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Memo - East CBD Project Economic Development MEMORANDUM TO: Honorable Mayor and City Council FROM~ j;Jim Kerrigan, Director of Planning & Economic Development DATE: April 18, 2001 SUBJECT: East CBD Project Purpose of Memo As the Council is aware, a portion of the block south of Mainstreet between Seventh and Eighth Avenues South have now been purchased by the HRA. Over the next couple of months, City staff will be working towards acquiring the remaining property necessary to facilitate redevelopment of this block. The Council needs to provide direction to staff on moving forward with redevelopment activities. This memo details an overview of various issues to be discussed at the April 24 work session. From the staffs perspective, what needs to be completed in the immediate future is to define the specifics of the redevelopment project and select a developer. Issues to Consider Proiect Phases . Concept refinement Developer selection Development agreement Construction Concept Refinement In recent staff discussions with the Council, there seems to be support for a mixed- use project that would involve a retail component on the street level along JIM/04l101 Memo to Honorable Mayor, et aI., April 18, 2001 - Page 2 Mainstreet, with residential above and along Seventh Avenue South. (The property along Seventh Avenue would need to be rezoned to allow residential on the first level.) In refining its redevelopment concept, the Council needs to discuss the following: Uses · Residential o Owner-occupied - There can be conflicts with owner-occupied above retail, especially a restaurant (noise, odor, etc.) o Rental - Rental housing pays higher property taxes - Higher-end rental not available within the downtown o Combination of rental/owner o Senior vs. professional/younger households - The majority of housing in the downtown is senior-oriented o What is the market? Could require selected developer to complete market analysis · Retail o Service vs. retail o Restaurant use Design issues · Architectural elements · Building materials · Setbacks · Focal elements Height · The Zoning Ordinance allows 45 feet (4 to 5 stories) Parking requirements · Require developer to provide all required parking on site or allow use of street and public parking to meet some of the need Develooer Selection Staff has already spoken with a number of developers that have expressed an interest in undertaking a mixed-use, retaillresidential project on this property. Letters of interest are attached to this memo. JIM/041l01 Memo to Honorable Mayor, et aI., April 18, 2001 -Page 3 In selecting a developer, the Council should consider the following criteria: Past experience, especially as relates to a mixed-use project Ability to provide a concept design that meets Council expectations Ability to finance the project Overall comfort level with being able to work with the developer and that the developer will be responsive to Council issues The following two options are available for selecting a developer: Select from those developers who have now submitted a letter of interest. Staff is comfortable recommending this approach, as most if not all of these developers should be able to meet the criteria as identified above. Undertake an RFQ (Request for Qualifications) process. This will probably extend the time for completing developer selection. by 45-60 days. If this process were undertaken, the next step would be to actually prepare the RFQ document and bring it back to the Council to ensure it is acceptable. Under either of the above developer options, the developer would be asked to provide the following information: Identification of development components, Le., restaurant, senior housing, retail, etc. General description of development .components, Le., neighborhood retail, family-style restaurant, co-op rental housing, owner-occupied housing, etc. Estimated market value of development components, Le., square foot value for retail and square foot value for rental apartments Concept drawings detailing development components and site improvements Estimated developer payment for land (what the developer expects to pay for land for type of use, Le., sq. footage for retail, amount per unit for residential. Developer background and experience (specifically as relates. to mixed-use retail/residential downtown projects) Description of development team, i.e., residential component, retail component, architect, etc. JIM/041101 Memo to Honorable Mayor, et aI., April 18, 2001 - Page 4 Public assistance requirements to facilitate projects (staff has anticipated that the City's involvement would be site assembly and demolition. With receipt of this information, there would need to be an interview process with those developers that are of the most interest to the Council. There would also probably be a benefit for the Council to visit projects they have completed in other cities. Once a developer is selected, a development agreement will need to be negotiated and approved. Proiect Schedule Developer selection Development agreement approval Property acquisition completion Lease termination (residential) Concept review CUP/Zoning approvals Lease termination (commercial) Building Environmental Survey Storm sewer relocation Environmental abatement Building demolition (3) Construction July 1, 2001 (1) August 15, 2001 August 30, 2001 September 1, 2001 September 25,2001 December 4, 2001 January 15, 2002 (2) January 15, 2002 April 1, 2002 April 1, 2002 April 15, 2002 May 1, 2002 (1) Would vary depending on selection process utilized. (2) By terms of their lease, Koss Paints can retain occupancy until approximately March 31, 2002; however, it is stipulated that he will be agreeable to an earlier move. (3) Demolition would be completed by the developer, with the cost reimbursed by the HRA. Suooortina Documents Site map Developer letters of interest JIM/041l01 ~ . ~132 trs ,\ 5 ,'132 , ! 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". . ;) " . ~. \. {I" I ~'\ '.. . 5 .t1 \' w > <t: :c t- Dunbar Development Corporation ~ April 2, 2001 Mr. Jim Kerrigan City of Hopkins 1010 First Street South Hopkins, MN 55343 Ms. Kersten Elvetum City of Hopkins , 1010 First Street South Hopkins, MN 55343 Re: Mixed Use'Development on 8th & Main City of Hopkins Dear Jim and Kersten: Thank you for taking the time to meet with me today so that I could learn more about the proposed development in downtown Hopkins. As I indicated to you in the meeting, I am familiar with the tremendous development activity that the City of Hopkins has had over the last few years. Dunbar Development Corporation would be enthusiastic to have the opportunity to work with the City of Hopkins to redevelop an area of their downtown towards commercial and housing on the Main Street block between 7th and 8th . We would be prepared to work through the process that the City determines to select a project coordinator/developer and to jointly develop the market concept that would best serve the community and create with your financial advisor the most favorable fmancial structure to ensure success of the development. I have enclosed as Exhibit I a list of developments that we have done in and around the metropolitan area and have provided you with a contact person by way of reference for you to get a better understanding of our organization. We look forward to furthering our discussion with you and we would be ready to respond to any process under which your selection detenninationwould be made. Again, thank you for your consideration. President Enclosures 5000 Glenwood Avenue, Suite 200 Minneapolis, Minnesota 55422-5146 (612) 377-7090 FAX (612) 377-7089 EXHIBIT I DEVELOPMENT LIST BY COMMUNITY AND COMMUNITY CONTACTS Minneapolis Developments: Laurel Village University Village Penn & Lowry * *(rendering enclosed) 727 residential apartments & 25,000 sq. ft. commercial 199 residential apartments & 22,000 sq. ft. commercial 54 residential apartments & 17,000 sq. ft. commercial Contact: Jim White - MCDA, Senior Project Coordinator Phone: 612-673-5170 Scott County Developments: River City Centre-Shakopee The Hamilton-Savage 52 residential apartments & 25,000 sq. ft. commercial 42 residential apartments & 1 7,000 sq. ft. commercial Contact: Bill Jaffa - Executive Director Scott County HRA Mark McN eill- Shakopee City Administrator Barry Stock -Savage Director Economic Development Phone: 952-402-9022 Phone: 952-496-9662 Phone: 952-882-2660 Carver County Developments: Centennial Hill-Chanhassen Lake Grace-Chaska Brickyard - Chaska 65 residential apartments 91 residential apartments 32 residential apartments & 5,000 sq. ft. commercial Contact: , Julie Frick - Executive Director Carver County HRA Phone: 952-448-7715 MallIe Grove Developments: Arbor Glen 264 residential apartments Maple Grove Executive Plaza 58,000 sq. ft. office building Contact: Dick Edwards - Assistant City Planner Phone: 763-494-6000 Golden Valley Development: Valley Creek Office Park Contact: Mark Grimes - Director of Planning & Deve!. Wavzata Development: Wayzata Executive Park Contact: Allan Orsen - City Manager Sarah Smith - City Planner Orono . Development: Orono Woods Apartments Orono Office Plaza 128,000 sq. ft. office building Phone: 763-593-8097 104,000 sq. ft. office building Phone: 952-473-0234 Phone: 952-473-0234 62 residential apartments 24,000 sq. ft. office building Contact: Ron Moorse - City Administrator Michael Gaffron - Senior Planning Coordinator Phone: 952-249-4600 Phone: 952-249-4600 .. ~.lJNBAR,S'TRANDNESS,I'NC~ 'Real Estate Servlc'es and Consulting 1306 Wynfidge Drive . St. Poul,MN 55112 (p51) 638:-0765. Fox ~ 651 J 638-Q766 .... April: i 6, 2001.. ..' . .'Mr."Jaines.K~riigan,. ..' .' . ',DirectQr QfP1at11ili?-g ~dEco11-6mic Development ',~i%(H~pkins.'" ' . .1010 Fir,st StreetSQuth. Hop~s~MN5534l Re: ' Letter of Interest Dear'Jim: . .' Thisis tpcQp.flrm Qur' interest"jn being selected by tp.~ city o.fHo.pkms' tod~veiQP the iand that the City is assembling along the south'sideofMalnstreet between7th and gthAvenues.and 'alo.ngthe west : side o.f7th:{\ yenue So.uth:~ DUnbar Strandness; In~. 'isproPQsirigtQ.undertake the:'develo.pnient-ofth~ properly with the: as~ist~ce'and backing o.f John Rochefo.rd ofRockf'Qrd, ltic.Enclo.sedare resumes . for Mr. ,RQcheford and. rile. . " ' . . ,. .".". , Mr. Rochefo.r4 and I- have, ~sp~pted the si~~and' give~consid~ratio.n "to. what might b~sffit the site~ ,We' envision a fQur-. or five-st9ry building with retail 0.J:l the, first fioo,r facing ,Mainstreetand with , '. ,ho.us~g ~ts QntheupJ;?er flo.ors.. Th~ facade of the b:uilding ~otild be designed to. comp~ement the, , historic character'ofMaipstreet.Theho.using woril~have 4irect-accessto Mainstreet,but the main., entr~ce. far the' 'hpusing Wo.uldhe. o.n '.. 7th . Avenue So.ut~.. _T~e hQu~ing 'would be. served.?y oodergro.tmdparki11g. ,One.ofour..goals would be'toens.ure,t4atthe builqinghas adeqlulteparkihg - withqut th~ pat~gn~gatively. impacting the de~ign 9f.the~building. .We expect that the housing -wo':!Id be geare((towar~sseniors~and wo.uld'be for~sale,father than ren~all1o#sing givei?-the high . prQPortiQn ofrentatho.using,th~t Hopkins. already has. The housing. w:ould, he 'priced ata variety of levels. aridwoUid incotpo.nite. afuenith~s tha.t :would make it an attractive aIte~ative far senior~ who., ,. are leaving single- famiiy homes~ - :" , .. .~ . '~le'~~,s'isour vision for the prop~rty,~we ar,eQpen and.flexible to. other,al~e~at~ves,~ .,Givep. the" time ~nd expens~ that the City is41vesting in ass,embling the land, yve ~ssume. that the.C~ty. will have ..'extensiyecriterialortl1e developme~t Qfthe l~d:' :We' are very in~ete~ted"in looking at those, criteria withthe..City once they~e'.fmalized.' ' . ' yvIUle Dunhar. Strandness is no.t adevelQpm,ent co.mpany Per se,JQM RQ,chefordand I h~ve a combmed S4, years of experience. inin~tifanuly, arid c'o.nimercial'real estate, hoth.' in development andmanag~merit. With our deyelopmerttexpedence, we know'how,to..put'together.a successM proj ~ct,' arid ,with ?llr management experierice,: we have learned in depth what makes a successful " ~ Letter to J ~mles:KelTigan' .Apri~ '16.,'2001. . \. . . Page 2 I... J: - ..proJect : '. We lQok-~o~ardt6: dlscu~~iligthis .inter~stu1g'and' exciting.~rdje~~ furtherwithyort.... Pleas'e' cOritact" ,.roe at YOp!collvenie~~e,to let me'kilowwliatthe next stepiri. t~e'process will be... ':" .... _~. . . _' " ~ . -~. , , Thank you for YOuf'c,onsicletation..: . :. ..., " ! J '.. .' " -" : .. . ' . '. - . . - ". S~ceielY'r" ....... ........ .' . <:::I.j' ..~. . '-". . ..... .,', , -' -~. . - .' . - - - . . . ..' ' ... 'D~glas.. s11<nidness ..... '" '.' ". ,..... President ~ I ','. . . . cc.. Kerst~i1 ElvetPm, H?u~ingCoo~dinaior' f ': 1_ -'. -'-.' -.-.. DUNBAR STRANDNESS, INC. 1306 Wynridge Drive St. Paul, Minnesota 55112-5769 Office: (651) 638-0765 Fax: (651) 638-0766 RESUME OF DOUGLAS D. STRANDNESS PROFESSION~ EXPERIENCE Aug. 1990- Present May 1989- July 1990 Feb. 1986- . Feb. 1989 July 1983- Feb. 1986 Jan. 1982- June 1983 DUNBAR STRANDNESS, INC., St. Paul, MN Owner: After selling interest in Perennial Properties in July, 1990, started property management management and real estate consulting frrm. Direct all areas of management for over 850 units including supervision of site staff, accounting and financial reporting, budgeting and fmancial planning, maintenance and major improvements, insurance and taxes, and policy development. Provide consulting services to a variety of clients including real estate developers, property investment companies, homeowner associations, non-profit organizations, business associations and neighborhood groups in the areas of construction and major rehabilitation, acquisitions, mortgage fmancing, financial planning, fiscal impact studies,. organizational evaluations and training, marketing, management, personnel, and maintenance. PERENNIAL PROPERTIES, INC., St. Paul, MN . Principal: Joined firm as a partner with a 50% ownership interest. Increased client portfolio from less than 200 units to over 450 units. Worked with all aspects of property management. In addition to property management, provided services in the areas of fmancial analysis and management consulting. WESTMINSTER CORPORATION, St. Paul, MN Vice President for Housing Management: Directed the management of over 40 housing develop~ents with over 2,300 units. Managed a combined staff of over 90. Worked with owners including investment groups, development companies, cooperatives and non-profit housing corporations. Also worked with HUD, Minnesota HF A, Minneapolis Community Development Agmcy, St Paul Department of Planning and Economic Development, and other government and private agencies. Worked directly with individual troubled projects. Developed and financed a $3.1 million rehabilitation program for a 142-unit family housing complex. Management Director: Directed the management of 12 developments. Also supervised the accounting department. of Westminster Corporation beginning in March, 1984. Set up and managed the receivership for a 212-unit rental development, and initiated a $7.0 million rehabilitation program. Negotiated a $4.0 million mortgage restructuring for a housing cooperative, and completed the sale of its units. CEDAR-RIVERSIDE ASSOCIATES, INC., Minneapolis, MN Director of Property Management (University Community Properties, Inc.) and Executive Vice President (Cedar-York Real Estate Management Co. and various housing companies): Directed the management of over 5,200 housing units in Minneapolis, New York City and Atlanta with combined staffs of over 230. Directed the development of maintenance programs (the properties included 15 buildings over 20 stories in height with sophisticated mechanical systems), and implemented over $2.0 in capital improvements. Moved to New York City temporarily to start up DOUGLAS D. STRANDNESS Oct. 1980- Jan. 1982 Sept. 1979- Oct. 1980 Sept. 1976- Sept. 1979 Apr. 1976- Sept. 1976 Mar. 1975- Apr. 1976 EDUCATION Page 2 a new management company and take over the, management of 2,300 apartments. REAL TV MANAGEMENT SERVlCESt INC.t Bloomington, MN Property Manager: Directed the management of 11 housing developments and an office park with 125,000 square feet of space. Handled many special assignments, and on occasion, acted in the stead of principals of the company. U.s. DEPARTMENT OF HOUSING & URBAN DEVELOPMENTt Minneapolis-St. Paul Area Office, Minneapolis, MN Chieft Multifamily Defa.ul~ Assignment and Acquisition Section: Supervised a staff of seven who worked with troubled housing developments, intervened to avoid mortgage defaults, worked with owners to avoid assignment by lenders of defaulted mortgages, negotiated work-out plans for defaulted mortgages, initiated foreclosures, and directed the management, rehabilitation and sale ofHUD-ownedmultifamily and single-family properties. Directly handled the most serious cases. Negotiated work-out agreements for over $50.0 million in defaulted mortgages, and represented HOD in foreclosure actions and other litigation in Federal Court. Senior Multifamily Mortgage Servicer: Handled most, and at times all, of the troubled housing developments in the jurisdiction of the Area Office. Multifanilly Mortgage Servicer: Monitored and evaluated the operations of housing developments. Analyzed fmancial statements, and performed physical inspections and management reviews. Urban Intern: Received training in the monitoring and analysis of the financial, physical and management operations of housing developments. Worked on special assignments for the Area Manager and the Director of Housing Management, researching and analyzing particular fmancial and management problems. Macalester College: Graduated magna cum laude with a degree in economics, mathematics and German and with honors and special distinction. One of only 3 elected to Phi Beta Kappa as a Junior. PROFESSIONAL DESIGNATIONS Minnesota Multi Housing Association. Board chair of industry association representing the owners and managers of over 200,000 rental housing units. Member of executive committee since 1997. Institute ofReaI Estate Ma,nagement: Completed all educational requirements for the Certified Property Manager designation. State of Minnesota: Real estate brokers license and notary public commission. JOlIN L. ROCHEFORD, JR., President Rockford, Inc. John L. Rocheford, Jr. provides business experience in both retail operations and the real estate industries. His background includes 10 years of retail management experience as a successful merchant's operator ofhis own stores. In 1973 he joined Draper and Kramer, Inc., a national real estate firm engaged in management, financing, and development of all types of real property. During his five years with Draper and Kramer he was responsible for the management, leasing, and tenant relations for shopping centers, offices, and apartment complexes. In 1978 he was employed by the St. Paul/Minneapolis Archdiocese as Director of Housing Management. During his eight years with these organizations, John was responsible for the development and management of over 2,000 HOD and MFHA related living units. He left his position as Vice-President in September of 1986. John acquired an interest in Rockford, Inc., in 1986 and currently serves as President. Rockford, Inc. manages approximately 2500 middle to upper class Condominiums and Townhouses Associations in the southwest suburbs. B R I" G H TON D EVE LOP MEN T COR P 0 RAT ION April 17, 2001 Mr. James Kerrigan Director of Planning and Development City of Hopkins 1010 First street south Hopkins, Minnesota 55343 Dear Mr. Kerrigan: I am writing to express our interest in the proposed development of the property on Main Street between 7th Avenue South and athAvenue South. It is our understanding that the general goal is market rate residential development with a retail component along Main Street. We would be very interested in working with the City of Hopkins on this idea. Your plan seems very sound. Our belief is that the development would be successful from a market standpoint. We have a twenty-year history of developing market rate housing in urban settings similar to your site. And we have developed mixed use residential and retail buildings. I am certain we could carry out a development similar to the goals established by the City of Hopkins for the block. We would be happy to provide you with more detailed information, and conduct a tour for you of some of our completed developments in downtown Minneapolis. Sincerely, BRIGHTON DEVELOPMENT CORPORATION '"..- -P\~ \ Richard Brustad RB:lb 15 NORTH TWELFTH STREET MINNEAPOLIS MINNESOTA 55403-1306 TEL (612) 332-5664 FAX (612) 332-1250 III ~ z .9 .2 SS III III :E:E .9 o US :E ~ ~ .E ... II "CI C II ...J oX .x c c ~~~ .8 11 ~ .x.x.x.x.x .x.x=~c 0 0 = .x~~~~~.x~~mmmoX.x~.x.x~oX.xmoX cmmmmmc~mEEEcc~cc~ccEc ~5~555~S5~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ c :8 III U o ...J >- ~~~~~~~~~~~~~~~~~~~~-~ ~&. &. ~ &. 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C o :c 9 cD '" 13 II) 0' 0:. ~;>\:,-~1 ,"\{H:): G R 0 U P I> I C(l C::-J N C April 18, 2001 Mr. Jim Kerrigan Director Planning & Economic Development City of Hopkins 1010 First Street South Hopkins, MN 55343-7573 RE: Redevelopment of the East Central Business District Dear Jim: As you know The Beard Group and Dominium is more than a little interested in developing the site. Our development plan would include 10,000 square feet of retail that fronts Mainstreet with 100 active senior housing units above. The housing could be either rental or for-sale. I have enclosed a copy of our most recent site plan study. The site plan study examines how the building could orient itself to the site. Th~ study begins to depict how the retail would open itself to Mainstreet, how parking could be shared in common with the Little Blind Spot building, how an attractive main entry to the housing could be developed behind the building creating a courtyard where dumpsters once stood. The site study looks at how vehicles could circulate through the site, how transport delivery to the neighbors building could be maintained. Someof the innovate ideas to come from the study include: creating a courtyard theme with expensive landscaping, fountain, and gathering areas around the main entrance to the housing located at the rear of the building and creating a pass-under where traffic could circulate under the building to either gain access to 7th Street or the parking lot. To make the retail portion of the plan a reality we have secured a commitment from a bright young chef, Dan Ritter, to do a one-of-a-kind sit down white tablecloth restaurant. Dan was trained at The New England Culinary Institute. He has apprenticed under some of the finest chefs in America including Julian Serrano, and Emeril Lagasse. Dan's local experience includes a tour of duty as the ChefD'Cuisine at the 81. Paul Hotel and the Food and Beverage Consultant to Aquavit. Dan also runs a specialty wine importing business and we are exploring the possibility of a specialty wine shop next to the restaurant. The restaurant would be located at the comer of 8th and Mainstreet and would include outside dining in season. I have included a photo of a restaurant the Beard Group developed in Chicago that is a good example of the "feel" that our new Mainstreet restaurant would have. Also included is a rendering of our recently completed Broadway Court project in Robbinsdale. Broadway Court included 7,000 square feet of retail on West Broadway with 57 units of active 10 -11th Avenue South Hopkins, MN 55343-7568 (952) 930-0630 Fax (952) 930-0631 senior rental housing above. We would like to extend an invitation to you and the Council to tour Broadway Court. This would be an ideal project for you to visit to see how retail and housing can be successfully integrated. Sincerely, The Beard Group, Inc. ~~~ -- ~ H. Beard President billb@beardgroupinc.com (612) 819.2209 Mobile WHB\ CC: Mark Moorhouse, Dominium. Enclosures: 10 - 11th Avenue South Hopkins, MN 55343-7568 (952) 930-0~30 Fax (952) 930-0631 N, C BROADWAY COURT ROBBINSDALE, MN RIVERS EURO..AMERICAN BISTRO CHICAGO, IL 10 11 TH Avenue South Hopkins, MN 55343 ....... ~ "t ~ h. ~' ~"'''''''''''''''''' fI!:e~7"tI~"f'Nr " eXISTING? "oPM''MCRC/AL. IJVIL.I?INt? -M~ I AI.7/ IS f:;&; I . W//le 5/1pp /?erA-It.. ~ ~ ~ ~ ~ ~ ~ \-... '" 'Plan '"" .. " . a. _" . 1 April 2001' , --= -Beard Group - Dominium IncoriJOrated _ SKV Group .:: "" e .) DOMlNIUM OlMl~I&Aqakitian.LlC