Memo- Excelsior Crossings ProjectEconomic Development
MEMORANDUM
TO: Honorable Mayor and City Council
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FROM: ~..,..~~ ~;,1~~m Kerrigan, Director of Planning & Economic Development
DATE: ° February 22, 2007
SUBJECT: Excelsior Crossings Project
The existing redevelopment agreement for Excelsior Crossings anticipates that Opus
Northwest, LLC, would own and develop all the property in this project area. Since
executing this document, Opus has now negotiated a lease with Cargill, Inc., to occupy
the first two buildings to be constructed.
• in i ' i I i wi h hat the were interested in securin
Cargill, the r snit a d scussions t Opus, stated t y g
control of the parcel on which the third building would be constructed (Parcel C) in order
to address future expansion needs. The lease agreement they have with Opus allows
the purchase of this property subject to approval of the terms of an agreement with the
City of Hopkins.
Over the last month, City staff has been working with representatives of Cargill
concerning a redevelopment agreement that would allow for their purchase of the above
described property from Opus. At the February 27 work session, staff has scheduled
time to discuss the parameters of the agreement that has now been negotiated. At this
meeting, representatives of Cargill will be present to provide a brief overview of their
occupancy plan for the Excelsior Crossings site. It is anticipated that following this
meeting a redevelopment agreement would be brought forward for consideration by the
HRA on March 6.
Attachments
Ca g~ll~
Office Services
2-26-2007
Dear Hopkins City Council Members,
Cargill is very excited about the Excelsior Crossings location for our new
office buildings. This is a premiere suburban location in the heart of the City
of Hopkins a real destination and a visible gateway to your downtown area.
Cargill's ownership of the third lot will allow us to create a complete campus
and an anchor for Cargill office growth.
The single tenant campus is a bit different than the earlier expectations for this
site. However, I feel that Hopkins is getting all the value -- and more --from
Cargill that it hoped to get from amulti-tenant project.
Here are some key points that support the change from multi-tenant to single
tenant.
• Cargill is making a significant financial investment with Opus to
guarantee construction of a third building.
• Cargill is committed to making this a location where our core businesses
will grow from our present arrangement.
• Cargill is committed to being a good neighbor and member of your
community. Multiple occupants might not be as engaged with the
community because of their smaller presence.
• As sole tenant of the campus, Cargill would treat the property as its own.
A collection of small tenants might be more transient, and look to their
landlords who are often large pension funds or insurance companies.
The commitment isn't the same.
• The two initial buildings will be almost full from the beginning with
approximately 1,500 people. Amulti-tenant building would have less
density and thus fewer potential customers for the community. There is
no guarantee what multi tenant occupancy levels would be, or when
a particular buildings would be built.
John McCabe PO Box 9300 Tel: 952-742-6344
Vice President, Administration MS 18 Fax: 952-742-5899
15407 McGinty Road West Minneapolis, MN 55440-9300 john mccabe@cargill.com
Wayzata, MN 55391
Cargill has every intention of constructing the third building, but is not able to
predict when that will be. Business growth will be the driver. I can say that
between 1992 and 2000 Cargill added 395,OOOsquare feet to its office portfolio
in Minnetonka. Much of that will be shifted to Excelsior Crossings to be the
foundation for the next round of growth.
Cargill's ownership of the third lot requires a development agreement between
Hopkins and Cargill to replace the Revised Agreement between Hopkins and
Opus. City Staff has summarized the minor changes to the agreement. I trust
you will find them acceptable and approve the new document.
Thank you for your kind consideration of our proposal.
Sincerely,
John McCabe
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Financial highlights
Dollars in millions
2006 2005
Percent
Sales and other revenues $75,208 $71,066 6
• Net earnings 1,537 2,103 {27)
Net earnings, excluding special items' 1,727 1,525 13
Cash flow from operations 3,318 3,196 4
~ Excludes in fiscal 2006 a noncash charge of $190 million related to a restructuring charge'recorded by The Mosaic Company, in which Cargill
is the majority shareholder. Excludes m fiscal 2005 a noncash net gain of $578 million related to the formation of Mosaic in that year.
Ca gUl~