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RAMSEY 67 / MCKINLEY STREET
<br />By: Ryan Schroeder, City Administrator
<br />
<br />CASE # 5
<br />
<br />Background:
<br />
<br />For a number of ~gears, the City of Ramsey has been negotiating with the owners of property in the
<br />McKinley Street ~roject area between the City of Anoka and Sunfish Lake Boulevard N.W. The
<br />Ramsey 67 Partn~ rship owns 146,240 square feet which we have proposed to buy for McKinley
<br />Street. It also ovens 96,000 square feet for the Uranium Street extension south of County Road
<br />#116 to McKinley Street. The second owner, Leonard Spohn, owns 59,520 square feet of
<br />McKinley right-df-way and another 15,320 square feet of utility easement. Staff has estimated the
<br />right-of-way purchase price from Ramsey 67 to range from $25,223 to $82,362, plus costs. In
<br />the case of the S~ohn property, the price ranges from $7,264 to $25,446, plus costs.
<br />
<br />In 1991, the City!was proposing to gain the McKinley Street right-of-way at no charge. It would
<br />then construct th~ roadway with Tax Increment Funds. We had proposed that the roadway costs
<br />would be written~'off and some portion of the utility costs would be covered by the trunk charges
<br />upon development of the land. The most likely result, however, would have been that the land
<br />costs would have increased due to the infrastructure. Any development proposal would have
<br />included a City subsidy request to cover the increased land costs.
<br />
<br />The McKinley Sg'eet roadway project is currently estimated at $527,000. The Uranium Street
<br />project is projected at $328,000, for a tot',d of $855,000.
<br />
<br />Most recently, ~ have been negotiating with Ramsey 67 Partnership for purchase of property
<br />greater than the ~ght-of-way areas. The reason is twofold, l:rn'st, we have not been able to acquire
<br />the fight-of-way[at an acceptable negotiated price. Second, we believe that for slightly more
<br />money (in a rela~ve sense) we can provide development parcels which will not be encumbered
<br />with market pricing escalated by City infrastructure. We had proposed to Ramsey 67 that we
<br />purchase all of their property north of McKinley Street (inclusive). We were not far apart on the
<br />price, but they w~nted a guarantee of no future assessments, due to McKinley Street, against the
<br />property they w~uld continue to hold. Pursuant to the above project estimates, this is a large
<br />guarantee (his ha~ of that street is $187,000).
<br />
<br />Given the above~, we are proposing buying the entire 38.05-acre parcel. We have offered
<br />$191,924 ($5,044 per acre) They have countered at $228,300 ($6,000 per acre). As a point of
<br />reference, AEC ptarchased a 145-acre parcel outside of the MUSA for $995,000 ($6,862 per acre).
<br />The AEC parcel has about 30 acres of wetland, making the net cost about $8,700 per acre. The
<br />Ramsey 67 parce! has about 1.6 acres of drainage easement and no wetland that shows up. This
<br />reduces the marketable parcel to 36.45 acres for a net price of $5,265 to $6,263 per acre. Both the
<br />AEC and RamseS67 parcels have debris clean-up costs. Our Ramsey 67 estimate is $15,000.
<br />
<br />If our total cost is~$225,000, we would need $6,200 per acre of marketable land (plus utilities and
<br />roadway costs) to,break even. The Detail Tool site has a bank appraisal (I am told) at $26,000 per
<br />acre, with servic~ to the property. Therefore, it appears that we could cover our costs at this
<br />purchase price. More importantly, however, we would be 'in control of costs incurred by an
<br />industrial development project. Further, we need to clear up the liability of McKinley Street sewer
<br />
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