CR 93-109 Well Site Property - Blake Road
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June 29, 1993
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council Report 93-109
WELL SITE PROPERTY - BLAKE ROAD
Proposed Action
staff recommends adoption of the fOllowing motion: Move to authorize
Mayor and city Manager to execute purchase agreement with Richard B.
Shaller for the sale of the property located at 302 Blake Road.
The above action will allow the purchase agreement to be executed
between the City and the buyer who is representing Big Wheel/Rossi.
This action is being recommended for approval based on previous
discussion with the city Council.
It is understood with this action that staff is authorized to make
minor revisions to the purchase agreement which do not change the
overall intent of the agreement.
Ov rview
The property located at the northwest corner of County Road 3 and
Second Street Northeast is a former water well pumping station that is
no longer in use and has been declared surplus property by the city
council. The site contains approximately 35,000 square feet and is
zoned B-3 commercial.
Over approximately the past year and one-half staff has attempted to
secure interest in this property with limited success. Recently, two
proposals were received for the site. The two different uses which
have been proposed are as follows:
o Big Wheel/Rossi Auto Repair Center
o McDonalds Restaurant
At a workshop session in May, staff discussed specifically the two
offers. At that meeting it was felt that the auto related use was
probably slightly better suited for the site because it would generate
less traffic and would not be open as late into the night. In
conjunction with that meeting staff has now negotiated a purchase
agreement with Mr. Richard B. Shaller who is representing Big
Wheel/Rossi.
primary Issues to Consider
o What are the specifics of the proposal?
o What are the specifics of the purchase agreement?
o What comments have been received from the public?
supporting Documents
o Purchase Agreement
o Letters from Twin Realty Investment Company and E.K. Ginkel
o Site map
o Sta memo
o L er from Bessesen Properties Inc. dated 4/28/93
Development Director
CR 93-109
Well site Property - Blake Road
Page 2
primary Issu s to consid r
o What are the specifics of the proposal?
The buyer is proposing to construct an auto service facility
which would be a new concept for Big Wheel/Rossi. The project
would apparently be a prototype for future projects in this area.
They have stated that in appearance and design it would be
similar to the auto mall at 11th and County Road 3. General
servicing of automobiles would be provided. No gas, retail sales
or auto body repair would take place.
Neither a site plan or building elevation was provided with the
purchase agreement. The buyer has stated that once a purchase
agreement is executed they would be willing to prepare concept
drawings and preliminary site plans.
o What are the specifics of the purchase agreement?
Purchase price of $105,000. An appraisal completed in March
of this year determined the value of this property at
$122,400 minus the cost of demolition and capping the well.
Based upon discussions with contractors it is estimated that
these costs would be approximately $19,800. Therefore the
value of this property as adjusted for this work would be
$102,600.
In conjunction with the sale the city would be required to
pay Bessesen Properties 10% of the purchase price as a sales
commission. The reason for this payment is that they are
the property broker that is responsible for bringing the
buyer into the city. The 10% is their regular fee
commlSSlon for the sale of bare land. As a result the
actual net proceeds from the sale would be $94,500.
Buyer would be responsible for demolition and capping of the
well. As stated previously it is estimated the cost of this
work will be $19,800.
The buyer would be required to undertake all environmental
analysis and soil tests at their own cost. If the Phase I
Environmental Report and Soil Test revealed problems on the
site the buyer would have the ability to terminate the
agreement and the earnest money would be returned.
The buyer shall be required to secure a conditional use
permit. The City shall have the right as a result of this
review process to include such conditions and requirements
as felt are necessary and appropriate to ensure an
acceptable site plan and building design and protect
adjacent properties from potential negative impacts. If a
conditional use permit is not approved by the City for the
project, the earnest money shall be returned and the
agreement shall be null and void.
CR 93-109
Well site Property - Blake Road
Page 3
Closing on property to take place by November 15, 1993. An
application for a building permit must be submitted by
December 31, 1994.
Buyer shall be required to commence construction of the
improvements within 210 days from date of receipt of a
building permit or by December 31, 1994, whichever comes
first. If the buyer has not undertaken such improvements
within this time period, the City shall have the right to
retake ownership of the property. If this action is
undertaken the City shall return to the buyer a check in the
amount of $94,500 ($105,000 minus $10,500 broker commission
fee) .
o What comments have been received from the public?
The City staff provided notification to the property owners
within 350 feet of this site concerning the projects being
proposed. The following provided comments:
Twin Realty Investment Company which owns the Hopkins Arches
E.K. Ginkel, the owner of Knollwood Towers East
Both of these property owners expressed concerns as relates to
either of the two projects that were discussed for this site.
The concerns seemed to be directly related to traffic and noise
issues. Neither party expressed an interest in purchasing the
property to be utilized in conjunction with their adjacent
residential use. They were informed by staff that if the city
did agree to enter into a purchase agreement they would be
notified of the public meeting in conjunction with the
conditional use permit and at that time be able to detail their
concerns. They were also informed that both traffic and noise
issues would need to be addressed as part of the conditional use
permit and that if they could not be resolved satisfactorily the
CUP would not be issued and the purchase agreement would be
terminated.
Alt rnatives
The City Council has the following alternatives regarding this issue:
o Approve the purchase agreement as proposed. Following this
action the buyer would be required to proceed through the
conditional use permit process. It is assumed that if
either Councilor abutting property owner concerns could not
be satisfactorily addressed as part of this process, a
conditional use permit would not be issued and the purchase
agreement would be terminated.
CR 93-109
Well site Property - Blake Road
Page 4
If the Council approves the proposed action the buyer will
experience significant expense proceeding through the
process to facilitate the project. Therefore, the Council
should feel comfortable with this use for the site should
the project be able to address the various concerns detailed
in conjunction with the CUP process.
o continue for additional information. It should be noted
that Big Wheel/Rossi is anxious to resolve whether Council
is willing to proceed with the purchase agreement. They are
presently looking at another site outside of Hopkins to
construct this prototype operation if the Council is not
willing to approve the agreement.
o Deny entering into a purchase agreement with the subject
party. Under this scenario their would be a couple of
options available.
1. Authorize staff to work with the other party that has
expressed an interest in this property, McDonalds
Corporation.
2. continue to market the property for another user which
the Council feels is more acceptable for this property.
PURCHASE AGREEMENT
THIS AGREEMENT, made as of this 22th day OI 0une, 1993, by
and between the City OI Hopkins, a Minne20ta Municipal
Corporation ("Seller") and Richard B. Shallsr ("Bu:';.rer").
WIT~lESS~TH :
WHEREAS, Seller ~~ now
property situated in the County
cO~uonly known as 302 Blake
legally described in Exhibit A
hereof;
the fee owner of certain real
of Hennepin, State of Minnesota,
Road, Hopkins, Minnesota, and
attached hereto and made a part
and
WHEREAS, a certain building and improvements
are hereinafter referred to as the "Building")
sala real property (the Building and real
hereinafter referred to as the "Property").
(which t.ogether
are located on
property being
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NOW, THEREFORE, in consideration of the mutual covenants and
conditions hereinafter expressed, the Earnest Money (as set forth
below), and other good and valuable consideration, the adequacy
and receipt of which is hereby acknowledged, Buyer and Seller
agree as follows:
~. SALE. Buyer agrees to purchase the Property
Seller, and Seller agrees to sell the Property to Buyer on
terms and subject to the cJnditions hereinafter set forth.
from
the
o Pt}RCHft..SE PRIC~E F,.~lII PAYMENT.. B.uyer
amount of One Hundred Five Thousand and
($105,000.00) for the Property ("Purchase
following manner:
agrees
00/100
Price")
to pay the
Dollars
in the
a. Earnest money in the amount or One Thousand and 00/100--
Dollars ($1,000.00), receipt or which amount is hereby
acknowledged by Seller. Said Earnest Money shall be
deposited in the trust account of broker, Bessesen
Properties, Inc.
b. The balance by cash at the date or closlng.
.
3. DATE OF CLOSING. Tl1e date of closing sl'lall be OIl or
before (at Buyer' s opt. ion) November- 1..:], 1893 p:cov ijed a:;" 1
conditions are satisfied herein; at which time Seller shall
deliver a Warranty Deed for the Property and such ot.her
doct<:::lentati\Jn referred t.c at paragr'::q:'h '7 her'eof. Tim,s heing of
the e3sence~ in the event the tran3a,:ti~n does il0t close en ~~
before t:ne rJc~.Ie~n1Jer 15, (v}lr()ugn !10 fa.ul t 0: BllY"~l~ arld Buy'er i.~:
ready, wil~ing and able to perform its obligatio~s hereuncer).
this Purchase Agreement shall ter"minate, and ;3elle1' sh~,ll
immediately reim~urse to Buyer any and all Earnest Money. In the
event all the conditions set forth herein are satisfied, Buyer
will close within 30 days or satisraction or all the conditions
described herein.
4. REAL ESTATE TAXES. SPECIAL ASSESSMENTS AND PRORATIONS.
a. Seller represents that all real estate taxes and
installments of special assessments due and
payable in all years prior to the year of Closing
have been paid in full. Real estate t~{es due and
payable in the year of Closing shall prorated to
the date of closing, on a calendar year basis.
Unpaid, levied, and pending special assessments
existing on the date of Closing shall be paid by
Seller on the date of Closing. Buyer shall pay
all taxes due and payable in the year after
Closing.
5. DOCUMENT INSPECTION/CONDITIONS PRECEDENT. Within the
specified time periods, or as soon thereafter as reasonably
practical, and at Seller"s cost, Seller shall provide Buyer with
the items indicated below.
Within 15 days of acceptance by all parties herein:
a. A current Registered Property Abstract or Abstract
of Title certified to date. Seller may alternately
prOVlcte a Title Commitment. If Seller' provides a
Registered Property Abstract or Abstract of Title,
Buyer shall pay all Title Cow~itment Fees. Copies of all
mortgages, assignments of rent, security agreements or
other liens affecting the Property shall be provided
with the Registered Property Abstract or Title
COllli-nitment. In any event Buyer shall pay the cost of
any title insurance policy issued in connection with
this Agreement..
Buyer shall be allowed sixty (~O) days after recelp~ of
said Registered Pr"cperty Abstract or Title commitmer..t
for examination and the making of any objections as to
marketability of title of the Property. Said objecticns
to 8e made In ,,,;::,-'iting or deemed waived. If ~uy
objections are so made, the Seller shall be allowed One
Hundred Twenty (120) days to make such title marketable.
Pending correction of title, the payments hereunder
2
required shall be postponed, but upon correC~lon of
t~tle and within ten (10) days after written noti,~e .___
correction to the Buyer, the parties shall perform this
agreement according to i~s terms. Seller shall pay for
the cost of issuing the title commitment a~d Buyer shall
pay the owner"s title insurance premium.
Within 15 days of acceptance by all parties hereto, Seller shall,
at its own expense, provide the following:
a. Prints of the survey at the Property attached to ~nlS
agreement as Exhibit A.
b.
Copies of
encumbrances
Property.
all easements, restrictions and other
or servitude benefiting or burdening the
c. Current real estate tax statements.
d.
Copies of any and
environmental tests
Property which are
available to Seller.
all existing soil tests
previously done relating to
in Seller's possession or
and.
the
al~e
Within sixty (60) days of acceptance of this Agreement and
at Buyer"s cost, Buyer shall obtain the following:
a. Report comInonly known as a" Phase I" report from a
reputable envirotunental consultant as to the presence of
any hazardous materials on or affecting the Property.
For purposes of this Agreement, "hazardous materials"
refers to any asbestos, urea-formaldehyde foamed-in-
place insulation or poly-chlorinated biphenyl, or any
other hazardous or toxic materials, the ~se. handling,
storage. manufacture, transportation or disposal of
which is regulated by any federal, state or local law,
ordinance, rule, regulation or policy. If Buyer elects
to obtain a Phase II environmental report, all expenses
associated therewith shall be paid by the Buyer. Buyer
shall notify Seller within 20 days of receipt of the
phase I report of such election.
b. Soil tests to determine the correction, if any, that may
be necessary to construct the size and type of
building upon the site that the Buyer is proposing,
wl:1ich is a Big Wheel/Rossi automotive sel'vice faci2..ity
(the "Improvements")
3
15. COMPLETION OF IMPROVEMENTS
a. Buyer agrees to apply and submit all required information
for the issuance of a building permit for the Improvements no later
than December 31, 1993. If Buyer fails to complete construction of
the Improvements, as evidenced by issuance of a Certificate of
Occupancy, by the earlier of i) the date which is 210 days after
the date of issuance of the building permit, or ii) December 31,
1994, Seller shall have the option to re-enter and take possession
of all of the real property described in Exhibit A hereto and to
terminate and revest in Seller the estate conveyed to Buyer, it
being the intent of this provision that the Warranty Deed conveying
th~ Property to Buyer shall contain a condition subsequent to the
effect that Seller may, at its option, declare a reversion in favor
of Seller of the title to the Property conveyed to Buyer, and to
any assigns or successors in interest to the Property, and that
title shall revert to and be vested in Seller, subject to the
following conditions:
(i) Seller shall notify Buyer, in writing and within
thirty (30) days following the earlier of the dates referred to in
the second sentence of this Paragraph 15, of Seller's intent to
exercise the Option, and
(ii) Such notice shall be accompanied by Seller's check,
in the amount of $94,500.00.
The Option shall terminate if Seller fails to exercise the same in
the manner specified in this subparagraph and Seller shall, upon
request from Buyer, furnish a recordable certificate evidencing the
termination of the Option. In addition, Seller agrees to provide
Buyer with a recordable certificate evidencing the completion of
construction of the Improvements and termination of the Option upon
issuance of a Certificate of Occupancy by the City of Hopkins.
SELLER:
BUYER:
City of Hopkins
By
Its
By
Its
Dated:
, 1993
Dated:
, 1993
LEGAL DESCRIPTION
I
Tract G, except the North 60 feet thereof, and except that part which lies South of a line drawn from a
point in the West line of said Tract, distant 4 feet North of the Southwest corner of said Tract, to a
point in the East line of said Tract distant 11.0 feet North of the Southeast corner of said Tract, also
except that part of said Tract lying East of a line drawn parallel with and distant 4.0 feet West of the
East line of said Tract G, and also except that part of said Tract G lying Southeasterly of a curve being
tangent to the above described lines and having a radius of 100 feet, in Registered Land Survey No.
561, Files of Registrar of Titles.
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EXIDBIT A
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Twin Realty Investment Co.
MAURICE GOLDMAN
DANIEL P. GOLDMAN
5401 GAMBLE DRIVE, SUITE 103
MINNEAPOLIS, MINNESOTA 55416
(612) 545.9155
Gl
EQUal HOUSINO
O'PDIlTUlun
Mr. James D. Kerrigan
Planning & Economic Development Director
City of Hopkins
1010 First Street South
Hopkins, l1N 55343
June 9, 1993
Dear Mr. Kerrigan:
1-Je are the Owllers and managing agents of Hopkins Arches Apartments
located at 1005,1015,1025,llll,112l 2nd Street N.E. This letter
is sent in response your letter dated May 28, 1993 which states
two proposed uses for the land located in the northwest corner of
Blake Road and 2nd Street N.E. The land is adjacent to our
apartment buildings.
We understand the need for the City of Hopkins to gain some taxable
use for the land. However, we are firmly opposed to a Big ~leel
Rossi facility or a l1cDonalds restaurant. The intersection of
Blake Road and 2nd Street N.E. is extremely busy already. Adding
a cownercial facility with medium to high traffic would be dangerous
and not in the public's best interest. Furthermore, that intersectio
gets very backed up every time a train goes by just south of the
parcel. In addition to the traffic problems, the two proposed
businesses would have a negative effect on our residents for the
following reasons:
BIG WHEEL ROSSI
1) Lack of adequate parking.
2) Lights shining on residents windows in the evening hours.
3) Noise. You state in your letter that there would be no
auto body repair. That does not m~ke us comfortable at
all. The fact of the matter is that car engines in shops
make noise and pneumatic tools like impact guns, air
ratchets, air hammers, and air chisels make noise; VERY
LOUD NOISE 'I
4) Fumes from cars that are being repaired.
MC DONALD'S
1) Lack of adequate parking.
2) Lights in the evening hours.
3) Noise
4) High potential for youth hangout causing potetial problems
for vandalism in the area.
5) Smells coming from kitchen vents all the time.
. .
Page 2 of 2
Repeatedly we find patrons of Bakers Square using
our parking facilities. Also, where a driveway is
proposed on 2nd St. is a school bus stop where fourteen
(14) children also congregate.
We have been working very closely with Pat Graham
of your inspections department as well as other owners
and managers of apartments in Hopkins. Our goal has been
to make Hopkins a good place to live. By considering an
auto repair shop or a fast food restaurant as our next
door neighbor we feel that you would be undermining our
efforts. You would be going in the wrong direction It
would be unfair to us and unfair to our residents. Fur-
thermore, you would be putting pedestrians and motorists
in a dangerous position.
For these reasons we ask that you reconsider these
proposed uses and search for a use that would be more
beneficial to the City of Hopkins and its residents.
Sincerely,
~~~~~----
DANIEL P. GOLDMAN
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,/ . J.---c....>---o...--.-
. MAURICE GOLDMAN
Iti~~
Knollwood Towers East
320 Blake Rd. N.
Hopkins, MN 55343
June 14, 1993
James Kerrigan
Planning and Economic Director
City of Hopkins
1010 First Street South
Hopkins, MN 55343
Dear Mr. Kerrigan:
I received your letter dated May 28, 1993, concerning the possible
development of a parcel of land on the northwest corner of Blake Road
and Second Street Northeast. We currently own and manage Knollwood
Towers East adjacent to the subject property. Knollwood Towers East is
a seven story apartment building with 129 units. We would be affected
by any development on this site and appreciate being able to provide
input to you about two specific apparently viable proposals you are now
entertaining. We are certainly not against development, but do have
genuine and legitimate concerns regarding traffic, noise and
aesthetics.
First, the McDonalds proposal is, we feel, a poor one. Blake Road is a
busy road now and this intersection is particularly congested often.
Adding another Blake Road ingress and egress would be less than wise
and almost catastrophic at certain times of the day. The noise of
cars, drive thru windows speakers, and voices of people in the parking
lots would be a problem all day and especially at night. Trash
including blowing papers would always be an eyesore and difficult to
control effectively. Adjacent apartments with some as high as 60 feet
off the ground would experience problems in all areas of traffic,
noise, and aesthetics. The problem of fast food locations becoming a
gathering point for people (desirables and undesirables) can be well
documented. This choice of a land owner would certainly be detrimental
to Knollwood Towers East and its residents.
Secondly, we see some same problems with a Big Wheel Rossi next door.
Traffic congestion even if access is granted only from Second Street
Northeast would be a problem. Frequent use of this entrance for this
type of business would be a certainty. Congestion, we feel, would be a
problem. Our biggest concern for this proposal is the issue of noise.
Sales of auto parts would be fine. The automotive repair you speak of
would be a big problem. The use of pneumatic tools can be heard from
great distances. Any type of repair work would be very disturbing to
our residents because of the close proximity of this site. The control
of trash and its on site policing would also be of concern to us.
Please address the issues I have mentioned when discussing these
proposals. Businesses that generate less traffic and less noise would
be best suited for this site and the Knollwood Towers East residents.
Thank you for your time.
~relY,
~~: Ginke:, General
KNOLLWOOD TOWERS EAST
Partner
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