopment." 2010: Over the long haul Charting the long -term fu- ture of real estate develop- ment in the Twin Cities is about as risky as trying to predict a blizzard in July. Fif- teen years ago, who could have predicted the birth of the Mall of America, or the office glut of the late '80s? But one thing's for sure: the Twin Cities will be a bigger place in 2010, economically as well as geographically. Gradual economic growth will support an additional 1.7 million jobs -52 percent of them in the western sub - urbs—by that year, according to the Metropolitan Council. The recently released Metro 2010 plan for downtown Min- neapolis forecasts a 40 per- cent increase in leased office space, a thriving entertain- ment complex on Hennepin Avenue, and an expanded Minneapolis Convention Center hosting 60 national events a year. The leading edge of metro development will have moved far beyond mature suburbs such as Anoka, Shakopee, and Hud- son, Wisconsin, into counties outside the Met Council's present jurisdiction. "In- evitably, 15 years from now, there will be a commercial corridor extending along I -94 to Hudson and beyond, and another one west up I -94 to Monticello," Allen says. St. Cloud, Rochester, Mankato, and Eau Claire, Wisconsin, will function as satellites, tied to the metro hub by freeways and high -speed telecommuni- cations. Forces of change But it's probably a mistake to assume that the next 15 years will bring more of the same, that the Twin Cities will sim- ply become more populous and sprawling with age. Many observers believe that Help Finance Research Is The Answer. We need your help. Call 625 -1148 L university children's Foundation LOOIONG FOR OFFICE SPACE IN ST. PAUL? WE'VE GOT YOU COVERED. FIRST TRUST CENTER 180 East Fifth Street A historic building built in 1916 and renovated in 1985, First Trust Center offers a floor plate of 46,644 sq. ft., eight elevators, skyway connected parking and more. The building is home to the Jerome J. Hill theater, has an onsite cafeteria and a Great Hall. Ideal for corporate tenant. Owned by St. Paul Burlington Limited Partnership and managed by Frauenshuh Management Company. CAPITAL CENTRE 386 North Wabasha This professional office building located in central downtown St. Paul offers convenient location with skyway connection, attached parking, building conference room and a central mail room on the lower level. PARK SQUARE COURT 400 Sibley Street Located in the historic lower town district of St. Paul, Park Square Court has several space offerings ranging in size from 1,000 - 5,000 sq. ft. of space overlooking the state capital plus 3,500 sq. ft. on first floor corner. Building amenities include skylights, adjacent parking, beamed 14 foot ceilings, a restaurant and skyway connections. Perfect for advertising agency or graphic design industry tenant. METROPOLITAN BUILDING 425 North Robert Street Located in the downtown central business district in the third busiest skyway in St. Paul. The Metropolitan Building has 75,680 sq. ft. of contiguous space from the second floor to the sixth floor currently available. Amenities include convenient parking, skyway connection. Ideal for government or companies seeking moderately priced space. f r FRAUENSHUH MANAGEMENT COMPANY 180 East Fifth Street, Suite 160, Saint Paul, Minnesota 55101 • (612)228.9456 • FAX (612)223.5652 Call Wayne Kuykendall at 228 -9456 TWIN CITIES BUSINESS MONTHLY MARCH 1996 109 Amana • Allstate Insurance • Anchor Hocking Plastics • Bayer Corporation •The Bedroom Bell Atlantic • Best Buy • CIGNA • Clarklift • Comerica Bank • Day -Tine ers • Department 56 1 C DHL Airways Dow Jones • EDS • Edy's Grand Ice Cream • Exel Logistics • FedEx • Foodland Distributors • General Motors • GTE Airfone • Hobart Brothers • IBM • Ingersoll Rand r. /llill�l'lif9 � JOS7EN5 - F When You're Judged by the Company You Keep. NFIRST � INDUSTRIAL Industrial Landlord to Corporate America James River Paper • Joseph E. Seagram • Kraft • Liberty Check Printers • McDonald's Motorola • Neodata Products • Nine West • Old Kent Bank • Pulitzer Publishing Rand McNally • Rif Reynolds • SCIMED Life Systems • Sears • Spartan Stores • Target • Tone Brother's • Travelers Express • Unisys • Whirlpool • Vaskawa Electric • Zerand- Bernal For additional information, call 612 - 943 - 2700 OLDEP U E pi EduSery Technologies i ,, Springsted Inc., Minnesota Mutual Life Insurance, State of Minnesota k: Department of Commerce, Minnesota Taxpayers 1 Association, EduSery Technologies, Inc., 512nLgsted Inc., Minnesota Mutual Life Insurance, State of ,+- Minnesota Department of Commerce, Minnesota t Taxpayers Association, EduSery Technologies, Inc.,°' t Springsted Inc., Minnesota mutual r a I nsurance State of Minnesota Department of Commerce, "'illu�9 Minnesota Taxpayers Association, EduSery Technologies, Inc., Springsted Inc., Minnesota ,y Mutual Life Insurance, State of Minnesota Deoartment of Cnm Minnesota Taxpayers 6 Association, EduSery Technologies, Inc., Springsted Inc., Minnesota Mutual Life Insurance, State of Minnesota Department of Commerce, Minnesota 9 Taxpayers Association Convenient location Axim y ate• � in , larg floor plate are some of the underlining reasons these companies have selected the Golden Rule Building in downtown Saint Paul. Call 290 -8890 110 MARCH 1996 TWIN CITIES BUSINESS MONTHLY the pattern of commercial de- velopment 15 years from now will be significantly different, altered by public policy, de- mographic changes, the emergence of mass transit, and such societal trends as corporate downsizing, tele- commuting, and on -line shopping. After a decade of allowing market forces to dictate when and where residential and commercial development oc- curs, the Met Council seems ready to try to curb urban sprawl and encourage rede- velopment in the inner cities and first -ring suburbs. One of three growth options being considered by the council would concentrate all devel- opment through 2020 within the existing MUSA. A sec- ond "growth center" scenario focuses commercial and resi- dential development in se- lected "nodes" along trunk highways and transit corri- dors; other areas would re- main rural and off limits to development. "One of the objectives in looking at the scenarios is to ask, `Are there ways in which we could develop the region over the next 25 years that would reduce dependence on the automobile, reduce the amount of travel that people have to do in order to get to work ? "' the Met Council's John Kari says. The Met Council also wants to forge ties with communities outside the seven - county metro area in order to exert a measure of control over the kind of "leap- frog" industrial development that is gaining momentum in western Wisconsin. Increasing highway conges- tion may accelerate the devel- opment of light -rail transit (LRT), and prompt tens of thousands of office employ- ees to telecommute. Both de- velopments could alter the balance of commercial power across the region, stimulating development in some areas while drawing it away from others. Minneapolis's 2010 plan, for example, calls for an LRT line from downtown to the airport along Hiawatha Avenue. Such a link would promote office and retail de- velopment at stops along the route, Johnson says. Telecommuting and "hotel - ing" (the practice of assigning mobile, laptop- equipped em- ployees to alternate work sites) would presumably re- duce demand for office space, stunting the growth of office meccas such as downtown Minneapolis and the I -494 strip. But people will proba- bly still feel the need to inter- act face to face, in traditional offices or at neighborhood "telecenters." "[Telecommut- ing] is at a stage where cars were in 1913," says Lyle Wray, executive director of the Citizens League, a non- partisan public - policy organi- zation in Minneapolis. "We C i I 1 1 "My vision is that these neighborhood cen- ters, with coffee shops and corner stores and shop -front offices, are really going to be the wave of the future." think there'll be a substantial impact, but how it's going to play out is going to be very hard to gauge." The ongoing shift to an en- trepreneurial economy domi- nated by small, service - oriented companies will help foster a new planning ethic early in the next century, one that has the potential to change the face of commer- cial development nationwide. Champions of "new urban- ism" call for a return to tradi- tional neighborhoods, with their high- density housing and mix of shops, restaurants, and offices clustered at key intersections. Instead of strip malls and isolated office tow- ers, the new landscape will feature neo -urban communi- ties such as Disney's model community, Celebration, a large -scale development near Orlando, Florida, that fea- tures corner stores, low -rise office campuses, and on- street parking. "My vision is that these neighborhood centers, with their coffee shops and corner stores and shop -front offices, are really going to be the wave of the future," says Richard McLaughlin, a prin- cipal with the Town Planning Collaborative, a Minneapolis architectural and planning firm that promotes the princi- ples of new urbanism. Cur- rent suburban -style zoning and building codes hamstring developers who want to build a Minnesota version of Cele- bration. But the Livable Communities Act provides $4.6 million in grants this year for neo -urban demon- stration projects, increasing the chance that the type of commercial development ad- vocated by McLaughlin and other city planners will be- come a reality. Conceptual drawings of downtown St. Paul prepared by Town Planning for the city's Riverfront Development Corporation show the West Side Flats transformed into a residential neighborhood with a strip of office, retail, and light- manufacturing facilities running along Wabasha Av- enue. Maple Grove, one of the sponsors of a conference on new urbanism held in Min- neapolis last January, is con- sidering a neo - traditional ap- proach for its future down- town, to be carved out of a 2,200 -acre gravel mining area along Elm Creek Boulevard. "We'd like to see something develop that's different from a strip mall on every corner," says Alan Madsen, the city's director of community and economic development. ■ Phil Davies wrote about in- surance fraud in the February issue of Twin Cities Business Monthly. A. TAKE ADVANTAGE OF OUR REPUTATION... 71vin Cities Business Monthly is pleased to announce its 1996 Reprint Program. Article Reprints offer a cost - effective, respected and new approach to marketing. Call us today! 339 -7571 ext. 341 Twin cities i :.n.., .AONTHLY A SMART MOVE. LUMBER EXCHANGE BUILDING OR MIDLAND SQUARE BUILDING. DOWNTOWN MINNEAPOLIS. An office landmark with immediate occupancy on short and long term leases for space from 400 to 4,000 square feet • Skyway connection • Security guards • Restaurant and sundry • On site management • Full office support services An outstanding office opportunity in the center of downtown Minneapolis. Lease up to 15,000 square feet - a full floor - or as little as 750 square feet • Security and card access • Skyway connection • Restaurant and sundry For leasing information - call Bruce Feik 612- 340 -9907 A kVMff, rtra&ANi%Qf INC Suite 888 ■ 10 South Fifth Street. Minneapolis, Minnesota 55402 TWIN CITIES BUSINESS MONTHLY MARCH 1996 111 Fifth Street and Hennepin Avenue Second Avenue and Fourth Street 3= F i D n \ O� U .-I \o It o \x 1 II *r- w ti \ * O > r♦ If 1 nom Q In \cnr•I w u Io I- z \►•-\ In x 11 WOO \lo Z \Q Mix 11 V DO \ii• xQ ilk 1- cr \ c.>:zwz II # owl--w \iF 3t!)JN \'IC Q•`�QdQ II $i�OQTVS \*M z z n *lzaoQ \•3t•ooxo 11 ii• [] V �O V \ If ■ ti GQ 1 1 1 1 1 1 1 1 h!L ; • a, ON 00 o� w N � . M N z w> v o M ar o °r o c 130 rC O a HOC p,c c v ara a?: 0 N N L o W� b o v 4° O O�� .°�0 U C. •a� C O c� O � 'E a °oo °a o �`"U i .0 y �''c O o 3ca °Z h o N O 0 4 � y N 'C a • Z Q • � C O Q om 'o m COD r. o � o " CA. :: o O o 4. ar 0' {(� um4 >,.G b � y d .0 rn 3 .a ... w �' 1c U i °°" 3 o Cd G1 a 00� > N c a�f 0 . s � O - d 'oQaa ° ee U) 0 �U av y • cd o y bO ! CJ A �7 0 3 'b ar L a c0 U U p c� . Cd U «7 i7 O .. b • cd aS > O p bA C U y O 'H 9°q � ° Q' r �" O O C bAq Opb '° m 0 O U • 'O • W 3 u O' ITS q a i o •� p y • W v 0 'b C N 0 " C v aoo m� a3 W� O .r bq w O d) ❑ 'O 7 U � o ° ar w ro • b A +,oa$o b o v 4° .°�0 U C. •a� O � .0 y �''c O h Q U U U a yy r. Q r. o � p � U� B< o >,.G N y d O .r bq w O d) ❑ 'O 7 U � o ° ar w ro • b A +,oa$o 36 CityBusiness february23, 1996 - EXPANSION from page 1 . last year to the comparative heights of the Dayton Hudson Corp. of Minneapolis. The latter will continue its Target discount store expansion and will speed up opening department stores for the first time in a decade. Musicland — with four divisions, a $136 million net loss in 1995 and hard competition from electronics discounters who use prerecord- ed music as loss leaders — usually opens 160 to 170 stores a year. It will debut perhaps 32 in 1996, according to company spokespeople. That's only 10 to 12 new stores for its mul- timedia Media Play concept, widely touted as the strong new group of large, likable stores that would bring similar strength to the com- pany. In more optimistic times, Musicland had predicted 30 new Media Plays, costing about $ I million each to build and stock, in 1996. "Media Play has four major categories [music, videos, books and computer soft- ware], and like all new concepts, it needs some tweaking and adjustment. If you're at the Southtown store [in Bloomington] now, it looks quite a bit different now than it did in December," said Marcia Appel, spokeswoman and marketing and merchandising vice presi- dent for the Musicland/Sam Goody stores. Musicland expects to spend roughly $25 million in 1996 on capital projects, compared with the $100 million it spent in 1995. "Slow growth is sometimes a very wise strategy;" she added. "We're slowing our growth so we can fund more of our own growth and reduce our debt. We need time for the stores we have to mature." At Dayton Hudson, openings for the com- pany's engine, its Target discount stores, will increase about 6 percent from 63 in 1995 to 67 in 1996. As the chain continues its plans to enter Fast Coast markets, particularly the Northeast, Target will pop up in New York state for the first time and also the Washington, D.C., area with stores in Virginia and Maryland in 1996. It also plans store openings in Alabama and Utah. A typical large Target in its Greatland class of about 140,000 square feet costs between $5 million and $10 million to build and stock, sources said. "We consider that Target is still showing very aggressive growth;" said Gail Dorn, the company's vice president of communications and community relations. That's particularly. true since the difficul- ties of land acquisition in the Northeast makes growth harder there than elsewhere, she added. In Dayton Hudson's department store divi- sion, after a decade or more of no construc- tion, the company will build four new depart- ment stores in 1996 to join the much - praised Marshall Field's store opened in late 1995 at Northbrook Court in the suburban Chicago area. The 1996 stores will include a Dayton's at Maplewood in the Twin Cities, two Marshall Field's home stores in the Chicago area and a WILDS from page I didn't return calls Thursday. Burtness said earlier this week that the development traded hands "in a friendly sale, for a lot of money." Employees at The Wilds said that the ownership of the property was in transition, but that they were not allowed to comment. Jim Jasper, a Waconia home builder who has built three homes on the development, Circuit City Stores Inc. - 378 61 - 66 60-65 r " Garyton Hudtat "' °y �` < , . . •, � �$:. . Kohl's Corp. 128 18 22 20-25 a Wal -Mart Stores Inc. 2,230 112 97 90 ...MusictanilStweiCoe� ` f' '.'trb";; , .,�' -� 7 GO°aYs� 4.322 i5'UndJel ecl 5wtcoast Moikit gtert ea AI2, 60'• 34'�" 7'.0 On Cuie 's: o' '' .. Mail iaPlas:§:�v7 ....'? 33 t0.tn' Kad.mr`«rdas roan nKnbr op «rum..ada»tatp�yl6uli�;L+�.AIon 1�Y+ 7":rs•;?, `�Doa as m cm" iri s t o d.pra�wrKS _ tnm use da canwi Mssco¢.pw ;: �. c�..; a �.;_:� "�: •� .,�,y,�r_ ""Dory aot iKkW. rrbgtlon:ti t9s4 In Ffla. <''.?�-'" "'tq +� s� �% Hudson s at Somerset Collections, an upscale Most of them' will be fill -ins in markets mall in suburban Detroit. where the company is already established, The construction of the new department according to Laurie Bauer, company spokes - stores shows the company's commitment to woman. Philadelphia and Tampa will be the that division, Dom said. company's major new markets. Over the last year, Wall Street analysts have Best Buy spends about $3 million to $3.6 begun suggesting that the department stores million to open and stock the average store, and its moderately priced department store Bauer said. Of 30 stores planned for 1996, division, Mervyn's, be disposed of so that half will be small stores in the 45,000- square- Dayton Hudson can concentrate on Target. foot range and half in the larger 58,000 - In fact, store expansion at financially trou- square -foot range. bled Mervyn's, a drag on the company's earn- The 30 -store plan is lower than earlier ings, has been slow for the past several years 1996 projections which ranged as high as 50 as Dayton Hudson attempts to fix the divi- stores according to analysts' prognostications sion's problems. and 40 when the company was making pre- In 1996, there will be six new Mervyn's diction. stores, three of those in the Twin Cities where Actual 1996 store tallies could be 20 to 25 the company is keeping an eagle eye on the when the year is over, said Hughes of Piper evolution of the upbeat Mervyn's California Jaffray. "And we expect to see them concen- theme it rolled out locally and then throughout trating more on the 45,000- square-foot stores the chain last summer. rather than the larger ones because they're Dayton Hudson's three pieces remain firm- harder to fill up," he added. ly in place, according to Dorn "We are still The expansion slowdown will allow Best very committed to a three- pronged approach. . Buy to pay for new stores out of cash rather We're focused on fixing Mervyn's," she added. than adding to its current $208 million in debt, John Hughes, a retail analyst with Piper Bauer said. The company also plans to contin- Jaffray Inc. in Minneapolis, is less certain, ue refining product mix. admitting confusion about what's going on "We consider that a positive," Bauer said. with the company and its expansion plans. Best Buy's major competitor, Circuit City "Dayton Hudson is a tough one to figure Stores Inc. of Richmond, Va., regularly spends out. It's got to resolve the Mervyn's issue, and its own money for expansion, according to the resolution will affect the whole corpora- Paul Rakov, company spokesman. lion and its-ability to open stores," he said. And the 378 -store chain is continuing its At Best Buy Co. Inc. in Eden Prairie where 60- stores -a -year expansion plan announced sales, particularly during the recent holiday . three years ago, and it is acting on its opti- season, have been lower than expectations, mism, Rakov said. 1996 store openings will be a about two-thirds "Ours is a cyclical business. We won't of the 1995 total — 30 stores vs. 47 last year slow down our expansion for a slow cycle. We — as the company attempts to begin financing will be well - positioned for an up cycle when it its growth out of cash rather than debt. comes," he added. ■ said Stanton contacted him Thursday and identified himself as the new owner of the property. Stanton said he planned to spend the next week trying to resolve the liens placed upon the development, and would hold a meeting with the project's home builders next week, Jasper said. I really feel good about it," Jasper said. "I don't know a lot about [Stanton], but there's one thing that I'm certain of, and that is that he will find a way to make this thing success- ful and that's what we need." Located about 45 minutes south of the Twin Cities' core, the development boasts a well- received 18 -hole golf course, which opened last summer, and a struggling upscale residential project. Plans for the housing component at one time called for up to 500 units, but builders have assembled about 45 units since 1992. Prices for the homes have ranged up to $2 million, but Jasper said Stanton indicated he may try to bring down the average price to encourage sales. ■ GAVIIDAE The deal is an important one for Brookfield. Without the land, Brookfield is hamstrung in its efforts to do anything signif- icant with the property. Packaged together — with both land and buildings — the Gaviidae complex becomes much easier to find financ- ing for or, should its owners want it, to sell. Ground leases are rarely done because they are an encumbrance on the property that usually keeps at least one property owner from selling or even refinancing its piece. For example, new investors or a new property owner aren't likely to want to pour millions of dollars into a real estate deal whose title they don't completely control. Brookfield has faced such a quandary, according to real estate sources. The company has been "in serious discussions with at least a couple different prospects about buying into the property, converting some of Brookfield's equity into cash," one source said. Harold Brandt, senior vice president of Brookfield's regional office in Minneapolis, did not return phone calls. Brookfield's par- ent company, Brookfield Commercial Properties, has its he8dquarters in Toronto. The price, equivalent to about $270 a square foot, is almost double the value as assessed by Hennepin County officials. (The county assesses the Gaviidae pad at $7.2 mil- lion and the two buildings at $60.6 million.) Yet, it's a deal that most real estate sources said needs to be done. "They must buy the land because the terms of the ground lease make the building unfinanceable," said one prominent down- town Minneapolis mortgage broker. That, in turn, greatly diminishes the building's long- term value. The real value, as with all major commer- cial properties, is in location, location, loca- tion: in this case, the Bradley pad. The cost was the original owner of the J.C. Penney store, and adjacent office and retail space that sat at Sixth Street and the Nicollet Mall. Brookfield rents the land from Bradley through a 99 -year ground lease that was 4e- cuted in 1987, when Brookfield first began development discussions on the property. On average, Brookfield pays Bradley about $1.1 million a year over the life of the lease. Thus far, Bradley has collected about $6.7 million in rent payments, according to the lease documents. Brookfield is the remnant of what was once the largest landlord and the busiest developer in both downtown Minneapolis and St. Paul. First as Oxford Development Inc., and then as BCE Development Inc., the company flourished in the real estate boom of the 1980s. A 1989 restructuring separated all the U.S. properties from those in Canada, and created the subsidiary known then as Brookfield Development Inc. Since 1991, the company has lost owner- ship and/or management contracts on many of the properties it once controlled. Late last year, Brookfield lost its interest in the World Trade Center, ending all its ownership ties to St. Paul. In Minneapolis, Brookfield still owns, manages and leases the Gaviidae Common and Promenade, respectively known as the Saks Fifth Avenue wing and the Neiman Marcus wing; the Dain Bosworth Plaza; the Multifoods Tower; and City Center. The Gaviidae properties were developed in 1989 and 1991, respectively, and were the last pieces of property Brookfield built. In December, Brookfield Development merged with Toronto-based Royal LePage, Canada's largest publicly owned real estate services company, and changed its name to Brookfield LePage Management Inc. ■ a ^1 - -setttesmng versions. --- i C E a' f s I i 1'