10. Audubon Road, Recon 10101 / 0
II CITY OF
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CHANHASSEN
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.--` _ -7-._ 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
1 (612) 937-1900
1 MEMORANDUM
TO: Mayor and City Council
1 FROM: Don Ashworth, City Manager
DATE: February 19, 1988
IISUBJ: Audubon Road Reconstruction, City Engineer
II 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
1 process included the County constructing new County Road 17 and
turning back existing County Road 17 (Audubon Road) to the City.
1 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
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Mayor and City Council
February 19 , 1988
page 2 I
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.- Mayor and City Council
February 19, 1988
I Page 3
IConventional Taxing Net Benefit Cost of Net Gain
to Chan Resident Improvement (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+]
I (50% Assess) (for 6 years)
87,500 [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
Cost of Project 700,000
6 years Increment 720,000
IAmount Remaining (Assess.) -0-
I 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.
I
I 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 .
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CITYOF
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CHANHASSEN
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690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937-1900
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MEMORANDUM
TO: Don Ashworth, City Manager
FROM: Gary Warren, City Engineer ,'
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DATE: February 4 , 1988
SUBJ: Audubon Road Reconstruction 1
As you requested at the staff meeting, I have taken a very crude
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
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.
According to the County, the existing road is a 3-inch bituminous
mat having a 28-foot paved rural section with drainage ditches .
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-
vements
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 11 inches of wearcourse.
I trust this estimate will assist you in your consideration of a
tax increment district for this area. If I can be of further
help, let me know. 1
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Background and Impact:
The amendment would eliminate the "windfall" paid to the tax
' increment district resulting from the referendum levy. The
1986 House School Aids Division analyzed TIF and school
financing and recommended the amendment. The amendment is
' effective for districts certified after April 1, 1988 .
Section 12.
Summary:
Subdivision 4 of Section 469 .177 is amended to eliminate the
' exclusion of prior planned improvements in the district' s
original assessed value. Under current law, improvements
which had been issued a building permit within three months
prior to district certification are excluded from the
' original assessed value.
Background and Impact:
' The Legislative Auditor found that rather than inducing
development, some districts were capturing development by
including planned development within a district. The
amendment would eliminate prior planned improvements from
being excluded from original assessed value.
' Section 13.
Summary:
' Subdivision 1 of Section 469 .179 relating to pre-1979
districts is amended to apply the Act to the pre-1979
districts under certain conditions . The amendment would
require a district to comply with the Act including the
preparation of a TIF plan if it' s project area is enlarged.
' Background and Impact:
The amendment is intended to curb the enlargement of project
area boundaries . The proposed language would permit
enlargement but cause the district to conform with the Act.
The district enlargements have been approved in several
cities. The amendment would be effective April 1 , 1988 .
Section 14.
' Summary:
The public debt law, Section 475 , is amended by this Section.
The definition of assessed value is changed to exclude
captured assessed value.
1/13/88 :COUNSEL SC5830-2
1 pursuant to section 369.033, subdivision. 5, with respect to
2 which the governing body has by resol.:t.on designated prooe:__es
3 for inclusion in the district prior to Aug.:st 1, 1973, except:
4 (1) as otherwise expressly provided in sections 469.174 to
5 469.178; or
6 (2) as an authority elects to proceed .pith an existing
7 district, under the provisions of sections 469.174 to 469.178;
8 or II 9 (3) that-arty-emiergements-of-the-geegrapnte-area-ef-en ,�
10 existing-tax-inerement-fireneing-distriet-sdbsegdent-te-Aegust
11 }7-i9?9;-shah-be-eeeempiished-in-aeeerdenee-with-and-shelf
12 sebjeet-the-preeerty-added-es-a-reedit-ef-the-eniergememt-te-the
13 terms-and-eenditiems-ef-seetiems-469T1?4-te-4698 as provided
14 in subdivision 2; or
15 (4) that-beg: ....:..g-with-taxes-payab:e-i.:-i999; section '
16 469.177, subdivision 3, clause (b) , shall apply to all
17 development districts created pursuant to Minnesota Statutes '
18 1978, chapter 472A, or any special law, prior to August 1, 1979.
19 Subd. 2. ;A??L:CAT:ON TO EX:ST:NG PROJECTS. ; The
20 provisions of sectic^s 469.174 to 463.173 apply to tax increment
21 financing projects established prior to Aucust 1, 1979, if the
22 geographic area of the project or district area is enlarged
23 after April 1, 1988. If any such district is enlarged, the
24 authority must prepare a tax increment financing plan covering
25 the entire district under section 469.175.
26 Sec. 14. Minnesota Statutes 1986, section 475.51, '
27 subdivision 5, is amended to read:
28 Subd. 5. "Assessed value" means the latest valuation for
29 purposes of taxation, as finally equalized, of all property
30 taxable within the municipality but not including captured
31 assessed value under section 469.174, subdivision 4, or any II 32 other law permitting collection of tax increments.
?'4)
33 Sec. 15. [EFFECTIVE DATE. ] II
34 Sections 1, 2, 3, 4, 6, paragraph (e), 9, 11, and 12 are
35 effective for districts certified after April 1, 1988. Sections
36 5, 8, 10, and 13 are effective April 1, 1988. The amendment to
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1 McGlynn Bakeries, Inc.®
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McGlynn B
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General Offices:
1 7752 Mitchell Road
Eden Prairie, Minn 55344
Phone 612.937.9404
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McGlynn Bakeries, Inc.®
THE COMPANY
McGlynn Bakeries was formed in 1919 by James T. McGlynn in Minneapolis,
Minresota. At the present time McGlynn Bakeries is structured into seven 1
divisions, they are:
Retail Bakeries
Cookie Shops
Retail Plant
Supply Division
DecoPac
A Taste of France
Betsy's Brownies
Our company headquarters is in Eden Prairie, Minnesota, a suburb of '
Minneapolis. We have approximately 160,000 square feet of manufacturing,
distribution and office space in our Eden Prairie facilities. We employ
about 900 people and have stores in five states. Sales for fiscal 1986
were $56 million, projected sales for 1987 are $68 million.
The principal officers of McGlynn Bakeries, Inc. are: '
Chairman Burton J. McGlynn
President Michael J. McGlynn
Vice President/Chief Financial Officer John R. Prichard
Vice President/A Taste of France Thomas F. Rains
Vice President/Procurement Daniel J. McGlynn
Vice President/Retail Stores Patrick D. Boedigheimer
Vice President/Marketing Michael F. McDaniel
The following pages will describe in detail each of the operating
divisions. For further information please call us at 1/800/MCGLYNN
(612/937/9404 in Minnesota) .
General Offices
7752 Mitchell Road
Eden Prairie, Minn 55344
Phone 612.937.9404
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McGlynn Bakeries, Inc.e
' RETAIL BAKERIES
Retail baking is the original segment of McGlynn Bakeries. We operate
in-store bakeries and bakery departments in over ninety stores including
Dayton's Department Stores, Target Stores, Applebaums Foods Stores,
Super Valu Stores, Rainbow Foods, and in major retail shopping centers.
We serve the metropolitan markets of Minneapolis/St. Paul and Milwaukee
' with our retail bakeries.
The majority of our stores are leased bakery departments inside someone
else's store where we pay percentage rent to our landlord, the owner of
' the store. Our retail bakeries offer a full line of traditional bakery
products such as bread, buns, dinner rolls, donuts, Danish, coffee cakes,
cookies, pies and cakes. Of particular emphasis in our stores is the
' attention we pay to decorated cakes and holiday promotional products.
All of our products in the retail bakeries division are marketed under
the name McGlynn Bakeries.
General Offices
7752 Mitchell Road
Eden Prairie, Minn 55344
Phone 612•937•9404
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COOKIE SHOPS
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We have two cookie shops which are both leased departments within I
Dayton's Department Stores. The shops sell a line of high quality
cookies using imported Lindt Swiss chocolate and other high quality
ingredients. The cookie dough is manufactured in our Eden Prairie II plant and shipped frozen to our stores for baking fresh on a daily
basis.
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General Offices: 7752 Mitchell Road • Eden Prairie, MN 55344 • 612.937.9404 • 1.800•MCGLYNN
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' McGlynn Bakeries, Inca
SUPPLY DIVISION
' Our Supply Division began as a central supply and distribution division
for cake decorations and custom printed packaging supplies in 1975. It
has been expanded to include every baking ingredient we use and all items
' for packaging, cleaning, and maintenance for our retail bakeries, COOKIES
shops, plants, and brownie stores. We stock over 1,500 items in our
Supply Division and employ a sophisticated purchasing, order entry,
inventory control , and invoicing computer system for reliable service and
efficient order handling, product reordering, and distribution. On an
annual basis, our shipments total over 50 million pounds of ingredients
and supplies.
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General Offices.
7752 Mitchell Road
Eden Prairie, Minn 55344
Phone 612.937.9404
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DECOPAC
DecoPac was created in 1983 as a direct result of McGlynn's retail
bakeries success in sustaining 25-30% of gross sales in decorated
cakes. This sales figure, in the light of national averages of
4-5% of annual sales in decorated cakes, highlights the effectiveness
of DecoPac's program for organizing and promoting decorated cake
sales at the retail level . "The Magic of Cakes" is our full-color
product display that promotes the complete DecoPac line of over 90
cakes to retail consumers and forms the centerpiece of our in-store c=
merchandising program. Pre-packaged DecoPac sets include all the
characters and items necessary to decorate six complete cakes.
Specializing in new products that capitalize on the media appeal of
popular Saturday morning children's television and emerging trends in
the toy industry, DecoPac planning puts us on the crest of marketplace
developments. In addition, DecoPac ensures the legality of its
product line of licensed characters as well as the popularity of its '
traditional characters and themes. Training materials, cake order
forms and a cake price list clipboard respond to the immediate needs
of cake decorators in combining quality cake decorating with effective
order processing at the in-store level . With our expansion into
direct marketing and telemarketing of DecoPac to retail bakers nation-
wide, DecoPac continues to offer the quality products and services
that have established it as an innovative leader in the cake decorating
supply industry.
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* Copyright 1986 McGlynn Bakeries, Inc.
Call toll-free for information
1-300-MCGUMN
7752 Mitchell Road, Eden Prairie. Minn. 55344
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' McGlynn Bakeries, Inc.®
EDEN PRAIRIE RETAIL PLANT
We manufacture in Eden Prairie our entire line of products for
distribution and wholesale sales to our COOKIES Shops and approximately
40% of our retail bakeries. Our Eden Prairie Retail Plant primarily
' produces our full line of products for distribution to approximately 60
of our retail bakeries in the Minneapolis/St. Paul metro area. Although
it is our most automated and largest plant, many of our production methods
are identical to the methods used in our retail on-premise bakeries and
most of our products are made from scratch.
The Eden Prairie Retail Plant also produces the frozen cookie dough for
' our COOKIES shops. The plant employs approximately 175 people and occupies
80,000 square feet of space.
General Offices
7752 Mitchell Road
Eden Prairie, Minn 55344
Phone 612.937.9404
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A TASTE OF FRANCE
A Taste of France manufactures frozen bakery foods for distribution to the
bakery and foodservice industries. The primary products manufactured are
frozen croissants (both pre-baked and unbaked frozen dough), Danish dough,
puff pastry dough, muffin batters, and cookie dough. The pre-baked
croissants are sold primarily through foodservice distributors to restaurants
and institutions. The frozen dough in an unbaked form is sold mainly to
bakery distributors and supermarket chains who thaw, proof, and then bake
the dough for sale to customers at retail . This division has seen explosive
growth since 1983 and has had a massive increase in production and freezing
capacity. The products are distributed nationwide and our present volume of
croissants alone exceeds 2 million pieces per week.
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General Offices: 7752 Mitchell Road • Eden Prairie, MN 55344 • 612.937.9404 • 1.800•MCGLYNN
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BETSY'S BROWNIES
Betsy's Brownies is one of the newest areas of the company's involvement.
' Betsy's Brownies specializes in high quality gourmet style brownies which
are prepared and baked on-site and sold fresh to the public in over twenty
varieties. The batter used for Betsy's Brownies is produced in our Frozen
Products Plant and shipped to the retail locations. The initial reaction to
the Betsy's Brownies concept and products has been excellent. We feel this
is due in large part to the high quality of the brownies which are made
using only the finest ingredients such as pure vanilla, butter, and chocolate
' liquor. Betsy's Brownies are located at St. Louis Union Station, The Grand
Avenue in Milwaukee, The Shops at Tabor Center in Denver, and Riverwalk in New
Orleans, all retail developments of The Rouse Company.
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' General Offices:
7752 Mitchell Road
Eden Prairie, Minnesota 55344
Phone 612•937.9404
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PRODUCTION AND MARKETING
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TOP 20: CAPITAL EXPENDITURES
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New plants account for higher spending levels
1985 1985
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1985 sales cap.ex. %of cap.ex. 1985 sales cap.ex. %of cap.ex.
Rank Company (millions) (millions) vs.sales Rank Company (millions) (millions) vs.sales
1.Borck's Country 11.American Bakeries
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f Home Bakery 80 33 41 Co. 454 16 4
2.Chas.Freihofer 12.Sunshine Biscuits 490 18 4
Baking Co. 100 16 16 13.Pepperidge Farms 211 8 4
3.Interbake Foods Ltd. 100 13 _ 13 14.Multi-Marques 215 _ _ _6 3
4.CFS Continental __101 12 _ _ 12 15.Arnold Foods Co. 242 . ',. 7 -' 3f' -' '
'5.McGlynn Bakeries 45 4.3 ` 9.5 16.Stroehmann Bros.
6.Heileman Inc., Co. 239 7 3
Bakery Division 175 14 8_ 17.Corporate Foods Ltd. 103 3 3 ._
7.Lance Inc. 337 16 . r 5 18.Frito Lay _350 9 3
8.Flowers Industries 557 24 4 19.Fuchs Baking Co. . 41 ,__. ' ;'
_- ' 1.3 ' ' 3
r 9.Tasty Baking Co. _150 - 8 --. ,_ 4 20.National Baking Co. 33 1 3
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10.Franklin Baking Co. 45 2 4
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TOP 20. SALES GAINS
Mid-size firms post
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greatest sales gains
1985 1984
sales sales 0/0 change
Rank Company (millions) (millions) 1984-85 I
1.Gai's Seattle French
Baking Co. 100 70 40
2.McGlynn Bakeries 45 35 28
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3.Chas.Freihofer
Baking Co. 100 80 25
4.Vie de France 46 38 21
5.McKee Baking Co. 210 175 20
6.Eastern Bakeries Ltd. 50 44 13
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7.Publix Super Markets 26' 23 13
8.Franklin
Baking Co. 45 40 12
9.Pepperidge Farms 211• 190 11
10.Arnold Foods Co. 242' 220 10 I
11.J.J.Nissen
Baking Co. 137' 125 10
12.Dad's Cookies Ltd. 22' 20 10
13.Mrs.Baird's Bakeries 110' 100 10
14.The Kroger Co. 359* 325 10 I
15.Waldensian Bakeries 35' 32 9
16.Kitchens of Sara Lee 405' 375 8
17.Keebler Co. 988 912 8
18.Rich Products 259 240 8
19.Drake Bakeries 130' 120 8
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20.American Bread Co. 30 28 - 7
'Estimated sales figure
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McGlynn Bakeries, Inc., 7752 Mitchell Road, Eden Prairie, MN 55344 612.937.9404 1.800•MCGLYNN
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