2003 05 27 Agenda
Economic Development Authority Meeting
Tuesday, May 27, 2003, Following the
Regular City Council Meeting (Approximately 8:00 p.m.)
City Council Chambers, 7700 Market Boulevard
le
Consider Approval of Purchase Agreement, Bowling Alley Property,
Bloomberg Companies.
2. Consider RFP for Red-E-Mix Site.
3. Approval of May 5, 2003 Minutes.
CITYOF
CI t gl
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 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
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
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MEMORANDUM
TO:
FROM:
DATE:
RE:
Todd Gerhardt, Executive Director
Justin Miller, Assistant to the Executive Directoro~
May 22, 2003
Bowling Alley Purchase Agreement with Bloomberg Companies
BACKGROUND
At the May 5th Economic Development Authority meeting, the Bloomberg
Companies were selected as the redeveloper of the bowling alley site. Since this
time, staff and legal counsel have negotiated a purchase agreement with
Bloomberg and are presenting it for the EDA's approval. Highlights of the
purchase agreement are:
· Section 2.1
· Section 2.1.1
· Section 4.1
· Section 6.1
· Section 7.3
· Section 7.7
· Section 7.8
The purchase price is $1,150,000
Bloomberg will deposit $10,000 in earnest money, which
will be applied to the purchase price at the time of closing.
Final sale of the property (the closing) is anticipated to be
no later than November 14, 2003. This deadline can be
extended by 30 days if all contingencies are not met by
November 14th provided that the buyer (Bloomberg) is
"diligently pursuing" the satisfaction of required actions.
Contracts for environmental testing by Bloomberg must be
entered into within 20 days of the signing of the purchase
agreement (costs to be paid by Bloomberg), and must
notify the City no later than August 1st if they are not
satisfied with the findings of the testing. If Bloomberg
does not notify the City of any problems by August 1st, they
will have waived their right to object to the environmental
conditions.
Site plan approval of the redevelopment project must be
gained by September 30th. This includes planning
commission review and City Council/EDA approvals. In
order for this timeline to occur, staff will need to work
diligently with the developer and planning commission.
Several planning commission meetings will be required for
such approvals.
Lease or occupancy agreements with prospective tenants
must be entered into by September 30th.
Bloomberg must have an agreement with Chanhassen
Cinema by August 1st as to the arrangements for demolition
of the existing bowling alley and reconstruction of the
partywall between the two buildings.
The City of Chanhassen o A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
· Section 7.9
· Section 7.9
· Section 11.1
An agreement must be reached with Southwest Metro Park
and Ride by August 1st for the termination of its easement
on the bowling alley property and relocation onto property
owned by Bloomberg.
Bloomberg will provide bi-weekly reports as to the status
of all requirements stipulated in the purchase agreement.
These status reports will be shared with the EDA members.
The developer will pay all fees normally associated with
new developments, except sewer and water area charges
(SAC and WAC) that have already been paid for the
property. Staff estimates that these fees total roughly
$136,000. These fees were paid with the original
development of the property.
RECOMMENDATION
Staff recommends that the EDA approve the attached purchase agreement with
Bloomberg Companies and direct staff to immediately begin work in regards to
the site plan approval process.
Attachment
Bowling Alley Purchase Agreement
5.22.03
REAL ESTATE PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") made and entered into this day of May,
2003, by and between Bloomberg Companies Incorporated, a Minnesota corporation, whose
address is 525 West 78th Street, Chanhassen, Minnesota 55317, or its permitted assigns (referred
to herein as the "Buyer"), and the ECONOMIC DEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF CHANHASSEN, a public body corporate and politic under the laws of
the State of Minnesota, with offices at 7700 Market Boulevard, P.O. Box 147, Chanhassen,
Minnesota 55317 (referred to herein as the "Seller").
IN CONSIDERATION of the mutual covenants and agreements herein, it is hereby
mutually agreed by Seller and Buyer as follows:
SECTION 1.
SALE AND PURCHASE OF LAND
AND GRANT OF EASEMENTS
1.1) Seller shall sell to Buyer and Buyer shall purchase from Seller, upon the terms
and conditions hereof, the following property and all buildings and other improvements thereon
("Buildings") (all collectively referred to as the "Subject Property"):
1.1.1) The land in Carver County, Minnesota, legally described as follows:
Lot Two (2), Block One (1), Chanhassen Mall, according to the plat
thereof now on file and of record in the Office of the County Recorder,
Carver County, Minnesota and Outlots A, B and C, Easy Rider Addition,
according to the plat thereof on file and of record in the office of the
County Recorder, Carver County, Minnesota.
1.1.2) It is intended that the Subject Property be conveyed as one
contiguous parcel, therefore, Seller agrees to execute and deliver to Buyer
at Closing, a quit-claim deed, if necessary, to convey any gaps that may
exist as disclosed by title or survey examination.
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SECTION 2.
PURCHASE PRICE
2.1) The purchase price for the Subject Property (the "Purchase Price") shall be One
Million One Hundred Fifty Thousand and 00/100 Dollars ($1,150,000.00) and shall be payable
by Buyer to Seller as follows:
2.1.1) Ten Thousand Dollars ($10,000.00) earnest money ("Earnest Money"), to
be deposited with the Title Company, defined in Section 3.1. The Earnest Money shall
be distributed to Seller (i) at the time of closing and applied against the Purchase Price, or
(ii) as liquidated damages and as Seller's sole remedy, in the event the Seller performs all
of its obligations under this Agreement and Buyer fails to close as required in this
Agreement. The Earnest Money shall be returned to the Buyer in the event of (i) refusal
of the Seller to perform its obligations under this Agreement, or (ii) Buyer's termination
of this Agreement as hereinafter set forth. Buyer's sole remedy if Seller refuses to
perform its obligations shall be to have the Earnest Money returned.
2.1.2) The balance of the Purchase Price shall be paid in cash on the date of
closing.
SECTION 3.
TITLE MATTERS
3.1) Seller shall, at Seller's expense, caused to be furnished to Buyer within twenty
(20) days after execution hereof by Seller a current commitment for the issuance of an ALTA
Form 1992 B owner's policy of title insurance (the "Commitment") issued by First American
Title Insurance Company by its agent Universal Title Company ("Title Company") in the amount
of the Purchase Price committing to insure that Buyer will have good and marketable title to the
Subject Property subject only to the easements, declarations, restrictions and covenants
acceptable to Buyer. Buyer shall, at Buyer's expense, and within thirty (30) days after execution
of this agreement by Seller, obtain an updated survey of the Subject Property prepared by a
registered land surveyor prepared and certified to meet the Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys as adopted by ALTA/ACSM and NSPS in
1999 for an urban survey that includes items 1-4, 6-11 and 13-16 of Table A thereof and such
other information and containing such other matters as Buyer may reasonably request ("Buyer's
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Survey"). Seller hereby discloses that title to the Subject Property is currently subject to the
following:
(a) Declaration of Covenants, Conditions, Restrictions and Easements and Partywall
Agreement dated May 1, 1985, recorded May 13, 1985 as Doc. No. 71070, as amended on June
26, 1985 and December 1, 1989 ("Covenants");
(b) Partywall Agreement dated July 18, 1997, recorded July 24, 1997 as Doc. No.
213637 ("Partywall Agreement");
(c) Easement Declaration for Parking and Access, dated July 18, 1997, recorded July
24, 1997 as Doc. No. 213628 ("Parking and Access Easement");
(d) Power Line Easement in favor of Northern States Power Company as contained in
the instrument dated January 3, 1968, recorded January 3, 1968 as Doc. No. 3185 ("Power Line
Easement");
(e) Easement Agreement dated June 11, 1970, recorded June 12, 1970 as Doc. No.
9295 ("Road Easement Agreement");
(f) Easement for street and utility purposes in favor of the City of Chanhassen as
contained in the instrument dated August 26, 1976, recorded August 30, 1976 as Doc. No. 30098
("Street Easement");
(g) Conditional Use Permit by the City of Chanhassen dated April 15, 1985, recorded
July 16, 1985 as Doc. No. 72186 ("CLIP");
Copies of all of the recorded documents set forth above are attached hereto as Exhibits B through
H. Buyer shall have thirty (30) days after receipt of the Commitment and Buyer's Survey to
make any objections to the matters disclosed in the Commitment including, but not limited to
those matters listed in items (a) through (g) above, but in no event shall such objections be made
later than July 15, 2003. Such objections to be made in writing or deemed to be waived.
3.2) If Buyer objects to any item contained in the Commitment or Survey or if any title
matters arise after the Effective Date of the Commitment, the Seller shall use reasonable efforts
to resolve the objections on or before the Contingency Date, hereinafter defined.
Notwithstanding the foregoing, Buyer acknowledges that Seller is in the process of creating
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additional restrictions on the use of the Subject Property to provide that the Subject Property may
not be used for the following purposes: liquor stores, automotive sales or fast food restaurants
i.e. drive through. Although Buyer may object to any of these new restrictions, which objections
may be grounds for Buyer's termination of this Agreement, Seller shall not be obligated to
remove the new restrictions. With regard to any title objections, other than those involving the
payment of money, if the Seller fails to remove the same within the time required herein, the
Buyer may either terminate this Agreement and receive a refund of the Earnest Money or waive
the objection and proceed to Closing. If the title objection involves the payment of money, if
Seller fails to cure the objection by the Closing Date, Buyer may, in addition to any other rights
available to Buyer, cure the objection by paying the amount necessary and receiving a
corresponding reduction in the Purchase Price.
3.3) Seller has provided Buyer with a copy of the Survey prepared by Otto Associates
dated August 1, 2002, and the Phase I Environmental Assessment prepared by Nova
Environmental Services dated September 9, 1996, ("Nova Environmental Assessment"). Seller
shall also furnish to Buyer a copy of any other surveys and environmental assessments of the
Subject Property that Seller has in its possession within fifteen (15) days after the execution of
this Agreement by Seller.
SECTION 4.
CLOSING
4.1) The closing (the "Closing") shall be at a location designated by Seller, and shall
occur on or before November 14, 2003 ("Closing Date"). Notwithstanding any other provision
herein to the contrary, Buyer may extend the Contingency Date (hereinafter defined), any other
dates specified in Section 7 for satisfaction of a specific contingency, and, if necessary, the
Closing Date an additional thirty (30) days if any of the contingencies set forth in Section 7
(Buyer's Contingencies) and other conditions set forth in Sections 8, 9 and 10 have not been
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satisfied, provided Buyer is diligently pursuing the satisfaction thereof. However, if the
contingencies and conditions are not satisfied (or waived by Buyer) by the 14th day of
December, 2003, Buyer may cancel this Agreement by giving Seller written notice of
cancellation. If Buyer fails to terminate this Agreement or close the transaction by December 15,
2003, Seller may cancel this Agreement in accordance with Minnesota Statutes Section 559.21.
In the event of such cancellation by either Seller or Buyer, the Earnest Money shall be returned
promptly to Buyer and neither party shall have any further rights under this Agreement.
4.2) On the Closing Date, Seller shall deliver to Buyer possession of the Subject
Property and Building "as is".
4.3) On the Closing Date, Seller shall execute and deliver to Buyer:
4.3.1) A duly executed warranty deed, subject only to the title matters listed in
the Commitment that are consented to by Buyer and subject to the right of reversion held
by Seller under Minnesota Statutes, Section 469.105(5) and the covenants running with
the Subject Property pursuant to Minnesota Statutes Section 469.090 - 469.1081; and
4.3.2) A customary affidavit that there are no unsatisfied judgments of record, no
actions pending in any state or federal courts, no tax liens, and no bankruptcy proceeding
filed against Seller, and no labor or materials have been furnished to the Subject Property
for which payment has not been made, and that there are no unrecorded interests relating
to the Subject Property.
4.3.3) The quit-claim deed described in Section 1.1.2 hereof; if applicable;
4.3.4) Documents evidencing compliance with Minnesota Statutes Section
469.090 - 469.1081.
4.4) Seller shall pay at Closing all general real estate taxes levied against the Subject
Property due and payable for all years prior to the year of Closing, together with the unpaid
balance of levied and pending special assessments due in the year of Closing and all years prior
to the year of Closing. Seller and Buyer shall prorate general real estate taxes due and payable in
the year of Closing. Buyer shall be responsible for payment of all assessments levied against the
Subject Property in all years subsequent to the year of Closing. Such assessments may include,
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but are not limited to, assessments associated with Buyer's anticipated development of the
Subject Property. Buyer shall pay for all general real estate taxes due and payable in years
subsequent to the year of Closing.
4.5) Seller shall pay at Closing:
4.5.1) state deed tax;
4.5.2) all costs associated with obtaining a title insurance commitment, including
name searches, tax searches, bankruptcy searches, and property inspection fees;
4.5.3) recording fees and state deed tax for corrective instruments required to
remove encumbrances and place marketable title in Buyer's name;
4.5.4) one-half of the Closing fee charged by the Title Company; and
4.6) Buyer shall pay at Closing:
4.6.1) all recording fees and charges relating to the filing of the deed;
4.6.2) title insurance fees and premiums;
4.6.3) one-half of the Closing fee charged by the Title Company;
SECTION 5.
COVENANTS, REPRESENTATIONS, AND WARRANTIES OF SELLER
5.1) Seller, as an inducement to Buyer to enter into this Agreement, and as part of the
consideration therefor, represents, warrants, and covenants with Buyer and its successors and
assigns that:
5.1.1) There are no leases, options, purchase agreements, fights to redeem,
tenancy agreements, written or verbal, and no person or party has, or will have any fights
of adverse possession, regarding the Subject Property except as set forth in Section 3.1
(a) through (g);
5.1.2) Seller will maintain in force insurance against public liability from such
risk and to such limits as in accordance with prudent business practice and suitable to the
Subject Property from the date hereof to the Closing Date;
5.1.3) Except as indicated in the Nova Environmental Assessment, to the best
knowledge of Seller, no entity or person has, at any time:
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i)
"released" or actively or passively consented to the "release" or
"threatened release" of any Hazardous Substance (as defined
below) from any "facility" or "vessel" located on or used in
connection with the Subject Property or adjacent tracts; or
ii)
taken any action in "response" to a "release" in connection with the
Subject Property or adjacent tracts; or
iii)
otherwise engaged in any activity or omitted to take any action
which could subject Seller or Buyer to claims for intentional or
negligent torts, strict or absolute liability, either pursuant to statute
or common law, in connection with Hazardous Substances (as
defined below) located in or on the Subject Property or adjacent
tracts, including the generating, transporting, treating, storage, or
manufacture of any Hazardous Substance (as defined below). The
terms set within quotation marks above shall have the meaning
given to them in the Comprehensive Environmental Response and
Liability Act, 42 U.S.C. Sec. 9601 et seq., as amended
CCERCLA") and any state environmental laws.
5.1.4) Seller, or any other person or entity, has not, at any time, ever installed,
used, or removed any underground storage tank on or in connection with the Subject
Property; and
5.1.5) There are no wells located upon the Subject Property.
5.1.6) Seller has the present full authority and power to execute this Agreement
and to close the sale and convey the Subject Property in accordance with this Agreement.
5.1.7) Seller represents that it is aware of asbestos on the Subject Property but it
has not done a survey thereof to determine the amount thereof.
5.2) The covenants, representations, and warranties contained in Section 5 shall be
deemed to benefit Buyer and its successors and assigns and shall survive any termination or
expiration of this Purchase Agreement or the giving of the Deed. All of Seller's covenants,
representations and warranties in this Agreement shall be true as of the date hereof and of the
Closing Date, and shall be a condition precedent to the performance of Buyer's obligations
hereunder. Subject to the liability limits set forth in Minn. Stat. Chapter 466, Seller indemnifies
Buyer from any breaches of the covenants, warranties and representations set forth in this
Section 5. If Buyer discovers that any such covenant, representation, or warranty is not true,
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Buyer may elect prior to Closing, in addition to and without waiver of any of its other rights and
remedies, to cancel this Agreement, or Buyer may postpone the Closing Date up to ninety (90)
days to allow time for correction, and if not corrected within such time, Buyer may cancel this
Agreement or proceed to Closing.
SECTION 6.
ENVIRONMENTAL/SOIL INVESTIGATION AND TESTING
6.1) Buyer and its agents shall have the right, at the sole option of Buyer and at
Buyer's cost and expense, to enter upon the Subject Property without charge and at all reasonable
times from the date of the execution of this Agreement to perform such inspections of the
Building, environmental investigation and soil tests as Buyer may reasonably deem appropriate.
If Buyer investigates and tests the Subject Property pursuant to this section, Buyer shall pay all
costs and expenses of such investigation and testing and shall hold Seller harmless from all costs
and liabilities arising out of Buyer's activities provided, however, that Buyer's indemnification
obligation under this Section 6 shall not obligate Buyer to remediate any environmental
condition identified on the Subject Property through Buyer's activities or pay the cost of any
remediation of such environmental conditions. If the purchase and sale contemplated by this
Agreement is not closed, Buyer shall, at its own expense, return the Subject Property to
substantially the same condition as existed prior to Buyer's entry. Buyer shall contract for any
inspections of the Building, environmental investigations and soil tests within twenty (20)
business days after the date of execution of the Agreement by the Seller and shall complete all
inspections and testing and inform Seller in writing by August 1, 2003 if Buyer is not satisfied,
in its sole discretion, with the results of the inspections, environmental investigation and/or soil
test and elects to terminate this Agreement. If Buyer does not object to the Building's condition,
environmental condition of the Subject Property or the soil condition by August 1, 2003, Buyer
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will be deemed to have waived its right to object thereto. If Buyer terminates this Agreement in
accordance herewith, Buyer shall be entitled to a full refund of the Earnest Money.
SECTION 7.
BUYER'S CONTINGENCIES
The obligations of Buyer under this Agreement are contingent upon satisfaction of each
of the following on or before September 30, 2003, (the "Contingency Date") unless a different
date is specified below:
7.1) Buyer being satisfied with all matters disclosed on Buyer's Survey.
7.2) Buyer determining that it is satisfied with title to the Subject Property and the title
insurance to be issued in accordance with the Commitment.
7.3) Buyer's proposed use and development of the Subject Property shall have been
approved by the City of Chanhassen. All costs associated with obtaining of the approval by the
City of Chanhassen shall be paid by the Buyer.
7.4) Buyer shall have obtained all necessary governmental or quasi-governmental
permits, licenses and approvals for the development of the Property, including without
limitation, PUD, site-plan and plat approval.
7.5) Buyer shall have determined that utility services, surface water disposal and/or
drainage required for the Improvements are currently available in a size and capacity reasonably
acceptable to Buyer and Buyer shall have completed any traffic studies that may be required by
the City of Chanhassen or any other governmental authority.
7.6) Buyer shall have determined that reasonable ingress, egress and adequate parking
are available to the Subject Property and whether or not the terms, covenants and conditions of
the Covenants, Road Easement Agreement, Street Easement and the Parking and Access
Easement Agreement are acceptable to the Buyer or that the foregoing have been amended or
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modified in a form and substance acceptable to Buyer or the same have been or will be
terminated prior to the Closing.
7.7) Buyer shall have entered into such other agreements as Buyer deems necessary to
develop the Subject Property, including, without limitation, leases or occupancy agreements with
prospective tenants of the Subject Property.
7.8) Buyer has determined that Buyer can demolish the Building as provided in
Section 9 hereof, has the agreement of the Owner and Tenant of Lot 1, Block 1, Frontier Cinema
Addition for such work and provides Seller with a mutual letter of intent for such agreement by
August 1, 2003, to be followed by a fully signed, recordable agreement prior to Closing.
7.9) Buyer shall have entered into an Agreement with Southwest Metro Transit for the
termination of its easement on the Subject Property and relocation to property owned by
Bloomberg Companies Incorporated and provides Seller with a mutual letter of intent for such
agreement by August 1, 2003, to be followed by a fully signed, recordable agreement prior to
Closing.
Buyer shall, by no later than August 1, 2003, at Buyer's sole cost and expense, provide
evidence that it has applied to the City of Chanhassen for approval of the Planned Unit
Development and re-platting necessary to redevelop the Subject Property in accordance with the
Concept Plan approved by Seller on May 5, 2003. Buyer shall use commercially reasonable
efforts to satisfy all Buyer's contingencies and all conditions to Closing as soon as possible.
Buyer agrees to report to Seller on a bi-weekly basis of its progress in satisfying all
contingencies, including, without limitation, its progress in securing tenants, completing its tests
and investigations, completing Buyer's Survey, the status of any studies required to be
performed, the status of site plan preparations and financing. Buyer also agrees to notify Seller
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as soon as possible if Buyer determines that any of Buyer's contingencies cannot be satisfied
and, as a result, Buyer elects to terminate this Agreement.
If any of the contingencies have not been satisfied on or before the Contingency Date or
on such other dates specified above for satisfaction of any contingency, the Buyer may, at
Buyer's option, either terminate this Agreement by giving written notice to Seller on or before
the Closing Date or Buyer may extend the period of time for the satisfaction of the contingencies
set forth above for any additional period of thirty (30) days by giving written notice to the Seller
on or before the Contingency Date or such other dates specified above for satisfaction of any
contingency. If Buyer elects to terminate this Agreement, neither party shall have any further
rights or obligations under this Agreement, except those expressly designated as surviving
termination, and the Earnest Money shall be returned to Buyer and the Buyer shall execute and
deliver to Seller a Quit Claim Deed at the time of the delivery of the Earnest Money, which Quit
Claim Deed shall memorialize the termination of this Agreement but without waiver of
obligations that survive termination.
SECTION 8.
INGRESS, EGRESS AND PARKING
8.1) Buyer and Seller acknowledge and agree that the current ingress and egress and
parking on the Subject Property, needs to be reconfigured and that it will be necessary to obtain
the consent of the other parties who currently have interest therein for ingress, egress and parking
including but not limited to Southwest Metro Transit Commission, the current owners of Lots 1
and 2, Block 1, Frontier Cinema Addition and City of Chanhassen. Buyer and Seller agree upon
execution of this Agreement to jointly enter into negotiation with all parties who have an interest
in the Parking Easement Area, to amend, modify, or terminate the Covenant, Partywall
Agreement, Parking and Access Easement, Street Easement, and the Road Easement, and/or
enter into new agreements with all parties, which agreements shall be in a form and substance
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acceptable to Buyer and Seller. Buyer agrees that the cost to reconfigure the ingress, egress and
parking shall be at the Buyer's sole cost and expense and shall comply with all requirements of
the City of Chanhassen and any agreements with other parties. If all amendments, modifications,
terminations and new agreements necessary to re-configure the access and parking on the
Subject Property are not executed and delivered by the Closing Date, Buyer may terminate this
Agreement by written notice to Seller and upon such termination, all Earnest Money shall be
refunded to Buyer.
SECTION 9.
BUILDING - PARTYWALL
9.1) Buyer acknowledges and agrees that it is purchasing the Subject Property "as is"
and that, if closing occurs, it will be responsible for demolishing the Building on the Subject
Property at its sole cost and expense in accordance with all laws and/or ordinances of any
governmental authority having jurisdiction over the same, including but not limited to the laws
of the State of Minnesota and the ordinances of the City of Chanhassen relating to the removal
and disposal of asbestos. Buyer further acknowledges and agrees that it may be necessary in
demolishing the Building to maintain and repair the partywall and the joint roof between the
Building and the Cinema Building according to the Partywall Agreement and that the Buyer shall
be responsible for all of the cost of repairing and maintaining the partywall and the roof.
SECTION 10.
INTENTIONALLY LEFT BLANK
SECTION 11.
DEVELOPMENT FEES
11.1) Buyer shall be responsible for all fees normally charged by the City of
Chanhassen for development of property, including but not limited to sewer area charges (SAC),
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water area charges (WAC) and hook-up fees, provided however that Buyer shall be given credit
for all SAC, WAC and other fees already paid that relate to the Subject Property.
SECTION 12.
MISCELLANEOUS
12.1) The covenants, warranties and representations made by Seller shall survive the
Closing of this transaction.
12.2) Any notice, demand, or request which may be permitted, required or desired to be
given in connection herewith shall be in writing and sent by certified mail. Any notice shall be
deemed effective upon mailing in accordance herewith to the party to whom it is directed.
Unless other addresses are given in writing, notices shall be sent to Seller or Buyer at the
applicable address stated on the first page of this Agreement.
12.3) Time shall be of the essence in this Agreement. If any date or time prescribed by
this Agreement falls on a Saturday, Sunday or holiday, such date or time shall automatically be
extended to the next normal business day.
12.4) Each party hereto shall promptly, on the request of the other party, have
acknowledged and delivered to the other party any and all further instruments and assurances
reasonably requested or appropriate to evidence or give effect to the provisions of this
Agreement.
12.5) This Agreement represents the entire agreement of the parties with respect to the
Subject Property and all prior agreements, understandings, or negotiations between the parties
are hereby revoked and superseded hereby. No representations, warranties, inducements, or oral
agreements have been made by any of the parties, except as expressly set forth herein, or in other
contemporaneous written agreements. This Agreement may not be changed or modified except
by a written agreement signed by Seller and Buyer. Seller and Buyer acknowledge and agree
that, subject to satisfaction of all of Buyer's contingencies and performance by Seller of its
106039 'l 3
obligations, Buyer will purchase the Subject Property before it has received Seller's approval of
the plans and specifications for the improvements and before it has obtained a building permit.
Seller agrees to cooperate with Buyer in completing its review and approval process in a
reasonable and timely manner to allow Buyer to construct the improvements substantially as
depicted in the Concept Plan approved by the Chanhassen Economic Development Authority on
May 5, 2003.
12.6) If Buyer defaults under any of the terms hereof, Seller shall have the right to
retain the Earnest Money as liquidated damages but shall not have a further right to damages or
specific performance.
12.7) If Seller defaults under any of the terms hereof, including, without limitation, the
delivery of marketable title to the Subject Property as set forth in Section 4 hereof, then Buyer
may either terminate this Agreement by giving Seller written notice thereof (in which case the
Earnest Money shall be refunded to Buyer) or Buyer may seek specific performance of this
Agreement or Buyer may proceed to Closing with or without waiver of any breach by Seller.
12.8) If any provision of this Agreement is declared void or unenforceable, such
provision shall be deemed severed from this Agreement, which shall otherwise remain in full
force and effect.
12.9) Failure of any party to exercise any right arising out of a breach of this Agreement
shall not be deemed a waiver of any right with respect to any subsequent or different breach, or
the continuance of any existing breach.
12.10) This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, personal representatives, successors and assigns.
12.11) Seller and Buyer represent and warrant to each other that they have not engaged
or dealt with any broker or agent with respect to the Subject Property. Notwithstanding the
106039 ~_ 4
foregoing, Buyer and Seller shall each defend, indemnify and hold the other harmless from and
against all claims, losses and liabilities incurred by the indemnified party in connection with any
claim or demand by any person or entity from any brokers, finders, or other fee or compensation
in connection with the indemnifying party's entry into this Agreement.
12.12) Buyer may assign its rights under this Agreement without the prior written
consent of Seller, provided that the assignee is an entity in which controlling interest is owned by
either Bloomberg Companies, Kraus-Anderson, Incorporated, or both.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
BUYER:
BLOOMBERG COMPANIES
INCORPORATED
SELLER:
ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF CHANHASSEN
By:
Its
By:
By:
Its
Its
THIS INSTRUMENT WAS DRAFTED BY:
CAMPBELL KNUTSON, P.A.
317 Eagandale Office Center
1380 Corporate Center Curve
Eagan, MN 55121
Telephone: (651) 452-5000
[JFK]
M:VAKA INCORPORATED~Cha~assen~Frontier Center (g4472)XPurch Agnl (CLEAN) (052203) -~-472.DOC
106039
CITYOF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1 II0
Building Inspections
Phone: 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: 952.22Ll110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952227.1110
Web Site
~,'~.ci.chanhassen.mn.us
MEMORANDUM
TO:
FROM:
DATE:
RE:
Todd Gerhardt, Executive Director
Justin Miller, Assistant to the Executive Director~,,,-
May 15,2003
Request for Proposals - Apple Valley Red-E-Mix Site
BACKGROUND
At the May 5th Economic Development Authority meeting, a representative of New
Horizons Day Care presented a development concept for the former Apple Valley
Red-E-Mix site. The City acquired these parcels as part of the City's redevelopment
efforts and to facilitate the realignment of Highways 5 and 101.
After the New Horizons plan was presented, the EDA directed staff to draft a
Request for Proposals (RFP) in order to see what other ideas developers could come
up with for this site. A draft RFP is attached to this report for the EDA's
consideration.
This RFP contains the same guidelines that were recommended when the New
Horizons proposal was presented. Architecture and landscaping standards will be of
high importance, the uses must be low traffic generators, and access must come from
the existing W. 79th Street. Deadlines for submittals is proposed to be June 20th, with
staff reporting back to the EDA after the City Council meeting on July 14th.
RECOMMENDATION
Staff recommends that the EDA approve the attached RFP and direct staff to
distribute it to developers who may have an interest in the project.
The City of Chanhassen. A growing community v:ith clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
CITYOF
CHAN SEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1100
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: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
,,'~¢,;.ci.chanhassen.mn.us
Chanhassen Redevelopment
Request for Proposals
Former Apple Valley Red-E-Mix and
Chanhassen Taco Shop Site
The City of Chanhassen is accepting proposals for redevelopment of the former Apple Valley
Red-E-Mix Concrete Plant and Chanhassen Taco Shop sites. This property is located at the
northwest corner of Highways 5 and 101 North. (location map is attached). This location is
seen as a gateway to the community, and is one of the most visible locations in Chanhassen.
The area is approximately 2.5 acres and is bordered on the north by the Twin Cities and
Western Railroad, to the east by Highway 101, to the south by Highway 5, and to the west by
a pedestrian bridge and an existing auto repair business.
In redeveloping this site, the City has the following guidelines:
· Preferred uses would be low-traffic generators. Probable uses would be professional
offices (such as insurance, medical professional, mortgage companies, etc.), but the
City is open to any other ideas that fit these guidelines.
· No retail, restaurant, or automotive uses will be accepted.
· Access to this location will only be allowed from the existing W. 79th Street, which
currently dead-ends at the northwest corner of the site. No access will be allowed off
of either Highways 5 or 101, and there shall be no access across the railroad tracks.
· Since this is a highly visible location for the City high architectural standards will be
required. Proposals with a prominent entry feature will be given extra merit.
· Landscaping shall also be of high importance, with a goal of enhancing the visual
character of the corner as much as possible.
Proposals should be sent to Chanhassen City Hall, c/o Justin Miller by 5:00 pm on June 20th.
It is anticipated that the Chanhassen Economic Development Authority will consider these
proposals at their meeting on July 14th (time to be determined). Depending on the number of
proposals received, there may be an opportunity to present proposals to the EDA.
When submitting your proposal, please include the following:
· 12 color copies of redevelopment drawings (these should include proposed building
layouts, exterior appearances, parking layouts, etc.)
· Detailed description of proposal, including proposed uses.
· Who will be the owner/landlord of the property?
· What kind of timeline are you looking at for the project? When could you begin
construction?
· What are you willing to purchase the land for? The City expects to receive at least
$9.00 per square foot, as comparable land has recently sold for in the Chanhassen
market.
It is essential that all of the above criteria be addressed in your proposal for our evaluation
purposes. Any omissions will be indicated in the report given to the EDA commissioners. If
you have any questions, please feel free to contact Justin Miller at (952) 227-1118.
The City of Chanhassen, A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
West 78th Street
CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY
SPECIAL MEETING
VERBATIM MINUTES
MAY 5, 2003
Mayor Furlong called the meeting to order at 7:00 p.m. The meeting was opened with the
Pledge to the Flag.
MEMBERS PRESENT: Tom Furlong, Steve Labatt, Craig Peterson, Brian Lundquist, Bob
Ayotte, and Jim Bohn
STAFF PRESENT: Todd Gerhardt, Justin Miller, and Roger Knutson
Public Present:
Name Address
Brad McNaught
Clayton Johnson
David Engelsma
John D. Rice
Gary Nystedt
Brian E. Tuttle
Tom Devine
Glenn Baird
Milo Thompson
Michael Korsh
John Uban
Melissa Gilman
Rich Sathre
Jamie Nelson
Mark Senn
Mike Burton
Amy & Patrick Senn
Ned V. Rukavina
Chad Dunkley
Janis Blumenthals
Dick Allendorf
Darryl Rozelle
20125 Sweetwater Curve, Shorewood
Bloomberg Companies
Kraus-Anderson
557 West 78t~ Street
Plymouth
19440 McKinley Court, Shorewood
7640 South Shore Drive
470 Pauly Drive
1123 IDS Center, Minneapolis 55402
Kraus-Anderson
DSU, 300 1st Avenue No, Minneapolis
Chanhassen Villager
150 South Broadway, Wayzata
2412 Meadow, Buffalo
7160 Willow View Cove
18810 Valley Drive, Minnetonka
5228 3rd Avenue So, Minneapolis
1704 Vicki Lane, St. Paul
4580 Queensland Lane No, Plymouth
Blumenthals Architecture
Allendorf Comm.
2505 Christian Drive, Chaska
Furlong: Thank you and good evening everyone. I'd like to add one item to the agenda this
evening without objection. We'll make it item number 1, not 5 and that is the nomination and
selection of a Vice Chair for the EDA. Is there any objection? Hearing none it will be so ordered
and we'll move to that at this time.
APPOINTMENT OF VICE CHAIR.
Furlong: Are there any nominations for the Vice Chair for the EDA?
Lundquist: Mr. Chair, I'd like to nominate Steve Labatt.
Economic Development Authority - May 5, 2003
Furlong: Mr. Labatt's been nominated. Is there a second?
Bohn: I'll second.
Furlong: There's been a second. Any other nominations? If there are none we'll close
nominations.
Lundquist moved, Bohn seconded to appoint Steve Labatt as Vice Chair of the Economic
and Development Authority. Ail voted in favor and the motion carried unanimously with a
vote of 6 to 0.
CONSIDERATION OF LETTER OF INTENT TO PURCHASE LOT 1, BLOCK 1, OLD
VILLAGE HALL ADDITION FOR THE PURPOSE OF A DAIRY QUEEN "GRILL AND
CHILL" RESTAURANT.
Miller: Good evening Mayor, council members. For the past few months staff has been in
discussions with Frauenshuh Companies with their intention to develop a new Dairy Queen
product called Grill and Chill on the old Pauly/Pony/Pryzmus site, what is now called Old Village
Hall. This location is at the comer of West 78th Street and Great Plains Boulevard, right next to
Old Village Hall and Old St. Hubert's Church. It has been vacant for several years. At one point
there was a bar, a bottle shop, some apartments and I believe a few offices there. When the City
began acquiring land for the realignment of Great Plains Boulevard it became necessary to
purchase this land, and we did so. Within the past year the property has been replatted for
potential development. It was in several parcels. That's all been corrected now and if it is the
wish of the EDA and the City Council, this land could be developed. There are a couple major
issues with this site. One is it's size. It's relatively small. Barely over an acre and two, it's kind
of an odd shape. As you can tell it's in a triangle shape. Another major issue with this site is the
sensitive architecture surrounding the site. One being old St. Hubert's Church. Probably the
oldest structure in Chanhassen, as well as Old Village Hall which is currently being used as the
Chamber of Commerce building. In several meetings with the developer they have made several
efforts to soften the architecture of their structure. I will give them credit, it' s a far cry from what
their prototype store would be. However staff still has some reservations with putting this
structure in this specific location, and for those reasons staff at this point is recommending
rejection of the letter of intent. They have provided the City with a letter of intent to purchase the
property. It really hasn't gone any further than that in terms of negotiations because we wanted to
find out exactly what the EDA felt about this before we spent a whole lot of time doing that. I'd
be happy to answer any questions but I know that Dean Williamson and Tom Lehman are both
here from Frauenshuh Companies and I think they'd probably appreciate getting a few minutes to
talk about their project.
Furlong: That'd be great. Good evening.
Dean Williamson: Good evening. I'm Dean Williamson with Frauenshuh Companies and I've
appreciated the staff's time in obviously finding a location. We're excited about the Grill and
Chill concept. We're got a few in the works right now in various other cities, and Chanhassen is
definitely a city that we want to look to get into. We've been working with staff to try and figure
out the right location and we're kind of in the same program. We want to find something that
works well for the city as well as us and more like a good marriage. Trying to marry the two
together so we do have some flexibility-with ultimately the materials and so forth that we end up
using for the building. The bigger question is the use and the layout and the site plan and how
that works with the concept from the city's perspective so we definitely have some flexibility
Economic Development Authority - May 5, 2003
there. It's just more or less figuring out is it the fight fit for everybody. Other than that, Tom
Lehman's from the operation side. He's been a long time citizen of Chanhassen and been a
proponent of actually the concept of the Grill and Chill and has operated these in various other
communities I guess starting what, a couple of years ago Tom was the first one.
Tom Lehman: December of 2001.
Dean Williamson: So like I said, we're open to any questions that you folks may have and again
appreciate the opportunity this evening.
Furlong: Good, thank you. Are there any questions for either the staff or.
Bohn: I have one.
Furlong: Sure, Mr. Bohn.
Bohn: Is there going to be a drive through?
Dean Williamson: Yes there would be. This is more or less deemed kind of, actually Tom I
think I'll let you kind of address really the concept of the restaurant. Tom' s, as I mentioned, on
the operational side and he can give you a little bit background. It's not your traditional fast food
type of restaurant and I' 11 let Tom address the operation and how it works.
Tom Lehman: Good evening. The restaurant, as you see it here, it's basically the growth phase
for the restaurant that you'll see in the next 10 to 15 years. It's called fast casual. Less emphasis
on the drive through. Typical fast food restaurants today is in the 55 to 65 percent of their sales
that go through that window. In this concept we currently have 18 of these operating, and when I
say we, International Dairy Queen does. But you're looking at sales in the range of 25 to 30
percent of the transactions go through there. The inside of the restaurant is unlike fast food
restaurants. A lot of earth tone colors. Comfortable seating. A lot of tile. This one will have a
fireplace. So it's more of an upscale restaurant whereby we encourage people to dine in rather
than use the drive through function. However there are a number of customers, for convenience,
for family and/or handicapped individuals that do not have the ability for access to come inside
the restaurant. And that as you can see by the photos, it doesn't look like your typical fast food
restaurant.
Bohn: Is it, I noticed it's got a flat roof. No gables, if that was at all. So this is the way the
building would look?
Tom Lehman: The design, I think it's on the other rendering. We have made adaptations to it
and this one here does not show a gabled roof on it, or a shield over the top, you're correct.
Bohn: What kind of shield would you have, fencing or between that and the old Village Hall and
the church?
Tom Lehman: The site plan that we have submitted at this point is to minimize the access going
down to one lane. Build up a berm and have it heavily landscaped with both coniferous and
deciduous trees so there'd be a natural barrier between our facility as well as that of the church.
Bohn: Where would the entrance be?
Economic Development Authority - May 5, 2003
Tom Lehman: The entrance would be, if you were facing down from the railroad tracks looking
up, off to your right would be the church. The main entrance for entry would be approximately in
the middle of the green space that's there right now, so you'd be facing 78t~ Street. The access
for the drive through lane would be to the right. To the rear near the church. We did submit
some photos to staff. There is a Hardee's location in Redwing, Minnesota. It's an old C&W
terminal that in fact the way they built that to the adjacent lot, it basically gives the access going,
and we would intend to do the same thing.
Bohn: Thank you.
Furlong: Any questions?
Peterson: Getting back to the drive through for a second. Is there a possibility of not having a
drive through from your perspective?
Tom Lehman: There is a possibility. Again it would be weighed against the economics, cost of
the land, total development. A project of this type typically costs in the range of about $1.7 to
$1.9 million. Based upon our return on investment, if we take 30 percent of our sales, we'd have
to look at it very closely. To date none of these have been opened without a drive through. So
there'd be a major concern there as to the viability of the business.
Ayotte: Staff's voiced biggest concern is architecture. How much more can you move on that
and what other points are there that would deal with that viewed liability on the part of staff?.
What else can be done?
Tom Lehman: From our vantage point, we do have flexibility. I think if you saw the photos from
where it started to where we've added. To date we've pretty much responded to everything that's
been requested. There still is some flexibility that we can do that, to look at it again. Where
we're at today is literally where we're at. It's not the end point but we're not sure where that is.
Furlong: Other questions? It was mentioned I think with regard to looking for a location, are
there any other locations that have been identified as opportunities here within Chanhassen at this
time?
Dean Williamson: We've looked at a few of that some of them have not necessarily worked. I
know one of the consideration would be, I know on your agenda tonight you're talking about the
bowling alley site. Obviously that's subject to whoever the developer is. If there's an
opportunity there, that's something we would deffmitely consider too. So right now we're just
kind of sitting on the status of this site and from there depending on what outcomes there are, we
are open to other alternatives that might come in front of us.
Furlong: Are there any other questions at this time for either staff or the applicant? If not we'll
bring it back for discussion for the EDA. Open it up for discussion at this time.
Peterson: I think from my perspective, I'd be much more amenable to it without the drive
through. With the drive through I don't think it fits at all and I wouldn't be enthusiastic about it
the least bit. I think it's an interesting concept that if it can be a drive up and a walk up, I think
it's got potential. In keying in on what Bob said, some architectural interest. Then I'd be
interested in it.
Furlong: Other comments. Mr. Ayotte.
Economic Development Authority - May 5, 2003
Ayotte: I'm pretty much in the same thinking as Craig. I'm not as hard put on the drive through
but I agree that I would prefer that it not be in there, and if there was some way where staff and
you could come closer architecturally, I think it'd be a good thing.
Furlong: Other comments?
Labatt: Yeah, I don't disagree with Craig or Bob in their location. I can think of about 2 or 3
other spots in Chanhassen where this would be a better suit in my mind. Depending on what we
do tonight in our fourth item, and that doesn't work out, there's another spot out at 5 and Galpin
area that may work so I'm not.
Ayotte: Closer to his house.
Labatt: It's walking distance to my house. So I'm f'me with staff's recommendation. I just don't
think this is the site.
Furlong: Okay.
Labatt: But I like the idea. I like the type of business. Let's make it fit somewhere in Chan.
Bohn: I know that Dairy Queen's been trying to come into Chan for like 15 years. One time
located next to the bowling alley, but I would like to see a pitched roof on this building. I don't
like it' s, it just doesn't look like it fits next to the church and the old Village Hall.
Furlong: Okay.
Lundquist: Mr. Chair I have my comments are, I like the concept of the Grill and Chill. It'd be a
good addition to the city, but I think regardless of the drive through, it's a poor location at that
point the way the streets are built there without turn lanes coming. Whichever way you put the
entrance, half of the traffic is going to be turning without a turn signal turning left and curbs and
all that in the way. Drive up, walk up, drive through, either way there's just going to be, that
would be a large concern of mine. On that particular comer that type of traffic would get to be
overwhelming.
Furlong: Okay. And I guess Mr. Lundquist, my comments mirror your's a little bit in terms of, I
like the concept. It'd be great to find a place somewhere in Chanhassen. I don't know if this
particular spot is that right place because of the traffic concerns. Because of the architectural
concerns and we can build buildings on, I've seen the rendering of Hardee's and they've done a
great job there so I know the building issue can be handled. I'm just more concerned about the
use and the volume of traffic. Whether by foot or by car in this particular part of the city, and so
whether it's closer to Mr. Labatt's house or not. I have the floor now please. Wherever it is, if
there's another location that we can seek, I think the concept is good. I like the idea. I think
there's demand. It's just a question of the space that I have concerns with so, those are my
thoughts. Is there a motion either to accept staff' s recommendation or to refer it back to staff and
the applicant to work out some of the details?
Ayotte: I really think, personally I think it's got to go back to staff.
Peterson: You don't need a motion do you Todd?
Gerhardt: We have direction.
Economic Development Authority - May 5, 2003
Furlong: Okay. Then since it's...should we at least table it for future consideration? Would that
be appropriate at this time then? If so, is there a motion to table for future consideration?
Labatt: Move to table.
Furlong; Is there a second?
Ayotte: Second.
Labatt moved, Ayotte seconded to table for future consideration the request from Dairy
Queen for a Grill and Chill development proposal on the Old Village Hall Addition, Lot 1,
Block 1. All voted in favor and the motion carried unanimously with a vote of 6 to 0.
PRELIMINARY DISCUSSION REGARDING A POTENTIAL NEW HORIZONS DAY
CARE DEVELOPMENT AT THE FORMER APPLE VALLEY RED-E-MIX SITE.
Miller: Good evening again. The City owns the land that you see shaded in the overhead there.
It's at the comer of Highways 5 and 101. Immediately to the west would be the pedestrian
bridge. To the north of it is the railroad and across the street, I guess to the southeast would be
McDonald's, so that puts it in everybody's mind. The City owns this because as part of the
redevelopment efforts, along with the realignments of some highways in the area, the City did
purchase and relocate the Apple Valley Red-E-Mix concrete plant as well as the Chanhassen
Taco Shoppe. Those were both formerly on that site. Staff has been approached, New Horizons
Day Care which currently operates back behind the American Legion, is looking at the possibility
of relocating. They would like to remain in Chanhassen and they 'like this area in particular.
They approached us about this site and we've d~ided we'd like a little bit of direction from the
EDA on whether or not this is an area that we want to see developed at all. To be honest we
really haven't had a whole lot of interest in this site recently in terms of redevelopment. Not that
staff is against it, it just hasn't really been on anybody's radar screen lately. Like I said before we
spend too much staff time or we have the developer spend too much time, we would like to get
some direction again on if the EDA thinks this is a property that they'd want to see developed,
and if so, is this a use that we'd like to see on this property. If this is something that the EDA
would like to see developed, staff does have a few recommendations and I outlined those in the
staff report that was provided to you. One would be that high architectural standards are
important. The City does own this property and we can dictate what we want on this so that's
something the EDA needs to remember. It should also be something that has some relatively low
traffic needs. This property can be accessed by West 79th Street which currently dead ends back
behind the pedestrian bridge right now. We would prefer that any development that happens on
this site continue that West 79th Street access, instead of coming over the railroad. You try to
minimize the number of railroad crossings as much as possible. And in preliminary discussions
with developer we believe he is open to using West 79th Street as the access point for this project.
We would also ask that there be no retail or automotive uses on this site, or restaurants. Along
with the daycare, preferred uses would be what I would consider professional building uses such
as office buildings, medical professional, insurance, title company, etc. And landscaping should
be of high importance as well. This is probably one of the most visible parcels in Chanhassen
since it's at the comer of Highways 101 and 5. So at this point I'd be open to answer any
questions but I also know that Dick Allendorf, the developer representing New Horizons is here
tonight. He's probably appreciate being able to address the EDA.
Furlong: Very good. Is Mr. Allendorf here? Good evening.
Economic Development Authority - May 5, 2003
Dick Allendorfi Mr. Mayor, council members. My name is Dick Allendorf. 4624 Mount Hall
Terrace in Minnetonka and I appreciate the opportunity to talk with you. I am the real estate
advisor on this project for New Horizon and the developer. With me I have Mr. Chad Dunkley
who's Chief Operating Officer and part owner of New Horizon. He's going to talk to you about
the business need and why this location is a good location for the service that they wish to expand
in Chanhassen. Janis Blumenthals is also with us, the architect employed by New Horizon.
He'll come up and talk about the footprints and some materials that we have worked with your
staff on. Mr. Blumenthals has worked on another site that didn't work out for New Horizon, and
is very familiar with your standards and we can meet those standards. Also the developer is here,
Gene Peterson, and I work for Mr. Peterson and New Horizon on this project. This site is a
perfect site for New Horizon and we know that it's a very important site for you so. When we
first came in, we came in with a New Horizon and an elder care facility connected with New
Horizon. Working with staff we got the feeling that this was a monument piece of property for
your city and it was suggested that we look at an office building, which we also have looked at
and Mr. Blumenthals will talk to you about that. The real message here is that this piece of
property, despite it's access difficulties, it's proximity to the railroad is a perfect location for New
Horizon and architecturally we can make it a real monument for the city and for the developer.
So with that I'd like to introduce Mr. Chad Dunkley, Chief Operating Officer and part owner of
New Horizon.
Chad Dunkley: Thank you Mr. Mayor and council members. My name is Chad Dunkley from
New Horizon. New Horizon's been in business since 1971. We started here in the Twin Cities.
It was actually Bill and Sue Dunkley who started New Horizon. We've become the largest
provider here and one of the largest in the nation. We've been in Chanhassen 14 years. We've
been very happy with this. This is a wonderful community for our type of service. Families very
much appreciate their children here and look for this service. Our current facility is no longer is
the standard prototype that we use and we've changed a lot of things about our concept over the
last 14 years, and we'd like to bring our newest prototype to Chanhassen. We've done that in
many communities in Minnesota. We can do a lot of wonderful things in it and it can be a
wonderful thing for the community. Not just that on the current site we're located on. There's
some issues with the development of Park Nicollet and our size of the space is very challenging
and small for what we'd like to do for the city of Chanhassen. So for the last couple of years
we've been looking for a replacement site for our facility and to build this newer prototype that's
about, a little over 10,000 square feet. We looked at a couple opportunities and nothing really
works for our type of business so and this site is wonderful in many ways and it doesn't provide a
lot of traffic. Parents come once in the morning and once at night. There's not ongoing traffic
during the day. But yet it' s visible from 5 and families would be well aware of our services to the
community by being located here. And Janis can talk to you a little bit about the exterior details
of the building. We do understand that you want to make sure that it's a very attractive looking
site and I think we're more than willing to be flexible in that area to make sure that we meet any
of your architectural needs on the design so, Janis can be here for any questions.
Furlong: Thank you.
Janis Blumenthals: Good evening. I just want to very briefly to tell you what we are thinking
about. It is very early in the game, if I can say so because we just have scoped the site. We know
that we can locate two buildings on this site, so we are talking about the complex of two
buildings. This one would be the child care facility and the other second building would be
facing Highway 5 and exactly how the details would work out, how the buildings would look, I
mean that is all to be determined and obviously we would be working with the city. The city staff
on that. We have experience working with the staff in one other location off the highway. Not
Economic Development Authority- May 5, 2003
very far from here and so we were told pretty much what the city requirements are and we did not
have any problems. Talking about sloped roofs. Talking about amount of windows. Materials,
brick, stucco and so on. So I don't think we would have any surprises on that. Obviously the
office building or elder care would, yeah good. This is our updated prototype building. What we
call Chanhassen design because we have added the sloped roofs for this city and the office
building, if that would be an office building behind. It's really not behind, it's just facing
Highway 5. This view is from intersection. It can be developed what I call signature building
that would be doing the justice to the site and would serve as a, if I can say gateway to the city.
Little beyond there is a bridge that is, everybody knows the bridge and I think it would be fun to
incorporate some design like for example this sign band allowing to develop some similar design
elements like from the bridge or some grid work or something like that. That's all possibilities.
So that's really all what we can tell you. We will be glad to answer questions.
Furlong: Good, thank you.
Gene Peterson: Hi, I'm Gene Peterson, the developer. I kind of go a long way back. You may
probably remember something but I had the opportunity when it was Apple Valley Red-E-Mix to
do, I was at that time doing some work for Matt Fisher from Apple Valley on it and know what
the problems were but one of the things that I'd like to bring up is, I don't think we have a
problem as far as design of the buildings to blend in to make it a landmark. As you see we've
incorporated one of the things that staff was concerned about was taking the parking and putting
it back against the railroad tracks and trying to buffer that and have it there and to bring on the
triangle there, to bring out that brick type and try to blend in the, as I call it, the clover leaf or the
shamrock to blend in so that you kind of get the concept of that comer as to part of Chanhassen.
We didn't design office building. We are in the process also of working on a whole new concept
which is called elderly daycare. It's something that's new nationwide. We may be premature but
that would...we could do that. But the whole idea was that we try to work with the staff and
before we got that far we got this far because we had been at one time all ready to go again with
this same daycare and some problems mn into on the land so we had to start all over again. We
would like very much to move ahead on this and are prepared to go ahead on it if you feel that it's
an asset to the city. From the experience, I've built several of the New Horizons and own them
and have several different buildings in the Twin Cities metro area. That's the business I'm in.
I'm kind of my own customer in the development business. I have several different types of
office retail of different kinds. I am probably one of the original, well I am the original one on
the auto mall system that was built. We built a dozen of them between the automobile king and
us from that standpoint. We built several of the New Horizons. I have built a combination of
office and daycares together, which have been very successful and blended in to different
locations. I'm sure you're not interested on where but we worked very closely and will with the
staff. The point that I'm getting at is this new concept that we have actually spent some time with
the staff on, I think would fit into your concern if you feel you want to put a building on that
property. I'm glad to answer any questions. I'm there for you and that's why we have Chad here
and we have Janis the architect and myself and Dick from the standpoint of, really Dick does a lot
of work for me in site location. His background is pretty good. You may or may not be aware of
the fact that he's pretty close on other city government so it's kind of a helpful situation using
Dick. I' ve used Dick and known Dick for several years.
Furlong: Okay, thank you.
Gene Peterson: I'll answer questions you have.
Economic Development Authority - May 5, 2003
Furlong: Very good, thank you. Thank you. With that, are there any questions for the staff or
the applicant?
Bohn: I have one question.
Furlong: Certainly.
Bohn: The road that goes up there is not owned by the city. Is there an easement?
Gene Peterson: It's my understanding there is an easement that is partially owned by the city.
I'm quickly answering that for them. On the research that I did, that between the property that the
city has and between the private road, that the easement is there to not landlock that property.
Am I correct on that?
Miller: That's correct.
Gene Peterson: Does that answer your question?
Bohn: Who'd maintain the road?
Gene Peterson: It could be either. We can either do it as a private road. We would maintain it,
or if the city feels that they want to, whatever is necessary on that. It doesn't make any different
to us from the maintenance end of it. If there's an advantage for the city wants to do it that way,
that's not a problem. We could maintain it or we could make it a public street. It's whatever way
they want from there. It's a public street to that cul-de-sac right now I understand, and it would
have to be private from there in. That's fine. And we would maintain it and do it to the city's
specs.
Gerhardt: Due to the contours in that area, staff would probably recommend, our engineering
department would recommend that it probably be a private driveway to service that site. Their
own driveway that they would maintain it, plow it. Make any repairs to it. To minimize the
amount of retaining wall that we need to go in on that property.
Gene Peterson: Does that answer?
Bohn: Yes.
Furlong: Any other questions? Other questions for the applicant?
Peterson: Is it safe to assume that the playground would be to the easterly section of the lot?
Gene Peterson: Let me answer you from this standpoint. What the staff had recommended was
that we put the playground on the side where the railroad tracks were. No, not the playground.
The parking. The playground would basically be with a brick wall around as you see there and it
would be hidden from the standpoint of if you're coming down 5 or going up the street on the
triangle. It is our intent to utilize, and correct me Janis on this if I'm, or Dick, is to try to make
that as much of a privacy deal that all you would see would be the top part of that. So that you
are going to basically look at that brick wall.
Dick Allendorf: The answer to your question is yes. It really wants to be right there, but as Mr.
Peterson just said, whatever elements is around the east side of the property should shield the kids
Economic Development Authority - May 5, 2003
playing. Whether someone can see the playground equipment, I don't think anybody objects to
that.
Gene Peterson: And that would be a solid brick, as you see in the picture and our intent was
down on the triangle as you're coming in there that we put that height and try to blend in the
combination and name and what we were trying to do was to bring out that shamrock deal and try
to utilize that somewhat as an entry to. Not trying to hard sell you on it but to try to make it as
much as possible that they know it's Chanhassen that they're coming into and we will put
whatever you really want on there from that standpoint. The way that brick wall is, it can really
capitalize on that for you. Does that somewhat answer?
Peterson: Yes, thanks.
Gerhardt: One of the questions I have, what type of wall is that? It's a brick wall because some
of the comments I've heard from either EDA members or staff is that if for some reason a vehicle
may veer off of Highway 5, are the children protected in that location is some of the comments
I' ve been hearing. Can you comment on that?
Gene Peterson: I think the best way to answer that to you is, we have no problem working with
the staff to eliminate that type of a problem. In other words, the protection factor or something
there, whether we do it with some type of a buffer type with that. That would be something that I
think we could work with the staff to eliminate that problem if that were to happen. Yes that
could happen. We're just as concerned that we would have that protection measure there. We
probably would have to put some reinforcement in to offset that and we're prepared to do that.
This is not the first time that I have done something like that so I think we don't have any
problems on that protection.
Furlong: Okay. Other. Sir.
Dick Allendorf: If I might just add on that piece. It is not particularly evident by the drawing
you saw before that the property actually starts back from the comer of 101 and the street that
goes to the right. This city owns this little triangle. How high that wall will be is really, as Mr.
Peterson says, up to staff and us working together. From a safety standpoint, that really is a help
to have that little triangle remain in the city.
Gene Peterson: We could accomplish that with trees or something that would be a stopping
factor.
Gerhardt: I think noise was also a factor when they talked about it. That section of Highway 5 is
concrete and it has the grooves cut into it so it howls quite a bit and they were concerned with the
kids being outside listening to that for periods of time.
Gene Peterson: And Chad maybe you might want to take that. That has not been a problem in
other locations being similar type situation but I think he could answer that better than I can.
Chad Dunkley: Absolutely. Yeah, in most cases the children actually love to see traffic and
those kinds of things. The noise won't be a factor for the children outside really. They enjoy
themselves and they're really only out for about a half hour sometimes in the morning and a half
hour at night each age group. It's not like they spend a big part of their day outside too.
Furlong: Other questions?
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Economic Development Authority - May 5, 2003
Ayotte: Could you tell me a little bit more about the elder care part of the business and what the
service base is and how you discern what portion is daycare vis a vis.
Gene Peterson: This would be a whole separate concept from the daycare. Separate building.
Here's what the problem is. Not only do, what we got into talking about this in the early stages
on it, we have to change some of the state regs. There's a lot of involvement involved. It's set
right now that you really can only go after the high end of adult daycare, and there has to be a lot
of revamping on it. What we run into when we started out doing this, we were going to do a pilot
on one and we still might do it, but we're even hesitant on that right now in Woodbury, and at the
same time we started to talk to, we thought it would be a good idea to do two pilots. Well since
finding our what our government is doing right now at this stage of the game, we may be
premature. I don't want to leave you with the idea that we would do the adult daycare there right
now. What' s happened to us, there was in talking to the staff and Dick was talking that there was
a possibility you might want an office building and we do have a national tenant that has
expressed an interest for putting an office building in there, and we would do that. Otherwise
we're prepared to go ahead, if you felt that you wanted to, we would just hold off on the second
building until such a time. In other words, whether we build the office building or the adult
daycare right. The thing that we want to move ahead with is the New Horizon daycare, but we
would work that out with the staff if there was some concern to pursue that. But I don't want to
leave you right now, we have bigger problems in the state right now because of the changes on
the whole idea on this elderly, it's very much in infant stage and we probably are probably farther
ahead than anybody is in looking into it. We would still come back. I don't think if we do get it,
and if we didn't have this site available, it is not a site that we have to have particularly heavy
traffic and that. We could go to another location in Chanhassen. We do know that if we could do
it, we would like to do one in Chanhassen but it doesn't have to be in that particular spot. We
were just going to do it at that time when we first come. I'm not trying to talk in circles. I just
want, don't want to leave you with the idea that we're going to do that and answer your question
for you.
Furlong: Okay. Other questions at this time?
Labatt: No.
Furlong: Alright, thank you.
Gene Peterson: Thank you.
Gerhardt: Chairman, EDA members. I just wanted to make one point that we did leave out of
our staff report is that our guide plans calls this area to remain as open space, but the zoning is
still commercial so I just wanted to clarify that so you knew that. If you are going to pursue some
type of development, we would have to change our guide plan as a part of that.
Furlong: Thank you. We' 11 open it up for discussion at this time, unless there are more questions
for staff from the applicant.
Ayotte: I have a question of staff.
Furlong: Certainly.
Ayotte: Is there any reason why we would not from a staff perspective, try to develop this piece
of property within the constraints that you've defined? Is there.
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Economic Development Authority - May 5, 2003
Gerhardt: Well just as I mentioned, the guide plan did call it for open space. You can tell by the
site plan, it's not a very wide site. It's limited to smaller type buildings. If you remember what
was there previous was the Taco Shoppe, which was just a little bit bigger than a double size
garage and then the Red-E-Mix plant was I think 3 bays also, and so the site kind of limits the
type of use that would go on there. From aesthetics as you drive by, right now it's remained open
and that is a concern for staff is the architectural and the landscape plan that would be done with
this. If it was to be developed.
Furlong: Are there other questions or discussion at this point? With regard to the proposal. Any
discussion? No? Anyone? I guess I'll just offer that it's an interesting concept and looking at
whether or not, you know I don't, there are the safety issues that we talked about but it sounds
like there's an answer for most of the questions. The real question is do we want to develop this
site at this time for this type of use or for a similar type of use so. Unless there's other
discussions, if there's comments or motion. For anyone or direction for staff.
Peterson: Yeah, I could just give you my two cents. I think I'm open to putting, developing this.
I guess what I'd be interested to hear to some degree is you know, later on tonight we've got
another city owned property where we had 5 potential people coming in making presentations and
tonight, you know we've got onethat we're considering. Not that we can't get more and I guess
part of what I'm saying perhaps is, you know what are the other options? Knowing that the site is
a difficult one to develop, what else might be out there? They kind of came to us but if we are
going to make a decision to develop it, I'd like to consider other options. So from my perspective
I'm open to it. If it's developed appropriately with the high architectural standards that we talked
about, which I think are absolutely critical. As it relates to specifically on this design, it's
difficult to picture a wall. A brick wall and I don't know whether I'd like that or whether I would
dislike it strongly. So I can't give staff direction as to whether or not that would be appropriate. I
don't know if a brick wall and then seeing the playground equipment would make me happy.
Because that is one of the views of Chanhassen and I don't know whether or not to, you know the
brick wall makes it for me. I think we can make the building appropriate, both buildings
appropriate. I know staff has done amazing things in the past, but the playground on the comer is
going to be a bigger challenge for staff so, that's my two cents.
Furlong: Okay. Other discussion, comments.
Ayotte: In this environment I think development's a good thing. I like the fact that someone's
had the initiative to come forward to formulate a plan to help us work it off. I wouldn't be
adverse to Craig's point at all if someone else had interest. And if we stay within these
constraints, I think Craig's concerns will be addressed. I like the idea of going forward to
develop the property.
Furlong: Okay. Any thoughts?
Labatt: Yeah. I think it's a win-win for the city and for them. We keep a long term business in
the city that's been here for 14 years. We have a chance to turn over some vacant property and
help our budget. It provides a definite need in our city, so I would hope that staff and New
Horizon can put this through and see what we can come up with. I think the brick wall, you
know it sounds like they're willing to make it our eastern monument for our entry into our city
and that's the maple side of our city, according to our 2020 vision here so it'd be kind of a neat
way, maybe we could find a way to take the chance and back light it or something or make it
visible at night. But I like it. I like the idea. I like the location.
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Economic Development Authority - May 5, 2003
Furlong: Okay. Any other comments at this point? I think the purpose here was for discussion
and comment. I guess I' 11 follow up a little bit. I think this use is appropriate because of the low
traffic volumes, unlike a restaurant or something that would have higher traffic volumes. I also
think it is important as you're recommending here to come in off of West 79th, not to seek a
railroad crossing or access off any other access so that would be an issue that I think is important.
As Mr. Labatt said, it is going to be the entrance to our city effectively, even though our city
starts further east of there, which we all know but it is going to be a prime location so it will have
to be done right. And I guess that's just something as Mr. Peterson said, I'm not quite sure if
what we're seeing or hearing tonight is going to seem right but maybe we need some options.
Not only from the current applicant but perhaps other applicants so that we can, from an
economic standpoint, from development, make sure that we can get the best that we have. And
what we're going to be talking about next, we've had, we've got 3 developers that are giving us
options on the bowling alley site. We had 5 originally. We're down to 3. It's nice to have
options so I guess I'd, the sense I'm getting is development will be okay if it's done right, but it'd
be nice to have some options as to what we can do. So is that fair enough for staff or is there any
other questions you have?
Gerhardt: No. Staff will be preparing a request for proposal, similar to the bowling alley
redevelopment and send those out to perspective developers and see if they respond or not and
what we'll do is put that request together. Bring it back to the EDA for your approval and we'll
use the current zoning for the site as the guide for types of uses that you want to see. Or we can
stick to the list that you've highlighted tonight, but we can discuss that once we put the request
together. If there's anything you'd like to add or delete from that list, we can do that at that time
and hopefully get something back to you in the next 60 days or so.
Furlong: Alright. Any other final comments for staff at this time? Good, thank you.
Gene Peterson: Thank you for your consideration.
Furlong: Thank you sir.
CONSIDERATION OF BOWLING ALLEY REDEVELOPMENT PROPOSALS.
Furlong: Back in February we had, as an EDA recommended 3, the developers continue working
with staff, which that's been done and we'd like to hear back from them at this time. I think what
I'd like to do is, Mr. Gerhardt if you could give us a brief background and then we'll have each of
the developers have 30 minutes allotted and we'd like to include, if we can, questions within that
time so if that is, if people can get through their presentations quickly. This is the second time
we're seeing it and try to get some questions so that we don't go on too long, but we want to
make sure that we have enough time for questions and presentations as well. The order that we'll
go into, which I understand was randomly selected, number one will be the Bloomberg
Companies. Number two, Market Development. Market Boulevard Development Group, and
number three, Marcus Corporation. So with that Mr. Gerhardt, is there an update staff report?
Gerhardt: Yeah, just a little background. Approximately 2 ½ years ago the EDA came to this
decision to buy the bowling alley property and how you did that was that you were in a second
position on the bowling alley property. You had approximately a week and a half to decide if you
were going to buy out the first mortgage on the facility. After I think a couple of meetings you
did decide to buy the bowling alley property and since then we had one purchase agreement on
the site with Kraus-Anderson who was teaming up with Shel Wertz to build apartments and retail.
In the last year the apartment market kind of dried up and Kraus-Anderson, Shel Wertz decided
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Economic Development Authority - May 5, 2003
not to move ahead with their development. Since that purchase agreement, staff sent out requests
for proposals to solicit developers who may be interested in redeveloping the bowling alley site.
Back in February the EDA did review 5 proposals. You narrowed those 5 proposals down to 3,
and that is Bloomberg Companies, which is proposing a bank, two restaurants, offices and retail,
and then have the Phase II and m to their development proposal. The second one was Marcus
Corporation, represented by Mark Senn who is presenting Gold's Gym and a free standing
restaurant. Gold's Gym would include a fitness center, a gym, a pool, locker room facilities,
daycare and a free standing 5,000 square foot restaurant pad as a part of his development. And
last but not least was the Market Boulevard Development group which was proposing some strip
retail, drug store with apartments above the drug store. Since our February meeting staff has met
with each of the developers to finalize site plans that you gave us direction on and tonight those
developers are ready to present their final proposals to you. Again I'd like to limit their
presentations to 20 to 30 minutes and first on the list is Bloomberg Companies.
Furlong: Thank you.
Clayton Johnson: Good evening. I'm Clayton Johnson, Executive Vice President of Bloomberg
Companies and rather than review our proposal in great detail, I brought the experts along tonight
but I did want to just say that the partnership of Kraus-Anderson and Bloomberg has been hard at
work with the city staff and with the Southwest Metro and our current tenants to bring you the
plan that we're bring you tonight. It has been revised, and I just want to call your attention to a
couple of things in case you didn't get it through the presentation. One is the cinema has gone
from an expansion to a major renovation. In our proposal tonight we lay out the fact that we're
going to convert all of their theaters to stadium style seating, greatly improve their lobby and so
on. We've been in extensive negotiations with park and ride about the relocation of park and
ride, and I think that's very significant. One of the reasons I wanted to include that aerial photo
on our presentation, as you can see the significance of park and ride in the location that it
currently is and how much space it takes. But that together with the fact that we've developed
underground parking under the bank and office building has enabled us to significantly increase
the size of the development. In other words the relocation of park and ride, the underground
parking has created a situation where we're able to meet your request in regard to selling price,
but also significantly increase the increment that's going to flow from the project. So with that
I'd like to introduce our experts that will take you through the plan and that's John Uban, our land
planner and Milo Thompson our architect. And then Dan Engelsma from Kraus-Anderson and
myself and Glen Baird from cinema will be available to answer any of your questions.
Furlong: Thank you.
John Uban: My name is John Uban. I'm a consulting planner with Dahlgren, Shardlow and
Uban and we do a lot of redevelopment work with cities and private developers and we're really
happy to be on this team and bring to you I think a really good approach to this property. First of
all by showing you this aerial, what I want to point out is our approach encompasses the whole
area. The whole entertainment block. The Chanhassen Dinner Theater block and all the other
properties, and it's to bring together this important part of Chanhassen downtown into a
collection of uses that really work together, and a new land plan that will improve circulation,
will provide the parking and really start a redevelopment pattern that will embrace all the rest of
the property. This block is really composed of really kind of 4 major owners, Bloomberg,
cinema, hotel and certainly the city, and we have, you can see the coloration, they're sort of
mixed up and so with our development plan we could pull all the properties together and really
make them work as a single unit. The development plan really starts to take a very important
look at sort of the key intersection at Market coming from the south where the railroad tracks are,
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Economic Development Authority - May 5, 2003
and develop the new main street approach. All the facades lining up. These are all two story
buildings. Multi-use buildings. All incorporated together to have an attractive and very
pedestrian friendly faqade. The circulation is actually between the buildings and out again so we
have good circulation this way. Restaurant pad, bank, mixed use building with retail and office.
Then a fine dining restaurant to really compliment these nighttime uses so we want to have a
good mix of the entertainment or evening uses and weekend uses, and that strengthens that
prospect of having those by improving the lobby to the cinema. And this improvement with their
new seating types will really bring a much friendlier entrance and facilitate people coming from
the lower level up to the upper level because of the sloping nature of the site. And the site of
course gives us some of those problems that we have to accommodate. Overall we have about
68,000 square feet...which will include a new road and sort of main street coming up to 78th
Street will be opened up. This really balances the two halves to the site, and then it opens up
phases II and III with future housing and future retail uses and another furore office building.
And this really fully embraces the Dinner Theater site. Really improves that whole south faqade.
Rebuilds much of that. And I should point out the bus and ride shelter here and we improved and
facilitate all the parking, more in the center of the site where we think it's more compatible.
Overall phasing, we have broken this into three phases. The fkst phase is the 68,000 square feet.
Second phase is the new road that cuts through between the Dinner Theater and the existing retail
and expands the parking and new retail space. And phase m being...and an office building. The
other thing I would like to point out is the general location and arrangement for the park and ride.
We accommodated with 122 parking spaces. New park and ride bus shelter and allows bus
circulation on Phase I in and out very nicely. Then Phase II we'll have a pass through out to 78th
Street. In Phase IH we can use and be relocated with the parking ramp. So we have a variety of
options and we have met with them to discuss those. The other important thing is we have, to
review with you is the architecture, and I'd like to have Milo Thompson of Bentz, Thompson
Rietow go through that. An interesting character and complimentary archit~ture that's being
proposed.
Milo Thompson: Good evening. Mr. Mayor, councilmen. I presume you don't know a lot about
my work or my firm so I thought it might be interesting to give you some kind of background
about us and I prepared this exhibit of some of the projects that we have done in the past. To give
you some kind of preview of how we might approach the character of some of the buildings here.
These projects are selected because they represent a kind of small scale that we think would be
instructive for some of the projects that we, or some of the elements of this architectural proposal.
And you can see that we are quite familiar with kind of historical appearing buildings. We are
quite practiced at doing pictrudes and buildings that we are very consciously trying to make
charming. And it seems in this location that this is a very appropriate approach to this project.
There are elements still of your historical fabric which are quite interesting. The church itself
needs I think more, buildings that compliment it, particularly in the way it strikes some vertical
note in the skyline and addresses the sense of a particular place. A lot of these buildings are
trying to do that. There's one other example locally that we think is quite significant. It's a
building that I' ve admired for as long as I practiced architecture, and the architect associated with
Edwin Lundee. And I understand that Mr. Lundee was even quite admired by Mr. Bloomberg as
he developed the Chanhassen Dinner Theater, and though the character is somewhat different, the
similarities there I think have to do with a small scale, the use of wood, a kind of rustic character.
And so this, even today I think would be something that we would hold as a model for some of
the character that we would like to think about as we develop the project. So you can see the
preoccupation we have for making some vertical elements identifying each piece of the complex.
On the left, left being a major bank we'd have a cupola that again is in the company of several
more that you already have in the town, but it adds to that kind of character. Finial on a building.
Provides perhaps a place where they might identify themselves with their logo. And continuing
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Economic Development Authority - May 5, 2003
on the right hand would be a feature that accommodates the major lobby stairway and elevator for
the upper levels of that part of the building. And you can see on that part of the architecture
extended porches which relate to the early Bloomberg work. It's rather unique. I think it's
something that really should be continued rather than denied. So the protection of pedestrian way
in front of commercial space is something that we think would be an important element to try to
introduce here. Re-introduce on this side. The next building being the restaurant. Having a form
of it's own so too some feature on the top and a porch would have a special character for not a
stand alone but something that has very striking image. And then just to the right of that, you can
see a substantial structure in front of the existing theater which would begin to take care of the
level changes that they have for their lobby, providing handicap accessibility. Rotunda that
would be a more dramatic marquee for them that is seen from afar but better than it is now. And
the continuing, the design of this faqade as a kind of village. Presenting a village character is
what we're really after. Just a couple of things about the next phases that you might find of
interest. We're showing a new retail building that continues this idea that I've been talking about.
Fagade development that finishes the street off. The new street that would connect there, we have
developments on the back of the Dinner Theater complex so it is not the back of a building
anymore. And then phasing into a future park and ride and a two level garage and housing in that
area. So you can see as John has mentioned that we're trying to look at this in a very
comprehensive way, not only for these few blocks but also related to some of the existing historic
buildings in the area just across the major entrance to the right. Now we're all here. We have a
large team assembled here and we're all available to answer your questions as you have them.
Furlong: Good. Ready for questions now? Okay, thank you. Are there any questions?
Bohn: I have. What's the time line for the phasing?
Clayton Johnson: Well Phase I is, we've enclosed the schedule for Phase I to close on November
134. Demolish this fall and construct next spring. I think the Phase I and the density of the
activity here is going to enable Phase II and Phase m to happen on an accelerated scale. We have
some major drainage issues as well as some aesthetic problems on the back side of the Dinner
Theater, and one of the things that we'll be doing is asking John and his fm-n to look at that and
see if we can't incorporate some of those improvements to the back side in this first phase, but
right now that's Phase II.
Furlong: Other questions.
Peterson: Part of what I'm struggling with is getting a better sense of the architecture flavor,
which is a pretty important part of what we're talking about. By example across the highway you
have Villages on the Ponds that has, we've tried to create a character of a village also. We set
some pretty high architectural standards and have special standards in building materials for that.
How can you help me better understand what kind of feel. The pictures that you laid down really
didn't give me a good feel. Obviously the pencil drawing is, it's tough to correlate that.
Milo Thompson: Basically I think we're trying to develop a rather rustic character, but that could
be done with a great variety of materials. We're thinking of stone, brick, wood, shingles. You
know the Arboretum building, that is a very frae example of a collection of materials I think that
add up to something really quite good. And there' s some amount of wood I think that' s necessary
just to provide the warmth and the small scale that we think is important. There's also always a
concern about maintenance, as we know for everyone. And I would suggest that wood is not
necessarily a material that is impossible to maintain or difficult to maintain. It depends very
much on how it's used, and in what proportion. But in this case, the architectural character I
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Economic Development Authority - May 5, 2003
think is heavily dependent on the idea of pitched roofs. And so it' s the material of the roof more
than anything that would be the important thing to explore and think out in terms of maintenance
and character and get a proper balance.
Peterson: Whether Clayton you should answer this or whether you should sir. What if I or we
said that that frontier doesn't excite us and rustic doesn't excite us?
Clayton Johnson: Well we might have those issues with the tenants also, I don't know. It's a
struggle between the tenants, the architect and the owner of course and we don't look at that as a.
Milo Thompson: If I were to show you my full portfolio of what you can see that I'm quite
practiced in a number of expressions and we brought these examples along because they seem to
represent the high quality of what I'm talking about.
Clayton Johnson: We think the character is important. We'd like to see something like this. We
think our tenants are going to like it, but we also understand that you guys have standards that
you' ve worked with and we have to work with those.
Peterson: I think to the point Clayton, I think if you remember the discussion we had on the
building.
Clayton Johnson: The Frontier.
Peterson: Yeah. I mean it was a challenge and that was your biggest challenge, and it wasn't an
easy decision so I suspect that this EDA will have a similar difficulty in trying to define whether
that's appropriate or not.
Clayton Johnson: I think there we had a situation though where we were the owners and now
we've got a lot of other people that influencing this decision like tenants and so on. I think one
comment on park and ride that I could just make too is that, you know park and ride is actively
working on an additional location at 5 and 41. They're working on an additional location at 212
and 101. One of the things that came up in our discussion is that this plan and with the ramp, if
that were to come about, would actually give them some expansion. Right now they're 122
spaces with no room to go. The thing that interested them about the ramp in Phase llI is the fact
that it would enable them to increase their capacity in this location. We need to do a complete
total survey in order to finalize the exact location of that park and ride.
Peterson: One more question for you Clayton. You look at the different, there's kind of different
pieces to Phase I. What can you share with us to engender in us that it will happen versus having
one building done. I know you've got one.
Clayton Johnson: You mean in Phase II and m?
Peterson: No, Phase I.
Clayton Johnson: Well, our partner Kraus has been very active already on the preliminary
leasing. You've got to remember though we're in the proposal stage here so even though we
spent a fair amount of money, there is a limit as to how much we can spend. But we've had Dan
and Mike might want to comment on that but we've had a lot of conversations with tenants. We
have a significant interest on a major part of the development. Is that a fair statement?
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Economic Development Authority - May 5, 2003
Dan Engelsma: My name is Dan Engelsma. I'm with Kraus-Anderson. We have found the,
we've been working on this site for quite a while, but we found the site from a commercial
standpoint quite viable. We're excited. We think we can do all of it in one phase.
Peterson: Even in this kind of economy?
Dan Engelsma: Yes.
Peterson: That's been, the challenge that I have is, I think it looks great on paper. Can it be done
in the next 2 or 3 years is really the question that I'm asking.
Dan Engelsma: We believe certainly it can. We have already identified the upscale restaurant.
We have identified the bank facility and about 4 or 5 other tenants who have expressed some
interest so all we need is sort of the fight to move forward and we think we can bring it together
very quickly.
Peterson: Okay.
Clayton Johnson: One of the things our market study told us is that even though there's a
saturation of office, and there' s certainly no need for office fight now, I think the feeling of their
marketing people was that there is a need for the boutique office and the underground heated
parking should be a real feature. So that's quite a commitment to bite off that amount of office
space in this current economy but it is second floor and it would have to be a part of the first
phase.
Peterson: Okay.
Furlong: Other questions?
Lundquist: Clayton I have some questions around the park and fide. You've had conversations
with Southwest. Are they at this point amenable to relocating their space as long as they keep
that same number of spaces?
Clayton Johnson: They're not willing to, they want a permanent easement which they have now,
and you can understand they're not going to give up a permanent for a temporary. But no, of
course there are 3 members to Southwest Metro, Chanhassen, Eden Prairie and Chaska, and
they're anxious also to accommodate you in terms of when they look at the site and the potential
for the site and I think us moving the park and ride has brought you a much larger development in
terms of increment and I'm sure they're going to consider that.
Lundquist: Total parking around your site on Phase I. You've got them scattered but I'm still
wondering, you feel like you have an adequate amount for the amount of retail and the movie
theater and a couple of restaurants?
Clayton Johnson: Yeah, I think we did, you know we included a detailed parking analysis and
John here, maybe.
John Uban: Our parking analysis really shows we're proposing almost 500 parking stalls for
what's being created. Including the cinema lobby visibility increased seating, actually the seating
decreases so there's a little less parking demand there, but with the underground parking and
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Economic Development Authority - May 5, 2003
really having the parking spread around a little bit it actually gives good opportunity for parking
close in to the front door of each of the establishments, and it also assembles, and assembles in
Phase II as well the sort of main core of parking really in the middle of the block which we think
that's where it really belongs and will do the most good in the long term.
Lundquist: For Phase I is my biggest concern fight now. Around, mainly around your main
building, all the office, the bank, the retail, a restaurant next to the movie theater. That I can see
when you add all the future parking and the ramp and certainly that's going to give you what you
need there but you're feeling that you've got adequate parking for Phase I?
John Uban: Yes. If you look at the chart that we've provided, we used your ordinance and at 516
stalls are what are required, and then we've provided 495 so we're shy just a little bit but
remember that we're also dealing with shared parking where we have a significant number of sort
of evening, night time uses. The restaurants, the hotel, the theaters, all of that is primarily
evening and that's when the offices and park and fide obviously don't need the parking. And
most of the parking for the large structure with the office and retail, all that office park is really
underground and that's what gives it sort of the true attraction in this sort of tight of market.
Tight market that here they can have heated underground parking, so that's going to be used up
very quickly. And so it's really the customer base that will use the very convenient on surface
parking all around the perimeter. So that land, and we've really matched it up we think to give
the high parking, so you don't see huge amounts of it, and yet having enough to meet all the
varied needs in just the fight places. So we're confident it's going to work very well.
Lundquist: And with regard to the tenants and using up that space, obviously that heated parking
is going to be a big attraction, but do you feel like you're going to be able to attract new tenants in
here or will we be vacating one office space in Chan for somebody that wants to come to a heated
parking space and then having that open?
Clayton Johnson: We don't know. That could be. You know our office is 100 percent occupied.
All the office we have but I guess you'd considered our space probably Class B or Class C. This
is going to be Class A space so we'll be competing with Chan Bank, Richfield Bank which is
now.
Lundquist: M&I.
Clayton Johnson: Right. I would think we're going to be competing with those people for this
space. We're thinking that the location of this is going to be very attractive and the heated
underground parking.
Lundquist: Okay. That's all the questions I had Mr. Chair.
Furlong: Thank you. Mr. Labatt.
Labatt: Not at this time.
Furlong: Okay. Mr. Bohn.
Bohn: I like the architecture. That really excites me as far as it fits better than...what it is now.
With the stone and the brick and that. I don't want to see a lot of shiny glass and plastic out there.
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Economic Development Authority - May 5, 2003
Clayton Johnson: Well you do, one of the things I think we caution you about. There is going to
have to be signage on the building and we're going to have to meet the needs of retail tenants so
Milo's going to have to design a sign band in that will satisfy everybody, but we don't want you
to believe there won't be signs because there will.
Bohn: Thank you.
Furlong: A number of my questions have already been asked, but a follow up to your last one on
the sign. That was one of mine. There's a message board monument sign identified.
Clayton Johnson: That's right, I should have mentioned that earlier.
Furlong: Okay, and I guess I'd like you to comment a little bit about what you envision there.
Clayton Johnson: Well primary beneficiary is the cinema. The cinema's got a real problem in
their current location and their lack of visibility and one of the commitments we've made to them
is to allow a pylon sign out there on the road. Glen, maybe you'd like to talk a little bit about
what you envision there in regard to the use and so on. But it's primarily for the cinema.
Gerhardt: Tom if I may add to your question is, also expand on what the lobby will include and
operations will change during your development?
Glen Baird: I can do the best I can. My name's Glen Baird. I'm with the Chanhassen Cinema.
We've been looking for a sign out on the highway. Been discussing with Todd for quite some
time about what we could possibly do out there, and in conjunction with Milo and the Bloomberg
proposal, we're trying to make something that's cohesive and meets with the architecture of the
entire operation. We currently have the neon bands. We have the repeater lights and the neon
Chanhassen Cinema. Somehow we'd like to incorporate that into the sign on the highway as
large as possible given the conf'mes of the codes. And try and give some kind of arrow, some
movement activity. If we could it'd be nice to do an LED type of a sign. We are flexible. We'll
work with whatever you rules are but we'd like to make it as attractive as possible. As flashy and
glitzy as we can given the architecture of the whole concept. Does that answer your question?
Milo Thompson: I forgot to mention that too in that is one of the I think more interesting
architectural elements of the whole complex. It sits very importantly at the, as you enter from the
highway, as you come in here, the existing circle that the park and ride uses is directly ahead and
it's really a wonderful place for a major architectural feature. Now obviously we are interested in
working with the community and with your planning staff and everyone who is interested in the
architectural character of this place to see how dramatic that can be. This is, this can be quite
subjective I know, but if we were permitted, I think we would like to see some major attraction
that identifies this place in Chanhassen because it is a significant entrance into this area. An
architectural feature can certainly bring the eye in and it can be a landmark. The church, you
need I think another element like that to kind of anchor the perimeters of the area, and I think it
can be designed. As we're showing in the drawing it's, the height is emphasized by these finials
which are part of the supporting elements and the sign is lower. So it's something that is very
much part of the skyline, breaking the sky in some picturesque way. But it needs a lot of
dialogue I think to see, in fact what is an appropriate expression there.
Clayton Johnson: I don't know how we're doing on time but do you want to talk about the
lobby?
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Economic Development Authority - May :5, 2003
Glen Baird: Real briefly. We don't have a specific layout at this point in time. One of the things
that we are going to move forward with is to remodel. We have currently 8 theaters. 4 of them
are stadium style and the other 4 we wish to convert to stadium which is going to reduce our
seating capacity by approximately 250 seats which is going to impact the parking needs. We can
share that a little bit, and then the lobby itself, what our thoughts are right now is to, we want to
enlarge the lobby area for customer use. Put in a larger expanded arcade area, a meeting room
where we can do for conference use or birthdays, that type of thing. Kind of a community area.
Improve our ticket location. Speed the customer service of getting people into the building, and
one of the biggest elements I think which is important from both safety and architectural is to
bring the entrance to the ground level and bring our customers in the building first, then give
them some type of an area to go up stairways, a couple different levels. We've got about, oh I'm
guessing about 8-10 feet rise there between the ground and the existing cinema level and it's a
maintenance issue that's just a nightmare in the winter time with the snow and ice and so on, so
it'd be nice to be able to get our customers inside the building first and then we'll give them a
couple of levels to come up gradually, and then give them a nicer area to, we want to put some
tables and chairs in there. Expand our concession menu to more food items. Give people an
opportunity to sit and spend some time there. Relax. More of a hangout. Right now there's
nothing for our customers to do but see a movie and have some popcorn. Some of the, a couple
of arcade games there so if we can expand that. Get people to relax and I think one of the
walkways on the front there is a little bit of an awning area where we could put more benches and
tables. We' ve talked about possible ice cream, frozen drinks, things like that to let people sit and
relax. It's kind of a nice view out there so we don't have anything more specific in terms of exact
layout other than the concept right now. So if this goes ahead I guess we would be more willing
to give some more direction there.
Furlong: Thank you. A couple quick final questions as we're running out of time here. Clayton,
the first is with regard to again, Southwest Metro and the placement of those parking places. The
proposed relocation of those is over off of the property looking at the.
Clayton Johnson: Yeah, it's on our land. On the Bloomberg land, yeah.
Furlong: And I guess my question is, have you shared this layout with Southwest Metro in terms
of not only the location but the flow of busing? I can see when that, if that second connection
goes through as part of Phase II that would be...
Clayton Johnson: ...because we want to create some additional parking back here which we
can't design in and so the f'mal layout will vary a little bit from this but.
Furlong: Okay, because there currently are not those 46 spaces along that run at this time.
Clayton Johnson: Right, but we can construct those. Yeah.
Furlong: Alright, thank you. And then just a f'mal question. In your proposal I guess I would
like to understand the basis for the purchase price for the city's interest. It was a very precise
number.
Clayton Johnson: Well it's consistent with what you have in it I guess and we worked the
numbers backwards obviously. The reason that we were able to achieve this price is the density
of the development and the fact that we could accommodate park and ride on our land.
Furlong: Okay, so this goes back to, so this is a money in.
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Economic Development Authority- May 5, 2003
Clayton Johnson: Yeah, it's working backwards in terms of what the project will support. And
you can see, I think in our proposal we included, it's not as simple as the land cost from the
purchase price from the city. There are a lot of other costs that are involved in arriving at what
we consider our land cost.
Furlong: Okay. And then just a clarification. You said Phase I in '04. Beginning under the
current time line.
Clayton Johnson: Well we'd close in '03 and demolish I think Dan right? I mean try to demolish
but more than likely not winter construction. More likely spring of '04.
Furlong: And Mr. Peterson asked it then, expected completion as well within '04-05?
Clayton Johnson: Yeah. No, we look at this as one project.
Furlong: You answered Mr. Bohn's question with regard to Phase II and 1/I might be expedited
given of course depending on market conditions. Can you give us a time frame of.
Clayton Johnson: Well Phase 1II has got, there's two major issues with Phase m. One is if park
and ride, Southwest Metro's going to participate. They really can't deliver on a grant until about
'05 or '06 at the earliest, so that would be a driving factor in Phase m. The other is that even
though we've got a friendly relationship with our tenant the Dinner Theater, their lease runs for 7
years so it's possible if we didn't get their cooperation we'd have to wait until that 7 years is up in
order to finalize Phase III. But I think the activity that's generated here will drive Phase 11. I'm
hoping that the amount of retail activity will create the demand to do Phase II. There's two
aspects to Phase II. One would be the possibility of closing off the alley that' s currently open by
expanding the bar and restaurant that's adjacent to the hotel. And then opening up the new
connection. But I couldn't commit any more than Phase I right now.
Furlong: And that's what I'm focusing on so that's fme. Any final questions then? Okay. Very
good, thank you very much for keeping to the time frame. Next group, Market Development
Group.
Ned Rukavina: Good evening. I'm Ned Rukavina with Market Developers. Thank you Mayor
and council members for inviting us back. We'll be rather brief. We are working with Todd.
Early on there was a step that we missed in the sequence of timing so, in the report you'll see that
they didn't have to spend too much time with us because we had spent a fair amount of time with
them before the last meeting we were at, and we responded to the RFP pretty much to the T. The
RFP was asking for housing and we responded that we're working with Julie Frick at the HRA.
We as well have been working with the Southwest Metro on the park and ride and relocating that.
They were receptive to our plan, and I'll let Brad talk a little bit more about the plan.
Brad McNaught: Good evening Mayor and EDA members. As you know, you're familiar with
our site plan here. Just to give you a brief overview. Basically we're proposing the drug store or
a retail anchor on the main level here. Then the back would be the lobby for the apartments, and
then it'd be three levels of apartments above that. Approximately 45 to 50 apartment units.
We're also proposing two out buildings that would be restaurants and service retail. We would
propose relocating the bus station from approximately right here to right here. Offering the buses
circulation through here. This would be open for parking, but the main parking for the bus station
would be in this area right here, leaving this field of parking over here for the retail and the
restaurants. The apartments would have underground parking, be self contained. They'd have all
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Economic Development Authority - May 5, 2003
their, approximately 50 stalls underneath there, and one of the reasons for our design is we
wanted something that's accessible to most the members of the community. We see that this
open area here, this patio would be open to those that are using the bus, the transit station. Those
using the restaurants. We wanted a nice mix of restaurants and service retail that would really
appeal to the community as a whole. We've talked to city staff about potentially having farmers
markets over here on Saturday and having the people be able to mingle over here and utilize the
restaurants and the retail. We just though that the transit station was a nice amenity. That it
really offered a service to the residents and to the retailers here and thought that the synergy of
the whole development was really strong. You know with the theater, with the retailers and the
residents, as well as the hotel right next door and the other retails so. We really haven't changed
this much. We talked to the Carver County HRA. They had a few comments about the location
of the residential units but they were relatively minor and so we'll just answer any questions you
might have.
Furlong: Okay, any questions? Mr. Lundquist.
Lundquist: You're building the drug store and the residential building. That sits on top of some
of the current parcels that are owned by Bloomberg, is that correct?
Brad McNaught: That's correct.
Lundquist: Okay. And your, where your entrance and exit to your parking is for your residential
building, any concerns about traffic conflicts with the pharmacy drive through?
Brad McNaught: I'll just put up another site plan. This shows, this is a rendering by the Carver
County's architects that they re-positioned it a little bit so that you can see there's, here's the
drive through still here. There's the entrance to the underground parking would be right here, and
they were very comfortable that the drive through was not going to be a hindrance to them.
Lundquist: Okay. And you have had discussions with Southwest Metro and I think in your
original proposal you had a letter of intention or support or something like that.
Brad McNaught: That's correct. They were generally supportive of our proposed relocation.
Lundquist: Okay. Good. That's all the questions I had Mr. Chair.
Furlong: Okay, thank you. Other comments?
Labatt: The housing component, is that through Carver County HRA, is that going to be all
affordable?
Brad McNaught: You'd have to ask Julie on that. I understand Julie did a presentation to the
EDA to discussion feasibility and she feels strongly that it is a feasible project. I can't remember
what she exactly said. Whether it was a mix of market and affordable, I'm just not sure. That
would be up to her. She would actually own the land, the parcel. And own and maintain the
units.
Labatt: Okay. That's all I had.
Furlong: Okay. Questions?
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Economic Development Authority - May 5, 2003
Bohn: Your development wouldn't include any of the theater?
Brad McNaught: Pardon me?
Bohn: Your development wouldn't include any of the theater?
Brad McNaught: No.
Peterson: One of the questions I'm going to ask everybody, and it's a difficult one to answer but
talk about confidence level on filling up the space that you're presenting tonight. Are you at 90
percent? Are you 60 percent sure it can be done right away? Are you planning on phasing it in
when appropriate, etc, etc,?
Brad McNaught: No, we've had preliminary discussions with enough tenants that there's enough
interest in this and we've had preliminary discussions with them. Obviously we can't commit if
you don't have the site control, but we're very confident there's enough interest to get this off the
ground right away.
Peterson: Okay.
Ned Rukavina: What staff liked about our discussing the plan with us was that we're ready to go
based on, other than getting the control of the easements and all that and that's where we bogged
down in the purchase agreement that we were negotiating with the City so we had a fair number
of the tenants in place and very interested and so the, and you referred to the market conditions a
few times tonight. In retail we're not seeing that. I mean in office and industrial they are but in
retail it hasn't been, and it's starting to pick up even more now so it's not much of a concern at
this point.
Peterson: Thanks.
Furlong: Other questions? A couple I have, and perhaps it's been answered here but just for
clarification with regard to the residential units. Those would be owned or those would be owned
exclusively by the Carver County HRA. There wouldn't be a joint ownership.
Ned Rukavina: No. They would own them and they would maintain them and be responsible for
leasing and everything else.
Furlong: Okay. And those would be on top of the drug store, the major tenant as well. Would
that be owned by the drug store major tenant, would it be joint ownership in terms of the property
itself?
Ned Rukavina: They'd be owning.
Furlong: Okay so there'd be some condominiums agreement. Okay.
Ned Rukavina: Which we've discussed with Julie and she's comfortable with that. A
Furlong: Alright. One of the issues that she mentioned at our work session was with regard to
construction materials are a big factor in terms of them being able to make units affordable. And
if I recall you talked in your presentation about the use of brick and the high standards and such
like that. Do you see that as a, have you had those discussions with her with regard to
construction material from a viability, workability standpoint?
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Economic Development Authority - May 5, 2003
Ned Rukavina: Right. This rendering you see right here is from her architects and this is a
design that she would consider. As you see, this particular design doesn't have all brick but there
is some, combination of brick and some other materials. The out buildings we would fully intend
to use brick, something along this line. A lot of brick and then in the first level retail of the
apartment building as well. And the out buildings were designed to be a four sided building so
they' 11 be, people will be coming from the parking lot side. They' 11 be visible and activity will be
on Market Street as well. Or on Market Boulevard as well so it really, there's not a back side to
those buildings.
Furlong: And then the recent drawing that you just showed us this evening, is the difference there
essentially a rotation of the drug store, the major building?
Ned Rukavina: That's correct. It's basically L-shaped whereas before it was not. Same parking
numbers were very similar, but it's just a little bit configuration that they were more comfortable
with the hotel and the drive through.
Furlong: I'm sorry, the hotel?
Ned Rukavina: I'm sorry, the housing. Residential.
Furlong: Okay. And can you just, it's hard for me to see on the screen. Could you explain
where's what? The apartments are the L-shape around the drug store?
Ned Rukavina: That's correct. This would be the entrance to the parking. For the underground
parking for the residential units. This would be the lobby and common areas. This would be the
drive through that would enter here and then exit back here.
Furlong: But they'd still be located on top of the drug store.
Ned Rukavina: Yes.
Furlong: Okay. Very good. That's all I have. Anything Mr. Ayotte? We passed you by. Okay.
Any other questions for the applicant at this time? Alright. Gentleman thank you. Our last group
here is the Marcus Corporation and I think what we'd like to do is right after that just take a quick
5 minute recess after the last presentation if we can, if that' s okay. We can certainly take a break
now if that's okay.
Labatt: Keep going.
Furlong: Why don't we go. So we have all three presentations done and then we'll break.
Mark Senn: Good evening Chair, members of the EDA. My name is Mark Senn with Marcus
Corporation. The project we're proposing answers a stated need, at least as long as I've lived in
Chanhassen over the last 15 years by many people for a community center based recreation
facility. Importantly our project requires no public participation. No subsidy. No TIF. Etc. Our
project does not impact Southwest Metro. It doesn't encroach on Bloomberg's parcels. And
while we understand and realize and have studied, there's a very complicated cross or shared
parking agreement, the reality of the situation is our proposal does not reduce the number of stalls
that are currently on the site with our development, so essentially in exchange for what's there
now. You get the same thing when we're done so there really is no loss or damages. Beyond that
as far as architectural considerations go, just to review a little bit from last time. What we took
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Economic Development Authority - May 5, 2003
into consideration in our architecture of the Gold's facility that we showed you last time has
really not changed at this point, was by the way no attempt to duplicate, realize or incorporate the
old Dinner Theater building concept but more importantly we try to tie into the newer hotel
concept and the theater concept. More importantly stated there, we're perfectly willing to look at
design issues for next year's standpoint. The only thing that's really important to Gold's is kind
of a signature entryway type of thing and they've advised us that they're pretty open otherwise as
far as working with city staff on overall design considerations. One of the things we've done
since last time here is we have gone back and responded to the city's desire to add a fine dining
restaurant to the site. We have locked in the Gold's facility at a permanent 40,000 square feet
now as you'll see on this plan, and we have proposed or incorporated a 6,400 square foot fine
dining restaurant. Now the 6,400 square feet, give or take a few is simply a number that we had
to pick at this point, but it's very much a workable number and as far as specific architectural
considerations, that would very much depend upon the restaurant that we would settle with.
We've been in ongoing discussions with a number of restaurants at this point. We have 4 very
interested, 2 very fine dining to very family orientated, and I don't believe that's going to be a
real issue. It's just hard to kind of go beyond those initial discussions until you have site control.
What I'd like to do from our end is come back up and answer any questions you have, but I think
that just kind of very short and sweet, I think hits the main issues. I've brought Jamie Nelson
with me tonight who is a partner, part owner in Gold's and who is responsible for operations in
the state of Minnesota. I've asked Jamie to make a presentation to you to let you know a little bit
more about Gold' s. What it is? How it functions, etc because Gold's really is the centerpiece of
our project or our development and I think that's really where the emphasis should be tonight.
One issue that I will leave you in closing though before Jamie gets up here is that, one thing I
guess I'd like to throw on the table is, we've gone back. Talked with our restaurant people.
We' ve reached some rough parameters, in fact just this afternoon and with that I know that one of
the issues here has always just been kind of like where the city sits in it's cost and all that sort of
thing into this thing but, and I believe staff' s report says that we were offering about 1.1 million
for the property. We're willing to up that offer to 1.3 tonight and leave it at that. Based on what
we have gotten back from our restaurant people, that's a very doable number between that and
Gold' s. Essentially beyond that we are ready to go now. We are not waiting for any tenants and
this is something we can get going starting in 2003. So with that I'd like to introduce Jamie
Nelson and have Jamie come up and walk you through a little bit more about Gold's as well as a
little bit of a tour of the facility.
Jamie Nelson: Hi, I'm Jamie Nelson with Gold's Gym. I want to address 3 main topics for you
tonight. Kind of basically who we are because there' s, with the name Gold's Gym, there's some
misconceptions of what our facilities really are about. The other is why Chanhassen, and then the
direction of where we're heading and why Chanhassen is so important for us. First of all, to kind
of just maybe set the tone I was hoping to run a really quick video of our St. Cloud location and
then I can kind of explain to you who we are as Gold's Gym and what community capacity we
can serve for Chanhassen. So with that being said if I could get that set. And this is our Sartell
location that you're going to look at. Sartell's commonly known in the northern Minnesota area.
They call it the Woodbury of St. Cloud so it's a really up and coming city. As you can see right
here it's a full amenity facility. At this one we feature tennis along with an Olympic size pool.
Huge whirlpools. We also offer a physical therapy rehab pool as well. Extensive child care.
Two aerobic studios. A lot of cardiovascular equipment and a lot of weight training equipment so
it' s a full amenity club. You're going to see a little bit of a fly through here. One of the things I
want to talk about a little bit is the design and why we think it fits the Chanhassen market. As
you go through you'll find that it's a very pleasing facility to the eye. A lot of curved walls,
stained concretes. It's a very modern, very upbeat center. Go through here real quick and give
you a virtual reality tour and I can kind of guide you through that. Also one of the things I
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mentioned upfront is that we also feature women's only exercise studios, large ones within our
facilities so we try to really encompass everyone from families to seniors to people who are just
getting started in fitness for the first time and those people tend to be more comfortable with it's
women's only environment. We're doing Phase m in St. Cloud right now so that's not shown on
this video but we're going to go through. Here we go. So as you come down, you f'md we have a
really big open lobby. Very spacious. What we really try to do in the Gold's Gym environment
is the minute you walk in we really try to set a wow factor. In our St. Cloud location we also
have an outdoor playground as well for the kids. Conference rooms. Large weight areas. You
notice a lot of different angled walls, curved walls. A lot of different colors. Stained concrete
like I said earlier. You also find a lot of spun metals. Very, very modem type facility. I compare
it a lot to a Sidney's restaurant if you've been in one. On the inside. We also have a running
track at this facility. Hardwood aerobics studio floors. All of our, what we usually furnish our
clubs with is approximately about a million dollars worth of modem equipment. So for those of
you who are familiar with the YMCA, Northwest and Lifetime's in town, equal if not more than
what they provide for equipment. So you can see large whirlpools. This is our physical therapy
pool. It's a hot pool just used for physical therapy. We also offer that. We're doing some
different study right now in conjunction with the St. Cloud hospital so we really take on a
different tone with a lot of our communities. As you come up front here, you can kind of see the
Roman look as you walk in. We used a marble front. Big pillars. It's a very appealing club to
the front. Again when you drive down the road, the number one comment we get from people is
wow. I had no idea that the Gold's Gym was going to be that nice. So this kind of gives you a
floor mn down of the different things you could expect in the facility. This one is actually a hair
bit smaller than the one we're proposing to you. So to kind of give you an idea of what it might
look like inside.
Lundquist: This one in Sartell is smaller then?
Jamie Nelson: It's about 4,000-5,000 feet smaller, not including the tennis. If you count the
tennis this is 70 plus thousand square feet. But obviously this community, it's tennis needs are
already being met in Eden Prairie so that wouldn't be something that we'd really want to dive
into. So with this being said at this point, the video's actually getting a little redundant so I don't
need to have you guys go through two full tours. To kind of give you an idea, can I pull this
forward really quick? This is also our facility in Vandais Heights that we're currently
constructing right now, so as you can see, and I don't know if you can zoom that back or not. So
your entry, there we go. So your entry is right here and as you see it's a different layout because
of the constraints of the building but a very similar prototype. A couple things that we're
proposing different in the Chanhassen market would be to start with a basketball court and
racquetball courts, and right here we have it slotted for a 3 story waterslide and we also want to
get started in Chanhassen with a 3 story waterslide right off the bat as well. So now to kind of
dive in real quick for you, and I'll keep it as brief as I can. First of all, Chanhassen for me has
been, has been I guess my dream city for about 5 years. I grew up in Minnesota, just recently
moved back and partnered up in this venture about a year ago and the first city I really wanted to
go to was Chanhassen. I have several family members and dear friends in the Chanhassen market
and I've always known that the need for a fitness center in Chanhassen is probably one of the
highest in the suburb area. What we offer in St. Cloud is what we'd really love to offer in
Chanhassen as well and that's a lot of community involvement. We do a lot of family swim
times. We do overnight proms. Overnight homecomings. You know we try to do a lot to get the
kids involved. We have varsity program for all the varsity and junior varsity people in the local
community, whether it be choir or football, band, debate team, whatever it might be. If you're a
varsity participant we offer free memberships at off peak hours of our clubs as well so we really
try to take on more of a community hub. The other thing that I've noticed in the Chanhassen
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market is there's not really a community center. There's not a place where really neighbors can
hang out with their kids and that's another need that we really feel that we can fulfill in the
Chanhassen market. What we do is we target cities just like Chanhassen. Right now we're
working on projects like I said in Vandais Heights. We have one in Sartell. One in St. Cloud,
and then we have another one in White Bear Lake. We're also looking to expand into the
Lakeville area, Mendota Heights and the Blaine area so really suburbs that have kind of evolved
that don't have a community center that really need one, and that's the purpose that we come to
town with this is to fulfill that community center. So that's kind of our vision on that. Some of
the long term visions about Gold's Gym is it's pretty much right now one of the longest standing
health club organizations in the country. It's been around for about 37 years. Longer than
Bally's, Northwest or Lifetime for that matter so the tradition with the club is there. It's got long
standing recognition. As far as our growth goes, we feel the Chanhassen market is a real gateway
into the Twin Cities that we're really trying to approach. As far as who we are as a company, we
won't go to a city unless we can get a lot of community participation. When I say community
participation, we have some cities right now that are offering us land and tax abatement. That's
not a necessary need for us to go into a city to do that, but to go into a city we really like to tie
into the school systems. Tie into any city events that there might be. If we can get tied in, then
our clubs can be very, very successful and for that we provide needs that the city has. And that's
how we market it. The reason that this particular location in Chanhassen is so appealing to us is
basically the curb appeal. For us not to have any community involvement in a city like this, it has
to be very easily recognized from main traffic. We also really like the concept of the park and
ride being right there. We feel we'll get a lot of members right from the park and ride because
one of the main components to a fitness center...right next to movie theaters the best they can.
There' s a lot of similarities in the marketing and the type of people who go to movies and health
clubs so for us being close to the movie theater is another very appealing feature for us. So with
that being said, I wanted to keep my presentation for you fairly brief tonight and open it to
questions. I'm assuming there will be several.
Furlong; Okay, thank you. Questions.
Ayotte: Is there much flexibility in terms of going smaller or possibly altering what might be
there and is there any discussion point about other locations in Chan? I know, I hear your points
especially with respect to the theater but is there any room for discussion about other
opportunities within the city of Chan? Location wise.
Jamie Nelson: Sure. Sure. And a lot of that would dictate when we come in. As you all know
there's a lot of health clubs in town that really only will go to a town with subsidy. That will
subsidize either the land, tax abatement, things like that and they won't go to a town unless that's
there. If we were to do something further out, say just west of town here a little bit, we'd still be
interested in coming to Chanhassen but it'd probably be a couple years out until some of the
development could reach out that way. With where it's at right there, it's really appealing to
where we can get the same kind of retail flow that other places can get. You know with that, I'm
sorry you had two questions. I think I addressed one there that we would still yes, be interested in
coming to Chanhassen but it would probably be a little ways out.
Ayotte: And a little more of a look see with regard to.
Jamie Nelson: Size.
Ayotte: Well, more configuration. I know tennis takes a lot of space but if we could look
towards the holes that we have in our community center activity, and I know the guy on my left is
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going to say something about ice rinks but. Not that left. But I'm just interested in exploring it
further I guess.
Jamie Nelson: Sure, and I think you bring up some valid points because when we looked at this
community we really pin pointed some of the needs and we felt the basketball courts and the pool
with the water slide were a vital need. As far as downsizing it, if I had to say there'd be one thing
that we would, that we could live without would be the racquetball courts but we also feel there's
a need in the town for that as well.
Ayotte: Just one more question. How much can you press?
Jamie Nelson: It depends.
Ayotte: Who were you asking?
Peterson: Can you press Mark?
Mark Senn: Yeah but he's half my age, come on.
Furlong: Anything else?
Ayotte: No, thanks.
Furlong: Okay, thanks. Mr. Lundquist.
Lundquist: Parking spots Mark on the north and east of the building. I'm assuming that there's
just one entrance into the facility, or you're not going to be coming in the back door, so the
number of parking stalls that you've got on the north and east. Is that, what's the intention? What
would they service? Would that be a, I mean who's going to park there?
Mark Senn: The configuration of the restaurant's going to answer a lot of that question. But we
feel some of the restaurant parking's going to be there because our expectation really is that that
restaurant is going to almost be 3 open sides, so to speak. In addition to that, that will be
predominantly where we try to funnel employee parking, that sort of thing. I mean essentially
you're talking about 40, what is that 46 stalls I think on the north side there and about 18 I think
on the east side.
Lundquist: Okay. Two questions Jamie for you. Anticipated effect, we have two fitness oriented
businesses in Chanhassen right now. The Curves for Women and the Chan Fitness Center.
What's your anticipated affect on those businesses?
Jamie Nelson: Sure. Curves for Women probably not a whole lot in the sense that they really
appeal to the first time fitness person and it's a very nitch market. With us having a women's
only center, what we tend to do is get what I would call a graduated Curves member. They've
evolved beyond what Curves can offer and that's usually when, and that's Curves' strategy.
They're the gateway into fitness. That's their whole concept. They have a very high attrition
rate. That's kind of how they do it. As far as the Chanhassen club right here, I've had several
thoughts in mind, depending on how this goes. I'd love to contact the owner of that facility and
find out what kind of opportunities would be there.
Ayotte: He's in the back row.
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Jamie Nelson: He's in the back row? Okay. There he is.
Lundquist: And how about any visions or thoughts about membership rates or is that something
you want to keep proprietary or no?
Jamie Nelson: I'll dive into that for you. As far as our rates go, what we try to really do is scale
down some of our versions so that without our club being all marble and all slate, as some of the
really grand clubs are in the Twin Cities, we can fulfill every need with a basketball and the
racquetball and all that, but without adding so many of those extra amenities. We're about 30
percent less than any other club in the Twin Cities. The average membership right now in the
Twin Cities for a single membership is $65 a month. We're right around $40 much more
affordable option.
Mark Senn: Talk about the family too.
Jamie Nelson: Yeah absolutely. We do offer a couple family memberships. Right now the
average family membership in the Twin Cities runs roughly around $150-155. And we're a little
under $99. So we also offer child care, which on a family membership is part of the membership
so really our goal is not to create tons of ancillary funds that way. We really excel in some other
areas that other clubs don't do as well such as personal training, supplementation and things like
that so we can create revenues from other arenas that some of the other clubs in town choose not
to.
Lundquist: Okay. That's all the questions I had Mr. Chairman.
Furlong: Okay, thank you. Mr. Labatt.
Labatt: Nothing.
Furlong: Jim.
Bohn: I had a question. What's the outside of this building going to look like?
Jamie Nelson: Well we kind of go with, it has a lot of similarities to the movie theater that's
currently there, only with more of a Roman look. We do a lot of really pretty pillars. Marble on
the front. Really we do a crown molding all around the facility so it's a very, it's a very elegant
look. I wish, I was kind of caught a little bit off guard tonight as far as exactly what we were
going to go over so I could have brought a beautiful picture of our Sartell facility because it will
look somewhat similar to that. But at the same token, as Mark alluded to earlier, we are open to
making sure that our center fits the look of Chanhassen. We're a very flexible organization and
that's why I think a lot of cities right now are interested in working with us. If I could add one
more thing too that at the back of your minds you might be interested, and I wasn't sure if I was
going to chime in on it or not, but with the allotted parking that's there, for our size facility and
how many members our goal, it's more than ample parking and I have several studies that I can
produce for you guys to show you that as well. We had this same issue, we're right next door to a
Target in Vandais Heights and Target's probably the most stickler company out there as far as,
Target won't do any center in America unless they have the right of refusal of any tenant and we
had to provide a lot of documentation to show that our parking truly wouldn't lead into their
parking lot so we can provide any kind of parking statistics and time of day that you'd like. We
also with our kind of business, since we're a destination point, we can really dictate our traffic so
due to different types of memberships, we can create off time memberships and what not to make
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sure that it doesn't affect other businesses where a lot of businesses don't have that kind of
luxury. We do.
Mark Senn: Yeah, in Vandais Heights we also have shared parking with Sidney' s.
Ayotte: Say that again please?
Mark Senn: With Sidney's. A major sit down fine dining restaurant. Same type of thing that
we'll have here.
Jamie Nelson: Our building's approximately 100 feet from their building.
Furlong: Other questions Mr. Bohn?
Bohn: No, that's it.
Furlong: Mr. Peterson.
Peterson: Just a question for staff. I don't know if anybody else has applicant questions or not.
Furlong: I have a couple so let me take care of those first. No particular order. The plan that we
received this time expanded the facility itself by 4,000 square feet. What was added within that
expansion? Or was it just more of the same?
Mark Senn: Essentially the concept we gave you before I believe was around a 30 or 36,000
square foot. It's pretty much the same size as the St. Cloud/Sartell facility, okay without the
tennis. And the plan with their's, we incorporated green area which would allow for future
expansion. Okay with the city's request essentially for the fine dining restaurant to accompany
the project what we had to do is go back to Gold's and sit down and come up with a permanent
concept essentially that would work, not allowing really expansion in the future but also taking in
all the needs of the current as well as allowing for the restaurant, and that's where the 40,000
square foot number came into play. Everything is in this facility that was in the facility before,
probably a little more of a presence with the gym and the racquetball, etc...
Furlong: Okay. With regard to the, and you've talked tonight about family oriented proposal. I
guess I'd, you mentioned that tennis was being satisfied or demand for tennis as being satisfied in
Eden Prairie. I assume you're speaking of Flagship, is that right?
Jamie Nelson: Flagship which is.
Furlong: And Northwest, right. Right. How do you, from operations and facilities, what are the
differences between Flagship and your gym as you envision them?
Jamie Nelson: Atmosphere. We're much more of a fun center, to kind of just be blunt with you.
They're very traditional. They're very what I would call.
Mark Senn: Stuffy.
Jamie Nelson: Well not even stuffy to a degree but more institutional. They're very, very set.
We create more of an atmosphere. You know it's okay if you don't look a certain way or you
know if, you know it's just more of a difference in atmosphere. It's a more upbeat center where
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the primary focus is fun. And their's is more of like country club, and our focus is to be a hub of
the community and we use fitness as the hub. They have several focuses and they do a good job
with all their focuses but we just stick to the one simple thing we know how to do.
Furlong: Okay. You talked about water slide and family and family swimming I assume. How it
is, you know when people have concepts of community centers, recreation centers, it's around the
clock, available for everybody. Is that true here as well?
Jamie Nelson: Can you elaborate on that a little bit? I'm not sure, with the kids or.
Furlong: Yeah. Opportunity.
Jamie Nelson: Hours of operation are from, generally 5:00 a.m. to 12:00 p.m. And what we do
is, since we are an adult facility that has a lot of family focus, we designate different hours
because there's going to be several people in this community that don't want to be around kids.
They don't want to be in a YMCA atmosphere and then there's plenty of people in this
community that want a place to go on Saturday with their kids. They want to be active with their
kids, so we designate hours for both your serious fitness people and your family people so that we
can accommodate both in a smaller facility and keep it affordable. Or else we'd have to make our
facility much bigger and then we'd have to charge much more.
Furlong: Okay. Mr. Senn I think you mentioned, there was no condemnation issues or
encroachment issues with regard to Bloomberg properties, and I don't know if, I don't want to put
words in your mouth, but I want to, the existing bowling alley, the existing building sits on some
of that property and so do you see that, I mean from a, I guess I want to be clear from your
understanding, are they the same type of deed for clearing property title with your proposal that
we would have with the other proposals?
Mark Senn: Well, don't get me wrong. I mean as far as, we are not encroaching on the
Bloomberg parcels, and that analysis.
Furlong: With your building, where you're building the site.
Mark Senn: ...yeah, right. And we had that analysis done by Sathre-Berquist and they've looked
at that. We're not encroaching on the access easement. I mean we're not encroaching on the
Southwest Metro easement. Okay? I mean we've designed around all of those elements so that
we don't. Now again there is a complicated cross parking or joint parking arrangement, but again
that needs to be worked out but essentially what I'm saying there is, there is really no net loss of
parking so I don't see any condemnations or damage issues as it relates to that because if you're
not suffering from that loss in parking, you know what could it be? So it's just mainly a matter of
reordering things. Maybe to put this into context, the existing building as we understand it from
the survey, incorporating I believe the bowling center and movie theater is approximately 60,000
some odd square feet. Which if you back the movie theater back out of it, ends up putting you
just under 40,000 square feet. Okay? So if you're getting the picture here, essentially you're
ripping down the old polling building which is roughly the same size as the Gold Gym. Moving
the building to accommodate all these things and reconstructing it, and then you're adding a
restaurant onto it.
Furlong: Okay. Alright, and I guess what I understand.
Mark Senn: I must have said something wrong because Rick's up here.
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Rick Sathre: I'm Rick Sathre with Sathre-Berquist. We've done the site plan. The Bloomberg
Companies own an outlot that's in the parking lot here. There's 4 parcels I believe that they own.
One is the strip along the east, which is part of the common wall between the buildings. This
parcel on the north, and this.
Gerhardt: There' s a map right down there. If you want to.
Rick Sathre: A rectangular site at the north edge of the city property. Strip, I believe it's 6
inches onto this site on the east edge. A little rectangle fight in the back of the cinema, which is
an access way back and forth I think. And then there's a larger rectangle, which I think is called
Outlot B on one of the plats. That lies in the parking lot area. As Mr. Senn indicated, we're not
on top of that. There's parking lot there now. There would still be parking lot there, but we're
not building on any of the Bloomberg parcels. We're not proposing to actually construct a
building on any of those.
Furlong: And I guess, well okay. Let me just make sure, I think that was my last question here
but I have a follow-up then for staff, unless Craig you want to go first.
Gerhardt: Well if it's regarding the easement area, John Kelly's here from our attorney's office
and John is very aware of the easement agreements. Where all the properties are located and he
can explain what the legal aspect of those are.
Furlong: I guess that's my question. While it sounds like the proposed building doesn't encroach
on any of the property, there's a building there right now that does, and we're going to have to
take that down first, and so I guess I'm curious, are there less issues here with regard to the
Bloomberg properties? Perhaps not from a parking easement issue but from an ownership and a
demolition issue. Or are they the same regardless.
John Kelly: He was right in talking about Outlot B I think is right about here. I don't know that
you're building on that or not, but. And that has a cross access easement between Bloomberg
Companies and the Cinema. They are the only ones that I think have that easement on that.
Those two jointly have it. Bloomberg Companies owns Outlot D, which runs up and down here.
It's about 6 inches. They are a party to a party wall agreement again with the Cinema people,
and does not really, the City at one point was, or the prior owner was part of a party wall
agreement. That was all wiped out in 1997 when a lot of things were created here, so there is an
issue when you go to tear it down, how you tear it down. Again the building is partially on this
little piece up here, so that this piece is probably not necessary for development, but again the
building sits on part of that.., side over here. The issue that really affects their piece is where that
building is, yeah that's owned by Bloomberg up on top. Right up here. But there is, the City,
Bloomberg and the Cinema have an easement for parking that runs probably right here. About
right through there, so you'd have to get rid of that easement from the standpoint of arranging for
parking and getting the... Yeah, you'd have to recreate a reciprocal parking agreement with
everyone. Mr. Rice is sitting over here who created all these documents so, tell me if I'm wrong
but anybody that develops it and wants to build in this area right here or do anything with that
other than leave it as parking as it is today would have to work with the Bloomberg Company and
the cinema to recreate a reciprocal easement for that. That was all created in about 6 documents
that created all that in 1997. Other than that, this is the City owned land. The City owns this
property and this property, and of course Southwest Metro has that non-exclusive easement on
that. This piece of City property is subject to the easement with Bloomberg and the Cinema. So
parking really affects all of this and kind of off of like that. And again if you can create
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reciprocal agreements with people to make for, let's just say you have the same number of
parking spaces but you' ve got to reconfigure.
Furlong: Okay, thank you. Mr. Peterson.
Peterson: Todd my only question was, they presented a new number on the purchase price and
whether or not that changes staff' s perspective at all, and if so, how?
Gerhardt: It helps. We listed a variety of things in our recommendation. Price was probably one
of the biggest things when it came to economic development issues. We have some concerns
regarding the viability of the movie theater complex, and their future on that site without their
expansion.
Peterson: Does one of the developments, you know does one of the developments presented
tonight preclude that? Either Marcus or Market Boulevard.
Gerhardt: For the cinema to put their expansion on, they're going to have to work with
Bloomberg Companies to get that accomplished. Right now the cinema owns about 30,000
square feet of land and they go into what is the Bloomberg parcel, for that to be accomplished.
Not seeing the specific site plan for that but.
Peterson: But to my question specifically was is, could the theater work with Market-Boulevard
and Marcus to still accomplish what they want to accomplish?
Gerhardt: Yes.
Peterson: Okay.
Lundquist: They work with Bloomberg separately.
Gerhardt: They could do that too.
Furlong: Okay. Any other questions.
Gerhardt: The other criteria that we measured in there were taxes and the difference in the tax
generation from the Bloomberg development and this one.
Furlong: Okay. Okay, thank you. Why don't we take a 5 minute recess. We'll reconvene at
9:30, if we can be prompt. Thank you.
(The EDA took a short recess at this point in the meeting.)
Furlong: At this point I guess we'll open it back up. I don't know if people have questions for
staff. There was a report with no questions ahead of time. Now that we've heard the proposals if
you've got different questions, or other questions for staff. For the attorneys at this time. If there
are none.
Lundquist: Just kind of getting back to the easements. In your opinion, is there obviously
Bloomberg has a much less of the issues to deal with but if we're comparing Marcus to Market
Boulevard development, is there one or the other that seems like it has less issues to resolve with
easements and other condemnation or whatever that process may be?
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Economic Development Authority - May 5, 2003
John Kelly: I don't, in looking at it I don't think they do. Assuming that Southwest Metro is
going to be satisfied with whatever they do, I believe Marcus intends to basically leave them
alone and so they don't have an issue with it at all. With the Market Development one, they do
intend to build on that area so they would have to obviously satisfy Southwest Metro. The other,
other than that I think they're both pretty much the same in that, as I was pointing out on the, to
the west of the actual building where the bowling alley is, it's pretty much encumbered with
easements that benefit Frontier Cinema property for the cinema and the Bloomberg, and they are
what they call the beneficiaries of it. And so both would have to deal with them and give them
replacement easement. Reciprocal easement on the property that would obviously meet what
staff would want from the standpoint of what is there and meet their needs. Otherwise the EDA
or city would have to beat them out of those rights and I don't know what damages were there...
from the standpoint of money damages, I don't know what would be. I think both of them have
an issue with Outlot B which is the small parcel that Bloomberg owns in there. It is encumbered
now with a parking easement. Right now without cinema's consent, Bloomberg couldn't build on
it. I don't know how buildable it is with or without it. In any rate, just for pure size and what you
could build so. Again you would have to, unless you can arrive at, and I know there's been
discussions with different developers and Mr. Bloomberg's companies, Mr. Johnson, about a
purchase of all those interests.
Lundquist: Okay, thank you.
Furlong: Any other questions or follow-up questions at this point? With that, why don't we open
it up for discussion. With regard to any or all of the proposals. Mr. Bohn, do you want to start?
Bohn: At this time I don't any questions.
Furlong: Okay, comments. Mr. Labatt.
Labatt: Well, I think that the easiest developer with the less hassle is obviously going to be
Bloomberg. Condemnation is something that I could not imagine if we were to go with
somebody else, that Bloomberg would be willing to sell and become a willing participant. I could
see them forces us to use condemnation. Condemnation is for a public purpose. I cannot see
condemning somebody else's private property to benefit another private individual. That's not
the business that we are in for as a city. In the 5 years that I've been up here, we've condemned
one property and that was the Frank Fox property and that was for public purpose, for open space.
So I'm not for taking of another's property if there's not a public purpose here. So my reasons
for Bloomberg, it's an excellent mixed use. It brings in office...Number two, it generates the
most in taxes. Almost $260,000. There's no hassles with condemnation or taking of property.
The purchase price, I'm not going to play that game. That's for people with desperate things.
His price has changed twice now so, his purchase price when we started tonight was the most.
Less net to the city so I'm going to go with Bloomberg.
Furlong: Okay. Mr. Peterson.
Peterson: I feel like this has been, as I shared at the last meetings, it's been one that I've
struggled with and dealt with. This will be the third time. I feel like I've been engaged twice and
still haven't seen the wedding ceremony yet. Part of my goal is forcing my decision to try and be
an economist of sorts. What is viable? The two things we approved before had great
presentations. They looked great and we were enthusiastic and they didn't come to fruition. So
hence now I put myself in the position, I need to be an economist of sorts. What can be done?
And we heard everybody tonight, all three parties say that they can be done. And as I shared last
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time, I want it be done. I want to put this behind us. So then I look at a couple other things. In
Market Development, the group presents housing that we initially asked for, that I think ideally
I'd still like it to be there. After the presentation by the County and knowing what role the city
has to play, I'm certainly less motivated to do that than I was originally. And I have never been
necessarily for the drug store with the drive through. I know that they're not limited to that, but
that's really what is focused on right now. So I don't think that for us is the most viable
alternative as they aren't necessarily bringing anything new to the party. Now, if you compare
the Bloomberg proposal to the Marcus Corporation proposal, you know clearly this council is
going to be struggling and the previous council certainly spent a lot of time on bringing a
recreational facility, finding a way to do that to Chanhassen. We're presented with an interesting
decision tonight. What can we bring Chanhassen that they don't already have? We all agree I
think that we want restaurants. Both proposals bring restaurants to the city. And one of the
primary points that Bloomberg's proposal, there's a bank there with a drive through. Again I'm
not, I don't think this site is conducive to drive through anything, so I'm kind of leaning away
from the Bloomberg proposal, only because it's similar to the ones that were there before they
couldn't get done. And if there's a bank in there that I'm not overwhelmed with having another
bank in this city. I think that lobby expansion for the theater can still potentially be done. And
Gold's brings something that we don't have, which is a recreational facility that in my economist
viewpoint is more apt to get done sooner than any of the other proposals tonight so I' 11 look at it
in summary. Market viability. I think Gold's can be done the quickest and it brings something to
the city that we don't already have that I think to a person we all want. So those are my summary
comments.
Furlong: Okay, thank you. Mr. Ayotte.
Ayotte: I'm going to, and I apologize. Part of Gold's, your name again is?
Jamie Nelson: Jamie Nelson.
Ayotte: Mr. Nelson?
Jamie Nelson: Yes.
Ayotte: One of the things I found that I liked about what Mr. Nelson has said is one, he wanted
to talk to the people that are already in business here. Chan Fitness as an example, and that was a
positive thing. Another positive thing is that he said he was interested in working with staff to
consider other opportunities, not necessarily at this site and to look at configuration. I'm selfishly
looking at our community center, and I think we have opportunities to improve that. And to coin
a phrase I think that Mr. Lundquist used in the past, pony in the pile. I think it was him that said
that. That I'd like, I'm hoping that this EDA can direct staff to look at how we can entice Gold' s,
Mr. Nelson to consider the options of fitting in tighter for our community center needs, because I
think there is an opportunity there. I don't believe that it's in this location. I believe that
Bloomberg's a better fit because it will facilitate cinema expansion. And although there's some
argument back and forth that with a lesser population, a restaurant and Gold's, that it's quicker,
there is from a conservative viewpoint the opportunity to have a number of tenants coming into
the Bloomberg project and jump starting it. Getting it going. I happen to, although I'm not the
fashion statement that Craig is, I think there is aesthetic appeal that comes along with the
Bloomberg project, and because of the easement issues, because of the other nature, the other
factors that were brought up with regard to demolition and so on, I also like that particular point.
I like the pedestrian friendly aspects of this one. I like the diversity of it. And for that reason I
favor Bloomberg's but at the same time I would hope that the staff, that this EDA group can ask
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staff to work closely with Gold's to see if there's an opportunity someplace else in the city other
than this location and then work hard towards that. I think, and I'm hoping that the City Council,
when we start taking a look at some of our strategic objectives, take a look at the community
aspects. Community center activities. But I do favor Bloomberg's. Thank you.
Furlong: Mr. Lundquist.
Lundquist: A lot of my comments are going to echo Mr. Peterson's comments. When I'm
looking at issues with Market Development, their building being, the actual building on top of
some of the Bloomberg property, I see that as creating a bigger issue. Retail and restaurant space
again is something that you've got to go out and get those tenants and make that a viable business
to go. Whereas Mr. Peterson already expressed that we've been down that road twice already and
haven't made that work. The Marcus proposal is your main tenant that's ready to go and filling
one restaurant space is, in my opinion, is probably easier than filling several office spaces and I
see the Marcus proposal as ready to go. They are ready, able and willing to break ground and get
going as soon as possible, which through the rest of the process, if we were to hold off on this
development another year or 6 months or whatever would be longer, whether it be Bloomberg or
Market, the lost opportunity in taxes could make up the gap in a hurry between the Gold's
proposal and others. I like the concept of the Gold's, again along the lines of Mr. Peterson's
comments on bringing something that we don't have in Chanhassen right now and that our
residents and previous council and, have expressed a great need for. They spent a lot of time with
citizen task force and other fact gathering and opinion gathering groups to try to put something
together and have yet been unsuccessful. Although there's probably other opportunities, as Mr.
Nelson stated, we're a couple of years or more out on that to wait for market conditions to be on
the western edge of the city to support that, so my leaning right now towards the Marcus proposal
for bringing something new to the community and something that the community wants and with
the extended purchase price comes in on par with the Bloomberg proposal.
Furlong: Okay, thank you. Mr. Bohn.
Bohn: I'd like to have the Gold's development in Chanhassen but not in this particular spot.
With the Bloomberg development it's going to start cleaning up that whole back side of the
Dinner Theater property, including all the way up to the apartments which you'll eventually get
some units in there. I like the Bloomberg concept much better. I've watched this property go
back and forth for 20 years and with Kraus-Anderson involved in it, I think it will grow. I think it
will work.
Furlong: Okay. Heard a lot of comments, similar comments to mine. I think time line for
performance is one that was mentioned a couple times. The concepts, as I said earlier we, it's
nice to have options. Sometimes that makes for difficult decisions but it is nice to have options.
We're in that situation we're in now from an opportunity standpoint. I think the, from an
economic standpoint, I agree Mr. Peterson that we need to look at that. I think from market focus
standpoint, market focus, excuse me. Marcus Corporation probably or could be quicker. There
would be the condemnation proceedings so we'd have to get our arms around, our comfort level
with that. Don't know from a public policy standpoint, I think we could argue that
redevelopment is a public purpose, if that's something that we felt was important. I think it'd be
easier to argue that if the owner of that property wasn't here with a proposal along side. If they
were just in the way or if they were not at the table so I think that makes it a little more difficult
there, because I think from a market standpoint, Marcus might go sooner. The ownership issues,
the easement issues, cleaning those up will certainly provide a delay. We've got some indication
that could be months rather than years but it could still take some time and cause some problems.
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Gold's does bring something new, without a doubt. Something we don't have. I don't know that
I have the comfort that it's what people are looking for, anticipating when they think community
center, and I think there is a difference there and a natural difference when the private market
provides something. They're looking for an economic return. Very often when the public entity
does, we don't need the market return that the private entity does. So I could see where there
could be some differences there but I have some concerns. The one that I haven't spoken about
to this point is Market Development Group, and I think given the other two and what we have
there, from an economic standpoint, from an option standpoint, I agree from the housing. Having
the benefit of the work session last week I think was very helpful in terms of understanding what
the city's role is there. And while housing is important and looking for affordable housing, I
don't know that we're in a position at this point to step up to those commitments. So where that
leaves me is with Marcus Corporation and Bloomberg. As I sit here I am torn between the two.
They both have benefits to the city, but for reasons stated there, there are some hesitations so
that's where I am. I guess one question I would like to ask somebody to tell me a little bit and
that is the timeframe from the condemnation standpoint. If we were to move forward with that, I
was just looking at John, the quick take procedure within Minnesota.
John Kelly: Yeah, there is a quick take procedure that if you go through and authorize the
condemnation for public purpose like this as a redevelopment area, and you're trying to put
together a package for doing that, and you authorize a resolution and send out notices, you can
acquire the property for use and development within 90 days. That doesn't mean that you'll
know the final dollar amount that you might have to pay whoever you condemn, but you have
your appraisals for the property and you deposit that money with the courts, and the courts would
then allow you, assuming that they also found that you have public purpose for taking the
property, would allow you to go in and develop the property. Then you go through a
commissioners hearing and potentially a court hearing if you don't arrive at a dollar number, and
would have to pay the amount that is awarded to them. But you do have control of the property
under the 90 day. It takes a 120 days to really get the job done once you pass a resolution for
condemnation. You have to have, if that's what you're going to do, if you can't arrive at
somebody buying it or something, you have to go in and pass a resolution showing a public
purpose and go forward. Once you do that you don't have to wait until you go through the jury
award and then court cases, you can do it in 90 days what they call a quick take.
Furlong: I guess the question is, Mr. Labatt raised the issue, is the redevelopment in this case,
would that be considered a public purpose?
John Kelly: We've looked at that and we feel that because of the need to redo the bowling alley
and this being all part of one thing that you'd have to do, that they would. You still have to make
the decision but there is potentially a legitimate public purpose for taking this property for the
redevelopment. I think you are in a redevelopment district, aren't you? And Tom Scott in our
office looked at it.
Labatt: Legally though would the property owner who is getting condemned who also wants
redevelopment, I mean that could potentially work against us.
John Kelly: I don't know that that makes a difference. It's done, and I understand your earlier
comment about taking private property for development by somebody else but if it is for public
purpose, like this could be because you're trying to redevelop that whole area up there, I would
have to look into that councilman to tell you if that. I don't know that they are going to develop
that property per se without buying the city land and some other stuff. I'd have to look at that
issue for you.
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Furlong: Okay. Other questions or comments?
Labatt: I just want to run some numbers by Todd quick. So the original offer from Marcus was
750. Then they upped it to 1.1. Right?
Gerhardt: That's correct.
Labatt: And now tonight he upped it to 1.3. So if you go back to the 1.1, and you minus out the
218 or up to 218 for the condemnation costs, and you come out with 882. Now you add his
200,000 back on top of that, what he upped it tonight, so you net out about 1,082,000. That's
$14,262 more than Bloomberg's offer. So are we going to give the opportunity to Mr.
Bloomberg to, or Mr. Clayton to counter offer with $15,000 or $14,2637 Are we going to get into
that game tonight? How are we going to handle that 1.3 offer?
Gerhardt: Well I hope it doesn't turn out into a bidding war here tonight. You were hoping that
the EDA would weigh the merits of each of the developments. When we laid out the best
economics from a tax standpoint, we felt it was important to weigh the condemnation costs so
you were aware of what the cost range was for that and then direct staff and negotiate a purchase
price. These are offers right now but you know, most of them have basically offered to cover our
costs and we haven't put anything in as a part of profit for this either. And in our calculations.
The City should be able to make a profit once in a while so there could be that added dimension
to it if you'd like to. But I wouldn't hope to get this into a bidding war tonight.
Furlong: With regard to negotiating a purchase agreement. We've heard comments tonight about
performance of getting it done. Mr. Gerhardt, what can we do as far as the purchase agreement to
ensure that it gets done if we go forward with one of these proposals? There are market forces.
There are legal issues for some of these and we don't want to bring Craig back to the alter one
more time. A third time. A fourth time I guess. I think everybody wants to get it done and so
from a negotiation, whether that's the economic negotiations or just the performance negotiations,
can we, what are our options there?
Gerhardt: Well we have steps, some on the EDA you may remember when we entered into a
purchase agreement with Kraus-Anderson. We had certain timeframes for them to meet. We
have timeframes that they had to show us intent from a bank. They had to show us for financing
construction of the project. They had to show us a tenant, signed lease agreements or by tenants
the lease sub-lease by a certain time. We had if they didn't meet any of these timeframes, then
the purchase agreement would be void. Then we go back through this process again like we did
in the last 2 months. So you can put those parameters in a purchase agreement, and if they don't
meet them, then the purchase agreement would be void.
Peterson: This is why you're Chair. You get paid the big bucks for this one.
Furlong: This is the big buck one, yeah. Alright. Well I guess, I guess what I would like to do,
and trying to balance the economic components with the practical components and all the aspects
that we see here my, I think at this point what I'd like to see, I'm somewhat concerned about
Bloomberg's ability to get it done within the timeframe they discussed and so I guess I'd like to
see if we go forward with them, some clear dates and soon dates. We had some in the proposal. I
guess I'd like to look at those or, my sense would be to make sure that those could not be
accelerated, but from an economic standpoint I would also like to see, we heard tonight from
Marcus Corporation an offer to increase their purchase price. We haven't given any of the other
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companies, other groups chances to do that. If we were to work with Bloomberg companies, that
might be something that we could ask them to do as well is revisit that price. I think overall my
sense is I'd like to see if we can't put something together with them, assuming that we can move
forward from a market development standpoint. That we have assurances, a comfort level that
they're going to be able to get it done because we avoid the condemnation and the ownership
issues. I think from a getting it done standpoint that, even with the legal issues I think it's an
easier route to take and as I said earlier, we've got two good choices here which should be an
opportunity but it makes for tough decisions. So I guess from my sense I'd like to build in some
constraints to this recommendation to staff and make those constraints very stringent for what
we're comfortable with to make sure that it gets done, and it gets done economically fair to the
city. Not just what the costs we have in. I wasn't here but at the time the city made this decision,
or the EDA made this decision they took the risk of being able to develop the site and I think that
should be some consideration included in staff' s discussion with Bloomberg Companies in terms
of the final offer price. There are intangible benefits clearly but economics are important too. So
I guess I'd be open to some thoughts or comments from others.
Ayotte: I think you bring up an excellent point because we want to keep, to coin a phrase that
Mr. Peterson's used in the past, push manure up the hill. So seriously though, if we could.
Gerhardt: One guy laughed.
Labatt: He's been heating it all year though. Either that or he's been watching him on video.
Ayotte: But we really do have to keep it on track and to build it, I wish there was some sort of
way that we could build in a back-up in case. You know and talk towards that but I think your
point is well taken. Let's put some constraints on it so that it has a greater chance of working.
I'd like to add the point that I hope we can get out of the EDA guidance to again look at the goals
and opportunity in tandem but I personally view Bloomberg as being the way to go.
Furlong: Understand and from my earlier comment, I agree. You know the Gold's Gym concept
is important. It would be a wonderful addition to our city and so I want to figure out how we can
do it. Unfortunately we only have one site at this point that an old bowling alley sits on. If we
had two old bowling alleys it'd be easier but we've only got one so how can we get it done and
maybe get both. I'm very open to ideas and, from anybody and that would include any of the
developers to try to fred a way to get it done from a cooperation standpoint. But in terms of
requirements for negotiating a purchase agreement and having deadlines within that purchase
agreement so that we move it along. What I don't want to do is be back here. Market conditions
change. What I heard tonight was that given current market conditions, Bloomberg Companies
can get it done and so relying upon that, you know it's not quite as quickly as Gold's but there's
the condemnation or the legal issues we talked about so. Are there other comments at this point?
Do we need a motion at this point or can we continue?
Gerhardt: How soon do you want to come back in 2 weeks?
Ayotte: What do we come back to in 2 weeks?
Furlong: Wait a minute.
Ayotte: You're confusing me.
Peterson: Finalize purchase price. Finalize.
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Economic Development Authority - May 5, 2003
Gerhardt: Time table and see if we can't get a couple of...together.
Furlong: Perhaps you could check the council schedule. If we could do this on a night of a
council meeting, unless you think it would take a full evening, and then let's discuss that as far as
the timing.
Gerhardt: We'll come back with a date.
Furlong: Yeah, we meet on the 27th but I don't recall what our agenda looks like then.
Gerhardt: Not too bad on the 27th.
Furlong: I'd like to do it quickly because if for some reason, and if they start bogging down, I
want to be able to get back to Marcus Corporation quickly.
Lundquist: So we're directing staff to develop a purchase agreement with all of the developers or
1 of the 3 developers?
Gerhardt: We're going to ask for a letter of intent from each of the developers with a price, a
time table, and we will be having other discussions with each of the developers about their
concepts.
Lundquist: So what have we accomplished in the last 30 days or 60 days that it's been?
Labatt: Well we've eliminated one. Why don't we make a formal motion as a EDA and just
limit it to one right now and give them 2 weeks. If nothing transpires, like you said Tom, let's go
back to Marcus then .... make a motion that we direct staff to negotiate and enter into a purchase
agreement with Bloomberg Corporation representing Clayton T. Johnson for the purchase of the
bowling alley site, and to come up with final purchase price and an aggressive time table.
Furlong: Is there a second?
Ayotte: I second that.
Furlong: Any discussion? Or amendments.
Lundquist: Ask for an amendment that we have it back, the purchase price back in 14 days.
Furlong: That would be, you want the full letter of intent, not just the purchase price.
Lundquist: Correct.
Labatt: Acceptable.
Furlong: Accepted, okay. 14 days. Any other comments or discussion? If there's none we'll
call the question.
Labatt moved, Ayotte seconded that the EDA direct staff to negotiate and enter into a
purchase agreement with Bloomberg Companies for the purchase of the bowling alley site
and bring back within 14 days a letter of intent with a final purchase price and aggressive
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time table. All voted in favor except Peterson and Lundquist who opposed, and the motion
carried with a vote of 4 to 2.
Furlong: Are there any other items to come before the EDA this evening? If there are none, you
already had your recess. If there are none, a motion to adjourn.
Bohn moved, Ayotte seconded to adjourn the meeting. AH voted in favor and the motion
carried. The EDA meeting was adjourned.
Submitted by Todd Gerhardt
Executive Director
Prepared by Nann Opheim
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