HomeMy WebLinkAboutEDA August 8, 2007
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1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
August 8, 2007
6:00 p.m.
Conference Rooms A & B
AGENDA
1. Call to Order - 6:00 p.m.
2. Approval of Minutes (7/17/07 Regular Mtg.)
3. Review Purchase Agreement (Tasty Pizza)
o 4. Discuss Frontage Road Reconstruction Request (Kwik Trip Store/Car Wash)
5. Update on Economic Development Activities
6. Other Business
7. Adjourn
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1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US
TO: Economic Development Authori
CC: Jim Dickinson, Executive Director
FROM: Vicki Volk. City Clerk
SUBJECT: Approval of Minutes
DATE: August 8,2007
INTRODUCTION
The following minutes were provided by staff for approval by the EDA:
July 17, 2007
DISCUSSION
Regular Meeting (Nowak. absent)
Attached are copies of the minutes for your review.
ACTION REOUIRED
The EDA is requested to approve the above minutes.
Respectfully submitted,
fL.L' ora
Vicki V olk
City Clerk
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ANDOVER ECONOMIC DEVELOPMENT AUTHORITY MEETING
JULY 17, 2007 - MINUTES
A Meeting of the Andover Economic Development Authority was called to order by President Mike
Gamache, July 17, 2007, 6:00 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW,
Andover, Minnesota.
Present:
Commissioners Don Jacobson, Mike Knight, Ken Orttel, Julie
Trude; and Voting resident member Joyce Twistol
Voting resident member Robert Nowak:
Executive Director, Jim Dickinson
Community Development Director, Will Neumeister
City Engineer, Dave Berkowitz
Others
Absent:
Also present:
APPROVAL OF MINUTES
June 19, 2007
MOTION by Trude, Seconded by Knight, approval of the Minutes as written, Motion carried
unanimously.
PURCHASE AGREEMENT PROGRESS REPORT
Mr. Neumeister stated the purchase agreement for Dynamic Sealing Technologies has been
signed, Closing date will be September 30,2007.
Kent Meister made a presentation regarding the exterior of the Dynamic Sealing building,
Mr. Neumeister stated the plan has met staff requirements. Staffwill work with Dynamic
regarding color scheme and breaking up the long wall spans.
Mr. Neumeister explained John Larkin (MVP Baseball Academy) would like the EDA to grant a
one-month time extension on his closing date,
MOTION by Knight, Seconded by Jacobson, approval to extend closing date to September 1,
2007 with John Larkin. Motion carried unanimously.
REVIEW LETTER OF INTENT (DARREN BRENK-TASTY PIZZA)
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Andover Economic Development Authority Meeting
Minutes - July 17, 2007
Page 2
Mr. Neumeister explained the letter of intent from Darren Brenk and his partners to purchase Lot
4, Block 3, Andover Station North to build a restaurant. Staff indicated that in order to accept
the letter of intent, the EDA will need to reject the previous letter of intent submitted by
Sportsman's Grill.
Discussion regarding the process of rejecting the letter of intent.
MOTION by Trude, Seconded by Jacobson, to rescind and reject previous letter of intent
submitted by Sportsman's Grill. Motion carried unanimously.
Mr. Neumeister explained the price of the land.
Darren Brenk from Tasty Pizza gave a presentation. The design of the building has changed to a
one level restaurant. There will be a full bar and the current menu will remain the same. There
will be an outdoor patio area. They would like room for expansion, Since the restaurant is
geared toward families they will not be asking for a 2:00 a.m, closing. There is ten months left
on the current lease.
Mr. Neumeister stated the City Attorney would have the purchase agreement ready in about two
weeks.
MOTION by Trude, Seconded by Jacobson, authorizing staffto prepare purchase agreement in
accord with the terms of the letter of intent dated July 9, 2007. Such purchase agreement must be
signed within 60 days of the effective date, The offered purchase agreement will be effective
upon receipt of the EDA rescission of a previously offered purchase agreement on the same
parcel. Motion carried unanimously.
MOTION by Trude, Seconded by Knight, authorizing staffto prepare a letter of rescission to
Sportsman's Grill. Motion carried unanimously.
UPDATE ON ECONOMIC DEVELOPMENT ACTIVITIES
Mr. Neumeister gave updates on the following:
Bruggeman Homes-They are interested in relocating the tot lot park to an undeveloped parcel in
their development. They believe it would be a plus for their market.
Office Development-There may be more interest if the property was office pads and they could
be sold off one at a time.
MVP Baseball (John Larkin)-An issue came up regarding a cross easement on the property, The
easement is in the agreement however cost was not discussed.
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Andover Economic Development Authority Meeting
Minutes - July 17, 2007
Page 3
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Mr. Neumeister discussed a proposal that was brought to staff regarding Eddy's Auto Body. The
proposal is a gas station and car wash to replace Eddy's Auto Body. The frontage road would
have to be reconstructed,
Motion by Jacobson, Seconded by Orttel, to adjourn, Motion carried unanimously, The meeting
adjourned at 6:59 p,m.
Respectfully submitted,
Michelle Hartner, Recording Secretary
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OVE
1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US
TO:
EDA President and Board
CC:
Jim Dickinson, Executive Director
Will Neumeister, Director of Community . velopment ut1..--
FROM:
SUBJECT: Review Purchase Agreement (Tasty Pizza)
DATE:
August 8, 2007
INTRODUCTION
On July 17, 2007 the EDA reviewed the "Letter of Intent" and sitelbuilding plans from Darren Brenk and his
associates. The EDA approved the preparation of a purchase agreement for the purchase of the lot directly
north of First Regions Bank (Lot 4, Block 3, Andover Station North) and build a 9,000 square foot
restaurant.
DISCUSSION
The staff has worked with the City Attorney to prepare the attached purchase agreement and the EDA is
asked to review and approve ofthe language in the document.
ACTION REQUESTED
Review and determine whether the EDA agrees with the terms and conditions of the purchase agreement
(attached) for Darren Brenk and his associates to buy Lot 4, Block 3, Andover Station North, to build a new
Tasty Pizza restaurant.
Respectfully submitted,
ad-
Will Neumeister
Attachment
Purchase Agreement
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PURCHASE AGREEMENT
1. PARTIES. This Purchase Agreement is made on ,
2007, by and between Andover Economic Development Authority, a body corporate and
politic, 1685 Crosstown Boulevard NW, Andover, Minnesota, Seller and C & D, Inc.,
d/b/a! Tasty Pizza V, Buyer
2. OFFER/ACCEPTANCE. Buyer agrees to purchase and Seller agrees to
sell real property legally described as follows:
Lot 4, Block 3, Andover Station North, Anoka County, Minnesota
("Property").
3. PURCHASE OF LOT WITH BUILDING OR VACANT LOT. (Check
paragraph that pertains.)
A. Buyer is purchasing the lot with an existing building.
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B.
Buyer is purchasing a vacant lot.
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4. PRICE AND TERMS. The price for the real property included in this sale:
Three Hundred Thirty Six Thousand Seven Hundred Eighty Five and NO/100 Dollars
($336,785.00) which Buyer shall pay as follows.: Earnest money of Five Thousand and
no/100 Dollars ($5,000.00) by check, receipt of which is hereby acknowledged, and
Three Hundred Thirty One Thousand Seven Hundred Eighty Five and NO/100 Dollars
($331,785.00) cash on or before November 15, 2007, DATE OF CLOSING.
The purchase price is based on a net site area of 67,357 square feet (exclusive
of street easement). The price herein represents a per square foot price of $5.00 and of
that amount 10% is earmarked as park dedication fee. The remainder includes all land
costs, and assessments for sanitary sewer and storm sewers, streets, water mains,
sidewalks, trails and area charges.
5. CONTINGENCIES. Buyer's obligations under this Purchase Agreement
are contingent upon the following:
(a) Seller shall permit Buyer, at Buyer's expense, to enter the Property to conduct
inv stigations and testing and Buyer shall be completely satisfied with the
environmental and soil conditions of the Property.
(b) Buyer shall' have obtained all zoning, land use, signage, watershed,
environmental and other governmental approvals and permits Buyer shall deem
necessary to use the Property in the manner contemplated by Buyer, including, without '
o limitation, a full building permit for a building conforming to Seller's design standards
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which Buyer determines can be built for a price acceptable to Buyer, in Buyer's sole
discretion.
(c) Buyer shall have determined that the roads, utilities, points of access and other
infrastructure serving the Property will be adequate for Buyer's purposes.
In the event any of the above contingencies have not been satisfied or waived by Buyer
on or before the date of closing, this Agreement shall be voidable at the option of the
Buyer. '
6. DEED/MARKETABLE TITLE. Upon performance by Buyer, Seller shall
execute and deliver a Warranty Deed conveying marketable title, subject to:
A. Building and zoning laws, ordinances, state and federal regulations;
B. Restrictions relating to use or improvement of the property without
effective forfeiture provisions;
C. Reservation of any mineral rights by the State of Minnesota;
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D. Utility and drainage easements which do not interfere with planned
improvements.
E. Declaration of Covenants filed by the Andover Economic
Development Authority.
7. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. Real estate
taxes due and payable in and for the year of closing shall be prorated between Seller
and Buyer on a calendar year basis to the actual DATE OF CLOSING.
SELLER SHALL PAY on DATE OF CLOSING all special assessments for
street, storm sewer, sanitary sewer, water main and water area charges levied as of the
date of closing.
BUYER SHALL PAY real estate taxes due and payable in the year
following closing and thereafter and any special assessments levied and payable aft r
the date of closing. Seller makes no representation concerning the amount of future
real estate taxes or of future special assessments.
8. SELLER'S OBLIGATIONS.
(a) Seller warrants that there has been no labor or material furnished to the
property in the past 120 days for which payment has not been made. Seller warrants
that there are no present violations of any restrictions relating to the use or improvement
o of the property. These warranties shall survive the delivery of the warranty deed.
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(b) SELLER shall cause all offsite utilities, storm drainage, street lights and
paving to be constructed, if not already completed, necessary to serve the property at
Seller's expense. Such obligation shall not include the sanitary sewer and water
connection charges.
9. BROKERAGE. Buyer and Seller represent that neither party is
represented by a real estate agent or broker and no brokerage commissions are due
any third parties as a result of this transaction.
10. BUYER'S OBLIGATIONS.
(a) Buyer shall construct a restaurant upon the property which is in substantial
conformance to the building identified in attached Exhibit A. Buyer's obligation shall
survive the closing on this transaction.
(b) Buyer shall provide to Seller, 30 days prior to the date of closing, financial
stat ments and such other documentation indicating that they have the financial
capability of constructing and operating the restaurant identified in Exhibit A. Sell r
shall have the right to determine the adequacy of the financial records submitted by
Buyer and shall, in its sole discretion, determine whether or not Buyer has the financial
capability to comply with the requirements of this section. In the event Seller is not
satisfied with the financial capabilities of the Buyer, Seller may, in its discretion,
terminate this agreement and all earnest money paid hereunder shall be refunded to
Buyer.
(c) Buyer acknowledges that it has had (and will have) an adequate
opportunity to inspect the Property and, upon closing the transaction contemplated by
this Agreement, shall be deemed to have accepted that Property in "AS IS" and
'WHERE IS" condition with any and all faults. . Seller hereby disclaims all warranties,
whether oral or written, express or implied, as to the Property's merchantability, fitness
for a particular purpose, condition, type, quantity and quality.
11. DISCLOSURE OF NOTICES. Seller has not received any notice from any
governmental authority as to violation of any law, ordinance or regulation. If the
property is subject to restrictive covenants, Seller has not received any notice from any
person as to a breach of the covenants.
12. POSSESSION. Seller shall deliver possession of the property not later
than DATE OF CLOSING.
13. EXAMINATION OF TITLE. Seller shall, within a reasonable time after
acceptance of this Agreement, furnish an Title Commitment, certified to date to include
proper searches covering bankruptcies, State and Federal judgments and liens. Buyer
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shall be allowed 30 business days after receipt for examination of title and making any
objections, which shall be made in writing or deemed waived.
14. TITLE CORRECTIONS AND REMEDIES. Seller shall have 120 days.
from receipt of Buyer's written title objections to make title marketable. Upon receipt of
Buyer's title objections, Seller shall, within ten (10) business days, notify Buyer of
Seller's intention of make title marketable within the 120 day period. Liens or
encumbrances for liquidated amounts which can be released by payment or escrow
from proceeds of closing shall not delay the closing. Cure of the defects by Seller shall
be reasonable, diligent, and prompt. Pending correction of title, all payments required
herein and the closing shall be postponed.
A. If notice is given and Seller makes title marketable, then upon
presentation to Buyer and proposed lender of documentation
establishing that title has been made marketable, and if not
objected to in the same time and manner as the original title
objections, the closing shall take place within ten (10) business
days or on the scheduled closing date, whichever is later.
B.
If notice is given and Seller proceeds in good faith to make title
marketable but the 120 day period expires without title being made
marketable, Buyer may declare this Agreement null and void by
notice to Seller, neither party shall be liable for damages hereunder
to the other, and earnest money shall be refunded to Buyer.
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C. If Seller does not give notice of intention to make title marketable,
or if notice is given but the 120 day period expires without title
being made marketable due to Seller's failure to proceed in good
faith, Buyer may seek, as permitted by law, anyone or more of the
following:
(1) Proceed to closing without waiver or merger in the deed of
the objections to title and without waiver of any remedies,
and may: (a) Seek damages, costs, and reasonable
attorney's fees from Seller as permitted by law (damages
under this subparagraph (a) shall be limited to the cost of
curing objections to title, and consequential damages are
excluded); or, (b) Undertake proceedings to correct the
objections to title;
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(2) Rescission of this Purchase Agreement by notice as
provided herein, in which case the Purchase Agreement
shall be null and void and all earnest money paid hereunder
shall be refunded to Buyer;
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(3) Damages from Seller including costs and reasonable
attorney's fees, as permitted by law;
(4) Specific performance within six months after such right of
action arises.
D. If title is marketable, or is made marketable as provided herein, and
Buyer defaults in any of the agreements herein, Seller may elect
either of the following options, as permitted by law:
(1) Cancel this contract as provided by statute and retain all
payments made hereunder as liquidated damages. The
parties acknowledge their intention that any note given
pursuant to this contract is a down payment note, and may
be presented for payment notwithstanding cancellation;
(2) Seek specific performance within six months after such right
of action arises, including costs and reasonable attorney's
fees, as permitted by law.
E.
If title is marketable, oris made marketable as provided herein, and
Seller defaults in any of the agreements herein, Buyer may, as
permitted by law:
(1) Seek damages from Seller including costs and reasonable
attorneys' fees;
(2) Seek specific performance within six months after such right
of action arises.
TIME IS OF THE ESSENCE FOR ALL PROVISIONS OF THIS CONTRACT.
15. NOTICES. All notices required herein shall be in writing and delivered
personally or mailed to the address as shown at paragraph 1 above and, if mailed, are
effective as of the date of mailing.
16. MINNESOTA lAW. This contract shall be governed by the laws of the
State of Minnesota.
17. WEll AND FUEL TANK DISCLOSURE. Seller certifies that the Seller
does not know of any fuel tanks or wells on the described real property.
18. INDIVIDUAL SEWAGE TREATMENT SYSTEM DISCLOSURE. Seller
certifies that there is no individual sewage treatment system on or serving the property.
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19. PAYMENT OF CLOSING COSTS. Each party will pay closing costs which
are normally allocated of Buyers and Sellers in a real estate transaction.
The Andover Economic Development
Authority agrees to sell the
property for the price and
terms and conditions
set forth above.
SELLER:
ANDOVER ECOMONIC DEVELOPMENT
AUTHORITY
We agree to purchase the property
for the price and terms and
conditions set forth above.
BUYER:
C & D, Inc., d/b/a Tasty Pizza V
By: By:
Michael R. Gamache, President Its:
By:
James Dickinson, Executive Director
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1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US
TO:
EDA President and Board
CC:
Jim Dickinson, Executive Director
Will Neumeister, Director of Community Development d-
FROM:
SUBJECT: Discuss Frontage Road Reconstruction Request (Kwik Trip Store/Car Wash)
August 8, 2007
INTRODUCTION
DATE:
Staff has received a request from "Kwik Trip" to reconstruct the frontage road at Jay Street
and Bunker Lake Boulevard as well as the median on Jay Street to enable them to improve the
access to the site that they are interested in purchasing from Eddy Prater. The EDA is
requested to review the attached letter/materials and provide staff direction on whether there is
interest in assisting with this project to redevelop the Southeast comer of Jay Street and
Bunker Lake Boulevard.
DISCUSSION
Please read the attached letter from "Kwik Trip" and review the pictures and drawings that are
attached. Staff is recommending the EDA seriously consider this request. If there is EDA
support, staffwould suggest that the EDA establish a dollar amount that they would be willing
to pay towards reconstructing the frontage road and median on Jay Street. Based on
estimates, an appropriate amount for the work to be done is $200,000. Whatever costs are
incurred above that amount would be "Kwik Trip's" to bear.
Reasoning for support of the request is as follows:
1. The frontage road is not a safe or convenient access to the properties that front on
Bunker Lake Boulevard (east of Jay Street). The access that currently exists does not
allow full movement to the properties that front along that section of road. The
reconstruction would enable patrons to more easily access them and it would be safer
than what currently exists.
2. The existing building that is operating as Eddies Autobody is not very attractive and is
very prominent at a major intersection in the community. The design of the proposed
new motor fuel convenience store and car wash is much more visually appealing when
compared to the existing structure and image projected (with the cars that need repairs
parked out front).
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3. The argument could be made that the City should probably have included this site in
the overall redevelopment plan for the area that was initiated over 17 years ago when
the old auto junkyards were removed using Tax Increment Financing (TIP). The
image of what Eddy's looks like negatively affects the other new buildings in the area
that the City spent a great deal of money to attract to the area.
4. In this proposal the City has a private redevelopment initiative that will take care of a
traffic/transportation problem and would not require the City to acquire right-of-way
to cause these things to occur. This is an example of what private redevelopment can
accomplish if the right conditions exist (Le.. willing buyer/willing seller).
5. Kwik Trip will dedicate approximately 34,400 square feet of Right-of-way and receive
approximately 21,500 square feet of vacated Right-of-way in return that will still be
encumbered by a utility easement. The difference of approximately 12,900 square feet
at a purchase price of $13.70 sq. ft. for Eddy's land will result in Kwik Trip
contributing $176,730 that does not need to be paid by the City. The project if done
by the City would be far in excess of the $200,000 figure that staff is estimating for
this project get off the ground.
6. Relative to this project negatively affecting the existing motor fuel stations in the area,
it could be argued that at least one of them already has a recent track record of not
being able to make it as it has been resold many times in the past five years. With the
access to Hanson Boulevard becoming less than it is today, it could be assumed that
the stations on the comer of Hanson and Bunker will become harder to get to and
associated with that will be less business. Preventing this site from developing in the
manner that is proposed will be less of an impact on them than what is already in
process.
7. Other vacant parcels in the area (to the east) have not sold because of the limited
access that they have to Bunker. If the access is improved, they will become much
more attractive as building sites that, if built on, would increase the City's tax base.
ACTION REOUESTED
Staff requests the EDA review the request from K wik Trip and determine if there is interest in
pursuing an agreement to realign the frontage road and modify the median at Jay Street and
Bunker Lake Boulevard.
Respectfully submittedwL-
Will Neumeister
Attachments: Letter from Kwik Trip, Photographs, Site Plan
Cc: Sam Van Tassel, 4815 James Avenue South. Minneapolis, MN 55419
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KWIK
TRIP
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Kwik Trip, Inc. - R al Estat
4815 James Ave. South. Minneapolis, MN 55419
Phone: (612) 916-5864' E-mail: svantassel@kwiktrip.com
INCORPORATED
"To serve our customers and community more effectively than anyone else by treating our
customers, co-workers and suppliers as we, personally, would like to be treated."
July 19, 2007
RECEIVED
Mr. Will Neumeister
Community Development Director
1685 Crosstown Blvd. N.W.
Andover, MN 55304
JUL 23 2007
CITY OF ANDOVER
Dear Will,
Kwik Trip has executed a letter of intent (LOI) with Eddy Prater to acquire his property
(Property) located at 1786 Bunker Lake Road to facilitate the construction of a Kwik Trip
store. The sale is conditioned on approvals by the City of Andover which include the
relocation of the frontage road to run along the south edge of the Property , as shown on
the enclosed site plan, and a break in the median in Jay street to facilitate full turning
movements to the relocated frontage road. Kwik Trip would provide the property for the
relocated frontage road. In return, Kwik Trip is requesting the City to vacate the current
frontage road property which would be incorporated into the Property and construct the
new frontage road and median break in Jay Street at the City's sole cost. Without the
o aforementioned, Kwik Trip would not be interested in pursuing this location.
We believe this request will benefit the City for the following reasons: it will enhance the
safety of the current intersection configuration by moving the frontage road access onto
Jay Street further south of Bunker Lake Blvd.; it will allow the City to relocate the
frontage road without using its power of eminent domain; it will eliminate the current
use of a body shop to a location better suited for such a use; it will increase the value
and the functionality of the area bounded by Hanson Blvd., Bunker Lake blvd. and Jay
Street; it will enhance the tax base for the City; it will provide a valuable service to the
citizens and businesses of Andover.
Kwik Trip is very excited about coming to Andover and providing the goods and services
for which we are known. Even though we were named convenience store of the year in
2004, article attached, we consider ourselves a small grocery store that provides our
customers great value.
We look forward to working with the City on what should be a mutually rewarding project.
Please contact me with any questions or comments.
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Sincerely,
~.;:~ cJ.
Real Estate Manager
Kwik Trip Inc.
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1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923'. WWW.CI.ANDOVER.MN.US
TO: EDA President and Board
CC: Jim Dickinson, Executive Director
FROM: Will Neumeister, Community Development Director tdl.-.
SUBJECT: Update on Economic Development Activities
DATE: August 8, 2007
INTRODUCTION
This memo is provided as a status update for all the economic development activities related to
Andover Station North that the City staff have recently been engaged in. The following is the
update on activities:
Rudnick's Retail Building - Still marketing to fill the spaces, staff assisting by providing leads.
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Bruggeman Homes - A new 8-unit townhome building is currently being built. New marketing
, signs were approved and are now up along Bunker and Hanson Boulevards. Sales still remain slow.
At the last EDA meeting, the comment was made that they should build the single townhome units
to be like those that they build in ForestLake. Staff called Bruggeman and they said those are built
on 90-foot wide lots and sell for $400,000. Bruggeman indicated they have no desire to upgrade or
redesign these units based on what they think the Andover market is at this location.
Funeral Home Proposal - They have obtained a building permit and will have a building under
construction once final approvals from the watershed district are given.
Office Development - The staff has begun to market the site to small businesses that want to own
their own office space. To sell off these pad sites may be easier than finding one developer to buy
and speculate on the property. The attached concept shows how potential new office buildings
starting at about 1,980 square feet in size could be developed on,the site north of Bruggeman's
townhomes. Larger office buildings (say 4,000 square foot in size) could be developed there
however it would reduce how many pads could be created. This development approach would have
one common lot and individual lots for each building pad, similar to the offices by the movie
theater. The pad sites would be served by one sewer line and a common parking lot. To facilitate
this, the City would need to become the developer and build the sewer/water/storm sewer and also
the common parking lot. Before staff does further marketing on this concept, staff would like input
from the EDA on whether this is something they would like to pursue.
o
MVP Baseball (John Larkin) - They are working on the architectural and site plans. John Larkin
would still like to close on or before September 1, 2007. The attached letter from MnPCA was just
received and indicates that there is no longer a need to install an explosive gas monitor inside the
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building unless some methane is detected in the gas monitoring probes located between the landfill
and the building.
Light Industrial Building (Dynamic Sealing Technologies) - Their architect is designing the
building and preparing a site plan. At the last EDA meeting they were reviewed and EDA agreed to
their design of the tip-up panel construction and site layout.. EDA authorized staff to work on any
minor modifications that may be needed. They anticipate having a full building permit by late fall.
OffICe Development (Northstar Partners) - As in the last three or four months of reporting on their
progress, there has not been a great deal of interest shown in the site. The signed listing agreement
is scheduled to expire on August 31, 2007. Based on this date coming up soon, the EDA should
decide if they want to continue with this listing agreement. The update (from Northstar Partners) on
recent development prospects for this site will be provided at the meeting.
Tasty Pizza (Darren Brenk & Associates) - A purchase agreement has been prepared and the
EDA is asked to act on it. Mr. Brenk would like to pursue getting a closing date soon and begin
building before winter sets in.
. Other Retail or Restaurant Prospects - Staff has been in conversation with two individuals that
would like to consider purchasing a portion of the land located south of Louis Rudnicki's retail
center. Staffhas indicated that the purchase price is $9.35 per square foot. They have indicated that
they may be willing to buy portions of the site to build "zero lot line" construction and allow the
center to keep on expanding. Each of these retail users would like to have 4,000 to 5,000 square
foot of space and build their individual spaces to look like the retail space that Louis Rudnicki built.
See attached sketch showing how this could be done and sell off portions of the lot. The center
could also have additional retail space facing Bunker that would have around 13,000 square feet of
new space facing Bunker. This could enable the retail center to continue expanding as the market
allows. If all the sites were purchased, the end result would be a center that would be 31 ,000 square
feet in size and the total sale price would be approximately $972,587 for the remaining vacant land.
If this approach is used, then the site will not be able to become another restaurant site. The EDA
is asked to comment on this approach and determine whether it is desired to hold the entire site for
anothet restaurant.
ACTION REQUESTED
The EDA is asked to provide input on the questions and issues raised above.
Respectfully sUb~1
Will Neumeister
Attachments:
Potential Small Office Building Drawing & Site Plan
Sketch of "Staged" Retail Expansion of North point Plaza
MnPCA Letter (Explosive Gas Monitoring)
2
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Minnesota Pollution Control Agency
520 Lafayette Road North I 51. Paul, MN 55155-4194 I 651-296-6300 I 800-675-3843 I 651-282-5332 TTY I www.pca.state.mn.us
July 27, 2007
Mr. David D. Berkowitz
City of Andover
1685 Crosstown Boulevard, NW
Andover, MN 55304
Dear Mr. Berkowitz:
RE: City Ordinance Title 9 ~ Building Regulations (9-1-6B.2)
This letter is being provided to inform and document that the Minnesota Pollution
Control Agency (MPCA) supports changing the above-referenced City Ordinance.
Specifically, 9-1-6B.2 "Completion of Construction: Explosive Gas Monitor..." states
that the property owner of an enclosed structure must install and maintain an explosive
gas monitor. At the time this ordinance was enacted, this requirement was considered an
appropriate safeguard for structures built this close to the WDE Landfill.
However, after further evaluation of various disadvantages of having the detectors inside
a building, usually not reliable due to lack of maintenance and not readily available for
MPCA staff inspection, the MPCA has decided that a continuous monitor is not
necessary IF there is no detection of methane in the permanent gas probes located
between the refuse limits and the new structures. MPCA's operation and maintenance
contractor is responsible for measuring the methane concentration in these gas probes.
This information is reported to the MPCA and evaluated.
Therefore, if there is a future detection of methane in any of these gas probes, the
property owner located between 200 and 500 feet from the refuse limits and near the
affected gas probe shall be advised by the MPCA to install a methane gas detector in their
enclosed structure.
Please let either Peter Tiffany or me know if you have any questions.
Sincerely,
~~
Je~anson
pt~'L~ader
Petroleum and Closed Landfill Section.
Remediation Division
JH:ls.
St. Paul I 8rainerd I Detroit Lakes I Duluth I Mankato I Marshall I Rochester I Willmar I Printed on 100% post-consumer recycled paper
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1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923. WWW.CI.ANDOVER.MN.US
TO: Economic Development Authority
FROM: Jim Dickinson, Executive Director
SUBJECT: Supplemental Agenda Items for August 8, 2007 EDA Meeting
DATE: August 8, 2007
The EDA is requested to receive the following supplemental information.
Item #5. Update on Economic Development Activities (Supplemental)/Northstar Partnership
Update
""
G:\ST AFF\RHONDAAIAGENDA\SUPPLEMENT AL \2007\supplemental 8-8-07.doc
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Andover Update
August 8, 2007
The Northstar Partners disposition team has executed its marking plan. The plan
was distributed at the meeting our team attended (attached).
Our approach to the sale of the Andover site has been to market the property on
two fronts, users/tenants and developers.
Thus far we have applied our marketing efforts to users in the area by: sending
direct mailers to users within a 5 mile radius of the site in Andover. After mailing
a follow up call with each group was completed to discuss the site and the
opportunity. A sample of the groups who we've talked to (several) about the site
include: Wells Fargo (office), Klein Bank, Bank of the West, Lanigan & Kolb, LLP
(CPAs) , NovaCare, Columbia Park Clinic, M&I Bank, Fresenius, Allina, Premier
Properties (prospect), Exit Realty prospect, and a few more smaller users. We
are still in discussions with a number of prospects but have yet to garner enough
interest from a larger tenant to kick off a building.
o
In this market, to get the smaller users to fill up a building, we need to have a
developer chosen and plans drawn, with a semi-firm completion date. So far we
have been taking a two pronged approach to selling this land (and leasing a
future building). Our goal is to keep marketing the site to users while finding a
developer who will purchase it and build the office building spec. The user list
should motivate a developer purchase at the site. Once a building is up th
users will fill in. Land sites take time. We will keep pursuing all the users in the
market and promoting the great opportunity in Andover.
DeveloDer Team
The development team has focused primarily on speculative developers that
would purchase the site and build a speculative development for lease. Our
developer list is comprehensive with large, medium and small developers.
The general consensus from the developer prospects was that while the Twin
Cities office market has improved, vacancy is at a five year low (2nd Qtr. Office
Market Snapshot attached) to 15% down from 16.3% in 2006. The bad news is
absorption of office space in the Northwest quadrant for the first two quarters of
2007 was a negative (25,000) SF. The good news is that the new construction
starts only totaled 57,000 SF. Because of the lack of new construction in th
northwest office market, rates for A & B office properties remain high 'and headed
higher at $18.21 for Band $24.00 for A. The higher rental rates will help to cover
some of the increase in interest rates and construction costs. The upward
movement in rental rates and lack of new construction should bring our list of
o interested developers to the table sooner rather than later.
o RECOMMENDATIONS.
o
=?-
o
Marketina
"STAY THE COURSE" Northstar Partners has done a great job of presenting
the opportunity to the market. We have traction with both the development and
lease side of the equation and will leverage that momentum into a sale as office
development in the Northwest quadrant improves. - Please refer to the
"Marketing Tactics"" attached.
NEW TIME FRAME Baring any natural disasters (Le. significantly higher interest
rates), the team expects to be under contract late 2007 to first quarter 2008.
Pricina
The team continues to support the cities pricing model of $5.50 PSF plus some
assessments, park dedication and the like. Only a major reduction in the price
would garner any additional significant interest. It would take $2.00 PSF
reduction to have any impact on the risk side of a developers thought process.
The site is reasonably priced as is.
Summary
. You have a great and improving site
· The market is improving
· Your team is enthusiastically marketing the opportunity
· The Northstar Partners team will bring this opportunity to a successful
conclusion
.
We are respectfully requesting a six (6) month extension of our ~
agreement. See attached.
Northstar Partners welcomes any and all comments and questions by an
member of the Andover City Council, EDA or City employee.
Please call me directly. Scott Kummel: 952-465-3360.
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OFFICE OVERVIEW.
MINNEAPOLlS1ST. P , MINNESOTA
Second Quarter 2007
,':,} :-",-~..,;-;"::",: ,:,,';"-:'::"::':\":-:':':;";-;:;<"-:':'0;;-"':',"':'';>':-"::::"":,,::.,,:: _ _ ":::,'<:",' :'-",-': :"c.,,;-.:
'--""--,",,':,',:,-"- :'- '-'-' :'; -:,:--: -: -'- ":'--':,,- -,-",--,',', ,-
',' ','" - '-"-' "-' -"'-" "-""-' ""-"- , -' -,- ,'C, ,':, ,'>",': ,"',"',':": ,,_,:,..,._'
. Steady tenant demand in the Mii:u1eapolis/St. Paul office market generated over 1.0 million square feet (mst) of
absorption during the first hal{ of 2007.. Suburban class A properties experienced 444,805 square feet (st) of absorption while
. 235,143 sf of class A space were absorbed in the Central Business District (CBD). The class B market experienced 303,955 sf of
absorption during the past six .
Direct Rental vs. Vacancy Rates
,.....,
25.0%
$28.00
$26.00
$24.00
$22.00
$20.00
$18.00
$16.00
$14.00
$12.00
1998 1999 20110
2001 2002 2003 2CI04 2005 2006
1Q07 2Q07
I_vacancy RatII -r Rental Rate I
Overall vacancy in the market is at a five-year low at 15.0%, down 1.3
. . percentage points from this time last year. Suburban class A properties are
currently 11.5% vacant while class A space in the CBD is 15.8% vacant,
. : . in' '. '~ver 3.00,000 sf of sublease space. The southwest submarket has the
. :.10 ss A vacancy rate at 10.1 % overall (9.3% direct).
we
;":> ,
demand and a narrow supply of available space are fueling
development activity. There are currently over 1.1 msf of space
un . .. ction in the suburbs with another 500,000 sf expected to
cOtl'ln,eflce during the summer. These projects will likely cause an uptick in
Ylls:n;cyrates as they get delivered to the market without being fully leased over
.tlienext several quarters. At mid-year 2007, the space under construction is
...40.0%pre-leased.
-C,:',', """,:>""",-,,',:-,'':'_,','
'-';"",".:_"'_-.:'-,.:'--:-,-:- -,',C,- -- -,-,',,-
----. "-,:".<,.,."".-.",',,,"",""-
:. 62.4,7~5 sf 0
in 2007.
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4% over the past twelve months to $22.58 per square foot (pst). Class A rates
3.4% to $19.95 psf. Class A properties in the CBD experienced the largest
k, $26.17 psf. Suburban class A rents increased 3.3% to $26.68 psf..
*NORTHSTAR
PARTNER
AnI~Uyownodond.
ullll.~ cUS'.;;;...&
~..,~.. WAKEFIELDI'>
ALL I A NeE
OFFICE OVERVIEW, MINNEAPOLIS/ST. PAUL, MINNESOTA
Second Quarter 2007
MINNEAPOLIS/ST. PAUL MARKET HIGHLIGHTS
6625 West 78th Street
7625 Smetana Lane
Metropoint
7625 Smetana Lane
Southwest
Compellent Technologies
56,000
June 2007
Excelsior Crossings Southwest Cargill 450,000 March 2008
Norman Pointe II Southwest N/A 322,000 November 2007
Superior Office Center Southwest NIA 90,000 August 2007
0
MINNEAPOLIS/ST. PAUL MARKET/SUBMARKET STATISTICS
Direct Direct
Overall Direct 2QD7 YTD YTD Class A Class B
Marl<eU submarl<et Inventory No. of Vacancy Vacancy 0.01311 OVerall Under Construction Asking Asking
(All Classes) Total SF Bldgs. Rate Rate Absorption Absorption Construction Completions Rent Rent
C80 TOlal 33,381,702 155 17.3% 15.6% 192,094 377,885 0 0 $26.17 $18.51
Minneapolis C80 25,783,365 104 15.7% 13.4% 202,073 466,728 0 0 $26.37 $19.32
Sl. Paul C8D 7,598,337 51 23.1% 22.9% (9,979) (88,843) 0 0 $24.37 $17.31
Suburban T olal 41,112,288 496 13.2% 12.2% 225,972 640,852 1,139,742 190,602 $26.68 $20.98
Northeast 6,506,965 87 14.0% 13.2% 67,994 100,757 135,656 0 $23.12 $19.96
Northwest 3,567,387 58 14.2% 13.4% (25,101) (9,178) 57,000 0 $24.28 $18.21
Southeast 7,140,819 90 15.3% 14.4% (29,439) (75,522) 85086 134,602 $23.64 $19.81
Southwest 15,519,406 164 12.6% 11.6% 137,069 365,776 862,000 56,000 $27.75 $22.08
West 8,377,711 97 11.3% 10.0% 75,449 259,019 0 0 $28.47 $21.61
Market T Olal 74,493,900 651 15.0% 13.7% 418,066 1,018,737 1,139,742 190,602 $26.39 $19.95
OVerall Direct 2Q07 YTD CBD Suburban
Class (All Inventory No. of Vacancy Vacancy OVOl311 OVerall Sublease Sublease Direct
submarkets) Total SF Bldgs. Rate Rate Absorption Absolption Availability Availability Asking Rent
Class A 35,526,913 196 13.7% 12.4% 138,872 679,948 313,725 168,846 $26.39
Class 8 27,078,299 287 16.5% 14.7% 216,167 303,955 264,431 231,733 $19.95
Class C 11,888,778 168 15.7% 15.5% 63,027 34.834 14,568 13,633 $15.77
o Market Tolal 74,493,990 651 15.0% 13.7% 418,066 1,018,737 592,724 414,212 $22.58
For more information, please contact our Rese<rch Dep<rtment This report contans infcrrnalon, induding informaliallMlilble kllle ptbic:, wt1ch has been relied l4XIn by Northstar Partners on the
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*NORTHSTAR
PARTNERS
EXCLUSIVE AGREEMENT
FOR SALE OF PROPERTY
THIS AGREEMENT is entered into this _ day of February, 2007, by and between Andover
Economic Development Authority ("Owner") and Northstar Partners LLC ("Northstar").
In consideration of the mutual covenants contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Owner hereby employs Northstar and grants to Northstar the exclusive right to negotiate a sale
of the real property described in compliance with Andover Station North design guidelines
("Property") upon the terms and conditions hereafter set forth. This Agreement shall apply to
all portions of the Property.
The term of this Agreement ("Term") shall commence on the date hereof and end at midnight
on August 31, 2007.
Northstar hereby accepts said grant and agrees to use its continuing and good faith efforts to
effect a sale of the Property upon the minimum terms and conditions specified in Exhibit B or
such other terms as Owner agrees in writing.
NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL OR MANAGEMENT
OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER
AND ITS CLIENT.
It is further agreed that Owner shall pay Northstar a brokerage fee of six percent (6%) of the
gross sales price and an additional 3% when an outside broker is involved for which the
Property is sold or exchanged or upon occurrence of any of the following conditions:
1. The sale, contract for sale, exchange, or conveyance of the Property during the period of
this Agreement by Northstar or any other person, including but not limited to Owner, or
any other agent or broker not a party to this Agreement, in accordance with the price,
design guidelines, terms or exchange as set forth herein or as otherwise consented to by
Owner.
2. A buyer is procured, whether by Northstar, or anyone else other than Owner, who is
ready, willing, and able to purchase the Property at the price and terms set forth above
and Owner refuses to sell.
3. Owner agrees to sell the Property before this contract expires, and Owner refuses to
close the sale.
4. Owner grants an option to purchase the Property ("Option Sale"). However, in the event
of an Option Sale, the parties agree that the brokerage fee arrangement and schedule
shall be as follows: Owner shall pay Northstar a sales commission in the percentage
provided herein based on the price paid for the option and for any extensions thereof.
This commission shall be paid upon receipt by Owner of any such payments under the
Option Sale. In the event such option is exercised, whether during the term of this
An independently owned and
operated member of the
IIIIII'~ CUSHMAN &
','r~~ WAKEFIELD@
ALLIANCE
11095 Viking Drive, Suite 240, Eden Prairie, MN 55344
952-465-3300 Phone 952-465-3301 Fax
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Agreement, or thereafter, Owner shall also pay Northstar a sales commission on the
gross sales price of the Property in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, to the extent that all or part of the price paid for the option
or any extension thereof under the Option Sale is applied to the sales price of the
Property, then any commission previously paid by Owner to Northstar on account of
such option payments shall be credited against the commission payable to Northstar on
account of the exercise of the option.
5. Within the "Override Period" (as defined below), Owner enters into any of the
transactions set forth in clauses 10r 4 above with anyone who has made an affirmative
showing of interest in the Property by responding to an advertisement or by contacting
Northstar or has been physically shown the Property by the Northstar. It is understood
that Northstar shall not seek to enforce collection of a commission under this Paragraph
5 unless the name of the prospect is on a written list given to Owner within seventy-two
(72) hours after expiration of this Listing Agreement ("Protected List"). The Protected .
List shall include the following language:
IF YOU RELlST WITH ANOTHER BROKER WITHIN THE OVERRIDE PERIOD AND THEN
SELL OR LEASE YOUR PREMISES TO ANYONE WHOSE NAME APPEARS ON THE LIST,
YOU COULD BE LIABLE FOR FULL COMMISSION TO BOTH BROKERS. IF THIS NOTICE
IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE.
"Gr 55 Sale Price" as used herein shall mean the total amount to be paid or value of other
consideration given for the Property including assumption of existing liabilities or the listed gross
sales price, as the case may be.
. "Override Period" shall mean the period of time within ninety (90) days after the expiration of
the Term.
Owner hereby authorizes Northstar to disburse part of Northstar commission, which may
become due and payable hereunder, to any cooperating broker, including brokers solely
representing buyers of the Property, in accordance with industry practice or agreements
between Northstar and any such brokers. .
Northstar is authorized to advertise the Property in Owner approved manners and to contact
such other brokers as may assist in concluding a sale of the Property. Northstar is further
authorized to place signs in and about the Property.
OWNER AGREES THAT IT SHALL:
1. Furnish Northstar with pertinent information regarding: (i) the current real estate taxes of
the Property; and (ii) the environmental status of the Property, including information on
wells or septic systems, above or below ground tanks, and environmental reports which
have been performed with respect to the Property.
2.
Furnish to Buyer an Abstract of Title, or a Registered Property Abstract, certified to date,
to include proper searches covering bankruptcies and state and federal judgments and
liens, and to execute or cause to be executed a deed of general warranty conveying a
An independently owned and
operated member of the
IIIIII'~ CUSHMAN &
fJ',t WAKEFIELD@
ALLIANCE
11095 Viking Drive, Suite 240, Eden Prairie, MN 55344
952-465-3300 Phone 952-465-3301 Fax
o
*NORTHSTAR
PARTNERS
marketable title to the Property to the Buyer and any further documents as may be
required to consummate the sale to Buyer in accordance with the terms above
designated or with the terms to which Owner may hereafter consent.
Forward to Northstar any inquiry of any sort received with regard to the sale of the
Property or any portion thereof.
Owner warrants that it is the record fee Owner of the Property and has the legal authority to
enter into this Agreement. Owner agrees to hold Northstar harmless from any liability,
damages, costs, and expenses arising from any incorrect information supplied by Owner.
3.
Owner does not request Northstar to arrange for closing services. Owner will separately
arrange for its closing services arising out of the sale of the Property.
NORTHSTAR PARTNERS LLC AGREES THAT IT SHALL:
1. Endeavor to procure buyers by all reasonable means . available, including direct
solicitation, consultation, and marketing presentations, processing of inquiries received
from any and all sources and advertising of the Property (as approved by Owner)
2. Provide Owner with reports detailing the status of the sale program as such times as
Owner shall reasonably request (at least bi-weekly)
THE EXPENSES INCURRED BY NORTHSTAR PARTNERS LLC AND OWNER in
o performance of this Agreement shall be borne as follows:
1. Signage, staffing, and other relative travel and entertainment expense shall be at
Northstar's expense.
2. Other expenses, agreed to by Northstar and Owner, including but not limited to, direct
. expenses such as appraisal fees, title charges and fees, survey charges and fees,
attorneys fees for preparing or negotiating purchase agreements and environmental
reports shall be at Owner's expense.
Northstar warrants that it is a duly licensed broker under the laws of Minnesota and that all
agents and salespersons working for Northstar in connection with the Property are also duly
licensed salespersons and/or brokers under the laws of Minnesota. Northstarfurther warrants
that it has the legal authority to enter into this Agreement. Northstar agrees to hold Owner
harmless from any liability, damages, costs and expenses arising from any incorrect information
(unless supplied by Owner) given by Northstar to others with respect to the Property.
You understand that Northstar represents buyers looking for Property including properties which
may be similar to the Property. If a potential buyer represented by Northstar becomes
interested in the Property, a dual agency will be created. This means that Northstar will owe the
same duties to the potential buyer that it does to the Owner. Northstar cannot act as a dual
agent unless both Owner and the potential buyer agree to the dual agency after it is disclosed to
both the Owner and the potential buyer. By agreeing to a possible dual agency, Owner will be
giving up the right of exclusive representation in the proposed transaction, however, if Owner
o decides not to agree to a possible dual agency, it may be giving up the opportunity to sell the
An independently owned and
operated member of the
i11111~~ CUSHMAN &
~J~f WAKEFIELD@
ALLIANCE
11095 Viking Drive, Suite 240, Eden Prairie, MN 55344
952-465-3300 Phone 952-465-3301 Fax
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*NORTHSTAR
PARTNERS
Property to potential buyers represented by Northstar. Northstar will immediately disclose to
Owner any situation that arises in which a dual agency relationship is created. If such a
situation does arise, Northstar will present Owner with a Dual Agency Representation
Agreement for review. Northstar will not continue any further representation of Owner under the
dual agency until such time as Owner has provided its consent to such dual agency by
executing the Dual Agency Representation Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement the day and year first
above written.
Accepted by: Accepted by:
ANDOVER ECONOMIC
DEVELOPMENT AUTHORITY
NORTHSTAR PARTNERS LLC
By
By
Its
Clinton A. Miller
President
President
Its
By Date
Its Executive Director
Date:
Address: 1685 Crosstown Boulevard NW
Andover, MN 55304
11095 Viking Drive
Suite 240
Eden Prairie, MN 55344
Telephone:
Fax:
Telephone: 952-465-3300
Fax: 952-465-3301
An independently owned and
operated member of the
IIIIII'~ CUSHMAN &
.J',' WAKEFIELD@
ALLIANCE
11095 Viking Drive, Suite 240, Eden Prairie, MN 55344
952-465-3300 Phone 952-465-3301 Fax