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2003 05 05 Agenda City Council Work Session Monday, May 5, 2003, 6:30 p.m. City Council Chambers, 7700 Market Boulevard 1. 6:30 p.m. - Interview Bethany Tjornhom for a position on the Planning Commission Agenda Economic Development Authority Meeting Monday, May 5, 2003, 7:00 p.m. City Council Chambers, 7700 Market Boulevard Consideration of Letter of Intent to Purc~ Lot 1, Block 1, Old Village Hall Addition for the Purpose of a Dairy Queen "Chill and Chill" Restaurant. Preliminary Discussion Regarding a Potential New Hofizom Day Care Development at the Former Apple Valley Red-E-Mix Site. 4. Consideration of Bowling Alley Redevel~~t Proposals. C1TYOF CHANHA EN 77O0 ~ PO BOx147 C~has.~n, MN 55317 Administration Phone: 952227.1100 Fax: 952.227.1110 Building Inspections Phone: 952227.1180 Fax: 952.227.1190 Englneedng Phone: 952.227.1160 Fax: 952.227.1170 Finance Phone: 952227.1140 Fax: 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax: 952.227.1110 Recn~on Center 2310 Coulter Boulevard Phone: 952.227.1400 Fax: 9,52.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Phone: 952.227.13~) Fax: 952.227,1310 Senior Center Phone: 952.227.1125 Fa~ 952.227.1110 Web Site www. ci.d'mhassea.mn.us FROM: DATE: Todd Gerhardt, Executive Director · Justin Miller, Assistant to the Executive Director'~V'f~fa/~ April 29, 2003 Dairy Queen "Grill and Chill" development proposal for Old Village Hall Addition, Lot 1, Block 1 As part of the downtown redevelopment process, and as part of acquiring right-of-way for the W. 78th Street and Great Hains Boulevard realiotmment, the. City acquired the parcels commonly known as the "Pony-Pauly-Pmymus" property. Uses on this land in the past have included a bar, bottle shop, and an office with second level apartment This land is next to Old SL Hubert's Church and Old Village Hall, which is currently being used by the Chanhassen Chamber of Commerce. Across the street is the Chanhassen Dinner Theater, and the Re-Max building is to the south. In January, 2003 this area was re-platted in order to create a developable piece of ~. A development proposal has been received by the City for a Dairy Queen '~rill and Chill" restaurant. This is a new concept for the Dairy Queen corporation, and features a more extensive menu than a typical Dairy Queen restaurant (copi~ of the sample menu are attached). Also attached is a purchase offer for the ~. Staff has not discussed the terms of this proposal with the developer because guidance is being sought regarding whether this is a use that the EDA would like to see on this site. In preliminary discussions with the developer, several key issues were ide~ that staff believed need~ to be acldx~. The, se issues are: Is this a use that the City wants w see on this site? · What are the thoughts regarding the proposed drive-thru? · Will the architecture be consistent with the historical nature of the area? RECOMMENDATION Due to the sensitive architecture and historic nature of the area, concerns regarding traffic flow, and general doubts regarding the appropriateness of a fast-food restaurant on this site, staff recommends that the letter of intent submitted by Frauenshuh Companies be rejected. Attachments · Location map · Letter of Intent to purchase · Sample menu · Recent article on "Grill and Chill" concept The City of Chanhassen · A growing community with clean lakes, quality schools, a channing downtown, tfldving businesses, winding trails, and beautiful parks. A gmat place to live, work, and play. I! ! .,~1 Iiii · th February 24, 2003 Mr. Justin J. Miller City of Chanhassen 7700 Market Boulevard Chanhassen, MN 55317 VIA EMAIL: jmiller@ ci. chanhassen.mn, us RE: Offer to Purchase Lot 1, Block I Old Village Hall Addition Chanhas~en, MN Dear Justin: Frauenshuh Hospitality Group of Minnesota, LLC is a Minnesota-based company engaged in the business of developing, owning, and operating restaurants for its own acoount, licensed by American Dairy Queen Corporation under the brand DQ® Grill & ChillTM DQ® Grill & ChillTM is a newly developed concept created by American Dairy Queen Corporation. After extensive research and development, the DQ~ Grill & ChilF~ concept began to be tested in Chattanooga, Tennessee in December 2001. This repooitioned concept provides a unique twist to the classic and highly recognized Dairy Queen® brand restaurant, which dates back to 1940. The restaurant has an exciting d6cor featuring unique architectural elements, extensive use of stone and tile, and warm earth-tone color schemes. The ambience of the restaurant is further enhanced by a comfortable vaded seating plan and features a gas fireplace in the dining area. The concept offers a new upscale menu featuring cooked-to-order burgers on freshly baked buttered buns, an extensive selection of cheeses, hot and cold condiments, an array of chicken sandwiches, fresh salads, and new food selections including freshly made quesadillas, grilled turkey sandwiches and Philly steak sandwiches. The menu is completed with chilled treats including Blizzard® Flavor Treats, cones, sundaes and other memorable Dairy Queen® treats. It blends the best of Dairy Queen® heritage with the moot modem innovation in quick-service food and design. The restaurant is approximately 3,900 square feet in size, seats 110+, features an open kitchen to 'see the flames and hear the sizzle", has a relaxing patio with seating and a'walk up wlndovV' dating back over 60 years. On behalf of Frauenshuh Hoopitality Group, LLC, we are pleased to submit the enclooed non- binding Offer to Purchase for your review and response. This letter ("Letter of Intent") shall constitute the general format of a proposal by DRF Holdings, LLC and/or assigns (as the 'Buyer"), to purchase from the City of Chanhassen (collectively as the 'Seller"), the above-referenced real property. This Letter of Intent is intended as an outline of the general provisions of a propooed transaction which, if clooed, would be based upon the following terms and conditions: 1. Property: Bu~,er is offering to purchase the property and all its improvements located as 401,402 and 431 W. 78"' Street in Chanhassen, Minnesota. The total estimated square footage is 1.25 acres. 2. Purchase Price: The purchase price shall be Four Hundred Fifty Thousand Dollars ($450,000), which equals $8.26 psf based on 1.25 acres. Such price shall be paid as follows: a. Eamest Money Deposit: Upon execution of the Purchase Agreement, Buyer shall deposit with Commercial Partners Title, LLC ('Escrow Agent") in cash Ten Thousand Dollars ($10,000.00) as Earnest Money. The Earnest Money shall be refundable to Buyer dudng the one hundred twenty (120) day due diligence pedod, if Buyer elects not to purchase the property for any reason. All Earnest Money, and any interest earned thereon, shall be applied and credited toward the Purchase Pdce; and b. Balance: The Purchase Price (less Earnest Money and interest) shall be due in cash on the Closing Date (as hereinafter defined). 3. Utilities: Seller will cause City to provide, at no expense to Buyer, adequate utility services to the pad. All SAC/WAC charges shall be the responsibility of Seller. 4. Review of Documents: Upon full execution of a Purchase Agreement, Seller shall deliver to Buyer the following documents and information within twenty (20) days after the date thereof. a. Legal description of the Real Property;, b. Title report prepared by Commercial Partners Title Company, along with underlying documents referenced or described therein; c. A current copy of the ALTA survey;, d. Current copy of the Property Tax Statement; and e. Any and all environmental, geotechnical and other related reports if available. ~ 5. Due Dilit:ience: The contemplated transaction will be subject, among other things, to Buyer determining, in its sole discretion, with one hundred twenty (120) days after the date of the Contract, that Buyer is satisfied with the results of the Due Diligence Investigation. 6. Subdivision & Plat: Seller will have the property subdivided and platted pdor to the end of the Due Diligence pedod. The property shall contain at minimum 1.25 acres. 7. Title Examination: On the Closing Date, Buyer shall receive a policy insuring Buyer's title on the current edition of ALTA Form B Owner's Policy, subject only to those matters disclosed by the preliminary title report and specifically approved by Buyer during the Due Diligence Period. 8. Purchase A!:ireement: Buyer and Seller shall negotiate and execute a definitive agreement (the 'Purchase Agreement') within twenty (20) business days of the execution of this Letter of Intent. Among other terms, said Purchase Agreement shall be non-contingent except that Buyer may terminate the Purchase Agreement for any reason during the one hundred twenty (120) day due diligence period. 9. Prorations and Costs: Seller shall pay (a) charges imposed bythe Title Company for issuance of its title insurance commi~nent; (b) state deed tax; (c) any costs associated with separating the parcel of record for tax purposes; and (d) any special assessments levied or pending against the property. Buyer shall pay the premium for the title insurance policy issued pumuant to the Title Company's commitment. All other costs and expenses will be allocated between Buyer and Seller in the manner customary in the pumhase and sale of commemial real estate in the State of Minnesota. 10. ClosinR Date: The transaction described herein and in the Purchase Agreement shall be closed within thirty (30) days after the due diligence pedod provided all governmental approvals have been obtained. 11. No Other NeRotiation: In recognition and consideration of the facts that Buyer will invest substantial money, time and effort in conducting the Due Diligence Investigations, in preparing and negotiating the Contract and in completing other necessary ancillary transactions related to the contemplated transaction. Seller agrees that (a) Seller will cause all discussions and negotiations with other pemons or entities, relating to the sale of the property or Seller's interest in it, to cease, and (b) Seller will not, directly or indirectly, solicit offem or negotiate, or permit any of Seller's representatives to solicit offers or negotiate with any other person or entity with respect to the sale of the Property or Seller's interest in it, so long as negotiations between Buyer and Seller are continuing. 12. Real Estate Commission: Seller agrees to pay Frauenshuh Companies a real estate commission equal to three percent (3%) of the purchase pdce. 13. Non-Bindinl:l Offer to Purchase: Only the Pumhase Agreement when fully executed by both Seller and Buyer shall constitute a binding and enforceable agreement obligating the Seller to sell and the Buyer to pumhase the Property. If the foregoing is acceptable, please execute of the Letter of Intent and retum it to the undersigned. Upon receipt, I will proceed with a Pumhase Agreement. Sincerely, Agreed & Acce~ Frauenahuh Companies By: Dean Williamson Dean Williamson Senior Vice President Date: itFC-6tPUBLICklatat4159tlDQ~dmw~ChanhassenWIiller - LOI. doc Classic 1.89 Classic w/Cheese 1.99 1/2 Pound~ w~ 3.59 Bacon Checsc 2.99 Mushroom Swiss 2.99 Bu l ld- Yo~,,..Owr~z,'g~ 3.49 Grilled Tutk~ 3.39 Philly Stink 3.59 Grilled Chick~ 3.29 Crispy Chicken 3.29 Southwestern Chick~ 3.49 Chick~ Caesar 4.89 House Salad .3.39 m' Grilled ~ 4.49 la Poundm'w/Chee~' .'.: "5.49'.. "~~'".. ' ' 1.~. -' · . . ~,~s,~..~ ",.~ .. '~..~:~~~' ~:~9-... .. . ... -. -... ..-...'- . . .. ?-.':'.. ..- :' ~~~~ . 3~9 ~~~-~ - ' - . . ~~ ~9 ' ~.'~'"' ..:' 2.v9 . . - . ~~~:~~- .' · .. ". . . . -. · . ~s~ ~ ' "' ' · .... - ~~ 2.~9- -. . - . - :.. . .---. ~.~ .-- -....:.:: .... .. - ~.: . .: .- .. . ~ ~ .. '...: :.. :'. ~a~ :'...-~ ~:,:.--~.-~,:-:~,_. ..... ... . - . . . ... . ._ . ~~"~~' ~.~:j - . -.. .... ............. F~F~.'.." :' 'l~-',~lz~9. 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'.W' .- '' '.. :...:.:-.:r~..:~,..r:¢~...~o-.~..~:-:':..)~< -[.:'- - ?:.?.,..v:'.."; ,-.*% . . ..: . ..~:~.'.:::~:~'.'?.'...)~...x.:.".:~c..~:..~ :.:.::':' .... '5:5: .. - -...: :~..'~...-:-:~:.'(?~:.::.~ ..... :-., Choose from a variety of -'. . icy cold sinfully delicious treats. ..." · . .. Bl~zana~Fl~vom: 2.19 2.49 2.99 Bu~rflngzre Bar Or, oe ~ ~~e~ ~e'~e p~ B~ ~ M~'~e P~ ~~ ~ Coho 129 1.49 1.69 Dippod Cone 1.49 1.69 1.89 Wafflo Con~ 1.99 - Clnssic Banana Split 2.99. ,.g/take & Ma/t Triple Fudgo Bmmna Split 3.19 ' F/avo~: Charry B~rry Bamma Split 3.! 9' Oux~o/a~ · P~mut ~ Parf~ 2.79 ' .Omrry ~ Em'Oh/ua~e 2.79 Hot Fudg~ Pcb:an Muda//d~e 2.79 Carame/Cr/me Ca~m 2.79 Cocoa Fudge~ '. 1,99.. 2,39.2.79 .. .. · . .. . -. . -. Hot ~ 1.39 1.59 1.99 RESTAURATOUR n a balm~ spring afternoon, the Dairy Qu~n Grill & Chill on Highway ~-53 in Chattanooga, Tenn., is ~ busy as an anthill at a picnic. ,i~ kinds of cus- tomers~enagers, families with c~3ff, dren, girls' soccer tea~tream into the store, onaermg bu''~'~''' ' rgers, hot dogs and, of course, ice cream. The restaurant opened in February, so by now most cus- tomers are used to the radically new look for the 63-year-old chain. It,s apparent, though, that some customers are seeing it for the first time. They do a double- take when they walk in, not expecting to see a spacious entryway, an employee rolling out dough for fresh-baked bread, or flame and smoke ris- ing from the grill in the display kitchen, much less upscale details like Corian counters and blond-wood accents. The restaurant, plus a sibling a few miles away, is the first from-scratch DQ Grill & Chill, designed to place the ice cream concept squarely in the food chain. %Ve wanted to keep our existing customers, expand our base and enter the food busi- ness in a dominant manner,~ says Chuck Chapman, execu- tive vice president of franchise development for Minneapolis- based International Dairy Queen. To that end, designer Jean- Pierre Lacroix of Toronto-based Shikatani Lacroix Brandesign was given three' mandates for the prototype: Make it casual, make it shout 'food,' and make it warm and inviting. The repositioning began in February 2001. Chapman and Lacroix took a team on a culi- CONCEPT DQ Grill & Chill LOCATION Chattanooga, Tenn. OWNERSHIP INI ...... II .......... International Dairy Queen, Minneapolis Feb. 12, 2002 DESIGNER IIHIIIIIIIINIIIIIM I Brandesign, Toronto AREA .......... 3,550 square feet SEATS ........ ii 82 inside, 32 patio EXPANSION PLANS ........ Iiiii ..... IIiiiIN~iIIiiIIiiHi 12 Grill & Chill.~ by year's end; systemwide rollout to begin in 2003 The Gfl'B & Ch'~s slate wah and wood floon add up to a look that's definite not fast food. Outside, a tal 'food' to Customers cannot see the drive-thru from the dining room. Red awnings and ceiling panels add a touch of color to the earth-toned space. Cool blue marks the ice aeam and treat section (above r.). Angled windows and red tile give the chive-thru window an old-fashioned look. This floor plan is designed to show the Im:ation of eoch key photograph. Shot numbers cmTespond with numbers in select photos. KEY m~a~Direction of shot -Shot No. "'"---rositio. of camera nary tour of the United States, visiting concepts both simihr to and wildly unlike Dairy Queen. Based on that tour, they came up with 33 potential ways to reposition the brand. Chapm~u says Grill & Chill triumphed because it~ an organic extension of Dairy Queen~ ~hot eats, cool treats" position. The words also work well together, with ~grill~ highlighting food (and harken- lng to the DQ Brazier concept of old) and ~chill" underscoring desserts. The challenge was to create a building that com- a blank shte: IDQ temporarily comm~rtdeered a 15- year-old fran~d outlet, then razed the building. Power of Pm'cep~ Outside, a massive fieldstone chimney is key to the food positioning. Even though there isnY a fireplace inside, the chimney sends a message of fi_re, and DQ Grill & Chill's inviting touches include large booths and warm textures. therefore food. A red mansard roof l~mmed with Apolic, art al~_~mirtlllll com- posite that changes to a copper hue when the sun hit~ it, also brings to mind images of fire and cooking. A landscaped patio with high-quality tables, chairs and ~mhrellas makes the building seem warm and inviting. So does the drive-thru. Slanted glass, red tiles and a bhck-and-white mural of a vintage Dairy Queen speak to the chain,s storied history. %Ve call it ~memory lane,'~ Chapman says. One trick of the design is that drive-thru customers can see the dining room, but cus- tomers inside cannot see them. This enhances the casual, stay-awhile atmosphere Dairy Queen strove to create, Chapman says. Scores of details contribute to that atmosphere. To start, when customers walk in, they see a menu board that,s frontlit, instead of backlit as are most fast-food menus. A display kitchen is hid out behind a broad Corian counter. Specious beeths enceurage guests to sit and linger over their meal. Retail cakes, which acceunt fer almut 7 percent of sales, now get their own chplay area. An open kitchen and front-lit menu board greet customers as they walk in. BREAKFAST Country Platter: scrambled eggs, hash browns, biscuits and choice of sausage, bacon or ham, $2.79 DQ BASKET DEAL Mushroom Swiss Grillburger with medium fries and drink, $4.99 HOT SANDWICH Grilled Turkey served on fresh-baked bread, $3.39 ENTREE Iiiiiiiiiiiiiii Vegetable Quesadilla served with fresh-baked bread, $2.99 ENTREE SALAD illlffllA ..... iIIMiillllllllll Chicken Caesar, $4.89 DESSERT ..... · ..... Triple Fudge Banana Split, $3.19 A colonnade of booths marches down the center of the dining room. The colon- nade will be repositiofled in future Gnll & (~ls to make more efficient use of the dining-room space. More termco than patio, the outdoor seating area underscores the restaurant's cosuol feeling. A look to the left reveals the ice cream counter with ~Chilled Temptations* written on a blue overhang. A red sign hangs above the hot-food counter, underscoring the Grill & Chill positioning. In the dining room, spadous booths with vinyl seam and moveable tables and chairs encourage guests to sit and linger over snacks or meals. Twelve-inch stone tiles cover the floor in highotra~c areas, while wood boards do in the dining room. ~rnited table service~ customers place their orders and are ~ by an employ~e~aJso adds to the comfort level h IBsfogt Hil The dining room is so inviting that drive° thru sales have dropped to 33 percent from 48 percent of total sales. Overall, the design has done its job of placing Dairy Queen in customers' minds as a place for food, not just ice cream. Food sales accounted for 30 percent of total sales before the redesign; that figure is now 58 percent. A few adjustments will be made as the concept is rolled out. A colonnade of booths, which now runs the length of the dining room, will be reposidoned to slice the room in half. That will make the room more intimate and easier for carryout cus- tomers to negotiate the space. A darker wood flooring will be used to further delin- eate the dining area. In the back of the house, the grill will be moved to accommodate a larger-than- expected demand for burgers and other grilled sandwiches. The fi_ne-tunings are OK with Chris Turk, a Da~'y Queen operator for six counties in Ohio, who stopped by the store while driving home ~rom Florida. "It~ awesome,* Turk says. ~It~ really pop- ping into a niche that~ not covered--fast- food casual. "I have a feeling thi.~ will push ~ Queen in a whole new direction." [] CITYOF CHANHAI EN PO Box147 Cl'mrlhassen, MN 55317 Administration Phone: 952.227.1100 Fax: 952~7.1110 Building Inspectlonc Pilot.. 952.227.1180 Fax: 952.227.1190 Engineering Phone: 952.227.1160 Fax:. 952.227.1170 Finance Phone: 952..227.1140 Fax: 952.227.1110 Park & Recreation Phone:. 952.227.1120 Fax: 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone: 952.22'/'.141~ Fax:. 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Ph~: 952.227.1~ Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web Site www. ci.chantmsm.mn.us ~ORANDUM TO: Todd Gerhardt, Executive Director FROM: Justin MiLler, Assistant to the Executive Director DATE: April 30, 2003 Development proposal for Apple Valley Red-E-Mix and Taco Shop Sites As part of the City' s redevelopment efforts, the land at the northwest earner of Highways 5 and 101 (immediately east of the pedestrian bridge) was purchased and the Red-E-Mix concrete plant and Chanhassen Taco Shop were relocamcb Since this time the property has remained vacant. The City has been approached by a developer to build a New Horizons Child and Elderly Daycare center at this location. New Horizons is currently doing business behind the new American Legion building, and needs to relocate due to the Park Nieollet clinic project. New Horizons would like to remain in Chanhassen, and believes that this location would be a potential site for their new facility. Negotiations between the developer and the City are in the very initial stages at thin point. While preliminary site drawings have been prep~ the developer has expressed that he is willing to modify the layouts, locations, and building materials to suit the City's needs. There is also a possibility that the senior daycare portion of the project could be replaced by an office building. The developer, Dick Allendorf, will be present at the meeting Monday night to answer any questions. RECOMMI~NDATION 1) Does the EDA want to see this property developed? Before either the developer or staff devotes too many reso~ to this project, we would like to receive direction on whether the EDA would like to see this ~ developed. 2) If the area is to be developed, staff would recommend that the following guidelines be in place: · Uses should be ones that have low traffic needs. · No retail, resta~ or automotive uses. · Along with a day care, prefened uses would be an office building (such as medical professional, insurance, rifle company, hotel, etc.). · Access to the site must come from W. 79" Street, with no additional · Lan~g should be of high imlxn-tance, with a goal to achieve a park- like setting. Attachments · Location map · Preliminary rendering/concept · Preliminary site layout · "Chanhassen Vision 2002: Focus on the Downtown", dated September 1994 The City of Chanhlssen · A growing community wilh clean lakes, quality schools, a cl'mmlino downtown, thrivlno businesses, winding balls, and beauUful parks. A gmat place to live, work, and play. ~V West 78th Street St. ~~ ''~ ' ~ o ~!.=:~ SSlUI CITYOF CHANH SEN 7700 Marlmt Boulevard ~ I~x 147 Cl~n, MN 55317 Admlnl~'atlon I~one: 952.227.1100 Far. 952.227.1110 Building Inspections Phone:. 952.227.1180 Fax: 952.227.1190 Engineering Phone: 952.227.1160 Fax: 952.227.1170 Finance Phone: 952.227.1140 Fac 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax: 952.227.1110 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Wo~ 1591 Park Road ~ooe: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web 81t~ www. ci.~.mn.us Todd Gerhardt, Executive Director FROM: DATE: RE: Justin Miller, Assistant to thc Executive Director ~,~/'' May 2, 2003 Bowling Alley Redevelopment Proposals BACKGROUND At the February 25th meeting, the Economic Development Authority considered five proposals for redevelopment of the bowling alley property. Of these five, three were selected for further review and development. The three finalists selected were Bloomberg Companies, Marcus Corporation, and Market Boulevard Development Group. The EDA directed staff to report back within 60 days with the purpose of selecting a developer to purchase and redevelop the site. Before the EDA tonight are updated proposals and further analysis of each. A comparison of each proposal is attached to this report. Since the last meeting, staff received the following changes to the proposals: Bloomberg Companies - Clayton Johnson Staff has met several times with the developer to fimher clarify their development plans. Of the three pwposals, theirs shows the most revisions, mostly due to the fact that the original proposal was lacking in many details the City wanted to see. Specifics of their proposal include an 8,000 sqtmm feet bank, 45,000 square feet of office and retail, 8,000 square feet of restaurant space, and 7,000 square feet for an expanded movie theater. There would be no additional screens added to thc current theater, but the owner intends to convert all eight screens to stadium seating, where only four screens currently have this seating. Competition from the new F_xtcn Prairie 16 screen theater has impacted thc Chanhassen Cinema's operations, and in order to make this local amenity viable, this expansion/renovation is necessaz3,. His original proposal did not include a purchase price, but Mr. Johnson has now offered $1,067,738 as a purchase price for the City-owned ~. Marcus Corporation - Mark Senn The original building size for a Gold's Gym was 36,000 square feel Thc proposed building size is now 40,000 square feel Also, a 6,400 square feet restatmmt has been added in thc northwest Comer to thc development concept. This proposal a~ to avoid encroaching onto the property owned by Bloomberg, but the building footprint does sit on existing parking easements which would need to be released, either through negotiated settlement or condemnation. In regards to purchase price, the original proposal stated that Marcus Corporation would pay $750,000. Mr. Senn has since stated that he is willing to pay what the City's holding costs are associated with the project to date. The City's holding costs to date near $1,100,000. The City of Chanhaaaen · A growing community wilh clean lakes, quality schools, a c~fmino downtown, lflriving businesses, winding trails, and beautiful parks. A gmat place to live, work, and play. Condemnation If the EDA decides to select a developer other than Bloomberg Companies, they would need to either negotiate the purchase of Bloomberg's properties, avoid encroaching on them, or enlist the City to use it's condemnation ability to acquire the properties. Legal counsel has estimated the following costs if condemnation would be needed: Appraisers fees Cost of appraisers to testify at trial Commissioner's cost for review and hearings Attorney's fees (hearings, depositions, trials) Cost to acquire land Total Condemnation Costs $10,000-$15,000 $12,000 - $15,000 $8,0O0 $20,000 - $30,00O $100,000 - $150,000 $142,000-$218,000 RECOMMENDATION After analyzing each proposal, staff believes that the plan submitted by Bloomberg Companies is the most beneficial to the community for the following reasons: · They will not have as many tifledeasement issues as the other propose. Since their proposal includes the other parties who have easement rights, they can negotiate thc release of such easements without the City having to get involved. Allows for expansion of the movie theater, which will enhance the viability of an amenity that is important to downtown. · Proposed tax generation is highest among the three. · Provides for a more complete use of the property. · Can lead to a more comprehensive development of the entire area. · Will not require the City to go through condemmafion. Staff recommends that the EDA direct staff to be~n negotiations with Bloomberg Companies for a purchase agreement and to report back to the EDA within 30 days. During this process, staff has looked for alternate locations for the Gold's Gym proposal. Staff would recommend that the EDA direct staff to continue this process and to work with Marcus Corporation and Gold's Gym to find a suitable location in the City for such a facility. Condemnation If the EDA decides to select a developer other than Bloomberg Companies, they would need to either negotiate the purchase of Bloomberg's properties, avoid encroaching on them, or enlist the City to use it's condemnation ability to acq~ the properties. Legal counsel has estimated the following costs ff condemnation would be needed: Appraisers fees Cost of appraisers to testify at trial Commissioner's cost for review and hearings Attorney's fees (hearings, depositions, trials) Cost to acq~ land Total Condemnation Costs $10,000-$15,000 $12,000 - $15,000 $8,000 $20,000 - $30,000 $100,000 - $150,000 $142,000 - $218,000 RECOMMENDATION After analyzing each proposal, staff believes that the plan submi~ by Bloomberg Companies is the most beneficial to the community for the following reasons: · They will not have as many rifle/easement issues as the other proposals. Since their proposal includes the other parties who have easement rights, they can negotiate the release of such easements without the City having to get involved. · Allows for expansion of the movie theater, which will enhance the viability of an amenity that is important to downtown. · Proposed tax generation is highest among the three. · Provides for a more complete use of the property. · Can lead to a more comprehensive development of the entire area. · Will not require the City to go through condemnation. Staff recommends that the EDA direct staff to begin negotiations with Bloomberg Companies for a purchase agreement and to report back to the EDA within 30 days. Staff would also recommend that the EDA direct staff to work with Marcus Corporation and Gold's Gym to find a suitable location in the City for such a facility. Attachments: Side-by-Side Comparisons Estimated Tax Generation Easement Maps West 78th Street SUites City Property ~City Property City Property Twin Cities &Westem Railroad ~/oomberg ,O, rO, Oe~ /J/lap West 78th Street CC)un: SUites City PrOperty Metro Easement City Property Twin Cities &Westem Railroad (i.. '\i'.' , :Ocl .I I- UJ ' ' '~"'~"~~:~"'~'~I'vlARKET BOULEVARD rn Z 0 -I rTl '1' Z ~~o ~+ 0 Q.. ii · ii '1- 0 0 ' ~ _ 'o 03 -~r~ ~ , ~ iI ill DODO L ! I i · .j ,