CR 91-133 Hopkins Sport Center Property
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... June 12, 1991 .y-o Co Council Report: 91-133
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HOPKINS SPORT CENTER PROPERTY - 2100 MAIN STREET
Proposed Action.
Staff recommends adoption of the following motion: Move to reiect the
proposal made bv Ken Duneman reqarding the purchase of future Hennepin
County riqht-of-way adiacent to ShadY Oak Road and direct staff to
commence the necessary procedures to abate the nuisances on the property at
2100 Mainstreet.
overview.
In May of 1988 the Hopkins Sport Center building burned down, leaving a
large hole on a majority of the site. The property in question is owned by
Ken Duneman and is zoned B-3, General Business. Since 1988 the property
has remained vacant and has presented concerns in terms of its appearance
and safety.
The City of Hopkins Nuisance Abatement Ordinance provides the city with the
authori ty to order a property owner to abate nuisances, including open
holes, open wells, open septic systems, etc. If the property owner refuses
to correct the problem within a prescribed period of time, the City may
correct the problem and assess the cost to the owner as a special
assessment.
.
Prior to implementing the City's Nuisance Abatement Ordinance, staff
attempted to negotiate an arrangement with Mr. Duneman whereby the City
would purchase in advance, and on behalf of Hennepin County, the
anticipated future right-of-way needed to accommodate the Shady Oak Road
expansion. In return, staff proposed that Mr. Duneman use the proceeds of
the sale to fill the hole on the site and abate other nuisances. After a
series of discussions and negotiations, Mr. Duneman has submitted in
writing his position on the compensation he should receive for the sale of
the future right-of-way. Staff is of the opinion that the offer is not in
the best interest of City and recommends the City take the necessary steps
to implement its Nuisance Abatement Ordinance.
Primary
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Issues to Consider.
What are the advantages and disadvantages to the City in
purchasing the necessary right-af-way at this time?
What work is required to be completed to abate the nuisances on
the site?
What process must be used to implement the city's Nuisance
Abatement Ordinance?
What would happen if the property were proposed to be developed
prior to the right-of-way being acquired?
o
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Supportinq Information.
o Detailed background information
o Analysis of issues
o Alternatives
o Letters from Ken Duneman and Hennepin County
o Appraisal information
o Excerpts from Nuisance Abatement Ordinance
o M of site
A.
.
'rector
Detailed Background.
.HennePin County is contemplating the improvement of Shady Oak Road sometime
after 1996. The improvement of Shady Oak Road would involve the
acquisition of right-of-way both on the east and west side of Shady Oak
Road, including a portion of the property in question. Although the County
has proposed a reconstruction project, no specific right-of-way alignment
has been approved.
Last November, city staff approached Mr. Duneman with a proposal which
would remove the right-of-way issue and at the same time provide capital to
Mr. Duneman to fill the hole on the site and make it building-ready. It
was also felt that by filling the hole, aesthetic and safety concerns would
be addressed. The proposal made to Mr. Duneman involved the city
purchasing from Duneman the necessary right-of-way to accommodate the Shady
Oak Road reconstruction project. In return, Mr. Duneman would agree that
the acquisition dollars would be placed in some form of an escrow account
to be used for the purpose of filling the hole on the site and making the
property building-ready. The City would eventually be reimbursed or
credited by the County at the time the Shady Oak Road Project took place
for 50 percent of the acquisition cost.
city staff has obtained appraisals on the property required to acquired for
the future right-of-way. Based upon an initial appraisal, and then a
subsequent reappraisal, it is estimated that the cost for the future right-
of-way is $81,500. The City Engineering staff has estimated that the cost
_to fill the hole on the site and abate other nuisances is approximately
_$50,000.
After a series of discussions and negotiations, Mr. Duneman submitted his
proposal as to the compensation he should receive for the right-of-way. In
this case, Duneman feels he should receive the $81,500 outlined in the
city's appraisal with the understanding that the city would be responsible
for filling that portion of the hole located on the right-of-way acquired.
Mr. Duneman further proposes that he be allowed to either fill the hole on
the remaining portion of the property he would own, or construct an
attractive wood fence or chain link fence around the hole. It has been
very roughly estimated at this time that the cost to fill the hole on the
future right-of-way would range between $15,000 and $20,000. This would
result in the cost to the city for the acquisition of the right-of-way of
approximately $12.75 to $13.40 per square foot. It should be noted that
the appraisal amount of $81,500 assumed that the hole had been filled.
Up to this point, Hennepin County has been very supportive of the city's
interest in purchasing the right-of-way. Hennepin County has indicated in
writing that it would not be able to share in the cost of the acquisition
up front. It is the County's policy to share right-of-way acquisition
costs with the city on a 50-50 basis. The County has indicated that it
does not see a problem in crediting the city for the right-of-way
acquisi tion cost on the Duneman property when the County acquires other
property along Shady Oak Road.
~nalysis of Issues.
Based on the action requested, the City Council has the following issues to
consider:
o What are the advantages and disadvantages to the city of Hopkins in
purchasing the right-of-way at this time?
The advantages to the city include:
.
o
Resolves the right-ot-way question on the property, which in turn
would probably assist in the redevelopment of the site.
will facilitate the correction of the nuisances on the site.
Possibly save the city money in the future when the County does
in fact acquire the necessary right-of-way for the Shady Oak Road
project. It is possible that the property in question may be
more expensive several years from now. As the City is required
to pay 50 percent of right-of-way acquisition costs, the City may
be able to save money in the long run if the acquisition were
made now.
Prior to the roadway project being undertaken, the city could use
the extra right-of-way for a variety or purposes including
landscaping, welcome signs, and possible temporary improvements
to the Shady Oak RoadjMainstreet intersection.
o
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Based upon the proposal made by Duneman, the following are the
disadvantages of acquiring the right-of-way at this time.:
.
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The cost to acquire the right-of-way, including the cost to fill
the hole on the right-of-way, exceeds what staff feels to be the
value of the property.
The City is acquiring the right-of-way with the assumption that
the county will undertake the future project in the right-Of-way
as currently proposed. If the right-Of-way alignment should
change, or the project is delayed or not undertaken, the city may
have expended dollars unnecessarily.
If the city were to acquire the right-of-way, the City may be
exposed to environmental problems or liability. To resolve this
question, an environmental study could be completed which would
involve a certain amount of expense.
The cost to acquire the property is greater than the cost the
city would experience to fill the hole on the site and abate the
other nuisances.
o
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o What work is required to be completed to abate the nuisances on the
site?
o Cap a six-inch well
o Bulkhead sanitary sewer service at the sanitary sewer manhole at
the intersection of Mainstreet and Shady Oak Road
o Disconnect water service
o Fill the hole on the site with appropriate material and compact
as necessary. In addition, topsoil would be placed on the site
along with seed or sod.
As stated previously, it is estimated the cost to undertake this work is
approximately $50,000.
o What process must the city use to implement the City's Nuisance
Abatement Ordinance?
_Due to the magnitude of the abatement required, the following procedure
would be necessary:
o The City's enforcement officer serves a written order upon the
owner which describes, among other things, the work which must be
completed and the time frame within which the work must be
undertaken. If the City were to utilize its Abatement Ordinance,
.
o
staff would estimate Mr. Duneman would be given 30 to 45 days to
complete the necessary work.
If the owner of the property does not undertake the remedial
action by the abatement deadline, the matter would be referred to
the City Council for the scheduling of a public hearing.
The city Council would conduct the public hearing. After the
hearing, the city council is required to adopt a resolution
describing what abatement action, if any, it deems appropriate.
If the resolution calls for abatement action, it may either order
the City to take abatement action or fix a time within which the
nuisance must be abated and provide that if corrective action is
not taken within the specified time, the City shall abate the
nuisance.
Due to the size of the abatement, it would appear necessary for
the city to bid the project and complete the abatement.
After the work had been completed, the city would then undertake
a special assessment process and assess the cost for the
abatement against the property for a term ranging from one to ten
years with interest.
o
o
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o What would happen if the property were proposed to be developed prior
to the right-of-way being acquired?
If a development proposal should be made for the subject site prior to the
City and/or county acquiring the necessary right-of-way, the question
arises as to where the development on the site would be allowed. It is
conceivable that a development proposal would be made for a building over
~the future right-of-way. The question then arises as to what position the
"'City and/or County may take as to approving the development plan.
Obviously, if the structure were allowed to be constructed over the future
right-of-way, the acquisition cost for the future right-of-way would be
increased substantially. If the City and/or County were to take the
position of requiring the project to be constructed based upon the future
right-of-way line, the city and/or County may be challenged regarding the
taking of property without compensation.
Alternatives.
Based upon the action recommended by staff, the city Council has the
following alternatives:
.
1. Approve the action as recommended by staff. This will allow
staff to initiate the necessary nuisance abatement procedure.
2. continue the matter for further information.
3. Direct staff to continue negotiations with Mr. Duneman on the
acquisition of the right-of-way.
e
Kenneth G. and Ari ta Dunernan
11351 County Road 3
Hopkins., Mirmesota 55343
May 30; 1991
Mr. Thomas K. Harmaning
corrmnity Deve10prent Director
City of Hopkins
1010 First Street South
napkins t Minnesota 55343
RE: partial taking of
2100 Mainstreet
Hopkins, Minnesota
Dear Mr. Harrnaning:
e
This letter will confinn our discussion of the Shady Oak Highway Right-of-Way
taking Which the city nay l:e willing to 1?ITchase.
It is our opinion that \\e should receive $817500. for this DClrtion of our
pro:p2Tty in' an Has is" condition. If you desire the hole filled on the
taking 1 we feel this should be at your expe:nse.
We will either fill the hole in the remaining portion or construct an
attractive \\DOClen fence or a chain link fence to protect people from the
hazard of the hole. You can withhold 150% of the cost of the fence at
c10smg to insure the W)rk is COffil)leted.
This is not a taking to comp:msate for access to our pronerty.f so consequently
we retain access.
We TM:IUld greatly a?preciate imnediate action on this ?roblem so that the
Realtors can effectively market our residue and know what t.."hey have to sell.
There are several prospects waiting to hear.
Sincerely"
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Kenneth G.~
BY: b - ., d
ermeth G.
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cc: Ari ta Duneman
Earl A. Dahlberg
Harold N. Hansen
K~J I..h\ C\\
DEPARTMENT OF PUBLIC WORKS
320 Washington Avenue South
Hopkinst Minnesota 55343-8468
PHONE: (612) 930-2500
FAX: (612) 930-2513
TDD: (612) 930-2696
December 31, 1990
.
HENNEPIN
Thomas K. Harmening
Community Development Director
City of Hopkins
1010 First street South
Hopkins, MN 55343
Re: CSAH 61, Project 8637, Duneman property
Dear Mr. Harmening:
As stated in your recent letter, the city is considering the purchase of
right of way from this parcel. The extent of the right of way acquisition
would conform to the needs for Hennepin County's proposed Project 8637.
4It It is the county's policy to share right of way acquisition costs on a
county highway project with a city on a 50 - 50 basis. without a formal
agreement, the county cannot at this time guarantee the reimbursement.
However, I do not expect that the county will have a problem in crediting
the city with its right of way acquisition costs on the Duneman property
in the future when County project 8637 is approved.
I am very much in favor of the City of Hopkins going ahead with an
intersection improvement at this locationt and I appreciate your efforts
in that regard.
Sincerely,
0:)1- t5 ~~
Patrick B. Murphy, P. E.
Director
PBMjDDS : j h
cc: J. Wold
D. Swenson
.
HENNEPIN COUNTY
an equal opportunity employer
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J. Scott Renne, MAl
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Real Estate Appraiser . Consultant . REALTOR
5617 CHOWEN AVENUE SOUTH. EDINA, MINNESOTA 55410 . (612) 926-3948
May 5[ 1991
Jim Kerrigan
City of Hopkins
1010 First street South
Hopkins, MN 55343
Subject: Update on January 21, 1991 market value appraisal of a
partial taking on Hopkins Schwinn land parcel, 2100 Mainstreet,
Hopkins, Minnesota
Dear Mr. Kerrigan:
On January 21, 1991, I submitted an appraisal of the above
referenced property describing my estimate of damages resulting
from a partial taking of the property. The estimate of damages was
$51,200.
On April 24, 1991, I met with you, Tom Harmoning, Earl Dahlberg,
and Harold Hanson to discuss the appraisal. The result of that
meeting was that I would review the appraisal submitted to you and
take into consideration issues that were discussed at the meeting.
The issues discussed at the meeting included:
Alternative uses before and after the taking.
The utility, marketability, and hence value associated
with those uses.
The existing complex arrangements of cross easements with
the parcel adjacent to the subject on the south.
The possibility of damages accruing to the subject
property from a partial taking of the parcel to the south
due to diminished parking on a site that the subject
property has a parking easement upon.
Severance damages to both parcels.
The result of this additional information and analysis was a
revised estimate of value for the subject property after the
taking. It must be noted that this damage estimate is for the
subject property alone and does not represent any damages resulting
from the partial taking from the adjacent parcel to the south and
~ Jim Kerrigan
May 5, 1991
Page 2
the property rights that the subject property has in that parcel.
The purpose of the revised appraisal was again to arrive at an
estimate of market value of the subject property before and after
a partial taking. Market value is defined in the definitions
section of the previously submitted report. This revision is
subject to the same assumptions and limiting conditions contained
in the previous report.
It is my opinion that as of January 18, 1991, the market value of
the property is:
Before taking
After taking
$207,900
$126,300
Damages
$ 81,500
This conclusion is based upon my personal inspection and review of
the property, comparable sales, and application of the appraisal
process.
.
Respectfully Submitted,
~3: ~~K~
J. Scott Renne, MAl, CAE
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Hopkins City Code
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615.11 Substantial abatement procedure. When the Enforcement Officer determines that
a nuisance exists on a property and the cost of abatement of the nuisance is estimated
to exceed two thousand dollars or the abatement involves demolition of a building
other than a structure accessary to a residential building or the abatement
substantially diminishes the value of the property and except in the case of an
emergency as provided for in Section 615_12, the City shall abate the nuisance by the
procedure described below. A good faith estimate of the abatement costs. not the
actual cost calculated after the abatement is completed, shall be the basis which
determines whether this abatement procedure shall be used.
Subd. l.
the owner. all
The order shall
Orders _ The Enforcement Officer shall serve a written order upon
interested parties, and any responsible party known to the Officer.
contain the following:
a) a description of the real estate which is
identification and which shall include the legal description;
sufficient
for
0) the location of the nuisance on the property;
c) a description of the nuisance and the basis upon which it is
declared to be a nuisance;
d) the remedial action required to abate the nuisance;
.
e) the abatement deadline, to be determined by the Enforcement Officer
allowing a reasonable time for the completion of any act required; and
f) a statement that if the remedial action is not taken before the
abatement deadline, the matter will be referred to the City Council who, after a
public hearing, may order the City to abate the nuisance and charge all costs
incurred against the real estate as a special assessment to be collected in the
same manner as taxes.
Subd. 2. Notice to public. When an order requires, exclusively or as an
option, the demolition of a building, the public shall be put on notice as follows.
a) A copy of the order shall be placed on file in the Office of the
City Clerk.
.
b) The Enforcement Officer shall notify the City Council of each
property subj ect to a demolition order as follows. The Enforcement Officer
shall send to the City Council a list of the properties that have become subject
to a demolition order. The list shall be in the form of a resolution declaring
that an enforcement action has been commenced and that as a result of the
nuisance status of a building on the property an order has been issued detailing
the violations and requiring, exclusively or as an option. that the building be
demolished and that a copy of this order is on file in the Office of the City
Clerk_ This resolution shall include the legal description of each property and
shall authorize and direct the City Clerk to file a copy of the resolution with
the Hennepin County Recorder.
.
Hopkins City Code
615.11, Subd. 3
Subd. 3. Setting a hearing date. If the remedial action is not taken within
the time specified in the written order. the Enforcement Officer may notify the City
council that substantial abatement is necessary and appropriate. Upon being notified
by the Enforcement Officer, the City Council shall. within two weeks, fix a date for
an abatement hearing.
Subd. 4. Notice. Written notice of the time, date, place and subject of the
hearing shall be given as set forth in this subdivision.
a) The City Clerk shall immediately notify the Enforcement Officer.
b) At least ten days prior to the hea:ring. the Enforcement Officer
shall notify the owner and all interested parties by personal service of the
notice upon the owner or ~isfher duly authorized representative and upon each
interested party or hisjher duly authorized representative. If, after
reasonable effo"rt personal service cannot be made. either of the following
methods of notice shall be considered adequate.
1) confirmed. mail service which is either certified mail with a signed
receipt returned or first cla~s mail confirmed by written response.
2)
mailing the notice to the last known address and publishing the
notice once a week for two weeks in the official city newspaper of
general circulation in the City of Hopkins and posting the notice in
a conspicuous place on the building or property.
.
c) At least ten days prior to the hearing, t:he Enforcement Officer
shall mail a notice to any responsible party known to the Enforcement Officer.
Subd. 5 Hearing. At the time of the public hearing. the City Council shall
hear from the Enforcement Officer and any other parties who wish to be heard. After
the hearing, the City Council shall adopt a resolution, describing what abatement
action, if any, it deems'appropriate. If the resolution calls for abatement action it
may either order the City to take the abatement action or fix a time within which the
nuisance must be abated and provide that if corrective action is not taken within the
. specified time. :the City shall abate the nuisance. The City Clerk shall give a copy
of this resolution to the Enforcement Officer who shall mail copies to any of the
parties required to be notified in Subd. 4 for whom the Enforcement Officer has a
current mailing address.
615.12. Emergency Abatement Procedure. When the Enforcement Officer determines that
a nuisance exists on a property and the nuisance constitutes an immediate danger or
hazard which if not immediately abated will endanger the health or safety of the
public and there does' not exist sufficient time to follow the procedures of 615.10 or
615.11, the City may abate the nuisance by the procedure described below.
Subd. 1. Order by City Manager. The City shall order emergency abatement by
an administrative order to be signed by the City Manager or. in the. case of
_availability of the City Manager, by the official authorized to act in the Manager's
'half as established by the chain of authority stated in the City Policy Manual. A
good faith effort shall be made to inform the owner that the action is being taken.
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