VII.2. Detachment and Annexation of Minnetonka Property; ElverumMay 5, 2020 Council Report 2020-030
DETACHMENT AND ANNEXATION OF MINNETONKA PROPERTY
Proposed Action
Staff recommends adoption of the following motion: Move to approve Resolution 2020-022 and
Resolution 2020-023 Requesting Concurrent Detachment and Annexation of Certain Lands
Pursuant to Minnesota Statute Section 414.061.
With this motion, the process of detachment and annexation will be initiated.
Overview
The City of Minnetonka is requesting to annex into Minnetonka a portion of the parcel at 2
Shady Oak Road. The purpose is to facilitate a redevelopment project, Shady Oak Crossings,
whereby the annexation allows for a better design and financial structure for the proposed
development.
To compensate the City of Hopkins for the lost tax revenue and future redevelopment potential,
the City of Minnetonka offered a one-time payment of $74,000. That offer was discussed at the
January 14, 2020, work session and the general feedback was that the Hopkins City Council
would prefer a land exchange that provided taxes in perpetuity and preserved redevelopment
opportunities in the future. There were also questions raised about the need for the additional
property which are answered by Minnetonka in the attached memo.
Minnetonka has responded with an offer to annex the portion of the Hopkins property in
exchange for the parcel at 11524 Excelsior Boulevard (Subway property). The owners of both 2
Shady Oak Road and 11524 Excelsior Boulevard are in agreement with the proposed
annexation/detachment.
Primary Issues to Consider
• Why is the land beneficial for the Minnetonka development?
• What is the financial impact on the City of Hopkins?
Supporting Information
• Resolutions 2020-022 and 2020-023
• Map – Parcel Split Exhibit
• Memo from City of Minnetonka
• Link to full Minnetonka Council report:
https://www.minnetonkamn.gov/home/showdocument?id=6658
___________________________
Kersten Elverum
Director of Planning & Development
Financial Impact: $__0__________Budgeted: Y/N ____ Source: ________________
Related Documents (CIP, ERP, etc.): _______________________________________
Council Rpt 2020-030
Page 2
Analysis of the Issues:
Why is the land beneficial for the Minnetonka development?
The additional land for the Minnetonka development by Ron Clark will allow the building to have
access to the underground parking from the controlled intersection of Shady Oak Road and
Mainstreet, taking most of the traffic from the local street, Oak Drive Lane. This is preferred
from a traffic management and neighborhood perspective. It also provides a larger footprint
which allows for a preferred building design and an increase in unit count from 49 to 75.
What is the financial impact on the City of Hopkins?
While splitting the parcel at 2 Shady Oak Road limits the future redevelopment potential,
especially if it could be combined with the property to the south, the proposed
detachment/annexation arrangement does provide an increase in annual property taxes and
maintains some future redevelopment opportunity. The following is a chart comparing the two
properties:
Property Size 2020 Tax Value City (Hopkins)
2020 Taxes
2 Shady Oak Road .36 acres $235,000 $1,808*
11524 Excelsior
Blvd
.47 acres $635,000 $5,471**
*city taxes on entire parcel - remnant parcel value unknown
**city taxes paid if property was in Hopkins
The Subway property is currently served by City of Hopkins water and sewer so the only
modification is to install Hopkins meters, which the City of Minnetonka has agreed to facilitate
and pay for.
The City of Minnetonka has agreed to pay all costs associated with the annexation/detachment
process.
Alternatives:
The Hopkins City Council has the following options:
• Approve Resolutions as presented
• Amend Resolutions. This action will require concurrence with Minnetonka.
• Elect to not pursue the annexation/detachment at this time. This action will result in the
Minnetonka development to go back to previous designs.
City of Hopkins
Resolution No. 2020-022
City of Minnetonka
Resolution No. 2020-022
JOINT RESOLUTION REQUESTING CONCURRENT DETACHMENT FROM HOPKINS AND
ANNEXATION TO MINNETONKA OF CERTAIN LANDS PURSUANT TO MINNESOTA
STATUTES SECTION 414.061
WHEREAS, certain real property, approximately 0.36 acres in size, legally described
and depicted on Exhibit A attached hereto and incorporated herein and depicted on the survey
thereof attached hereto and incorporated herein as Exhibit A (the “Annexation Property”) is
located in the City of Hopkins; and
WHEREAS, the Annexation Property is located southerly of and abutting real property
estate that is located in the City of Minnetonka; and
WHEREAS, Ron Clark (“Developer”) desires to incorporate the Annexation Property into
a proposed plat and residential development known as Shady Oak Crossings; and
WHEREAS, the Annexation Property is part of a larger tax parcel, with a street address
of 2 Shady Oak Road, Hopkins, MN and a tax parcel number of 23-117-22-42-0056; and
WHEREAS, the City of Hopkins, the City of Minnetonka and the Developer desire that
the entire Shady Oak Crossings plat and development be located within the boundaries of
Minnetonka by detaching the Annexation Property from Hopkins and annexing the Annexation
Property to Minnetonka; and
WHEREAS, the detachment of the Annexation Property from Hopkins will result the
division of tax parcel number 23-117-22-42-0056 into the Annexation Property and a separate
parcel, legally described and depicted as the “Remainder Parcel” on the attached Exhibit A; and
WHEREAS, the division of tax parcel number 23-117-22-42-0056 is a lot line adjustment
that may be administratively approved and does not constitute a subdivision within the meaning
of the City of Hopkins subdivision ordinances; and
WHEREAS, the City of Hopkins wishes to preserve future redevelopment opportunities
for the Remainder Parcel; and
WHEREAS, the city of Minnetonka desires to transfer this property into the city of
Hopkins in a “land swap” between the two cities; and
WHEREAS, the City of Hopkins and the City of Minnetonka desire to modify their
respective boundaries by detaching the Annexation Property from the City of Hopkins and
annexing the Annexation Property to the City of Minnetonka pursuant to Minnesota Statutes
Section 414.061.
NOW, THEREFORE, BE IT RESOLVED:
1. The City of Hopkins and the City of Minnetonka jointly request that the Office of
Administrative Hearings – Municipal Boundary Adjustment concurrently detach the
Annexation Property from the City of Hopkins and annex the same to the City of
Minnetonka at the earliest possible date.
2. The city clerk for each city is directed to submit this Joint Resolution to the Office
of Administrative Hearings – Municipal Boundary Adjustments for the purposes set forth
herein.
3. The City of Hopk ins and the City of Minnetonka agree that, within 30 days of
receipt of this Resolution, passed and adopted by each party, the Office of
Administrative Hearings – Municipal Boundary Adjustments, may review and comment,
but shall order the concurrent detachment and annexation consistent with the terms of
this Resolution.
4. The City of Hopkins has designated a Comprehensive Plan Land Use Guiding of
Commercial and a Zoning District designation of Commercial for the Annexation
Property. As a condition of annexation of the Annexation Property into the City of
Minnetonka, the Developer is required to combine the Annexation Property with tax
parcel 23-117-22-42-0057. Upon annexation into the City of Minnetonka and the filing of
the tax parcel combination, the Annexation Property shall have a Comprehensive Plan
Land Use Guiding designation of High Density Residential and a Zoning District
designation of Planned Unit Development. These designations match the existing
comprehensive plan land use guidance zoning designation for tax parcel 23-117-22-42-
0057.
5. As a condition of the Shady Oak Crossings development approvals, the City of
Minnetonka agrees to require a cross access easement to provide joint use of the
driveway by the Annexation Parcel and the Remainder Parcel. In approving the cross
access easement, the City of Minnetonka will ensure that future redevelopment
opportunities of the Remainder Parcel are not precluded and that the function of the
driveway to the Shady Oak Crossings development will not compromise or restrict the
use of the driveway in providing future opportunities for the redevelopment of the
Remainder Parcel.
6. The City of Minnetonka is responsible for all costs associated with processing
this Resolution, including reimbursement of reasonable attorney’s fees incurred by the
City of Hopkins.
7. The City of Minnetonka and City of Hopkins will not submit this Resolution to the
Office of Administrative Hearings – Municipal Boundary Adjustments until the City of
Minnetonka has granted final land use and financing approvals for the Shady Oak
Crossings residential development project.
8. This Resolution is conditioned upon approval of the concurrent
detachment/annexation Resolution for the 11524 Excelsior Boulevard property also
requested by the city of Minnetonka and city of Hopkins.
Adopted by the City Council of the City of Minnetonka on Feb. 24, 2020.
____________________________
Brad Wiersum, Mayor
ATTEST:
______________________________
Becky Koosman, City Clerk
Action on this resolution:
Motion for adoption: Kirk
Seconded by: Schack
Voted in favor of: Kirk, Schack, Carter, Calvert, Schaeppi, Coakley, Wiersum
Voted against:
Abstained:
Absent:
Resolution adopted.
I hereby certify that the foregoing is a true and correct copy of a resolution adopted by the City
Council of the City of Minnetonka at a meeting held on Feb. 24, 2020.
______________________________
Becky Koosman, City Clerk
(Seal)
Passed and adopted by the City Council of the City of Hopkins on the ___ day of
_____________, 2020.
___________________________
Jason Gadd, Mayor
ATTEST:
______________________________
Amy Domeier, City Clerk
CERTIFICATION
The undersigned, being the duly qualified Clerk of the City of Hopkins, hereby certifies the
foregoing Resolution No. _____ is a true and correct copy of a resolution presented to and
adopted by the Council of the City of Hopkins at a duly authorized meeting thereof held on the
____ day of __________, 2020, as shown by the minutes of the aforesaid meeting in possession
of the undersigned.
______________________________
Amy Domeier, City Clerk
(Seal)
City of Hopkins
Resolution No. 2020-023
City of Minnetonka
Resolution No. 2020-026
JOINT RESOLUTION REQUESTING CONCURRENT DETACHMENT FROM MINNETONKA
AND ANNEXATION TO HOPKINS OF CERTAIN LANDS PURSUANT TO MINNESOTA
STATUTES SECTION 414.061
WHEREAS, certain real property, approximately 0.46 acres in size, legally described
and depicted on Exhibit A attached hereto and incorporated herein and depicted on the survey
thereof attached hereto and incorporated herein as Exhibit A (the “Annexation Property”) is
located in the City of Minnetonka; and
WHEREAS, the city of Minnetonka desires to transfer this property into the city of
Hopkins in a “land swap” between the two cities; and
WHEREAS, the Annexation Property has a street address of 11524 Excelsior Blvd.,
Minnetonka, MN and a tax parcel number of 23-117-22-44-0160; and
WHEREAS, the City of Minnetonka and the City of Hopkins desire to detach the
Annexation Property from Minnetonka and annexing the Annexation Property to Hopkins; and
WHEREAS, the City of Minnetonka and the City of Hopkins desire to modify their
respective boundaries by detaching the Annexation Property from the City of Minnetonka and
annexing the Annexation Property to the City of Hopkins pursuant to Minnesota Statutes
Section 414.061.
NOW, THEREFORE, BE IT RESOLVED:
1. The City of Hopkins and the City of Minnetonka jointly request that the Office of
Administrative Hearings – Municipal Boundary Adjustment concurrently detach the
Annexation Property from the City of Minnetonka and annex the same to the City of
Hopkins at the earliest possible date.
2. The city clerk for each city is directed to submit this Joint Resolution to the Office
of Administrative Hearings – Municipal Boundary Adjustments for the purposes set forth
herein.
3. The City of Hopkins and the City of Minnetonka agree that, within 30 days of
receipt of this Resolution, passed and adopted by each party, the Office of
Administrative Hearings – Municipal Boundary Adjustments, may review and comment,
but shall order the concurrent detachment and annexation consistent with the terms of
this Resolution.
4. The City of Minnetonka is responsible for all costs associated with processing
this Resolution, including reimbursement of reasonable attorney’s fees incurred by the
City of Hopkins.
5. The City of Minnetonka and City of Hopkins will not submit this Resolution to the
Office of Administrative Hearings – Municipal Boundary Adjustments until the City of
Minnetonka has granted final land use and financing approvals for the Shady Oak
Crossings residential development project.
6. This Resolution is conditioned upon approval of the concurrent
detachment/annexation Resolution for the 2 Shady Oak Rd. property also requested by
the city of Minnetonka and city of Hopkins.
Adopted by the City Council of the City of Minnetonka on Feb. 24, 2020.
____________________________
Brad Wiersum, Mayor
ATTEST:
______________________________
Becky Koosman, City Clerk
Action on this resolution:
Motion for adoption: Kirk
Seconded by: Schack
Voted in favor of: Kirk, Schack, Carter, Calvert, Schaeppi, Coakley, Wiersum
Voted against:
Abstained:
Absent:
Resolution adopted.
I hereby certify that the foregoing is a true and correct copy of a resolution adopted by the City
Council of the City of Minnetonka at a meeting held on Feb. 24, 2020.
______________________________
Becky Koosman, City Clerk
(Seal)
Passed and adopted by the City Council of the City of Hopkins on the ___ day of
_____________, 2020.
___________________________
Jason Gadd, Mayor
ATTEST:
______________________________
Amy Domeier, City Clerk
CERTIFICATION
The undersigned, being the duly qualified Clerk of the City of Hopkins, hereby certifies the
foregoing Resolution No. _____ is a true and correct copy of a resolution presented to and
adopted by the Council of the City of Hopkins at a duly authorized meeting thereof held on the
____ day of __________, 2020, as shown by the minutes of the aforesaid meeting in possession
of the undersigned.
______________________________
Amy Domeier, City Clerk
(Seal)
EXHIBIT A
All that part of the following described portion of the Southeast Quarter of the Southeast Quarter of
Section 23, Township 117, Range 22, lying west of a line drawn parallel with and 1165.2 feet measured at
right angles from the east line of said Southeast Quarter of Southeast Quarter and lying south of the north
263 feet of said portion, which portion is bounded and described as follows: Beginning at a point where
the northerly line of the abandoned right-of-way of the Chicago, Milwaukee & St. Paul Railway Company
(later leased to and occupied by the Minneapolis, St. Paul & Suburban Railroad Company) as said right-
of-way was located and constructed across said Southeast Quarter of Southeast Quarter of said Section
23, is intersected by a line parallel with and 660 feet West, measured at right angles from the East line of
said Southeast Quarter of Southeast Quarter of said Section 23, running thence North on said parallel
line 310.3 feet; thence West at right angles 366.8 feet to the actual point of beginning of the land to be
described; thence continuing West on said last described right angle line 306.8 feet, more or less to the
West line of said Southeast Quarter of Southeast Quarter of Section 23, thence South on said West line
358.2 feet, more or less to said northerly line of right-of-way; thence Easterly along said right-of-way line
to its intersection with a line drawn parallel with and 1026.8 feet West from the East line of said Southeast
Quarter; thence North parallel with said East line to the actual point of beginning.
SHADY OAK R
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1 BOUNDARY DESCRIPTIONCONFLICTBOUNDARYDESCRIPTIONCONFLICTBOUNDARY DESCRIPTIONCONFLICTREMAINDER PARCEL AREA: 19,047 S.F. (0.437 AC.) PURCHASE PARCELAREA (EXCLUDING ROW): 15,829 S.F. (0.363 AC.)P
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)PARCEL SPLIT EXHIBITLEGEND
TO: Geralyn Barone, City Manager
FROM: Julie Wischnack, AICP, Community Development Director
DATE: Jan. 16, 2020
SUBJECT: Shady Oak Crossings – City of Hopkins request for joint resolution.
This memo is in response to questions raised at the Jan.14, 2020 Hopkins City Council Study
Session regarding the city of Minnetonka’s request for detachment from Hopkins and
annexation to Minnetonka of property abutting the proposed plat and residential development
known as Shady Oak Crossings.
Site Access/Building Movement
There were several questions relating to the building location and the size of the remaining
parcel. There was a discussion about moving the building to the north. The developer indicated
while movement is somewhat feasible, there is no change to the proposed parcel boundaries
(annexation area) as the road access cannot move - as it must align with the existing Main
Street and Shady Oak Road intersection and stoplight. The existing turn lanes and through
street lane alignments are set and cannot be changed. See additional attached information.
Alignment of City Boundary (straight vs. curved)
The developer, who has an active purchase agreement with the subject parcel, has met with the
property owner again about this issue and the property owner will not change the proposed
boundary. The reasoning is the boundary is clearly defined by the proposed access road curb
lines with the project so that maintenance of the access road is easily understood and not
confusing in the physical environment realm. The second issue for the property owner is the
area west of the curved annexation line is the truck turning movement area for the south
building, again addressing maintenance and contemplated property ownership.
Compensation for Annexation
The City of Minnetonka proposes an upfront payment of $74,000 for potential lost tax revenue.
The upfront payment, if invested with a 4% rate of return over 7 years (modeling how taxes are
collected), equals $85,575.73. The point is there is an added benefit of an upfront payment
rather than an annual payment (i.e. present value).
The justification for this amount is based upon the potential loss of the city portion of local
property taxes that Hopkins would not receive due to the annexation. The current 2019
estimated market value of the entire parcel located at 2 Shady Oak Rd is $225,000. The total
tax in 2019 is $6,846.56, the city portion of the taxes on the entire parcel is $1,800. A potential
housing development on the northern portion of the property could result in approximately
$14,000 per year in tax revenue. There is existing property tax flow from the parcel remaining.
During the discussion of the payment, Hopkins asked about the time frame in which the
payments are calculated. Below is a reference point that is used in township/city annexation
documents and informed the payment proposal, although it’s not required in city/city
annexation/detachment proceedings.
Parcel Exchange – Alternatives
The Hopkins City Council also discussed a potential parcel exchange as compensation for the
annexation. This would make the tax payments in perpetuity. Minnetonka is proposing the
option of exchanging one of the following properties to address that issue:
• 4548 Shady Oak Road – Gas Station
o .74 Acres
o Total tax in 2019 = $34,048
o City portion of taxes $4,459
• 4540 Shady Oak Road combined with 11651 Bradford – Domino’s
o .44 Acres
o Total tax in 2019 = $7,823
o City portion of taxes = $1,232
• 11524 Excelsior Blvd - Subway
o .47 Acres
o Total tax in 2019 = $19,777.86
o City portion of taxes = $2,623.78
Draft Resolution
The draft resolution reflects other matters discussed at the meeting and is attached. The
detachment/annexation would not occur if the project does not move forward.
Attachments:
• Draft detachment resolution