CR 92-197 Tax Increement Application - Hoyt
,-
"\
.-_.......
September 28, 1992
\ 1 Y .0
:m:..
. .y '"
OPK\~
council Report 92-197
.L
TAX INCREMENT APPLICATION -
HOYT DEVELOPMENT COMPANY
Proposed Action.
staff recommends adoption of the following action: Approval of motion
concurrinq with HRA Resolution No. 294.
This will terminate any further action by the city Council/HRA on this
application. This does not prevent the applicant from making a future
application.
overview
The applicant has submitted a proposal for the development of the 13
acre R.L. Johnson property located at 11th Avenue and County Road 3.
The project as proposed involves construction of a 66,000 square foot
Rainbow Foods grocery store and an additional 65,000 square feet of
large retail space. In conjunction with the tax increment
application, Mr. Hoyt has also made application to the Zoning and
Planning commission for a variety of items. Action on these have been
continued pending approval of a preliminary and final tax increment
application and preparation and approval of a redevelopment agreement.
.
Recently, the City/HRA staff were informed that the major tenant of
this project, Rainbow Foods, was no longer interested in participating
in this project. To date, there has been no new tenant identified to
take this space in the project. staff is now recommending denial of
the tax increment application based on the following:
o The project as proposed in the application is not feasible
at this time as the anchor tenant, Rainbow Foods, is no
longer willing to participate in the project.
o Staff has not received the additional information requested
from the applicant in order to facilitate adequate staff.
review.
primary Issues to Consider
o What is the impact of this action?
with approval of the proposed resolution it is assumed that this
will terminate any further action on the application presently
submitted by Hoyt Development for tax increment assistance. This
however, doesn't mean that a new application could be submitted
at a future date should a project appear feasible.
Supporting Information
o Alternatives
o Resolution No. 294
o Tax crement Financing Assistance Preapplication
.
\
Director
.
.
.
CR92-197
Page 2
Alternatives
The BRA has the following alternatives regarding this issue:
o Deny approval of the application. This is the action
recommended by staff. This will terminate any further
action on this application request.
o From a timing standpoint the HRA has the ability to continue
this item. However, it would seem appropriate that at some
time in the near future action be taken on this item.
~
.
CITY OF HOPKINS
HOUSING AND REDEVELOPMENT AUTHORITY
Hennepin county, Minnesota
RESOLUTION: 92-294.....
DENYING APPROVAL OF PRELIMINARY TAX INCREMENT FINANCING APPLICATION -
HOYT DEVELOPMENT COMPANY
WHEREAS, the City Council of the city of Hopkins has adopted a .
Tax Increment Financing Policy;
WHEREAS, the Hopkins Housing and Redevelopment Authority acts as
the administrative body for that policy; .
WHEREAS, Hoyt Development Company has submitted a Tax Increment
Financing Assistance preapplication dated 6/25/92 in accordance with
that policy, said application detailing construction of a project
which involves a 66,000 square foot Rainbow Foods grocery store and an
additional 65,000 square f~et of large retail space;
'.
WHEREAS, the city/HRA has previously reviewed this application
and recommended continuation; , .
WHEREAS, the Hopkins Housing and Redevelopment Authority
reviewed this application and continued action because additional
information has not been provided by the applicant to city/BRA staff
as requested in order to facilitate a review and the applicant
informed the BRA Board that the major tenant of the project, Rainbow
Foods, was no longer going to participate in this project.
NOW, THEREFORE, BE IT RESOLVED by the Hopkins Housing and
Redevelopment Authority of the City of Hopkins that the preliminary
Tax Increment Financing Assistance application by Hoyt Development
Company dated 6/25/92 be denied based upon the following:
1. The applicant has informed the HRA that the major
tenant identified in the Tax Increment Financing preapplication
has withdrawn from this project and consequently there is
insufficient evidence that the project is feasible.
2. The applicant has not submitted information as
requested by City staff in order to facilitate a review of the
application.
. Adopted this 6th day of October, 1992.
Nelson W. Berg, Mayor
ATTEST:
James A. Genellie, city Clerk
~
. ..~.
. -. . l .:.
":.
" .
CITY OF HOPKINS
PRE-APPLICATION
TAX INCREMENT FINANCING ASSISTANCE
Legal name of applicant:
Hoyt Development Company
Address:
. 6321 Bury Drive, Suite #3, ~den Prairie, M~ 55344
Telephone,numb.r:
612 949-0197
Name of contact person:
Brad Hoyt
REQUESTED INFORMATION
Addendum shall be attached bereto addressing in detail the
following:
1. A map showing the exact boundaries of proposed
development.
.
2. Give a general description. of the project including: size
and location of building(s); business type or use;
traffic information including parking, projected vehicle
counts and traffic flow; timing of the project; estimated
market value tollowing completion.
3. The existing Co~prehensrve Guide Plan Land Use
deSignation and zoning of the property. Include a
statement as to how the propos~ddevelopment viII conform
to the land use designation and hov.the property will be
zoned.
4. A statement identifying hbW' the increment assistance wilL
be used and why it is nec~ssary to undertake the project.
~. A statement identifying the public benefits of the
proposal including estimated increase in property
valuation, new jobs to be created and other community
assets.
6. A written perspective of tb'e developerscomp.any of
corporation, principals, history and past projects.
. :::::::::'5 51gnat~re~~~ ~
Date: \c~;::J.. -:5'-~!)---
..... .
. ..o. ... -..
-F
. . '- '. ~ ". .
. . . .' + '. ..." .. ~ ~ .".. .. . .. .. . . '.. ., :f
~ . . .. . r..... _'. . .. . ' .. T . . . . .'
. t . .. .. ....o. . . . . . . _ " . _. ~. .. ... -... ":' .' .. -iI- . '-.: . .. .~. .
.:~;;:> .::;/.:./. '..: :.,' '.; ..<:::~:<:. ;:::>:" :::...: ....~:. .'.~ .'-' ":~;,, 'r:> :.'. "..' ... :", ,.. ~,'
.. . .. - . -.... . <" . - . '. '. ~_.
"
". ......:
. ':0.. '.
CITY OF HOPKINS
TAX INCREMENT FINANCING INFORMATION
.ADOENDUM
,- ~ '...~~ .;::~ ..; ~. :i~:\-::. : .:--" . : ~ ..:.n. .~..~._.~ ... . ~
, . r . _.1 ._ W-' . ...... 01. .. .... .... .... .... ~ - - ... ., '.. - . ...
.~. :: . T '. .....}. ..... .. .' . .: . .~... .... . ..:, '1-...'". ~ .. r.:'
.. ... . l~ :. . .
,
.~ 4' ....... o'r
. ' .
" ~. . r ...
'. . . ....~. > ':-'i~.-:"" --!,-:'.;.~:-.
1. See attached survey.
.
2~ The project proposed consists of a 66,000 square
foot Rainbow Foods Grocery Store and an additional
65,000 square feet of large retail. The grocery
store will be located on the east half of the site
facing west, the additional large retail will be
located on the south side of the site facing north.
Traffic and vehicle information is available from
the recently, performed Traffic Study on file at the
city. The timing of t~e project is for completion
of the city approvals processes by september of
1992 with occupancy in the early Spring of 1993.
The estimate market value of the project upon
completion will be approximately $9,000,000.
3. Hoyt Development is processing an application for
Amendment to the Comprehensive Guide Plan and for
.appropriate zoning.to retail for the. subject,
property. This submission is being processed on
a'parallel tract. The project will conform to the
.. new zoning as proposed .
4. ,The increment assistance is necessary to defray
the total project costs of this redevelopment.
Due to the large scale nature of the tenants, in
order to avoid competition with the Main street
Retailers, the achievable rental rate is somewhat
lower than normally associated with grocery
anchored retail centers. The increment'assistance
will be used to defray excessive costs associated
with the development. In the absence of the Tax
Increment Assistance the project will not be
economically viable.
5. The project will provide numerous benefits to the
public:
.
A~
Project will provide goods and services
currently not available to the citizens of
Hopkins within the City.
B. The project will provide high quality jobs.
# Hoyt Development
~..
6.
.
at excellent pay scal~s. The grocery store
alone will generate nearly 350 jobs. It is
important to stress all jobs created will be
~ jobs. Additionally, the market value
of the property will increase by more than
$7,000,000.
The project will be developed by Hoyt Development
Company. Hoyt Development Company is ranked as the
third largest developer of industrial real estate
in the metropolitan area over the past ten years.
Having developed over 5,000,000 square feet of
property in the metropolitan area, the Company
is fully capable of delivering this project.
The principal, and owner, of Hoyt Development Company
is Bradley A. Hoyt. The Company was founded in
1979 and operated as a sole proprietorship until
its incorporation in 1988. Major projects in the
metropolitan area include Technology Park in Eden
Prairie, The Best Buy World Distribution Center
in Bloomington, the Plymouth Technology Centers
in Plymouth, and the New Hope Industrial Center
in New Hope. Recent retail projects include
the White Bear Hills Shopping Center, and st.
Michael Mall. Office projects include the Bell-
Atlantic Office headquarters in Bloomington, and
General Mills.Fulfillment Center in Plymouth.
The Company is best known for its performance in
fast track development situations. Most notably
its completion of the Best Buy World Headquarters,
totalling 445,000 square feet in under 90 days.
Attached.is a partial listing of projects
developed as well as additional information on the
developer.
BAR: kc
0624092
TAXINCRE.DOC
Attachment
.
. .
.,:t ~
..9 '. '. : _ .. ~ '4
-. .~ .
'.:.'.. ..~,' ~-,~.;.' -.: .~.'.,,'~. ~-,'
"'. .... -. . .",. .
. . ~ .' ..
. "
.....:.>Ho~tD.eveI6s:imeril.~; ......:....
c. 0 M p' 'A ,.N Y
6 3 2 1 au R Y 0 R I V E SUI T e /I 3
ED EN P R A I R IE. M INN E SOT A 5.5344
Phone 612.949-0197 Fax 612-949-0199
.. . ..
,Ju1r 23, 1992 ...
. -City. .-of -Hopkin.s ';..... J'. ..;', ,"..' ..' .' , ",. .., :... .' ,. ,.;.
~loio '. FfJ::~t str.eet~.Sout~'.' -" ...........
1Iopkins~ MN 55343.'
._ "co' _ '.._ Tf.
~ . ~-' -'
. . .
T' ". "11,-".. .
.' ._ :4
. :-">
'" . .-
.~.
. ".- ..'
RE: Hopkins Gateway Center T.I.F. Request
Gentlemen;
The following sets forth the best estimate available at this
time for the above captioned project. At staffls request,
we have increased the scope of the project to include the
creation of a linkage to Main street via 8th and 11th Avenue
South. We will separate these areas as we do not control
the corner site. This does not, however, mean that the
increment established by development of the corner site
cannot be estimated and utilized. It" should be noted that
the corner requires R. o. W. from the city to meet the
projections.
.
GATEWAY CENTER
T.T.F. Required:
$2,800,000 - $3,200,000
Defray costs of land acquisition
(4,450,000). The total project
costs are estimated at $11,700,000.
The project's underwriteable income
stream is estimated at 895,000 per
year which would generate a value of
just under $9,000,000.
Th~refore a cost reduction of
approximately $3,000,000 is necessary
to make the project viable.
Increment Generated: with a market value of approximately
$9,000,000 an increment of approximately
$7,500,000 will be generated.
Use of.Proceeds:
Period of T.I.F.:
.
Type of T. I. F. :
city of Hopkins
It is estimated a ten year T.I.F. period
will provide the necessary funds.
The developer is requesting Pay-As-YOu-
Go T.I.F. The city will not be required
to issue any bonds in connection with
DEVELOPMENT ·
CONSTRUCTION ·
MANAGEMENT ·
INVESTMENT
..
.
.
July 23, 1992
Page 2
CORNER SITE
this application. (We have not included
costs for street modifications due to
the inability to project these costs,
if any, prior to completion of a traffic
. study.) ,
Projected Increment: It is estimated that the completed
project value of a Hardee's and sit
down restaurant will approach
$2,000,000.
Approximately $500,000 - $800,000
T.I.F. Required:
Use of Proceeds:
T.I.F. Method:
Benefits:
Upgrade 8th Avenue South and 11th
Avenue South. Sidewalks, lighting,
landscaping, and signage to create
Main Street Linkage. (Architects
estimate attached)
Due to the inability to financeoffsite
improvements privately, this portion of
the project would require a bond sale.
Main street would benefit from the
improvements with the corner site at
11th and Excelsior providing the
funding.
Additional detail will be provided as it becomes available
on request. Thank you for your consideration.
'~~~)
.. .....
. '- - ... -. - ...
.;-" ----
~ra~~: ~~-
President
BAH:kc
Attachment
cc: R. L. Johnson
John Bessesen
HOPTIF.DOC.
F~[C t.:~t\h:-.J J~;L 2. i'i-:
ARCHITECTS' PROFESSIONAL ASSOCIATION
6365 Cartson Drive, Eden Prairie, Minnesota 55346 612-934-8898
HOPKINS GATEWAY IMPROVEMENTS July 21, 1992
It is the intent of this report to describe improvements
long 8th Avenue from Excelsior Boulevard to Mainstreet and
. along 11th Avenue from the path way to Mainstreet. these
..improvements as. shown on .the-. revj,.sed preliminary'
.-. neighborhood plaIt- wpuld consIst of': . ,
1- New curb and gutter 5190 L Fx$6/L .F= $31,140
2. Removal and replacement of signals at 8th Ave
and at 11th Ave on Excelsior Blvd. 65,000
3. Add 12 refurbished 30'light poles @ $2300 ea 27,600
4. Add 37 ornamental light poles @ $3300 ea 122,100
4. New 9' concrete walks on both sides of streets.
46,260 S F x $2.50/S F= 115,650
.
5. 7 concrete paver circles at corners 19,250
6. Estimate concrete driveway removal and
replacement 14 thus @ 240 S F = 41 CY x $30/ CY 1232
7. 40 trees with grating 34,000
8. 3 landscape clusters consisting of 2 half
circles pavers courts wi raised walls with bench
seating, nine ornamental trees with grating, trash
receptacle and 20 L F of ornamental fence. 76.692
Total
$492,664
The above work does not include any work on Excelsior
Boulevard or south of it except along 11th Avenue.
Submitted by Frank L. Reese.
.
# New Developments
Imnrn
Hoyt Development Design/Build
Our Success Is Building.
To Own Or Lease? Build-To-Own We Make It Easy
After years of leasing space, a com- Since real estate is not a liquid in- . Whether a company prefers to own
panyoccupying a sizable amount of vestment, a company considering or lease, Hoyt Development takes
space, maywanttoconsider building fuU property ownership will want to the worry and hassle out of any
a facility of its own. look closely at its growth picture and designlbuild project. From land
need for working capital. acquisition to design, financing and
construction, we can do it all. . .on
time and on budget.
The benefits of ownership can be
compelling: name identifICation, pride
. of ownership, tax advantages and
fixed occupancy costs. But building
. can also be a major headache for
Imeone who isn't in the develop-
ltbusiness and can result in costly
lstakes.
What Are The Options?
Each company's situation will vary
and the options are many. Just as a
building can be designed specially
for a company, the arrangements
should be structured to suit the
company's financial picture. Options
to consider are build-Io-own, build-
to-lease or build with option to buy.
From Conception
To Completion. . . .
AndBeyond
Hoyt Development brings expertise
and a wealth of resources to the
consultation process. Hoyt profes-
sionalswork closelywith clients and
their legal and financial advisors.
_~g together all aspects of the
~ct. until moving day. After
y",u've moved, Hoyt can provide
ongoing support services, property
management and future expansion
options.
An organization with sufficient cash
reserves and static space require-
ments may find it practical to build
and own its building. Profitability
may allow a greater tax benefit with
ownership. and gaining a fix on occu-
pancy costs may be appealing.
Build- To-Lease
Many companies prefer a build-to-
lease situation in order to retain more
cash fir growth opportunities. Alease-
to-suit building offer~ advantages
such as customized space and name
identification without tying up cash
for the . long term. In such cases,
Hoyt Development will not only de-
sign and build to suit a company's
requirements, but we will own the
building too.
Build-With-Option
Sometimes a company's circum-
stances require that it be tenant
rather than a owner. Leasing with an
option to buy may be the best choice
for companies in this position while
offering desired maximum flexibility.
Hoyt will design and build on a lease-
back basis with eventual ownership
planned according to the individual
company's time frame.
t
H
!
Best Buy Company's 442,000 square foot
World Distribution and Service Center - a
Hoyt Development project completed in just
93 days.
Hoyt Development brings together
any combination of goals and re-
quirements. needs and desires a
client might have to produce the
most suitable building for the
company's operation. One call to
Hoyt in the thinking stages will allow
us to assist in the planning process.
(612) 949-0197. (612) 949-0199 Fax #
~3?,t'1D,;?s:e~~~~e~;~t
....' i'
"i
.'.
.
.-
.
HOYT DEVELOPMENT COMPANY
PROJECTS SUMMARY
BUILT OR RENOVATED
Best Buy Company
Bloomington Business Plaza
Braemar II Building
Braemer IIIBuilding
Burnsville Bluffs Business Center I
Burnsville Bluffs Business Center II
Burnsville Bluffs Business Center III
Creekview Business Center
Dewey Hill Business Center
Department 56
Edina Twin North
Edina Twin South
Federal Business center
Kleer-Flo
Lucht Engineering
Lyndale Business Center
Minnesota Supply
New Hope Industrial Center
Nicollet Business campus
OlYmpia Business Center
Pillsbury Business Center
Plantscape
Plymouth Business Center
Plymouth Corporate Center
Prairie view Business Center I
prairie View Business Center II
Roberts Litho
Shady View Business Center I
Shady'View Business Center II
sioux Empire TndustrialCenter
st~ Michael Mall
Technology Park I and II
Technology Park III
Technology Park IV
Technology Park V and VI
Technology Park VII and VIII
Thresher Square West
Vinyl Therm Building
Westwood IV
White Bear Hills Shopping Center
150 West 88th street
200 West 88th Street
33 South Fifth Street
6365 Carlson Drive
062692
PROJSUM.DOC
SQUARE
FOOTAGE
425,000
125,000
33,.000
36,400
57,000
45,000
78,473
.43,000
73,000
150,000
26,000
27,000
28,000
53,000
60,400
41,000
29,000
210,000
118,000
56,000
42,000
29,000
45,000
82,600
64,000
150,000
42,000
68,000
122,000
77,000
22,000
162,800
57,000
58,644
126,000
162,860
63,000
83,000
72,700
70,000
44,000
41,000
43,000
28,000