Agenda - Council - 09/12/1995 - Laserfiche WebLink

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I I I I I I I I I I I I I I I I I I Case //9: r Old Town Ilall City Adminisu'ator Schroeder reported that, as directed by Council, the City has received a market appraisal on the old Town Hall/Public Works site. KKE Architects estimates , renovanon of the Old Town Hall to marketable condition at approximately $90,000, plus a new foundati6n, market value of the building after renovation will be approximately $65,000, andyaluation of the Public Works site is at $1.83/square foot, assuming it is vacant and av~ailable for development (estimated at $79,000 for 43,108 square feet). Mr. Schroeder rerrlinded Council that the City has received a Minnesota Historical Society grant for $16,000. ~2ouncil has allocated an additional $23,769 toward renovation of the Old Town Hall from CDBG. He stated that the Isanti State Bank has offered a purchase agreement in,the amount of $1,80/square foot for the north development parcel. He estimates the ~alue of their offer to be approximately $80,000, minus costs. Costs would include a su~ey, legal fees, probably a phase 3 environmental, and any remediation and removal of th{: existing structures. Assuming no remediation and only minor utility work, it is possible ~ net $50,000 to $60,000. A second option would be to require the bank to redevelop the {entire site, including the Town Hall, in exchange for the north p.roperty. The intent is to en~ure that both projects conform in design and other development zssues. After development, ~t is estimated by the appraiser that net rents of $8 - $10 per net rentable foot is reasonable. !A net operating income of $6,900 is estimated. He figured that at 8 percent, that net operaiing income supports an investment, to break even, of $46,300 over 10 years, or $67,745 oder 20 years. He explained what would be proposed: The City would deed the north landito the bank; the bank would be designated as the City's agent to renovate the Old Town H~I using the $39,769 in grant funds; and that the bank escrow $80,000 of its funds toward i'edevelopment of the Old Town Hall with any unutilized funds being paid to the City. Elil~ible expenditures from this escrow would be architectural fees and any City expenditure cbnducted by the bank on behalf of the City (such as surveying, site work and remodeling), iThe City would retain the right to design approval. The City would also remain owner of the Town Hall site upon development completion. Mr. Schroeder suggested tha~t if Council felt that the second option was the better of the two, it would make sense to make the property marketable as a lease space. He stated he is not asking City Council !o decide on that immediately, he is just asking for a decision on whether or not to sell theiproperty and the authority to work out an acceptable purchase agreement or work with theM on the redevelopment. Discussion ensued regarding moving the Old Town Hall from it's original site. Councilmemljer Zimmennan stated he would be in favor of moving it to a more suitable location to al!low for easier maintenance. He added that he would not be in favor of sticking any ~oney into it at it's present site. Putting $90,000 into a building to get a $65,000 valud does not make sense. Maybe it should be solely for historical purposes. Councilmember Beyer agreed that there should not be more money put into it at that site. Mr. Schroed6r stated that if the Old Town Hall stays on that site, it would be the bank's intention to d6 a project that would conform with the aesthetics of that building. Councilmem§er Beyer stated that we would still have to "dump" all that money into it and she felt that Sg0,000 could be better spent elsewhere. Mr. Schroeder advised that structure in R~tmsey and that he felt it woulkl be worth it. as far as he knows, this is the only historically significant is worth something. If you did nothing more than break even, Cily Council/August 8, 1995 Page 9 of 15