Memo Sale Of Well Site Property
c
.
CITY OF HOPKINS
MEMORANDUM
DATE:
May 7, 1993
TO:
FROM: ~
SUBJECT:
Honorable Mayor and City Council
Jim Kerrigan, Director, Planning & Economic Development
SALE OF WELL SITE PROPERTY
BLAKE ROAD AND SECOND STREET NE
-----------------------------
I. PURPOSE OF DISCUSSION:
The purpose of this item is to discuss with the City Council
two proposals and purchase offers which the City has
received for the acquisition and development of the "well
site" property which the City owns at Blake Road and Second.
Street NE. Staff would like to receive direction from the
City Council as to which proposal, if any, it might wish
staff to pursue further. If staff should receive direction
from the City Council on a preferred proposal, staff would
attempt to finalize a purchase agreement. This purchase
agreement would then be brought back for City Council
consideration.
The two proposed projects are:
o Big Wheel Rossi Auto Service Center
o McDonalds restaurant
II. BACKGROUND
In early 1990 the City Council designated the well site
property as surplus. The site contains approximately 35,000
square feet and is zoned B-3, commercial.
During 1990 staff worked with Marcus Corporation on a retail
project for the site. However, due to a variety of
problems, the redevelopment agreement was terminated.
SUbsequently, the Council discussed the potential aspects of
a preferred development for this site. Based upon this
discussion the following criteria was established:
o No gas sales
o No heavy traffic generation
o Compatibility with abutting residential property
, ~
Honorable Mayor and City Council
May 7, 1993
Page 2
.
For approximately the past year and one-half staff has been
attempting to secure interest in this property with limited
success. However, two proposals and purchase offers were
recently received for the site from Big Wheel Rossi and
McDonalds.
Information regarding these two proposals is as follows:
A. Big Wheel Rossi
The auto service facility would be a new concept for
Big Wheel Rossi. The project would apparently be the
prototype for future projects in this area.
Neither a site plan or building elevation was provided
with their purchase agreement. They have stated that
once a purchase agreement is executed they would be
willing to pr~pare concept drawings and preliminary
site plans. They have detailed the following as
relates to their project:
o No gasoline sales
o No retail sales
o No access would be required from Blake Road
o Quality of the project to be equal to or greater
than Midwest Auto Mallon County Road 3
A. McDonalds Restaurant
The McDonalds project as proposed includes the
following aspects:
o 3400 square foot building, which is somewhat
smaller than the usual 4,000 square foot
restaurant
o Seating for 65 customers
o 39 parking spaces. Access would be provided by a
right-in right-out on Blake Road with a two-way
drive and an exit only drive on Second Street NE.
o Drive-thru window
City staff recently had the appraisal updated on the well
site property. This appraisal established a fair market
value of $113,000. Both of the offers received would
require that the City close the well and demolish the
existing building. However, the actual dollar amount to the
City based on this expenditure and payment of any realtor
~
Honorable Mayor and city Council
May 7, 1993
Page 3
fees would still hopefully net the City approximately
$113,000.
Upon reviewing the two projects the following should be
considered:
Biq Wheel Rossi Service Facility
o Does not require any access from Blake Road
o Would have minimal traffic generation
o Would not be open in the late evening
o Would add another auto related use to the City
which has been expressed as a concern previously
o Compatibility with adjacent residential land uses
would need to be considered
McDonalds
o Requires 'access off of Blake Road and an
additional access point from Second Street. Staff
has a concern that these could create some traffic
safety problems.
o Would operate into the late evening
o Heavy traffic generator
o Would probably pay more property taxes than the
other project as proposed
o Provides another restaurant use which has been
previously discussed as positive type development
for the City.
III. SUMMARY
Staff requests direction as to whether the Council desires
to have staff continue discussions with one of the two uses
and negotiate a purchase agreement. By providing this type
of direction the Council is not bound to approve the
purchase agreement. Furthermore, it is likely a purchase
agreement would have a condition which allows either party
to terminate the agreement if the required conditional use
permit were not issued.
JK04303D
'.
~ Bessesen
. . Properties
Inc.
33 10th Ave, So,
Suite 215
Hopkins. MN 55343
612-935-1258
Mr. James Kerrigan
City of Hopkins
101 First Street South
Hopkins, mn. 55343
April 28, 1993
RE: Submital of Purchase agreement for 302 Blake Road
Dear Mr. Kerrigan:
Enclosed is the counter offer for your submittal to the
Council. We are waiting until we know whether you are prepared to
accept this offer in concept and substance before we begin to
produce drawings. Of interest to you should be the hours of
operation that this facility will keep. Weekdays will be 7:00
A.M. to 8 or 9:00 P.M., Saturday till 5:30 P.M. and closed
Sundays. The facility will built to exude quality of service and
professionalism. The impact on neighboring properties will be
negligible and there will be no overnight outdoor storage of cars
except on an emergency basis.
We are looking forward to working with you on this project.
Sincerel~~~
,~-
<::::""
-=:>
John Bessessen
Bessessen Properties,
33 10th. Ave. South
Hopkins, Mn. 55343
Inc.
Commercial - Industrial Real Estate
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v.
That ~he Property
transferred without
is a separate parcel which may
platting or subdivision approval.
be
c. That there are no existing proceedings nor, to the best
of Seller's knowledge, any threatened proceedings
against the Property or owners thereof, either
administrative or judicial, on account of any alleged
violation of any laws, any rules, regulations or order,
and that there is no litigation or oondemnation pending,
nor to the best of Seller"s knowledge, threatened, which
would affect the Property or the use thereof by Buyer.
d.
That the person executing
Seller has full authority to
Seller to this Agreement.
this Agreement on behalf of
bind the Property and the
10. CASUALTY LOSS. The risk of loss from fire or other'
casualty shall remain on Seller until Closing. If prior to
Closing any improvements on the Property are da~aged by fire or
other casualty, Seller shall nO~l~y Buyer in writing of the
casualty within three (3) days of its occurrence and Buyer shall
within twenty (20) days of ~ne no~ice have the election of
proceeding with the closing or canceling this Purchase Agreement
and receiving back the earnest money deposited, all subject to
the terms of any lease of the Property.
11. CONDEt-'lNATION. The rlSK of loss from conderrmation or
threat thereof shall remain on Seller until Closing. If prior to
Closing any of the Property is condemned under the power of
eminent domain or is the subject of a threatened condemnation.
Seller shall notify Buyer in writing of that threat or
condemnation within three (3) days of its occurrence. Buyer
shall within ten (10) days of the. notice have the option of
proceeding with the Closing and receiving the award or
condemnation payment (or any assignment thereof if the same is
not received by Closing), or canceling this Purchase Agreement
and receiving back the earnest money deposited, all subject to
the terms of any lease of the Property.
12, REAL ESTATE BROKERS. Seller aad Furchaser each
represents and warrants to the other that nel~ner has e~ployed
any real esta~e agent, broker or finder in connection with the
contemplated transaction, with the exception of Bessesen
Properties, Inc. Seller further acknowledges that Bessesen
Properties, Inc. is entitled to a fee of ten per0ent (10%) of the
Purc}1ase Price~ subject to the terms and conditions of the Fee
Agreemen"t attas11ed hereto as Exhibit E. Sue}'l fee s11all be paid
entirely by the Seller at the date and time of Closing.
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