HomeMy WebLinkAbout03-09-10 Chair James Ostlund 1245 W. Highway 96 Committee Members . EN HILLS Arden Hills, 55112
651.79 MN MN2.7800
(Vacant Seat) www.ci.arden-hills.mn.us
Jerlene ff Johnson
A Mitchell Arden Hills
(Vacant Seat)(Vacant Seat) Financial Planning and
Council Liaison Brenda Holden Analysis Committee
March 9, 2010 _City Vision
s
A strong community that values its un fiscal soundnessnmental tting,and ouolong standing trang residential dition asds,desiralble City in
community, well maintained infrastructure,which to live, work, and •la .
Agenda
Regular Committee Meeting Convenes 6:00 PM
Call to Order
1. APPROVAL OF THE AGENDA
2. MINUTES
A. February 9, 2010 - Regular Meeting
3. UNFINISHED AND NEW BUSINESS
A. Communications Tower Sale Proposal—James Lehnhoff
B. Work Plan for 2010
4. REPORTS
A. Report from the City Council
B. Financial Planning and Analysis Committee Comments and Requests
5. ADJOURNMENT
A quorum of the City Council may be present at this meeting.
S
MINUTES
-ARZE_I\J HILLS
• FINANCIAL PLANNING&ANALYSIS COMMITTEE
Tuesday, February 9, 2010
6:00 P.M.
Second Level Conference Room,Arden Hills City Hall
CALL MEETING TO ORDER AND ROLL CALL
The meeting was called to order by Jim Ostlund at 6:00 pm.
MEMBERS PRESENT: Jeff Johnson;Arlene Mitchell;Jim Ostlund
MEMBERS NOT PRESENT: Brenda Holden,Council Liaison
OTHERS PRESENT: Sue Iverson;Joe Rueb;John Braun
Call to Order
APPROVAL OF THE AGENDA
Motioned: Jeff Johnson
Seconded: Arlene Mitchell
2. APPROVAL OF NOVEMBER 13, 2009 MI TE
Motioned:Jeff Johnson
Seconded: Arlene Mitchell
3. UNFINISHED AND NEW BUSINESS".=
• .
b
A. Selection of a new Chair forth Com "teee
Jim Ostlund was nominate
Motioned:Jeff Johnson a
Seconded:Arlene Mitchel
B. Work Plan for 2010
Iverson shared wit; the cornttee that Holden has several ideas that she would like to
discuss at the next '7erson gave the committee an update on the projects
currently going on wit"''"k,, ity.
4. REPORTS
A. Report from the City Council
No report was provided.
B. Financial Planning and Analysis Committee Comments and Requests
NEXT MEETING—Tuesday, March 9, 2009
5. ADJOURNMENT
Motioned:Jeff Johnson
Seconded:Arlene Mitchell
Jim Ostlund.Chair Susan K. Iverson, Finance Director
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Cite of Arden Hills
1245 West Highway 96•Arden Hills Minnesota 55112
Phone 651.792.7800•Fax 651.634.5137
w ww.ci.arden-hills.inn us
•
II�� j HILLS
MEMORANDUM
DATE: March 9, 2010
TO: Financial Planning and Analysis Committee
Sue Iverson, Acting City Administrator
FROM: James Lehnhoff, Community Development Director
SUBJECT: Communications Tower Sale Proposal
Action Request
Provide staff with comments and questions regarding the proposal from Sand Companies, Inc.
(SCI) to sell the communications tower at 1296 County Road F to the City.
Background
illIn 1972, the City approved the construction of a 240 foot communications tower at 1296 County
Road F. The property is currently owned by the George J. Reiling Estate. The antenna tower
itself had been owned and maintained by a company called Great River Wireless; however, they
abandoned their rights to the tower in early 2009 due to a disagreement with the Reiling Estate.
U.S. Bank was subsequently hired by the Reiling Estate to manage the tower and property.
Sand Companies, Inc. (SCI) approached the City in August 2009 to discuss the concept of
constructing a 55 unit workforce housing building at 1296 County Road F. Workforce housing
is geared toward working families, and the units have both minimum and maximum income
requirements. Rents range from $755/month for a one bedroom to $1,043/month for a three
bedroom. This is not subsidized housing, and residents must provide documentation of their
income. SCI selected this property because of its proximity to jobs, nearby retail services,
freeway access, and the bus service on Lexington Avenue. To help finance the project, SCI is
pursuing housing tax credits from the Minnesota Housing Finance Agency and have requested
Tax Increment Financing from the City. The City Council approved a letter of support for the
housing tax credit application, which included a support for up to $400,000 in TIF. The letter of
support does not constitute TIF approval in any amount.
City of Arden Hills
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Tower Purchase.doe
Page 1 of 3
The Planning Commission reviewed the land use applications at their December 2009 meeting
• and has recommended approval to the City Council. The City Council is scheduled to review the
proposal at their March 8, 2010, meeting. If the land use applications are approved, the City
would then begin review of a business subsidy application for the TIF to determine if and how
much TIF is justified for the project. SCI has a purchase agreement for 1296 County Road F but
their purchase is contingent up the financing and land use approvals.
While the communications tower is part of the property that SCI would purchase, they have
stated that they are not in the business of owning or managing communication towers. During
discussions with SCI, the idea of the City purchasing the tower from SCI was proposed. The
tower and underlying property is already proposed to subdivided from the housing project due to
financing rqeuriements. The concept was discussed at the February 22, 2010, City Council
worksession, and the Council directed staff to explore the concept and seek input from the
Financial Planning and Analysis Committee.
The Communications Tower
An independent structural analysis of the tower was conducted by Ulteig Engineering in January
2010. The report indicated that the tower is in good condition and has been properly maintained.
According to the engineer, these types of towers do not have defined lifetimes, but this tower can
be expected to remain operating for many years to come.
• There are currently three tenants on the tower: Verizon Wireless has 18 antennas for cellular
services, American Messaging has two antennas for pager services, and Nextera has one antenna
for business interne services. There are nine antennas that are no longer being used and can be
removed from the tower. Once the nonfunctional antennas are removed, there is capacity for
additional tenants.
Proposal Review
The proposal is attached. Staff has begun research the following items for the proposal review:
o Insurance requirements and liability;
o Maintenance costs;
o Utility costs; and.
o Management responsibilities;
The leases and revenue are considered confidential information by the Reiling Estate and cannot
be released with this memorandum. Since the lease provisions and revenue information are
paramount to making any informed decision, staff is working with SCI to obtain that
information. The leases will include such items as the annual payment, annual adjustment rates,
term lengths, and termination provisions.
City of Arden Hills
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Tower Purchase.doc
Page 2 of 3
0 While the City does not own any other freestanding communication towers, the City does
manage four leases for antennas on the City water towers. Those four leases generate
approximately$60,000 in revenue per year.
Property Information
The existing property is 2.76. Once subdivided, the communications tower property would
retain approximately.5 and the housing property would include the remaining 2.26 acres. An
access easement connecting County Road F to the tower property would be dedicated to the City.
Ramsey County Assessor lists the following values for the existing property:
o 2010 Total Market Value= $903,000
o 2009 Land Market Value= $715,600
o 2009 Building Market Value=$187,770
o 2009 Total Market Value= $903,300
o 2009 Total Tax Payable= $27,580
If the City purchases the communications tower property, it would no longer generate property
taxes. The housing portion of the property would continue to generate property taxes.
0 Attachment
o Communications Tower Sale Proposal
o Air Photos of Communications Tower
City of Arden Hills
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Page 3 of 3
• February 22, 2010 ;,S
Sent Via E-Mail Transmission �6;'�compEsrlies, Inc.
366 South Tenth Avenue
PO Box 727
Mr. Stan Harpstead Waite Park. MN 56387-0727
Honorable Mayor Office: (320)202-310()
City of Arden Hills Fax: (320)202-3139
1245 West Highway 96 E-trail: SUI6u.;SandCompanies.cont
\telFsite: t\tvw4SandContpanies.com
Arden Hills, Minnesota 55112
RE: Sale of Tower at 1296 County Road F West.
Arden Hills, Minnesota.
Dear Honorable Mayor Harpstead:
As you are aware,Arden Village, LLC is proposing to develop a housing project located at
the above address called Arden Village. With our purchase of the land for our proposed
development, the site includes a tower and other improvements that we are proposing
to separate from our project.
The operation of a tower is not a business we are familiar with or are very interested in
pursing. Our goal is to develop and own a quality housing development that will help
meet some of the housing needs and goals for the City of Arden Hills. With the City
already in this business with the water tower antennas, we are proposing to offer the
tower and related improvements to the City.
Some of the more significant terms and conditions of the proposal are as follows for the
sale from Arden Village, LLC or assigns ("Seller")to the City of Arden Hills ("Buyer"):
1. Property. The sale will include the tower and corresponding leases agreements,
related improvements and the real property encompassing approximately 0.50
acres, herein referred to as the "Property".
2. Access & Platting. Seller shall provide access to the Property through a perpetual
easement and shall construct a driveway to the Property at Seller's cost. Any
improvements on the Property will be at the cost of the Buyer. Seller and Buyer
shall enter into a maintenance agreement for the improvements within the
easement area. Seller shall pay for all costs relating to platting including
surveying and engineering and Buyer shall waive the City's platting fees.
3. Sale Price. The sale price will be determined from an appraisal of the Property
by an independent, third party appraiser and payable in the following manner:
cash at closing from the Buyer in the amount of $1.00 and the balance will be
deemed as a charitable donation from Seller to the Buyer. The cost of the
appraisal will be paid by Seller.
•
Construction • Property Management- 8 Development
Equal Opportunity Employer ��,
0
4. Closing. Closing shall take place simultaneously with Seller's closing on the
financing for Arden Village with Minnesota Housing. Buyer shall pay for the cost
of the title policy, the closing fee and pay the recording cost of the deed. Seller
shall pay for state deed tax and recording documents clearing title to the
Property.
5. Real Estate Taxes. Real estate taxes due and payable in the year of closing shall
be prorated on a calendar year basis.
6. Seller Contingencies. Sale shall be contingent on Seller obtaining all necessary
local approvals, an award of federal tax credits from Minnesota Housing and the
approval of pay-as-you-go tax increment financing for Arden Village. Tax
increment financing shall be over a period of time necessary to finance not less
than $575,000. In lieu of tax increment financing or a combination thereof,
participation could include waived fees or cash. The costs for the tax increment
financing shall be paid 50% by each Buyer and Seller. The Arden Village
development will need to meet all statutory requirements of tax increment
financing including the "but for test".
If there are any questions or comments on this proposal, please do not hesitate to
• contact me with questions. If the City is interested in pursuing the purchase of the
tower, the next step would be to enter into a purchase agreement that we would draft.
Thank you for your consideration.
Sincerely,
Sand Companies, c.
Jamie Thelen
Chief Executive Officer
•
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1296 County Road F
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DfSCLAIMER:This map is neither,a legally recorded map nor a survey and is not intended to be used as one.This map is a compilation of records•information and
data located in various city, ounty,state and federal offices and other sources regarding the area shown,and is to be used for reference purposes only.
SOURCES:Ramsey County(March 3,2010),The Lawrence(iroun;March 3,2010 for County parcel and property records data;March 2010 for commercial and residential data;April 2009 for color aerial imagery,
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•
EN HILLS
MEMORANDUM
DATE: March 9, 2010
TO: Financial Planning and Analysis Committee
FROM: Sue Iverson, Finance Director/Treasurer
SUBJECT: 2010 Work Plan
Councilmember Holden and Committee Chair Ostlund met and discussed various topics for the
committee to work on. Among them are:
1. City purchase of Tower from George Reiling estate(This item is currently on this agenda)
2. Fees/revenues generation from non-profits
3. TIF policy as to what maximum percentage of City should be in a TIF district
4. Affordable housing subsidy/support
5. Use of bonding for capital expenditures
b. PMP Neighborhood approach
7. TCAAP development implications
8. B2 District
We will discuss with Councilmember Holden to prioritize two or three of these items to develop work
plans to come back with recommendations to the Council in 2010. This will basically be an
organizational meeting for our committee resulting in a work plan for the committee for 2010.
•