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5. McGlynn Property, Feasibility Study for Audubon Rd r y L I CITY of ...5.2 I \ , ,.A CHANHASSEN 1 ` \ - _ 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 I (612) 937-1900 Argon by Cyv ,,e--.ri:tmtot' MEMORANDUM E^;L,7,,I - ITO: Don Ashworth, City Manager ``;0t,;;;----- —•..._ Date 2• :-.7,v r ..;ii ,-ter I FROM Gary Warren, City Engineer .lip./., DATE: June 23 , 1988 - II SUBJ: Authorize Feasibility Study for Audubon Road between Soo Line Railroad and State Trunk Highway 5 File No. PW138 II Attached is a letter request from McGlynn Bakeries requesting the initiation of a feasibility study for street and utility improve- !' along Audubon Road and the south entrance road to the McGlynn properties. With the recent completion of Paisley Park and the anticipated impact from McGlynn Bakeries and the recently II approved Audubon West subdivision along Soo Line Railroad, Audubon Road in this area needs to be upgraded to keep pace with the traffic demands and utility needs that this area willo- t generate. With the anticipated establishment of the tax incre- ment district also scheduled for final adoption at the June 27 , 1988 Council meeting , the funding mechanism is in place for I undertaking an evaluation of the needs in this area. The project cost estimate prepared by Engelhardt and Associates in February was approximately $625 ,000 . With McGlynn Bakeries I tentatively scheduled for occupancy June 15 , 1989, it is appropriate that the feasibility by authorized at this time. It is therefore recommended that a feasibility study be authorized I to evaluate the street and utility needs for Audubon Road from State Trunk Highway 5 to the Soo Line Railroad and that the engi- neering firm of William R. Engelhardt and Associates be designated to prepare this engineering study. Attachments I1. June 3 , 1988 correspondence from McGlynn Bakeries . 2. February 22 , 1988 City Council minutes. II 3 . February 19 , 1988 Memo from City Manager. 4 . February 4 , 1988 memo from City Engineer. I II I v CIS C a 3,., McGlynn Bakeries, Inc.® June 3, 1988 1 1 Mr. Gary Warren, City Engineer City of Chanhassen 690 Coulter Drive Chanhassen, MN 55317 Dear Mr. Warren, 1 In a recent meeting with Ms. Barbara Dacy, we discussed the status of the improvement of Audubon Road and its effect on the McGlynn Bakeries parcel . As you are aware, McGlynn Bakeries is in the process of finalizing our submittals for a new frozen products plant and corporate office on the south half of our property. We tentatively hope to occupy the new building by June 15, 1989. In order to meet this schedule, it is imperative that utility and road improvements be in place to support the new building. Therefore, I would like to officially request that the City of Chanhassen conduct a feasibility study of street and utility improvements along both Audubon Road and the southern entrance road to our site. Thank you for your attention to this matter. If McGlynn Bakeries can provide you with any additional information to expedite the process, please contact me. Sincerely, ' Michael J. McGlynn President CITY OF CHANHASSE bb ETHEM JUN 0 3 1988 I ENGINEERING DEPT. General Offices: 7752 Mitchell Road Eden Prairie, Minn 55344 Phone 612.937.9404 I I City Council- Meeting - February 22, 1988 ( ' d d I - 1 WATER QUALITY POLICY PLAN UPDATE, CITY PLANNER. IIBarbara Dacy: If you would like to make any comments on the four major issues or add or subtract anything, please feel free to do so. II Councilman Geving: I'm surprised that Chaska is not a member of this group. Is that correct? IIBarbara Dacy: That is correct. They have been coming to more meetings on this issue, on the sewer policy plan issue but they have not been contributing to Mr. Boland's expenses. ICouncilman Geving: The reason I ask that is I think I've seen them there. IMayor Hamilton moved, Councilman Horn seconded to accept the four items of the Metropolitan Council's Water Resources Management Chapter as outlined by the City Planner. All voted in favor and motion carried. II J AUDUBON ROAD RECONSTRUCTION, CITY ENGINEER. Iff� 1 3 'Z Don Ashworth: The major portion of the report is written by myself. I did have Gary do a cost estimate. In fact it was running late on Friday so my example uses $700,000.00 as a total cost figure and again, the actual cost is estimated at $625,000.00 from the engineer. The question becomes one of, will we be looking to improving Audubon Road and at what time frame? McGlynn Industries is interested in coming into Chanhassen. They're concerned with II that expenditure. They have seen the business park, in fact Mr. McGlynn was out over the weekend, I just learned that today, taking pictures of our existing business park. I think it's fair to say that they are very impressed with the existing business park and would hope that they'll be a good neighbor I to the community and again, locate in Chanhassen. Would like to see development standards set for their property similar to those that have been set in the Business Park itself. Of concern again to them, is Audubon Road I which previously was old County Road 17. It's a roadway that the County turned back to the City really leaving it in the condition that it was in advance of that turnback. Creation of tax increment districts are unpopular type of II things, especially in today's day and age but if there were a project that would rightly and justly fall into a tax increment district, it is this one. McGlynn's or other property owners that would purchase property or own property on either side of Audubon Road, do not directly benefit from that roadway. ILegally we could assess them and we could assess than to some viable 50°% or 75%. I think you would find it very difficult to sustain that assessment. However, if you did make that assessment, you would still have the remaining I 25% or 50o GO, which would have to come back against the citizens as a whole. What my analysis attempted to point out was that as being a part of a tax increment district, if it can be reduced to a 3 to 6 year period of time, we in fact will benefit all of our citizens by doing it as a tax increment district. I Now again, one of the underlying questions becomes one of the roadway itself and the necessity to do that work. Staff believes that the road functions as it is, that it could be brought up to a 9 ton standard but I think we're only IIfooling ourselves if within a 5 to 10 year period of time, we would be bringing II l,-i1'li_,J'`gyp• \ City Council Meeting - February 22, 1988 II it up to urban standards. I'm assuming Gary is ready for any additional comments regarding the costs. Mayor Hamilton: Urban standards, you mean by putting in curb and gutter? Don Ashworth: Curb and gutter, street lighting. ' Mayor Hamilton: How much would you widen it? Gary Warren: You'd probably be looking at a 44 foot section. ' Mayor Hamilton: How far south would we go? All the way down to CR 18? Gary Warren: Just to merge with the approach to the railroad, where it's just south of the Public Works property. Councilman Geving: That's an expensive piece for a short ways. Is it only about half a mile? Gary Warren: About 6/10th's of a mile. We're trying to be very generous with ' our costs. Mayor Hamilton: I know that I'm not too much inclined to want to create another TID but I know the State is considering eliminating them altogether before long because they don't like them at all but we do need, that road is in bad shape. Councilman Geving: We couldn't afford to do it any other way. The thing that bothers me is that, have you talked to McGlynn? Don Ashworth: Yes. Councilman Geving: Could this be a factor in whether or not they actually follow through and come to Chanhassen or not? Don Ashworth: They have been very good to work with. I think when they saw the total cost associated with bringing that road up, they were surprised themselves. They in no way said that that would make or break their decision but I think if we came back and said that we were going to assess that 75% or 100%, I think they would reassess their decision to come. I Councilman Geving: Let me ask you about the timing on there. Something I read about April was it? The TID, April 1? Don Ashworth: There is a piece of legislation in front of the legislature which would eliminate what has been a clause that allows construction within 3 months of the creation of a tax increment district. Right now you can capture that value. The State Law change would say, they're eliminating that so if you created a district, you would not capture any values for 18 months following the date that you adopted the district. Councilman Geving: On the other hand, if we created the district, let's say in March, chances are it's going to take a good year before we would have McGlynn in there or any other developer in there. You really wouldn't be talking about II • --,Olt City Council Meeting - February 22, 1988 1 q0-)‘3taxes generated until 1990 I would suspect. So the 18 months really doesn't hurt us. IIDon Ashworth: Except it's from the date of the issuance of the building permit. McGlynn does want to move along to the building � point where they would seek a II g permit in the June to July timeframe. June is preferably what they would like to work towards. Councilman Geving: I don't think we've got any choice personally. I think we II have to establish a district. Mayor Hamilton: I think for a couple of reasons. I stop and think of all the t things we did for Beddor and their whole development and that was all tax increment district and it's worked out really well. McGlynn is bringing over a part of their operation. I think if we made that road nice enough and showed II them we liked to work with them and we'd like them to be here, it's certainly a good opportunity to move the rest of their operation over here at some time. I certainly would like to accomplish that. I "Councilman Horn: Are there any other areas that staff would recommend to set up as a district or are just going to piecemeal this thing? It seems to me we should look at the whole issue. IICouncilman Geving: Can we bring it all the back to the new CR 17? Create a new district there because we're going to be expanding the industrial park, I IIwould hope, from where we're at all the way over to Audubon. "`- Don Ashworth: You could extend it all the way down to Lyman Blvd.,, yes. I Councilman Geving: I'm not thinking that far down. I was thinking just that narrow band along the road. From CR 17 west to Audubon. Almost where we would build a new road. The extension of Lake Drive East. IDon Ashworth: Actually, that is within tax increment district #1. Councilman Horn: I was thinking more specifically the area to include TH 101. I I'd like to look at all of these potential districts in one group if we could when we discuss this issue. II Don Ashworth: I don't know if you could establish a district. Have a parcel here. Normally the improvements go along with the parcels. I don't know if you could have the parcel from which you're collecting monies and then you're IIgoing to skip over a mile and make the expenditure. Councilman Horn: I'm not suggesting that. I'm saying, if we're I establish one district here, would there be other areas where we would want to establish districts. I'd like to see all of those proposals at once so we get a feel for them rather than just take them as they come. Let's look at the whole picture. ILCouncilman Geving: Don, would this be the district here? II I - 1:7 t.c. City Council Meeting - February 22, 1988 II L e,t* 4 Don Ashworth: I believe the parcel is this entire parcel, was it not Barbara? III So yes, that's the only section that had that. Councilman Geving: It's too bad in a way because don't you actually have as much adminstrative work in creating that 80 acres as you would if you were to expand for a much larger area? I don't know where the MUSA comes in there but II it seems to me we could come all the way south even though there are homes down there next to CR 18. Mayor Hamilton: That's outside the MUSA. I Don Ashworth: As far as the road improvement itself, it could be considered all the way down though. You just wouldn't have sanitary sewer. - II Mayor Hamilton: But why include it in the district then? Don Ashworth: Only to the extent that the Council would feel that this section II of Audubon is going to have to be upgraded at some point in time... Councilman Geving: We could pick up the cost. I Don Ashworth: One thing about a district and bringing the thing back, the City Council can always cut it back. The only concern I would have is that the I April 1 date is important. If the Attorney tells me I can't get everything done, if you ask us to do all of this, then I will give him guidance to just focus in on the one section he can get done. Mayor Hamilton: Bring it back next meeting. Don Ashworth: We will try to take and get it down as quickly as we can. The I legal notice section is what I'm worried about. Mayor Hamilton: I think you've got unanimous agreement. I POSITION CLASSIFICATION PLAN, FINALIZE 1988 REVIEW PROCESS. I r/ 74Don Ashworth: Typically the Mayor has met with myself at the end where we have completed the overall position classification process. I would anticipate that the Council wants to follow a similar procedure. If that's the case, we would II present this item then on our first meeting in March. Councilman Horn: Are you the only one who takes a shot at it? I Mayor Hamilton: No, everybody does. I write it up and go through it with Don and then if somebody wants to add or delete they can do that. II Councilman Geving: Is it your idea Tom that we would fill out these and give then to you? Mayor Hamilton: I think we've done that in the past. Usually fill one out and [!! I think everybody's gotten the one that I filled out and seen my comments on there. I 'f�J '0 yi , we' 1 I (. , CITY OF• 1 �\ f CHANHASSEN 1 f ,_„• ,.., 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 1 (612) 937-1900 MEMORANDUM ITO: Mayor and City Council IFROM: Don Ashworth, City Manager DATE: February 19, 1988 ISUBJ: Audubon Road Reconstruction, City Engineer I Audubon Road existed as County Road 17 during the early planning processes for developing Chanhassen Lakes Business Park (creating tax increment district number one) . The finalization of that I process included the County constructing new County Road 17 and turning back existing County Road 17 (Audubon Road) to the City. I Audubon Road currently exists as a 7-ton roadway with rural ditch sections . Audubon road could exist in its current condition for several years into the future (assumes that some form of overlay would be required to bring it up to a 9-ton standard) . The I question is when it will be brought up to urban standards and who will pay for such. That answer primarily rests with the amount of development which occurs on the west side of Audubon from I Highway 5 to the railroad track. With new street connections comes the necessity to build bypass lanes and right-in/right-out lanes . With no additional development, street lighting, street I signage, storm water drainage is not critical. Again, with the construction of new streets to the west, will come the necessity for these types of improvements . I McGlynn Bakeries is considering building their corporate head- quarters on the 80-acre parcel lying west of Audubon between Highway 5 and the railroad tracks . Staff has met with officials I of McGlynn and sincerely believes that they will be a tremendous asset to our community. They have not requested any form of assistance in locating in Chanhassen. Similarly, they have retained professional planners/architects to ensure that all Irequirements of the City are fully met. The question of when and how Audubon road will be brought up to I urban standards has been brought to the attention of McGlynn. They are impressed with the standards that have been set within the business park itself and would be desirious of seeing County 1 Road 17 brought up to the same standards . In fact, the appearance I fir ' , " Mayor and City Council February 19 , 1988 page 2 ' of Audubon Road as the primary roadway leading to the entrance for "McGlynn Business Park" (name established by staff rather than McGlynn) could be highly desirious in portraying the type of image that McGlynn desires to bring into our community. Managers of Prince' s studio would also welcome the upgrading of Audubon Road. As can be seen from the attached report from the City Engineer, the cost of upgrading Audubon approaches $700,000. Again, the question before us is when Audubon should be upgraded and who will pay. The question of paying for upgrading Audubon will be difficult. It could be paid as a future upgrade within our State Aid system. However, it is doubtful that funds would be available until the mid-1990 ' s . Audubon Road functions as a collector street. Accordingly, there is very minor benefit to properties on either side (both proper- ties to the west as well as existing easterly properties have interior road systems serving those developments) . Hypothetically, the roadway could be assessed at a 25 or 50% level leaving the remaining portion for general obligation or state aid. This project truly represents the type of project envisioned when ' tax-increment financing was authorized by the state legislature. Specifically, the project in question is one which only minorly benefits the abutting properties and, without considering it as a tax-increment district, could create significant financial hardship for the City. To understand this statement requires a bit of financial analysis as to which of the two options are better for the citizens of Chanhassen, i .e. 1) constructing Audubon Road as a public improvement project being approximately 50% assessed; or 2) carry out the construction as a tax-increment project. The financial analysis of each of these two options is as follows: 1 . Upgrade Audubon Road as a Public Improvement Project with 50% Assessments (Assessment Level Probably High) - this option assumes that McGlynn Bakeries does choose Chanhassen (maybe not a good assumption if one-half of 50% of the roadway is to be assessed against them) and that their initial construction would be approximately 150, 000 square feet. As this assumption has the upgrade being made as a public improvement project and not as a tax-increment project, the approximate $200 ,000 in taxes created by McGlynn would be shared by all taxpayers. The true cost of the improvement would then be as follows : ' 1 I M, s IMayor and City Council February 19 , 1988 Page 3 IConventional Taxing Net Benefit Cost of Net Gain to Chan Resident Improve meet (Loss) I Gross Taxes 200,000 Net Taxes (Less F.D.) 120,000 Dist. to School 60,000 20,000 I Dist. to County 35,000 8,500 Dist. to City 25,000 25,000 53,500 58,300 [5,000+] (50% Assess) (for 6 years) I87,500 [34,000] (25% Assess) (for 6 years) I2 . Analysis of Tax Implication if Project Completed Via Tax Increment - if the McGlynn property were established as a I tax-increment district and the tax increments collected for the first six years dedicated solely to paying the costs of upgrading Audubon Road, the following tax impli- cations would exist: ' If Project Financed by Tax Increments I Gross Taxes 200,000 Net Taxes 120,000 Avail. for T.I. 120,000 ICost of Project 700,000 6 years Increment 720,000 IAmount Remaining (Assess.) -0- ' NOTE: No interest shown as both General Obligation bonds and Tax Increment Bonds would have some interest rates and analysis made easier by using present values. II would like to discuss the above concepts with the Council further Monday evening. I should note that changes to the tax I increment statutes are being considered at the State Legislature. If the City were to desire including the McGlynn property into a new tax-increment district, our work would have to be completed I prior to April 1 of this year. Again, I would like to discuss this further with the Council Monday evening. I 166-60,_),, i I • CITY OF 1_, - .--, s , . \ 1 , CHANHASSEN ' 1 1 `` 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937-1900 1 MEMORANDUM TO: Don Ashworth, City Manager 1 FROM: Gary Warren, City Engineer 1 %% DATE: February 4 , 1988 SUBJ: Audubon Road Reconstruction 1 As you requested at the staff meeting, I have taken a very crude II look at reconstructing Audubon Road to a 44-foot wide full urban section with concrete curb and gutter and street lighting from the railroad bridge just south of Park Road, north to Trunk II Highway 5 (Arboretum Blvd. ) , approximately 8 ,800 feet. In 1988 dollars we estimate the cost to be $480 ,000 for construction. Allowing 30% for overhead and contingencies arrives at a total construction cost of roughly $625 ,000 . 1 According to the County, the existing road is a 3-inch bituminous mat having a 28-foot paved rural section with drainage ditches . II This surface is old and may have another 5 to 10 years of useful life left. As such, this cost estimate includes complete reconstruction of the roadway and some vertical alignment impro- IIvements which would be appropriate. Our estimate is based on constructing a 9-ton urban section with 12 inches of granular, 3 inches bituminous base and li inches of wearcourse. I trust this estimate will assist you in your consideration of a II tax increment district for this area. If I can be of further help, let me know. I 1 1 1 1 1