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1h. City Hall Expansion: Purchase Schneider Park.1 CAMPBELL, KNUTSON, SCOTT & FUCHS, P.A. Attorneys at Law Thomas J. Campbell (612) 452 -5000 Andrea McDowell Poehler Ro-erN. KRUtson Thomas M. Scott Fax (612) 452 -5550 M K. Brokl Jahn F. Kelly Gary G. Fuchs Marguerite M. McCarron Ja mes R. Walston Elliott B. Knetsch June 19 1996 George T. Stephenson Suesan Len face IN* CEIVFn : UN 2 0 RECD Mr. Don Ashworth City Manager City of Chanhassen 690 Coulter Drive Box 147 Chanhassen, MN 55317 QTY OF CHANha�SEN k RE: City of Chanhassen/Mithun Enterprises Property for Future City Hall Expansion ' Dear Don: Enclosed herewith please find a letter dated June 4, 1996 from Mithun Enterprises and addressed to me regarding the ongoing effort by the City to acquire the remaining parcel on West 78th Street for future expansion of the City Hall. The letter arrived while I was on vacation last week. Enclosed also please find a letter ' dated May 1, 1996 from me to Ms. Egland regarding the proposed terms of an acquisition of the property by the City. As you can see from the June 4 letter, Ms. ' Egland, on behalf of Mithun Enterprises, Inc., has indicated that Mithun Enterprises, Inc. is willing to sell the land to the City for the appraised value. ' By way of background, several years ago the City authorized condemnation of the property on West 78th Street for the City Hall expansion. Included were three separate lots, one of which is improved with the old bank building. After ' condemnation had started, the City was approached by the bank and requested to hold the condemnation proceedings in abeyance for a period of time because Mithun Enterprises was attempting to sell its banking interest in Chanhassen. It did not want ' the condemnation process to create a problem for that sale transaction. ' Following the sale of the bank to the new owners, we negotiated acquisition of two of the three lots from the new owner. That acquisition was authorized by the Council and closed quite some time ago. This lot is the remaining lot of the three. It ' was not sold to the new owners of the bank by Mithun Enterprises because it was held by a different Mithun entity than owned the bank at the time. ' Suite 317 • Eagan&ale Office Center • 1.380 Corporate Center Curve • Ea (Tan, iv1N 571 ' 1 Mr. Don Ashworth June 19, 1996 Page 2 In an effort to acquire the remaining parcel without expense and without , adversarial confrontations and court proceedings, Mithun Enterprises was approached to determine if an negotiated sale was possible. I suggested, and Mithun Enterprises , agreed, that they would have an appraisal done and, if acceptable to them, would agree to sell the property at the appraised value. They agreed to hire the Andrus Agency to conduct that appraisal. , A copy of the appraisal was provided to me some time ago but written ' confirmation by Mithun Enterprises of their willingness to sell the property at the appraised price and upon the terms of a standard real estate transaction had never been given to us. We now have that written confirmation in the enclosed June 4th letter. ' Based on my review of the appraisal by the Andrus Agency (a copy is enclosed herewith) I believe the appraisal to be fair and reasonable and an accurate indication ' of the fair market value of the subject property. I recommend that the Council approve acquisition of the property at the appraised value. I find it unlikely that the , City would be able to obtain the property at any lesser value if it pursued condemnation proceedings, hired its own appraiser and actually went through the condemnation process. I think it would be much more expensive for the City to do SO. Please place the matter on the Council agenda for Council's review. Again, I ' recommend the Council approve the acquisition at the appraised value of $195,000.00 and pursuant to the terms as set forth in my May 1, 1996 letter. In addition, I suggest that the $1,450.00 appraisal cost be split between the parties. , As always, if you or any member of the Council requires additional information or has any questions about this matter, please feel free to contact me. Very truly yours, ' CAMPBELL, UTSON, S T & FUCHS, P. . ' 111 . M GGF:cjh Enclosure // w 1 June 4, 1996 MITHUN ENTERPRISES, INC. 900 East Wayzata Boulevard, Suite 130 , Wayzata, Minnesota 55391 Tel. (612) 473 -6422 Mr. Gary Fuchs Campbell, Knutson, Scott & Fuchs, P.A. Eagandale Office Center, Suite 317 1380 Corporate Center Curve Eagan, MN 55121 ' Re: City of Chanhassen / Mithun Enterprises, Inc. 1 Dear Mr. Fuchs: ' As you know, the City of Chanhassen issued a notice of pending condemnation on Lot 1, Block 2, Schneider Park in 1993. Since that time the City has not proceeded with condemnation of the Lot. In January 1996, you inquired whether we would be willing to sell or otherwise transfer the ' property to the City without going through the condemnation proceeding. When we indicated our willingness to proceed with a transfer without going through a ' condemnation, you asked us to have the property appraised. A copy of the Andrus Agency appraisal valuing the property at $195,000 was provided to you. We would prefer not to sell the property, but since the City has started condemnation proceedings we feel compelled to reach an agreement with the City for an amicable transfer. Accordingly, we are willing to transfer the property to the City for the appraised amount of ' $195,000 (pursuant to a "standard" commercial real estate transaction as outlined in your May, 1, 1996 letter) plus the $1,450 cost of the appraisal. In addition, we concur with Your suggestion that the property be transferred by stipulated settlement in condemnation proceeding. ' I trust that I have responded to all of your inquiries regarding the transfer and that you will bring the matter to the City Council as soon as possible so that we can complete the transfer. If, ' however, you have any further questions, or if there is anything I can do to conclude this matter, please call me at 473 -1295. *Sincerely, land Ms. Lori M. Eglund Mithun Enterprises, Inc. CAMPBELL, KNUTSON, SCOTT & FUCHS, P.A. , Suite 130 Attorneys at Law 900 East Wayzata Boulevard Andrea McDowell Poehler , Thomas J. Campbell (612) 452 -5000 Dear Ms. Eglund: Roger N. Knutson Fax (612) 452 -5550 Matthew K. Brokl John F. Kelly ' Thomas M. Scott Gary G. Fuchs Marguerite M. McCarron ' James R. Walston May 1, 1996 George T. Stephenson ' Elliott B. Knetsch Council. Suesan Lea Pace However, prior to presenting the matter to the Council, I would like to verify Ms. Lori M. Eglund Mithun Enterprises, Inc. Norwest Bank Building , Suite 130 900 East Wayzata Boulevard Wayzata, Minnesota 55391 , Re: City of Chanhassen/Mithun Enterprises, Inc. ' Dear Ms. Eglund: ' Thank you for sending me the copy of Mr. Andrus' appraisal of Lot 1, Block 2, Schneider Park. I have sent a copy to the City for review and consideration. I have also discussed the appraisal with City staff. It is my intention to obtain review ' and comment from a couple of staff members and then present the matter to the City Council. ' However, prior to presenting the matter to the Council, I would like to verify that I understand the position of Mithun Enterprises. It is my understanding that your ' client is willing to sell /transfer ownership of the subject parcel for $195,000.00 pursuant to a "standard" commercial real estate transaction; that is, 1996 real estate taxes would be pro rated to the date of transfer, special assessments would be ' deducted from the sale price or paid by Mithun, deed tax would be paid by Mithun, and recording fees and closing costs would be paid by the City. ' Since the subject property is already the subject of a pending condemnation proceeding, it is possible to effect transfer of the property within that proceeding and ' payment of some of the costs becomes unnecessary. Mithun would not pay deed tax, there would be no closing costs and only one document would need to be recorded. The tax proration and the special assessments would still be reflected in the final ' purchase price. I suggest that transferring the property by stipulated settlement in the condemnation proceeding is more efficient and less costly to both parties. , request that you send me a letter verifying or clarifying all of the above I q Y fY g fY g points P Suite 317 • Eagandale Office Center • 1380 Corporate Center Curve • Eagan, MN 55121 I r i i i i Ms. Lori M. Eglund May 1, 1996 Page 2 and any other items that would require agreement by the Council to close the transaction. Once I receive your written position, I will go to the Council with the matter. In the meantime if you have any questions, please feel free to call me. Your courtesies and cooperation are appreciated. Very truly yours, CAMPBELL, KNUTSON, SCOTT &I I: GGF:cjh Enclosure cc: Mr. Don Ashworth I Real Estate Appraisal UNDEVELOPED COMMERCIAL SITE N.E. Corner Kerber Blvd. and W. 78th St. Chanhassen, Minnesota PREPARED FOR Mithun Enterprises 900 East Wayzata Boulevard Wayzata, Minnesota As Of February 20, 1996 Prepared By NELSON ANDRUS, I.F.A.S. ANDRUS AGENCY MINNETONKA BUSINESS AND PROFESSIONAL BUILDING 17809 HUTCHINS DRIVE MINNETONKA, MINNESOTA 55345 Minnesota Certified Federal General License #4000065 Andrnc Apencv.Inc. Andrus Agency, Inc. Minnetonka Business and Professional Center 17809 Hutchins Drive, Minnetonka, MN 55345 Phone 612.474.9443 I February 29, 1996 ' Ms. Lori Egland Mithun Enterprises 900 East Wayzata Boulevard ' Suite 130 Wayzata, MN. 55391 ' RE: Estimate of Current Market Value Lot 1, Block 2, Schneider Park Chanhassen, Minnesota 1 ' Dear Ms. Egland: Pursuant to your request, I have personally inspected the undeveloped land ' identified above. The purpose of my inspection being to complete an appraisal report estimating the current market value of said site as of February 20, 1996. This appraisal is made in accordance with the Uniform Standards of Professional ' Appraisal Practice as adopted by the Appraisal Standards Board. My analysis of all of the discoverable factors affecting the market value of the ' Fee Simple Interest of this property indicates that the market value as of February 20, 1996 was: ' ONE HUNDRED NINETY FIVE THOUSAND DOLLARS ($195,000) ' This transmittal letter is followed by the Certification of this appraisal and the narrative appraisal report further describing the subject property and containing the reasoning and the pertinent data leading to the above estimate of value. ' Your attention is directed to the "General Underlying Assumptions" and "Limiting Conditions" which are considered usual for this type of assignment. They have ' been included at the beginning of the report. ' Real Estate Services for Business Individual Membership, Society of Industrial & Office Realtors • Certified Commercial & Investment Membership • National Association of Realtors Ms. Lori Egland February 29, 1996 Page 2 This report consists of: This letter which identifies the property and summarizes the results of the investigation. • summary of facts about the property. • narrative section which contains the valuation study, the highest and best use discussion, and conclusion of value. Exhibits and addenda This appraisal conforms with the Uniform Standards of Professional Appraisal Practice as adopted by the Appraisal Standards Board. Enclosed are two copies of the report. Thank you for this opportunity to be of service. If you have any questions regarding any of the information, approaches to value, or conclusions contained in the report; I hope that you will call me. Respectfully submitted: N Ison L. Andrus, IFAS Minnesota Certified Federal General License #4000065 r Andrnc AaPnrv_ Tnv I � r i i i i i y CERTIFICATE OF APPRAISAL I Certify that, to the best of my knowledge and belief, the statements of fact contained ' in this report are true and correct. The appraised proposed property is identified as Lot 1, Block 2, Schneider Park in Chanhassen, Minnesota. The reported analyses, opinions, and conclusions limited only by the reported assumptions and limiting conditions are my personal, professional analyses, opinions, and conclusions. I have no present or contemplated interest in the subject property, and I have no personal interest or bias with respect to the parties involved. This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. My compensation is not contingent upon the reporting of a pre- determined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Uniform Standards of Professional Appraisal Practice, as well as the Code of Ethics and Standards of Professional Conduct of the National Association of Independent Fee Appraisers I certify that I am, based upon my experience and training, competent to estimate the value of the subject property . I have made a personal inspection of the property that is the subject of this report. No one provided significant professional assistance to me. I hold a Senior designation in the National Association of Independent Fee Appraisers. This organization has a mandatory program of continuing education for designated members. I am certified under this program through December 31, 1996. 1 have met all of the requirements of the continuing education program of the State of Minnesota as a Certified State /Federal General Appraiser. My license #4000065 expires August 31, 1996. I hereby certify that based upon the information available to me, the analysis of the data contained herein; and the plans given me, I have estimated the subject's market value assuming completion as of this date to be: $195,000 Z�Z� Date Nelson L. Andrus Certified Federal General License #4000065 A nrilrne A rsanou Tnr- I 9 TABLE OF CONTENTS Page General Underlying Assumptions ........................................ ..............................1 ExecutiveSummary ............................................................. ..............................4 Photographsof Property ...........:......................................... ..............................5 GeneralData ....................................................................... ..............................8 Important Definitions ........................................................... .............................10 Market Value Fee Simple Estate or Interest Leased Fee Estate Highest and Best Use Minnesota and the Metropolitan Area ................................ .............................12 AreaMaps .......................................................................... .............................18 Chanhassen and The Neighborhood ................................. .............................20 Property Description .......................................................... .............................23 Highestand Best Use ........................................................ .............................24 The Valuation Process ...................................................... .............................26 LandValue ......................................................................... .............................28 Conclusion......................................................................... .............................36 Exhibits............................................................................ ............................... 37 Plat Map Zoning Map Community Profile Growth Charts Appraiser's Qualifications Appraisal License Anrlrrnc AoPnev_ Tnr